Document and Entity Information
Document and Entity Information | 3 Months Ended |
Aug. 31, 2015shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Aug. 31, 2015 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q1 |
Trading Symbol | NEOG |
Entity Registrant Name | NEOGEN CORP |
Entity Central Index Key | 711,377 |
Current Fiscal Year End Date | --05-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 37,372,476 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2015 | May. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 42,326 | $ 66,061 |
Marketable securities (at fair value, which approximates cost) | 68,629 | 48,103 |
Accounts receivable, less allowance of $1,350 and $1,300 | 59,041 | 59,208 |
Inventories | 56,107 | 51,601 |
Deferred income taxes | 2,300 | 1,991 |
Prepaid expenses and other current assets | 6,958 | 4,231 |
TOTAL CURRENT ASSETS | 235,361 | 231,195 |
NET PROPERTY AND EQUIPMENT | 49,294 | 44,473 |
OTHER ASSETS | ||
Goodwill | 75,292 | 70,119 |
Other non-amortizable intangible assets | 9,020 | 9,020 |
Customer-based intangibles, net of accumulated amortization of $14,385 and $14,446 at August 31 and May 31, 2015 | 24,875 | 24,170 |
Other non-current assets, net of accumulated amortization of $6,689 and $7,191 | 15,544 | 13,204 |
Total Other Assets | 124,731 | 116,513 |
TOTAL ASSETS | 409,386 | 392,181 |
CURRENT LIABILITIES | ||
Accounts payable | 14,762 | 13,691 |
Accrued compensation | 3,898 | 4,142 |
Income taxes | 2,292 | 1,275 |
Other accruals | 5,947 | 6,348 |
TOTAL CURRENT LIABILITIES | 26,899 | 25,456 |
DEFERRED INCOME TAXES | 14,495 | 13,711 |
OTHER LONG-TERM LIABILITIES | 2,086 | 2,051 |
Liabilities, Noncurrent, Total | 16,581 | 15,762 |
TOTAL LIABILITIES | 43,480 | 41,218 |
COMMITMENTS AND CONTINGENCIES (note 7) | 0 | 0 |
EQUITY | ||
Preferred stock, $1.00 par value, 100,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.16 par value, 60,000,000 shares authorized; 37,372,476 and 37,128,269 shares issued and outstanding at August 31 and May 31, 2015, respectively | 5,980 | 5,941 |
Additional paid-in capital | 138,234 | 131,906 |
Accumulated other comprehensive income (loss) | (3,155) | (2,442) |
Retained earnings | 224,892 | 215,569 |
TOTAL NEOGEN CORPORATION AND SUBSIDIARIES STOCKHOLDERS' EQUITY | 365,951 | 350,974 |
Non-controlling interest | (45) | (11) |
TOTAL EQUITY | 365,906 | 350,963 |
TOTAL LIABILITIES AND EQUITY | $ 409,386 | $ 392,181 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Aug. 31, 2015 | May. 31, 2015 |
Accounts receivable, allowance | $ 1,350 | $ 1,300 |
Customer based intangibles, accumulated amortization | 14,385 | 14,446 |
Other non-current assets, accumulated amortization | $ 6,689 | $ 7,191 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.16 | $ 0.16 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 37,372,476 | 37,128,269 |
Common stock, shares outstanding | 37,372,476 | 37,128,269 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2015 | Aug. 31, 2014 | |
REVENUES | ||
Product revenues | $ 65,036 | $ 58,224 |
Service revenues | 9,824 | 9,375 |
Total Revenues | 74,860 | 67,599 |
COST OF REVENUES | ||
Cost of product revenues | 30,630 | 27,976 |
Cost of service revenues | 6,438 | 5,547 |
Total Cost of Revenues | 37,068 | 33,523 |
GROSS MARGIN | 37,792 | 34,076 |
OPERATING EXPENSES | ||
Sales and marketing | 13,571 | 12,220 |
General and administrative | 6,753 | 6,013 |
Research and development | 2,573 | 2,404 |
Operating Expenses, Total | 22,897 | 20,637 |
OPERATING INCOME | 14,895 | 13,439 |
OTHER INCOME (EXPENSE) | ||
Interest income | 68 | 45 |
Change in purchase consideration | 0 | 241 |
Other income (expense) | (524) | (16) |
Nonoperating Income (Expense), Total | (456) | 270 |
INCOME BEFORE INCOME TAXES | 14,439 | 13,709 |
INCOME TAXES | 5,150 | 4,800 |
NET INCOME | 9,289 | 8,909 |
NET LOSS/(INCOME) ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 34 | (26) |
NET INCOME ATTRIBUTABLE TO NEOGEN CORPORATION | $ 9,323 | $ 8,883 |
NET INCOME ATTRIBUTABLE TO NEOGEN CORPORATION PER SHARE | ||
Basic | $ 0.25 | $ 0.24 |
Diluted | $ 0.25 | $ 0.24 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2015 | Aug. 31, 2014 | |
Net Income | $ 9,289 | $ 8,909 |
Other Comprehensive Income (Loss), Net of Tax | ||
Currency Translation Adjustments | (713) | (219) |
Comprehensive Income | 8,576 | 8,690 |
Comprehensive Loss (Income) attributable to non-controlling interest | 34 | (26) |
Comprehensive Income attributable to Neogen Corporation | $ 8,610 | $ 8,664 |
Consolidated Statement of Equit
Consolidated Statement of Equity - 3 months ended Aug. 31, 2015 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-controlling Interest |
Beginning Balance (in shares) at May. 31, 2015 | 37,128,269 | 37,128,000 | ||||
Beginning Balance at May. 31, 2015 | $ 350,963 | $ 5,941 | $ 131,906 | $ (2,442) | $ 215,569 | $ (11) |
Issuance of shares of common stock under equity compensation plans, and share based compensation (in shares) | 235,000 | |||||
Issuance of shares of common stock under equity compensation plans, and share based compensation | 6,007 | $ 38 | 5,969 | |||
Issuance of shares under employee stock purchase plan (in shares) | 9,000 | |||||
Issuance of shares under employee stock purchase plan | 360 | $ 1 | 359 | |||
Comprehensive income: | ||||||
Net income (loss) for the three months ended August 31, 2015 | 9,289 | 9,323 | (34) | |||
Other comprehensive loss | $ (713) | (713) | ||||
Ending Balance (in shares) at Aug. 31, 2015 | 37,372,476 | 37,372,000 | ||||
Ending Balance at Aug. 31, 2015 | $ 365,906 | $ 5,980 | $ 138,234 | $ (3,155) | $ 224,892 | $ (45) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2015 | Aug. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income | $ 9,289 | $ 8,909 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,704 | 2,515 |
Share based compensation | 1,297 | 907 |
Excess income tax benefit from the exercise of stock options | (1,880) | (865) |
Changes in operating assets and liabilities, net of business acquisitions: | ||
Accounts receivable | 1,209 | 155 |
Inventories | (3,310) | (3,933) |
Prepaid expenses and other current assets | (2,725) | 2,843 |
Accounts payable, accruals and other | 16 | (106) |
NET CASH FROM OPERATING ACTIVITIES | 6,600 | 10,425 |
CASH FLOWS FOR INVESTING ACTIVITIES: | ||
Purchases of property, equipment and other noncurrent assets | (2,821) | (2,511) |
Proceeds from the sale of marketable securities | 28,648 | 22,946 |
Purchases of marketable securities | (49,174) | (21,765) |
Business acquisitions, net of cash acquired | (13,126) | 0 |
NET CASH FOR INVESTING ACTIVITIES | (36,473) | (1,330) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Exercise of stock options | 4,293 | 2,933 |
Excess income tax benefit from the exercise of stock options | 1,880 | 865 |
Increase (decrease) in other long-term liabilities | 0 | 0 |
NET CASH FROM BY FINANCING ACTIVITIES | 6,173 | 3,798 |
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS | (35) | (111) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (23,735) | 12,782 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 66,061 | 40,675 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 42,326 | $ 53,457 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Aug. 31, 2015 | |
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. Certain amounts in the fiscal 2015 statements have been reclassified to conform to the fiscal 2016 presentation. The results of operations for the three month period ended August 31, 2015 are not necessarily indicative of the results to be expected for the fiscal year ending May 31, 2016. For more complete financial information, these consolidated financial statements should be read in conjunction with the May 31, 2015 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, 2015. |
Inventories
Inventories | 3 Months Ended |
Aug. 31, 2015 | |
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: August 31, 2015 May 31, 2015 (In thousands) Raw Materials $ 24,211 $ 21,605 Work-in-process 4,025 3,972 Finished and purchased goods 27,871 26,024 $ 56,107 $ 51,601 |
Net Income per Share
Net Income per Share | 3 Months Ended |
Aug. 31, 2015 | |
Net Income per Share | 3. NET INCOME PER SHARE The calculation of net income per share attributable to Neogen Corporation follows: Three Months Ended August 31, 2015 2014 (In thousands, except per share amounts) Numerator for basic and diluted net income per share: Net Income attributable to Neogen shareholders $ 9,323 $ 8,883 Denominator: Denominator for basic net income per share: Weighted average shares 37,213 36,776 Effect of dilutive stock options and warrants 542 514 Denominator for diluted net income per share 37,755 37,290 Net income attributable to Neogen Corporation per share: Basic $ 0.25 $ 0.24 Diluted $ 0.25 $ 0.24 |
Segment Information
Segment Information | 3 Months Ended |
Aug. 31, 2015 | |
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, disinfectants and insecticides to assist in the control of rodents and disease in and around agricultural, food production and other facilities. Segment information as of and for the three months ended August 31, 2015 and 2014 follows: Food Animal Corporate and Total (In thousands) Fiscal 2016 Product revenues to external customers $ 32,051 $ 32,985 $ $ 65,036 Service revenues to external customers 2,408 7,416 0 9,824 Total revenues to external customers 34,459 40,401 0 74,860 Operating income (loss) 8,421 7,340 (866 ) 14,895 Total assets 132,115 179,453 97,818 409,386 Fiscal 2015 Product revenues to external customers $ 28,062 $ 30,162 $ 0 $ 58,224 Service revenues to external customers 2,901 6,474 0 9,375 Total revenues to external customers 30,963 36,636 0 67,599 Operating income (loss) 7,515 6,705 (781 ) 13,439 Total assets 103,637 176,419 77,606 357,662 (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 | 3 Months Ended |
Aug. 31, 2015 | |
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 three months ended August 31, 2015 follows: Shares Weighted- Options outstanding at June 1, 2015 1,988,000 $ 31.04 Granted 0 0 Exercised (245,000 ) 21.08 Forfeited 0 0 Options outstanding at August 31, 2015 1,743,000 32.44 During the three month periods ended August 31, 2015 and 2014, the Company recorded $1,297,000 and $907,000 of compensation expense related to its share-based awards. The weighted-average fair value of stock options granted during fiscal 2015, estimated on the date of grant using the Black-Scholes option pricing model was $11.91, per option. No options were granted in the first quarter of fiscal 2016. The fair value of stock options granted was estimated using the following weighted-average assumptions. FY 2015 Risk-free interest rate 1.2 % Expected dividend yield 0 % Expected stock price volatility 36.2 % Expected option life 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 recorded in administrative expense as of the date of purchase. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Aug. 31, 2015 | |
New Accounting Pronouncements | 6. NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the Financial Accounting Standards Board issued a new standard on revenue recognition. 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. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. |
Business and Product Line Acqui
Business and Product Line Acquisitions | 3 Months Ended |
Aug. 31, 2015 | |
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 acquisition method. Goodwill recognized in the acquisitions discussed above relates primarily to enhancing the Company’s strategic platform for the expansion of available product offerings. On July 1, 2013, the Company 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 a strong presence in Mexico and Latin America. Consideration for the purchase was $10,012,000 in cash and up to $1,500,000 of a contingent consideration liability, due at the end of the first year, based on an excess net sales formula. The Company estimated the contingent consideration liability to be $930,000, based on forecasted sales. The final purchase price allocation, based upon the fair value of these assets determined using the income approach, included accounts receivable of $747,000, net inventory of $2,195,000, property and equipment of $556,000, current liabilities of $226,000, contingent consideration liabilities of $930,000, non-amortizable trademarks of $790,000, intangible assets of $4,810,000 (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 has been relocated to Lexington, Kentucky and integrated with the Company’s current operations there, reporting within the Animal Safety segment. In August 2014, the Company paid $689,000 to the former owner for contingent consideration based upon the level of achievement of sales targets; the remaining $241,000 of the accrual was reversed to Other Income. On November 1, 2013, the Company 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 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 contingent consideration, due at the end of the first year, based on an excess net sales formula. The Company estimated the contingent consideration liability to be $146,000 based on forecasted sales. The final purchase price allocation, based upon the fair value of these assets determined using the income approach, included accounts receivable of $963,000, net inventory of $2,796,000, property and equipment of $1,653,000, prepaid assets of $8,000, current liabilities of $1,840,000, contingent consideration liabilities of $146,000, non-amortizable trademarks of $1,500,000, intangible assets of $4,400,000 (with an estimated life of 5-15 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 Animal Safety segment. In October 2014, the Company paid the former owners $600,000 and recorded an additional $454,000 for contingent consideration, charged to Other Expense, based on achievement of defined sales targets. On January 2, 2014, the Company acquired all of 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 up to $1,000,000 of a contingent consideration liability, due at the end of the first year, based on an excess net sales formula. The Company estimated the contingent consideration liability to be $390,000, based on forecasted sales. The final purchase price allocation included accounts receivable of $380,000, net inventory of $4,184,000, prepaid assets of $100,000, property and equipment of $807,000, current liabilities of $184,000, contingent consideration liabilities of $390,000, intangible assets of $8,327,000 (with an estimated life of 5-25 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 Animal Safety segment. In February 2015, the Company paid the former owners $474,000 and recorded an additional $84,000 for contingent consideration, charged to Other Expense, based upon achievement of sales targets. On October 1, 2014, the Company acquired all of the stock of BioLumix, Inc., a manufacturer and marketer of automated systems for the detection of microbial contaminants located in Ann Arbor, Michigan. Consideration for the purchase was $4,514,000 in cash. The preliminary purchase price allocation included accounts receivable of $499,000, other receivable of $178,000, net inventory of $421,000, prepaid assets of $48,000, property and equipment of $159,000, current liabilities of $130,000, long-term liabilities of $813,000, intangible assets of $2,109,000 (with an estimated life of 5-15 years) and the remainder to goodwill (non-deductible for tax purposes). These values are Level 3 fair value measurements. This business has been relocated to Lansing, Michigan and integrated with the Company’s operations there, reporting within the Food Safety segment. On December 8, 2014, the Company acquired the food safety and veterinary genomic assets of its Chinese distributor Beijing Anapure BioScientific Co., Ltd. Consideration for the purchase was $2,040,000 in cash. The preliminary purchase allocation included inventory of $525,000, property and equipment of $64,000, intangible assets of $20,000 (with an estimated life of five years) and the remainder to goodwill. These are Level 3 fair value measurements. This business has been integrated into the Company’s subsidiary in China and reports within the Food Safety segment. On June 1, 2015, Neogen 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. The purchase price allocation included accounts receivable of $43,000, net inventory of $14,000, property and equipment of $141,000 and the remainder to goodwill and other intangible assets. These are Level 3 fair value measurements. This business will continue to operate in its current location and reports within the Animal Safety segment. On August 26, 2015, the Company acquired all of 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 preliminary purchase allocation included cash of $285,000, accounts receivable of $975,000, net inventory of $1,169,000, property and equipment of $3,337,000, other current assets of $596,000, current liabilities of $1,350,000, long-term deferred tax liability of $784,000, intangible assets of $3,918,000 (with an estimated life of 3-15 years) and the remainder to goodwill. These are Level 3 fair value measurements. This business will continue to operate in its current location and reports within the Food Safety segment. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Aug. 31, 2015 | |
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, 2017. There were no advances against this line of credit during fiscal 2016 and fiscal 2015 and no balance outstanding at August 31, 2015. Interest is at LIBOR plus 100 basis points (rate under the terms of the agreement was 1.20% at August 31, 2015). 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 August 31, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Aug. 31, 2015 | |
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 $47,000 to $56,000 per year over the past five years. The Company’s estimated liability for these costs of $916,000 at August 31 and May 31, 2015, measured on an undiscounted basis over an estimated period of 15 years; $50,000 of the liability is recorded within current liabilities and the remainder 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 | 3 Months Ended |
Aug. 31, 2015 | |
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 August 31, 2015, 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 fiscal 2016 and there were none in fiscal 2015. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Aug. 31, 2015 | |
Inventories | The components of inventories follow: August 31, 2015 May 31, 2015 (In thousands) Raw Materials $ 24,211 $ 21,605 Work-in-process 4,025 3,972 Finished and purchased goods 27,871 26,024 $ 56,107 $ 51,601 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Aug. 31, 2015 | |
Calculation of Net Income Per Share | The calculation of net income per share attributable to Neogen Corporation follows: Three Months Ended August 31, 2015 2014 (In thousands, except per share amounts) Numerator for basic and diluted net income per share: Net Income attributable to Neogen shareholders $ 9,323 $ 8,883 Denominator: Denominator for basic net income per share: Weighted average shares 37,213 36,776 Effect of dilutive stock options and warrants 542 514 Denominator for diluted net income per share 37,755 37,290 Net income attributable to Neogen Corporation per share: Basic $ 0.25 $ 0.24 Diluted $ 0.25 $ 0.24 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Aug. 31, 2015 | |
Segment Information | Segment information as of and for the three months ended August 31, 2015 and 2014 follows: Food Animal Corporate and Total (In thousands) Fiscal 2016 Product revenues to external customers $ 32,051 $ 32,985 $ $ 65,036 Service revenues to external customers 2,408 7,416 0 9,824 Total revenues to external customers 34,459 40,401 0 74,860 Operating income (loss) 8,421 7,340 (866 ) 14,895 Total assets 132,115 179,453 97,818 409,386 Fiscal 2015 Product revenues to external customers $ 28,062 $ 30,162 $ 0 $ 58,224 Service revenues to external customers 2,901 6,474 0 9,375 Total revenues to external customers 30,963 36,636 0 67,599 Operating income (loss) 7,515 6,705 (781 ) 13,439 Total assets 103,637 176,419 77,606 357,662 (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) | 3 Months Ended |
Aug. 31, 2015 | |
Stock Option Activity | A summary of stock option activity during the three months ended August 31, 2015 follows: Shares Weighted- Options outstanding at June 1, 2015 1,988,000 $ 31.04 Granted 0 0 Exercised (245,000 ) 21.08 Forfeited 0 0 Options outstanding at August 31, 2015 1,743,000 32.44 |
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 2015 Risk-free interest rate 1.2 % Expected dividend yield 0 % Expected stock price volatility 36.2 % Expected option life 4.0 years |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Aug. 31, 2015 | May. 31, 2015 |
Inventory [Line Items] | ||
Raw Materials | $ 24,211 | $ 21,605 |
Work-in-process | 4,025 | 3,972 |
Finished and purchased goods | 27,871 | 26,024 |
Inventories | $ 56,107 | $ 51,601 |
Calculation of Net Income Per S
Calculation of Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Aug. 31, 2015 | Aug. 31, 2014 | |
Earnings Per Share [Line Items] | ||
Net Income attributable to Neogen shareholders | $ 9,323 | $ 8,883 |
Weighted average shares | 37,213 | 36,776 |
Effect of dilutive stock options and warrants | 542 | 514 |
Denominator for diluted net income per share | 37,755 | 37,290 |
Net income attributable to Neogen Corporation per share: | ||
Basic | $ 0.25 | $ 0.24 |
Diluted | $ 0.25 | $ 0.24 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended |
Aug. 31, 2015Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 31, 2015 | Aug. 31, 2014 | May. 31, 2015 | ||
Segment Reporting Information [Line Items] | ||||
Product revenues to external customers | $ 65,036 | $ 58,224 | ||
Service revenues to external customers | 9,824 | 9,375 | ||
Total revenues to external customers | 74,860 | 67,599 | ||
Operating income (loss) | 14,895 | 13,439 | ||
Total assets | 409,386 | 357,662 | $ 392,181 | |
Operating Segments | Food Safety | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues to external customers | 32,051 | 28,062 | ||
Service revenues to external customers | 2,408 | 2,901 | ||
Total revenues to external customers | 34,459 | 30,963 | ||
Operating income (loss) | 8,421 | 7,515 | ||
Total assets | 132,115 | 103,637 | ||
Operating Segments | Animal Safety | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues to external customers | 32,985 | 30,162 | ||
Service revenues to external customers | 7,416 | 6,474 | ||
Total revenues to external customers | 40,401 | 36,636 | ||
Operating income (loss) | 7,340 | 6,705 | ||
Total assets | 179,453 | 176,419 | ||
Corporate and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues to external customers | [1] | 0 | ||
Service revenues to external customers | [1] | 0 | 0 | |
Total revenues to external customers | [1] | 0 | 0 | |
Operating income (loss) | [1] | (866) | (781) | |
Total assets | [1] | $ 97,818 | $ 77,606 | |
[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 - Add
Equity Compensation Plans - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2015 | Aug. 31, 2014 | May. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | $ 1,297,000 | $ 907,000 | |
Weighted-Average Grant-Date Fair Value of Options Granted | $ 11.91 | ||
Number of options granted | 0 | ||
Employee Stock Purchase Plan | 2011 Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Annual maximum limit percentage of compensation to purchase shares | 5.00% | ||
Employee and Director Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option vesting period | 5 years | ||
Non-Qualified Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option vesting period | 10 years |
Stock Option Activity (Detail)
Stock Option Activity (Detail) | 3 Months Ended |
Aug. 31, 2015$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Shares Outstanding, Beginning Balance | shares | 1,988,000 |
Shares, Granted | shares | 0 |
Shares, Exercised | shares | (245,000) |
Shares, Forfeited | shares | 0 |
Shares Outstanding, Ending Balance | shares | 1,743,000 |
Weighted-Average Exercise Price, Beginning Balance | $ 31.04 |
Weighted-Average Exercise Price, Granted | 0 |
Weighted-Average Exercise Price, Exercised | 21.08 |
Weighted-Average Exercise Price, Forfeited | 0 |
Weighted-Average Exercise Price, Ending Balance | $ 32.44 |
Fair Value of Stock Options Gra
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions (Detail) | 12 Months Ended |
May. 31, 2015 | |
Schedule of Weighted Average Assumptions for Fair Values of Stock Options [Line Items] | |
Risk-free interest rate | 1.20% |
Expected dividend yield | 0.00% |
Expected stock price volatility | 36.20% |
Expected option life (in years) | 4 years |
Business and Product Line Acq29
Business and Product Line Acquisitions - Additional Information (Detail) - USD ($) | Aug. 26, 2015 | Jun. 01, 2015 | Dec. 08, 2014 | Oct. 01, 2014 | Jan. 02, 2014 | Nov. 01, 2013 | Jul. 01, 2013 | Feb. 28, 2015 | Oct. 31, 2014 | Aug. 31, 2014 | Aug. 31, 2015 | Aug. 31, 2014 |
Business Acquisition [Line Items] | ||||||||||||
Reversed the remaining contingent consideration accrual to other income | $ 0 | $ 241,000 | ||||||||||
SyrVet, Inc. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash consideration for purchase of business | $ 10,012,000 | |||||||||||
Contingent consideration potential payment | 1,500,000 | |||||||||||
Purchase price allocation for accounts receivable | 747,000 | |||||||||||
Purchase price allocation for inventory | 2,195,000 | |||||||||||
Purchase price allocation for property and equipment | 556,000 | |||||||||||
Purchase price allocation for current liabilities | 226,000 | |||||||||||
Allocation of purchase price for contingent consideration potential payment | 930,000 | |||||||||||
Purchase price allocation for intangible assets | $ 4,810,000 | |||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||
Cash paid for contingent consideration | $ 689,000 | |||||||||||
Reversed the remaining contingent consideration accrual to other income | $ 241,000 | |||||||||||
SyrVet, Inc. | Trademarks | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Purchase price allocation for non-amortizable trademarks | $ 790,000 | |||||||||||
Prima Tech Incorporated | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash consideration for purchase of business | $ 12,068,000 | |||||||||||
Contingent consideration potential payment | 600,000 | |||||||||||
Purchase price allocation for accounts receivable | 963,000 | |||||||||||
Purchase price allocation for inventory | 2,796,000 | |||||||||||
Purchase price allocation for property and equipment | 1,653,000 | |||||||||||
Purchase price allocation for current liabilities | 1,840,000 | |||||||||||
Allocation of purchase price for contingent consideration potential payment | 146,000 | |||||||||||
Purchase price allocation for intangible assets | 4,400,000 | |||||||||||
Cash paid for contingent consideration | $ 600,000 | |||||||||||
Purchase price allocation for prepaid assets | $ 8,000 | |||||||||||
Cash accrued for contingent consideration | $ 454,000 | |||||||||||
Prima Tech Incorporated | Minimum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||
Prima Tech Incorporated | Maximum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||
Prima Tech Incorporated | Trademarks | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Purchase price allocation for non-amortizable trademarks | $ 1,500,000 | |||||||||||
Chem Tech Ltd | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash consideration for purchase of business | $ 17,185,000 | |||||||||||
Contingent consideration potential payment | 1,000,000 | |||||||||||
Purchase price allocation for accounts receivable | 380,000 | |||||||||||
Purchase price allocation for inventory | 4,184,000 | |||||||||||
Purchase price allocation for property and equipment | 807,000 | |||||||||||
Purchase price allocation for current liabilities | 184,000 | |||||||||||
Allocation of purchase price for contingent consideration potential payment | 390,000 | |||||||||||
Purchase price allocation for intangible assets | 8,327,000 | |||||||||||
Cash paid for contingent consideration | $ 474,000 | |||||||||||
Purchase price allocation for prepaid assets | $ 100,000 | |||||||||||
Cash accrued for contingent consideration | $ 84,000 | |||||||||||
Chem Tech Ltd | Minimum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||
Chem Tech Ltd | Maximum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Finite lived intangible assets, useful life | 25 years | |||||||||||
BioLumix, Inc. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash consideration for purchase of business | $ 4,514,000 | |||||||||||
Purchase price allocation for accounts receivable | 499,000 | |||||||||||
Purchase price allocation for inventory | 421,000 | |||||||||||
Purchase price allocation for property and equipment | 159,000 | |||||||||||
Purchase price allocation for current liabilities | 130,000 | |||||||||||
Purchase price allocation for intangible assets | 2,109,000 | |||||||||||
Purchase price allocation for prepaid assets | 48,000 | |||||||||||
Purchase price allocation for other receivable | 178,000 | |||||||||||
Purchase price allocation for long-term liabilities | $ 813,000 | |||||||||||
BioLumix, Inc. | Minimum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||
BioLumix, Inc. | Maximum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||
Sterling Test House | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash consideration for purchase of business | $ 1,118,000 | |||||||||||
Purchase price allocation for accounts receivable | 43,000 | |||||||||||
Purchase price allocation for inventory | 14,000 | |||||||||||
Purchase price allocation for property and equipment | $ 141,000 | |||||||||||
Beijing Anapure BioScientific Co., Ltd. | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash consideration for purchase of business | $ 2,040,000 | |||||||||||
Purchase price allocation for inventory | 525,000 | |||||||||||
Purchase price allocation for property and equipment | 64,000 | |||||||||||
Purchase price allocation for intangible assets | $ 20,000 | |||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||
Lab M Holdings | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Cash consideration for purchase of business | $ 12,436,000 | |||||||||||
Purchase price allocation for accounts receivable | 975,000 | |||||||||||
Purchase price allocation for inventory | 1,169,000 | |||||||||||
Purchase price allocation for property and equipment | 3,337,000 | |||||||||||
Purchase price allocation for current liabilities | 1,350,000 | |||||||||||
Purchase price allocation for intangible assets | 3,918,000 | |||||||||||
Purchase price allocation for cash | 285,000 | |||||||||||
Purchase price allocation for other current assets | 596,000 | |||||||||||
Purchase price allocation for deferred tax liability | $ 784,000 | |||||||||||
Lab M Holdings | Minimum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Finite lived intangible assets, useful life | 3 years | |||||||||||
Lab M Holdings | Maximum | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Finite lived intangible assets, useful life | 15 years |
Long Term Debt - Additional Inf
Long Term Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Aug. 31, 2015 | May. 31, 2015 | |
Debt Instrument [Line Items] | ||
Unsecured revolving line of credit, total amount available | $ 12,000,000 | |
Unsecured revolving line of credit, maturity date | Sep. 1, 2017 | |
Unsecured revolving line of credit, interest terms | LIBOR plus 100 basis points | |
Unsecured revolving line of credit, interest rate | 1.20% | |
Unsecured revolving line of credit, balance outstanding | $ 0 | |
Unsecured revolving line of credit, advances | $ 0 | $ 0 |
Libor Plus | Unsecured Revolving Line of Credit | ||
Debt Instrument [Line Items] | ||
Unsecured revolving line of credit, spread | 1.00% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Aug. 31, 2015 | May. 31, 2015 | |
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 costs of remediation, current | $ 50,000 | $ 50,000 |
Estimated liability, measurement period, years | 15 years | |
Minimum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | $ 47,000 | |
Maximum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | $ 56,000 |
Stock Purchase - Additional Inf
Stock Purchase - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2015 | May. 31, 2015 | Dec. 31, 2008 | |
Stock Repurchase Program [Line Items] | |||
Shares authorized to purchase | 1,125,000 | ||
Cumulative number of shares repurchased | 112,026 | 0 | |
Cost of repurchased shares, including commissions | $ 923 |