Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Nov. 30, 2013 | Dec. 01, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Nov-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Trading Symbol | 'NEOG | ' |
Entity Registrant Name | 'NEOGEN CORP | ' |
Entity Central Index Key | '0000711377 | ' |
Current Fiscal Year End Date | '--05-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 36,598,767 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Nov. 30, 2013 | 31-May-13 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $43,613 | $50,032 |
Marketable securities (at fair value, which approximates cost) | 35,479 | 35,337 |
Accounts receivable, less allowance of $1,000 and $900 | 45,800 | 38,737 |
Inventories | 47,330 | 38,315 |
Deferred income taxes | 1,462 | 1,462 |
Prepaid expenses and other current assets | 5,172 | 4,564 |
TOTAL CURRENT ASSETS | 178,856 | 168,447 |
NET PROPERTY AND EQUIPMENT | 38,233 | 34,345 |
OTHER ASSETS | ' | ' |
Goodwill | 66,538 | 59,491 |
Other non-amortizable intangible assets | 7,280 | 6,660 |
Customer based intangibles, net of accumulated amortization of $9,954 and $9,446 | 18,143 | 12,345 |
Other non-current assets, net of accumulated amortization of $5,427 and $4,222 | 10,663 | 9,270 |
Total Other Assets | 102,624 | 87,766 |
TOTAL ASSETS | 319,713 | 290,558 |
CURRENT LIABILITIES | ' | ' |
Accounts payable | 11,358 | 9,212 |
Accrued compensation | 4,014 | 3,227 |
Income taxes | 312 | 165 |
Other accruals | 7,606 | 5,115 |
TOTAL CURRENT LIABILITIES | 23,290 | 17,719 |
DEFERRED INCOME TAXES | 12,449 | 12,449 |
OTHER LONG-TERM LIABILITIES | 2,164 | 2,103 |
Liabilities, Noncurrent, Total | 14,613 | 14,552 |
TOTAL LIABILITIES | 37,903 | 32,271 |
EQUITY | ' | ' |
Preferred stock, $1.00 par value, 100,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $.16 par value, 60,000,000 shares authorized, 36,598,767 and 36,084,021 shares issued and outstanding at November 30, 2013 and May 31, 2013, respectively | 5,856 | 5,773 |
Additional paid-in capital | 108,239 | 99,935 |
Accumulated other comprehensive loss | -160 | -1,372 |
Retained earnings | 167,930 | 153,885 |
Total Neogen Corporation Stockholders' Equity | 281,865 | 258,221 |
Noncontrolling interest | -55 | 66 |
TOTAL EQUITY | 281,810 | 258,287 |
TOTAL LIABILITIES AND EQUITY | $319,713 | $290,558 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Nov. 30, 2013 | 31-May-13 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, allowance | $1,000 | $900 |
Customer based intangibles, accumulated amortization | 9,954 | 9,446 |
Other non-current assets, accumulated amortization | $5,427 | $4,222 |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common stock, par value | $0.16 | $0.16 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 36,598,767 | 36,084,021 |
Common stock, shares outstanding | 36,598,767 | 36,084,021 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Nov. 30, 2013 | Nov. 30, 2012 | Nov. 30, 2013 | Nov. 30, 2012 |
REVENUES | ' | ' | ' | ' |
Product revenues | $53,228 | $46,492 | $104,575 | $91,306 |
Service revenues | 6,371 | 4,245 | 13,572 | 9,161 |
Total Revenues | 59,599 | 50,737 | 118,147 | 100,467 |
COST OF REVENUES | ' | ' | ' | ' |
Cost of product revenues | 25,792 | 20,695 | 49,302 | 41,015 |
Cost of service revenues | 4,316 | 2,736 | 8,990 | 5,652 |
Total Cost of Revenues | 30,108 | 23,431 | 58,292 | 46,667 |
GROSS MARGIN | 29,491 | 27,306 | 59,855 | 53,800 |
OPERATING EXPENSES | ' | ' | ' | ' |
Sales and marketing | 11,219 | 9,941 | 21,543 | 19,698 |
General and administrative | 6,280 | 4,895 | 11,815 | 9,377 |
Research and development | 2,303 | 1,993 | 4,390 | 3,920 |
Operating Expenses, Total | 19,802 | 16,829 | 37,748 | 32,995 |
OPERATING INCOME | 9,689 | 10,477 | 22,107 | 20,805 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' |
Interest income | 28 | 43 | 59 | 81 |
Change in purchase consideration | 0 | -40 | 0 | -53 |
Other income (expense) | 11 | 75 | -542 | 122 |
Nonoperating Income (Expense), Total | 39 | 78 | -483 | 150 |
INCOME BEFORE INCOME TAXES | 9,728 | 10,555 | 21,624 | 20,955 |
INCOME TAXES | 3,500 | 3,800 | 7,700 | 7,500 |
NET INCOME | 6,228 | 6,755 | 13,924 | 13,455 |
NET LOSS (INCOME) ATTRIBUTABLE TO NON- CONTROLLING INTEREST | -21 | 38 | 121 | 52 |
NET INCOME ATTRIBUTABLE TO NEOGEN CORPORATION | $6,207 | $6,793 | $14,045 | $13,507 |
NET INCOME ATTRIBUTABLE TO NEOGEN CORPORATION PER SHARE | ' | ' | ' | ' |
Basic | $0.17 | $0.19 | $0.39 | $0.38 |
Diluted | $0.17 | $0.19 | $0.38 | $0.37 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2013 | Nov. 30, 2012 | Nov. 30, 2013 | Nov. 30, 2012 |
Net Income | $6,228 | $6,755 | $13,924 | $13,455 |
Currency Translation Adjustments | 882 | 130 | 1,212 | 478 |
Comprehensive Income | 7,110 | 6,885 | 15,136 | 13,933 |
Comprehensive Loss (Income) attributable to non-controlling interest | -21 | 38 | 121 | 52 |
Comprehensive Income attributable to Neogen Corporation | $7,089 | $6,923 | $15,257 | $13,985 |
Consolidated_Statement_of_Equi
Consolidated Statement of Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-controlling Interest |
In Thousands, except Share data, unless otherwise specified | ||||||
Beginning Balance at May. 31, 2013 | $258,287 | $5,773 | $99,935 | ($1,372) | $153,885 | $66 |
Beginning Balance (in shares) at May. 31, 2013 | 36,084,021 | 36,084 | ' | ' | ' | ' |
Issuance of shares of common stock under equity compensation plans, and share based compensation, including $2,107 of excess income tax benefit (in shares) | ' | 506 | ' | ' | ' | ' |
Issuance of shares of common stock under equity compensation plans, and share based compensation, including $2,107 of excess income tax benefit | 8,104 | 82 | 8,022 | ' | ' | ' |
Issuance of shares under employee stock purchase plan (in shares) | ' | 9 | ' | ' | ' | ' |
Issuance of shares under employee stock purchase plan | 283 | 1 | 282 | ' | ' | ' |
Comprehensive income: | ' | ' | ' | ' | ' | ' |
Net income (loss) for the six months ended November 30, 2013 | 13,924 | ' | ' | ' | 14,045 | -121 |
Foreign currency translation adjustments | 1,212 | ' | ' | 1,212 | ' | ' |
Ending Balance at Nov. 30, 2013 | $281,810 | $5,856 | $108,239 | ($160) | $167,930 | ($55) |
Ending Balance (in shares) at Nov. 30, 2013 | 36,598,767 | 36,599 | ' | ' | ' | ' |
Consolidated_Statement_of_Equi1
Consolidated Statement of Equity (Parenthetical) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Nov. 30, 2013 |
Issuance of shares of common stock under equity compensation plans, and share based compensation, excessive income tax benefit | $2,107 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2013 | Nov. 30, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net Income | $13,924 | $13,455 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 4,170 | 3,291 |
Share based compensation | 1,695 | 1,406 |
Excess income tax benefit from the exercise of stock options | -2,107 | -1,500 |
Changes in operating assets and liabilities, net of business acquisitions: | ' | ' |
Accounts receivable | -5,001 | -1,297 |
Inventories | -3,718 | -2,076 |
Prepaid expenses and other current assets | -104 | -1,337 |
Accounts payable, accruals and other | 1,870 | -608 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 10,729 | 11,334 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment and other assets | -4,491 | -3,370 |
Proceeds from the sale of marketable securities | 52,083 | 34,153 |
Purchases of marketable securities | -52,225 | -44,082 |
Payments for business | -22,080 | -9,918 |
NET CASH USED IN INVESTING ACTIVITIES | -26,713 | -23,217 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Increase (decrease) in other long-term liabilities | 110 | -90 |
Net proceeds from issuance of common stock | 6,871 | 2,586 |
Excess income tax benefit from the exercise of stock options | 2,107 | 1,500 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 9,088 | 3,996 |
EFFECT OF EXCHANGE RATE ON CASH | 477 | 151 |
DECREASE IN CASH | -6,419 | -7,736 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 50,032 | 49,045 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $43,613 | $41,309 |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Nov. 30, 2013 | |
Basis of Presentation | ' |
1. BASIS OF PRESENTATION | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the three and six month periods ended November 30, 2013 are not necessarily indicative of the results to be expected for the fiscal year ending May 31, 2014. For more complete financial information, these consolidated financial statements should be read in conjunction with the May 31, 2013 audited consolidated financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the year ended May 31, 2013. |
Inventories
Inventories | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Inventories | ' | ||||||||
2. INVENTORIES | |||||||||
Inventories are stated at the lower of cost, determined on the first-in, first-out method, or market. The components of inventories follow: | |||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(In thousands) | |||||||||
Raw Materials | $ | 20,516 | $ | 16,587 | |||||
Work-in-process | 3,935 | 3,583 | |||||||
Finished and purchased goods | 22,879 | 18,145 | |||||||
$ | 47,330 | $ | 38,315 | ||||||
Net_Income_per_Share
Net Income per Share | 6 Months Ended | ||||||||||||||||
Nov. 30, 2013 | |||||||||||||||||
Net Income per Share | ' | ||||||||||||||||
3. NET INCOME PER SHARE | |||||||||||||||||
The calculation of net income per share attributable to Neogen Corporation follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
November 30, | November 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||
Numerator for basic and diluted net income per share: | |||||||||||||||||
Net Income attributable to Neogen shareholders | $ | 6,207 | $ | 6,793 | $ | 14,045 | $ | 13,507 | |||||||||
Denominator: | |||||||||||||||||
Denominator for basic net income per share: | |||||||||||||||||
Weighted average shares | 36,458 | 35,742 | 36,302 | 35,628 | |||||||||||||
Effect of dilutive stock options and warrants | 916 | 659 | 939 | 719 | |||||||||||||
Denominator for diluted net income per share | 37,374 | 36,401 | 37,241 | 36,347 | |||||||||||||
Net income attributable to Neogen Corporation per share: | |||||||||||||||||
Basic | $ | 0.17 | $ | 0.19 | $ | 0.39 | $ | 0.38 | |||||||||
Diluted | $ | 0.17 | $ | 0.19 | $ | 0.38 | $ | 0.37 | |||||||||
The Board of Directors declared a 3 for 2 stock split effective October 31, 2013. All share and per share amounts in this Form 10-Q reflect amounts as if the split took place at the beginning of the periods presented. |
Segment_Information
Segment Information | 6 Months Ended | ||||||||||||||||
Nov. 30, 2013 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
4. SEGMENT INFORMATION | |||||||||||||||||
The Company has two reportable segments: Food Safety and Animal Safety. The Food Safety segment produces and markets diagnostic test kits and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation. The Animal Safety segment is primarily engaged in the production and marketing of products dedicated to animal health, including a complete line of consumable products marketed to veterinarians and animal health product distributors; the segment also provides genetic identification services. Additionally, Animal Safety produces and markets rodenticides and disinfectants to assist in the control of rodents and disease in and around agricultural, food production and other facilities. | |||||||||||||||||
Segment information for the three months ended November 30, 2013 and 2012 follows: | |||||||||||||||||
Food | Animal | Corporate and | Total | ||||||||||||||
Safety | Safety | Eliminations | |||||||||||||||
-1 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Fiscal 2014 | |||||||||||||||||
Product revenues to external customers | $ | 27,578 | $ | 25,650 | $ | 0 | $ | 53,228 | |||||||||
Service revenues to external customers | 821 | 5,550 | 0 | 6,371 | |||||||||||||
Total revenues to external customers | 28,399 | 31,200 | 0 | 59,599 | |||||||||||||
Operating income (loss) | 6,286 | 4,157 | (754 | ) | 9,689 | ||||||||||||
Total assets | 100,172 | 150,943 | 68,598 | 319,713 | |||||||||||||
Fiscal 2013 | |||||||||||||||||
Product revenues to external customers | $ | 25,344 | $ | 21,148 | $ | 0 | $ | 46,492 | |||||||||
Service revenues to external customers | 686 | 3,559 | 0 | 4,245 | |||||||||||||
Total revenues to external customers | 26,030 | 24,707 | 0 | 50,737 | |||||||||||||
Operating income (loss) | 7,112 | 3,946 | (581 | ) | 10,477 | ||||||||||||
Total assets | 88,755 | 119,471 | 61,445 | 269,671 | |||||||||||||
Segment information for the six months ended November 30, 2013 and 2012 follows: | |||||||||||||||||
Food | Animal | Corporate and | Total | ||||||||||||||
Safety | Safety | Eliminations | |||||||||||||||
-1 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Fiscal 2014 | |||||||||||||||||
Product revenues to external customers | $ | 56,135 | $ | 48,440 | $ | 0 | $ | 104,575 | |||||||||
Service revenues to external customers | 2,263 | 11,309 | 0 | 13,572 | |||||||||||||
Total revenues to external customers | 58,398 | 59,749 | 0 | 118,147 | |||||||||||||
Operating income (loss) | 14,987 | 8,577 | (1,457 | ) | 22,107 | ||||||||||||
Fiscal 2013 | |||||||||||||||||
Product revenues to external customers | $ | 51,127 | $ | 40,179 | $ | 0 | $ | 91,306 | |||||||||
Service revenues to external customers | 1,098 | 8,063 | 0 | 9,161 | |||||||||||||
Total revenues to external customers | 52,225 | 48,242 | 0 | 100,467 | |||||||||||||
Operating income (loss) | 14,781 | 7,189 | (1,165 | ) | 20,805 | ||||||||||||
-1 | Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, deferred assets and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. |
Equity_Compensation_Plans
Equity Compensation Plans | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Equity Compensation Plans | ' | ||||||||
5. EQUITY COMPENSATION PLANS | |||||||||
Options are generally granted under the employee and director stock option plan for five-year periods and become exercisable in equal annual installments during that period. Certain non-qualified options are granted for ten-year periods. A summary of stock option activity during the nine months ended November 30, 2013 follows: | |||||||||
Shares | Weighted- | ||||||||
Average | |||||||||
Exercise Price | |||||||||
Options outstanding at June 1, 2013 | 2,091,000 | $ | 19.21 | ||||||
Granted | 512,000 | 36.44 | |||||||
Exercised | (513,000 | ) | 13.39 | ||||||
Forfeited | (80,000 | ) | 21.25 | ||||||
Options outstanding at November 30, 2013 | 2,010,000 | 25 | |||||||
During the three and six month periods ended November 30, 2013 and 2012, the Company recorded $906,000 and $724,000 and $1,695,000 and $1,406,000 of compensation expense related to its share-based awards. | |||||||||
The weighted-average fair value of stock options granted during FY-14 and FY-13, estimated on the date of grant using the Black-Scholes option pricing model was $9.87 and $9.20 respectively, per option. The fair value of stock options granted was estimated using the following weighted-average assumptions. | |||||||||
FY-14 | FY-13 | ||||||||
Risk-free interest rate | 0.8 | % | 1.2 | % | |||||
Expected dividend yield | 0 | % | 0 | % | |||||
Expected stock price volatility | 33.1 | % | 39.2 | % | |||||
Expected option life | 4.0 years | 4.0 years | |||||||
The Company has an Employee Stock Purchase plan that provides for employee stock purchases at a 5% discount to market price. The discount is expensed as of the date of purchase. |
New_Accounting_Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Nov. 30, 2013 | |
New Accounting Pronouncements | ' |
6. NEW ACCOUNTING PRONOUNCEMENTS | |
In June 2011, the FASB issued an accounting standards update titled Presentation of Comprehensive Income. This update eliminated the current option to report other comprehensive income and its components in the statement of changes in equity. An entity can elect to present items of net income and other comprehensive income in one continuous statement or in two separate consecutive statements. Each component of net income and each component of other comprehensive income, together with totals for comprehensive income and its two parts, net income and other comprehensive income, must be displayed under either alternative. The Company adopted the update in the first quarter of its fiscal 2013; the adoption affected the presentation of its financial statements, but did not have an impact on the results of the Company’s operations. | |
In September 2011, the FASB issued an accounting standards update titled Intangibles — Goodwill and Other: Testing Goodwill for Impairment. This update gives the option of performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount and, in some cases, skip the two-step impairment test. The adoption of this update did not have a material effect on the Company’s consolidated financial statements. | |
In July 2012, the FASB issued an accounting standard update titled Intangibles – Goodwill and Other: Testing Indefinite Lived Intangible Assets for Impairment. This update gives the option of performing a qualitative assessment to determine whether it is more likely than not that the fair value of the intangible amount is less than its carrying amount and, in some cases, skip the quantitative impairment test. The early adoption of this update did not have a material effect on the Company’s consolidated financial statements. | |
In February 2013, the FASB further amended ASC220, Comprehensive Income, with ASU 2013-02, Comprehensive Income (Topic 220) – Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (amended ASC220), which was designed to improve the reporting of reclassifications out of accumulated other comprehensive income by requiring an entity to present the effect of significant reclassifications out of accumulated other comprehensive income on the respective lines of net income. The impact of adopting amended ASC220 did not have a material impact on the consolidated financial statements and therefore has not been disclosed in the FY2014 second quarter Form 10-Q. |
Business_and_Product_Line_Acqu
Business and Product Line Acquisitions | 6 Months Ended |
Nov. 30, 2013 | |
Business and Product Line Acquisitions | ' |
7. BUSINESS AND PRODUCT LINE ACQUISITIONS | |
The Consolidated Statements of Income reflect the results of operations for business acquisitions since the respective dates of purchase. All are accounted for using the purchase method. | |
On October 1, 2012, Neogen Corporation acquired the stock of Macleod Pharmaceuticals, Inc., of Fort Collins, Colorado. Macleod is the manufacturer of Uniprim, a leading veterinary antibiotic. The product is widely distributed throughout the U.S., and is also available in Canada through an exclusive distribution agreement. Consideration for the purchase was $9,918,000 in net cash and $100,000 accrued for secondary consideration. The purchase price was allocated to the fair value of these assets which included accounts receivable of $353,000, inventory of $1,238,000, fixed assets of $300,000, current liabilities of $82,000, deferred tax liabilities of $2,054,000, secondary payment liabilities of $100,000, intangible assets of $5,542,000 and the remainder to goodwill (non-deductible for tax purposes). The secondary payment was finalized in October 2013 and amounted to $62,000. These values are Level 3 fair value measurements. Macleod operates as a subsidiary of Neogen Corporation, reporting within the Animal Safety segment. | |
On January 2, 2013, Neogen Corporation acquired the assets of Scidera Genomics, LLC, an animal genomics business based in Davis, California. The company, formerly operated as MetaMorphix, Inc., or MMI Genomics, performs parentage testing and trait analysis primarily for the cattle and canine industries. Consideration for the purchase was $3,400,000 in cash. The preliminary purchase price allocation included current assets of $35,000, fixed assets of $246,000, intangible assets of $1,570,000 and the remainder to goodwill (deductible for tax purposes). These values are Level 3 fair value measurements. This business has been relocated to the Geneseek facility in Lincoln, Nebraska, and reports within the Animal Safety segment. | |
On July 1, 2013, Neogen Corporation acquired the assets of SyrVet, Inc., a veterinary business based in Waukee, Iowa. SyrVet offered a product line similar to Neogen’s Ideal Instruments line of veterinary instruments with 30% of their sales coming from international markets, primarily in Mexico and Latin America. Consideration for the purchase was $10,012,000 in cash and up to $1,500,000 of a secondary payment liability, due at the end of the first year, based on an excess net sales formula. The Company has estimated the secondary payment liability to be $700,000, based on forecasted sales. The preliminary purchase price allocation included accounts receivable of $747,000, net inventory of $2,195,000, fixed assets of $556,000, current liabilities of $226,000, secondary payment liabilities of $700,000, non-amortizable trademarks of $347,000, intangible assets of $3,010,000 (with an estimated life of 15 years) and the remainder to goodwill (deductible for tax purposes). These values are Level 3 fair value measurements. This business is currently being relocated to Lexington, Kentucky to be integrated with the Company’s current operation there, reporting within the Animal Safety segment. | |
On November 1, 2013, Neogen Corporation acquired the assets of Prima Tech Incorporated, a veterinary instrument company based in Kenansville, North Carolina. Prima Tech manufactures devices used by farmers, ranchers, and veterinarians to inject animals, provide topical applications, and to use for oral administration. Prima Tech is also a unique supplier of products used in artificial insemination in the swine industry. Consideration for the purchase was $12,068,000 in cash and up to $600,000 of a secondary payment, due at the end of the first year, based on an excess net sales formula. The Company has estimated the secondary payment liability to be $200,000 based on forecasted sales. The preliminary purchase price allocation included accounts receivable of $963,000, net inventory of $2,944,000, fixed assets of $1,653,000, prepaid assets of $8,000, current liabilities of $1,840,000, secondary payment liabilities of $200,000, non-amortizable trademarks of $196,000, intangible assets of $5,275,000 (with an estimated life of 15 years) and the remainder to goodwill (deductible for tax purposes). These values are Level 3 fair value measurements. This business will continue to operate in its current location and reports within the Animal Safety segment. | |
On January 2, 2014, Neogen Corporation acquired the stock of Chem Tech, Ltd., a pest control manufacturing and distribution business located in Pleasantville, Iowa. Consideration for the purchase was $17,185,000 in cash and secondary payment liability of up to $1,000,000. Due to the timing of the transaction, the preliminary allocation was not complete at the time of filing. | |
Goodwill recognized in the acquisitions discussed above relates primarily to enhancing the Company’s strategic platform for the expansion of available product offerings. |
Long_Term_Debt
Long Term Debt | 6 Months Ended |
Nov. 30, 2013 | |
Long Term Debt | ' |
8. LONG TERM DEBT | |
The Company has a financing agreement with a bank providing for an unsecured revolving line of credit of $12,000,000, which matures on September 1, 2014. There were no advances against this line of credit during FY-2014 and FY-2013 and no balance outstanding at November 30, 2013. Interest is at LIBOR plus 100 basis points (rate under the terms of the agreement was 1.17% at November 30, 2013). Financial covenants include maintaining specified levels of tangible net worth, debt service coverage, and funded debt to EBITDA, each of which the Company was in compliance with at November 30, 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Nov. 30, 2013 | |
Commitments and Contingencies | ' |
9. COMMITMENTS AND CONTINGENCIES | |
The Company is involved in environmental remediation and monitoring activities at its Randolph, Wisconsin manufacturing facility and accrues for related costs when such costs are determined to be probable and estimable. The Company is currently expensing annual costs of remediation, which have ranged from $50,000 to $105,000 per year over the past five years. The Company’s estimated liability for these costs of $916,000 at November 30, 2013 and May 31, 2013, measured on an undiscounted basis over an estimated period of 15 years, is recorded within other long-term liabilities in the consolidated balance sheet. | |
The Company is subject to certain legal and other proceedings in the normal course of business that, in the opinion of management, should not have a material effect on its future results of operations or financial position. |
Stock_Purchase
Stock Purchase | 6 Months Ended |
Nov. 30, 2013 | |
Stock Purchase | ' |
10. STOCK PURCHASE | |
In December 2008, the Company’s Board of Directors authorized a program to purchase, subject to market conditions, up to 1,125,000 shares of the Company’s common stock. As of November 30, 2013, 112,026 cumulative shares had been purchased in negotiated and open market transactions for a total price, including commissions, of approximately $923,000. Shares purchased under the program were retired. There have been no purchases in FY-14 and there were none in FY-13. |
Inventories_Tables
Inventories (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Inventories | ' | ||||||||
The components of inventories follow: | |||||||||
November 30, | May 31, | ||||||||
2013 | 2013 | ||||||||
(In thousands) | |||||||||
Raw Materials | $ | 20,516 | $ | 16,587 | |||||
Work-in-process | 3,935 | 3,583 | |||||||
Finished and purchased goods | 22,879 | 18,145 | |||||||
$ | 47,330 | $ | 38,315 | ||||||
Net_Income_per_Share_Tables
Net Income per Share (Tables) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2013 | |||||||||||||||||
Calculation of Net Income Per Share | ' | ||||||||||||||||
The calculation of net income per share attributable to Neogen Corporation follows: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
November 30, | November 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||
Numerator for basic and diluted net income per share: | |||||||||||||||||
Net Income attributable to Neogen shareholders | $ | 6,207 | $ | 6,793 | $ | 14,045 | $ | 13,507 | |||||||||
Denominator: | |||||||||||||||||
Denominator for basic net income per share: | |||||||||||||||||
Weighted average shares | 36,458 | 35,742 | 36,302 | 35,628 | |||||||||||||
Effect of dilutive stock options and warrants | 916 | 659 | 939 | 719 | |||||||||||||
Denominator for diluted net income per share | 37,374 | 36,401 | 37,241 | 36,347 | |||||||||||||
Net income attributable to Neogen Corporation per share: | |||||||||||||||||
Basic | $ | 0.17 | $ | 0.19 | $ | 0.39 | $ | 0.38 | |||||||||
Diluted | $ | 0.17 | $ | 0.19 | $ | 0.38 | $ | 0.37 | |||||||||
Segment_Information_Tables
Segment Information (Tables) | 6 Months Ended | ||||||||||||||||
Nov. 30, 2013 | |||||||||||||||||
Segment Information | ' | ||||||||||||||||
Segment information for the three months ended November 30, 2013 and 2012 follows: | |||||||||||||||||
Food | Animal | Corporate and | Total | ||||||||||||||
Safety | Safety | Eliminations | |||||||||||||||
-1 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Fiscal 2014 | |||||||||||||||||
Product revenues to external customers | $ | 27,578 | $ | 25,650 | $ | 0 | $ | 53,228 | |||||||||
Service revenues to external customers | 821 | 5,550 | 0 | 6,371 | |||||||||||||
Total revenues to external customers | 28,399 | 31,200 | 0 | 59,599 | |||||||||||||
Operating income (loss) | 6,286 | 4,157 | (754 | ) | 9,689 | ||||||||||||
Total assets | 100,172 | 150,943 | 68,598 | 319,713 | |||||||||||||
Fiscal 2013 | |||||||||||||||||
Product revenues to external customers | $ | 25,344 | $ | 21,148 | $ | 0 | $ | 46,492 | |||||||||
Service revenues to external customers | 686 | 3,559 | 0 | 4,245 | |||||||||||||
Total revenues to external customers | 26,030 | 24,707 | 0 | 50,737 | |||||||||||||
Operating income (loss) | 7,112 | 3,946 | (581 | ) | 10,477 | ||||||||||||
Total assets | 88,755 | 119,471 | 61,445 | 269,671 | |||||||||||||
Segment information for the six months ended November 30, 2013 and 2012 follows: | |||||||||||||||||
Food | Animal | Corporate and | Total | ||||||||||||||
Safety | Safety | Eliminations | |||||||||||||||
-1 | |||||||||||||||||
(In thousands) | |||||||||||||||||
Fiscal 2014 | |||||||||||||||||
Product revenues to external customers | $ | 56,135 | $ | 48,440 | $ | 0 | $ | 104,575 | |||||||||
Service revenues to external customers | 2,263 | 11,309 | 0 | 13,572 | |||||||||||||
Total revenues to external customers | 58,398 | 59,749 | 0 | 118,147 | |||||||||||||
Operating income (loss) | 14,987 | 8,577 | (1,457 | ) | 22,107 | ||||||||||||
Fiscal 2013 | |||||||||||||||||
Product revenues to external customers | $ | 51,127 | $ | 40,179 | $ | 0 | $ | 91,306 | |||||||||
Service revenues to external customers | 1,098 | 8,063 | 0 | 9,161 | |||||||||||||
Total revenues to external customers | 52,225 | 48,242 | 0 | 100,467 | |||||||||||||
Operating income (loss) | 14,781 | 7,189 | (1,165 | ) | 20,805 | ||||||||||||
-1 | Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, deferred assets and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. |
Equity_Compensation_Plans_Tabl
Equity Compensation Plans (Tables) | 6 Months Ended | ||||||||
Nov. 30, 2013 | |||||||||
Stock Option Activity | ' | ||||||||
A summary of stock option activity during the nine months ended November 30, 2013 follows: | |||||||||
Shares | Weighted- | ||||||||
Average | |||||||||
Exercise Price | |||||||||
Options outstanding at June 1, 2013 | 2,091,000 | $ | 19.21 | ||||||
Granted | 512,000 | 36.44 | |||||||
Exercised | (513,000 | ) | 13.39 | ||||||
Forfeited | (80,000 | ) | 21.25 | ||||||
Options outstanding at November 30, 2013 | 2,010,000 | 25 | |||||||
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions | ' | ||||||||
The fair value of stock options granted was estimated using the following weighted-average assumptions. | |||||||||
FY-14 | FY-13 | ||||||||
Risk-free interest rate | 0.8 | % | 1.2 | % | |||||
Expected dividend yield | 0 | % | 0 | % | |||||
Expected stock price volatility | 33.1 | % | 39.2 | % | |||||
Expected option life | 4.0 years | 4.0 years |
Inventories_Detail
Inventories (Detail) (USD $) | Nov. 30, 2013 | 31-May-13 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ' | ' |
Raw Materials | $20,516 | $16,587 |
Work-in-process | 3,935 | 3,583 |
Finished and purchased goods | 22,879 | 18,145 |
Inventories | $47,330 | $38,315 |
Calculation_of_Net_Income_Per_
Calculation of Net Income Per Share (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Nov. 30, 2013 | Nov. 30, 2012 | Nov. 30, 2013 | Nov. 30, 2012 |
Earnings Per Share [Line Items] | ' | ' | ' | ' |
Net Income attributable to Neogen shareholders | $6,207 | $6,793 | $14,045 | $13,507 |
Weighted average shares | 36,458 | 35,742 | 36,302 | 35,628 |
Effect of dilutive stock options and warrants | 916 | 659 | 939 | 719 |
Denominator for diluted net income per share | 37,374 | 36,401 | 37,241 | 36,347 |
Net income attributable to Neogen Corporation per share: | ' | ' | ' | ' |
Basic | $0.17 | $0.19 | $0.39 | $0.38 |
Diluted | $0.17 | $0.19 | $0.38 | $0.37 |
Net_Income_Per_Share_Additiona
Net Income Per Share - Additional Information (Detail) | 0 Months Ended |
Oct. 31, 2013 | |
Net Income Per Share [Line Items] | ' |
Stock split | 1.5 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 6 Months Ended |
Nov. 30, 2013 | |
Segment | |
Segment Reporting Information [Line Items] | ' |
Number of reportable segments | 2 |
Segment_Information_Detail
Segment Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||||||
In Thousands, unless otherwise specified | Nov. 30, 2013 | Nov. 30, 2012 | Nov. 30, 2013 | Nov. 30, 2012 | 31-May-13 | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Product revenues to external customers | $53,228 | $46,492 | $104,575 | $91,306 | ' | ||||
Service revenues to external customers | 6,371 | 4,245 | 13,572 | 9,161 | ' | ||||
Total revenues to external customers | 59,599 | 50,737 | 118,147 | 100,467 | ' | ||||
Operating income (loss) | 9,689 | 10,477 | 22,107 | 20,805 | ' | ||||
Total assets | 319,713 | 269,671 | 319,713 | 269,671 | 290,558 | ||||
Food Safety | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Product revenues to external customers | 27,578 | 25,344 | 56,135 | 51,127 | ' | ||||
Service revenues to external customers | 821 | 686 | 2,263 | 1,098 | ' | ||||
Total revenues to external customers | 28,399 | 26,030 | 58,398 | 52,225 | ' | ||||
Operating income (loss) | 6,286 | 7,112 | 14,987 | 14,781 | ' | ||||
Total assets | 100,172 | 88,755 | 100,172 | 88,755 | ' | ||||
Animal Safety | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Product revenues to external customers | 25,650 | 21,148 | 48,440 | 40,179 | ' | ||||
Service revenues to external customers | 5,550 | 3,559 | 11,309 | 8,063 | ' | ||||
Total revenues to external customers | 31,200 | 24,707 | 59,749 | 48,242 | ' | ||||
Operating income (loss) | 4,157 | 3,946 | 8,577 | 7,189 | ' | ||||
Total assets | 150,943 | 119,471 | 150,943 | 119,471 | ' | ||||
Corporate Eliminations | ' | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ||||
Product revenues to external customers | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ' |
Service revenues to external customers | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ' |
Total revenues to external customers | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ' |
Operating income (loss) | -754 | [1] | -581 | [1] | -1,457 | [1] | -1,165 | [1] | ' |
Total assets | $68,598 | [1] | $61,445 | [1] | $68,598 | [1] | $61,445 | [1] | ' |
[1] | Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, deferred assets and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. |
Equity_Compensation_Plans_Addi
Equity Compensation Plans - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 9 Months Ended | |||
Nov. 30, 2013 | Nov. 30, 2012 | Nov. 30, 2013 | Nov. 30, 2012 | 31-May-13 | Nov. 30, 2013 | Nov. 30, 2013 | Nov. 30, 2013 | |
Employee Stock Purchase Plan | Minimum | Maximum | ||||||
2011 Employee Stock Purchase Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option vesting period | ' | ' | ' | ' | ' | ' | '5 years | '10 years |
Share based compensation | $906,000 | $724,000 | $1,695,000 | $1,406,000 | ' | ' | ' | ' |
Weighted-Average Grant-Date Fair Value of Options Granted | ' | ' | $9.87 | ' | $9.20 | ' | ' | ' |
Annual maximum limit percentage of compensation to purchase shares | ' | ' | ' | ' | ' | 5.00% | ' | ' |
Stock_Option_Activity_Detail
Stock Option Activity (Detail) (USD $) | 9 Months Ended |
Nov. 30, 2013 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Shares Outstanding, Beginning Balance | 2,091,000 |
Shares, Granted | 512,000 |
Shares, Exercised | -513,000 |
Shares, Forfeited | -80,000 |
Shares Outstanding, Ending Balance | 2,010,000 |
Weighted-Average Exercise Price, Beginning Balance | $19.21 |
Weighted-Average Exercise Price, Granted | $36.44 |
Weighted-Average Exercise Price, Exercised | $13.39 |
Weighted-Average Exercise Price, Forfeited | $21.25 |
Weighted-Average Exercise Price, Ending Balance | $25 |
Fair_Value_of_Stock_Options_Gr
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions (Detail) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2013 | 31-May-13 | |
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items] | ' | ' |
Risk-free interest rate | 0.80% | 1.20% |
Expected dividend yield | 0.00% | 0.00% |
Expected stock price volatility | 33.10% | 39.20% |
Expected option life (in years) | '4 years | '4 years |
Business_and_Product_Line_Acqu1
Business and Product Line Acquisitions - Additional Information (Detail) (USD $) | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||
Jul. 01, 2013 | Jul. 01, 2013 | Oct. 31, 2013 | Oct. 01, 2012 | Jan. 02, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Jan. 02, 2014 | |
SyrVet, Inc. | SyrVet, Inc. | Macleod Pharmaceuticals | Macleod Pharmaceuticals | Scidera Genomics,LLC | Prima Tech Incorporated | Prima Tech Incorporated | Chem Tech Ltd | |
Trademarks | Trademarks | Subsequent Event | ||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Cash consideration for purchase of business | $10,012,000 | ' | ' | $9,918,000 | $3,400,000 | $12,068,000 | ' | $17,185,000 |
Contingent consideration potential payment | 1,500,000 | ' | ' | 100,000 | ' | 600,000 | ' | 1,000,000 |
Purchase price allocation for accounts receivable | 747,000 | ' | ' | 353,000 | ' | 963,000 | ' | ' |
Purchase price allocation for inventory | 2,195,000 | ' | ' | 1,238,000 | ' | 2,944,000 | ' | ' |
Purchase price allocation for fixed assets | 556,000 | ' | ' | 300,000 | 246,000 | 1,653,000 | ' | ' |
Purchase price allocation for current liabilities | 226,000 | ' | ' | 82,000 | ' | 1,840,000 | ' | ' |
Purchase price allocation for deferred tax liabilities, current | ' | ' | ' | 2,054,000 | ' | ' | ' | ' |
Allocation of purchase price for contingent consideration potential payment | 700,000 | ' | ' | 100,000 | ' | 200,000 | ' | ' |
Purchase price allocation for intangible assets | 3,010,000 | ' | ' | 5,542,000 | 1,570,000 | 5,275,000 | ' | ' |
Business Acquisition Contingent Consideration Cash Payment | ' | ' | 62,000 | ' | ' | ' | ' | ' |
Purchase price allocation for current assets | ' | ' | ' | ' | 35,000 | ' | ' | ' |
Sales from International Markets | 30.00% | ' | ' | ' | ' | ' | ' | ' |
Purchase price allocation for non-amortizable trademarks | ' | 347,000 | ' | ' | ' | ' | 196,000 | ' |
Finite lived intangible assets, useful life | '15 years | ' | ' | ' | ' | '15 years | ' | ' |
Purchase price allocation for prepaid assets | ' | ' | ' | ' | ' | $8,000 | ' | ' |
Long_Term_Debt_Additional_Info
Long Term Debt - Additional Information (Detail) (USD $) | 6 Months Ended |
Nov. 30, 2013 | |
Debt Instrument [Line Items] | ' |
Unsecured revolving line of credit, total amount available | $12,000,000 |
Unsecured revolving line of credit, maturity date | 1-Sep-14 |
Unsecured revolving line of credit, interest terms | 'LIBOR plus 100 basis points |
Unsecured revolving line of credit, spread | 1.00% |
Unsecured revolving line of credit, interest rate | 1.17% |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 6 Months Ended | |
Nov. 30, 2013 | 31-May-13 | |
Commitments and Contingencies Disclosure [Line Items] | ' | ' |
Environmental remediation expense, period of remediation, years | '5 years | ' |
Estimated liability costs of remediation | $916,000 | $916,000 |
Estimated liability, measurement period, years | '15 years | ' |
Minimum | ' | ' |
Commitments and Contingencies Disclosure [Line Items] | ' | ' |
Environmental remediation expense | 50,000 | ' |
Maximum | ' | ' |
Commitments and Contingencies Disclosure [Line Items] | ' | ' |
Environmental remediation expense | $105,000 | ' |
Stock_Purchase_Additional_Info
Stock Purchase - Additional Information (Detail) (USD $) | 6 Months Ended | |
Nov. 30, 2013 | Dec. 31, 2008 | |
Stock Repurchase Program [Line Items] | ' | ' |
Shares authorized to purchase | ' | 1,125,000 |
Cumulative number of shares repurchased | 112,026 | ' |
Cost of repurchased shares, including commissions | $923,000 | ' |