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

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

(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☒ 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 RegulationS-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☒ 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 a~~non-accelerated~~ ~~filer (see definition~~an emerging growth company. See the definitions of ~~“accelerated filer and large~~“large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange ~~Act):~~Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended ~~transaction~~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 Rule12b-2 of the Exchange Act): YES ☐ NO ☒

As of ~~February 28, 2018,~~November 30, 2023 there were ~~51,583,085~~216,520,296 shares of Common Stock outstanding.


	February 28, 2018			May 31, 2017
	(Unaudited)			(Audited)			November 30, 2023			May 31, 2023
Assets
Current Assets
Cash and cash equivalents	$	82,066		$	77,567		$	205,765		$	163,240
Marketable securities (at fair value, which approximates cost)		110,089			66,068
Accounts receivable, less allowance of $1,750 and $2,000		73,209			68,576
Marketable securities								24,501			82,329
Accounts receivable, net of allowance of $3,403 and $2,827								150,498			153,253
Inventories, net		77,506			73,144			160,529			133,812
Prepaid expenses and other current assets		9,334			7,606			83,080			53,297

Total Current Assets		352,204			292,961			624,373			585,931
Property and Equipment, net		72,514			61,748
Net Property and Equipment								244,300			198,749
Other Assets
Right of use assets								15,015			11,933
Goodwill		99,478			104,759			2,137,983			2,137,496
Othernon-amortizable intangible assets		15,011			14,323
Customer-based intangibles, net of accumulated amortization of $23,846 and $20,846 at February 28, 2018 and May 31, 2017		33,518			35,983
Othernon-current assets, net of accumulated amortization of $11,893 and $9,931 at February 28, 2018 and May 31, 2017		22,876			18,635

Intangible assets, net								1,564,744			1,605,103
Other non-current assets								16,000			15,220
Total Assets	$	595,601		$	528,409		$	4,602,415		$	4,554,432

Liabilities and Equity
Liabilities and Stockholders’ Equity
Current Liabilities
Current portion of finance lease							$	2,569		$	-
Accounts payable	$	19,654		$	16,244			112,184			76,669
Accrued compensation		5,469			5,002			15,642			25,153
Income taxes		960			936
Income tax payable								10,217			6,951
Accrued interest								10,985			11,149
Deferred revenue								4,679			4,616
Other accruals		11,210			13,820			20,336			20,934

Total Current Liabilities		37,293			36,002			176,612			145,472
Deferred Income Taxes		11,400			17,048
Non-Current Liabilities		4,973			3,602

Deferred Income Tax Liability								355,005			353,427
Non-Current Debt								886,915			885,439
Other Non-Current Liabilities								36,316			35,877
Total Liabilities		53,666			56,652			1,454,848			1,420,215
Commitments and Contingencies (note 9)
Commitments and Contingencies (note 12)
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, 51,583,085 and 50,932,489 shares issued and outstanding at February 28, 2018 and May 31, 2017, respectively		8,253			8,149
Preferred stock, $1.00 par value, 100,000 shares authorized, none issued and outstanding								-			-
Common stock, $0.16 par value, 315,000,000 shares authorized, 216,520,296 and 216,245,501 shares issued and outstanding at November 30, 2023, and May 31, 2023, respectively								34,644			34,599
Additionalpaid-in capital		197,246			174,742			2,574,994			2,567,828
Accumulated other comprehensive loss		(5,303	)		(7,203	)		(25,128	)		(33,251	)
Retained earnings		341,459			295,926			563,057			565,041

Total Neogen Corporation Stockholders’ Equity		541,655			471,614
Non-controlling interest		280			143

Total Equity		541,935			471,757

Total Liabilities and Equity	$	595,601		$	528,409

Total Stockholders’ Equity								3,147,567			3,134,217
Total Liabilities and Stockholders’ Equity							$	4,602,415		$	4,554,432

The accompanying notes ~~to interim~~are an integral part of these condensed consolidated financial statements.


	Three Months Ended					Nine Months Ended
	February 28,					February 28,						Three Months Ended November 30,						Six Months Ended November 30,
	2018		2017			2018			2017			2023			2022			2023			2022
Revenues
Product revenues	$	78,142	$	73,964		$	244,298		$	223,170		$	203,869		$	203,317		$	408,270		$	310,109
Service revenues		17,750		14,421			48,667			39,577			25,760			26,716			50,346			52,273

Total Revenues		95,892		88,385			292,965			262,747			229,629			230,033			458,616			362,382
Cost of Revenues
Cost of product revenues		40,352		38,816			124,785			113,241			98,353			102,530			195,312			157,971
Cost of service revenues		10,019		8,689			27,517			24,556			14,502			14,964			29,769			29,602

Total Cost of Revenues		50,371		47,505			152,302			137,797			112,855			117,494			225,081			187,573

Gross Margin		45,521		40,880			140,663			124,950

Gross Profit													116,774			112,539			233,535			174,809
Operating Expenses
Sales and marketing		17,492		15,340			52,331			45,824			44,832			36,348			90,615			59,731
General and administrative		9,280		8,548			29,096			25,094			51,721			77,001			96,842			104,945
Research and development		2,836		2,641			8,901			8,087			5,756			6,846			12,478			11,727

Total Operating Expenses		29,608		26,529			90,328			79,005			102,309			120,195			199,935			176,403

Operating Income		15,913		14,351			50,335			45,945

Other Income
Operating Income (Loss)													14,465			(7,656	)		33,600			(1,594	)
Other Expense
Interest income		524		271			1,322			690			1,863			553			3,653			1,523
Other income		844		1,105			1,913			1,098

Total Other Income		1,368		1,376			3,235			1,788

Income Before Taxes		17,281		15,727			53,570			47,733
Interest expense													(18,032	)		(20,545	)		(36,488	)		(20,547	)
Other expense													(2,043	)		(6,443	)		(2,849	)		(6,814	)
Total Other Expense													(18,212	)		(26,435	)		(35,684	)		(25,838	)
Loss Before Taxes													(3,747	)		(34,091	)		(2,084	)		(27,432	)
Provision for Income Taxes		700		5,350			7,900			16,250			(260	)		7,750			(100	)		9,200

Net Income		16,581		10,377			45,670			31,483
Net (Income)/Loss Attributable toNon-Controlling Interest		5		(90	)		(70	)		(163	)

Net Income Attributable to Neogen	$	16,586	$	10,287		$	45,600		$	31,320

Net Income Attributable to Neogen Per Share
Net Loss												$	(3,487	)	$	(41,841	)	$	(1,984	)	$	(36,632	)
Net Loss Per Share
Basic	$	0.32	$	0.20		$	0.89		$	0.62		$	(0.02	)	$	(0.19	)	$	(0.01	)	$	(0.23	)

Diluted	$	0.32	$	0.20		$	0.88		$	0.61		$	(0.02	)	$	(0.19	)	$	(0.01	)	$	(0.23	)

Weighted Average Shares Outstanding
Basic													216,410,493			216,134,350			216,359,511			161,689,929
Diluted													216,410,493			216,134,350			216,359,511			161,689,929

The accompanying notes ~~to interim~~are an integral part of these condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive (Loss) Income (unaudited)

(1)Amounts are net of tax of $84 and $46 during the three months ended November 30, 2023 and 2022 and $267 and ($80) during the six months ended November 30, 2023 and 2022, respectively.

(2) Amounts are net of tax of ($111) and ($757) during the three months ended November 30, 2023 and 2022 and $822 and ($757) during the six months ended November 30, 2023 and 2022, respectively.

The accompanying notes ~~to interim~~are an integral part of these condensed consolidated financial statements.

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

DESCRIPTION OF BUSINESS

Neogen Corporation and subsidiaries ("Neogen," "we," "our," or the "Company") develop, manufacture and market a diverse line of products and services dedicated to food and animal safety. Our Food Safety segment consists primarily of diagnostic test kits and complementary products (e.g., culture media) sold to food producers and processors to detect dangerous and/or unintended substances in human food and animal feed, such as foodborne pathogens, spoilage organisms, natural toxins, food allergens, genetic modifications, ruminant by-products, meat speciation, drug residues, pesticide residues and general sanitation concerns. Our diagnostic test kits are generally easier to use and provide quicker results than conventional diagnostic methods. The majority of the test kits are disposable, single-use, immunoassay and DNA detection products that rely on proprietary antibodies and RNA and DNA testing methodologies to produce rapid and accurate test results. Our expanding line of food safety products also includes genomics-based diagnostic technology, and advanced software systems that help testers to objectively analyze and store their results and perform analysis on the results from multiple locations over extended periods.

Neogen’s Animal Safety segment is engaged in the development, manufacture, marketing and distribution of veterinary instruments, pharmaceuticals, vaccines, topicals, parasiticides, diagnostic products, rodent control products, cleaners, disinfectants, insect control products and genomics testing services for the worldwide animal safety market. The majority of these consumable products are marketed through veterinarians, retailers, livestock producers and animal health product distributors. Our line of drug detection products is sold worldwide for the detection of abused and therapeutic drugs in animals and animal products, and has expanded into the workplace and human forensic markets.

BASIS OF PRESENTATION AND CONSOLIDATION

The accompanying unaudited condensed 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 Form10-Q and Article 10 of RegulationS-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 of the results of the interim period have been ~~included.~~included in the accompanying unaudited condensed consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. The results of operations ~~for~~during the three and ~~nine month periods~~six months ended ~~February 28, 2018~~November 30, 2023 are not necessarily indicative of the results to be expected for the full fiscal year ending May 31, ~~2018.~~2024. For more complete financial information, these condensed consolidated financial statements should be read in conjunction with the ~~May 31, 2017~~ audited consolidated financial statements and the notes thereto included in ~~the Company’s~~our Annual Report on Form10-K for the fiscal year ended May 31, ~~2017.~~2023.

Our functional currency is the U.S. dollar. We translate our non-U.S. operations’ assets and liabilities denominated in foreign currencies into U.S. dollars at current rates of exchange as of the balance sheet date and income and expense items at the average exchange rate for the reporting period. Translation adjustments resulting from exchange rate fluctuations are recorded in other comprehensive (loss) income. Gains or losses from foreign currency transactions are included in other expense on our condensed consolidated statements of operations. Management has designated certain intercompany loans as long-term in nature, and therefore, the gains and losses on remeasurement of these loans are recorded within accumulated other comprehensive loss.

ACCOUNTING POLICIES

Comprehensive (Loss) Income

Comprehensive (loss) income represents net loss and any revenues, expenses, gains and losses that, under U.S. generally accepted accounting principles, are excluded from net loss and recognized directly as a component of equity. Accumulated other comprehensive (loss) income consists of foreign currency translation adjustments and unrealized gains or losses on our marketable securities and derivative instruments.

Fair Value of Financial 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. The Company utilizes 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.

The carrying amounts of certain financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable, our revolving credit agreement, and long-term debt, approximate their fair value based on either their short maturity or current terms for similar instruments.

Leases

We lease various manufacturing, laboratory, warehousing and distribution facilities, administrative and sales offices, equipment and vehicles under operating leases. We evaluate our contracts to determine if an arrangement is a lease at inception and classify it as a finance or operating lease. Currently, many of our leases are classified as operating leases. Operating leases are included in Other assets, Other accruals and Other non-current liabilities on the Company’s condensed consolidated balance sheets. Finance leases are included in net property and equipment and current portion of finance lease on the Company’s condensed consolidated balance sheets.

Costs associated with operating leases are recognized on a straight-line basis within operating expenses over the term of the lease. Costs associated with finance leases are recognized on a straight-line basis within depreciation and interest expense over the term of the lease. The right-of-use operating lease assets were $15,015 and $11,933 as of November 30, 2023 and May 31, 2023, respectively. The total current and non-current operating lease liabilities were $15,366 and $12,089 as of November 30, 2023 and May 31, 2023, respectively. The finance lease assets were $2,569 as of November 30, 2023. There were no finance leases recorded as of May 31, 2023. See Note 10. "Debt" for detail on the finance lease liabilities.

Derivatives

The Company operates on a global basis and is exposed to the risk that its financial condition, results of operations and cash flows could be adversely affected by changes in foreign currency exchange rates and changes in interest rates. To reduce the potential effects of foreign currency exchange rate movements on net earnings, the Company enters into derivative financial instruments in the form of foreign currency exchange forward contracts with major financial institutions and have also entered into interest rate swap contracts as a hedge against changes in interest rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. On the date the derivative is established, the Company designates the derivative as either a fair value hedge, a cash flow hedge or a net investment hedge in accordance with its established policy. Each reporting period, derivatives are recorded at fair value in other current assets, other assets, accrued liabilities and other long-term liabilities. The change in fair value is recorded in accumulated other comprehensive (loss) income, and amounts are reclassified into earnings on the condensed consolidated statement of income when transactions are realized. Derivatives that are not determined to be effective hedges are adjusted to fair value with a corresponding adjustment to earnings. The Company does not enter into derivative financial instruments for trading or speculative purposes.

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 and derivatives. 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.

Accounts Receivable and Concentrations of Credit Risk

Financial instruments which potentially subject Neogen to concentrations of credit risk consist principally of accounts receivable. Management attempts to minimize credit risk by reviewing customers’ credit histories before extending credit and by monitoring credit exposure on a regular basis. Collateral or other security is generally not required for accounts receivable. We maintain an allowance for customer accounts that reduces receivables to amounts that are expected to be collected. In estimating the allowance for doubtful accounts, management considers relevant information about past events, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets. Once a receivable balance has been determined to be uncollectible, generally after all collection efforts have been exhausted, that amount is charged against the allowance for doubtful accounts. No customer accounted for more than 10% of accounts receivable atNovember 30, 2023 or May 31, 2023, respectively.

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. The Company's business is organized into two operating segments: Food Safety and Animal Safety. Under the goodwill guidance, management determined that each of its segments represents a reporting unit. Other intangible assets include customer relationships, trademarks, licenses, trade names, covenants not-to-compete and patents. Customer relationships intangibles are amortized on either an accelerated or straight-line basis, reflecting the pattern in which the economic benefits are consumed, while all other amortizable intangibles are amortized on a straight-line basis. Intangibles are amortized over 2 to 25 years.

Management reviews the carrying amounts of goodwill annually at the reporting unit level, or when indications of impairment exist, to determine if goodwill may be impaired. Goodwill is tested for impairment annually in the fourth quarter. During management's annual test or when there are indicators of impairment, if the carrying amount is deemed to be less than fair value based upon a discounted cash flow analysis and comparison to comparable EBITDA multiples of peer companies, goodwill is reduced to the estimated fair value and a charge is recorded to operations.

Amortizable intangible assets are tested for impairment when indications of impairment exist. If the carrying amounts of these assets are deemed to be less than fair value based upon a discounted cash flow analysis, such assets are reduced to their estimated fair value and a charge is recorded to operations.

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.

Business Combinations

We utilize the acquisition method of accounting for business combinations. This method requires, among other things, that results of operations of acquired companies are included in Neogen’s results of operations beginning on the respective acquisition dates and that assets acquired and liabilities assumed are recognized at fair value as of the acquisition date. Any excess of the fair value of consideration transferred over the fair values of the net assets acquired is recognized as goodwill. As part of our acquisition accounting, the Company will recognize intangible assets. Management determines the fair value of the intangible assets by applying certain valuation methodologies, including the multi-period excess earnings method, which involves the use of significant estimates and assumptions related to forecasted revenue growth rate and customer attrition rate. Valuation specialists are often used to develop and evaluate the appropriateness of the multi-period excess earnings method, our discount rates, our attrition rate and our fair value estimates using our cash flow projections.

The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other business acquisition costs are expensed when incurred.

Our estimates of fair value are based on assumptions believed to be reasonable at that time. If we made different estimates or judgments, it could result in material differences in the fair values of the net assets acquired.

Equity Compensation Plans

Share options awarded to employees, restricted stock units (RSUs) 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, an estimate of award forfeitures, 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. For RSUs, we use the intrinsic value method to value the units.

To value equity awards, several recognized valuation models exist; none of these models can be singled out as being the best or most correct. The model applied by us can accommodate most of the specific features included in the options granted, which is the reason for its use. If different models 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 7. "Equity Compensation Plans."

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 year.

New Accounting Pronouncements Not Yet Adopted

Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which modifies the disclosure and presentation requirements of reportable segments. The amendments in the update require the disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit and loss. The amendments also require disclosure of all other segment items by reportable segment and a description of its composition. Additionally, the amendments require disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that this guidance will have on the presentation of its consolidated financial statements and accompanying notes.

2. ~~INVENTORIES~~CASH AND MARKETABLE SECURITIES

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. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has not experienced losses related to these balances and believes it is not exposed to significant credit risk regarding its cash and cash equivalents. Cash and cash equivalents were $205,765 and $163,240 as of November 30, 2023 and May 31, 2023, respectively. The carrying value of these assets approximates fair value due to the short maturity of these instruments and is classified as Level 1 in the fair value hierarchy.

Marketable Securities

The Company has marketable securities held by banks or broker-dealers consisting of commercial paper and corporate bonds rated at least A-1/P-1 (short-term) and A/A2 (long-term) with original maturities between 91 days and two years. These securities are classified as available for sale. Changes in fair value are monitored and recorded on a monthly basis and are recorded in other comprehensive (loss) income. In the event of a downgrade in credit quality subsequent to purchase, the marketable securities investment is evaluated to determine the appropriate action to take to minimize the overall risk to our marketable securities portfolio. If fair value is less than its amortized cost basis, then the Company evaluates whether the decline is the result of a credit loss, in which case an impairment is recorded through an allowance for credit losses. Where there is an intention or a requirement to sell an impaired available-for-sale debt security, the entire impairment is recognized in earnings with a corresponding adjustment to the amortized cost basis of the security. The primary objective of management’s short-term investment activity is to preserve capital for the purpose of funding current operations, capital expenditures and business acquisitions. Short-term investments are not entered into for trading or speculative purposes. These securities are recorded at fair value based on recent trades or pricing models and therefore meet the Level 2 criteria. Interest income on these investments is recorded within other (expense) income on the condensed consolidated statements of operations.

Marketable Securities as of November 30, 2023 and May 31, 2023 are listed below by classification and remaining maturities.


	Maturity	November 30, 2023		May 31, 2023
Commercial Paper & Corporate Bonds	0 - 90 days	$	17,536	$	22,552
	91 - 180 days		6,644		35,692
	181 days - 1 year		321		23,768
	1 - 2 years		—		317
Total Marketable Securities		$	24,501	$	82,329

The components of marketable securities, consisting of commercial paper and corporate bonds, as of November 30, 2023 are as follows:


	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial Paper & Corporate Bonds	$	24,615	$	—	$	(114	)	$	24,501

The components of marketable securities, consisting of commercial paper and corporate bonds, as of May 31, 2023 are as follows:


	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Commercial Paper & Corporate Bonds	$	83,549	$	—	$	(1,220	)	$	82,329

4. REVENUE RECOGNITION

The Company derives revenue from two primary sources—product revenue and service revenue.

Product revenue consists of shipments of:

•

Diagnostic test kits, dehydrated culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation;

•

Consumable products marketed to veterinarians, retailers, livestock producers and animal health product distributors; and

•

Rodent control products, disinfectants and insect control products to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities.

Revenues for our products are recognized and invoiced when the product is shipped to the customer.

Service revenue consists primarily of:

•

Genomic identification and related interpretive bioinformatic services; and

•

Other commercial laboratory services.

Revenues for Neogen’s genomics and commercial laboratory services are recognized and invoiced when the applicable laboratory service is performed and the results are conveyed to the customer.

Payment terms for products and services are generally 30 to 60 days.

The Company has no contract assets. Contract liabilities represent deposits made by customers before the satisfaction of performance obligation(s) and recognition of revenue. Upon completion of the performance obligation(s) that the Company has with the customer, the liability for the customer deposit is relieved and revenue is recognized. These customer deposits are recorded within Deferred revenue on the condensed consolidated balance sheets. During the three and six months ended November 30, 2023, the Company recorded additions of $4,121 and $5,978 to deferred revenue, respectively. During the three and six months ended November 30, 2022, the Company recorded additions of $2,479 and $4,671 to deferred revenue, respectively. During the three and six months ended November 30, 2023, the Company recognized $3,231 and $5,915, respectively, of deferred revenue amounts into revenue. During the three and six months ended November 30, 2022, the Company recognized $2,860 and $5,048, respectively, of deferred revenue amounts into revenue. Changes in the balances relate primarily to sales of the Company's genomics services.

On September 1, 2022, Neogen closed on a Reverse Morris Trust transaction to combine with 3M Company's ("3M") Food Safety Division (“3M FSD”, “FSD”). Similar to Neogen, 3M’s former FSD sells diagnostic test kits, dehydrated culture media, and related products used by food producers and processors to detect foodborne bacteria, allergens and levels of general sanitation. Revenues for these products are recognized and invoiced when the product

is shipped to the customer. Many of these products are currently manufactured, invoiced, and distributed by 3M on behalf of Neogen under a number of transition service contracts. However, the Company is currently in the process of exiting the distribution-related service contracts. This will be complete on a global basis by the end of the third quarter in fiscal 2024.

The following table presents disaggregated revenue by major product and service categories during the three and six months ended November 30, 2023 and 2022:


	Three Months Ended November 30,				Six Months Ended November 30,
	2023		2022		2023		2022
Food Safety
Natural Toxins & Allergens		21,110	$	22,251	$	43,378	$	42,038
Bacterial & General Sanitation		42,774		41,121		87,998		51,849
Indicator Testing, Culture Media & Other		83,758		82,084		165,644		101,338
Rodent Control, Insect Control & Disinfectants		10,954		10,377		22,044		19,952
Genomics Services		5,807		5,510		11,617		10,809
	$	164,403	$	161,343	$	330,681	$	225,986
Animal Safety
Life Sciences	$	1,677	$	1,427	$	3,338	$	3,016
Veterinary Instruments & Disposables		16,937		16,433		29,869		31,106
Animal Care & Other		8,985		10,569		17,160		21,095
Rodent Control, Insect Control & Disinfectants		19,953		20,665		42,639		42,879
Genomics Services		17,674		19,596		34,929		38,300
		65,226		68,690		127,935		136,396
Total Revenues	$	229,629	$	230,033	$	458,616	$	362,382

5. NET ~~INCOME~~LOSS PER SHARE

Basic net loss per share was computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share was computed using the treasury stock method by dividing net loss by the weighted average number of shares of common stock outstanding.

The calculation of net ~~income~~loss per share ~~attributable~~follows:


	Three Months Ended November 30,						Six Months Ended November 30,
	2023			2022			2023			2022
Numerator for basic and diluted net loss per share:
Net loss attributable to Neogen	$	(3,487	)	$	(41,841	)	$	(1,984	)	$	(36,632	)
Denominator for basic net loss per share:
Weighted average shares		216,410,493			216,134,350			216,359,511			161,689,929
Effect of dilutive stock options and RSUs		—			—			—			—
Denominator for diluted net loss per share		216,410,493			216,134,350			216,359,511			161,689,929
Net loss per share:
Basic	$	(0.02	)	$	(0.19	)	$	(0.01	)	$	(0.23	)
Diluted	$	(0.02	)	$	(0.19	)	$	(0.01	)	$	(0.23	)

Due to ~~Neogen Corporation follows:~~

   Three Months Ended
February 28,    Nine Months Ended
February 28,
   2018    2017    2018    2017
   (in thousands, except per share amounts)
Numerator for basic and diluted net income per share:

Net income attributable to Neogen
   $ 16,586    $ 10,287    $ 45,600    $ 31,320
Denominator for basic net income per share:

Weighted average shares
   51,537    50,746    51,253    50,438
Effect of dilutive stock options
   700    633    761    723








Denominator for diluted net income per share
   52,237    51,379    52,014    51,161
Net income attributable to Neogen per share:

Basic
   $ 0.32    $ 0.20    $ 0.89    $ 0.62








Diluted
   $ 0.32    $ 0.20    $ 0.88    $ 0.61

~~The Board of Directors declared a 4~~the net loss for 3the three and six months ended November 30, 2023 and the three and six months ended November 30, 2022, the dilutive stock ~~split effective December 29, 2017. All share~~options and ~~per share amounts in this Form10-Q~~ ~~reflect amounts as if the split took place at the beginning of the periods presented.~~RSUs would have been anti-dilutive.

6. SEGMENT INFORMATION AND GEOGRAPHIC DATA

~~The Company has~~ 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. All product revenues from the merger of the 3M FSD, effective September 1, 2022, are currently reported through the Food Safety segment. 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~~distributors. This segment also provides genomic identification and related interpretive bioinformatic services. Additionally, the Animal Safety segment produces and markets ~~rodenticides, cleaners,~~rodent control products, disinfectants and ~~insecticides~~insect control products to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities.

~~Neogen’s~~Our international operations in the United Kingdom, Mexico, Brazil, China and India originally focused on the Company’s ~~Food Safety~~food safety products, and each of these units reports through the Food Safety segment. In recent years, these operations have expanded to offer ~~the Company’s~~our complete line of products and services, including those usually associated with the Animal Safety segment, such as cleaners, disinfectants, ~~rodenticides, insecticides,~~rodent control products, insect control products, veterinary instruments and ~~genomic~~genomics services. These additional products and services are managed and directed by existing Food Safety management and are reported through the Food Safety segment.

Neogen’s operation in Australia originally focused on providing genomics services and sales of animal safety products and reports through the Animal Safety segment. With the acquisition of Cell BioSciences in February 2020, this operation expanded to offer our complete line of products and services, including those usually associated with the Food Safety segment. These additional products are managed and directed by existing management at Neogen Australasia and report through the Animal Safety segment.

The accounting policies of each of the segments are the same as those described in Note 1. "Description of Business and Basis of Presentation."

Segment information follows:


	Food Safety		Animal Safety		Corporate and Eliminations (1)			Total		Food Safety		Animal Safety		Corporate and Eliminations (1)			Total
	(in thousands)
As of and for the three months ended February 28, 2018
As of and during the three months ended November 30, 2023
Product revenues to external customers	$	42,618	$	35,524	$	—		$	78,142	$	156,317	$	47,552	$	—		$	203,869
Service revenues to external customers		5,027		12,723		—			17,750		8,086		17,674		—			25,760

Total revenues to external customers		47,645		48,247		—			95,892	$	164,403	$	65,226	$	—		$	229,629
Operating income (loss)		8,258		8,493		(838	)		15,913	$	24,329	$	7,739	$	(17,603	)	$	14,465
Total assets		188,075		215,371		192,155			595,601	$	4,029,108	$	341,919	$	231,388		$	4,602,415

As of and for the three months ended February 28, 2017
As of and during the three months ended November 30, 2022
Product revenues to external customers	$	39,318	$	34,646	$	—		$	73,964	$	154,223	$	49,094	$	—		$	203,317
Service revenues to external customers		3,631		10,790		—			14,421		7,120		19,596		—			26,716

Total revenues to external customers		42,949		45,436		—			88,385	$	161,343	$	68,690	$	—		$	230,033
Operating income (loss)		7,403		7,743		(795	)		14,351	$	21,446	$	12,806	$	(41,908	)	$	(7,656	)
Total assets		183,419		215,243		108,636			507,298	$	3,955,488	$	329,177	$	278,577		$	4,563,242

(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.


	Food Safety		Animal Safety		Corporate and Eliminations (1)			Total
As of and during the six months ended November 30, 2023
Product revenues to external customers	$	315,264	$	93,006	$	—		$	408,270
Service revenues to external customers		15,417		34,929		—			50,346
Total revenues to external customers	$	330,681	$	127,935	$	—		$	458,616
Operating income (loss)	$	46,570	$	16,095	$	(29,065	)	$	33,600


As of and during the six months ended November 30, 2022
Product revenues to external customers	$	212,013	$	98,096	$	—		$	310,109
Service revenues to external customers		13,973		38,300		—			52,273
Total revenues to external customers		225,986		136,396		-			362,382
Operating income (loss)		30,042		24,687		(56,323	)		(1,594	)

(1)

Includes the elimination of intersegment transactions.

The following table presents the Company’s revenue disaggregated by geographic location:


	Three Months Ended November 30,				Six Months Ended November 30,
	2023		2022		2023		2022
Domestic	$	113,554	$	114,413	$	224,622	$	195,055
International		116,075		115,620		233,994		167,327
Total revenue	$	229,629	$	230,033	$	458,616	$	362,382

8. BUSINESS COMBINATIONS

The condensed consolidated statements of ~~purchase.~~

~~6. NEW ACCOUNTING PRONOUNCEMENTS~~

~~In May 2014, the FASB issued ASU No.2014-09—Revenue~~ from Contracts with Customers (Topic 606). The new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. In April 2016, the FASB issued Accounting Standards Update~~No. 2016-10—~~ ~~Revenue from Contracts with Customers (Topic 606), which amends and adds clarity to certain aspects of the guidance set forth in ASU2014-09~~ related to identifying performance obligations and licensing. The guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The guidance permits two methods of adoption: a full retrospective method to each prior reporting period presented or a modified retrospective approach with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company has formed an internal team to implement the new standard. This team has identified all revenue streams at each significant subsidiary and is currently reviewing contracts to evaluate the potential impact of adopting the new standard on the Company’s revenue recognition policies, procedures and control framework and ultimately on the Company’s consolidated financial statements and related disclosures. The Company will adopt this ASU on June 1, 2018 using the modified retrospective approach.

~~In February 2016, the FASB issued ASU No.2016-02—Leases~~ to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a~~right-of-use~~ asset representing its right to use the underlying asset for the lease term. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessor have not significantly changed from previous U.S. GAAP. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018; early adoption is permitted. Modified retrospective application is permitted with certain practical expedients. The Company expects to adopt this ASU on June 1, 2019 and is currently in the process of evaluating its lessee and lessor arrangements to determine the impact of this amendment on its consolidated financial condition and results of operations. This evaluation includes a review of revenue through leasing arrangements as well as lease expenses, which are primarily through operating lease arrangements at most of the Company’s facilities.

~~In March 2016, the FASB issued ASUNo. 2016-09~~ — Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to provide guidance that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional~~paid-in~~ capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The Company adopted this standard effective June 1, 2017. Adoption of this ASU increased income tax expense by $331,000 for the three months ended February 28, 2018 as the reduction in the corporate tax rate from the tax reform enacted in December 2017 resulted in a partial reversal of tax benefit previously recorded at the higher corporate rate in the first and second quarters of the current fiscal year; year to date, income tax expense decreased by $3,463,000 as a result of adoption of the ASU.

~~In June 2016, the FASB issued ASU No.2016-13—Measurement~~ of Credit Losses on Financial Instruments, which changes how companies measure credit losses on most financial instruments measured at amortized cost and certain other instruments, such as loans, receivables and held-~~to-maturity~~ debt securities. Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost the Company expects to collect over the instrument’s contractual life. ASU~~2016-13~~ is effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. The Company does not believe the adoption of this guidance will have an impact on its consolidated financial statements.

~~In August 2016, the FASB issued ASUNo. 2016-15—~~ ~~Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The amendments in ASU2016-15~~ address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (FASB ASC) 230, Statement of Cash Flows. The amendments in ASU~~2016-15~~ are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The Company has not yet adopted this update and is currently evaluating the impact of ASU~~No. 2016-15~~ ~~on its consolidated financial statements.~~

~~7. BUSINESS AND PRODUCT LINE ACQUISITIONS~~

~~The Consolidated Statements of Income~~operations 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.

Fiscal 2023

Thai-Neo Biotech Co., Ltd. Acquisition

On ~~December~~July 1, ~~2016, the Company~~2022, Neogen acquired all of the stock of ~~Quat-Chem~~Thai-Neo Biotech Co., Ltd., a ~~chemical company that manufactures biosecurity~~longstanding distributor of Neogen’s food safety products ~~based in Rochdale, England.~~to Thailand and Southeast Asia. Consideration for the purchase was ~~$21,606,000~~$1,581 in net cash, with $1,310 paid at closing, $37 paid in November 2022 as a working capital adjustment and ~~up to $3,778,000 of contingent consideration, due at the end of each of the first two years, based on an excess net sales formula.~~$234 paid in October 2023. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of ~~$4,684,000,~~$177, inventory of ~~$1,243,000, land,~~$232, prepaids of $3, net property, plant and equipment of ~~$2,526,000,~~$16, other non-current assets of $6, accounts payable of ~~$2,197,000, deferred~~$98, other payables of $6, non-current tax ~~liability of $1,133,000, contingent consideration accrual of $1,058,000, other current~~ liabilities of ~~$604,000,non-amortizable~~$124, intangible assets of ~~$1,889,000, intangible assets of $6,900,000~~$620 (with an estimated life of~~5-15~~ 10 years) and the remainder to goodwill~~(non-deductible~~ (non-deductible for tax purposes). The business continues to operate in Bangkok, Thailand, reporting within the Food Safety segment.

Corvium Acquisition

On February 10, 2023, the Company acquired certain assets as part of an asset purchase agreement with Corvium, Inc., a partner and supplier within the Company's software analytics platform. This acquisition, which primarily includes the software technology, advances the Company's food safety data analytics strategy. The purchase price consideration was $24,067, which included $9,004 held in escrow. In the first quarter of fiscal 2024, $8,000 of the escrow balance was released to Corvium, Inc. This transaction is a business combination and was accounted for using the acquisition method.

There also is the potential for performance milestone payments of up to $8,500 based on successful implementation of the software service at customer sites and sale of licenses. As a result, the Company has recorded contingent liabilities of $930 as part of the opening balance sheet within other non-current liabilities, as shown below.

In the first quarter of fiscal 2024, the Company recorded adjustments to intangible assets of $100, which increased the balance, based on finalization of a third-party advisor's valuation work and fair value estimates. Goodwill, which is fully deductible for tax purposes, includes value associated with profits earned from data management solutions that can be offered to existing customers and the expertise and reputation of the assembled workforce. These values are Level 3 fair value measurements. In January 2018, the Company paid the former owners $249,000 in contingent consideration based on the achievement of sales targets in the first year, and recorded a credit of $255,000 to other income, reducing the contingent consideration accrual by a corresponding amount; $554,000 remains accrued for contingent consideration payable at the end of the second year. This business continues to operate in its current location and is managed by Neogen Europe, reporting within the Food Safety segment.

On December 27, 2016, the Company acquired the stock of Rogama Industria e Comercio, Ltda., a company that develops and manufactures rodenticides and insecticides, based near Sao Paulo, Brazil. Consideration for the purchase was $12,428,000 in cash and up to $2,069,000 of contingent consideration, due at the end of each of the first two years, based on an excess net sales formula. The final purchase price allocation, based upon the fair value of these assets acquired and liabilities assumed, which was determined using the income approach, ~~included accounts receivable~~is summarized in the following table:


Prepaids and other current assets	$	66
Property, plant and equipment		13
Intangible assets		10,280
Deferred revenue		(1,827	)
Adjustment of annual license prepaid		(419	)
Other non-current liabilities		(930	)
Total identifiable assets and liabilities acquired		7,183
Goodwill		16,884
Total purchase consideration	$	24,067

For each completed acquisition listed above, the revenues and net income were not considered material and were therefore not disclosed.

3M Food Safety Transaction

On September 1, 2022, Neogen, 3M, and Neogen Food Safety Corporation (“Neogen Food Safety Corporation”), a subsidiary created to carve out 3M’s FSD, closed on a transaction combining 3M’s FSD with Neogen in a Reverse Morris Trust transaction and Neogen Food Safety Corporation became a wholly owned subsidiary of ~~$1,866,000, othernon-current~~Neogen (“FSD transaction”). Immediately following the FSD transaction, pre-merger Neogen Food Safety Corporation stockholders owned, in the aggregate, approximately 50.1% of the issued and outstanding shares of Neogen common stock and pre-merger Neogen shareholders owned, in the aggregate, approximately 49.9% of the issued and outstanding shares of Neogen common stock. This transaction is a business combination and was accounted for using the acquisition method.

The purchase price consideration for the 3M FSD was $3.2 billion, net of customary purchase price adjustments and transaction costs, which consisted of 108,269,946 shares of Neogen common stock issued on closing with a fair value of $2.2 billion and cash consideration of $1 billion, funded by the additional financing secured by the Company. See Note 10. "Debt" for further detail on the debt incurred.

In the first quarter of fiscal 2024, the Company recorded adjustments to goodwill and intangible assets, ~~of $26,000, inventory of $960,000, land, property~~based on third-party advisor's valuation work and ~~equipment of $4,734,000, current liabilities of $2,562,000, contingent consideration accrual of $213,000,non-current~~fair value estimates, resulting in an increase to goodwill and a decrease to the intangible assets balance. The company also recorded adjustments to deferred tax ~~liability~~liabilities, which increased the balance, based on finalization of ~~$1,307,000,non-amortizable~~entity income tax provisions. The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of ~~$870,000,~~$1.97 billion was recorded as goodwill, of which $1.92 billion is not deductible for tax purposes. Goodwill includes value associated with profits earned from market and expansion capabilities, expected synergies from integration and streamlining operational activities, the expertise and reputation of the assembled workforce and other intangible assets ~~of $5,112,000 (with an estimated life of5-15~~ ~~years) and the remainder to goodwill(non-deductible~~that do not qualify for ~~tax purposes).~~separate recognition. These values are Level 3 fair value measurements. ~~This business continues to operate in its current location and is managed by Neogen do Brasil, reporting within the Food Safety segment.~~

~~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 has been paid in cash with the remainder due in annual installments over the next five years. The preliminaryfinal purchase price allocation, ~~included inventory~~based upon the fair value of ~~$19,000, equipment of $419,000,non-current~~these assets acquired and liabilities ~~of $1,629,000,~~assumed, which was determined using the income approach, is summarized in the following table:


Cash and cash equivalents	$	319
Inventories		18,403
Other current assets		14,855
Property, plant and equipment		25,832
Intangible assets		1,559,805
Right of use asset		882
Lease liability		(885	)
Deferred tax liabilities		(352,636	)
Other liabilities		(2,832	)
Total identifiable assets and liabilities acquired		1,263,743
Goodwill		1,974,870
Total purchase consideration	$	3,238,613

The following table summarizes the intangible assets ~~of $850,000 (with an estimated~~acquired and the useful life of~~5-15~~ ~~years)~~ these assets.


	Fair Value		Useful Life in Years
Trade Names and Trademarks	$	108,434		25
Developed Technology		277,650		15
Customer Relationships		1,173,721		20
Total intangible assets acquired	$	1,559,805

During the three and six months ended November 30, 2023, integration expenses and professional fees related to the ~~remainder~~transaction of $4,585 and $6,246 were expensed. In the three and six months ended November 30, 2022, acquisition related costs of $39,132 and $52,864 were expensed. These costs are included in general and administrative expenses in the Company’s condensed consolidated statements of operations.

The operating results of the FSD have been included in the Company’s condensed consolidated statements of operations since the acquisition date. In the second quarter of fiscal 2024, the FSD’s total revenue was $99,847 and operating income was approximately $12,000. The operating income includes $4,585 of integration expenses and professional fees related to ~~goodwill(non-deductible~~the transaction and $20,120 of amortization expense for ~~tax purposes)~~acquired intangible assets.

The following table presents pro forma information as if the merger with the 3M FSD business had occurred on June 1, 2022 and had been combined with the results reported in our condensed consolidated statements of operations for all periods presented:


	Three Months Ended November 30,					Six Months Ended November 30,
	2023		2022			2023		2022
Net sales	$	229,629	$	230,033		$	458,616	$	459,894
Operating Income (Loss)	$	14,465	$	(7,656	)	$	33,600	$	3,437

The unaudited pro forma information is presented for informational purposes only and is not indicative of the results that would have been achieved if the merger had taken place at such time. The unaudited pro forma information presented above includes adjustments primarily for amortization charges for acquired intangible assets and certain acquisition-related expenses for legal and professional fees.

In connection with the acquisition of the 3M FSD, the Company and 3M entered into several transition service agreements, including manufacturing, distribution and certain back-office support, that have been accounted for separately from the acquisition of assets and assumption of liabilities in the business combination. 3M periodically remits amounts charged to customers on our behalf and charges us for the associated cost of goods sold and transition service fees. As of November 30, 2023 and May 31, 2023, a net receivable from 3M of $25,337 and $12,365, respectively, was included in prepaid expenses and other current assets in the Company’s condensed consolidated balance sheets.

9. GOODWILL AND INTANGIBLE ASSETS

The following table summarizes goodwill by reportable segment:


	Food Safety		Animal Safety		Total
May 31, 2023	$	2,056,161	$	81,335	$	2,137,496
Acquisitions(1)		250		—		250
Foreign currency translation and other		181		56		237
November 30, 2023	$	2,056,592	$	81,391	$	2,137,983

(1)

Represents measurement period adjustments relating to our 3M FSD and Corvium acquisitions.

As of May 31, 2023, non-amortizable intangible assets included licenses of $569, trademarks of $12,522 and other intangibles of $1,224. ~~These values~~

Amortizable intangible assets consisted of the following and are ~~Level 3 fair value measurements. The new business, renamed Neogen Australasia, continues to operate~~included in ~~its current location, reporting~~customer-based intangibles and other non-current assets within the ~~Animal Safety segment.~~condensed consolidated balance sheets:

~~8. LONG TERM~~


	Gross Carrying Amount		Less Accumulated Amortization		Net Carrying Amount
Licenses	$	20,624	$	7,585	$	13,039
Covenants not to compete		490		421		69
Patents		7,988		4,149		3,839
Customer relationships		1,247,000		109,660		1,137,340
Trade names and trademarks		122,992		7,296		115,696
Developed technology		307,577		30,741		276,836
Other product and service-related intangibles		23,894		5,969		17,925
November 30, 2023	$	1,730,565	$	165,821	$	1,564,744

Licenses	$	16,010	$	6,763	$	9,247
Covenants not to compete		488		384		104
Patents		8,499		4,865		3,634
Customer relationships		1,244,635		81,577		1,163,058
Trade names and trademarks		111,172		3,583		107,589
Developed technology		309,609		20,175		289,434
Other product and service-related intangibles		23,628		5,907		17,721
May 31, 2023	$	1,714,041	$	123,254	$	1,590,787

Amortization expense relating to definite-lived intangible assets was $23,693 and $47,397 during the three and six months ended November 30, 2023, respectively. Amortization expense relating to definite-lived intangible assets was $22,687 and $25,069 during the three and six months ended November 30, 2022, respectively.

Estimated amortization expense for fiscal years 2024 through 2028 is expected to be in the range of approximately $95,000 to $97,000 per year.

The amortizable intangible assets useful lives are 2 to 20 years for licenses, 3 to 10 years for covenants not to compete, 5 to 25 years for patents, 9 to 20 years for customer relationships, 5 to 25 years for trade names and trademarks, 10 to 20 years for developed technology and 5 to 15 years for other product and service-related intangibles. All definite-lived intangibles are amortized on a straight-line basis with the exception of definite-lived customer-based intangibles and product and service-related intangibles, which are amortized on either a straight-line or an accelerated basis.

10. DEBT

The Company’s debt and finance lease consists of the following:


	November 30, 2023			May 31, 2023
Term Loan	$	550,000		$	550,000
Senior Notes		350,000			350,000
Finance Lease		2,569			—
Total debt and finance lease		902,569			900,000
Less: Current portion		(2,569	)		—
Total non-current debt		900,000			900,000
Less: Unamortized debt issuance costs		(13,085	)		(14,561	)
Total non-current debt, net	$	886,915		$	885,439

The Company ~~has~~had a financing agreement with a bank providing for ana $15,000 unsecured revolving line of credit, which originally expired on November 30, 2023, but was replaced by the five-year senior secured revolving facility as part of ~~$15,000,000, which expires on September 30, 2019.~~the Credit Facilities described below. There were no advances against the line of credit ~~during fiscal year 2017 and there have been none thus far~~ in fiscal ~~year 2018; there~~2023 before it was ~~no balance outstanding at February 28, 2018.~~extinguished. Interest on any borrowings ~~remained~~under that agreement was at LIBOR plus 100 basis points ~~(rate under the terms of the agreement was 2.82% at February 28, 2018)~~. Financial covenants ~~include~~included maintaining specified levels of tangible net worth, debt service coverage, and funded debt to EBITDA, each of which the Company was in compliance with during the period the line of credit was available.

Credit Facilities

In June 2022, Neogen Food Safety Corporation entered into a credit agreement consisting of a five-year senior secured term loan facility (“term loan facility”) in the amount of $650,000 and a five-year senior secured revolving facility (“revolving facility”) in the amount of $150,000 (collectively, the “Credit Facilities”) to fund the 3M Food Safety transaction. The term loan facility was drawn on August 31, 2022, to fund the closing of the 3M Food Safety transaction on September 1, 2022 while the revolving facility remained undrawn and continues to be undrawn as of November 30, 2023.

The Credit Facilities bear interest based on the term SOFR plus an applicable margin between a range of 150 to 225 basis points determined for each interest period and paid monthly. During the six months ended November 30, 2023, the interest rates ranged from 7.42% to 7.67% per annum. The term loan facility matures on June 30, 2027 and the revolving facility matures at ~~February 28, 2018.~~the earlier of June 30, 2027 and the termination of the revolving commitments. In November 2022, the Company entered into an interest rate swap agreement, whereby interest on $250,000 of the total $550,000 principal balance is paid at a fixed rate. See Note 13. "Derivatives"for further detail on the swap agreement.

9.The term loan facility contains an optional prepayment feature at the discretion of the Company. The Company determined that the prepayment feature did not meet the definition of an embedded derivative and does not require bifurcation from the host liability and, accordingly, has accounted for the entire instrument at amortized cost. In accordance with the prepayment feature, the Company paid $100,000 of the term loan facility’s principal in fiscal year 2023.

The Company can draw any amount under the revolving facility up to the $150,000 limit, with the amount to be repaid on the termination date of the revolving commitments. Debt issuance costs of $2,361 were incurred related to the revolving facility. These costs are being amortized as interest expense in the condensed consolidated statements of operations over the contractual life of the revolving facility using the straight-line method. Amortization of the deferred debt issuance costs for the revolving facility was $122 and $244, respectively, during the three and six months ended November 30, 2023. Amortization of the deferred debt issuance costs for the revolving facility was $122 for the three and six months ended November 30, 2022. As of November 30, 2023 and May 31, 2023 the Company had $1,751 and $1,995, respectively, of unamortized debt issuance costs.

The Company must pay an annual commitment fee ranging from 0.20% and 0.35% on the unused portion of the Revolving Credit Facility, paid quarterly. As of November 30, 2023, the commitment fee was 0.30%, with $111 and $245, respectively, recorded as interest expense in the condensed consolidated statements of operations during the three and six months ended November 30, 2023. During the three and six months ended November 30, 2022, $133 and $225, respectively, relating to the commitment fee was recorded as interest expense in the consolidated statements of operations.

There was no accrued interest payable on the term loan as of November 30, 2023. The Company incurred $10,232 in total debt issuance costs on the term loan which is recorded as an offset to the term loan facility and amortized over the contractual life of the loan to interest expense using the straight-line method. The amortization of deferred debt issuance costs of $529 and $1,059 and interest expense of $10,267 and $20,868 (excluding swap credit of $764 and $1,452) for the term loan was included in the condensed consolidated statements of operations during the three and six months ended November 30, 2023, respectively. The amortization of deferred debt issuance costs of $529 and interest expense of $8,327 was included in the consolidated statements of operations during the three and six months ended November 30, 2022. As of November 30, 2023 and May 31, 2023 the Company had $7,585 and $8,644, respectively, of unamortized debt issuance costs.

Financial covenants include maintaining specified levels of funded debt to EBITDA, and debt service coverage. As of November 30, 2023, the Company was in compliance with its debt covenants.

Senior Notes

In July 2022, Neogen Food Safety Corporation closed on an offering of $350,000 aggregate principal amount of 8.625% senior notes due in 2030 (the “Notes”) in a private placement at par. The Notes were initially issued by Neogen Food Safety Corporation to 3M and were transferred and delivered by 3M to the selling securityholder in the offering, in satisfaction of certain of 3M’s existing debt. Upon closing of the 3M Food Safety transaction on September 1, 2022, the Notes became guaranteed on a senior unsecured basis by the Company and certain wholly-owned domestic subsidiaries of the Company.

The Company determined that the redemption features of the Notes did not meet the definition of a derivative and thus does not require bifurcation from the host liability and accordingly has accounted for the entire instrument at amortized cost.

Total accrued interest on the Notes was $10,985 as of November 30, 2023 and May 31, 2023 based on the stated interest rate of 8.625% and included in current liabilities on the condensed consolidated balance sheets. The Company incurred total debt issuance costs of $6,683, which are recorded as an offset to the Notes and amortized over the contractual life of the Notes to interest expense using the straight-line method. During the three and six months ended November 30, 2023, the Company recorded $7,756 and $15,511 of interest expense for the Notes in the condensed consolidated statements of operations, of which $209 and $417 related to the amortization of deferred debt issuance costs, respectively. During the three and six months ended November 30, 2022, the Company recorded $10,985 of interest expense in the consolidated statements of operations, of which $348 related to the amortization of deferred debt issuance costs. As of November 30, 2023 and May 31, 2023 the Company had $5,500 and $5,917, respectively, of unamortized debt issuance costs.

Finance Lease

The finance lease as of November 30, 2023 is a building lease that is classified within property and equipment and the current portion of debt on the condensed consolidated balance sheets. The Company intends to elect the purchase option within the lease agreement prior to the end of the lease term.

Maturity of Term Loan and Senior Notes

There are no required principal payments through fiscal year 2026, due to $100,000 in prepayments made in fiscal 2023.

13. DERIVATIVES

~~10. STOCK PURCHASE~~Derivatives Not Designated as Hedging Instruments

We forecast our net exposure in various receivables and payables to fluctuations in the value of various currencies, and have entered into a number of foreign currency forward contracts each month to mitigate that exposure. These contracts are recorded net at fair value on our condensed consolidated balance sheets, classified as Level 2 in the fair value hierarchy. Gains and losses from these contracts are recognized in other income in our condensed consolidated statements of operations. The notional amount of forward contracts in place was $65,041 and $15,500 as of November 30, 2023 and May 31, 2023, respectively, and consisted of hedges of transactions up to January 2024.



Fair Value of Derivatives Not Designated as Hedging Instruments	Balance Sheet Location	November 30, 2023			May 31, 2023
Foreign currency forward contracts, net	Other (payable) receivable	$	(389	)	$	140

The location and amount of gains (losses) from derivatives not designated as hedging instruments in our condensed consolidated statements of operations were as follows:


		Three Months Ended
Derivatives Not Designated as Hedging Instruments	Location in statements of operations	November 30, 2023			November 30, 2022
Foreign currency forward contracts	Other expense	$	(221	)	$	(9,128	)


		Six Months Ended
Derivatives Not Designated as Hedging Instruments	Location in statements of operations	November 30, 2023			November 30, 2022
Foreign currency forward contracts	Other expense	$	(541	)	$	(8,248	)

Derivatives Designated as Hedging Instruments

In November 2022, we entered into a receive-variable, pay-fixed interest rate swap agreement with an initial $250,000 notional value, which is designated as a cash flow hedge. This agreement fixed a portion of the variable interest due on our term loan facility, with an effective date of December 2, 2022 and a maturity date of June 30, 2027. Under the terms of the agreement, we pay a fixed interest rate of 4.215%, plus an applicable margin ranging between 150 to 225 basis points and receive a variable rate of interest based on term SOFR from the counterparty, which is reset according to the duration of the SOFR term. The fair value of the interest rate swap as of November 30, 2023 and May 31, 2023 was a net asset (liability) of $745 and ($2,683), respectively. The Company ~~has~~expects to reclassify a ~~stock repurchase program, authorized by~~$2,265 gain of accumulated other comprehensive income into earnings in the ~~Board~~next 12 months.

We record the fair value of ~~Directors~~our interest rate swaps on a recurring basis using Level 2 observable market inputs for similar assets or liabilities in ~~calendar year 2008, to purchase, subject to market conditions, up to 1,500,000 shares~~active markets.


Fair Value of Derivatives Designated as Hedging Instruments	Balance Sheet Location	November 30, 2023			May 31, 2023
Interest rate swap – current	Other current assets	$	2,265		$	2,087
Interest rate swap – non-current	Other non-current liabilities		(1,521	)		(4,770	)

The following table summarizes the other comprehensive income before reclassifications of derivative gains and losses:


	Other Comprehensive Income Before Reclassifications During
	Three Months Ended					Six Months Ended
Derivatives Designated as Hedging Instruments	November 30, 2023		November 30, 2022			November 30, 2023		November 30, 2022
Interest rate swaps	$	229	$	(2,428	)	$	3,708	$	(2,428	)

The following table summarizes the ~~Company’s common stock. As~~reclassification of ~~February 28, 2018, 1,350,632 shares were available to be repurchased under the program. There were no purchases in fiscal year 2017~~derivative gains and ~~there have been none thus far in fiscal year 2018.~~

losses into net loss from accumulated other comprehensive income (loss):


		Gain Reclassified During
		Three Months Ended				Six Months Ended
Derivatives Designated as Hedging Instruments	Location of Gain Reclassified	November 30, 2023		November 30, 2022		November 30, 2023		November 30, 2022
Interest rate swaps	Interest expense	$	580	$	—	$	1,103	$	—

Item 2. Management’s Discussion and Analysis of Financial Condition 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 financial performance. While management is optimistic about the Company’s long-term prospects, historical financial information may not be indicative of future financial results.

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.~~ 10-Q, including statements relating to management’s expectations regarding new product introductions; the adequacy of our sources for certain components, raw materials and finished products; and our ability to utilize certain inventory. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be ~~forward looking~~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. These forward-looking statements are intended to provide our current expectations or forecasts of future events; are based on current estimates, projections, beliefs, and assumptions; and are not guarantees of future performance. Actual events or results may differ materially from those described in the forward-looking statements. There are a number of important factors, including circumstances beyond our control at our transition manufacturing partner, competition, recruitment, ~~and~~retention, dependence on key employees, impact of weather on agriculture and food production, global business disruption caused by the Russia invasion in Ukraine and related sanctions and the conflict between Israel and Hamas, identification and integration of acquisitions, research and development risks, ~~patent and trade secret~~intellectual property 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 Form10-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.

In prior years, production was negatively impacted by broad supply chain challenges, labor market disruptions and ~~Estimates~~

~~The discussion and analysis~~other related lingering impacts of the ~~Company’s~~COVID-19 pandemic. Additionally, input costs inflation, including increases in certain raw materials, negatively impacted operating results. In fiscal 2023, these negative impacts steadily improved throughout the fiscal year. In fiscal 2024, despite a slowing of inflation rates, there remains economic headwinds of softening consumer demand and high interest rates, coupled with ongoing geopolitical tension in certain regions.

Interest rates have risen sharply, particularly in fiscal 2023, as a way to combat inflation. This, subsequently, increased our borrowing costs and raised the overall cost of capital. While the frequent increases have largely subsided, the overall rate is significantly higher than in recent years, which increases interest expense on the unhedged portion of our Term Loan.

In response to the historically high inflationary environment, we have taken pricing actions to mitigate the impacts on the business. We anticipate that the impact of inflation will continue to affect us throughout fiscal year 2024, although at a continually decreasing rate compared to the prior two fiscal years.

Although we have no operations in or direct exposure to Russia, Belarus and Ukraine, we have experienced intermittent shortages in materials and increased costs for transportation, energy and raw materials due, in part, to the negative impact of the Russia-Ukraine military conflict, which began in February 2022, on the global economy. Our European operations and customer base have been negatively impacted by the conflict. Similarly, the military conflict between Israel and Hamas has increased overall geopolitical tensions. As the respective conflicts continue or worsen, they may further impact our business, financial condition or results of operations throughout fiscal year 2024.

We continue to evaluate the nature and extent to which these issues impact our business, including consolidated results of operations, financial condition and ~~results~~liquidity. We expect these issues to continue to impact us throughout fiscal year 2024.

Service revenue, which includes genomics testing and other laboratory services, was $25.8 million and $50.3 million, respectively, during the three and six months ended November 30, 2023. Service revenue was $26.7 million and $52.3 million, respectively, during the three and six months ended November 30, 2022. The decrease was primarily driven by the attrition of ~~operations are based on the consolidated financial statements that have been prepared in accordance with accounting principles generally accepted~~a large domestic customer in the ~~United States.~~poultry market as the Company shifts its strategic focus to larger production animals, partially offset by strength in beef testing in Australia and new business in beef markets in Europe.

International sales were $116.1 million and $234.0 million during the three and six months ended November 30, 2023, compared to $115.6 million and $167.3 million during the three and six months ended November 30, 2022. The ~~preparation of these financial statements requires that management make estimates and judgments that affect~~increase during 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, but not limitedsix months ended November 30, 2023 was primarily due to ~~those~~$63.8 million in international sales related to receivable allowances, inventories, 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,~~3M FSD transaction during the ~~results~~first quarter 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 were no significant changes to the contractual obligations or contingent liabilities and commitments disclosed~~fiscal 2024. The increase in sales in the ~~Company’s Annual Report on Form10-K~~ ~~for the fiscal year ended May 31, 2017.~~

~~The Company adopted ASUNo. 2016-09~~ ~~related to share-based compensation on June 1, 2017. (See Note 5 Equity Compensation Plans for further discussion).~~

On December 22, 2017, the Tax Cuts and Jobs Act, (“the Tax Act”) was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal Tax Rate”) from 35% to 21% effective January 1, 2018. The Company will compute its income tax for the fiscal year ending May 31, 2018 using a blended Federal Tax Rate of 29.2%.

In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Tax Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year.

~~As of February 28, 2018, the Company was able to determine a reasonable estimate for certain effects of tax reform and recorded that estimate~~second quarter as a provisional amount. The provisional remeasurement of the deferred tax assets and liabilities resulted in a $5.6 million discrete tax benefit. In addition, the Company was required to estimate its cumulative unrepatriated foreign earnings and profits and

calculate estimated tax owed on those earnings and profits; this tax was provisionally estimated at $2.7 million. The provisional remeasurement and repatriation amounts are anticipated to change as more data becomes available allowing more accurate computations of the amounts.

~~There have been no other material changes to the critical accounting policies and estimates disclosed in the Company’s Annual Report on Form10-K~~ ~~for the fiscal year ended May 31, 2017.~~

~~Revenues for the Company for the third quarter ended February 28, 2018 were $95.9 million, an increase of 8%, or $7.5 million,~~ compared to ~~revenues of $88.4 million for~~ the same period in the prior ~~year. For~~year was primarily due to strength of indicator and pathogen testing products in Central and South American countries. These increases were partially offset by lower sales of food safety products in Europe due to supply challenges attributable, in part, to our recent exit from the year to date period, revenues were $293.0 million, an increase of 12%, or $30.3 million, compared to revenues of $262.7 million in the first nine months of fiscal year 2017. Net income attributable to Neogen for the third quarter of fiscal 2018 increased 61% to $16.6 million, compared to $10.3 million in the third quarter of fiscal year 2017. Earnings per share for the third quarter of fiscal 2018 were $0.32 compared to $0.20 per share in the same period a year ago. Net earnings for the third quarter were favorably impacted by adjustments resulting from tax reform legislation enacted in December 2017. For the first nine months of the current fiscal year, net income attributable to Neogen increased 46% to $45.6 million, or $0.88 per fully diluted share, compared to $31.3 million, or $0.61, for the same period in the prior fiscal year. For the year to date period, net earnings were favorably impacted by tax reform, excess tax benefits from stock option exercises, and the favorable conclusion of an IRS audit.transition distribution services agreement with 3M.

Food Safety ~~segment revenues increased 11% and Animal Safety segment revenues increased 6% for~~

Natural Toxins & Allergens – Revenuesin this category decreased 5% during the three ~~month period~~months ended ~~February 28, 2018, each~~November 30, 2023 compared to the same period in the prior year. ~~For~~Excluding currency impact and sales of drug residue test kits that were largely discontinued in fiscal 2023, core revenue in this category decreased 4%. In the second quarter of the ~~overall organic sales increase was 7%; organic~~fiscal year, growth in ~~the Food Safety and Animal Safety segments~~sales of allergen test kits was ~~9% and 5%, respectively. The acquisitions of Rogama, purchased inmid-December~~ ~~2016, and Neogen Australasia, in September 2017, contributed $1.6 million to the overall revenue growth~~offset by a decline in the ~~third quarter. Food Safety segment~~sale of natural toxins test kits, driven primarily by shipment delays. During the six months ended November 30, 2023, revenues in this category

increased 17% and Animal Safety segment revenues increased 7% for the year to date period. Overall organic sales increased 7% for the year to date period; the organic increases were 9% for the Food Safety segment and 6% for the Animal Safety segment. The previously discussed acquisitions, and Quat-Chem, purchased on December 1, 2016, contributed $11.1 million to the overall sales increase for the nine month period.

~~International sales were $37.4 million in the third quarter of fiscal 2018, an increase of 17%~~3% compared to the same period in the prior year. ~~Expressed as~~On a ~~percentage of sales, international sales were 39.0%~~core growth basis, revenues increased 1% in the year-to-date period, driven by strong sales of allergen test kits, primarily gluten and milk, during the first quarter, which offset the headwinds in sales of natural toxin test kits during the most recent fiscal quarter.

Bacterial & General Sanitation – Revenues in this category increased 4% and 70% during the three and six months ended November 30, 2023, respectively, compared to ~~36.3% in~~ the ~~third quarter a year ago. For the year to date, international sales were $110.5 million, an increase of 20%; international sales were 37.7% of total sales in the current year to date period and 35.1%~~same periods in the prior year. ~~For each comparative period, international revenue increases were~~Core growth in this category was 5% and 6%, during the ~~result~~three and six months ended November 30, 2023, respectively. The increase during the current quarter was driven primarily by higher sales of pathogen test kits and hygiene monitoring products in Latin America. Strong placements of Soleris® microbiological diagnostic equipment in the ~~acquisitions of Quat-Chem (England), Rogama (Brazil)~~first quarter also contributed to the year-to-date core growth.

Indicator Testing, Culture Media & Other – Revenues in this category increased 2% and ~~Neogen Australasia (Australia),~~63% during the three and six months ended November 30, 2023, respectively, compared to the same periods in the prior year. Core growth was slightly positive during the quarter and decreased 1% during the year-to-date period. Strong indicator testing revenues during the quarter in North America and Latin America more than offset softer culture media sales due to a large, non-recurring sale to a vaccine manufacturer in the prior year and, to a lesser extent, shipment delays. For the year-to-date period, a first-quarter decline in sales of Megazyme food quality and nutritional analysis products, due to distributor ordering patterns, contributed to the year-to-date core revenue ~~increases at existing Company locations. Currency translation had a positive effect on international revenues of approximately $1.9 million~~decline.

Rodent Control, Insect Control & Disinfectants – Revenues in this category increased 6% and 10% during the three and six months ended November 30, 2023, respectively, compared to the same periods in the ~~third~~prior year. During the second quarter, core revenue decreased in this category by 1%, driven by lower sales of ~~fiscal 2018 as~~cleaners and disinfectants in China and rodent control products in Latin America. On a year-to-date basis, core revenue increased 6%, driven primarily by strong cleaner and disinfectant sales in the ~~pound, euro,~~Middle East and ~~peso were stronger on average against~~U.K.

Genomics Services – Revenuesof genomics services sold through our international Food Safety operations increased 5% and 7% during the ~~dollar than~~three and six months ended November 30, 2023, respectively, compared to the same ~~period a year ago; for the year to date period, the positive revenue impact was $2.5 million.~~

~~Revenues at Neogen Europe increased 16% in U.S. dollars~~periods in the ~~third~~prior year. Core growth in this category was 1% in the second quarter, driven by increased sales in China. On a year-to-date basis, core growth was 4%, led by new business in beef markets in the U.K. and Brazil.

Life Sciences – Revenues in this category increased 18% and 11% during the three and six months ended November 30, 2023, respectively, compared to the same periods in the prior year, primarily due to increased demand for substrates from manufacturers of diagnostic tests.

Veterinary Instruments & Disposables – Revenues in this category increased 3% during the three months ended November 30, 2023 compared to the same period in the prior ~~year; for~~year, driven by increases in sales of detectable needles and syringes. During the ~~nine month period, sales rose 10%. For the quarter, a 39% increase~~six months ended November 30, 2023, revenues in ~~genomics revenues offset lower mycotoxin test kit sales, as last year’s deoxynivalenol (DON) outbreak in corn crops in western Europe did not repeat~~this category decreased 4% primarily driven by inventory de-stocking at some of our large veterinary distributors in the ~~current year. For~~first quarter.

Animal Care & Other – Revenues of these products decreased 15% and 19% during the ~~year to date period, genomics sales increased 34%~~three and helped to offset lower DON test kit sales. Sales at Lab M, the Company’s subsidiary in England, increased 20% in the third quarter and 25% for the nine month period, as its culture media products continued to be integrated into Neogen’s global sales and marketing channels. Neogen Latinoamerica recorded a sales increase of 19% in the third quarter; Food Safety products increased 21% and Animal Safety products increased 17%, with broad-based gains recorded in both categories. For the year to date, revenues rose 18%, with Food Safety products and increases in genomics services providing the majority of the increase. Revenues at Neogen do Brasil declined 2% in the year’s third quarter, as a decrease in forensic test kit sales resulting from increased competition and customer losses caused by conversion to different testing methods more than offset increased sales of mycotoxin and dairy drug residue test kits. For the year to date, revenues increased 18%. Neogen China sales increased 28% in the third quarter and 21% for the year to date period, eachsix months ended November 30, 2023, respectively, compared to the same periods in the prior ~~year; for each period, increases~~year. Core growth in this category, which excludes currency impact and the discontinued Thyrokare product line, declined 13% and 17% during three and six months ended November 30, 2023, respectively. This decrease was driven by lower sales of small animal supplements and wound care products caused primarily by distributor ordering patterns.

Rodent Control, Insect Control & Disinfectants – Revenues decreased 3% and 1% during the three and six months ended November 30, 2023, respectively, compared to the same periods in the prior year. The core revenue declines were equal to the reported revenue decreases and were driven by ~~strength~~the phasing of certain insect control booking programs in ~~genomics services~~North America compared to the prior year.

Genomics Services – Revenues in this category decreased 10% and ~~animal safety products. Revenues for Neogen India declined 37% for~~9% during the ~~quarter, as a large cleaner~~three and ~~disinfectant order~~six months ended November 30, 2023, respectively, compared to the same periods in the prior ~~year’s third~~year. Core growth declined 9% during the quarter ~~did not repeat; for~~and 8% during the ~~year~~year-to-date periods. Core revenue in both periods was negatively impacted by a

strategic shift in the business to ~~date, revenues were flat, as higher~~focus primarily on large production animals to improve profitability and the associated customer attrition.

Gross margin was 50.9% during the three and six months ended November 30, 2023 compared to 48.9% and 48.2% during the three and six months ended November 30, 2022, respectively. The 200 basis point increase in the second quarter was primarily due to product mix from increased sales of higher margin products in the Food Safety ~~products and testing services were almost entirely offset by the cleaner and disinfectant revenue from last year’s third quarter which did not repeat this year.~~

~~Service revenue was $17.8 million~~segment. The increase in the ~~quarter~~year-to-date period was primarily due to incremental revenues from the FSD transaction, which generated gross margin higher than the legacy company average gross margin. Within each reporting segment, increased raw material costs pressured gross margins in certain product lines, specifically in the prior fiscal year periods. However, while inflation continues to impact the business, raw material price increases and freight costs declined significantly during the comparative period, particularly benefiting the Animal Safety segment. Finally, pricing actions taken during the prior fiscal year also mitigated the impact of cost increases.

Operating expenses were $102.3 million and $199.9 million during the three and six months ended ~~February 28, 2018, an increase of $3.4 million, or 24%,~~November 30, 2023, respectively, compared to ~~$14.4~~$120.2 million and $176.4 million during the three and six months ended November 30, 2022, respectively. The decrease during the three months ended November 30, 2023 was primarily the result of lower transaction fees and integration expenses. The increase during the six months ended November 30, 2023 was primarily the result of an entire six months of ongoing expenses resulting from the acquired 3M FSD employees, additional costs added to facilitate providing back office and distribution activities related to the acquired 3M FSD product lines and amortization of intangible assets acquired in the ~~third~~FSD Transaction. As the transaction was executed on September 1, 2022, these additional costs were not incurred in the first quarter of the prior year. ~~For~~

Sales and marketing expenses were $44.8 million and $90.6 million during the ~~year to date period, service revenue was $48.7 million, an increase of $9.1 million, or 23%,~~three and six months ended November 30, 2023, respectively, compared to ~~$39.6~~$36.3 million inand $59.7 million during the ~~prior year.~~three and six months ended November 30, 2022, respectively. The ~~growth, for both the quarter and year to date periods,~~increase was ~~led~~primarily driven by ~~increases in sales to the global cattle and companion animal markets, increased testing volumes with a large poultry customer and, to a lesser extent, revenues~~incremental costs resulting from the ~~acquisition~~FSD transaction. These costs consisted of ~~Neogen Australasia, in September 2017.~~

The Company’s Food Safety segment revenues were $47.6 million in the quarter ended February 28, 2018, an increase of 11% compared to the same period in the prior year. For the nine month period, Food Safety revenues increased 17% to $143.9 million. Organic growthcompensation and related expenses for the ~~segment was 9%~~acquired FSD sales and marketing teams and charges for ~~both the quarter~~transition services provided by 3M. These invoicing and ~~year~~distribution services will be provided under contract for an initial period of up to ~~date periods, with the acquisition of Rogama, occurring~~18 months, concluding on ~~December 21, 2016, contributing the~~March 1, 2024. The remainder of the ~~growth.~~increase during the comparable periods was due primarily to higher personnel related spending, the result of headcount additions and compensation increases.

Natural Toxins, Allergens & Drug Residues sales increased 2% in the third quarter; revenues for the year to date period increased 4%. Sales of dairy drug residue kits, used to detect the presence of antibiotics in raw milk, increased 29% in the third quarter as new products continued to gain share, particularly in international markets; for the year to date period, dairy drug residue test kit revenues rose 15%. Allergen test kit sales increased 14%General and ~~13% in~~administrative expenses were $51.7 million and $96.8 million during the three and ~~nine month periods~~six months ended ~~February 28, 2018,~~November 30, 2023, respectively, ~~as product recalls relating~~compared to allergenic contamination of food continued to expand the market. Sales of test kits to detect the presence of natural toxins in grain crops decreased 17% in the third quarter. An 11% increase in aflatoxin test kit sales, due to moderate

~~outbreaks in U.S.~~$77.0 million and Brazilian corn crops, was offset by a 41% decrease in sales of deoxynivalenol (DON) test kits, as prior year outbreaks of DON in corn crops in the U.S., Canada and Europe did not recur in the current year. For the year to date period, sales of natural toxin test kits decreased 7%.

~~Bacterial & General Sanitation sales increased 8% in both~~$104.9 million during the three and ~~nine month periods~~six months ended ~~February 28, 2018. Within this category, the Company’s AccuPoint sanitation monitoring product line increased 18% in the third quarter and 19%~~November 30, 2022, respectively. Decreases for the ~~year to date period, on sales strength in both reader equipment and consumable supplies. Sales of test kits to detect pathogens increased 22% in~~periods were primarily the ~~third quarter, led by strength in~~~~Listeria~~ ~~products, including the Company’s new~~~~Listeria~~ Right Now test kit that launched earlier in the fiscal year. The Company also benefitted from strong sales of equipment used with the Company’s ANSR line of test kits to detect various pathogens, as the Company gained new customers; overall pathogen revenues increased 14% for the year to date period. Revenues for the Company’s consumable product lines to detect spoilage organisms in processed foods decreased 2% in the current quarter but increased 3% for the nine month period.

Dehydrated Culture Media & Other sales increased 1% in the third quarter. This category includes forensic test kits sold through the Company’s Brazilian subsidiary. Demand for these kits from customers located in Brazil had increased dramatically in the prior year due to a new requirement for drug testing of commercial truck drivers, however, sales of these kits in Brazil have decreased in the current year as a result of ~~increased competition~~lower transaction fees and ~~customer losses caused by conversion to different testing methods. In the third quarter, the Company’s worldwide Lab M sales increased 21% and Acumedia sales increased 6%.~~

Sales of Rodenticides, Insecticides & Disinfectants products sold through the Company’s Food Safety operations increased 46% in the third quarter; the organic sales increase in this category was 29%. For the nine month period, sales increased $11.1 million; excluding first year sales of the Quat-Chem and Rogama acquisitions, the year to date sales increase was 16%. In the third quarter, the increase was primarily due to Rogama shipping a large order resulting from a government contract; this sale is unlikely to recur in the next 12 months. The increase in sales wasintegration expenses, partially offset by ~~termination~~additional personnel hired to accommodate the increased size and complexity of ~~a distribution agreement in January 2017, which resulted in a decline in sales for those distributed products~~the organization, compensation increases across the organization, the issuance of ~~$143,000 in the third quarter~~share-based compensation grants, software license fees and ~~$859,000 for the year to date.~~other information technology infrastructure investments.

~~Genomics Services revenue recorded in the Food Safety segment increased 46%~~Research and ~~40% for~~development expense was $5.8 million and $12.5 million during the three and ~~nine month periods,~~six months ended November 30, 2023, respectively, ~~due primarily to growth of these services in Europe.~~

Sales for the Company’s Animal Safety segment were $48.2 million in the third quarter, an increase of 6% over the same period a year ago. Revenues for the nine month period increased 7% to $149 million compared to ~~$139.7~~$6.8 million ~~in the prior year. Organic growth in this segment was 5%~~ and ~~6% in~~$11.7 million during the three and nine month periods, respectively; the Neogen Australasia acquisition in September 2017 contributed the remainder of the growth. Sales of Life Sciences products increased 19% in the third quarter, partially due to order timing, and have risen 5% for the year to date period.six months ended November 30, 2022, respectively. The ~~Company has increased volumes of forensic test kits sold to commercial labs in the U.S.~~

~~Veterinary Instruments & Disposables revenues increased 6% and 12% for~~decrease during the three ~~and nine month periods, respectively. For both periods, the increase~~months ended November 30, 2023 is primarily the result of ~~strength in detectable needles, syringes~~lower contracted services and ~~animal marking products. Sales~~employee costs. The increase during the six months ended November 30, 2023 was primarily the result of ~~Animal Care & Other products~~cost associated with the acquired FSD employees.

Operating income was $14.5 million and $33.6 million during the three and six months ended November 30, 2023 respectively, compared to an operating loss of $7.7 million and $1.6 million during the three and six months ended November 30, 2022, respectively. Operating income increased ~~19% in the quarter ended February 28, 2018,~~ compared to the ~~same period~~prior year comparative periods primarily due to incremental revenues and higher gross profits from the FSD transaction. The prior year also included transaction and integration costs of $39.1 million and $52.9 million during the three and six months ended

November 30, 2022 compared to $4.7 million and $6.6 million during the three and six months ended November 30, 2023, respectively.

The interest expense recorded during the three and six months ended November 30, 2023 was the result of debt incurred to fund the 3M transaction. In the first quarter of fiscal 2023, the Company had no debt outstanding. Interest income relates to earnings on our marketable securities portfolio. Higher yields on the portfolio during the three and six months ended November 30, 2023 were partially offset by lower balances. Other expense resulting from foreign currency transactions was the result of changes in the value of foreign currencies relative to the U.S. dollar in countries in which we operate.

Income tax benefit was $0.3 million and $0.1 million during the three and six months ended November 30, 2023, respectively, compared to $7.8 million and $9.2 million of income tax expense during the three and six months ended November 30, 2022, respectively. The net tax benefit during the three and six months ended November 30, 2023 is primarily related to pre-tax losses resulting from amortization expense, interest expense and continued FSD integration efforts. In the prior comparable periods, the net tax expense, despite pre-tax losses, is primarily related to certain non-deductible acquisition and transaction costs related to the 3M FSD transaction.

The total amounts of unrecognized tax benefits that, if recognized, would affect the effective tax rate as of November 30, 2023 and May 31, 2023 are $1.0 million and $1.1 million, respectively. Changes in unrecognized tax benefits are primarily associated with the acquired 3M FSD, including positions for transfer pricing and research and development credits.

Net loss was $3.5 million and $2.0 million during the three and six months ended November 30, 2023, respectively, compared to net loss of $41.8 million and $36.6 million during the three and six months ended November 30, 2022, respectively. The decrease in the net loss during the three and six months ended November 30, 2023 was primarily the result of higher transaction fees and integration costs in the prior ~~year;~~year, which were $39.1 million and $52.9 million during the ~~year to date increase was 12%. The increase in the current year is due to market share gains of supplements for companion animals~~three and vitamin injectables, and increased sales of vaccines to a large distributor; additionally, last year’s results included sales credits totaling $1.1 million in the first quarter as the Company removed its canine thyroid product from its distribution channels, after the FDA approved a new drug application for a competitive product.

Rodenticides, Insecticides & Disinfectants sales decreased 9% in the quarter and 5% for the year to date period, as the termination of a distribution agreement with a manufacturer of cleaners and disinfectants in January 2017 resulted in lost sales for those distributed products of $1.4 million in the third quartersix months ended November 30, 2022, respectively. Since completion of the current fiscal year and $3.9 million for the year to date period. These losses were offset by an 11% increase in rodenticide sales in the third quarter as the Company gained incremental business with several large customers; year to date sales rose by 9%.

~~Genomics Services~~3M transaction, increased 19% in both the third quarter and year to date periods, respectively, each compared to the same period in the prior year. The growth for both periods was led by increases in sales to the global cattle and companion animal markets, higher volumes from a large poultry customer and, to a lesser extent, revenues from the acquisition of Neogen Australasia, in September 2017.

Gross margin was 47.5% in the third quarter of fiscal 2018 compared to 46.3% in the same quarter a year ago. Gross margins for the quarter were positively impacted by lower costs inputs at the Company’s genomics operations and favorable product mix towards higher margin diagnostic and animal care products; this improvement was somewhat offset by lower sales of mycotoxin test kits due to a prior year outbreak of DON in corn crops in the U.S. and western Europe, which did not recur in the current fiscal year. Gross margin for the nine month period ended February 28, 2018 was 48.0% compared to 47.6% in the same period of the prior year. Gross margins for the year to date were positively impacted by improved raw material costs at the Company’s genomics operations and favorable product mix towards higher margin diagnostic and animal care products; this improvement was somewhat offset by mix

changes resulting from the three most recent acquisitions (Rogama, Quat-Chem and Neogen Australasia), all of which have gross margins that are lower than the historical average for the Company, and lower sales of mycotoxin test kits due to a prior year outbreak of DON in corn crops in the U.S. and western Europe, which did not recur in the current fiscal year.

~~Operating expenses were $29.6 million in the third quarter, compared to $26.5 million in the same quarter of last fiscal year, an~~

increase of $3.1 million, or 12%. Sales and marketing expenses were $17.5 million, compared to $15.3 million in last year’s third quarter, an increase of 14%, primarily due to increases in salaries and related personnel costs, shipping expense, and higher advertising expenses in support of new product launches. General and administrative expense increased $700,000, or 9%, in the third quarter; increases in amortization of acquired intangible assets, IT consulting, and higher salary expenses were partially offset by ~~lower stock based~~incremental revenues, which generated gross profits higher than the legacy company average margin.

This report includes certain financial information for the Company that differs from what is reported in accordance with GAAP. These non-GAAP financial measures consist of core revenue growth, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Earnings per Share. These non-GAAP financial measures are included in this report because management believes that they provide investors with additional useful information to measure the performance of the Company, and because these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties as common performance measures to compare results or estimate valuations across companies in industries the Company operates in.

We define core revenue growth as net sales for the period excluding the impacts of foreign currency translation rates, the first-year impacts of acquisitions and divestitures, where applicable, and net sales from discontinued product lines. We present core revenue growth because it allows for a meaningful comparison of results across periods without the volatility caused by foreign currency gains or losses, or the incomparability that would be caused by the impact of an acquisition or divestiture.

We define EBITDA as net income before interest, income taxes, and depreciation and amortization. We present EBITDA as a performance measure because it may allow for a comparison of results across periods and results across companies in the industries in which Neogen operates on a consistent basis, by removing the effects on operating performance of (a) capital structure (such as the varying levels of interest expense and interest income), (b) asset base and capital investment cycle (such as depreciation and amortization) and (c) items largely outside the control of management (such as income taxes). EBITDA also forms the basis for the measurement of Adjusted EBITDA (discussed below).

We define Adjusted EBITDA as EBITDA, adjusted for share-based compensation and certain transaction fees and expenses. We present Adjusted EBITDA because it provides an understanding of underlying business performance by excluding the following:

We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of total revenues. We present Adjusted EBITDA margin as a performance measure to analyze the level of Adjusted EBITDA generated from total revenue.

We define Adjusted Net Income as Net Income, adjusted for share-based compensation, FX translation gain/(loss) on loan revaluation, certain transaction fees and expenses, and other one-time adjustments, all of which are tax effected.

We define Adjusted Earnings per Share as Adjusted Net Income divided by diluted average shares outstanding.

These non-GAAP financial measures are presented for informational purposes only. Core Revenue Growth, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Earnings per Share are not recognized terms under GAAP and should not be considered in isolation or as a substitute for, or superior to, net income (loss), operating income, cash flow from operating activities or other measures of financial performance.

This information does not purport to represent the results Neogen would have achieved had any of the transactions for which an adjustment is made occurred at the beginning of the periods presented or as of the dates indicated. This information is inherently subject to risks and uncertainties. It may not give an accurate or complete picture of Neogen’s financial condition or results of operations for the periods presented and should not be relied upon when making an investment decision.

The use of the terms EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Earnings per Share may not be comparable to similarly titled measures used by other companies or persons due to potential differences in the method of calculation.

These non-GAAP financial measures have limitations as analytical tools. For example, for EBITDA-based metrics:

A reader should compensate for these limitations by relying primarily on the financial statements of Neogen and using these non-GAAP financial measures only as a supplement to evaluate Neogen’s performance.

For each of these non-GAAP financial measures below, we are providing a reconciliation of the differences between the non-GAAP measure and the most directly comparable GAAP measure.

Reconciliation between net loss and EBITDA and Adjusted EBITDA and between net loss margin % and Adjusted EBITDA margin % are as follows:

Adjusted EBITDA decreased $9.0 million during the three months ended November 30, 2023 and ~~reduced legal expenses. In last year’s third quarter,~~increased $16.4 million during the Company closed on two acquisitions, while there were none in this year’s third quarter. For the year to date period, research and development expense increased 7% in the third quarter to a total of $2.8 million. Increases were due to increases in compensation, higher depreciation resulting from investments in laboratory equipment, and projects relating to product improvements and new product development. For the year to date, research and development expenses increased 10%. Operating expenses for the nine month period were $90.3 million, an increase of $11.3 million, or 14% over the same period last fiscal year. The recent acquisitions accounted for $2.8 million of the increase.

~~Operating income was $15.9 million in the third quarter, an increase of $1.5 million, or 11%, compared to operating income of~~

~~$14.4 million in the prior year.~~six months ended November 30, 2023. Expressed as a percentage of revenue, ~~operating income~~adjusted EBITDA was ~~16.6%~~24.0% and 23.4% during the three and six months ended November 30, 2023, respectively, compared to ~~16.2%~~27.8% and 25.1% during the three and six months ended November 30, 2022, respectively. Decreases in ~~last year’s~~

~~third quarter. The improvement in operating~~the margin ~~percentage for the comparative quarter was primarily the result of higher gross margins offset somewhat by~~reflect prior year periods when operating expenses ~~which rose more than~~had not yet been fully added to accommodate the ~~rate~~increased size of the ~~overall revenue increase. For~~Company following the ~~nine~~completion of the 3M transaction.

Reconciliation between net loss and Adjusted Net Income and earnings per share and Adjusted Earnings per Share are as follows:

Adjusted Net Income decreased $6.5 million and $0.4 million, respectively, during the three and six months ended February 28, 2018, operating income was $50.3 million, an increase of $4.4 million, or 10%, compared to operating income of $45.9 million for the same period last year. Expressed as a percentage of revenue, year to date operating income was 17.2% compared to 17.5% in the prior year.

Other income was $1.4 million for both the third quarter of fiscal 2018 and the same period in 2017. Components of other income in this year’s third quarter included $525,000 of interest income, $360,000 from an insurance settlement, $179,000 in currency gains and a $255,000 gain recorded on the settlement of contingent consideration related to the Quat-Chem acquisition. Last year’s fiscal third quarter included a gain on the settlement of a licensing agreement of $660,000, currency gains of $442,000, and interest income of $271,000. For the year to date period in fiscal 2018, other income was $3.2 million, primarily comprised of $1.3 million of interest income, currency gains of $1.1 million, $360,000 from an insurance settlement, $255,000 gain recorded on the settlement of contingent consideration related to the Quat-Chem acquisition, and $78,000 of royalty income. For the same period in fiscal 2017, other income was $1.8 million, which included interest income of $691,000, gain on the settlement of a licensing agreement of $660,000, currency gains of $263,000, and royalty income of $79,000.

Income tax expense in the third quarter was $700,000, an effective tax rate of 4%, compared to prior year third quarter expense of $5.4 million, an effective tax rate of 34%. The Company recorded favorable tax adjustments totaling $2.9 million during the quarter as the result of tax reform passed in the U.S. in December 2017. The tax reform reduced the statutory federal income tax rate from 35% to 21%, and also resulted in other adjustments to income tax expense. The Company will compute its income tax for the fiscal year ending May 31, 2018 using a blended Federal Tax Rate of 29.2%. Accordingly, first and second quarter income previously subject to tax at the 35% Federal Tax Rate benefitted from the 29.2% Federal Tax Rate. As required by generally accepted accounting principles, the Company revalued its net deferred tax liabilities during the quarter to reflect the lower rate, resulting in a credit to income tax expense of $5.6 million. In addition, the Company was required to estimate its cumulative unrepatriated foreign earnings and profits and calculate tax owed on those earnings and profits during the third quarter. This tax was estimated at $2.7 million, and the amount was recorded as federal income tax expense; payment of the tax is permitted over an eight year period.

For the first nine months of fiscal 2018, income tax expense was $7.9 million compared to $16.3 million in the prior year; the current year to date effective tax rate was 15%, compared to an effective tax rate of 34% in the prior fiscal year. For the year to date period, the lower effective rate is primarily the result of the tax reform passed in the U.S. in December 2017 as discussed in the preceding paragraph. Additionally, during the year the Company has recorded credits of $3.4 million to federal income tax expense for excess tax benefits from the exercise of stock options,November 30, 2023 due to the ~~adoption of ASU2016-09;~~ refer to Note 5 of the Company’s Consolidated Financial Statements for further information. In the second quarter of fiscal 2018, an IRS examination of the Company’s federal income tax returns for fiscal years 2014, 2015 and 2016 was concluded. As a result of the favorable outcome of the audit, the Company reversed a total of $816,000 from its reserve for uncertain tax positions, which had been accrued in prior fiscal years, with a corresponding credit to federal income tax expense.lower Adjusted EBITDA.

~~Net income attributable to Neogen increased 61% from $10.3 million to $16.6 million for the three month period ended February 28,~~

2018. For the year to date period, net income was $45.6 million, a 46% increase over prior year net income of $31.3 million. Pre tax income increases of 10% for the quarter and 12% for the year to date were favorably impacted by the effects of tax reform, excess tax benefits from the exercise of stock options, and positive results from the IRS examination that concluded during the year’s second quarter.

The overall cash, cash equivalents and marketable securities position of ~~the Company~~Neogen was ~~$192.2~~$230.3 million ~~at February 28, 2018~~as of November 30, 2023, compared to ~~$143.6~~$245.6 million atas of May 31, ~~2017. Approximately $46.5~~2023. Cash flow from operating activities was $38.7 million ~~was generated from operations~~ during the ~~first nine~~six months ended November 30, 2023, which was primarily the result of ~~fiscal 2018. Net cash~~fewer transaction fees and working capital improvements. Cash flow from investing activities was $2.9 million during the six months ended November 30, 2023 from proceeds ~~of $18.9 million were realized~~ from the ~~exercise~~sale of ~~stock options~~marketable securities of $57.8 million, partially offset by purchases of property and ~~issuance~~equipment of ~~shares under the Company’s employee stock purchase plan~~$55.0 million. Cash flow from financing activities was $0.8 million during the ~~same period. The Company spent $16.3 million for property, equipment and othernon-current~~ ~~assets during the first nine~~six months ~~of fiscal 2018.~~ended November 30, 2023.

~~Accounts~~Net accounts receivable balances were ~~$73.2~~$150.5 million ~~at February 28, 2018, an increase~~as of ~~$4.6 million, or 7%,~~November 30, 2023 compared to ~~$68.6~~$153.3 million atas of May 31, ~~2017, less than the increase in revenue. Days~~2023. Days' sales outstanding, a measurement of the time it takes to collect receivables, ~~were 63~~was 56 days ~~at February 28, 2018~~as of November 30, 2023, compared to 6057 days atas of May 31, ~~2017. All customer accounts are actively managed~~2023 and ~~no losses in excess~~54 days as of ~~amounts reserved~~November 30, 2022.

As part of transition services agreements between the Company and 3M, related to the merger of the Food Safety business, 3M is invoicing our customers for products that 3M is manufacturing and shipping on our behalf. We are currently ~~expected.~~in the process of exiting a number of transition service contracts, which is expected to be completed in the third quarter of fiscal 2024. As of November 30, 2023, there were $35.1 million in customer receivables billed by 3M on our behalf, compared to $57.3 million as of May 31, 2023. The Company is working collaboratively with 3M

on managing the credit risk associated with the former FSD customers during the period when 3M is providing transition invoicing and distribution services to the Company.

Net inventory ~~balances were $77.5~~was $160.5 million ~~at February 28, 2018,~~as of November 30, 2023, an increase of ~~$4.4~~$26.7 million, ~~or 6%,~~ compared to ~~$73.1 million at~~a May 31, ~~2017.~~2023 balance of $133.8 million. The higher inventory levels are primarily the result of the Company ~~actively monitors its~~now stocking FSD products manufactured by 3M. We currently expect to spend approximately $40 to $50 million to initially stock FSD inventory ~~and balances the need for adequate product availability to minimize backorders with a desire to improve inventory turnover and efficiency levels. Formal programs have been instituted~~globally in fiscal ~~2018~~year 2024. Additionally, we expect to ~~improve inventory turnover.~~spend approximately $130 million in capital expenditures in fiscal year 2024; $100 million of the total is related to our new building, systems implementation and related food safety integration projects.

On September 1, 2022, Neogen, 3M, and Neogen Food Safety Corporation, a subsidiary of 3M created to carve out 3M’s Food Safety business, closed on the FSD Transaction that previously was announced in December 2021, combining 3M’s Food Safety business with Neogen in a Reverse Morris Trust transaction.

In June 2022, Neogen Food Safety Corporation entered into a credit agreement consisting of a five-year senior secured term loan facility in the amount of $650 million and a five-year senior secured revolving facility in the amount of $150 million (collectively, the “Credit Facilities”), which became available in connection with the merger and related transactions. The loan facility was funded to Neogen Food Safety Corporation on August 31, 2022, and upon the effectiveness of the merger on September 1, 2022, became Neogen’s obligation. Financial covenants include maintaining specified levels of funded debt to EBITDA and debt service coverage. The Credit Facilities, together with the Notes described below, represent the financing incurred in connection with the merger of the 3M FSD with Neogen. In accordance with the prepayment feature, the Company paid $100 million of the term loan facility’s principal in fiscal year 2023, in order to decrease the outstanding debt balance.

In July 2022, Neogen Food Safety Corporation closed on an offering of $350 million aggregate principal amount of 8.625% senior notes due 2030 (the “Notes”) in a private placement at par. The Notes were initially issued by Neogen Food Safety Corporation to 3M and were transferred and delivered by 3M to the selling securityholder in the offering, in satisfaction of certain of 3M’s existing debt. Neogen Food Safety Corporation did not ~~expected~~receive any proceeds from the sale of the Notes by the selling securityholder. Prior to ~~have~~the distribution of the shares of Neogen Food Safety Corporation’s common stock to 3M stockholders, the Notes were guaranteed on a ~~material effect on operations, as management believes it will continue to be successful in offsetting increased input costs with price increases and/or cost efficiencies.~~

~~Management believes that the Company’s existing cash and marketable securities balances at February 28, 2018 along with available borrowings~~senior unsecured basis by 3M. Upon consummation of such distribution, 3M was released from all obligations under its ~~credit facility~~guarantee. Upon the effectiveness of the merger on September 1, 2022, the Notes became guaranteed on a senior unsecured basis by Neogen and certain wholly-owned domestic subsidiaries of Neogen.

In addition to the 3M transaction described above, our future cash ~~expected to be generated from future operations, will be sufficient to fund activities for the foreseeable future. However, existing cash~~generation and borrowing capacity may not be sufficient to meet ~~the Company’s~~ cash requirements to fund the operating business, repay debt obligations, construct new manufacturing facilities, commercialize products currently under development or ~~its~~execute our future plans to acquire ~~other organizations, technologies or~~additional businesses, technology and products that fit within ~~the Company’s mission statement.~~our strategic plan. Accordingly, ~~the Company~~we may be required, or may choose, to issue additional equity securities or enter into other financing arrangements for a portion of ~~its~~our future ~~financing~~capital needs.

We are subject to certain legal and other proceedings in the normal course of business that have not had, and, in the opinion of management, are not expected to have, a material effect on our results of operations or financial position.

~~The Company has~~Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have interest rate and foreign exchange rate risk exposure but no long-term fixed rate ~~investments or borrowings. The Company’s~~investments. Our primary interest rate risk is due to potential fluctuations of interest rates for our variable rate ~~borrowings (no borrowings at February 28, 2018) and short-term investments.~~borrowings.

Foreign exchange risk exposure arises because ~~the Company markets~~we market and ~~sells its~~sell our products throughout the world. 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~~As such, our operating results are exposed to changes in exchange rates between the U.S. dollar and the British pound sterling, the euro, the Brazilian real, the Mexican peso, the Chinese yuan, and to a lesser extent, the Indian rupee, the Canadian dollar, and the Australian dollar.rates. 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~~invoiced amounts can be positively or negatively affected by changes in exchange rates in the course of ~~collection can be affected positively or negatively by changes in exchange rates. The Company enters into forward contracts~~collection. We use derivative financial instruments to help ~~mitigate~~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, located in Scotland, England, Brazil, Mexico, China, India, Canada, and Australia where the functional currency is the British pound sterling, Brazilian real, Mexican peso, Chinese yuan, Indian rupee, Canadian dollar, and Australian dollar respectively, and also transacts business throughout Europe in the euro. The Company’sU.S. Our investments in foreign subsidiaries are considered tolong-term. As discussed in ITEM 1A. RISK FACTORS of our Annual Report on Form 10-K for the year ended May 31, 2023, our financial condition and results of operations could be ~~primarily long-term.~~adversely affected by currency fluctuations.

The following table sets forth the potential loss in future earnings or fair values, resulting from hypothetical changes in relevant market rates or prices:

The Company maintains disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

An evaluation of the effectiveness of the design and operation of ~~the Company’s~~our disclosure controls and procedures as of ~~February 28, 2018~~November 30, 2023 was carried out under the supervision and with the participation of the Company’s management, including the ~~Executive Chairman and the Vice~~ President & Chief Executive Officer and Chief Financial Officer (“the Certifying Officers”). Based on the evaluation, the Certifying Officers concluded that the Company’s disclosure controls and procedures were not effective because of previously reported material weaknesses in our internal control over financial reporting, which we describe in Part II, Item 9A of our Annual Report on Form 10-K for the year ended May 31, 2023.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

As disclosed in Item 9A of our Annual Report on Form 10-K for the year ended May 31, 2023, management identified the following material weaknesses in internal controls over financial reporting during the year ended May 31, 2023: (1) information technology general controls ("ITGCs") in the areas of user access and change management over certain information technology systems that support the Company’s financial reporting process and the manual business process controls dependent on the affected ITGCs (2) ineffective period-end invoice accrual controls and (3) ineffective operation of management review controls related to the accounting, valuation and purchase price allocation of the Company’s acquisitions and associated goodwill.

Ongoing Remediation Efforts to Address the Previously Identified Material Weaknesses

As previously disclosed in our Annual Report on Form 10-K for the year ended May 31, 2023, management concluded that our internal controls over financial reporting were not effective as of May 31, 2023. Management is in the process of enhancing, and will continue to enhance, the risk assessment process and design and implementation of internal controls over financial reporting. The remediation measures to correct the previously identified material weaknesses include enhancing the design and implementation of existing controls and creating new controls as needed to address identified risks and providing additional training to personnel including the appropriate level of documentation to be maintained to support internal controls over financial reporting.

As we continue to evaluate and work to improve our internal control over financial reporting, management may determine to take additional measures to strengthen controls or to modify the remediation plan described above. When fully implemented and operational, we believe the controls we have designed or plan to design will remediate the control deficiency that has led to the material weaknesses that we have identified. The previously identified material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are ~~effective.~~operating effectively.

NoOther than with respect to the remediation efforts described above in connection with the previously identified material weaknesses, no changes in our control over financial reporting were identified as having occurred during the quarter ended ~~February 28, 2018~~November 30, 2023 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

For a description of our material pending legal proceedings, see Note 12. “Commitments and Contingencies” of the Notes to interim condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is ~~subject to certain legal and other proceedings~~incorporated by reference.

This Form 10-Q should be read in conjunction with Part I Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended May 31, 2023. There have been no material changes in the ~~normal course of business. In~~risk factors described in our Annual Report on Form 10-K for the ~~opinion of management, the outcomes of these matters are not expected to have a material effect on its future results of operations or financial position.~~year ended May 31, 2023.

Items ~~1A,~~ 2, 3, 4, and 54 are not applicable or removed or reserved and have been omitted.

21During the quarterly period ended November 30, 2023, our directors and officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) did not adopt, terminate or modify Rule 10b5-1 or non-Rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K).

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.


			Page No.
					~~Page No.~~
PART I. FINANCIAL INFORMATION


Item 1.		Interim Condensed Consolidated Financial Statements (unaudited)			2

		Condensed Consolidated Balance Sheets – ~~February 28, 2018~~November 30, 2023 and May 31, ~~2017~~2023			2

		Condensed Consolidated Statements of Operations – Three and six months ended November 30, 2023 and 2022		3
	Condensed Consolidated Statements of Comprehensive (Loss) Income – Three and ~~nine~~six months ended ~~February 28, 2018~~November 30, 2023 and ~~2017~~2022			3	4

		Condensed Consolidated Statements of ~~Comprehensive Income~~Equity – Three and ~~nine~~six months ended ~~February 28, 2018~~November 30, 2023 and ~~2017~~2022			4	5

		~~Consolidated Statement of Equity – Nine months ended February 28, 2018~~Condensed			5

		Consolidated Statements of Cash Flows – ~~Nine~~Six months ended ~~February 28, 2018~~November 30, 2023 and ~~2017~~2022			6

		Notes to Interim Condensed Consolidated Financial Statements – ~~February 28, 2018~~November 30, 2023			7

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			13
			26
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			20
			37
Item 4.		Controls and Procedures			20	38

PART II. OTHER INFORMATION

~~Item 1.~~		~~Legal Proceedings~~			21

Item 6.1.	Legal Proceedings	~~Exhibits~~			21
			39
~~SIGNATURES~~Item 1A.	Risk Factors		22	39
Item 6.	Exhibits		40
			~~Certification of Principal Executive Officer~~
SIGNATURES			41
		~~Certification of Principal Financial Officer~~
	CEO Certification

	CFO Certification

	Section 906 Certification


	Three Months Ended November 30,						Six Months Ended November 30,
	2023			2022			2023			2022
Net loss	$	(3,487	)	$	(41,841	)	$	(1,984	)	$	(36,632	)
Foreign currency translation gain (loss)		1,455			1,102			4,678			(10,031	)
Unrealized gain (loss) on marketable securities (1)		264			154			840			(270	)
Unrealized (loss) gain on derivative instruments (2)		(351	)		(2,428	)		2,605			(2,428	)
Other comprehensive income (loss), net of tax:		1,368			(1,172	)		8,123			(12,729	)
Total comprehensive (loss) income	$	(2,119	)	$	(43,013	)	$	6,139		$	(49,361	)


							Accumulated
					Additional		Other
	Common Stock				Paid-in		Comprehensive			Retained
	Shares		Amount		Capital		Loss			Earnings			Total
Balance, June 1, 2022		107,801,094	$	17,248	$	309,984	$	(27,769	)	$	587,911		$	887,374
Exercise of options and share-based compensation expense		4,000		1		1,904		—			—			1,905
Issuance of shares under employee stock purchase plan		32,636		5		862		—			—			867
Net income		—		—		—		—			5,209			5,209
Other comprehensive loss		—		—		—		(11,557	)		—			(11,557	)
Balance, August 31, 2022		107,837,730	$	17,254	$	312,750	$	(39,326	)	$	593,120		$	883,798
Exercise of options and share-based compensation expense		46,607		7		2,630		—			—			2,637
Issuance of shares for 3M transaction		108,269,946		17,323		2,245,518		—			—			2,262,841
Net loss		—		—		—		—			(41,841	)		(41,841	)
Other comprehensive loss		—		—		—		(1,172	)		—			(1,172	)
Balance, November 30, 2022		216,154,283	$	34,584	$	2,560,898	$	(40,498	)	$	551,279		$	3,106,263


	Nine Months Ended
	February 28,
	2018			2017
Cash Flows From Operating Activities
Net Income	$	45,670		$	31,483
Adjustments to reconcile net income to net cash provided from operating activities:
Depreciation and amortization		12,682			10,691
Share-based compensation		3,692			3,932
Excess income tax benefit from the exercise of stock options (see note 5)		—			(3,671	)
Change in operating assets and liabilities, net of business acquisitions:
Accounts receivable		(4,013	)		5,916
Inventories		(3,859	)		(9,460	)
Prepaid expenses and other current assets		(7,316	)		717
Accounts payable, accruals and other changes		(280	)		5,580

Net Cash Provided By Operating Activities		46,576			45,188

Cash Flows Used In Investing Activities
Purchases of property, equipment and othernon-current intangible assets		(16,297	)		(13,002	)
Proceeds from the sale of marketable securities		211,327			102,957
Purchases of marketable securities		(255,348	)		(115,117	)
Business acquisitions, net of cash acquired		(468	)		(34,027	)

Net Cash Used In Investing Activities		(60,786	)		(59,189	)

Cash Flows From Financing Activities
Exercise of stock options		18,916			15,844
Excess income tax benefit from the exercise of stock options		—			3,671

Net Cash Provided By Financing Activities		18,916			19,515

Effect of Exchange Rates on Cash		(207	)		(888	)

Net Increase In Cash and Cash Equivalents		4,499			4,626
Cash And Cash Equivalents At Beginning Of Period		77,567			55,257

Cash And Cash Equivalents At End Of Period	$	82,066		$	59,883


	Six Months Ended November 30,
	2023			2022
Cash Flows From (For) Operating Activities
Net loss	$	(1,984	)	$	(36,632	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization		58,203			32,467
Deferred income taxes		1,178			(1,983	)
Share-based compensation		6,150			4,499
Loss (gain) on disposal of property and equipment		754			(456	)
Amortization of debt issuance costs		1,720			999
Change in operating assets and liabilities, net of business acquisitions:
Accounts receivable, net		3,633			(44,452	)
Inventories, net		(25,929	)		6,478
Prepaid expenses and other current assets		(29,896	)		(37,833	)
Accounts payable and accrued liabilities		34,950			24,103
Interest expense accrual		(164	)		13,974
Change in other assets and liabilities		(9,892	)		5,967
Net Cash From (For) Operating Activities		38,723			(32,869	)
Cash Flows From Investing Activities
Purchases of property, equipment and other non-current intangible assets		(55,046	)		(25,102	)
Proceeds from the maturities of marketable securities		57,828			172,763
Purchases of marketable securities		—			(12,523	)
Business acquisitions, net of working capital adjustments and cash acquired		—			38,896
Proceeds from the sale of property and equipment and other		70			606
Net Cash From Investing Activities		2,852			174,640
Cash Flows From (For) Financing Activities
Exercise of stock options and issuance of employee stock purchase plan shares		1,141			920
Repayment of debt		—			(60,000	)
Debt issuance costs paid and other		(389	)		(19,276	)
Net Cash From (For) Financing Activities		752			(78,356	)
Effect of Foreign Exchange Rates on Cash		198			(7,888	)
Net Increase In Cash and Cash Equivalents		42,525			55,527
Cash and Cash Equivalents, Beginning of Period		163,240			44,473
Cash and Cash Equivalents, End of Period	$	205,765		$	100,000


Large accelerated filer	☒	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller Reporting Company		☐
~~Non-accelerated~~ ~~filer~~		~~☐ (Do not check if a smaller reporting company)~~	~~Smaller reporting company~~	☐

Emerging growth company	☐	☐


					Additional		Accumulated Other
	Common Stock				Paid-in		Comprehensive			Retained
	Shares		Amount		Capital		Loss			Earnings			Total
Balance, June 1, 2023		216,245,501	$	34,599	$	2,567,828	$	(33,251	)	$	565,041		$	3,134,217
Exercise of options and share-based compensation expense		2,591		—		2,661		—			—			2,661
Issuance of shares under employee stock purchase plan		62,490		11		1,028		—			—			1,039
Net income		—		—		—		—			1,503			1,503
Other comprehensive income		—		—		—		6,755			—			6,755
Balance, August 31, 2023		216,310,582	$	34,610	$	2,571,517	$	(26,496	)	$	566,544		$	3,146,175
Exercise of options and share-based compensation expense		209,714		34		3,477		—			—			3,511
Net loss		—		—		—		—			(3,487	)		(3,487	)
Other comprehensive income		—		—		—		1,368			—			1,368
Balance, November 30, 2023		216,520,296	$	34,644	$	2,574,994	$	(25,128	)	$	563,057		$	3,147,567


	Three Months Ended February 28,				Nine Months Ended February 28,
	2018		2017		2018		2017
	(in thousands, except per share amounts)
Numerator for basic and diluted net income per share:
Net income attributable to Neogen	$	16,586	$	10,287	$	45,600	$	31,320
Denominator for basic net income per share:
Weighted average shares		51,537		50,746		51,253		50,438
Effect of dilutive stock options		700		633		761		723

Denominator for diluted net income per share		52,237		51,379		52,014		51,161

Net income attributable to Neogen per share:
Basic	$	0.32	$	0.20	$	0.89	$	0.62

Diluted	$	0.32	$	0.20	$	0.88	$	0.61


				Weighted-
				Average
	Shares			Exercise Price
	(in thousands)
Options outstanding June 1, 2017		2,708		$	32.88
Granted		819			59.26
Exercised		(668	)		28.23
Forfeited		(144	)		37.31

Options outstanding February 28, 2018		2,715			41.75


	FY 2018	FY 2017
Risk-free interest rate	1.6%	1.2%
Expected dividend yield	0.0%	0.0%
Expected stock price volatility	27.7%	35.2%
Expected option life	4.0 years	4.0 years


	Three Months Ended November 30,									Six Months Ended November 30,
(in thousands)	2023			2022			% Change			2023			2022			% Change
Consolidated
Revenues	$	229,629		$	230,033			(0	)%	$	458,616		$	362,382			27	%
Core Sales Growth*								(1	)%								(1	)%
Food Safety
Revenues	$	164,403		$	161,343			2	%	$	330,681		$	225,986			46	%
Core Sales Growth*								1	%								2	%
Animal Safety
Revenues	$	65,226		$	68,690			(5	)%	$	127,935		$	136,396			(6	)%
Core Sales Growth*								(5	)%								(6	)%

% of International Sales		51	%		50	%					51	%		46	%
Effective Tax Rate		6.9	%		(22.7	)%					4.8	%		(33.5	)%
Net Loss	$	(3,487	)	$	(41,841	)		(92	)%	$	(1,984	)	$	(36,632	)		(95	)%
Loss per Diluted Share		(0.02	)		(0.19	)					(0.01	)		(0.23	)
Cash from (for) Operations											38,723			(32,869	)


	Three Months ended February 28,
					Increase/
	2018		2017		(Decrease)			%
			(in thousands)
Food Safety
Natural Toxins, Allergens & Drug Residues	$	16,807	$	16,453	$	354			2	%
Bacterial & General Sanitation		8,992		8,348		644			8	%
Dehydrated Culture Media & Other		10,511		10,383		128			1	%
Rodenticides, Insecticides & Disinfectants		7,359		5,040		2,319			46	%
Genomics Services		3,976		2,725		1,251			46	%

	$	47,645	$	42,949	$	4,696			11	%
Animal Safety
Life Sciences	$	2,769	$	2,332	$	437			19	%
Veterinary Instruments & Disposables		10,630		10,000		630			6	%
Animal Care & Other		7,535		6,311		1,224			19	%
Rodenticides, Insecticides & Disinfectants		14,590		16,111		(1,521	)		(9	)%
Genomics Services		12,723		10,682		2,041			19	%

	$	48,247	$	45,436	$	2,811			6	%

Total Revenues	$	95,892	$	88,385	$	7,507			8	%


	Nine Months ended February 28,
					Increase/
	2018		2017		(Decrease)			%
			(in thousands)
Food Safety
Natural Toxins, Allergens & Drug Residues	$	54,960	$	53,090	$	1,870			4	%
Bacterial & General Sanitation		27,435		25,340		2,095			8	%
Dehydrated Culture Media & Other		32,483		29,792		2,691			9	%
Rodenticides, Insecticides & Disinfectants		18,175		7,088		11,087			156	%
Genomics Services		10,887		7,757		3,130			40	%

	$	143,940	$	123,067	$	20,873			17	%
Animal Safety
Life Sciences	$	7,589	$	7,261	$	328			5	%
Veterinary Instruments & Disposables		32,804		29,281		3,523			12	%
Animal Care & Other		24,056		21,563		2,493			12	%
Rodenticides, Insecticides & Disinfectants		50,228		52,796		(2,568	)		(5	)%
Genomics Services		34,348		28,779		5,569			19	%

	$	149,025	$	139,680	$	9,345			7	%

Total Revenues	$	292,965	$	262,747	$	30,218			12	%


	Three Months Ended November 30,						Six Months Ended November 30,
(in thousands, except for percentages)	2023			2022			2023			2022
Net Loss	$	(3,487	)	$	(41,841	)	$	(1,984	)	$	(36,632	)
Net loss margin %		-1.5	%		-18.2	%		-0.4	%		-10.1	%
Provision for income taxes		(260	)		7,750			(100	)		9,200
Depreciation and amortization		29,469			26,738			58,203			32,467
Interest expense, net		16,169			19,992			32,835			19,024
EBITDA	$	41,891		$	12,639		$	88,954		$	24,059
Share-based compensation		3,512			2,632			6,150			4,499
FX transaction loss on loan and other revaluation (1)		1,002			5,789			712			5,789
Certain transaction fees and integration costs		4,688			39,132			6,639			52,864
Restructuring (2)		1,856			—			2,415			—
Contingent consideration adjustments		150			—			450			—
ERP expense (3)		2,075			—			2,203			—
Discontinued product line expense		—			—			20			—
Recovery on sale of minority interest		(74	)		—			(74	)		—
Inventory step-up charge		—			3,859			—			3,859
Adjusted EBITDA	$	55,100		$	64,051		$	107,469		$	91,070
Adjusted EBITDA margin %		24.0	%		27.8	%		23.4	%		25.1	%


	Three Months Ended November 30,						Six Months Ended November 30,
(in thousands, except per share amounts)	2023			2022			2023			2022
Net Loss	$	(3,487	)	$	(41,841	)	$	(1,984	)	$	(36,632	)
Loss per diluted share	$	(0.02	)	$	(0.19	)	$	(0.01	)	$	(0.23	)
Amortization of acquisition-related intangibles		23,094			22,116			46,419			23,957
Share-based compensation		3,512			2,632			6,150			4,499
FX transaction loss on loan and other revaluation (1)		1,002			5,789			712			5,789
Certain transaction fees and integration costs		4,688			39,132			6,639			52,864
Restructuring (2)		1,856			—			2,415			—
Contingent consideration adjustments		150			—			450			—
ERP expense (3)		2,075			—			2,203			—
Discontinued product line expense		—			—			20			—
Recovery on sale of minority interest		(74	)		—			(74	)		—
Inventory step-up charge		—			3,859			—			3,859
Other adjustments(4)		—			4,350			—			4,350
Estimated tax effect of above adjustments (5)		(7,953	)		(4,676	)		(14,400	)		(9,769	)
Adjusted Net Income	$	24,863		$	31,361		$	48,550		$	48,917
Adjusted Earnings per Share	$	0.11		$	0.15		$	0.22		$	0.30


Risk Category	Hypothetical Change	November 30, 2023		Impact
(in thousands)
Foreign Currency—Revenue	10% Decrease in exchange rates	$	11,608	Earnings
Foreign Currency—Hedges	10% Decrease in exchange rates		6,504	Fair Value
Interest Income	10% Decrease in interest rates		939	Earnings
Interest Expense	10% Increase in interest rates		2,227	Earnings



~~31.1~~		~~Certification of Principal Executive Officer pursuant to Rule13a-14(a).~~

~~31.2~~		~~Certification of Principal Financial Officer pursuant to Rule13a-14(a).~~

32		~~Certification pursuant to 18 U.S.C. section 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~~



3.1	Amended and Restated Bylaws of Neogen Corporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Neogen Corporation on October 31, 2023).

10.1	Form of Severance Letter Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Neogen Corporation on October 31, 2023).

10.2	Neogen Corporation 2023 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Proxy Statement on Schedule 14A filed by Neogen Corporation on September 18, 2023).

31.1	Certification of Principal Executive Officer


31.2	Certification of Principal Financial Officer

32	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definition Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


		~~NEOGEN CORPORATION~~
		~~(Registrant)~~

~~Dated: March 29, 2018~~NEOGEN CORPORATION
(Registrant)



		/s/ ~~James L. Herbert~~John E. Adent
		~~James L. Herbert~~ John E. Adent
		President & Chief Executive ~~Chairman~~Officer
		(Principal Executive Officer)


~~Dated: March 29, 2018~~

		/s/ ~~Steven J. Quinlan~~David H. Naemura
		~~Steven J. Quinlan~~ David H. Naemura
		~~Vice President &~~ Chief Financial Officer
		(Principal Financial ~~Officer~~ and ~~Principal~~ Accounting Officer)