Document and Entity Information
Document and Entity Information | 9 Months Ended |
Feb. 28, 2019shares | |
Document and Entity Information [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Feb. 28, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q3 |
Entity Registrant Name | NEOGEN CORP |
Trading Symbol | NEOG |
Entity Central Index Key | 0000711377 |
Current Fiscal Year End Date | --05-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 52,120,422 |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Feb. 28, 2019 | May 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 93,576 | $ 83,074 |
Marketable securities (at fair value, which approximates cost) | 153,104 | 127,736 |
Accounts receivable, less allowance of $1,700 and $1,550 | 80,011 | 79,086 |
Inventories | 84,870 | 76,005 |
Prepaid expenses and other current assets | 11,041 | 9,888 |
Total Current Assets | 422,602 | 375,789 |
Net Property and Equipment | 76,453 | 73,069 |
Other Assets | ||
Goodwill | 104,077 | 99,558 |
Other non-amortizable intangible assets | 15,658 | 14,783 |
Total Assets | 672,585 | 618,009 |
Current Liabilities | ||
Accounts payable | 18,952 | 20,750 |
Accrued compensation | 5,391 | 6,065 |
Income taxes | 0 | 165 |
Other accruals | 9,925 | 11,708 |
Total Current Liabilities | 34,268 | 38,688 |
Deferred Income Taxes | 14,211 | 14,103 |
Other Non-Current Liabilities | 4,190 | 5,043 |
Total Liabilities | 52,669 | 57,834 |
Commitments and Contingencies (Note 8) | ||
Equity | ||
Preferred stock, $1.00 par value, 100,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.16 par value, 120,000,000 shares authorized, 52,120,422 and 51,735,732 shares issued and outstanding at February 28, 2019 and May 31, 2018, respectively | 8,339 | 8,278 |
Additional paid-in capital | 217,274 | 202,572 |
Accumulated other comprehensive loss | (9,129) | (9,746) |
Retained earnings | 403,432 | 359,071 |
Total Stockholders' Equity | 619,916 | 560,175 |
Total Liabilities and Equity | 672,585 | 618,009 |
Customer-based intangibles | ||
Other Assets | ||
Amortizable intangible assets, net of accumulated amortization | 30,007 | 31,841 |
Other Intangible Assets | ||
Other Assets | ||
Amortizable intangible assets, net of accumulated amortization | $ 23,788 | $ 22,969 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands | Feb. 28, 2019 | May 31, 2018 |
Accounts receivable, allowance | $ 1,700 | $ 1,550 |
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 | 120,000,000 | 120,000,000 |
Common stock, shares issued | 52,120,422 | 51,735,732 |
Common stock, shares outstanding | 52,120,422 | 51,735,732 |
Customer-based intangibles | ||
Accumulated Amortization | $ 27,184 | $ 24,579 |
Other Intangible Assets | ||
Accumulated Amortization | $ 12,304 | $ 12,470 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |||
Revenues | ||||||
Total Revenues | $ 97,700 | $ 94,903 | $ 304,424 | $ 289,811 | ||
Cost of Revenues | ||||||
Total Cost of Revenues | 53,072 | 50,302 | 163,034 | 152,037 | ||
Gross Margin | 44,628 | 44,601 | 141,390 | 137,774 | ||
Operating Expenses | ||||||
Sales and marketing | 16,722 | 16,572 | 52,454 | 49,442 | ||
General and administrative | 10,018 | 9,280 | 30,337 | 29,096 | ||
Research and development | 3,249 | 2,836 | 9,235 | 8,901 | ||
Total Operating Expenses | 29,989 | 28,688 | 92,026 | 87,439 | ||
Operating Income | 14,639 | 15,913 | [1] | 49,364 | 50,335 | [2] |
Other Income | ||||||
Interest income | 1,335 | 524 | 3,290 | 1,322 | ||
Other income | 649 | 844 | 807 | 1,913 | ||
Total Other Income | 1,984 | 1,368 | 4,097 | 3,235 | ||
Income Before Taxes | 16,623 | 17,281 | 53,461 | 53,570 | ||
Provision for Income Taxes | 3,550 | 700 | 9,100 | 7,900 | ||
Net Income | 13,073 | 16,581 | 44,361 | 45,670 | ||
Net (Income) Loss Attributable to Non-Controlling Interest | 0 | 5 | 0 | (70) | ||
Net Income Attributable to Neogen | $ 13,073 | $ 16,586 | $ 44,361 | $ 45,600 | ||
Net Income Attributable to Neogen Per Share | ||||||
Basic | $ 0.25 | $ 0.32 | $ 0.86 | $ 0.89 | ||
Diluted | $ 0.25 | $ 0.32 | $ 0.85 | $ 0.88 | ||
Product Revenues | ||||||
Revenues | ||||||
Total Revenues | $ 77,375 | $ 77,184 | $ 249,897 | $ 241,200 | ||
Cost of Revenues | ||||||
Total Cost of Revenues | 41,902 | 40,283 | 132,157 | 124,520 | ||
Service Revenues | ||||||
Revenues | ||||||
Total Revenues | 20,325 | 17,719 | 54,527 | 48,611 | ||
Cost of Revenues | ||||||
Total Cost of Revenues | $ 11,170 | $ 10,019 | $ 30,877 | $ 27,517 | ||
[1] | Revenues for the three months ended February 28, 2018 have been revised as discussed in Note 1. For the three months ended February 28, 2018, product revenues were reduced by $332,000 in the Food Safety segment and $626,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and were reduced by $31,000 in the Animal Safety segment. | |||||
[2] | Revenues for the nine months ended February 28, 2018 have been revised as discussed in Note 1. For the nine months ended February 28, 2018, product revenues were reduced by $1,130,000 in the Food Safety segment and $1,968,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and reduced by $56,000 in the Animal Safety segment. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Net income | $ 13,073 | $ 16,581 | $ 44,361 | $ 45,670 |
Other comprehensive income, net of tax: currency translation adjustments | 3,105 | 1,163 | 617 | 1,900 |
Comprehensive income | 16,178 | 17,744 | 44,978 | 47,570 |
Comprehensive (income) loss attributable to non-controlling interest | 0 | 5 | 0 | (70) |
Comprehensive income attributable to Neogen Corporation | $ 16,178 | $ 17,749 | $ 44,978 | $ 47,500 |
Consolidated Statement of Equit
Consolidated Statement of Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings |
Beginning Balance at May. 31, 2018 | $ 560,175 | $ 8,278 | $ 202,572 | $ (9,746) | $ 359,071 |
Beginning Balance (in shares) at May. 31, 2018 | 51,735,732 | 51,736,000 | |||
Issuance of shares under share-based compensation plan | $ 8,473 | $ 40 | 8,433 | 0 | 0 |
Issuance of shares under share-based compensation plan (in shares) | 251,000 | ||||
Issuance of shares under employee stock purchase plan | 519 | $ 2 | 517 | 0 | 0 |
Issuance of shares under employee stock purchase plan (in shares) | 8,000 | ||||
Net income | 15,237 | $ 0 | 0 | 0 | 15,237 |
Other comprehensive income (loss) | (2,778) | 0 | 0 | (2,778) | 0 |
Ending Balance at Aug. 31, 2018 | 581,626 | $ 8,320 | 211,522 | (12,524) | 374,308 |
Ending Balance (in shares) at Aug. 31, 2018 | 51,995,000 | ||||
Beginning Balance at May. 31, 2018 | $ 560,175 | $ 8,278 | 202,572 | (9,746) | 359,071 |
Beginning Balance (in shares) at May. 31, 2018 | 51,735,732 | 51,736,000 | |||
Net income | $ 44,361 | ||||
Ending Balance at Feb. 28, 2019 | $ 619,916 | $ 8,339 | 217,274 | (9,129) | 403,432 |
Ending Balance (in shares) at Feb. 28, 2019 | 52,120,422 | 52,120,000 | |||
Beginning Balance at Aug. 31, 2018 | $ 581,626 | $ 8,320 | 211,522 | (12,524) | 374,308 |
Beginning Balance (in shares) at Aug. 31, 2018 | 51,995,000 | ||||
Issuance of shares under share-based compensation plan | 4,107 | $ 14 | 4,093 | 0 | 0 |
Issuance of shares under share-based compensation plan (in shares) | 87,000 | ||||
Net income | 16,051 | $ 0 | 0 | 0 | 16,051 |
Other comprehensive income (loss) | 290 | 0 | 0 | 290 | 0 |
Ending Balance at Nov. 30, 2018 | 602,074 | $ 8,334 | 215,615 | (12,234) | 390,359 |
Ending Balance (in shares) at Nov. 30, 2018 | 52,082,000 | ||||
Issuance of shares under share-based compensation plan | 4,158 | $ 12 | 4,146 | 0 | 0 |
Issuance of shares under share-based compensation plan (in shares) | 78,000 | ||||
Issuance of shares under employee stock purchase plan | 641 | $ 1 | 640 | 0 | 0 |
Issuance of shares under employee stock purchase plan (in shares) | 10,000 | ||||
Shares repurchased | (3,135) | $ (8) | (3,127) | 0 | 0 |
Shares repurchased (in shares) | (50,000) | ||||
Net income | 13,073 | $ 0 | 0 | 0 | 13,073 |
Other comprehensive income (loss) | 3,105 | 0 | 0 | 3,105 | 0 |
Ending Balance at Feb. 28, 2019 | $ 619,916 | $ 8,339 | $ 217,274 | $ (9,129) | $ 403,432 |
Ending Balance (in shares) at Feb. 28, 2019 | 52,120,422 | 52,120,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Cash Flows From Operating Activities | ||
Net Income | $ 44,361 | $ 45,670 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 13,028 | 12,682 |
Share-based compensation | 4,137 | 3,692 |
Change in operating assets and liabilities, net of business acquisitions: | ||
Accounts receivable | (898) | (4,013) |
Inventories | (8,745) | (3,859) |
Prepaid expenses and other current assets | (1,463) | (7,316) |
Accounts payable, accruals and other changes | (7,455) | (280) |
Net Cash From Operating Activities | 42,965 | 46,576 |
Cash Flows From Investing Activities | ||
Purchases of property, equipment and other non-current intangible assets | (11,877) | (16,297) |
Proceeds from the sale of marketable securities | 290,827 | 211,327 |
Purchases of marketable securities | (316,195) | (255,348) |
Business acquisitions, net of cash acquired | (6,388) | (468) |
Net Cash Used In Investing Activities | (43,633) | (60,786) |
Cash Flows From Financing Activities | ||
Exercise of stock options and issuance of employee stock purchase plan shares | 13,752 | 18,916 |
Repurchase of common stock | (3,135) | 0 |
Net Cash From Financing Activities | 10,617 | 18,916 |
Effect of Exchange Rate on Cash | 553 | (207) |
Net Increase In Cash and Cash Equivalents | 10,502 | 4,499 |
Cash and Cash Equivalents, Beginning of Period | 83,074 | 77,567 |
Cash and Cash Equivalents, End of Period | $ 93,576 | $ 82,066 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Feb. 28, 2019 | |
Accounting Policies | 1. ACCOUNTING POLICIES BASIS OF PRESENTATION AND CONSOLIDATION The accompanying unaudited consolidated financial statements include the accounts of Neogen Corporation (“Neogen” or the “Company”) and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included in the accompanying unaudited consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. February 28, 2019 are not necessarily indicative of the results to be expected for the fiscal year ending May 31, 2019. For more complete financial information, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018. Share and per share amounts reflect the December 29, 2017 4-for-3 stock split as if it took place at the beginning of the period presented. Recently Adopted Accounting Standards Revenue Recognition On June 1, 2018, we adopted ASU No. 2014-09—Revenue from Contracts with Customers (Topic 606). Refer to the Revenue Recognition section of Note 1 for further information. Classification of Cash Receipts and Payments In August 2016, the FASB issued ASU No. 2016-15—Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (FASB ASC) 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on June 1, 2018; the impact on our consolidated financial statements was immaterial. Recent Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued ASU No. 2016-02—Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessor have not significantly changed from previous U.S. GAAP. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. Modified retrospective application is required with certain practical expedients. We will adopt this ASU on June 1, 2019 and are currently in the process of evaluating our lessee and lessor arrangements to determine the impact of this pronouncement on our consolidated financial condition and results of operations. This evaluation includes a review of revenue through leasing arrangements as well as lease expenses, . Financial Instruments- Credit Losses In June 2016, the FASB issued ASU No. 2016-13—Measurement of Credit Losses on Financial Instruments, which changes how companies measure credit losses on most financial instruments measured at amortized cost and certain other instruments, such as loans, receivables and held-to-maturity debt securities. Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s contractual life. ASU 2016-13 is effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. We do not believe adoption of this guidance will have an impact on our consolidated financial statements. 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. 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. The carrying value of these assets approximates fair value due to the short maturity of these instruments and meets the Level 1 criteria. Marketable Securities The Company has marketable securities held by banks or broker-dealers at February 28, 2019, consisting of short-term domestic certificates of deposit and commercial paper rated at least between 91 days and two years. These securities are classified as available for sale. The primary objective of our short-term investment activity is to preserve capital for the purpose of funding operations, capital expenditures and business acquisitions; short-term investments are not entered into for trading or speculative purposes. These securities are recorded at fair value (that approximates cost) based on recent trades of similar securities or pricing models and therefore meet the Level 2 criteria. Interest income on these investments is recorded within Other Income on the consolidated statements of income. ESTIMATES AND ASSUMPTIONS The preparation of these financial statements requires that management make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates the estimates, including, but not limited to, variable consideration related to revenue recognition, allowances for doubtful accounts, the market value of, and demand for, inventories, stock-based compensation, provision for income taxes and related balance sheet accounts, accruals, goodwill and other intangible assets. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018, except for the new revenue recognition standard the Company adopted effective June 1, 2018. See the below sections Revenue Recognition and Recently Adopted Accounting Standards for further information on revenue recognition. There were no significant changes to the contractual obligations or contingent liabilities and commitments disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018. Accounts Receivable Allowance 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 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. Inventory The reserve for obsolete and slow-moving inventory is reviewed at least quarterly based on an analysis of the inventory, considering the current condition of the asset as well as other known facts and future plans. The reserve required to record inventory at lower of cost or net realizable value is adjusted as conditions change. Product obsolescence may be caused by shelf-life expiration, discontinuance of a product line, replacement products in the marketplace or other competitive situations. Goodwill and Other Intangible Assets Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses after amounts are allocated to other identifiable intangible assets. Other intangible assets include customer relationships, trademarks, licenses, trade names, covenants not-to-compete and patents. Customer-based intangibles are amortized on either an accelerated or straight-line basis, reflecting the pattern in which the economic benefits are consumed, while all other amortizable intangibles are amortized on a straight-line basis; intangibles are generally amortized over 5 to 25 years. We review the carrying amounts of goodwill and other non-amortizable intangible assets annually, or when indications of impairment exist, to determine if such assets may be impaired by performing a quantitative assessment. If the carrying amounts of these assets are deemed to be less than fair value based upon a discounted cash flow analysis and comparison to comparable EBITDA multiples of peer companies, such assets are reduced to their estimated fair value and a charge is recorded to operations. Long Lived Assets Management reviews the carrying values of its long-lived assets to be held and used, including definite-lived intangible assets, for possible impairment whenever events or changes in business conditions warrant such a review. The carrying value of a long-lived asset is considered impaired when the anticipated separately identifiable undiscounted cash flows over the remaining useful life of the asset indicate that the carrying amount of the asset may not be recoverable. In such an event, fair value is determined using discounted cash flows and, if lower than the carrying value, impairment is recognized through a charge to operations. Equity Compensation Plans Share options awarded to employees and shares of stock awarded to employees under certain stock purchase plans are recognized as compensation expense based on their fair value at grant date. The fair market value of options granted under the Company stock option plans was estimated on the date of grant using the Black-Scholes option-pricing model with assumptions for inputs such as interest rates, expected dividends, volatility measures and specific employee exercise behavior patterns based on statistical data. Some of the inputs used are not market-observable and have to be estimated or derived from available data. Use of different estimates would produce different option values, which in turn would result in higher or lower compensation expense recognized. To value options, several recognized valuation models exist. None of these models can be singled out as being the best or most correct one. The model applied by us can handle most of the specific features included in the options granted, which is the reason for its use. If a different model were used, the option values could differ despite using the same inputs. Accordingly, using different assumptions coupled with using a different valuation model could have a significant impact on the fair value of employee stock options. Fair value could be either higher or lower than the number provided by the model applied and the inputs used. Further information on our equity compensation plans, including inputs used to determine the fair value of options, is disclosed in Note 5 to the unaudited consolidated financial statements. 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 period. 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 reduction 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 transition tax on the mandatory deemed repatriation of foreign earnings. The Tax Act also includes a provision to tax global intangible low taxed income (“GILTI”) of foreign subsidiaries, which became effective for us beginning June 1, 2018. In the fourth quarter of fiscal 2018, we recorded an estimated net charge of $4.8 million related to the Tax Act, due to the impact of the reduction in the tax rate on deferred tax assets and liabilities of $6.0 million, partially offset by $1.2 Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09—Revenue from Contracts with Customers (Topic 606). The new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. In April 2016, the FASB issued Accounting Standards Update No. 2016-10—Revenue from Contracts with Customers (Topic 606), which amends and adds clarity to certain aspects of the guidance set forth in ASU 2014-09 related to identifying performance obligations and licensing. The guidance became effective for the Company on June 1, 2018. We adopted this standard using the full retrospective approach. This approach was chosen to provide appropriate comparisons against our prior year financial statements; accordingly, historical information for the year ended May 31, 2018, including interim periods therein, has been adjusted to conform to the new standard. Prior to the adoption, we identified all revenue streams at each significant subsidiary and reviewed contracts to evaluate the impact of adopting the new standard on our revenue recognition policies, procedures and control framework and ultimately on our consolidated financial statements and related disclosures. In our review of contracts in each revenue stream, we noted no material impact in the implementation of the standard. We determined the impact of adopting the standard on our control framework and noted minimal, insignificant changes to our system and other controls processes. Under Topic 606, the Company determines the amount of revenue to be recognized through application of the following steps: • Identification of the contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies the performance obligations. Essentially all of our revenue is generated through contracts with our customers. A performance obligation is a promise in a contract to transfer a product or service to a customer. We generally recognize revenue at a point in time when all of our performance obligations under the terms of a contract are satisfied. With the adoption of Topic 606, revenue is recognized upon transfer of control of promised products and services in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met. In certain situations, we provide rebates, marketing support, credits or incentives to select customers, which are accounted for as variable consideration when estimating the amount of revenue to recognize on a contract. Variable consideration reduces the amount of revenue that is recognized. These variable consideration estimates are updated at the end of each reporting period based on information currently available. The performance obligations in our contracts are generally satisfied well within one year of contract inception. In such cases, we have elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component. We have elected to utilize the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred because the amortization period for the prepaid costs that would otherwise have been deferred and amortized is one year or less. The Company accounts for shipping and handling for products as a fulfillment activity when goods are shipped. Revenue is recognized net of any tax collected from customers; the taxes are subsequently remitted to governmental authorities. The Company’s terms and conditions of sale generally do not provide for returns of product or reperformance of service except in the case of quality or warranty issues. These situations are infrequent; due to immateriality of the amount, warranty claims are recorded in the period incurred. We derive revenue from two primary sources — product revenue and service revenue. Product revenue consists primarily of shipments of: • Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; • Consumable products marketed to veterinarians retailers, livestock producers and animal health product distributors; and • Rodenticides, disinfectants and insecticides to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities. Revenues for our products are recognized and invoiced when the product is shipped to the customer. Service revenue consists primarily of: • Genomic identification and related interpretive bioinformatic services; and • Other commercial laboratory services. Revenues for our genomics and commercial laboratory services are recognized and invoiced when the applicable laboratory service is performed and the results are conveyed to the customer. Payment terms for products and services are generally 30 to 60 days. The following table presents disaggregated revenue by major product and service categories for the three and nine months ended February 28, 2019 and 2018: Three Months Ended Nine Months Ended February 28, February 28, 2019 2018 2019 2018 (in thousands) (in thousands) Food Safety Natural Toxins, Allergens & Drug Residues $ 18,612 $ 16,807 $ 58,021 $ 54,960 Bacterial & General Sanitation 9,519 8,992 30,807 27,435 Culture Media & Other 11,893 10,179 36,302 31,353 Rodenticides, Insecticides & Disinfectants 5,953 7,359 18,521 18,175 Genomics Services 5,136 3,976 13,395 10,887 $ 51,113 $ 47,313 $ 157,046 $ 142,810 Animal Safety Life Sciences $ 1,823 $ 2,769 $ 5,794 $ 7,589 Veterinary Instruments & Disposables 10,682 10,630 32,769 32,804 Animal Care & Other 6,823 7,245 22,439 22,894 Rodenticides, Insecticides & Disinfectants 13,256 14,255 48,921 49,422 Genomics Services 14,003 12,691 37,455 34,292 $ 46,587 $ 47,590 $ 147,378 $ 147,001 Total Revenues $ 97,700 $ 94,903 $ 304,424 $ 289,811 Restatement of Previously Issued Financial Statements The Company has historically classified certain variable consideration components resulting from volume rebates, distributor support, and other marketing discounts as cost of revenues or sales and marketing expense in our consolidated financial statements of income. These amounts should have been classified as contra revenue in product or service revenues. The Company had determined in prior periods that the misstatements were clearly immaterial, individually and in the aggregate, to each of the reporting periods affected. The Company began properly classifying these items as contra revenues beginning in the three month period ended August 31, 2018, the first quarter of the Company’s current fiscal year, and has revised the prior year’s quarter and year to date periods to conform to the current period presentation. These immaterial adjustments had no impact on our operating income, income before taxes, net income or reported earnings per share, and no change to . The effects of the revisions on the line items within our unaudited consolidated statements of income for the three and nine months ended February 28, 2018 are as follows: Three Months Ended Nine Months Ended February 28, 2018 February 28, 2018 As As Previously Previously Reported Adjustments As Revised Reported Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 78,142 $ (958 ) $ 77,184 $ 244,298 $ (3,098 ) $ 241,200 Service revenues 17,750 (31 ) 17,719 48,667 (56 ) 48,611 Total revenues 95,892 (989 ) 94,903 292,965 (3,154 ) 289,811 Cost of revenues Cost of product revenues 40,352 (69 ) 40,283 124,785 (265 ) 124,520 Cost of service revenues 10,019 — 10,019 27,517 — 27,517 Total cost of revenues 50,371 (69 ) 50,302 152,302 (265 ) 152,037 Gross margin 45,521 (920 ) 44,601 140,663 (2,889 ) 137,774 Operating expenses Sales and marketing 17,492 (920 ) 16,572 52,331 (2,889 ) 49,442 Total operating expenses 29,608 (920 ) 28,688 90,328 (2,889 ) 87,439 Operating income 15,913 — 15,913 50,335 — 50,335 Presented below are the effects of the revisions on the line items within our previously issued consolidated statements of income for the years ended May 31, 2018 and 2017. Revised consolidated statements of income related to these periods are presented in this Form 10-Q and the Form 10-K to be filed in the succeeding period of this fiscal year. Year Ended Year Ended May 31, 2018 May 31, 2017 As As Previously Previously Reported Adjustments As Revised Reported Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 335,554 $ (4,266 ) $ 331,288 $ 306,512 $ (3,390 ) $ 303,122 Service revenues 66,698 (56 ) 66,642 55,082 73 55,155 Total revenues 402,252 (4,322 ) 397,930 361,594 (3,317 ) 358,277 Cost of revenues Cost of product revenues 174,067 (342 ) 173,725 156,568 (273 ) 156,295 Cost of service revenues 37,933 — 37,933 33,058 — 33,058 Total cost of revenues 212,000 (342 ) 211,658 189,626 (273 ) 189,353 Gross margin 190,252 (3,980 ) 186,272 171,968 (3,044 ) 168,924 Operating expenses Sales and marketing 70,909 (3,980 ) 66,929 62,424 (3,044 ) 59,380 Total operating expenses 120,058 (3,980 ) 116,078 107,023 (3,044 ) 103,979 Operating income 70,194 — 70,194 64,945 — 64,945 The revisions had no impact on our audited consolidated balance sheets as of May 31, 2018 and 2017 and no impact on our unaudited consolidated statements of equity or unaudited consolidated statements of cash flows for the three and nine ended February 28, 2018. |
Inventories
Inventories | 9 Months Ended |
Feb. 28, 2019 | |
Inventories | 2. INVENTORIES Inventories are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value. The components of inventories follow: February 28, May 31, 2019 2018 (in thousands) Raw materials $ 38,944 $ 36,702 Work-in-process 6,758 5,993 Finished and purchased goods 39,168 33,310 $ 84,870 $ 76,005 |
Net Income per Share
Net Income per Share | 9 Months Ended |
Feb. 28, 2019 | |
Net Income per Share | 3. NET INCOME PER SHARE The calculation of net income per share attributable to Neogen Corporation follows: Three Months Ended Nine Months Ended February 28, February 28, 2019 2018 2019 2018 (in thousands, except per share amounts) Numerator for basic and diluted net income per share: Net income attributable to Neogen $ 13,073 $ 16,586 $ 44,361 $ 45,600 Denominator for basic net income per share: Weighted average shares 52,071 51,537 51,849 51,253 Effect of dilutive stock options 401 700 599 761 Denominator for diluted net income per share 52,472 52,237 52,448 52,014 Net income attributable to Neogen per share: Basic $ 0.25 $ 0.32 $ 0.86 $ 0.89 Diluted $ 0.25 $ 0.32 $ 0.85 $ 0.88 |
Segment Information and Geograp
Segment Information and Geographic Data | 9 Months Ended |
Feb. 28, 2019 | |
Segment Information and Geographic Data | 4. SEGMENT INFORMATION AND GEOGRAPHIC DATA We have two reportable segments: Food Safety and Animal Safety. The Food Safety segment is primarily engaged in the development, production and marketing of diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation. 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 retailer, livestock producers 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 the control of rodents, insects and disease in and around agricultural, food production and other facilities. Our international operations in the United Kingdom, Mexico, Brazil, China and India originally focused on selling the Company’s 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 follows: Corporate and Food Animal Eliminations Safety Safety (1) Total (in thousands) As of and for the three months ended February 28, 2019 Product revenues to external customers $ 44,790 $ 32,585 $ — $ 77,375 Service revenues to external customers 6,323 14,002 — 20,325 Total revenues to external customers 51,113 46,587 — 97,700 Operating income (loss) 8,339 7,338 (1,038 ) 14,639 Total assets 204,570 221,335 246,680 672,585 As of and for the three months ended February 28, 2018 - Revised (2) Product revenues to external customers $ 42,286 $ 34,898 $ — $ 77,184 Service revenues to external customers 5,027 12,692 — 17,719 Total revenues to external customers 47,313 47,590 — 94,903 Operating income (loss) 8,258 8,493 (838 ) 15,913 Total assets 188,075 215,371 192,155 595,601 (1) Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, current and deferred tax accounts and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. (2) Revenues for the three months ended February 28, 2018 have been revised as discussed in Note 1. For the three months ended February 28, 2018, product revenues were reduced by $332,000 in the Food Safety segment and $626,000 in the Animal Safety segment; service revenues were unchanged in the segment. Corporate and Food Animal Eliminations Safety Safety (1) Total (in thousands) For the nine months ended February 28, 2019 Product revenues to external customers $ 139,979 $ 109,918 $ — $ 249,897 Service revenues to external customers 17,067 37,460 — 54,527 Total revenues to external customers 157,046 147,378 — 304,424 Operating income (loss) 29,554 23,101 (3,291 ) 49,364 For the nine months ended February 28, 2018 - Revised (2) Product revenues to external customers $ 128,491 $ 112,709 $ — $ 241,200 Service revenues to external customers 14,319 34,292 — 48,611 Total revenues to external customers 142,810 147,001 — 289,811 Operating income (loss) 25,704 27,691 (3,060 ) 50,335 (1) Includes the elimination of intersegment transactions. (2) Revenues for the nine months ended February 28, 2018 have been revised as discussed in Note 1. For the nine months ended February 28, 2018, product revenues were reduced by $1,130,000 in the Food Safety segment and $1,968,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and reduced by $56,000 in the Animal Safety segment. The following table presents the Company’s revenue disaggregated by geographic location: Three Months ended Nine Months Ended February 28, February 28, 2019 2018 2019 2018 (in thousands) (in thousands) Revenues by Geographic Location Domestic $ 57,422 $ 57,825 $ 182,298 $ 180,414 International 40,278 37,078 122,126 109,397 Total revenue 97,700 94,903 304,424 289,811 |
Equity Compensation Plans
Equity Compensation Plans | 9 Months Ended |
Feb. 28, 2019 | |
Equity Compensation Plans | 5. EQUITY COMPENSATION PLANS Qualified and non-qualified options to purchase shares of common stock may be granted to directors, officers and employees of the Company under the terms of our stock option plans. These options are granted at an exercise price of not less than the fair market value of the stock on the date of grant. Options vest ratably over three and five year periods and the contractual terms are generally five or ten years. A summary of stock option activity during the nine months ended February 28, 2019 follows: Weighted- Average Shares Exercise Price Options outstanding June 1, 2018 2,497,124 $ 42.63 Granted 526,750 62.92 Exercised (418,598 ) 30.76 Forfeited (105,835 ) 46.50 Options outstanding February 28, 2019 2,499,441 48.78 During the three and nine month periods ended February 28, 2019 and 2018, the Company recorded $1,306,000 and $1,026,000 and $4,137,000 and $3,692,000, respectively, of compensation expense related to its share-based awards. The weighted-average fair value per share of stock options granted during fiscal years 2019 and fiscal 2018, estimated on the date of grant using the Black-Scholes option pricing model, was $14.91 and $14.44, respectively. The fair value of stock options granted was estimated using the following weighted-average assumptions. FY 2019 FY 2018 Risk-free interest rate 2.6 % 1.6 % Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 27.0 % 27.2 % Expected option life 3.5 4.0 The Company has an employee stock purchase plan that provides for employee stock purchases at a 5% discount to market price. The discount is recorded in administrative expense as of the date of purchase. |
Business and Product Line Acqui
Business and Product Line Acquisitions | 9 Months Ended |
Feb. 28, 2019 | |
Business and Product Line Acquisitions | 6. BUSINESS AND PRODUCT LINE ACQUISITIONS 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 discussed below relates primarily to enhancing the Company’s strategic platform for the expansion of available product offerings. On September 1, 2017, the Company acquired the assets of The University of Queensland Animal Genetics Laboratory, an animal genomics laboratory located near Brisbane, Australia. This acquisition is intended to accelerate the growth of the Company’s animal genomics business in Australia and New Zealand. Consideration for the purchase was $2,063,000; $468,000 was paid in cash on the acquisition date 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 liabilities of $1,629,000, intangible assets of $902,000 (with an estimated life of 5-15 years) and the remainder to goodwill (non-deductible for tax purposes). These values are Level 3 fair value measurements. The new business, renamed Neogen Australasia, continues to operate in its current location, reporting within the Animal Safety segment. On August 1, 2018, the Company acquired the stock of Clarus Labs, Inc., a manufacturer of water testing products. Neogen has distributed Clarus’ Colitag water test to the food and beverage industries since 2004 and this acquisition gives the Company access to sell this product to new markets. Consideration for the purchase was $4,204,000 in cash and approximately $1.3 $32,000, machinery and equipment of $120,000, accounts payable of $53,000, contingent consideration accrual of $1,256,000, non-current deferred tax liability of $426,000, non-amortizable intangible assets of $878,000, intangible assets of $1,487,000 (with an estimated life of 5-15 years) and the remainder to goodwill (non-deductible for tax purposes). These values are Level 3 fair value . On September 4, 2018, the Company acquired the assets of Livestock Genetic Services, LLC, a Virginia-based company that specializes in genetic evaluations and data management for cattle breeding organizations. Livestock Genetic Services has been a long-time strategic partner of Neogen and the acquisition will enhance the Company’s in-house genetic evaluation capabilities. Consideration for the purchase was $1,100,000 in cash, with $700,000 paid at closing and $400,000 payable to the former owner on September 1, 2019 On January 1, 2019, the Company acquired the assets of Edmonton, Alberta-based Delta Genomics Centre, an animal genomics laboratory in Canada. Delta’s laboratory operations were renamed Neogen Canada and the acquisition is intended to accelerate growth of the Company’s animal genomics business in Canada. Consideration for the purchase was $1,485,000 in cash. The preliminary purchase price allocation, based upon the fair value of these assets and liabilities determined using the income approach, included inventory of $38,000, machinery and equipment of $371,000, unearned revenue liability of $125,000, intangible assets of $186,000 (with an estimated life of 5 to 10 years) and the remainder to goodwill (deductible for tax purposes). These values are Level 3 fair value measurements. Services provided by this operation continue to be performed in its current location, reporting within the Animal Safety segment. |
Long Term Debt
Long Term Debt | 9 Months Ended |
Feb. 28, 2019 | |
Long Term Debt | 7. LONG TERM DEBT We have a financing agreement with a bank providing for a $15,000,000 unsecured revolving line of credit, which was amended on November 30, 2018 to extend the maturity from September 30, 2019 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Feb. 28, 2019 | |
Commitments and Contingencies | 8. COMMITMENTS AND CONTINGENCIES The Company is involved in environmental remediation and monitoring activities at its Randolph, Wisconsin manufacturing facility and accrues for related costs when such costs are determined to be probable and estimable. The Company expenses annual costs of remediation, which have ranged from $38,000 to $74,000 per year over the past five years. The Company’s estimated liability for these costs was $916,000 at February 28, 2019 and May 31, 2018, measured on an undiscounted basis over an estimated period of 15 years; $100,000 of the liability is recorded within current liabilities, and the remainder is recorded within other non-current liabilities on the consolidated balance sheets. During the second quarter of fiscal 2019, the Company’s environmental consultant performed an updated Corrective Measures Study on the Randolph site, per a request from the Wisconsin Department of Natural Resources. Based on the results of the study, the Company plans to continue the current remediation and monitoring program, with no changes proposed. The Company is 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 its future results of operations or financial position. |
Stock Purchase
Stock Purchase | 9 Months Ended |
Feb. 28, 2019 | |
Stock Purchase | 9. STOCK PURCHASE In October 2018, the Company’s Board of Directors passed a resolution canceling the Company’s prior stock buyback program, which had been approved in December 2008, and authorized a new program to purchase, subject to market conditions, up to 3,000,000 shares of the Company’s common stock. As of February 28, 2019, there had been no purchases of common stock in the current fiscal year under either program. In December 2018, the Company purchased 50,000 shares under the new program in negotiated and open market transactions for a total price, including commissions, of $3,134,727. Shares purchased under the program have been retired. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Feb. 28, 2019 | |
Basis of Presentation and Consolidation | BASIS OF PRESENTATION AND CONSOLIDATION The accompanying unaudited consolidated financial statements include the accounts of Neogen Corporation (“Neogen” or the “Company”) and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included in the accompanying unaudited consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. February 28, 2019 are not necessarily indicative of the results to be expected for the fiscal year ending May 31, 2019. For more complete financial information, these consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018. Share and per share amounts reflect the December 29, 2017 4-for-3 stock split as if it took place at the beginning of the period presented. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards Revenue Recognition On June 1, 2018, we adopted ASU No. 2014-09—Revenue from Contracts with Customers (Topic 606). Refer to the Revenue Recognition section of Note 1 for further information. Classification of Cash Receipts and Payments In August 2016, the FASB issued ASU No. 2016-15—Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (FASB ASC) 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. We adopted this ASU on June 1, 2018; the impact on our consolidated financial statements was immaterial. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued ASU No. 2016-02—Leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessor have not significantly changed from previous U.S. GAAP. This ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018. Modified retrospective application is required with certain practical expedients. We will adopt this ASU on June 1, 2019 and are currently in the process of evaluating our lessee and lessor arrangements to determine the impact of this pronouncement on our consolidated financial condition and results of operations. This evaluation includes a review of revenue through leasing arrangements as well as lease expenses, . Financial Instruments- Credit Losses In June 2016, the FASB issued ASU No. 2016-13—Measurement of Credit Losses on Financial Instruments, which changes how companies measure credit losses on most financial instruments measured at amortized cost and certain other instruments, such as loans, receivables and held-to-maturity debt securities. Rather than generally recognizing credit losses when it is probable that the loss has been incurred, the revised guidance requires companies to recognize an allowance for credit losses for the difference between the amortized cost basis of a financial instrument and the amount of amortized cost that the company expects to collect over the instrument’s contractual life. ASU 2016-13 is effective for fiscal periods beginning after December 15, 2019 and must be adopted as a cumulative effect adjustment to retained earnings. Early adoption is permitted. We do not believe adoption of this guidance will have an impact on our consolidated financial statements. |
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. |
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 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. The carrying value of these assets approximates fair value due to the short maturity of these instruments and meets the Level 1 criteria. |
Marketable Securities | Marketable Securities The Company has marketable securities held by banks or broker-dealers at February 28, 2019, consisting of short-term domestic certificates of deposit and commercial paper rated at least between 91 days and two years. These securities are classified as available for sale. The primary objective of our short-term investment activity is to preserve capital for the purpose of funding operations, capital expenditures and business acquisitions; short-term investments are not entered into for trading or speculative purposes. These securities are recorded at fair value (that approximates cost) based on recent trades of similar securities or pricing models and therefore meet the Level 2 criteria. Interest income on these investments is recorded within Other Income on the consolidated statements of income. |
Estimates and Assumptions | ESTIMATES AND ASSUMPTIONS The preparation of these financial statements requires that management make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates the estimates, including, but not limited to, variable consideration related to revenue recognition, allowances for doubtful accounts, the market value of, and demand for, inventories, stock-based compensation, provision for income taxes and related balance sheet accounts, accruals, goodwill and other intangible assets. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018, except for the new revenue recognition standard the Company adopted effective June 1, 2018. See the below sections Revenue Recognition and Recently Adopted Accounting Standards for further information on revenue recognition. There were no significant changes to the contractual obligations or contingent liabilities and commitments disclosed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2018. |
Accounts Receivable Allowance | Accounts Receivable Allowance 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 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. |
Inventory | Inventory The reserve for obsolete and slow-moving inventory is reviewed at least quarterly based on an analysis of the inventory, considering the current condition of the asset as well as other known facts and future plans. The reserve required to record inventory at lower of cost or net realizable value is adjusted as conditions change. Product obsolescence may be caused by shelf-life expiration, discontinuance of a product line, replacement products in the marketplace or other competitive situations. |
Goodwill and Other Intangible Assets | Goodwill 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 and patents. Customer-based intangibles are amortized on either an accelerated or straight-line basis, reflecting the pattern in which the economic benefits are consumed, while all other amortizable intangibles are amortized on a straight-line basis; intangibles are generally amortized over 5 to 25 years. We review the carrying amounts of goodwill and other non-amortizable intangible assets annually, or when indications of impairment exist, to determine if such assets may be impaired by performing a quantitative assessment. If the carrying amounts of these assets are deemed to be less than fair value based upon a discounted cash flow analysis and comparison to comparable EBITDA multiples of peer companies, such assets are reduced to their estimated fair value and a charge is recorded to operations. |
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 indicate that the carrying amount of the asset may not be recoverable. In such an event, fair value is determined using discounted cash flows and, if lower than the carrying value, impairment is recognized through a charge to operations. |
Equity Compensation Plans | Equity Compensation Plans Share options awarded to employees and shares of stock awarded to employees under certain stock purchase plans are recognized as compensation expense based on their fair value at grant date. The fair market value of options granted under the Company stock option plans was estimated on the date of grant using the Black-Scholes option-pricing model with assumptions for inputs such as interest rates, expected dividends, volatility measures and specific employee exercise behavior patterns based on statistical data. Some of the inputs used are not market-observable and have to be estimated or derived from available data. Use of different estimates would produce different option values, which in turn would result in higher or lower compensation expense recognized. To value options, several recognized valuation models exist. None of these models can be singled out as being the best or most correct one. The model applied by us can handle most of the specific features included in the options granted, which is the reason for its use. If a different model were used, the option values could differ despite using the same inputs. Accordingly, using different assumptions coupled with using a different valuation model could have a significant impact on the fair value of employee stock options. Fair value could be either higher or lower than the number provided by the model applied and the inputs used. Further information on our equity compensation plans, including inputs used to determine the fair value of options, is disclosed in Note 5 to the unaudited consolidated financial statements. |
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 period. 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 reduction 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 transition tax on the mandatory deemed repatriation of foreign earnings. The Tax Act also includes a provision to tax global intangible low taxed income (“GILTI”) of foreign subsidiaries, which became effective for us beginning June 1, 2018. In the fourth quarter of fiscal 2018, we recorded an estimated net charge of $4.8 million related to the Tax Act, due to the impact of the reduction in the tax rate on deferred tax assets and liabilities of $6.0 million, partially offset by $1.2 |
Revenue Recognition | Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09—Revenue from Contracts with Customers (Topic 606). The new standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is designed to create greater comparability for financial statement users across industries and jurisdictions and also requires enhanced disclosures. In April 2016, the FASB issued Accounting Standards Update No. 2016-10—Revenue from Contracts with Customers (Topic 606), which amends and adds clarity to certain aspects of the guidance set forth in ASU 2014-09 related to identifying performance obligations and licensing. The guidance became effective for the Company on June 1, 2018. We adopted this standard using the full retrospective approach. This approach was chosen to provide appropriate comparisons against our prior year financial statements; accordingly, historical information for the year ended May 31, 2018, including interim periods therein, has been adjusted to conform to the new standard. Prior to the adoption, we identified all revenue streams at each significant subsidiary and reviewed contracts to evaluate the impact of adopting the new standard on our revenue recognition policies, procedures and control framework and ultimately on our consolidated financial statements and related disclosures. In our review of contracts in each revenue stream, we noted no material impact in the implementation of the standard. We determined the impact of adopting the standard on our control framework and noted minimal, insignificant changes to our system and other controls processes. Under Topic 606, the Company determines the amount of revenue to be recognized through application of the following steps: • Identification of the contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies the performance obligations. Essentially all of our revenue is generated through contracts with our customers. A performance obligation is a promise in a contract to transfer a product or service to a customer. We generally recognize revenue at a point in time when all of our performance obligations under the terms of a contract are satisfied. With the adoption of Topic 606, revenue is recognized upon transfer of control of promised products and services in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met. In certain situations, we provide rebates, marketing support, credits or incentives to select customers, which are accounted for as variable consideration when estimating the amount of revenue to recognize on a contract. Variable consideration reduces the amount of revenue that is recognized. These variable consideration estimates are updated at the end of each reporting period based on information currently available. The performance obligations in our contracts are generally satisfied well within one year of contract inception. In such cases, we have elected the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component. We have elected to utilize the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred because the amortization period for the prepaid costs that would otherwise have been deferred and amortized is one year or less. The Company accounts for shipping and handling for products as a fulfillment activity when goods are shipped. Revenue is recognized net of any tax collected from customers; the taxes are subsequently remitted to governmental authorities. The Company’s terms and conditions of sale generally do not provide for returns of product or reperformance of service except in the case of quality or warranty issues. These situations are infrequent; due to immateriality of the amount, warranty claims are recorded in the period incurred. We derive revenue from two primary sources — product revenue and service revenue. Product revenue consists primarily of shipments of: • Diagnostic test kits, culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; • Consumable products marketed to veterinarians retailers, livestock producers and animal health product distributors; and • Rodenticides, disinfectants and insecticides to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities. Revenues for our products are recognized and invoiced when the product is shipped to the customer. Service revenue consists primarily of: • Genomic identification and related interpretive bioinformatic services; and • Other commercial laboratory services. Revenues for our genomics and commercial laboratory services are recognized and invoiced when the applicable laboratory service is performed and the results are conveyed to the customer. Payment terms for products and services are generally 30 to 60 days. The following table presents disaggregated revenue by major product and service categories for the three and nine months ended February 28, 2019 and 2018: Three Months Ended Nine Months Ended February 28, February 28, 2019 2018 2019 2018 (in thousands) (in thousands) Food Safety Natural Toxins, Allergens & Drug Residues $ 18,612 $ 16,807 $ 58,021 $ 54,960 Bacterial & General Sanitation 9,519 8,992 30,807 27,435 Culture Media & Other 11,893 10,179 36,302 31,353 Rodenticides, Insecticides & Disinfectants 5,953 7,359 18,521 18,175 Genomics Services 5,136 3,976 13,395 10,887 $ 51,113 $ 47,313 $ 157,046 $ 142,810 Animal Safety Life Sciences $ 1,823 $ 2,769 $ 5,794 $ 7,589 Veterinary Instruments & Disposables 10,682 10,630 32,769 32,804 Animal Care & Other 6,823 7,245 22,439 22,894 Rodenticides, Insecticides & Disinfectants 13,256 14,255 48,921 49,422 Genomics Services 14,003 12,691 37,455 34,292 $ 46,587 $ 47,590 $ 147,378 $ 147,001 Total Revenues $ 97,700 $ 94,903 $ 304,424 $ 289,811 |
Restatement of Previously Issued Financial Statements | Restatement of Previously Issued Financial Statements The Company has historically classified certain variable consideration components resulting from volume rebates, distributor support, and other marketing discounts as cost of revenues or sales and marketing expense in our consolidated financial statements of income. These amounts should have been classified as contra revenue in product or service revenues. The Company had determined in prior periods that the misstatements were clearly immaterial, individually and in the aggregate, to each of the reporting periods affected. The Company began properly classifying these items as contra revenues beginning in the three month period ended August 31, 2018, the first quarter of the Company’s current fiscal year, and has revised the prior year’s quarter and year to date periods to conform to the current period presentation. These immaterial adjustments had no impact on our operating income, income before taxes, net income or reported earnings per share, and no change to . The effects of the revisions on the line items within our unaudited consolidated statements of income for the three and nine months ended February 28, 2018 are as follows: Three Months Ended Nine Months Ended February 28, 2018 February 28, 2018 As As Previously Previously Reported Adjustments As Revised Reported Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 78,142 $ (958 ) $ 77,184 $ 244,298 $ (3,098 ) $ 241,200 Service revenues 17,750 (31 ) 17,719 48,667 (56 ) 48,611 Total revenues 95,892 (989 ) 94,903 292,965 (3,154 ) 289,811 Cost of revenues Cost of product revenues 40,352 (69 ) 40,283 124,785 (265 ) 124,520 Cost of service revenues 10,019 — 10,019 27,517 — 27,517 Total cost of revenues 50,371 (69 ) 50,302 152,302 (265 ) 152,037 Gross margin 45,521 (920 ) 44,601 140,663 (2,889 ) 137,774 Operating expenses Sales and marketing 17,492 (920 ) 16,572 52,331 (2,889 ) 49,442 Total operating expenses 29,608 (920 ) 28,688 90,328 (2,889 ) 87,439 Operating income 15,913 — 15,913 50,335 — 50,335 Presented below are the effects of the revisions on the line items within our previously issued consolidated statements of income for the years ended May 31, 2018 and 2017. Revised consolidated statements of income related to these periods are presented in this Form 10-Q and the Form 10-K to be filed in the succeeding period of this fiscal year. Year Ended Year Ended May 31, 2018 May 31, 2017 As As Previously Previously Reported Adjustments As Revised Reported Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 335,554 $ (4,266 ) $ 331,288 $ 306,512 $ (3,390 ) $ 303,122 Service revenues 66,698 (56 ) 66,642 55,082 73 55,155 Total revenues 402,252 (4,322 ) 397,930 361,594 (3,317 ) 358,277 Cost of revenues Cost of product revenues 174,067 (342 ) 173,725 156,568 (273 ) 156,295 Cost of service revenues 37,933 — 37,933 33,058 — 33,058 Total cost of revenues 212,000 (342 ) 211,658 189,626 (273 ) 189,353 Gross margin 190,252 (3,980 ) 186,272 171,968 (3,044 ) 168,924 Operating expenses Sales and marketing 70,909 (3,980 ) 66,929 62,424 (3,044 ) 59,380 Total operating expenses 120,058 (3,980 ) 116,078 107,023 (3,044 ) 103,979 Operating income 70,194 — 70,194 64,945 — 64,945 The revisions had no impact on our audited consolidated balance sheets as of May 31, 2018 and 2017 and no impact on our unaudited consolidated statements of equity or unaudited consolidated statements of cash flows for the three and nine ended February 28, 2018. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 9 Months Ended |
Feb. 28, 2019 | |
Disaggregated Revenue | The following table presents the Company’s revenue disaggregated by geographic location: Three Months ended Nine Months Ended February 28, February 28, 2019 2018 2019 2018 (in thousands) (in thousands) Revenues by Geographic Location Domestic $ 57,422 $ 57,825 $ 182,298 $ 180,414 International 40,278 37,078 122,126 109,397 Total revenue 97,700 94,903 304,424 289,811 |
Summary of Impact of Adoption of New Accounting Pronouncements on Unaudited Consolidated Statement of Income | The effects of the revisions on the line items within our unaudited consolidated statements of income for the three and nine months ended February 28, 2018 are as follows: Three Months Ended Nine Months Ended February 28, 2018 February 28, 2018 As As Previously Previously Reported Adjustments As Revised Reported Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 78,142 $ (958 ) $ 77,184 $ 244,298 $ (3,098 ) $ 241,200 Service revenues 17,750 (31 ) 17,719 48,667 (56 ) 48,611 Total revenues 95,892 (989 ) 94,903 292,965 (3,154 ) 289,811 Cost of revenues Cost of product revenues 40,352 (69 ) 40,283 124,785 (265 ) 124,520 Cost of service revenues 10,019 — 10,019 27,517 — 27,517 Total cost of revenues 50,371 (69 ) 50,302 152,302 (265 ) 152,037 Gross margin 45,521 (920 ) 44,601 140,663 (2,889 ) 137,774 Operating expenses Sales and marketing 17,492 (920 ) 16,572 52,331 (2,889 ) 49,442 Total operating expenses 29,608 (920 ) 28,688 90,328 (2,889 ) 87,439 Operating income 15,913 — 15,913 50,335 — 50,335 Year Ended Year Ended May 31, 2018 May 31, 2017 As As Previously Previously Reported Adjustments As Revised Reported Adjustments As Revised (in thousands) (in thousands) Revenues Product revenues $ 335,554 $ (4,266 ) $ 331,288 $ 306,512 $ (3,390 ) $ 303,122 Service revenues 66,698 (56 ) 66,642 55,082 73 55,155 Total revenues 402,252 (4,322 ) 397,930 361,594 (3,317 ) 358,277 Cost of revenues Cost of product revenues 174,067 (342 ) 173,725 156,568 (273 ) 156,295 Cost of service revenues 37,933 — 37,933 33,058 — 33,058 Total cost of revenues 212,000 (342 ) 211,658 189,626 (273 ) 189,353 Gross margin 190,252 (3,980 ) 186,272 171,968 (3,044 ) 168,924 Operating expenses Sales and marketing 70,909 (3,980 ) 66,929 62,424 (3,044 ) 59,380 Total operating expenses 120,058 (3,980 ) 116,078 107,023 (3,044 ) 103,979 Operating income 70,194 — 70,194 64,945 — 64,945 |
Operating Segments | |
Disaggregated Revenue | The following table presents disaggregated revenue by major product and service categories for the three and nine months ended February 28, 2019 and 2018: Three Months Ended Nine Months Ended February 28, February 28, 2019 2018 2019 2018 (in thousands) (in thousands) Food Safety Natural Toxins, Allergens & Drug Residues $ 18,612 $ 16,807 $ 58,021 $ 54,960 Bacterial & General Sanitation 9,519 8,992 30,807 27,435 Culture Media & Other 11,893 10,179 36,302 31,353 Rodenticides, Insecticides & Disinfectants 5,953 7,359 18,521 18,175 Genomics Services 5,136 3,976 13,395 10,887 $ 51,113 $ 47,313 $ 157,046 $ 142,810 Animal Safety Life Sciences $ 1,823 $ 2,769 $ 5,794 $ 7,589 Veterinary Instruments & Disposables 10,682 10,630 32,769 32,804 Animal Care & Other 6,823 7,245 22,439 22,894 Rodenticides, Insecticides & Disinfectants 13,256 14,255 48,921 49,422 Genomics Services 14,003 12,691 37,455 34,292 $ 46,587 $ 47,590 $ 147,378 $ 147,001 Total Revenues $ 97,700 $ 94,903 $ 304,424 $ 289,811 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Feb. 28, 2019 | |
Inventories | Inventories are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value. The components of inventories follow: February 28, May 31, 2019 2018 (in thousands) Raw materials $ 38,944 $ 36,702 Work-in-process 6,758 5,993 Finished and purchased goods 39,168 33,310 $ 84,870 $ 76,005 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 9 Months Ended |
Feb. 28, 2019 | |
Calculation of Net Income Per Share | The calculation of net income per share attributable to Neogen Corporation follows: Three Months Ended Nine Months Ended February 28, February 28, 2019 2018 2019 2018 (in thousands, except per share amounts) Numerator for basic and diluted net income per share: Net income attributable to Neogen $ 13,073 $ 16,586 $ 44,361 $ 45,600 Denominator for basic net income per share: Weighted average shares 52,071 51,537 51,849 51,253 Effect of dilutive stock options 401 700 599 761 Denominator for diluted net income per share 52,472 52,237 52,448 52,014 Net income attributable to Neogen per share: Basic $ 0.25 $ 0.32 $ 0.86 $ 0.89 Diluted $ 0.25 $ 0.32 $ 0.85 $ 0.88 |
Segment Information and Geogr_2
Segment Information and Geographic Data (Tables) | 9 Months Ended |
Feb. 28, 2019 | |
Segment Information | Segment information follows: Corporate and Food Animal Eliminations Safety Safety (1) Total (in thousands) As of and for the three months ended February 28, 2019 Product revenues to external customers $ 44,790 $ 32,585 $ — $ 77,375 Service revenues to external customers 6,323 14,002 — 20,325 Total revenues to external customers 51,113 46,587 — 97,700 Operating income (loss) 8,339 7,338 (1,038 ) 14,639 Total assets 204,570 221,335 246,680 672,585 As of and for the three months ended February 28, 2018 - Revised (2) Product revenues to external customers $ 42,286 $ 34,898 $ — $ 77,184 Service revenues to external customers 5,027 12,692 — 17,719 Total revenues to external customers 47,313 47,590 — 94,903 Operating income (loss) 8,258 8,493 (838 ) 15,913 Total assets 188,075 215,371 192,155 595,601 (1) Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, current and deferred tax accounts and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. (2) Revenues for the three months ended February 28, 2018 have been revised as discussed in Note 1. For the three months ended February 28, 2018, product revenues were reduced by $332,000 in the Food Safety segment and $626,000 in the Animal Safety segment; service revenues were unchanged in the segment. Corporate and Food Animal Eliminations Safety Safety (1) Total (in thousands) For the nine months ended February 28, 2019 Product revenues to external customers $ 139,979 $ 109,918 $ — $ 249,897 Service revenues to external customers 17,067 37,460 — 54,527 Total revenues to external customers 157,046 147,378 — 304,424 Operating income (loss) 29,554 23,101 (3,291 ) 49,364 For the nine months ended February 28, 2018 - Revised (2) Product revenues to external customers $ 128,491 $ 112,709 $ — $ 241,200 Service revenues to external customers 14,319 34,292 — 48,611 Total revenues to external customers 142,810 147,001 — 289,811 Operating income (loss) 25,704 27,691 (3,060 ) 50,335 (1) Includes the elimination of intersegment transactions. (2) Revenues for the nine months ended February 28, 2018 have been revised as discussed in Note 1. For the nine months ended February 28, 2018, product revenues were reduced by $1,130,000 in the Food Safety segment and $1,968,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and reduced by $56,000 in the Animal Safety segment. |
Disaggregated Revenue | The following table presents the Company’s revenue disaggregated by geographic location: Three Months ended Nine Months Ended February 28, February 28, 2019 2018 2019 2018 (in thousands) (in thousands) Revenues by Geographic Location Domestic $ 57,422 $ 57,825 $ 182,298 $ 180,414 International 40,278 37,078 122,126 109,397 Total revenue 97,700 94,903 304,424 289,811 |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 9 Months Ended |
Feb. 28, 2019 | |
Stock Option Activity | A summary of stock option activity during the nine months ended February 28, 2019 follows: Weighted- Average Shares Exercise Price Options outstanding June 1, 2018 2,497,124 $ 42.63 Granted 526,750 62.92 Exercised (418,598 ) 30.76 Forfeited (105,835 ) 46.50 Options outstanding February 28, 2019 2,499,441 48.78 |
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. FY 2019 FY 2018 Risk-free interest rate 2.6 % 1.6 % Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 27.0 % 27.2 % Expected option life 3.5 4.0 |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Detail) $ in Millions | Dec. 29, 2017 | Dec. 22, 2017 | May 31, 2018USD ($) | Feb. 28, 2019 |
Significant Accounting Policies [Line Items] | ||||
Stock split ratio | 1.33 | |||
Federal corporate tax rate | 35.00% | 21.00% | ||
Deferred tax benefit | $ 6 | |||
Deferred tax benefit, net | 4.8 | |||
Current tax expense | $ 1.2 | |||
Products and services, payment terms | 30 to 60 days | |||
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 |
Disaggregated Revenue (Detail)
Disaggregated Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | $ 97,700 | $ 94,903 | $ 304,424 | $ 289,811 | $ 397,930 | $ 358,277 |
Food Safety | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 51,113 | 47,313 | 157,046 | 142,810 | ||
Food Safety | Natural Toxins, Allergens & Drug Residues | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 18,612 | 16,807 | 58,021 | 54,960 | ||
Food Safety | Bacterial & General Sanitation | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 9,519 | 8,992 | 30,807 | 27,435 | ||
Food Safety | Culture Media & Other | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 11,893 | 10,179 | 36,302 | 31,353 | ||
Food Safety | Rodenticides, Insecticides & Disinfectants | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 5,953 | 7,359 | 18,521 | 18,175 | ||
Food Safety | Genomics Services | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 5,136 | 3,976 | 13,395 | 10,887 | ||
Animal Safety | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 46,587 | 47,590 | 147,378 | 147,001 | ||
Animal Safety | Rodenticides, Insecticides & Disinfectants | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 13,256 | 14,255 | 48,921 | 49,422 | ||
Animal Safety | Genomics Services | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 14,003 | 12,691 | 37,455 | 34,292 | ||
Animal Safety | Life Sciences | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 1,823 | 2,769 | 5,794 | 7,589 | ||
Animal Safety | Veterinary Instruments & Disposables | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | 10,682 | 10,630 | 32,769 | 32,804 | ||
Animal Safety | Animal Care & Other | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total Revenues | $ 6,823 | $ 7,245 | $ 22,439 | $ 22,894 |
Summary of Unaudited Consolidat
Summary of Unaudited Consolidated Statement of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |||
Revenues | ||||||||
Total revenues | $ 97,700 | $ 94,903 | $ 304,424 | $ 289,811 | $ 397,930 | $ 358,277 | ||
Cost of revenues | ||||||||
Total cost of revenues | 53,072 | 50,302 | 163,034 | 152,037 | 211,658 | 189,353 | ||
Gross margin | 44,628 | 44,601 | 141,390 | 137,774 | 186,272 | 168,924 | ||
Operating Expenses | ||||||||
Sales and marketing | 16,722 | 16,572 | 52,454 | 49,442 | 66,929 | 59,380 | ||
Total operating expenses | 29,989 | 28,688 | 92,026 | 87,439 | 116,078 | 103,979 | ||
Operating income | 14,639 | 15,913 | [1] | 49,364 | 50,335 | [2] | 70,194 | 64,945 |
Product Revenues | ||||||||
Revenues | ||||||||
Total revenues | 77,375 | 77,184 | 249,897 | 241,200 | 331,288 | 303,122 | ||
Cost of revenues | ||||||||
Total cost of revenues | 41,902 | 40,283 | 132,157 | 124,520 | 173,725 | 156,295 | ||
Service Revenues | ||||||||
Revenues | ||||||||
Total revenues | 20,325 | 17,719 | 54,527 | 48,611 | 66,642 | 55,155 | ||
Cost of revenues | ||||||||
Total cost of revenues | $ 11,170 | 10,019 | $ 30,877 | 27,517 | 37,933 | 33,058 | ||
Accounting Standards Update 2014-09 | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||
Revenues | ||||||||
Total revenues | 95,892 | 292,965 | 402,252 | 361,594 | ||||
Cost of revenues | ||||||||
Total cost of revenues | 50,371 | 152,302 | 212,000 | 189,626 | ||||
Gross margin | 45,521 | 140,663 | 190,252 | 171,968 | ||||
Operating Expenses | ||||||||
Sales and marketing | 17,492 | 52,331 | 70,909 | 62,424 | ||||
Total operating expenses | 29,608 | 90,328 | 120,058 | 107,023 | ||||
Operating income | 15,913 | 50,335 | 70,194 | 64,945 | ||||
Accounting Standards Update 2014-09 | Adjustments | ||||||||
Revenues | ||||||||
Total revenues | (989) | (3,154) | (4,322) | (3,317) | ||||
Cost of revenues | ||||||||
Total cost of revenues | (69) | (265) | (342) | (273) | ||||
Gross margin | (920) | (2,889) | (3,980) | (3,044) | ||||
Operating Expenses | ||||||||
Sales and marketing | (920) | (2,889) | (3,980) | (3,044) | ||||
Total operating expenses | (920) | (2,889) | (3,980) | (3,044) | ||||
Accounting Standards Update 2014-09 | Product Revenues | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||
Revenues | ||||||||
Total revenues | 78,142 | 244,298 | 335,554 | 306,512 | ||||
Cost of revenues | ||||||||
Total cost of revenues | 40,352 | 124,785 | 174,067 | 156,568 | ||||
Accounting Standards Update 2014-09 | Product Revenues | Adjustments | ||||||||
Revenues | ||||||||
Total revenues | (958) | (3,098) | (4,266) | (3,390) | ||||
Cost of revenues | ||||||||
Total cost of revenues | (69) | (265) | (342) | (273) | ||||
Accounting Standards Update 2014-09 | Service Revenues | Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||
Revenues | ||||||||
Total revenues | 17,750 | 48,667 | 66,698 | 55,082 | ||||
Cost of revenues | ||||||||
Total cost of revenues | 10,019 | 27,517 | 37,933 | 33,058 | ||||
Accounting Standards Update 2014-09 | Service Revenues | Adjustments | ||||||||
Revenues | ||||||||
Total revenues | $ (56) | $ (56) | $ 73 | |||||
[1] | Revenues for the three months ended February 28, 2018 have been revised as discussed in Note 1. For the three months ended February 28, 2018, product revenues were reduced by $332,000 in the Food Safety segment and $626,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and were reduced by $31,000 in the Animal Safety segment. | |||||||
[2] | Revenues for the nine months ended February 28, 2018 have been revised as discussed in Note 1. For the nine months ended February 28, 2018, product revenues were reduced by $1,130,000 in the Food Safety segment and $1,968,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and reduced by $56,000 in the Animal Safety segment. |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Feb. 28, 2019 | May 31, 2018 |
Inventory [Line Items] | ||
Raw materials | $ 38,944 | $ 36,702 |
Work-in-process | 6,758 | 5,993 |
Finished and purchased goods | 39,168 | 33,310 |
Inventories | $ 84,870 | $ 76,005 |
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 | 9 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | |
Earnings Per Share [Line Items] | ||||
Numerator for basic and diluted net income per share - Net income attributable to Neogen | $ 13,073 | $ 16,586 | $ 44,361 | $ 45,600 |
Denominator for basic net income per share - Weighted average shares | 52,071 | 51,537 | 51,849 | 51,253 |
Effect of dilutive stock options | 401 | 700 | 599 | 761 |
Denominator for diluted net income per share | 52,472 | 52,237 | 52,448 | 52,014 |
Net income attributable to Neogen per share: | ||||
Basic | $ 0.25 | $ 0.32 | $ 0.86 | $ 0.89 |
Diluted | $ 0.25 | $ 0.32 | $ 0.85 | $ 0.88 |
Segment Information (Detail)
Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Feb. 28, 2019 | Feb. 28, 2018 | [1] | Feb. 28, 2019 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | $ 97,700 | $ 94,903 | $ 304,424 | $ 289,811 | [2] | ||||||
Operating income (loss) | 14,639 | 15,913 | 49,364 | 50,335 | [2] | $ 70,194 | $ 64,945 | ||||
Total assets | 672,585 | 595,601 | 672,585 | 595,601 | [1] | $ 618,009 | |||||
Operating Segments | Food Safety | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 51,113 | 47,313 | 157,046 | 142,810 | [2] | ||||||
Operating income (loss) | 8,339 | 8,258 | 29,554 | 25,704 | [2] | ||||||
Total assets | 204,570 | 188,075 | 204,570 | 188,075 | [1] | ||||||
Operating Segments | Animal Safety | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 46,587 | 47,590 | 147,378 | 147,001 | [2] | ||||||
Operating income (loss) | 7,338 | 8,493 | 23,101 | 27,691 | [2] | ||||||
Total assets | 221,335 | 215,371 | 221,335 | 215,371 | [1] | ||||||
Product Revenues | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 77,375 | 77,184 | 249,897 | 241,200 | [2] | ||||||
Product Revenues | Operating Segments | Food Safety | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 44,790 | 42,286 | 139,979 | 128,491 | [2] | ||||||
Product Revenues | Operating Segments | Animal Safety | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 32,585 | 34,898 | 109,918 | 112,709 | [2] | ||||||
Service Revenues | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 20,325 | 17,719 | 54,527 | 48,611 | [2] | ||||||
Service Revenues | Operating Segments | Food Safety | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 6,323 | 5,027 | 17,067 | 14,319 | [2] | ||||||
Service Revenues | Operating Segments | Animal Safety | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 14,002 | 12,692 | 37,460 | 34,292 | [2] | ||||||
Corporate and Eliminations | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 0 | [3] | 0 | [4] | |||||||
Operating income (loss) | (1,038) | [3] | (838) | [3] | (3,291) | [4] | (3,060) | [2],[4] | |||
Total assets | [3] | 246,680 | $ 192,155 | 246,680 | $ 192,155 | [1] | |||||
Corporate and Eliminations | Product Revenues | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | 0 | [3] | 0 | [4] | |||||||
Corporate and Eliminations | Service Revenues | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Product revenues to external customers | $ 0 | [3] | $ 0 | [4] | |||||||
[1] | Revenues for the three months ended February 28, 2018 have been revised as discussed in Note 1. For the three months ended February 28, 2018, product revenues were reduced by $332,000 in the Food Safety segment and $626,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and were reduced by $31,000 in the Animal Safety segment. | ||||||||||
[2] | Revenues for the nine months ended February 28, 2018 have been revised as discussed in Note 1. For the nine months ended February 28, 2018, product revenues were reduced by $1,130,000 in the Food Safety segment and $1,968,000 in the Animal Safety segment; service revenues were unchanged in the Food Safety segment and reduced by $56,000 in the Animal Safety segment. | ||||||||||
[3] | Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, current and deferred tax accounts and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. | ||||||||||
[4] | Includes the elimination of intersegment transactions. |
Segment Information (Parentheti
Segment Information (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 97,700 | $ 94,903 | $ 304,424 | $ 289,811 | $ 397,930 | $ 358,277 |
Food Safety | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 51,113 | 47,313 | 157,046 | 142,810 | ||
Animal Safety | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 46,587 | 47,590 | 147,378 | 147,001 | ||
Product Revenues | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 77,375 | 77,184 | 249,897 | 241,200 | 331,288 | 303,122 |
Product Revenues | Food Safety | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 1,130,000 | |||||
Product Revenues | Animal Safety | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 1,968,000 | |||||
Service Revenues | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | $ 20,325 | 17,719 | $ 54,527 | 48,611 | 66,642 | 55,155 |
Service Revenues | Animal Safety | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 31,000 | 56,000 | ||||
Accounting Standards Update 2014-09 | Adjustments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | (989) | (3,154) | (4,322) | (3,317) | ||
Accounting Standards Update 2014-09 | Adjustments | Product Revenues | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | (958) | (3,098) | (4,266) | (3,390) | ||
Accounting Standards Update 2014-09 | Adjustments | Product Revenues | Food Safety | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 332,000 | |||||
Accounting Standards Update 2014-09 | Adjustments | Product Revenues | Animal Safety | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 626,000 | |||||
Accounting Standards Update 2014-09 | Adjustments | Service Revenues | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | $ (56) | $ (56) | $ 73 |
Disaggregated Revenue by Geogra
Disaggregated Revenue by Geographic Location (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | May 31, 2018 | May 31, 2017 | |
Schedule Of Geographical Information [Line Items] | ||||||
Total revenue | $ 97,700 | $ 94,903 | $ 304,424 | $ 289,811 | $ 397,930 | $ 358,277 |
Domestic | ||||||
Schedule Of Geographical Information [Line Items] | ||||||
Total revenue | 57,422 | 57,825 | 182,298 | 180,414 | ||
International | ||||||
Schedule Of Geographical Information [Line Items] | ||||||
Total revenue | $ 40,278 | $ 37,078 | $ 122,126 | $ 109,397 |
Equity Compensation Plans - Add
Equity Compensation Plans - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2019 | Feb. 28, 2018 | May 31, 2019 | May 31, 2018 | |
Compensation expense related to share based awards | $ 1,306,000 | $ 1,026,000 | $ 4,137,000 | $ 3,692,000 | ||
Weighted-average fair value per share of stock options granted | $ 14.91 | |||||
During Fiscal 2019 | ||||||
Weighted-average fair value per share of stock options granted | $ 14.44 | |||||
Employee Stock Purchase Plan | 2011 Employee Stock Purchase Plan | ||||||
Annual maximum limit percentage of compensation to purchase shares | 5.00% | |||||
Minimum | ||||||
Stock option vesting period | 3 years | |||||
Stock option contractual terms | 5 years | |||||
Maximum | ||||||
Stock option vesting period | 5 years | |||||
Stock option contractual terms | 10 years |
Stock Option Activity (Detail)
Stock Option Activity (Detail) shares in Thousands | 9 Months Ended |
Feb. 28, 2019$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Shares Outstanding, Beginning Balance | shares | 2,497,124 |
Shares, Granted | shares | 526,750 |
Shares, Exercised | shares | (418,598) |
Shares, Forfeited | shares | (105,835) |
Shares Outstanding, Ending Balance | shares | 2,499,441 |
Weighted-Average Exercise Price, Beginning Balance | $ / shares | $ 42.63 |
Weighted-Average Exercise Price, Granted | $ / shares | 62.92 |
Weighted-Average Exercise Price, Exercised | $ / shares | 30.76 |
Weighted-Average Exercise Price, Forfeited | $ / shares | 46.50 |
Weighted-Average Exercise Price, Ending Balance | $ / shares | $ 48.78 |
Fair Value of Stock Options Gra
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions (Detail) | 12 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Schedule of Weighted Average Assumptions for Fair Values of Stock Options [Line Items] | ||
Risk-free interest rate | 1.60% | |
Expected dividend yield | 0.00% | |
Expected stock price volatility | 27.20% | |
Expected option life (in years) | 4 years | |
During Fiscal 2019 | ||
Schedule of Weighted Average Assumptions for Fair Values of Stock Options [Line Items] | ||
Risk-free interest rate | 2.60% | |
Expected dividend yield | 0.00% | |
Expected stock price volatility | 27.00% | |
Expected option life (in years) | 3 years 6 months |
Business and Product Line Acq_2
Business and Product Line Acquisitions - Additional Information (Detail) - USD ($) | Jan. 01, 2019 | Sep. 04, 2018 | Aug. 01, 2018 | Sep. 01, 2017 | Feb. 28, 2019 | Feb. 28, 2019 |
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 | |||||
The University of Queensland Animal Genetics Laboratory | ||||||
Business Acquisition [Line Items] | ||||||
Consideration for purchase of business | $ 2,063,000 | |||||
Cash consideration for purchase of business | 468,000 | |||||
Purchase price allocation for inventory | 19,000 | |||||
Purchase price allocation for land, property and equipment | 419,000 | |||||
Purchase price allocation for non-current liabilities | 1,629,000 | |||||
Purchase price allocation for intangible assets | $ 902,000 | |||||
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 | |||||
Clarus Labs Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration for purchase of business | $ 4,204,000 | |||||
Purchase price allocation for inventory | 32,000 | |||||
Purchase price allocation for land, property and equipment | 120,000 | |||||
Purchase price allocation for intangible assets | 1,487,000 | |||||
Contingent consideration potential payment | 1,300,000 | |||||
Purchase price allocation for accounts payable | 53,000 | |||||
Allocation of purchase price for contingent consideration potential payment | 1,256,000 | |||||
Purchase price allocation for deferred tax liability | 426,000 | |||||
Purchase price allocation for non-amortizable intangible assets | $ 878,000 | |||||
contingent consideration paid | $ 90,000 | |||||
Clarus Labs Inc. | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 5 years | |||||
Clarus Labs Inc. | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 15 years | |||||
Livestock Genetic Services LLC | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration for purchase of business | $ 1,100,000 | |||||
Purchase price allocation for intangible assets | 860,000 | |||||
Contingent consideration potential payment | 385,000 | |||||
Allocation of purchase price for contingent consideration potential payment | 385,000 | |||||
Cash paid for purchase of business | 700,000 | |||||
Cash payable to former owner for purchase of business | $ 400,000 | |||||
Cash payable to former owner for purchase of business, due date | Sep. 1, 2019 | |||||
Purchase price allocation for office equipment | $ 15,000 | |||||
Livestock Genetic Services LLC | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 5 years | |||||
Livestock Genetic Services LLC | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 15 years | |||||
Edmonton Albertabased Delta Genomics Centre [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Consideration for purchase of business | $ 1,485,000 | |||||
Purchase price allocation for inventory | 38,000 | |||||
Purchase price allocation for land, property and equipment | 371,000 | |||||
Purchase price allocation for intangible assets | 186,000 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | $ 125,000 | |||||
Edmonton Albertabased Delta Genomics Centre [Member] | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 5 years | |||||
Edmonton Albertabased Delta Genomics Centre [Member] | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Finite lived intangible assets, useful life | 10 years |
Long Term Debt - Additional Inf
Long Term Debt - Additional Information (Detail) - USD ($) | Nov. 29, 2018 | Feb. 28, 2019 | May 31, 2019 | May 31, 2018 |
Debt Instrument [Line Items] | ||||
Unsecured revolving line of credit, total amount available | $ 15,000,000 | |||
Unsecured revolving line of credit, maturity date | Sep. 30, 2019 | Sep. 30, 2021 | ||
Unsecured revolving line of credit, interest terms | LIBOR plus 100 basis points | |||
Unsecured revolving line of credit, interest rate | 3.58% | |||
Unsecured revolving line of credit, balance outstanding | $ 0 | |||
Unsecured revolving line of credit, advances | $ 0 | |||
Libor Plus | Unsecured Revolving Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Unsecured revolving line of credit, spread | 1.00% | |||
During Fiscal 2019 | ||||
Debt Instrument [Line Items] | ||||
Unsecured revolving line of credit, advances | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Feb. 28, 2019 | May 31, 2018 | |
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 | |
Minimum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | 38,000 | |
Maximum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Environmental remediation expense | $ 74,000 |
Stock Purchase - Additional Inf
Stock Purchase - Additional Information (Detail) - USD ($) | 1 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | |
Stock Repurchase Program [Line Items] | ||
Shares authorized to purchase | 3,000,000 | |
Cost of repurchased shares, including commissions | $ 3,134,727 | |
Number of shares repurchased | 50,000 |