ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State of other jurisdiction of incorporation organization) |
(I.R.S. Employer Identification No.) |
Title of each Class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ |
Accelerated filer |
☐ | ||||
Non-accelerated filer |
☐ |
Smaller reporting company |
||||
Emerging growth company |
| ||||||
ITEM 1. |
3 |
|||||
ITEM 1A. |
14 |
|||||
ITEM 1B. |
23 |
|||||
ITEM 2. |
23 |
|||||
ITEM 3. |
23 |
|||||
ITEM 4. |
23 |
|||||
| ||||||
ITEM 5. |
24 |
|||||
ITEM 6. |
26 |
|||||
ITEM 7. |
26 |
|||||
ITEM 7A. |
38 |
|||||
ITEM 8. |
38 |
|||||
ITEM 9. |
38 |
|||||
ITEM 9A. |
38 |
|||||
ITEM 9B. |
41 |
|||||
ITEM 9C. |
41 |
|||||
| ||||||
ITEM 10. |
42 |
|||||
ITEM 11. |
44 |
|||||
ITEM 12. |
44 |
|||||
ITEM 13. |
44 |
|||||
ITEM 14. |
44 |
|||||
| ||||||
ITEM 15. |
44 |
|||||
ITEM 16. |
44 |
|||||
46 |
||||||
F-1 |
||||||
Subsidiaries |
||||||
Consent of independent registered public accounting firm — BDO USA, LLP |
||||||
Section 302 Certification of Principal Executive Officer |
||||||
Section 302 Certification of Principal Financial Officer |
||||||
Section 1350 Certification pursuant to Section 906 |
ITEM 1. |
BUSINESS |
• | Milling and grain |
• | Meat and poultry ready-to-eat |
• | Prepared foods and ingredients |
• | Fruits and vegetables |
• | Seafood |
• | Dairy |
• | Beverage |
• | Water, |
• | Healthcare |
• | Traditional culture media markets |
• | Food service |
• | Dietary supplements |
• | Companion animal veterinarians. |
• | Livestock producers, veterinarians and breed associations. |
• | Distributors. |
• | Retailers. |
• | Breeding and genetics companies. |
• | Diagnostic labs and universities. |
• | Other manufacturers and government agencies. |
• | Quat-Chem, Ltd., |
• | Neogen Italia |
• | Megazyme, Ltd |
• | Delf, Ltd |
• | Abbott Analytical, Ltd. |
• | Heywood, England, which manufactures an extensive range of microbiological culture media, supplements and immunomagnetic separation techniques. |
• | Liverpool, England, which manufacturers culture media supplements and microbiology technologies. |
USA |
International |
Expiration | ||||||||
Natural Toxins, Allergens, & Drug Residues |
18 | 57 | 2023-2042 | |||||||
Life Sciences |
0 | 3 | 2024 | |||||||
Vaccine |
1 | 0 | 2028 | |||||||
Veterinary Instruments & Other |
10 | 28 | 2023-2042 | |||||||
Genomics Services |
18 | 3 | 2024-2029 |
ITEM 1A. |
RISK FACTORS |
• | the integration of the 3M Food Safety business with Neogen’s current businesses while carrying on the ongoing operations of all businesses; |
• | managing a significantly larger company than before the consummation of the transaction; |
• | integrating the business cultures of the 3M Food Safety business and Neogen, which could prove to be incompatible; |
• | creating uniform standards, controls, procedures, policies and information systems and controlling the costs associated with such matters; |
• | the ability to ensure the effectiveness of internal control over financial reporting across the combined company; |
• | integrating certain information technology, purchasing, accounting, finance, sales, billing, human resources, payroll and regulatory compliance systems; and |
• | the potential difficulty in retaining key officers and personnel of Neogen and the 3M Food Safety business. |
• | for a two-year period following the distribution date, except as described below: |
• | Garden SpinCo will continue the active conduct of its trade or business and the trade or business of certain Garden SpinCo subsidiaries; |
• | Garden SpinCo will not voluntarily dissolve or liquidate or permit certain Garden SpinCo subsidiaries to voluntarily dissolve or liquidate; |
• | Neogen and Garden SpinCo will not enter into any transaction or series of transactions (or any agreement, understanding or arrangement) as a result of which one or more persons would acquire (directly or indirectly) stock comprising 50% or more of the vote or value of Garden SpinCo or Neogen (taking into account the stock acquired pursuant to the merger); |
• | Neogen and Garden SpinCo will not engage in certain mergers or consolidations; |
• | Garden SpinCo will not, and will not permit certain Garden SpinCo subsidiaries to, sell, transfer or otherwise dispose of 30% or more of the gross assets of Garden SpinCo, such subsidiaries, the Garden SpinCo group or the active trade or business of Garden SpinCo or certain Garden SpinCo subsidiaries, subject to certain exceptions; |
• | Neogen and Garden SpinCo will not, and will not permit certain Garden SpinCo subsidiaries to, redeem or repurchase stock or rights to acquire stock, unless certain requirements are met; |
• | Neogen and Garden SpinCo will not, and will not permit certain Garden SpinCo subsidiaries to, amend their certificates of incorporation (or other organizational documents) or take any other action affecting the voting rights of any stock or stock rights of Neogen or Garden SpinCo; and |
• | Neogen and Garden SpinCo will not, and will not permit any member of the Garden SpinCo group or Neogen to, take any other action that would, when combined with any other direct or indirect changes in ownership of Garden SpinCo and Neogen stock (including pursuant to the merger), have the effect of causing one or more persons to acquire stock representing 50% or more of the vote or value of Garden SpinCo or Neogen, or otherwise jeopardize the tax-free status of the transaction; |
• | during the time period ending three years after the date of the distribution, Garden SpinCo and Neogen also will be subject to certain restrictions relating to the SpinCo Business in Switzerland; and |
• | additionally, none of Garden SpinCo, Neogen or any member of Garden SpinCo group or Neogen may: |
• | take, or permit to be taken, any action that could reasonably be expected to jeopardize the qualification of certain Garden SpinCo debt as a security under Section 361(a) of the Code (other than making any payment permitted or required by the terms of the Garden SpinCo debt); |
• | within 90 days of the distribution date, refinance or repay (other than in the ordinary course of business) any third-party debt of any member of the Garden SpinCo group, except as required by the transaction documents; or |
• | permit any portion of certain nonqualified preferred stock to cease to be outstanding or modify the terms of such stock; |
• | political, social and economic instability and disruptions, including social unrest, geopolitical tensions, currency, inflation and interest rate uncertainties; |
• | government export controls, economic sanctions, embargoes or trade restrictions; |
• | the imposition of duties and tariffs and other trade barriers; |
• | limitations on ownership and on repatriation or dividend of earnings; |
• | transportation delays and interruptions; |
• | labor unrest and current and changing regulatory environments; |
• | increased compliance costs, including costs associated with disclosure requirements and related due diligence; |
• | difficulties in staffing and managing multi-national operations; |
• | limitations on Neogen’s ability to enforce legal rights and remedies; |
• | current products may not comply with product standards established by foreign regulatory bodies; |
• | access to or control of networks and confidential information due to local government controls and vulnerability of local networks to cyber risks; and |
• | fluctuations in foreign currency exchange rates. |
• | Public announcements (including the timing of these announcements) regarding our business, financial performance, acquisitions and prospects or new products or services, product enhancements or technological advances by our competitors or us; |
• | Trading activity in our stock, including transactions by us, our executive officers and directors, and significant stockholders; trading activity that results from the ordinary course rebalancing of stock indices in which we may be included, such as the S&P Mid-Cap 400 Index; trading activity related to our inclusion in, or removal from, any stock indices; and short-interest in our common stock, which could be significant from time to time; |
• | Investor perception of us and the industry and markets in which we operate, including changes in earnings estimates or buy/sell recommendations by securities analysts; and whether or not we meet earnings estimates of securities analysts who follow us; and |
• | General financial, domestic, international, economic and market conditions, including overall fluctuations in the U.S. equity markets, which may experience extreme volatility that, in some cases, is unrelated or disproportionate to the operating performance of particular companies. |
• | Pay damages, including up to treble damages and the other party’s attorneys’ fees, which may be substantial; |
• | Cease the development, manufacture, importation, use and sale of products that infringe the patent rights of others, through a court-imposed injunction; |
• | Expend significant resources to redesign our technology so that it does not infringe others’ patent rights, or develop or acquire non-infringing intellectual property, which may not be possible; |
• | Discontinue manufacturing or other processes incorporating infringing technology; and/or |
• | Obtain licenses to the infringed intellectual property, which may not be available to us on acceptable terms, or at all. |
ITEM 1B. |
UNRESOLVED STAFF COMMENTS – NONE |
ITEM 2. |
PROPERTIES |
Location |
Square Feet |
Owned |
Leased |
Segment | ||||||||||
U.S. |
1,146,100 | 6 | 5 | Corporate, Food Safety, Animal Safety | ||||||||||
Canada |
4,800 | 1 | 0 | Animal Safety | ||||||||||
United Kingdom |
190,800 | 3 | 2 | Food Safety | ||||||||||
Ireland |
39,000 | 1 | 0 | Food Safety | ||||||||||
Italy |
1,000 | 0 | 1 | Food Safety | ||||||||||
UAE |
1,100 | 0 | 1 | Food Safety | ||||||||||
Brazil |
82,800 | 1 | 1 | Food Safety | ||||||||||
Mexico |
33,580 | 0 | 4 | Food Safety | ||||||||||
Guatemala |
1,700 | 0 | 1 | Food Safety | ||||||||||
Argentina |
7,500 | 0 | 1 | Food Safety | ||||||||||
Uruguay |
3,200 | 0 | 1 | Food Safety | ||||||||||
Chile |
3,200 | 0 | 1 | Food Safety | ||||||||||
China |
7,900 | 0 | 1 | Food Safety | ||||||||||
India |
9,500 | 1 | 1 | Food Safety | ||||||||||
Australia |
34,600 | 1 | 1 | Animal Safety | ||||||||||
|
|
|
|
|
|
|||||||||
Total |
1,566,780 |
14 |
21 |
|||||||||||
|
|
|
|
|
|
ITEM 3. |
LEGAL PROCEEDINGS |
ITEM 4. |
MINE SAFETY DISCLOSURES — NOT APPLICABLE |
ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Securities Authorized for Issuance under Equity Compensation Plan |
| |||||||||||
Equity Compensation Plan Information | ||||||||||||
(shares in thousands) |
Number of shares to be issued upon exercise of outstanding options and RSUs (1) |
Weighted average price of outstanding options and RSUs |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) (2) |
|||||||||
Equity compensation plans approved by shareholders |
3,501 | $ | 32.42 | 5,386 | ||||||||
Equity compensation plans not approved by shareholders |
— | |
|
— | ||||||||
3,501 | $ | 32.42 | 5,386 |
(1) | Outstanding options and RSUs as of May 31, 2022. |
(2) | Reflects shares available for future issuance as May 31, 2022 under our 2018 Omnibus Incentive Plan dated August 28, 2018 and approved by shareholders on October 4, 2018. |
5/17 |
5/18 |
5/19 |
5/20 |
5/21 |
5/22 |
|||||||||||||||||||
Neogen Corporation |
100.00 |
159.50 |
118.71 |
150.04 |
194.47 |
111.49 |
||||||||||||||||||
NASDAQ Composite |
100.00 |
121.34 |
122.84 |
158.05 |
230.68 |
204.09 |
||||||||||||||||||
NASDAQ Medical Equipment |
100.00 |
127.47 |
113.54 |
125.55 |
180.52 |
123.62 |
||||||||||||||||||
S&P Life Sciences Tools & Services |
100.00 |
119.37 |
145.59 |
178.60 |
247.39 |
247.97 |
ITEM 6. |
RESERVED |
ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
(in thousands, except earnings per share) |
2022 |
2021 |
% |
|||||||||
Consolidated |
||||||||||||
Revenues |
$ | 527,159 | $ | 468,459 | 13 | % | ||||||
Organic Sales Growth |
9 |
% | ||||||||||
Food Safety |
||||||||||||
Revenues |
$ | 259,979 | $ | 234,244 | 11 | % | ||||||
Organic Sales Growth |
7 |
% | ||||||||||
Animal Safety |
||||||||||||
Revenues |
$ | 267,180 | $ | 234,215 | 14 | % | ||||||
Organic Sales Growth |
12 |
% | ||||||||||
% of International Sales |
40 | % | 39 | % | ||||||||
Effective Tax Rate |
19.8 | % | 19.1 | % | ||||||||
Net Income |
$ | 48,307 | $ | 60,882 | (21 | )% | ||||||
Earnings per Diluted Share |
$ | 0.45 | $ | 0.57 | ||||||||
Cash from Operations |
$ | 68,038 | 81,089 |
• | Food Safety organic sales exclude revenues from the acquisitions of Megazyme (December 2020) and Delf/Abbott Analytical (November 2021). |
• | Animal Safety organic sales exclude revenues from the acquisitions of StandGuard (July 2020), CAPInnoVet (September 2021) and Genetic Veterinary Sciences (December 2021). |
• | Net income was negatively impacted by $25.6 million in the current fiscal year due to legal and consulting expenses for due diligence related to our recently announced agreement to combine with 3M’s Food Safety business. |
Revenue Change USD |
Revenue Change Local Currency |
|||||||
U.K. Operations (including Neogen Italia) |
13 | % | 12 | % | ||||
Brazil Operations |
1 | % | (2 | )% | ||||
Neogen Latinoamerica |
11 | % | 9 | % | ||||
Neogen Argentina |
34 | % | 71 | % | ||||
Neogen Uruguay |
9 | % | 9 | % | ||||
Neogen Chile |
33 | % | 43 | % | ||||
Neogen China |
0 | % | (3 | )% | ||||
Neogen India |
19 | % | 21 | % | ||||
Neogen Canada |
37 | % | 35 | % | ||||
Neogen Australasia |
25 | % | 27 | % |
Year Ended |
||||||||||||||||||||
(dollars in thousands) |
May 31, 2022 |
Change |
May 31, 2021 |
Change |
May 31, 2020 |
|||||||||||||||
Food Safety: |
||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues |
$ | 79,395 | 4 | % | $ | 76,614 | 1 | % | $ | 76,207 | ||||||||||
Bacterial & General Sanitation |
47,282 | 7 | % | 44,009 | 5 | % | 41,780 | |||||||||||||
Culture Media & Other |
75,278 | 23 | % | 61,245 | 28 | % | 47,847 | |||||||||||||
Rodenticides, Insecticides & Disinfectants |
35,691 | 11 | % | 32,219 | 12 | % | 28,890 | |||||||||||||
Genomics Services |
22,333 | 11 | % | 20,157 | 12 | % | 17,967 | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
$ | 259,979 | 11 | % | $ | 234,244 | 10 | % | $ | 212,691 | |||||||||||
Animal Safety: |
||||||||||||||||||||
Life Sciences |
5,685 | (1 | %) | 5,715 | (10 | %) | 6,322 | |||||||||||||
Veterinary Instruments & Disposables |
63,938 | 33 | % | 48,128 | 12 | % | 42,941 | |||||||||||||
Animal Care & Other |
39,805 | 11 | % | 35,897 | 26 | % | 28,389 | |||||||||||||
Rodenticides, Insecticides & Disinfectants |
83,610 | 8 | % | 77,458 | 13 | % | 68,815 | |||||||||||||
Genomics Services |
74,142 | 11 | % | 67,017 | 14 | % | 59,012 | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
$ | 267,180 | 14 | % | $ | 234,215 | 14 | % | $ | 205,479 | |||||||||||
|
|
|
|
|
|
|||||||||||||||
Total Revenue |
$ | 527,159 | 13 | % | $ | 468,459 | 12 | % | $ | 418,170 | ||||||||||
|
|
|
|
|
|
(in thousands) |
2022 |
Change |
2021 |
Change |
2020 |
|||||||||||||||
Cost of Revenues |
$ | 284,146 | 12 | % | $ | 253,403 | 14 | % | $ | 221,891 |
(dollars in thousands) |
2022 |
Change |
2021 |
Change |
2020 |
|||||||||||||||
Sales and Marketing |
$ | 84,604 | 15 | % | $ | 73,443 | 5 | % | $ | 69,675 | ||||||||||
General and Administrative |
82,742 | 62 | % | 51,197 | 15 | % | 44,331 | |||||||||||||
Research and Development |
17,049 | 5 | % | 16,247 | 10 | % | 14,750 | |||||||||||||
|
|
|
|
|
|
|||||||||||||||
Total Operating Expense |
$ | 184,395 | 31 | % | $ | 140,887 | 9 | % | $ | 128,756 | ||||||||||
|
|
|
|
|
|
(dollars in thousands) |
2022 |
Change |
2021 |
Change |
2020 |
|||||||||||||||
Operating Income |
$ | 58,618 | (21 | %) | $ | 74,169 | 10 | % | $ | 67,523 |
(dollars in thousands) |
2022 |
2021 |
2020 |
|||||||||
Interest income (net of expense) |
$ | 1,267 | $ | 1,614 | $ | 5,992 | ||||||
Foreign currency transactions |
(40 | ) | (541 | ) | (1,178 | ) | ||||||
Licenses and settlements |
— | 9 | (38 | ) | ||||||||
Magiar contingent consideration |
— | 111 | — | |||||||||
Clarus contigent consideration |
356 | — | — | |||||||||
Livestock Genomics contingent consideration |
(136 | ) | 37 | — | ||||||||
Other |
142 | (131 | ) | 6 | ||||||||
|
|
|
|
|
|
|||||||
Total Other Income |
$ | 1,589 | $ | 1,099 | $ | 4,782 | ||||||
|
|
|
|
|
|
(dollars in thousands) |
2022 |
Change |
2021 |
Change |
2020 |
|||||||||||||||
Provision for Income Taxes |
$ | 11,900 | (17 | %) | $ | 14,386 | 12 | % | $ | 12,830 |
(dollars in thousands, except per share data) |
2022 |
Change |
2021 |
Change |
2020 |
|||||||||||||||
Net Income |
$ | 48,307 | (21 | %) | $ | 60,882 | 2 | % | $ | 59,475 | ||||||||||
Net Income Per Share-Basic |
$ | 0.45 | $ | 0.57 | $ | 0.57 | ||||||||||||||
Net Income Per Share-Diluted |
$ | 0.45 | $ | 0.57 | $ | 0.56 |
• | Stock-based compensation |
• | Certain transaction fees and expenses. |
• | they do not reflect changes in, or cash requirements for, Neogen’s working capital needs; |
• | they do not reflect Neogen’s tax expense or the cash requirements to pay taxes; |
• | they do not reflect the historical cash expenditures or future requirements for capital expenditures or contractual commitments; |
• | they do not reflect any cash requirements for future replacements of assets that are being depreciated and amortized; and |
• | they may be calculated differently from other companies in Neogen’s industries limiting their usefulness as comparative measures. |
Year ended May 31 |
||||||||||||
(in thousands) |
2022 |
2021 |
2020 |
|||||||||
Net Income |
$ | 48,307 | $ | 60,882 | $ | 59,475 | ||||||
Net Income margin % |
9.2 |
% |
13.0 |
% |
14.2 |
% | ||||||
Provision for income taxes |
11,900 | 14,386 | 12,830 | |||||||||
Interest income, net |
(1,267 | ) | (1,614 | ) | (5,992 | ) | ||||||
Depreciation and amortization |
23,694 | 21,041 | 18,396 | |||||||||
|
|
|
|
|
|
|||||||
EBITDA |
$ |
82,634 |
$ |
94,695 |
$ |
84,709 |
||||||
Stock-based compensation |
7,154 | 6,437 | 6,468 | |||||||||
Certain transaction fees and expenses |
25,581 | 3,085 | — | |||||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA |
$ |
115,369 |
$ |
104,217 |
$ |
91,177 |
||||||
|
|
|
|
|
|
|||||||
Adjusted EBITDA margin % |
21.9 |
% |
22.2 |
% |
21.8 |
% |
(dollars in thousands) |
2022 |
Change |
2021 |
Change |
2020 |
|||||||||||||||
EBITDA |
82,634 | (13 | %) | 94,695 | 12 | % | 84,709 | |||||||||||||
Adjusted EBITDA |
115,369 | 11 | % | 104,217 | 14 | % | 91,177 | |||||||||||||
Adjusted EBITDA Margin % |
21.9 | % | 22.2 | % | 21.8 | % |
• | developing, manufacturing and marketing new products with new features and capabilities, and having those new products successfully accepted in the marketplace; |
• | expanding our markets by fostering increased use of our products by customers; |
• | maintaining or increasing gross and net operating margins in changing cost environments; |
• | strengthening operations and sales and marketing activities in geographies outside of the U.S.; |
• | developing and implementing new technology development strategies; and |
• | identifying and completing acquisitions that enhance existing product categories or create new products or services, and successfully integrating completed acquisitions, including our previously announced proposed transaction to combine with 3M’s Food Safety business. |
Less than |
More than |
|||||||||||||||||||
(dollars in thousands) |
Total |
1 year |
1-3 years |
3-5 years |
5 years |
|||||||||||||||
Long-Term Debt |
$ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Operating Leases |
3,316 | 1,458 | 1,324 | 534 | — | |||||||||||||||
Unconditional Purchase Obligations (1) |
|
85,781 |
|
83,031 | 2,750 | — | — | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 89,097 | $ | 84,489 | $ | 4,074 | $ | 534 | $ | — |
(1) | Unconditional purchase obligations are primarily purchase orders for future inventory and capital equipment purchases. |
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS |
Risk Category |
Hypothetical Change |
May 31, 2022 |
Impact | |||||
(dollars in thousands) |
||||||||
Foreign Currency — Revenue |
10% Decrease in exchange rates | $ | 20,934 | Earnings | ||||
Foreign Currency — Hedges |
10% Decrease in exchange rates | 442 | Earnings | |||||
Interest Income |
10% Decrease in interest rates | 233 | Earnings |
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE—NONE |
ITEM 9A. |
CONTROLS AND PROCEDURES |
ITEM 9B. |
OTHER INFORMATION—NONE |
ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS—NOT APPLICABLE |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name |
Position with the Company |
Year Joined the Company |
||||
John E. Adent |
President & Chief Executive Officer | 2017 | ||||
Robert S. Donofrio, Ph.D. |
Vice President, Research & Development | 2016 | ||||
Jerome L. Hagedorn |
Vice President, North American Operations | 2018 | ||||
Douglas E. Jones |
Vice President & Chief Operating Officer | 2020 | ||||
Jason W. Lilly, Ph.D. |
Vice President, International Business | 2005 | ||||
Julie L. Mann |
Vice President & Chief Human Resources Officer | 2017 | ||||
Steven J. Quinlan |
Vice President & Chief Financial Officer | 2011 | ||||
Amy M. Rocklin, Ph.D. |
Vice President, General Counsel & Corporate Secretary | 2021 |
ITEM 11. |
EXECUTIVE COMPENSATION |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
ITEM 16. |
FORM 10-K SUMMARY — NONE |
NEOGEN CORPORATION | ||||||
By: | /s/ John E. Adent |
By: | /s/ Steven J. Quinlan | |||
John E. Adent, President & Chief | Steven J. Quinlan, Vice President & | |||||
Executive Officer | Chief Financial Officer | |||||
(Principal Executive Officer) | (Principal Financial & Accounting Officer) |
Signature |
Title |
Date | ||||
President & Chief Executive Officer | ||||||
/s/ John E. Adent |
(Principal Executive Officer) | July 27, 2022 | ||||
John E. Adent | ||||||
Vice President & Chief Financial Officer | ||||||
/s/ Steven J. Quinlan |
(Principal Financial & Accounting Officer) | July 27, 2022 | ||||
Steven J. Quinlan | ||||||
* |
Chairman of the Board of Directors | July 27, 2022 | ||||
James C. Borel | ||||||
* |
Director | July 27, 2022 | ||||
William T. Boehm, Ph.D. | ||||||
* |
Director | July 27, 2022 | ||||
Ronald D. Green, Ph.D. | ||||||
* |
Director | July 27, 2022 | ||||
Ralph A. Rodriguez | ||||||
* |
Director | July 27, 2022 | ||||
James P. Tobin | ||||||
* |
Director | July 27, 2022 | ||||
Darci L. Vetter | ||||||
* |
Director | July 27, 2022 | ||||
Catherine E. Woteki, Ph.D. | ||||||
*By: | /s/ John E. Adent |
|||||
John E. Adent, Attorney-in-fact |
July 27, 2022 |
Report of Independent Registered Public Accounting Firm, |
F-2 | |||
F-4 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
F-9 | ||||
F-10 |
• |
Testing the design and operating effectiveness of certain controls over the development of the significant assumptions used in the valuation model selected, including controls over assumptions related to: (i) long-range revenue forecasts and (ii) discount rates applied to the forecasts. |
• |
Assessing management’s estimated timing of milestone achievement and probabilities of success by corroborating with personnel knowledgeable of the current progression of the product candidates and reviewed filings with the applicable regulatory agencies. |
• |
Assessing management’s ability to forecast long-range revenue by analyzing historical accuracy of management’s forecasts related to business combinations and comparing to industry data to validate the reasonableness of the growth assumption. |
• |
Utilizing professionals with specialized knowledge and skills in valuation to assist in evaluating the valuation methodology selected by management as well as assessing the reasonableness of key inputs including the discount rate and revenue volatility. |
May 31 |
||||||||
2022 |
2021 |
|||||||
Assets |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ |
$ | ||||||
Marketable securities |
||||||||
Accounts receivable, net of allowance of $ |
||||||||
Inventories |
||||||||
Prepaid expenses and other current assets |
||||||||
|
|
|
|
|||||
Total Current Assets |
||||||||
Property and Equipment |
||||||||
Land and improvements |
||||||||
Building and improvements |
||||||||
Machinery and equipment |
||||||||
Furniture and fixtures |
||||||||
Construction in progress |
||||||||
|
|
|
|
|||||
Less accumulated depreciation |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Net Property and Equipment |
||||||||
Other Assets |
||||||||
Right of use assets |
||||||||
Goodwill |
||||||||
Other non-amortizable intangible assets |
||||||||
Amortizable intangible assets, net of accumulated amortization of $ |
||||||||
Other non-current assets |
||||||||
|
|
|
|
|||||
Total Other Assets |
||||||||
|
|
|
|
|||||
Total Assets |
$ | $ | ||||||
|
|
|
|
May 31 |
||||||||
2022 |
2021 |
|||||||
Liabilities and Stockholders’ Equity |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ |
$ | ||||||
Accruals |
||||||||
Accrued compensation |
||||||||
Income tax payable |
||||||||
Deferred revenue |
||||||||
Other accruals |
||||||||
|
|
|
|
|||||
Total Current Liabilities |
||||||||
Deferred Income Tax Liability |
||||||||
Other Non-Current Liabilities |
||||||||
|
|
|
|
|||||
Total Liabilities |
||||||||
Commitments and Contingencies (note 7) |
||||||||
Stockholders’ Equity |
||||||||
Preferred stock, $ |
||||||||
Common stock, $ a |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive loss |
( |
) |
( |
) | ||||
Retained earnings |
||||||||
|
|
|
|
|||||
Total Neogen Corporation and Subsidiaries Stockholders’ Equity |
||||||||
|
|
|
|
|||||
Total Liabilities and Stockholders’ Equity |
$ | $ | |
|||||
|
|
|
|
Year Ended May 31 |
||||||||||||
2022 |
2021 |
2020 |
||||||||||
Revenues |
||||||||||||
Product revenues |
$ |
$ | $ | |||||||||
Service revenues |
||||||||||||
|
|
|
|
|
|
|||||||
Total Revenues |
||||||||||||
|
|
|
|
|
|
|||||||
Cost of Revenues |
||||||||||||
Cost of product revenues |
||||||||||||
Cost of service revenues |
||||||||||||
|
|
|
|
|
|
|||||||
Total Cost of Revenues |
||||||||||||
|
|
|
|
|
|
|||||||
Gross Margin |
||||||||||||
Operating Expenses |
||||||||||||
Sales and marketing |
||||||||||||
General and administrative |
||||||||||||
Research and development |
||||||||||||
|
|
|
|
|
|
|||||||
Total Operating Expenses |
||||||||||||
|
|
|
|
|
|
|||||||
Operating Income |
||||||||||||
Other Income |
||||||||||||
Interest income, net |
||||||||||||
Royalty income |
||||||||||||
Other, net |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Total Other Income |
||||||||||||
|
|
|
|
|
|
|||||||
Income Before Income Taxes |
||||||||||||
Provision for Income Taxes |
||||||||||||
|
|
|
|
|
|
|||||||
Net Income |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Net Income per Share |
||||||||||||
Basic |
$ |
$ | $ | |||||||||
Diluted |
$ |
$ | $ | |||||||||
Weighted Average Shares Outstanding |
||||||||||||
Basic |
||||||||||||
Diluted |
Year Ended May 31 |
||||||||||||
2022 |
2021 |
2020 |
||||||||||
Net Income |
$ |
$ | $ | |||||||||
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translations |
( |
) | ( |
) | ||||||||
Unrealized (loss) gain on marketable securities, net of tax of $( |
( |
) |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
Comprehensive income |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Accumulated |
||||||||||||||||||||||||
Additional |
Other |
|||||||||||||||||||||||
Common Stock |
Paid-in |
Comprehensive |
Retained |
Total |
||||||||||||||||||||
Shares |
Amount |
Capital |
Income (Loss) |
Earnings |
Equity |
|||||||||||||||||||
Balance, June 1, 2019 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Exercise of options, RSUs and share-based compensation expense |
— | — | ||||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
— | — | ||||||||||||||||||||||
Net income for 2020 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, May 31, 2020 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Exercise of options, RSUs and share-based compensation expense |
— | — | ||||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
— | — | ||||||||||||||||||||||
Issuance of shares for Megazyme acquisition |
— | — | ||||||||||||||||||||||
Net income for 2021 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive income |
— | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, May 31, 2021 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
Exercise of options, RSUs and share-based compensation expense |
|
|||||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
|
|||||||||||||||||||||||
Net income for 2022 |
— |
|
||||||||||||||||||||||
Other comprehensive loss |
— |
( |
) | ( |
) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance, May 31, 2022 |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended May 31 |
||||||||||||
2022 |
2021 |
2020 |
||||||||||
Cash Flows From Operating Activities |
||||||||||||
Net income |
$ |
$ | $ | |||||||||
Adjustments to reconcile net income to net cash from operating activities: |
|
|||||||||||
Depreciation and amortization |
||||||||||||
Deferred income taxes |
( |
) | ( |
) | ||||||||
Share-based compensation |
||||||||||||
Changes in operating assets and liabilities, net of business acquisitions: |
||||||||||||
Accounts receivable |
( |
) | ( |
) | ( |
) | ||||||
Inventories |
( |
) |
( |
) | ||||||||
Prepaid expenses and other assets |
( |
) | ( |
) | ( |
) | ||||||
Accounts payable |
( |
) | ||||||||||
Accruals and other changes |
||||||||||||
|
|
|
|
|
|
|||||||
Net Cash From Operating Activities |
||||||||||||
Cash Flows for Investing Activities |
||||||||||||
Purchase of property, equipment and other non-current intangible assets |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from the maturities of marketable securities |
||||||||||||
Purchase of marketable securities |
( |
) | ( |
) | ( |
) | ||||||
Business acquisitions, net of cash acquired |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net Cash for Investing Activities |
( |
) | ( |
) | ( |
) | ||||||
Cash Flows From Financing Activities |
||||||||||||
Exercise of stock options and other |
||||||||||||
Payment of contingent consideration |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net Cash From Financing Activities |
||||||||||||
Effects of Foreign Exchange Rate on Cash |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net (Decrease) Increase in Cash and Cash Equivalents |
( |
) | ||||||||||
Cash and Cash Equivalents, Beginning of Year |
||||||||||||
|
|
|
|
|
|
|||||||
Cash and Cash Equivalents, End of Year |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Supplementary Cash Flow Information |
||||||||||||
Income taxes paid, net of refunds |
$ |
$ | $ |
1. |
Summary of Significant Accounting Policies |
(in thousands) |
Foreign Currency Translation Adjustments |
Unrealized Gain (Loss) on Marketable Securities |
Total AOCI |
|||||||||
Balance, May 31, 2020 |
$ | ( |
) | $ | $ | ( |
) | |||||
Other comprehensive income (loss) |
( |
) | ||||||||||
Balance, May 31, 2021 |
$ | ( |
) | $ | $ | ( |
) | |||||
Other comprehensive loss |
( |
) |
( |
) |
( |
) | ||||||
Balance, May 31, 2022 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Level 1: |
Observable inputs such as quoted prices in active markets; | |
Level 2: |
Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and | |
Level 3: |
Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
Year ended May 31 |
||||||||||||
(in thousands) |
Maturity |
2022 |
2021 |
|||||||||
Commercial Paper & Corporate Bonds |
|
0 - 90 days | |
$ |
$ |
|||||||
|
91 -180 days | |
||||||||||
|
181 days -1 year | |
||||||||||
|
1 - 2 years | |
||||||||||
Certificates of Deposit |
|
0 - 90 days | |
|||||||||
|
91 - 180 days | |
||||||||||
|
181 days -1 year | |
||||||||||
|
1 - 2 years | |
— | |||||||||
|
|
|
|
|
|
|||||||
Total Marketable Securities |
|
|
$ | $ | ||||||||
|
|
|
|
|
|
Amortized |
Unrealized |
Unrealized |
||||||||||||||
(in thousands) |
Cost |
Gains |
Losses |
Fair Value |
||||||||||||
Commercial Paper & Corporate Bonds |
$ |
$ |
$ |
( |
) | $ |
||||||||||
Certificates of Deposit |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketable Securities |
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
Amortized |
Unrealized |
Unrealized |
||||||||||||||
(in thousands) |
Cost |
Gains |
Losses |
Fair Value |
||||||||||||
Commercial Paper & Corporate Bonds |
$ |
$ |
$ |
( |
) | $ |
||||||||||
Certificates of Deposit |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Marketable Securities |
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
Year ended May 31 |
||||||||||||
(in thousands) |
2022 |
2021 |
2020 |
|||||||||
Beginning Balance |
$ | $ | $ | |||||||||
Provision |
||||||||||||
Recoveries |
||||||||||||
Write-offs |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Ending Balance |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year ended May 31 |
||||||||
(in thousands) |
2022 |
2021 |
||||||
Raw Materials |
$ | $ | ||||||
Work-in-process |
||||||||
Finished goods |
||||||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
Year ended May 31 |
||||||||||||
2022 |
2021 |
2020 |
||||||||||
Risk-free interest rate |
% | % | % | |||||||||
Expected dividend yield |
% | % | % | |||||||||
Expected stock volatility |
% | % | % | |||||||||
Expected option life |
Year ended May 31 |
||||||||||||
(in thousands, except per share) |
2022 |
2021 |
2020 |
|||||||||
Numerator for basic and diluted net income per share — Net Income |
$ |
$ | $ | |||||||||
Denominator for basic net income per share — Weighted average shares |
||||||||||||
Effect of dilutive stock options and restricted stock units |
||||||||||||
|
|
|
|
|
|
|||||||
Denominator for diluted net income per share |
||||||||||||
Net income attributable per share |
||||||||||||
Basic |
$ | $ | $ | |||||||||
Diluted |
$ | $ | $ |
• | 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 asset and lease liability for short-term leases (i.e. leases with a term of 12 months or less). |
• | 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 our estimate of what we would normally pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments. |
Year ended May 31 |
||||||||
(in thousands) |
2022 |
2021 |
||||||
Rights of use - assets |
$ | $ | ||||||
Lease liabilities - current |
||||||||
Lease liabilities - non-current |
Year ended May 31 |
||||||||
2022 |
2021 |
|||||||
Weighted average remaining lease term |
||||||||
Weighted average discount rate |
% | % |
Year ended May 31 |
||||||||
(in thousands) |
2022 |
2021 |
||||||
Operating leases |
$ | $ | ||||||
Short term leases |
||||||||
|
|
|
|
|||||
Total lease expense |
$ | $ |
(in thousands) |
Amount |
|||
Years ending May 31, 2023 |
$ | | ||
2024 |
||||
2025 |
||||
2026 |
||||
2027 and thereafter |
||||
|
|
|||
Total lease payments |
$ | |||
Less: imputed interest |
( |
) | ||
|
|
|||
Total lease liabilities |
$ | |||
|
|
• | Identification of the contract with a customer; |
• | Identification of the performance obligations in the contract; |
• | Determination of the transaction price; |
• | Allocation of the transaction price to the performance obligations in the contract; and |
• | Recognition of revenue when or as the Company satisfies the performance obligations. |
• | Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; |
• | Consumable products marketed to veterinarians, retailers, livestock producers and animal health product distributors; and |
• | Rodenticides, disinfectants and insecticides to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities. |
• |
Genomic identification and related interpretive bioinformatic services; and |
• |
Other commercial laboratory services. |
Year Ended | ||||||||||||
(dollars in thousands) |
May 31, 2022 |
May 31, 2021 |
May 31, 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 Revenue |
$ | $ | $ | |||||||||
|
|
|
|
|
|
(in thousands) |
Food Safety |
Animal Safety |
Total |
|||||||||
Balance, May 31, 2020 |
$ | $ | $ | |||||||||
Goodwill acquired |
||||||||||||
Goodwill and/or currency adjustments (1) |
||||||||||||
|
|
|
|
|
|
|||||||
Balance, May 31, 2021 |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Goodwill acquired |
||||||||||||
Goodwill and/or currency adjustments (1) |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Balance, May 31, 2022 |
$ | $ | $ | |||||||||
|
|
|
|
|
|
(1) |
Includes final purchase price allocation adjustments and currency adjustments for goodwill recorded at international locations. |
Gross |
Less |
Net |
||||||||||
Carrying |
Accumulated |
Carrying |
||||||||||
(in thousands) |
Amount |
Amortization |
Amount |
|||||||||
Licenses |
$ |
$ |
$ | |||||||||
Covenants not to compete |
||||||||||||
Patents |
||||||||||||
Customer-based intangibles |
||||||||||||
Other product and service-related intangibles |
||||||||||||
|
|
|
|
|
|
|||||||
Balance, May 31, 2022 |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Licenses |
$ | $ | $ | |||||||||
Covenants not to compete |
||||||||||||
Patents |
||||||||||||
Customer-based intangibles |
||||||||||||
Other product and service-related intangibles |
||||||||||||
|
|
|
|
|
|
|||||||
Balance, May 31, 2021 |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Weighted-Average |
Weighted-Average |
|||||||||||
(options in thousands) |
Options |
Exercise Price |
Grant Date Fair Value |
|||||||||
Outstanding at May 31, 2019 ( |
$ |
$ |
||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
|
|
|
||||||||||
Outstanding at May 31, 2020 ( |
||||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
|
|
|
||||||||||
Outstanding at May 31, 2021 ( |
||||||||||||
Granted |
||||||||||||
Exercised |
( |
) | ||||||||||
Forfeited |
( |
) | ||||||||||
|
|
|
||||||||||
Outstanding at May 31, 2022 ( |
||||||||||||
|
|
Options Outstanding |
Options Exercisable |
|||||||||||||||||||
Average |
||||||||||||||||||||
(options in thousands) |
Contractual Life |
Weighted-Average |
Weighted-Average |
|||||||||||||||||
Range of Exercise Price |
Number |
(in years) |
Exercise Price |
Number |
Exercise Price |
|||||||||||||||
$ |
$ | $ | ||||||||||||||||||
$ |
||||||||||||||||||||
$ |
||||||||||||||||||||
$ |
||||||||||||||||||||
$ |
||||||||||||||||||||
|
|
|
|
|||||||||||||||||
Year ended May 31 |
||||||||||||
(in thousands) |
2022 |
2021 |
2020 |
|||||||||
Aggregate intrinsic value of options outstanding |
$ | $ | $ | |||||||||
Aggregate intrinsic value of options exercisable |
$ | $ | $ | |||||||||
Aggregate intrinsic value of options exerised |
$ | $ | $ |
(RSU Grants in thousands) |
RSUs |
Weighted Average Grant Date Fair Value |
||||||
Outstanding at May 31, 2020 |
$ |
|||||||
Granted |
||||||||
Released |
||||||||
Forfeited |
( |
) |
||||||
|
|
|||||||
Outstanding at May 31, 2021 |
||||||||
Granted |
||||||||
Released |
( |
) |
||||||
Forfeited |
( |
) |
||||||
|
|
|||||||
Outstanding at May 31, 2022 |
||||||||
Year ended May 31 |
||||||||||||
(in thousands) |
2022 |
2021 |
2020 |
|||||||||
U.S. |
$ |
$ | $ | |||||||||
Foreign |
||||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
Year ended May 31 |
||||||||||||
(in thousands) |
2022 |
2021 |
2020 |
|||||||||
Current |
||||||||||||
Domestic |
||||||||||||
Federal |
$ |
$ | $ | |||||||||
Change in tax-related uncertainties |
( |
) | ||||||||||
State |
||||||||||||
Foreign |
||||||||||||
Total Current |
||||||||||||
Deferred |
||||||||||||
Domestic |
||||||||||||
Federal |
( |
) | ||||||||||
State |
( |
) | ||||||||||
Foreign |
( |
) | ( |
) | ( |
) | ||||||
Total Deferred |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Provision for Income Taxes |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year ended May 31 |
||||||||||||
(in thousands) |
2022 |
2021 |
2020 |
|||||||||
Tax at U.S. statutory rate |
$ |
$ | $ | |||||||||
Permanent differences |
||||||||||||
Global intangible low-taxed income (GILTI) |
||||||||||||
Foreign derived intangible income deduction (FDII) |
( |
) |
( |
) | ( |
) | ||||||
Foreign rate differential |
( |
) | ||||||||||
Subpart F income |
||||||||||||
Tax benefits on stock-based compensation |
( |
) | ( |
) | ( |
) | ||||||
Provision for state income taxes, net of federal benefit |
||||||||||||
Tax Credits |
( |
) | ( |
) | ( |
) | ||||||
Impact of tax rate changes |
— | — | ||||||||||
Other |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Income Tax Expense |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year ended May 31 |
||||||||
( i n thousands) |
2022 |
2021 |
||||||
Deferred income tax liabilities |
||||||||
Indefinite and long-lived assets |
$ |
( |
) | $ | ( |
) | ||
Right of use asset |
( |
) |
( |
) | ||||
Prepaid expenses |
( |
) | ( |
) | ||||
|
|
|
|
|||||
( |
) | ( |
) | |||||
Deferred income tax assets |
||||||||
Stock options |
||||||||
Inventories and accounts receivable |
||||||||
Tax loss carryforwards |
||||||||
Lease liability |
||||||||
Accrued expenses and other |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
|
|
|
|
|||||
|
|
|
|
|||||
Net deferred income tax liabilities |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
( i n thousands) |
As of May 31, 2022 |
Expiry | ||||
U.S. |
$ | |||||
Foreign |
||||||
|
|
|||||
$ | ||||||
|
|
Year ended May 31 |
||||||||||||
(in thousands) |
2022 |
2021 |
2020 |
|||||||||
Beginning balance |
$ |
|
$ | $ | |
|||||||
Increase/(decrease) related to prior periods |
( |
) | ( |
) | ||||||||
Increase related to current period |
||||||||||||
Lapses of applicable statute of limitations |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Ending balance |
$ | $ | $ | |||||||||
|
|
|
|
|
|
( i n thousands) |
||||||||||
Fair Value of Derivatives Not Designated as Hedging Instruments |
Balance Sheet Location |
May 31, 2022 |
May 31, 2021 |
|||||||
Foreign currency forward contracts, net |
Prepaid and Other |
$ |
( |
) |
$ |
( i |
Year ended May 31, |
|||||||||||||
Derivatives Not Designated as Hedging Instruments |
Location in statements of income |
2022 |
2021 |
2020 |
||||||||||
Foreign currency forward contracts |
Other income (expense) |
$ |
$ |
$ |
(in thousands) |
Food Safety |
Animal Safety |
Corporate and Eliminations (1) |
Total |
||||||||||||
Fiscal 2022 |
||||||||||||||||
Product revenues to external customers |
$ |
$ |
$ | — | $ | |||||||||||
Service revenues to external customers |
— | |||||||||||||||
Total revenues to external customers |
— | |||||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||
Depreciation and amortization |
— | |||||||||||||||
Total assets |
||||||||||||||||
Expenditures for long-lived assets |
— | |||||||||||||||
Fiscal 2021 |
||||||||||||||||
Product revenues to external customers |
$ | $ | $ | — | $ | |||||||||||
Service revenues to external customers |
— | |||||||||||||||
Total revenues to external customers |
— | |||||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||
Depreciation and amortization |
— | |||||||||||||||
Total assets |
||||||||||||||||
Expenditures for long-lived assets |
— | |||||||||||||||
Fiscal 2020 |
||||||||||||||||
Product revenues to external customers |
$ | $ | $ | — | $ | |||||||||||
Service revenues to external customers |
— | |||||||||||||||
Total revenues to external customers |
— | |||||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||
Depreciation and amortization |
— | |||||||||||||||
Total assets |
||||||||||||||||
Expenditures for long-lived assets |
— |
(1) | Includes corporate assets, including cash and cash equivalents, marketable securities, current and deferred tax accounts, and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions and non-controlling interests. |
Year ended May 31 |
||||||||
(in thousands) |
2022 |
2021 |
||||||
Domestic |
$ | $ | ||||||
International |
||||||||
Total revenue |
$ | $ | ||||||