10-Q

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller Reporting Company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2021.

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number

0-17988

Neogen Corporation

(Exact name of registrant as specified in its charter)


Michigan		38-2367843
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

620 Lesher Place

Lansing, Michigan 48912

(Address of principal executive offices, including zip code)

(517)

372-9200

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:


Title of each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.16 par value per share	NEOG	NASDAQ Global Select Market

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by a check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act): YES ☐ NO ☒

As of February 28, 2021 there were 53,511,262 shares of Common Stock outstanding.

Table of Contents

NEOGEN CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Interim Consolidated Financial Statements (unaudited)		2

	Consolidated Balance Sheets – February 28, 2021 and May 31, 2020		2

	Consolidated Statements of Income – Three and nine months ended February 28, 2021 and February 29, 2020		3

	Consolidated Statements of Comprehensive Income – Three and nine months ended February 28, 2021 and February 29, 2020		4

	Consolidated Statements of Equity – Three and nine months ended February 28, 2021 and February 29, 2020		5

	Consolidated Statements of Cash Flows – Nine months ended February 28, 2021 and February 29, 2020		6

	Notes to Interim Consolidated Financial Statements		7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		28

Item 4.	Controls and Procedures		28

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		29

Item 6.	Exhibits		29

SIGNATURES			30

	CEO Certification

	CFO Certification

	Section 906 Certification

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Interim Consolidated Financial Statements

Neogen Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share and per share amounts)


	February 28,			May 31,
	2021			2020
	Unaudited
Assets
Current Assets
Cash and cash equivalents	$	73,482		$	66,269
Marketable securities		279,865			277,404
Accounts receivable, net of allowance of $1,400 and $1,350 at February 28, 2021 and May 31, 2020, respectively		87,241			84,681
Inventories		99,267			95,053
Prepaid expenses and other current assets		15,449			13,999

Total Current Assets		555,304			537,406
Net Property and Equipment		97,981			78,671
Other Assets
Right of use assets		1,269			1,952
Goodwill		133,029			110,340
Other non-amortizable intangible assets		15,441			15,217
Amortizable intangible and other assets, net of accumulated amortization of $50,998 and $44,690 at February 28, 2021 and May 31, 2020, respectively		77,192			53,596

Total Assets	$	880,216		$	797,182

Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	23,257		$	25,650
Accrued compensation		7,928			7,735
Income taxes		—			1,456
Other accruals		14,757			13,648

Total Current Liabilities		45,942			48,489
Deferred Income Taxes		21,276			18,125
Other Non-Current Liabilities		5,315			5,391

Total Liabilities		72,533			72,005
Commitments and Contingencies (note 11)
Equity
Preferred stock, $1.00 par value, 100,000 shares authorized, none issued and outstanding		—			—
Common stock, $0.16 par value, 120,000,000 shares authorized, 53,511,262 and 52,945,841 shares issued and outstanding at February 28, 2021 and May 31, 2020, respectively		8,562			8,471
Additional paid-in capital		290,118			257,693
Accumulated other comprehensive loss		(14,841	)		(19,709	)
Retained earnings		523,844			478,722

Total Stockholders’ Equity		807,683			725,177

Total Liabilities and Stockholders’ Equity	$	880,216		$	797,182

See notes to interim consolidated financial statements.

Table of Contents

Neogen Corporation and Subsidiaries

Consolidated Statements of Income (unaudited)

(in thousands, except per share amounts)


	Three Months Ended						Nine Months Ended
	February 28/29,						February 28/29,
	2021			2020			2021			2020
Revenues
Product revenues	$	92,816		$	77,736		$	273,288		$	247,071
Service revenues		23,893			22,133			67,746			62,025

Total Revenues		116,709			99,869			341,034			309,096
Cost of Revenues
Cost of product revenues		49,466			41,068			145,336			128,658
Cost of service revenues		13,394			13,471			38,333			35,888

Total Cost of Revenues		62,860			54,539			183,669			164,546

Gross Margin		53,849			45,330			157,365			144,550
Operating Expenses
Sales and marketing		18,693			17,675			52,938			53,206
General and administrative		15,146			10,789			38,343			32,473
Research and development		4,236			3,823			12,170			11,292

Total Operating Expenses		38,075			32,287			103,451			96,971

Operating Income		15,774			13,043			53,914			47,579
Other Income (Expense)
Interest income		294			1,600			1,571			4,381
Other expense		(91	)		(393	)		(363	)		(832	)

Total Other Income		203			1,207			1,208			3,549

Income Before Taxes		15,977			14,250			55,122			51,128
Provision for Income Taxes		2,600			2,050			10,000			8,000

SEC Form 10-Q filed by Neogen Corporation