Welcome to the fourth quarter and fiscal year 2011 earnings results conference call. My name is Monica, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I would now turn the call over to Mr. Jim Herbert. Mr. Herbert, you may begin. James L. Herbert: Well, good morning, and welcome to our regular quarterly conference call for investors and analysts. As Monica reported, today, we'll be reporting to you the results of our fourth quarter that ended on May 31, as well as the results of this complete 2011 fiscal year. And I'd remind you that some of the statements that are made here today could be termed as forward-looking statements. These forward-looking statements, of course, are subject to certain risk and uncertainties. The actual results may differ from those that we discuss today. These risks that our associated with our business are covered in part in the company's Form 10-K, as filed with the Securities and Exchange Commission. And in fact, that filing for our fiscal year 2011 is currently scheduled to be made later this week. In addition, to those of you that are joining us today by live telephone conference, I'd also welcome those who may be joined by way of simulcast on the worldwide Web. Those comments along with some exhibits will be available on the Web for approximately 90 days. And following our comments this morning, we'll entertain questions from participants who are joined by this live telephone conference. And I'm joined today by Lon Bohannon, Neogen's President; and Steve Quinlan, our Chief Financial Officer. Earlier today, Neogen issued a press release announcing the results of our fourth quarter for the 2011 fiscal year. Once again, it was another record-breaking quarter to cap off another record-breaking year. As I look back over the last 12 months, there were a number of rough spots in the road that we had to get over in order to get us to this point today. The credit for this year's accomplishments in making it across those rough spots goes to our team of over 600 employees that are now located in several places around the world. They just continue to remember that the toughest thing about success is that you have to keep on being a success. As the press release reported this morning, our net income for the 2011 fiscal year increased 30% from the previous year to approximately $22.8 million. This is equal to $0.96 per share, as compared to last year's $0.76 per share. Revenues for the 2011 fiscal year increased 23% to approximately $172.7 million, up from the $140.5 million in the last fiscal year. Of course, both revenues and net income established new all-time highs for our 29-year-old company. Fourth quarter results were also strong, with net increase -- net income increasing by 29% to almost $6 million or to $0.25 per share, as compared to $0.20 per share in the 2010 fiscal year. Overall, revenues for the fourth quarter showed a 12% increase. This fourth quarter marked the 77th quarter in the past 82, in which we have shown increased revenues as compared to a year earlier. I even marvel at times when I realize that we've only had 5 down quarters in the past 20.5 years. The great performance of the year was broad-based by each of our operating groups in both Food Safety and Animal Safety, and they both made very significant contributions. Two acquisitions that we made in fiscal 2010 also played a role in setting these new records. However, organic growth, or what we sometimes refer to as same-store sales, was also up for all the groups. The accomplished months during the year have allowed us to increase our tangible assets by about $39 million, while increasing liabilities by only $3 million. We grew revenues by 23%, but we only added 3% to inventories and accounts receivable. We continue to have good cash balances and no bank borrowing. Adding to this string of good numbers has resulted in an increase of 24% in shareholder equity, as compared to the beginning of the year. I'm pleased that our performance has not gone unnoticed by the financial markets. Early in the year, Neogen stock was selling for as little as $25 a share, as compared to the current levels in the $40 range. I believe that this is in part based on our performance during the year and the consistency of performance over the last 20 years. But I think even more, it's based upon a perception of the future of Neogen's markets, the markets in which we operate and Neogen's participation in those markets. I'll talk a bit more about that in my concluding comments. But let me stop at this point and let Lon Bohannon get in and give you some color on both operating divisions for the quarter that we just finished, as well as a summation of the operations for the year. Lon? Lon M. Bohannon: Thank you, Jim, and welcome to everyone listening on the conference call, as well as to those joining us via the Internet. I do think that today's press release describing Neogen's record-breaking 2011 fiscal year is a fair indication of the overall condition of Neogen as a company. And like Jim, I think it's appropriate for me to begin my comments by expressing my appreciation to Neogen's 600-plus employees who delivered the outstanding results we are able to report today. Jim's already described many of the overall highlights for our 2011 fiscal year, so I will focus my comments on more specific details pertaining to the quarter and fiscal year results. Our Food Safety group finished off a very strong year with overall sales growth of 12%. I think even more gratifying was the fact that this growth was broad-based across multiple market segments and product lines. All 6 operating divisions in Food Safety achieved sales increases ranging from 2% to 38% compared to the prior year. In terms of product lines, food allergens led the way in FY '11 with overall growth of 45%, our tests sold under the trade names Reveal and Gene-Trak to detect specific pathogens like E. coli, Salmonella and Listeria, as well as our Soleris test systems to detect spoilage organisms, such as yeast and mold, were both up 15% for the year. AccuPoint test systems, used for general sanitation purposes, also had another strong year with double-digit growth. Drug residue test kits sold under BetaStar trade name also experienced a solid year of sales growth. And more importantly, after several months of review by FDA and the National Conference on Interstate Milk Shipments, Neogen received final approval on June 3, 2011, for its new BetaStar Plus test for dairy antibiotics. This approval significantly expands Neogen's market for testing of drug residues in milk. Prior to the approval, we had already been working with customers and prospects regarding BetaStar Plus and upon approval, launched an extensive marketing campaign targeting milk processing facilities around the country. The marketing effort involves both our Food Safety and Animal Safety groups to ensure we achieve maximum synergistic impact in the dairy industry. As you know, Neogen has a complete product offering... [Technical Difficulties] Not sure exactly where it was cut off at, but I think I was talking about our BetaStar Plus product and the fact that we had received approval on June 3 from FDA and the National Conference on Interstate Milk Shipments. And this approval does significantly expand Neogen's market for testing of drug residues in milk. Prior to the approval, we had been working with customers and prospects regarding BetaStar Plus and upon approval, we launched an extensive marketing campaign targeting milk processing facilities around the country. This marketing effort involves both our Food Safety and Animal Safety groups to ensure that we achieve maximum synergistic impact in the dairy industry. I think as you know, Neogen has a complete product offering for dairy production inside the farm gate. This includes our Ag-Tek line of gloves and hoof care products, in addition to our Ideal line of veterinary instruments and our complete line of cleaners and disinfectant biosecurity solutions. Combining these products with BetaStar Plus, to perform on farm milk antibiotic testing provides our Animal Safety group a compelling product offering for the 55,000 dairy producers in the United States. All right. This discussion on the synergy between Food Safety and Animal Safety as it pertains to BetaStar Plus provides a convenient segue for me to discuss the 2011 fiscal year results for the Animal Safety group. Animal Safety sales were up 22% in the fourth quarter, with 16% of that increase representing organic growth. The strong finish helped Animal Safety complete its strongest year ever with overall sales growth of 36% and organic growth of 12%. Similar to Food Safety, the increase in sales was broad-based, with all 3 operating divisions achieving solid growth compared to the prior-year, ranging from 8% to 50%. As we have mentioned in each quarter for FY '11, our GeneSeek agricultural genetics laboratory in Lincoln, Nebraska exceeded expectations in its first year as part of Neogen. Sales for GeneSeek were approximately 50% higher than in the year prior to Neogen's ownership. Product lines that exhibited superior performance in FY '11 for Animal Safety included our life science diagnostics, that achieved 11% growth, and the Ideal line of veterinary instruments, that increased 28%. In addition, Neogen's efforts in marketing biosecurity solutions to animal protein producers continue to pay dividends, as evidenced by the 19% sales increase in rodenticides and double-digit organic growth in FY '11 sales of cleaners and disinfectants. International sales growth contributed significantly to Neogen's record-breaking year and is another area worth mentioning. Sales to customers outside the borders of the United States were up 30% for the year, accounting for 42% of Neogen's total revenues. The 42% represents an all-time high for international sales as a percentage of total revenues. Neogen Europe continues to lead the charge in growing international sales, achieving another year of outstanding growth with overall sales increase of 27%. Sales were up across a number of product lines in the U.K., France and Scandinavia. Distributors serving other EU countries and managed by our Neogen Europe operation also experienced an exceptional year with sales growth of 34%. Our Neogen Latinoamerican subsidiary in Mexico City, completed another successful year of revenue growth. Their sales were up 38% led by increases in sales of food diagnostic tests for mycotoxins, allergens and pathogens, higher revenue for dehydrated culture media, as well as increased sales for cleaners and disinfectants. Neogen do Brazil completed its first year of operation, coming in at budget and now has full access to sell Neogen's complete line of Food and Animal Safety products, including our BetaStar dairy antibiotic test. We continue to feel optimistic regarding the potential sales growth in both Mexico and Brazil. And we also believe we're making good progress in building our sales and marketing teams to take advantage of opportunities in those countries. Another country that experienced significant growth in FY '11 was China. A number of our operating divisions benefited from sales to China last fiscal year. Our Animal Safety group shipped a large stocking order of disinfectants to China during our second quarter. Neogen Europe achieved strong sales of plant disease test and AccuPoint ATP systems to China, and other Food Safety divisions also experienced strong revenue growth to China, especially during the third and fourth quarters as a result of sales of Soleris test systems for spoilage organisms and BetaStar dairy antibiotic tests. In total, sales to China increased more than 250% during FY '11. Now I know, China remains a wildcard in terms of opportunity for Neogen, and it makes it virtually impossible to forecast future sales. However, we did make very good progress during FY '11 penetrating the dairy processing market in China, and we expect to expand our share of the China dairy market even further in FY '12. There are a couple of other noteworthy accomplishments for our FY '11 fiscal year that deserve mentioning before I turn the call back over to Jim. We were particularly proud of our operating profits for the year, which increased 33% and ended the year at 20.8% of sales. As you know, we've had a goal of getting operating profit to 20% for a number of years, and it was gratifying to see us achieve that goal in FY '11. Much of the improvement in operating profit is of course, directly related to increased volume and better utilization of fixed costs, including facilities and other overhead items. However, it's also a result of our ongoing cost reduction and productivity improvement efforts that have become an important part of Neogen's operating culture. I am very proud of our operations and administrative employees who have taken it upon themselves to put together teams focused on specific cost-saving measures. During the year, these teams were successful in improving systems to minimize our investment in inventories and receivables and achieve reductions in various cost categories like raw materials and shipping through alternative sourcing and more effective purchasing. And since I mentioned efforts in the area of receivables and inventories, I know you heard Jim make this comment, but I think it's worth repeating that our investments in receivables and inventories went up a scant 3% in spite of our 23% increase in sales volume for the year. This excellent management of working capital contributed to another outstanding year of cash flow from operations for Neogen, giving us a very strong balance sheet at year-end with no outstanding debt. As we look ahead to our 2012 fiscal year, we are fortunate to be serving markets that are growing significantly, both domestically and internationally. Recent third-party market reports suggest that food safety-related markets are growing in excess of 10% annually and food micro-related markets are growing even faster. Neogen is well positioned in these rapidly expanding markets, and we are in the process of making additional investments in sales and marketing to take full advantage of the significant opportunities that we believe exist for our company. Management expects our 2012 fiscal year to continue our trend of consistent growth in sales and profitability. At this point, I'll turn it back to Jim for his closing remarks. James L. Herbert: Thank you, Lon. I guess throughout the year, I've generally felt good about our progress and our accomplishments. But it really came into focus here tonight, as I prepared my comments for our Board of Directors that meets later this week. And I never lose sight of the fact that the main responsibility of our Board of Directors is to hire and fire the Chief Executive. And since I'd like to continue working here, I always want to make sure I discuss with them the general metrics of the business and do that on a regular basis. As I wrote down those important metrics the other night, my pride in what this team has accomplished during past year's welled a bit. And I'll just run down that list once more. Revenue is up 23%; operating profits up to 33%; earnings up 30%; shareholder equity up 24%; market capital went over $1 billion for the first time. Forbes named Neogen to the list of the 200 Best Small Companies in America for the ninth time. Fortune named us once again as one of the 100 fastest-growing small public companies. All that's great, but I guess what makes me feel even better, are the great opportunities that I see that's still ahead of us. The title of our annual report for the year that we just finished, which you'll be receiving in about another month, is titled Satisfying Global -- a Growing Global Demand. Satisfying Growing Global Demand, I'm just getting used to using that phrase. I believe that our opportunity is bigger than just the desire to have safer food through improved production and processing. Bear with me just a minute, and I'll try to explain what I believe is that bigger picture. I believe that the global market for food and Animal Safety will highly correlate to increases in global population, increases in urbanization worldwide, the more occurrences in widespread news about food-borne illnesses and death, more legislation and regulations on food safety and the resulting demand for significantly more high-quality food. Take a minute and look at the global population that now stands at about 6.9 billion. Even with the slower growth rates that is expected to occur we should hit perhaps 9 billion people by the year 2050. Not only will we need to feed 30% more people but they will be demanding higher quality food than we even provide today. Look at the trend toward urbanization. Sometime around 2007, we've crossed the line in which the majority of the people worldwide lived in towns and cities for the first time in history. A United Nations study shows that by 2050, that same year I referred to above, that 70% of the world's population will be living in cities and towns. They won't be producing their own food and therefore, processing and transportation from the rural food source to the urban table will create even bigger food safety problems. This urban population, even a decade from now, will be demanding higher quality food and are rapidly moving away -- particularly in third world countries, moving away from subsistence dot. I remember about a decade ago, sitting with an important Chinese government official in Beijing in an effort to discuss food safety issues. He politely advised we must first produce enough food so that our people are not hungry, then we'll worry about its safety. While they are already reaching that point in China and a number of other developing countries, in the case of China, they no longer are producing huge quantities of shrimp just to ship to the developed countries. They're producing more, but exporting less as they're seeking higher quality diets themselves. They are no longer satisfied to have their babies drink rice milk but instead, are owning more cows, importing more grain and worrying about how to make sure that, that milk supply is safe for those children. To produce the quantity and quality of food that will be increasingly demanded each year, we'll need to produce more food in the same space and process it at higher speeds. Then, we'll have to transport it further and push it through tighter distribution systems. Food safety and animal safety stands in the way of nearly every one of these requirements. Companies like Neogen, will play an ever-increasing role in helping to identify and solve the food safety problems to allow for this expanded production to be possible. For our 2012 year that is now almost 60 days old, we'll be making some strategic decisions to make certain that we get our share and maybe a little bit more of this growing global market. Though we've had good revenue increases in the year that we just finished, I think that there are a lot of opportunities to grow our market share from our current position. We've spent about $4 million more in 2011 for sales and marketing, but we're in the process of ratcheting up those numbers significantly as we look into new year. We'll be looking for opportunities in markets that we don't presently have a position, and we'll be allocating more expenses to those markets that have the fastest-growing growth rates. We need to spend more money on our research and development efforts in our quest to help the market find quicker, easier and more affordable food and animal safety solutions. I'm proud of our R&D group that we currently have in place and the new products that are in the pipeline. However, we need to apply more resources to push those through the pipeline faster. An example would be our announcement this past week of combining our scientists from the genomics group at GeneSeek in Nebraska, with our microbiology research group in Lansing to move rapidly in developing diagnostic tools to be able to detect those important E. coli strains that are now being recognized worldwide as more critical problems, not just in ground beef but in a multitude of other products, including fresh fruits and vegetables. We'll continue to search for acquisition opportunities that can provide products faster than we might develop them ourselves or last to enter into markets that we don't currently serve in a more accelerated fashion. An example would be our VeroMara acquisition that we made last month, that opened up a whole new market in aqua sciences, as we began to put more attention to food production through aquaculture. We already had a significant program going in the development of diagnostic tests for the detection of important shellfish toxins. This will become, by the way, an even bigger issue as these marine animals are grown under in higher numbers and more confined spaces that we've been accustomed to in the past. The VeroMara acquisition gave us the leading laboratory and an outstanding group of scientists, who were already using older methods to test for shellfish toxins every day. Now, combined with our own research scientists, rapid new commercial diagnostic tests should be developed even faster. Furthermore, this acquisition gave us a stronger footing in those rapidly growing European Union markets and an opportunity to carry more of our existing products to these new customers. Our strategy for 2012 fiscal year will likely push some of our employees into some uncharted waters, as we expect a little more risk or accept a little more risk to capitalize on some of these growth areas. When I talked to our international sales meeting group at our international sales meeting last month, I asked our sales force when they looked ahead into the year to not be saying, "I wish I had," but instead at the end of the year to be saying, "I'm glad I did." It was exciting today to report the great year we just completed, however, its far more exciting to look at the opportunities that lie ahead of us. I think that the results that we reported today clearly indicate that Neogen is capturing a piece of the growing global demand for Food and Animal Safety products. This concludes our prepared comments for the morning. And we can now open the conference call for any questions, Monica.

[Operator Instructions] Our first question comes from Steve Crowley of Craig-Hallum Capital Steven F. Crowley: I'm wondering what kind of reaction you've had from people, besides the operator, on the BetaStar product approval and what kind of momentum you see building in the marketplace. Lon M. Bohannon: Yes, it's been a long time coming for us and our sales force is very excited about having a product that captures all of the beta-lactams and antibiotics that are used. It opens up for us significantly the U.S. market. We've estimated and have maintained that that's probably $15 million that we've not had access to with the products that we had currently. I'm always a little bit sensitive in terms of the competitors that might be listening in on the call. I can tell you that the test has been received favorably. We think it has some competitive advantages in the marketplace, and we're going to aggressively pursue opportunities at both the milk processing side as well as back inside the farm gate. And we think we've got a nice approach going with both our Food Safety and Animal Safety sales teams working together, and we expect that we'll achieve sales growth with that product right away as we move into the first and second quarters in this coming fiscal year. James L. Herbert: Those people that hadn't followed that drama, it might be worth just a little bit more to add to that, Lon. Our test for diagnosing the antibiotic residues in milk has done very well for us on a worldwide basis and continues to show increases. The problem we had in the U.S. was the test was too good, just to be frank. It recognized levels lower than the U.S. requirements. So therefore, couldn't be used in the U.S. We had to dumb the test down to fit the U.S. market, and in doing that, it's taking a little bit of work to get done. We've got it in that position now, and as Lon said, we think it's going to be great. The worldwide product, though remains the same as it was going throughout the world, and we expect it to continue to see the same basic increases we've had. There are probably 3 major competitor or 3 major producers, I guess, Lon, on a worldwide basis, producing dairy antibiotic tests. So it's -- we're clearly -- depending on what country you're in, we're clearly one of the leaders. Steven F. Crowley: And did you guys say that the Dairy Antibiotic Test business was up double digit or up nicely? How should we think of the performance of that business in fiscal '11? Lon M. Bohannon: Yes, it was up double-digit for the year. Steven F. Crowley: Okay. Another area that you pointed out in your prepared comments that performed well was GeneSeek. The laboratory business you've acquired and grown. China, to mesh your comments with its performance in the fourth quarter, it seems like it might have had a strong performance but maybe a little bit below recent quarters. You've advertised some lumpiness in that business. And is that a fair inference on my part that you might have seen a little bit of that? And then the related question is, what kind of normalized organic growth rate do you think you can generate with GeneSeek? James L. Herbert: I wish I knew the answer to that question. It does have lumpiness in it, and I think you saw little bit of that in the fourth quarter. We saw. And you're right, the first quarter last year was huge compared to what that business usually does. It's growing. It's going to continue to grow. We're doing a lot of things there to change that business just a bit as we're moving from pure laboratory work over into the more into the bioinformatics area. We're working on a worldwide basis there. Two of our lead guys just came from 2 weeks in Australia and New Zealand, brought a lot of business back with them. The European business is growing. We are probably adding some people in Europe this year instead of trying to cover it all out of the U.S. as far as our activities. Most of that is with the Animal Breeding business. So we're talking about the cattle, being the dairy cattle, beef cattle, swine, sheep, mostly in that area. But we're also doing a lot of stuff in the canine area. So the Canine business is growing. We spent some time last month with the equine area with the Horse business. And it's an opportunity that we're pretty close to the Horse business in the U.S., and I'm in Ireland next -- I guess, it's next month and expect to spend a little time with the Irish equine breeders. So it's hard to -- it's still a young business, and It's hard to say from quarter-to-quarter and hard to predict what we're going to do. But at the same time, I think, we told you when we began this that we saw some opportunities for that these genomic tools to be used in things other than determine which was the best Holstein Sire for dairy heifers. And that came through as we announced last week that working between -- the work between our microbiologist here in Michigan and our genomics people in Nebraska, we've come up with programs to be able to identify not just E. coli 157, which is a product we've had, obviously for a long time, but to be able to pick up it's 6 ugly sisters and get it done in a hurry. And we've been able to do that. We identified. And those of you who are following that side of the business, when I say snips you'll understand what I mean, but we used 71 snips to be able to identify that, which is far more reaching than you could do with the typical kind of test that we've been accustomed to in the past. This is not the be all, the end of there. There's a lot of work yet to be done but none of our competition is there yet either. So long political answer to what was a short question. Steven F. Crowley: Well, it's always interesting to get the color. I've got one more, and then I'll hop back in the queue. You're coming off a couple of years where you've really demonstrated some great improvement in operating margins. I think 170 basis points and 180 basis points the year before that. I'm trying to rationalize kind of that trajectory with the commentary you made about the desire, the opportunity to invest in 2012. And I'm wondering whether or not you can show meaningful operating margin improvement, let's say, 100 basis points plus in the context of those investments or we should interpret your comments differently. Lon M. Bohannon: Well, I'll try to answer your question. I think you have interpreted our remarks accurately as it relates to looking at fiscal year '12. We are going to make an investment in sales and marketing, and because the markets themselves are growing so rapidly that we -- to get not just our share but gain market share, we need to make a strong effort in that area in fiscal year '12, we believe. We kind of -- I kind of looked at -- at fiscal year '11 we've been -- had this goal of getting a 20% operating profit, and we certainly achieved it but actually, if I had to sit here today, I'd say maybe we over shot the mark a little bit. We could've used some extra dollars to make some investment in infrastructure to take advantage of these markets that are developing. We certainly want to do that as we move into FY '12, and I think we'll be very happy if we can maintain an operating profit of 20%. And I think with that kind of growth that's out there, that will still yield significant results to the bottom line that will be very acceptable. But I think going forward, at least in FY '12, I think our increases on the top line and in the operating profit line will come more in line because we are going to make an investment to gross sales. Steven F. Crowley: So I trust the rationale for the investment is to get that top line moving faster. How much lag time is there likely to be between the investment mode and the top line moving up, which is kind of the first tranche of payoff of those investments? James L. Herbert: Well I'd like to think that some of them are a quarter out. There won't pay for themselves in the first quarter, but they're beginning to show in second quarter , I think the latter. What we're looking and we've got a number of pieces to strategy on the table now. We've typically looked at will it do within 12 months of implementation. So it's -- some of our R&D resources will take a bit longer because they do -- but our R&D returns, we push up through the pipeline because of the nature of our products, pretty generally, within a year so. It's a lot of different when you're dealing with pharmaceutical products or whatever when you got long, long lead times. But I think we'll begin at the sales and marketing areas, as Lon talked about. We'll see the results of those in the FY '12 year. We may not see them in the exact quarter, in which we began expenses.

Our next question comes from Tony Brenner of Roth Capital Partners

Does your increased investment also relate to general & administrative expense in 2012. Those numbers have been coming up pretty quickly in the last several years as you've made a number of acquisitions and invested internationally. It didn't sound like that would continue at the same pace, at least in terms of international new areas being entered. James L. Herbert: I'll cut back and let Lon Bohannon handle that because I get a little bit emotional when I think about what the FASB rules have done and how we have to account for acquisitions anymore. But part of what you saw this year was simply the way in which acquisitions had to be accounted for. They were not cash expenses. I think I'm pretty proud of, Tony, where we've continued to pull our percentage down on G&A expenses, I wouldn't expect, Steve. With that lead in, I'll let you and Lon pick up on it, but I wouldn't expect to see anything. I don't think we got anything major that we're looking at there. Lon M. Bohannon: Yes. I think that's right. We look at that particular category more as a percent of total revenues. I think for the year, we made some good progress, maybe even now about 80 basis points or something for the year going from 9.6 in G&A down 8.8. So we think we can continue to manage that and keep it under control. It is going to increase somewhat as volume goes up but not at the same pace. So we probably will have some increases in the G&A area. But as a percent of total revenues, it should not increase.

Okay. And secondly, Food Safety, in the fourth quarter revenues were up a little over 2%, I believe. Was that small increase only reflective of the mycotoxin detection sales? Or were there other factors holding back that number? Lon M. Bohannon: There were -- mycotoxins and particularly DON, was the primary difference between last year and this year. Just short -- our milling and grain group, which is selling predominantly those mycotoxin diagnostic test kits to the grain processors and flour millers and customers like that, was down just short of $1 million in the quarter. But when you break it down and look at it, in terms of where they were at compared to 2 years ago, they were up about 80%. It's almost double. So it was just such an unusual year last year that, that comparison was very tough for that particular group. There's only one other category that I would say that kind of bumped us in that quarter for the Food Safety and that was in the area of our instrumentation both our AccuPoint readers and our Soleris test systems. We're down in the quarter. That is not an unusual situation. We see that from quarter-to-quarter. We've actually talked about it on the conference calls. I think the important thing there is that for the year, we placed just as many instruments this year as we did last year, and of course, our interest in doing that is to get those disposable sales up. And it was very good to see that our samplers for the ATP test systems were up 13% for the year and our vials in the Soleris systems were up 20% for the year. We monitor that very closely, the pipeline in both of those areas looks very good and is very strong. So that was an anomaly that also dinged us in the quarter, but still looks very favorable going forward

I'm just -- the mycotoxin comparison problem now go away following the fourth quarter? Lon M. Bohannon: We have -- that was a long tail on that harvest from year before last. We will have some challenge in the first quarter.

Our next question comes from Paul Knight of CLSA. Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division Being from Nebraska but from a broker based in Asia, I got -- I'll start in Nebraska. What do you think -- do you have backlog on the GeneSeek business? What's the visibility relative -- I mean, I think the number one question is what's visibility versus the product business that you're used to? James L. Herbert: Well, we don't have -- in most of our businesses, we don't have any backlog. Certainly, if you looked at the business overall, we do have some backlog at GeneSeek, but again, not very much. Our guys came out of Australia last week with new business that we hadn't anticipated that is pretty sizable. It kicks in starting, I think, next month. So it's that business -- it's just still too early to -- for us to be able to predict the preciseness of it. I don't think it's any question, we predict it's good, and it's going to continue to be good because of where it sits. But it's just pretty difficult to be able to predict on a month-to-month basis what it's going to look like. Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division On the Asian side, specifically, China, how will you do -- how will you handle the distribution of product? Lon M. Bohannon: We have 2 primary distributors that we work with in China to help carry our products to the end-users. They work with some sub-distributors, as you might expect in such a large country, to get the products sold throughout. But we're also, I think, doing a good job of focusing on particular markets. We've had some success. I mentioned the plant disease test market over there. We've done some nice collaborations with some universities. That product is manufactured and comes out of our Neogen Europe operations. And most of those sales are going through a distributor, and Beijing has done a nice job. We've also focused on the general sanitation area with our ATP test systems. We had a very nice tender that we won last year in that marketplace, and that looks like an opportunity. And then I mentioned the dairy industry over there, which is rapidly growing. Jim even commented on that in his remarks. That represents a very good opportunity for us with both the Soleris product, as well as the dairy antibiotic test. So -- and we're handling that through a distributor over there. We are probably going to be looking at -- that's one of the areas from a sales and marketing standpoint where we will be making a little investment to support perhaps a representative office there or some other form of having our own people on the ground to build brand awareness for those products, and we think there are opportunities there that are starting to take place and take hold there. And that represent good future for the company. Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division How big are those markets as a percent of total Asia and rest of world versus South America? And what's the growth rate? Lon M. Bohannon: Well that's a much more difficult question to answer. A lot of that information is not readily available. There is -- I mean, the dairy testing market over there is sizable and growing, and I think it's more an issue of enforcement over there. They've been giving a lot of attention to their food safety issues and concerns over there, and they continue to draft regulations to place more emphasis on testing in those areas. It just takes time for that to get done in the individual processes -- or in the individual states and provinces over there. So it's a significant opportunity. I mean you can't have a 1.3 billion people and as they improve their diets in terms of the quality of the food that they have for their own internal consumption, they're going to need more of the products like we have. So we're going to continue not get too far ahead of ourselves but take advantage in specific markets as we see those opportunities develop. James L. Herbert: And that's one of those countries, too, when you really have to look at urbanization, it's what's happening over there. It's urbanization in much of Beijing and particularly, China's happening so rapidly as if taking people off of those little small subsistence patches in the countryside, and they're bringing them in the cities. And it's different as to who's producing the food and how they get it there. It's real challenges that they face but the challenges that they seem to be willing to accept.

Our next question comes from Jason Rogers of the Great Lakes Review.

I wonder if you could -- just a few number of questions here for Steve. Steve, do you have the cash flow from operations for the quarter or the year? Steven J. Quinlan: Yes. For the quarter, about $7 million. For the year-to-date, it's somewhere around $29 million.

All right. And then looking at CapEx, do you have that figure fiscal '11 and any expectations for fiscal 2012 that you have currently? Steven J. Quinlan: '11 is around $8 million, and it will approximate that level next year.

Okay. And then looking at the tax rate, I wonder if you could detail why that was off year-over-year for the quarter, as well as the expectations for fiscal 2012? Steven J. Quinlan: Sure. The first 3 quarters of the year, we're kind of booking at an estimated rate based on our expectation of how income earned in states and credits that we're going to receive are going to come out. And at the end of the year, when we've filed some of our state returns and calculate deductions we get for R&D credits -- or credits for R&D and deductions for domestic production activity, things like that, that kind of results on a refinement of our total year rate. So when we did the fourth quarter, it actually -- it distorts because it's -- once we adjust to kind of it, the fourth quarter's almost a plug or a fallout number. So that resulted in the rate being significantly lower in the fourth quarter. Next year, we're looking at 35.5% effective rate.

Okay. And finally, what was the impact for the quarter that FX had on sales and operating income? Steven J. Quinlan: I'll look a second here. it was an increase in sales of about $880,000 and operating income about $280,000.

Okay. That was a quarter, right? Steven J. Quinlan: I'm sorry. Were you asking for the quarter or the year-to-date?

Quarter. Steven J. Quinlan: Okay, I misspoke, that number is $580,000 for the quarter and $280,000 -- revenue, $580,000; operating income $280,000 for the quarter. Lon M. Bohannon: That currency translation is -- the volatility of it is just going crazy, and we have quarters when it's in our face and other quarters when it's in our back. You got the fourth quarter numbers. For the year, I think, our revenues were down $750,000 and our operating profit was down $800,000, as a result of currency translation. So it really goes back and forth from quarter to quarter sometimes.

The next question is from Brad Hoover of Sidoti

I want to ask first on the veterinary instruments. They were strong in the quarter, and I think you made similar comments earlier this year as well. And I was just curious. From fiscal 2011, was that pushed a lot by the over the counter market? Or is there something working or another geography that's helping you having success there with the instruments? And kind of what's your expectation as we move into fiscal '12. Lon M. Bohannon: It is -- it has been over the counter primarily. We've had a couple of things that were in favor in 2011. We continued to do very well with the farm and field retail stores. A lot of that market is moving through that form of distribution. You've heard us talk before about our relationship with Tractor Supply. When we started with them, they had something just over 300 stores in the U.S. They now have over 1,000 stores and continue to be aggressive in terms of their expansion. We work with a number of other retail store chains as well. They're just not as large as Tractor Supply, and that's been a good success for us. And then, we continue to just, look our sales people to a good job of looking for opportunities out there in that OTC market and including some opportunities to help us in fiscal year '12, with some of the larger animal health companies in terms of some private label opportunities. So all of that contributed to nice growth, again, for veterinary instruments in 2012. We feel pretty good about that piece of the market going in. I mean, in fiscal year '11, that contributed to the growth overall, and in fiscal year '12, we feel good particularly in the retail farm market about our opportunities. James L. Herbert: And remember, too, that a lot of the product goes into what I call food safety back inside the farm gate. Some of you remember our story of the D3 needle, the detectable needle. It was started in total recently, but it continues to grow with a product that is going in on a worldwide basis. It's detectable going through metal detectors and meat processing plants where regular needles are not. So we're doing a lot of stuff to the farm and fleet-type stores through Tractor Supply. We got more people in the field and we also get more traction if you look at the work we're doing with the major dairy producers in the United States and major swine producers are a big part of what we're doing. So it's coming from all around, it's great to see that old product line, that Ideal instruments product line, it's been a name brand for, gosh, I guess, 80-years-plus now, continues to grow and then take on a new face.

Okay, great. There seems to be a lot of rain, I guess, down South during the quarter. I was wondering if potentially later planting season would benefit you, maybe in terms of toxins or if there's other potential applications. And if you have any kind of thoughts on that, that would be great. James L. Herbert: I wish to hell I knew where the rain was down South. It don't extend over to what we got in Texas from the Southwest for sure today. The crop's kind of unusual if you kept up with the crop report that we saw back 4, 5 weeks ago. I guess, that surprised everybody. I'm not sure how accurate it is. It says for instance, we going to produce more corn than anybody thought, that we planted more acres of corn, and the FDA thinks the yields are going to be higher. It's a weather market out there playing. Now we're in that market somewhere. We're buying grains for our red mass [ph] feed business, but the -- I think typically the crop was late. It was cold and wet across a big part of the corn belt. The crop got in a little bit late, and there are a few spots were they're hit some heat areas over the course of last week or 2 where corn ought to be pollinating and anybody that keeps up with that knows that corn don't pollinate real well when you got hot weather, and it stays hot all night. It doesn't fill out every grain, every kernel of corn on the ear like you'd like to see. I think it's too early to be calling anything yet. I think we're going to have probably a pretty good year. There's going to parts of the country where the quality of the grain is not going to be as good, and they'll be an opportunity for us to help in analyzing that with our tests. There'll be parts of the country where we're not going to have a crop. But Texas, I think, you can just mark us off. We don't produce very much down there. But what we did produce, we're not going to have this year. But the crop I think -- the people that I've talked to, they've been riding across, particularly, the northern part of the corn belt, think the crop looks good.

Our next question comes from Larry Southam of My Broker, llc.

I wanted to get some further insight into the GeneSeek and especially NeoSEEK. This is -- do I understand correctly that this is done as a service in your labs? Or is this a product that also ships? James L. Herbert: Right. At this point, it is a service, a confirmation service in our lab. There's all kinds of stories particularly over the past week. It's been running around about where the 6 ugly sisters and whose testing and who isn't and who claims to be testing and who claims to have tested and who doesn't have. We're not there yet. There are a couple of really good labs that are doing a lot of work with the meat industry and now the food and vegetable industry that are able to get differentiation and send it to 96 hours kind of thing. We all find 87, E. coli 15787, and we all find that in 8 hours. And that's where the lightning rods were, of course, always attached. But as we look at the 6 ugly sisters we're still not there yet. I think what we succeeded in doing was the combination between GeneSeek and our microbiologists in Michigan. It was that we were able to do the genomics of the E. coli and be able to determine by genomics how to differentiate one from the other. So that's an overnight issue. So if we got a sample into our lab, we can tell you overnight whether -- which one of the 6 ugly sisters it happened to be other than just 87. Probably, the best guys in the field out there today are getting there. And with products that they have available, probably getting there in, I don't know, 96 hours or so. But us being in the testing industry and the lab industry, we're going have to pick up speed a little bit. The FDA's being criticized because they haven't declared all of this adulterants. The problem in declaring them adulterants is now we don't know how to find them. That organism is doing some genetic shift and drift on us, I'm sure, plus the fact that when we looked at back in the very beginning, years ago, I was involved in some of those conversations. Everybody knew that there was a few other servars of E. coli that were hemorrhagic. But we said as long as we can find 87, and whatever it takes to control 87 will control the rest of them. Well, I guess, we're finding out that, that wasn't true now. So it's an industry problem based on what you saw in the outbreak in Germany. It's no longer confined to the U.S., and the there are going to be opportunities for those of us in the diagnostic business to help solve that problem. There are going to be opportunities for people in the lab testing business. So it's interesting, but it's also heartening to see how fast this industry is responding.

[Operator Instructions] The next question comes from Joe Papven [ph] of Wells Fargo Unknown Analyst -: Cash flow question got asked. So that got it down about $1.21 a share. I assume that's correct? Steven J. Quinlan: $1.21 a share cash. Keep in mind we also have -- we have about $34 million of marketable securities, so we're at $55 million in total cash and securities. Unknown Analyst -: What are we earning on our cash? Steven J. Quinlan: Almost nothing. Between 20 and 60 basis points, really. Unknown Analyst -: Jim, that kind of leads into the acquisition question. When cash has become such a large part of the balance sheet, what do we do to earn something on it? Acquisition sounds like the way to go. James L. Herbert: You're being very polite, Joe. We are seriously looking. We've got I guess, at this point, no letters of intent anywhere and nothing that we can announce that's at that point. We've got soft circle around about 3 opportunities out there. It's a challenge not to let money burn a hole in your pocket. But we continue to look back say what we've done in the past since year 2000, we brought in 19 acquisitions, and they were all accretive, and we hadn't had a mistake that cost us a lot of money or constant lost effort. So it's... Unknown Analyst -: So I guess , another question. Were there accretive acquisitions out there? James L. Herbert: Pardon. Unknown Analyst -: Were there accretive acquisitions out there? I guess there aren't any. James L. Herbert: No, no, no, there's some. There's some out there. It's just you can't snap your finger and find them tomorrow, there's some places where the sellers don't want to be sellers, and there's some other places where we're just not sure how we can integrate it within our own operations. But we're not through looking. I was out last Friday looking at one. So there's still stuff there. Unknown Analyst -: What kind of gross margins are you seeing out of these folks? James L. Herbert: You mean the acquisitions, Joe? Unknown Analyst -: Yes, potential acquisitions. James L. Herbert: I think, again, I'll go back to conversations that we've had in the past. I think, it's more what do we see in the operating margin side, more so than the gross margin side, particularly, when we can find things that are bolt on. You can remember the GeneSeek store, the gross margins are not that great on GeneSeek but the operating margins -- I don't know where we ended up exactly this year, Steve, but probably 21% plus in the operating margin side. So I think when we look at acquisition opportunities, obviously, we don't ignore gross margins but the true test for us is to see when its integrated, how it fits -- fits in our structure on the operating margin line. Unknown Analyst -: And my only last comment is you haven't gotten the call already, I'd like to thank you, on behalf of the Obama administration, for maintaining a very high tax rate. James L. Herbert: I will reserve any comment on that.

Do you have the corporate jet order in yet? James L. Herbert: No. No, we decided not to buy the jet because we couldn't afford the taxes we were gonna have to pay.

Our next question comes from Peter Coil [ph] Unknown Analyst -: I guess, did I understand correctly that you are considering opening a representative office in China? Or is one already established there? Lon M. Bohannon: We do not have one established as yet. There's a couple of different options that you can do, and we're exploring whether or not there's value to doing that or introducing our own wholly-owned enterprise operation over there so that we can have some of our own sales and marketing presence in that country. So we're just in the early stages of exploring that considering what we might be able to do there to expand our sales and marketing efforts in China because we do see some opportunities there that look like they're starting to gain some traction. James L. Herbert: And we're over there a lot, Peter. By the way, it's good to hear from you. We're over there a lot. Lon's over there, Chuck Bird and our guys on the Food Safety side. There's spending a good bit down there. Our Animal Safety guys are over there. So it's not like we're trying to run it from a distance but it's just what is the correct organizational structure, I think. Unknown Analyst -: Could you comment on the approximate revenues that are coming out of China for you? Or do you prefer not to do that at this point? Lon M. Bohannon: I think we prefer not to do that. It's significant but... Unknown Analyst -: And it's growing? Lon M. Bohannon: Yes.

Our last question is a follow-up question from Steve Crowley of Craig-Hallum Capital Steven F. Crowley: We've covered a lot of ground, and we've talked to the kind of the potential impact of weather on the crop side of your business or the crop-related side of your business. In terms of the impact on the cattle herd and the dairy herd and what that means in terms of challenge to you guys, if it even means that? Can you help us understand that just a bit? James L. Herbert: Yes. It's still kind of early. I can give you all kinds of horror stories on what's happening in the Southwest. Some of you know I still run a little ranching operation down there, and we're out of everything. We got water but we actually began to liquidate part of the herds a week ago, and we're in better shape than some of my neighbors. That's going to impact the beef side. The dairy guys are -- they're finding enough to be able to keep those animals going, and it's not a huge piece of the country. It's all of Texas. And it's part of New Mexico, and it's part of Oklahoma but it happens to be a big place were there is a whole lot of the nation's total beef cattle. So that's going to disrupt the market, I think, a little bit here as we move into next few months. Some of these cattle are going to market early. We're killing cows that we wouldn't normally be killing just because we can't feed them. And there's enough out there that's going to impact it . I don't know, I think it's still early to tell what the weather's going to do for grains. It's just too early to tell. There's nothing happened yet that's, I think, going to impact mycotoxins. We tend to see that in August. We'll begin to look for hot dry weather that might impact the corn crop in August. It's worth watching, and I feel good that we've got a group of people that got their feet on the ground, and then they're following what's happening every day. So I think we'll be in a position to come to help the industry as we untangle what's going to happen. It's not a normal year.

There's no further questions in queue. I'll now turn the call back over to Jim Herbert for any closing remarks. James L. Herbert: Good. Well, thank you for your participation this morning, and let me make sure to remind you of our annual open house for investors and analysts that will be held here in Lansing on Thursday of this week. And if for some reason, we overlooked you with an invitation, there's still plenty of room under the big tent. And I'm sure more than enough food to go around. So you're certainly welcome, and we look forward to seeing you. Also, since I won't have the opportunity to talk to you again in the next month or so, let me ask that you watch out for the proxy along with the annual report that you'll be receiving in September. Proxy requirements have increased significantly as a result of new SEC provisions. And so when you get the proxy, don't rely on the broker to vote for you. Please vote it, and get it back for us. Thanks again for your support throughout the year that we just finished, and we look forward to talking to you in the next conference call when we can report the first quarter of this new year. That's all I have Monica.

Thank you. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.