Document and Entity Information
Document and Entity Information | 3 Months Ended |
Aug. 31, 2017shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Aug. 31, 2017 |
Document Fiscal Year Focus | 2,018 |
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 | 38,233,260 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2017 | May 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 58,456 | $ 77,567 |
Marketable securities (at fair value, which approximates cost) | 101,534 | 66,068 |
Accounts receivable, less allowance of $1,900 and $2,000 | 66,341 | 68,576 |
Inventories | 73,413 | 73,144 |
Prepaid expenses and other current assets | 11,190 | 7,606 |
Total Current Assets | 310,934 | 292,961 |
Net Property and Equipment | 63,285 | 61,748 |
Other Assets | ||
Goodwill | 105,073 | 104,759 |
Other non-amortizable intangible assets | 14,346 | 14,323 |
Total Assets | 547,334 | 528,409 |
Current Liabilities | ||
Accounts payable | 16,665 | 16,244 |
Accrued compensation | 5,079 | 5,002 |
Income taxes | 6,032 | 936 |
Other accruals | 10,546 | 13,820 |
Total Current Liabilities | 38,322 | 36,002 |
Deferred Income Taxes | 16,917 | 17,048 |
Other Non-Current Liabilities | 4,842 | 3,602 |
Total Liabilities | 60,081 | 56,652 |
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, 38,233,260 and 38,199,367 shares issued and outstanding at August 31, 2017 and May 31, 2017, respectively | 6,117 | 6,112 |
Additional paid-in capital | 180,131 | 176,779 |
Accumulated other comprehensive loss | (7,000) | (7,203) |
Retained earnings | 307,773 | 295,926 |
Total Neogen Corporation Stockholders' Equity | 487,021 | 471,614 |
Non-controlling interest | 232 | 143 |
Total Equity | 487,253 | 471,757 |
Total Liabilities and Equity | 547,334 | 528,409 |
Customer-based intangibles | ||
Other Assets | ||
Amortizable intangible assets, net of accumulated amortization | 35,011 | 35,983 |
Other Intangible Assets | ||
Other Assets | ||
Amortizable intangible assets, net of accumulated amortization | $ 18,685 | $ 18,635 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Aug. 31, 2017 | May 31, 2017 |
Accounts receivable, allowance | $ 1,900 | $ 2,000 |
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 | 38,233,260 | 38,199,367 |
Common stock, shares outstanding | 38,233,260 | 38,199,367 |
Customer-based intangibles | ||
Accumulated Amortization | $ 21,931 | $ 20,846 |
Other Intangible Assets | ||
Accumulated Amortization | $ 10,167 | $ 9,931 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Revenues | ||
Product revenues | $ 80,567 | $ 72,245 |
Service revenues | 14,689 | 11,400 |
Total Revenues | 95,256 | 83,645 |
Cost of Revenues | ||
Cost of product revenues | 41,084 | 35,535 |
Cost of service revenues | 8,301 | 7,631 |
Total Cost of Revenues | 49,385 | 43,166 |
Gross Margin | 45,871 | 40,479 |
Operating Expenses | ||
Sales and marketing | 17,024 | 14,797 |
General and administrative | 9,325 | 8,262 |
Research and development | 3,098 | 2,678 |
Total Operating Expenses | 29,447 | 25,737 |
Operating Income | 16,424 | 14,742 |
Other Income | ||
Interest income | 369 | 123 |
Other income | 443 | 369 |
Total Other Income | 812 | 492 |
Income Before Taxes | 17,236 | 15,234 |
Provision for Income Taxes | 5,300 | 5,300 |
Net Income | 11,936 | 9,934 |
Net (Income) Attributable to Non-Controlling Interest | (22) | (53) |
Net Income Attributable to Neogen | $ 11,914 | $ 9,881 |
Net Income Attributable to Neogen Per Share | ||
Basic | $ 0.31 | $ 0.26 |
Diluted | $ 0.31 | $ 0.26 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Net income | $ 11,936 | $ 9,934 |
Other comprehensive income (loss), net of tax: currency translation adjustments | 203 | (2,578) |
Comprehensive income | 12,139 | 7,356 |
Comprehensive (income) attributable to non-controlling interest | (22) | (53) |
Comprehensive income attributable to Neogen Corporation | $ 12,117 | $ 7,303 |
Consolidated Statement of Equit
Consolidated Statement of Equity - 3 months ended Aug. 31, 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, 2017 | $ 471,757 | $ 6,112 | $ 176,779 | $ (7,203) | $ 295,926 | $ 143 |
Beginning Balance (in shares) at May. 31, 2017 | 38,199,367 | 38,199,000 | ||||
Issuance of shares under share-based compensation plan | $ 2,872 | $ 4 | 2,868 | |||
Issuance of shares under share-based compensation plan (in shares) | 26,000 | |||||
Issuance of shares under employee stock purchase plan | 485 | $ 1 | 484 | |||
Issuance of shares under employee stock purchase plan (in shares) | 8,000 | |||||
Conversion of minority interest purchase to retained earnings | (67) | 67 | ||||
Net income | 11,936 | 11,914 | 22 | |||
Other comprehensive income | 203 | 203 | ||||
Ending Balance at Aug. 31, 2017 | $ 487,253 | $ 6,117 | $ 180,131 | $ (7,000) | $ 307,773 | $ 232 |
Ending Balance (in shares) at Aug. 31, 2017 | 38,233,260 | 38,233,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2017 | Aug. 31, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 11,936 | $ 9,934 |
Adjustments to reconcile net income to net cash provided from operating activities: | ||
Depreciation and amortization | 3,993 | 3,476 |
Share-based compensation | 1,401 | 1,516 |
Excess income tax benefit from the exercise of stock options (see note 5) | (728) | |
Change in operating assets and liabilities: | ||
Accounts receivable | 2,227 | 7,684 |
Inventories | (276) | (5,910) |
Prepaid expenses and other current assets | (3,590) | 42 |
Accounts payable, accruals and other changes | 2,980 | 4,262 |
Net Cash From Operating Activities | 18,671 | 20,276 |
Cash Flows Used In Investing Activities | ||
Purchases of property, equipment and other non-current intangible assets | (4,415) | (3,446) |
Proceeds from the sale of marketable securities | 44,502 | 28,116 |
Purchases of marketable securities | (79,968) | (28,616) |
Net Cash Used In Investing Activities | (39,881) | (3,946) |
Cash Flows From Financing Activities | ||
Exercise of stock options | 1,956 | 4,053 |
Excess income tax benefit from the exercise of stock options (see note 5) | 728 | |
Net Cash From Financing Activities | 1,956 | 4,781 |
Effect of Exchange Rate on Cash | 143 | (181) |
Net Increase In Cash and Cash Equivalents | (19,111) | 20,930 |
Cash And Cash Equivalents At Beginning Of Period | 77,567 | 55,257 |
Cash And Cash Equivalents At End Of Period | $ 58,456 | $ 76,187 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Aug. 31, 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 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 month period ended August 31, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending May 31, 2018. For more complete financial information, these consolidated financial statements should be read in conjunction with the May 31, 2017 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, 2017. |
Inventories
Inventories | 3 Months Ended |
Aug. 31, 2017 | |
Inventories | 2. INVENTORIES Inventories are stated at the lower of cost, determined on the first-in, first-out method, or net realizable value. The components of inventories follow: August 31, May 31, 2017 2017 (in thousands) Raw materials $ 34,364 $ 33,190 Work-in-process 5,185 4,831 Finished and purchased goods 33,864 35,123 $ 73,413 $ 73,144 |
Net Income per Share
Net Income per Share | 3 Months Ended |
Aug. 31, 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 August 31, 2017 2016 (in thousands, except per share amounts) Numerator for basic and diluted net income per share: Net income attributable to Neogen $ 11,914 $ 9,881 Denominator for basic net income per share: Weighted average shares 38,211 37,615 Effect of dilutive stock options 465 550 Denominator for diluted net income per share 38,676 38,165 Net income attributable to Neogen per share: Basic $ 0.31 $ 0.26 Diluted $ 0.31 $ 0.26 |
Segment Information
Segment Information | 3 Months Ended |
Aug. 31, 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. Neogen’s international operations in the United Kingdom, Mexico, Brazil, China and India originally focused on the Company’s Food Safety products, and each of these units reports through the Food Safety segment. In recent years, these operations have expanded to offer the Company’s complete line of products and services, including those usually associated with the Animal Safety segment such as cleaners, disinfectants, rodenticides, insecticides, veterinary instruments and genomics services. These additional products and services are managed and directed by existing management, and are reported through the Food Safety segment. The accounting policies of each of the segments are the same as those described in Note 1. Segment information follows: Corporate and Food Animal Eliminations Safety Safety (1) Total (in thousands) As of and for the three months ended August 31, 2017 Product revenues to external customers $ 42,282 $ 38,285 $ — $ 80,567 Service revenues to external customers 4,452 10,237 — 14,689 Total revenues to external customers 46,734 48,522 — 95,256 Operating income (loss) 8,777 8,669 (1,022 ) 16,424 Total assets 194,857 209,404 143,073 547,334 As of and for the three months ended August 31, 2016 Product revenues to external customers $ 35,693 $ 36,552 $ — $ 72,245 Service revenues to external customers 3,464 7,936 — 11,400 Total revenues to external customers 39,157 44,488 — 83,645 Operating income (loss) 7,999 7,780 (1,037 ) 14,742 Total assets 143,990 210,176 114,449 468,615 (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 | 3 Months Ended |
Aug. 31, 2017 | |
Equity Compensation Plans | 5. EQUITY COMPENSATION PLANS Qualified and non-qualified options to purchase shares of common stock may be granted to directors, officers and employees of the 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 three months ended August 31, 2017 follows: Weighted- Average Shares Exercise Price Options outstanding June 1, 2017 2,031,000 $ 43.84 Granted 75,000 63.95 Exercised (46,000 ) 31.66 Forfeited — Options outstanding August 31, 2017 2,060,000 44.85 During the three month period ended August 31, 2017 and 2016, the Company recorded $1,401,000 and $1,516,000, respectively, of compensation expense related to its share-based awards. On June 1, 2017, the Company adopted ASU No. 2016-09, which simplifies the accounting for 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 capital pools. The guidance also allows for a policy election to account for forfeitures as they occur, rather than on an estimated basis, and requires that excess tax benefits be classified as an operating activity on the Statement of Cash Flows. The Company has elected to account for forfeitures as they occur. The adoption of this ASU reduced income tax expense by $396,000 in the first quarter of fiscal 2018. The weighted-average fair value per share of stock options granted during fiscal years 2018 and 2017, estimated on the date of grant using the Black-Scholes option pricing model, was $15.59 and $15.86, respectively. The fair value of stock options granted was estimated using the following weighted-average assumptions. FY2018 FY2017 Risk-free interest rate 1.6 % 1.2 % Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 27.2 % 35.2 % 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 recorded in administrative expense as of the date of purchase. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Aug. 31, 2017 | |
New Accounting Pronouncements | 6. NEW ACCOUNTING PRONOUNCEMENTS In May 2014, the FASB issued ASU No. 2014-09—Revenue from Contracts with Customers. The new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. In April 2016, the FASB issued Accounting Standards Update No. 2016-10—Revenue from Contracts with Customers (Topic 606), which amends and adds clarity to certain aspects of the guidance set forth in ASU 2014-09 related to identifying performance obligations and licensing. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The guidance permits two methods of adoption; a full retrospective method to each prior reporting period presented or a modified retrospective approach with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company has formed an internal team to implement this ASU and is currently identifying revenue streams and evaluating the potential impact of each stream on its consolidated financial statements. The Company currently expects to adopt using the modified retrospective approach. In February 2016, the FASB issued ASU No. 2016-02—Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessor have not significantly changed from previous U.S. GAAP. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. Modified retrospective application is permitted with certain practical expedients. Early adoption is permitted. The Company is in the process of evaluating its lessee and lessor arrangements to determine the impact of this amendment on its consolidated financial condition and results of operations. This evaluation includes a review of revenue through leasing arrangements as well as lease expenses, which are primarily through operating lease arrangements at most of the Company’s facilities. In March 2016, the FASB issued ASU No. 2016-09—Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to provide guidance that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016 with early adoption permitted. The Company adopted this standard effective June 1, 2017; this resulted in a reduction of federal income tax expense of $396,000 in the first quarter of fiscal 2018. The Company believes that tax benefits related to share-based payments will result in a lower effective tax rate in fiscal 2018 and could increase earnings per share by between one to three cents per quarter for the remainder of the fiscal year. In June 2016, the FASB issued ASU No. 2016-13—Measurement of Credit Losses on Financial Instruments, which changes how companies measure credit losses on most financial instruments measured at amortized cost and certain other instruments, such as loans, receivables and held-to-maturity debt securities. Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s contractual life. ASU 2016-13 is effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. The Company does not believe the adoption of this guidance will have an impact on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15—Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (FASB ASC) 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The Company has not yet adopted this update and is currently evaluating the impact of ASU No. 2016-15 on its consolidated financial statements. |
Business and Product Line Acqui
Business and Product Line Acquisitions | 3 Months Ended |
Aug. 31, 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 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 intangible assets of $1,637,000, intangible assets of $5,682,000 (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 continues to operate in its current location and is managed by Neogen Europe, reporting within the Food Safety segment. 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 $2,177,000, contingent consideration accrual of $430,000, non-current deferred tax liability of $1,307,000, non-amortizable intangible assets of $591,000, intangible assets of $3,252,000 (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 is managed by Neogen do Brasil, reporting within the Food Safety segment. Subsequent to the end of the quarter, on September 1, 2017, the Company acquired the assets of The University of Queensland Animal Genetics Laboratory (AGL), an animal genomics laboratory located near Brisbane, Australia. This acquisition is intended to accelerate the growth of the Company’s animal genomics business in Australia and New Zealand. Consideration for the purchase was $2,014,000 in cash. Due to the timing of the transaction, the preliminary purchase price allocation was not complete at the time of filing. |
Long Term Debt
Long Term Debt | 3 Months Ended |
Aug. 31, 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 2017 and there have been none thus far in fiscal 2018; there was no balance outstanding at August 31, 2017. Interest on any borrowings remained at LIBOR plus 100 basis points (rate under the terms of the agreement was 2.28% at August 31, 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 August 31, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Aug. 31, 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 $38,000 to $57,000 per year over the past five years. The Company’s estimated liability for these costs was $916,000 at August 31, 2017 and May 31, 2017, measured on an undiscounted basis over an estimated period of 15 years; $54,000 of the liability is recorded within current liabilities and the remainder is recorded within other non-current 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, 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 August 31, 2017, 1,012,974 shares were available to be repurchased under the program. There were no purchases in fiscal year 2017 and there have been none thus far in fiscal 2018. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Inventories | The components of inventories follow: August 31, May 31, 2017 2017 (in thousands) Raw materials $ 34,364 $ 33,190 Work-in-process 5,185 4,831 Finished and purchased goods 33,864 35,123 $ 73,413 $ 73,144 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Calculation of Net Income Per Share | The calculation of net income per share attributable to Neogen Corporation follows: Three Months Ended August 31, 2017 2016 (in thousands, except per share amounts) Numerator for basic and diluted net income per share: Net income attributable to Neogen $ 11,914 $ 9,881 Denominator for basic net income per share: Weighted average shares 38,211 37,615 Effect of dilutive stock options 465 550 Denominator for diluted net income per share 38,676 38,165 Net income attributable to Neogen per share: Basic $ 0.31 $ 0.26 Diluted $ 0.31 $ 0.26 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Aug. 31, 2017 | |
Segment Information | Segment information follows: Corporate and Food Animal Eliminations Safety Safety (1) Total (in thousands) As of and for the three months ended August 31, 2017 Product revenues to external customers $ 42,282 $ 38,285 $ — $ 80,567 Service revenues to external customers 4,452 10,237 — 14,689 Total revenues to external customers 46,734 48,522 — 95,256 Operating income (loss) 8,777 8,669 (1,022 ) 16,424 Total assets 194,857 209,404 143,073 547,334 As of and for the three months ended August 31, 2016 Product revenues to external customers $ 35,693 $ 36,552 $ — $ 72,245 Service revenues to external customers 3,464 7,936 — 11,400 Total revenues to external customers 39,157 44,488 — 83,645 Operating income (loss) 7,999 7,780 (1,037 ) 14,742 Total assets 143,990 210,176 114,449 468,615 (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) | 3 Months Ended |
Aug. 31, 2017 | |
Stock Option Activity | A summary of stock option activity during the three months ended August 31, 2017 follows: Weighted- Average Shares Exercise Price Options outstanding June 1, 2017 2,031,000 $ 43.84 Granted 75,000 63.95 Exercised (46,000 ) 31.66 Forfeited — Options outstanding August 31, 2017 2,060,000 44.85 |
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. FY2018 FY2017 Risk-free interest rate 1.6 % 1.2 % Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 27.2 % 35.2 % Expected option life 4.0 years 4.0 years |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Aug. 31, 2017 | May 31, 2017 |
Inventory [Line Items] | ||
Raw materials | $ 34,364 | $ 33,190 |
Work-in-process | 5,185 | 4,831 |
Finished and purchased goods | 33,864 | 35,123 |
Inventories | $ 73,413 | $ 73,144 |
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, 2017 | Aug. 31, 2016 | |
Earnings Per Share [Line Items] | ||
Numerator for basic and diluted net income per share - Net income attributable to Neogen | $ 11,914 | $ 9,881 |
Denominator for basic net income per share - Weighted average shares | 38,211 | 37,615 |
Effect of dilutive stock options | 465 | 550 |
Denominator for diluted net income per share | 38,676 | 38,165 |
Net income attributable to Neogen per share: | ||
Basic | $ 0.31 | $ 0.26 |
Diluted | $ 0.31 | $ 0.26 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended |
Aug. 31, 2017Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 31, 2017 | Aug. 31, 2016 | May 31, 2017 | ||
Segment Reporting Information [Line Items] | ||||
Product revenues to external customers | $ 80,567 | $ 72,245 | ||
Service revenues to external customers | 14,689 | 11,400 | ||
Total revenues to external customers | 95,256 | 83,645 | ||
Operating income (loss) | 16,424 | 14,742 | ||
Total assets | 547,334 | 468,615 | $ 528,409 | |
Operating Segments | Food Safety | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues to external customers | 42,282 | 35,693 | ||
Service revenues to external customers | 4,452 | 3,464 | ||
Total revenues to external customers | 46,734 | 39,157 | ||
Operating income (loss) | 8,777 | 7,999 | ||
Total assets | 194,857 | 143,990 | ||
Operating Segments | Animal Safety | ||||
Segment Reporting Information [Line Items] | ||||
Product revenues to external customers | 38,285 | 36,552 | ||
Service revenues to external customers | 10,237 | 7,936 | ||
Total revenues to external customers | 48,522 | 44,488 | ||
Operating income (loss) | 8,669 | 7,780 | ||
Total assets | 209,404 | 210,176 | ||
Corporate and Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | [1] | (1,022) | (1,037) | |
Total assets | [1] | $ 143,073 | $ 114,449 | |
[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 ($) | 3 Months Ended | 12 Months Ended | ||
Aug. 31, 2017 | Aug. 31, 2016 | May 31, 2018 | May 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation expense related to share based awards | $ 1,401,000 | $ 1,516,000 | ||
Weighted-average fair value per share of stock options granted | $ 15.86 | |||
During fiscal 2018 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted-average fair value per share of stock options granted | $ 15.59 | |||
U.S. | ASU No. 2016-09 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Decrease in income tax expense | $ (396,000) | |||
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) | 3 Months Ended |
Aug. 31, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Shares Outstanding, Beginning Balance | shares | 2,031,000 |
Shares, Granted | shares | 75,000 |
Shares, Exercised | shares | (46,000) |
Shares, Forfeited | shares | 0 |
Shares Outstanding, Ending Balance | shares | 2,060,000 |
Weighted-Average Exercise Price, Beginning Balance | $ / shares | $ 43.84 |
Weighted-Average Exercise Price, Granted | $ / shares | 63.95 |
Weighted-Average Exercise Price, Exercised | $ / shares | 31.66 |
Weighted-Average Exercise Price, Forfeited | $ / shares | 0 |
Weighted-Average Exercise Price, Ending Balance | $ / shares | $ 44.85 |
Fair Value of Stock Options Gra
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions (Detail) | 12 Months Ended | |
May 31, 2018 | May 31, 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 | |
During fiscal 2018 | ||
Schedule of Weighted Average Assumptions for Fair Values of Stock Options [Line Items] | ||
Risk-free interest rate | 1.60% | |
Expected dividend yield | 0.00% | |
Expected stock price volatility | 27.20% | |
Expected option life (in years) | 4 years |
New Accounting Pronouncements -
New Accounting Pronouncements - Additional Information (Detail) - ASU No. 2016-09 | 3 Months Ended |
Aug. 31, 2017USD ($)$ / shares | |
U.S. | |
Decrease in income tax expense | $ | $ (396,000) |
Minimum | |
New Accounting Pronouncement, Effect of Change on Basic Earnings Per Share | $ 0.01 |
Maximum | |
New Accounting Pronouncement, Effect of Change on Basic Earnings Per Share | $ 0.03 |
Business and Product Line Acq30
Business and Product Line Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 01, 2017 | Dec. 27, 2016 | Dec. 01, 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 | ||
Purchase price allocation for accounts payable | 2,197 | ||
Purchase price allocation for deferred tax liability | 1,133 | ||
Allocation of purchase price for contingent consideration potential payment | 1,105 | ||
Purchase price allocation for other current liabilities | 604 | ||
Purchase price allocation for non-amortizable intangible assets | 1,637 | ||
Purchase price allocation for intangible assets | $ 5,682 | ||
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 non-amortizable intangible assets | 591 | ||
Purchase price allocation for intangible assets | 3,252 | ||
Purchase price allocation for current liabilities | 2,177 | ||
Purchase price allocation for Non-current deferred tax liability | $ 1,307 | ||
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 | ||
The University of Queensland Animal Genetics Laboratory | Subsequent Event | |||
Business Acquisition [Line Items] | |||
Cash consideration for purchase of business | $ 2,014 |
Long Term Debt - Additional Inf
Long Term Debt - Additional Information (Detail) - USD ($) | Nov. 29, 2016 | Aug. 31, 2017 | May 31, 2018 | May 31, 2017 |
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 | 2.28% | |||
Unsecured revolving line of credit, balance outstanding | $ 0 | |||
Unsecured revolving line of credit, advances | $ 0 | |||
During fiscal 2018 | ||||
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 ($) | 3 Months Ended | |
Aug. 31, 2017 | May 31, 2017 | |
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 | $ 54,000 | $ 54,000 |
Minimum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | 38,000 | |
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, 2018 | May 31, 2017 | Aug. 31, 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 2018 | ||||
Stock Repurchase Program [Line Items] | ||||
Number of shares repurchased | 0 |