☒ | 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 |
orof other jurisdiction ofor organization)
Title of each Class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of RegulationS-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form10-K. ☐
(Check one):
Large accelerated filer ☒ | Accelerated filer ☐ | Non-accelerated filer ☐ | Smaller reporting company ☐ | |||
Emerging growth company ☐ |
2020.
ITEM 1. | 3 | ||||||||||
ITEM 1A. | 14 | ||||||||||
ITEM 1B. | 19 | ||||||||||
ITEM 2. | 19 | ||||||||||
ITEM 3. | 20 | ||||||||||
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ITEM 7A. | 34 | ||||||||||
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ITEM 9. | 34 | ||||||||||
ITEM 9A. | 34 | ||||||||||
ITEM 9B. | 36 | ||||||||||
ITEM 10. | 36 | ||||||||||
ITEM 11. | 38 | ||||||||||
ITEM 12. | 38 | ||||||||||
ITEM 13. | 38 | ||||||||||
ITEM 14. | 38 | ||||||||||
ITEM 15. | 38 | ||||||||||
ITEM 16. | 38 | ||||||||||
40 | |||||||||||
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 |
statements.
ITEM 1. | BUSINESS |
technology, and advanced software systems that help testers to objectively analyze and store their results and perform analysis on the results from multiple locations over extended periods.
markets.
technology.
Our test kits are used to detect potential hazards or unintended substances in food and animal feed by testers ranging from small local grain elevators to the largest, best-known food and feed processors in the world, and numerous regulatory agencies. Neogen’s products include tests for:
Seafood contaminants. Neogen’s specialty products
feed industry.
Neogen’s water line cleaner and disinfectant products, including Peraside, NeoKlor, AquaPrime and Siloxycide, clean water lines, and provide continuous disinfection of a livestock facility’s water supply.
Neogen’s SureKill line of products is used by professionals to control a variety of insects.
States.
Neogen markets a broad range
We believe the animal health market offers growth opportunities for Neogen and its products. Neogen offers a broad range of products including well-recognized brands of rodenticides, cleaners and disinfectants, insecticides, instruments and horse care products. To reach the OTC market, Neogen’s sales team works with a large network of animal health distributors including marketing groups, traditionaltwo-step distributors, catalogers and large retail chains. Support includes product training, field support, planogram solutions,various promotions and advertising.
As
services for their needs.
its entire product portfolio.
Neogen Australasia. In September 2017,January 2019, Neogen acquired the assets of The University of Queensland Animal Genetics Laboratory (AGL) — the leadingEdmonton-based Delta Genomics Centre, a major animal genomics laboratory in Australia, a country with large cattle and sheep markets. The acquisition of AGL was intended to help accelerate the growth of our animal genomics business in Australia and New Zealand.Canada. With the acquisition, AGL wasDelta’s laboratory operations were renamed Neogen Australasia,Canada, and became Neogen’s fourthsixth animal genomics laboratory, — joining existing locations in the U.S., Scotland, and Brazil.
Dairy antibiotics distributor. Neogen’s dairy antibiotics diagnostic products are marketed directly to customers in North America, Brazil, and China and distributed elsewhere internationally by Denmark based Chr. Hansen, an international supplier of natural ingredient solutions for the food, health and nutritional industries.
Australia.
2022.
USA | International | Expiration | ||||||||||
Natural Toxins, Allergens, & Drug Residues | 24 | 48 | 2018-2042 | |||||||||
Bacterial & General Sanitation | 1 | 9 | 2018-2021 | |||||||||
Life Sciences | 0 | 4 | 2024 | |||||||||
Vaccine | 2 | 0 | 2018-2028 | |||||||||
Veterinary Instruments & Other | 13 | 33 | 2019-2039 | |||||||||
Genomics Services | 18 | 4 | 2021-2029 |
USA | International | Expiration | ||||||||||
Natural Toxins, Allergens, & Drug Residues | 21 | 33 | 2021-2026 | |||||||||
Bacterial & General Sanitation | 5 | 0 | 2021-2022 | |||||||||
Life Sciences | 0 | 4 | 2024 | |||||||||
Vaccine | 1 | 0 | 2028 | |||||||||
Veterinary Instruments & Other | 13 | 44 | 2020-2042 | |||||||||
Genomics Services | 18 | 4 | 2021-2029 |
the United Kingdom. The Heywood location produces prepared media plates, sterile liquid media, and other related products in ready to use format for the food testing laboratories across the U.K. and western Europe.
Pesticides.
ITEM 1A. | RISK FACTORS |
In addition, if
Our international operations are subject to different product standards as well as other operational risks.
In fiscal 2018, sales to customers outside of the U.S. accounted for 37.6% of our total revenue. We expect that our international business will continue to account for a significant portion of our total sales. Foreign regulatory bodies may establish product standards different from those in the U.S. and with which our current products do not comply. Our potential inability to design products that comply with foreign standards could have a material adverse effect on our future growth. Other risks related to sales to customers outside of the U.S. include possible disruptions in transportation, difficulties in building and managing foreign distribution, fluctuation in the value of foreign currencies, changes in import duties and quotas and unexpected economic and political changes in foreign markets. These factors could adversely affect international sales and our overall financial performance.
Operating
Future operatingmanufacture, sell or distribute our products may be difficult to predict and may adversely affect our business and financial results. For example, the U.K.’s decision to leave the European Union has created uncertainty regarding, among other things, the U.K.’s future legal and economic framework and how the U.K. will interact with other countries, including with respect to the free movement of goods, services, capital and people. In addition, results of elections, referendums or other political processes in certain markets in which our products are manufactured, sold or distributed could be negatively impacted by unstable economic, political and social conditions, including but not limited to fluctuations in foreign currency exchange rates, political instability, or changes in the creation or interpretation ofcreate uncertainty regarding how existing governmental policies, laws and regulations or administrative actions in eachmay change, including with respect to sanctions, taxes, the movement of goods, services, capital and people between countries and other matters. The potential implications of such uncertainty, which include, among others, exchange rate fluctuations, trade barriers and market contraction, could adversely affect the countries where we conductCompany’s business including the U.S.
These potential negative impacts include, but are not limited to, the following: reduction of demand for some of our products, increase in the rate of order cancellations or delays, increased risk of excess and obsolete inventories, increased pressure on prices for our products and services, and longer sales cycles and greater difficulty in collecting accounts receivable.
financial results.
liabilities and their valuation. In addition, tax laws and regulations are extremely complex and subject to varying interpretations. For example, the legislation known as the U.S. Tax Cuts and Jobs Act of 2017 (the “U.S. Tax Act”) requires complex computations to be performed that were not previously required by U.S. tax law, significant judgments to be made in interpretation of the provision of the U.S. Tax Act, significant estimates in calculations, and the preparation and analysis of information not previously relevant or regularly produced. The U.S. Treasury Department, the IRS, and other standard-setting bodies will continue to interpret or issue guidance on how provisions of the U.S. Tax Act will be applied or otherwise administered. As future guidance is issued, we may make adjustments to amounts that we have previously recorded that may materially impact our financial statements in the period in which the adjustments are made.
ITEM 1B. | UNRESOLVED STAFF COMMENTS – NONE |
ITEM 2. | PROPERTIES |
Location | Square Feet | Operations | Ownership | |||||
Lansing, Michigan | 300,000 | Corporate, Food Safety, Animal Safety | Owned | |||||
Lexington, Kentucky | 210,000 | Animal Safety | Owned | |||||
Kenansville, North Carolina | 33,500 | Animal Safety | Leased, expires 3/ | |||||
St Joseph, Michigan | 7,000 | Animal Safety | Leased, expires 5/ | |||||
Randolph, Wisconsin | 137,000 | Animal Safety | Owned | |||||
Pleasantville, Iowa | 59,000 | Animal Safety | Leased, expires 12/ | |||||
Lincoln, Nebraska | 41,000 | Animal Safety | Owned | |||||
Memphis, Tennessee | 66,100 | Animal Safety | Owned | |||||
Turlock, California | 29,500 | Animal Safety | Leased, expires 9/2022 | |||||
Edmonton, Alberta, Canada | Animal Safety | |||||||
Ayr, Scotland, United Kingdom | 74,000 | Food Safety | Owned | |||||
Heywood, England, United Kingdom | Food Safety | Owned | ||||||
Rochdale, England, United Kingdom | 60,000 | Food Safety | Owned | |||||
Liverpool, England, United Kingdom | 4,000 | Food Safety | Leased, expires 12/2025 | |||||
Milan, Italy | 1,000 | Food Safety | Leased, expires 12/2020 | |||||
Indaiatuba, Brazil | 6,800 | Food Safety | Leased, expires 5/2021 | |||||
Pindamonhangaba, Brazil | ||||||||
| Food Safety | Owned | ||||||
Naucalpan, Mexico | 27,000 | Food Safety | Leased, expires 10/ | |||||
Buenos Aires, Argentina | Food Safety | Leased, expires | ||||||
Ciudad de la Costa, Uruguay | Food Safety | Leased, expires | ||||||
Santiago, Chile | 2,700 | Food Safety | Leased, expires 3/2022 | |||||
Shanghai, China | 7,900 | Food Safety | Leased, expires 10/2021 | |||||
Kochi, India | 5,500 | Food Safety | Leased, expires 4/ | |||||
Gatton, Australia | 4,600 | Animal Safety | Leased, expires 1/2023 |
For those leases expiring within the next 12 months, we believe that we will be able to negotiate agreements to extend such leases on similar terms.
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | MINE SAFETY DISCLOSURES — NOT APPLICABLE |
MARKET INFORMATION:
High | Low | |||||||
Year ended May 31, 2018 | ||||||||
First Quarter | $ | 52.28 | $ | 48.30 | ||||
Second Quarter | $ | 63.25 | $ | 51.85 | ||||
Third Quarter | $ | 62.86 | $ | 54.64 | ||||
Fourth Quarter | $ | 76.13 | $ | 58.78 | ||||
Year ended May 31, 2017 | ||||||||
First Quarter | $ | 44.76 | $ | 38.00 | ||||
Second Quarter | $ | 47.47 | $ | 38.40 | ||||
Third Quarter | $ | 50.92 | $ | 46.20 | ||||
Fourth Quarter | $ | 51.43 | $ | 44.76 |
Neogen declared a4-for-3 stock split effective on December 29, 2017. All share prices above have been adjusted as if the split had been in effect at the beginning of the periods presented.
HOLDERS:
NEOG.
DIVIDENDS:
5/13 | 5/14 | 5/15 | 5/16 | 5/17 | 5/18 | |||||||||||||||||||
Neogen Corporation | 100.00 | 104.07 | 128.71 | 135.96 | 174.29 | 277.99 | ||||||||||||||||||
NASDAQ Composite | 100.00 | 125.98 | 151.80 | 150.04 | 189.31 | 228.19 | ||||||||||||||||||
NASDAQ Medical Equipment | 100.00 | 105.43 | 134.12 | 140.40 | 184.56 | 258.15 |
2020.
5/15 | 5/16 | 5/17 | 5/18 | 5/19 | 5/20 | |||||||||||||||||||
Neogen Corporation | 100.00 | 105.63 | 135.41 | 215.97 | 160.75 | 203.17 | ||||||||||||||||||
NASDAQ Composite | 100.00 | 98.82 | 125.26 | 152.00 | 153.87 | 197.98 | ||||||||||||||||||
NASDAQ Medical Equipment | 100.00 | 105.80 | 140.72 | 197.84 | 194.22 | 235.57 |
Issuer Purchases of Equity Securities
In December 2008, our Board of Directors authorized a program to purchase, subject to market conditions, up to 1,500,000 shares of our common stock. As of May 31, 2018, 149,368 cumulative shares have been purchased in negotiated and open market transactions for a total price, including commissions, of approximately $923,000. There were no purchases in fiscal years 2018, 2017 or 2016. Shares purchased under the program were retired.
ITEM 6. | SELECTED FINANCIAL DATA |
Years Ended May 31 | ||||||||||||||||||||
(in thousands, except per share data) | 2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Food Safety Revenues | $ | 196,047 | $ | 171,325 | $ | 146,421 | $ | 131,479 | $ | 116,290 | ||||||||||
Animal Safety Revenues | 206,205 | 190,269 | 174,854 | 151,595 | 131,115 | |||||||||||||||
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Total Revenues | 402,252 | 361,594 | 321,275 | 283,074 | 247,405 | |||||||||||||||
Total Cost of Revenues | 212,000 | 189,626 | 168,211 | 143,389 | 124,807 | |||||||||||||||
Sales and Marketing | 70,909 | 62,424 | 57,599 | 51,757 | 46,432 | |||||||||||||||
General and Administrative | 38,294 | 34,214 | 29,189 | 25,233 | 24,449 | |||||||||||||||
Research and Development | 10,855 | 10,385 | 9,890 | 9,577 | 8,326 | |||||||||||||||
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Operating Income | 70,194 | 64,945 | 56,386 | 53,118 | 43,391 | |||||||||||||||
Other Income (Expense) | 3,271 | 1,728 | (873 | ) | (1,042 | ) | (360 | ) | ||||||||||||
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Income Before Income Taxes | 73,465 | 66,673 | 55,513 | 52,076 | 43,031 | |||||||||||||||
Provision for Income Taxes | 10,250 | 22,700 | 18,975 | 18,500 | 15,000 | |||||||||||||||
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Net Income | 63,215 | 43,973 | 36,538 | 33,576 | 28,031 | |||||||||||||||
Net (Income) Loss Attributable toNon-Controlling Interest | (70 | ) | (180 | ) | 26 | (50 | ) | 127 | ||||||||||||
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Net Income Attributable to Neogen | $ | 63,145 | $ | 43,793 | $ | 36,564 | $ | 33,526 | $ | 28,158 | ||||||||||
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Net Income per Share (basic) (1) | $ | 1.23 | $ | 0.87 | $ | 0.73 | $ | 0.68 | $ | 0.58 | ||||||||||
Net Income per Share (diluted) (1) | $ | 1.21 | $ | 0.86 | $ | 0.72 | $ | 0.67 | $ | 0.57 | ||||||||||
Weighted Average Shares Outstanding (diluted) (1) | 52,149 | 51,165 | 50,500 | 49,926 | 49,689 | |||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Cash and Cash Equivalents and Marketable Securities | $ | 210,810 | $ | 143,635 | $ | 107,796 | $ | 114,164 | $ | 76,496 | ||||||||||
Working Capital (2) | 337,101 | 256,959 | 219,628 | 205,739 | 163,779 | |||||||||||||||
Total Assets | 618,009 | 528,409 | 449,940 | 392,181 | 345,301 | |||||||||||||||
Long-Term Debt | — | — | — | — | — | |||||||||||||||
Total Equity | 560,175 | 471,757 | 404,161 | 350,963 | 306,300 |
Year Ended May 31 | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Food Safety Revenues | $ | 212,691 | $ | 213,474 | $ | 194,477 | $ | 170,034 | $ | 145,057 | ||||||||||
Animal Safety Revenues | 205,479 | 200,712 | 203,453 | 188,243 | 172,172 | |||||||||||||||
Total Revenues | 418,170 | 414,186 | 397,930 | 358,277 | 317,229 | |||||||||||||||
Total Cost of Revenues | 221,891 | 222,266 | 211,658 | 189,353 | 167,898 | |||||||||||||||
Gross Margin | 196,279 | 191,920 | 186,272 | 168,924 | 149,331 | |||||||||||||||
Sales and Marketing | 69,675 | 70,230 | 66,929 | 59,380 | 53,866 | |||||||||||||||
General and Administrative | 44,331 | 40,791 | 38,294 | 34,214 | 29,189 | |||||||||||||||
Research and Development | 14,750 | 12,805 | 10,855 | 10,385 | 9,890 | |||||||||||||||
Operating Income | 67,523 | 68,094 | 70,194 | 64,945 | 56,386 | |||||||||||||||
Other Income (Expense) | 4,782 | 4,865 | 3,271 | 1,728 | (873 | ) | ||||||||||||||
Income Before Income Taxes | 72,305 | 72,959 | 73,465 | 66,673 | 55,513 | |||||||||||||||
Provision for Income Taxes | 12,830 | 12,783 | 10,250 | 22,700 | 18,975 | |||||||||||||||
Net Income | 59,475 | 60,176 | 63,215 | 43,973 | 36,538 | |||||||||||||||
Net (Income) Loss Attributable to Non-controlling Interest | — | — | (70 | ) | (180 | ) | 26 | |||||||||||||
Net Income Attributable to Neogen | $ | 59,475 | $ | 60,176 | $ | 63,145 | $ | 43,793 | $ | 36,564 | ||||||||||
Net Income per Share (basic) (1) | $ | 1.13 | $ | 1.16 | $ | 1.23 | $ | 0.87 | $ | 0.73 | ||||||||||
Net Income per Share (diluted) (1) | $ | 1.13 | $ | 1.15 | $ | 1.21 | $ | 0.86 | $ | 0.72 | ||||||||||
Weighted Average Shares Outstanding (diluted) (1) | 52,860 | 52,425 | 52,149 | 51,165 | 50,500 | |||||||||||||||
Year Ended May 31 | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Cash and Cash Equivalents and Marketable Securities | $ | 343,673 | $ | 267,524 | $ | 210,810 | $ | 143,635 | $ | 107,796 | ||||||||||
Working Capital (2) | 488,917 | 411,278 | 337,101 | 256,959 | 219,628 | |||||||||||||||
Total Assets | 797,182 | 695,740 | 618,009 | 528,409 | 449,940 | |||||||||||||||
Long-Term Debt | — | — | — | — | — | |||||||||||||||
Total Equity | 725,177 | 637,899 | 560,175 | 471,757 | 404,161 |
(1) | On December 29, 2017, the Company effected a 4-for-3 10-K have been adjusted to reflect the stock split as if it had taken place at the beginning of the period presented. |
(2) | Defined as current assets less current liabilities. |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” and similar expressions are intended to identify forward-looking statements. There are a number of important factors, including competition, recruitment and dependenceAnnual Report on key employees, impact of weather on agriculture and food production, identification and integration of acquisitions, research and development risks, patent and trade secret protection, government regulation and other risks detailed in Item 1A. RISK FACTORS in this Form 10-K and from time to time in the Company’s reports on file at the Securities and Exchange Commission, that could cause Neogen Corporation’s results to differ materially from those indicated by such forward-looking statements, including those detailed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Revenue Recognition
Revenue from products and services is recognized when the product has been shipped or the service performed, the sales price is fixed and determinable, and collection of any receivable is probable. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred and later recognized in the period that all recognition criteria have been met. Customer credits for sales returns, pricing and other disputes, and other related matters (including volume rebates offered to certain distributors as marketing support) represent approximately 3% of reported net revenue for each period presented.
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 receivable is established based upon factors surrounding the credit risk of specific customers, historical trends and other information. Collateral or other security is generally not required for accounts receivable. Once a receivable balance has been determined to be uncollectible, that amount is charged against the allowance for doubtful accounts.
Inventory
A reserve for obsolete and slow-moving inventory has been established and 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 may be 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, covenantsnot-to-compete and patents. Customer-based intangibles are amortized on either an accelerated or straight-line basis, reflecting the pattern in which the economic benefits are consumed, while all other amortizable intangibles are amortized on a straight-line basis; intangibles are generally amortized over 5 to 25 years. We review the carrying amounts of goodwill and othernon-amortizable intangible assets annually, or when indications of impairment exist, to determine if such assets may be impaired by performing a quantitative assessment. If the carrying amounts of these assets are deemed to be less than fair value based upon a discounted cash flow analysis and comparison to comparable EBITDA multiples of peer companies, such assets are reduced to their estimated fair value and a charge is made to operations.
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 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 our 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, 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.
To value options, several recognized valuation models exist. None of these models can be singled out as being the best or most correct one. The model applied by us can handle most of the specific features included in the options granted, which is the reason for its use. If a different model 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 Notes 1 and 5 to the consolidated financial statements.
The determination of income subject to income tax in each tax paying jurisdiction requires us to apply transfer pricing guidelines for certain intercompany transactions.
not reinvested indefinitely.
information.
Revenue % Increase USD | Revenue % Increase Local Currency | |||||||
Neogen Europe (including Lab M & Quat-Chem) | 23 | % | 16 | % | ||||
Neogen do Brasil (including Deoxi & Rogama) | 54 | % | 56 | % | ||||
Neogen Latinoamerica | 13 | % | 9 | % | ||||
Neogen China | 18 | % | 14 | % | ||||
Neogen India | 18 | % | 14 | % |
Currency translation had a positive impact of approximately $3.7 million on revenues recorded
Revenue | Revenue | |||||||
% Increase | % Increase | |||||||
USD | Local Currency | |||||||
Neogen Europe (including Lab M, Quat-Chem & Abtek) | 5% | 8% | ||||||
Neogen do Brasil (including Rogama) | (10)% | 0% | ||||||
Neogen Latinoamerica | 6% | 11% | ||||||
Neogen China | 22% | 26% | ||||||
Neogen India | 3% | 5% | ||||||
Neogen Australasia | 18% | 26% | ||||||
Neogen Canada | 70% | 72% |
Year Ended | ||||||||||||||||||||
Increase/ | Increase/ | |||||||||||||||||||
(dollars in thousands) | May 31, 2020 | (Decrease) | May 31, 2019 | (Decrease) | May 31, 2018 | |||||||||||||||
Food Safety: | ||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues | $ | 76,207 | (3)% | $ | 78,373 | 7% | $ | 72,962 | ||||||||||||
Bacterial & General Sanitation | 41,780 | (0)% | 41,966 | 10% | 38,156 | |||||||||||||||
Culture Media & Other | 47,847 | (4)% | 49,857 | 13% | 44,271 | |||||||||||||||
Rodenticides, Insecticides & Disinfectants | 28,890 | 13% | 25,584 | 7% | 23,821 | |||||||||||||||
Genomics Services | 17,967 | 2% | 17,694 | 16% | 15,267 | |||||||||||||||
212,691 | (0)% | 213,474 | 10% | 194,477 | ||||||||||||||||
Animal Safety: | ||||||||||||||||||||
Life Sciences | 6,322 | (20)% | 7,858 | (25)% | 10,411 | |||||||||||||||
Veterinary Instruments & Disposables | 42,941 | (4)% | 44,582 | (7)% | 47,749 | |||||||||||||||
Animal Care & Other | 28,389 | (5)% | 29,941 | (3)% | 30,930 | |||||||||||||||
Rodenticides, Insecticides & Disinfectants | 68,815 | 4% | 66,389 | (2)% | 67,646 | |||||||||||||||
Genomics Services | 59,012 | 14% | 51,942 | 11% | 46,717 | |||||||||||||||
205,479 | 2% | 200,712 | (1)% | 203,453 | ||||||||||||||||
Total Revenue | $ | 418,170 | 1% | $ | 414,186 | 4% | $ | 397,930 | ||||||||||||
Service revenue was $66.7 millionlower demand in fiscal 2018, an increase of 21% over prior fiscal year sales of $55.1 million, aided by the September 2017 acquisition of Neogen Australasia. The growth was led by increases in sales to the global beef and dairy cattle and companion animal markets, and increased testing volumes with a large poultry customer.
REVENUES
Year Ended | ||||||||||||||||||||
(dollars in thousands) | May 31, 2018 | Increase/ (Decrease) | May 31, 2017 | Increase/ (Decrease) | May 31, 2016 | |||||||||||||||
Food Safety: | ||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues | $ | 72,962 | 3 | % | $ | 70,926 | 12 | % | $ | 63,269 | ||||||||||
Bacterial & General Sanitation | 38,155 | 10 | % | 34,706 | 2 | % | 33,899 | |||||||||||||
Culture Media & Other | 45,842 | 13 | % | 40,658 | 9 | % | 37,285 | |||||||||||||
Rodenticides, Insecticides & Disinfectants | 23,821 | 75 | % | 13,620 | 223 | % | 4,213 | |||||||||||||
Genomics Services | 15,267 | 34 | % | 11,415 | 47 | % | 7,755 | |||||||||||||
|
|
|
|
|
| |||||||||||||||
196,047 | 14 | % | 171,325 | 17 | % | 146,421 | ||||||||||||||
Animal Safety: | ||||||||||||||||||||
Life Sciences | 10,411 | 7 | % | 9,704 | 24 | % | 7,815 | |||||||||||||
Veterinary Instruments & Disposables | 47,748 | 15 | % | 41,693 | (1 | )% | 42,028 | |||||||||||||
Animal Care & Other | 32,719 | 11 | % | 29,495 | (19 | )% | 36,494 | |||||||||||||
Rodenticides, Insecticides & Disinfectants | 68,553 | (2 | )% | 69,825 | 31 | % | 53,490 | |||||||||||||
Genomics Services | 46,774 | 18 | % | 39,552 | 13 | % | 35,027 | |||||||||||||
|
|
|
|
|
| |||||||||||||||
206,205 | 8 | % | 190,269 | 9 | % | 174,854 | ||||||||||||||
|
|
|
|
|
| |||||||||||||||
Total Revenue | $ | 402,252 | 11 | % | $ | 361,594 | 13 | % | $ | 321,275 | ||||||||||
|
|
|
|
|
|
Year Ended May 31, 2018 Compared to Year Ended May 31, 2017
Food Safety:
Natural Toxins, Allergens & Drug Residues –Sales in this category increased 3% in fiscal 2018 compared to the prior year. For the allergens and dairy drug residues product lines, test kit sales increased 12% and 13%, respectively, for the year. These increases were partially offset by a 26% decrease in sales of deoxynivalenol (DON) test kits, as prior year outbreaks of DON in corn crops in the U.S., Canada and Europe did not recur in fiscal 2018.
Europe.
that country.
specific to the Brazilian market.
in the prior fiscal year, but has since moved to commercial labs located in Brazil.
Animal Care & Other –Sales of these products increased 11% in fiscal 2018, due to higher sales of PanaKare, our pancreatic replacement therapy, which benefitted from competitor backorders in fiscal 2018. Additionally, results from fiscal 2017 included sales credits totaling $1.1 million in the first quarter as we removed our canine thyroid product from the market, after the FDA approved a new drug application for a competitive product.
partially caused by tariff issues.
Year Ended May 31, 2017 Compared to Year Ended May 31, 2016
Food Safety:
Overall Food Safety segment revenues in fiscal 2017 were $171.3 million compared to $146.4 million in fiscal 2016, an increase of 17%. Organic growth for the segment was 9%, with the acquisitions of Lab M (August 2015), Deoxi (April 2016), Quat-Chem (December 2016) and Rogama (December 2016) contributing the remainder of the growth. Adverse currency conditions, resulting from strength of the U.S. dollar, reduced overall growth and organic growth within the segment for the comparative period. In a neutral currency environment, overall Food Safety growth for the year was 22% and organic growth was 14%.
Natural Toxins, Allergens & Drug Residues –Sales in this category increased 12% to $70.9 million in fiscal 2017. Within this category, sales of natural toxin test kits increased 19%, led by sales of test kits and related equipment to detect deoxynivalenol (DON), due to outbreaks of DON in corn crops in the Midwest U.S., Canada and western Europe. Allergen test kit revenues rose 16% for the year, as increases in product recalls relating to allergenic contamination of food continued to expand the market. The largest increases in this product line were test kits to detect milk, gliadin, tree nuts, hazelnut and peanut contamination. Partially offsetting these increases, sales of test kits to detect drug residues were down 4%, due primarily to market losses in Europe caused by delays in the launch of new products, and, to a lesser extent, currency translations, as this product is sold in euros, which declined 2% against the dollar in fiscal 2017.
Bacterial & General Sanitation –Revenues of these products rose 2%, compared to the prior fiscal year, led by a 4% increase in sales of our line of automated equipment and consumable vials to detect spoilage microorganisms (e.g. yeast and mold), and an 11% increase in sales ofSalmonella test kits for the year as we gained market share with our ANSR product line. These increases were partially offset by revenue decreases in U.S. poultry and porcine markets, despite increases in sample volumes, resulting from a shift to lower salespriced chips and services. Additionally, poor economic conditions in the U.S. commercial dairy production market resulted in lower revenues from that market.
(dollars in thousands) | 2020 | Increase | 2019 | Increase | 2018 | |||||||||||||||
Cost of Revenues | $ | 221,891 | 0 | % | $ | 222,266 | 5 | % | $ | 211,658 |
Culture Media & Other –Sales in this category increased 9%2019 and rose 5% in fiscal 2017, aided in part by the acquisition of Lab M; organic sales in this category increased 6%. Within this category, there was a significant increase in sales of forensic test kits through our Brazilian subsidiary. Demand for these kits from commercial labs located in Brazil increased dramatically due to a new requirement for drug testing of commercial truck drivers. Partially offsetting this increase was an 11% decrease in sales of our Acumedia line of dehydrated culture media sold into traditional domestic markets; the first half of fiscal 2016 had strong sales resulting from a research project, which did not recur.
Rodenticides, Insecticides & Disinfectants –Sales ofrodenticides, insecticides and disinfectants into our Food Safety segment increased 223%, almost entirely due to the acquisitions of Rogama (Brazil), which reports through Neogen do Brasil, and Quat-Chem (U.K.), which reports through Neogen Europe; each was purchased in December 2016. Excluding these acquisitions, growth in this category was 3%, primarily from rodenticide and disinfectant sales into Mexico and Central America by our Mexican subsidiary.
Genomics Services –Genomics revenues sold through the Food Safety segment increased 47%, primarily due to strong demand of genomics testing in Europe and expanded capabilities at our operation in Ayr, Scotland to better serve the growing European market; the Deoxi acquisition in April 2016 also contributed to the growth.
Animal Safety:
Revenues for the Company’s Animal Safety segment were $190.3 million in fiscal 2017, an increase of 9% compared to prior year revenues of $174.9 million. The revenue growth resulted from the acquisitions of Virbac (December 2015) and Preserve (May 2016). In the first quarter of fiscal 2017, we lost the ability to sell our popular canine thyroid replacement product after the FDA approved a new drug application for a competitor, which gave the competitor exclusive marketing rights to the product. We will be unable to sell this product, which had sales of $6.2 million in fiscal 2016, in the U.S. until similar regulatory approval is granted. Additionally, in January 2017, our agreement with a manufacturer to distribute certain cleaners and disinfectants was canceled, resulting in the loss of $1.3 million of sales in the 4th quarter of fiscal 2017. Excluding these products, this segment had overall organic growth of 5% for the year. Currency translations had minimal effect on revenues in this segment.
Life Sciences –Sales in this category increased 24% in fiscal 2017, compared to the prior year. This growth was primarily due to increased volume to U.S. commercial labs to meet new requirements for drug testing of commercial truck drivers in Brazil.
Veterinary Instruments & Disposables –Revenues in this category decreased 1%, the result of lower sales of disposable syringes, which had increased sales in the prior year due to a competitor’s backorder situation, and marking products. Partially offsetting this were gains in the sales of our proprietary detectable needles and durable speed syringes, with both gains due to strong demand from customers.
Animal Care & Other –Sales in this category decreased 19% due to the loss of our ability to sell our popular thyroid replacement product, mentioned above. Partially offsetting this was an increase in revenues for vitamin injectable products due to increased market share and price increases.
Rodenticides, Insecticides & Disinfectants –Sales in this category increased 31% in fiscal 2017, due to the acquisitions of Virbac (December 2015) and Preserve (May 2016); organic sales in this category were flat. The Preserve acquisition added $15.5 million of revenue in fiscal 2017, primarily to the domestic swine, poultry, dairy and food processing markets. Rodenticide sales increased 1% with strong sales in the custom solutions, retail and distribution markets offset by lower sales in the northwest U.S. after the prior year rodent outbreak subsided. Cleaners and disinfectant sales were 8% lower on an organic basis, due to the early termination of a distribution agreement for certain cleaners and disinfectants in the second half of the fiscal year.
Genomics Services –Genomics Services revenues reported within the Animal Safety segment increased 13% in fiscal 2017,2019 compared to fiscal 2016. The increase was primarily due to increased market share in the beef and dairy markets from new product offerings and focused sales efforts in these markets; also contributing to the increase was expanded business with a large customer in the poultry market.
COST OF REVENUES
(dollars in thousands) | 2018 | Increase | 2017 | Increase | 2016 | |||||||||||||||
Cost of Revenues | $ | 212,000 | 12 | % | $ | 189,626 | 13 | % | $ | 168,211 |
Cost of revenues increased 12% in fiscal 2018 and 13% in fiscal 2017 in comparison with the prior years.2018. This compares with revenue
increases of 11%1% in fiscal 20182020 and 13%4% in fiscal 2017.2019. Expressed as a percentage of sales, cost of revenues was 52.7%53.1%, 52.4%53.7% and 53.2% in fiscal years 2020, 2019 and 2018, respectively. Gross margins were 46.9%, 46.3%, and 46.8% for fiscal years 2020, 2019, and 2018, respectively.
Fiscal 2017 – Improvements in Animal Safety gross margins, resulting from2020, primarily due to lower raw material costs in the genomics business and increased higher margin forensics test kit sales into the commercial laboratory market, and strong growth in sales of higher margin mycotoxin and allergen test kits in the Food Safety segment, overcame the lower gross margins resulting from the Quat-Chem and Rogama acquisitions.
Food Safety Gross Margins:
Food Safety gross margins were 52.8%, 55.3% and 56.7% in fiscal years 2018, 2017 and 2016, respectively.
Fiscal 2018 – Our fiscal 2018 results reflect the full year impact of lower gross margins from revenues contributed by the recent acquisitions of Quat-Chem and Rogama. Excluding these businesses, Food Safety gross margins would have been 330 basis points higher in fiscal 2018. Additionally, the decrease in sales of higher margin forensic test kits through our Brazilian subsidiary, due to increased competition,in Brazil, and lower salesthe continued strength of mycotoxin test kits, due to a DON outbreakthe U.S. dollar against currencies in the prior yearcountries in which did not recurwe operate; our international operations pay for their inventory primarily in fiscal 2018,U.S. dollars
margins.
partially offset these decreases.
Fiscal 2017 –Improvements in raw material costs, favorable product mix in the genomics business and strong sales of forensic kits to commercial labsscale. Partially offsetting these lower margins were increased margins in the U.S. more than offsetgenomics operations, based primarily on improved input costs and increased sales of higher margin services to the loss of high margin revenues from the thyroid replacement product forbovine and companion animals, which we were required to stop selling at the end of fiscal 2016.
animal markets.
(dollars in thousands) | 2018 | Increase | 2017 | Increase | 2016 | |||||||||||||||
Sales and Marketing | $ | 70,909 | 14 | % | $ | 62,424 | 8 | % | $ | 57,599 | ||||||||||
General and Administrative | 38,294 | 12 | % | 34,214 | 17 | % | 29,189 | |||||||||||||
Research and Development | 10,855 | 5 | % | 10,385 | 5 | % | 9,890 | |||||||||||||
|
|
|
|
|
| |||||||||||||||
Total Operating Expense | $ | 120,058 | 12 | % | $ | 107,023 | 11 | % | $ | 96,678 | ||||||||||
|
|
|
|
|
|
(dollars in thousands) | 2020 | Increase | 2019 | Increase | 2018 | |||||||||||
Sales and Marketing | $ | 69,675 | -1% | $ | 70,230 | 5% | $ | 66,929 | ||||||||
General and Administrative | 44,331 | 9% | 40,791 | 7% | 38,294 | |||||||||||
Research and Development | 14,750 | 15% | 12,805 | 18% | 10,855 | |||||||||||
Total Operating Expense | $ | 128,756 | 4% | $ | 123,826 | 7% | $ | 116,078 | ||||||||
compare to revenue increases of 11%1% and 13%4%, respectively, infor each comparative period.
percentage of sales, sales and marketing expense was 17.6%16.7%, 17.3%17.0% and 17.9%16.8% in fiscal years 2020, 2019 and 2018, 2017 and 2016, respectively.
Approximately $1.2 million of the increase The $550,000 decline in sales and marketing expenses in fiscal 2020 was driven by a $1.3 million, or 7.4%, decline in spending in this category in the fourth quarter of the year, caused by a reduction in business travel, meals and entertainment, trade shows, and related marketing expenses, as the
due to product registration efforts in our international markets.
expenses rose 7%.air shipments. Other significant expense increases were domestic shipping expense, up 11%the result of higher trade show, exhibit and in line with the revenue increase,
sponsorship costs, and royalty expense, which rose 35% due to increased sales in fiscal 2017provision for bad debts. Partially offsetting these increases were lower promotion and aone-time credit in the prior year resulting from a
retroactive rate reduction on a royalty agreement. Of the $4.8 million increase in expenses, approximately $2.2 million resulted from our recent acquisitions.
consulting expenses.
2016. 2018. As a percentage of sales, general and administrative expense was 9.5%10.6%, 9.5%9.8% and 9.1%9.6% in fiscal years 2020, 2019 and 2018, 2017respectively.
a significant uptick in legal fees, driven in part by the number of acquisitions completed during the year, resulted in the overall 9% expense increase. In both fiscal years,addition, the increase is primarilycompany continued to invest in information technology infrastructure, network capabilities and
amortization expense as certain intangible assets from past acquisitions were fully amortized during the year.
Higher salaries expense in each fiscal year, resulting from increased headcount and compensation increases, was partially offset by lower levels of consulting and other outside services. As a percentage of revenue, these expenses were 3.5% in fiscal year 2020, 3.1% in fiscal year 2019 and 2.7% in fiscal year 2018, 2.9% in fiscal year 2017 and 3.1% in fiscal year 2016;2018; we expect to spend approximately 3% of total revenue on research and development annually.
(dollars in thousands) | 2018 | Increase | 2017 | Increase | 2016 | |||||||||||||||
Operating Income | $ | 70,194 | 8 | % | $ | 64,945 | 15 | % | $ | 56,386 |
(dollars in thousands) | 2020 | Increase | 2019 | Increase | 2018 | |||||||||||
Operating Income | $ | 67,523 | -1% | $ | 68,094 | -3% | $ | 70,194 |
The 15% increase in operating income for fiscal 2017 was due to the 13% increase in revenues andoverall operating expense increases of $7.7 million, up 7%, which were less than the revenue growth rate, combined withcompared to a gross margins which, at 47.6%margin increase of sales, were the same as the prior year.
$5.6 million.
(dollars in thousands) | 2018 | 2017 | 2016 | |||||||||
Interest income (net of expense) | $ | 2,043 | $ | 838 | $ | 322 | ||||||
Foreign currency transactions | 274 | (40 | ) | (1,338 | ) | |||||||
Royalty income | 147 | 171 | 217 | |||||||||
Settlement of licensing agreement | — | 660 | — | |||||||||
Quat-Chem contingent consideration | 255 | — | — | |||||||||
Deoxi contingent consideration | (42 | ) | (14 | ) | — | |||||||
Neogen India contingent consideration | — | 32 | — | |||||||||
Other | 594 | 81 | (74 | ) | ||||||||
|
|
|
|
|
| |||||||
Total Other Income (Expense) | $ | 3,271 | $ | 1,728 | $ | (873 | ) | |||||
|
|
|
|
|
|
(dollars in thousands) | 2020 | 2019 | 2018 | |||||||||
Interest income (net of expense) | $ | 5,992 | $ | 4,683 | $ | 2,043 | ||||||
Foreign currency transactions | (1,178 | ) | (1,279 | ) | 274 | |||||||
Royalty income | 1 | 150 | 147 | |||||||||
Licenses and settlements | (38 | ) | 672 | 360 | ||||||||
Quat-Chem contingent consideration | — | 422 | 255 | |||||||||
Deoxi contingent consideration | — | (10 | ) | (42 | ) | |||||||
Other | 5 | 227 | 234 | |||||||||
Total Other Income | $ | 4,782 | $ | 4,865 | $ | 3,271 | ||||||
years.
(dollars in thousands) | 2018 | Increase | 2017 | Increase | 2016 | |||||||||||||||
Provision for Income Taxes | $ | 10,250 | (55 | )% | $ | 22,700 | 20 | % | $ | 18,975 |
(dollars in thousands) | 2020 | Increase | 2019 | Increase | 2018 | |||||||||||
Provision for Income Taxes | $ | 12,830 | 0% | $ | 12,783 | 25% | $ | 10,250 |
Additionally, during the year we recorded incremental credits of $4.8 million to federal income tax expense for excess tax benefits from the exercise of stock options, due to the adoption of ASU2016-09;options. Please refer to Note 6 of our Consolidated Financial Statementsto the consolidated financial statements for furthermore information. In the second quarter of fiscal 2018, an IRS examination of our federal income tax returns for fiscal years 2014, 2015 and 2016 was concluded. As a result of the favorable outcome of the audit, we reversed a total of $1.0 million from our reserve for uncertain tax positions, which had been accrued in prior fiscal years, with a corresponding credit to federal income tax expense.
(dollars in thousands-except per share data) | 2018 | Increase | 2017 | Increase | 2016 | |||||||||||||||
Net Income Attributable to Neogen | $ | 63,145 | 44 | % | $ | 43,793 | 20 | % | $ | 36,564 | ||||||||||
Net Income Per Share-Basic | $ | 1.23 | $ | 0.87 | $ | 0.73 | ||||||||||||||
Net Income Per Share-Diluted | $ | 1.21 | $ | 0.86 | $ | 0.72 |
(dollars in thousands, except per share data) | 2020 | Increase | 2019 | Increase | 2018 | |||||||||||||||
Net Income Attributable to Neogen | $ | 59,475 | -1% | $ | 60,176 | -5% | $ | 63,145 | ||||||||||||
Net Income Per Share-Basic | $ | 1.13 | $ | 1.16 | $ | 1.23 | ||||||||||||||
Net Income Per Share-Diluted | $ | 1.13 | $ | 1.15 | $ | 1.21 |
Accounts2019.
adjust the allowance account as circumstances change.
(dollars in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Long-Term Debt | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Operating Leases | 906 | 498 | 194 | 214 | — | |||||||||||||||
Unconditional Purchase Obligations (1) | 54,339 | 54,061 | 278 | — | — | |||||||||||||||
|
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|
|
|
| |||||||||||
$ | 55,245 | $ | 54,559 | $ | 472 | $ | 214 | $ | — |
Less than | More than | |||||||||||||||||||
(dollars in thousands) | Total | 1 year | 1-3 years | 3-5 years | 5 years | |||||||||||||||
Long-Term Debt | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Operating Leases | 2,094 | 1,080 | 973 | 41 | — | |||||||||||||||
Unconditional Purchase Obligations (1) | 55,180 | 48,681 | 6,499 | — | — | |||||||||||||||
$ | 57,283 | $ | 49,763 | $ | 7,478 | $ | 42 | $ | — |
(1) | Unconditional purchase obligations are primarily purchase orders for future inventory and capital equipment purchases. |
consolidated financial statements.
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE—NONE |
ITEM 9A. | CONTROLS AND PROCEDURES |
30, 2020
ITEM 9B. | OTHER INFORMATION – NONE |
2020.
OFFICERS OF THE REGISTRANT
globalassets/pdfs/corporate-governance-sec-and-investor-information/codeofconduct.pdf
Name | Position with the Company | Year Joined the Company | ||||
John E. Adent | President & Chief Executive Officer | 2017 | ||||
Stewart W. Bauck, D.V.M., Ph.D. | Vice President, Agrigenomics | 2012 | ||||
Joseph A. Corbett | Vice President, Animal Safety Sales | 1993 | ||||
Robert S. Donofrio, Ph.D. | Vice President, Food Safety Research & Development | 2016 | ||||
Shane M. Fitzwater | Vice President, Animal Safety Operations | 2018 | ||||
Jerome L. Hagedorn | Vice President, Food Safety Operations | 2018 | ||||
Jason W. Lilly, Ph.D. | ||||||
| Vice President, | 2005 | ||||
Julie A. Mann* | Vice President | |||||
Terri A. Morrical | Vice President, Animal Safety | 1992 | ||||
Marylinn Munson | Vice President, Agrigenomics | 2020 | ||||
Steven J. Quinlan | Vice President & Chief Financial Officer | 2011 | ||||
|
Melissa K. Herbert, Vice President, Support Services, is the daughter of James L. Herbert, Executive Chairman of the Board.
Sciences.
James L. Herbert, age 78, is Executive Chairman of the Board of Directors. He had been Chief Executive Officer and Chairman of the Board since 2006; he resigned as Chief Executive Officer on July 17, 2017, when John Adent was named to that role. Prior to 2006, he had been President and a Director since he founded the Company in June 1982. Mr. Herbert previously held the position of Corporate Vice President of DeKalb Ag Research, a major agricultural genetics and energy company. He has management experience in animal biologics, specialized chemical research, medical instruments, aquaculture, animal nutrition, and poultry and livestock breeding and production.
Melissa K. Herbert, age 54, joined Neogen in August 2005 as a sales representative in our Food Safety Division in Lansing, Michigan. In 2011, Ms. Herbert was named Manager of Industry Affairs, with oversight of regulatory issues for both the Food and Animal Safety segments, and in June 2013, Director of Industry Affairs. She was named Vice President, Support Services in October 2015. Support Services is comprised of Technical Service, Regulatory Affairs and Industry Affairs departments.
Dwight E. Schroedter, age 61, joined Neogen in January 1995 as Research and Development Manager of the Animal Safety Division based in Lexington, Kentucky. He has served in a variety of technical, operational and sales roles as part of the Animal Safety Division and was named Vice President, Animal Safety Manufacturing in October 2014, overseeing manufacturing operations at our domestic Animal Safety manufacturing locations, excluding Lansing. Prior to joining Neogen, Mr. Schroedter managed the antibody development laboratory for the Ames Division of Miles, Incorporated.
ITEM 11. | EXECUTIVE COMPENSATION |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
ITEM 16. | FORM 10-K SUMMARY — NONE |
2020
NEOGEN CORPORATION | ||||||||
By: | /s/ | By: | /s/ Steven J. Quinlan | |||||
Steven J. Quinlan, Vice President & | ||||||||
Chief Financial Officer | ||||||||
(Principal Executive Officer) | (Principal Financial & Accounting Officer) |
30, 2020
Signature | Title | Date | ||||
| ||||||
/s/ John E. Adent John E. Adent | President & Chief Executive Officer (Principal Executive Officer) | July | ||||
30, 2020 | ||||||
/s/ Steven J. Quinlan Steven J. Quinlan | Vice President & Chief Financial Officer
| July | ||||
30, 2020 | ||||||
* James C. Borel | Chairman of the Board | July 30, 2020 | ||||
* | Director | July 30, 2020 | ||||
William T. Boehm, Ph.D. | ||||||
* | Director | |||||
| July 30, 2020 | |||||
Ronald D. Green, Ph.D. | ||||||
* | Director | July 30, 2020 | ||||
James L. Herbert | ||||||
* | Director | July 30, 2020 | ||||
G. Bruce Papesh | ||||||
* | Director | |||||
| ||||||
| July 30, 2020 | |||||
James P. Tobin | ||||||
* | Director | July 30, 2020 | ||||
Darci L. Vetter |
*By: | /s/ | |||||||
Attorney-in-fact | July |
Report of Independent Registered Public Accounting Firm | ||||
Consolidated Balance Sheets—May 31, | ||||
Consolidated Statements of Income—Years ended May 31, | ||||
Consolidated Statements of Comprehensive Income—Years ended May 31, | ||||
Consolidated Statements of Stockholders’ Equity— Years ended May 31, | ||||
Consolidated Statements of Cash Flows— Years ended May 31, | ||||
Notes to Consolidated Financial Statements |
FORM10-K – ITEM 15 (a) (3) AND (b)
A list of Exhibits required to be filed as a part of this report is set forth in the Exhibit Index, which immediately precedes the signature page, and is incorporated herein by reference.
/s/ BDO USA, LLP
30, 2020
May 31 | ||||||||
2018 | 2017 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 83,074 | $ | 77,567 | ||||
Marketable securities | 127,736 | 66,068 | ||||||
Accounts receivable, less allowance of $1,550 and $2,000 at May 31, 2018 and 2017, respectively | 79,086 | 68,576 | ||||||
Inventories | 76,005 | 73,144 | ||||||
Prepaid expenses and other current assets | 9,888 | 7,606 | ||||||
|
|
|
| |||||
Total Current Assets | 375,789 | 292,961 | ||||||
Property and Equipment | ||||||||
Land and improvements | 4,730 | 3,094 | ||||||
Building and improvements | 44,008 | 37,917 | ||||||
Machinery and equipment | 74,911 | 64,867 | ||||||
Furniture and fixtures | 3,568 | 3,333 | ||||||
Construction in progress | 2,654 | 2,290 | ||||||
|
|
|
| |||||
129,871 | 111,501 | |||||||
Less accumulated depreciation | 56,802 | 49,753 | ||||||
|
|
|
| |||||
Net Property and Equipment | 73,069 | 61,748 | ||||||
Other Assets | ||||||||
Goodwill | 99,558 | 104,759 | ||||||
Othernon-amortizable intangible assets | 14,938 | 14,323 | ||||||
Amortizable customer-based intangible assets, net of accumulated amortization of $24,579 and $20,846 at May 31, 2018 and 2017, respectively | 31,841 | 35,983 | ||||||
Othernon-current assets, net of accumulated amortization of $12,470 and $9,931 at May 31, 2018 and 2017, respectively | 22,814 | 18,635 | ||||||
|
|
|
| |||||
Total Other Assets | 169,151 | 173,700 | ||||||
|
|
|
| |||||
Total Assets | $ | 618,009 | $ | 528,409 | ||||
|
|
|
|
May 31 | ||||||||
2020 | 2019 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 66,269 | $ | 41,688 | ||||
Marketable securities | 277,404 | 225,836 | ||||||
Accounts receivable, net of allowance of $1,350 and $1,700 at May 31, 2020 and 2019, respectively | 84,681 | 82,582 | ||||||
Inventories | 95,053 | 85,992 | ||||||
Prepaid expenses and other current assets | 13,999 | 13,431 | ||||||
Total Current Assets | 537,406 | 449,529 | ||||||
Property and Equipment | ||||||||
Land and improvements | 5,456 | 5,324 | ||||||
Building and improvements | 48,881 | 46,205 | ||||||
Machinery and equipment | 90,351 | 82,752 | ||||||
Furniture and fixtures | 4,324 | 3,895 | ||||||
Construction in progress | 4,968 | 2,294 | ||||||
153,980 | 140,470 | |||||||
Less accumulated depreciation | 75,309 | 65,623 | ||||||
Net Property and Equipment | 78,671 | 74,847 | ||||||
Other Assets | ||||||||
Right of use assets | 1,952 | — | ||||||
Goodwill | 110,340 | 103,619 | ||||||
Other non-amortizable intangible assets | 15,217 | 15,510 | ||||||
Amortizable intangible assets, net of accumulated amortization of $44,690 and $40,835 at May 31, 2020 and 2019, | 51,364 | 52,096 | ||||||
Other non-current assets | 2,232 | 139 | ||||||
Total Other Assets | 181,105 | 171,364 | ||||||
Total Assets | $ | 797,182 | $ | 695,740 | ||||
May 31 | ||||||||
2018 | 2017 | |||||||
Liabilities and Equity | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 20,750 | $ | 16,244 | ||||
Accruals | ||||||||
Accrued compensation | 6,065 | 5,002 | ||||||
Income taxes | 165 | 936 | ||||||
Other accruals | 11,708 | 13,820 | ||||||
|
|
|
| |||||
Total Current Liabilities | 38,688 | 36,002 | ||||||
Deferred Income Taxes | 14,103 | 17,048 | ||||||
OtherNon-Current Liabilities | 5,043 | 3,602 | ||||||
|
|
|
| |||||
Total Liabilities | 57,834 | 56,652 | ||||||
Commitments and Contingencies (note 7) | ||||||||
Equity | ||||||||
Preferred stock, $1.00 par value — shares authorized 100,000; none issued and outstanding | — | — | ||||||
Common stock, $0.16 par value — shares authorized 60,000,000; 51,735,732 and 50,932,489 shares issued and outstanding at May 31, 2018 and 2017, respectively | 8,278 | 8,149 | ||||||
Additionalpaid-in capital | 202,572 | 174,742 | ||||||
Accumulated other comprehensive loss | (9,746 | ) | (7,203 | ) | ||||
Retained earnings | 359,071 | 295,926 | ||||||
|
|
|
| |||||
Total Neogen Corporation and Subsidiaries Stockholders’ Equity | 560,175 | 471,614 | ||||||
Non-controlling interest | — | 143 | ||||||
|
|
|
| |||||
Total Equity | 560,175 | 471,757 | ||||||
|
|
|
| |||||
$ | 618,009 | 528,409 | ||||||
|
|
|
|
May 31 | ||||||||
2020 | 2019 | |||||||
Liabilities and Stockholders’ Equity | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 25,650 | $ | 19,063 | ||||
Accruals | ||||||||
Accrued compensation | 7,735 | 7,085 | ||||||
Income taxes | 1,456 | 601 | ||||||
Other accruals | 13,648 | 11,502 | ||||||
Total Current Liabilities | 48,489 | 38,251 | ||||||
Deferred Income Taxes | 18,125 | 15,618 | ||||||
Other Non-Current Liabilities | 5,391 | 3,972 | ||||||
Total Liabilities | 72,005 | 57,841 | ||||||
Commitments and Contingencies (note 7) | ||||||||
Stockholders’ Equity | ||||||||
Preferred stock, $1.00 par value — shares authorized 100,000; 0ne issued and outstanding | — | — | ||||||
Common stock, $0.16 par value — shares authorized 120,000,000; 52,945,841 and 52,216,589 shares issued and outstanding at May 31, 2020 and 2019, respectively | 8,471 | 8,355 | ||||||
Additional paid-in capital | 257,693 | 221,937 | ||||||
Accumulated other comprehensive loss | (19,709 | ) | (11,640 | ) | ||||
Retained earnings | 478,722 | 419,247 | ||||||
Total Neogen Corporation and Subsidiaries Stockholders’ Equity | 725,177 | 637,899 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 797,182 | $ | 695,740 | ||||
Year Ended May 31 | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Revenues | ||||||||||||
Product revenues | $ | 335,554 | $ | 306,512 | $ | 273,570 | ||||||
Service revenues | 66,698 | 55,082 | 47,705 | |||||||||
|
|
|
|
|
| |||||||
Total Revenues | 402,252 | 361,594 | 321,275 | |||||||||
|
|
|
|
|
| |||||||
Cost of Revenues | ||||||||||||
Cost of product revenues | 174,067 | 156,568 | 137,766 | |||||||||
Cost of service revenues | 37,933 | 33,058 | 30,445 | |||||||||
|
|
|
|
|
| |||||||
Total Cost of Revenues | 212,000 | 189,626 | 168,211 | |||||||||
|
|
|
|
|
| |||||||
Gross Margin | 190,252 | 171,968 | 153,064 | |||||||||
Operating Expenses | ||||||||||||
Sales and marketing | 70,909 | 62,424 | 57,599 | |||||||||
General and administrative | 38,294 | 34,214 | 29,189 | |||||||||
Research and development | 10,855 | 10,385 | 9,890 | |||||||||
|
|
|
|
|
| |||||||
120,058 | 107,023 | 96,678 | ||||||||||
|
|
|
|
|
| |||||||
Operating Income | 70,194 | 64,945 | 56,386 | |||||||||
Other Income (Expense) | ||||||||||||
Interest income, net | 2,043 | 838 | 322 | |||||||||
Royalty income | 147 | 171 | 217 | |||||||||
Other, net | 1,081 | 719 | (1,412 | ) | ||||||||
|
|
|
|
|
| |||||||
3,271 | 1,728 | (873 | ) | |||||||||
|
|
|
|
|
| |||||||
Income Before Income Taxes | 73,465 | 66,673 | 55,513 | |||||||||
Provision for Income Taxes | 10,250 | 22,700 | 18,975 | |||||||||
|
|
|
|
|
| |||||||
Net Income | 63,215 | 43,973 | 36,538 | |||||||||
Net (Income) Loss Attributable toNon-controlling Interest | (70 | ) | (180 | ) | 26 | |||||||
|
|
|
|
|
| |||||||
Net Income Attributable to Neogen | $ | 63,145 | $ | 43,793 | $ | 36,564 | ||||||
|
|
|
|
|
| |||||||
Net Income Attributable to Neogen per Share | ||||||||||||
Basic | $ | 1.23 | $ | 0.87 | $ | 0.73 | ||||||
|
|
|
|
|
| |||||||
Diluted | $ | 1.21 | $ | 0.86 | $ | 0.72 | ||||||
|
|
|
|
|
|
Year Ended May 31 | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Revenues | ||||||||||||
Product revenues | $ | 335,539 | $ | 339,439 | $ | 331,288 | ||||||
Service revenues | 82,631 | 74,747 | 66,642 | |||||||||
Total Revenues | 418,170 | 414,186 | 397,930 | |||||||||
Cost of Revenues | ||||||||||||
Cost of product revenues | 173,566 | 179,660 | 173,725 | |||||||||
Cost of service revenues | 48,325 | 42,606 | 37,933 | |||||||||
Total Cost of Revenues | 221,891 | 222,266 | 211,658 | |||||||||
Gross Margin | 196,279 | 191,920 | 186,272 | |||||||||
Operating Expenses | ||||||||||||
Sales and marketing | 69,675 | 70,230 | 66,929 | |||||||||
General and administrative | 44,331 | 40,791 | 38,294 | |||||||||
Research and development | 14,750 | 12,805 | 10,855 | |||||||||
Total Operating Expenses | 128,756 | 123,826 | 116,078 | |||||||||
Operating Income | 67,523 | 68,094 | 70,194 | |||||||||
Other Income | ||||||||||||
Interest income, net | 5,992 | 4,683 | 2,043 | |||||||||
Royalty income | — | 150 | 147 | |||||||||
Other, net | (1,210 | ) | 32 | 1,081 | ||||||||
Total Other Income | 4,782 | 4,865 | 3,271 | |||||||||
Income Before Income Taxes | 72,305 | 72,959 | 73,465 | |||||||||
Provision for Income Taxes | 12,830 | 12,783 | 10,250 | |||||||||
Net Income | 59,475 | 60,176 | 63,215 | |||||||||
Net Income Attributable to Non-controlling Interest | — | — | (70 | ) | ||||||||
Net Income Attributable to Neogen | $ | 59,475 | $ | 60,176 | $ | 63,145 | ||||||
Net Income Attributable to Neogen per Share | ||||||||||||
Basic | $ | 1.13 | $ | 1.16 | $ | 1.23 | ||||||
Diluted | $ | 1.13 | $ | 1.15 | $ | 1.21 | ||||||
Weighted Average Shares Outstanding | ||||||||||||
Basic | 52,550 | 51,888 | 51,358 | |||||||||
Diluted | 52,860 | 52,425 | 52,149 |
Year Ended May 31 | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Net Income | $ | 63,215 | $ | 43,973 | $ | 36,538 | ||||||
Other comprehensive (loss), net of tax: currency translations | (2,543 | ) | (3,257 | ) | (1,504 | ) | ||||||
|
|
|
|
|
| |||||||
Comprehensive income | 60,672 | 40,716 | 35,034 | |||||||||
Comprehensive (income) loss attributable tonon-controlling interest | (70 | ) | (180 | ) | 26 | |||||||
|
|
|
|
|
| |||||||
Comprehensive income attributable to Neogen | $ | 60,602 | $ | 40,536 | $ | 35,060 | ||||||
|
|
|
|
|
|
thousands)
Year Ended May 31 | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Net Income | $ | 59,475 | $ | 60,176 | $ | 63,215 | ||||||
Other comprehensive loss, net of tax: foreign currency translations | (8,495 | ) | (1,894 | ) | (2,543 | ) | ||||||
Other comprehensive income, net of tax: unrealized gain on marketable securities | 426 | — | — | |||||||||
Comprehensive income | 51,406 | 58,282 | 60,672 | |||||||||
Comprehensive income attributable to non-controlling interest | — | — | (70 | ) | ||||||||
Comprehensive income attributable to Neogen | $ | 51,406 | $ | 58,282 | $ | 60,602 | ||||||
Accumulated | ||||||||||||||||||||||||||||
Common Stock | Additional Paid-in | Other Comprehensive | Retained | Non- Controlling | Total | |||||||||||||||||||||||
Shares | Amount | Capital | Income (Loss) | Earnings | Interest | Equity | ||||||||||||||||||||||
Balance, May 31, 2015 | 49,504,359 | $ | 7,921 | $ | 129,926 | $ | (2,442 | ) | $ | 215,569 | $ | (11 | ) | $ | 350,963 | |||||||||||||
Exercise of options, share-based compensation and $2,945 income tax benefit | 561,524 | 89 | 17,288 | 17,377 | ||||||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 24,369 | 4 | 782 | 786 | ||||||||||||||||||||||||
Net income (loss) for 2016 | 36,564 | (26 | ) | 36,538 | ||||||||||||||||||||||||
Other comprehensive income (loss) | (1,504 | ) | (1,504 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance, May 31, 2016 | 50,090,252 | 8,014 | 147,996 | (3,946 | ) | 252,133 | (37 | ) | 404,160 | |||||||||||||||||||
Exercise of options, share-based compensation and $3,922 income tax benefit | 817,284 | 131 | 26,589 | 26,720 | ||||||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 24,953 | 4 | 921 | 925 | ||||||||||||||||||||||||
Purchase of minority interest | (764 | ) | (764 | ) | ||||||||||||||||||||||||
Net income (loss) for 2017 | 43,793 | 180 | 43,973 | |||||||||||||||||||||||||
Other comprehensive income (loss) | (3,257 | ) | (3,257 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance, May 31, 2017 | 50,932,489 | 8,149 | 174,742 | (7,203 | ) | 295,926 | 143 | 471,757 | ||||||||||||||||||||
Exercise of options, share-based compensation | 781,116 | 125 | 26,992 | 27,117 | ||||||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 22,127 | 4 | 1,048 | 1,052 | ||||||||||||||||||||||||
Purchase of minority interest | (210 | ) | (213 | ) | (423 | ) | ||||||||||||||||||||||
Net income (loss) for 2018 | 63,145 | 70 | 63,215 | |||||||||||||||||||||||||
Other comprehensive income (loss) | (2,543 | ) | (2,543 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||
Balance, May 31, 2018 | 51,735,732 | $ | 8,278 | $ | 202,572 | $ | (9,746 | ) | $ | 359,071 | $ | — | $ | 560,175 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated | ||||||||||||||||||||||||||||
Common Stock | Additional Paid-in | Other Comprehensive | Retained | Non- Controlling | Total | |||||||||||||||||||||||
Shares | Amount | Capital | Income (Loss) | Earnings | Interest | Equity | ||||||||||||||||||||||
Balance, June 1, 2017 | 50,932,489 | $ | 8,149 | $ | 174,742 | $ | (7,203 | ) | $ | 295,926 | $ | 143 | $ | 471,757 | ||||||||||||||
Exercise of options and share-based compensation expense | 781,116 | 125 | 26,992 | — | — | — | 27,117 | |||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 22,127 | 4 | 1,048 | — | — | — | 1,052 | |||||||||||||||||||||
Purchase of minority interest | — | — | (210 | ) | — | — | (213 | ) | (423 | ) | ||||||||||||||||||
Net income for 2018 | — | — | — | — | 63,145 | 70 | 63,215 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | (2,543 | ) | — | — | (2,543 | ) | |||||||||||||||||||
Balance, May 31, 2018 | 51,735,732 | 8,278 | 202,572 | (9,746 | ) | 359,071 | — | 560,175 | ||||||||||||||||||||
Exercise of options and share-based compensation expense | 512,527 | 82 | 21,335 | — | — | — | 21,417 | |||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 18,330 | 3 | 1,157 | — | — | — | 1,160 | |||||||||||||||||||||
Shares repurchased | (50,000 | ) | (8 | ) | (3,127 | ) | — | — | — | (3,135 | ) | |||||||||||||||||
Net income for 2019 | — | — | — | — | 60,176 | — | 60,176 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | (1,894 | ) | — | — | (1,894 | ) | |||||||||||||||||||
Balance, May 31, 2019 | 52,216,589 | 8,355 | 221,937 | (11,640 | ) | 419,247 | — | 637,899 | ||||||||||||||||||||
Exercise of options and share-based compensation expense | 707,674 | 113 | 34,566 | — | — | — | 34,679 | |||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 21,578 | 3 | 1,190 | — | — | — | 1,193 | |||||||||||||||||||||
Net income for 2020 | — | — | — | — | 59,475 | — | 59,475 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | (8,069 | ) | — | — | (8,069 | ) | |||||||||||||||||||
Balance, May 31, 2020 | 52,945,841 | $ | 8,471 | $ | 257,693 | $ | (19,709 | ) | $ | 478,722 | $ | — | $ | 725,177 | ||||||||||||||
Year Ended May 31 | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Cash Flows From Operating Activities | ||||||||||||
Net income | $ | 63,215 | $ | 43,973 | $ | 36,538 | ||||||
Adjustments to reconcile net income to net cash provided from operating activities: | ||||||||||||
Depreciation and amortization | 17,058 | 14,691 | 12,181 | |||||||||
Deferred income taxes | (2,996 | ) | (292 | ) | 1,906 | |||||||
Share-based compensation | 4,909 | 5,261 | 5,468 | |||||||||
Excess income tax benefit from exercise of stock options | — | (3,922 | ) | (2,945 | ) | |||||||
Changes in operating assets and liabilities, net of business acquisitions: | ||||||||||||
Accounts receivable | (10,233 | ) | 5,035 | (6,002 | ) | |||||||
Inventories | (2,647 | ) | (6,970 | ) | (9,427 | ) | ||||||
Prepaid expenses and other assets | (2,275 | ) | 812 | (3,836 | ) | |||||||
Accounts payable | 4,381 | (1,691 | ) | 704 | ||||||||
Accruals and other changes | (2,281 | ) | 3,377 | 744 | ||||||||
|
|
|
|
|
| |||||||
Net Cash From Operating Activities | 69,131 | 60,274 | 35,331 | |||||||||
Cash Flows Used in Investing Activities | ||||||||||||
Purchase of property, equipment and othernon-current intangible assets | (20,946 | ) | (14,578 | ) | (14,222 | ) | ||||||
Proceeds from the sales of marketable securities | 299,751 | 149,226 | 147,189 | |||||||||
Purchase of marketable securities | (361,419 | ) | (162,755 | ) | (151,625 | ) | ||||||
Business acquisitions, net of cash acquired | (468 | ) | (34,029 | ) | (42,491 | ) | ||||||
|
|
|
|
|
| |||||||
Net Cash Used in Investing Activities | (83,082 | ) | (62,136 | ) | (61,149 | ) | ||||||
Cash Flows From Financing Activities | ||||||||||||
Exercise of stock options and other | 23,261 | 21,148 | 12,363 | |||||||||
Excess income tax benefit from the exercise of stock options | — | 3,922 | 2,945 | |||||||||
Purchase of minority interest | (423 | ) | — | — | ||||||||
|
|
|
|
|
| |||||||
Net Cash From Financing Activities | 22,838 | 25,070 | 15,308 | |||||||||
Effect of Exchange Rate on Cash | (3,380 | ) | (898 | ) | (294 | ) | ||||||
|
|
|
|
|
| |||||||
Net Increase (Decrease) in Cash and Cash Equivalents | 5,507 | 22,310 | (10,804 | ) | ||||||||
Cash and Cash Equivalents, Beginning of Year | 77,567 | 55,257 | 66,061 | |||||||||
|
|
|
|
|
| |||||||
Cash and Cash Equivalents, End of Year | $ | 83,074 | $ | 77,567 | $ | 55,257 | ||||||
|
|
|
|
|
| |||||||
Supplementary Cash Flow Information | ||||||||||||
Income taxes paid, net of refunds | $ | 11,800 | $ | 13,865 | $ | 13,413 |
Year Ended May 31 | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Cash Flows From Operating Activities | ||||||||||||
Net income | $ | 59,475 | $ | 60,176 | $ | 63,215 | ||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||
Depreciation and amortization | 18,396 | 17,624 | 17,058 | |||||||||
Deferred income taxes | 1,601 | 1,197 | (2,996 | ) | ||||||||
Share-based compensation | 6,468 | 5,543 | 4,909 | |||||||||
Changes in operating assets and liabilities, net of business acquisitions: | ||||||||||||
Accounts receivable | (2,881 | ) | (4,025 | ) | (10,233 | ) | ||||||
Inventories | (10,011 | ) | (10,437 | ) | (2,647 | ) | ||||||
Prepaid expenses and other assets | (1,017 | ) | (3,569 | ) | (2,275 | ) | ||||||
Accounts payable | 6,745 | (1,461 | ) | 4,381 | ||||||||
Accruals and other changes | 7,102 | (1,206 | ) | (2,281 | ) | |||||||
Net Cash From Operating Activities | 85,878 | 63,842 | 69,131 | |||||||||
Cash Flows For Investing Activities | ||||||||||||
Purchase of property, equipment and other non-current intangible assets | (24,052 | ) | (14,661 | ) | (20,946 | ) | ||||||
Proceeds from the sales of marketable securities | 406,731 | 339,225 | 299,751 | |||||||||
Purchase of marketable securities | (458,300 | ) | (437,324 | ) | (361,419 | ) | ||||||
Business acquisitions, net of cash acquired | (13,164 | ) | (6,388 | ) | (468 | ) | ||||||
Net Cash For Investing Activities | (88,785 | ) | (119,148 | ) | (83,082 | ) | ||||||
Cash Flows From Financing Activities | ||||||||||||
Exercise of stock options and other | 29,405 | 17,034 | 23,261 | |||||||||
Repurchase of common stock | — | (3,135 | ) | — | ||||||||
Purchase of non-controlling minority interest | — | — | (423 | ) | ||||||||
Net Cash From Financing Activities | 29,405 | 13,899 | 22,838 | |||||||||
Effect of Foreign Exchange Rate on Cash | (1,917 | ) | 21 | (3,380 | ) | |||||||
Net Increase (Decrease) in Cash and Cash Equivalents | 24,581 | (41,386 | ) | 5,507 | ||||||||
Cash and Cash Equivalents, Beginning of Year | 41,688 | 83,074 | 77,567 | |||||||||
Cash and Cash Equivalents, End of Year | $ | 66,269 | $ | 41,688 | $ | 83,074 | ||||||
Supplementary Cash Flow Information | ||||||||||||
Income taxes paid, net of refunds | $ | 7,364 | $ | 13,027 | $ | 14,966 |
1. | Summary of Significant Accounting Policies |
Use
The preparationexchange 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.
Implementation Cost Incurred in a Cloud Computing Arrangement That Is a Service Contract, which clarifies the accounting for implementation costs in cloud computing arrangements. ASU
adjustments and unrealized gains and losses on our marketable securities.
Level 1: | Observable inputs such as quoted prices in active markets; | |
Level 2: | Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and | |
Level 3: | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
Year ended May 31 | ||||||||||||
(in thousands) | Maturity | 2020 | 2019 | |||||||||
US Treasuries | 0 – 90 days | $ | — | $ | 2,470 | |||||||
91 –180 days | — | — | ||||||||||
181 days –1 year | 2,532 | 2,435 | ||||||||||
1 – 2 years | — | 2,505 | ||||||||||
Commercial Paper & Corporate Bonds | 0 – 90 days | 133,130 | 84,338 | |||||||||
91 – 180 days | 73,824 | 47,960 | ||||||||||
181 days –1 year | 43,231 | 34,369 | ||||||||||
1 – 2 years | 7,839 | 34,078 | ||||||||||
Certificates of Deposit | 0 – 90 days | 1,003 | 7,732 | |||||||||
91 – 180 days | 5,184 | 5,000 | ||||||||||
181 days –1 year | 6,069 | 750 | ||||||||||
1 – 2 years | 4,592 | 4,199 | ||||||||||
Total Marketable Securities | $ | 277,404 | $ | 225,836 | ||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||
(in thousands) | Cost | Gains | Losses | Fair Value | ||||||||||||
US Treasuries | $ | 2,502 | $ | 30 | $ | — | $ | 2,532 | ||||||||
Commercial Paper & Corporate Bonds | 257,700 | 347 | (23 | ) | 258,024 | |||||||||||
Certificates of Deposit | 16,648 | 200 | — | 16,848 | ||||||||||||
Total Marketable Securities | $ | 276,850 | $ | 577 | $ | (23 | ) | $ | 277,404 | |||||||
Year ended May 31 | ||||||||||||
(in thousands) | 2018 | 2017 | 2016 | |||||||||
Beginning Balance | $ | 2,000 | $ | 1,500 | $ | 1,300 | ||||||
Provision | 152 | 645 | 305 | |||||||||
Recoveries | 40 | 25 | 90 | |||||||||
Write-offs | (642 | ) | (170 | ) | (195 | ) | ||||||
|
|
|
|
|
| |||||||
Ending Balance | $ | 1,550 | $ | 2,000 | $ | 1,500 | ||||||
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|
|
Fair Value of Financial Instruments
The carrying amounts of our 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. We utilize a fair value hierarchy based upon the observability of inputs used in valuation techniques as follows:
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| |
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| |
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|
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 were $83,074,000 and $77,567,000 at May 31, 2018 and 2017, respectively. The carrying value of these assets approximates fair value due to the short maturity of these instruments and meets the Level 1 criteria. Cash held by foreign subsidiaries was $7,101,000 and $8,132,000 at May 31, 2018 and 2017, respectively.
Marketable Securities
We have marketable securities held by banks or broker-dealers at May 31, 2018, consisting of short-term domestic certificates of deposit of $27,400,000 and commercial paper rated at leastA-2/P-2 with maturities between 91 days and one year of $100,336,000. Total outstanding marketable securities at May 31, 2018 was $127,736,000; there were $66,068,000 in marketable securities outstanding at May 31, 2017. These securities are classified as available for sale. The primary objective of our short-term investment activity is to preserve capital for the purpose of funding 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 (that approximates cost) 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.
Year ended May 31 | ||||||||||||
(in thousands) | 2020 | 2019 | 2018 | |||||||||
Beginning Balance | $ | 1,700 | $ | 1,550 | $ | 2,000 | ||||||
Provision | 393 | 263 | 152 | |||||||||
Recoveries | 49 | 38 | 40 | |||||||||
Write-offs | (792 | ) | (151 | ) | (642 | ) | ||||||
Ending Balance | $ | 1,350 | $ | 1,700 | $ | 1,550 | ||||||
Year ended May 31 | ||||||||
(in thousands) | 2018 | 2017 | ||||||
Raw Materials | $ | 36,702 | $ | 33,190 | ||||
Work-in-process | 5,993 | 4,831 | ||||||
Finished goods | 33,310 | 35,123 | ||||||
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$ | 76,005 | $ | 73,144 | |||||
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Our
Year ended May 31 | ||||||||
(in thousands) | 2020 | 2019 | ||||||
Raw Materials | $ | 45,058 | $ | 41,594 | ||||
Work-in-process | 6,887 | 5,581 | ||||||
Finished goods | 43,108 | 38,817 | ||||||
$ | 95,053 | $ | 85,992 | |||||
Stock Options
5 to the consolidated financial statements.
Year ended May 31 | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Risk-free interest rate | 1.6% | 1.2% | 1.2% | |||||||||
Expected dividend yield | 0.0% | 0.0% | 0.0% | |||||||||
Expected stock volatility | 27.7% | 35.2% | 33.3% | |||||||||
Expected option life | 4.0 years | 4.0 years | 4.0 years |
Year ended May 31 | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Risk-free interest rate | 1.9% | 2.6% | 1.6% | |||||||||
Expected dividend yield | 0.0% | 0.0% | 0.0% | |||||||||
Expected stock volatility | 29.4% | 27.0% | 27.7% | |||||||||
Expected option life | 3.5 | 3.5 years | 4.0 years |
Revenue Recognition
Revenue from products and services is recognized whenmethod over the product has been shipped or the service performed, the sales price is fixed and determinable, and collection of any receivable is probable. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred and later recognized in thevesting period, that all recognition criteria have been met. Customer credits for sales returns, pricing and other disputes, and other related matters (including volume rebates offered to certain distributors as marketing support) represent approximately 3% of reported net revenue in fiscal years 2018, 2017 and 2016.
Shipping and Handling Costs
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; these expenses totaled $12,147,000, $10,185,000 and $9,734,000 in fiscal years 2018, 2017 and 2016, respectively.
generally five years.
not reinvested indefinitely.
information.
Year ended May 31 | ||||||||||||
(in thousands, except per share) | 2018 | 2017 | 2016 | |||||||||
Numerator for basic and diluted net income per share - Net Income attributable to Neogen | $ | 63,145 | $ | 43,793 | $ | 36,564 | ||||||
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Denominator for basic net income per share - Weighted average shares | 51,358 | 50,544 | 49,869 | |||||||||
Effect of dilutive stock options | 791 | 621 | 631 | |||||||||
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Denominator for diluted net income per share | 52,149 | 51,165 | 50,500 | |||||||||
Net income attributable to Neogen per share | ||||||||||||
Basic | $ | 1.23 | $ | 0.87 | $ | 0.73 | ||||||
Diluted | $ | 1.21 | $ | 0.86 | $ | 0.72 |
Year ended May 31 | ||||||||||||
(in thousands, except per share) | 2020 | 2019 | 2018 | |||||||||
Numerator for basic and diluted net income per share - Net Income attributable to Neogen | $ | 59,475 | $ | 60,176 | $ | 63,145 | ||||||
Denominator for basic net income per share - Weighted average shares | 52,550 | 51,888 | 51,358 | |||||||||
Effect of dilutive stock options | 310 | 537 | 791 | |||||||||
Denominator for diluted net income per share | 52,860 | 52,425 | 52,149 | |||||||||
Net income attributable to Neogen per share | ||||||||||||
Basic | $ | 1.13 | $ | 1.16 | $ | 1.23 | ||||||
Diluted | $ | 1.13 | $ | 1.15 | $ | 1.21 |
New Accounting Pronouncements
In At May 2014, the FASB issued ASU No.2014-09—Revenue from Contracts with Customers (Topic 606). The new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most
current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity
should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. In April 2016, the FASB issued Accounting Standards UpdateNo. 2016-10— Revenue from Contracts with Customers (Topic 606), which amends and adds clarity to certain aspects of the guidance set forth in ASU2014-09 related to identifying performance obligations and licensing. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The guidance permits two methods of adoption: a full retrospective method to each prior reporting period presented or a modified retrospective approach with the cumulative effect of initially applying the guidance recognized at the date of initial application. Our internal task force identified31, 2018, all revenue streams at each significant subsidiary and reviewed contracts to evaluate the impact of adopting the new standard on our revenue recognition policies, procedures and control framework and ultimately on our consolidated financial statements and related disclosures. In our review of contracts in each revenue stream, we noted no material impactpotential shares were included in the implementation of the standard. We have determined the impact of adopting the standard on our control framework and noted minimal, insignificant changes to our system and other controls processes. We adopted this standard oncomputation.
In February 2016, the FASB issued ASU No.2016-02—Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a
In March 2016,leases are classified as operating leases. Leased assets and corresponding liabilities are recognized based on the FASB issued ASUNo. 2016-09—Compensation-Stock Compensation (Topic 718): Improvements to Employee
Share-Based Payment Accounting to provide guidance that changes the accounting for certain aspects of share-based payments to
employees. The guidance requires the recognitionpresent value of the income tax effects of awards inlease payments over the income statement when the awards vest or are settled, thus eliminating additionalpaid-in capital pools. The guidance also allows for the employerlease term. Our lease terms may include options to repurchase more of an
employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy
election to account for forfeitures as they occur rather than on an estimated basis. We adopted this standard effective June 1,
2017. Adoption of this ASU decreased income tax expense by $4,816,000 in fiscal 2018; refer to Note 6 of our Consolidated Financial Statements for further information.
In June 2016, the FASB issued ASUNo. 2016-13—Measurement of Credit Losses on Financial Instruments, which changes how companies measure credit losses on most financial instruments measured at amortized cost and certain other instruments, such as loans, receivables andheld-to-maturity debt securities. Rather than generally recognizing credit lossesextend when it is probablereasonably certain that we will exercise that option.
• | 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 andnon-lease components as a single lease component. |
• | The determination of the discount rate used in a lease is our incremental borrowing rate that is based on what we would normally pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. |
(in thousands) | May 31, 2020 | |||
Right of use – assets | $ | 1,952 | ||
Lease liabilities – current | 1,054 | |||
Lease liabilities – non-current | 913 |
May 31, 2020 | ||||
Weighted average remaining lease term | 2.5 years | |||
Weighted average discount rate | 3.2 | % |
(in thousands) | Year Ended May 31, 2020 | |||
Operating leases | $ | 1,207 | ||
Short term leases | 166 | |||
Total lease expense | $ | 1,373 | ||
In August 2016, the FASB issued ASUNo. 2016-15—Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The amendments in ASU2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows were approximately $1,178,000 for the year ended May 31, 2020. There were 0
(in thousands) | Amount | |||
Years ending May 31, 2021 | $ | 1,080 | ||
2022 | 546 | |||
2023 | 286 | |||
2024 | 141 | |||
2025 and thereafter | 41 | |||
Total lease payments | 2,094 | |||
Less: imputed interest | (112 | ) | ||
Total lease liabilities | $ | 1,982 | ||
• | Identification of the contract with a customer; |
• | Identification of the performance obligations in the contract; |
• | Determination of the transaction price; |
• | Allocation of the transaction price to the performance obligations in the contract; and |
• | Recognition of revenue when or as the Company satisfies the performance obligations. |
• | Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; |
• | Consumable products marketed to veterinarians, retailers, livestock producers and animal health product distributors; and |
• | Rodenticides, disinfectants and insecticides to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities. |
• | Genomic identification and related interpretive bioinformatic services; and |
• | Other commercial laboratory services. |
Year Ended | ||||||||||||||||||||
Increase/ | Increase/ | |||||||||||||||||||
(dollars in thousands) | May 31, 2020 | (Decrease) | May 31, 2019 | (Decrease) | May 31, 2018 | |||||||||||||||
Food Safety: | ||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues | $ | 76,207 | (3 | )% | $ | 78,373 | 7 | % | $ | 72,962 | ||||||||||
Bacterial & General Sanitation | 41,780 | (0 | )% | 41,966 | 10 | % | 38,156 | |||||||||||||
Culture Media & Other | 47,847 | (4 | )% | 49,857 | 13 | % | 44,271 | |||||||||||||
Rodenticides, Insecticides & Disinfectants | 28,890 | 13 | % | 25,584 | 7 | % | 23,821 | |||||||||||||
Genomics Services | 17,967 | 2 | % | 17,694 | 16 | % | 15,267 | |||||||||||||
212,691 | (0 | )% | 213,474 | 10 | % | 194,477 | ||||||||||||||
Animal Safety: | ||||||||||||||||||||
Life Sciences | 6,322 | (20 | )% | 7,858 | (25 | )% | 10,411 | |||||||||||||
Veterinary Instruments & Disposables | 42,941 | (4 | )% | 44,582 | (7 | )% | 47,749 | |||||||||||||
Animal Care & Other | 28,389 | (5 | )% | 29,941 | (3 | )% | 30,930 | |||||||||||||
Rodenticides, Insecticides & Disinfectants | 68,815 | 4 | % | 66,389 | (2 | )% | 67,646 | |||||||||||||
Genomics Services | 59,012 | 14 | % | 51,942 | 11 | % | 46,717 | |||||||||||||
205,479 | 2 | % | 200,712 | (1 | )% | 203,453 | ||||||||||||||
Total Revenue | $ | 418,170 | 1 | % | $ | 414,186 | 4 | % | $ | 397,930 | ||||||||||
Year Ended May 31, 2018 | ||||||||||||
As Previously Reported | Adjustments | As Revised | ||||||||||
(in thousands) | ||||||||||||
Revenues | ||||||||||||
Product revenues | $ | 335,554 | $ | (4,266 | ) | $ | 331,288 | |||||
Service revenues | 66,698 | (56 | ) | 66,642 | ||||||||
Total revenues | 402,252 | (4,322 | ) | 397,930 | ||||||||
Cost of revenues | ||||||||||||
Cost of product revenues | 174,067 | (342 | ) | 173,725 | ||||||||
Cost of service revenues | 37,933 | — | 37,933 | |||||||||
Total cost of revenues | 212,000 | (342 | ) | 211,658 | ||||||||
Gross margin | 190,252 | (3,980 | ) | 186,272 | ||||||||
Operating expenses | ||||||||||||
Sales and marketing | 70,909 | (3,980 | ) | 66,929 | ||||||||
Total operating expenses | 120,058 | (3,980 | ) | 116,078 | ||||||||
Operating income | 70,194 | — | 70,194 | |||||||||
2. | Goodwill and Other Intangible Assets |
(in thousands) | Food Safety | Animal Safety | Total | |||||||||
Balance, May 31, 2016 | $ | 26,889 | $ | 61,617 | $ | 88,506 | ||||||
Goodwill acquired | 19,051 | — | 19,051 | |||||||||
Goodwill adjustments and/or currency (1) | (20 | ) | (2,778 | ) | (2,798 | ) | ||||||
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Balance, May 31, 2017 | $ | 45,920 | $ | 58,839 | $ | 104,759 | ||||||
Goodwill acquired | — | 757 | 757 | |||||||||
Goodwill adjustments and/or currency (1) | (5,919 | ) | (39 | ) | (5,958 | ) | ||||||
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Balance, May 31, 2018 | $ | 40,001 | $ | 59,557 | $ | 99,558 | ||||||
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(in thousands) | Food Safety | Animal Safety | Total | |||||||||
Balance, May 31, 2018 | $ | 40,001 | $ | 59,557 | $ | 99,558 | ||||||
Goodwill acquired | 3,796 | 1,196 | 4,992 | |||||||||
Goodwill and/or currency adjustments (1) | (1,244 | ) | 313 | (931 | ) | |||||||
Balance, May 31, 2019 | $ | 42,553 | $ | 61,066 | $ | 103,619 | ||||||
Goodwill acquired | 6,254 | 2,095 | 8,349 | |||||||||
Goodwill and/or currency adjustments (1) | (1,592 | ) | (36 | ) | (1,628 | ) | ||||||
Balance, May 31, 2020 | $ | 47,215 | $ | 63,125 | $ | 110,340 | ||||||
(1) | Includes final purchase price allocation |
2018,2020,$12,989,000$13,424,000 and other intangibles of $1,224,000. At May 31, 2017,2019,$12,530,000$13,717,000 and other intangibles of $1,224,000.
(in thousands) | Gross Carrying Amount | Less Accumulated Amortization | Net Carrying Amount | |||||||||
Licenses | $ | 9,491 | $ | 2,523 | $ | 6,968 | ||||||
Covenants not to compete | 801 | 483 | 318 | |||||||||
Patents | 9,693 | 5,013 | 4,680 | |||||||||
Customer-based intangibles | 56,420 | 24,579 | 31,841 | |||||||||
Other products and service-related intangibles | 15,299 | 4,451 | 10,848 | |||||||||
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Balance, May 31, 2018 | $ | 91,704 | $ | 37,049 | $ | 54,655 | ||||||
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Licenses | $ | 5,989 | $ | 2,011 | $ | 3,978 | ||||||
Covenants not to compete | 1,208 | 309 | 899 | |||||||||
Patents | 9,304 | 4,601 | 4,703 | |||||||||
Customer-based intangibles | 56,829 | 20,846 | 35,983 | |||||||||
Other products and service-related intangibles | 12,065 | 3,010 | 9,055 | |||||||||
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Balance, May 31, 2017 | $ | 85,395 | $ | 30,777 | $ | 54,618 | ||||||
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(in thousands) | Gross Carrying Amount | Less Accumulated Amortization | Net Carrying Amount | |||||||||
Licenses | $ | 10,346 | $ | 3,330 | $ | 7,016 | ||||||
Covenants not to compete | 706 | 407 | 299 | |||||||||
Patents | 8,509 | 4,118 | 4,391 | |||||||||
Customer-based intangibles | 59,847 | 29,898 | 29,949 | |||||||||
Other products and service-related intangibles | 16,646 | 6,937 | 9,709 | |||||||||
Balance, May 31, 2020 | $ | 96,054 | $ | 44,690 | $ | 51,364 | ||||||
Licenses | $ | 9,813 | $ | 3,182 | $ | 6,631 | ||||||
Covenants not to compete | 862 | 542 | 320 | |||||||||
Patents | 8,158 | 3,570 | 4,588 | |||||||||
Customer-based intangibles | 57,634 | 28,017 | 29,617 | |||||||||
Other products and service-related intangibles | 16,464 | 5,524 | 10,940 | |||||||||
Balance, May 31, 2019 | $ | 92,931 | $ | 40,835 | $ | 52,096 | ||||||
3. | Business Combinations |
Fiscal 2016
On June 1, 2015, we acquired the assets of Sterling Test House, a commercial food testing laboratory based in India. Consideration for the purchase was $1,118,000 in cash and approximately $102,000 of a contingent consideration liability, due in installments on the first two anniversary dates, based on an excess 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 $43,000, inventory of $14,000, property and equipment of $141,000, contingent consideration accrual of $102,000, intangible assets of $345,000 (with an estimated life of5-15 years) and the remainder to goodwill (deductible for tax purposes). These values are Level 3 fair value measurements. This business continues to operate in its current location and reports within the Food Safety segment. In July 2016, we paid the former owner $70,000 for contingent consideration based on the achievement of sales targets, and reduced the recorded liability by a corresponding amount. In May 2016, we charged the remaining contingent consideration accrual of $32,000 to Other Income because sales targets for the applicable periods were not achieved.
On August 26, 2015, we acquired all the stock of Lab M Holdings, a developer, manufacturer and supplier of microbiological culture media and diagnostic systems located in the United Kingdom. Consideration for the purchase was $12,436,000 in cash. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included cash of $285,000, accounts receivable of $975,000, inventory of $1,169,000, property and equipment of $3,337,000, other current assets of $309,000, current liabilities of $948,000,non-current deferred tax liability of $784,000, intangible assets of $3,611,000 (with an estimated life of5-15 years) and the remainder to goodwill(non-deductible for tax purposes). These values are Level 3 fair value measurements. This business continues to operate in its current location and reports within the Food Safety segment.
On December 22, 2015, we acquired the rodenticide assets of Virbac Corporation, the North American affiliate of the France-based Virbac group, a global animal health company. The acquired assets include a rodenticide active ingredient that complements Neogen’s existing active ingredients, and more than 40 regulatory approvals for a variety of formulations in the United States, Canada and Mexico. The acquired assets also include a large retail and OEM customer base. Consideration for the purchase was $3,525,000 in cash and up to $300,000 of contingent consideration. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included inventory of $317,000, property and equipment of $60,000, current liabilities of $300,000, intangible assets of $1,759,000 (with an estimated life of5-15 years),non-amortizable trademarks of $200,000 and the remainder to goodwill (deductible for tax purposes). These values are Level 3 fair value measurements. The products are manufactured at our production facility in Randolph, Wisconsin, and report within the Animal Safety segment. In fiscal 2016, we paid the former owner $300,000 of contingent consideration based on the achievement of specific objectives, and reduced the recorded liability by a corresponding amount.
On April 26, 2016, we acquired the stock of Deoxi Biotecnologia Ltda., an animal genomics laboratory located in Aracatuba, Brazil. This acquisition is intended to help accelerate the growth of Neogen’s animal genomics services in Brazil. Consideration for the purchase was $1,549,000 in cash and up to $2,552,000 of contingent consideration, due at the end of each of the first two years, based on 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 $132,000, inventory of $89,000, other current assets of $9,000, property and equipment of $232,000, current liabilities of $266,000, contingent consideration accrual of $453,000,non-current deferred tax liability of $184,000,non-amortizable trademarks of $193,000, intangible assets of $350,000 (with an estimated life of5-10 years) and the remainder to goodwill (deductible for tax purposes). These values are Level 3 fair value measurements. This business continues to operate in its current location and is managed by Neogen do Brasil, reporting within the Food Safety segment. In June 2017, we paid the former owners $393,000 in contingent consideration based on the achievement of sales targets, and charged $14,000 to Other Expense. In June 2018, we agreed to pay the former owners $122,000 in contingent consideration based on the achievement of sales targets and charged $42,000 to Other Expense; the funds are currently in escrow awaiting settlement of a legal matter.
On May 1, 2016, we acquired the stock of Preserve International and its sister company, Tetradyne LLC, manufacturers and marketers of cleaners, disinfectants and associated products to the swine, poultry, food processing and dairy markets. Preserve and Tetradyne have manufacturing locations in Memphis, Tennessee and Turlock, California. Consideration for the purchase was $24,245,000 in 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 $1,629,000, inventory of $1,964,000, other current assets of $269,000, land, property and equipment of $1,625,000, current liabilities of $987,000,non-current liabilities of $660,000, intangible assets of $11,950,000 (with an estimated life of5-15 years),non-amortizable trademarks of $2,600,000, and the remainder to goodwill (partially deductible for tax purposes). These values are Level 3 fair value measurements. This business continues to operate in its current locations and reports within the Animal Safety segment.
Fiscal 2017
On December 1, 2016, we acquired the stock of Quat-Chem Ltd., a chemical company that manufactures biosecurity products, based in Rochdale, England. Consideration for the purchase was $21,606,000 in cash and up to $3,778,000 of contingent consideration, due at the end of each of the first two years, based on 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 $4,684,000, inventory of $1,243,000, land, property and equipment of $2,526,000, accounts payable of $2,197,000, deferred tax liability of $1,758,000, contingent consideration accrual of $1,058,000, other current liabilities of $604,000,non-amortizable intangible assets of $1,889,000, intangible assets of $6,900,000 (with an estimated life of5-15 years) and the remainder to goodwill(non-deductible for tax purposes). These values are Level 3 fair value measurements. In January 2018, we paid the former owners $249,000 in contingent consideration based on the achievement of sales targets in the first year, and recorded a credit of $255,000 to Other Income, reducing the contingent consideration accrual by a corresponding amount; $554,000 remains accrued for contingent consideration payable at the end of the second year. This business continues to operate in its current location and is managed by Neogen Europe, reporting within the Food Safety segment.
On December 27, 2016, we acquired the stock of Rogama Industria e Comercio, Ltda., a company that develops and manufactures rodenticides and insecticides, based near São Paulo, Brazil. Consideration for the purchase was $12,423,000 in cash and up to $2,069,000 of contingent consideration, due at the end of each of the first two years, based on 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 $1,866,000, othernon-current assets of $26,000, inventory of $960,000, land, property and equipment of $4,734,000, current liabilities of $2,562,000, contingent consideration accrual of $213,000, deferred tax liability of $2,034,000,non-amortizable intangible assets of $870,000, intangible assets of $5,112,000 (with an estimated life of5-15 years) and the remainder to goodwill (deductible for tax purposes). These values are Level 3 fair value measurements. In April 2018, we paid the former owners $130,000 in contingent consideration based on the achievement of sales targets in the first year. The contingent consideration accrual was reduced by the same amount; $83,000 remains accrued for contingent consideration payable at the end of the second year. This business continues to operate in its current location and is managed by Neogen do Brasil, reporting within the Food Safety segment.
4. | Long-Term Debt |
We have
2020.
5. | Equity Compensation Plans |
Outstanding at May 31, 2015 (852 exercisable) Granted Exercised Forfeited Outstanding at May 31, 2016 (875 exercisable) Granted Exercised Forfeited Outstanding at May 31, 2017 (661 exercisable) Granted Exercised Forfeited Outstanding at May 31, 2018 (508 exercisable) Range of Exercise Price $8.27 - $30.03 $30.04 - $37.26 $37.27 - $40.91 $40.92 - $59.78 $59.79 - $68.96 2020:Qualifiedmay behave been granted to directors, officers and employees of Neogen under the terms of ourthe Company’s stock option plans. These options arewere granted at an exercise price of not less than the fair market value of the stock on the date of grant. Remaining shares available for grant under stock option plans were 1,913,000, 2,525,0003,501,000, 3,997,000 and 3,276,0001,913,000 at May 31, 2018, 20172020, 2019 and 2016,2018, respectively. Options vest ratably over three and five-yearfive-year periods and the contractual terms are generally five or ten years.(options in thousands) Options Weighted-Average
Exercise Price Weighted-Average
Grant Date Fair Value 2,651 23.29 6.90 732 35.23 9.83 (569 ) 17.60 5.36 (39 ) 28.93 8.36 2,775 27.53 7.97 828 40.68 11.89 (827 ) 22.82 6.77 (77 ) 32.04 9.17 2,699 32.88 9.51 829 59.37 14.47 (821 ) 28.18 8.20 (208 ) 39.57 11.12 2,499 42.63 11.44
Exercise Price
Grant Date Fair Value $ $ ) ) ) ) ) ) 2018:(options in thousands) Options Outstanding Options Exercisable Number Average
Contractual Life
(in years) Weighted-Average
Exercise Price Number Weighted-Average
Exercise Price 515 1.5 $ 27.08 226 $ 24.78 522 3.2 34.84 179 34.00 619 3.8 40.45 90 40.44 173 6.0 50.85 13 42.19 670 4.5 60.55 — — 2,499 3.5 42.63 508 31.23 $ $ 20182020 and 20172019 was $31.23$48.94 and $26.49,$40.68, respectively.$4,909,000, $5,261,000$6,468,000, $5,543,000 and $5,468,000$4,909,000 in fiscal years 2018, 20172020, 2019 and 2016,2018, respectively. Remaining compensation cost to be expensed in future periods for$15,367,000$16,949,000 at May 31, 2018,2020, with a weighted average expense recognition period of 3.53.2 years. $ $ $
Common stock totaling 332,000 of the 450,000 originally authorized shares are reserved for issuance under the terms of the 2011 Employee Stock Purchase Plan. The plan givesCompany offers eligible employees the
2018.
6. | Income Taxes |
Year ended May 31 | ||||||||||||
(in thousands) | 2018 | 2017 | 2016 | |||||||||
U.S. | $ | 62,310 | $ | 55,171 | $ | 50,662 | ||||||
Foreign | 11,155 | 11,502 | 4,851 | |||||||||
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$ | 73,465 | $ | 66,673 | $ | 55,513 | |||||||
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Year ended May 31 | ||||||||||||
(in thousands) | 2020 | 2019 | 2018 | |||||||||
U.S. | $ | 62,329 | $ | 58,479 | $ | 62,310 | ||||||
Foreign | 9,976 | 14,480 | 11,155 | |||||||||
$ | 72,305 | $ | 72,959 | $ | 73,465 | |||||||
Year ended May 31 | ||||||||||||
(in thousands) | 2018 | 2017 | 2016 | |||||||||
Current: | ||||||||||||
U.S. Taxes | $ | 10,129 | $ | 20,259 | $ | 14,630 | ||||||
Foreign | 3,066 | 2,514 | 1,756 | |||||||||
Deferred | (2,945 | ) | (73 | ) | 2,589 | |||||||
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Provision for Income Taxes | $ | 10,250 | $ | 22,700 | $ | 18,975 | ||||||
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Year ended May 31 | ||||||||||||
(in thousands) | 2020 | 2019 | 2018 | |||||||||
Current | ||||||||||||
Domestic | ||||||||||||
Federal | $ | 6,886 | $ | 7,173 | $ | 9,715 | ||||||
Uncertain tax provision | 269 | 13 | (963 | ) | ||||||||
State | 1,262 | 1,265 | 1,377 | |||||||||
Foreign | 2,475 | 3,758 | 3,066 | |||||||||
Deferred | ||||||||||||
Domestic | ||||||||||||
Federal | 1,964 | 1,031 | (1,981 | ) | ||||||||
State | 195 | 98 | (355 | ) | ||||||||
Foreign | (221 | ) | (555 | ) | (609 | ) | ||||||
Provision for Income Taxes | $ | 12,830 | $ | 12,783 | $ | 10,250 | ||||||
Year ended May 31 | ||||||||||||
(in thousands) | 2018 | 2017 | 2016 | |||||||||
Tax at U.S. statutory rate | $ | 21,459 | $ | 23,336 | $ | 19,429 | ||||||
Section 199 domestic production deduction | (1,167 | ) | (1,057 | ) | (1,143 | ) | ||||||
Foreign rate differential | (461 | ) | (1,247 | ) | (699 | ) | ||||||
Subpart F income | 816 | 996 | 1,049 | |||||||||
Excess tax benefits on stock-based compensation | (4,816 | ) | — | — | ||||||||
Release of FIN 48 reserve from closed tax years | (1,035 | ) | — | — | ||||||||
Provision for state income taxes, net of federal benefit | 975 | 972 | 779 | |||||||||
Remeasurement of deferred taxes | (6,022 | ) | — | — | ||||||||
Transition tax on foreign earnings and profits | 1,223 | — | — | |||||||||
Amended U.S. Federal tax returns FY12, FY13 & FY14 | — | — | (777 | ) | ||||||||
Tax credits and other | (722 | ) | (300 | ) | 337 | |||||||
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$ | 10,250 | $ | 22,700 | $ | 18,975 | |||||||
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Year ended May 31 | ||||||||||||
(in thousands) | 2020 | 2019 | 2018 | |||||||||
Tax at U.S. statutory rate | $ | 15,184 | $ | 15,321 | $ | 21,459 | ||||||
Permanent differences | 360 | (56 | ) | |||||||||
Section 199 domestic production deduction | — | — | (1,167 | ) | ||||||||
Global intangible low-taxed income (GILTI) | 438 | 840 | — | |||||||||
Foreign derived intangible income deduction (FDII) | (1,120 | ) | (1,531 | ) | — | |||||||
Foreign rate differential | (182 | ) | 495 | (461 | ) | |||||||
Subpart F income | 634 | 842 | 816 | |||||||||
Tax benefits on stock-based compensation | (1,998 | ) | (2,586 | ) | (4,816 | ) | ||||||
Changes in tax contingencies - Increase/(Release) | 269 | 13 | (1,035 | ) | ||||||||
Provision for state income taxes, net of federal benefit | 1,412 | 1,251 | 975 | |||||||||
Remeasurement of deferred taxes | — | — | (6,022 | ) | ||||||||
Transition tax on foreign earnings and profits | — | — | 1,223 | |||||||||
Tax c redits | (1,417 | ) | (1,726 | ) | (1,151 | ) | ||||||
Other | (750 | ) | (80 | ) | 429 | |||||||
Tax Expense | $ | 12,830 | $ | 12,783 | $ | 10,250 | ||||||
Bulletin No. 118 (SAB 118) was issuedThe U.S. Tax Act also includes a provision to addresstax global intangible
development credits
Year ended May 31 | ||||||||
(in thousands) | 2018 | 2017 | ||||||
Deferred income tax liabilities | ||||||||
Indefinite and long-lived assets | $ | (17,503 | ) | $ | (23,177 | ) | ||
Prepaid expenses | (573 | ) | (640 | ) | ||||
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(18,076 | ) | (23,817 | ) | |||||
Deferred income tax assets | ||||||||
Stock Options | 1,489 | 2,604 | ||||||
Inventories and accounts receivable | 1,593 | 2,603 | ||||||
Tax loss carryforwards | 134 | 436 | ||||||
Accrued expenses and other | 757 | 1,126 | ||||||
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3,973 | 6,769 | |||||||
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Net deferred income tax liabilities | $ | (14,103 | ) | $ | (17,048 | ) | ||
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Year ended May 31 | ||||||||
(in thousands) | 2020 | 2019 | ||||||
Deferred income tax liabilities | ||||||||
Indefinite and long-lived assets | $ | (20,867 | ) | $ | (18,963 | ) | ||
Prepaid expenses | (795 | ) | (586 | ) | ||||
(21,662 | ) | (19,549 | ) | |||||
Deferred income tax assets | ||||||||
Stock o ptions | 1,479 | 1,497 | ||||||
Inventories and accounts receivable | 1,336 | 1,315 | ||||||
Tax loss carryforwards | 484 | 417 | ||||||
Accrued expenses and other | 657 | 1,109 | ||||||
Less: Valuation a llowance | (419 | ) | (407 | ) | ||||
3,537 | 3,931 | |||||||
Net deferred income tax liabilities | $ | (18,125 | ) | $ | (15,618 | ) | ||
As of | ||||||||
Jurisdiction | May 31, 2020 | Expiry | ||||||
U.S. | $ | 408 | 2037 to indefinite | |||||
Foreign | 1,354 | 2024 to 2039 | ||||||
$ | 1,762 | |||||||
Year ended May 31 | ||||||||||||
(in thousands) | 2020 | 2019 | 2018 | |||||||||
Beginning balance | $ | 611 | $ | 598 | $ | 1,633 | ||||||
Increase/(decrease) related to prior periods | 56 | (106 | ) | (1,157 | ) | |||||||
Increase to current period | 213 | 119 | 122 | |||||||||
Ending balance | $ | 880 | $ | 611 | $ | 598 | ||||||
7. | Commitments and Contingencies |
105,000.We areourits Randolph, Wisconsin manufacturing facility and accrueaccrues 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. We expense these annual costs of remediation, which have ranged from $38,000 $74,000 $years. Ouryearsis $916,000 was $ 2018 2017,$100,000 $includes $45,000 to performthe remainder is recorded within other received in 2017 from the Wisconsin Department of Natural Resources (WDNR), and is currently in discussion with the remainderWDNR regarding potential alternative remediation strategies going forward. The Company believes that the current pump and treat strategy is recorded within othernon-current liabilitiesappropriate for the site. At this time, the outcome in terms of approach and future costs is unknown, but a change in the consolidated balance sheet.We havecurrent remediation strategy, depending on the alternative selected, could require an increase in the currently recorded liability, with an offsetting charge to operations in the period recorded. license fees and royalties on the sale of certain products. Royalty expense, recorded in sales and marketing, under the terms of these agreements was $2,876,000, $2,659,000$2,524,000, $2,795,000 and $1,969,000$2,876,000 for fiscal years 2018, 20172020, 2019 and 2016,2018, respectively. Some of these agreements provide for guaranteed minimum royalty payments to be paid each fiscal year by the Company for certain technologies. Future minimum royalty payments are as follows: 2019—$634,000, 2020—$641,000, 2021—$649,000,182,000, 2022—$572,000110,000, 2023—$105,000, 2024—$105,000 and 2023—2025—$568,000.2017 was2016 was $799,000, $729,000 and $662,000, $ Future fiscal year minimum rental payments for these leases over their remaining terms are as follows: 2019—$498,000, 2020—$86,000, 2021—$108,000, 2022—$141,000, and 2023 and later—$73,000.We areshouldare not expected to have a material effect on ourits future results of operations or financial position.We maintain deferred. Our $1,325,000, $1,259,000,$1,188,000 $ 2017 and 2016,9. Segment Information We have twoFood Safetyfood safety products, and each of these units reports through the Food Safety segment. In recent years, these operations have expanded to offer ourthe Company’s 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.
(in thousands) | Food Safety | Animal Safety | Corporate and Eliminations (1) | Total | ||||||||||||
Fiscal 2018 | ||||||||||||||||
Product revenues to external customers | $ | 176,123 | $ | 159,431 | $ | — | $ | 335,554 | ||||||||
Service revenues to external customers | 19,924 | 46,774 | — | 66,698 | ||||||||||||
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Total revenues to external customers | 196,047 | 206,205 | — | 402,252 | ||||||||||||
Operating income (loss) | 34,561 | 39,529 | (3,896 | ) | 70,194 | |||||||||||
Depreciation and amortization | 9,083 | 7,975 | — | 17,058 | ||||||||||||
Total Assets | 186,570 | 220,629 | 210,810 | 618,009 | ||||||||||||
Expenditures for long-lived assets | 10,538 | 10,408 | — | 20,946 | ||||||||||||
Fiscal 2017 | ||||||||||||||||
Product revenues to external customers | $ | 155,795 | $ | 150,717 | $ | — | $ | 306,512 | ||||||||
Service revenues to external customers | 15,530 | 39,552 | — | 55,082 | ||||||||||||
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Total revenues to external customers | 171,325 | 190,269 | — | 361,594 | ||||||||||||
Operating income (loss) | 33,971 | 34,841 | (3,867 | ) | 64,945 | |||||||||||
Depreciation and amortization | 7,088 | 7,603 | — | 14,691 | ||||||||||||
Total Assets | 190,895 | 210,927 | 126,587 | 528,409 | ||||||||||||
Expenditures for long-lived assets | 10,332 | 4,246 | — | 14,578 | ||||||||||||
Fiscal 2016 | ||||||||||||||||
Product revenues to external customers | $ | 133,743 | $ | 139,827 | $ | — | $ | 273,570 | ||||||||
Service revenues to external customers | 12,678 | 35,027 | — | 47,705 | ||||||||||||
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Total revenues to external customers | 146,421 | 174,854 | — | 321,275 | ||||||||||||
Operating income (loss) | 28,984 | 30,978 | (3,576 | ) | 56,386 | |||||||||||
Depreciation and amortization | 5,609 | 6,572 | — | 12,181 | ||||||||||||
Total Assets | 143,303 | 215,374 | 91,263 | 449,940 | ||||||||||||
Expenditures for long-lived assets | 9,192 | 5,030 | — | 14,222 |
(in thousands) | Food Safety | Animal Safety | Corporate and Eliminations (1) | Total | ||||||||||||
Fiscal 2020 | ||||||||||||||||
Product revenues to external customers | $ | 189,893 | $ | 145,646 | $ | — | $ | 335,539 | ||||||||
Service revenues to external customers | 22,798 | 59,833 | — | 82,631 | ||||||||||||
Total revenues to external customers | 212,691 | 205,479 | — | 418,170 | ||||||||||||
Operating income (loss) | 33,526 | 39,051 | (5,054 | ) | 67,523 | |||||||||||
Depreciation and amortization | 10,173 | 8,223 | — | 18,396 | ||||||||||||
Total Assets | 222,331 | 231,178 | 343,673 | 797,182 | ||||||||||||
Expenditures for long-lived assets | 15,867 | 8,185 | — | 24,052 | ||||||||||||
Fiscal 2019 | ||||||||||||||||
Product revenues to external customers | $ | 190,675 | $ | 148,764 | $ | — | $ | 339,439 | ||||||||
Service revenues to external customers | 22,799 | 51,948 | — | 74,747 | ||||||||||||
Total revenues to external customers | 213,474 | 200,712 | — | 414,186 | ||||||||||||
Operating income (loss) | 39,020 | 33,875 | (4,801 | ) | 68,094 | |||||||||||
Depreciation and amortization | 9,525 | 8,099 | — | 17,624 | ||||||||||||
Total Assets | 206,267 | 221,950 | 267,523 | 695,740 | ||||||||||||
Expenditures for long-lived assets | 8,916 | 5,745 | — | 14,661 | ||||||||||||
Fiscal 2018 | ||||||||||||||||
Product revenues to external customers | $ | 174,553 | $ | 156,735 | $ | — | $ | 331,288 | ||||||||
Service revenues to external customers | 19,924 | 46,718 | — | 66,642 | ||||||||||||
Total revenues to external customers | 194,477 | 203,453 | — | 397,930 | ||||||||||||
Operating income (loss) | 34,561 | 39,529 | (3,896 | ) | 70,194 | |||||||||||
Depreciation and amortization | 9,083 | 7,975 | — | 17,058 | ||||||||||||
Total Assets | 186,570 | 220,629 | 210,810 | 618,009 | ||||||||||||
Expenditures for long-lived assets | 10,538 | 10,408 | — | 20,946 |
(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. |
Revenues to customers located outside the United States amounted to $151,262,000 or 37.6% of consolidated revenues in fiscal 2018, $129,322,000 or 35.8% in fiscal 2017 and $107,680,000 or 33.5% in fiscal 2016 and were derived primarily in various countries throughout Europe, Canada, South and Central America and Asia. No customer represented revenues in excess of 10% of consolidated net sales in any of the three years.
Year ended May 31 | ||||||||
(in thousands) | 2020 | 2019 | ||||||
Domestic | $ | 253,458 | $ | 248,304 | ||||
International | 164,712 | 165,882 | ||||||
Total revenue | 418,170 | 414,186 | ||||||
10. | Stock |
11. | Summary of Quarterly Data (Unaudited) |
Quarter Ended | Quarter Ended | |||||||||||||||||||||||||||||||
(in thousands, except per share) | August 2017 | November 2017 | February 2018 | May 2018 | August 2019 | November 2019 | February 2020 | May 2020 | ||||||||||||||||||||||||
Total Revenue | $ | 95,256 | $ | 101,817 | $ | 95,892 | $ | 109,287 | $ | 101,424 | $ | 107,803 | $ | 99,869 | $ | 109,074 | ||||||||||||||||
Gross Margin | 45,871 | 49,271 | 45,521 | 49,589 | 48,194 | 51,026 | 45,330 | 51,729 | ||||||||||||||||||||||||
Net income | 11,936 | 17,153 | 16,581 | 17,545 | 14,652 | 16,276 | 12,200 | 16,347 | ||||||||||||||||||||||||
Net income attributable to Neogen | 11,914 | 17,100 | 16,586 | 17,545 | ||||||||||||||||||||||||||||
Basic net income per share | 0.23 | 0.33 | 0.32 | 0.34 | $ | 0.28 | $ | 0.31 | $ | 0.23 | $ | 0.31 | ||||||||||||||||||||
Diluted net income per share | 0.23 | 0.33 | 0.32 | 0.33 | $ | 0.28 | $ | 0.31 | $ | 0.23 | $ | 0.31 | ||||||||||||||||||||
Quarter Ended | Quarter Ended | |||||||||||||||||||||||||||||||
(in thousands, except per share) | August 2016 | November 2016 | February 2017 | May 2017 | August 2018 | November 2018 | February 2019 | May 2019 | ||||||||||||||||||||||||
Total Revenue | $ | 83,645 | $ | 90,717 | $ | 88,385 | $ | 98,847 | $ | 99,626 | $ | 107,098 | $ | 97,700 | $ | 109,762 | ||||||||||||||||
Gross Margin | 40,479 | 43,591 | 40,880 | 47,018 | 46,729 | 50,033 | 44,628 | 50,530 | ||||||||||||||||||||||||
Net income | 9,934 | 11,171 | 10,377 | 12,491 | 15,237 | 16,051 | 13,073 | 15,815 | ||||||||||||||||||||||||
Net income attributable to Neogen | 9,881 | 11,151 | 10,287 | 12,474 | ||||||||||||||||||||||||||||
Basic net income per share | 0.20 | 0.22 | 0.20 | 0.25 | $ | 0.29 | $ | 0.31 | $ | 0.25 | $ | 0.31 | ||||||||||||||||||||
Diluted net income per share | 0.20 | 0.22 | 0.20 | 0.24 | $ | 0.29 | $ | 0.31 | $ | 0.25 | $ | 0.30 |
F-21