QUARTERLY 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 |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification Number) |
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 |
February 28, |
May 31, |
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2021 |
2020 |
|||||||
Unaudited |
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Assets |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Marketable securities |
||||||||
Accounts receivable, net of allowance of $ |
||||||||
Inventories |
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Prepaid expenses and other current assets |
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|
|
|
|
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Total Current Assets |
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Net Property and Equipment |
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Other Assets |
||||||||
Right of use assets |
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Goodwill |
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Other non-amortizable intangible assets |
||||||||
Amortizable intangible and other assets, net of accumulated amortization of $ |
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|
|
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Total Assets |
$ | $ | |
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|
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|
|||||
Liabilities and Stockholders’ Equity |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued compensation |
||||||||
Income taxes |
||||||||
Other accruals |
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|
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|
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Total Current Liabilities |
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Deferred Income Taxes |
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Other Non-Current Liabilities |
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Total Liabilities |
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Commitments and Contingencies (note 11) |
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Equity |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Retained earnings |
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|
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Total Stockholders’ Equity |
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Total Liabilities and Stockholders’ Equity |
$ | |
$ | |||||
|
|
|
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
February 28/29, |
February 28/29, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Revenues |
||||||||||||||||
Product revenues |
$ | $ | |
$ | |
$ | |
|||||||||
Service revenues |
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Total Revenues |
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Cost of Revenues |
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Cost of product revenues |
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Cost of service revenues |
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Total Cost of Revenues |
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Gross Margin |
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Operating Expenses |
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Sales and marketing |
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General and administrative |
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Research and development |
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Total Operating Expenses |
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|||||||||
Operating Income |
||||||||||||||||
Other Income (Expense) |
||||||||||||||||
Interest income |
||||||||||||||||
Other expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
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|
|||||||||
Total Other Income |
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|
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|
|||||||||
Income Before Taxes |
||||||||||||||||
Provision for Income Taxes |
||||||||||||||||
|
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|
|
|
|
|
|
|||||||||
Net Income |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net Income Per Share |
||||||||||||||||
Basic |
$ | $ | $ | $ | ||||||||||||
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|
|||||||||
Diluted |
$ | $ | $ | $ | ||||||||||||
|
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|
|||||||||
Weighted Average Shares Outstanding |
|
|||||||||||||||
Basic |
||||||||||||||||
Diluted |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
February 28/29, |
February 28/29, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Net income |
$ | |
$ | |
$ | |
$ | |
||||||||
Other comprehensive income (loss), net of tax: foreign currency translations |
( |
) | ( |
) | ||||||||||||
Other comprehensive income (loss), net of tax: unrealized gain (loss) on marketable securities |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total comprehensive income |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
Accumulated |
||||||||||||||||||||||||
Additional |
Other |
|||||||||||||||||||||||
Common Stock |
Paid-in |
Comprehensive |
Retained |
|||||||||||||||||||||
Shares |
Amount |
Capital |
Income (Loss) |
Earnings |
Total |
|||||||||||||||||||
Balance at June 1, 2020 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation plan |
— | — | ||||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
— | — | ||||||||||||||||||||||
Net income for the three months ended August 31, 2020 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive income for the three months ended August 31, 2020 |
— | — | — | — | ||||||||||||||||||||
Balance at August 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation plan |
— | — | ||||||||||||||||||||||
Net income for the three months ended November 30, 2020 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive income for the three months ended November 30, 2020 |
— | — | — | — | ||||||||||||||||||||
Balance at November 30, 2020 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation plan |
||||||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
||||||||||||||||||||||||
Issuance of shares for Megazyme acquisition |
— | — | ||||||||||||||||||||||
Net income for the three months ended February 28, 2021 |
— | |||||||||||||||||||||||
Other comprehensive income for the three months ended February 28, 2021 |
— | |||||||||||||||||||||||
Balance at February 28, 2021 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Accumulated |
||||||||||||||||||||||||
Additional |
Other |
|||||||||||||||||||||||
Common Stock |
Paid-in |
Comprehensive |
Retained |
|||||||||||||||||||||
Shares |
Amount |
Capital |
Income (Loss) |
Earnings |
Total |
|||||||||||||||||||
Balance at June 1, 2019 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation plan |
— | — | ||||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
— | — | ||||||||||||||||||||||
Net income for the three months ended August 31, 2019 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive loss for the three months ended August 31, 2019 |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance at August 31, 2019 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation plan |
— | — | ||||||||||||||||||||||
Net income for the three months ended November 30, 2019 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive income for the three months ended November 30, 2019 |
— | — | — | — | ||||||||||||||||||||
Balance at November 30, 2019 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation plan |
— | — | ||||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
— | — | ||||||||||||||||||||||
Net income for the three months ended February 29, 2020 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive loss for the three months ended February 29, 2020 |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance at February 29, 2020 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Nine Months Ended |
||||||||
February 28/29, |
||||||||
2021 |
2020 |
|||||||
Cash Flows From Operating Activities |
||||||||
Net Income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash from operating activities: |
||||||||
Depreciation and amortization |
||||||||
Share-based compensation |
||||||||
Change in operating assets and liabilities, net of business acquisitions: |
||||||||
Accounts receivable |
||||||||
Inventories |
( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Accounts payable, accruals and other changes |
( |
) | ||||||
|
|
|
|
|||||
Net Cash From Operating Activities |
||||||||
Cash Flows For Investing Activities |
||||||||
Purchases of property, equipment and other non-current intangible assets |
( |
) | ( |
) | ||||
Proceeds from the sale of marketable securities |
||||||||
Purchases of marketable securities |
( |
) | ( |
) | ||||
Business acquisitions, net of cash acquired |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net Cash For Investing Activities |
( |
) | ( |
) | ||||
Cash Flows From Financing Activities |
||||||||
Exercise of stock options and issuance of employee stock purchase plan shares |
||||||||
|
|
|
|
|||||
Net Cash From Financing Activities |
||||||||
Effect of Foreign Exchange Rates on Cash |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net Increase In Cash and Cash Equivalents |
||||||||
Cash and Cash Equivalents, Beginning of Period |
||||||||
|
|
|
|
|||||
Cash and Cash Equivalents, End of Period |
$ | $ | ||||||
|
|
|
|
(in thousands) |
Maturity |
February 28, 2021 |
May 31, 2020 |
|||||||
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 |
$ | |
$ | |
||||||
(in thousands) |
Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
||||||||||||
US Treasuries |
$ |
$ |
$ |
$ |
||||||||||||
Commercial Paper & Corporate Bonds |
( |
) |
||||||||||||||
Certificates of Deposit |
||||||||||||||||
Total Marketable Securities |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
(in thousands) |
Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
||||||||||||
US Treasuries |
$ |
$ |
$ |
— |
$ |
|||||||||||
Commercial Paper & Corporate Bonds |
( |
) |
||||||||||||||
Certificates of Deposit |
— |
|||||||||||||||
Total Marketable Securities |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
(in thousands) |
February 28, 2021 |
May 31, 2020 |
||||||
Raw materials |
$ | $ | ||||||
Work-in-process |
||||||||
Finished and purchased goods |
||||||||
$ |
$ |
|||||||
• | 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 an amount equal to the lease payments. |
(in thousands) |
February 28, 2021 |
May 31, 2020 |
||||||
Right of use - assets |
$ | |
$ | |
||||
Lease liabilities - current |
||||||||
Lease liabilities - non-current |
February 28, 2021 |
May 31, 2020 |
|||||||
Weighted average remaining lease term |
||||||||
Weighted average discount rate |
% | % |
Three Months Ended February 28/29, |
Nine Months Ended February 28/29, |
|||||||||||||||
(in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Operating leases |
$ | |
$ | |
$ | |
$ | |
||||||||
Short term leases |
||||||||||||||||
Total lease expense |
$ | $ | $ | $ | ||||||||||||
Amount |
||||
Years ending May 31, 2021 (1) |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
2026 and thereafter |
||||
Total lease payments |
||||
Less: imputed interest |
||||
Total lease liabilities |
$ |
|||
(1) | Excluding the nine months ended February 28, 2021. |
• | 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, dehydrated 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. |
Three Months ended February 28/29, |
Nine Months ended February 28/29, |
|||||||||||||||
(in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
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 Revenues |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended February 28/29, |
Nine Months Ended February 28/29, |
|||||||||||||||
(in thousands, except per share amounts) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
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 and RSUs |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Denominator for diluted net income per share |
||||||||||||||||
Net income attributable to Neogen per share: |
||||||||||||||||
Basic |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
(in thousands) |
Food Safety |
Animal Safety |
Corporate and Eliminations (1) |
Total |
||||||||||||
As of and for the three months ended February 28, 2021 |
|
|||||||||||||||
Product revenues to external customers |
$ | $ | $ | $ | ||||||||||||
Service revenues to external customers |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues to external customers |
||||||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||
Total assets |
||||||||||||||||
As of and for the three months ended February 29, 2020 |
|
|||||||||||||||
Product revenues to external customers |
$ | $ | $ | — | $ | |||||||||||
Service revenues to external customers |
— | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues to external customers |
— | |||||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||
Total assets |
(1) | Includes corporate assets, consisting principally of 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. |
(in thousands) |
Food Safety |
Animal Safety |
Corporate and Eliminations (1) |
Total |
||||||||||||
As of and for the nine months ended February 28, 2021 |
||||||||||||||||
Product revenues to external customers |
$ | |
$ | |
$ | $ | |
|||||||||
Service revenues to external customers |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues to external customers |
||||||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||
As of and for the nine months ended February 29, 2020 |
||||||||||||||||
Product revenues to external customers |
$ | $ | $ | — | $ | |||||||||||
Service revenues to external customers |
— | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues to external customers |
— | |||||||||||||||
Operating income (loss) |
( |
) |
(1) | Includes elimination of intersegment transactions. |
Three months ended February 28/29, |
Nine months ended February 28/29, |
|||||||||||||||
(in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Domestic |
$ | $ | |
$ | |
$ | |
|||||||||
International |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
||||||||||||||||
|
|
|
|
|
|
|
|
(Options in thousands) |
Shares |
Weighted- Average Exercise Price |
||||||
Options outstanding June 1, 2020 |
$ | |
||||||
Granted |
||||||||
Exercised |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Options outstanding February 28, 2021 |
$ |
FY2021 |
||||
Risk-free interest rate |
% | |||
Expected dividend yield |
% | |||
Expected stock price volatility |
% | |||
Expected option life |
• | Consolidated revenues were $116.7 million in the third quarter of fiscal 2021, an increase of 17% compared to $99.9 million in the third quarter of fiscal 2020. Organic sales growth in the third quarter of fiscal 2021 was 13%. For the nine month period, consolidated revenues were $341.0 million, an increase of 10% compared to $309.1 million in the same period in the prior fiscal year. On a year to date basis, organic sales rose 8%. |
• | Food Safety segment sales were $58.4 million in the third quarter of fiscal 2021, an increase of 16% compared to $50.5 million in the same period a year ago. Organic sales in this segment increased 11% for the comparative period, with revenues from the acquisitions of Neogen Italia (January 2020), Neogen Argentina (January 2020), Neogen Uruguay (January 2020), Abtek (January 2020), Neogen Chile (March 2020) and Megazyme (December 2020) providing the remainder of the increase in revenues for the segment. For the year to date, Food Safety segment sales were $170.1 million, an increase of 7% compared to $158.4 million in the same period of the prior fiscal year; the organic sales increase was 4% for the comparative period, with the acquisitions listed above providing the additional contributions to revenue. |
• | Animal Safety segment sales were $58.3 million in the third quarter of fiscal 2021, an increase of 18% compared to $49.4 million in the third quarter of fiscal 2020. Organic sales in this segment rose 16% in the third quarter, with additional contribution from the August 2020 acquisition of the StandGuard product line. For the nine month period, Animal Safety segment sales were $170.9 million, an increase of 13% compared to $150.7 million in the same period a year ago. Year to date organic sales rose 12%, with revenues from the StandGuard acquisition contributing the difference. |
• | International sales in the third quarter of fiscal 2021 were 40% of total sales compared to 40% of total sales in the third quarter of fiscal 2020. For the year to date, fiscal 2021 international sales were 39% of total sales compared to 40% of total sales in the same period of the prior year. |
• | Our effective tax rate in the third quarter was 16.3% compared to an effective tax rate of 14.4% in the prior year third quarter; the fiscal 2021 year to date effective tax rate was 18.1% compared to 15.6% for the same period a year ago. |
• | Net income for the quarter ended February 28, 2021 was $13.4 million, or $0.25 per diluted share, compared to $12.2 million, or $0.23 per diluted share in the same period in the prior year. For the year to date, net income was $45.1 million, an increase of 5% compared to prior year to date net income of $43.1 million. Earnings per fully diluted share for the year to date was $0.85 compared to $0.82 per diluted share for the same period in the prior year. |
• | Cash provided from operating activities in the first nine months of fiscal 2021 was $57.9 million, compared to $60.3 million in the same period of fiscal 2020. |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
February 28, 2021, |
February 28, 2021, |
|||||||||||||||
Revenue |
Revenue |
Revenue |
Revenue |
|||||||||||||
% Inc (Dec) |
% Inc (Dec) |
% Inc (Dec) |
% Inc (Dec) |
|||||||||||||
USD |
Local Currency |
USD |
Local Currency |
|||||||||||||
UK Companies |
9 | % | 4 | % | 13 | % | 9 | % | ||||||||
Brazil Operations |
(11 | )% | 12 | % | (11 | )% | 17 | % | ||||||||
Neogen Latinoamerica |
7 | % | 14 | % | 6 | % | 17 | % | ||||||||
Neogen China |
125 | % | 109 | % | 97 | % | 88 | % | ||||||||
Neogen India |
(6 | )% | (3 | )% | 2 | % | 7 | % | ||||||||
Neogen Canada |
38 | % | 33 | % | 2 | % | 1 | % | ||||||||
Neogen Australasia |
95 | % | 73 | % | 81 | % | 69 | % |
Three Months Ended February 28/29, |
||||||||||||||||
Increase/ |
||||||||||||||||
(in thousands) |
2021 |
2020 |
(Decrease) |
% |
||||||||||||
Food Safety |
||||||||||||||||
Natural Toxins, Allergens & Drug Residues |
$ | 18,255 | $ | 17,154 | $ | 1,101 | 6 | % | ||||||||
Bacterial & General Sanitation |
10,333 | 9,413 | 920 | 10 | % | |||||||||||
Culture Media & Other |
14,888 | 11,222 | 3,666 | 33 | % | |||||||||||
Rodenticides, Insecticides & Disinfectants |
9,644 | 7,964 | 1,680 | 21 | % | |||||||||||
Genomics Services |
5,304 | 4,745 | 559 | 12 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
$ | 58,424 | $ | 50,498 | $ | 7,926 | 16 | % | |||||||||
Animal Safety |
||||||||||||||||
Life Sciences |
$ | 1,399 | $ | 1,376 | $ | 23 | 2 | % | ||||||||
Veterinary Instruments & Disposables |
12,494 | 10,799 | 1,695 | 16 | % | |||||||||||
Animal Care & Other |
8,873 | 6,667 | 2,206 | 33 | % | |||||||||||
Rodenticides, Insecticides & Disinfectants |
18,085 | 14,558 | 3,527 | 24 | % | |||||||||||
Genomics Services |
17,434 | 15,971 | 1,463 | 9 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
$ | 58,285 | $ | 49,371 | $ | 8,914 | 18 | % | |||||||||
|
|
|
|
|
|
|||||||||||
Total Revenues |
$ | 116,709 | $ | 99,869 | $ | 16,840 | 17 | % | ||||||||
|
|
|
|
|
|
Nine Months Ended February 28/29, |
||||||||||||||||
Increase/ |
||||||||||||||||
(in thousands) |
2021 |
2020 |
(Decrease) |
% |
||||||||||||
Food Safety |
||||||||||||||||
Natural Toxins, Allergens & Drug Residues |
$ | 57,271 | $ | 57,950 | $ | (679 | ) | (1 | )% | |||||||
Bacterial & General Sanitation |
31,499 | 31,345 | 154 | 0 | % | |||||||||||
Culture Media & Other |
39,577 | 35,259 | 4,318 | 12 | % | |||||||||||
Rodenticides, Insecticides & Disinfectants |
27,230 | 20,859 | 6,371 | 31 | % | |||||||||||
Genomics Services |
14,566 | 12,961 | 1,605 | 12 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
$ | 170,143 | $ | 158,374 | $ | 11,769 | 7 | % | |||||||||
Animal Safety |
||||||||||||||||
Life Sciences |
$ | 4,122 | $ | 4,901 | $ | (779 | ) | (16 | )% | |||||||
Veterinary Instruments & Disposables |
34,843 | 32,621 | 2,222 | 7 | % | |||||||||||
Animal Care & Other |
25,902 | 20,859 | 5,043 | 24 | % | |||||||||||
Rodenticides, Insecticides & Disinfectants |
56,470 | 47,462 | 9,008 | 19 | % | |||||||||||
Genomics Services |
49,554 | 44,879 | 4,675 | 10 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
$ | 170,891 | $ | 150,722 | $ | 20,169 | 13 | % | |||||||||
|
|
|
|
|
|
|||||||||||
Total Revenues |
$ | 341,034 | $ | 309,096 | $ | 31,938 | 10 | % | ||||||||
|
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||
February 28/29, |
February 28/29, |
|||||||||||||||
(in thousands) |
2021 |
2020 |
2021 |
2020 |
||||||||||||
Interest income (net of expense) |
$ | 294 | $ | 1,600 | $ | 1,571 | $ | 4,381 | ||||||||
Foreign currency transactions |
(118 | ) | (420 | ) | (374 | ) | (889 | ) | ||||||||
Insurance settlement |
— | — | 309 | 1 | ||||||||||||
Legal settlement |
— | — | (300 | ) | — | |||||||||||
Contingent consideration |
111 | — | 111 | — | ||||||||||||
Other |
(84 | ) | 27 | (109 | ) | 56 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Other Income |
$ | 203 | $ | 1,207 | $ | 1,208 | $ | 3,549 | ||||||||
|
|
|
|
|
|
|
|
NEOGEN CORPORATION |
(Registrant) |
/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 Officer and Principal Accounting Officer) |
EXHIBIT 31.1
13a. CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
NEOGEN CORPORATION AND SUBSIDIARIES
I, John E. Adent, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended February 28, 2021 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; and |
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; and |
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 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: March 31, 2021
/s/ John E. Adent |
John E. Adent |
President & Chief Executive Officer |
(Principal Executive Officer) |
EXHIBIT 31.2
13a. CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
NEOGEN CORPORATION AND SUBSIDIARIES
I, Steven J. Quinlan, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended February 28, 2021 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; and |
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; and |
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 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: March 31, 2021
/s/ Steven J. Quinlan |
Steven J. Quinlan |
Vice President & Chief Financial Officer |
(Principal Financial Officer and Principal Accounting Officer) |
EXHIBIT 32
18 U.S.C. SECTION 1350 CERTIFICATION
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 Quarterly Report on Form 10-Q of Neogen Corporation (the Company) for the period ended February 28, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, John E. Adent, as Chief Executive Officer of the Company and I, Steven J. Quinlan, as Chief Financial 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. |
Dated: March 31, 2021
/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 Officer and Principal 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.
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Feb. 28, 2021 |
May 31, 2020 |
---|---|---|
Accounts receivable, allowance | $ 1,400 | $ 1,350 |
Accumulated Amortization | $ 50,998 | $ 44,690 |
Preferred stock, par value | $ 1.00 | $ 1.00 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.16 | $ 0.16 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 53,511,262 | 52,945,841 |
Common stock, shares outstanding | 53,511,262 | 52,945,841 |
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Revenues | ||||
Total Revenues | $ 116,709 | $ 99,869 | $ 341,034 | $ 309,096 |
Cost of Revenues | ||||
Total Cost of Revenues | 62,860 | 54,539 | 183,669 | 164,546 |
Gross Margin | 53,849 | 45,330 | 157,365 | 144,550 |
Operating Expenses | ||||
Sales and marketing | 18,693 | 17,675 | 52,938 | 53,206 |
General and administrative | 15,146 | 10,789 | 38,343 | 32,473 |
Research and development | 4,236 | 3,823 | 12,170 | 11,292 |
Total Operating Expenses | 38,075 | 32,287 | 103,451 | 96,971 |
Operating Income | 15,774 | 13,043 | 53,914 | 47,579 |
Other Income (Expense) | ||||
Interest income | 294 | 1,600 | 1,571 | 4,381 |
Other expense | (91) | (393) | (363) | (832) |
Total Other Income | 203 | 1,207 | 1,208 | 3,549 |
Income Before Taxes | 15,977 | 14,250 | 55,122 | 51,128 |
Provision for Income Taxes | 2,600 | 2,050 | 10,000 | 8,000 |
Net Income | $ 13,377 | $ 12,200 | $ 45,122 | $ 43,128 |
Net Income Per Share | ||||
Basic | $ 0.25 | $ 0.23 | $ 0.85 | $ 0.82 |
Diluted | $ 0.25 | $ 0.23 | $ 0.85 | $ 0.82 |
Weighted Average Shares Outstanding | ||||
Basic | 53,413 | 52,795 | 53,132 | 52,463 |
Diluted | 53,695 | 53,048 | 53,384 | 52,783 |
Product Revenues | ||||
Revenues | ||||
Total Revenues | $ 92,816 | $ 77,736 | $ 273,288 | $ 247,071 |
Cost of Revenues | ||||
Total Cost of Revenues | 49,466 | 41,068 | 145,336 | 128,658 |
Service Revenues | ||||
Revenues | ||||
Total Revenues | 23,893 | 22,133 | 67,746 | 62,025 |
Cost of Revenues | ||||
Total Cost of Revenues | $ 13,394 | $ 13,471 | $ 38,333 | $ 35,888 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Net income | $ 13,377 | $ 12,200 | $ 45,122 | $ 43,128 |
Other comprehensive income (loss), net of tax: | ||||
foreign currency translations | 360 | (1,761) | 5,419 | (2,452) |
unrealized gain (loss) on marketable securities | (115) | 172 | (552) | 585 |
Total comprehensive income | $ 13,622 | $ 10,611 | $ 49,989 | $ 41,261 |
Accounting Policies |
9 Months Ended |
---|---|
Feb. 28, 2021 | |
Accounting Policies | 1. ACCOUNTING POLICIES BASIS OF PRESENTATION AND CONSOLIDATION The accompanying unaudited consolidated financial statements include the accounts of Neogen Corporation (“Neogen” or the “Company”) and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included in the accompanying unaudited consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and nine month periods ended February 28, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending May 31, 2021. For more complete financial information, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2020. Our functional currency is the U.S. dollar. We translate our non-U.S. operations’ assets and liabilities denominated in foreign currencies into U.S. dollars at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in other comprehensive income (loss). Gains or losses from foreign currency transactions are included in other income (expense) on our consolidated statement of income. Recently Adopted Accounting Standards Financial Instruments - Credit Losses On June 1, 2020, the Company adopted ASU No. 2016-13—Measurement of Credit Losses on Financial Instruments, which changes how the Company measures credit losses on most financial instruments measured at amortized cost and certain other instruments, such as loans, receivables and held-to-maturity Fair Value Measurements On June 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements of fair value measurements. The adoption of this guidance did not have an impact on our consolidated financial statements. Cloud Computing Implementation Cost On June 1, 2020, the Company adopted ASU 2018-15, Intangible-Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Cost Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in cloud computing arrangements. The adoption of this guidance did not have an impact on our consolidated financial statements. Comprehensive Income Comprehensive income represents net income and any revenues, expenses, gains and losses that, under U.S. generally accepted accounting principles, are excluded from net income and recognized directly as a component of equity. Accumulated other comprehensive income (loss) consists of foreign currency translation adjustments and unrealized gains or losses on marketable securities. Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments other than cash equivalents and marketable securities, which include accounts receivable and accounts payable, approximate fair value based on either their short maturity or current terms for similar instruments. Fair value measurements are determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. The Company utilizes a fair value hierarchy based upon the observability of inputs used in valuation techniques as follows: 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. ESTIMATES AND ASSUMPTIONS The preparation of these financial statements requires that management make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates the estimates, including, but not limited to, variable consideration related to revenue recognition, allowances for doubtful accounts, the market value of, and demand for, inventories, stock-based compensation, provision for income taxes and related balance sheet accounts, accruals, goodwill and other intangible assets. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Accounts Receivable Allowance Management attempts to minimize credit risk by reviewing customers’ credit history before extending credit and by monitoring credit exposure on a regular basis. An allowance for doubtful accounts is established based upon factors surrounding the credit risk of specific customers, historical trends, current conditions and other information. Collateral or other security is generally not required for accounts receivable. Once a receivable balance has been determined to be uncollectible, generally after all collection efforts have been exhausted, that amount is charged against the allowance for doubtful accounts. Inventory The reserve for obsolete and slow-moving inventory is reviewed at least quarterly based on an analysis of the inventory, considering the current condition of the asset as well as other known facts and future plans. The reserve required to record inventory at lower of cost or net realizable value is adjusted as conditions change. Product obsolescence may be caused by shelf-life expiration, discontinuance of a product line, replacement products in the marketplace or other competitive situations. Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses after amounts are allocated to other identifiable intangible assets. Other intangible assets include customer relationships, trademarks, licenses, trade names, covenants not-to-compete Long-Lived Assets Management reviews the carrying values of its long-lived assets to be held and used, including definite-lived intangible assets, for possible impairment whenever events or changes in business conditions warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated separately identifiable undiscounted cash flows over the remaining useful life of the asset indicate that the carrying amount of the asset may not be recoverable. In such an event, fair value is determined using discounted cash flows and, if lower than the carrying value, impairment is recognized through a charge to operations. Equity Compensation Plans Share options awarded to employees, restricted stock units (RSUs) and shares of stock awarded to employees under certain stock purchase plans are recognized as compensation expense based on their fair value at grant date. The fair market value of options granted under the Company stock option plans was estimated on the date of grant using the Black-Scholes option-pricing model with assumptions for inputs such as interest rates, expected dividends, an estimate of award forfeitures, volatility measures and specific employee exercise behavior patterns based on statistical data. Some of the inputs used are not market-observable and have to be estimated or derived from available data. Use of different estimates would produce different option values, which in turn would result in higher or lower compensation expense recognized. For RSUs, we use the intrinsic value method to value the units. To value other equity awards, several recognized valuation models exist; none of these models can be singled out as being the best or most correct. The model applied by us can handle most of the specific features included in the options granted, which are the reason for their use. If different models were used, the option values could differ despite using the same inputs. Accordingly, using different assumptions coupled with using a different valuation model could have a significant impact on the fair value of employee stock options. Fair value could be either higher or lower than the number provided by the model applied and the inputs used. Further information on our equity compensation plans, including inputs used to determine the fair value of options, is disclosed in Note 8. Income Taxes We account for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and for tax credit carryforwards and are measured using the enacted tax rates in effect for the years in which the differences are expected to reverse. Deferred income tax expense represents the change in net deferred income tax assets and liabilities during the year. |
Cash and Marketable Securities |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Cash and Cash Equivalents [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and marketable securities | 2. CASH AND MARKETABLE SECURITIES Cash and Cash Equivalents Cash and cash equivalents consist of bank demand accounts, savings deposits, certificates of deposit and commercial paper with original maturities of 90 days or less. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has not experienced losses related to these balances and believes it is not exposed to significant credit risk regarding its cash and cash equivalents. Cash and cash equivalents were $73,482,000 and $66,269,000 at February 28, 2021 and May 31, 2020, respectively. The carrying value of these assets approximates fair value due to the short maturity of these instruments and is classified as Level 1 in the fair value hierarchy. Marketable Securities The Company has marketable securities held by banks or broker-dealers at February 28, 2021. Changes in market value are monitored and recorded on a monthly basis; in the event of a downgrade in credit quality subsequent to purchase, the marketable securities investment is evaluated to determine the appropriate action to take to minimize the overall risk to our marketable securities portfolio. These securities are classified as available for sale. The primary objective of management’s short-term investment activity is to preserve capital for the purpose of funding current operations, capital expenditures and business acquisitions; short-term investments are not entered into for trading or speculative purposes. These securities are recorded at fair value based on recent trades or pricing models and therefore meet the Level 2 criteria. Interest income on these investments is recorded within other income on the income statement. Adjustments in the fair value of these assets are recorded in other comprehensive income. Marketable Securities as of February 28, 2021 and May 31, 2020 are listed below by classification and remaining maturities.
The components of marketable securities at February 28, 2021 are as follows:
The components of marketable securities at May 31, 2020 are as follows:
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Inventories |
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Inventories | 3. INVENTORIES Inventories are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value. The components of inventories follow:
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Leases |
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Leases | 4. LEASES We lease various manufacturing, laboratory, warehousing and distribution facilities, administrative and sales offices, equipment and vehicles under operating leases. We evaluate our contracts to determine if an arrangement is a lease at inception and classify it as a finance or operating lease. Currently, all of our leases are classified as operating leases. Leased assets and corresponding liabilities are recognized based on the present value of the lease payments over the lease term. Our lease terms may include options to extend when it is reasonably certain that we will exercise that option. Topic ASC 842 requires the Company to recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use Right-of-use non-current lease liabilities are recorded in other accruals within current liabilities and other non-current liabilities, respectively, on our consolidated balance sheets. Costs associated with operating leases are recognized on a straight-line basis within operating expenses over the term of the lease. We have made certain assumptions and judgments when applying ASC 842, the most significant of which are:
Supplemental balance sheet information related to operating leases was as follows:
The weighted average remaining lease term and weighted average discount rate were as follows:
Operating lease expenses are classified as cost of revenues or operating expenses on the consolidated statements of income. The components of lease expense were as follows:
Cash paid for amounts included in the measurement of lease liabilities for operating leases included in cash flows from operations on the statement of cash flows were approximately $946,000 and $868,000 for the nine months ended February 28, 2021 and February 29, 2020, respectively. There were no non-cash additions to right-of-use Undiscounted minimum lease payments as of February 28, 2021 were as follows:
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Revenue Recognition |
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Revenue Recognition | 5. REVENUE RECOGNITION The Company determines the amount of revenue to be recognized through application of the following steps:
Essentially all of Neogen’s revenue is generated through contracts with its customers. A performance obligation is a promise in a contract to transfer a product or service to a customer. We generally recognized revenue at a point in time when all of our performance obligations under the terms of a contract are satisfied. Revenue is recognized upon transfer of control of promised products and services in an amount that reflects the consideration we expect to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met. Certain agreements with customers include discounts or rebates on the sale of products and services applied retrospectively, such as volume rebates achieved by purchasing a specified purchase threshold of goods and services. We account for these discounts as variable consideration and estimate the likelihood of a customer meeting the threshold in order to determine the transaction price using the most predictive approach. We typically use the most-likely-amount method, for incentives that are offered to individual customers, and the expected-value method, for programs that are offered to a broad group of customers. Variable consideration reduces the amount of revenue that is recognized. Rebate obligations related to customer incentive programs are recorded in accrued liabilities; the rebate estimates are adjusted at the end of each applicable measurement period based on information currently available. The performance obligations in Neogen’s contracts are generally satisfied well within one year of contract inception. In such cases, management has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component. Management has elected to utilize the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred because the amortization period for the prepaid costs that would otherwise have been deferred and amortized is one year or less. We account for shipping and handling for products as a fulfillment activity when goods are shipped. Shipping and handling costs that are charged to and reimbursed by the customer are recognized as revenues, while the related expenses incurred by Neogen are recorded in sales and marketing expense. Revenue is recognized net of any tax collected from customers; the taxes are subsequently remitted to governmental authorities. Our terms and conditions of sale generally do not provide for returns of product or reperformance of service except in the case of quality or warranty issues. These situations are infrequent; due to immateriality of the amount, warranty claims are recorded in the period incurred. The Company derives revenue from two primary sources—product revenue and service revenue. Product revenue consists of shipments of:
Revenues for our products are recognized and invoiced when the product is shipped to the customer. Service revenue consists primarily of:
Revenues for Neogen’s genomics and commercial laboratory services are recognized and invoiced when the applicable laboratory service is performed and the results are conveyed to the customer. Payment terms for products and services are generally The following table presents disaggregated revenue by major product and service categories for the three and nine month periods ended February 28, 2021 and February 29, 2020:
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Net Income per Share |
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Net Income per Share | 6. NET INCOME PER SHARE The calculation of net income per share follows:
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Segment Information and Geographic Data |
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Segment Information and Geographic Data | 7. SEGMENT INFORMATION AND GEOGRAPHIC DATA We have two Our international operations in the United Kingdom, Mexico, Brazil, China and India originally focused on the Company’s food safety products, and each of these units reports through the Food Safety segment. In recent years, these operations have expanded to offer our complete line of products and services, including those usually associated with the Animal Safety segment such as cleaners, disinfectants, rodenticides, insecticides, veterinary instruments and genomics services. These additional products and services are managed and directed by existing management and are reported through the Food Safety segment. Neogen’s operation in Australia originally focused on providing genomics services and sales of animal safety products and reports through the Animal Safety segment. With the acquisition of Cell BioSciences on February 28, 2020, this operation has expanded to offer our complete line of products and services, including those usually associated with the Food Safety segment. These additional products are managed and directed by existing management at Neogen Australasia and report through the Animal Safety segment. The accounting policies of each of the segments are the same as those described in Note 1. Segment information follows:
The following table presents the Company’s revenue disaggregated by geographic location:
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Equity Compensation Plans |
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Equity Compensation Plans | 8. EQUITY COMPENSATION PLANS Incentive and non-qualified options to purchase shares of common stock have been granted to directors, officers and employees of Neogen under the terms of the Company’s stock option plans. These options are granted at an exercise price of not less than the fair market value of the stock on the date of grant. Options vest ratably over and five year periods and the contractual terms are generally or ten years. A summary of stock option activity during the nine months ended February 28, 2021 follows:
The weighted-average fair value per share of stock options granted during the first nine months of fiscal years 2021 and 2020, estimated on the date of grant using the Black-Scholes option pricing model, was $15.41 and $15.56, respectively.
The Company granted 59,125 restricted stock units (RSUs) to directors, officers and employees under the terms of the 2018 Omnibus Incentive Plan in October 2020, which vest ratably over andR s have a weighted average value of $68.43 per share and will be expensed straight-line over the remaining weighted-average period of 4.49 years. On February 28, 2021 there was $3,144,000 in unamortized compensation cost related to SU non-vested RSUs. During the three and nine month periods ended February 28, 2021 and February 29, 2020, the Company recorded $1,581,000 and $1,640,000 and $4,773,000 and $4,795,000, respectively, of compensation expense related to its share-based awards. The Company offers eligible employees the option to purchase common stock at a 5% discount to the lower of the market value of the stock at the beginning or end of each participation period under the terms of the 2011 Employee Stock Purchase Plan; the discount is recorded in general and administrative expense. Total individual purchases in any year are limited to 10% of compensation. |
Business and Product Line Acquisitions |
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Business and Product Line Acquisitions | 9. BUSINESS AND PRODUCT LINE ACQUISITIONS The Consolidated Statements of Income reflect the results of operations for business acquisitions since the respective dates of purchase. All are accounted for using the acquisition method. Goodwill recognized in the acquisitions discussed below relates primarily to enhancing the Company’s strategic platform for the expansion of available product offerings. On January 1, 2020, the Company acquired all of the stock of Productos Quimicos Magiar, a distributor of Neogen’s Food Safety products for the past 20 years, located in Argentina. This acquisition gives Neogen a direct sales presence in Argentina. Consideration for the purchase was $3,776,000 in net cash, with $3,237,000 paid at closing and $540,000 payable to the former owner on January 1, 2022, and up to $979,000 of contingent consideration, payable in one year, based upon an excess net sales formula. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $603,000, inventory of $446,000, machinery and equipment of $36,000, other current assets of $221,000, accounts payable of $383,000, other current liabilities of $312,000, contingent consideration accrual of $640,000, non-current deferred tax5- 10 (non-deductible but not earned was recorded as a gain in Other Income in the third quarter of fiscal 2021. This operation continues to operate from its current location in Buenos Aires, Argentina, reporting within the Food Safety segment. It is managed through Neogen’s Latin America operation. On January 1, 2020, the Company acquired all of the stock of Productos Quimicos Magiar, a distributor of Neogen’s Food Safety products for the past 20 years, located in Uruguay. This acquisition gives Neogen a direct sales presence in Uruguay. Consideration for the purchase was $1,488,000 in net cash, with $1,278,000 paid at closing and $210,000 payable to the former owner on January 1, 2022, and up to $241,000 in contingent consideration, payable in one year, based upon an excess net sales formula. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $280,000, inventory of $174,000, machinery and equipment of $16,000, other current assets of $68,000, accounts payable of $204,000, other current liabilities of $11,000, contingent consideration accrual of $159,000,non-current 5-10 (non-deductible but no was recorded as a gain in Other Income in the third quarter of fiscal 2021. This operation continues to operate from its current location in Montevideo, Uruguay, reporting within the Food Safety segment. It is managed through Neogen’s Latin America operation.t earned On January 9, 2020, the Company acquired all of the stock of Diessechem Srl, a distributor of food and feed diagnostics for the past 27 years, located in Italy. This acquisition gives Neogen a direct sales presence in Italy. Consideration for the purchase was $3,455,000 in net cash. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $780,000, inventory of $5,000, other current assets of $160,000, accounts payable of $140,000, other current liabilities of $305,000,non-current 5-10 (non-deductible Scotland operation.On January 31, 2020, the Company acquired all of the stock of Abtek Biologicals Limited, a manufacturer and supplier of culture media supplements and microbiology technologies. This acquisition enhances the Company’s culture media product line offering for the worldwide industrial microbiology markets. Consideration for the purchase was $1,401,000 in net cash, with $1,282,000 paid at closing and $119,000 payable to the former owner on January 31, 2021. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $135,000, inventory of $207,000, machinery and equipment of $105,000, prepayments of $6,000, accounts payable of $118,000, other current liabilities of $34,000,non-current 5-10 (non-deductible On February 28, 2020, the Company acquired the assets of Cell BioSciences, an Australian distributor of food safety and industrial microbiology products. This acquisition gives Neogen a direct sales presence across Australasia for its entire product portfolio. Consideration for the purchase was $3,768,000 in cash, with $3,596,000 paid at closing and $172,000 payable in one year. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included inventory of $420,000, unearned revenue liability of $13,000, intangible assets of $1,338,000 (with an estimated life of 3 to 10 years) and the remainder to goodwill (non-deductible o the former owner in March 2021. The business operates in Gatton, Australia, reporting within the Australian operations in the Animal Safety segment.On March 26, 2020, the Company acquired the assets of Chile-based Magiar Chilena, a distributor of food , animal and plant diagnostics, including Neogen products. This acquisition gives Neogen a direct sales presence in Chile. Consideration for the purchase was $400,000 in cash, with $350,000 paid at closing and $50,000 payable to the former owner on March 26, 2021. The preliminary purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included inventory of $164,000, machinery and equipment of $53,000, and intangible assets of $183,000 (with an estimated life of5-10 On July 31, 2020, the Company acquired the U.S. (including territories) rights to Elanco’s StandGuard Pour-on for horn fly and lice control in beef cattle, and related assets. This product line fits in well with Neogen’s existing agricultural insecticide portfolio and organizational capabilities. Consideration for the purchase was $2,351,000 in cash, all paid at closing. The preliminary purchase price allocation, based upon the fair value of these assets determined using the income approach, included inventory of $51,000 and intangible assets of $2,300,000 (with an estimated life of 15 years). This product line is currently being toll manufactured for the Company but is eventually expected to be manufactured at Neogen’s operation in Iowa; the sales are reported within the Animal Safety segment. On December 30, 2020, the Company acquired all of the stock of Megazyme, Ltd, an Ireland-based company, and its wholly owned U.S. subsidiary, Megazyme, Inc. Megazyme is a manufacturer and supplier of diagnostic assay kits and enzymes to measure dietary fiber, complex carbohydrates and enzymes in food and beverages as well as animal feeds. This acquisition will allow Neogen to expand its commercial relationships across food, feed and beverage companies, and provide additional food quality diagnostic products to commercial labs and food science research institutions. Consideration for the purchase was net cash of $39.8 million paid at closing, $8.6 million of cash payable in two installments in two and four years, $4.9 million of stock issued at closing, and up to $2.5 million of contingent consideration, payable in two installments over the next year, based upon an excess net sales formula. The preliminary purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $1,339,000, inventory of $5,619,000, net property, plant and equipment of $12,141,000, prepayments of $69,000, accounts payable of $4,000, other current liabilities of $2,405,000, contingent consideration accrual of $2,458,000, non-current deferred tax liabilities of $2,389,000, intangible assets of $19,461,000 (with an estimated life of 5-10 years) and the remainder to goodwill (non-deductible for tax purposes). These values are Level 3 fair value measurements. In February 2021, the former owner was paid $1,229,000 for the first installment of contingent consideration, based upon the achievement of sales targets. The Irish company continues to operate from its current location in Bray, Ireland, reporting within the Food Safety segment and is managed through Neogen’s Scotland operation. The U.S. company’s business is managed by our Lansing-based Food Safety team. For each acquisition listed above, the revenues and net income were not considered material and were therefore not disclosed. |
Long Term Debt |
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Long Term Debt | 10. LONG TERM DEBT We have a financing agreement with a bank providing for a $15,000,000 unsecured revolving line of credit, which was amended in the second quarter to extend the expiration to November 30, 2023. There were no |
Commitments and Contingencies |
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Commitments and Contingencies | 11. COMMITMENTS AND CONTINGENCIES The Company is involved in environmental remediation and monitoring activities at its Randolph, Wisconsin manufacturing facility and accrues for related costs when such costs are determined to be probable and estimable. The Company currently utilizes a pump and treat remediation strategy, which includes semi-annual monitoring and reporting, consulting, and maintenance of monitoring wells. Neogen expenses these annual costs of remediation, which have ranged from $38,000 to $131,000 per year over the past five years. The Company’s estimated liability for these costs was $916,000 at both February 28, 2021 and May 31, 2020, measured on an undiscounted basis over an estimated period of 15 years; $100,000 of the liability is recorded within current liabilities and the remainder is recorded within other non-current liabilities on the consolidated balance sheets. In fiscal 2019, the Company performed an updated Corrective Measures Study (CMS) on the site, per a request from the Wisconsin Department of Natural Resources (WDNR), and is in discussion with the WDNR regarding potential alternative remediation strategies going forward. The Company believes that the current pump and treat strategy is appropriate for the site. At this time, the outcome of the review in terms of approach and future costs is unknown, but a change in the current remediation strategy, depending on the alternative selected, could require an increase in the recorded liability, with an offsetting charge to operations in the period recorded. The Company is subject to certain legal and other proceedings in the normal course of business that, in the opinion of management, should not have a material effect on its future results of operations or financial position. |
Accounting Policies (Policies) |
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Basis of presentation and consolidation | BASIS OF PRESENTATION AND CONSOLIDATION The accompanying unaudited consolidated financial statements include the accounts of Neogen Corporation (“Neogen” or the “Company”) and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included in the accompanying unaudited consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and nine month periods ended February 28, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending May 31, 2021. For more complete financial information, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2020. Our functional currency is the U.S. dollar. We translate our
non-U.S. operations’ assets and liabilities denominated in foreign currencies into U.S. dollars at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in other comprehensive income (loss). Gains or losses from foreign currency transactions are included in other income (expense) on our consolidated statement of income. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Financial Instruments - Credit Losses On June 1, 2020, the Company adopted ASU No. 2016-13—Measurement of Credit Losses on Financial Instruments, which changes how the Company measures credit losses on most financial instruments measured at amortized cost and certain other instruments, such as loans, receivables and held-to-maturity Fair Value Measurements On June 1, 2020, the Company adopted ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements of fair value measurements. The adoption of this guidance did not have an impact on our consolidated financial statements. Cloud Computing Implementation Cost On June 1, 2020, the Company adopted ASU
2018-15, Intangible-Goodwill and Other Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Cost Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in cloud computing arrangements. The adoption of this guidance did not have an impact on our consolidated financial statements. |
Comprehensive Income | Comprehensive Income Comprehensive income represents net income and any revenues, expenses, gains and losses that, under U.S. generally accepted accounting principles, are excluded from net income and recognized directly as a component of equity. Accumulated other comprehensive income (loss) consists of foreign currency translation adjustments and unrealized gains or losses on marketable securities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments other than cash equivalents and marketable securities, which include accounts receivable and accounts payable, approximate fair value based on either their short maturity or current terms for similar instruments. Fair value measurements are determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. The Company utilizes a fair value hierarchy based upon the observability of inputs used in valuation techniques as follows: 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. |
Estimates and assumptions | ESTIMATES AND ASSUMPTIONS The preparation of these financial statements requires that management make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates the estimates, including, but not limited to, variable consideration related to revenue recognition, allowances for doubtful accounts, the market value of, and demand for, inventories, stock-based compensation, provision for income taxes and related balance sheet accounts, accruals, goodwill and other intangible assets. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Accounts Receivable Allowance | Accounts Receivable Allowance Management attempts to minimize credit risk by reviewing customers’ credit history before extending credit and by monitoring credit exposure on a regular basis. An allowance for doubtful accounts is established based upon factors surrounding the credit risk of specific customers, historical trends, current conditions and other information. Collateral or other security is generally not required for accounts receivable. Once a receivable balance has been determined to be uncollectible, generally after all collection efforts have been exhausted, that amount is charged against the allowance for doubtful accounts. |
Inventory | Inventory The reserve for obsolete and slow-moving inventory is reviewed at least quarterly based on an analysis of the inventory, considering the current condition of the asset as well as other known facts and future plans. The reserve required to record inventory at lower of cost or net realizable value is adjusted as conditions change. Product obsolescence may be caused by shelf-life expiration, discontinuance of a product line, replacement products in the marketplace or other competitive situations. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses after amounts are allocated to other identifiable intangible assets. Other intangible assets include customer relationships, trademarks, licenses, trade names, covenants
not-to-compete |
Long-lived Assets | Long-Lived Assets Management reviews the carrying values of its long-lived assets to be held and used, including definite-lived intangible assets, for possible impairment whenever events or changes in business conditions warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated separately identifiable undiscounted cash flows over the remaining useful life of the asset indicate that the carrying amount of the asset may not be recoverable. In such an event, fair value is determined using discounted cash flows and, if lower than the carrying value, impairment is recognized through a charge to operations. |
Equity Compensation Plans | Equity Compensation Plans Share options awarded to employees, restricted stock units (RSUs) and shares of stock awarded to employees under certain stock purchase plans are recognized as compensation expense based on their fair value at grant date. The fair market value of options granted under the Company stock option plans was estimated on the date of grant using the Black-Scholes option-pricing model with assumptions for inputs such as interest rates, expected dividends, an estimate of award forfeitures, volatility measures and specific employee exercise behavior patterns based on statistical data. Some of the inputs used are not market-observable and have to be estimated or derived from available data. Use of different estimates would produce different option values, which in turn would result in higher or lower compensation expense recognized. For RSUs, we use the intrinsic value method to value the units. To value other equity awards, several recognized valuation models exist; none of these models can be singled out as being the best or most correct. The model applied by us can handle most of the specific features included in the options granted, which are the reason for their use. If different models were used, the option values could differ despite using the same inputs. Accordingly, using different assumptions coupled with using a different valuation model could have a significant impact on the fair value of employee stock options. Fair value could be either higher or lower than the number provided by the model applied and the inputs used. Further information on our equity compensation plans, including inputs used to determine the fair value of options, is disclosed in Note 8. |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and for tax credit carryforwards and are measured using the enacted tax rates in effect for the years in which the differences are expected to reverse. Deferred income tax expense represents the change in net deferred income tax assets and liabilities during the year. |
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Schedule Of Classification And Maturities Of Marketable Securities | Marketable Securities as of February 28, 2021 and May 31, 2020 are listed below by classification and remaining maturities.
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Summary of components of marketable securities | The components of marketable securities at February 28, 2021 are as follows:
The components of marketable securities at May 31, 2020 are as follows:
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Inventories (Tables) |
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Inventories | The components of inventories follow:
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Leases (Tables) |
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Supplemental balance sheet information related to operating leases | Supplemental balance sheet information related to operating leases was as follows:
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Weighted average remaining lease term and weighted average discount rate | The weighted average remaining lease term and weighted average discount rate were as follows:
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Components of lease expense | The components of lease expense were as follows:
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Undiscounted minimum lease payments | Undiscounted minimum lease payments as of February 28, 2021 were as follows:
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Revenue Recognition (Tables) |
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Disaggregated Revenue | The following table presents the Company’s revenue disaggregated by geographic location:
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Disaggregated Revenue | The following table presents disaggregated revenue by major product and service categories for the three and nine month periods ended February 28, 2021 and February 29, 2020:
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Net Income per Share (Tables) |
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Calculation of Net Income Per Share | The calculation of net income per share follows:
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Segment Information and Geographic Data (Tables) |
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Segment Information | Segment information follows:
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Disaggregated Revenue | The following table presents the Company’s revenue disaggregated by geographic location:
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Equity Compensation Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 28, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Option Activity | A summary of stock option activity during the nine months ended February 28, 2021 follows:
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Fair Value of Stock Options Granted Estimated Weighted-Average Assumptions | The fair value of stock options granted was estimated using the following weighted-average assumptions.
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Accounting Policies - Additional Information (Detail) |
9 Months Ended |
---|---|
Feb. 28, 2021 | |
Minimum | |
Significant Accounting Policies [Line Items] | |
Finite lived intangible assets, useful life | 5 years |
Maximum | |
Significant Accounting Policies [Line Items] | |
Finite lived intangible assets, useful life | 25 years |
Cash and Marketable Securities - Additional Information (Detail) - USD ($) |
9 Months Ended | |||
---|---|---|---|---|
Feb. 28, 2021 |
May 31, 2020 |
Feb. 29, 2020 |
May 31, 2019 |
|
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities, maturity period | 90 days | |||
Cash and cash equivalents | $ 73,482,000 | $ 66,269,000 | $ 50,774,000 | $ 41,688,000 |
Components of marketable securities (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Feb. 28, 2021 |
May 31, 2020 |
|
Marketable Securities [Line Items] | ||
Amortized Cost | $ 279,884 | $ 276,850 |
Unrealized gains | 234 | 577 |
Unrealized Losses | (253) | (23) |
Fair Value | 279,865 | 277,404 |
US Treasury Securities [Member] | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 0 | 2,502 |
Unrealized gains | 0 | 30 |
Unrealized Losses | 0 | |
Fair Value | 0 | 2,532 |
Commercial Paper And Corporate Bonds [Member] | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 271,600 | 257,700 |
Unrealized gains | 185 | 347 |
Unrealized Losses | (253) | (23) |
Fair Value | 271,532 | 258,024 |
Certificates of Deposit [Member] | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 8,284 | 16,648 |
Unrealized gains | 49 | 200 |
Unrealized Losses | 0 | |
Fair Value | $ 8,333 | $ 16,848 |
Inventories (Detail) - USD ($) $ in Thousands |
Feb. 28, 2021 |
May 31, 2020 |
---|---|---|
Inventory [Line Items] | ||
Raw Materials | $ 46,423 | $ 45,058 |
Work-in-process | 7,408 | 6,887 |
Finished and purchased goods | 45,436 | 43,108 |
Inventories | $ 99,267 | $ 95,053 |
Supplemental Balance Sheet Information Related to Operating Leases (Detail) - USD ($) $ in Thousands |
Feb. 28, 2021 |
May 31, 2020 |
---|---|---|
Right of use - assets | $ 1,269 | $ 1,952 |
Lease liabilities - current | 131 | 1,054 |
Lease liabilities - non-current | $ 1,089 | $ 913 |
Weighted Average Remaining Lease Term and Weighted Average Discount Rate (Detail) |
Feb. 28, 2021 |
May 31, 2020 |
---|---|---|
Weighted average remaining lease term | 2 years 4 months 24 days | 2 years 6 months |
Weighted average discount rate | 3.00% | 3.20% |
Components of Lease Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Operating leases | $ 372 | $ 316 | $ 1,017 | $ 889 |
Short term leases | 17 | 25 | 76 | 106 |
Total lease expense | $ 389 | $ 341 | $ 1,093 | $ 995 |
Undiscounted Minimum Lease Payments (Detail) $ in Thousands |
Feb. 28, 2021
USD ($)
|
---|---|
Years ending May 31, 2021 | $ 133 |
2022 | 601 |
2023 | 347 |
2024 | 176 |
2025 | 47 |
2026 and thereafter | 0 |
Total lease payments | 1,304 |
Less: imputed interest | 84 |
Total lease liabilities | $ 1,220 |
Leases - Additional Information (Detail) - USD ($) |
9 Months Ended | |
---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Operating lease payments | $ 946,000 | $ 868,000 |
Revenue Recognition- Additional Information (Detail) |
9 Months Ended |
---|---|
Feb. 28, 2021 | |
Products and Services, Payment Terms | 30 to 60 days |
Calculation of Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
|
Earnings Per Share [Line Items] | ||||
Numerator for basic and diluted net income per share - Net income attributable to Neogen | $ 13,377 | $ 12,200 | $ 45,122 | $ 43,128 |
Denominator for basic net income per share - Weighted average shares | 53,413 | 52,795 | 53,132 | 52,463 |
Effect of dilutive stock options and RSUs | 282 | 253 | 252 | 320 |
Denominator for diluted net income per share | 53,695 | 53,048 | 53,384 | 52,783 |
Net income attributable to Neogen per share: | ||||
Basic | $ 0.25 | $ 0.23 | $ 0.85 | $ 0.82 |
Diluted | $ 0.25 | $ 0.23 | $ 0.85 | $ 0.82 |
Segment Information and Geographic Data - Additional Information (Detail) |
9 Months Ended |
---|---|
Feb. 28, 2021
Segment
| |
Segment Reporting Information [Line Items] | |
Number of reportable segments | Segment | 2 |
Disaggregated Revenue by Geographic Location (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 28, 2021 |
Feb. 29, 2020 |
Feb. 29, 2020 |
|
Revenues by Geographic Location [Line Items] | |||||
Total revenue | $ 116,709 | $ 99,869 | $ 341,034 | $ 309,096 | $ 309,096 |
Domestic | |||||
Revenues by Geographic Location [Line Items] | |||||
Total revenue | 70,387 | 59,762 | 207,544 | 186,887 | |
International | |||||
Revenues by Geographic Location [Line Items] | |||||
Total revenue | $ 46,322 | $ 40,107 | $ 133,490 | $ 122,209 |
Stock Option Activity (Detail) |
9 Months Ended |
---|---|
Feb. 28, 2021
$ / shares
shares
| |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options Outstanding, Beginning Balance | shares | 2,162,000 |
Options, Granted | shares | 261,000 |
Options, Exercised | shares | (491,000) |
Options, Forfeited | shares | (179,000) |
Options Outstanding, Ending Balance | shares | 1,753,000 |
Weighted-Average Exercise Price, Beginning Balance | $ / shares | $ 55.96 |
Weighted-Average Exercise Price, Granted | $ / shares | 68,470 |
Weighted-Average Exercise Price, Exercised | $ / shares | 44,910 |
Weighted-Average Exercise Price, Forfeited | $ / shares | 57,580 |
Weighted-Average Exercise Price, Ending Balance | $ / shares | $ 58.41 |
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions (Detail) |
9 Months Ended |
---|---|
Feb. 28, 2021 | |
Schedule of Weighted Average Assumptions for Fair Values of Stock Options [Line Items] | |
Risk-free interest rate | 0.20% |
Expected dividend yield | 0.00% |
Expected stock price volatility | 31.30% |
Expected option life (in years) | 3 years 3 months |
Long Term Debt - Additional Information (Detail) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2021 |
Feb. 28, 2021 |
May 31, 2021 |
May 31, 2020 |
|
Debt Instrument [Line Items] | ||||
Unsecured revolving line of credit, total amount available | $ 15,000,000 | $ 15,000,000 | ||
Unsecured revolving line of credit, maturity date | Nov. 30, 2023 | |||
Unsecured revolving line of credit, interest terms | LIBOR plus 100 basis points | |||
Unsecured revolving line of credit, interest rate | 1.12% | 1.12% | ||
Unsecured revolving line of credit, balance outstanding | $ 0 | |||
Unsecured revolving line of credit, advances | $ 0 | $ 0 | ||
Libor Plus | Unsecured Revolving Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Unsecured revolving line of credit, spread | 1.00% |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
9 Months Ended | |
---|---|---|
Feb. 28, 2021 |
May 31, 2020 |
|
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense, period of remediation, years | 5 years | |
Estimated liability costs of remediation | $ 916,000 | $ 916,000 |
Estimated liability, measurement period, years | 15 years | |
Estimated liability costs of remediation, current | $ 100,000 | |
Minimum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | $ 38,000 | |
Maximum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | $ 131,000 |
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