ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| |
(State of other jurisdiction of incorporation organization) |
(I.R.S. Employer Identification No.) |
Title of each Class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ |
Accelerated filer ☐ |
Non-accelerated filer ☐ |
Smaller reporting company | |||
Emerging growth company |
ITEM 1. |
3 |
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ITEM 1A. |
14 |
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ITEM 1B. |
19 |
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ITEM 2. |
19 |
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ITEM 3. |
20 |
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ITEM 4. |
20 |
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ITEM 5. |
20 |
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ITEM 6. |
22 |
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ITEM 7. |
23 |
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ITEM 7A. |
34 |
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ITEM 8. |
34 |
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ITEM 9. |
34 |
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ITEM 9A. |
34 |
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ITEM 9B. |
36 |
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ITEM 10. |
36 |
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ITEM 11. |
38 |
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ITEM 12. |
38 |
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ITEM 13. |
38 |
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ITEM 14. |
38 |
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ITEM 15. |
38 |
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ITEM 16. |
38 |
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40 |
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F-1 |
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Subsidiaries |
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Consent of independent registered public accounting firm — BDO USA, LLP |
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Section 302 Certification of Principal Executive Officer |
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Section 302 Certification of Principal Financial Officer |
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Section 1350 Certification pursuant to Section 906 |
ITEM 1. |
BUSINESS |
• | Milling and grain |
• | Meat and poultry ready-to-eat |
• | Prepared foods and ingredients |
• | Fruits and vegetables |
• | Seafood |
• | Dairy |
• | Beverage |
• | Water, |
• | Healthcare |
• | Traditional culture media markets |
• | Food service |
• | Nutraceuticals |
• | Companion animal veterinarians. |
• | Livestock producers, veterinarians and breed associations. |
• | Distributors. |
• | Retailers. |
• | Breeding and genetics companies. |
• | Diagnostic labs and universities. |
• | Other manufacturers and government agencies. |
• | Lab M Ltd., located in Heywood, England, which manufactures an extensive range of microbiological culture media, supplements and immunomagnetic separation techniques; its proficiency testing systems are used in laboratories around the world. |
• | Quat-Chem Ltd., a Rochdale, England-based chemical company that specializes in the development, manufacture and sale of agricultural, industrial, and food processing biocidal hygiene products, including cleaners and disinfectants. Quat-Chem sells its products on a global basis, with a focus on markets in the U.K., E.U., Middle East and Asia. |
• | Neogen Italia, a Milan, Italy-based business acquired in January 2020, directly markets and sells Neogen’s products in Italy. |
• | Abtek (Biologicals) Ltd., acquired in February 2020, a developer and supplier of culture media supplements and microbiology technologies. With the acquisition, Abtek’s Liverpool operations became Neogen’s third global microbiology manufacturing facility, joining locations in Lansing and Heywood. |
USA |
International |
Expiration |
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Natural Toxins, Allergens, & Drug Residues |
21 | 33 | 2021-2026 |
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Bacterial & General Sanitation |
5 | 0 | 2021-2022 | |||||||||
Life Sciences |
0 | 4 | 2024 | |||||||||
Vaccine |
1 | 0 | 2028 | |||||||||
Veterinary Instruments & Other |
13 | 44 | 2020-2042 | |||||||||
Genomics Services |
18 | 4 | 2021-2029 |
ITEM 1A. |
RISK FACTORS |
• | Pay damages, including up to treble damages and the other party’s attorneys’ fees, which may be substantial; |
• | Cease the development, manufacture, importation, use and sale of products that infringe the patent rights of others, through a court-imposed injunction; |
• | Expend significant resources to redesign our technology so that it does not infringe others’ patent rights, or develop or acquire non-infringing intellectual property, which may not be possible; |
• | Discontinue manufacturing or other processes incorporating infringing technology; and/or |
• | Obtain licenses to the infringed intellectual property, which may not be available to us on acceptable terms, or at all. |
ITEM 1B. |
UNRESOLVED STAFF COMMENTS – NONE |
ITEM 2. |
PROPERTIES |
Location |
Square Feet |
Operations |
Ownership | |||||
Lansing, Michigan |
300,000 | Corporate, Food Safety, Animal Safety | Owned | |||||
Lexington, Kentucky |
210,000 | Animal Safety | Owned | |||||
Kenansville, North Carolina |
33,500 | Animal Safety | Leased, expires 3/2021 | |||||
St Joseph, Michigan |
7,000 | Animal Safety | Leased, expires 5/2021 | |||||
Randolph, Wisconsin |
137,000 | Animal Safety | Owned | |||||
Pleasantville, Iowa |
59,000 | Animal Safety | Leased, expires 12/2020 | |||||
Lincoln, Nebraska |
41,000 | Animal Safety | Owned | |||||
Memphis, Tennessee |
66,100 | Animal Safety | Owned | |||||
Turlock, California |
29,500 | Animal Safety | Leased, expires 9/2022 | |||||
Edmonton, Alberta, Canada |
4,800 | Animal Safety | Owned | |||||
Ayr, Scotland, United Kingdom |
74,000 | Food Safety | Owned | |||||
Heywood, England, United Kingdom |
26,800 | Food Safety | Owned | |||||
Rochdale, England, United Kingdom |
60,000 | Food Safety | Owned | |||||
Liverpool, England, United Kingdom |
4,000 | Food Safety | Leased, expires 12/2025 | |||||
Milan, Italy |
1,000 | Food Safety | Leased, expires 12/2020 | |||||
Indaiatuba, Brazil |
6,800 | Food Safety | Leased, expires 5/2021 | |||||
Pindamonhangaba, Brazil |
76,000 | Food Safety | Owned | |||||
Naucalpan, Mexico |
27,000 | Food Safety | Leased, expires 10/2021 | |||||
Buenos Aires, Argentina |
2,200 | Food Safety | Leased, expires 8/2020 | |||||
Ciudad de la Costa, Uruguay |
900 | Food Safety | Leased, expires 10/2020 | |||||
Santiago, Chile |
2,700 | Food Safety | Leased, expires 3/2022 | |||||
Shanghai, China |
7,900 | Food Safety | Leased, expires 10/2021 | |||||
Kochi, India |
5,500 | Food Safety | Leased, expires 4/2021 | |||||
Gatton, Australia |
4,600 | Animal Safety | Leased, expires 1/2023 |
ITEM 3. |
LEGAL PROCEEDINGS |
ITEM 4. |
MINE SAFETY DISCLOSURES — NOT APPLICABLE |
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
5/15 |
5/16 |
5/17 |
5/18 |
5/19 |
5/20 |
|||||||||||||||||||
Neogen Corporation |
100.00 |
105.63 |
135.41 |
215.97 |
160.75 |
203.17 |
||||||||||||||||||
NASDAQ Composite |
100.00 |
98.82 |
125.26 |
152.00 |
153.87 |
197.98 |
||||||||||||||||||
NASDAQ Medical Equipment |
100.00 |
105.80 |
140.72 |
197.84 |
194.22 |
235.57 |
ITEM 6. |
SELECTED FINANCIAL DATA |
Year Ended May 31 |
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2020 |
2019 |
2018 |
2017 |
2016 |
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(in thousands, except per share data) |
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Income Statement Data: |
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Food Safety Revenues |
$ | 212,691 | $ | 213,474 | $ | 194,477 | $ | 170,034 | $ | 145,057 | ||||||||||
Animal Safety Revenues |
205,479 | 200,712 | 203,453 | 188,243 | 172,172 | |||||||||||||||
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Total Revenues |
418,170 | 414,186 | 397,930 | 358,277 | 317,229 | |||||||||||||||
Total Cost of Revenues |
221,891 | 222,266 | 211,658 | 189,353 | 167,898 | |||||||||||||||
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Gross Margin |
196,279 | 191,920 | 186,272 | 168,924 | 149,331 | |||||||||||||||
Sales and Marketing |
69,675 | 70,230 | 66,929 | 59,380 | 53,866 | |||||||||||||||
General and Administrative |
44,331 | 40,791 | 38,294 | 34,214 | 29,189 | |||||||||||||||
Research and Development |
14,750 | 12,805 | 10,855 | 10,385 | 9,890 | |||||||||||||||
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Operating Income |
67,523 | 68,094 | 70,194 | 64,945 | 56,386 | |||||||||||||||
Other Income (Expense) |
4,782 | 4,865 | 3,271 | 1,728 | (873 | ) | ||||||||||||||
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Income Before Income Taxes |
72,305 | 72,959 | 73,465 | 66,673 | 55,513 | |||||||||||||||
Provision for Income Taxes |
12,830 | 12,783 | 10,250 | 22,700 | 18,975 | |||||||||||||||
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Net Income |
59,475 | 60,176 | 63,215 | 43,973 | 36,538 | |||||||||||||||
Net (Income) Loss Attributable to Non-controlling Interest |
— | — | (70 | ) | (180 | ) | 26 | |||||||||||||
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Net Income Attributable to Neogen |
$ | 59,475 | $ | 60,176 | $ | 63,145 | $ | 43,793 | $ | 36,564 | ||||||||||
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|
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Net Income per Share (basic) (1) |
$ | 1.13 | $ | 1.16 | $ | 1.23 | $ | 0.87 | $ | 0.73 | ||||||||||
Net Income per Share (diluted) (1) |
$ | 1.13 | $ | 1.15 | $ | 1.21 | $ | 0.86 | $ | 0.72 | ||||||||||
Weighted Average Shares Outstanding (diluted) (1) |
52,860 | 52,425 | 52,149 | 51,165 | 50,500 | |||||||||||||||
Year Ended May 31 |
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2020 |
2019 |
2018 |
2017 |
2016 |
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Balance Sheet Data: |
||||||||||||||||||||
Cash and Cash Equivalents and Marketable Securities |
$ | 343,673 | $ | 267,524 | $ | 210,810 | $ | 143,635 | $ | 107,796 | ||||||||||
Working Capital (2) |
488,917 | 411,278 | 337,101 | 256,959 | 219,628 | |||||||||||||||
Total Assets |
797,182 | 695,740 | 618,009 | 528,409 | 449,940 | |||||||||||||||
Long-Term Debt |
— | — | — | — | — | |||||||||||||||
Total Equity |
725,177 | 637,899 | 560,175 | 471,757 | 404,161 |
(1) | On December 29, 2017, the Company effected a 4-for-3 10-K have been adjusted to reflect the stock split as if it had taken place at the beginning of the period presented. |
(2) | Defined as current assets less current liabilities. |
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Consolidated revenues were $418.2 million in fiscal 2020, an increase of 1.0% compared to $414.2 million in fiscal 2019. Organic sales overall increased 0.2% compared to the prior year. |
• | Food Safety segment sales were $212.7 million in fiscal 2020 compared to $213.5 million in fiscal 2019, a decrease of $800,000, or 0.4%. Organic sales decreased 1.3%, while the Clarus Labs (August 2018) acquisition, the purchase of four former distributors and a small manufacturer (Abtek) completed during the year, contributed $2.0 million in revenues. |
• | Animal Safety segment sales were $205.5 million in fiscal 2020, an increase of 2.4% compared to $200.7 million in fiscal 2019. Organic sales rose 1.9%, with the acquisitions of Livestock Genetic Services (September 2018), Delta Genomics (January 2019) and Cell BioSciences (March 2020) contributing the remainder of the growth. |
• | International sales were 39.4% of total sales in fiscal 2020 compared to 40.1% of total sales in fiscal 2019. |
• | Our effective tax rate was 17.7% in fiscal 2020 compared to an effective tax rate of 17.5% in fiscal 2019. |
• | Net income was $59.5 million, or $1.13 per diluted share, a decrease of 1% compared to $60.2 million, or $1.15 per share, in the prior year. |
• | Cash generated from operating activities in fiscal 2020 was $85.9 million, compared to $63.8 million in fiscal 2019. |
Revenue |
Revenue |
|||||||
% Increase |
% Increase |
|||||||
USD |
Local Currency |
|||||||
Neogen Europe (including Lab M, Quat-Chem & Abtek) |
5% | 8% | ||||||
Neogen do Brasil (including Rogama) |
(10)% | 0% | ||||||
Neogen Latinoamerica |
6% | 11% | ||||||
Neogen China |
22% | 26% | ||||||
Neogen India |
3% | 5% | ||||||
Neogen Australasia |
18% | 26% | ||||||
Neogen Canada |
70% | 72% |
Year Ended |
||||||||||||||||||||
Increase/ |
Increase/ |
|||||||||||||||||||
(dollars in thousands) |
May 31, 2020 |
(Decrease) |
May 31, 2019 |
(Decrease) |
May 31, 2018 |
|||||||||||||||
Food Safety: |
||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues |
$ | 76,207 | (3)% | $ | 78,373 | 7% | $ | 72,962 | ||||||||||||
Bacterial & General Sanitation |
41,780 | (0)% | 41,966 | 10% | 38,156 | |||||||||||||||
Culture Media & Other |
47,847 | (4)% | 49,857 | 13% | 44,271 | |||||||||||||||
Rodenticides, Insecticides & Disinfectants |
28,890 | 13% | 25,584 | 7% | 23,821 | |||||||||||||||
Genomics Services |
17,967 | 2% | 17,694 | 16% | 15,267 | |||||||||||||||
|
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|
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212,691 | (0)% | 213,474 | 10% | 194,477 | ||||||||||||||||
Animal Safety: |
||||||||||||||||||||
Life Sciences |
6,322 | (20)% | 7,858 | (25)% | 10,411 | |||||||||||||||
Veterinary Instruments & Disposables |
42,941 | (4)% | 44,582 | (7)% | 47,749 | |||||||||||||||
Animal Care & Other |
28,389 | (5)% | 29,941 | (3)% | 30,930 | |||||||||||||||
Rodenticides, Insecticides & Disinfectants |
68,815 | 4% | 66,389 | (2)% | 67,646 | |||||||||||||||
Genomics Services |
59,012 | 14% | 51,942 | 11% | 46,717 | |||||||||||||||
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|
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205,479 | 2% | 200,712 | (1)% | 203,453 | ||||||||||||||||
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|
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Total Revenue |
$ | 418,170 | 1% | $ | 414,186 | 4% | $ | 397,930 | ||||||||||||
|
|
|
|
|
|
(dollars in thousands) |
2020 |
Increase |
2019 |
Increase |
2018 |
|||||||||||||||
Cost of Revenues |
$ | 221,891 | 0 | % | $ | 222,266 | 5 | % | $ | 211,658 |
(dollars in thousands) |
2020 |
Increase |
2019 |
Increase |
2018 |
|||||||||||
Sales and Marketing |
$ | 69,675 | -1% | $ | 70,230 | 5% | $ | 66,929 | ||||||||
General and Administrative |
44,331 | 9% | 40,791 | 7% | 38,294 | |||||||||||
Research and Development |
14,750 | 15% | 12,805 | 18% | 10,855 | |||||||||||
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|||||||||||
Total Operating Expense |
$ | 128,756 | 4% | $ | 123,826 | 7% | $ | 116,078 | ||||||||
|
|
|
|
|
|
(dollars in thousands) |
2020 |
Increase |
2019 |
Increase |
2018 |
|||||||||||
Operating Income |
$ | 67,523 | -1% | $ | 68,094 | -3% | $ | 70,194 |
(dollars in thousands) |
2020 |
2019 |
2018 |
|||||||||
Interest income (net of expense) |
$ | 5,992 | $ | 4,683 | $ | 2,043 | ||||||
Foreign currency transactions |
(1,178 | ) | (1,279 | ) | 274 | |||||||
Royalty income |
1 | 150 | 147 | |||||||||
Licenses and settlements |
(38 | ) | 672 | 360 | ||||||||
Quat-Chem contingent consideration |
— | 422 | 255 | |||||||||
Deoxi contingent consideration |
— | (10 | ) | (42 | ) | |||||||
Other |
5 | 227 | 234 | |||||||||
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|
|||||||
Total Other Income |
$ | 4,782 | $ | 4,865 | $ | 3,271 | ||||||
|
|
|
|
|
|
(dollars in thousands) |
2020 |
Increase |
2019 |
Increase |
2018 |
|||||||||||
Provision for Income Taxes |
$ | 12,830 | 0% | $ | 12,783 | 25% | $ | 10,250 |
(dollars in thousands, except per share data) |
2020 |
Increase |
2019 |
Increase |
2018 |
|||||||||||||||
Net Income Attributable to Neogen |
$ | 59,475 | -1% | $ | 60,176 | -5% | $ | 63,145 | ||||||||||||
Net Income Per Share-Basic |
$ | 1.13 | $ | 1.16 | $ | 1.23 | ||||||||||||||
Net Income Per Share-Diluted |
$ | 1.13 | $ | 1.15 | $ | 1.21 |
• | developing, manufacturing and marketing new products with new features and capabilities, and having those new products successfully accepted in the marketplace; |
• | expanding our markets by fostering increased use of our products by customers; |
• | maintaining or increasing gross and net operating margins in changing cost environments; |
• | strengthening operations and sales and marketing activities in geographies outside of the U.S.; |
• | developing and implementing new technology development strategies; and |
• | identifying and completing acquisitions that enhance existing product categories or create new products or services. |
Less than |
More than |
|||||||||||||||||||
(dollars in thousands) |
Total |
1 year |
1-3 years |
3-5 years |
5 years |
|||||||||||||||
Long-Term Debt |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Operating Leases |
2,094 | 1,080 | 973 | 41 | — | |||||||||||||||
Unconditional Purchase Obligations (1) |
55,180 | 48,681 | 6,499 | — | — | |||||||||||||||
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|||||||||||
$ | 57,283 | $ | 49,763 | $ | 7,478 | $ | 42 | $ | — |
(1) | Unconditional purchase obligations are primarily purchase orders for future inventory and capital equipment purchases. |
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS |
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE—NONE |
ITEM 9A. |
CONTROLS AND PROCEDURES |
ITEM 9B. |
OTHER INFORMATION – NONE |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name |
Position with the Company |
Year Joined the Company |
||||
John E. Adent |
President & Chief Executive Officer |
2017 | ||||
Stewart W. Bauck, D.V.M., Ph.D. |
Vice President, Agrigenomics |
2012 | ||||
Joseph A. Corbett |
Vice President, Animal Safety Sales |
1993 | ||||
Robert S. Donofrio, Ph.D. |
Vice President, Food Safety Research & Development |
2016 | ||||
Shane M. Fitzwater |
Vice President, Animal Safety Operations |
2018 | ||||
Jerome L. Hagedorn |
Vice President, Food Safety Operations |
2018 | ||||
Jason W. Lilly, Ph.D. |
Vice President, International Business |
2005 | ||||
Julie A. Mann* |
Vice President & Chief Human Resources Officer |
2017 | ||||
Terri A. Morrical |
Vice President, Animal Safety |
1992 | ||||
Marylinn Munson |
Vice President, Agrigenomics |
2020 | ||||
Steven J. Quinlan |
Vice President & Chief Financial Officer |
2011 |
ITEM 11. |
EXECUTIVE COMPENSATION |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. |
EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
ITEM 16. |
FORM 10-K SUMMARY — NONE |
NEOGEN CORPORATION | ||||||||
By: |
/s/ John E. Adent |
By: |
/s/ Steven J. Quinlan | |||||
John E. Adent, President & Chief | Steven J. Quinlan, Vice President & | |||||||
Executive Officer | Chief Financial Officer | |||||||
(Principal Executive Officer) | (Principal Financial & Accounting Officer) |
Signature |
Title |
Date | ||||
/s/ John E. Adent John E. Adent |
President & Chief Executive Officer (Principal Executive Officer) | July 30, 2020 | ||||
/s/ Steven J. Quinlan Steven J. Quinlan |
Vice President & Chief Financial Officer (Principal Financial & Accounting Officer) | July 30, 2020 | ||||
* James C. Borel |
Chairman of the Board | July 30, 2020 | ||||
* |
Director | July 30, 2020 | ||||
William T. Boehm, Ph.D. | ||||||
* |
Director | July 30, 2020 | ||||
Ronald D. Green, Ph.D. | ||||||
* |
Director | July 30, 2020 | ||||
James L. Herbert | ||||||
* |
Director | July 30, 2020 | ||||
G. Bruce Papesh | ||||||
* |
Director | July 30, 2020 | ||||
James P. Tobin | ||||||
* |
Director | July 30, 2020 | ||||
Darci L. Vetter |
*By: | /s/ John E. Adent | |||||||
John E. Adent, Attorney-in-fact |
July 30, 2020 |
Report of Independent Registered Public Accounting Firm |
Consolidated Balance Sheets—May 31, 2020 and 2019 |
Consolidated Statements of Income—Years ended May 31, 2020, 2019 and 2018 |
Consolidated Statements of Comprehensive Income—Years ended May 31, 2020, 2019 and 2018 |
Consolidated Statements of Stockholders’ Equity— Years ended May 31, 2020, 2019 and 2018 |
Consolidated Statements of Cash Flows— Years ended May 31, 2020, 2019 and 2018 |
Notes to Consolidated Financial Statements |
• |
Assessing the design and testing operating effectiveness of certain controls over the Company’s income tax provision process, including controls over the identification and application of tax laws over earnings from multiple tax jurisdictions and the process to assess the technical merits of tax positions taken. |
• |
Evaluating the reasonableness and appropriateness of the data used to develop the assumptions and allocations made by management against relevant evidence obtained in other areas of the audit. |
• |
Utilizing professionals with specialized skills and knowledge in taxation to evaluate the Company’s application of the applicable tax laws, the technical merit of tax positions taken, and the reasonableness of the Company’s apportionment methodologies used. |
May 31 |
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2020 |
2019 |
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Assets |
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Current Assets |
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Cash and cash equivalents |
$ | |
$ | |
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Marketable securities |
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Accounts receivable, net of allowance of $ |
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Inventories |
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Prepaid expenses and other current assets |
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Total Current Assets |
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Property and Equipment |
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Land and improvements |
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Building and improvements |
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Machinery and equipment |
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Furniture and fixtures |
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Construction in progress |
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Less accumulated depreciation |
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Net Property and Equipment |
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Other Assets |
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Right of use assets |
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— |
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Goodwill |
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Other non-amortizable intangible assets |
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Amortizable intangible assets, net of accumulated amortization of $ at May 31, 2020 and 2019, |
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Other non-current assets |
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Total Other Assets |
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Total Assets |
$ |
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$ |
|
||||
May 31 |
||||||||
2020 |
2019 |
|||||||
Liabilities and Stockholders’ Equity |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Accruals |
||||||||
Accrued compensation |
||||||||
Income taxes |
||||||||
Other accruals |
||||||||
Total Current Liabilities |
||||||||
Deferred Income Taxes |
||||||||
Other Non-Current Liabilities |
||||||||
Total Liabilities |
||||||||
Commitments and Contingencies (note 7) |
||||||||
Stockholders’ Equity |
||||||||
Preferred stock, $ |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Retained earnings |
||||||||
Total Neogen Corporation and Subsidiaries Stockholders’ Equity |
||||||||
Total Liabilities and Stockholders’ Equity |
$ | $ | ||||||
Year Ended May 31 |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Revenues |
||||||||||||
Product revenues |
$ | |
$ | |
$ | |
||||||
Service revenues |
|
|
|
|||||||||
Total Revenues |
|
|
|
|||||||||
Cost of Revenues |
||||||||||||
Cost of product revenues |
|
|
|
|||||||||
Cost of service revenues |
|
|
|
|||||||||
Total Cost of Revenues |
|
|
|
|||||||||
Gross Margin |
|
|
|
|||||||||
Operating Expenses |
||||||||||||
Sales and marketing |
|
|
|
|||||||||
General and administrative |
|
|
|
|||||||||
Research and development |
|
|
|
|||||||||
Total Operating Expenses |
|
|
|
|||||||||
Operating Income |
|
|
|
|||||||||
Other Income |
||||||||||||
Interest income, net |
|
|
|
|||||||||
Royalty income |
— |
|
|
|||||||||
Other, net |
( |
) | |
|
||||||||
Total Other Income |
|
|
|
|||||||||
Income Before Income Taxes |
|
|
|
|||||||||
Provision for Income Taxes |
|
|
|
|||||||||
Net Income |
|
|
|
|||||||||
Net Income Attributable to Non-controlling Interest |
— |
— |
( |
) | ||||||||
Net Income Attributable to Neogen |
$ | |
$ | |
$ | |
||||||
Net Income Attributable to Neogen per Share |
||||||||||||
Basic |
$ | |
$ | |
$ | |
||||||
Diluted |
$ | |
$ | |
$ | |
||||||
Weighted Average Shares Outstanding |
||||||||||||
Basic |
||||||||||||
Diluted |
Year Ended May 31 |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Net Income |
$ |
|
$ |
|
$ |
|
||||||
Other comprehensive loss, net of tax: foreign currency translations |
( |
) | ( |
) | ( |
) | ||||||
Other comprehensive income, net of tax: unrealized gain on marketable securities |
|
— |
— |
|||||||||
Comprehensive income |
|
|
|
|||||||||
Comprehensive income attributable to non-controlling interest |
— |
— |
( |
) | ||||||||
Comprehensive income attributable to Neogen |
$ | |
$ | |
$ | |
||||||
Accumulated |
||||||||||||||||||||||||||||
Common Stock |
Additional Paid-in |
Other Comprehensive |
Retained |
Non- Controlling |
Total |
|||||||||||||||||||||||
Shares |
Amount |
Capital |
Income (Loss) |
Earnings |
Interest |
Equity |
||||||||||||||||||||||
Balance, June 1, 2017 |
|
$ | |
$ | |
$ | ( |
) | $ | |
$ | |
$ | |
||||||||||||||
Exercise of options and share-based compensation expense |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Purchase of minority interest |
— |
— |
( |
) | — |
— |
( |
) | ( |
) | ||||||||||||||||||
Net income for 2018 |
— |
— |
— |
— |
|
|
|
|||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
( |
) | — |
— |
( |
) | |||||||||||||||||||
Balance, May 31, 2018 |
|
|
|
( |
) | |
— |
|
||||||||||||||||||||
Exercise of options and share-based compensation expense |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Shares repurchased |
( |
) | ( |
) | ( |
) | — |
— |
— |
( |
) | |||||||||||||||||
Net income for 2019 |
— |
— |
— |
— |
|
— |
|
|||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
( |
) | — |
— |
( |
) | |||||||||||||||||||
Balance, May 31, 2019 |
|
|
|
( |
) | |
— |
|
||||||||||||||||||||
Exercise of options and share-based compensation expense |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
|
|
|
— |
— |
— |
|
|||||||||||||||||||||
Net income for 2020 |
— |
— |
— |
— |
|
— |
|
|||||||||||||||||||||
Other comprehensive loss |
— |
— |
— |
( |
) | — |
— |
( |
) | |||||||||||||||||||
Balance, May 31, 2020 |
|
$ |
|
$ |
|
$ | ( |
) | $ |
|
$ | — |
$ |
|
||||||||||||||
Year Ended May 31 |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Cash Flows From Operating Activities |
||||||||||||
Net income |
$ | |
$ | |
$ | |
||||||
Adjustments to reconcile net income to net cash from operating activities: |
||||||||||||
Depreciation and amortization |
|
|
|
|||||||||
Deferred income taxes |
|
|
( |
) | ||||||||
Share-based compensation |
|
|
|
|||||||||
Changes in operating assets and liabilities, net of business acquisitions: |
||||||||||||
Accounts receivable |
( |
) | ( |
) | ( |
) | ||||||
Inventories |
( |
) | ( |
) | ( |
) | ||||||
Prepaid expenses and other assets |
( |
) | ( |
) | ( |
) | ||||||
Accounts payable |
|
( |
) | |
||||||||
Accruals and other changes |
|
( |
) | ( |
) | |||||||
Net Cash From Operating Activities |
|
|
|
|||||||||
Cash Flows For Investing Activities |
||||||||||||
Purchase of property, equipment and other non-current intangible assets |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from the sales of marketable securities |
|
|
|
|||||||||
Purchase of marketable securities |
( |
) | ( |
) | ( |
) | ||||||
Business acquisitions, net of cash acquired |
( |
) | ( |
) | ( |
) | ||||||
Net Cash For Investing Activities |
( |
) | ( |
) | ( |
) | ||||||
Cash Flows From Financing Activities |
||||||||||||
Exercise of stock options and other |
|
|
|
|||||||||
Repurchase of common stock |
— |
( |
) | — |
||||||||
Purchase of non-controlling minority interest |
— |
— |
( |
) | ||||||||
Net Cash From Financing Activities |
|
|
|
|||||||||
Effect of Foreign Exchange Rate on Cash |
( |
) | |
( |
) | |||||||
Net Increase (Decrease) in Cash and Cash Equivalents |
|
( |
) | |
||||||||
Cash and Cash Equivalents, Beginning of Year |
|
|
|
|||||||||
Cash and Cash Equivalents, End of Year |
$ | |
$ | |
$ | |
||||||
Supplementary Cash Flow Information |
||||||||||||
Income taxes paid, net of refunds |
$ | |
$ | |
$ | |
1. |
Summary of Significant Accounting Policies |
Level 1: |
Observable inputs such as quoted prices in active markets; | |
Level 2: |
Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and | |
Level 3: |
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
Year ended May 31 |
||||||||||||
(in thousands) |
Maturity |
2020 |
2019 |
|||||||||
US Treasuries |
0 – 90 days |
$ | — |
$ | ||||||||
91 –180 days |
— |
— |
||||||||||
181 days –1 year |
||||||||||||
1 – 2 years |
— |
|||||||||||
Commercial Paper & Corporate Bonds |
0 – 90 days |
|||||||||||
91 – 180 days |
||||||||||||
181 days –1 year |
||||||||||||
1 – 2 years |
||||||||||||
Certificates of Deposit |
0 – 90 days |
|||||||||||
91 – 180 days |
||||||||||||
181 days –1 year |
||||||||||||
1 – 2 years |
||||||||||||
Total Marketable Securities |
$ | $ | ||||||||||
Amortized |
Unrealized |
Unrealized |
||||||||||||||
(in thousands) |
Cost |
Gains |
Losses |
Fair Value |
||||||||||||
US Treasuries |
$ |
$ |
$ |
— |
$ |
|||||||||||
Commercial Paper & Corporate Bonds |
( |
) |
||||||||||||||
Certificates of Deposit |
— |
|||||||||||||||
Total Marketable Securities |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
Year ended May 31 |
||||||||||||
(in thousands) |
2020 |
2019 |
2018 |
|||||||||
Beginning Balance |
$ | $ | $ | |||||||||
Provision |
||||||||||||
Recoveries |
||||||||||||
Write-offs |
( |
) | ( |
) | ( |
) | ||||||
Ending Balance |
$ |
$ |
$ |
|||||||||
Year ended May 31 |
||||||||
(in thousands) |
2020 |
2019 |
||||||
Raw Materials |
$ | $ | ||||||
Work-in-process |
||||||||
Finished goods |
||||||||
$ |
$ |
|||||||
Year ended May 31 |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Risk-free interest rate |
||||||||||||
Expected dividend yield |
||||||||||||
Expected stock volatility |
||||||||||||
Expected option life |
Year ended May 31 |
||||||||||||
(in thousands, except per share) |
2020 |
2019 |
2018 |
|||||||||
Numerator for basic and diluted net income per share - Net Income attributable to Neogen |
$ |
$ |
$ |
|||||||||
Denominator for basic net income per share - Weighted average shares |
||||||||||||
Effect of dilutive stock options |
||||||||||||
Denominator for diluted net income per share |
||||||||||||
Net income attributable to Neogen per share |
||||||||||||
Basic |
$ | $ | $ | |||||||||
Diluted |
$ | $ | $ |
• |
We elected the package of practical expedients available for transition that allow us to not reassess whether expired or existing contracts contain leases under the new definition of a lease, lease classification for expired or existing leases and whether previously capitalized initial direct costs would qualify for capitalization under ASC 842. |
• |
We did not elect to use hindsight when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset. |
• |
For all asset classes, we elected to not recognize a right-of-use |
• |
For all asset classes, we elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component. |
• |
The determination of the discount rate used in a lease is our incremental borrowing rate that is based on what we would normally pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. |
(in thousands) |
May 31, 2020 |
|||
Right of use – assets |
$ |
|||
– current |
||||
– non-current |
May 31, 2020 |
||||
Weighted average remaining lease term |
||||
Weighted average discount rate |
% |
(in thousands) |
Year Ended May 31, 2020 |
|||
Operating leases |
$ | |||
Short term leases |
||||
Total lease expense |
$ | |||
(in thousands) |
Amount |
|||
Years ending May 31, 2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 and thereafter |
||||
Total lease payments |
||||
Less: imputed interest |
( |
) | ||
Total lease liabilities |
$ | |||
• |
Identification of the contract with a customer; |
• |
Identification of the performance obligations in the contract; |
• |
Determination of the transaction price; |
• |
Allocation of the transaction price to the performance obligations in the contract; and |
• |
Recognition of revenue when or as the Company satisfies the performance obligations. |
• |
Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; |
• |
Consumable products marketed to veterinarians, retailers, livestock producers and animal health product distributors; and |
• |
Rodenticides, disinfectants and insecticides to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities. |
• |
Genomic identification and related interpretive bioinformatic services; and |
• |
Other commercial laboratory services. |
Year Ended |
||||||||||||||||||||
Increase/ |
Increase/ |
|||||||||||||||||||
(dollars in thousands) |
May 31, 2020 |
(Decrease) |
May 31, 2019 |
(Decrease) |
May 31, 2018 |
|||||||||||||||
Food Safety: |
||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues |
$ | ( |
)% |
$ | % |
$ | ||||||||||||||
Bacterial & General Sanitation |
( |
)% |
% |
|||||||||||||||||
Culture Media & Other |
( |
)% |
% |
|||||||||||||||||
Rodenticides, Insecticides & Disinfectants |
% |
% |
||||||||||||||||||
Genomics Services |
% |
% |
||||||||||||||||||
( |
)% |
% |
||||||||||||||||||
Animal Safety: |
||||||||||||||||||||
Life Sciences |
( |
)% |
( |
)% |
||||||||||||||||
Veterinary Instruments & Disposables |
( |
)% |
( |
)% |
||||||||||||||||
Animal Care & Other |
( |
)% |
( |
)% |
||||||||||||||||
Rodenticides, Insecticides & Disinfectants |
% |
( |
)% |
|||||||||||||||||
Genomics Services |
% |
% |
||||||||||||||||||
% |
( |
)% |
||||||||||||||||||
Total Revenue |
$ | % |
$ | % |
$ | |||||||||||||||
Year Ended May 31, 2018 |
||||||||||||
As Previously Reported |
Adjustments |
As Revised |
||||||||||
(in thousands) |
||||||||||||
Revenues |
||||||||||||
Product revenues |
$ | $ | ( |
) | $ | |||||||
Service revenues |
( |
) | ||||||||||
Total revenues |
( |
) | ||||||||||
Cost of revenues |
||||||||||||
Cost of product revenues |
( |
) | ||||||||||
Cost of service revenues |
— |
|||||||||||
Total cost of revenues |
( |
) | ||||||||||
Gross margin |
( |
) | ||||||||||
Operating expenses |
||||||||||||
Sales and marketing |
( |
) | ||||||||||
Total operating expenses |
( |
) | ||||||||||
Operating income |
— |
|||||||||||
2. | Goodwill and Other Intangible Assets |
(in thousands) |
Food Safety |
Animal Safety |
Total |
|||||||||
Balance, May 31, 2018 |
$ | $ | $ | |||||||||
Goodwill acquired |
||||||||||||
Goodwill and/or currency adjustments (1) |
( |
) | ( |
) | ||||||||
Balance, May 31, 2019 |
$ | $ | $ | |||||||||
Goodwill acquired |
||||||||||||
Goodwill and/or currency adjustments (1) |
( |
) | ( |
) | ( |
) | ||||||
Balance, May 31, 2020 |
$ | $ | $ | |||||||||
(1) |
Includes final purchase price allocation adjustments and currency adjustments for goodwill recorded at international locations. |
(in thousands) |
Gross Carrying Amount |
Less Accumulated Amortization |
Net Carrying Amount |
|||||||||
Licenses |
$ | $ | $ | |||||||||
Covenants not to compete |
||||||||||||
Patents |
||||||||||||
Customer-based intangibles |
||||||||||||
Other products and service-related intangibles |
||||||||||||
Balance, May 31, 2020 |
$ | $ | $ | |||||||||
Licenses |
$ | $ | $ | |||||||||
Covenants not to compete |
||||||||||||
Patents |
||||||||||||
Customer-based intangibles |
||||||||||||
Other products and service-related intangibles |
||||||||||||
Balance, May 31, 2019 |
$ | $ | $ | |||||||||
3. |
Business Combinations |
4. | Long-Term Debt |
5. | Equity Compensation Plans |
(options in thousands) |
Options |
Weighted-Average Exercise Price |
Weighted-Average Grant Date Fair Value |
|||||||||
Outstanding at May 31, 2017 ( |
|
$ | |
$ | |
|||||||
Granted |
|
|
|
|||||||||
Exercised |
( |
) | |
|
||||||||
Forfeited |
( |
) | |
|
||||||||
Outstanding at May 31, 2018 ( |
|
|
|
|||||||||
Granted |
|
|
|
|||||||||
Exercised |
( |
) | |
|
||||||||
Forfeited |
( |
) | |
|
||||||||
Outstanding at May 31, 2019 ( |
|
|
|
|||||||||
Granted |
|
|
|
|||||||||
Exercised |
( |
) | |
|
||||||||
Forfeited |
( |
) | |
|
||||||||
Outstanding at May 31, 2020 ( |
|
|
|
|||||||||
(options in thousands) |
Options Outstanding |
Options Exercisable |
||||||||||||||||||
Average |
||||||||||||||||||||
Contractual Life |
Weighted-Average |
Weighted-Average |
||||||||||||||||||
Range of Exercise Price |
Number |
(in years) |
Exercise Price |
Number |
Exercise Price |
|||||||||||||||
$ |
|
|
$ | |
|
$ | |
|||||||||||||
$ |
|
|
|
|
|
|||||||||||||||
$ |
|
|
|
|
|
|||||||||||||||
$ |
|
|
|
|
|
|||||||||||||||
$ |
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
Year Ended |
||||||||||||
(in thousands) |
May 31 , 2020 |
May 31 , 2019 |
May 31 , 2018 |
|||||||||
Aggregate intrinsic value of options outstanding |
$ | |
$ | |
$ | |
||||||
Aggregate intrinsic value of options exercisable |
|
|
|
|||||||||
Aggregate intrinsic value of options exercised |
|
|
|
6. | Income Taxes |
Year ended May 31 |
||||||||||||
(in thousands) |
2020 |
2019 |
2018 |
|||||||||
U.S. |
$ | |
$ | |
$ | |
||||||
Foreign |
|
|
|
|||||||||
$ | |
$ | |
$ | |
|||||||
Year ended May 31 |
||||||||||||
(in thousands) |
2020 |
2019 |
2018 |
|||||||||
Current |
||||||||||||
Domestic |
||||||||||||
Federal |
$ | |
$ | |
$ | |
||||||
Uncertain tax provision |
|
|
( |
) | ||||||||
State |
|
|
|
|||||||||
Foreign |
|
|
|
|||||||||
Deferred |
||||||||||||
Domestic |
||||||||||||
Federal |
|
|
( |
) | ||||||||
State |
|
|
( |
) | ||||||||
Foreign |
( |
) | ( |
) | ( |
) | ||||||
Provision for Income Taxes |
$ | |
$ | |
$ | |
||||||
Year ended May 31 |
||||||||||||
(in thousands) |
2020 |
2019 |
2018 |
|||||||||
Tax at U.S. statutory rate |
$ | |
$ | |
$ | |
||||||
Permanent differences |
|
( |
) | |||||||||
Section 199 domestic production deduction |
— |
— |
( |
) | ||||||||
Global intangible low-taxed income (GILTI) |
|
|
— |
|||||||||
Foreign derived intangible income deduction (FDII) |
( |
) | ( |
) | — |
|||||||
Foreign rate differential |
( |
) | |
( |
) | |||||||
Subpart F income |
|
|
|
|||||||||
Tax benefits on stock-based compensation |
( |
) | ( |
) | ( |
) | ||||||
Changes in tax contingencies - Increase/(Release) |
|
|
( |
) | ||||||||
Provision for state income taxes, net of federal benefit |
|
|
|
|||||||||
Remeasurement of deferred taxes |
— |
— |
( |
) | ||||||||
Transition tax on foreign earnings and profits |
— |
— |
|
|||||||||
Tax c redits |
( |
) | ( |
) | ( |
) | ||||||
Other |
( |
) |
( |
) |
||||||||
Tax Expense |
$ | |
$ | |
$ | |
||||||
Year ended May 31 |
||||||||
(in thousands) |
2020 |
2019 |
||||||
Deferred income tax liabilities |
||||||||
Indefinite and long-lived assets |
$ | ( |
) | $ | ( |
) | ||
Prepaid expenses |
( |
) | ( |
) | ||||
( |
) | ( |
) | |||||
Deferred income tax assets |
||||||||
Stock o ptions |
|
|
||||||
Inventories and accounts receivable |
|
|
||||||
Tax loss carryforwards |
|
|
||||||
Accrued expenses and other |
|
|
||||||
Less: Valuation a llowance |
( |
) | ( |
) | ||||
|
|
|||||||
Net deferred income tax liabilities |
$ | ( |
) | $ | ( |
) | ||
As of |
||||||||
Jurisdiction |
May 31, 2020 |
Expiry |
||||||
U.S. |
$ | |
|
|||||
Foreign |
|
|
||||||
$ | |
|||||||
Year ended May 31 |
||||||||||||
(in thousands) |
2020 |
2019 |
2018 |
|||||||||
Beginning balance |
$ | |
$ | |
$ | |
||||||
Increase/(decrease) related to prior periods |
|
( |
) | ( |
) | |||||||
Increase to current period |
|
|
|
|||||||||
Ending balance |
$ | |
$ | |
$ | |
||||||
7. | Commitments and Contingencies |
8. |
Defined Contribution Benefit Plan |
9. | Segment Information |
(in thousands) |
Food Safety |
Animal Safety |
Corporate and Eliminations (1) |
Total |
||||||||||||
Fiscal 2020 |
||||||||||||||||
Product revenues to external customers |
$ | |
$ | |
$ | — |
$ | |
||||||||
Service revenues to external customers |
|
|
— |
|
||||||||||||
Total revenues to external customers |
|
|
— |
|
||||||||||||
Operating income (loss) |
|
|
( |
) | |
|||||||||||
Depreciation and amortization |
|
|
— |
|
||||||||||||
Total Assets |
|
|
|
|
||||||||||||
Expenditures for long-lived assets |
|
|
— |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2019 |
||||||||||||||||
Product revenues to external customers |
$ | |
$ | |
$ | — |
$ | |
||||||||
Service revenues to external customers |
|
|
— |
|
||||||||||||
Total revenues to external customers |
|
|
— |
|
||||||||||||
Operating income (loss) |
|
|
( |
) | |
|||||||||||
Depreciation and amortization |
|
|
— |
|
||||||||||||
Total Assets |
|
|
|
|
||||||||||||
Expenditures for long-lived assets |
|
|
— |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2018 |
||||||||||||||||
Product revenues to external customers |
$ | |
$ | |
$ | — |
$ | |
||||||||
Service revenues to external customers |
|
|
— |
|
||||||||||||
Total revenues to external customers |
|
|
— |
|
||||||||||||
Operating income (loss) |
|
|
( |
) | |
|||||||||||
Depreciation and amortization |
|
|
— |
|
||||||||||||
Total Assets |
|
|
|
|
||||||||||||
Expenditures for long-lived assets |
|
|
|
|
|
|
|
|
— |
|
|
|
(1) | Includes corporate assets, including cash and cash equivalents, marketable securities, current and deferred tax accounts, and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions and non-controlling interests. |
Year ended May 31 |
||||||||
(in thousands) |
2020 |
2019 |
||||||
Domestic |
$ | |
$ | |
||||
International |
|
|
||||||
Total revenue |
|
|
||||||
10. |
Stock Repurchases |
11. | Summary of Quarterly Data (Unaudited) |
Quarter Ended |
||||||||||||||||
(in thousands, except per share) |
August 2019 |
November 2019 |
February 2020 |
May 2020 |
||||||||||||
Total Revenue |
$ | |
$ | |
$ | |
$ | |
||||||||
Gross Margin |
|
|
|
|
||||||||||||
Net income |
|
|
|
|
||||||||||||
Basic net income per share |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Diluted net income per share |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Quarter Ended |
||||||||||||||||
(in thousands, except per share) |
August 2018 |
November 2018 |
February 2019 |
May 2019 |
||||||||||||
Total Revenue |
$ | |
$ | |
$ | |
$ | |
||||||||
Gross Margin |
|
|
|
|
||||||||||||
Net income |
|
|
|
|
||||||||||||
Basic net income per share |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Diluted net income per share |
$ |
|
$ |
|
$ |
|
$ |
|
EXHIBIT 3.2
Michigan Department of Energy, Labor & Economic Growth Filing Endorsement This is to Certify that the CERTIFICATE OF AMENDMENT- CORPORATION for NEOGEN CORPORATION ID NUMBER: 059092 received by facsimile transmission on October 11, 2010 is hereby endorsed Filed on October 11, 2010 by the Administrator. The document is effective on the date filed, unless a subsequent effective date within 90 days after received date is stated in the document. In testimony whereof, I have hereunto set my hand and affixed the Seal of the Department, in the City of Lansing, this 11TH day of October, 2010. Director
BCS/CD-515 (Rev. 08/10) MICHIGAN DEPARTMENT OF ENERGY, LABOR & ECONOMIC GROWTH BUREAU OF COMMERCIAL SERVICES Date Received This document is effective on the date filed, unless a subsequent effective date within 90 days after received date Is stated in the document. Name Richard C. Lowe, Lowe Law Firm, PC Address 2375 Woodlake Drive, Suite 380 City State ZIP Code Okemos Ml 48864 EFFECTIVE DATE: Document will be returned to the name and address you enter above. If left blank, document will be returned to the registered office. CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION For use by Domestic Profit and Nonprofit Corporations (Please read information and instructions on the last page) Pursuant to the provisions of Act 284, Public Acts of 1972, (profit corporations), or Act 162, Public Acts of 1982 (nonprofit corporations), the undersigned corporation executes the following Certificate: 1. The present name of the corporation is: Neogen Corporation 2. The identification number assigned by the Bureau Is: 059092 3. Article ____Ill ___ of the Articles of Incorporation is hereby amended to read as follows: The total authorized shares: Common Shares: 30,000,000 Par Value: $0.16 Preferred Shares: Par Value: 100,000 $1 .00 A statement of all or any of the relative rights, preferences and limitations of the shares of each class Is as follows: The Preferred Stock shall be issued from time to time in one or more series of such number of shares with such distinctive serial designations and (a) may have such voting powers; (b) may be subject to redemption at such time or times and at such prices; (c) may be entitled to receive dividends (which may be cumulative or non-cumulative) at such rate or rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of stock; (d) may have such rights upon the dissolution of or upon any distribution of the assets of, the Company; (e) may be convertible into, or exchangeable for, shares of any other class or classes or of any other series of tho same or any other class or classes of stock of the Company, at such price or prices or at such rates of exchange, and with such adjustments; and (f) may have such other relative participation, optional or other special rights, preferences, qualifications, limitations, or restrictions thereof, all as shall hereafter be stated and expressed in the resolution or resolutions providing for the Issue of each such series of Preferred Stock from time to time adopted by the Board of Directors pursuant to the authority so to do which is hereby expressly vested in the Board of Directors.
COMPLETE ONLY ONE OF THE FOLLOWING: 4. Profit or Nonprofit Corporations: For amendments adopted by unanimous consent of incorporators before the first meeting of the board of directors or trustees. The foregoing amendment to the Articles of Incorporation was duly adopted on the day of ---------, , in accordance with the provisions of the Act by the unanimous consent of the incorporator(s) before the first meeting of the Board of Directors or Trustees. Signed this ____ day of ________ _ (Signature) (Signature) (Type or Print Name) (Type or Print Name) (Signature) (Signature) (Type or Print Name) (Type or Print Name) 5. Profit Corporation Only: Shareholder or Board Approval The foregoing amendment to the Articles of Incorporation proposed by the board was was duly adopted on the ___11th days october _- __2007 _ , by the: (check one of the following) [l] shareholders at a meeting in accordance with Section 611 (3) of the Act. D written consent of the shareholders having not less than the minimum number of votes required by statute In accordance with Section 407(1) of the Act. Written notice to shareholders who have not consented in writing has been given. (Note: Written consent by less than all of the shareholders is permitted only if such provision appears in the Articles of Incorporation.) D written consent of all the shareholders entitled to vote In accordance with Section 407(2) of the Act. 0 board of a profit corporation pursuant to section 611 (2) of the Act. Profit Corporations and Professional Service Corporations Signed this _7th day of _october , 2010 By (Signature of an lu1horized officer or agent) James L. Herbert, Chief Executive Officer (Type or Print Name)
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
NEOGEN CORPORATION AND SUBSIDIARIES
May 31, 2020
WHERE INCORPORATED | PERCENTAGE OWNED BY NEOGEN CORPORATION | |||
Abtek (Biologicals) Ltd |
England, United Kingdom | 100% | ||
Acumedia Manufacturers, Inc. |
Michigan, U.S. | 100% | ||
Chem-Tech, Ltd. |
Michigan, U.S. | 100% | ||
GeneSeek, Inc. |
Nebraska, U.S. | 100% | ||
Hacco, Inc. |
Michigan, U.S. | 100% | ||
Lab M Ltd |
England, United Kingdom | 100% | ||
Neogen Australasia Pty Limited |
Australia | 100% | ||
Neogen Canada |
Canada | 100% | ||
Neogen Chile SpA |
Chile | 100% | ||
Neogen do Brasil Productos Para Labratories LTDA. |
Brazil | 100% | ||
Neogen Europe Limited |
Scotland, United Kingdom | 100% | ||
Neogen Italia S.r.l. |
Italy | 100% | ||
Neogen Latinoamerica S.A.P.I. DE C.V. |
Mexico | 100% | ||
Neogen Bio-Scientific Technology (Shanghai) Co., Ltd. |
China | 100% | ||
Neogen Food and Animal Security (India) PVT, LTD |
India | 100% | ||
Neogen Properties, LLC II |
Michigan, U.S. | 100% | ||
Neogen Properties, LLC III |
Michigan, U.S. | 100% | ||
Neogen Properties, LLC V |
Michigan, U.S. | 100% | ||
Neogen Properties, LLC VI |
Michigan, U.S. | 100% | ||
Neogen Properties, LLC VII |
Nebraska, U.S. | 100% | ||
Neogen Uruguay |
Uruguay | 100% | ||
Preserve International |
Nevada, U.S. | 100% | ||
Productos Quimicos Magiar S.A. |
Argentina | 100% | ||
Quat-Chem Ltd. |
England, United Kingdom | 100% | ||
Rogama Industria Comercio Ltda. |
Brazil | 100% |
All subsidiaries listed above are included in the consolidated financial statements of Neogen Corporation.
EXHIBIT 23
Consent of Independent Registered Public Accounting Firm
Neogen Corporation
Lansing, Michigan
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-184176) of Neogen Corporation of our reports dated July 30, 2020, relating to the consolidated financial statements, and the effectiveness of Neogen Corporations internal control over financial reporting, which appear in this Form 10-K.
/s/ BDO USA, LLP
Grand Rapids, Michigan
July 30, 2020
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.
BDO is the brand name for the BDO network and for each of the BDO Member Firms.
EXHIBIT 24
POWER OF ATTORNEY APPOINTING
JOHN E. ADENT AND STEVEN J. QUINLAN
Power of Attorney
Each of the undersigned, in his/her capacity as a director, officer, or both, of Neogen Corporation, appoints John E. Adent and Steven J. Quinlan, or either of them, to be his/her true and lawful attorney to execute in his/her name, place and stead, a Report on Form 10-K for the year ended May 31, 2020 and to file the same with any exhibits or amendments thereto and other documents in connection therewith, with the Securities and Exchange Commission. John E. Adent and Steven J. Quinlan shall have full power and authority to do and perform in the name and on the behalf of each of the undersigned, in any capacity, every act required or necessary to be done as fully as each of the undersigned might or could do in person.
Signature |
Title |
Date | ||
President & Chief Executive Officer | ||||
/s/ John E. Adent |
(Principal Executive Officer) | July 30, 2020 | ||
John E. Adent | ||||
Vice President & Chief Financial Officer | ||||
/s/ Steven J. Quinlan |
(Principal Financial & Accounting Officer) | July 30, 2020 | ||
Steven J. Quinlan | ||||
/s/ James C. Borel |
Chairman of the Board of Directors | July 30, 2020 | ||
James C. Borel | ||||
/s/ William T. Boehm, Ph.D. |
Director | July 30, 2020 | ||
William T. Boehm, Ph.D. | ||||
/s/ Ronald D. Green, Ph.D. |
Director | July 30, 2020 | ||
Ronald D. Green, Ph.D. | ||||
/s/ James L. Herbert |
Director | July 30, 2020 | ||
James L. Herbert | ||||
/s/ G. Bruce Papesh |
Director | July 30, 2020 | ||
G. Bruce Papesh | ||||
/s/ James P. Tobin |
Director | July 30, 2020 | ||
James P. Tobin | ||||
/s/ Darci L. Vetter |
Director | July 30, 2020 | ||
Darci L. Vetter |
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO RULES 13a-14(a) and 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
NEOGEN CORPORATION AND SUBSIDIARIES
I, John E. Adent, certify that:
1. | I have reviewed this Annual Report on Form 10-K for the period ended May 31, 2020 of Neogen Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrants auditors and the audit committee of the registrants board of directors: |
a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Dated: July 30, 2020
/s/ John E. Adent |
John E. Adent |
President & Chief Executive Officer |
(Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO RULES 13a-14(a) and 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
NEOGEN CORPORATION AND SUBSIDIARIES
I, Steven J. Quinlan, certify that:
1. | I have reviewed this Annual Report on Form 10-K for the period ended May 31, 2020 of Neogen Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrants auditors and the audit committee of the registrants board of directors: |
a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Dated: July 30, 2020
/s/ Steven J. Quinlan |
Steven J. Quinlan |
Vice President & Chief Financial Officer |
(Principal Financial & Accounting Officer) |
EXHIBIT 32
NEOGEN CORPORATION
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Annual Report on Form 10-K of Neogen Corporation (the Company) for the period ended May 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, John E. Adent, as Chief Executive Officer and I, Steven J. Quinlan, as Chief Accounting Officer, hereby certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) | This Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | Information contained in this Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: July 30, 2020
/s/ John E. Adent |
John E. Adent |
President & Chief Executive Officer |
(Principal Executive Officer) |
/s/ Steven J. Quinlan |
Steven J. Quinlan |
Vice President & Chief Financial Officer |
(Principal Financial & Accounting Officer) |
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
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