Document and Entity Information
Document and Entity Information | 6 Months Ended |
Nov. 30, 2018shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Nov. 30, 2018 |
Document Fiscal Year Focus | 2,019 |
Document Fiscal Period Focus | Q2 |
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 | 52,081,876 |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Nov. 30, 2018 | May 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 101,585 | $ 83,074 |
Marketable securities (at fair value, which approximates cost) | 139,385 | 127,736 |
Accounts receivable, less allowance of $1,700 and $1,550 | 82,282 | 79,086 |
Inventories | 79,473 | 76,005 |
Prepaid expenses and other current assets | 11,569 | 9,888 |
Total Current Assets | 414,294 | 375,789 |
Net Property and Equipment | 73,910 | 73,069 |
Other Assets | ||
Goodwill | 103,309 | 99,558 |
Other non-amortizable intangible assets | 15,423 | 14,783 |
Total Assets | 660,492 | 618,009 |
Current Liabilities | ||
Accounts payable | 20,555 | 20,750 |
Accrued compensation | 5,216 | 6,065 |
Income taxes | 1,533 | 165 |
Other accruals | 11,456 | 11,708 |
Total Current Liabilities | 38,760 | 38,688 |
Deferred Income Taxes | 14,144 | 14,103 |
Other Non-Current Liabilities | 5,514 | 5,043 |
Total Liabilities | 58,418 | 57,834 |
Commitments and Contingencies (Note 8) | ||
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, 52,081,876 and 51,735,732 shares issued and outstanding at November 30, 2018 and May 31, 2018, respectively | 8,334 | 8,278 |
Additional paid-in capital | 215,615 | 202,572 |
Accumulated other comprehensive loss | (12,234) | (9,746) |
Retained earnings | 390,359 | 359,071 |
Total Stockholders' Equity | 602,074 | 560,175 |
Total Liabilities and Equity | 660,492 | 618,009 |
Customer-based intangibles | ||
Other Assets | ||
Amortizable intangible assets, net of accumulated amortization | 30,022 | 31,841 |
Other Intangible Assets | ||
Other Assets | ||
Amortizable intangible assets, net of accumulated amortization | $ 23,534 | $ 22,969 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands | Nov. 30, 2018 | May 31, 2018 |
Accounts receivable, allowance | $ 1,700 | $ 1,550 |
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 | 52,081,876 | 51,735,732 |
Common stock, shares outstanding | 52,081,876 | 51,735,732 |
Customer-based intangibles | ||
Accumulated Amortization | $ 26,292 | $ 24,579 |
Other Intangible Assets | ||
Accumulated Amortization | $ 11,440 | $ 12,470 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | |
Revenues | ||||
Total revenues | $ 107,098 | $ 100,698 | $ 206,724 | $ 194,907 |
Cost of revenues | ||||
Total Cost of Revenues | 57,065 | 52,449 | 109,962 | 101,734 |
Gross Margin | 50,033 | 48,249 | 96,762 | 93,173 |
Operating Expenses | ||||
Sales and marketing | 18,499 | 16,793 | 35,732 | 32,869 |
General and administrative | 10,121 | 10,491 | 20,319 | 19,817 |
Research and development | 3,167 | 2,967 | 5,986 | 6,065 |
Total Operating Expenses | 31,787 | 30,251 | 62,037 | 58,751 |
Operating Income | 18,246 | 17,998 | 34,725 | 34,422 |
Other Income | ||||
Interest income | 1,028 | 429 | 1,955 | 798 |
Other income | 427 | 626 | 158 | 1,069 |
Total Other Income | 1,455 | 1,055 | 2,113 | 1,867 |
Income Before Taxes | 19,701 | 19,053 | 36,838 | 36,289 |
Provision for Income Taxes | 3,650 | 1,900 | 5,550 | 7,200 |
Net Income | 16,051 | 17,153 | 31,288 | 29,089 |
Net (Income) Attributable to Non-Controlling Interest | (53) | (75) | ||
Net Income Attributable to Neogen | $ 16,051 | $ 17,100 | $ 31,288 | $ 29,014 |
Net Income Attributable to Neogen Per Share | ||||
Basic | $ 0.31 | $ 0.33 | $ 0.60 | $ 0.57 |
Diluted | $ 0.31 | $ 0.33 | $ 0.60 | $ 0.56 |
Product Revenues | ||||
Revenues | ||||
Total revenues | $ 89,562 | $ 84,471 | $ 172,522 | $ 164,016 |
Cost of revenues | ||||
Total Cost of Revenues | 47,305 | 43,252 | 90,255 | 84,236 |
Service Revenues | ||||
Revenues | ||||
Total revenues | 17,536 | 16,227 | 34,202 | 30,891 |
Cost of revenues | ||||
Total Cost of Revenues | $ 9,760 | $ 9,197 | $ 19,707 | $ 17,498 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | |
Net Income | $ 16,051 | $ 17,153 | $ 31,288 | $ 29,089 |
Other comprehensive income (loss), net of tax: currency translation adjustments | 290 | 534 | (2,488) | 737 |
Comprehensive income | 16,341 | 17,687 | 28,800 | 29,826 |
Comprehensive (income) attributable to non-controlling interest | (53) | (75) | ||
Comprehensive income attributable to Neogen Corporation | $ 16,341 | $ 17,634 | $ 28,800 | $ 29,751 |
Consolidated Statement of Equit
Consolidated Statement of Equity - 6 months ended Nov. 30, 2018 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Beginning Balance at May. 31, 2018 | $ 560,175 | $ 8,278 | $ 202,572 | $ (9,746) | $ 359,071 |
Beginning Balance (in shares) at May. 31, 2018 | 51,735,732 | 51,736,000 | |||
Issuance of shares under share-based compensation plan | $ 12,580 | $ 54 | 12,526 | ||
Issuance of shares under share-based compensation plan (in shares) | 338,000 | ||||
Issuance of shares under employee stock purchase plan | 519 | $ 2 | 517 | ||
Issuance of shares under employee stock purchase plan (in shares) | 8,000 | ||||
Net Income | 31,288 | 31,288 | |||
Other comprehensive (loss) | (2,488) | (2,488) | |||
Ending Balance at Nov. 30, 2018 | $ 602,074 | $ 8,334 | $ 215,615 | $ (12,234) | $ 390,359 |
Ending Balance (in shares) at Nov. 30, 2018 | 52,081,876 | 52,082,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Nov. 30, 2018 | Nov. 30, 2017 | |
Cash Flows From Operating Activities | ||
Net Income | $ 31,288 | $ 29,089 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 8,597 | 8,268 |
Share-based compensation | 2,831 | 2,666 |
Change in operating assets and liabilities, net of business acquisitions: | ||
Accounts receivable | (3,615) | (5,859) |
Inventories | (3,787) | (218) |
Prepaid expenses and other current assets | (2,025) | (7,916) |
Accounts payable, accruals and other changes | (706) | 1,377 |
Net Cash From Operating Activities | 32,583 | 27,407 |
Cash Flows From Investing Activities | ||
Purchases of property, equipment and other non-current intangible assets | (6,720) | (10,409) |
Proceeds from the sale of marketable securities | 179,839 | 123,601 |
Purchases of marketable securities | (191,488) | (168,943) |
Business acquisitions, net of cash acquired | (4,903) | (468) |
Net From Investing Activities | (23,272) | (56,219) |
Cash Flows From Financing Activities | ||
Exercise of stock options and issuance of employee stock purchase plan shares | 10,268 | 16,395 |
Net Cash From Financing Activities | 10,268 | 16,395 |
Effect of Exchange Rate on Cash | (1,068) | (725) |
Net Increase (decrease) In Cash and Cash Equivalents | 18,511 | (13,142) |
Cash and Cash Equivalents, Beginning of Period | 83,074 | 77,567 |
Cash and Cash Equivalents, End of Period | $ 101,585 | $ 64,425 |
Accounting Policies
Accounting Policies | 6 Months Ended |
Nov. 30, 2018 | |
Accounting Policies | 1. ACCOUNTING POLICIES BASIS OF PRESENTATION AND CONSOLIDATION The accompanying unaudited consolidated financial statements include the accounts of Neogen Corporation (“Neogen” or the “Company”) and its wholly owned subsidiaries and 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. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included in the accompanying unaudited consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the six-month 10-K Share and per share amounts reflect the December 29, 2017 4-for-3 Recently Adopted Accounting Standards Revenue Recognition On June 1, 2018, we adopted ASU No. 2014-09—Revenue Classification of Cash Receipts and Payments In August 2016, the FASB issued ASU No. 2016-15—Classification 2016-15 2016-15 Recent Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued ASU No. 2016-02—Leases right-of-use Financial Instruments- Credit Losses In June 2016, the FASB issued ASU No. 2016-13—Measurement held-to-maturity 2016-13 Comprehensive Income Comprehensive income represents net income and any revenues, expenses, gains and losses that, under U.S. generally accepted accounting principles, are excluded from net income and recognized directly as a component of equity. Accumulated other comprehensive income (loss) consists solely of foreign currency translation adjustments. Fair Value of Financial Instruments The carrying amounts of our financial instruments other than cash equivalents and marketable securities, which include accounts receivable and accounts payable, approximate fair value based on either their short maturity or current terms for similar instruments. Fair value measurements are determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. We utilize a fair value hierarchy based upon the observability of inputs used in valuation techniques as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Cash and Cash Equivalents Cash and cash equivalents consist of bank demand accounts, savings deposits, certificates of deposit and commercial paper with original maturities of 90 days or less. The carrying value of these assets approximates fair value due to the short maturity of these instruments and meets the Level 1 criteria. Marketable Securities The Company has marketable securities held by banks or broker-dealers at November 30, 2018, consisting of short-term domestic certificates of deposit and commercial paper rated at least A-2/P-2 ESTIMATES AND ASSUMPTIONS The preparation of these financial statements requires that management make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates the estimates, including, but not limited to, variable consideration related to revenue recognition, allowances for doubtful accounts, the market value of, and demand for, inventories, stock-based compensation, provision for income taxes and related balance sheet accounts, accruals, goodwill and other intangible assets. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K There were no significant changes to the contractual obligations or contingent liabilities and commitments disclosed in our Annual Report on Form 10-K Accounts Receivable Allowance Management attempts to minimize credit risk by reviewing customers’ credit history before extending credit and by monitoring credit exposure on a regular basis. An allowance for doubtful accounts receivable is established based upon factors surrounding the credit risk of specific customers, historical trends and other information. Collateral or other security is generally not required for accounts receivable. Once a receivable balance has been determined to be uncollectible, that amount is charged against the allowance for doubtful accounts. Inventory The reserve for obsolete and slow-moving inventory is reviewed at least quarterly based on an analysis of the inventory, considering the current condition of the asset as well as other known facts and future plans. The reserve required to record inventory at lower of cost or net realizable value is adjusted as conditions change. Product obsolescence may be caused by shelf-life expiration, discontinuance of a product line, replacement products in the marketplace or other competitive situations. Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses after amounts are allocated to other identifiable intangible assets. Other intangible assets include customer relationships, trademarks, licenses, trade names, covenants not-to-compete non-amortizable Long Lived Assets Management reviews the carrying values of its long-lived assets to be held and used, including definite-lived intangible assets, for possible impairment whenever events or changes in business conditions warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated separately identifiable undiscounted cash flows over the remaining useful life of the asset indicate that the carrying amount of the asset may not be recoverable. In such an event, fair value is determined using discounted cash flows and, if lower than the carrying value, impairment is recognized through a charge to operations. Equity Compensation Plans Share options awarded to employees and shares of stock awarded to employees under certain stock purchase plans are recognized as compensation expense based on their fair value at grant date. The fair market value of options granted under the Company stock option plans was estimated on the date of grant using the Black-Scholes option-pricing model with assumptions for inputs such as interest rates, expected dividends, volatility measures and specific employee exercise behavior patterns based on statistical data. Some of the inputs used are not market-observable and have to be estimated or derived from available data. Use of different estimates would produce different option values, which in turn would result in higher or lower compensation expense recognized. To value options, several recognized valuation models exist. None of these models can be singled out as being the best or most correct one. The model applied by us can handle most of the specific features included in the options granted, which is the reason for its use. If a different model were used, the option values could differ despite using the same inputs. Accordingly, using different assumptions coupled with using a different valuation model could have a significant impact on the fair value of employee stock options. Fair value could be either higher or lower than the number provided by the model applied and the inputs used. Further information on our equity compensation plans, including inputs used to determine the fair value of options, is disclosed in Note 5 to the unaudited consolidated financial statements. Income Taxes We account for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and for tax credit carryforwards and are measured using the enacted tax rates in effect for the years in which the differences are expected to reverse. Deferred income tax expense represents the change in net deferred income tax assets and liabilities during the period. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the Tax Act) was signed into law making significant changes to the Internal Revenue Code. Changes include a federal corporate tax rate reduction from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time one-time Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09—Revenue No. 2016-10— 2014-09 Prior to the adoption, we identified all revenue streams at each significant subsidiary and reviewed contracts to evaluate the impact of adopting the new standard on our revenue recognition policies, procedures and control framework and ultimately on our consolidated financial statements and related disclosures. In our review of contracts in each revenue stream, we noted no material impact in the implementation of the standard. We determined the impact of adopting the standard on our control framework and noted minimal, insignificant changes to our system and other controls processes. We derive revenue from two primary sources — product revenue and service revenue. Product revenue consists primarily of shipments of: • Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; • Consumable products marketed to veterinarians and animal health product distributors; and • Rodenticides, disinfectants and insecticides to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities. Service revenue consists primarily of: • Genomic identification and related interpretive bioinformatic services; and • Other commercial laboratory services. Revenues for our genomics and commercial laboratory services are recognized and invoiced when the applicable laboratory service is performed and the results are conveyed to the customer. Under Topic 606, the Company determines the amount of revenue to be recognized through application of the following steps: • Identification of the contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies the performance obligations. Essentially all our revenue is generated through contracts with our customers. A performance obligation is a promise in a contract to transfer a product or service to a customer. We generally recognize revenue at a point in time when all our performance obligations under the terms of a contract are satisfied. With the adoption of Topic 606, revenue is recognized upon transfer of control of promised products and services in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met. In certain situations, we provide rebates, marketing support, credits or incentives to selected customers, which are accounted for as variable consideration when estimating the amount of revenue to recognize on a contract. Variable consideration reduces the amount of revenue that is recognized. These variable consideration estimates are updated at the end of each reporting period based on information currently available. The performance obligations in our contracts are generally satisfied well within one year of the contract inception. In such cases, we have elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component. We have elected to utilize the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred because the amortization period for the prepaid costs that would otherwise have been deferred and amortized is one year or less. The Company accounts for shipping and handling for products as a fulfillment activity when goods are shipped. Revenue is recognized net of any tax collected from customers; the taxes are subsequently remitted to governmental authorities. The Company’s terms and conditions of sale generally do not provide for returns of product or reperformance of service except in the case of quality or warranty issues. These situations are infrequent; due to immateriality of the amount, warranty claims are recorded in the period incurred. The following table presents disaggregated revenue by major product and service categories for the three and six months ended November 30, 2018 and 2017: Three Months Ended Six Months Ended 2018 2017 2018 2017 (in thousands) (in thousands) Food Safety Natural Toxins, Allergens & Drug Residues $ 20,571 $ 18,989 $ 39,409 $ 38,153 Bacterial & General Sanitation 10,822 9,324 21,288 18,443 Culture Media & Other 12,191 11,041 24,408 21,173 Rodenticides, Insecticides & Disinfectants 5,943 6,126 12,569 10,817 Genomics Services 4,223 3,726 8,259 6,911 Animal Safety $ 53,750 $ 49,206 $ 105,933 $ 95,497 Life Sciences $ 1,891 $ 2,394 $ 3,971 $ 4,820 Veterinary Instruments & Disposables 11,683 11,687 22,087 22,174 Animal Care & Other 9,064 8,237 15,617 15,649 Rodenticides, Insecticides & Disinfectants 18,673 17,786 35,664 35,167 Genomics Services 12,037 11,388 23,452 21,600 $ 53,348 $ 51,492 $ 100,791 $ 99,410 Total Revenues $ 107,098 $ 100,698 $ 206,724 $ 194,907 Restatement of Previously Issued Financial Statements The Company has historically classified certain variable consideration components resulting from volume rebates, distributor support, and other marketing discounts as cost of product revenues or sales and marketing expense in our consolidated financial statements of income. These amounts should have been classified as contra revenue in product or service revenues. The Company had determined in prior periods that the misstatements were clearly immaterial, individually and in the aggregate, to each of the reporting periods affected. The Company began properly classifying these items as contra revenues beginning in the three-month period ended August 31, 2018, the first quarter of the Company’s current fiscal year, and has revised the prior year’s quarter and year-to-date The effects of the revisions on the line items within our unaudited consolidated statements of income for the three and six months ended November 30, 2017 are as follows: Three Months Ended Six Months Ended As Adjustments As Revised As Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 85,590 $ (1,119 ) $ 84,471 $ 166,157 $ (2,141 ) $ 164,016 Service revenues 16,227 — 16,227 30,916 (25 ) 30,891 Total revenues 101,817 (1,119 ) 100,698 197,073 (2,166 ) 194,907 Cost of revenues Cost of product revenues 43,349 (97 ) 43,252 84,433 (197 ) 84,236 Cost of service revenues 9,197 — 9,197 17,498 — 17,498 Total cost of revenues 52,546 (97 ) 52,449 101,931 (197 ) 101,734 Gross margin 49,271 (1,022 ) 48,249 95,142 (1,969 ) 93,173 Operating expenses Sales and marketing 17,815 (1,022 ) 16,793 34,838 (1,969 ) 32,869 Total operating expenses 31,273 (1,022 ) 30,251 60,720 (1,969 ) 58,751 Operating income 17,998 — 17,998 34,422 — 34,422 Presented below are the effects of the revisions on the line items within the previously issued unaudited consolidated statements of income for the three and nine months ended February 28, 2018 and the consolidated statements of income for the years ended May 31, 2018 and 2017. Revised consolidated statements of income related to these periods will be presented in the Forms 10-Q 10-K Three Months Ended February 28, 2018 Nine Months Ended February 28, 2018 As Adjustments As Revised As Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 78,142 $ (958 ) $ 77,184 $ 244,298 $ (3,098 ) $ 241,200 Service revenues 17,750 (31 ) 17,719 48,667 (56 ) 48,611 Total revenues 95,892 (989 ) 94,903 292,965 (3,154 ) 289,811 Cost of revenues Cost of product revenues 40,352 (69 ) 40,283 124,785 (265 ) 124,520 Cost of service revenues 10,019 — 10,019 27,517 — 27,517 Total cost of revenues 50,371 (69 ) 50,302 152,302 (265 ) 152,037 Gross margin 45,521 (920 ) 44,601 140,663 (2,889 ) 137,774 Operating expenses Sales and marketing 17,492 (920 ) 16,572 52,331 (2,889 ) 49,442 Total operating expenses 29,608 (920 ) 28,688 90,328 (2,889 ) 87,439 Operating income 15,913 — 15,913 50,335 — 50,335 Year Ended Year Ended May 31, 2018 May 31, 2017 As Adjustments As As Adjustments As (in thousands) (in thousands) Revenues Product revenues $ 335,554 $ (4,266 ) $ 331,288 $ 306,512 $ (3,390 ) $ 303,122 Service revenues 66,698 (56 ) 66,642 55,082 73 55,155 Total revenues 402,252 (4,322 ) 397,930 361,594 (3,317 ) 358,277 Cost of revenues Cost of product revenues 174,067 (342 ) 173,725 156,568 (273 ) 156,295 Cost of service revenues 37,933 — 37,933 33,058 — 33,058 Total cost of revenues 212,000 (342 ) 211,658 189,626 (273 ) 189,353 Gross margin 190,252 (3,980 ) 186,272 171,968 (3,044 ) 168,924 Operating expenses Sales and marketing 70,909 (3,980 ) 66,929 62,424 (3,044 ) 59,380 Total operating expenses 120,058 (3,980 ) 116,078 107,023 (3,044 ) 103,979 Operating income 70,194 — 70,194 64,945 — 64,945 The revisions had no impact on our audited consolidated balance sheets as of May 31, 2018 and 2017 and no impact on our unaudited consolidated statements of equity or unaudited consolidated statements of cash flows for the three and six months ended November 30, 2017 and the three and nine months ended February 28, 2018. |
Inventories
Inventories | 6 Months Ended |
Nov. 30, 2018 | |
Inventories | 2. INVENTORIES Inventories are stated at the lower of cost, determined by the first-in, first-out November 30, May 31, (in thousands) Raw materials $ 36,563 $ 36,702 Work-in-process 7,601 5,993 Finished and purchased goods 35,309 33,310 $ 79,473 $ 76,005 |
Net Income per Share
Net Income per Share | 6 Months Ended |
Nov. 30, 2018 | |
Net Income per Share | 3. NET INCOME PER SHARE The calculation of net income per share attributable to Neogen Corporation follows: Three Months Ended Six Months Ended November 30, November 30, 2018 2017 2018 2017 (in thousands, except per share amounts) Numerator for basic and diluted net income per share: Net income attributable to Neogen $ 16,051 $ 17,100 $ 31,288 $ 29,014 Denominator for basic net income per share: Weighted average shares 52,019 51,264 51,820 51,109 Effect of dilutive stock options 572 697 721 669 Denominator for diluted net income per share 52,591 51,961 52,541 51,778 Net income attributable to Neogen per share: Basic $ 0.31 $ 0.33 $ 0.60 $ 0.57 Diluted $ 0.31 $ 0.33 $ 0.60 $ 0.56 |
Segment Information and Geograp
Segment Information and Geographical Data | 6 Months Ended |
Nov. 30, 2018 | |
Segment Information and Geographical Data | 4. SEGMENT INFORMATION AND GEOGRAPHIC DATA We have 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, 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. Our 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 our 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: Food Animal Corporate and Total (in thousands) As of and for the three months ended November 30, 2018 Product revenues to external customers $ 48,256 $ 41,306 $ — $ 89,562 Service revenues to external customers 5,494 12,042 — 17,536 Total revenues to external customers 53,750 53,348 — 107,098 Operating income (loss) 10,342 9,057 (1,153 ) 18,246 Total assets 201,291 218,231 240,970 660,492 As of and for the three months ended November 30, 2017—Revised (2) Product revenues to external customers $ 44,367 $ 40,104 $ — $ 84,471 Service revenues to external customers 4,839 11,388 — 16,227 Total revenues to external customers 49,206 51,492 — 100,698 Operating income (loss) 8,668 10,529 (1,199 ) 17,998 Total assets 175,836 215,099 190,093 581,028 (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. (2) Segment revenues for the three months ended November 30, 2017 have been revised as discussed in Note 1. For the three months ended November 30, 2017, product revenues were reduced by $354,000 in the Food Safety segment and $765,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and in the Animal Safety segment. Food Animal Corporate and Total (in thousands) For the six months ended November 30, 2018 Product revenues to external customers $ 95,189 $ 77,333 $ — $ 172,522 Service revenues to external customers 10,744 23,458 — 34,202 Total revenues to external customers 105,933 100,791 — 206,724 Operating income (loss) 21,215 15,763 (2,253 ) 34,725 For the six months ended November 30, 2017—Revised (2) Product revenues to external customers $ 86,206 $ 77,810 $ — $ 164,016 Service revenues to external customers 9,291 21,600 — 30,891 Total revenues to external customers 95,497 99,410 — 194,907 Operating income (loss) 17,446 19,198 (2,222 ) 34,422 (1) Includes the elimination of intersegment transactions. (2) Segment revenues for the six months ended November 30, 2017 have been revised as discussed in Note 1. For the six months ended November 30, 2017, product revenues were reduced by $798,000 in the Food Safety segment and $1,343,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and reduced by $25,000 in the Animal Safety segment. The following table presents the Company’s revenue disaggregated by geographic location: Three Months ended Six Months Ended November 30, November 30, 2018 2017 2018 2017 (in thousands) (in thousands) Revenues by Geographic Location Domestic $ 65,033 $ 62,452 $ 124,879 $ 122,588 International 42,065 38,246 81,845 72,319 Total revenue 107,098 100,698 206,724 194,907 |
Equity Compensation Plans
Equity Compensation Plans | 6 Months Ended |
Nov. 30, 2018 | |
Equity Compensation Plans | 5. EQUITY COMPENSATION PLANS Qualified and non-qualified Company under the terms of our 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 10 years. A summary of stock option activity during the six months ended November 30, 2018 follows: Shares Weighted- Options outstanding June 1, 2018 2,497,124 $ 42.63 Granted 525,750 62.93 Exercised (340,023 ) 29.49 Forfeited (91,620 ) 45.87 Options outstanding November 30, 2018 2,591,231 48.40 During the three and six month periods ended November 30, 2018 and 2017, the Company recorded $1,400,000 and $1,264,000 and $2,831,000 and $2,666,000, respectively, of compensation expense related to its share-based awards. The weighted-average fair value per share of stock options granted during fiscal year 2018 and fiscal 2019, estimated on the date of grant using the Black-Scholes option pricing model, was $14.47 and $14.91, respectively. The fair value of stock options granted was estimated using the following weighted-average assumptions. FY 2019 FY 2018 Risk-free interest rate 2.6 % 1.6 % Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 27.0 % 27.2 % Expected option life 3.5 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. |
Business and Product Line Acqui
Business and Product Line Acquisitions | 6 Months Ended |
Nov. 30, 2018 | |
Business and Product Line Acquisitions | 6. 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 September 1, 2017, the Company acquired the assets of The University of Queensland Animal Genetics Laboratory, 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 $2,063,000; $468,000 was paid in cash on the acquisition date with the remainder due in annual installments over the next five years. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included inventory of $19,000, equipment of $419,000, non-current 5-15 (non-deductible On August 1, 2018, the Company acquired the stock of Clarus Labs, Inc., a manufacturer of water testing products. Neogen has distributed Clarus’ Colitag water test to the food and beverage industries since 2004 and this acquisition gives the Company access to sell this product to new markets. Consideration for the purchase was $4,204,000 in cash and approximately $1.3 million of contingent consideration, due at the end of each of the first five years, based on an excess net sales formula. The preliminary purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included inventory of $32,000, machinery and equipment of $120,000, accounts payable of $53,000, contingent consideration accrual of $1,256,000, non-current non-amortizable 5-15 (non-deductible measurements. Manufacturing of these products was moved to the Company’s Lansing, Michigan location in October, reporting within the Food Safety segment. On September 4, 2018, the Company acquired the assets of Livestock Genetic Services, LLC, a Virginia-based company that specializes in genetic evaluations and data management for cattle breeding organizations. Livestock Genetic Services has been a long-time strategic partner of Neogen and the acquisition will enhance the Company’s in-house 5-15 |
Long Term Debt
Long Term Debt | 6 Months Ended |
Nov. 30, 2018 | |
Long Term Debt | 7. LONG TERM DEBT We have a financing agreement with a bank providing for a $15,000,000 unsecured revolving line of credit, which was amended on November 30, 2018 to extend the maturity from September 30, 2019 to September 30, 2021. There were no advances against the line of credit during fiscal 2018 and there have been none thus far in fiscal 2019; there was no balance outstanding at November 30, 2018. Interest on any borrowings remained at LIBOR plus 100 basis points (rate under the terms of the agreement was 3.51% at November 30, 2018). Financial covenants include maintaining specified levels of tangible net worth, debt service coverage, and funded debt to EBITDA, each of which the Company was in compliance with at November 30, 2018. |
Commitments and Contigencies
Commitments and Contigencies | 6 Months Ended |
Nov. 30, 2018 | |
Commitments and Contigencies | 8. 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 $74,000 per year over the past five years. The Company’s estimated liability for these costs was $916,000 at November 30, 2018 and May 31, 2018, measured on an undiscounted basis over an estimated period of 15 years; $100,000 of the liability is recorded within current liabilities, and the remainder is recorded within other non-current The Company is subject to certain legal and other proceedings in the normal course of business that, in the opinion of management, should not have a material effect on its future results of operations or financial position. |
Stock Purchase
Stock Purchase | 6 Months Ended |
Nov. 30, 2018 | |
Stock Purchase | 9. STOCK PURCHASE In October 2018, the Company’s Board of Directors passed a resolution canceling the Company’s prior stock buyback program, which had been approved in December 2008, and authorized a new program to purchase, subject to market conditions, up to 3,000,000 shares of the Company’s common stock. As of November 30, 2018, there had been no purchases of common stock in the current fiscal year under either program. In December 2018, the Company purchased 50,000 shares under the new program in negotiated and open market transactions for a total price, including commissions, of $3,134,727. Shares purchased under the program have been retired. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 6 Months Ended |
Nov. 30, 2018 | |
Basis of Presentation and Consolidation | BASIS OF PRESENTATION AND CONSOLIDATION The accompanying unaudited consolidated financial statements include the accounts of Neogen Corporation (“Neogen” or the “Company”) and its wholly owned subsidiaries and 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. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included in the accompanying unaudited consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the six-month 10-K Share and per share amounts reflect the December 29, 2017 4-for-3 |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Revenue Recognition On June 1, 2018, we adopted ASU No. 2014-09—Revenue Classification of Cash Receipts and Payments In August 2016, the FASB issued ASU No. 2016-15—Classification 2016-15 2016-15 |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued ASU No. 2016-02—Leases right-of-use Financial Instruments- Credit Losses In June 2016, the FASB issued ASU No. 2016-13—Measurement held-to-maturity 2016-13 |
Comprehensive Income | Comprehensive Income Comprehensive income represents net income and any revenues, expenses, gains and losses that, under U.S. generally accepted accounting principles, are excluded from net income and recognized directly as a component of equity. Accumulated other comprehensive income (loss) consists solely of foreign currency translation adjustments. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our financial instruments other than cash equivalents and marketable securities, which include accounts receivable and accounts payable, approximate fair value based on either their short maturity or current terms for similar instruments. Fair value measurements are determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. We utilize a fair value hierarchy based upon the observability of inputs used in valuation techniques as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of bank demand accounts, savings deposits, certificates of deposit and commercial paper with original maturities of 90 days or less. The carrying value of these assets approximates fair value due to the short maturity of these instruments and meets the Level 1 criteria. |
Marketable Securities | Marketable Securities The Company has marketable securities held by banks or broker-dealers at November 30, 2018, consisting of short-term domestic certificates of deposit and commercial paper rated at least A-2/P-2 |
Estimates and Assumptions | ESTIMATES AND ASSUMPTIONS The preparation of these financial statements requires that management make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates the estimates, including, but not limited to, variable consideration related to revenue recognition, allowances for doubtful accounts, the market value of, and demand for, inventories, stock-based compensation, provision for income taxes and related balance sheet accounts, accruals, goodwill and other intangible assets. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K There were no significant changes to the contractual obligations or contingent liabilities and commitments disclosed in our Annual Report on Form 10-K |
Accounts Receivable Allowance | Accounts Receivable Allowance Management attempts to minimize credit risk by reviewing customers’ credit history before extending credit and by monitoring credit exposure on a regular basis. An allowance for doubtful accounts receivable is established based upon factors surrounding the credit risk of specific customers, historical trends and other information. Collateral or other security is generally not required for accounts receivable. Once a receivable balance has been determined to be uncollectible, that amount is charged against the allowance for doubtful accounts. |
Inventory | Inventory The reserve for obsolete and slow-moving inventory is reviewed at least quarterly based on an analysis of the inventory, considering the current condition of the asset as well as other known facts and future plans. The reserve required to record inventory at lower of cost or net realizable value is adjusted as conditions change. Product obsolescence may be caused by shelf-life expiration, discontinuance of a product line, replacement products in the marketplace or other competitive situations. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses after amounts are allocated to other identifiable intangible assets. Other intangible assets include customer relationships, trademarks, licenses, trade names, covenants not-to-compete non-amortizable |
Long Lived Assets | Long Lived Assets Management reviews the carrying values of its long-lived assets to be held and used, including definite-lived intangible assets, for possible impairment whenever events or changes in business conditions warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated separately identifiable undiscounted cash flows over the remaining useful life of the asset indicate that the carrying amount of the asset may not be recoverable. In such an event, fair value is determined using discounted cash flows and, if lower than the carrying value, impairment is recognized through a charge to operations. |
Equity Compensation Plans | Equity Compensation Plans Share options awarded to employees and shares of stock awarded to employees under certain stock purchase plans are recognized as compensation expense based on their fair value at grant date. The fair market value of options granted under the Company stock option plans was estimated on the date of grant using the Black-Scholes option-pricing model with assumptions for inputs such as interest rates, expected dividends, volatility measures and specific employee exercise behavior patterns based on statistical data. Some of the inputs used are not market-observable and have to be estimated or derived from available data. Use of different estimates would produce different option values, which in turn would result in higher or lower compensation expense recognized. To value options, several recognized valuation models exist. None of these models can be singled out as being the best or most correct one. The model applied by us can handle most of the specific features included in the options granted, which is the reason for its use. If a different model were used, the option values could differ despite using the same inputs. Accordingly, using different assumptions coupled with using a different valuation model could have a significant impact on the fair value of employee stock options. Fair value could be either higher or lower than the number provided by the model applied and the inputs used. Further information on our equity compensation plans, including inputs used to determine the fair value of options, is disclosed in Note 5 to the unaudited consolidated financial statements. |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and for tax credit carryforwards and are measured using the enacted tax rates in effect for the years in which the differences are expected to reverse. Deferred income tax expense represents the change in net deferred income tax assets and liabilities during the period. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the Tax Act) was signed into law making significant changes to the Internal Revenue Code. Changes include a federal corporate tax rate reduction from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time one-time |
Revenue Recognition | Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09—Revenue No. 2016-10— 2014-09 Prior to the adoption, we identified all revenue streams at each significant subsidiary and reviewed contracts to evaluate the impact of adopting the new standard on our revenue recognition policies, procedures and control framework and ultimately on our consolidated financial statements and related disclosures. In our review of contracts in each revenue stream, we noted no material impact in the implementation of the standard. We determined the impact of adopting the standard on our control framework and noted minimal, insignificant changes to our system and other controls processes. We derive revenue from two primary sources — product revenue and service revenue. Product revenue consists primarily of shipments of: • Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; • Consumable products marketed to veterinarians and animal health product distributors; and • Rodenticides, disinfectants and insecticides to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities. Service revenue consists primarily of: • Genomic identification and related interpretive bioinformatic services; and • Other commercial laboratory services. Revenues for our genomics and commercial laboratory services are recognized and invoiced when the applicable laboratory service is performed and the results are conveyed to the customer. Under Topic 606, the Company determines the amount of revenue to be recognized through application of the following steps: • Identification of the contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies the performance obligations. Essentially all our revenue is generated through contracts with our customers. A performance obligation is a promise in a contract to transfer a product or service to a customer. We generally recognize revenue at a point in time when all our performance obligations under the terms of a contract are satisfied. With the adoption of Topic 606, revenue is recognized upon transfer of control of promised products and services in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met. In certain situations, we provide rebates, marketing support, credits or incentives to selected customers, which are accounted for as variable consideration when estimating the amount of revenue to recognize on a contract. Variable consideration reduces the amount of revenue that is recognized. These variable consideration estimates are updated at the end of each reporting period based on information currently available. The performance obligations in our contracts are generally satisfied well within one year of the contract inception. In such cases, we have elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component. We have elected to utilize the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred because the amortization period for the prepaid costs that would otherwise have been deferred and amortized is one year or less. The Company accounts for shipping and handling for products as a fulfillment activity when goods are shipped. Revenue is recognized net of any tax collected from customers; the taxes are subsequently remitted to governmental authorities. The Company’s terms and conditions of sale generally do not provide for returns of product or reperformance of service except in the case of quality or warranty issues. These situations are infrequent; due to immateriality of the amount, warranty claims are recorded in the period incurred. The following table presents disaggregated revenue by major product and service categories for the three and six months ended November 30, 2018 and 2017: Three Months Ended Six Months Ended 2018 2017 2018 2017 (in thousands) (in thousands) Food Safety Natural Toxins, Allergens & Drug Residues $ 20,571 $ 18,989 $ 39,409 $ 38,153 Bacterial & General Sanitation 10,822 9,324 21,288 18,443 Culture Media & Other 12,191 11,041 24,408 21,173 Rodenticides, Insecticides & Disinfectants 5,943 6,126 12,569 10,817 Genomics Services 4,223 3,726 8,259 6,911 Animal Safety $ 53,750 $ 49,206 $ 105,933 $ 95,497 Life Sciences $ 1,891 $ 2,394 $ 3,971 $ 4,820 Veterinary Instruments & Disposables 11,683 11,687 22,087 22,174 Animal Care & Other 9,064 8,237 15,617 15,649 Rodenticides, Insecticides & Disinfectants 18,673 17,786 35,664 35,167 Genomics Services 12,037 11,388 23,452 21,600 $ 53,348 $ 51,492 $ 100,791 $ 99,410 Total Revenues $ 107,098 $ 100,698 $ 206,724 $ 194,907 |
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Financial Statements The Company has historically classified certain variable consideration components resulting from volume rebates, distributor support, and other marketing discounts as cost of product revenues or sales and marketing expense in our consolidated financial statements of income. These amounts should have been classified as contra revenue in product or service revenues. The Company had determined in prior periods that the misstatements were clearly immaterial, individually and in the aggregate, to each of the reporting periods affected. The Company began properly classifying these items as contra revenues beginning in the three-month period ended August 31, 2018, the first quarter of the Company’s current fiscal year, and has revised the prior year’s quarter and year-to-date The effects of the revisions on the line items within our unaudited consolidated statements of income for the three and six months ended November 30, 2017 are as follows: Three Months Ended Six Months Ended As Adjustments As Revised As Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 85,590 $ (1,119 ) $ 84,471 $ 166,157 $ (2,141 ) $ 164,016 Service revenues 16,227 — 16,227 30,916 (25 ) 30,891 Total revenues 101,817 (1,119 ) 100,698 197,073 (2,166 ) 194,907 Cost of revenues Cost of product revenues 43,349 (97 ) 43,252 84,433 (197 ) 84,236 Cost of service revenues 9,197 — 9,197 17,498 — 17,498 Total cost of revenues 52,546 (97 ) 52,449 101,931 (197 ) 101,734 Gross margin 49,271 (1,022 ) 48,249 95,142 (1,969 ) 93,173 Operating expenses Sales and marketing 17,815 (1,022 ) 16,793 34,838 (1,969 ) 32,869 Total operating expenses 31,273 (1,022 ) 30,251 60,720 (1,969 ) 58,751 Operating income 17,998 — 17,998 34,422 — 34,422 Presented below are the effects of the revisions on the line items within the previously issued unaudited consolidated statements of income for the three and nine months ended February 28, 2018 and the consolidated statements of income for the years ended May 31, 2018 and 2017. Revised consolidated statements of income related to these periods will be presented in the Forms 10-Q 10-K Three Months Ended February 28, 2018 Nine Months Ended February 28, 2018 As Adjustments As Revised As Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 78,142 $ (958 ) $ 77,184 $ 244,298 $ (3,098 ) $ 241,200 Service revenues 17,750 (31 ) 17,719 48,667 (56 ) 48,611 Total revenues 95,892 (989 ) 94,903 292,965 (3,154 ) 289,811 Cost of revenues Cost of product revenues 40,352 (69 ) 40,283 124,785 (265 ) 124,520 Cost of service revenues 10,019 — 10,019 27,517 — 27,517 Total cost of revenues 50,371 (69 ) 50,302 152,302 (265 ) 152,037 Gross margin 45,521 (920 ) 44,601 140,663 (2,889 ) 137,774 Operating expenses Sales and marketing 17,492 (920 ) 16,572 52,331 (2,889 ) 49,442 Total operating expenses 29,608 (920 ) 28,688 90,328 (2,889 ) 87,439 Operating income 15,913 — 15,913 50,335 — 50,335 Year Ended Year Ended May 31, 2018 May 31, 2017 As Adjustments As As Adjustments As (in thousands) (in thousands) Revenues Product revenues $ 335,554 $ (4,266 ) $ 331,288 $ 306,512 $ (3,390 ) $ 303,122 Service revenues 66,698 (56 ) 66,642 55,082 73 55,155 Total revenues 402,252 (4,322 ) 397,930 361,594 (3,317 ) 358,277 Cost of revenues Cost of product revenues 174,067 (342 ) 173,725 156,568 (273 ) 156,295 Cost of service revenues 37,933 — 37,933 33,058 — 33,058 Total cost of revenues 212,000 (342 ) 211,658 189,626 (273 ) 189,353 Gross margin 190,252 (3,980 ) 186,272 171,968 (3,044 ) 168,924 Operating expenses Sales and marketing 70,909 (3,980 ) 66,929 62,424 (3,044 ) 59,380 Total operating expenses 120,058 (3,980 ) 116,078 107,023 (3,044 ) 103,979 Operating income 70,194 — 70,194 64,945 — 64,945 The revisions had no impact on our audited consolidated balance sheets as of May 31, 2018 and 2017 and no impact on our unaudited consolidated statements of equity or unaudited consolidated statements of cash flows for the three and six months ended November 30, 2017 and the three and nine months ended February 28, 2018. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 6 Months Ended |
Nov. 30, 2018 | |
Disaggregated Revenue | The following table presents the Company’s revenue disaggregated by geographic location: Three Months ended Six Months Ended November 30, November 30, 2018 2017 2018 2017 (in thousands) (in thousands) Revenues by Geographic Location Domestic $ 65,033 $ 62,452 $ 124,879 $ 122,588 International 42,065 38,246 81,845 72,319 Total revenue 107,098 100,698 206,724 194,907 |
Summary of Impact of Adoption of New Accounting Pronouncements on Unaudited Consolidated Statement of Income | The effects of the revisions on the line items within our unaudited consolidated statements of income for the three and six months ended November 30, 2017 are as follows: Three Months Ended Six Months Ended As Adjustments As Revised As Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 85,590 $ (1,119 ) $ 84,471 $ 166,157 $ (2,141 ) $ 164,016 Service revenues 16,227 — 16,227 30,916 (25 ) 30,891 Total revenues 101,817 (1,119 ) 100,698 197,073 (2,166 ) 194,907 Cost of revenues Cost of product revenues 43,349 (97 ) 43,252 84,433 (197 ) 84,236 Cost of service revenues 9,197 — 9,197 17,498 — 17,498 Total cost of revenues 52,546 (97 ) 52,449 101,931 (197 ) 101,734 Gross margin 49,271 (1,022 ) 48,249 95,142 (1,969 ) 93,173 Operating expenses Sales and marketing 17,815 (1,022 ) 16,793 34,838 (1,969 ) 32,869 Total operating expenses 31,273 (1,022 ) 30,251 60,720 (1,969 ) 58,751 Operating income 17,998 — 17,998 34,422 — 34,422 Presented below are the effects of the revisions on the line items within the previously issued unaudited consolidated statements of income for the three and nine months ended February 28, 2018 and the consolidated statements of income for the years ended May 31, 2018 and 2017. Revised consolidated statements of income related to these periods will be presented in the Forms 10-Q 10-K Three Months Ended February 28, 2018 Nine Months Ended February 28, 2018 As Adjustments As Revised As Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 78,142 $ (958 ) $ 77,184 $ 244,298 $ (3,098 ) $ 241,200 Service revenues 17,750 (31 ) 17,719 48,667 (56 ) 48,611 Total revenues 95,892 (989 ) 94,903 292,965 (3,154 ) 289,811 Cost of revenues Cost of product revenues 40,352 (69 ) 40,283 124,785 (265 ) 124,520 Cost of service revenues 10,019 — 10,019 27,517 — 27,517 Total cost of revenues 50,371 (69 ) 50,302 152,302 (265 ) 152,037 Gross margin 45,521 (920 ) 44,601 140,663 (2,889 ) 137,774 Operating expenses Sales and marketing 17,492 (920 ) 16,572 52,331 (2,889 ) 49,442 Total operating expenses 29,608 (920 ) 28,688 90,328 (2,889 ) 87,439 Operating income 15,913 — 15,913 50,335 — 50,335 Year Ended Year Ended May 31, 2018 May 31, 2017 As Adjustments As As Adjustments As (in thousands) (in thousands) Revenues Product revenues $ 335,554 $ (4,266 ) $ 331,288 $ 306,512 $ (3,390 ) $ 303,122 Service revenues 66,698 (56 ) 66,642 55,082 73 55,155 Total revenues 402,252 (4,322 ) 397,930 361,594 (3,317 ) 358,277 Cost of revenues Cost of product revenues 174,067 (342 ) 173,725 156,568 (273 ) 156,295 Cost of service revenues 37,933 — 37,933 33,058 — 33,058 Total cost of revenues 212,000 (342 ) 211,658 189,626 (273 ) 189,353 Gross margin 190,252 (3,980 ) 186,272 171,968 (3,044 ) 168,924 Operating expenses Sales and marketing 70,909 (3,980 ) 66,929 62,424 (3,044 ) 59,380 Total operating expenses 120,058 (3,980 ) 116,078 107,023 (3,044 ) 103,979 Operating income 70,194 — 70,194 64,945 — 64,945 |
Operating Segments | |
Disaggregated Revenue | The following table presents disaggregated revenue by major product and service categories for the three and six months ended November 30, 2018 and 2017: Three Months Ended Six Months Ended 2018 2017 2018 2017 (in thousands) (in thousands) Food Safety Natural Toxins, Allergens & Drug Residues $ 20,571 $ 18,989 $ 39,409 $ 38,153 Bacterial & General Sanitation 10,822 9,324 21,288 18,443 Culture Media & Other 12,191 11,041 24,408 21,173 Rodenticides, Insecticides & Disinfectants 5,943 6,126 12,569 10,817 Genomics Services 4,223 3,726 8,259 6,911 Animal Safety $ 53,750 $ 49,206 $ 105,933 $ 95,497 Life Sciences $ 1,891 $ 2,394 $ 3,971 $ 4,820 Veterinary Instruments & Disposables 11,683 11,687 22,087 22,174 Animal Care & Other 9,064 8,237 15,617 15,649 Rodenticides, Insecticides & Disinfectants 18,673 17,786 35,664 35,167 Genomics Services 12,037 11,388 23,452 21,600 $ 53,348 $ 51,492 $ 100,791 $ 99,410 Total Revenues $ 107,098 $ 100,698 $ 206,724 $ 194,907 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Nov. 30, 2018 | |
Inventories | The components of inventories follow: November 30, May 31, (in thousands) Raw materials $ 36,563 $ 36,702 Work-in-process 7,601 5,993 Finished and purchased goods 35,309 33,310 $ 79,473 $ 76,005 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 6 Months Ended |
Nov. 30, 2018 | |
Calculation of Net Income Per Share | The calculation of net income per share attributable to Neogen Corporation follows: Three Months Ended Six Months Ended November 30, November 30, 2018 2017 2018 2017 (in thousands, except per share amounts) Numerator for basic and diluted net income per share: Net income attributable to Neogen $ 16,051 $ 17,100 $ 31,288 $ 29,014 Denominator for basic net income per share: Weighted average shares 52,019 51,264 51,820 51,109 Effect of dilutive stock options 572 697 721 669 Denominator for diluted net income per share 52,591 51,961 52,541 51,778 Net income attributable to Neogen per share: Basic $ 0.31 $ 0.33 $ 0.60 $ 0.57 Diluted $ 0.31 $ 0.33 $ 0.60 $ 0.56 |
Segment Information and Geogr_2
Segment Information and Geographical Data (Tables) | 6 Months Ended |
Nov. 30, 2018 | |
Segment Information | Segment information follows: Food Animal Corporate and Total (in thousands) As of and for the three months ended November 30, 2018 Product revenues to external customers $ 48,256 $ 41,306 $ — $ 89,562 Service revenues to external customers 5,494 12,042 — 17,536 Total revenues to external customers 53,750 53,348 — 107,098 Operating income (loss) 10,342 9,057 (1,153 ) 18,246 Total assets 201,291 218,231 240,970 660,492 As of and for the three months ended November 30, 2017—Revised (2) Product revenues to external customers $ 44,367 $ 40,104 $ — $ 84,471 Service revenues to external customers 4,839 11,388 — 16,227 Total revenues to external customers 49,206 51,492 — 100,698 Operating income (loss) 8,668 10,529 (1,199 ) 17,998 Total assets 175,836 215,099 190,093 581,028 (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. (2) Segment revenues for the three months ended November 30, 2017 have been revised as discussed in Note 1. For the three months ended November 30, 2017, product revenues were reduced by $354,000 in the Food Safety segment and $765,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and in the Animal Safety segment. Food Animal Corporate and Total (in thousands) For the six months ended November 30, 2018 Product revenues to external customers $ 95,189 $ 77,333 $ — $ 172,522 Service revenues to external customers 10,744 23,458 — 34,202 Total revenues to external customers 105,933 100,791 — 206,724 Operating income (loss) 21,215 15,763 (2,253 ) 34,725 For the six months ended November 30, 2017—Revised (2) Product revenues to external customers $ 86,206 $ 77,810 $ — $ 164,016 Service revenues to external customers 9,291 21,600 — 30,891 Total revenues to external customers 95,497 99,410 — 194,907 Operating income (loss) 17,446 19,198 (2,222 ) 34,422 (1) Includes the elimination of intersegment transactions. (2) Segment revenues for the six months ended November 30, 2017 have been revised as discussed in Note 1. For the six months ended November 30, 2017, product revenues were reduced by $798,000 in the Food Safety segment and $1,343,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and reduced by $25,000 in the Animal Safety segment. |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 6 Months Ended |
Nov. 30, 2018 | |
Stock Option Activity | A summary of stock option activity during the six months ended November 30, 2018 follows: Shares Weighted- Options outstanding June 1, 2018 2,497,124 $ 42.63 Granted 525,750 62.93 Exercised (340,023 ) 29.49 Forfeited (91,620 ) 45.87 Options outstanding November 30, 2018 2,591,231 48.40 |
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 2019 FY 2018 Risk-free interest rate 2.6 % 1.6 % Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 27.0 % 27.2 % Expected option life 3.5 years 4.0 years |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Detail) $ in Millions | Dec. 29, 2017 | Dec. 22, 2017 | May 31, 2018USD ($) | Nov. 30, 2018 |
Significant Accounting Policies [Line Items] | ||||
Stock split ratio | 1.33 | |||
Federal corporate tax rate | 35.00% | 21.00% | ||
Deferred tax benefit | $ 6 | |||
Deferred tax benefit, net | 4.8 | |||
Current tax expense | $ 1.2 | |||
Minimum | ||||
Significant Accounting Policies [Line Items] | ||||
Marketable securities, maturity period | 91 days | |||
Finite lived intangible assets, useful life | 5 years | |||
Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Marketable securities, maturity period | 1 year | |||
Finite lived intangible assets, useful life | 25 years |
Disaggregated Revenue (Detail)
Disaggregated Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | $ 107,098 | $ 94,903 | $ 100,698 | $ 206,724 | $ 194,907 | $ 289,811 | $ 397,930 | $ 358,277 |
Food Safety | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 53,750 | 49,206 | 105,933 | 95,497 | ||||
Food Safety | Natural Toxins, Allergens & Drug Residues | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 20,571 | 18,989 | 39,409 | 38,153 | ||||
Food Safety | Bacterial & General Sanitation | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 10,822 | 9,324 | 21,288 | 18,443 | ||||
Food Safety | Culture Media & Other | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 12,191 | 11,041 | 24,408 | 21,173 | ||||
Food Safety | Rodenticides, Insecticides & Disinfectants | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 5,943 | 6,126 | 12,569 | 10,817 | ||||
Food Safety | Genomics Services | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 4,223 | 3,726 | 8,259 | 6,911 | ||||
Animal Safety | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 53,348 | 51,492 | 100,791 | 99,410 | ||||
Animal Safety | Rodenticides, Insecticides & Disinfectants | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 18,673 | 17,786 | 35,664 | 35,167 | ||||
Animal Safety | Genomics Services | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 12,037 | 11,388 | 23,452 | 21,600 | ||||
Animal Safety | Life Sciences | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 1,891 | 2,394 | 3,971 | 4,820 | ||||
Animal Safety | Veterinary Instruments & Disposables | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | 11,683 | 11,687 | 22,087 | 22,174 | ||||
Animal Safety | Animal Care & Other | ||||||||
Disaggregation of Revenue [Line Items] | ||||||||
Total revenues | $ 9,064 | $ 8,237 | $ 15,617 | $ 15,649 |
Summary of Unaudited Consolidat
Summary of Unaudited Consolidated Statement of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |
Revenues | ||||||||
Total revenues | $ 107,098 | $ 94,903 | $ 100,698 | $ 206,724 | $ 194,907 | $ 289,811 | $ 397,930 | $ 358,277 |
Cost of revenues | ||||||||
Total Cost of Revenues | 57,065 | 50,302 | 52,449 | 109,962 | 101,734 | 152,037 | 211,658 | 189,353 |
Gross margin | 50,033 | 44,601 | 48,249 | 96,762 | 93,173 | 137,774 | 186,272 | 168,924 |
Operating Expenses | ||||||||
Sales and marketing | 18,499 | 16,572 | 16,793 | 35,732 | 32,869 | 49,442 | 66,929 | 59,380 |
Total operating expenses | 31,787 | 28,688 | 30,251 | 62,037 | 58,751 | 87,439 | 116,078 | 103,979 |
Operating income | 18,246 | 15,913 | 17,998 | 34,725 | 34,422 | 50,335 | 70,194 | 64,945 |
Product Revenues | ||||||||
Revenues | ||||||||
Total revenues | 89,562 | 77,184 | 84,471 | 172,522 | 164,016 | 241,200 | 331,288 | 303,122 |
Cost of revenues | ||||||||
Total Cost of Revenues | 47,305 | 40,283 | 43,252 | 90,255 | 84,236 | 124,520 | 173,725 | 156,295 |
Service Revenues | ||||||||
Revenues | ||||||||
Total revenues | 17,536 | 17,719 | 16,227 | 34,202 | 30,891 | 48,611 | 66,642 | 55,155 |
Cost of revenues | ||||||||
Total Cost of Revenues | $ 9,760 | 10,019 | 9,197 | $ 19,707 | 17,498 | 27,517 | 37,933 | 33,058 |
Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||
Revenues | ||||||||
Total revenues | 95,892 | 101,817 | 197,073 | 292,965 | 402,252 | 361,594 | ||
Cost of revenues | ||||||||
Total Cost of Revenues | 50,371 | 52,546 | 101,931 | 152,302 | 212,000 | 189,626 | ||
Gross margin | 45,521 | 49,271 | 95,142 | 140,663 | 190,252 | 171,968 | ||
Operating Expenses | ||||||||
Sales and marketing | 17,492 | 17,815 | 34,838 | 52,331 | 70,909 | 62,424 | ||
Total operating expenses | 29,608 | 31,273 | 60,720 | 90,328 | 120,058 | 107,023 | ||
Operating income | 15,913 | 17,998 | 34,422 | 50,335 | 70,194 | 64,945 | ||
Accounting Standards Update 2014-09 | Adjustments | ||||||||
Revenues | ||||||||
Total revenues | (989) | (1,119) | (2,166) | (3,154) | (4,322) | (3,317) | ||
Cost of revenues | ||||||||
Total Cost of Revenues | (69) | (97) | (197) | (265) | (342) | (273) | ||
Gross margin | (920) | (1,022) | (1,969) | (2,889) | (3,980) | (3,044) | ||
Operating Expenses | ||||||||
Sales and marketing | (920) | (1,022) | (1,969) | (2,889) | (3,980) | (3,044) | ||
Total operating expenses | (920) | (1,022) | (1,969) | (2,889) | (3,980) | (3,044) | ||
Accounting Standards Update 2014-09 | Product Revenues | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||
Revenues | ||||||||
Total revenues | 78,142 | 85,590 | 166,157 | 244,298 | 335,554 | 306,512 | ||
Cost of revenues | ||||||||
Total Cost of Revenues | 40,352 | 43,349 | 84,433 | 124,785 | 174,067 | 156,568 | ||
Accounting Standards Update 2014-09 | Product Revenues | Adjustments | ||||||||
Revenues | ||||||||
Total revenues | (958) | (1,119) | (2,141) | (3,098) | (4,266) | (3,390) | ||
Cost of revenues | ||||||||
Total Cost of Revenues | (69) | (97) | (197) | (265) | (342) | (273) | ||
Accounting Standards Update 2014-09 | Service Revenues | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||
Revenues | ||||||||
Total revenues | 17,750 | 16,227 | 30,916 | 48,667 | 66,698 | 55,082 | ||
Cost of revenues | ||||||||
Total Cost of Revenues | 10,019 | $ 9,197 | 17,498 | 27,517 | 37,933 | 33,058 | ||
Accounting Standards Update 2014-09 | Service Revenues | Adjustments | ||||||||
Revenues | ||||||||
Total revenues | $ (31) | $ (25) | $ (56) | $ (56) | $ 73 |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Nov. 30, 2018 | May 31, 2018 |
Inventory [Line Items] | ||
Raw materials | $ 36,563 | $ 36,702 |
Work-in-process | 7,601 | 5,993 |
Finished and purchased goods | 35,309 | 33,310 |
Inventories | $ 79,473 | $ 76,005 |
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 | 6 Months Ended | ||
Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | |
Earnings Per Share [Line Items] | ||||
Numerator for basic and diluted net income per share - Net income attributable to Neogen | $ 16,051 | $ 17,100 | $ 31,288 | $ 29,014 |
Denominator for basic net income per share - Weighted average shares | 52,019 | 51,264 | 51,820 | 51,109 |
Effect of dilutive stock options | 572 | 697 | 721 | 669 |
Denominator for diluted net income per share | 52,591 | 51,961 | 52,541 | 51,778 |
Net income attributable to Neogen per share: | ||||
Basic | $ 0.31 | $ 0.33 | $ 0.60 | $ 0.57 |
Diluted | $ 0.31 | $ 0.33 | $ 0.60 | $ 0.56 |
Segment Information and Geogr_3
Segment Information and Geographical Data - Additional Information (Detail) | 6 Months Ended |
Nov. 30, 2018Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Nov. 30, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | ||
Segment Reporting Information [Line Items] | |||||||||
Product revenues to external customers | $ 107,098 | $ 100,698 | $ 206,724 | $ 194,907 | |||||
Operating income (loss) | 18,246 | $ 15,913 | 17,998 | 34,725 | 34,422 | $ 50,335 | $ 70,194 | $ 64,945 | |
Total assets | 660,492 | 581,028 | 660,492 | 581,028 | $ 618,009 | ||||
Operating Segments | Food Safety | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Product revenues to external customers | 53,750 | 49,206 | 105,933 | 95,497 | |||||
Operating income (loss) | 10,342 | 8,668 | 21,215 | 17,446 | |||||
Total assets | 201,291 | 175,836 | 201,291 | 175,836 | |||||
Operating Segments | Animal Safety | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Product revenues to external customers | 53,348 | 51,492 | 100,791 | 99,410 | |||||
Operating income (loss) | 9,057 | 10,529 | 15,763 | 19,198 | |||||
Total assets | 218,231 | 215,099 | 218,231 | 215,099 | |||||
Product Revenues | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Product revenues to external customers | 89,562 | 84,471 | 172,522 | 164,016 | |||||
Product Revenues | Operating Segments | Food Safety | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Product revenues to external customers | 48,256 | 44,367 | 95,189 | 86,206 | |||||
Product Revenues | Operating Segments | Animal Safety | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Product revenues to external customers | 41,306 | 40,104 | 77,333 | 77,810 | |||||
Service Revenues | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Product revenues to external customers | 17,536 | 16,227 | 34,202 | 30,891 | |||||
Service Revenues | Operating Segments | Food Safety | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Product revenues to external customers | 5,494 | 4,839 | 10,744 | 9,291 | |||||
Service Revenues | Operating Segments | Animal Safety | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Product revenues to external customers | 12,042 | 11,388 | 23,458 | 21,600 | |||||
Corporate and Eliminations | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Operating income (loss) | [1] | (1,153) | (1,199) | (2,253) | (2,222) | ||||
Total assets | [1] | $ 240,970 | $ 190,093 | $ 240,970 | $ 190,093 | ||||
[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. |
Segment Information (Parentheti
Segment Information (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||||
Revenues | $ 107,098 | $ 94,903 | $ 100,698 | $ 206,724 | $ 194,907 | $ 289,811 | $ 397,930 | $ 358,277 |
Food Safety | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 53,750 | 49,206 | 105,933 | 95,497 | ||||
Animal Safety | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 53,348 | 51,492 | 100,791 | 99,410 | ||||
Product Revenues | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 89,562 | 77,184 | 84,471 | 172,522 | 164,016 | 241,200 | 331,288 | 303,122 |
Product Revenues | Food Safety | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 798,000 | |||||||
Product Revenues | Animal Safety | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 1,343,000 | |||||||
Service Revenues | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 17,536 | 17,719 | 16,227 | $ 34,202 | 30,891 | 48,611 | 66,642 | 55,155 |
Service Revenues | Food Safety | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 0 | |||||||
Service Revenues | Animal Safety | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 25,000 | |||||||
Accounting Standards Update 2014-09 | Adjustments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | (989) | (1,119) | (2,166) | (3,154) | (4,322) | (3,317) | ||
Accounting Standards Update 2014-09 | Adjustments | Product Revenues | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | (958) | $ (1,119) | (2,141) | (3,098) | (4,266) | (3,390) | ||
Accounting Standards Update 2014-09 | Adjustments | Product Revenues | Food Safety | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 354,000 | |||||||
Accounting Standards Update 2014-09 | Adjustments | Product Revenues | Animal Safety | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 765,000 | |||||||
Accounting Standards Update 2014-09 | Adjustments | Service Revenues | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | $ (31) | $ (25) | $ (56) | $ (56) | $ 73 | |||
Accounting Standards Update 2014-09 | Adjustments | Service Revenues | Food Safety | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | $ 0 |
Disaggregated Revenue by Geogra
Disaggregated Revenue by Geographic Location (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |
Schedule Of Geographical Information [Line Items] | ||||||||
Total revenue | $ 107,098 | $ 94,903 | $ 100,698 | $ 206,724 | $ 194,907 | $ 289,811 | $ 397,930 | $ 358,277 |
Domestic | ||||||||
Schedule Of Geographical Information [Line Items] | ||||||||
Total revenue | 65,033 | 62,452 | 124,879 | 122,588 | ||||
International | ||||||||
Schedule Of Geographical Information [Line Items] | ||||||||
Total revenue | $ 42,065 | $ 38,246 | $ 81,845 | $ 72,319 |
Equity Compensation Plans - Add
Equity Compensation Plans - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Nov. 30, 2018 | Nov. 30, 2017 | Nov. 30, 2018 | Nov. 30, 2017 | May 31, 2019 | May 31, 2018 | |
Compensation expense related to share based awards | $ 1,400,000 | $ 1,264,000 | $ 2,831,000 | $ 2,666,000 | ||
Weighted-average fair value per share of stock options granted | $ 14.47 | |||||
During Fiscal 2019 | ||||||
Weighted-average fair value per share of stock options granted | $ 14.91 | |||||
Employee Stock Purchase Plan | 2011 Employee Stock Purchase Plan | ||||||
Annual maximum limit percentage of compensation to purchase shares | 5.00% | |||||
Minimum | ||||||
Stock option vesting period | 3 years | |||||
Stock option contractual terms | 5 years | |||||
Maximum | ||||||
Stock option vesting period | 5 years | |||||
Stock option contractual terms | 10 years |
Stock Option Activity (Detail)
Stock Option Activity (Detail) shares in Thousands | 6 Months Ended |
Nov. 30, 2018$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Shares Outstanding, Beginning Balance | shares | 2,497,124 |
Shares, Granted | shares | 525,750 |
Shares, Exercised | shares | (340,023) |
Shares, Forfeited | shares | (91,620) |
Shares Outstanding, Ending Balance | shares | 2,591,231 |
Weighted-Average Exercise Price, Beginning Balance | $ / shares | $ 42.63 |
Weighted-Average Exercise Price, Granted | $ / shares | 62.93 |
Weighted-Average Exercise Price, Exercised | $ / shares | 29.49 |
Weighted-Average Exercise Price, Forfeited | $ / shares | 45.87 |
Weighted-Average Exercise Price, Ending Balance | $ / shares | $ 48.40 |
Fair Value of Stock Options Gra
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions (Detail) | 12 Months Ended | |
May 31, 2019 | May 31, 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 | |
During Fiscal 2019 | ||
Schedule of Weighted Average Assumptions for Fair Values of Stock Options [Line Items] | ||
Risk-free interest rate | 2.60% | |
Expected dividend yield | 0.00% | |
Expected stock price volatility | 27.00% | |
Expected option life (in years) | 3 years 6 months |
Business and Product Line Acq_2
Business and Product Line Acquisitions - Additional Information (Detail) - USD ($) | Sep. 04, 2018 | Aug. 01, 2018 | Sep. 01, 2017 | Nov. 30, 2018 |
Minimum | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible assets, useful life | 5 years | |||
Maximum | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible assets, useful life | 25 years | |||
The University of Queensland Animal Genetics Laboratory | ||||
Business Acquisition [Line Items] | ||||
Consideration for purchase of business | $ 2,063,000 | |||
Cash consideration for purchase of business | 468,000 | |||
Purchase price allocation for inventory | 19,000 | |||
Purchase price allocation for land, property and equipment | 419,000 | |||
Purchase price allocation for non-current liabilities | 1,629,000 | |||
Purchase price allocation for intangible assets | $ 902,000 | |||
The University of Queensland Animal Genetics Laboratory | Minimum | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible assets, useful life | 5 years | |||
The University of Queensland Animal Genetics Laboratory | Maximum | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible assets, useful life | 15 years | |||
Clarus Labs Inc. | ||||
Business Acquisition [Line Items] | ||||
Cash consideration for purchase of business | $ 4,204,000 | |||
Purchase price allocation for inventory | 32,000 | |||
Purchase price allocation for land, property and equipment | 120,000 | |||
Purchase price allocation for intangible assets | 1,100,000 | |||
Contingent consideration potential payment | 1,300,000 | |||
Purchase price allocation for accounts payable | 53,000 | |||
Allocation of purchase price for contingent consideration potential payment | 1,256,000 | |||
Purchase price allocation for deferred tax liability | 426,000 | |||
Purchase price allocation for non-amortizable intangible assets | $ 750,000 | |||
Clarus Labs Inc. | Minimum | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible assets, useful life | 5 years | |||
Clarus Labs Inc. | Maximum | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible assets, useful life | 15 years | |||
Livestock Genetic Services LLC | ||||
Business Acquisition [Line Items] | ||||
Cash consideration for purchase of business | $ 1,100,000 | |||
Purchase price allocation for intangible assets | 860,000 | |||
Contingent consideration potential payment | 385,000 | |||
Allocation of purchase price for contingent consideration potential payment | 385,000 | |||
Cash paid for purchase of business | 700,000 | |||
Cash payable to former owner for purchase of business | $ 400,000 | |||
Cash payable to former owner for purchase of business, due date | Sep. 1, 2019 | |||
Purchase price allocation for office equipment | $ 15,000 | |||
Livestock Genetic Services LLC | Minimum | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible assets, useful life | 5 years | |||
Livestock Genetic Services LLC | 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 ($) | Nov. 29, 2018 | Nov. 30, 2018 | May 31, 2019 | May 31, 2018 |
Debt Instrument [Line Items] | ||||
Unsecured revolving line of credit, total amount available | $ 15,000,000 | |||
Unsecured revolving line of credit, maturity date | Sep. 30, 2019 | Sep. 30, 2021 | ||
Unsecured revolving line of credit, interest terms | LIBOR plus 100 basis points | |||
Unsecured revolving line of credit, interest rate | 3.51% | |||
Unsecured revolving line of credit, balance outstanding | $ 0 | |||
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% | |||
During Fiscal 2019 | ||||
Debt Instrument [Line Items] | ||||
Unsecured revolving line of credit, advances | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Nov. 30, 2018 | May 31, 2018 | |
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 | $ 100,000 | |
Minimum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | 38,000 | |
Maximum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | $ 74,000 |
Stock Purchase - Additional Inf
Stock Purchase - Additional Information (Detail) - USD ($) | 1 Months Ended | 6 Months Ended | |
Dec. 31, 2018 | Nov. 30, 2018 | Oct. 31, 2018 | |
Stock Repurchase Program [Line Items] | |||
Shares authorized to purchase | 3,000,000 | ||
Number of shares repurchased | 0 | ||
During Fiscal 2019 | |||
Stock Repurchase Program [Line Items] | |||
Cost of repurchased shares, including commissions | $ 3,134,727 | ||
Number of shares repurchased | 50,000 |