Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2018 | Jun. 30, 2018 | Nov. 30, 2017 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | May 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | NEOG | ||
Entity Registrant Name | NEOGEN CORP | ||
Entity Central Index Key | 711,377 | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 51,756,964 | ||
Entity Public Float | $ 3,242,762,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 83,074 | $ 77,567 |
Marketable securities | 127,736 | 66,068 |
Accounts receivable, less allowance of $1,550 and $2,000 at May 31, 2018 and 2017, respectively | 79,086 | 68,576 |
Inventories | 76,005 | 73,144 |
Prepaid expenses and other current assets | 9,888 | 7,606 |
Total Current Assets | 375,789 | 292,961 |
Property and Equipment | ||
Land and improvements | 4,730 | 3,094 |
Building and improvements | 44,008 | 37,917 |
Machinery and equipment | 74,911 | 64,867 |
Furniture and fixtures | 3,568 | 3,333 |
Construction in progress | 2,654 | 2,290 |
Property, Plant and Equipment, Gross, Total | 129,871 | 111,501 |
Less accumulated depreciation | 56,802 | 49,753 |
Net Property and Equipment | 73,069 | 61,748 |
Other Assets | ||
Goodwill | 99,558 | 104,759 |
Other non-amortizable intangible assets | 14,938 | 14,323 |
Amortizable intangible assets, net of accumulated amortization | 54,655 | 54,618 |
Total Other Assets | 169,151 | 173,700 |
Total Assets | 618,009 | 528,409 |
Current Liabilities | ||
Accounts payable | 20,750 | 16,244 |
Accruals | ||
Accrued compensation | 6,065 | 5,002 |
Income taxes | 165 | 936 |
Other accruals | 11,708 | 13,820 |
Total Current Liabilities | 38,688 | 36,002 |
Deferred Income Taxes | 14,103 | 17,048 |
Other Non-Current Liabilities | 5,043 | 3,602 |
Total Liabilities | 57,834 | 56,652 |
Commitments and Contingencies (note 7) | ||
Equity | ||
Preferred stock, $1.00 par value - shares authorized 100,000; none issued and outstanding | ||
Common stock, $0.16 par value - shares authorized 60,000,000; 51,735,732 and 50,932,489 shares issued and outstanding at May 31, 2018 and 2017, respectively | 8,278 | 8,149 |
Additional paid-in capital | 202,572 | 174,742 |
Accumulated other comprehensive loss | (9,746) | (7,203) |
Retained earnings | 359,071 | 295,926 |
Total Neogen Corporation and Subsidiaries Stockholders' Equity | 560,175 | 471,614 |
Non-controlling interest | 143 | |
Total Equity | 560,175 | 471,757 |
Total Liabilities and Equity | 618,009 | 528,409 |
Customer-based intangibles | ||
Other Assets | ||
Amortizable intangible assets, net of accumulated amortization | 31,841 | 35,983 |
Other Intangible Assets | ||
Other Assets | ||
Other non-amortizable intangible assets | 1,224 | 1,224 |
Amortizable intangible assets, net of accumulated amortization | $ 22,814 | $ 18,635 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Accounts receivable, allowance | $ 1,550 | $ 2,000 |
Accumulated Amortization | $ 37,049 | $ 30,777 |
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.16 | $ 0.16 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 51,735,732 | 50,932,489 |
Common stock, shares outstanding | 51,735,732 | 50,932,489 |
Customer-based intangibles | ||
Accumulated Amortization | $ 24,579 | $ 20,846 |
Other Intangible Assets | ||
Accumulated Amortization | $ 12,470 | $ 9,931 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Revenues | |||
Total Revenues | $ 402,252 | $ 361,594 | $ 321,275 |
Cost of Revenues | |||
Total Cost of Revenues | 212,000 | 189,626 | 168,211 |
Gross Margin | 190,252 | 171,968 | 153,064 |
Operating Expenses | |||
Sales and marketing | 70,909 | 62,424 | 57,599 |
General and administrative | 38,294 | 34,214 | 29,189 |
Research and development | 10,855 | 10,385 | 9,890 |
Total Operating Expenses | 120,058 | 107,023 | 96,678 |
Operating Income | 70,194 | 64,945 | 56,386 |
Other Income (Expense) | |||
Interest income, net | 2,043 | 838 | 322 |
Royalty income | 147 | 171 | 217 |
Other, net | 1,081 | 719 | (1,412) |
Nonoperating Income (Expense), Total | 3,271 | 1,728 | (873) |
Income Before Income Taxes | 73,465 | 66,673 | 55,513 |
Provision for Income Taxes | 10,250 | 22,700 | 18,975 |
Net Income | 63,215 | 43,973 | 36,538 |
Net (Income) Loss Attributable to Non-controlling Interest | (70) | (180) | 26 |
Net Income Attributable to Neogen | $ 63,145 | $ 43,793 | $ 36,564 |
Net Income Attributable to Neogen per Share | |||
Basic | $ 1.23 | $ 0.87 | $ 0.73 |
Diluted | $ 1.21 | $ 0.86 | $ 0.72 |
Product Revenues | |||
Revenues | |||
Total Revenues | $ 335,554 | $ 306,512 | $ 273,570 |
Cost of Revenues | |||
Total Cost of Revenues | 174,067 | 156,568 | 137,766 |
Service Revenues | |||
Revenues | |||
Total Revenues | 66,698 | 55,082 | 47,705 |
Cost of Revenues | |||
Total Cost of Revenues | $ 37,933 | $ 33,058 | $ 30,445 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Net income | $ 63,215 | $ 43,973 | $ 36,538 |
Other comprehensive (loss), net of tax: currency translations | (2,543) | (3,257) | (1,504) |
Comprehensive income | 60,672 | 40,716 | 35,034 |
Comprehensive (income) loss attributable to non-controlling interest | (70) | (180) | 26 |
Comprehensive income attributable to Neogen | $ 60,602 | $ 40,536 | $ 35,060 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non - Controlling Interest |
Beginning Balance at May. 31, 2015 | $ 350,963 | $ 7,921 | $ 129,926 | $ (2,442) | $ 215,569 | $ (11) |
Beginning Balance (in shares) at May. 31, 2015 | 49,504,359 | |||||
Exercise of options, share-based compensation and income tax benefit (in shares) | 561,524 | |||||
Exercise of options, share-based compensation and income tax benefit | $ 17,377 | $ 89 | 17,288 | |||
Issuance of shares under employee stock purchase plan (in shares) | 24,369 | 24,369 | ||||
Issuance of shares under employee stock purchase plan | $ 786 | $ 4 | 782 | |||
Issuance of shares under employee stock purchase plan (in shares) | 24,369 | 24,369 | ||||
Net income (loss) | $ 36,538 | 36,564 | (26) | |||
Other comprehensive income (loss) | (1,504) | (1,504) | ||||
Ending Balance at May. 31, 2016 | 404,160 | $ 8,014 | 147,996 | (3,946) | 252,133 | (37) |
Ending Balance (in shares) at May. 31, 2016 | 50,090,252 | |||||
Exercise of options, share-based compensation and income tax benefit (in shares) | 817,284 | |||||
Exercise of options, share-based compensation and income tax benefit | $ 26,720 | $ 131 | 26,589 | |||
Issuance of shares under employee stock purchase plan (in shares) | 24,953 | 24,953 | ||||
Issuance of shares under employee stock purchase plan | $ 925 | $ 4 | 921 | |||
Issuance of shares under employee stock purchase plan (in shares) | 24,953 | 24,953 | ||||
Purchase of minority interest | $ (764) | (764) | ||||
Net income (loss) | 43,973 | 43,793 | 180 | |||
Other comprehensive income (loss) | (3,257) | (3,257) | ||||
Ending Balance at May. 31, 2017 | $ 471,757 | $ 8,149 | 174,742 | (7,203) | 295,926 | 143 |
Ending Balance (in shares) at May. 31, 2017 | 50,932,489 | 50,932,489 | ||||
Exercise of options, share-based compensation and income tax benefit (in shares) | 781,116 | |||||
Exercise of options, share-based compensation and income tax benefit | $ 27,117 | $ 125 | 26,992 | |||
Issuance of shares under employee stock purchase plan (in shares) | 22,127 | 22,127 | ||||
Issuance of shares under employee stock purchase plan | $ 1,052 | $ 4 | 1,048 | |||
Issuance of shares under employee stock purchase plan (in shares) | 22,127 | 22,127 | ||||
Purchase of minority interest | $ (423) | (210) | (213) | |||
Net income (loss) | 63,215 | 63,145 | $ 70 | |||
Other comprehensive income (loss) | (2,543) | (2,543) | ||||
Ending Balance at May. 31, 2018 | $ 560,175 | $ 8,278 | $ 202,572 | $ (9,746) | $ 359,071 | |
Ending Balance (in shares) at May. 31, 2018 | 51,735,732 | 51,735,732 |
Consolidated Statements of Equ7
Consolidated Statements of Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Exercise of options, share-based compensation, income tax benefit | $ 3,922 | $ 2,945 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Cash Flows From Operating Activities | |||
Net income | $ 63,215 | $ 43,973 | $ 36,538 |
Adjustments to reconcile net income to net cash provided from operating activities: | |||
Depreciation and amortization | 17,058 | 14,691 | 12,181 |
Deferred income taxes | (2,996) | (292) | 1,906 |
Share-based compensation | 4,909 | 5,261 | 5,468 |
Excess income tax benefit from exercise of stock options | (3,922) | (2,945) | |
Changes in operating assets and liabilities, net of business acquisitions: | |||
Accounts receivable | (10,233) | 5,035 | (6,002) |
Inventories | (2,647) | (6,970) | (9,427) |
Prepaid expenses and other assets | (2,275) | 812 | (3,836) |
Accounts payable | 4,381 | (1,691) | 704 |
Accruals and other changes | (2,281) | 3,377 | 744 |
Net Cash From Operating Activities | 69,131 | 60,274 | 35,331 |
Cash Flows Used in Investing Activities | |||
Purchase of property, equipment and other non-current intangible assets | (20,946) | (14,578) | (14,222) |
Proceeds from the sales of marketable securities | 299,751 | 149,226 | 147,189 |
Purchase of marketable securities | (361,419) | (162,755) | (151,625) |
Business acquisitions, net of cash acquired | (468) | (34,029) | (42,491) |
Net Cash Used in Investing Activities | (83,082) | (62,136) | (61,149) |
Cash Flows From Financing Activities | |||
Exercise of stock options and other | 23,261 | 21,148 | 12,363 |
Excess income tax benefit from the exercise of stock options | 3,922 | 2,945 | |
Purchase of minority interest | (423) | ||
Net Cash From Financing Activities | 22,838 | 25,070 | 15,308 |
Effect of Exchange Rate on Cash | (3,380) | (898) | (294) |
Net Increase (Decrease) in Cash and Cash Equivalents | 5,507 | 22,310 | (10,804) |
Cash and Cash Equivalents, Beginning of Year | 77,567 | 55,257 | 66,061 |
Cash and Cash Equivalents, End of Year | 83,074 | 77,567 | 55,257 |
Supplementary Cash Flow Information | |||
Income taxes paid, net of refunds | $ 11,800 | $ 13,865 | $ 13,413 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
May 31, 2018 | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Nature of Operations Neogen Corporation develops, manufactures and markets a diverse line of products and services dedicated to food and animal safety. 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, 2018. Neogen Latinoamérica was 100% and 90% owned as of May 31, 2018 and 2017. We purchased all shares owned by the minority interest owner on December 31, 2017, which increased our ownership in Neogen Latinoamérica to 100%. For Neogen do Brasil, we purchased the 10% owned by the two minority interest owners on February 28, 2017, which increased our ownership interest to 100%. Non-controlling non-controlling non-controlling All intercompany accounts and transactions have been eliminated in consolidation. Share and per share amounts reflect the December 29, 2017 4-for-3 Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Significant estimates impacting the accompanying consolidated financial statements include the allowance for uncollectible accounts receivable, inventory valuation and intangible assets. Comprehensive Income Comprehensive income represents net income and any revenues, expenses, gains and losses that, under U.S. generally accepted accounting principles, are excluded from net income and recognized directly as a component of equity. Accumulated other comprehensive income (loss) consists solely of foreign currency translation adjustments. Accounts Receivable and Concentrations of Credit Risk Financial instruments which potentially subject us to concentrations of credit risk consist principally of accounts receivable. Management attempts to minimize credit risk by reviewing customers’ credit history before extending credit and by monitoring credit exposure on a regular basis. An allowance for doubtful accounts on accounts receivable is established based upon factors surrounding the credit risk of specific customers, historical trends and other information. Collateral or other security is generally not required for accounts receivable. Once a receivable balance has been determined to be uncollectible, that amount is charged against the allowance for doubtful accounts. No customer accounted for more than 10% of accounts receivable at May 31, 2018 or 2017, respectively. The activity in the allowance for doubtful accounts was as follows: Year ended May 31 (in thousands) 2018 2017 2016 Beginning Balance $ 2,000 $ 1,500 $ 1,300 Provision 152 645 305 Recoveries 40 25 90 Write-offs (642 ) (170 ) (195 ) Ending Balance $ 1,550 $ 2,000 $ 1,500 Fair Value of Financial Instruments The carrying amounts of our financial instruments other than cash equivalents and marketable securities, which include accounts receivable and accounts payable, approximate fair value based on either their short maturity or current terms for similar instruments. Fair value measurements are determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. We utilize a fair value hierarchy based upon the observability of inputs used in valuation techniques as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. Cash and Cash Equivalents Cash and cash equivalents consist of bank demand accounts, savings deposits, certificates of deposit and commercial paper with original maturities of 90 days or less. Cash and cash equivalents were $83,074,000 and $77,567,000 at May 31, 2018 and 2017, respectively. The carrying value of these assets approximates fair value due to the short maturity of these instruments and meets the Level 1 criteria. Cash held by foreign subsidiaries was $7,101,000 and $8,132,000 at May 31, 2018 and 2017, respectively. Marketable Securities We have marketable securities held by banks or broker-dealers at May 31, 2018, consisting of short-term domestic certificates of deposit of $27,400,000 and commercial paper rated at least A-2/P-2 Inventories Inventories are stated at the lower of cost or net realizable value, determined on the first-in, first-out Year ended May 31 (in thousands) 2018 2017 Raw Materials $ 36,702 $ 33,190 Work-in-process 5,993 4,831 Finished goods 33,310 35,123 $ 76,005 $ 73,144 Our inventories are analyzed for slow moving, expired and obsolete items no less frequently than quarterly and the valuation allowance is adjusted as required. The valuation allowance for inventory was $2,200,000 and $2,000,000 at May 31, 2018 and 2017, 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. 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 ten years for furniture, fixtures, machinery and equipment. Depreciation expense was $10,315,000, $8,783,000 and $7,452,000 in fiscal years 2018, 2017 and 2016, 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. Other intangible assets include customer relationships, trademarks, licenses, trade names, covenants not-to-compete non-amortizable Long-lived Assets Management reviews the carrying values of its long-lived assets to be held and used, including definite-lived intangible assets, for possible impairment whenever events or changes in business conditions warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated separately identifiable undiscounted cash flows over the remaining useful life of the asset 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. Reclassifications Certain amounts in the fiscal 2017 and 2016 financial statements have been reclassified to conform to the fiscal 2018 presentation. Stock Options At May 31, 2018, we had stock option plans which are described more fully in Note 5. The weighted-average fair value per share of stock options granted during fiscal years 2018, 2017 and 2016, estimated on the date of grant using the Black-Scholes option pricing model, was $14.47, $11.89 and $9.83, respectively. The fair value of stock options granted was estimated using the following weighted-average assumptions: Year ended May 31 2018 2017 2016 Risk-free interest rate 1.6% 1.2% 1.2% Expected dividend yield 0.0% 0.0% 0.0% Expected stock volatility 27.7% 35.2% 33.3% Expected option life 4.0 years 4.0 years 4.0 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 our 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. Prior to the fiscal 2017 grants, we recognized the fair value of stock options using the accelerated method over their requisite service periods which we have determined to be the vesting periods; for options granted in fiscal years 2017 and 2018, we recognized the fair value of stock options using the straight-line method. Revenue Recognition Revenue from products and services is recognized when the product has been shipped or the service performed, the sales price is fixed and determinable, and collection of any receivable is probable. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred and later recognized in the period that all recognition criteria have been met. Customer credits for sales returns, pricing and other disputes, and other related matters (including volume rebates offered to certain distributors as marketing support) represent approximately 3% of reported net revenue in fiscal years 2018, 2017 and 2016. Shipping and Handling Costs 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 $12,147,000, $10,185,000 and $9,734,000 in fiscal years 2018, 2017 and 2016, respectively. Income Taxes We account for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and for tax credit carryforwards, and are measured using the enacted tax rates in effect for the years in which the differences are expected to reverse. Deferred income tax expense represents the change in net deferred income tax assets and liabilities during the year. Our wholly-owned foreign subsidiaries are comprised of Neogen Europe, Lab M Holdings, Quat-Chem, Neogen do Brasil, Deoxi Biotecnologia Ltda, Rogama Industria e Comercio Ltda, Acumedia do Brasil, Neogen Latinoamérica, Neogen Bio-Scientific re-invested re-evaluation re-invest On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the Tax Act) was signed into law, making significant changes to the Internal Revenue Code. Changes include a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time 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 as incurred and totaled $1,699,000, $1,643,000 and $1,463,000 in fiscal years 2018, 2017 and 2016, respectively. Net Income Attributable to Neogen per Share Basic net income per share is based on the weighted average number of common shares outstanding during each year. Diluted 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 entirely from dilutive stock options. The following table presents the net income per share calculations: Year ended May 31 (in thousands, except per share) 2018 2017 2016 Numerator for basic and diluted net income per share - Net Income attributable to Neogen $ 63,145 $ 43,793 $ 36,564 Denominator for basic net income per share - Weighted average shares 51,358 50,544 49,869 Effect of dilutive stock options 791 621 631 Denominator for diluted net income per share 52,149 51,165 50,500 Net income attributable to Neogen per share Basic $ 1.23 $ 0.87 $ 0.73 Diluted $ 1.21 $ 0.86 $ 0.72 At May 31, 2018, 2017 and 2016, the market price of the common stock exceeded the option exercise price for all outstanding options; therefore, no shares were excluded from the diluted net income per share computation. New Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09—Revenue current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. In April 2016, the FASB issued Accounting Standards Update No. 2016-10— 2014-09 In February 2016, the FASB issued ASU No. 2016-02—Leases right-of-use In March 2016, the FASB issued ASU No. 2016-09—Compensation-Stock Share-Based Payment Accounting to provide guidance that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. We adopted this standard effective June 1, 2017. Adoption of this ASU decreased income tax expense by $4,816,000 in fiscal 2018; refer to Note 6 of our Consolidated Financial Statements for further information. In June 2016, the FASB issued ASU No. 2016-13—Measurement held-to-maturity 2016-13 In August 2016, the FASB issued ASU No. 2016-15—Classification 2016-15 2016-15 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
May 31, 2018 | |
Goodwill and Other Intangible Assets | 2. Goodwill and Other Intangible Assets Management has completed the annual impairment analysis of goodwill and intangible assets with indefinite lives using a quantitative assessment as of the first day of the fourth quarter of fiscal years 2018, 2017 and 2016, respectively, and determined that recorded amounts were not considered impaired and that no write-down was necessary. The following table summarizes goodwill by reportable segment: (in thousands) Food Safety Animal Safety Total Balance, May 31, 2016 $ 26,889 $ 61,617 $ 88,506 Goodwill acquired 19,051 — 19,051 Goodwill adjustments and/or currency (1) (20 ) (2,778 ) (2,798 ) Balance, May 31, 2017 $ 45,920 $ 58,839 $ 104,759 Goodwill acquired — 757 757 Goodwill adjustments and/or currency (1) (5,919 ) (39 ) (5,958 ) Balance, May 31, 2018 $ 40,001 $ 59,557 $ 99,558 (1) Includes final purchase price allocation adjustment. At May 31, 2018, non-amortizable non-amortizable Amortizable intangible assets consisted of the following and are included in customer-based intangible and other non-current (in thousands) Gross Less Net Licenses $ 9,491 $ 2,523 $ 6,968 Covenants not to compete 801 483 318 Patents 9,693 5,013 4,680 Customer-based intangibles 56,420 24,579 31,841 Other products and service-related intangibles 15,299 4,451 10,848 Balance, May 31, 2018 $ 91,704 $ 37,049 $ 54,655 Licenses $ 5,989 $ 2,011 $ 3,978 Covenants not to compete 1,208 309 899 Patents 9,304 4,601 4,703 Customer-based intangibles 56,829 20,846 35,983 Other products and service-related intangibles 12,065 3,010 9,055 Balance, May 31, 2017 $ 85,395 $ 30,777 $ 54,618 Amortization expense for intangibles totaled $6,743,000, $5,908,000 and $4,730,000 in fiscal years 2018, 2017, and 2016, respectively. The estimated amortization expense for each of the five succeeding fiscal years is as follows: $6,179,000 in 2019, $5,865,000 in 2020, $5,435,000 in 2021, $5,048,000 in 2022 and $4,702,000 in 2023. The amortizable intangible assets useful lives are 2 to 20 years for licenses, 5 to 13 years for covenants not to compete, 5 to 25 years for patents, 5 to 20 years for customer-based intangibles and 2 to 20 years for other product and service-related intangibles, which primarily consist of product formulations. All definite-lived intangibles are amortized on a straight line basis with the exception of definite-lived customer-based intangibles and product and service-related intangibles, which are amortized on either a straight-line or an accelerated basis. |
Business Combinations
Business Combinations | 12 Months Ended |
May 31, 2018 | |
Business Combinations | 3. Business Combinations The Consolidated Statements of Income reflect the results of operations for business acquisitions since the respective dates of purchase. All are accounted for using the acquisition method. Goodwill recognized in the acquisitions described below relates primarily to enhancing our strategic platform for the expansion of available product offerings. Fiscal 2016 On June 1, 2015, we acquired the assets of Sterling Test House, a commercial food testing laboratory based in India. Consideration for the purchase was $1,118,000 in cash and approximately $102,000 of a contingent consideration liability, due in installments on the first two anniversary dates, based on an excess 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 $43,000, inventory of $14,000, property and equipment of $141,000, contingent consideration accrual of $102,000, intangible assets of $345,000 (with an estimated life of 5-15 On August 26, 2015, we acquired all the stock of Lab M Holdings, a developer, manufacturer and supplier of microbiological culture media and diagnostic systems located in the United Kingdom. Consideration for the purchase was $12,436,000 in cash. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included cash of $285,000, accounts receivable of $975,000, inventory of $1,169,000, property and equipment of $3,337,000, other current assets of $309,000, current liabilities of $948,000, non-current 5-15 (non-deductible On December 22, 2015, we acquired the rodenticide assets of Virbac Corporation, the North American affiliate of the France-based Virbac group, a global animal health company. The acquired assets include a rodenticide active ingredient that complements Neogen’s existing active ingredients, and more than 40 regulatory approvals for a variety of formulations in the United States, Canada and Mexico. The acquired assets also include a large retail and OEM customer base. Consideration for the purchase was $3,525,000 in cash and up to $300,000 of contingent consideration. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included inventory of $317,000, property and equipment of $60,000, current liabilities of $300,000, intangible assets of $1,759,000 (with an estimated life of 5-15 non-amortizable On April 26, 2016, we acquired the stock of Deoxi Biotecnologia Ltda., an animal genomics laboratory located in Aracatuba, Brazil. This acquisition is intended to help accelerate the growth of Neogen’s animal genomics services in Brazil. Consideration for the purchase was $1,549,000 in cash and up to $2,552,000 of contingent consideration, due at the end of each of the first two years, based on an excess net sales formula. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $132,000, inventory of $89,000, other current assets of $9,000, property and equipment of $232,000, current liabilities of $266,000, contingent consideration accrual of $453,000, non-current non-amortizable 5-10 On May 1, 2016, we acquired the stock of Preserve International and its sister company, Tetradyne LLC, manufacturers and marketers of cleaners, disinfectants and associated products to the swine, poultry, food processing and dairy markets. Preserve and Tetradyne have manufacturing locations in Memphis, Tennessee and Turlock, California. Consideration for the purchase was $24,245,000 in cash. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $1,629,000, inventory of $1,964,000, other current assets of $269,000, land, property and equipment of $1,625,000, current liabilities of $987,000, non-current 5-15 non-amortizable Fiscal 2017 On December 1, 2016, we acquired the stock of Quat-Chem Ltd., a chemical company that manufactures biosecurity products, based in Rochdale, England. Consideration for the purchase was $21,606,000 in cash and up to $3,778,000 of contingent consideration, due at the end of each of the first two years, based on an excess net sales formula. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $4,684,000, inventory of $1,243,000, land, property and equipment of $2,526,000, accounts payable of $2,197,000, deferred tax liability of $1,758,000, contingent consideration accrual of $1,058,000, other current liabilities of $604,000, non-amortizable 5-15 (non-deductible On December 27, 2016, we acquired the stock of Rogama Industria e Comercio, Ltda., a company that develops and manufactures rodenticides and insecticides, based near São Paulo, Brazil. Consideration for the purchase was $12,423,000 in cash and up to $2,069,000 of contingent consideration, due at the end of each of the first two years, based on an excess net sales formula. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included accounts receivable of $1,866,000, other non-current non-amortizable 5-15 Fiscal 2018 On September 1, 2017, we acquired the assets of The University of Queensland Animal Genetics Laboratory, an animal genomics laboratory located near Brisbane, Australia. This acquisition is intended to accelerate the growth of our animal genomics business in Australia and New Zealand. Consideration for the purchase was $2,063,000; $468,000 has been paid in cash with the remainder due in annual installments over the next five years. The final purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included inventory of $19,000, equipment of $419,000, non-current 5-15 (non-deductible |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
May 31, 2018 | |
Long-Term Debt | 4. Long-Term Debt We have a financing agreement with a bank providing for an unsecured revolving line of credit, which was amended on November 30, 2016 to increase the line from $12,000,000 to $15,000,000, and extend the maturity from September 1, 2017 to September 30, 2019. There were no advances against the line of credit during fiscal years 2017 and 2018; there was no balance outstanding at May 31, 2018. Interest on any borrowings is at LIBOR plus 100 basis points (rate under the terms of the agreement was 3.14% at May 31, 2018). Financial covenants include maintaining specified levels of tangible net worth, debt service coverage, and funded debt to EBITDA, each of which we were in compliance with at May 31, 2018. |
Equity Compensation Plans
Equity Compensation Plans | 12 Months Ended |
May 31, 2018 | |
Equity Compensation Plans | 5. Equity Compensation Plans Qualified and non-qualified (options in thousands) Options Weighted-Average Weighted-Average Outstanding at May 31, 2015 (852 exercisable) 2,651 23.29 6.90 Granted 732 35.23 9.83 Exercised (569 ) 17.60 5.36 Forfeited (39 ) 28.93 8.36 Outstanding at May 31, 2016 (875 exercisable) 2,775 27.53 7.97 Granted 828 40.68 11.89 Exercised (827 ) 22.82 6.77 Forfeited (77 ) 32.04 9.17 Outstanding at May 31, 2017 (661 exercisable) 2,699 32.88 9.51 Granted 829 59.37 14.47 Exercised (821 ) 28.18 8.20 Forfeited (208 ) 39.57 11.12 Outstanding at May 31, 2018 (508 exercisable) 2,499 42.63 11.44 The following is a summary of stock options outstanding at May 31, 2018: (options in thousands) Options Outstanding Options Exercisable Range of Exercise Price Number Average Weighted-Average Number Weighted-Average $8.27 - $30.03 515 1.5 $ 27.08 226 $ 24.78 $30.04 - $37.26 522 3.2 34.84 179 34.00 $37.27 - $40.91 619 3.8 40.45 90 40.44 $40.92 - $59.78 173 6.0 50.85 13 42.19 $59.79 - $68.96 670 4.5 60.55 — — 2,499 3.5 42.63 508 31.23 The weighted average exercise price of shares that were exercisable at May 31, 2018 and 2017 was $31.23 and $26.49, respectively. Compensation expense related to share-based awards was $4,909,000, $5,261,000 and $5,468,000 in fiscal years 2018, 2017 and 2016, respectively. Remaining compensation cost to be expensed in future periods for non-vested The aggregate intrinsic value of options outstanding and options exercisable was $82,649,000 and $22,572,000, respectively, at May 31, 2018, $39,388,000 and $13,929,000 respectively, at May 31, 2017 and $26,344,000 and $12,912,000 respectively, at May 31, 2016. The aggregate intrinsic value of options exercised during the year was $25,844,000 in fiscal 2018, $18,067,000 in fiscal 2017 and $12,980,000 in fiscal 2016. Common stock totaling 332,000 of the 450,000 originally authorized shares are reserved for issuance under the terms of the 2011 Employee Stock Purchase Plan. The plan gives 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; 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 were 22,127 in fiscal 2018, 24,953 in fiscal 2017 and 24,369 in fiscal 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2018 | |
Income Taxes | 6. Income Taxes Income before income taxes by source consists of the following amounts: Year ended May 31 (in thousands) 2018 2017 2016 U.S. $ 62,310 $ 55,171 $ 50,662 Foreign 11,155 11,502 4,851 $ 73,465 $ 66,673 $ 55,513 The provision for income taxes consisted of the following: Year ended May 31 (in thousands) 2018 2017 2016 Current: U.S. Taxes $ 10,129 $ 20,259 $ 14,630 Foreign 3,066 2,514 1,756 Deferred (2,945 ) (73 ) 2,589 Provision for Income Taxes $ 10,250 $ 22,700 $ 18,975 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 (in thousands) 2018 2017 2016 Tax at U.S. statutory rate $ 21,459 $ 23,336 $ 19,429 Section 199 domestic production deduction (1,167 ) (1,057 ) (1,143 ) Foreign rate differential (461 ) (1,247 ) (699 ) Subpart F income 816 996 1,049 Excess tax benefits on stock-based compensation (4,816 ) — — Release of FIN 48 reserve from closed tax years (1,035 ) — — Provision for state income taxes, net of federal benefit 975 972 779 Remeasurement of deferred taxes (6,022 ) — — Transition tax on foreign earnings and profits 1,223 — — Amended U.S. Federal tax returns FY12, FY13 & FY14 — — (777 ) Tax credits and other (722 ) (300 ) 337 $ 10,250 $ 22,700 $ 18,975 On June 1, 2017, the Company adopted ASU No. 2016-09, paid-in On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the Tax Act) was signed into law, making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time 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 (in thousands) 2018 2017 Deferred income tax liabilities Indefinite and long-lived assets $ (17,503 ) $ (23,177 ) Prepaid expenses (573 ) (640 ) (18,076 ) (23,817 ) Deferred income tax assets Stock Options 1,489 2,604 Inventories and accounts receivable 1,593 2,603 Tax loss carryforwards 134 436 Accrued expenses and other 757 1,126 3,973 6,769 Net deferred income tax liabilities $ (14,103 ) $ (17,048 ) We had no accrual for unrecognized tax benefits at both May 31, 2018 and 2017. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, such accruals will be reflected within income tax accounts. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
May 31, 2018 | |
Commitments and Contingencies | 7. Commitments and Contingencies We are involved in environmental remediation and monitoring activities at our Randolph, Wisconsin manufacturing facility and accrue for related costs when such costs are determined to be probable and estimable. We expense annual costs of remediation which have ranged from $38,000 to $74,000 per year over the past five years. Our estimated liability for these costs is $916,000 at both May 31, 2018 and 2017, measured on an undiscounted basis over an estimated period of 15 years; $100,000 of the liability is recorded within current liabilities and includes $45,000 to perform an updated Corrective Measures Study, per a request received in 2017 from the Wisconsin Department of Natural Resources and the remainder is recorded within other non-current We have agreements with unrelated third parties that provide for the payment of license fees and royalties on the sale of certain products. Royalty expense, recorded in sales and marketing, under the terms of these agreements was $2,876,000, $2,659,000 and $1,969,000 for fiscal years 2018, 2017 and 2016, 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: 2019—$634,000, 2020—$641,000, 2021—$649,000, 2022—$572,000 and 2023—$568,000. We lease office and manufacturing facilities under non-cancelable We are subject to certain legal and other proceedings in the normal course of business that, in the opinion of management, should not have a material effect on our future results of operations or financial position. |
Defined Contribution Benefit Pl
Defined Contribution Benefit Plan | 12 Months Ended |
May 31, 2018 | |
Defined Contribution Benefit Plan | 8. Defined Contribution Benefit Plan We maintain 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% deferred. Our expense under this plan was $1,325,000, $1,259,000, and $1,188,000 in fiscal years 2018, 2017 and 2016, respectively. |
Segment Information
Segment Information | 12 Months Ended |
May 31, 2018 | |
Segment Information | 9. Segment Information We have two reportable segments: Food Safety and Animal Safety. The Food Safety segment is primarily engaged in the development, production and marketing of diagnostic test kits and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation. The Animal Safety segment is primarily engaged in the development, production and marketing of products dedicated to animal safety, including a complete line of consumable products marketed to veterinarians and animal health product distributors; this segment also provides genomic identification and related interpretive bioinformatic services. Additionally, the Animal Safety segment produces and markets rodenticides, disinfectants, and insecticides to assist in control of rodents, insects and disease in and around agricultural, food production and other facilities. Neogen’s international operations in the United Kingdom, Mexico, Brazil, 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 our complete line of products and services, including those usually associated with the Animal Safety segment such as cleaners, disinfectants, rodenticides, insecticides, veterinary instruments and genomics services. These additional products and services are managed and directed by existing management, and are reported through the Food Safety segment. The accounting policies of each of the segments are the same as those described in Note 1. Segment information is as follows: (in thousands) Food Safety Animal Safety Corporate and Total Fiscal 2018 Product revenues to external customers $ 176,123 $ 159,431 $ — $ 335,554 Service revenues to external customers 19,924 46,774 — 66,698 Total revenues to external customers 196,047 206,205 — 402,252 Operating income (loss) 34,561 39,529 (3,896 ) 70,194 Depreciation and amortization 9,083 7,975 — 17,058 Total Assets 186,570 220,629 210,810 618,009 Expenditures for long-lived assets 10,538 10,408 — 20,946 Fiscal 2017 Product revenues to external customers $ 155,795 $ 150,717 $ — $ 306,512 Service revenues to external customers 15,530 39,552 — 55,082 Total revenues to external customers 171,325 190,269 — 361,594 Operating income (loss) 33,971 34,841 (3,867 ) 64,945 Depreciation and amortization 7,088 7,603 — 14,691 Total Assets 190,895 210,927 126,587 528,409 Expenditures for long-lived assets 10,332 4,246 — 14,578 Fiscal 2016 Product revenues to external customers $ 133,743 $ 139,827 $ — $ 273,570 Service revenues to external customers 12,678 35,027 — 47,705 Total revenues to external customers 146,421 174,854 — 321,275 Operating income (loss) 28,984 30,978 (3,576 ) 56,386 Depreciation and amortization 5,609 6,572 — 12,181 Total Assets 143,303 215,374 91,263 449,940 Expenditures for long-lived assets 9,192 5,030 — 14,222 (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 and non-controlling Revenues to customers located outside the United States amounted to $151,262,000 or 37.6% of consolidated revenues in fiscal 2018, $129,322,000 or 35.8% in fiscal 2017 and $107,680,000 or 33.5% in fiscal 2016 and were derived primarily in various countries throughout Europe, Canada, South and Central America and Asia. No customer represented revenues in excess of 10% of consolidated net sales in any of the three years. The U.S. based operations represent 75% of the Company’s long-lived assets as of May 31, 2018 and 76% as May 31, 2017. |
Stock Repurchase
Stock Repurchase | 12 Months Ended |
May 31, 2018 | |
Stock Repurchase | 10. Stock Repurchase In December 2008, our Board of Directors authorized a program to purchase, subject to market conditions, up to 1,500,000 shares of our common stock. As of May 31, 2018, 149,368 cumulative shares have been purchased in negotiated and open market transactions for a total price, including commissions, of approximately $923,000. There were no purchases in fiscal years 2018, 2017 or 2016. Shares purchased under the program were retired. |
Summary of Quarterly Data (Unau
Summary of Quarterly Data (Unaudited) | 12 Months Ended |
May 31, 2018 | |
Summary of Quarterly Data (Unaudited) | 11. Summary of Quarterly Data (Unaudited) Quarter Ended (in thousands, except per share) August November February May 2018 Total Revenue $ 95,256 $ 101,817 $ 95,892 $ 109,287 Gross Margin 45,871 49,271 45,521 49,589 Net income 11,936 17,153 16,581 17,545 Net income attributable to Neogen 11,914 17,100 16,586 17,545 Basic net income per share 0.23 0.33 0.32 0.34 Diluted net income per share 0.23 0.33 0.32 0.33 Quarter Ended (in thousands, except per share) August November February May 2017 Total Revenue $ 83,645 $ 90,717 $ 88,385 $ 98,847 Gross Margin 40,479 43,591 40,880 47,018 Net income 9,934 11,171 10,377 12,491 Net income attributable to Neogen 9,881 11,151 10,287 12,474 Basic net income per share 0.20 0.22 0.20 0.25 Diluted net income per share 0.20 0.22 0.20 0.24 Quarterly net income per share is based on weighted-average shares outstanding and potentially dilutive stock options for the specific period, and as a result, will not necessarily aggregate to total net income per share as computed for the year as disclosed in the consolidated statements of income. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2018 | |
Nature of Operations | Nature of Operations Neogen Corporation develops, manufactures and markets a diverse line of products and services dedicated to food and animal safety. |
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, 2018. Neogen Latinoamérica was 100% and 90% owned as of May 31, 2018 and 2017. We purchased all shares owned by the minority interest owner on December 31, 2017, which increased our ownership in Neogen Latinoamérica to 100%. For Neogen do Brasil, we purchased the 10% owned by the two minority interest owners on February 28, 2017, which increased our ownership interest to 100%. Non-controlling non-controlling non-controlling All intercompany accounts and transactions have been eliminated in consolidation. Share and per share amounts reflect the December 29, 2017 4-for-3 |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Significant estimates impacting the accompanying consolidated financial statements include the allowance for uncollectible accounts receivable, inventory valuation and intangible assets. |
Comprehensive Income | Comprehensive Income Comprehensive income represents net income and any revenues, expenses, gains and losses that, under U.S. generally accepted accounting principles, are excluded from net income and recognized directly as a component of equity. Accumulated other comprehensive income (loss) consists solely of foreign currency translation adjustments. |
Accounts Receivable and Concentrations of Credit Risk | Accounts Receivable and Concentrations of Credit Risk Financial instruments which potentially subject us to concentrations of credit risk consist principally of accounts receivable. Management attempts to minimize credit risk by reviewing customers’ credit history before extending credit and by monitoring credit exposure on a regular basis. An allowance for doubtful accounts on accounts receivable is established based upon factors surrounding the credit risk of specific customers, historical trends and other information. Collateral or other security is generally not required for accounts receivable. Once a receivable balance has been determined to be uncollectible, that amount is charged against the allowance for doubtful accounts. No customer accounted for more than 10% of accounts receivable at May 31, 2018 or 2017, respectively. The activity in the allowance for doubtful accounts was as follows: Year ended May 31 (in thousands) 2018 2017 2016 Beginning Balance $ 2,000 $ 1,500 $ 1,300 Provision 152 645 305 Recoveries 40 25 90 Write-offs (642 ) (170 ) (195 ) Ending Balance $ 1,550 $ 2,000 $ 1,500 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of our financial instruments other than cash equivalents and marketable securities, which include accounts receivable and accounts payable, approximate fair value based on either their short maturity or current terms for similar instruments. |
Fair Value Measurements | Fair value measurements are determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. We utilize a fair value hierarchy based upon the observability of inputs used in valuation techniques as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of bank demand accounts, savings deposits, certificates of deposit and commercial paper with original maturities of 90 days or less. Cash and cash equivalents were $83,074,000 and $77,567,000 at May 31, 2018 and 2017, respectively. The carrying value of these assets approximates fair value due to the short maturity of these instruments and meets the Level 1 criteria. Cash held by foreign subsidiaries was $7,101,000 and $8,132,000 at May 31, 2018 and 2017, respectively. |
Marketable Securities | Marketable Securities We have marketable securities held by banks or broker-dealers at May 31, 2018, consisting of short-term domestic certificates of deposit of $27,400,000 and commercial paper rated at least A-2/P-2 |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, determined on the first-in, first-out Year ended May 31 (in thousands) 2018 2017 Raw Materials $ 36,702 $ 33,190 Work-in-process 5,993 4,831 Finished goods 33,310 35,123 $ 76,005 $ 73,144 Our inventories are analyzed for slow moving, expired and obsolete items no less frequently than quarterly and the valuation allowance is adjusted as required. The valuation allowance for inventory was $2,200,000 and $2,000,000 at May 31, 2018 and 2017, 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. 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 ten years for furniture, fixtures, machinery and equipment. Depreciation expense was $10,315,000, $8,783,000 and $7,452,000 in fiscal years 2018, 2017 and 2016, 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. Other intangible assets include customer relationships, trademarks, licenses, trade names, covenants not-to-compete non-amortizable |
Long-lived Assets | Long-lived Assets Management reviews the carrying values of its long-lived assets to be held and used, including definite-lived intangible assets, for possible impairment whenever events or changes in business conditions warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated separately identifiable undiscounted cash flows over the remaining useful life of the asset 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. |
Reclassifications | Reclassifications Certain amounts in the fiscal 2017 and 2016 financial statements have been reclassified to conform to the fiscal 2018 presentation. |
Stock Options | Stock Options At May 31, 2018, we had stock option plans which are described more fully in Note 5. The weighted-average fair value per share of stock options granted during fiscal years 2018, 2017 and 2016, estimated on the date of grant using the Black-Scholes option pricing model, was $14.47, $11.89 and $9.83, respectively. The fair value of stock options granted was estimated using the following weighted-average assumptions: Year ended May 31 2018 2017 2016 Risk-free interest rate 1.6% 1.2% 1.2% Expected dividend yield 0.0% 0.0% 0.0% Expected stock volatility 27.7% 35.2% 33.3% Expected option life 4.0 years 4.0 years 4.0 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 our 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. Prior to the fiscal 2017 grants, we recognized the fair value of stock options using the accelerated method over their requisite service periods which we have determined to be the vesting periods; for options granted in fiscal years 2017 and 2018, we recognized the fair value of stock options using the straight-line metho |
Revenue Recognition | Revenue Recognition Revenue from products and services is recognized when the product has been shipped or the service performed, the sales price is fixed and determinable, and collection of any receivable is probable. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred and later recognized in the period that all recognition criteria have been met. Customer credits for sales returns, pricing and other disputes, and other related matters (including volume rebates offered to certain distributors as marketing support) represent approximately 3% of reported net revenue in fiscal years 2018, 2017 and 2016. |
Shipping and Handling Costs | Shipping and Handling Costs 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 $12,147,000, $10,185,000 and $9,734,000 in fiscal years 2018, 2017 and 2016, respectively. |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and for tax credit carryforwards, and are measured using the enacted tax rates in effect for the years in which the differences are expected to reverse. Deferred income tax expense represents the change in net deferred income tax assets and liabilities during the year. Our wholly-owned foreign subsidiaries are comprised of Neogen Europe, Lab M Holdings, Quat-Chem, Neogen do Brasil, Deoxi Biotecnologia Ltda, Rogama Industria e Comercio Ltda, Acumedia do Brasil, Neogen Latinoamérica, Neogen Bio-Scientific re-invested re-evaluation re-invest On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the Tax Act) was signed into law, making significant changes to the Internal Revenue Code. Changes include a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time |
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 as incurred and totaled $1,699,000, $1,643,000 and $1,463,000 in fiscal years 2018, 2017 and 2016, respectively. |
Net Income Attributable to Neogen per Share | Net Income Attributable to Neogen per Share Basic net income per share is based on the weighted average number of common shares outstanding during each year. Diluted 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 entirely from dilutive stock options. The following table presents the net income per share calculations: Year ended May 31 (in thousands, except per share) 2018 2017 2016 Numerator for basic and diluted net income per share - Net Income attributable to Neogen $ 63,145 $ 43,793 $ 36,564 Denominator for basic net income per share - Weighted average shares 51,358 50,544 49,869 Effect of dilutive stock options 791 621 631 Denominator for diluted net income per share 52,149 51,165 50,500 Net income attributable to Neogen per share Basic $ 1.23 $ 0.87 $ 0.73 Diluted $ 1.21 $ 0.86 $ 0.72 At May 31, 2018, 2017 and 2016, the market price of the common stock exceeded the option exercise price for all outstanding options; therefore, no shares were excluded from the diluted net income per share computation. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09—Revenue current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. In April 2016, the FASB issued Accounting Standards Update No. 2016-10— 2014-09 In February 2016, the FASB issued ASU No. 2016-02—Leases right-of-use In March 2016, the FASB issued ASU No. 2016-09—Compensation-Stock Share-Based Payment Accounting to provide guidance that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid-in employee’s shares for tax withholding purposes without triggering liability accounting. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. We adopted this standard effective June 1, 2017. Adoption of this ASU decreased income tax expense by $4,816,000 in fiscal 2018; refer to Note 6 of our Consolidated Financial Statements for further information. In June 2016, the FASB issued ASU No. 2016-13—Measurement held-to-maturity 2016-13 In August 2016, the FASB issued ASU No. 2016-15—Classification 2016-15 2016-15 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2018 | |
Allowance for Doubtful Accounts | The activity in the allowance for doubtful accounts was as follows: Year ended May 31 (in thousands) 2018 2017 2016 Beginning Balance $ 2,000 $ 1,500 $ 1,300 Provision 152 645 305 Recoveries 40 25 90 Write-offs (642 ) (170 ) (195 ) Ending Balance $ 1,550 $ 2,000 $ 1,500 |
Inventories | The components of inventories were as follows: Year ended May 31 (in thousands) 2018 2017 Raw Materials $ 36,702 $ 33,190 Work-in-process 5,993 4,831 Finished goods 33,310 35,123 $ 76,005 $ 73,144 |
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions | The fair value of stock options granted was estimated using the following weighted-average assumptions: Year ended May 31 2018 2017 2016 Risk-free interest rate 1.6% 1.2% 1.2% Expected dividend yield 0.0% 0.0% 0.0% Expected stock volatility 27.7% 35.2% 33.3% Expected option life 4.0 years 4.0 years 4.0 years |
Calculation of Net Income Per Share | The following table presents the net income per share calculations: Year ended May 31 (in thousands, except per share) 2018 2017 2016 Numerator for basic and diluted net income per share - Net Income attributable to Neogen $ 63,145 $ 43,793 $ 36,564 Denominator for basic net income per share - Weighted average shares 51,358 50,544 49,869 Effect of dilutive stock options 791 621 631 Denominator for diluted net income per share 52,149 51,165 50,500 Net income attributable to Neogen per share Basic $ 1.23 $ 0.87 $ 0.73 Diluted $ 1.21 $ 0.86 $ 0.72 |
Goodwill and Other Intangible22
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
May 31, 2018 | |
Goodwill by Business Segment | The following table summarizes goodwill by reportable segment: (in thousands) Food Safety Animal Safety Total Balance, May 31, 2016 $ 26,889 $ 61,617 $ 88,506 Goodwill acquired 19,051 — 19,051 Goodwill adjustments and/or currency (1) (20 ) (2,778 ) (2,798 ) Balance, May 31, 2017 $ 45,920 $ 58,839 $ 104,759 Goodwill acquired — 757 757 Goodwill adjustments and/or currency (1) (5,919 ) (39 ) (5,958 ) Balance, May 31, 2018 $ 40,001 $ 59,557 $ 99,558 (1) Includes final purchase price allocation adjustment. |
Amortizable of Intangible Assets | Amortizable intangible assets consisted of the following and are included in customer-based intangible and other non-current (in thousands) Gross Less Net Licenses $ 9,491 $ 2,523 $ 6,968 Covenants not to compete 801 483 318 Patents 9,693 5,013 4,680 Customer-based intangibles 56,420 24,579 31,841 Other products and service-related intangibles 15,299 4,451 10,848 Balance, May 31, 2018 $ 91,704 $ 37,049 $ 54,655 Licenses $ 5,989 $ 2,011 $ 3,978 Covenants not to compete 1,208 309 899 Patents 9,304 4,601 4,703 Customer-based intangibles 56,829 20,846 35,983 Other products and service-related intangibles 12,065 3,010 9,055 Balance, May 31, 2017 $ 85,395 $ 30,777 $ 54,618 |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 12 Months Ended |
May 31, 2018 | |
Stock Option Activity | Qualified and non-qualified (options in thousands) Options Weighted-Average Weighted-Average Outstanding at May 31, 2015 (852 exercisable) 2,651 23.29 6.90 Granted 732 35.23 9.83 Exercised (569 ) 17.60 5.36 Forfeited (39 ) 28.93 8.36 Outstanding at May 31, 2016 (875 exercisable) 2,775 27.53 7.97 Granted 828 40.68 11.89 Exercised (827 ) 22.82 6.77 Forfeited (77 ) 32.04 9.17 Outstanding at May 31, 2017 (661 exercisable) 2,699 32.88 9.51 Granted 829 59.37 14.47 Exercised (821 ) 28.18 8.20 Forfeited (208 ) 39.57 11.12 Outstanding at May 31, 2018 (508 exercisable) 2,499 42.63 11.44 |
Summary of Stock Options Outstanding | The following is a summary of stock options outstanding at May 31, 2018: (options in thousands) Options Outstanding Options Exercisable Range of Exercise Price Number Average Weighted-Average Number Weighted-Average $8.27 - $30.03 515 1.5 $ 27.08 226 $ 24.78 $30.04 - $37.26 522 3.2 34.84 179 34.00 $37.27 - $40.91 619 3.8 40.45 90 40.44 $40.92 - $59.78 173 6.0 50.85 13 42.19 $59.79 - $68.96 670 4.5 60.55 — — 2,499 3.5 42.63 508 31.23 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2018 | |
Income Before Income Taxes | Income before income taxes by source consists of the following amounts: Year ended May 31 (in thousands) 2018 2017 2016 U.S. $ 62,310 $ 55,171 $ 50,662 Foreign 11,155 11,502 4,851 $ 73,465 $ 66,673 $ 55,513 |
Provision for Income Taxes | The provision for income taxes consisted of the following: Year ended May 31 (in thousands) 2018 2017 2016 Current: U.S. Taxes $ 10,129 $ 20,259 $ 14,630 Foreign 3,066 2,514 1,756 Deferred (2,945 ) (73 ) 2,589 Provision for Income Taxes $ 10,250 $ 22,700 $ 18,975 |
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 (in thousands) 2018 2017 2016 Tax at U.S. statutory rate $ 21,459 $ 23,336 $ 19,429 Section 199 domestic production deduction (1,167 ) (1,057 ) (1,143 ) Foreign rate differential (461 ) (1,247 ) (699 ) Subpart F income 816 996 1,049 Excess tax benefits on stock-based compensation (4,816 ) — — Release of FIN 48 reserve from closed tax years (1,035 ) — — Provision for state income taxes, net of federal benefit 975 972 779 Remeasurement of deferred taxes (6,022 ) — — Transition tax on foreign earnings and profits 1,223 — — Amended U.S. Federal tax returns FY12, FY13 & FY14 — — (777 ) Tax credits and other (722 ) (300 ) 337 $ 10,250 $ 22,700 $ 18,975 |
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 (in thousands) 2018 2017 Deferred income tax liabilities Indefinite and long-lived assets $ (17,503 ) $ (23,177 ) Prepaid expenses (573 ) (640 ) (18,076 ) (23,817 ) Deferred income tax assets Stock Options 1,489 2,604 Inventories and accounts receivable 1,593 2,603 Tax loss carryforwards 134 436 Accrued expenses and other 757 1,126 3,973 6,769 Net deferred income tax liabilities $ (14,103 ) $ (17,048 ) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
May 31, 2018 | |
Segment Information | Segment information is as follows: (in thousands) Food Safety Animal Safety Corporate and Total Fiscal 2018 Product revenues to external customers $ 176,123 $ 159,431 $ — $ 335,554 Service revenues to external customers 19,924 46,774 — 66,698 Total revenues to external customers 196,047 206,205 — 402,252 Operating income (loss) 34,561 39,529 (3,896 ) 70,194 Depreciation and amortization 9,083 7,975 — 17,058 Total Assets 186,570 220,629 210,810 618,009 Expenditures for long-lived assets 10,538 10,408 — 20,946 Fiscal 2017 Product revenues to external customers $ 155,795 $ 150,717 $ — $ 306,512 Service revenues to external customers 15,530 39,552 — 55,082 Total revenues to external customers 171,325 190,269 — 361,594 Operating income (loss) 33,971 34,841 (3,867 ) 64,945 Depreciation and amortization 7,088 7,603 — 14,691 Total Assets 190,895 210,927 126,587 528,409 Expenditures for long-lived assets 10,332 4,246 — 14,578 Fiscal 2016 Product revenues to external customers $ 133,743 $ 139,827 $ — $ 273,570 Service revenues to external customers 12,678 35,027 — 47,705 Total revenues to external customers 146,421 174,854 — 321,275 Operating income (loss) 28,984 30,978 (3,576 ) 56,386 Depreciation and amortization 5,609 6,572 — 12,181 Total Assets 143,303 215,374 91,263 449,940 Expenditures for long-lived assets 9,192 5,030 — 14,222 (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 and non-controlling |
Summary of Quarterly Data (Un26
Summary of Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
May 31, 2018 | |
Summary of Quarterly Data | Quarter Ended (in thousands, except per share) August November February May 2018 Total Revenue $ 95,256 $ 101,817 $ 95,892 $ 109,287 Gross Margin 45,871 49,271 45,521 49,589 Net income 11,936 17,153 16,581 17,545 Net income attributable to Neogen 11,914 17,100 16,586 17,545 Basic net income per share 0.23 0.33 0.32 0.34 Diluted net income per share 0.23 0.33 0.32 0.33 Quarter Ended (in thousands, except per share) August November February May 2017 Total Revenue $ 83,645 $ 90,717 $ 88,385 $ 98,847 Gross Margin 40,479 43,591 40,880 47,018 Net income 9,934 11,171 10,377 12,491 Net income attributable to Neogen 9,881 11,151 10,287 12,474 Basic net income per share 0.20 0.22 0.20 0.25 Diluted net income per share 0.20 0.22 0.20 0.24 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Additional Information (Detail) | Dec. 29, 2017 | Dec. 22, 2017 | Feb. 28, 2017 | May 31, 2018USD ($)$ / sharesshares | May 31, 2017USD ($)$ / sharesshares | May 31, 2016USD ($)$ / sharesshares | May 31, 2015USD ($) |
Significant Accounting Policies [Line Items] | |||||||
Stock split ratio | 1.33 | ||||||
Cash and cash equivalents | $ 83,074,000 | $ 77,567,000 | $ 55,257,000 | $ 66,061,000 | |||
Cash held at foreign subsidiaries | 7,101,000 | 8,132,000 | |||||
Short-term domestic certificates of deposit | 27,400,000 | ||||||
Commercial Paper | 100,336,000 | ||||||
Marketable securities | 127,736,000 | 66,068,000 | |||||
Valuation allowance for inventory | 2,200,000 | 2,000,000 | |||||
Depreciation expense | $ 10,315,000 | $ 8,783,000 | $ 7,452,000 | ||||
Finite lived intangible assets, useful life | 11 years | 11 years | |||||
Weighted-average fair value per share of stock options granted | $ / shares | $ 14.47 | $ 11.89 | $ 9.83 | ||||
Percentage of customer credits for sales returns, pricing and other disputes, and other related matters against net revenue | 3.00% | 3.00% | 3.00% | ||||
Cost of goods and services sold | $ 212,000,000 | $ 189,626,000 | $ 168,211,000 | ||||
Unremitted earnings of foreign subsidiaries | $ 43,784,000 | ||||||
Federal corporate tax rate | 35.00% | 21.00% | |||||
Deferred tax benefit | $ (6,022,000) | ||||||
Current tax expense | $ 1,223,000 | ||||||
Shares excluded from computations of diluted net income per share | shares | 0 | 0 | 0 | ||||
ASU No. 2016-09 | |||||||
Significant Accounting Policies [Line Items] | |||||||
Increase (decrease) in income tax expense | $ 4,816,000 | ||||||
Minimum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Marketable securities, maturity period | 91 days | ||||||
Finite lived intangible assets, useful life | 5 years | ||||||
Maximum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Marketable securities, maturity period | 1 year | ||||||
Finite lived intangible assets, useful life | 25 years | ||||||
Buildings And Improvements | Minimum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Property, plant and equipment estimated useful life | 7 years | 7 years | 7 years | ||||
Buildings And Improvements | Maximum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Property, plant and equipment estimated useful life | 39 years | 39 years | 39 years | ||||
Furniture, Machinery and Equipment | Minimum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Property, plant and equipment estimated useful life | 3 years | 3 years | 3 years | ||||
Furniture, Machinery and Equipment | Maximum | |||||||
Significant Accounting Policies [Line Items] | |||||||
Property, plant and equipment estimated useful life | 10 years | 10 years | 10 years | ||||
Shipping and Handling | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cost of goods and services sold | $ 12,147,000 | $ 10,185,000 | $ 9,734,000 | ||||
Advertising Cost | |||||||
Significant Accounting Policies [Line Items] | |||||||
Cost of goods and services sold | $ 1,699,000 | $ 1,643,000 | $ 1,463,000 | ||||
Neogen Do Brazil | |||||||
Significant Accounting Policies [Line Items] | |||||||
Percentage of ownership in subsidiaries | 100.00% | 90.00% | |||||
Percentage of ownership in subsidiaries after capital contribution | 100.00% | 100.00% | 100.00% | ||||
Neogen Latin America | |||||||
Significant Accounting Policies [Line Items] | |||||||
Percentage of ownership in subsidiaries | 10.00% | 100.00% | 100.00% | ||||
Customer one | |||||||
Significant Accounting Policies [Line Items] | |||||||
Account receivable percentage from major customer | 10.00% | 10.00% |
Activity in Allowance for Doubt
Activity in Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Beginning Balance | $ 2,000 | $ 1,500 | $ 1,300 |
Provision | 152 | 645 | 305 |
Recoveries | 40 | 25 | 90 |
Write-offs | (642) | (170) | (195) |
Ending Balance | $ 1,550 | $ 2,000 | $ 1,500 |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Inventory [Line Items] | ||
Raw Materials | $ 36,702 | $ 33,190 |
Work-in-process | 5,993 | 4,831 |
Finished goods | 33,310 | 35,123 |
Inventories | $ 76,005 | $ 73,144 |
Fair Value of Stock Options Gra
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions (Detail) | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Schedule of Weighted Average Assumptions for Fair Values of Stock Options [Line Items] | |||
Risk-free interest rate | 1.60% | 1.20% | 1.20% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected stock volatility | 27.70% | 35.20% | 33.30% |
Expected option life (in years) | 4 years | 4 years | 4 years |
Calculation of Net Income Per S
Calculation of Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May 31, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Earnings Per Share [Line Items] | |||||||||||
Numerator for basic and diluted net income per share - Net Income attributable to Neogen | $ 17,545 | $ 16,586 | $ 17,100 | $ 11,914 | $ 12,474 | $ 10,287 | $ 11,151 | $ 9,881 | $ 63,145 | $ 43,793 | $ 36,564 |
Denominator for basic net income per share - Weighted average shares | 51,358 | 50,544 | 49,869 | ||||||||
Effect of dilutive stock options | 791 | 621 | 631 | ||||||||
Denominator for diluted net income per share | 52,149 | 51,165 | 50,500 | ||||||||
Net Income Attributable to Neogen per Share | |||||||||||
Basic | $ 0.34 | $ 0.32 | $ 0.33 | $ 0.23 | $ 0.25 | $ 0.20 | $ 0.22 | $ 0.20 | $ 1.23 | $ 0.87 | $ 0.73 |
Diluted | $ 0.33 | $ 0.32 | $ 0.33 | $ 0.23 | $ 0.24 | $ 0.20 | $ 0.22 | $ 0.20 | $ 1.21 | $ 0.86 | $ 0.72 |
Goodwill by Business Segment (D
Goodwill by Business Segment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | ||
Goodwill [Line Items] | |||
Beginning Balance | $ 104,759 | $ 88,506 | |
Goodwill acquired | 757 | 19,051 | |
Goodwill adjustments and/or currency | [1] | (5,958) | (2,798) |
Ending Balance | 99,558 | 104,759 | |
Food Safety | |||
Goodwill [Line Items] | |||
Beginning Balance | 45,920 | 26,889 | |
Goodwill acquired | 19,051 | ||
Goodwill adjustments and/or currency | [1] | (5,919) | (20) |
Ending Balance | 40,001 | 45,920 | |
Animal Safety | |||
Goodwill [Line Items] | |||
Beginning Balance | 58,839 | 61,617 | |
Goodwill acquired | 757 | ||
Goodwill adjustments and/or currency | [1] | (39) | (2,778) |
Ending Balance | $ 59,557 | $ 58,839 | |
[1] | Includes final purchase price allocation adjustment. |
Goodwill and Other Intangible33
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Goodwill And Other Intangible Asset [Line Items] | |||
Other non-amortizable intangible assets | $ 14,938,000 | $ 14,323,000 | |
Amortization expense for intangible assets | 6,743,000 | $ 5,908,000 | $ 4,730,000 |
Estimated amortization expense for period, 2019 | 6,179,000 | ||
Estimated amortization expense for period, 2020 | 5,865,000 | ||
Estimated amortization expense for period, 2021 | 5,435,000 | ||
Estimated amortization expense for period, 2022 | 5,048,000 | ||
Estimated amortization expense for period, 2023 | $ 4,702,000 | ||
Finite lived intangible assets, useful life | 11 years | 11 years | |
Minimum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 5 years | ||
Maximum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 25 years | ||
Licenses | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Other non-amortizable intangible assets | $ 569,000 | $ 569,000 | |
Licenses | Minimum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 2 years | ||
Licenses | Maximum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 20 years | ||
Trademarks | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Other non-amortizable intangible assets | $ 12,989,000 | 12,530,000 | |
Other Intangible Assets | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Other non-amortizable intangible assets | $ 1,224,000 | $ 1,224,000 | |
Noncompete Agreements | Minimum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 5 years | ||
Noncompete Agreements | Maximum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 13 years | ||
Patents | Minimum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 5 years | ||
Patents | Maximum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 25 years | ||
Customer-based intangibles | Minimum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 5 years | ||
Customer-based intangibles | Maximum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 20 years | ||
Other products and service-related intangibles | Minimum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 2 years | ||
Other products and service-related intangibles | Maximum | |||
Goodwill And Other Intangible Asset [Line Items] | |||
Finite lived intangible assets, useful life | 20 years |
Amortizable of Intangible Asset
Amortizable of Intangible Assets (Detail) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 91,704 | $ 85,395 |
Less Accumulated Amortization | 37,049 | 30,777 |
Net Carrying Amount | 54,655 | 54,618 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9,491 | 5,989 |
Less Accumulated Amortization | 2,523 | 2,011 |
Net Carrying Amount | 6,968 | 3,978 |
Noncompete Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 801 | 1,208 |
Less Accumulated Amortization | 483 | 309 |
Net Carrying Amount | 318 | 899 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9,693 | 9,304 |
Less Accumulated Amortization | 5,013 | 4,601 |
Net Carrying Amount | 4,680 | 4,703 |
Customer-based intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 56,420 | 56,829 |
Less Accumulated Amortization | 24,579 | 20,846 |
Net Carrying Amount | 31,841 | 35,983 |
Other products and service-related intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 15,299 | 12,065 |
Less Accumulated Amortization | 4,451 | 3,010 |
Net Carrying Amount | $ 10,848 | $ 9,055 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 01, 2017 | Dec. 27, 2016 | Dec. 01, 2016 | May 01, 2016 | Apr. 26, 2016 | Dec. 22, 2015 | Aug. 26, 2015 | Jun. 01, 2015 | Jun. 30, 2018 | Jan. 31, 2018 | Jun. 30, 2017 | Jul. 31, 2016 | May 31, 2016 | May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2019 | Apr. 30, 2018 |
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 11 years | 11 years | ||||||||||||||||
Minimum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||||||||
Maximum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 25 years | |||||||||||||||||
Sterling Test House | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash consideration for purchase of business | $ 1,118 | |||||||||||||||||
Contingent consideration potential payment | 102 | |||||||||||||||||
Purchase price allocation for accounts receivable | 43 | |||||||||||||||||
Purchase price allocation for inventory | 14 | |||||||||||||||||
Purchase price allocation for land, property and equipment | 141 | |||||||||||||||||
Allocation of purchase price for contingent consideration potential payment | 102 | |||||||||||||||||
Purchase price allocation for intangible assets | $ 345 | |||||||||||||||||
Cash paid for contingent consideration | $ 70 | |||||||||||||||||
Reverse the remaining contingent consideration accrual to other income | $ 32 | |||||||||||||||||
Sterling Test House | Minimum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||||||||
Sterling Test House | Maximum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||||||||
Lab M Holdings | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash consideration for purchase of business | $ 12,436 | |||||||||||||||||
Purchase price allocation for accounts receivable | 975 | |||||||||||||||||
Purchase price allocation for inventory | 1,169 | |||||||||||||||||
Purchase price allocation for land, property and equipment | 3,337 | |||||||||||||||||
Purchase price allocation for intangible assets | 3,611 | |||||||||||||||||
Purchase price allocation for cash | 285 | |||||||||||||||||
Purchase price allocation for other current assets | 309 | |||||||||||||||||
Purchase price allocation for current liabilities | 948 | |||||||||||||||||
Purchase price allocation for deferred tax liability | $ 784 | |||||||||||||||||
Lab M Holdings | Minimum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||||||||
Lab M Holdings | Maximum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||||||||
Virbac Corporation | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash consideration for purchase of business | $ 3,525 | |||||||||||||||||
Contingent consideration potential payment | 300 | |||||||||||||||||
Purchase price allocation for inventory | 317 | |||||||||||||||||
Purchase price allocation for land, property and equipment | 60 | |||||||||||||||||
Purchase price allocation for intangible assets | 1,759 | |||||||||||||||||
Purchase price allocation for current liabilities | $ 300 | |||||||||||||||||
Purchase price allocation for contingent consideration | $ 300 | |||||||||||||||||
Virbac Corporation | Minimum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||||||||
Virbac Corporation | Maximum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||||||||
Deoxi Biotecnologia Ltd | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash consideration for purchase of business | $ 1,549 | |||||||||||||||||
Contingent consideration potential payment | 2,552 | $ 393 | ||||||||||||||||
Purchase price allocation for accounts receivable | 132 | |||||||||||||||||
Purchase price allocation for inventory | 89 | |||||||||||||||||
Purchase price allocation for land, property and equipment | 232 | |||||||||||||||||
Allocation of purchase price for contingent consideration potential payment | 453 | |||||||||||||||||
Purchase price allocation for intangible assets | 350 | |||||||||||||||||
Reverse the remaining contingent consideration accrual to other income | $ 14 | |||||||||||||||||
Purchase price allocation for other current assets | 9 | |||||||||||||||||
Purchase price allocation for current liabilities | 266 | |||||||||||||||||
Purchase price allocation for deferred tax liability | $ 184 | |||||||||||||||||
Deoxi Biotecnologia Ltd | Subsequent Event | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Contingent consideration potential payment | $ 122 | |||||||||||||||||
Reverse the remaining contingent consideration accrual to other expense | $ 42 | |||||||||||||||||
Deoxi Biotecnologia Ltd | Minimum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||||||||
Deoxi Biotecnologia Ltd | Maximum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 10 years | |||||||||||||||||
Tetradyne LLC | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash consideration for purchase of business | $ 24,245 | |||||||||||||||||
Purchase price allocation for accounts receivable | 1,629 | |||||||||||||||||
Purchase price allocation for inventory | 1,964 | |||||||||||||||||
Purchase price allocation for land, property and equipment | 1,625 | |||||||||||||||||
Purchase price allocation for intangible assets | 11,950 | |||||||||||||||||
Purchase price allocation for other current assets | 269 | |||||||||||||||||
Purchase price allocation for current liabilities | 987 | |||||||||||||||||
Purchase price allocation for long-term liabilities | $ 660 | |||||||||||||||||
Tetradyne LLC | Minimum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||||||||
Tetradyne LLC | Maximum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||||||||
Quat-Chem Ltd. | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash consideration for purchase of business | $ 21,606 | |||||||||||||||||
Contingent consideration potential payment | 3,778 | $ 249 | ||||||||||||||||
Purchase price allocation for accounts receivable | 4,684 | |||||||||||||||||
Purchase price allocation for inventory | 1,243 | |||||||||||||||||
Purchase price allocation for land, property and equipment | 2,526 | |||||||||||||||||
Allocation of purchase price for contingent consideration potential payment | 1,058 | |||||||||||||||||
Purchase price allocation for intangible assets | 6,900 | |||||||||||||||||
Reverse the remaining contingent consideration accrual to other income | $ 255 | |||||||||||||||||
Purchase price allocation for non-amortizable intangible assets | 1,889 | |||||||||||||||||
Purchase price allocation for accounts payable | 2,197 | |||||||||||||||||
Purchase price allocation for deferred tax liability | 1,758 | |||||||||||||||||
Purchase price allocation for other current liabilities | $ 604 | |||||||||||||||||
Quat-Chem Ltd. | Scenario forecast | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Allocation of purchase price for contingent consideration potential payment | $ 554 | |||||||||||||||||
Quat-Chem Ltd. | Minimum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||||||||
Quat-Chem Ltd. | Maximum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||||||||
Rogama Industria e Comercio, Ltda. | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash consideration for purchase of business | $ 12,423 | |||||||||||||||||
Contingent consideration potential payment | 2,069 | $ 130 | ||||||||||||||||
Purchase price allocation for accounts receivable | 1,866 | |||||||||||||||||
Purchase price allocation for inventory | 960 | |||||||||||||||||
Purchase price allocation for land, property and equipment | 4,734 | |||||||||||||||||
Allocation of purchase price for contingent consideration potential payment | 213 | |||||||||||||||||
Purchase price allocation for intangible assets | 5,112 | |||||||||||||||||
Purchase price allocation for current liabilities | 2,562 | |||||||||||||||||
Purchase price allocation for non-amortizable intangible assets | 870 | |||||||||||||||||
Purchase price allocation for deferred tax liability | 2,034 | |||||||||||||||||
Purchase price allocation for other non-current assets | $ 26 | |||||||||||||||||
Rogama Industria e Comercio, Ltda. | Scenario forecast | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Allocation of purchase price for contingent consideration potential payment | $ 83 | |||||||||||||||||
Rogama Industria e Comercio, Ltda. | Minimum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||||||||
Rogama Industria e Comercio, Ltda. | Maximum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||||||||
The University of Queensland Animal Genetics Laboratory | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Cash consideration for purchase of business | $ 468 | |||||||||||||||||
Purchase price allocation for inventory | 19 | |||||||||||||||||
Purchase price allocation for land, property and equipment | 419 | |||||||||||||||||
Purchase price allocation for intangible assets | 902 | |||||||||||||||||
Purchase price allocation for long-term liabilities | 1,629 | |||||||||||||||||
Consideration for purchase of business | $ 2,063 | |||||||||||||||||
The University of Queensland Animal Genetics Laboratory | Minimum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 5 years | |||||||||||||||||
The University of Queensland Animal Genetics Laboratory | Maximum | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Finite lived intangible assets, useful life | 15 years | |||||||||||||||||
Trademarks | Virbac Corporation | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Purchase price allocation for non-amortizable intangible assets | $ 200 | |||||||||||||||||
Trademarks | Deoxi Biotecnologia Ltd | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Purchase price allocation for non-amortizable intangible assets | $ 193 | |||||||||||||||||
Trademarks | Tetradyne LLC | ||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||
Purchase price allocation for non-amortizable intangible assets | $ 2,600 |
Long Term Debt - Additional Inf
Long Term Debt - Additional Information (Detail) - USD ($) | Nov. 29, 2016 | May 31, 2018 | May 31, 2017 |
Debt Instrument [Line Items] | |||
Unsecured revolving line of credit, total amount available | $ 12,000,000 | $ 15,000,000 | |
Unsecured revolving line of credit, maturity date | Sep. 1, 2017 | Sep. 30, 2019 | |
Unsecured revolving line of credit, interest terms | LIBOR plus 100 basis points | ||
Unsecured revolving line of credit, interest rate | 3.14% | ||
Unsecured revolving line of credit, balance outstanding | $ 0 | ||
Unsecured revolving line of credit, advances | $ 0 | $ 0 | |
Libor Plus | Unsecured Revolving Line of Credit | |||
Debt Instrument [Line Items] | |||
Unsecured revolving line of credit, spread | 1.00% |
Equity Compensation Plans - Add
Equity Compensation Plans - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant | 1,913,000 | 2,525,000 | 3,276,000 |
Options Exercisable, Weighted Average Exercise Price | $ 31.23 | $ 26.49 | |
Compensation expense related to share based awards | $ 4,909,000 | $ 5,261,000 | $ 5,468,000 |
Remaining compensation cost to be expensed in future periods for non-vested options | $ 15,367,000 | ||
Weighted average expense recognition period | 3 years 6 months | ||
Aggregate intrinsic value of options outstanding | $ 82,649,000 | 39,388,000 | 26,344,000 |
Aggregate intrinsic value of options exercisable | 22,572,000 | 13,929,000 | 12,912,000 |
Aggregate intrinsic value of options exercised | $ 25,844,000 | $ 18,067,000 | $ 12,980,000 |
Number of shares purchased by employees | 22,127 | 24,953 | 24,369 |
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 | 332,000 | ||
Number of shares authorized for grant | 450,000 | ||
Annual maximum limit percentage of compensation to purchase shares | 5.00% | ||
Employee stock purchase plan stock price percentage | 10.00% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option vesting period | 3 years | ||
Stock option contractual terms | 5 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 |
Stock Option Activity (Detail)
Stock Option Activity (Detail) - $ / shares shares in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Options Outstanding, Beginning Balance | 2,699 | 2,775 | 2,651 |
Options, Granted | 829 | 828 | 732 |
Options, Exercised | (821) | (827) | (569) |
Options, Forfeited | (208) | (77) | (39) |
Options Outstanding, Ending Balance | 2,499 | 2,699 | 2,775 |
Weighted-Average Exercise Price, Beginning Balance | $ 32.88 | $ 27.53 | $ 23.29 |
Weighted-Average Exercise Price, Granted | 59.37 | 40.68 | 35.23 |
Weighted-Average Exercise Price, Exercised | 28.18 | 22.82 | 17.60 |
Weighted-Average Exercise Price, Forfeited | 39.57 | 32.04 | 28.93 |
Weighted-Average Exercise Price, Ending Balance | 42.63 | 32.88 | 27.53 |
Weighted-Average Grant Date Fair Value, Beginning Balance | 9.51 | 7.97 | 6.90 |
Weighted-Average Grant Date Fair Value, Granted | 14.47 | 11.89 | 9.83 |
Weighted-Average Grant Date Fair Value, Exercised | 8.20 | 6.77 | 5.36 |
Weighted-Average Grant Date Fair Value, Forfeited | 11.12 | 9.17 | 8.36 |
Weighted-Average Grant Date Fair Value, Ending Balance | $ 11.44 | $ 9.51 | $ 7.97 |
Stock Option Activity (Parenthe
Stock Option Activity (Parenthetical) (Detail) - shares shares in Thousands | May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options Outstanding, Exercisable Beginning Balance | 508 | 661 | 875 | 852 |
Summary of Stock Options Outsta
Summary of Stock Options Outstanding (Detail) - $ / shares shares in Thousands | 12 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Options Outstanding, Number | 2,499 | 2,699 | 2,775 | 2,651 |
Options Outstanding, Average Contractual Life | 3 years 6 months | |||
Options Outstanding, Weighted-Average Exercise Price | $ 42.63 | $ 32.88 | $ 27.53 | $ 23.29 |
Options Exercisable, Number | 508 | 661 | 875 | 852 |
Options Exercisable, Weighted Average Exercise Price | $ 31.23 | $ 26.49 | ||
$8.27 - $30.03 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise price, minimum | 8.27 | |||
Range of Exercise price, maximum | $ 30.03 | |||
Options Outstanding, Number | 515 | |||
Options Outstanding, Average Contractual Life | 1 year 6 months | |||
Options Outstanding, Weighted-Average Exercise Price | $ 27.08 | |||
Options Exercisable, Number | 226 | |||
Options Exercisable, Weighted Average Exercise Price | $ 24.78 | |||
$30.04 - $37.26 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise price, minimum | 30.04 | |||
Range of Exercise price, maximum | $ 37.26 | |||
Options Outstanding, Number | 522 | |||
Options Outstanding, Average Contractual Life | 3 years 2 months 12 days | |||
Options Outstanding, Weighted-Average Exercise Price | $ 34.84 | |||
Options Exercisable, Number | 179 | |||
Options Exercisable, Weighted Average Exercise Price | $ 34 | |||
$37.27 - $40.91 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise price, minimum | 37.27 | |||
Range of Exercise price, maximum | $ 40.91 | |||
Options Outstanding, Number | 619 | |||
Options Outstanding, Average Contractual Life | 3 years 9 months 18 days | |||
Options Outstanding, Weighted-Average Exercise Price | $ 40.45 | |||
Options Exercisable, Number | 90 | |||
Options Exercisable, Weighted Average Exercise Price | $ 40.44 | |||
$40.92 - $59.78 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise price, minimum | 40.92 | |||
Range of Exercise price, maximum | $ 59.78 | |||
Options Outstanding, Number | 173 | |||
Options Outstanding, Average Contractual Life | 6 years | |||
Options Outstanding, Weighted-Average Exercise Price | $ 50.85 | |||
Options Exercisable, Number | 13 | |||
Options Exercisable, Weighted Average Exercise Price | $ 42.19 | |||
$59.79 - $68.96 | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Range of Exercise price, minimum | 59.79 | |||
Range of Exercise price, maximum | $ 68.96 | |||
Options Outstanding, Number | 670 | |||
Options Outstanding, Average Contractual Life | 4 years 6 months | |||
Options Outstanding, Weighted-Average Exercise Price | $ 60.55 |
Income Before Income Taxes (Det
Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Income Before Income Taxes [Line Items] | |||
Income Before Income Taxes | $ 73,465 | $ 66,673 | $ 55,513 |
U.S. | |||
Income Before Income Taxes [Line Items] | |||
Income Before Income Taxes | 62,310 | 55,171 | 50,662 |
Foreign | |||
Income Before Income Taxes [Line Items] | |||
Income Before Income Taxes | $ 11,155 | $ 11,502 | $ 4,851 |
Provision for Income Taxes (Det
Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Current: | |||
U.S. Taxes | $ 10,129 | $ 20,259 | $ 14,630 |
Foreign | 3,066 | 2,514 | 1,756 |
Deferred | (2,945) | (73) | 2,589 |
Provision for Income Taxes | $ 10,250 | $ 22,700 | $ 18,975 |
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, 2018 | May 31, 2017 | May 31, 2016 | |
Components Of Deferred Income Tax Assets And Liabilities [Line Items] | |||
Tax at U.S. statutory rate | $ 21,459 | $ 23,336 | $ 19,429 |
Section 199 domestic production deduction | (1,167) | (1,057) | (1,143) |
Foreign rate differential | (461) | (1,247) | (699) |
Subpart F income | 816 | 996 | 1,049 |
Excess tax benefits on stock-based compensation | (4,816) | ||
Release of FIN 48 reserve from closed tax years | (1,035) | ||
Provision for state income taxes, net of federal benefit | 975 | 972 | 779 |
Remeasurement of deferred taxes | (6,022) | ||
Transition tax on foreign earnings and profits | 1,223 | ||
Amended U.S. Federal tax returns FY12, FY13 & FY14 | (777) | ||
Tax credits and other | (722) | (300) | 337 |
Provision for Income Taxes | $ 10,250 | $ 22,700 | $ 18,975 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 22, 2017 | May 31, 2018 |
Income Taxes [Line Items] | ||
Decreased income tax expense | $ (4,800) | |
Federal corporate tax rate | 35.00% | 21.00% |
Deferred tax benefit | $ (6,022) | |
Current tax expense | $ 1,223 |
Significant Components of Defer
Significant Components of Deferred Income Tax Liabilities and Assets (Detail) - USD ($) $ in Thousands | May 31, 2018 | May 31, 2017 |
Deferred income tax liabilities | ||
Indefinite and long-lived assets | $ (17,503) | $ (23,177) |
Prepaid expenses | (573) | (640) |
Deferred Tax Liabilities, Gross | (18,076) | (23,817) |
Deferred income tax assets | ||
Stock Options | 1,489 | 2,604 |
Inventories and accounts receivable | 1,593 | 2,603 |
Tax loss carryforwards | 134 | 436 |
Accrued expenses and other | 757 | 1,126 |
Deferred Tax Assets, Net of Valuation Allowance, Total | 3,973 | 6,769 |
Net deferred income tax liabilities | $ (14,103) | $ (17,048) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Commitments and Contingencies Disclosure [Line Items] | |||
Environmental remediation expense, period of remediation, years | 5 years | ||
Estimated liability costs of remediation | $ 916,000 | $ 916,000 | |
Estimated liability, measurement period, years | 15 years | ||
Estimated liability costs of remediation, current | $ 100,000 | 100,000 | |
Royalty Expense | 2,876,000 | 2,659,000 | $ 1,969,000 |
Future minimum royalty payment for period, 2019 | 634,000 | ||
Future minimum royalty payment for period, 2020 | 641,000 | ||
Future minimum royalty payment for period, 2021 | 649,000 | ||
Future minimum royalty payment for period, 2022 | 572,000 | ||
Future minimum royalty payment for period, 2023 | 568,000 | ||
Office and Manufacturing facilities operating lease expense | 799,000 | 729,000 | $ 662,000 |
Future minimum rental payments for 2019 | 498,000 | ||
Future minimum rental payments for 2020 | 86,000 | ||
Future minimum rental payments for 2021 | 108,000 | ||
Future minimum rental payments for 2022 | 141,000 | ||
Future minimum rental payments for 2023 and later | 73,000 | ||
Corrective Measures Study [Member] | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Estimated liability costs of remediation, current | 45,000 | $ 45,000 | |
Minimum | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Environmental remediation expense | 38,000 | ||
Maximum | |||
Commitments and Contingencies Disclosure [Line Items] | |||
Environmental remediation expense | $ 74,000 |
Defined Contribution Benefit 47
Defined Contribution Benefit Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution 401(K) benefit expense | $ 1,325,000 | $ 1,259,000 | $ 1,188,000 |
First 3% employees deferred amount | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan employer matching contribution | 100.00% | ||
Next 2% employees deferred amount | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined contribution plan employer matching contribution | 50.00% |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | |||||||||
May 31, 2018USD ($) | Feb. 28, 2018USD ($) | Nov. 30, 2017USD ($) | Aug. 31, 2017USD ($) | May 31, 2017USD ($) | Feb. 28, 2017USD ($) | Nov. 30, 2016USD ($) | Aug. 31, 2016USD ($) | May 31, 2018USD ($)Segment | May 31, 2017USD ($) | May 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of reportable segments | Segment | 2 | ||||||||||
Net Sales | $ 109,287,000 | $ 95,892,000 | $ 101,817,000 | $ 95,256,000 | $ 98,847,000 | $ 88,385,000 | $ 90,717,000 | $ 83,645,000 | $ 402,252,000 | $ 361,594,000 | $ 321,275,000 |
Foreign Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 151,262,000 | $ 129,322,000 | $ 107,680,000 | ||||||||
Net Sales, percentage | 37.60% | 35.80% | 33.50% | ||||||||
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Long lived assets percentage | 75.00% | 76.00% | 75.00% | 76.00% |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
May 31, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2018 | May 31, 2017 | May 31, 2016 | ||
Segment Reporting Information [Line Items] | ||||||||||||
Product revenues to external customers | $ 109,287 | $ 95,892 | $ 101,817 | $ 95,256 | $ 98,847 | $ 88,385 | $ 90,717 | $ 83,645 | $ 402,252 | $ 361,594 | $ 321,275 | |
Operating income (loss) | 70,194 | 64,945 | 56,386 | |||||||||
Depreciation and amortization | 17,058 | 14,691 | 12,181 | |||||||||
Total Assets | 618,009 | 528,409 | 618,009 | 528,409 | 449,940 | |||||||
Expenditures for long-lived assets | 20,946 | 14,578 | 14,222 | |||||||||
Product Revenues | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Product revenues to external customers | 335,554 | 306,512 | 273,570 | |||||||||
Service Revenues | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Product revenues to external customers | 66,698 | 55,082 | 47,705 | |||||||||
Operating Segments | Food Safety | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Product revenues to external customers | 196,047 | 171,325 | 146,421 | |||||||||
Operating income (loss) | 34,561 | 33,971 | 28,984 | |||||||||
Depreciation and amortization | 9,083 | 7,088 | 5,609 | |||||||||
Total Assets | 186,570 | 190,895 | 186,570 | 190,895 | 143,303 | |||||||
Expenditures for long-lived assets | 10,538 | 10,332 | 9,192 | |||||||||
Operating Segments | Animal Safety | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Product revenues to external customers | 206,205 | 190,269 | 174,854 | |||||||||
Operating income (loss) | 39,529 | 34,841 | 30,978 | |||||||||
Depreciation and amortization | 7,975 | 7,603 | 6,572 | |||||||||
Total Assets | 220,629 | 210,927 | 220,629 | 210,927 | 215,374 | |||||||
Expenditures for long-lived assets | 10,408 | 4,246 | 5,030 | |||||||||
Operating Segments | Product Revenues | Food Safety | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Product revenues to external customers | 176,123 | 155,795 | 133,743 | |||||||||
Operating Segments | Product Revenues | Animal Safety | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Product revenues to external customers | 159,431 | 150,717 | 139,827 | |||||||||
Operating Segments | Service Revenues | Food Safety | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Product revenues to external customers | 19,924 | 15,530 | 12,678 | |||||||||
Operating Segments | Service Revenues | Animal Safety | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Product revenues to external customers | 46,774 | 39,552 | 35,027 | |||||||||
Corporate and Eliminations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Operating income (loss) | [1] | (3,896) | (3,867) | (3,576) | ||||||||
Total Assets | [1] | $ 210,810 | $ 126,587 | $ 210,810 | $ 126,587 | $ 91,263 | ||||||
[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 and non-controlling interests. |
Stock Repurchase - Additional I
Stock Repurchase - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2016 | Dec. 31, 2008 | |
Stock Repurchase Program [Line Items] | ||||
Shares authorized to purchase | 1,500,000 | |||
Cumulative number of shares repurchased | 149,368 | |||
Cost of repurchased shares, including commissions | $ 923 | |||
Number of shares repurchased | 0 | 0 | 0 |
Summary of Quarterly Data (Deta
Summary of Quarterly Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
May 31, 2018 | Feb. 28, 2018 | Nov. 30, 2017 | Aug. 31, 2017 | May 31, 2017 | Feb. 28, 2017 | Nov. 30, 2016 | Aug. 31, 2016 | May 31, 2018 | May 31, 2017 | May 31, 2016 | |
Quarterly Financial Information [Line Items] | |||||||||||
Total Revenue | $ 109,287 | $ 95,892 | $ 101,817 | $ 95,256 | $ 98,847 | $ 88,385 | $ 90,717 | $ 83,645 | $ 402,252 | $ 361,594 | $ 321,275 |
Gross Margin | 49,589 | 45,521 | 49,271 | 45,871 | 47,018 | 40,880 | 43,591 | 40,479 | 190,252 | 171,968 | 153,064 |
Net income | 17,545 | 16,581 | 17,153 | 11,936 | 12,491 | 10,377 | 11,171 | 9,934 | 63,215 | 43,973 | 36,538 |
Net income attributable to Neogen | $ 17,545 | $ 16,586 | $ 17,100 | $ 11,914 | $ 12,474 | $ 10,287 | $ 11,151 | $ 9,881 | $ 63,145 | $ 43,793 | $ 36,564 |
Basic net income per share | $ 0.34 | $ 0.32 | $ 0.33 | $ 0.23 | $ 0.25 | $ 0.20 | $ 0.22 | $ 0.20 | $ 1.23 | $ 0.87 | $ 0.73 |
Diluted net income per share | $ 0.33 | $ 0.32 | $ 0.33 | $ 0.23 | $ 0.24 | $ 0.20 | $ 0.22 | $ 0.20 | $ 1.21 | $ 0.86 | $ 0.72 |