Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
May 31, 2023 | Jun. 30, 2023 | Nov. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | May 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Registrant Name | NEOGEN CORPORATION | ||
Entity Central Index Key | 0000711377 | ||
Trading Symbol | NEOG | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Small Business | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Public Float | $ 3,572,273,371 | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 216,308,912 | ||
Entity File Number | 0-17988 | ||
Title of 12(g) Security | Common Stock, $0.16 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity Incorporation, State or Country Code | MI | ||
Entity Tax Identification Number | 38-2367843 | ||
Entity Address, Address Line One | 620 Lesher Place | ||
Entity Address, State or Province | MI | ||
Local Phone Number | 372-9200 | ||
Entity Address, City or Town | Lansing | ||
City Area Code | 517 | ||
Entity Address, Postal Zip Code | 48912 | ||
ICFR Auditor Attestation Flag | true | ||
Auditor Name | BDO USA, P.A. | ||
Auditor Firm ID | 243 | ||
Auditor Location | Grand Rapids, MI |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 163,240 | $ 44,473 |
Marketable securities | 82,329 | 336,578 |
Accounts receivable, net | 153,253 | 99,674 |
Inventories | 133,812 | 122,313 |
Prepaid expenses and other current assets | 53,297 | 23,760 |
Total Current Assets | 585,931 | 626,798 |
Property and Equipment | ||
Land and improvements | 10,209 | 9,485 |
Building and improvements | 96,794 | 79,513 |
Machinery and equipment | 152,547 | 114,180 |
Furniture and fixtures | 7,080 | 6,307 |
Construction in progress | 52,237 | 5,974 |
Property, Plant and Equipment, Gross | 318,867 | 215,459 |
Less accumulated depreciation | (120,118) | (104,875) |
Net Property and Equipment | 198,749 | 110,584 |
Other Assets | ||
Right of use assets | 11,933 | 3,184 |
Goodwill | 2,137,496 | 142,704 |
Other non-amortizable intangible assets | 14,316 | 15,397 |
Amortizable intangible assets, net | 1,590,787 | 92,106 |
Other non-current assets | 15,220 | 2,156 |
Total Other Assets | 3,769,752 | 255,547 |
Total Assets | 4,554,432 | 992,929 |
Current Liabilities | ||
Accounts payable | 76,669 | 34,614 |
Accrued compensation | 25,153 | 11,123 |
Income tax payable | 6,951 | 2,126 |
Accrued interest | 11,149 | |
Deferred revenue | 4,616 | 5,460 |
Other accruals | 20,934 | 24,521 |
Total Current Liabilities | 145,472 | 77,844 |
Deferred Income Tax Liability | 353,427 | 17,011 |
Non-Current Debt | 885,439 | |
Other Non-Current Liabilities | 35,877 | 10,700 |
Total Liabilities | 1,420,215 | 105,555 |
Commitments and Contingencies (note 7) | ||
Stockholders' Equity | ||
Preferred stock, $1.00 par value — shares authorized 100,000; none issued and outstanding | 0 | 0 |
Common stock, $0.16 par value - shares authorized 315,000,000; 216,245,501 and 107,801,094 shares issued and outstanding at May 31, 2023 and 2022, respectively | 34,599 | 17,248 |
Additional paid-in capital | 2,567,828 | 309,984 |
Accumulated other comprehensive loss | (33,251) | (27,769) |
Retained earnings | 565,041 | 587,911 |
Total Stockholders' Equity | 3,134,217 | 887,374 |
Total Liabilities and Stockholders' Equity | $ 4,554,432 | $ 992,929 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2023 | May 31, 2022 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.16 | $ 0.16 |
Common stock, shares authorized | 315,000,000 | 315,000,000 |
Common stock, shares issued | 216,245,501 | 107,801,094 |
Common stock, shares outstanding | 216,245,501 | 107,801,094 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Revenues | |||
Total Revenues, net | $ 822,447 | $ 527,159 | $ 468,459 |
Cost of Revenues | |||
Total Cost of Revenues | 416,492 | 284,146 | 253,403 |
Gross Margin | 405,955 | 243,013 | 215,056 |
Operating Expenses | |||
Sales and marketing | 141,222 | 84,604 | 73,443 |
General and administrative | 201,179 | 82,742 | 51,197 |
Research and development | 26,039 | 17,049 | 16,247 |
Total Operating Expenses | 368,440 | 184,395 | 140,887 |
Operating Income | 37,515 | 58,618 | 74,169 |
Other (Expense) Income | |||
Interest income | 3,166 | 1,339 | 1,692 |
Interest expense | (55,961) | (72) | (78) |
Other, net | (6,762) | 322 | (515) |
Total Other (Expense) Income | (59,557) | 1,589 | 1,099 |
(Loss) Income Before Taxes | (22,042) | 60,207 | 75,268 |
Provision for Income Taxes | 828 | 11,900 | 14,386 |
Net (Loss) Income | $ (22,870) | $ 48,307 | $ 60,882 |
Net (Loss) Income Per Share | |||
Basic | $ (0.12) | $ 0.45 | $ 0.57 |
Diluted | $ (0.12) | $ 0.45 | $ 0.57 |
Weighted Average Shares Outstanding | |||
Basic | 188,881 | 107,684 | 106,499 |
Diluted | 188,881 | 108,020 | 107,120 |
Product Revenues | |||
Revenues | |||
Total Revenues, net | $ 715,076 | $ 424,664 | $ 376,302 |
Cost of Revenues | |||
Total Cost of Revenues | 354,707 | 228,017 | 201,348 |
Service Revenues | |||
Revenues | |||
Total Revenues, net | 107,371 | 102,495 | 92,157 |
Cost of Revenues | |||
Total Cost of Revenues | $ 61,785 | $ 56,129 | $ 52,055 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Net (loss) income | $ (22,870) | $ 48,307 | $ 60,882 |
Other comprehensive income (loss): | |||
Foreign currency translations | (4,796) | (13,955) | 8,602 |
Unrealized gain (loss) on marketable securities, net of tax of $389, $(728), and $(80) | 1,353 | (2,439) | (268) |
Unrealized loss on derivative instruments, net of tax of $(644) | (2,039) | ||
Other comprehensive (loss) income, net of tax: | (5,482) | (16,394) | 8,334 |
Comprehensive (loss) income | $ (28,352) | $ 31,913 | $ 69,216 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss)(Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized (loss) gain on marketable securities, net of tax | $ 389 | $ (728) | $ (80) |
Unrealized loss on derivative instruments, net of tax | $ (644) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Beginning Balance at May. 31, 2020 | $ 725,177 | $ 16,943 | $ 249,221 | $ (19,709) | $ 478,722 |
Beginning Balance (in shares) at May. 31, 2020 | 105,891,682 | ||||
Exercise of options, RSUs and share-based compensation expense | 39,680 | $ 226 | 39,454 | ||
Exercise of options, RSUs and share-based compensation expense (in shares) | 1,410,948 | ||||
Issuance of shares under employee stock purchase plan | $ 1,388 | $ 6 | 1,382 | ||
Issuance of shares under employee stock purchase plan (in shares) | 38,406 | 38,406 | |||
Issuance of shares for acquisition | $ 4,916 | $ 20 | 4,896 | ||
Issuance of shares for acquisition (in shares) | 127,268 | ||||
Net (loss) income | 60,882 | 60,882 | |||
Other comprehensive income (loss) | 8,334 | 8,334 | |||
Ending Balance at May. 31, 2021 | 840,377 | $ 17,195 | 294,953 | (11,375) | 539,604 |
Ending Balance (in shares) at May. 31, 2021 | 107,468,304 | ||||
Exercise of options, RSUs and share-based compensation expense | 13,208 | $ 46 | 13,162 | ||
Exercise of options, RSUs and share-based compensation expense (in shares) | 289,334 | ||||
Issuance of shares under employee stock purchase plan | $ 1,876 | $ 7 | 1,869 | ||
Issuance of shares under employee stock purchase plan (in shares) | 43,456 | 43,456 | |||
Net (loss) income | $ 48,307 | 48,307 | |||
Other comprehensive income (loss) | (16,394) | (16,394) | |||
Ending Balance at May. 31, 2022 | $ 887,374 | $ 17,248 | 309,984 | (27,769) | 587,911 |
Ending Balance (in shares) at May. 31, 2022 | 107,801,094 | 107,801,094 | |||
Exercise of options, RSUs and share-based compensation expense | $ 10,496 | $ 13 | 10,483 | ||
Exercise of options, RSUs and share-based compensation expense (in shares) | 79,857 | ||||
Issuance of shares under employee stock purchase plan | $ 1,858 | $ 15 | 1,843 | ||
Issuance of shares under employee stock purchase plan (in shares) | 94,604 | 94,604 | |||
Issuance of shares for acquisition | $ 2,262,841 | $ 17,323 | 2,245,518 | ||
Issuance of shares for acquisition (in shares) | 108,269,946 | ||||
Net (loss) income | (22,870) | (22,870) | |||
Other comprehensive income (loss) | (5,482) | (5,482) | |||
Ending Balance at May. 31, 2023 | $ 3,134,217 | $ 34,599 | $ 2,567,828 | $ (33,251) | $ 565,041 |
Ending Balance (in shares) at May. 31, 2023 | 216,245,501 | 216,245,501 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Cash Flows From Operating Activities | |||
Net (loss) income | $ (22,870) | $ 48,307 | $ 60,882 |
Adjustments to reconcile net (loss) income to net cash from operating activities: | |||
Depreciation and amortization | 88,377 | 23,694 | 21,041 |
Impairment of discontinued product lines | 3,109 | 0 | 0 |
Loss on sale of minority interest and investment | 2,016 | 0 | 0 |
Deferred income taxes | (19,230) | (4,695) | (640) |
Share-based compensation | 10,177 | 7,154 | 6,437 |
Gain on disposal of property and equipment | (486) | 0 | 0 |
Amortization of debt issuance costs | 2,720 | 0 | 0 |
Changes in operating assets and liabilities, net of business acquisitions: | |||
Accounts receivable | (53,879) | (7,798) | (2,595) |
Inventories | 9,955 | (21,072) | 2,450 |
Prepaid expenses and other assets | (3,121) | (4,054) | (3,386) |
Accounts payable, accruals and changes | 18,642 | 20,238 | (2,221) |
Interest expense accrual | 4,052 | 0 | 0 |
Changes in other non-current assets and non-current liabilities | 1,566 | 6,264 | (879) |
Net Cash From Operating Activities | 41,028 | 68,038 | 81,089 |
Cash Flows From (For) Investing Activities | |||
Purchase of property, equipment and other non-current intangible assets | (65,757) | (24,429) | (26,712) |
Proceeds from the maturities of marketable securities | 266,772 | 381,839 | 764,597 |
Purchase of marketable securities | (12,523) | (415,894) | (792,678) |
Proceeds from the sale of property and equipment | 826 | 0 | 0 |
Business acquisitions, net of working capital adjustments and cash acquired | 11,721 | (38,745) | (50,771) |
Net Cash From (For) Investing Activities | 201,039 | (97,229) | (105,564) |
Cash Flows (For) From Financing Activities | |||
Exercise of stock options and issuance of employee stock purchase plan shares | 1,195 | 7,933 | 34,631 |
Debt issuance costs paid | (19,276) | 0 | 0 |
Repayment of debt | (100,000) | 0 | 0 |
Payment of contingent consideration | 0 | (1,120) | (1,087) |
Net Cash (For) From Financing Activities | (118,081) | 6,813 | 33,544 |
Effects of Foreign Exchange Rate on Cash | (5,219) | (8,751) | 264 |
Net Increase (Decrease) in Cash and Cash Equivalents | 118,767 | (31,129) | 9,333 |
Cash and Cash Equivalents, Beginning of Year | 44,473 | 75,602 | 66,269 |
Cash and Cash Equivalents, End of Year | 163,240 | 44,473 | 75,602 |
Supplementary Cash Flow Information | |||
Cash paid for interest | 42,616 | 72 | 78 |
Income taxes paid, net of refunds | $ 15,473 | $ 17,242 | $ 14,966 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
May 31, 2023 | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies 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. The majority of the diagnostic 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 Consolidation The consolidated financial statements include the accounts of Neogen Corporation and its subsidiaries, all of which are wholly-owned as of May 31, 2023. All intercompany accounts and transactions have been eliminated in consolidation. Share and per share amounts reflect the June 4, 2021 2-for-1 stock split as if it took place at the beginning of the periods presented. Functional Currency 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 income (loss). Gains or losses from foreign currency transactions are included in other income (expense) on our consolidated statement of income. Recently Adopted Accounting Standards Acquired contract assets and liabilities in a business combination On June 1, 2023, the Company adopted ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amended ASC 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. Adoption of this standard did not have a material impact on its consolidated financial statements and related disclosures. Reference Rate Reform On September 1, 2022, the Company adopted Accounting Standards Codification Topic 848, Reference Rate Reform (Topic 848), which provided temporary optional expedients to applying the reference rate reform guidance to contracts that reference LIBOR or another reference rate expected to be discontinued. Under Topic 848, contract modifications resulting from the transition to a new reference rate may be accounted for as a continuation of the existing contract. The Company now uses the Secured Overnight Financing Rate (SOFR). Adoption of this standard did not have a material impact on its consolidated financial statements and related disclosures. Accounting Policies 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. 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. Cash held by foreign subsidiaries was $ 36,288 and $ 17,057 at May 31, 2023 and 2022 , respectively. 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 income (loss). 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 consolidated statements of income (loss). Marketable Securities as of May 31, 2023 and 2022 are listed below by classification and remaining maturities. Year ended May 31 Maturity 2023 2022 Commercial Paper & Corporate Bonds 0 - 90 days $ 22,552 $ 106,497 91 -180 days 35,692 61,373 181 days -1 year 23,768 91,706 1 - 2 years 317 77,002 Total Marketable Securities $ 82,329 $ 336,578 The components of marketable securities as of May 31, 2023 are as follows: Amortized Unrealized Unrealized Fair Value Commercial Paper & Corporate Bonds $ 83,549 $ 0 $ ( 1,220 ) $ 82,329 The components of marketable securities as of May 31, 2022 are as follows: Amortized Unrealized Unrealized Fair Value Commercial Paper & Corporate Bonds $ 339,540 $ 7 $ ( 2,969 ) $ 336,578 Derivative Financial Instruments 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 income (loss), and amounts are reclassified into earnings on the consolidated statement of income (loss) 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. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect amounts reflected in the consolidated financial statements. Considerable judgment is often involved in making such estimates, and the use of different assumptions could result in different conclusions. Management believes its assumptions and estimates are reasonable and appropriate. However, actual results could differ from those estimates. 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 credit losses, 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 credit losses. No customer accounted for more than 10 % of accounts receivable May 31, 2023 or 2022 , respectively. The activity in the allowance for credit losses was as follows: Year ended May 31 2023 2022 2021 Beginning Balance $ 1,650 $ 1,400 $ 1,350 Provision 1,460 332 239 Recoveries 46 98 139 Write-offs ( 329 ) ( 180 ) ( 328 ) Ending Balance $ 2,827 $ 1,650 $ 1,400 Inventories Inventories are stated at the lower of cost or net realizable value, determined on the first-in, first-out method. The components of inventories were as follows: Year ended May 31 2023 2022 Raw Materials $ 64,971 $ 58,667 Work-in-process 5,369 6,388 Finished goods 63,472 57,258 $ 133,812 $ 122,313 The Company’s inventories are analyzed for slow moving, expired and obsolete items on a quarterly basis and the valuation allowance is adjusted as required within cost of revenues expense. The valuation allowance for inventory was $ 6,270 and $ 4,050 at May 31, 2023 and 2022 , respectively. Property and Equipment Property and equipment is stated at cost. Expenditures for major improvements are capitalized while repairs and maintenance are charged to expense as incurred. Depreciation is provided on the straight-line method over the estimated useful lives of the respective assets, which are generally seven to 39 years for buildings and improvements, and three to 10 years for furniture, fixtures, computers, leasehold improvements, and machinery and equipment. Depreciation expense was $ 17,292 , $ 14,094 , and $ 13,288 in fiscal years 2023, 2022, and 2021 , respectively. 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. Management also reviews the carrying amounts of non-amortizable intangible assets annually, or when indications of impairment exist, to determine if such assets may be impaired. These are tested for impairment annually in the fourth quarter. During management's annual test or when there are indicators of impairment, if the carrying amounts of these assets are deemed to be less than fair value based upon a discounted cash flow analysis and comparison to comparable EBITDA multiples of peer companies, such assets are reduced to their 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 are less than the carrying value of the asset. 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. No impairments of long-lived assets were identified during the years ended May 31, 2023, 2022 and 2021 , respectively. E quity Compensation Plans At May 31, 2023, the Company had stock option plans which are described more fully in Note 5 to the consolidated financial statements. We measure stock-based compensation at the grant date, based on the estimated fair value of the award, and recognize the cost (net of estimated forfeitures) as compensation expense on a straight-line basis over the requisite service period. Our stock-based compensation expense is reflected in general and administrative expense in our consolidated statements of income (loss). Research and Development Costs Research and development costs, which consist primarily of compensation costs, administrative expenses and new product development, among other items, are expensed as incurred. Advertising Costs Advertising costs are expensed within sales and marketing as incurred and totaled $ 2,548 , $ 2,018 , and $ 1,687 in fiscal years 2023, 2022, and 2021 , respectively. Net (Loss) Income per Share Basic net (loss) income per share is based on the weighted average number of common shares outstanding during each year. Diluted (loss) earnings per share is based on the weighted average number of common shares and dilutive potential common shares outstanding. Our dilutive potential common shares outstanding during the years result from dilutive stock options and restricted stock units. The following table presents the net (loss) income per share calculations: Year ended May 31 2023 2022 2021 Numerator for basic and diluted net (loss) income per share — Net (Loss) Income $ ( 22,870 ) $ 48,307 $ 60,882 Denominator for basic net (loss) income per share — Weighted average shares 188,881 107,684 106,499 Effect of dilutive stock options and restricted stock units - 336 621 Denominator for diluted net (loss) income per share 188,881 108,020 107,120 Net (loss) income attributable per share Basic $ ( 0.12 ) $ 0.45 $ 0.57 Diluted $ ( 0.12 ) $ 0.45 $ 0.57 Due to the net loss in fiscal 2023, the dilutive stock options and RSUs are anti-dilutive. At May 31, 2023 and May 31, 2022 , 148,000 and 383,000 shares, respectively, were excluded from the calculation of diluted net (loss) income per share, because the inclusion of such securities in the calculation would have been anti-dilutive. At May 31, 2021, no potential shares were excluded from the computation. Leases The Company recognizes 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. We recognized all leases with terms greater than 12 months in duration on our consolidated balance sheets as right-of-use assets and lease liabilities . Right-of-use assets are recorded in other assets on our consolidated balance sheets. Current and non-current lease liabilities are recorded in other accruals within current liabilities and other non-current liabilities, respectively, on our consolidated balance sheets. 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, all of our leases are classified as operating leases. Leased assets and corresponding liabilities are recognized based on the present value of the lease payments over the lease term. Our lease terms may include options to extend when it is reasonably certain that we will exercise that option. We have made certain assumptions and judgments when accounting for leases, the most significant of which are: • We did not elect to use hindsight when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset. • For all asset classes, we elected to not recognize a right-of-use asset and lease liability for short-term leases (i.e. leases with a term of 12 months or less). • For all asset classes, we elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component. • The determination of the discount rate used in a lease is our incremental borrowing rate that is based on our estimate of what we would normally pay to borrow on a fully collateralized and amortized basis over a similar term an amount equal to the lease payments. Supplemental balance sheet information related to operating leases was as follows: Year ended May 31 2023 2022 Rights of use - assets $ 11,933 $ 3,184 Lease liabilities - current 3,277 1,440 Lease liabilities - non-current 8,812 1,788 The weighted average remaining lease term and weighted average discount rate were as follows: Year ended May 31 2023 2022 Weighted average remaining lease term 4.7 years 3 years Weighted average discount rate 4.7 % 1.7 % Operating lease expenses are classified as cost of revenues or operating expenses on the consolidated statements of income (loss). The components of lease expense were as follows: Year ended May 31 2023 2022 Operating leases $ 2,097 $ 438 Short term leases 460 277 Total lease expense $ 2,557 $ 715 Cash paid for amounts included in the measurement of lease liabilities for operating leases included in cash flows from operations on the statement of cash flows was approximately $ 2,139 , $ 1,407 , and $ 1,397 for the years ended May 31, 2023, 2022 and 2021 , respectively. Non-cash additions to right-of-use assets obtained from new operating lease liabilities were $ 11,192 for the year ended May 31, 2023. Maturities of operating lease liabilities as of May 31, 2023 are as follows: Years ending May 31, Amount 2024 $ 3,542 2025 3,014 2026 2,725 2027 1,624 2028 1,105 2029 and thereafter 1,885 Total lease payments $ 13,895 Less: imputed interest ( 1,806 ) Total lease liabilities $ 12,089 Revenue Recognition We determine the amount of revenue to be recognized through application of the following steps: • Identification of the contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies the performance obligations. Essentially all of Neogen’s revenue is generated through contracts with its customers. A performance obligation is a promise in a contract to transfer a product or service to a customer. We generally recognized revenue at a point in time when all of our performance obligations under the terms of a contract are satisfied. Revenue is recognized upon transfer of control of promised products or services in an amount that reflects the consideration we expect to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met. Certain agreements with customers include discounts or rebates on the sale of products and services applied retrospectively, such as volume rebates achieved by purchasing a specified purchase threshold of goods and services. We account for these discounts as variable consideration and estimate the likelihood of a customer meeting the threshold in order to determine the transaction price using the most predictive approach. We typically use the most-likely-amount method, for incentives that are offered to individual customers, and the expected-value method, for programs that are offered to a broad group of customers. Variable consideration reduces the amount of revenue that is recognized. Rebate obligations related to customer incentive programs are recorded in accrued liabilities. The rebate estimates are adjusted at the end of each applicable measurement period based on information currently available. The performance obligations in Neogen’s contracts are generally satisfied well within one year of contract inception. In such cases, management has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component. Management has elected to utilize the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred because the amortization period for the prepaid costs that would otherwise have been deferred and amortized is one year or less. We account for shipping and handling for products as a fulfillment activity when goods are shipped. Shipping and handling costs that are charged to and reimbursed by the customer are recognized as revenues, while the related expenses incurred by Neogen are recorded in sales and marketing expense. These expenses totaled $ 18,513 , $ 17,482 , and $ 15,180 in fiscal years 2023, 2022, and 2021, respectively. Revenue is recognized net of any tax collected from customers. The taxes are subsequently remitted to governmental authorities. Our terms and conditions of sale generally do not provide for returns of product or reperformance of service except in the case of quality or warranty issues. While these situations are infrequent, due to immateriality of the amount, warranty claims are recorded in the period incurred. The Company derives revenue from two primary sources — product revenue and service revenue. Product revenue consists primarily of shipments of: • Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; • Consumable products marketed to veterinarians, 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. Revenue for Neogen’s 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 listed as Deferred revenue on the consolidated balance sheets. During fiscal year 2023 and 2022 , the Company recorded additions of $ 11,046 and $ 10,229 to deferred revenue, respectively. During fiscal year 2023 and 2022 , the Company recognized $ 11,890 and $ 8,173 , 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’s Food Safety business. Similar to Neogen, 3M’s former Food Safety business 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. Revenue for these products are recognized and invoiced when the product is shipped to the customer. These products are currently manufactured, invoiced and distributed by 3M on behalf of, and as directed by Neogen to its customers under a number of transition service contracts. The following table presents disaggregated revenue by major product and service categories for the years ended May 31, 2023, 2022 and 2021: Year Ended May 31, 2023 May 31, 2022 May 31, 2021 Food Safety: Natural Toxins, Allergens & Drug Residues $ 82,567 $ 79,395 $ 76,614 Bacterial & General Sanitation 134,934 47,282 44,009 Culture Media & Other 267,178 75,278 61,245 Rodent Control, Insect Control & Disinfectants 39,655 35,691 32,219 Genomics Services 22,463 22,333 20,157 $ 546,797 $ 259,979 $ 234,244 Animal Safety: Life Sciences 6,254 5,685 5,715 Veterinary Instruments & Disposables 63,843 63,938 48,128 Animal Care & Other 39,068 39,805 35,897 Rodent Control, Insect Control & Disinfectants 87,423 83,610 77,458 Genomics Services 79,062 74,142 67,017 $ 275,650 $ 267,180 $ 234,215 Total Revenue $ 822,447 $ 527,159 $ 468,459 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
May 31, 2023 | |
Goodwill and Other Intangible Assets | 2. Goodwill and Other Intangible Assets Goodwill Management completed the annual impairment analysis of goodwill using a third-party quantitative assessment as of the first day of the fourth quarter of fiscal year 2023. The fair value of each reporting unit was determined and compared to the carrying value. The inputs to the fair value are defined in the fair value hierarchy as Level 3 inputs. If the carrying value had exceeded the fair value, an impairment charge would have been recorded based on that difference. The annual impairment analysis resulted in no impairment for 2023. Management completed the annual impairment analysis of goodwill using a qualitative approach during fiscal year 2022, which resulted in no impairment charges. The following table summarizes goodwill by reportable segment: Food Animal Total Balance, May 31, 2021 $ 67,822 $ 63,654 $ 131,476 Acquisitions 4,152 11,752 15,904 Foreign currency translation and other ( 4,416 ) ( 260 ) ( 4,676 ) Balance, May 31, 2022 $ 67,558 $ 75,146 $ 142,704 Acquisitions (1) 1,985,476 6,783 1,992,259 Foreign currency translation and other 3,127 ( 594 ) 2,533 Balance, May 31, 2023 $ 2,056,161 $ 81,335 $ 2,137,496 (1) Animal Safety acquisitions represents portion of FSD transaction recorded at Neogen Australasia . Other Intangible Assets As of May 31, 2023 , non-amortizable intangible assets included licenses of $ 569 , trademarks of $ 12,522 and other intangibles of $ 1,224 . During fiscal year 2023, the Company recorded an impairment of $ 1,000 to its non-amortizable trademarks related to discontinued product lines. As of May 31, 2022 , non-amortizable intangible assets included licenses of $ 569 , trademarks of $ 13,604 and other intangibles of $ 1,224 . Management completed the annual impairment analysis of intangible assets with indefinite lives using a qualitative assessment for fiscal year 2023 and a quantitative assessment for fiscal year 2022. Other than the impairment in fiscal year 2023 related to the discrete trademarks discussed above, management determined that recorded amounts were not impaired and that no impairment charges were necessary. Amortizable intangible assets consisted of the following and are included in amortizable intangible assets within the consolidated balance sheets: Gross Less Net Licenses $ 16,010 $ 6,763 $ 9,247 Covenants not to compete 488 384 104 Patents 8,499 4,865 3,634 Customer relationships intangibles 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 Balance, May 31, 2023 $ 1,714,041 $ 123,254 $ 1,590,787 Licenses $ 17,109 $ 5,682 $ 11,427 Covenants not to compete 846 671 175 Patents 8,347 4,583 3,764 Customer relationships intangibles 75,000 33,662 41,338 Trade names and trademarks 1,180 167 1,013 Developed technology 17,741 6,124 11,617 Other product and service-related intangibles 27,299 4,527 22,772 Balance, May 31, 2022 $ 147,522 $ 55,416 $ 92,106 During fiscal year 2023, the Company recorded an impairment of $ 2,109 to its amortizable licenses related to discontinued product lines. Amortization expense for intangibles totaled $ 71,085 , $ 9,600 , and $ 7,753 in fiscal years 2023, 2022, and 2021 , respectively. The estimated amortization expense for each of the five succeeding fiscal years is as follows: $ 93,200 in 2024, $ 92,900 in 2025, $ 92,300 in 2026, $ 91,700 in 2027, $ 90,900 in 2028 and $ 1,129,987 thereafter. 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, 10 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 relationships intangibles and product and service-related intangibles, which are amortized on either a straight-line or an accelerated basis. The weighted average remaining amortization period for intangibles was 18 years as of May 31, 2023 and eight years as of May 31, 2022. |
Business Combinations
Business Combinations | 12 Months Ended |
May 31, 2023 | |
Business Combinations | 3. Business Combinations The Consolidated Statements of Income (Loss) 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 described below relates primarily to enhancing the Company’s strategic platform for the expansion of available product offerings. Fiscal 2021 In July 2020, the Company acquired the U.S. (including territories) rights to Elanco’s StandGuard Pour-on for horn fly and lice control in beef cattle, and related assets. Consideration for the purchase was $ 2,351 in cash, all paid at closing. The final purchase price allocation, based upon the fair value of these assets determined using the income approach, included inventory of $ 51 and intangible assets of $ 2,300 . Sales are reported within the Animal Safety segment. In December 2020, the Company acquired all of the stock of Megazyme, Ltd, an Ireland-based company, and its wholly-owned subsidiaries, U.S.-based Megazyme, Inc. and Ireland-based Megazyme IP. Megazyme is a manufacturer and supplier of diagnostic assay kits and enzymes to measure dietary fiber, complex carbohydrates and enzymes in food and beverages as well as animal feeds. Consideration for the purchase was net cash of $ 39,800 paid at closing, $ 8,600 of cash placed in escrow payable to the former owner in two installments in two and four years, $ 4,900 of stock issued at closing, and up to $ 2,500 of contingent consideration, payable in two installments over the next year, based upon an excess net sales formula. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $ 1,376 , inventory of $ 5,595 , net property, plant and equipment of $ 12,599 , prepayments of $ 69 , other current liabilities of $ 1,815 , contingent consideration accrual of $ 2,458 , non-current liabilities of $ 319 , non-current deferred tax liabilities of $ 3,306 , intangible assets of $ 22,945 and the remainder to goodwill (non-deductible for tax purposes). In the year subsequent to the acquisition, payments of $ 2,349 were made to the former owner. In the second year after the acquisition, the first escrow installment payment was also made. The Irish companies continue to operate in Bray, Ireland, reporting within the Food Safety segment and are managed through Neogen’s Scotland operation. The Company’s U.S. business is now managed by our Lansing-based Food Safety team. Fiscal 2022 In September 2021, the Company acquired all of the stock of CAPInnoVet, Inc., a companion animal health business that provides pet medications to the veterinary market. This acquisition provided entry into the retail parasiticide market and enhanced the Company’s presence in companion animal markets. Consideration for the purchase was net cash of $ 17,900 paid at closing. There also is the potential for performance milestone payments to the former owners of up to $ 6,500 and the Company could incur up to $ 14,500 in future royalty payments. The final purchase allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $ 308 , inventory of $ 531 , prepayments of $ 296 , accounts payable of $ 120 , other current liabilities of $ 84 , non-current liabilities of $ 6,500 , intangible assets of $ 19,200 and the remainder to goodwill (deductible for tax purposes). Upon revaluation of the contingent liability during the third quarter of fiscal year 2023, the Company recognized a gain of $ 300 on the performance milestone liability, recorded within other income. The business is operated from our location in Lexington, KY, reporting within the Animal Safety segment. In November 2021, the Company acquired all of the stock of Delf (U.K.) Ltd., a United Kingdom-based manufacturer and supplier of animal hygiene and industrial cleaning products, and Abbott Analytical Ltd., a related service provider. This acquisition expanded the Company’s line of dairy hygiene products and enhances our cleaner and disinfectant product portfolio. Consideration for the purchase was net cash of $ 9,500 paid at closing. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $ 1,059 , inventory of $ 972 , net property, plant and equipment of $ 152 , prepayments of $ 31 , accounts payable of $ 497 , other current liabilities of $ 378 , non-current deferred tax liabilities of $ 780 , intangible assets of $ 3,100 and the remainder to goodwill (non-deductible for tax purposes). The companies continue to operate from their current location in Liverpool, England, reporting within the Food Safety segment and are managed through Neogen’s Scotland operation. In December 2021, the Company acquired all of the stock of Genetic Veterinary Sciences, Inc., a companion animal genetic testing business providing genetic information for dogs, cats and birds to animal owners, breeders and veterinarians. This acquisition further will expand the Company’s presence in the companion animal market. Consideration for the purchase was $ 11,300 in net cash. T he final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $ 38 , net inventory of $ 292 , net property, plant and equipment of $ 399 , prepayments of $ 54 , accounts payable of $ 325 , unearned revenue of $ 1,900 , other current liabilities of $ 321 , intangible assets of $ 5,500 and the remainder to goodwill (deductible for tax purposes). The business is operated from its current location in Spokane, Washington, reporting within the Animal Safety segment. Since completion of initial estimates in the second quarter of fiscal year 2022, the Company has recorded insignificant measurement period adjustments, which resulted in a decrease to the base purchase price. Fiscal 2023 Thai-Neo Biotech Co., Ltd. Acquisition On July 1, 2022, the Company acquired all of the stock of Thai-Neo Biotech Co., Ltd., a longstanding distributor of Neogen’s food safety products to Thailand and Southeast Asia. This acquisition gives Neogen a direct sales presence in Thailand. Consideration for the purchase was $ 1,581 in net cash, with $ 1,310 paid at closing, $ 37 paid on November 29, 2022 as a working capital adjustment and $ 234 payable on October 1, 2023. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included intangible assets of $ 620 (with an estimated life of 10 years). 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. Subsequent to May 31, 2023, $ 8,000 of the escrow balance was released to Corvium, Inc. in July 2023. 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 fourth quarter of fiscal 2023, the Company recorded adjustments to intangible assets of $ 3,820 and contingent liability of $ 1,070 , which decreased the balances, based on 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 custom ers and the expertise and reputation of the assembled workforce. These values are Level 3 fair value measurements. Our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). While we believe that these preliminary estimates provide a reasonable basis for estimating the fair value of the assets acquired and liabilities assumed, we will continue to evaluate available information prior to finalization of the amounts. The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the fair value of intangible assets. Due to the Company's acquisition of Corvium, Inc., it recorded a loss of $ 1,500 during fiscal year 2023 on dissolution of its minority interest in that company. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition: Prepaids and other current assets $ 66 Property, plant and equipment 13 Intangible assets 10,180 Deferred revenue ( 1,827 ) Adjustment of annual license prepaid ( 419 ) Other non-current liabilities ( 930 ) Total identifiable assets and liabilities acquired 7,083 Goodwill 16,984 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 Company (“3M”), and Neogen Food Safety Corporation (“Neogen Food Safety Corporation”), a subsidiary created to carve out 3M’s Food Safety Division (“3M FSD”, “FSD”), closed on the transaction combining 3M’s FSD with Neogen in a Reverse Morris Trust transaction and Neogen Food Safety Corporation became a wholly owned subsidiary of 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 acquired business is a leading provider of food safety testing solutions. It offers a broad range of food safety testing products that support multiple industries within food and beverage, helping producers to prevent and protect consumers from foodborne illnesses. The business has a broad global presence with products used in more than 60 countries and a diversified revenue base of more than 100,000 end-user customers. The combination of Neogen and the 3M FSD creates a leading innovator with an enhanced geographic footprint, innovative product offerings, digitization capabilities, and financial flexibility to capitalize on robust growth trends in sustainability, food safety, and supply chain integrity. The acquired Food Safety business continues to primarily operate in facilities in Minnesota and the United Kingdom ("U.K."), and is being managed overall in Michigan, reporting within the Food Safety segment. 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 4 "Long-Term Debt" for further detail on the debt incurred. During the fiscal year ended May 31, 2023 , the Company recorded adjustments to its preliminary allocation of the purchase consideration to assets acquired and liabilities assumed based on initial fair value estimates and is subject to continuing management analysis, with assistance from third-party valuation advisors. In the fourth quarter of fiscal 2023, Inventory and Property, plant and equipment amounts were finalized. The excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets of $ 1.97 billion was recorded as goodwill, of which $ 1.92 billion is non-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 that do not qualify for separate recognition. These values are Level 3 fair value measurements. The preliminary fair values of net tangible assets and intangible assets acquired were based on preliminary valuations, and our estimates and assumptions are subject to change within the measurement period (up to one year from the acquisition date). The primary areas of the preliminary purchase price allocation that are not yet finalized relate to deferred income tax liabilities. The fair values of the assets acquired and liabilities assumed are based on our preliminary estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While we believe that these preliminary estimates provide a reasonable basis for estimating the fair value of the assets acquired and liabilities assumed, we will continue to evaluate available information prior to finalization of the amounts. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition: Cash and cash equivalents $ 319 Inventories 18,403 Other current assets 14,855 Property, plant and equipment 25,832 Intangible assets 1,560,000 Right of use asset 882 Lease liability ( 885 ) Deferred tax liabilities ( 352,481 ) Other liabilities ( 2,832 ) Total identifiable assets and liabilities acquired 1,264,093 Goodwill 1,974,520 Total purchase consideration $ 3,238,613 The following table summarizes the intangible assets acquired and the useful life of these assets. Fair Value Useful Life in Years Trade Names and Trademarks $ 110,000 25 Developed Technology 280,000 15 Customer Relationships 1,170,000 20 Total intangible assets acquired $ 1,560,000 The Company determined the fair value of the acquired customer relationships intangible assets by applying the multi-period excess earnings method, which involved the use of significant estimates and assumptions related to forecasted revenue growth rate and customer attrition rate. Valuation specialists were used to develop and evaluate the appropriateness of the multi-period excess earnings method, the Company's discount rates, attrition rate and fair value estimates using its cash flow projections. During the twelve months ended May 31, 2023, transaction fees and integration costs of $ 58,175 were expensed. In the twelve months ended May 31, 2022, acquisition related costs of $ 25,581 were expensed. These costs are included in general and administrative expenses in the Company’s consolidated statements of income (loss). The operating results of the FSD have been included in the Company’s consolidated statements of income (loss) since the acquisition date. In fiscal year 2023, the FSD’s total revenue was $ 279,541 and operating loss was approximately $ 28,200 . The operating loss includes $ 58,175 of transaction fees and integration expenses, $ 60,872 of amortization expense for acquired intangible assets and a $ 3,245 charge to cost of goods sold related to the step up to fair value on acquired inventory. The following table presents unaudited pro forma information as if the merger with the 3M FSD business had occurred on June 1, 2021 and had been combined with the results reported in our consolidated statements of income (loss) for all periods presented: Year Ended May 31 2023 2022 Net sales $ 919,959 $ 910,978 Operating income $ 44,373 $ 42,258 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. Additionally, 3M is reimbursing the Company for a portion of its SAP implementation costs. As of May 31, 2023 , a receivable from 3M of $ 12,365 was included in prepaid expenses and other current assets in the Company’s consolidated balance sheets. |
Long Term Debt
Long Term Debt | 12 Months Ended |
May 31, 2023 | |
Debt Disclosure [Abstract] | |
Long Term Debt | 4. Long-Term Debt The Company’s long-term debt consists of the following: May 31, 2023 Term Loan $ 550,000 Senior Notes 350,000 Total long-term debt 900,000 Less: Unamortized debt issuance costs ( 14,561 ) Total non-current debt, net $ 885,439 The Company had a financing agreement with a bank providing for a $ 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 the Credit Facilities described below. There were no advances against the line of credit during fiscal 2022 and there were no advances in fiscal 2023 before the line of credit was extinguished. Interest on any borrowings under that agreement was at LIBOR plus 100 basis points . Financial covenants 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. As of May 31, 2022, the Company had no outstanding debt. In connection with the acquisition of 3M’s Food Safety business as described more fully in Note 8, Neogen incurred financing through Neogen Food Safety Corporation as follows: Credit Facilities On June 30, 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 FSD transaction. The term loan facility was drawn on August 31, 2022, to fund the closing of the FSD transaction on September 1, 2022 while the revolving facility was undrawn and continues to be undrawn as of May 31, 2023. The Credit Facilities bear interest based on term SOFR plus an applicable margin which ranges between 150 to 225 basis points, determined for each interest period and paid monthly. During the twelve months ended May 31, 2023 , the interest rates ranged from 4.81 % to 7.33 % per annum. The term loan facility matures on June 30, 2027 and the revolving facility matures at the earlier of June 30, 2027 and the termination of the revolving commitments. The Company paid $ 60,000 of the term loan facility’s principal in September 2022 and an additional $ 40,000 of the term loan facility's principal in December 2022, in order to decrease the outstanding debt balance. 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 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 9. "Fair Value and Derivatives" for further detail on the interest rate swap agreement. 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 consolidated statements of (loss) income 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 $ 366 during the twelve months ended May 31, 2023 . Debt issuance costs of $ 489 were recorded in Prepaid expenses and other current assets and $ 1,506 were recorded in Other non-current assets on the consolidated balance sheet as of May 31, 2023 . 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 May 31, 2023 , the commitment fee was 0.35 % and $ 473 was recorded as interest expense in the consolidated statements of income (loss) during the twelve months ended May 31, 2023. Accrued interest payable on the term loan as of May 31, 2023 was $ 164 . 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 $ 1,588 and interest expense of $ 27,254 (excluding swap credit of $ 577 ) for the term loan was included in the consolidated statements of income (loss) during the twelve months ended May 31, 2023. Financial covenants include maintaining specified levels of funded debt to EBITDA, and debt service coverage. As of May 31, 2023, the Company was in compliance with its debt covenants. Senior Notes On July 20, 2022, Neogen Food Safety Corporation closed on an offering of $ 350,000 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. Upon closing of the FSD 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 May 31, 2023 based on the stated interest rate of 8.625 %. This amount was included in current liabilities on the consolidated balance sheets. The Company incurred total debt issuance costs of $ 6,683 , which is recorded as an offset to the Notes and amortized over the contractual life of the Notes to interest expense using the straight line method. The amortization of deferred debt issuance costs of $ 766 and interest expense of $ 26,079 for the Notes was included in the consolidated statements of income (loss) during the twelve months ended May 31, 2023. There are no required principal payments on the Term Loan or the Senior Notes through fiscal year 2026, due to $ 100,000 in prepayments made on the Term Loan in fiscal 2023. The expected maturities associated with the Company’s outstanding debt as of May 31, 2023, were as follows: Amount Fiscal Year 2024 $ — 2025 — 2026 — 2027 34,063 2028 515,937 Thereafter 350,000 Total $ 900,000 |
Equity Compensation Plans
Equity Compensation Plans | 12 Months Ended |
May 31, 2023 | |
Equity Compensation Plans | 5. Equity Compensation Plans The Company’s long-term incentive plans allow for the grant of various types of share-based awards to officers, directors and other key employees of the Company. Incentive and non-qualified options to purchase shares of common stock have been granted under the terms of the 2018 Omnibus Incentive Plan. These options are granted at an exercise price of the closing price of the common stock on the date of grant. Options vest ratably over three and five year periods and the contractual terms are generally five , seven or ten years . The Company grants restricted stock units (RSUs) under the terms of the 2018 Omnibus Incentive Plan, which vest ratably over three and five year periods. The fair value of the options was estimated at the date of the grant using the Black-Scholes option pricing model. The fair value of the RSUs is determined based on the closing price of the common stock on the date of grant. Remaining shares available for grant under share-based compensation plans were 2,871,000 , 5,386,000 , and 6,355,000 at May 31, 2023, 2022, and 2021, respectively. Compensation expense related to share-based awards was $ 10,177 , $ 7,154 , and $ 6,437 in fiscal years 2023, 2022, and 2021, respectively. Options (options in thousands) Options Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value Outstanding at May 31, 2020 ( 972 exercisable) 4,324 $ 27.98 $ 6.98 Granted 403 34.23 7.71 Exercised ( 1,389 ) 24.38 6.31 Forfeited ( 381 ) 28.99 7.20 Outstanding at May 31, 2021 ( 643 exercisable) 2,957 27.98 6.98 Granted 615 36.42 8.49 Exercised ( 281 ) 22.79 6.29 Forfeited ( 47 ) 33.93 8.02 Outstanding at May 31, 2022 ( 1,191 exercisable) 3,244 32.13 7.66 Granted 1,704 14.68 4.61 Exercised ( 22 ) 14.78 4.23 Forfeited ( 704 ) 29.81 7.26 Outstanding at May 31, 2023 ( 1,401 exercisable) 4,222 25.56 6.51 The following is a summary of stock options outstanding at May 31, 2023: Options Outstanding Options Exercisable Average (options in thousands) Contractual Life Weighted-Average Weighted-Average Range of Exercise Price Number (in years) Exercise Price Number Exercise Price $ 12.20 - $ 20.00 1,585 6.3 $ 13.63 27 $ 15.95 $ 20.01 - $ 28.00 138 6.7 25.11 90 23.93 $ 28.01 - $ 36.00 2,124 1.8 31.77 1,205 31.84 $ 36.01 - $ 42.15 375 3.4 40.94 79 40.99 4,222 3.8 $ 25.56 1,401 $ 31.54 The weighted average exercise price of shares subject to options that were exercisable at May 31, 2022 and 2021 was $ 30.24 and $ 28.10 , respectively. Remaining compensation cost to be expensed in future periods for non-vested options was $ 11,729 at May 31, 2023 , with a weighted average expense recognition period of 2.4 years. Year ended May 31 2023 2022 2021 Aggregate intrinsic value of options outstanding $ 6,154 $ 850 $ 46,667 Aggregate intrinsic value of options exercisable $ 42 $ 817 $ 11,617 Aggregate intrinsic value of options exercised $ 73 $ 5,507 $ 22,349 The fair value of stock options granted was estimated using the following weighted-average assumptions: Year ended May 31 2023 2022 2021 Risk-free interest rate 3.3 % 0.4 % 0.2 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected stock volatility 34.0 % 32.8 % 31.3 % Expected option life 4.5 years 3.12 years 3.25 years The risk-free interest rate for periods within the expected life of options granted is based on the United States Treasury yield curve in effect at the time of grant. Expected stock price volatility is based on historical volatility of the Company’s stock. The expected option life, representing the period of time that options granted are expected to be outstanding, is based on historical option exercise and employee termination data. We include recent historical experience in estimating our forfeitures. As employees terminate, grant tranches expire or as forfeitures are known, estimated expense is adjusted to actual. For options granted in fiscal years 2023, 2022, and 2021 , the Company recorded charges in general and administrative expense based on the fair value of stock options using the straight-line method over the vesting period of three to five years . Restricted Stock Units The RSUs are expensed straight-line over the remaining weighted-average period of 2.7 years. On May 31, 2023 , there was $ 10,839 in unamortized compensation cost related to non-vested RSUs. The fair value of restricted stock units vested during fiscal years 2023 and 2022 was $ 820 and $ 1,032 , respectively. There were no RSUs that vested during fiscal year 2021. (RSU Grants in thousands) RSUs Weighted Average Grant Date Fair Value Outstanding at May 31, 2021 121 $ 34.21 Granted 169 37.28 Released ( 25 ) 34.24 Forfeited ( 8 ) 36.80 Outstanding at May 31, 2022 257 36.14 Granted 596 13.83 Released ( 60 ) 35.14 Forfeited ( 27 ) 22.81 Outstanding at May 31, 2023 766 19.30 The weighted average grant date fair value of the fiscal year 2021 awards was $ 34.21 . Employee Stock Purchase Plan The Company offers eligible employees the option to purchase common stock at a 5 % discount to the lower of the market value of the stock at the beginning or end of each participation period under the terms of the 2021 Employee Stock Purchase Plan. The discount is recorded in general and administrative expense. Total individual purchases in any year are limited to 10 % of compensation. Shares purchased by employees through this program were 94,604 in fiscal 2023 , 43,456 in fiscal 2022 , and 38,406 in fiscal 2021. As of May 31, 2023 , common stock totaling 881,323 of the 1,000,000 authorized shares remained reserved for issuance under the plan. |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2023 | |
Income Taxes | 6. Income Taxes Income before income taxes by source consists of the following amounts: Year ended May 31 2023 2022 2021 U.S. $ ( 85,681 ) $ 38,554 $ 55,753 Foreign 63,639 21,653 19,515 $ ( 22,042 ) $ 60,207 $ 75,268 The provision for income taxes consists of the following: Year ended May 31 2023 2022 2021 Current Domestic Federal $ 8,674 $ 8,579 $ 6,981 Change in tax-related uncertainties 278 3 ( 75 ) State 1,616 2,406 2,147 Foreign 9,490 5,140 4,875 Total Current 20,058 16,128 13,928 Deferred Domestic Federal ( 17,406 ) ( 3,721 ) 479 State ( 1,865 ) ( 356 ) 44 Foreign 41 ( 151 ) ( 65 ) Total Deferred ( 19,230 ) ( 4,228 ) 458 Provision for Income Taxes $ 828 $ 11,900 $ 14,386 The reconciliation of income taxes computed at the U.S. federal statutory tax rate to income tax expense is as follows: Year ended May 31 2023 2022 2021 Tax at U.S. statutory rate $ ( 4,629 ) $ 12,643 $ 15,806 Permanent differences 325 179 292 Global intangible low-taxed income (GILTI) 6,482 1,501 2,064 Foreign derived intangible income deduction (FDII) ( 643 ) ( 1,308 ) ( 1,210 ) Foreign rate differential ( 3,742 ) 215 669 Subpart F income 152 397 628 Tax-effect from stock-based compensation 1,946 ( 462 ) ( 2,651 ) Provision for state income taxes, net of federal benefit 18 1,517 1,601 Non-deductible acquisition expenses 7,187 — — Tax credits ( 6,709 ) ( 2,527 ) ( 3,298 ) Impact of tax rate changes — 583 ( 75 ) Change in tax-related uncertainties 278 3 55 Changes in valuation allowances 355 85 — Research expenditures deduction ( 365 ) ( 112 ) — Other 173 ( 814 ) 505 Income Tax Expense $ 828 $ 11,900 $ 14,386 Foreign tax credits, primarily offsetting taxes associated with Subpart F and GILTI income, were $ 5,324 , $ 1,747 , and $ 2,753 in fiscal years 2023, 2022, and 2021 , respectively. The Company’s research and development credits were $ 1,385 , $ 780 , and $ 545 in fiscal years 2023, 2022, and 2021, respectively. Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred income tax liabilities and assets are as follows: Year ended May 31 2023 2022 Deferred income tax liabilities Indefinite and long-lived assets $ ( 369,500 ) $ ( 22,709 ) Right of use asset ( 1,834 ) ( 344 ) Prepaid expenses ( 1,480 ) ( 884 ) ( 372,814 ) ( 23,937 ) Deferred income tax assets Interest expense not currently deductible 5,782 — Research and experimentation capitalization 5,868 — Stock options 2,192 2,085 Inventories and accounts receivable 3,219 2,044 Tax loss carryforwards 3,909 561 Lease liability 1,899 382 Accrued expenses and other 1,981 2,422 24,850 7,494 Valuation allowance ( 2,110 ) ( 568 ) Net deferred income tax liabilities $ ( 350,074 ) $ ( 17,011 ) Net deferred income tax assets (jurisdictional) $ 3,353 $ 575 Net deferred income tax liabilities (jurisdictional) ( 353,427 ) ( 17,586 ) Net deferred income tax liabilities $ ( 350,074 ) $ ( 17,011 ) The Company has the following net operating loss carryforwards: As of May 31, 2023 Expiry U.S. $ 218 2037 Foreign 13,362 2024 to Indefinite $ 13,580 Valuation allowances against certain deferred tax assets are established based on management’s determination of a more likely than not standard that the tax benefits will not be realized. We are subject to income taxes in the U.S. (federal and state) and in numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The Company’s policy is to recognize both accrued interest expense and penalties related to unrecognized tax benefits in income tax expense. The amount of interest and penalties included in the unrecognized tax benefits reserve was $ 145 at May 31, 2023 , $ 69 at May 31, 2022 , and $ 65 at May 31, 2021. Of the total unrecognized tax benefits at May 31, 2023 and 2022 , $ 1,087 and $ 808 , respectively, comprise unrecognized tax positions that would, if recognized, affect our effective tax rate. The reconciliation of our unrecognized tax benefits is as follows: Year ended May 31 2023 2022 2021 Beginning balance $ 741 $ 764 $ 762 Increase/(decrease) related to prior periods 2 ( 75 ) ( 182 ) Increase related to current period 479 147 184 Lapses of applicable statute of limitations ( 276 ) ( 95 ) — Ending balance $ 946 $ 741 $ 764 The Company is no longer subject to examination by the Internal Revenue Service for fiscal year 2019 and preceding years. As of May 31, 2023, the Company has approximately $ 153 million of undistributed earnings in its foreign subsidiaries. Approximately $ 41 million of these earnings are no longer considered permanently reinvested. The incremental tax cost to repatriate these earnings to the US is immaterial. The Company has not provided deferred taxes on approximately $ 112 million of undistributed earnings from non-U.S. subsidiaries as of May 31, 2023 which are indefinitely reinvested in operations. Based on historical experience, as well as management’s future plans, earnings from these subsidiaries will continue to be re-invested indefinitely for future expansion and working capital needs. On an annual basis, we evaluate the current business environment and whether any new events or other external changes might require future evaluation of the decision to indefinitely re-invest these foreign earnings. It is not practical to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
May 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies The Company is involved in environmental remediation and monitoring activities at its Randolph, Wisconsin manufacturing facility and accrues for related costs when such costs are determined to be probable and estimable. The Company currently utilizes a pump and treat remediation strategy, which includes semi-annual monitoring and reporting, consulting, and maintenance of monitoring wells. We expense these annual costs of remediation, which have ranged from $ 63 to $ 131 per year over the past five years. The Company’s estimated remaining liability for these costs was $ 916 at both May 31, 2023 and 2022 , measured on an undiscounted basis over an estimated period of 15 years. In fiscal 2019, the Company performed an updated Corrective Measures Study on the site, per a request from the Wisconsin Department of Natural Resources (WDNR), and is currently working with the WDNR regarding potential alternative remediation strategies going forward. The Company believes that the current pump and treat strategy is appropriate for the site. However, the Company initiated a pilot study in fiscal 2022 which chemical reagents were injected into the ground in an attempt to reduce on-site contamination. The study will run over a two year period, with a majority of expenses incurred in fiscal 2022. Testing and treatment costs of $ 85 were incurred in fiscal 2023. At this time, the outcome of the pilot study is unknown, but a change in the current remediation strategy, depending on the alternative selected, could result in an increase in future costs and ultimately, an increase in the currently recorded liability, with an offsetting charge to operations in the period recorded. The Company has recorded $ 100 as a current liability , and the remaining $ 816 is recorded in other non-current liabilities in the consolidated balance sheet as of May 31, 2023. The Company previously disclosed an ongoing investigation by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) regarding activities or transactions involving parties located in Iran. In fiscal year 2020, the Company recorded a charge to Other (expense) income and recorded a reserve of $ 600 to provide for potential fines or penalties on this matter. On March 28, 2023, the Company received a Cautionary Letter from OFAC concluding its investigation without civil monetary penalty or other enforcement action. As the investigation is effectively resolved, the Company reversed a $ 600 accrual in the fourth quarter of 2023. The Company has agreements with unrelated third parties that provide for the payment of royalties on the sale of certain products. Royalty expense, recorded in sales and marketing, under the terms of these agreements was $ 3,392 , $ 1,999 , and $ 2,129 for fiscal years 2023, 2022, and 2021 , respectively. Some of these agreements provide for guaranteed minimum royalty payments to be paid each fiscal year by the Company for certain technologies. Future minimum royalty payments are as follows: 2024—$ 112 , 2025—$ 109 , 2026—$ 84 , 2027—$ 84 , and 2028—$ 67 . The Company is subject to certain legal and other proceedings in the normal course of business that, in the opinion of management, are not expected to have a material effect on its future results of operations or financial position. |
Defined Contribution Benefit Pl
Defined Contribution Benefit Plan | 12 Months Ended |
May 31, 2023 | |
Defined Contribution Benefit Plan | 8. Defined Contribution Benefit Plan The Company maintains a defined contribution 401(k) benefit plan covering substantially all domestic employees. Employees are permitted to defer compensation up to IRS limits, with Neogen matching 100 % of the first 3% of deferred compensation and 50 % of the next 2% of deferred compensation. Neogen’s expense under this plan was $ 2,439 , $ 1,834 , and $ 1,204 in fiscal years 2023, 2022, and 2021 , respectively. |
Fair Value and Derivatives
Fair Value and Derivatives | 12 Months Ended |
May 31, 2023 | |
Fair Value and Derivatives [Abstract] | |
Fair Value and Derivatives | 9. Fair Value and Derivatives 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 the Company’s financial instruments other than cash equivalents and marketable securities, which include accounts receivable and accounts payable, approximate fair value based on either their short maturity or current terms for similar instruments. Items Measured at Fair Value on a Recurring Basis 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 consolidated balance sheets, classified as Level 2 in the fair value hierarchy. Gains and losses from these foreign currency forward contracts are recognized in other income in our consolidated statements of income (loss). The notional amount of forward contracts in place was $ 15,500 and $ 4,424 as of May 31, 2023 and 2022, respectively, and consisted of hedges of transactions up to June 2023. Fair Value of Derivatives Not Designated as Hedging Instruments Balance Sheet Location May 31, 2023 May 31, 2022 Foreign currency forward contracts, net Other receivable (Other accruals) $ 140 $ ( 78 ) We record the fair value of our interest rate swaps on a recurring basis using Level 2 observable market inputs for similar assets or liabilities in active markets. Fair Value of Derivatives Designated as Hedging Instruments Balance Sheet Location May 31, 2023 May 31, 2022 Interest rate swaps – current Other current assets $ 2,087 $ - Interest rate swaps – non-current Other non-current liabilities ( 4,770 ) - Items Measured at Fair Value on a Nonrecurring Basis In addition to items that are measured at fair value on a recurring basis, the Company measures certain assets and liabilities at fair value on a nonrecurring basis, which are not included in the table above. As these nonrecurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy. For further information see Note 2 "Goodwill and Other Intangible Assets" and Note 3 “Business Combinations”. Items Not Carried at Fair Value Fair values of the Company’s Term Loan and Senior Notes were as follows: May 31, 2023 Aggregate fair value $ 927,720 Aggregate carrying value (1) 900,000 (1) Excludes unamortized debt issuance costs. Fair values were based on available market information and other observable data and are classified within Level 2 of the fair value hierarchy. Derivatives Derivatives Not Designated as Hedging Instruments The location and amount of gains from derivatives not designated as hedging instruments in our consolidated statements of income (loss) were as follows: Location in statements Year Ended May 31 Derivatives Not Designated as Hedging Instruments of (loss) income May 31, 2023 May 31, 2022 May 31, 2021 Foreign currency forward contracts Other (expense) income $ ( 10,092 ) $ 1,218 $ 2,651 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 May 31, 2023 was a net liability of $ 2,683 . The Company expects to reclassify a $ 2,087 gain of accumulated other comprehensive income into earnings in the next 12 months. The following table summarizes the other comprehensive income (loss) before reclassifications of derivative gains and losses: Other Comprehensive Income (Loss) Before Reclassifications During Year Ended May 31 Derivatives Designated as Hedging Instruments 2023 2022 2021 Interest rate swaps $ ( 1,599 ) $ — $ — The following table summarizes the reclassification of derivative gains and losses into net income from accumulated other comprehensive income (loss): Gain (Loss) Reclassified During Location of Gain (Loss) Year Ended May 31 Derivatives Designated as Hedging Instruments Reclassified 2023 2022 2021 Interest rate swaps Interest expense $ 440 $ — $ — |
Segment Information
Segment Information | 12 Months Ended |
May 31, 2023 | |
Segment Information | 10. Segment Information The Company has two reportable segments: Food Safety and Animal Safety. The Food Safety segment is primarily engaged in the development, production and marketing of diagnostic test kits and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation. The Animal Safety segment is primarily engaged in the development, production and marketing of products dedicated to animal safety, including a complete line of consumable products marketed to veterinarians and animal health product distributors. This segment also provides genomic identification and related interpretive bioinformatic services. Additionally, the Animal Safety segment produces and markets 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. Neogen’s international operations in the United Kingdom, Mexico, Guatemala, Brazil, Argentina, Uruguay, Chile, China and India originally focused on the sales and marketing of our food safety products, and each of these units reports through the Food Safety segment. In recent years, these operations have expanded to offer the Company’s complete line of products and services, including those usually associated with the Animal Safety segment such as cleaners, disinfectants, rodent control products, insect control products, veterinary instruments and genomics services. These additional products and services are managed and directed by existing management and are reported through the Food Safety segment. Neogen’s operation in Australia originally focused on providing genomics services and sales of animal safety products and reports through the Animal Safety segment. This operation has 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. "Summary of Significant Accounting Policies". Segment information is as follows: Food Safety Animal Safety Corporate and (1) Total Fiscal 2023 Product revenues, net to external customers $ 518,488 $ 196,588 $ — $ 715,076 Service revenues, net to external customers 28,309 79,062 — 107,371 Total revenues to external customers 546,797 275,650 — 822,447 Operating income (loss) 60,414 43,332 ( 66,231 ) 37,515 Depreciation and amortization 76,841 11,536 — 88,377 Interest expense — — 55,961 55,961 Total assets 3,970,356 338,507 245,569 4,554,432 Expenditures for long-lived assets 52,169 13,588 — 65,757 Fiscal 2022 Product revenues, net to external customers $ 231,626 $ 193,038 $ — $ 424,664 Service revenues, net to external customers 28,353 74,142 — 102,495 Total revenues to external customers 259,979 267,180 — 527,159 Operating income (loss) 38,581 52,546 ( 32,509 ) 58,618 Depreciation and amortization 13,386 10,308 — 23,694 Interest expense — — 72 72 Total assets 304,461 307,417 381,051 992,929 Expenditures for long-lived assets 7,842 16,939 — 24,781 Fiscal 2021 Product revenues, net to external customers $ 209,104 $ 167,198 $ — $ 376,302 Service revenues, net to external customers 25,140 67,017 — 92,157 Total revenues to external customers 234,244 234,215 — 468,459 Operating income (loss) 33,725 48,685 ( 8,241 ) 74,169 Depreciation and amortization 11,575 9,466 — 21,041 Interest expense — — 78 78 Total assets 295,065 244,039 381,088 920,192 Expenditures for long-lived assets 13,730 12,982 — 26,712 (1) Includes corporate assets, including 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. Revenue is determined by location of the end customer. The following table presents the Company’s revenue disaggregated by geographical location. Year ended May 31 2023 2022 2021 Domestic $ 424,005 $ 317,820 $ 285,262 International 398,442 209,339 183,197 Total revenue $ 822,447 $ 527,159 $ 468,459 The following table presents the Company's net property and equipment amounts disaggregated by country. Year ended May 31 2023 2022 United States $ 130,967 $ 63,313 United Kingdom 20,123 14,204 Other 47,659 33,067 Total PPE $ 198,749 $ 110,584 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2023 | |
Description of Business | 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. The majority of the diagnostic 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 Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of Neogen Corporation and its subsidiaries, all of which are wholly-owned as of May 31, 2023. All intercompany accounts and transactions have been eliminated in consolidation. Share and per share amounts reflect the June 4, 2021 2-for-1 stock split as if it took place at the beginning of the periods presented. |
Functional Currency | Functional Currency 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 income (loss). Gains or losses from foreign currency transactions are included in other income (expense) on our consolidated statement of income. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Acquired contract assets and liabilities in a business combination On June 1, 2023, the Company adopted ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amended ASC 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. Adoption of this standard did not have a material impact on its consolidated financial statements and related disclosures. Reference Rate Reform On September 1, 2022, the Company adopted Accounting Standards Codification Topic 848, Reference Rate Reform (Topic 848), which provided temporary optional expedients to applying the reference rate reform guidance to contracts that reference LIBOR or another reference rate expected to be discontinued. Under Topic 848, contract modifications resulting from the transition to a new reference rate may be accounted for as a continuation of the existing contract. The Company now uses the Secured Overnight Financing Rate (SOFR). Adoption of this standard did not have a material impact on its consolidated financial statements and related disclosures. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of bank demand accounts, savings deposits, certificates of deposit and commercial paper with original maturities of 90 days or less. 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. 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. Cash held by foreign subsidiaries was $ 36,288 and $ 17,057 at May 31, 2023 and 2022 , respectively. |
Marketable Securities | 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 income (loss). 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 consolidated statements of income (loss). Marketable Securities as of May 31, 2023 and 2022 are listed below by classification and remaining maturities. Year ended May 31 Maturity 2023 2022 Commercial Paper & Corporate Bonds 0 - 90 days $ 22,552 $ 106,497 91 -180 days 35,692 61,373 181 days -1 year 23,768 91,706 1 - 2 years 317 77,002 Total Marketable Securities $ 82,329 $ 336,578 The components of marketable securities as of May 31, 2023 are as follows: Amortized Unrealized Unrealized Fair Value Commercial Paper & Corporate Bonds $ 83,549 $ 0 $ ( 1,220 ) $ 82,329 The components of marketable securities as of May 31, 2022 are as follows: Amortized Unrealized Unrealized Fair Value Commercial Paper & Corporate Bonds $ 339,540 $ 7 $ ( 2,969 ) $ 336,578 |
Derivative Financial Instruments | Derivative Financial Instruments 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 income (loss), and amounts are reclassified into earnings on the consolidated statement of income (loss) 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. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect amounts reflected in the consolidated financial statements. Considerable judgment is often involved in making such estimates, and the use of different assumptions could result in different conclusions. Management believes its assumptions and estimates are reasonable and appropriate. However, actual results could differ from those estimates. |
Accounts Receivable and Concentrations of Credit Risk | 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 credit losses, 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 credit losses. No customer accounted for more than 10 % of accounts receivable May 31, 2023 or 2022 , respectively. The activity in the allowance for credit losses was as follows: Year ended May 31 2023 2022 2021 Beginning Balance $ 1,650 $ 1,400 $ 1,350 Provision 1,460 332 239 Recoveries 46 98 139 Write-offs ( 329 ) ( 180 ) ( 328 ) Ending Balance $ 2,827 $ 1,650 $ 1,400 |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, determined on the first-in, first-out method. The components of inventories were as follows: Year ended May 31 2023 2022 Raw Materials $ 64,971 $ 58,667 Work-in-process 5,369 6,388 Finished goods 63,472 57,258 $ 133,812 $ 122,313 The Company’s inventories are analyzed for slow moving, expired and obsolete items on a quarterly basis and the valuation allowance is adjusted as required within cost of revenues expense. The valuation allowance for inventory was $ 6,270 and $ 4,050 at May 31, 2023 and 2022 , respectively. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost. Expenditures for major improvements are capitalized while repairs and maintenance are charged to expense as incurred. Depreciation is provided on the straight-line method over the estimated useful lives of the respective assets, which are generally seven to 39 years for buildings and improvements, and three to 10 years for furniture, fixtures, computers, leasehold improvements, and machinery and equipment. Depreciation expense was $ 17,292 , $ 14,094 , and $ 13,288 in fiscal years 2023, 2022, and 2021 , respectively. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses after amounts are allocated to other identifiable intangible assets. 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. Management also reviews the carrying amounts of non-amortizable intangible assets annually, or when indications of impairment exist, to determine if such assets may be impaired. These are tested for impairment annually in the fourth quarter. During management's annual test or when there are indicators of impairment, if the carrying amounts of these assets are deemed to be less than fair value based upon a discounted cash flow analysis and comparison to comparable EBITDA multiples of peer companies, such assets are reduced to their 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 | 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 are less than the carrying value of the asset. 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. No impairments of long-lived assets were identified during the years ended May 31, 2023, 2022 and 2021 , respectively. |
Equity Compensation Plans | quity Compensation Plans At May 31, 2023, the Company had stock option plans which are described more fully in Note 5 to the consolidated financial statements. We measure stock-based compensation at the grant date, based on the estimated fair value of the award, and recognize the cost (net of estimated forfeitures) as compensation expense on a straight-line basis over the requisite service period. Our stock-based compensation expense is reflected in general and administrative expense in our consolidated statements of income (loss). |
Research and Development Costs | Research and Development Costs Research and development costs, which consist primarily of compensation costs, administrative expenses and new product development, among other items, are expensed as incurred. |
Advertising Costs | Advertising Costs Advertising costs are expensed within sales and marketing as incurred and totaled $ 2,548 , $ 2,018 , and $ 1,687 in fiscal years 2023, 2022, and 2021 , respectively. |
Net (Loss) Income per Share | Net (Loss) Income per Share Basic net (loss) income per share is based on the weighted average number of common shares outstanding during each year. Diluted (loss) earnings per share is based on the weighted average number of common shares and dilutive potential common shares outstanding. Our dilutive potential common shares outstanding during the years result from dilutive stock options and restricted stock units. The following table presents the net (loss) income per share calculations: Year ended May 31 2023 2022 2021 Numerator for basic and diluted net (loss) income per share — Net (Loss) Income $ ( 22,870 ) $ 48,307 $ 60,882 Denominator for basic net (loss) income per share — Weighted average shares 188,881 107,684 106,499 Effect of dilutive stock options and restricted stock units - 336 621 Denominator for diluted net (loss) income per share 188,881 108,020 107,120 Net (loss) income attributable per share Basic $ ( 0.12 ) $ 0.45 $ 0.57 Diluted $ ( 0.12 ) $ 0.45 $ 0.57 Due to the net loss in fiscal 2023, the dilutive stock options and RSUs are anti-dilutive. At May 31, 2023 and May 31, 2022 , 148,000 and 383,000 shares, respectively, were excluded from the calculation of diluted net (loss) income per share, because the inclusion of such securities in the calculation would have been anti-dilutive. At May 31, 2021, no potential shares were excluded from the computation. |
Leases | Leases The Company recognizes 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. We recognized all leases with terms greater than 12 months in duration on our consolidated balance sheets as right-of-use assets and lease liabilities . Right-of-use assets are recorded in other assets on our consolidated balance sheets. Current and non-current lease liabilities are recorded in other accruals within current liabilities and other non-current liabilities, respectively, on our consolidated balance sheets. 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, all of our leases are classified as operating leases. Leased assets and corresponding liabilities are recognized based on the present value of the lease payments over the lease term. Our lease terms may include options to extend when it is reasonably certain that we will exercise that option. We have made certain assumptions and judgments when accounting for leases, the most significant of which are: • We did not elect to use hindsight when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset. • For all asset classes, we elected to not recognize a right-of-use asset and lease liability for short-term leases (i.e. leases with a term of 12 months or less). • For all asset classes, we elected to not separate non-lease components from lease components to which they relate and have accounted for the combined lease and non-lease components as a single lease component. • The determination of the discount rate used in a lease is our incremental borrowing rate that is based on our estimate of what we would normally pay to borrow on a fully collateralized and amortized basis over a similar term an amount equal to the lease payments. Supplemental balance sheet information related to operating leases was as follows: Year ended May 31 2023 2022 Rights of use - assets $ 11,933 $ 3,184 Lease liabilities - current 3,277 1,440 Lease liabilities - non-current 8,812 1,788 The weighted average remaining lease term and weighted average discount rate were as follows: Year ended May 31 2023 2022 Weighted average remaining lease term 4.7 years 3 years Weighted average discount rate 4.7 % 1.7 % Operating lease expenses are classified as cost of revenues or operating expenses on the consolidated statements of income (loss). The components of lease expense were as follows: Year ended May 31 2023 2022 Operating leases $ 2,097 $ 438 Short term leases 460 277 Total lease expense $ 2,557 $ 715 Cash paid for amounts included in the measurement of lease liabilities for operating leases included in cash flows from operations on the statement of cash flows was approximately $ 2,139 , $ 1,407 , and $ 1,397 for the years ended May 31, 2023, 2022 and 2021 , respectively. Non-cash additions to right-of-use assets obtained from new operating lease liabilities were $ 11,192 for the year ended May 31, 2023. Maturities of operating lease liabilities as of May 31, 2023 are as follows: Years ending May 31, Amount 2024 $ 3,542 2025 3,014 2026 2,725 2027 1,624 2028 1,105 2029 and thereafter 1,885 Total lease payments $ 13,895 Less: imputed interest ( 1,806 ) Total lease liabilities $ 12,089 |
Revenue Recognition | Revenue Recognition We determine the amount of revenue to be recognized through application of the following steps: • Identification of the contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies the performance obligations. Essentially all of Neogen’s revenue is generated through contracts with its customers. A performance obligation is a promise in a contract to transfer a product or service to a customer. We generally recognized revenue at a point in time when all of our performance obligations under the terms of a contract are satisfied. Revenue is recognized upon transfer of control of promised products or services in an amount that reflects the consideration we expect to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met. Certain agreements with customers include discounts or rebates on the sale of products and services applied retrospectively, such as volume rebates achieved by purchasing a specified purchase threshold of goods and services. We account for these discounts as variable consideration and estimate the likelihood of a customer meeting the threshold in order to determine the transaction price using the most predictive approach. We typically use the most-likely-amount method, for incentives that are offered to individual customers, and the expected-value method, for programs that are offered to a broad group of customers. Variable consideration reduces the amount of revenue that is recognized. Rebate obligations related to customer incentive programs are recorded in accrued liabilities. The rebate estimates are adjusted at the end of each applicable measurement period based on information currently available. The performance obligations in Neogen’s contracts are generally satisfied well within one year of contract inception. In such cases, management has elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component. Management has elected to utilize the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred because the amortization period for the prepaid costs that would otherwise have been deferred and amortized is one year or less. We account for shipping and handling for products as a fulfillment activity when goods are shipped. Shipping and handling costs that are charged to and reimbursed by the customer are recognized as revenues, while the related expenses incurred by Neogen are recorded in sales and marketing expense. These expenses totaled $ 18,513 , $ 17,482 , and $ 15,180 in fiscal years 2023, 2022, and 2021, respectively. Revenue is recognized net of any tax collected from customers. The taxes are subsequently remitted to governmental authorities. Our terms and conditions of sale generally do not provide for returns of product or reperformance of service except in the case of quality or warranty issues. While these situations are infrequent, due to immateriality of the amount, warranty claims are recorded in the period incurred. The Company derives revenue from two primary sources — product revenue and service revenue. Product revenue consists primarily of shipments of: • Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; • Consumable products marketed to veterinarians, 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. Revenue for Neogen’s 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 listed as Deferred revenue on the consolidated balance sheets. During fiscal year 2023 and 2022 , the Company recorded additions of $ 11,046 and $ 10,229 to deferred revenue, respectively. During fiscal year 2023 and 2022 , the Company recognized $ 11,890 and $ 8,173 , 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’s Food Safety business. Similar to Neogen, 3M’s former Food Safety business 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. Revenue for these products are recognized and invoiced when the product is shipped to the customer. These products are currently manufactured, invoiced and distributed by 3M on behalf of, and as directed by Neogen to its customers under a number of transition service contracts. The following table presents disaggregated revenue by major product and service categories for the years ended May 31, 2023, 2022 and 2021: Year Ended May 31, 2023 May 31, 2022 May 31, 2021 Food Safety: Natural Toxins, Allergens & Drug Residues $ 82,567 $ 79,395 $ 76,614 Bacterial & General Sanitation 134,934 47,282 44,009 Culture Media & Other 267,178 75,278 61,245 Rodent Control, Insect Control & Disinfectants 39,655 35,691 32,219 Genomics Services 22,463 22,333 20,157 $ 546,797 $ 259,979 $ 234,244 Animal Safety: Life Sciences 6,254 5,685 5,715 Veterinary Instruments & Disposables 63,843 63,938 48,128 Animal Care & Other 39,068 39,805 35,897 Rodent Control, Insect Control & Disinfectants 87,423 83,610 77,458 Genomics Services 79,062 74,142 67,017 $ 275,650 $ 267,180 $ 234,215 Total Revenue $ 822,447 $ 527,159 $ 468,459 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2023 | |
Schedule Of Classification And Maturities Of Marketable Securities | Marketable Securities as of May 31, 2023 and 2022 are listed below by classification and remaining maturities. Year ended May 31 Maturity 2023 2022 Commercial Paper & Corporate Bonds 0 - 90 days $ 22,552 $ 106,497 91 -180 days 35,692 61,373 181 days -1 year 23,768 91,706 1 - 2 years 317 77,002 Total Marketable Securities $ 82,329 $ 336,578 |
Summary of components of marketable securities | The components of marketable securities as of May 31, 2023 are as follows: Amortized Unrealized Unrealized Fair Value Commercial Paper & Corporate Bonds $ 83,549 $ 0 $ ( 1,220 ) $ 82,329 The components of marketable securities as of May 31, 2022 are as follows: Amortized Unrealized Unrealized Fair Value Commercial Paper & Corporate Bonds $ 339,540 $ 7 $ ( 2,969 ) $ 336,578 |
Allowance for Credit Losses | The activity in the allowance for credit losses was as follows: Year ended May 31 2023 2022 2021 Beginning Balance $ 1,650 $ 1,400 $ 1,350 Provision 1,460 332 239 Recoveries 46 98 139 Write-offs ( 329 ) ( 180 ) ( 328 ) Ending Balance $ 2,827 $ 1,650 $ 1,400 |
Inventories | Inventories are stated at the lower of cost or net realizable value, determined on the first-in, first-out method. The components of inventories were as follows: Year ended May 31 2023 2022 Raw Materials $ 64,971 $ 58,667 Work-in-process 5,369 6,388 Finished goods 63,472 57,258 $ 133,812 $ 122,313 |
Calculation of Net (Loss) Income per Share | The following table presents the net (loss) income per share calculations: Year ended May 31 2023 2022 2021 Numerator for basic and diluted net (loss) income per share — Net (Loss) Income $ ( 22,870 ) $ 48,307 $ 60,882 Denominator for basic net (loss) income per share — Weighted average shares 188,881 107,684 106,499 Effect of dilutive stock options and restricted stock units - 336 621 Denominator for diluted net (loss) income per share 188,881 108,020 107,120 Net (loss) income attributable per share Basic $ ( 0.12 ) $ 0.45 $ 0.57 Diluted $ ( 0.12 ) $ 0.45 $ 0.57 |
Supplemental balance sheet information related to operating leases | Supplemental balance sheet information related to operating leases was as follows: Year ended May 31 2023 2022 Rights of use - assets $ 11,933 $ 3,184 Lease liabilities - current 3,277 1,440 Lease liabilities - non-current 8,812 1,788 |
Weighted average remaining lease term and weighted average discount rate | The weighted average remaining lease term and weighted average discount rate were as follows: Year ended May 31 2023 2022 Weighted average remaining lease term 4.7 years 3 years Weighted average discount rate 4.7 % 1.7 % |
Components of lease expense | The components of lease expense were as follows: Year ended May 31 2023 2022 Operating leases $ 2,097 $ 438 Short term leases 460 277 Total lease expense $ 2,557 $ 715 |
Undiscounted minimum lease payments | Maturities of operating lease liabilities as of May 31, 2023 are as follows: Years ending May 31, Amount 2024 $ 3,542 2025 3,014 2026 2,725 2027 1,624 2028 1,105 2029 and thereafter 1,885 Total lease payments $ 13,895 Less: imputed interest ( 1,806 ) Total lease liabilities $ 12,089 |
Disaggregated Revenue | The following table presents the Company’s revenue disaggregated by geographical location. Year ended May 31 2023 2022 2021 Domestic $ 424,005 $ 317,820 $ 285,262 International 398,442 209,339 183,197 Total revenue $ 822,447 $ 527,159 $ 468,459 |
Operating Segments | |
Disaggregated Revenue | The following table presents disaggregated revenue by major product and service categories for the years ended May 31, 2023, 2022 and 2021: Year Ended May 31, 2023 May 31, 2022 May 31, 2021 Food Safety: Natural Toxins, Allergens & Drug Residues $ 82,567 $ 79,395 $ 76,614 Bacterial & General Sanitation 134,934 47,282 44,009 Culture Media & Other 267,178 75,278 61,245 Rodent Control, Insect Control & Disinfectants 39,655 35,691 32,219 Genomics Services 22,463 22,333 20,157 $ 546,797 $ 259,979 $ 234,244 Animal Safety: Life Sciences 6,254 5,685 5,715 Veterinary Instruments & Disposables 63,843 63,938 48,128 Animal Care & Other 39,068 39,805 35,897 Rodent Control, Insect Control & Disinfectants 87,423 83,610 77,458 Genomics Services 79,062 74,142 67,017 $ 275,650 $ 267,180 $ 234,215 Total Revenue $ 822,447 $ 527,159 $ 468,459 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
May 31, 2023 | |
Goodwill by Business Segment | The following table summarizes goodwill by reportable segment: Food Animal Total Balance, May 31, 2021 $ 67,822 $ 63,654 $ 131,476 Acquisitions 4,152 11,752 15,904 Foreign currency translation and other ( 4,416 ) ( 260 ) ( 4,676 ) Balance, May 31, 2022 $ 67,558 $ 75,146 $ 142,704 Acquisitions (1) 1,985,476 6,783 1,992,259 Foreign currency translation and other 3,127 ( 594 ) 2,533 Balance, May 31, 2023 $ 2,056,161 $ 81,335 $ 2,137,496 (1) Animal Safety acquisitions represents portion of FSD transaction recorded at Neogen Australasia . |
Amortizable of Intangible Assets | Amortizable intangible assets consisted of the following and are included in amortizable intangible assets within the consolidated balance sheets: Gross Less Net Licenses $ 16,010 $ 6,763 $ 9,247 Covenants not to compete 488 384 104 Patents 8,499 4,865 3,634 Customer relationships intangibles 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 Balance, May 31, 2023 $ 1,714,041 $ 123,254 $ 1,590,787 Licenses $ 17,109 $ 5,682 $ 11,427 Covenants not to compete 846 671 175 Patents 8,347 4,583 3,764 Customer relationships intangibles 75,000 33,662 41,338 Trade names and trademarks 1,180 167 1,013 Developed technology 17,741 6,124 11,617 Other product and service-related intangibles 27,299 4,527 22,772 Balance, May 31, 2022 $ 147,522 $ 55,416 $ 92,106 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
May 31, 2023 | |
Corvium Inc [Member] | |
Summary of Preliminary Fair Values of Assets Acquired And Liabilities Assumed As of The Date of Acquisition | The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition: Prepaids and other current assets $ 66 Property, plant and equipment 13 Intangible assets 10,180 Deferred revenue ( 1,827 ) Adjustment of annual license prepaid ( 419 ) Other non-current liabilities ( 930 ) Total identifiable assets and liabilities acquired 7,083 Goodwill 16,984 Total purchase consideration $ 24,067 |
3M Food Safety Transaction | |
Summary of Preliminary Fair Values of Assets Acquired And Liabilities Assumed As of The Date of Acquisition | The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the date of acquisition: Cash and cash equivalents $ 319 Inventories 18,403 Other current assets 14,855 Property, plant and equipment 25,832 Intangible assets 1,560,000 Right of use asset 882 Lease liability ( 885 ) Deferred tax liabilities ( 352,481 ) Other liabilities ( 2,832 ) Total identifiable assets and liabilities acquired 1,264,093 Goodwill 1,974,520 Total purchase consideration $ 3,238,613 |
Summary of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table summarizes the intangible assets acquired and the useful life of these assets. Fair Value Useful Life in Years Trade Names and Trademarks $ 110,000 25 Developed Technology 280,000 15 Customer Relationships 1,170,000 20 Total intangible assets acquired $ 1,560,000 |
Summary of Business Acquisition, Unaudited Pro Forma Information | The following table presents unaudited pro forma information as if the merger with the 3M FSD business had occurred on June 1, 2021 and had been combined with the results reported in our consolidated statements of income (loss) for all periods presented: Year Ended May 31 2023 2022 Net sales $ 919,959 $ 910,978 Operating income $ 44,373 $ 42,258 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 12 Months Ended |
May 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Long Term Debt | The Company’s long-term debt consists of the following: May 31, 2023 Term Loan $ 550,000 Senior Notes 350,000 Total long-term debt 900,000 Less: Unamortized debt issuance costs ( 14,561 ) Total non-current debt, net $ 885,439 |
Summary of Expected Maturities Associated With Outstanding Debt | There are no required principal payments on the Term Loan or the Senior Notes through fiscal year 2026, due to $ 100,000 in prepayments made on the Term Loan in fiscal 2023. The expected maturities associated with the Company’s outstanding debt as of May 31, 2023, were as follows: Amount Fiscal Year 2024 $ — 2025 — 2026 — 2027 34,063 2028 515,937 Thereafter 350,000 Total $ 900,000 |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 12 Months Ended |
May 31, 2023 | |
Stock Option Activity | (options in thousands) Options Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value Outstanding at May 31, 2020 ( 972 exercisable) 4,324 $ 27.98 $ 6.98 Granted 403 34.23 7.71 Exercised ( 1,389 ) 24.38 6.31 Forfeited ( 381 ) 28.99 7.20 Outstanding at May 31, 2021 ( 643 exercisable) 2,957 27.98 6.98 Granted 615 36.42 8.49 Exercised ( 281 ) 22.79 6.29 Forfeited ( 47 ) 33.93 8.02 Outstanding at May 31, 2022 ( 1,191 exercisable) 3,244 32.13 7.66 Granted 1,704 14.68 4.61 Exercised ( 22 ) 14.78 4.23 Forfeited ( 704 ) 29.81 7.26 Outstanding at May 31, 2023 ( 1,401 exercisable) 4,222 25.56 6.51 |
Summary of Stock Options Outstanding | The following is a summary of stock options outstanding at May 31, 2023: Options Outstanding Options Exercisable Average (options in thousands) Contractual Life Weighted-Average Weighted-Average Range of Exercise Price Number (in years) Exercise Price Number Exercise Price $ 12.20 - $ 20.00 1,585 6.3 $ 13.63 27 $ 15.95 $ 20.01 - $ 28.00 138 6.7 25.11 90 23.93 $ 28.01 - $ 36.00 2,124 1.8 31.77 1,205 31.84 $ 36.01 - $ 42.15 375 3.4 40.94 79 40.99 4,222 3.8 $ 25.56 1,401 $ 31.54 |
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options Intrinsic Value | Remaining compensation cost to be expensed in future periods for non-vested options was $ 11,729 at May 31, 2023 , with a weighted average expense recognition period of 2.4 years. Year ended May 31 2023 2022 2021 Aggregate intrinsic value of options outstanding $ 6,154 $ 850 $ 46,667 Aggregate intrinsic value of options exercisable $ 42 $ 817 $ 11,617 Aggregate intrinsic value of options exercised $ 73 $ 5,507 $ 22,349 The fair value of stock options granted was estimated using the following weighted-average assumptions: Year ended May 31 2023 2022 2021 Risk-free interest rate 3.3 % 0.4 % 0.2 % Expected dividend yield 0.0 % 0.0 % 0.0 % Expected stock volatility 34.0 % 32.8 % 31.3 % Expected option life 4.5 years 3.12 years 3.25 years |
Restricted Stock Units (RSUs) [Member] | |
Schedule of Nonvested Restricted Stock Units Activity | (RSU Grants in thousands) RSUs Weighted Average Grant Date Fair Value Outstanding at May 31, 2021 121 $ 34.21 Granted 169 37.28 Released ( 25 ) 34.24 Forfeited ( 8 ) 36.80 Outstanding at May 31, 2022 257 36.14 Granted 596 13.83 Released ( 60 ) 35.14 Forfeited ( 27 ) 22.81 Outstanding at May 31, 2023 766 19.30 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2023 | |
Disclosure Text Block [Abstract] | |
Income Before Income Taxes | Income before income taxes by source consists of the following amounts: Year ended May 31 2023 2022 2021 U.S. $ ( 85,681 ) $ 38,554 $ 55,753 Foreign 63,639 21,653 19,515 $ ( 22,042 ) $ 60,207 $ 75,268 |
Provision for Income Taxes | The provision for income taxes consists of the following: Year ended May 31 2023 2022 2021 Current Domestic Federal $ 8,674 $ 8,579 $ 6,981 Change in tax-related uncertainties 278 3 ( 75 ) State 1,616 2,406 2,147 Foreign 9,490 5,140 4,875 Total Current 20,058 16,128 13,928 Deferred Domestic Federal ( 17,406 ) ( 3,721 ) 479 State ( 1,865 ) ( 356 ) 44 Foreign 41 ( 151 ) ( 65 ) Total Deferred ( 19,230 ) ( 4,228 ) 458 Provision for Income Taxes $ 828 $ 11,900 $ 14,386 |
Reconciliation of Income Taxes Computed at U.S. Federal Statutory Tax Rate to Income Tax Expense | The reconciliation of income taxes computed at the U.S. federal statutory tax rate to income tax expense is as follows: Year ended May 31 2023 2022 2021 Tax at U.S. statutory rate $ ( 4,629 ) $ 12,643 $ 15,806 Permanent differences 325 179 292 Global intangible low-taxed income (GILTI) 6,482 1,501 2,064 Foreign derived intangible income deduction (FDII) ( 643 ) ( 1,308 ) ( 1,210 ) Foreign rate differential ( 3,742 ) 215 669 Subpart F income 152 397 628 Tax-effect from stock-based compensation 1,946 ( 462 ) ( 2,651 ) Provision for state income taxes, net of federal benefit 18 1,517 1,601 Non-deductible acquisition expenses 7,187 — — Tax credits ( 6,709 ) ( 2,527 ) ( 3,298 ) Impact of tax rate changes — 583 ( 75 ) Change in tax-related uncertainties 278 3 55 Changes in valuation allowances 355 85 — Research expenditures deduction ( 365 ) ( 112 ) — Other 173 ( 814 ) 505 Income Tax Expense $ 828 $ 11,900 $ 14,386 |
Significant Components of Deferred Income Tax Liabilities and Assets | Significant components of our deferred income tax liabilities and assets are as follows: Year ended May 31 2023 2022 Deferred income tax liabilities Indefinite and long-lived assets $ ( 369,500 ) $ ( 22,709 ) Right of use asset ( 1,834 ) ( 344 ) Prepaid expenses ( 1,480 ) ( 884 ) ( 372,814 ) ( 23,937 ) Deferred income tax assets Interest expense not currently deductible 5,782 — Research and experimentation capitalization 5,868 — Stock options 2,192 2,085 Inventories and accounts receivable 3,219 2,044 Tax loss carryforwards 3,909 561 Lease liability 1,899 382 Accrued expenses and other 1,981 2,422 24,850 7,494 Valuation allowance ( 2,110 ) ( 568 ) Net deferred income tax liabilities $ ( 350,074 ) $ ( 17,011 ) Net deferred income tax assets (jurisdictional) $ 3,353 $ 575 Net deferred income tax liabilities (jurisdictional) ( 353,427 ) ( 17,586 ) Net deferred income tax liabilities $ ( 350,074 ) $ ( 17,011 ) |
Summary of net operating loss carryforwards | The Company has the following net operating loss carryforwards: As of May 31, 2023 Expiry U.S. $ 218 2037 Foreign 13,362 2024 to Indefinite $ 13,580 |
Sumary of reconciliation of our tax contingencies | The reconciliation of our unrecognized tax benefits is as follows: Year ended May 31 2023 2022 2021 Beginning balance $ 741 $ 764 $ 762 Increase/(decrease) related to prior periods 2 ( 75 ) ( 182 ) Increase related to current period 479 147 184 Lapses of applicable statute of limitations ( 276 ) ( 95 ) — Ending balance $ 946 $ 741 $ 764 |
Fair Value and Derivatives (Tab
Fair Value and Derivatives (Tables) | 12 Months Ended |
May 31, 2023 | |
Fair Value and Derivatives [Abstract] | |
Schedule of Other Derivatives Not Designated As Hedging Instruments Statements of Financial Performance And Financial Position Location | Fair Value of Derivatives Not Designated as Hedging Instruments Balance Sheet Location May 31, 2023 May 31, 2022 Foreign currency forward contracts, net Other receivable (Other accruals) $ 140 $ ( 78 ) |
Schedule of Gain Loss From Derivatives Not Designated As Hedging Instruments Statements of Financial Performance And Location | The location and amount of gains from derivatives not designated as hedging instruments in our consolidated statements of income (loss) were as follows: Location in statements Year Ended May 31 Derivatives Not Designated as Hedging Instruments of (loss) income May 31, 2023 May 31, 2022 May 31, 2021 Foreign currency forward contracts Other (expense) income $ ( 10,092 ) $ 1,218 $ 2,651 |
Summary of Interest Rate Swaps on Recurring Basis Using Observable Market Inputs for Similar Assets or Liabilities | We record the fair value of our interest rate swaps on a recurring basis using Level 2 observable market inputs for similar assets or liabilities in active markets. Fair Value of Derivatives Designated as Hedging Instruments Balance Sheet Location May 31, 2023 May 31, 2022 Interest rate swaps – current Other current assets $ 2,087 $ - Interest rate swaps – non-current Other non-current liabilities ( 4,770 ) - |
Summary of Fair Value of Term Loan and Senior Notes | Fair values of the Company’s Term Loan and Senior Notes were as follows: May 31, 2023 Aggregate fair value $ 927,720 Aggregate carrying value (1) 900,000 (1) Excludes unamortized debt issuance costs. |
Summary of Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | The following table summarizes the other comprehensive income (loss) before reclassifications of derivative gains and losses: Other Comprehensive Income (Loss) Before Reclassifications During Year Ended May 31 Derivatives Designated as Hedging Instruments 2023 2022 2021 Interest rate swaps $ ( 1,599 ) $ — $ — The following table summarizes the reclassification of derivative gains and losses into net income from accumulated other comprehensive income (loss): Gain (Loss) Reclassified During Location of Gain (Loss) Year Ended May 31 Derivatives Designated as Hedging Instruments Reclassified 2023 2022 2021 Interest rate swaps Interest expense $ 440 $ — $ — |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
May 31, 2023 | |
Segment Information | Segment information is as follows: Food Safety Animal Safety Corporate and (1) Total Fiscal 2023 Product revenues, net to external customers $ 518,488 $ 196,588 $ — $ 715,076 Service revenues, net to external customers 28,309 79,062 — 107,371 Total revenues to external customers 546,797 275,650 — 822,447 Operating income (loss) 60,414 43,332 ( 66,231 ) 37,515 Depreciation and amortization 76,841 11,536 — 88,377 Interest expense — — 55,961 55,961 Total assets 3,970,356 338,507 245,569 4,554,432 Expenditures for long-lived assets 52,169 13,588 — 65,757 Fiscal 2022 Product revenues, net to external customers $ 231,626 $ 193,038 $ — $ 424,664 Service revenues, net to external customers 28,353 74,142 — 102,495 Total revenues to external customers 259,979 267,180 — 527,159 Operating income (loss) 38,581 52,546 ( 32,509 ) 58,618 Depreciation and amortization 13,386 10,308 — 23,694 Interest expense — — 72 72 Total assets 304,461 307,417 381,051 992,929 Expenditures for long-lived assets 7,842 16,939 — 24,781 Fiscal 2021 Product revenues, net to external customers $ 209,104 $ 167,198 $ — $ 376,302 Service revenues, net to external customers 25,140 67,017 — 92,157 Total revenues to external customers 234,244 234,215 — 468,459 Operating income (loss) 33,725 48,685 ( 8,241 ) 74,169 Depreciation and amortization 11,575 9,466 — 21,041 Interest expense — — 78 78 Total assets 295,065 244,039 381,088 920,192 Expenditures for long-lived assets 13,730 12,982 — 26,712 (1) Includes corporate assets, including 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. |
Disaggregated Revenue | The following table presents the Company’s revenue disaggregated by geographical location. Year ended May 31 2023 2022 2021 Domestic $ 424,005 $ 317,820 $ 285,262 International 398,442 209,339 183,197 Total revenue $ 822,447 $ 527,159 $ 468,459 |
Disaggregated Property and Equipment Net | The following table presents the Company's net property and equipment amounts disaggregated by country. Year ended May 31 2023 2022 United States $ 130,967 $ 63,313 United Kingdom 20,123 14,204 Other 47,659 33,067 Total PPE $ 198,749 $ 110,584 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Dec. 29, 2017 | May 31, 2023 USD ($) Segment $ / shares shares | May 31, 2022 USD ($) $ / shares shares | May 31, 2021 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) | Jun. 01, 2019 | |
Significant Accounting Policies [Line Items] | ||||||
Stock split ratio | 1.33 | |||||
Number of operating segments | Segment | 2 | |||||
Products and services, payment terms | 30 to 60 days | |||||
Valuation allowance for inventory | $ 6,270 | $ 4,050 | ||||
Depreciation expense | 17,292 | 14,094 | $ 13,288 | |||
Cost of goods and services sold | $ 416,492 | $ 284,146 | $ 253,403 | |||
Weighted-average fair value per share of stock options granted | $ / shares | $ 4.61 | $ 8.49 | $ 7.71 | |||
Cash held at foreign subsidiaries | $ 36,288 | $ 17,057 | ||||
Shares excluded from computations of diluted net income per share | shares | 148,000 | 383,000 | 0 | |||
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Operating lease liability | Operating lease liability | ||||
Operating lease payments | $ 2,139 | $ 1,407 | $ 1,397 | |||
Right of use assets in exchange of lease liability | 11,192 | |||||
Impairments of long-lived assets | $ 0 | $ 0 | $ 0 | |||
Weighted-Average Exercise Price, Exercised | $ / shares | $ 14.78 | $ 22.79 | $ 24.38 | |||
Contract assets | $ 0 | |||||
Contract liabilities | $ 0 | |||||
Additions to deferred revenue | $ 11,046 | $ 10,229 | ||||
Deferred revenue recognized | 11,890 | 8,173 | ||||
Shipping and Handling | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cost of goods and services sold | 18,513 | 17,482 | $ 15,180 | |||
Advertising Cost | ||||||
Significant Accounting Policies [Line Items] | ||||||
Cost of goods and services sold | $ 2,548 | $ 2,018 | $ 1,687 | |||
Customer One | ||||||
Significant Accounting Policies [Line Items] | ||||||
Account receivable percentage from major customer | 10% | |||||
Minimum | ||||||
Significant Accounting Policies [Line Items] | ||||||
Marketable securities, maturity period | 91 days | |||||
Finite lived intangible assets, useful life | 2 years | |||||
Stock option vesting period | 3 years | |||||
Minimum | Buildings And Improvements | ||||||
Significant Accounting Policies [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 7 years | |||||
Minimum | Furniture, fixtures, machinery and equipment | ||||||
Significant Accounting Policies [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 3 years | |||||
Maximum | ||||||
Significant Accounting Policies [Line Items] | ||||||
Marketable securities, maturity period | 2 years | |||||
Finite lived intangible assets, useful life | 25 years | |||||
Stock option vesting period | 5 years | |||||
Maximum | Buildings And Improvements | ||||||
Significant Accounting Policies [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 39 years | |||||
Maximum | Furniture, fixtures, machinery and equipment | ||||||
Significant Accounting Policies [Line Items] | ||||||
Property, Plant and Equipment, Useful Life | 10 years |
Marketable Securities (Detail)
Marketable Securities (Detail) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Marketable Securities, Current | $ 82,329 | $ 336,578 |
Commercial Paper | Maturing in 0 - 90 days | ||
Marketable Securities, Current | 22,552 | 106,497 |
Commercial Paper | Maturing in 91 - 180 days | ||
Marketable Securities, Current | 35,692 | 61,373 |
Commercial Paper | Maturing in 1 - 2 years | ||
Marketable Securities, Current | 317 | 77,002 |
Certificates of Deposit | Maturing in 181 days -1 year | ||
Marketable Securities, Current | $ 23,768 | $ 91,706 |
Components of marketable securi
Components of marketable securities (Details) - Commercial PaperAnd Corporate Bonds [Member] - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 83,549 | $ 339,540 |
Unrealized gains | 0 | 7 |
Unrealized Losses | (1,220) | (2,969) |
Fair Value | $ 82,329 | $ 336,578 |
Activity in Allowance for Doubt
Activity in Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Beginning Balance | $ 1,650 | $ 1,400 | $ 1,350 |
Provision | 1,460 | 332 | 239 |
Recoveries | 46 | 98 | 139 |
Write-offs | (329) | (180) | (328) |
Ending Balance | $ 2,827 | $ 1,650 | $ 1,400 |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Inventory [Line Items] | ||
Raw Materials | $ 64,971 | $ 58,667 |
Work-in-process | 5,369 | 6,388 |
Finished goods | 63,472 | 57,258 |
Inventories | $ 133,812 | $ 122,313 |
Calculation of Net (Loss) Incom
Calculation of Net (Loss) Income per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Earnings Per Share [Line Items] | |||
Numerator for basic and diluted net (loss) income per share - Net (Loss) Income attributable to Neogen | $ (22,870) | $ 48,307 | $ 60,882 |
Denominator for basic net (loss) income per share - Weighted average shares | 188,881 | 107,684 | 106,499 |
Effect of dilutive stock options | 336 | 621 | |
Denominator for diluted net (loss) income per share | 188,881 | 108,020 | 107,120 |
Net (loss) income attributable to Neogen per share: | |||
Basic | $ (0.12) | $ 0.45 | $ 0.57 |
Diluted | $ (0.12) | $ 0.45 | $ 0.57 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information Related to Operating Leases (Detail) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Rights of use - assets | $ 11,933 | $ 3,184 |
Lease liabilities – current | $ 3,277 | $ 1,440 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Accrued Liabilities, Current | Other Accrued Liabilities, Current |
Lease liabilities – non-current | $ 8,812 | $ 1,788 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Weighted Average Remaining Leas
Weighted Average Remaining Lease Term and Weighted Average Discount Rate (Detail) | May 31, 2023 | May 31, 2022 |
Weighted average remaining lease term | 4 years 8 months 12 days | 3 years |
Weighted average discount rate | 4.70% | 1.70% |
Components of Lease Expense (De
Components of Lease Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Operating leases | $ 2,097 | $ 438 |
Short term leases | 460 | 277 |
Total lease expense | $ 2,557 | $ 715 |
Undiscounted Minimum Lease Paym
Undiscounted Minimum Lease Payments (Detail) - USD ($) $ in Thousands | May 31, 2023 | Jun. 01, 2019 |
2024 | $ 3,542 | |
2025 | 3,014 | |
2026 | 2,725 | |
2027 | 1,624 | |
2028 | 1,105 | |
2029 and thereafter | 1,885 | |
Total lease payments | 13,895 | |
Less: imputed interest | (1,806) | |
Total lease liabilities | $ 12,089 | |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Total lease liabilities | Total lease liabilities |
Disaggregated Revenue (Detail)
Disaggregated Revenue (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | $ 822,447 | $ 527,159 | $ 468,459 |
Food Safety | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 546,797 | 259,979 | 234,244 |
Food Safety | Natural Toxins, Allergens & Drug Residues | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 82,567 | 79,395 | 76,614 |
Food Safety | Bacterial & General Sanitation | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 134,934 | 47,282 | 44,009 |
Food Safety | Culture Media & Other | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 267,178 | 75,278 | 61,245 |
Food Safety | Rodenticides, Insecticides & Disinfectants | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 39,655 | 35,691 | 32,219 |
Food Safety | Genomics Services | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 22,463 | 22,333 | 20,157 |
Animal Safety | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 275,650 | 267,180 | 234,215 |
Animal Safety | Life Sciences | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 6,254 | 5,685 | 5,715 |
Animal Safety | Animal Care & Other | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 39,068 | 39,805 | 35,897 |
Animal Safety | Veterinary Instruments & Disposables | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 63,843 | 63,938 | 48,128 |
Animal Safety | Rodenticides, Insecticides & Disinfectants | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | 87,423 | 83,610 | 77,458 |
Animal Safety | Genomics Services | |||
Disaggregation of Revenue [Line Items] | |||
Total Revenues, net | $ 79,062 | $ 74,142 | $ 67,017 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Other non-amortizable intangible assets | $ 14,316 | $ 15,397 | |
Amortization expense for intangible assets | 71,085 | 9,600 | $ 7,753 |
Estimated amortization expense for period, 2024 | 93,200 | ||
Estimated amortization expense for period, 2025 | 92,900 | ||
Estimated amortization expense for period, 2026 | 92,300 | ||
Estimated amortization expense for period, 2027 | 91,700 | ||
Estimated amortization expense for period, 2028 | $ 90,900 | ||
Finite-lived intangible asset, expected amortization, after year five | $ 1,129,987 | ||
Weighted average remaining amortization period for intangibles | 18 years | 8 years | |
Maximum | |||
Finite lived intangible assets, useful life | 25 years | ||
Minimum | |||
Finite lived intangible assets, useful life | 2 years | ||
Licenses | |||
Other non-amortizable intangible assets | $ 569 | $ 569 | |
Impairment | $ 2,109 | ||
Licenses | Maximum | |||
Finite lived intangible assets, useful life | 20 years | ||
Licenses | Minimum | |||
Finite lived intangible assets, useful life | 2 years | ||
Trademarks | |||
Other non-amortizable intangible assets | $ 12,522 | 13,604 | |
Impairment | 1,000 | ||
Other Intangible Assets | |||
Other non-amortizable intangible assets | $ 1,224 | $ 1,224 | |
Noncompete Agreements | Maximum | |||
Finite lived intangible assets, useful life | 10 years | ||
Noncompete Agreements | Minimum | |||
Finite lived intangible assets, useful life | 3 years | ||
Patents | Maximum | |||
Finite lived intangible assets, useful life | 25 years | ||
Patents | Minimum | |||
Finite lived intangible assets, useful life | 5 years | ||
Customer Relationships | Maximum | |||
Finite lived intangible assets, useful life | 20 years | ||
Customer Relationships | Minimum | |||
Finite lived intangible assets, useful life | 9 years | ||
Trade Names and Trademarks | Maximum | |||
Finite lived intangible assets, useful life | 25 years | ||
Trade Names and Trademarks | Minimum | |||
Finite lived intangible assets, useful life | 10 years | ||
Developed Technology | Maximum | |||
Finite lived intangible assets, useful life | 20 years | ||
Developed Technology | Minimum | |||
Finite lived intangible assets, useful life | 10 years | ||
Other products and service-related intangibles | Maximum | |||
Finite lived intangible assets, useful life | 15 years | ||
Other products and service-related intangibles | Minimum | |||
Finite lived intangible assets, useful life | 5 years |
Goodwill by Business Segment (D
Goodwill by Business Segment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | ||
Goodwill [Line Items] | |||
Beginning Balance | $ 142,704 | $ 131,476 | |
Acquisitions | 1,992,259 | [1] | 15,904 |
Foreign currency translation and other | 2,533 | (4,676) | |
Ending Balance | 2,137,496 | 142,704 | |
Food Safety | |||
Goodwill [Line Items] | |||
Beginning Balance | 67,558 | 67,822 | |
Acquisitions | 1,985,476 | [1] | 4,152 |
Foreign currency translation and other | 3,127 | (4,416) | |
Ending Balance | 2,056,161 | 67,558 | |
Animal Safety | |||
Goodwill [Line Items] | |||
Beginning Balance | 75,146 | 63,654 | |
Acquisitions | 6,783 | [1] | 11,752 |
Foreign currency translation and other | (594) | (260) | |
Ending Balance | $ 81,335 | $ 75,146 | |
[1] Animal Safety acquisitions represents portion of FSD transaction recorded at Neogen Australasia |
Amortizable of Intangible Asset
Amortizable of Intangible Assets (Detail) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,714,041 | $ 147,522 |
Less Accumulated Amortization | 123,254 | 55,416 |
Net Carrying Amount | 1,590,787 | 92,106 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 16,010 | 17,109 |
Less Accumulated Amortization | 6,763 | 5,682 |
Net Carrying Amount | 9,247 | 11,427 |
Noncompete Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 488 | 846 |
Less Accumulated Amortization | 384 | 671 |
Net Carrying Amount | 104 | 175 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,499 | 8,347 |
Less Accumulated Amortization | 4,865 | 4,583 |
Net Carrying Amount | 3,634 | 3,764 |
Customer relationships intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,244,635 | 75,000 |
Less Accumulated Amortization | 81,577 | 33,662 |
Net Carrying Amount | 1,163,058 | 41,338 |
Trade Names and Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 111,172 | 1,180 |
Less Accumulated Amortization | 3,583 | 167 |
Net Carrying Amount | 107,589 | 1,013 |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 309,609 | 17,741 |
Less Accumulated Amortization | 20,175 | 6,124 |
Net Carrying Amount | 289,434 | 11,617 |
Other products and service-related intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 23,628 | 27,299 |
Less Accumulated Amortization | 5,907 | 4,527 |
Net Carrying Amount | $ 17,721 | $ 22,772 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||||||
Jun. 01, 2023 | Feb. 10, 2023 | Nov. 29, 2022 | Sep. 01, 2022 | Jul. 01, 2022 | Dec. 13, 2021 | Nov. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Jul. 31, 2020 | May 31, 2023 | May 31, 2023 | May 31, 2022 | May 31, 2021 | Feb. 28, 2023 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration for purchase of business | $ 37 | $ 1,310 | ||||||||||||||
Purchase price allocation for intangible assets | 620 | |||||||||||||||
Adjustments to intangible assets | $ 3,820 | |||||||||||||||
Adjustments to contingent liability | 1,070 | |||||||||||||||
Cash payable to former owner for purchase of business | 234 | $ 8,600 | ||||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ (11,721) | $ 38,745 | $ 50,771 | |||||||||||||
Maximum potential Payments | $ 8,500 | $ 6,500 | ||||||||||||||
Maximum future royalty payments | 14,500 | |||||||||||||||
Performance milestone liability | $ 300 | |||||||||||||||
Other non-current liabilities | 930 | |||||||||||||||
Stock Issued During Period, Value, Acquisitions | 2,262,841 | 4,916 | ||||||||||||||
Goodwill | 2,137,496 | 2,137,496 | 142,704 | 131,476 | ||||||||||||
Operating income (loss) | 37,515 | 58,618 | 74,169 | |||||||||||||
Amortization expense for intangible assets | 71,085 | 9,600 | $ 7,753 | |||||||||||||
Beef Cattle and Related Assets | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration for purchase of business | $ 2,351 | |||||||||||||||
Purchase price allocation for inventory | 51 | |||||||||||||||
Purchase price allocation for intangible assets | $ 2,300 | |||||||||||||||
Megazyme Ltd and Subsidiary Megazyme Inc | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration for purchase of business | 2,349 | |||||||||||||||
Contingent consideration potential payment | 2,500 | |||||||||||||||
Purchase price allocation for accounts receivable | 1,376 | |||||||||||||||
Purchase price allocation for inventory | 5,595 | |||||||||||||||
Purchase price allocation for land, property and equipment | 12,599 | |||||||||||||||
Purchase price allocation for Prepaid Expenses | 69 | |||||||||||||||
Purchase price allocation for other current liabilities | 1,815 | |||||||||||||||
Allocation of purchase price for contingent consideration potential payment | 2,458 | |||||||||||||||
Purchase price allocation for long-term liabilities | 319 | |||||||||||||||
Purchase price allocation for deferred tax liability | 3,306 | |||||||||||||||
Purchase price allocation for intangible assets | 22,945 | |||||||||||||||
Business acquisition Value of equity interest issued | 4,900 | |||||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 39,800 | |||||||||||||||
CAPInnoVet, Inc | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Purchase price allocation for accounts receivable | 308 | |||||||||||||||
Purchase price allocation for inventory | 531 | |||||||||||||||
Purchase price allocation for Prepaid Expenses | 296 | |||||||||||||||
Purchase price allocation for other current liabilities | 84 | |||||||||||||||
Purchase price allocation for long-term liabilities | 6,500 | |||||||||||||||
Purchase price allocation for intangible assets | 19,200 | |||||||||||||||
Purchase price allocation for accounts payable | 120 | |||||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 17,900 | |||||||||||||||
Delf (UK) Ltd | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration for purchase of business | $ 9,500 | |||||||||||||||
Purchase price allocation for accounts receivable | 1,059 | |||||||||||||||
Purchase price allocation for inventory | 972 | |||||||||||||||
Purchase price allocation for land, property and equipment | 152 | |||||||||||||||
Purchase price allocation for Prepaid Expenses | 31 | |||||||||||||||
Purchase price allocation for other current liabilities | 378 | |||||||||||||||
Purchase price allocation for deferred tax liability | 780 | |||||||||||||||
Purchase price allocation for intangible assets | 3,100 | |||||||||||||||
Purchase price allocation for accounts payable | $ 497 | |||||||||||||||
Genetic Veterinary Services, Inc | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Purchase price allocation for accounts receivable | $ 38 | |||||||||||||||
Purchase price allocation for inventory | 292 | |||||||||||||||
Purchase price allocation for land, property and equipment | 399 | |||||||||||||||
Purchase price allocation for Prepaid Expenses | 54 | |||||||||||||||
Purchase price allocation for other current liabilities | 321 | |||||||||||||||
Unearned revenue liability | 1,900 | |||||||||||||||
Purchase price allocation for intangible assets | 5,500 | |||||||||||||||
Purchase price allocation for accounts payable | $ 325 | |||||||||||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 11,300 | |||||||||||||||
Thaineo Biotech Co Ltd | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Business combination, consideration transferred | $ 1,581 | |||||||||||||||
Corvium Inc | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Purchase price allocation for land, property and equipment | 13 | |||||||||||||||
Purchase price allocation for Prepaid Expenses | 66 | |||||||||||||||
Unearned revenue liability | 1,827 | |||||||||||||||
Purchase price allocation for intangible assets | 10,180 | |||||||||||||||
Business combination, consideration transferred | 24,067 | |||||||||||||||
Cash held in escrow | 9,004 | |||||||||||||||
Other non-current liabilities | 930 | |||||||||||||||
Loss on sale of minority interest | 1,500 | |||||||||||||||
Goodwill | $ 16,984 | |||||||||||||||
3M Food Safety Transaction | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Cash consideration for purchase of business | $ 1,000,000 | |||||||||||||||
Purchase price allocation for inventory | 18,403 | |||||||||||||||
Purchase price allocation for land, property and equipment | 25,832 | |||||||||||||||
Purchase price allocation for deferred tax liability | 352,481 | |||||||||||||||
Purchase price allocation for intangible assets | 1,560,000 | |||||||||||||||
Other non-current liabilities | $ 2,832 | |||||||||||||||
Number of shares issued in business acquisitions | 108,269,946 | |||||||||||||||
Stock Issued During Period, Value, Acquisitions | $ 2,200,000 | |||||||||||||||
Goodwill | 1,974,520 | 1,970,000 | 1,970,000 | |||||||||||||
Business acquisition, goodwill, not deductible for tax purposes | 1,920,000 | 1,920,000 | ||||||||||||||
Revenues | 919,959 | 910,978 | ||||||||||||||
Operating income (loss) | 44,373 | 42,258 | ||||||||||||||
Business Combination, Acquisition Related Costs | 58,175 | |||||||||||||||
Amortization expense for intangible assets | 60,872 | |||||||||||||||
Cost of goods sold | 3,245 | |||||||||||||||
BusinessCombinationConsiderationTransferredOther1 | $ 3,200,000 | |||||||||||||||
3M Food Safety Transaction | Accounts Receivable Prepaid expenses and other current assets [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Accounts receivable | $ 12,365 | 12,365 | ||||||||||||||
3M Food Safety Transaction | General and Administrative Expense | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Acquisition related fees and integration costs | 58,175 | $ 25,581 | ||||||||||||||
3M Food Safety Transaction | Postmerger Neogen Corp | PreMerger Neogen Shareholders | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Minority interest ownership percentage by Noncontrolling owners | 49.90% | |||||||||||||||
3M Food Safety Transaction | Postmerger Neogen Corp | Neogen Food Safety Corporation | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Minority interest ownership percentage by Parent | 50.10% | |||||||||||||||
3M FSD | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Revenues | 279,541 | |||||||||||||||
Operating income (loss) | $ 28,200 | |||||||||||||||
Subsequent Event [Member] | Corvium Inc | ||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||
Escrow balance released | $ 8,000 |
Business Combinations - Summary
Business Combinations - Summary of Preliminary Fair Values of Assets Acquired And Liabilities Assumed As of The Date of Acquisition (Detail) - USD ($) $ in Thousands | May 31, 2023 | Feb. 10, 2023 | Sep. 01, 2022 | Jul. 01, 2022 | May 31, 2022 | May 31, 2021 |
Business Combination Recognized Identifiable Assets Acquired Goodwill And Liabilities Assumed Net [Line Items] | ||||||
Intangible assets | $ 620 | |||||
Other non-current liabilities | $ (930) | |||||
Goodwill | $ 2,137,496 | $ 142,704 | $ 131,476 | |||
Corvium Inc [Member] | ||||||
Business Combination Recognized Identifiable Assets Acquired Goodwill And Liabilities Assumed Net [Line Items] | ||||||
Prepaids and other current assets | 66 | |||||
Property, plant and equipment | 13 | |||||
Intangible assets | 10,180 | |||||
Deferred revenue | (1,827) | |||||
Adjustment of annual license prepaid | (419) | |||||
Other non-current liabilities | (930) | |||||
Total identifiable assets and liabilities acquired | 7,083 | |||||
Goodwill | 16,984 | |||||
Total purchase consideration | $ 24,067 | |||||
Three M Food Safety Transaction [Member] | ||||||
Business Combination Recognized Identifiable Assets Acquired Goodwill And Liabilities Assumed Net [Line Items] | ||||||
Cash and cash equivalents | $ 319 | |||||
Inventories | 18,403 | |||||
Other current assets | 14,855 | |||||
Property, plant and equipment | 25,832 | |||||
Intangible assets | 1,560,000 | |||||
Right of use asset | 882 | |||||
Lease liability | (885) | |||||
Deferred tax liabilities | (352,481) | |||||
Other non-current liabilities | (2,832) | |||||
Total identifiable assets and liabilities acquired | 1,264,093 | |||||
Goodwill | $ 1,970,000 | 1,974,520 | ||||
Total purchase consideration | $ 3,238,613 |
Business Combinations - Summa_2
Business Combinations - Summary of Finite-Lived Intangible Assets Acquired as Part of Business Combination (Details) - 3M Food Safety Transaction $ in Thousands | 12 Months Ended |
May 31, 2023 USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 1,560,000 |
Trade Names and Trademarks | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 110,000 |
Useful Life in Years | 25 years |
Developed Technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 280,000 |
Useful Life in Years | 15 years |
Customer Relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 1,170,000 |
Useful Life in Years | 20 years |
Business Combinations - Summa_3
Business Combinations - Summary of Business Acquisition, Unaudited Pro Forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Business Acquisition Pro Forma Information [Line Items] | |||
Operating income | $ 37,515 | $ 58,618 | $ 74,169 |
3M Food Safety Transaction | |||
Business Acquisition Pro Forma Information [Line Items] | |||
Net sales | 919,959 | 910,978 | |
Operating income | $ 44,373 | $ 42,258 |
Long Term Debt - Summary of Lon
Long Term Debt - Summary of Long Term Debt (Detail) $ in Thousands | May 31, 2023 USD ($) | |
Debt Instrument [Line Items] | ||
Long-term debt | $ 900,000 | [1] |
Less: Unamortized debt issuance costs | (14,561) | |
Long-Term Debt, Excluding Current Maturities, Total | 885,439 | |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | 550,000 | |
Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 350,000 | |
[1] Excludes unamortized debt issuance costs. |
Long Term Debt - Additional Inf
Long Term Debt - Additional Information (Detail) - USD ($) | 12 Months Ended | ||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jul. 20, 2022 | May 31, 2023 | May 31, 2022 | May 31, 2021 | Nov. 30, 2022 | Jun. 30, 2022 | ||
Debt Instrument [Line Items] | |||||||||
Unsecured revolving line of credit, total amount available | $ 15,000,000 | ||||||||
Unsecured revolving line of credit, maturity date | Nov. 30, 2023 | ||||||||
Unsecured revolving line of credit, interest terms | LIBOR plus 100 basis points | ||||||||
Long-term debt | [1] | $ 900,000,000 | |||||||
Amortization of debt issuance costs on line of credit | 2,720,000 | $ 0 | $ 0 | ||||||
Accrued interest | 11,149,000 | ||||||||
Payments of Debt Issuance Costs | 19,276,000 | $ 0 | $ 0 | ||||||
Amortization of deferred debt issuance costs | 1,588,000 | ||||||||
Interest expense | 27,254,000 | ||||||||
Swap Credit | 577,000 | ||||||||
Debt instrument accrued interest | 10,985,000 | ||||||||
Debt issuance costs incurred | 6,683,000 | ||||||||
Interest expenses related to amortization, debt issuance costs | 766,000 | ||||||||
Debt instrument interest expense | 26,079,000 | ||||||||
Principal payments in 2026 | $ 0 | ||||||||
Interest Expense [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of annual commitment fee | 0.35% | ||||||||
Commitment fee | $ 473,000 | ||||||||
Interest Rate Swaps [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivative, notional amount | $ 250,000,000 | ||||||||
Long-term debt | $ 550,000,000 | ||||||||
Term Loan Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument periodic payments | $ 40,000,000 | $ 60,000,000 | |||||||
Payments of Debt Issuance Costs | 10,232,000 | ||||||||
Term Loan [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt | 550,000,000 | ||||||||
Accrued interest | 164,000 | ||||||||
Principal payments in 2026 | 0 | ||||||||
Prepayments of principal amount | 100,000,000 | ||||||||
Senior Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 350,000,000 | ||||||||
Long-term debt | $ 350,000,000 | ||||||||
Debt instrument stated interest rate | 8.625% | 8.625% | |||||||
Debt instrument, term | 2030 years | ||||||||
Principal payments in 2026 | $ 0 | ||||||||
Credit Agreement [Member] | 3M Food Safety Transaction | |||||||||
Debt Instrument [Line Items] | |||||||||
Unsecured revolving line of credit, total amount available | $ 150,000,000 | ||||||||
Credit Agreement [Member] | Term Loan Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 650,000,000 | ||||||||
Five Year Senior Secured Revolving Facility [Member] | Credit Agreement [Member] | 3M Food Safety Transaction | |||||||||
Debt Instrument [Line Items] | |||||||||
Line of credit debt issuance costs gross | $ 2,361,000 | ||||||||
Amortization of debt issuance costs on line of credit | 366,000 | ||||||||
Five Year Senior Secured Revolving Facility [Member] | Credit Agreement [Member] | 3M Food Safety Transaction | Prepaid Expenses and Other Current Assets [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs line of credit arrangements net | 489,000 | ||||||||
Five Year Senior Secured Revolving Facility [Member] | Credit Agreement [Member] | 3M Food Safety Transaction | Other Noncurrent Assets [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issuance costs line of credit arrangements net | $ 1,506,000 | ||||||||
Revolving Credit Facility | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of annual commitment fee | 0.20% | ||||||||
Revolving Credit Facility | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of annual commitment fee | 0.35% | ||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Credit Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Unsecured revolving line of credit, maturity date | Jun. 30, 2027 | ||||||||
Debt instrument description | revolving facility matures at the earlier of June 30, 2027 | ||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Credit Agreement [Member] | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Unsecured revolving line of credit, spread | 150% | ||||||||
Debt instrument interest rate effective percentage | 4.81% | ||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Credit Agreement [Member] | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Unsecured revolving line of credit, spread | 225% | ||||||||
Debt instrument interest rate effective percentage | 7.33% | ||||||||
[1] Excludes unamortized debt issuance costs. |
Long Term Debt - Summary of Exp
Long Term Debt - Summary of Expected Maturities Associated With Outstanding Debt (Detail) | May 31, 2023 USD ($) | |
Debt Instrument [Line Items] | ||
2024 | $ 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 34,063,000 | |
2028 | 515,937,000 | |
Thereafter | 350,000,000 | |
Total | $ 900,000,000 | [1] |
[1] Excludes unamortized debt issuance costs. |
Equity Compensation Plans - Add
Equity Compensation Plans - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of shares available for grant | 2,871,000 | 5,386,000 | 6,355,000 |
Options Exercisable, Weighted Average Exercise Price | $ 31.54 | $ 30.24 | $ 28.10 |
Compensation expense related to share based awards | $ 10,177,000 | $ 7,154,000 | $ 6,437,000 |
Remaining compensation cost to be expensed in future periods for non-vested options | $ 11,729,000 | ||
Weighted average expense recognition period | 2 years 4 months 24 days | ||
Weighted average grant date fair value | $ 13.83 | $ 37.28 | $ 34.21 |
Number of shares purchased by employees | 94,604 | 43,456 | 38,406 |
Restricted Stock Units (RSUs) | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Weighted average expense recognition period | 2 years 8 months 12 days | ||
Restricted stock units vested- fair value | $ 820,000 | $ 1,032,000 | $ 0 |
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 10,839,000 | ||
Employee Stock Purchase Plan | 2011 Employee Stock Purchase Plan | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of shares available for grant | 881,323 | ||
Number of shares authorized for grant | 1,000,000 | ||
Annual maximum limit percentage of compensation to purchase shares | 5% | ||
Employee stock purchase plan stock price percentage | 10% | ||
Minimum | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock option vesting period | 3 years | ||
Stock option contractual terms | 5 years | ||
Minimum | 2018 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock option vesting period | 3 years | ||
Average | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock option contractual terms | 7 years | ||
Maximum | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock option vesting period | 5 years | ||
Stock option contractual terms | 10 years | ||
Maximum | 2018 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Stock option vesting period | 5 years |
Stock Option Activity (Detail)
Stock Option Activity (Detail) - $ / shares | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options Outstanding, Beginning Balance | 3,244,000 | 2,957,000 | 4,324,000 |
Options, Granted | 1,704,000 | 615,000 | 403,000 |
Options, Exercised | (22,000) | (281,000) | (1,389,000) |
Options, Forfeited | (704,000) | (47,000) | (381,000) |
Options Outstanding, Ending Balance | 4,222,000 | 3,244,000 | 2,957,000 |
Weighted-Average Exercise Price, Beginning Balance | $ 32.13 | $ 27.98 | $ 27.98 |
Weighted-Average Exercise Price, Granted | 14.68 | 36.42 | 34.23 |
Weighted-Average Exercise Price, Exercised | 14.78 | 22.79 | 24.38 |
Weighted-Average Exercise Price, Forfeited | 29.81 | 33.93 | 28.99 |
Weighted-Average Exercise Price, Ending Balance | 25.56 | 32.13 | 27.98 |
Weighted-Average Grant Date Fair Value, Beginning Balance | 7.66 | 6.98 | 6.98 |
Weighted-Average Grant Date Fair Value, Granted | 4.61 | 8.49 | 7.71 |
Weighted-Average Grant Date Fair Value, Exercised | 4.23 | 6.29 | 6.31 |
Weighted-Average Grant Date Fair Value, Forfeited | 7.26 | 8.02 | 7.20 |
Weighted-Average Grant Date Fair Value, Ending Balance | $ 6.51 | $ 7.66 | $ 6.98 |
Stock Option Activity (Parenthe
Stock Option Activity (Parenthetical) (Detail) - shares | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options Outstanding, Exercisable Beginning Balance | 1,401,000 | 1,191,000 | 643,000 | 972,000 |
Summary of Stock Options Outsta
Summary of Stock Options Outstanding (Detail) - $ / shares | 12 Months Ended | |||
May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options Outstanding, Number | 4,222,000 | 3,244,000 | 2,957,000 | 4,324,000 |
Options Outstanding, Average Contractual Life | 3 years 9 months 18 days | |||
Options Outstanding, Weighted-Average Exercise Price | $ 25.56 | $ 32.13 | $ 27.98 | $ 27.98 |
Options Exercisable, Number | 1,401,000 | 1,191,000 | 643,000 | 972,000 |
Options Exercisable, Weighted Average Exercise Price | $ 31.54 | $ 30.24 | $ 28.10 | |
$12.20 - $20.00 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise price, minimum | 12.20 | |||
Range of Exercise price, maximum | $ 20 | |||
Options Outstanding, Number | 1,585,000 | |||
Options Outstanding, Average Contractual Life | 6 years 3 months 18 days | |||
Options Outstanding, Weighted-Average Exercise Price | $ 13.63 | |||
Options Exercisable, Number | 27,000 | |||
Options Exercisable, Weighted Average Exercise Price | $ 15.95 | |||
$20.01 - $28.00 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise price, minimum | 20.01 | |||
Range of Exercise price, maximum | $ 28 | |||
Options Outstanding, Number | 138,000 | |||
Options Outstanding, Average Contractual Life | 6 years 8 months 12 days | |||
Options Outstanding, Weighted-Average Exercise Price | $ 25.11 | |||
Options Exercisable, Number | 90,000 | |||
Options Exercisable, Weighted Average Exercise Price | $ 23.93 | |||
$28.01 - $36.00 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise price, minimum | 28.01 | |||
Range of Exercise price, maximum | $ 36 | |||
Options Outstanding, Number | 2,124,000 | |||
Options Outstanding, Average Contractual Life | 1 year 9 months 18 days | |||
Options Outstanding, Weighted-Average Exercise Price | $ 31.77 | |||
Options Exercisable, Number | 1,205,000 | |||
Options Exercisable, Weighted Average Exercise Price | $ 31.84 | |||
$36.01 - $42.15 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise price, minimum | 36.01 | |||
Range of Exercise price, maximum | $ 42.15 | |||
Options Outstanding, Number | 375,000 | |||
Options Outstanding, Average Contractual Life | 3 years 4 months 24 days | |||
Options Outstanding, Weighted-Average Exercise Price | $ 40.94 | |||
Options Exercisable, Number | 79,000 | |||
Options Exercisable, Weighted Average Exercise Price | $ 40.99 |
Schedule of Share-based Compens
Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options Intrinsic Value (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Aggregate intrinsic value of options outstanding | $ 6,154 | $ 850 | $ 46,667 |
Aggregate intrinsic value of options exercisable | 42 | 817 | 11,617 |
Aggregate intrinsic value of options exerised | $ 73 | $ 5,507 | $ 22,349 |
Equity Compensation Plans - Sum
Equity Compensation Plans - Summary of Fair Value of Stock Options Granted Estimated Weighted-Average Assumptions (Details) | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Schedule of Weighted Average Assumptions for Fair Values of Stock Options [Line Items] | |||
Risk-free interest rate | 3.30% | 0.40% | 0.20% |
Expected dividend yield | 0% | 0% | 0% |
Expected stock volatility | 34% | 32.80% | 31.30% |
Expected option life (in years) | 4 years 6 months | 3 years 1 month 13 days | 3 years 3 months |
Equity Compensation Plans - Sch
Equity Compensation Plans - Schedule Of Nonvested Restricted Stock Units Activity (Detail) - $ / shares shares in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding Beginning (RSU) | 257 | 121 | |
Granted (RSU) | 596 | 169 | |
Released (RSU) | (60) | (25) | |
Forfeited (RSU) | (27) | (8) | |
Ending balance (RSU) | 766 | 257 | 121 |
Outstanding Beginning (Weighted Average Grant Date Fair Value) | $ 36.14 | $ 34.21 | |
Granted (Weighted Average Grant Date Fair Value) | 13.83 | 37.28 | $ 34.21 |
Released (Weighted Average Grant Date Fair Value) | 35.14 | 34.24 | |
Forfeited (Weighted Average Grant Date Fair Value) | 22.81 | 36.80 | |
Outstanding Ending (Weighted Average Grant Date Fair Value) | $ 19.30 | $ 36.14 | $ 34.21 |
Income Before Income Taxes (Det
Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Income Before Income Taxes [Line Items] | |||
Income Before Income Taxes | $ (22,042) | $ 60,207 | $ 75,268 |
U.S. | |||
Income Before Income Taxes [Line Items] | |||
Income Before Income Taxes | (85,681) | 38,554 | 55,753 |
Foreign | |||
Income Before Income Taxes [Line Items] | |||
Income Before Income Taxes | $ 63,639 | $ 21,653 | $ 19,515 |
Provision for Income Taxes (Det
Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Current: | |||
Federal | $ 8,674 | $ 8,579 | $ 6,981 |
Change in tax-related uncertainties | 278 | 3 | (75) |
State | 1,616 | 2,406 | 2,147 |
Foreign | 9,490 | 5,140 | 4,875 |
Total Current | 20,058 | 16,128 | 13,928 |
Deferred: | |||
Federal | (17,406) | (3,721) | 479 |
State | (1,865) | (356) | 44 |
Foreign | 41 | (151) | (65) |
Total Deferred | (19,230) | (4,228) | 458 |
Provision for Income Taxes | $ 828 | $ 11,900 | $ 14,386 |
Reconciliation of Income Taxes
Reconciliation of Income Taxes Computed at the U.S. Federal Statutory Tax Rate to Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Components Of Deferred Income Tax Assets And Liabilities [Line Items] | |||
Tax at U.S. statutory rate | $ (4,629) | $ 12,643 | $ 15,806 |
Permanent differences | 325 | 179 | 292 |
Global intangible low-taxed income (GILTI) | 6,482 | 1,501 | 2,064 |
Foreign derived intangible income deduction (FDII) | (643) | (1,308) | (1,210) |
Foreign rate differential | (3,742) | 215 | 669 |
Subpart F income | 152 | 397 | 628 |
Tax-effect from stock-based compensation | 1,946 | (462) | (2,651) |
Provision for state income taxes, net of federal benefit | 18 | 1,517 | 1,601 |
Non-deductible acquisition expenses | 7,187 | ||
Tax credits | (6,709) | (2,527) | (3,298) |
Impact of tax rate changes | 583 | (75) | |
Change in tax-related uncertainties | 278 | 3 | 55 |
Changes in valuation allowances | 355 | 85 | |
Research expenditures deduction | (365) | (112) | |
Other | 173 | (814) | 505 |
Income Tax Expense | $ 828 | $ 11,900 | $ 14,386 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Income Taxes [Line Items] | |||
Foreign tax credits | $ 5,324 | $ 1,747 | $ 2,753 |
Research and development credit | 1,385 | 780 | 545 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 145 | 69 | $ 65 |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 1,087 | $ 808 | |
Undistributed earnings in foreign subsidiaries | 153,000 | ||
Undistributed earnings in foreign subsidiaries not permanently reinvested | 41,000 | ||
Deferred tax on undistributed foreign earnings | $ 112,000 |
Significant Components of Defer
Significant Components of Deferred Income Tax Liabilities and Assets (Detail) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Deferred income tax liabilities | ||
Indefinite and long-lived assets | $ (369,500) | $ (22,709) |
Right of use asset | (1,834) | (344) |
Prepaid expenses | (1,480) | (884) |
Deferred Tax Liabilities, Gross | (372,814) | (23,937) |
Deferred income tax assets | ||
Interest expense not currently deductible | 5,782 | |
Research and experimentation capitalization | 5,868 | |
Stock options | 2,192 | 2,085 |
Inventories and accounts receivable | 3,219 | 2,044 |
Tax loss carryforwards | 3,909 | 561 |
Lease liability | 1,899 | 382 |
Accrued expenses and other | 1,981 | 2,422 |
Valuation allowance on tax carryforwards | (2,110) | (568) |
Deferred Tax Assets, Net of Valuation Allowance, Total | 24,850 | 7,494 |
Net deferred income tax liabilities | (350,074) | (17,011) |
Net deferred income tax assets (jurisdictional) | 3,353 | 575 |
Net deferred income tax liabilities (jurisdictional) | $ (353,427) | $ (17,586) |
Operating Loss Carry forwards (
Operating Loss Carry forwards (Detail) $ in Thousands | 12 Months Ended |
May 31, 2023 USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 13,580 |
U.S. | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 218 |
Operating Loss Carryforwards Expiration Description | 2037 |
Foreign | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 13,362 |
Operating Loss Carryforwards Expiration Description | 2024 to Indefinite |
Reconciliation of Our Tax Conti
Reconciliation of Our Tax Contingencies (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Income Tax Contingency [Line Items] | |||
Beginning balance | $ 741 | $ 764 | $ 762 |
Increase/(decrease) related to prior periods | (2) | (75) | (182) |
Increase related to current period | 479 | 147 | 184 |
Lapses of applicable statute of limitations | (276) | (95) | |
Ending balance | $ 946 | $ 741 | $ 764 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
May 31, 2023 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Commitments and Contingencies Disclosure [Line Items] | ||||
Estimated liability costs of remediation | $ 916,000 | $ 916,000 | $ 916,000 | |
Environmental Loss Contingency, Statement of Financial Position [Extensible Enumeration] | Liabilities | Liabilities | Liabilities | |
Estimated liability, measurement period, years | 15 years | |||
Estimated liability costs of remediation, current | $ 100,000 | $ 100,000 | ||
Testing and treatment costs | $ 85,000 | |||
Environmental Loss Contingency, Current, Statement of Financial Position [Extensible Enumeration] | Liabilities, Current | Liabilities, Current | ||
Royalty Expense | $ 3,392,000 | $ 1,999,000 | $ 2,129,000 | |
Future minimum royalty payment for period, 2024 | $ 112,000 | 112,000 | ||
Future minimum royalty payment for period, 2025 | 109,000 | 109,000 | ||
Future minimum royalty payment for period, 2026 | 84,000 | 84,000 | ||
Future minimum royalty payment for period, 2027 | 84,000 | 84,000 | ||
Future minimum royalty payment for period, 2028 | 67,000 | 67,000 | ||
Estimated liability costs of remediation, non current | $ 816,000 | $ 816,000 | ||
Environmental Loss Contingency, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent | ||
Accrual reversed | $ 600,000 | |||
Environmental loss contingencies, charges to expense for potential fines or penalties | $ 600,000 | |||
Debt issuance costs incurred | $ 6,683,000 | 6,683,000 | ||
Minimum | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Environmental remediation expense | $ 63,000 | |||
Environmental Remediation Expense, Statement of Income or Comprehensive Income [Extensible Enumeration] | Operating Expenses | |||
Maximum | ||||
Commitments and Contingencies Disclosure [Line Items] | ||||
Environmental remediation expense | $ 131,000 | |||
Environmental Remediation Expense, Statement of Income or Comprehensive Income [Extensible Enumeration] | Operating Expenses |
Defined Contribution Benefit _2
Defined Contribution Benefit Plan - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution 401(K) benefit expense | $ 2,439 | $ 1,834 | $ 1,204 |
First 3% employees deferred amount | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan employer matching contribution | 100% | ||
Next 2% employees deferred amount | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan employer matching contribution | 50% |
Fair Value and Derivatives - Ad
Fair Value and Derivatives - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2023 | May 31, 2024 | Nov. 30, 2022 | May 31, 2022 | |
Derivative [Line Items] | ||||
Gain of accumulated other comprehensive income | $ (33,251) | $ (27,769) | ||
Scenario Forecast [Member] | ||||
Derivative [Line Items] | ||||
Gain of accumulated other comprehensive income | $ 2,087 | |||
Interest Rate Swaps [Member] | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | $ 250,000 | |||
Fair value of interest rate swap | $ 2,683 | |||
Cash Flow Hedging [Member] | Base Rate | ||||
Derivative [Line Items] | ||||
Derivative fixed interest rate | 1.50% | |||
Not Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | $ 15,500 | $ 4,424 | ||
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | $ 250,000 | |||
Derivatives, maturity date | Jun. 30, 2027 | |||
Derivative fixed interest rate | 4.215% | |||
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Prime Rate | ||||
Derivative [Line Items] | ||||
Derivative fixed interest rate | 2.25% |
Fair Value and Derivatives - Sc
Fair Value and Derivatives - Schedule of Other Derivatives Not Designated As Hedging Instruments Statements of Financial Performance And Financial Position Location (Detail) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Not Designated as Hedging Instrument [Member] | Forward Contracts [Member] | Other Accruals [Member] | ||
Foreign Currency Derivative Instruments Not Designated As Hedging Instruments At Fair Value Net [Line Items] | ||
Foreign currency forward contracts, net | $ 140 | $ (78) |
Fair Value and Derivatives - _2
Fair Value and Derivatives - Schedule of Gain Loss From Derivatives Not Designated As Hedging Instruments Statements of Financial Performance And Location (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Not Designated as Hedging Instrument [Member] | Forward Contracts [Member] | Other income (expense) [Member] | |||
Schedule of Gain Loss From Derivatives Not Designated As Hedging Instruments Statements of Financial Performance And Location [Line Items] | |||
Foreign currency forward contracts | $ (10,092) | $ 1,218 | $ 2,651 |
Fair Value and Derivatives - Su
Fair Value and Derivatives - Summary of Interest Rate Swaps on Recurring Basis Using Observable Market Inputs for Similar Assets or Liabilities (Details) - Interest Rate Swaps [Member] $ in Thousands | May 31, 2023 USD ($) |
Derivative [Line Items] | |
Interest rate swaps | $ 2,683 |
Designated as Hedging Instrument [Member] | Other Current Assets [Member] | |
Derivative [Line Items] | |
Interest rate swaps | 2,087 |
Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member] | |
Derivative [Line Items] | |
Interest rate swaps | $ (4,770) |
Fair Value and Derivatives - _3
Fair Value and Derivatives - Summary of Fair Value of Term Loan and Senior Notes (Detail) $ in Thousands | May 31, 2023 USD ($) | |
Derivative Instrument Detail [Abstract] | ||
Aggregate fair value | $ 927,720 | |
Aggregate carrying value | $ 900,000 | [1] |
[1] Excludes unamortized debt issuance costs. |
Fair Value and Derivatives - _4
Fair Value and Derivatives - Summary of Other Comprehensive Income (Loss) Before Reclassifications of Derivative Gains and Losses (Details) $ in Thousands | 12 Months Ended |
May 31, 2023 USD ($) | |
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Other comprehensive income before reclassifications | $ (1,599) |
Fair Value and Derivatives - _5
Fair Value and Derivatives - Summary of Reclassification of Derivative Gains and Losses into Net Income from Accumulated Other Comprehensive Income (Loss) (Details) - Designated as Hedging Instrument [Member] - Interest Rate Swap [Member] $ in Thousands | 12 Months Ended |
May 31, 2023 USD ($) | |
Derivative [Line Items] | |
Location of Gain (Loss) Reclassified | Interest expense |
Net income from accumulated other comprehensive income (loss) | $ 440 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended |
May 31, 2023 Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | Segment | 2 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
Segment Reporting Information [Line Items] | ||||
Total revenues to external customers | $ 822,447 | $ 527,159 | $ 468,459 | |
Operating income (loss) | 37,515 | 58,618 | 74,169 | |
Depreciation and amortization | 88,377 | 23,694 | 21,041 | |
Interest expense | 55,961 | 72 | 78 | |
Total Assets | 4,554,432 | 992,929 | 920,192 | |
Expenditures for long-lived assets | 65,757 | 24,781 | 26,712 | |
Operating Segments | Food Safety | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues to external customers | 546,797 | 259,979 | 234,244 | |
Operating income (loss) | 60,414 | 38,581 | 33,725 | |
Depreciation and amortization | 76,841 | 13,386 | 11,575 | |
Total Assets | 3,970,356 | 304,461 | 295,065 | |
Expenditures for long-lived assets | 52,169 | 7,842 | 13,730 | |
Operating Segments | Animal Safety | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues to external customers | 275,650 | 267,180 | 234,215 | |
Operating income (loss) | 43,332 | 52,546 | 48,685 | |
Depreciation and amortization | 11,536 | 10,308 | 9,466 | |
Total Assets | 338,507 | 307,417 | 244,039 | |
Expenditures for long-lived assets | 13,588 | 16,939 | 12,982 | |
Product Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues to external customers | 715,076 | 424,664 | 376,302 | |
Product Revenues | Operating Segments | Food Safety | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues to external customers | 518,488 | 231,626 | 209,104 | |
Product Revenues | Operating Segments | Animal Safety | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues to external customers | 196,588 | 193,038 | 167,198 | |
Service Revenues | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues to external customers | 107,371 | 102,495 | 92,157 | |
Service Revenues | Operating Segments | Food Safety | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues to external customers | 28,309 | 28,353 | 25,140 | |
Service Revenues | Operating Segments | Animal Safety | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues to external customers | 79,062 | 74,142 | 67,017 | |
Corporate and Eliminations | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | [1] | (66,231) | (32,509) | (8,241) |
Interest expense | [1] | 55,961 | 72 | 78 |
Total Assets | [1] | $ 245,569 | $ 381,051 | $ 381,088 |
[1] Includes corporate assets, including 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. |
Disaggregated Revenue by Geogra
Disaggregated Revenue by Geographic Location (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Revenues by Geographic Location [Line Items] | |||
Total revenue | $ 822,447 | $ 527,159 | $ 468,459 |
Domestic | |||
Revenues by Geographic Location [Line Items] | |||
Total revenue | 424,005 | 317,820 | 285,262 |
International | |||
Revenues by Geographic Location [Line Items] | |||
Total revenue | $ 398,442 | $ 209,339 | $ 183,197 |
Segment Information - Summary o
Segment Information - Summary of Net Property and Equipment Disaggregated by Country (Detail) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Net Property and Equipment | $ 198,749 | $ 110,584 |
United States [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net Property and Equipment | 130,967 | 63,313 |
United Kingdom [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net Property and Equipment | 20,123 | 14,204 |
Other [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Net Property and Equipment | $ 47,659 | $ 33,067 |