8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)    September 19, 2017

NEOGEN CORPORATION

(Exact name of registrant as specified in its charter)

MICHIGAN	0-17988	38-2367843
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

620 Lesher Place Lansing, Michigan	48912
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 517-372-9200

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operations and Financial Condition

On September 19, 2017, Neogen Corporation issued a press release announcing results of operations for its fiscal 2018 first quarter ended August 31, 2017. A copy of the press release is attached as Exhibit 99.1 to this report. This Form 8-K and the attached exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not incorporated by reference into any filing of the Registrant, whether made before or after the date of this report, regardless of any general incorporation language in the filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1 Press Release dated September 19, 2017

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NEOGEN CORPORATION
	(Registrant)
Date: September 19, 2017
	/s/ Steven J. Quinlan
	Steven J. Quinlan
	Vice President & CFO

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT: Steven J. Quinlan, Vice President and CFO 517/372-9200

Neogen reports 21% net income increase

LANSING, Mich., Sept. 19, 2017 — Neogen Corporation (Nasdaq: NEOG) announced today that net income for the first quarter of its 2018 fiscal year, which ended Aug. 31, increased 21% to $11,914,000, or $0.31 per share, from the previous year’s first quarter net income of $9,881,000, or $0.26 a share.

First quarter revenues increased 14% to $95,256,000, compared to the previous year’s first quarter revenues of $83,645,000. The revenues and net income represent first quarter records for the 35-year-old company.

“The first quarter was a solid start for our 2018 fiscal year, and reflects the positive impact of growth in many of our core product lines,” said James Herbert, Neogen’s executive chairman. “In the first quarter, we named an experienced new CEO to help us maintain Neogen’s growth trajectory going forward. We are also pleased with the rate of integration of recent acquisitions as that contributed to financial results.”

The first quarter was the 102nd of the past 107 quarters that Neogen reported revenue increases compared with the previous year — including all consecutive quarters in the last 12 years.

“A key goal of ours during this transition of leadership is to identify and ensure continuity with what Neogen has done very well for many years,” said John Adent, who was named Neogen’s chief executive officer on July 17. “Sales of our core food safety products, including tests for mycotoxins, food allergens and sanitation all increased nicely in the quarter. On the animal safety side, the quarter was led by significant increases in revenues from our animal genomics services, as well as growth in sales of our veterinary instruments and insect control products.”

Neogen’s gross margin was 48.2% of sales in the first quarter of the current fiscal year, compared to the 48.4% recorded in the same period a year ago. Operating income for the quarter was $16,424,000, or 17.2% of sales, compared to $14,742,000, or 17.6%, a year ago.

“We saw a moderation of the negative currency translation effects seen in recent quarters, as the currencies we do business in steadied against the dollar. Overall, currency translations had an immaterial impact on the company’s revenues and earnings for the quarter,” said Steve Quinlan, Neogen’s chief financial officer. “Our net income increase was aided somewhat by new accounting guidance regarding stock option exercises, which resulted in a $396,000 reduction in federal income tax expense for the quarter.”

Revenues for the company’s Food Safety segment increased 19% during the first quarter compared to the prior year’s first three months, aided by the acquisitions of Quat-Chem and Rogama within the past year, which report through Neogen’s operations in Scotland and Brazil, respectively. Sales of Neogen’s rapid tests for food allergens, such as gluten and peanuts, increased 17% in the quarter compared to the prior year. This growth continues to be aided by increased global regulatory efforts and consumer demand to ensure products represented as being free of food allergens are correctly labeled.

Sales of Neogen’s AccuPoint^® Advanced ATP Sanitation Verification System increased 14% in the current quarter when compared to the prior year. In the current quarter, sales of the company’s mycotoxin test kits increased 9%, and included a 23% increase in the sales of test kits to detect aflatoxin. This increase was the result of hot and dry weather in global corn-growing regions, which is conducive to the growth of molds that produce aflatoxin. The increase was also aided by the introduction of Neogen’s new test for aflatoxin that replaces methanol with water in the testing process.

Revenues from Neogen do Brasil increased 39%, in U.S. dollars, in the current quarter, the result of increases in sales of mycotoxin and drug residue test kits. Mexico-based Neogen Latinoamerica’s sales decreased 2%, due to lower sales of cleaners and disinfectants, the result of the termination of a distribution agreement earlier in the calendar year. Neogen Europe revenues rose 1% in the quarter; strong genomics growth of 19% was offset by lower mycotoxin test sales, as last year’s DON outbreak did not repeat in the current year. Sales of Neogen’s England-based Lab M culture media products increased 34% in the first quarter, as the subsidiary continued its integration into Neogen’s global sales and marketing organization. In the first quarter, Neogen recorded sales into 127 countries and territories outside the U.S. — an all-time high.

Neogen’s Animal Safety segment reported a revenue increase for the first quarter of 9%, led by significant growth in its genomics business, an 11% increase in sales of its insect control product line, and an 11% increase in sales of veterinary instruments, primarily in its needle and syringe product lines.

Revenues from Neogen’s worldwide animal genomics business increased 29% in the first quarter of fiscal 2018 compared to the prior year. This growth was primarily the result of increased market share in the global cattle and poultry markets. The company’s Sept. 1, 2017, acquisition of The University of Queensland Animal Genetics Laboratory (AGL), the leading animal genomics laboratory in Australia, will help accelerate the growth of Neogen’s animal genomics business in Australia, New Zealand and throughout Oceania. AGL is Neogen’s fourth animal genomics laboratory — joining locations in the U.S., Scotland, and Brazil.

Neogen Corporation develops and markets products dedicated to food and animal safety. The company’s Food Safety Division markets dehydrated culture media and diagnostic test kits to detect foodborne bacteria, natural toxins, food allergens, drug residues, plant diseases and sanitation concerns. Neogen’s Animal Safety Division is a leader in worldwide biosecurity products, animal genomics testing and the manufacturing and distribution of a variety of animal healthcare products, including diagnostics, pharmaceuticals and veterinary instruments.

Certain portions of this news release that do not relate to historical financial information constitute forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties. Actual future results and trends may differ materially from historical results or those expected depending on a variety of factors listed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s most recently filed Form 10-K.

NEOGEN CORPORATION UNAUDITED SUMMARIZED CONSOLIDATED OPERATING DATA

(In thousands, except for per share and percentages)

	Quarter ended Aug. 31
	2017			2016
Revenue
Food Safety	$	46,734		$	39,156
Animal Safety		48,522			44,489
Total revenue		95,256			83,645
Cost of sales		49,385			43,166
Gross margin		45,871			40,479
Operating expenses
Sales & marketing		17,024			14,797
Administrative		9,325			8,262
Research & development		3,098			2,678
Total operating expenses		29,447			25,737
Operating income		16,424			14,742
Other income		812			492
Income before tax		17,236			15,234
Income tax		5,300			5,300
Net income	$	11,936		$	9,934
Net (income) attributable to non-controlling interest	$	(22	)	$	(53	)
Net income attributable to Neogen Corp	$	11,914		$	9,881
Net income attributable to Neogen Corp per diluted share	$	0.31		$	0.26
Other information:
Shares to calculate per share		38,676			38,165
Depreciation & amortization	$	3,993		$	3,478
Interest income		369			123
Gross margin (% of sales)		48.2	%		48.4	%
Operating income (% of sales)		17.2	%		17.6	%
Revenue increase vs. FY 2017		13.9	%
Net income vs. FY 2017		20.6	%

NEOGEN CORPORATION SUMMARIZED CONSOLIDATED BALANCE SHEET DATA

(In thousands)

	Aug. 31 2017		May 31 2017
	(Unaudited)		(Audited)
Assets
Current assets
Cash & investments	$	159,990	$	143,635
Accounts receivable		66,341		68,576
Inventory		73,413		73,144
Other current assets		11,190		7,606
Total current assets		310,934		292,961
Property & equipment, net		63,285		61,748
Goodwill & other assets		173,115		173,700
Total assets	$	547,334	$	528,409
Liabilities & Equity
Current liabilities	$	38,322	$	36,002
Other long-term liabilities		21,759		20,650
Equity: Shares outstanding 38,233 in Aug. & 38,199 in May		487,253		471,757
Total liabilities & equity	$	547,334	$	528,409

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