UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR |
For the quarterly period ended November 30, 2010.August 31, 2011.
or
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period fromto
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)
N/A
(Former name, former address and former fiscal year, if changed since last report)
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 x NO ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ¨x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (see definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act):
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller Reporting Company | ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): YES ¨ NO x
As of DecemberSeptember 1, 2010,2011, there were 23,115,00023,374,000 shares of Common Stock outstanding.
NEOGEN CORPORATION AND SUBSIDIARIES
PART I – FINANCIAL INFORMATION
Item 1. | Interim Consolidated Financial Statements |
NEOGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
August 31, | May 31, | |||||||||||||||
November 30, 2010 | May 31, 2010 | 2011 | 2011 | |||||||||||||
(In thousands, except share and per share amounts) | (In thousands, except share and per share amounts) | |||||||||||||||
(Unaudited) | (Audited) | (Unaudited) | (Audited) | |||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS | ||||||||||||||||
Cash and cash equivalents | $ | 44,392 | $ | 22,806 | $ | 22,032 | $ | 35,844 | ||||||||
Accounts receivable, less allowance of $700 and $600. | 28,050 | 27,433 | ||||||||||||||
Marketable securities | 29,325 | 20,239 | ||||||||||||||
Accounts receivable, less allowance of $800 and $800 | 32,673 | 28,634 | ||||||||||||||
Inventories | 31,433 | 31,316 | 34,222 | 31,994 | ||||||||||||
Deferred income taxes | 774 | 774 | 1,044 | 1,044 | ||||||||||||
Prepaid expenses and other current assets | 3,479 | 3,691 | 4,923 | 4,747 | ||||||||||||
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TOTAL CURRENT ASSETS | 108,128 | 86,020 | 124,219 | 122,502 | ||||||||||||
NET PROPERTY AND EQUIPMENT | 20,739 | 19,180 | 28,238 | 22,340 | ||||||||||||
OTHER ASSETS | ||||||||||||||||
Goodwill | 53,320 | 52,899 | 51,609 | 51,584 | ||||||||||||
Other non-amortizable intangible assets | 4,089 | 4,139 | 5,166 | 5,166 | ||||||||||||
Customer based intangibles, net of accumulated amortization of $4,779 and $4,002 | 12,245 | 13,021 | ||||||||||||||
Other non-current assets, net of accumulated amortization of $2,360 and $1,822 | 5,154 | 4,974 | ||||||||||||||
Customer based intangibles, net of accumulated amortization of $5,810 and $5,431 | 11,627 | 12,006 | ||||||||||||||
Other non-current assets, net of accumulated amortization of $2,977 and $2,789 | 6,763 | 6,064 | ||||||||||||||
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74,808 | 75,033 | 75,165 | 74,820 | |||||||||||||
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TOTAL ASSETS | $ | 227,622 | $ | 219,662 | ||||||||||||
$ | 203,675 | $ | 180,233 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||
Accounts payable | $ | 9,010 | $ | 7,187 | $ | 9,802 | $ | 8,516 | ||||||||
Accrued compensation | 1,803 | 2,346 | 2,280 | 2,715 | ||||||||||||
Income taxes | 4,685 | 2,838 | 1,778 | 0 | ||||||||||||
Other accruals | 5,799 | 4,662 | 4,393 | 6,566 | ||||||||||||
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TOTAL CURRENT LIABILITIES | 21,297 | 17,033 | 18,253 | 17,797 | ||||||||||||
DEFERRED INCOME TAXES | 5,824 | 5,824 | 8,347 | 8,347 | ||||||||||||
OTHER LONG-TERM LIABILITIES | 4,596 | 4,323 | 4,456 | 4,540 | ||||||||||||
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10,420 | 10,147 | 12,803 | 12,887 | |||||||||||||
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TOTAL LIABILITIES | 31,717 | 27,180 | 31,056 | 30,684 | ||||||||||||
EQUITY | ||||||||||||||||
Preferred stock, $1.00 par value, 100,000 shares authorized, none issued and outstanding | — | — | 0 | 0 | ||||||||||||
Common stock, $.16 par value, 30,000,000 shares authorized 23,115,106 shares issued and outstanding at November 30, 2010; 22,625,399 shares issued and outstanding at May 31, 2010 | 3,698 | 3,621 | ||||||||||||||
Common stock, $.16 par value, 30,000,000 shares authorized, 23,374,082 and 23,290,604 shares issued and outstanding at August 31, 2011 and May 31, 2011, respectively | 3,739 | 3,727 | ||||||||||||||
Additional paid-in capital | 75,584 | 69,550 | 82,934 | 81,248 | ||||||||||||
Accumulated other comprehensive loss | (817 | ) | (1,676 | ) | (508 | ) | (394 | ) | ||||||||
Retained earnings | 93,137 | 81,170 | 110,059 | 104,064 | ||||||||||||
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Total Neogen Corporation Stockholders’ Equity | 171,602 | 152,665 | 196,224 | 188,645 | ||||||||||||
Noncontrolling Interest | 356 | 388 | ||||||||||||||
Noncontrolling interest | 342 | 333 | ||||||||||||||
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TOTAL EQUITY | 171,958 | 153,053 | 196,566 | 188,978 | ||||||||||||
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TOTAL LIABILITIES AND EQUITY | $ | 227,622 | $ | 219,662 | ||||||||||||
$ | 203,675 | $ | 180,233 |
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See notes to interim consolidated financial statements
NEOGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended November 30 | Six Months Ended November 30 | Three Months Ended August 31 | ||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2011 | 2010 | |||||||||||||||||||
(In thousands, except per share amounts) | (In thousands, except per share amounts) | |||||||||||||||||||||||
Net sales | $ | 43,931 | $ | 35,251 | $ | 86,853 | $ | 67,598 | $ | 45,697 | $ | 42,923 | ||||||||||||
Cost of goods sold | 21,443 | 16,729 | 41,598 | 31,806 | 22,720 | 20,156 | ||||||||||||||||||
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GROSS MARGIN | 22,488 | 18,522 | 45,255 | 35,792 | 22,977 | 22,767 | ||||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||||||
Sales and marketing | 7,504 | 6,405 | 15,016 | 12,377 | 8,103 | 7,512 | ||||||||||||||||||
General and administrative | 3,714 | 3,191 | 7,576 | 6,082 | 4,012 | 3,862 | ||||||||||||||||||
Research and development | 1,641 | 1,698 | 3,438 | 3,161 | 1,512 | 1,797 | ||||||||||||||||||
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12,859 | 11,294 | 26,030 | 21,620 | 13,627 | 13,171 | |||||||||||||||||||
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OPERATING INCOME | 9,629 | 7,228 | 19,225 | 14,172 | 9,350 | 9,596 | ||||||||||||||||||
OTHER INCOME (LOSS) | ||||||||||||||||||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||||||||||
Interest income | 28 | 16 | 57 | 33 | 22 | 29 | ||||||||||||||||||
Change in purchase consideration | (100 | ) | — | (400 | ) | — | 0 | (300 | ) | |||||||||||||||
Other income (expense) | (47 | ) | (34 | ) | (147 | ) | 1 | (68 | ) | (101 | ) | |||||||||||||
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(119 | ) | (18 | ) | (490 | ) | 34 | (46 | ) | (372 | ) | ||||||||||||||
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INCOME BEFORE INCOME TAXES | 9,510 | 7,210 | 18,735 | 14,206 | 9,304 | 9,224 | ||||||||||||||||||
INCOME TAXES | 3,400 | 2,600 | 6,800 | 5,200 | 3,300 | 3,400 | ||||||||||||||||||
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NET INCOME | $ | 6,110 | $ | 4,610 | $ | 11,935 | $ | 9,006 | $ | 6,004 | $ | 5,824 | ||||||||||||
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NET INCOME PER SHARE | ||||||||||||||||||||||||
Basic | $ | .27 | $ | .21 | $ | .52 | $ | .40 | $ | .26 | $ | .26 | ||||||||||||
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Diluted | $ | .26 | $ | .20 | $ | .51 | $ | .39 | $ | .25 | $ | .25 | ||||||||||||
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See notes to interim consolidated financial statements
NEOGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED)
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Noncontrolling Interest | Total | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Balance, June 1, 2010 | 22,625 | $ | 3,621 | $ | 69,550 | $ | (1,676 | ) | $ | 81,170 | $ | 388 | $ | 153,053 | ||||||||||||||
Issuance of shares of common stock under equity compensation plans, and share based compensation, including $322 of excess income tax benefit | 481 | 75 | 5,841 | 5,916 | ||||||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 9 | 2 | 193 | 195 | ||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||
Net income for the six months ended November 30, 2010 | 11,967 | (32 | ) | 11,935 | ||||||||||||||||||||||||
Foreign currency translation adjustments | 859 | 859 | ||||||||||||||||||||||||||
Total comprehensive income ($8,924 in the six months ended November 30, 2009) | 12,794 | |||||||||||||||||||||||||||
Balance, November 30, 2010 | 23,115 | $ | 3,698 | $ | 75,584 | $ | (817 | ) | $ | 93,137 | $ | 356 | $ | 171,958 | ||||||||||||||
Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Retained | Noncontrolling | ||||||||||||||||||||||||
Shares | Amount | Capital | Income (Loss) | Earnings | Interest | Total | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Balance, June 1, 2011 | 23,291 | $ | 3,727 | $ | 81,248 | $ | (394 | ) | $ | 104,064 | $ | 333 | $ | 188,978 | ||||||||||||||
Issuance of shares of common stock under equity compensation plans, and share based compensation, including $556 of excess income tax benefit | 77 | 11 | 1,465 | 1,476 | ||||||||||||||||||||||||
Issuance of shares under employee stock purchase plan | 6 | 1 | 221 | 222 | ||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||
Net income for the three months ended August 31, 2011 | 5,995 | 9 | 6,004 | |||||||||||||||||||||||||
Foreign currency translation adjustments | (114 | ) | (114 | ) | ||||||||||||||||||||||||
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Total comprehensive income ($6,500 in the three months ended August 31, 2010) | 5,890 | |||||||||||||||||||||||||||
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Balance, August 31, 2011 | 23,374 | $ | 3,739 | $ | 82,934 | $ | (508 | ) | $ | 110,059 | $ | 342 | $ | 196,566 | ||||||||||||||
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See notes to interim consolidated financial statements
NEOGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended November 30, | Three Months Ended August 31, | |||||||||||||||
2010 | 2009 | 2011 | 2010 | |||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income | $ | 11,935 | $ | 9,006 | $ | 6,004 | $ | 5,824 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 2,584 | 2,027 | 1,379 | 1,259 | ||||||||||||
Share based compensation | 1,240 | 1,050 | 600 | 675 | ||||||||||||
Excess income tax benefit from the exercise of stock options | (322 | ) | (596 | ) | (556 | ) | (155 | ) | ||||||||
Changes in operating assets and liabilities, net of business acquisitions: | ||||||||||||||||
Accounts receivable | (215 | ) | (1,875 | ) | (4,039 | ) | 683 | |||||||||
Inventories | 213 | 1,173 | (2,208 | ) | 1,438 | |||||||||||
Prepaid expenses and other current assets | 292 | (65 | ) | (176 | ) | (375 | ) | |||||||||
Accounts payable and accruals | 3,832 | 5,777 | 457 | 2,197 | ||||||||||||
Other | (114 | ) | 0 | |||||||||||||
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NET CASH PROVIDED BY OPERATING ACTIVITIES | 19,559 | 16,497 | 1,347 | 11,546 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||
Purchases of property and equipment and other assets | (3,423 | ) | (1,522 | ) | (6,827 | ) | (1,574 | ) | ||||||||
Proceeds from the sale of marketable securities | 16,070 | 0 | ||||||||||||||
Purchases of marketable securities | (25,157 | ) | (10,945 | ) | ||||||||||||
Payments for business acquisitions | (810 | ) | 0 | |||||||||||||
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NET CASH USED IN INVESTING ACTIVITIES | (3,423 | ) | (1,522 | ) | (16,724 | ) | (12,519 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Increases in other long-term liabilities | 257 | 70 | (86 | ) | 140 | |||||||||||
Net proceeds from issuance of common stock | 4,871 | 2,971 | 1,098 | 628 | ||||||||||||
Excess income tax benefit from the exercise of stock options | 322 | 596 | 556 | 155 | ||||||||||||
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NET CASH PROVIDED BY FINANCING ACTIVITIES | 5,450 | 3,637 | 1,568 | 923 | ||||||||||||
EFFECT OF EXCHANGE RATE ON CASH | (3 | ) | 0 | |||||||||||||
INCREASE IN CASH | 21,586 | 18,612 | (13,812 | ) | (50 | ) | ||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 22,806 | 13,842 | 35,844 | 22,806 | ||||||||||||
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CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 44,392 | $ | 32,454 | $ | 22,032 | $ | 22,756 | ||||||||
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See notes to interim consolidated financial statements
NEOGEN CORPORATION AND SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the three and six month periodsperiod ended November 30, 2010August 31, 2011 are not necessarily indicative of the results to be expected for the fiscal year ending May 31, 2011.2012. For more complete financial information, these consolidated financial statements should be read in conjunction with the May 31, 20102011 audited consolidated financial statements and the notes thereto included in the Company’s annual report on Form 10-K for the year ended May 31, 2010.2011.
2. INVENTORIES
Inventories are stated at the lower of cost, determined on the first-in, first-out method, or market. The components of inventories follow:
November 30, 2010 | May 31, 2010 | August 31, 2011 | May 31, 2011 | |||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
Raw materials | $ | 12,098 | $ | 11,815 | $ | 12,909 | $ | 12,125 | ||||||||
Work-in-process | 2,057 | 1,958 | 2,681 | 2,192 | ||||||||||||
Finished and purchased goods | 17,278 | 17,543 | 18,632 | 17,677 | ||||||||||||
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$ | 31,433 | $ | 31,316 | $ | 34,222 | $ | 31,994 | |||||||||
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3. NET INCOME PER SHARE
The calculation of net income per share follows:
Three Months Ended November 30, | Six Months Ended November 30, | Three Months Ended August 31, | ||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2011 | 2010 | |||||||||||||||||||
(In thousands, except per share amounts) | (In thousands, except per share amounts) | |||||||||||||||||||||||
Numerator for basic and diluted net income per share: | ||||||||||||||||||||||||
Net income | $ | 6,110 | $ | 4,610 | $ | 11,935 | $ | 9,006 | $ | 6,004 | $ | 5,824 | ||||||||||||
Denominator: | ||||||||||||||||||||||||
Denominator for basic net income per share: | ||||||||||||||||||||||||
Weighted average shares | 22,926 | 22,387 | 22,802 | 22,281 | 23,326 | 22,677 | ||||||||||||||||||
Effect of dilutive stock options and warrants | 803 | 663 | 797 | 652 | 735 | 767 | ||||||||||||||||||
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Denominator for diluted net income per share | 23,729 | 23,050 | 23,599 | 22,933 | 24,061 | 23,444 | ||||||||||||||||||
Net income per share: | ||||||||||||||||||||||||
Basic | $ | .27 | $ | .21 | $ | .52 | $ | .40 | $ | .26 | $ | .26 | ||||||||||||
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Diluted | $ | .26 | $ | .20 | $ | .51 | $ | .39 | $ | .25 | $ | .25 | ||||||||||||
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4. SEGMENT INFORMATION
The Company has two reportable segments: Food Safety and Animal Safety. The Food Safety segment produces and markets diagnostic test kits and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation. The Animal Safety segment is primarily engaged in the production and marketing of products dedicated to animal health, including a complete line of consumable products marketed to veterinarians and animal health product distributors anddistributors; the segment also provides genetic identification services. Additionally, the Animal Safety segment produces and markets rodenticides and disinfectants to assist in control of rodents and disease in and around agricultural, food production and other facilities.
Segment information as of and for the three months ended November 30,August 31, 2011 and 2010 and 2009 follows:
Food Safety | Animal Safety | Corporate and Eliminations (1) | Total | |||||||||||||
(In thousands) | ||||||||||||||||
Fiscal 2011 | ||||||||||||||||
Net sales to external customers | $ | 21,341 | $ | 22,590 | $ | — | $ | 43,931 | ||||||||
Operating income (reduction) | 6,264 | 3,775 | (410 | ) | 9,629 | |||||||||||
Fiscal 2010 | ||||||||||||||||
Net sales to external customers | $ | 18,446 | $ | 16,805 | $ | — | $ | 35,251 | ||||||||
Operating income (reduction) | 5,282 | 2,428 | (482 | ) | 7,228 |
Segment information as of and for the six months ended November 30, 2010 and 2009 follows:
Food Safety | Animal Safety | Corporate and Eliminations (1) | Total | Food Safety | Animal Safety | Corporate and Eliminations (1) | Total | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Fiscal 2012 | ||||||||||||||||||||||||||||||||
Net sales to external customers | $ | 23,282 | $ | 22,415 | $ | 0 | $ | 45,697 | ||||||||||||||||||||||||
Operating income (reduction) | 7,163 | 2,743 | (556 | ) | 9,350 | |||||||||||||||||||||||||||
Total assets | 68,689 | 98,231 | 60,702 | 227,622 | ||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Fiscal 2011 | ||||||||||||||||||||||||||||||||
Net sales to external customers | $ | 43,593 | $ | 43,260 | $ | — | $ | 86,853 | $ | 22,252 | $ | 20,671 | $ | 0 | $ | 42,923 | ||||||||||||||||
Operating income (reduction) | 13,237 | 6,886 | (898 | ) | 19,225 | 6,973 | 3,111 | (488 | ) | 9,596 | ||||||||||||||||||||||
Total Assets | 76,790 | 87,914 | 38,971 | 203,675 | ||||||||||||||||||||||||||||
Fiscal 2010 | ||||||||||||||||||||||||||||||||
Net sales to external customers | $ | 35,921 | $ | 31,677 | $ | — | $ | 67,598 | ||||||||||||||||||||||||
Operating income (reduction) | 10,413 | 4,645 | (886 | ) | 14,172 | |||||||||||||||||||||||||||
Total Assets | 62,287 | 68,719 | 29,907 | 160,913 | ||||||||||||||||||||||||||||
Total assets | 76,781 | 85,653 | 28,280 | 190,714 |
(1) | Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, deferred assets and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. |
5. EQUITY COMPENSATION PLANS
Options are generally granted under the employee and director stock option plan for 5 yearsyear periods and become exercisable in varying installments.equal annual installments during that period. Certain non-qualified options are granted for 10 year periods. A summary of stock option activity during the sixthree months ended November 30, 2010August 31, 2011 follows:
Shares | Weighted-Average Exercise Price | Shares | Weighted-Average Exercise Price | |||||||||||||
Options outstanding at June 1, 2010 | 1,998,000 | $ | 14.14 | |||||||||||||
Options outstanding at June 1, 2011 | 1,574,000 | $ | 17.77 | |||||||||||||
Granted | 288,000 | 28.29 | 0 | 0 | ||||||||||||
Exercised | (467,000 | ) | 11.11 | (77,000 | ) | 12.31 | ||||||||||
Forfeited | (5,000 | ) | 9.53 | (3,000 | ) | 22.53 | ||||||||||
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Options outstanding at November 30, 2010 | 1,814,000 | 17.18 | ||||||||||||||
Options outstanding at August 31, 2011 | 1,494,000 | 18.05 |
During the three and six month periods ended November 30,August 31, 2011 and 2010, and 2009 the Company recorded $564,000$600,000 and $525,000 and $1,240,000 and $1,050,000,$675,000, respectively, of compensation expense related to its share-based awards.
The weighted-average fair value of stock options granted during FY 2011, and 2010, estimated on the date of grant using the Black-Scholes option pricing model was $8.60 and $6.35 respectively.$8.66 per option. As of August 31, 2011, no grants had been granted for the FY 2012 to date. The fair value of stock options granted in FY 2011 was estimated using the following weighted-average assumptions.
2011 | 2010 | |||||||
Risk-free interest rate | 1.7 | % | 2.0 | % | ||||
Expected dividend yield | 0 | % | 0 | % | ||||
Expected stock price volatility | 35.8 | % | 37.8 | % | ||||
Expected option life | 4.0 years | 4.0 years |
2011 | ||||
Risk-free interest rate | 1.7 | % | ||
Expected dividend yield | 0 | % | ||
Expected stock price volatility | 38.8 | % | ||
Expected option life | 4.0 years |
The Company has 11,2506,750 outstanding warrants that are exercisable for common stock. The warrants have lives of 5 years and were expensed at fair value upon issuance.
The Company has an Employee Stock Purchase plan that provides for employee stock purchases at a 5% discount to market.market price. The discount is expensed as of the date of purchase.
6. NEW ACCOUNTING PRONOUNCEMENTS
Recent ASU’s issued by the FASB and guidance issued by the SEC did not have, or are not currently believed by management, to have, a material effect on the Company’s present or future consolidated financial statements.
7. BUSINESS AND PRODUCT LINE ACQUISITIONS
On December 1, 2009, the Company purchased the BioKits food safety business of Gen-Probe Incorporated. Consideration for the purchase, which was determined through arms length negotiations, approximated $6.5 million in cash and the assumption of trade accounts payable of $175,000. The preliminary allocation of the purchase price included net current assets of $770,000, fixed assets $163,000 and intangible assets of $5,742,000. The acquired business operates as a unit of Neogen’s food safety division. Principal products include allergen test kits.
On April 1, 2010, Neogen Corporation acquired GeneSeek, Inc. of Lincoln, Nebraska, a leading commercial agricultural genetic laboratory. GeneSeek’s technology employs high-resolution DNA genotyping for identity and trait analysis in a variety of important animal and agricultural plant species. Consideration for the purchase was $13,800,000$14,050,000 in cash and secondary payment obligations of up to $7,000,000. The preliminary allocation of the purchase price included accounts receivable of $1,923,000, inventory of $1,212,000,$1,512,000, fixed assets of $847,000, current liabilities of $600,000,$905,000, deferred tax liabilities of $2,050,000,$2,530,000, secondary payment liabilities of $3,583,000, based upon future operating results of the GeneSeek business until and is payable yearly over a three year measurement period, and the remainder to goodwill (not deductible for tax purposes) and other intangible assets (with estimated lives of 5-20 years). The allocation was generally based on the fair value of these assets determined using the income approach. These fair value measurements were based on significant inputs not observable in the market and thus represent Level 3 fair value measurements. The secondary payment was based upon future operating results of the GeneSeek business through 2013, and payable annually over a three year period, measured at fair value, and is considered a levelLevel 3 fair value measurement under ASC 820-Fair Value Measurement and Disclosure, as it was based on unobservable inputs and involves management’s judgment.measurement. The Company recorded a charge within other income (expense) of approximately $400,000$300,000 for the sixthree months ended November 30,August 31, 2010 and $787,000 for the year ended May 31, 2011, representing the increase from its original estimate in fair value of the secondary payment liability. As of November 30, 2010,May 31, 2011, the balance of the secondary payment liability recorded was approximately $3,933,000.$4,370,000. A payment of $1,856,000 was made in June, 2011 to the former owners of GeneSeek, comprised of $1,537,000 for the first year contingent payment and an additional $319,000 for inventory purchased post acquisition and settlement of other liabilities. As of August 31, 2011, the balance of the secondary payment liability was approximately $2,546,000. The acquisition will behas been integrated into the Animal Safety segmentsegment.
On June 21, 2011, Neogen Corporation acquired the assets of VeroMara seafood testing laboratory for approximately $800,000 in cash and a potential secondary payment of approximately $200,000 from its parent company, GlycoMar Ltd. Based in Oban, Scotland, VeroMara offers testing services to the shellfish and salmon aquaculture industries. VeroMara’s services include testing for shellfish toxins, general foodborne pathogens, includingE. coli, noroviruses, and salmon husbandry. VeroMara recorded revenues of approximately $800,000 (U.S.) in its most recently completed fiscal year. The purchase accounting for this transaction will be completed in fiscal year 2012. The acquisition is expected to beprovide a strong synergistic fit.fit for the Company’s Food Safety segment.
8. LONG TERM DEBT AND LIABILITIES
The Company maintains a financing agreement with a bank (no amounts drawn at November 30, 2010August 31, 2011 or May 31, 2010)2011) providing for an unsecured revolving line of credit of $10,000,000. During the quarter, the company extended the agreement by one year through August 31, 2013 and increased the total available credit by $2,000,000. This increased amount is available to satisfy obligations related to foreign currency risk mitigation transactions. The interest rate is at LIBOR plus 100 basis points (rate under terms of the agreement was 1.25%1.22% at November 30, 2010)August 31, 2011). 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, 2010.August 31, 2011.
9. COMMITMENTS AND CONTINGENCIES
The Company is involved in environmental remediation and monitoring activities at its Randolph, Wisconsin manufacturing facility and accrues for related costs when such costs are determined to be probable and estimable. The Company is currently expensing annual costs of remediation, of approximately $90,000.which have ranged from $50,000 to $105,000 per year over the past five years. The Company’s estimated liability for this expensethese costs of $916,000 at November 30,August 31, 2011 and 2010, and May 31, 2010measured on an undiscounted basis over an estimated period of 15 years, is recorded within other long-termlong term liabilities in the consolidated balance sheet.
The Company is subject to certain legal and other proceedings in the normal course of business that, in the opinion of management, will not have a material effect on its future results of operations or financial position.
10. STOCK PURCHASE
In December 2008, the Company’s Board of Directors authorized a program to purchase, subject to market conditions, up to 750,000 shares of the Company’s common stock. As of November 30, 2010,August 31, 2011, 74,684 cumulative shares had been purchased in negotiated and open market transactions for a total price, including commissions, of approximately $923,000. There were no purchases in fiscal year 2011 or 2010. Shares purchased under the program were retired. There have been no purchases in fiscal year 2012 and there were none in 2011.
PART I – FINANCIAL INFORMATION
Item 2. | Management’s Discussion and Analysis of Financial Conditions and Results of Operations |
The information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations contains both historical financial information and forward-looking statements. Neogen does not provide forecasts of future performance. While management is optimistic about the Company’s long-term prospects, historical financial information may not be indicative of future financial performance.
Safe Harbor and Forward-Looking Statements
Forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, are made throughout this Quarterly Report on Form 10-Q. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” and similar expressions are intended to identify forward-looking statements. There are a number of important factors, including competition, recruitment, retention and dependence on key employees, impact of weather on agriculture and food production, identification and integration of acquisitions, research and development risks, patent and trade secret protection, government regulation and other risks detailed from time to time in the Company’s reports on file at the Securities and Exchange Commission, that could cause Neogen Corporation’s results to differ materially from those indicated by such forward-looking statements, including those detailed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
In addition, any forward-looking statements represent management’s views only as of the day this Quarterly Report on Form 10-Q was first filed with the Securities and Exchange Commission and should not be relied upon as representing management’s views as of any subsequent date. While management may elect to update forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if its views change.
Critical Accounting Policies and Estimates
The discussion and analysis of the Company’s financial condition and results of operations are based on the consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States. 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 disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates the estimates, including those related to receivable allowances, inventories, accruals and 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 material changes to the critical accounting policies and estimates disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2010.2011.
Results of Operations
Executive Overview
Neogen Corporation revenues increased by 25%6.5% in the secondfirst quarter of FY-12 to $43.9$45.7 million, and by 28% to $86.9 million for the six-month period ended November 30, 2010 when compared to $42.9 million in the prior year.first quarter of FY-11. Food Safety revenues increased by 16%4.6% and 21% in the quarter and in the six-month period ended November 30, 2010, respectively. Animal Safety revenues increased by 34% and 37% in8.4%, each compared with the first quarter and in the six-month period ended November 30, 2010, respectively. Exclusive of the prior year. Both Food Safety and Animal Safety revenues were almost entirely organic with the Food Safety revenues benefiting slightly (.5%) from the BioKits and GeneSeek acquisitions, and foreign currency effects overall revenues increased 10% and 13%VeroMara acquisition which closed in the second quarter and year-to-date periods, respectively.June 2011. Sales to international markets were 41.4% of total revenues. Gross margins decreased from 52.5%53.0% in the November 2009 quarterFY-11 to 51.2%50.3% in FY-12, primarily the November 2010 quarter and decreased from 52.9% to 52.1% on a year-to-date basis. The decrease in gross margins was a principally result of less favorable product mix. Operating margins decreased from 22.4% to 20.5% as gains from the increased revenue were more than offset by the decline in the quartergross margin and six-month periods from 20.5% to 21.9% and from 21.0% to 22.1% respectively. The gains were the result of growth leverage and acquisitions as well as continuing cost control efforts.increased operating expenses.
Revenues
Three and Six Months Ended November 30, 2010 Comparedmonths ended August 31, 2011 compared to Three and Six Months Ended November 30, 2009three months ended August 31, 2010:
Three Months Ended November 30 | Three Months Ended August 31 | |||||||||||||||||||||||||||||||
2010 | 2009 | Increase (Decrease) | % | 2011 | 2010 | Increase (Decrease) | % | |||||||||||||||||||||||||
(In thousands, except percents) | (In thousands except percents) | |||||||||||||||||||||||||||||||
Food Safety | ||||||||||||||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues | $ | 11,192 | $ | 9,444 | $ | 1,748 | 18.5 | $ | 11,962 | $ | 11,479 | $ | 483 | 4.2 | ||||||||||||||||||
Bacteria & General Sanitation | 5,393 | 4,720 | 673 | 14.3 | 6,436 | 5,350 | 1,086 | 20.3 | ||||||||||||||||||||||||
Dehydrated Culture Media & Other | 4,756 | 4,282 | 474 | 11.1 | 4,884 | 5,423 | (539 | ) | (9.9 | ) | ||||||||||||||||||||||
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21,341 | 18,446 | 2,895 | 15.7 | $ | 23,282 | $ | 22,252 | 1,030 | 4.6 | |||||||||||||||||||||||
Animal Safety | ||||||||||||||||||||||||||||||||
Life Science & Other | 1,883 | 1,735 | 148 | 8.5 | 2,096 | 2,078 | 18 | 0.9 | ||||||||||||||||||||||||
Vaccines | 746 | 796 | (50 | ) | (6.3 | ) | 487 | 582 | (95 | ) | (16.3 | ) | ||||||||||||||||||||
Rodenticides & Disinfectants | 7,868 | 6,960 | 908 | 13.0 | 6,624 | 5,694 | 930 | 16.3 | ||||||||||||||||||||||||
Veterinary Instruments & Other | 7,484 | 7,314 | 170 | 2.3 | 9,441 | 7,576 | 1,865 | 24.6 | ||||||||||||||||||||||||
DNA Testing | 4,609 | — | 4,609 | — | 3,767 | 4,741 | (974 | ) | (20.5 | ) | ||||||||||||||||||||||
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22,590 | 16,805 | 5,785 | 34.4 | 22,415 | 20,671 | 1,744 | 8.4 | |||||||||||||||||||||||||
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Total Revenues | $ | 43,931 | $ | 35,251 | $ | 8,680 | 24.6 | $ | 45,697 | $ | 42,923 | $ | 2,774 | 6.5 | ||||||||||||||||||
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Six Months Ended November 30 | ||||||||||||||||||||||||||||||||
2010 | 2009 | Increase (Decrease) | % | |||||||||||||||||||||||||||||
(In thousands except percents) | ||||||||||||||||||||||||||||||||
Food Safety | ||||||||||||||||||||||||||||||||
Natural Toxins, Allergens & Drug Residues | $ | 22,671 | $ | 18,728 | $ | 3,943 | 21.1 | |||||||||||||||||||||||||
Bacteria & General Sanitation | 10,743 | 9,125 | 1,618 | 17.7 | ||||||||||||||||||||||||||||
Dehydrated Culture Media & Other | 10,179 | 8,068 | 2,111 | 26.2 | ||||||||||||||||||||||||||||
43,593 | 35,921 | 7,672 | 21.4 | |||||||||||||||||||||||||||||
Animal Safety | ||||||||||||||||||||||||||||||||
Life Science & Other | 3,953 | 3,615 | 338 | 9.3 | ||||||||||||||||||||||||||||
Vaccines | 1,328 | 1,370 | (42 | ) | (3.1 | ) | ||||||||||||||||||||||||||
Rodenticides & Disinfectants | 13,561 | 12,589 | 972 | 7.7 | ||||||||||||||||||||||||||||
Veterinary Instruments & Other | 15,069 | 14,103 | 966 | 6.8 | ||||||||||||||||||||||||||||
DNA Testing | 9,349 | — | 9,349 | — | ||||||||||||||||||||||||||||
43,260 | 31,677 | 11,583 | 36.6 | |||||||||||||||||||||||||||||
Total Revenues | $ | 86,853 | $ | 67,598 | $ | 19,255 | 28.5 | |||||||||||||||||||||||||
During the first quarter of FY-12, Food Safety revenues increased 16%4.6% in comparison with FY-11. This sales growth was broad based across most market segments and product lines. Organic revenue increases were .5% less due to the second quarteracquisition of VeroMara, an Oban, Scotland based provider of diagnostic testing services to the shellfish and 21%aquaculture industries, in the first six months of FY-11. Sales ofJune 2011. Natural Toxin,Toxins, Allergen and Drug Residue products increased by 19% in the quarter and by 21% year-to-date in comparison with FY-10. Exclusive of the BioKits acquisition,Residues revenues increased by 10% and 15% in the quarter and six month periods, in comparison with the same periods of the prior year. Mycotoxin second quarter revenue growth increased by 3% and 17% in the six month period, with difficult comparisons to FY-10, in which much of the United States had cool and often wet weather conditions during the summer months and fall harvest seasons resulting in a spike in the sales of these products. Revenues from Food Allergen tests continued their recent trend of growth with an overall increase of 87% in the second quarter and 92% in the six months ended November 2010 with strong organic growth combined with the effect of the acquisition of the BioKits product line in December 2009. Drug residue test kits revenue increased 11% in the quarter and 1% in the first six months of FY-11 as revenues were affected by the strength of the US Dollar in foreign markets. Bacteria and General Sanitation product revenues increased by 14% in the quarter and increased by 18% in the first six months of FY-11 with more Soleris capital equipment placements in the current year. Dehydrated Culture Media and Other product revenues increased by 11% and 26% in the quarter and in the six-month periods respectively. These revenue increases were broad based and continued a trend from the prior quarters.
Animal Safety revenues increased by 34% in the second quarter and 37% in the six months ended November 30, 20104.2%, in comparison with the prior year. Excludingyear quarter. In the revenuesfirst quarter of fiscal 2011, sales of Deoxynivalenol (DON) test kit sales were up 45.0% over the GeneSeek acquisitionprior year due to a significant mycotoxin outbreak resulting from a wet, cool growing season for grains in April 2010,FY 2010. There was no such outbreak in the first quarter of FY 2012.
Revenue of diagnostic products for bacteria and general sanitation detection increased 20.3% in comparison with the prior year quarter, due to continued growth in the Soleris product line, both in units and disposable vials. Revenue from dehydrated culture media and other products decreased by 9.9% over the prior year quarter primarily due to lower sales to certain international distributors.
During the first quarter of FY-12, Animal Safety revenues increased 7% in both the quarter and the first six months of FY-2011. Life Sciences and Other
revenue increased by 9%8.4% overall in bothcomparison with FY-11. Revenue growth was entirely organic and included contributions from many product lines. Life science and other revenues increased by .9% in comparison with FY-11. Components of the quarterlife science and six months respectively. Revenue increasesother diagnostic test kits used to detect drugs of abuse and in forensic applications were broad basedup 3.2% with increasesincreased orders from existing customers and new key accounts. Vaccine revenues decreased by 16.3% or by $95,000 in FY-12 in comparison with the first three months of FY-11, due to the timing of large distributor orders.
Rodenticide and Disinfectant productdisinfectant revenues increased by 13%16.3% in comparison with FY-11, as the cleaners and disinfectants continued strong gains in the first quarter of FY-12. Veterinary instruments and other revenues increased by 24.6% in comparison with the prior year quarter and by 8% on a year-to-date basis. Rodenticideincluded strong contributions from oral and Disinfectant revenues growth includedtopical product lines as well as Ideal Instruments needles and syringe product offerings. Sales of products through over-the-counter distributor channels were led by strong increases in products to treat animal wound, leg and foot conditions.
Revenues decreased at GeneSeek by 20.5% in FY-12 compared to the agronomics segmentfirst quarter of FY 2011 due primarily to pent-up demand for a new product and a well received fall rodenticide program. Veterinary Instrument and Other product revenues increased by 2% and 7%opportunistic contracts won in the quarter and six months respectivelyprior year which did not repeat in comparison with prior year. Increases were due to strong OEM and specialty needle revenues, which rebounded from a slowthe first quarter of FY 2012. These contracts are not necessarily predictable as to achieve 93% growthtiming and amount and could result in the second quarter.some period-to-period fluctuations.
Gross margins decreased from 52.5% to 51.2%53.0% in the secondfirst quarter of FY-11 and from 52.9% to 52.1%50.3% in the first six months of FY-11.FY-12. This resulted principally from changesa shift in product mix that included awithin the Animal Safety segment, caused by higher sales of lower percentage of diagnostic products in relation to overall revenues.
margin products. Operating margins in the secondfirst quarter increaseddecreased from 22.4% of revenues in FY-11 to 20.5% to 21.9%in FY-12 primarily as a result of the decrease in gross margins and from 21.0% to 22.1% in the first six months of FY-11 as compared to the first six months of FY-10. These increases resulted from increased operating leverage and continuing cost controls.expenses, somewhat offset by the overall increase in revenues. Sales and marketing expenses as expressed as a percentage of revenues decreasedincreased from 18.2%17.5% to 17.1% in the second quarter and decreased from 18.3% to 17.3% on a year-to-date basis.17.7%. The decreaseincrease in sales and marketing as a percentage of revenues is the direct effect of the acquisitions during the yeardue to investment in additional personnel for specific selling initiatives and longer-term sales opportunities that contributed revenue dollars without commensurate increase in distribution cost.have been identified. General and administrative expenses decreased from 9.1% to 8.5%9.0% of revenues in the second quarter, and from 9.0% to 8.7% on a year to date basis principally8.8% as a result of operating leverage. The change in general and administrative expense, while an increaseincreases in absolute dollars of $523,000spending were not as great as the increase in the quarter and $1,494,000 fiscal year-to-date, isrevenues on a percentage basis. Research expense decreased from 4.2% of revenues to 3.3% of revenues primarily due to the increased costtiming of compensation, employee stock optionscontract and other outside services.
The total amount included in other expense amortization from acquired businesses and the cost of acquiring businesses with increased governmental licensing and regulatory affairs. Research expense, decreased $57,000 in absolute dollars in the secondfirst quarter and increased by $277,000 forof FY 2012 of $46,000 represents a decrease compared to expense of $372,000 recognized in the first six monthsquarter of FY-11, decreased as a percentFY 2011. A charge of revenues from 4.8% to 3.7%$300,000 was recorded in the second fiscalfirst quarter and from 4.7% to 4.0% in the six-month periods. While these expenses vary on a quarter to quarter basis depending on the timing of new projects and the completion of existing projects, management expects that research and development efforts will range between 4% to 5% in support of existing products and2011 to increase the supplyliability for the Company’s expected payout to the former owners of future products.Geneseek, based on its earnings as part of the Company; $26,000 was recorded in the first quarter of FY 2012.
Financial Condition and Liquidity
ProceedsThe overall cash and marketable securities position of $4,871,000the Company was $51,357,000 at August 31, 2011, compared to $56,083,000 at May 31, 2011. Approximately $1,525,000 in cash was generated from operations during the first fiscal quarter of 2012. Net cash proceeds of $1,098,000 were realized with the exercise of 481,000 stock options and warrants and the issuance of 9,000 shares under the Employee Stock Purchase Plan during the six months ended November 30, 2010. Despitefirst quarter of FY-12. Accounts receivable increased by $4,039,000 due to increases in revenues accounts receivable increased only $215,000and in the first six monthstiming of FY-11, due to continued strong collection efforts. Despitereceipt of payments; inventories increased operations to support increased revenues, inventories decreased by $213,000$2,208,000 as a result of the timing of receipt of international products and a build-up for anticipated orders. In June, the Company closed its purchase of VeroMara for approximately $800,000 in cash. In August, the six-month period under regimented inventory reduction and control efforts. $19,559,000Company completed the purchase of cash was generated from operationsa 128,000 square foot facility in its Lexington, Kentucky location for $4,950,000. Inflation and changing prices doare not generallyexpected to have a material effect on operations. As of November 30, 2010, Cashoperations, as management believes it has and cash equivalents consisted of funds used to support current operations and certificates of deposit and top tier commercial paperwill be successful in offsetting increased input costs with maturities of 90 days or less. price increases.
Management believes that the Company’s existing cash and marketable securities balances at November 30, 2010,August 31, 2011, along with available borrowings under its credit facility and cash expected to be generated from future operations, will be sufficient to fund operating needs and acquisition activities for the foreseeable future. However, existing cash needs are contingent on future events many of which cannotand borrowing capacity may not be predicted.sufficient to meet the Company’s cash requirements to commercialize products currently under development or its plans to acquire other organizations, technologies or products that fit within the Company’s mission statement. Accordingly, the Company may be requiredchoose to issue equity securities or enter into other financing arrangements for a portion of its future financing needs.
PART I – FINANCIAL INFORMATION
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
The Company has interest rate and foreign exchange rate risk exposure and no long-term fixed rate investments or borrowings. Primary interest rate risk is due to potential fluctuations of exposure to interest rates for variable rate borrowings.
Foreign exchange risk exposure arises because the Company markets and sells its products throughout the world. It thereforeThe Company also could be affected by weak economic conditions in foreign markets that could reduce demand for its products. Additionally, revenues in certain foreign countries as well as certain expenses related to those revenues are transacted in currencies other than the U.S. Dollar. The Company’s operating results are primarily exposed to changes in exchange rates between the U.S. Dollar, the British Pound Sterling and the Euro. When the U.S. Dollar weakens against foreign currencies, the dollar value of revenues denominated in foreign currencies increases. When the U.S. Dollar strengthens, the opposite situation occurs. Additionally, previously recognized revenues in the course of collection can be affected positively or negatively by changes in exchange rates. The Company uses derivative financial instruments to help manage the economic impact of fluctuations in certain currency exchange rates. These contracts are adjusted to fair value through earnings.
Neogen has assets, liabilities and operations outside of the United States, thatwhich are located in Scotland, Brazil and Mexico where the functional currency is the British Pound Sterling, Brazilian Real and Mexican Peso, respectively. The Company’s investmentinvestments in its foreign subsidiaries are considered to be long-term.
PART I – FINANCIAL INFORMATION
Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
An evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of November 30, 2010August 31, 2011 was carried out under the supervision and with the participation of the Company’s management, including the Chairman & Chief Executive Officer and the Vice President & Chief Financial Officer (“the Certifying Officers”). Based on the evaluation, the Certifying Officers concluded that the Company’s disclosure controls and procedures are effective.
Changes in Internal Controls Over Financial Reporting –
There was no change to the Company’s internal control over financial reporting during the quarter ended November 30, 2010August 31, 2011 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. For purposes of this evaluation, the impact of the acquisition of GeneSeek, Inc. which closed on April 1, 2010, on our internal controls over financial reporting has been excluded.
Item 1. | Legal Proceedings |
The Company is subject to certain legal and other proceedings in the normal course of business. In the opinion of management, the outcome of these matters will not have a material effect on its future results of operations or financial position.
Item 6. | Exhibits |
(a) Exhibit Index
31.1 | – | Certification of Chief Executive Officer pursuant to Rule 13a – 14 (a). | – | Certification of Chief Executive Officer pursuant to Rule 13a – 14 (a). | ||||
31.2 | – | Certification of Chief Financial Officer pursuant to Rule 13a – 14 (a). | – | Certification of Chief Financial Officer pursuant to Rule 13a – 14 (a). | ||||
32 | – | Certification pursuant to 18 U.S.C. sections 1350. | – | Certification pursuant to 18 U.S.C. sections 1350. | ||||
101.INS | – | XBRL Instance Document | ||||||
101.SCH | – | XBRL Taxonomy Extension Schema Document | ||||||
101.CAL | – | XBRL Taxonomy Extension Calculation Linkbase Document | ||||||
101.DEF | – | XBRL Taxonomy Extension Definition Document | ||||||
101.LAB | – | XBRL Taxonomy Extension Label Linkbase Document | ||||||
101.PRE | – | XBRL Taxonomy Extension Presentation Linkbase Document |
Items 1A, 2, 3, 4, and 5 are not applicable or removed or reserved and have been omitted.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
NEOGEN CORPORATION | ||||
(Registrant) | ||||
Dated: | ||||
/S/ JAMES L. HERBERT | ||||
James L. Herbert | ||||
Chairman & Chief Executive Officer | ||||
(Principal Executive Officer) | ||||
Dated: | ||||
/S/ | ||||
Vice President & Chief Financial Officer | ||||
(Principal Financial Officer and Principal Accounting Officer) |
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