Hello and welcome to the Neogen fourth quarter and year-end 2017 earnings results conference call. My name is Eric and I will be your operator for today's call. At this time, all participants are in a listen-only-mode. Later, we will conduct a question-and-answer session. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the call over to Jim Herbert. Please go ahead, sir.

Thanks Eric and good morning and welcome to our regular quarterly conference call for investors and analysts. And as Eric said, today we will be reporting to the results of our fourth quarter that ended on May 31 and of course the company's 2017 fiscal year-end. And I will remind you, as normal, that some of the statements that are made here today could be termed us forward-looking statements. These forward-looking statements, of course, are subject to certain risks and uncertainties. And the actual results may differ from those that we discuss today. These risks are associated with our business are covered in part in company's Form 10-K as filed with the Securities and Exchange Commission. In addition to those of you who are joining us today by this live telephone conference, I will also welcome those who may be joined by way of simulcast on the worldwide web. Following our comments this morning, we will entertain questions from participants who are joined on this live conference. And I am joined today by Rick Calk, Neogen's Chief Operating Officer, Steve Quinlan, Neogen's Chief Financial Officer and John Adent, Neogen's newly announced Chief Executive Officer. John has been with us now for only about 24 hours, so we have not asked him for any prepared comments but I would like to take the opportunity to welcome John and to introduce him to this group. John will replace me as CEO but I will remain as Executive Chairman and I will work closely with John in a transition of our responsibilities. I am excited to have John join our leadership team and bring his strong background to many of our activities, both domestically and internationally. Until recently John served as CEO of Animal Health International, a $3.3 billion animal health distributor, a…

Well, thank you Jim and welcome to everyone who is listening. Jim's already reported on the overall sales and profit performance for our fourth quarter as well as our entire 2017 fiscal year. I will try to provide some more detail on the performance of our food and animal safety segments as well as offering you a little perspective. As stated in the press release, revenues for our food safety segment increased 22% during the fourth fiscal quarter when compared to the same quarter of the prior fiscal year. For the entire fiscal year, revenues increased 17% when compared to the prior fiscal year. These results reflect the adverse impact of the strength of the U.S. dollar as compared to other currencies. Neogen's international operations report through the food safety segment and Steve will provide more detail on the effects of the adverse currency translations in his presentation. On the flipside, the 2017 increase in revenues for our food safety segment were aided by the company's acquisitions of Quat-Chem and Rogama during the fiscal year. The recently acquired companies report through Neogen's food safety operations in Scotland and Brazil, respectively. Organic growth for that segment was 9% for the year. And if you exclude the adverse currency effect on the revenues, the increase in our organic growth was 14%. Food safety highlights for the year included 19% increase in the sales of our rapid test to detect natural toxins. As I have mentioned on prior calls, this increase was largely due to the increased sale of tests to detect the mycotoxins DON and zearalenone in corn and wheat grown in the U.S., Canada and Europe. Now, increased testing of the existing grain stores will continue until the current grain crops are harvested mostly in the second quarter of Neogen's 2018…

Thanks Rick. As Rick and Jim have both indicated, we were very pleased with our results for the year which were solid. Before I talk about GeneSeek, I want to talk a little bit about the impact of currency translations on the company for the year. We have talked about the impact each quarter for the past two years and we will talk about it again today. Hopefully we won't be talking about this issue in 2018. The most significant negative currency impact to our revenues came from the Pound Sterling in which we conduct good portion of our European business which was worth 14% less this year versus the dollar on average than last year with the biggest part of that decline occurring as a result of the Brexit vote in the U.K. last June. The Euro was up and down during the year declining at one point to near parity with the dollar before recovering somewhat and was down 2% on average for the year. The Mexican peso declined 12% on average and continues to be somewhat volatile. At one point during the year, the peso fell to almost MXN22 to the dollar before closing the year at MXN18.5 to the dollar. The Brazilian Real on the other hand strengthened significantly during the year and was 13% higher on average than this time last year, helping boost the comparative revenues and earnings of our Brazilian operations. Overall, the negative impact of the stronger dollar on our comparative revenues for the fourth quarter was $1.5 million and for full year was about $7.2 million. The negative impact of translations was about $0.01 per share for the quarter and $0.06 per share for the full year. In constant currency, our overall growth for the year was 15% versus the 13%…

Thanks Steve. Without being repetitive, 2017 growth continued to be good despite those few short-term setbacks we talked about. We lost some revenue from sales of small animal pharmaceutical product but we expect recover this late in the fiscal year. We dropped distribution of some DuPont products that had some impact on revenue but we did that in favor of our products that will contribute several times more income in the year ahead. But our international growth in sales and our acquisition progress this year were great and they happen to be in the same bundle. In December 2016, we acquired Quat-Chem, a well-established agriculture cleaner and disinfectant company located in Central England. We also acquired Rogama, an insecticide and a rodenticide company that's located in Brazil. Of course, both of those added to our worldwide strategy in biosecurity to supply the animal protein market with cleaners, disinfectants, insecticides, rodenticides to help produce higher-quality safer animal products. Now these also added of course to our international growth and both were bolted on to strong management teams that we have in both Neogen Europe and at Neogen do Brasil. In total, our international sales for this past year accounted for about $129 million in revenue or 35.8% of total revenue and this is up from last year's 33.5%. The geographic synergy of our genomics business that Steve talked a bit about is also a help in that international growth. We earlier acquired Deoxi, the leading animal health testing company in Brazil. During the past year, we greatly expanded our own genomic testing laboratory at the Neogen Europe operations in Ayr, Scotland. Both of these have communications back to a central genomics lab in Lincoln, Nebraska, which by the way is that largest animal genomics testing lab in the world. We think…

[Operator Instructions]. Our first question comes from Kurt Kemper from Hilliard Lyons. Kurt, your line is now open.

Good morning, guys. Thanks for taking the questions. A couple of quick ones before I get to kind of more of an overview. On expense control, that was pretty strong sales and marketing cost control. I was just wondering if that was kind of a more of a one-time item? Or if that's the integration of acquisitions and other activities you are doing to control spending there?

Yes. Thanks Kurt. I think you are going to see it was good control in the fourth quarter. Jim was talking a little bit about the 2018 budgeting and we are continuing to invest in our sales and marketing group. So I don't think that it would be at the 5% rate in 2018. But we obviously will continue to exercise strong control of our expenses and match them to our revenue growth.

And one of the things, Kurt, that makes it work so easy for us is a lot of these are bolt-ons. And from a sales and marketing standpoint, when you already got access to the market, you have already got a group that's out there, you can add another product line or add another product to what they are doing and it beats starting over again. So we will continue to see some of that too.

Okay. And then one for Steve. Do you expect the tax rate to change much for this coming fiscal years?

I think last year, we had some R&D credits that we took and amended some returns. This year, when we closed the year, that effective rate was about the same as last year's. I think we are going to be in that 34% to 35% rate.

Okay.

We are not any strategic decisions based on what might happen in Washington. We are just going to keep playing the hand that's been dealt us.

Okay. Fair enough. And then last question. I just kind of wanted to get, what you all hope to accomplish on the M&A front and how the landscape looks in terms of opportunities?

Obviously I can't talk a lot about what's not public but there's some continued opportunities. It's an industry that's seeking to consolidate. There is a lot of cash floating around. We looked at and missed a couple of opportunities. I shouldn't say missed, we walked away from a couple of acquisition opportunities when valuation we thought just got out of any control. So when you got big money and equity capital trying to find a home, it is pretty hard to compete. And we don't try to compete with them. But we have got ourselves circled around several things and probably nothing big we are looking at now that's been available to us. But we think will be able to continue to bring in some new stuff that will either add to product line or give us access to some technology or in a lot of places give us access to some international market. So nothing concrete to report, but we think we still got a good year.

Okay. Thank you.

Thank you.

Our next question comes from David Westenberg from C.L. King. David, your line is now open.

Hi guys. Thanks for taking the question. Just on the ThyroKare and I am sorry if I missed this in the opening comments. Is there any change in expectations around the FDA approval or getting that FDA approval in ThyroKare?

No. Probably no changes. There is a long process as to Washington. Our FDA, in particular, moves at its own speed. That's about $6 million, most of which was comparison year-to-year is behind us. It's a good product. We controlled that market at one point in time. We just didn't go forward, if you remember David and we were operated under the authority of FDA, but without any requirement for registration and we had a competitor that decided to go register the product and when they did, all that suspended sales for many of us that didn't have registration. So we are still working on it and will get it done. I think I mentioned in my comments I expect that we ought to have that registration back in place by the end of the fiscal year. So that will open up again. It's got a demand from several of our distributors. It is a strong product and we are a strong player there with those people.

Okay. And then do you have any expectations in changes of strategy with John as the CEO in terms of maybe with M&A or with just overall strategic focus?

No. That is one thing that John and I worked out several months ago that, it's not broken, doesn't need fixing. And I think John's very comfortable with our strategy going forward. Mine and his program is, we strengthen the bench now and it's an opportunity to get bigger and get there faster. So we think we are zeroed in the right places and John certainly has a similar mind.

Got it. And then I was pretty pleased with the operating margin in this quarter and on a go forward basis, getting back to 20%, is this something that can be happening in next, let's call it, couple of quarters? And then just an add on to that, is there any potential benefit in terms of margin expansion with better integration or maybe some sort of ERP system integration or anything like that that could maybe be an unexpected margin expansion potential here?

Well, I don't think unexpected. To the contrary, I think it's expected that we continue to improve that operating margin with 20% as being the bogey. There is some things obviously that come in that are difficult to predict. You have got the non-cash items that impact that that have an impact on where we are going. Though if we continue to do bolt ons, that helps improve the margin. And that's the reason that, as you just recently picked up coverage, that we like to talk about net operating profits and not gross margins because we can bring in a product that's got a gross margin below what our average is but it has got no operating cost below the line, it's a major contributor. So some of that has been acquisitions that we bring in, how long it takes us to bring them in, what we have to do with the accounting for the expenses used to, it was in the good old days when you made an acquisition you folded in all the legal costs and everything else it took to acquire product and you divided it by 17 years and you knew where you are going, well, we are accountants, so we made life more interesting since then. And so it sometimes it is a little more difficult to predict but if you look at, as Steve talked about, cash flow contribution for the year, from that standpoint, we are awful proud of where we are.

Okay. Thank you. I will jump back in queue.

Thank you.

Our next question comes from Charles Haff from Craig-Hallum. Charles, your line is now open.

Hi. Thanks for taking my questions. Jim, I guess focusing on the transition from you over to John, a lot of investors have associated you with the culture of the organization. You built this company. It's quite uncommon to see a company of your size still run by a founder. I know you have a really active work schedule. I guess I was just wondering why now to pass over the reins to John? Is it because he was available because of the AHI Patterson acquisition? Or was there something else here?

Thank you Charles and good to have you on the call. Now the transition idea goes all the way back. This is not, some might say it was unexpected. Well, it wasn't unexpected from the Board. We began to look at where we were last July and where we needed to be and where the company was going. I still feel good. I had to see all my doctors within the last month and everybody gave me a clean bill of health. And I have got a three year warranty but one of these days somebody is going to say, what if you don't cross the road fast enough and the beer truck gets you? In the event that happened, we didn't want to leave everybody in lurch. And really, we have got so much to do now that, I told John, I want to cut back to 50-hour week and he is going to have to help me get that done. And I am going to take off an extra two weeks and go to the ranch. But we still got plenty of work for all of us to do. John is going to add a tremendous amount of experience to the company and what we are doing. He is going to help us do some things that we won't have to learn for the first time. He comes out of running a $3.3 billion company. So he understands big data and IT better than I do and he understands what to do with HR issues that we won't have to deal with for the first time. So I think he is going make a major contribution. Obviously I get more credit than I am due. I have been the chief cheerleader for a lot of years, but there is pretty damn strong team standing behind me everywhere we go and that team is still there and very much intact. But thank you for your kind words, Charles and your continued support of what we are doing.

Yes. Well, I guess it goes without saying that a lot of people, including your 1,500 employees owe you a big debt or gratitude and you have you really created a great company here and I am looking forward to seeing it move forward. And then Steve, question for you on the organic growth in the fourth quarter for food safety and animal safety fourth quarter. What were those numbers?

Food is about 8% and animal was, we actually contracted 4%.

Okay. And then, on the gross margin side, usually when we see this mix benefit to food safety and the deceleration in animal safety, we tend to get a strong gross margin improvement. But we didn't really see the full bang, I guess, for the buck on the mix side. Was there anything going on? I know you have had to match some prices of some of your European competitors. Was there any change in pricing dynamic this quarter? Or did you think the gross margin was kind of where you thought it would be?

Actually, Charles, it came in really very close to where we thought it was going to be. What you probably didn't or couldn't see until we tell you is that we absorbed the Quat-Chem and Rogama acquisitions and that damped really a little bit of the gross margins on the overall company on the food safety side. But we were very pleased with how the gross margin came in in the fourth quarter.

Okay.

Charles, as I am sure you know, another accounting rule which I just really love, you bring in new inventories and you can't bring them in cost. When you buy a company, you have got to bring them in based on what some might think the value is. So when you turn around and sell those, you don't get the same gross margins out of them. So those purchase and sale of inventories had some impact on us during the year. and it's a part of the operating story versus gross margins that those are some bolt-ons and we didn't need to have some extra people as part of the operating cost. So we had less operating costs associated with those.

Okay. Great. And maybe I will ask one more and then I will jump back in the queue. I want to be respectful to other people's time here. In terms of the food safety segment analysis that you provided, was there anything, Steve, that moved from animal safety into food safety with the two new line items that you have in food safety, the rodenticide and genomics piece? Or was everything between food safety and animal safety still the same as you have reported it in the past?

It was the same, Charles. If you will notice in that table, we did break out of the other kind of that rodenticide, insecticide and disinfectant line because that other was getting to be a very large number it would have made sense to break it out. But the numbers as they are, the exact same from a comparative perspective.

Okay. Great. Thanks Steve and I appreciate the additional granularity. I will jump back in the queue.

Thanks Charles.

Our next question comes from Brian Weinstein from William Blair. Brian, your line is now open.

Hi guys. Thanks for taking the questions. A question on genomics. It looked like, obviously for the full year, growth was very good. Steve, I think you gave the number of 19% for the full year. But I think the fourth quarter was a little bit slower with kind of up 9%. Can you just talk about, was it just a comp issue, was there anything going on in the fourth quarter that stood out to you as to why growth appeared to slow a little bit there?

Yes. Actually, it's a comp thing. Brian. We added to the Scotland lab last year in late third quarter and they really started ramping up in the fourth quarter. So when you do that comp, what looks to be a softening is really just a difficult comp. Their business is still going gangbusters.

So longer term, we should still expect mid-teens plus type of growth rate for, I guess, the combined genomics business between the two, obviously food safety and animal safety, but combined we should still be thinking about longer-term mid-teens plus type of growth?

Yes. And we look at it back here, we have got the genomics work that's going on in Lincoln that's part of the GeneSeek operations. We then spun out what we are doing in Scotland and that a year ago probably came back. A big part of that could have been done in Nebraska where we are now able to do it in-country. We are doing more work at Deoxi in Brazil now direct. And we will be looking at some other opportunities going forward. So what we do back here is, our guys pull together for me a consolidated genomics number at the end of every month and when you compare it, regardless of what location it is and what is reported, if you reported as a part of that business segment, it's really looking awful nice. And I mentioned in my comments, it has now gone beyond just what we might be doing on animals, our own, few of the raw inputs. But we are growing over on the genomics side for food safety. For instance, we have got a major company that had a spoilage problem in fresh meat and they didn't figure out what it was and they sent it in to us and said, where shelf life is not lasting as long as we need to. Can you find it and make it long term. Well, bravo, we did and we told them where it was and they never expected to find that it was in an ingredient. They went back and fixed it. So those are the kind of services that genomics can do for us that even help on the food safety side.

And you mentioned that margins were improving a little bit there. Can you just update us on where the margins are? Historically, this has been well below corporate average on the margin side. Where are they now? And can you give us an update on where you think these can be?

You are talking about the genomics side now?

Yes, sir. Sorry about that.

Yes. When we bought the business, Brian, the margins were, gross I would say were mid-30% and then the last couple years they had moved a little bit lower, but as Jim said the operating expenses are still pretty strong there. But we recently have done some improvements, gotten some improvements on the cost side and those gross margins have expanded back up to that mid-30% level and I think that we will be able to hold on if not improve them with some efficiencies going forward.

Yes. A couple of things there. Our reagent cost is improving and there's several reason for that. Plus the fact that, we are finding more and more ways to automate. We have got almost totally automated system at some animal samples that instead of a hand pulling them out and doing the segregation and get them in, we can actually load up a machine that does that and we are working on a new machine now that will help in being able to do hair samples. Still hair samples are a bit of a tedious problem because you pull in the animal that tells Listeria, pulling the hair out of the tail of a day old Holstein calf in Inner Mongolia or China and send it in and 10 days later we can go back and tell you whether it was safer as a replacement heifer or not. But in the meantime, somebody has got to arrange that hair and find those little follicles on the end and punch them out and get them in as a sample. And so those are the kind of things that we see where we have an opportunity that ought to make today as we get large and just economies of scale are helping there too.

Great. And last one for me. Thinking about margins for next year as we have got operating margins expanding about 100 basis points over 2017. So I just want to understand some of the headwinds and tailwinds and things that we should be thinking about that are specific to next year to the fiscal year in terms of how we should be thinking about how much to expand those margins?

I think you are trying to come in the back door and ask us to forecast.

Never, never. I am just really --

Nice. But we don't respond very often.

Just thinking about then headwinds and tailwinds. Is there anything that's sort of unique or special that we should be thinking about to make sure we are accounting for that would be taking place in 2018 without getting specific on the numbers then?

We have got some new products coming out this year, Brian, that we are pretty excited about on the food safety side. And as we have talked before, anytime we have that expansion on the food safety side of the business unit, you may see some margin expansion. So I think your model is probably correct when you say 100 basis points. Obviously we are not going to talk about that. But if the food safety side is expanding quicker than the animal side, there could be some margin expansion there.

Great. I appreciate it. Thank you guys.

Thank you.

Thanks.

[Operator Instructions]. Our next question comes from David Stratton from Great Lakes Review. David, your line is open.

Good morning. Thanks for taking the question. Just to piggyback on some of the other questions regarding John. I know that you said the strategy isn't going to change and you mentioned IT, data and then also HR as areas of strength that he might bring. But also when we look at his international experience, can we expect to see a more aggressive expansion internationally given his background?

I don't know what more aggressive means. We are pretty aggressive now. But John does bring a lot to that in areas that he and I discussed to begin with. John operated in international market. It goes back few years since he was there, but he has a good understanding of that market where we are and particularly as we look at our animal safety business, it doesn't stop at Atlantic or the Pacific. So John has had actual working knowledge of what's going on in some of the places. For instance, we will be expanding in the EU and other areas. And among other things, he understands the culture and the people and that's pretty important. I can't vouch for it, but they tell me that he speaks perfectly good Mandarin Chinese. So if we got somebody that understand the marketplace and can communicate in the language, I think we are going to see some, he and I are planning o see some growth going on there.

All right. Thank you. And then the CapEx outlook for 2018. Did you mention that? Or would you be willing to? I know that you mentioned some projects on the horizon there. Just any more detail around that would be helpful.

We did not mention that. I think we spent somewhere around $14.5 million this year. And that's probably a good place holding number, somewhere in there, say $15 million for next year. Some of the expenditures that we are making that will be CapEx but as much will be investing that would be running through the income statement in terms of some of those IT investments that we are talking about.

Okay.

And we have got some automation stuff that would come in there. But it's in chunks of $0.5 million. So it would be the kind of chunks we are looking at.

Got you. And then one last thing with all the numbers going around. Did you give a full year organic in constant currency number?

In constant currency?

Yes.

Well, let me give it to you.

All right.

In constant currency, it was 6%.

Okay.

And we did speak to the food safety side. That was about 14%. Animal was about flat. And that averages about to 6%.

All right. Thank you very much.

[Operator Instructions]. Our next question comes from Paul Knight from Janney. Paul, your line is now open.

Hi guys. This is actually Bill, on for Paul. How are you doing?

Hi Bill.

First, maybe just on the food safety and animal safety genomic services. Could you just talk about what's driving the different growth rates you are seeing from both of those end markets?

Well, the better quality food is of course driving a lot on the food side, if that's what you are asking. And one of the problems, the Food Safety Modernization Act is there. If it's fully enforced, it's going to make a lot of changes. It won't get fully enforced for a while because it there is just not dollars to do it. But our Listeria Right Now program is the newest one out there, is an example of what are happening. Now that's not on the genomics side, but that's is on the testing side is because of what we have been able to do. There has been a tendency for people to not know whether, do I test for Listeria and find out that I have got a big problem and I have got a go back and pull food out of the marketplace and what happens when I do that. We all know what the right answer is, but that might not always be the answer. Now if I have got to test it, I can go in because I start that line up in the morning and I know about where I might have problems with Listeria and I can pull samples and I find it I can clean it up before I ever start that conveyor belt running. And that's where we see a lot of opportunities developing there is in those kind of areas. When you move over to the genomic side, as an example, we have got our customer who knows that they have to be concerned about the presence of E. coli 0157, a pathogen that we have all talked about for a long time. And so, we have got a library in our genomics lab of some samples from different, we don't know where they came from, but they are under different codenames and if this customer finds a problem with an E. coli, they can send it to us. We can run that through the system and we can say, it look like S39 and they know where S39 is, so they can go there and say we know where it is, now we have got to go and stop it, fix it, whatever. So those are the kind of new things that are coming along. It's going to make it the much easier to really fix the food safety issue without always been concerned about the legal issues that surround it. So those are the fast breakthrough areas that we think are going to be so important. And you know, that's always been our mission, is to provide those solutions.

Got you. And then just one last one in terms of M&A. Obviously you acquired Deoxi in April of last year. As you think about the growth of the genomic services business, is that something that you can build organically and move into other countries? Or is that something that's going to continue to be a focus on M&A?

Well, it would be both. Deoxi will be a big contributor this year. If you remember the story, Brazil has more beef cattle than anybody in the world and that's a major place for beef cattle. It's also a different breed. It's called the Nelore breed, which is a different breed than what we are accustomed to seeing bottom source cattle like we got in this country, they are not Angus, they are not even Brahman process. They are different. We developed a Nelore model that will help those guys to predict the right heifers, to say. And a lot of talking to, Terri and I were talking to somebody yesterday and he said, you mean for $25 a heifer, I can decide which ones to keep and which ones not to. And he said, well that's an easy decision to make. There is no problem there. So those are the kind of things we are seeing that will come out of what we are doing. And on top of that, certainly in Brazil, we actually are doing some work on animals that might be going into some other countries around. We have got some Uruguay and samples that come through. In that part of the world, it makes it a little easier maybe to get to them and you are dealing with animals that are a little bit different. So that's going to help organic growth considerably. I do think that there's a place or two and don't want talk a lot about it yet, but there is place to where we can expand through M&A to give us another set of laboratories to deal with a different kind of animal population and to put the laboratory closer to the point of the animal. So I think we would really like to see another country expansion going into that we will look this year.

Great. Thanks guys. Have a good one.

And our final question comes from Charles Haff. Charles, your line is now open.

Hi. Thanks for taking my follow-up question. Steve, on veterinary instruments, it came in a little bit lighter in the quarter than I was expecting. Is there anything to our call out there? Do you think that this is kind of where the market growth rate is? Any help you can give us on understanding the veterinary performance in the fourth quarter would be great.

Charles, there wasn't anything that really jumped out. I think the quarter was a little bit soft in that space, primarily because a couple of the larger distributors that we do business with recently been purchased in the last couple years and we have just seen that there is less uptake of inventory. They are being a little more fiscally responsible and we just had soft orders in the fourth quarter. But nothing, there is really no change in the market growth there.

Okay.

From time to time, it gets a little up in there. We do, what I call, OEM sales. So we may make a specific product for a major pharmaceutical company that they give away in order to support the sales of their vaccine or sales of a pharmaceutical product. And when they take on one of those big orders for something like that, they don't come in every month. So it could be that it was a month different one year to next. That business continues to be strong for us, but it's a bit unpredictable.

Okay. Thank you for the color. And then my last one is on the international side. Jim, on Brazil, there has been a lot of political upheaval down there. It continues and just when we think it's over, it starts again. Now we have the problem with JBS and some of the issues down there. What's your perspective right now on Brazil? Are you full steam ahead? You talked about a little bit on the genomic side. Are you taking a little bit of pause in terms of investment? How should we kind of think about Brazil for your company right now? And then I have one follow-up. Steve. I wanted to get the constant currency breakouts by major regions that you usually give us. Thank you.

Yes. I would be happy to talk about Brazil. JBS obviously were a major player in that market and they are a major customer. And I don't express any opinion about what they did was right or wrong. We see that that's, my feeling at this point is that, one, the Brazilian economy is too strong to let it be strangled by the corruption that's going on. They have got some problems that they got to cleaned up. It will get cleaned up. But I think that economy is just too strong. It won't be another Argentina in my opinion. It will make a difference, maybe with JBS. JBS is strong in the United States and in Mexico. They are stronger outside of Brazil. It may mean that they take, in fact they have already taken a look at how they might spin off their cattle feeding operations in the U.S. to supply and support and some of their U.S. beef business. That's somebody else will pick that up. Somebody else will feed those cattle. We will still be there. But long-term, we just have a real strong feeling about Brazil and what's going on, not just the cattle business. We talked about that. But Brazil still is going to be a major feeder to the world and we think that's not going to change. We look at coffee, we look at fruit, we look at a lot of things that's coming out of there. They are major soybean producer now. I guess maybe the largest in the world. Those things are not going to change as a result of the corruption. And I just think they will overpower it.

Okay. Thanks Jim. And Steve, on the constant currency growth rates for EU, Mexico, Brazil and China?

Constant currency in Europe was 32% versus their 13% reported. Brazil was 45% constant currency and then converted it was 65%. Mexico was up 6% in constant currency and then adjusted was about a decline of 7%. And China was 32% and that converted to 24%. And India was about upper 60% growth in both.

Great. Thank you very much guys for taking my questions.

Well, thank you for the questions.

We have no additional questions at this time. I would now like to turn the call over back to Mr. Herbert for closing remarks.

Yes. Well, thank you all and thank you for your continued support. Tomorrow or Thursday, I guess it is, I should in fact wanted to tell you that please if you hadn't received an invitation and you are within reaching distance, our annual shareholder open house and picnic is here in Lansing tomorrow afternoon starting by 4:30, or 4:00, 4:30 and the promises to Thursday. I am sorry, let me get this straight. Thursday and don't come the wrong day. You won't get any food. So Thursday starting about 4:00 o'clock and that's always a great time, a lot of people there and we would love to see you. We will have -- it will kind of like county fair day. We will have exhibits under the big tent with what we are doing in a lot of places and you will get to see products and talk to real world people. So we hope you can make it. In the meantime, we will thank you for your support for the full year. It's has been a great year and an even more exciting year as we look ahead. So good day.

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