Document and Entity Information
Document and Entity Information | 9 Months Ended |
Feb. 28, 2017shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Feb. 28, 2017 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | Q3 |
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 | 38,119,486 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Feb. 28, 2017 | May 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 59,883 | $ 55,257 |
Marketable securities (at fair value, which approximates cost) | 64,699 | 52,539 |
Accounts receivable, less allowance of $1,750 and $1,500 | 67,367 | 67,652 |
Inventories | 75,396 | 64,371 |
Deferred income taxes | 1,747 | 1,775 |
Prepaid expenses and other current assets | 7,678 | 8,407 |
Total Current Assets | 276,770 | 250,001 |
Net Property and Equipment | 60,975 | 54,683 |
Other Assets | ||
Goodwill | 104,080 | 88,506 |
Other non-amortizable intangible assets | 11,699 | 9,170 |
Total Assets | 507,298 | 451,715 |
Current Liabilities | ||
Accounts payable | 17,072 | 15,800 |
Accrued compensation | 4,393 | 4,986 |
Income taxes | 2,179 | |
Other accruals | 11,079 | 7,812 |
Total Current Liabilities | 34,723 | 28,598 |
Deferred Income Taxes | 17,692 | 16,533 |
Other Long-Term Liabilities | 3,227 | 2,423 |
Total Liabilities | 55,642 | 47,554 |
Commitments and Contingencies (note 9) | ||
Equity | ||
Preferred stock, $1.00 par value, 100,000 shares authorized, none issued and outstanding | ||
Common stock, $0.16 par value, 60,000,000 shares authorized, 38,119,486 and 37,567,689 shares issued and outstanding at February 28, 2017 and May 31, 2016, respectively | 6,099 | 6,011 |
Additional paid-in capital | 169,667 | 150,000 |
Accumulated other comprehensive loss | (7,689) | (3,946) |
Retained earnings | 283,453 | 252,133 |
Total Neogen Corporation Stockholders' Equity | 451,530 | 404,198 |
Non-controlling interest | 126 | (37) |
Total Equity | 451,656 | 404,161 |
Total Liabilities and Equity | 507,298 | 451,715 |
Customer-based intangibles | ||
Other Assets | ||
Amortizable intangible assets, net of accumulated amortization | 35,508 | 30,909 |
Other Intangible Assets | ||
Other Assets | ||
Amortizable intangible assets, net of accumulated amortization | $ 18,266 | $ 18,446 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands | Feb. 28, 2017 | May 31, 2016 |
Accounts receivable, allowance | $ 1,750 | $ 1,500 |
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 | 38,119,486 | 37,567,689 |
Common stock, shares outstanding | 38,119,486 | 37,567,689 |
Customer-based intangibles | ||
Accumulated Amortization | $ 19,782 | $ 17,277 |
Other Intangible Assets | ||
Accumulated Amortization | $ 9,449 | $ 7,530 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
Revenues | ||||
Product revenues | $ 73,964 | $ 64,377 | $ 223,170 | $ 198,131 |
Service revenues | 14,421 | 12,348 | 39,577 | 33,065 |
Total Revenues | 88,385 | 76,725 | 262,747 | 231,196 |
Cost of Revenues | ||||
Cost of product revenues | 38,816 | 32,920 | 113,241 | 97,558 |
Cost of service revenues | 8,689 | 8,609 | 24,556 | 22,427 |
Total Cost of Revenues | 47,505 | 41,529 | 137,797 | 119,985 |
Gross Margin | 40,880 | 35,196 | 124,950 | 111,211 |
Operating Expenses | ||||
Sales and marketing | 15,340 | 13,953 | 45,824 | 41,727 |
General and administrative | 8,548 | 7,538 | 25,094 | 21,081 |
Research and development | 2,641 | 2,451 | 8,087 | 7,642 |
Total Operating Expenses | 26,529 | 23,942 | 79,005 | 70,450 |
Operating Income | 14,351 | 11,254 | 45,945 | 40,761 |
Other Income (Expense) | ||||
Interest income | 271 | 120 | 690 | 238 |
Other income (expense) | 1,105 | 265 | 1,098 | (730) |
Total Other Income (Expense) | 1,376 | 385 | 1,788 | (492) |
Income Before Taxes | 15,727 | 11,639 | 47,733 | 40,269 |
Provision for Income Taxes | 5,350 | 3,350 | 16,250 | 13,550 |
Net Income | 10,377 | 8,289 | 31,483 | 26,719 |
Net (Income) Loss Attributable to Non-Controlling Interest | (90) | 22 | (163) | (12) |
Net Income Attributable to Neogen | $ 10,287 | $ 8,311 | $ 31,320 | $ 26,707 |
Net Income Attributable to Neogen Per Share | ||||
Basic | $ 0.27 | $ 0.22 | $ 0.83 | $ 0.71 |
Diluted | $ 0.27 | $ 0.22 | $ 0.82 | $ 0.71 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
Net income | $ 10,377 | $ 8,289 | $ 31,483 | $ 26,719 |
Other comprehensive income (loss), net of tax: currency translation adjustments | 441 | (2,245) | (3,743) | (3,252) |
Comprehensive income | 10,818 | 6,044 | 27,740 | 23,467 |
Comprehensive (income) loss attributable to non-controlling interest | (90) | 22 | (163) | (12) |
Comprehensive income attributable to Neogen Corporation | $ 10,728 | $ 6,066 | $ 27,577 | $ 23,455 |
Consolidated Statement of Equit
Consolidated Statement of Equity - 9 months ended Feb. 28, 2017 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-controlling Interest |
Beginning Balance at May. 31, 2016 | $ 404,161 | $ 6,011 | $ 150,000 | $ (3,946) | $ 252,133 | $ (37) |
Beginning Balance (in shares) at May. 31, 2016 | 37,567,689 | 37,567,689 | ||||
Issuance of shares under share-based compensation plan and $3,671 income tax benefit (in shares) | 533,000 | |||||
Issuance of shares under share-based compensation plan and $3,671 income tax benefit | $ 18,830 | $ 85 | 18,745 | |||
Issuance of shares under employee stock purchase plan (in shares) | 18,000 | |||||
Issuance of shares under employee stock purchase plan | 925 | $ 3 | 922 | |||
Net income | 31,483 | 31,320 | 163 | |||
Other comprehensive loss | (3,743) | (3,743) | ||||
Ending Balance at Feb. 28, 2017 | $ 451,656 | $ 6,099 | $ 169,667 | $ (7,689) | $ 283,453 | $ 126 |
Ending Balance (in shares) at Feb. 28, 2017 | 38,119,486 | 38,119,000 |
Consolidated Statement of Equi7
Consolidated Statement of Equity (Parenthetical) $ in Thousands | 9 Months Ended |
Feb. 28, 2017USD ($) | |
Issuance of shares under share-based compensation plan and income tax benefit | $ 3,671 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 31,483 | $ 26,719 |
Adjustments to reconcile net income to net cash provided from operating activities: | ||
Depreciation and amortization | 10,691 | 8,829 |
Share-based compensation | 3,932 | 4,007 |
Excess income tax benefit from the exercise of stock options | (3,671) | (2,690) |
Change in operating assets and liabilities, net of business acquisitions: | ||
Accounts receivable | 5,916 | 3,512 |
Inventories | (9,460) | (12,770) |
Prepaid expenses and other current assets | 717 | (1,699) |
Accounts payable, accruals and other changes | 5,580 | 2,104 |
Net Cash From Operating Activities | 45,188 | 28,012 |
Cash Flows Used In Investing Activities | ||
Purchases of property, equipment and other non-current intangible assets | (13,002) | (11,145) |
Proceeds from the sale of marketable securities | 102,957 | 113,069 |
Purchases of marketable securities | (115,117) | (123,262) |
Business acquisitions, net of cash acquired | (34,027) | (16,615) |
Net Cash Used In Investing Activities | (59,189) | (37,953) |
Cash Flows From Financing Activities | ||
Exercise of stock options | 15,844 | 8,344 |
Excess income tax benefit from the exercise of stock options | 3,671 | 2,690 |
Net Cash From Financing Activities | 19,515 | 11,034 |
Effect of Exchange Rate on Cash | (888) | (292) |
Net Increase In Cash and Cash Equivalents | 4,626 | 801 |
Cash And Cash Equivalents At Beginning Of Period | 55,257 | 66,061 |
Cash And Cash Equivalents At End Of Period | $ 59,883 | $ 66,862 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Feb. 28, 2017 | |
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 S-X. 10-K |
Inventories
Inventories | 9 Months Ended |
Feb. 28, 2017 | |
Inventories | 2. INVENTORIES Inventories are stated at the lower of cost, determined on the first-in, first-out February 28, May 31, (in thousands) Raw materials $ 33,375 $ 29,501 Work-in-process 5,588 4,498 Finished and purchased goods 36,433 30,372 $ 75,396 $ 64,371 |
Net Income per Share
Net Income per Share | 9 Months Ended |
Feb. 28, 2017 | |
Net Income per Share | 3. NET INCOME PER SHARE The calculation of net income per share attributable to Neogen Corporation follows: Three Months Ended Nine Months Ended 2017 2016 2017 2016 (in thousands, except per share amounts) Numerator for basic and diluted net income per share: Net income attributable to Neogen $ 10,287 $ 8,311 $ 31,320 $ 26,707 Denominator for basic net income per share: Weighted average shares 38,059 37,473 37,829 37,358 Effect of dilutive stock options 475 485 542 500 Denominator for diluted net income per share 38,534 37,958 38,371 37,858 Net income attributable to Neogen per share: Basic $ 0.27 $ 0.22 $ 0.83 $ 0.71 Diluted $ 0.27 $ 0.22 $ 0.82 $ 0.71 |
Segment Information
Segment Information | 9 Months Ended |
Feb. 28, 2017 | |
Segment Information | 4. SEGMENT INFORMATION The Company has two reportable segments: Food Safety and Animal Safety. The Food Safety segment is primarily engaged in the development, production and marketing of diagnostic test kits, dehydrated culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation. The Animal Safety segment is primarily engaged in the development, production and marketing of products dedicated to animal safety, including a complete line of consumable products marketed to veterinarians and animal health product distributors; this segment also provides genomic identification and related interpretive bioinformatic services. Additionally, the Animal Safety segment produces and markets rodenticides, disinfectants and insecticides to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities. These segments are managed separately because they represent strategic business units that offer different products and require different marketing strategies. The Company evaluates performance based on total sales and operating income of the respective segments. Segment information follows: Food Animal Corporate and Total (in thousands) As of and for the three months ended February 28, 2017 Product revenues to external customers $ 39,318 $ 34,646 $ — $ 73,964 Service revenues to external customers 3,631 10,790 — 14,421 Total revenues to external customers 42,949 45,436 — 88,385 Operating income (loss) 7,403 7,743 (795 ) 14,351 Total assets 183,419 215,243 108,636 507,298 As of and for the three months ended February 29, 2016 Product revenues to external customers $ 31,975 $ 32,402 $ — $ 64,377 Service revenues to external customers 2,735 9,613 — 12,348 Total revenues to external customers 34,710 42,015 — 76,725 Operating income (loss) 6,091 6,172 (1,009 ) 11,254 Total assets 130,077 189,191 112,973 432,241 Food Animal Corporate and Total (in thousands) For the nine months ended February 28, 2017 Product revenues to external customers $ 112,592 $ 110,578 $ — $ 223,170 Service revenues to external customers 10,475 29,102 — 39,577 Total revenues to external customers 123,067 139,680 — 262,747 Operating income (loss) 24,286 24,616 (2,957 ) 45,945 For the nine months ended February 29, 2016 Product revenues to external customers $ 98,708 $ 99,423 $ — $ 198,131 Service revenues to external customers 7,998 25,067 — 33,065 Total revenues to external customers 106,706 124,490 — 231,196 Operating income (loss) 22,216 21,328 (2,783 ) 40,761 (1) Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, current and deferred tax accounts and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. |
Equity Compensation Plans
Equity Compensation Plans | 9 Months Ended |
Feb. 28, 2017 | |
Equity Compensation Plans | 5. EQUITY COMPENSATION PLANS Qualified and non-qualified Company under the terms of the Company’s stock option plans. These options are granted at an exercise price of not less than the fair market value of the stock on the date of grant. Options vest ratably over three and five year periods and the contractual terms are generally five or ten years. A summary of stock option activity during the nine months ended February 28, 2017 follows: Shares Weighted- Options outstanding June 1, 2016 2,081,000 $ 36.71 Granted 618,000 54.19 Exercised (542,000 ) 29.04 Forfeited (49,000 ) 42.72 Options outstanding February 28, 2017 2,108,000 43.66 During the three and nine month periods ended February 28/29, 2017 and 2016 the Company recorded $1,198,000 and $1,462,000 and $3,932,000 and $4,007,000, respectively, of compensation expense related to its share-based awards. The weighted-average fair value per share of stock options granted during fiscal 2017 and fiscal 2016, estimated on the date of grant using the Black-Scholes option pricing model was $15.79 and $13.11, respectively. The fair value of stock options granted was estimated using the following weighted-average assumptions. FY2017 FY2016 Risk-free interest rate 1.2 % 1.2 % Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 35.2 % 33.3 % 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 recorded in administrative expense as of the date of purchase. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Feb. 28, 2017 | |
New Accounting Pronouncements | 6. NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU No. 2014-09—Revenue No. 2016-10— 2014-09 In July 2015, the FASB issued ASU No. 2015-11—Inventory: In September 2015, the FASB issued ASU 2015-16—Simplifying The FASB recently issued ASU No. 2015-17—Income Income Taxes non-current In February 2016, the FASB issued ASU No. 2016-02—Leases right-of-use In March 2016, the FASB issued ASU No. 2016-09 Share-Based Payment Accounting to provide guidance that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in In August 2016, the FASB issued ASU No. 2016-15— 2016-15 2016-15 No. 2016-15 In January 2017, the FASB issued ASU 2017-04 2017-04 two-step 2017-04 |
Business and Product Line Acqui
Business and Product Line Acquisitions | 9 Months Ended |
Feb. 28, 2017 | |
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 below relates primarily to enhancing the Company’s strategic platform for the expansion of available product offerings. On June 1, 2015, the Company 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 of 5-15 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 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, long-term deferred tax liability of $784,000, intangible assets of $3,611,000 (with an estimated life of 5-15 (non-deductible On December 22, 2015, the Company 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 of 5-15 non-amortizable On April 26, 2016, the Company 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-amortizable 5-10 On May 1, 2016, the Company 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 $24,086,000 in cash. The preliminary purchase price allocation 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 $868,000, long-term liabilities of $660,000, intangible assets of $10,590,000 (with an estimated life of 5-15 On December 1, 2016, the Company 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 preliminary purchase price allocation included accounts receivable of $4,684,000, inventory of $1,243,000, land, property and equipment of $2,715,000, accounts payable of $2,197,000, deferred tax liability of $1,133,000, contingent consideration accrual of $1,105,000, other current liabilities of $604,000, non-amortizable 5-15 (non-deductible On December 27, 2016, the Company acquired the stock of Rogama Industria e Comercio, Ltda., a company that develops and manufactures rodenticides and insecticides, based near Sao 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 preliminary purchase price allocation included accounts receivable of $1,863,000, inventory of $1,026,000, property and equipment of $1,840,000, current liabilities of $177,000, contingent consideration accrual of $430,000, non-amortizable 5-15 |
Long Term Debt
Long Term Debt | 9 Months Ended |
Feb. 28, 2017 | |
Long Term Debt | 8. LONG TERM DEBT The Company has a financing agreement with a bank providing for an unsecured revolving line of credit, which was amended on November 30, 2016 to increase the line from $12,000,000 to $15,000,000, and extend the maturity from September 1, 2017 to September 30, 2019. There were no advances against the line of credit during fiscal 2016 and there have been none thus far in fiscal 2017; there was no balance outstanding at February 28, 2017. Interest on any borrowings remained at LIBOR plus 100 basis points (rate under the terms of the agreement was 1.92% at February 28, 2017). 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 February 28, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Feb. 28, 2017 | |
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 expenses annual costs of remediation, which have ranged from $47,000 to $57,000 per year over the past five years. The Company’s estimated liability for these costs was $916,000 at February 28, 2017 and May 31, 2016, measured on an undiscounted basis over an estimated period of 15 years; $60,000 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 | 9 Months Ended |
Feb. 28, 2017 | |
Stock Purchase | 10. STOCK PURCHASE The Company has a stock repurchase program, authorized by the Board of Directors in calendar year 2008, to purchase, subject to market conditions, up to 1,125,000 shares of the Company’s common stock. As of February 28, 2017, 1,012,974 shares were available to be repurchased under the program. There were no purchases in fiscal year 2016 and there have been none thus far in fiscal 2017. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Feb. 28, 2017 | |
Inventories | The components of inventories follow: February 28, May 31, (in thousands) Raw materials $ 33,375 $ 29,501 Work-in-process 5,588 4,498 Finished and purchased goods 36,433 30,372 $ 75,396 $ 64,371 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 9 Months Ended |
Feb. 28, 2017 | |
Calculation of Net Income Per Share | The calculation of net income per share attributable to Neogen Corporation follows: Three Months Ended Nine Months Ended 2017 2016 2017 2016 (in thousands, except per share amounts) Numerator for basic and diluted net income per share: Net income attributable to Neogen $ 10,287 $ 8,311 $ 31,320 $ 26,707 Denominator for basic net income per share: Weighted average shares 38,059 37,473 37,829 37,358 Effect of dilutive stock options 475 485 542 500 Denominator for diluted net income per share 38,534 37,958 38,371 37,858 Net income attributable to Neogen per share: Basic $ 0.27 $ 0.22 $ 0.83 $ 0.71 Diluted $ 0.27 $ 0.22 $ 0.82 $ 0.71 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Feb. 28, 2017 | |
Segment Information | Segment information follows: Food Animal Corporate and Total (in thousands) As of and for the three months ended February 28, 2017 Product revenues to external customers $ 39,318 $ 34,646 $ — $ 73,964 Service revenues to external customers 3,631 10,790 — 14,421 Total revenues to external customers 42,949 45,436 — 88,385 Operating income (loss) 7,403 7,743 (795 ) 14,351 Total assets 183,419 215,243 108,636 507,298 As of and for the three months ended February 29, 2016 Product revenues to external customers $ 31,975 $ 32,402 $ — $ 64,377 Service revenues to external customers 2,735 9,613 — 12,348 Total revenues to external customers 34,710 42,015 — 76,725 Operating income (loss) 6,091 6,172 (1,009 ) 11,254 Total assets 130,077 189,191 112,973 432,241 Food Animal Corporate and Total (in thousands) For the nine months ended February 28, 2017 Product revenues to external customers $ 112,592 $ 110,578 $ — $ 223,170 Service revenues to external customers 10,475 29,102 — 39,577 Total revenues to external customers 123,067 139,680 — 262,747 Operating income (loss) 24,286 24,616 (2,957 ) 45,945 For the nine months ended February 29, 2016 Product revenues to external customers $ 98,708 $ 99,423 $ — $ 198,131 Service revenues to external customers 7,998 25,067 — 33,065 Total revenues to external customers 106,706 124,490 — 231,196 Operating income (loss) 22,216 21,328 (2,783 ) 40,761 (1) Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, current and deferred tax accounts and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 9 Months Ended |
Feb. 28, 2017 | |
Stock Option Activity | A summary of stock option activity during the nine months ended February 28, 2017 follows: Shares Weighted- Options outstanding June 1, 2016 2,081,000 $ 36.71 Granted 618,000 54.19 Exercised (542,000 ) 29.04 Forfeited (49,000 ) 42.72 Options outstanding February 28, 2017 2,108,000 43.66 |
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. FY2017 FY2016 Risk-free interest rate 1.2 % 1.2 % Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 35.2 % 33.3 % Expected option life 4.0 years 4.0 years |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Feb. 28, 2017 | May 31, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 33,375 | $ 29,501 |
Work-in-process | 5,588 | 4,498 |
Finished and purchased goods | 36,433 | 30,372 |
Inventories | $ 75,396 | $ 64,371 |
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 | 9 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
Earnings Per Share [Line Items] | ||||
Numerator for basic and diluted net income per share - Net income attributable to Neogen | $ 10,287 | $ 8,311 | $ 31,320 | $ 26,707 |
Denominator for basic net income per share - Weighted average shares | 38,059 | 37,473 | 37,829 | 37,358 |
Effect of dilutive stock options | 475 | 485 | 542 | 500 |
Denominator for diluted net income per share | 38,534 | 37,958 | 38,371 | 37,858 |
Net income attributable to Neogen per share: | ||||
Basic | $ 0.27 | $ 0.22 | $ 0.83 | $ 0.71 |
Diluted | $ 0.27 | $ 0.22 | $ 0.82 | $ 0.71 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
Feb. 28, 2017Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | May 31, 2016 | ||
Segment Reporting Information [Line Items] | ||||||
Product revenues to external customers | $ 73,964 | $ 64,377 | $ 223,170 | $ 198,131 | ||
Service revenues to external customers | 14,421 | 12,348 | 39,577 | 33,065 | ||
Total revenues to external customers | 88,385 | 76,725 | 262,747 | 231,196 | ||
Operating income (loss) | 14,351 | 11,254 | 45,945 | 40,761 | ||
Total assets | 507,298 | 432,241 | 507,298 | 432,241 | $ 451,715 | |
Operating Segments | Food Safety | ||||||
Segment Reporting Information [Line Items] | ||||||
Product revenues to external customers | 39,318 | 31,975 | 112,592 | 98,708 | ||
Service revenues to external customers | 3,631 | 2,735 | 10,475 | 7,998 | ||
Total revenues to external customers | 42,949 | 34,710 | 123,067 | 106,706 | ||
Operating income (loss) | 7,403 | 6,091 | 24,286 | 22,216 | ||
Total assets | 183,419 | 130,077 | 183,419 | 130,077 | ||
Operating Segments | Animal Safety | ||||||
Segment Reporting Information [Line Items] | ||||||
Product revenues to external customers | 34,646 | 32,402 | 110,578 | 99,423 | ||
Service revenues to external customers | 10,790 | 9,613 | 29,102 | 25,067 | ||
Total revenues to external customers | 45,436 | 42,015 | 139,680 | 124,490 | ||
Operating income (loss) | 7,743 | 6,172 | 24,616 | 21,328 | ||
Total assets | 215,243 | 189,191 | 215,243 | 189,191 | ||
Corporate and Eliminations | ||||||
Segment Reporting Information [Line Items] | ||||||
Operating income (loss) | [1] | (795) | (1,009) | (2,957) | (2,783) | |
Total assets | [1] | $ 108,636 | $ 112,973 | $ 108,636 | $ 112,973 | |
[1] | Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, current and deferred tax accounts and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. |
Equity Compensation Plans - Add
Equity Compensation Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | May 31, 2017 | May 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expense related to share based awards | $ 1,198 | $ 1,462 | $ 3,932 | $ 4,007 | ||
Weighted-average fair value per share of stock options granted | $ 13.11 | |||||
During fiscal 2017 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average fair value per share of stock options granted | $ 15.79 | |||||
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% | |||||
Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option vesting period | 3 years | |||||
Stock option contractual terms | 5 years | |||||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock option vesting period | 5 years | |||||
Stock option contractual terms | 10 years |
Stock Option Activity (Detail)
Stock Option Activity (Detail) | 9 Months Ended |
Feb. 28, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Shares Outstanding, Beginning Balance | shares | 2,081,000 |
Shares, Granted | shares | 618,000 |
Shares, Exercised | shares | (542,000) |
Shares, Forfeited | shares | (49,000) |
Shares Outstanding, Ending Balance | shares | 2,108,000 |
Weighted-Average Exercise Price, Beginning Balance | $ / shares | $ 36.71 |
Weighted-Average Exercise Price, Granted | $ / shares | 54.19 |
Weighted-Average Exercise Price, Exercised | $ / shares | 29.04 |
Weighted-Average Exercise Price, Forfeited | $ / shares | 42.72 |
Weighted-Average Exercise Price, Ending Balance | $ / shares | $ 43.66 |
Fair Value of Stock Options Gra
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions (Detail) | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
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 | 33.30% | |
Expected option life (in years) | 4 years | |
During fiscal 2017 | ||
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 | 35.20% | |
Expected option life (in years) | 4 years |
New Accounting Pronouncements -
New Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands | Feb. 28, 2017 | May 31, 2016 |
Current deferred tax assets | $ 1,747 | $ 1,775 |
Business and Product Line Acq31
Business and Product Line Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 27, 2016 | Dec. 01, 2016 | May 01, 2016 | Apr. 26, 2016 | Dec. 22, 2015 | Aug. 26, 2015 | Jun. 01, 2015 | Jul. 31, 2016 | May 31, 2016 |
Quat-Chem Ltd. | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration for purchase of business | $ 21,606 | ||||||||
Contingent consideration potential payment | 3,778 | ||||||||
Purchase price allocation for accounts receivable | 4,684 | ||||||||
Purchase price allocation for inventory | 1,243 | ||||||||
Purchase price allocation for land, property and equipment | 2,715 | ||||||||
Allocation of purchase price for contingent consideration potential payment | 1,105 | ||||||||
Purchase price allocation for intangible assets | 5,682 | ||||||||
Purchase price allocation for non-amortizable intangible assets | 1,637 | ||||||||
Purchase price allocation for accounts payable | 2,197 | ||||||||
Purchase price allocation for deferred tax liability | 1,133 | ||||||||
Purchase price allocation for other current liabilities | $ 604 | ||||||||
Quat-Chem Ltd. | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 5 years | ||||||||
Quat-Chem Ltd. | Maximum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 15 years | ||||||||
Rogama Industria e Comercio, Ltda. | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration for purchase of business | $ 12,423 | ||||||||
Contingent consideration potential payment | 2,069 | ||||||||
Purchase price allocation for accounts receivable | 1,863 | ||||||||
Purchase price allocation for inventory | 1,026 | ||||||||
Purchase price allocation for land, property and equipment | 1,840 | ||||||||
Allocation of purchase price for contingent consideration potential payment | 430 | ||||||||
Purchase price allocation for intangible assets | 3,252 | ||||||||
Purchase price allocation for current liabilities | 177 | ||||||||
Purchase price allocation for non-amortizable intangible assets | $ 591 | ||||||||
Rogama Industria e Comercio, Ltda. | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 5 years | ||||||||
Rogama Industria e Comercio, Ltda. | 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 | ||||||||
Contingent consideration potential payment | 102 | ||||||||
Purchase price allocation for accounts receivable | 43 | ||||||||
Purchase price allocation for inventory | 14 | ||||||||
Purchase price allocation for land, property and equipment | 141 | ||||||||
Allocation of purchase price for contingent consideration potential payment | 102 | ||||||||
Purchase price allocation for intangible assets | $ 345 | ||||||||
Cash paid for contingent consideration | $ 70 | ||||||||
Sterling Test House | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 5 years | ||||||||
Sterling Test House | Maximum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 15 years | ||||||||
Lab M Holdings | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration for purchase of business | $ 12,436 | ||||||||
Purchase price allocation for accounts receivable | 975 | ||||||||
Purchase price allocation for inventory | 1,169 | ||||||||
Purchase price allocation for land, property and equipment | 3,337 | ||||||||
Purchase price allocation for intangible assets | 3,611 | ||||||||
Purchase price allocation for cash | 285 | ||||||||
Purchase price allocation for other current assets | 309 | ||||||||
Purchase price allocation for current liabilities | 948 | ||||||||
Purchase price allocation for deferred tax liability | $ 784 | ||||||||
Lab M Holdings | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 5 years | ||||||||
Lab M Holdings | Maximum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 15 years | ||||||||
Virbac Corporation | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration for purchase of business | $ 3,525 | ||||||||
Contingent consideration potential payment | 300 | ||||||||
Purchase price allocation for inventory | 317 | ||||||||
Purchase price allocation for land, property and equipment | 60 | ||||||||
Purchase price allocation for intangible assets | 1,759 | ||||||||
Purchase price allocation for current liabilities | $ 300 | ||||||||
Purchase price allocation for contingent consideration | $ 300 | ||||||||
Virbac Corporation | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 5 years | ||||||||
Virbac Corporation | Maximum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 15 years | ||||||||
Deoxi Biotecnologia Ltd | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration for purchase of business | $ 1,549 | ||||||||
Contingent consideration potential payment | 2,552 | ||||||||
Purchase price allocation for accounts receivable | 132 | ||||||||
Purchase price allocation for inventory | 89 | ||||||||
Purchase price allocation for land, property and equipment | 232 | ||||||||
Allocation of purchase price for contingent consideration potential payment | 453 | ||||||||
Purchase price allocation for intangible assets | 350 | ||||||||
Purchase price allocation for other current assets | 9 | ||||||||
Purchase price allocation for current liabilities | $ 266 | ||||||||
Deoxi Biotecnologia Ltd | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 5 years | ||||||||
Deoxi Biotecnologia Ltd | Maximum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 10 years | ||||||||
Tetradyne LLC | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration for purchase of business | $ 24,086 | ||||||||
Purchase price allocation for accounts receivable | 1,629 | ||||||||
Purchase price allocation for inventory | 1,964 | ||||||||
Purchase price allocation for land, property and equipment | 1,625 | ||||||||
Purchase price allocation for intangible assets | 10,590 | ||||||||
Purchase price allocation for other current assets | 269 | ||||||||
Purchase price allocation for current liabilities | 868 | ||||||||
Purchase price allocation for long-term liabilities | $ 660 | ||||||||
Tetradyne LLC | Minimum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 5 years | ||||||||
Tetradyne LLC | Maximum | |||||||||
Business Acquisition [Line Items] | |||||||||
Finite lived intangible assets, useful life | 15 years | ||||||||
Trademarks | Virbac Corporation | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase price allocation for non-amortizable intangible assets | $ 200 | ||||||||
Trademarks | Deoxi Biotecnologia Ltd | |||||||||
Business Acquisition [Line Items] | |||||||||
Purchase price allocation for non-amortizable intangible assets | $ 193 |
Long Term Debt - Additional Inf
Long Term Debt - Additional Information (Detail) - USD ($) | Nov. 29, 2016 | Feb. 28, 2017 | May 31, 2017 | May 31, 2016 |
Debt Instrument [Line Items] | ||||
Unsecured revolving line of credit, total amount available | $ 12,000,000 | $ 15,000,000 | ||
Unsecured revolving line of credit, maturity date | Sep. 1, 2017 | Sep. 30, 2019 | ||
Unsecured revolving line of credit, interest terms | LIBOR plus 100 basis points | |||
Unsecured revolving line of credit, interest rate | 1.92% | |||
Unsecured revolving line of credit, balance outstanding | $ 0 | |||
Unsecured revolving line of credit, advances | $ 0 | |||
During fiscal 2017 | ||||
Debt Instrument [Line Items] | ||||
Unsecured revolving line of credit, advances | $ 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 ($) | 9 Months Ended | |
Feb. 28, 2017 | May 31, 2016 | |
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense, period of remediation, years | 5 years | |
Estimated liability costs of remediation | $ 916,000 | $ 916,000 |
Estimated liability, measurement period, years | 15 years | |
Estimated liability costs of remediation, current | $ 60,000 | $ 60,000 |
Minimum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | 47,000 | |
Maximum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | $ 57,000 |
Stock Purchase - Additional Inf
Stock Purchase - Additional Information (Detail) - shares | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | Feb. 28, 2017 | Dec. 31, 2008 | |
Stock Repurchase Program [Line Items] | ||||
Shares authorized to purchase | 1,125,000 | |||
Number of shares available to be repurchased | 1,012,974 | |||
Number of shares repurchased | 0 | |||
During fiscal 2017 | ||||
Stock Repurchase Program [Line Items] | ||||
Number of shares repurchased | 0 |