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)    January 3, 2018

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 January 3, 2018, Neogen Corporation issued a press release announcing results of operations for its fiscal 2018 second quarter and six month periods ended November 30, 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 January 3, 2018

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: January 3, 2018
	/s/ Steven J. Quinlan
	Steven J. Quinlan
	Vice President & CFO

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT: Steve Quinlan, Vice President & CFO

Neogen Corporation, 517/372-9200

Neogen reports record revenues and earnings

LANSING, Mich., Jan. 3, 2018 — Neogen Corporation (NASDAQ: NEOG) announced today that its revenues for the second quarter of its 2018 fiscal year, which ended Nov. 30, increased 12% to $101,817,000, from the previous year’s second quarter revenues of $90,717,000. Current year-to-date revenues were $197,073,000, up 13% compared to $174,362,000 for the same period a year ago.

Second quarter net income was $17,100,000, an increase of 53% compared to the prior year’s $11,151,000. Adjusted for a 4-for-3 stock split effective Dec. 29, 2017, earnings per share in the current quarter were $0.33, compared to $0.22 a year ago. In the current quarter, Neogen benefitted $3.4 million, or $0.07 per share, due to the adoption of Accounting Standard Update 2016-09 on June 1, 2017, which changes how companies report the excess tax benefits of employee stock option exercises. Current year-to-date net income was $29,014,000, or $0.56 per share after being adjusted for the split, compared to $21,032,000, or an adjusted $0.41 per share, for the same period a year ago. The quarterly revenue and net income results represent records for the 35-year-old company.

“We are pleased to report strong performance that combined organic growth and the continued integration of recent acquisitions. In addition, recent changes in accounting rules added a tax benefit that boosted our net income,” said James Herbert, Neogen’s executive chairman. “We were also pleased to reward shareholders with our recent stock split. The split reflects our Board’s strong belief in Neogen’s long-term growth prospects, and enhances the availability and liquidity of our shares to allow more participation in Neogen’s success.”

The second quarter was the 103rd of the past 108 quarters that Neogen reported revenue increases as compared with the previous year — a record spanning 27 years. The current quarter marked the first time Neogen has exceeded $100 million in quarterly revenues.

“We are particularly pleased with the strong organic growth of a number of our existing core product lines in the current quarter,” said John Adent, Neogen’s president and chief executive officer. “Within our food safety segment, we had substantial organic sales increases in our line of dehydrated culture media, and test kits to detect sanitation concerns, dairy antibiotics, and foodborne pathogens, especially Listeria. In our animal safety segment, we also recorded increases in sales of veterinary instruments, rodent control products, and continued our strong growth in our agricultural genomic services.”

Expressed as a percentage of sales, operating income was 17.7% for the second quarter, compared to 18.6% in the same quarter a year ago. Neogen’s gross margin was 48.4% of sales in its second quarter of the current year, compared to 48.1% recorded in the same quarter of the prior fiscal year.

“We continue to generate strong cash flow from operations, which has enabled us to reinvest in the business, particularly in areas such as information technology,” said Steve Quinlan, Neogen’s chief financial officer. “Our strong cash position will allow us to pursue our identified growth strategies going forward.”

Revenues for the company’s Food Safety segment increased 21% during the second quarter compared to the prior year quarter, aided by acquisitions within the past year, which report through Neogen’s operations in Scotland and Brazil. Sales of Neogen’s line of general sanitation products increased 23% in the current quarter compared to the prior year quarter. The line includes AccuPoint^®, a system that allows users to instantly verify that surfaces and equipment have been effectively sanitized. The segment’s comparative results also included a 20% increase in sales of culture media products.

Also of note in the Food Safety segment’s current second quarter results was an 18% increase in sales of test kits to detect drug residues in milk, and a 14% increase in foodborne pathogen detection tests — including a 43% increase in sales of tests to detect Listeria. In June, Neogen launched Listeria Right Now^™, an innovative test that detects Listeria in environmental samples in under 60 minutes — without the need to enrich samples.

In the current quarter, revenues from international sources increased to 38% of total revenues, compared to 34% in the prior year quarter. Overall, international sales increased 24% over the prior year, aided by acquisitions. Revenues from Neogen do Brasil increased 22% in U.S. dollars in the current quarter, Mexico-based Neogen Latinoamerica’s sales increased 36%, Neogen Europe’s revenues rose 15% in the quarter, Neogen China’s revenues increased 23%, and Neogen India’s revenues increased 48%, albeit from a small base.

Neogen’s Animal Safety segment reported a revenue increase for the second quarter of 5%, led by growth in its genomics business, a 10% increase in sales of its animal care line of products, a 14% increase in its rodent control product line, and a 19% increase in sales of veterinary instruments, which included a 17% increase in sales of its detectable needles. Revenues from Neogen’s worldwide animal genomics business increased 19% in the second quarter of fiscal 2018 compared to the prior year.

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 Nov. 30						Six months ended Nov. 30
	2017			2016			2017			2016
Revenue
Food Safety	$	49,560		$	40,961		$	96,295		$	80,118
Animal Safety		52,257			49,756			100,778			94,244
Total revenue		101,817			90,717			197,073			174,362
Cost of sales		52,546			47,126			101,931			90,292
Gross margin		49,271			43,591			95,142			84,070
Operating expenses
Sales & marketing		17,815			15,687			34,838			30,484
Administrative		10,491			8,284			19,817			16,546
Research & development		2,967			2,768			6,065			5,446
Total operating expenses		31,273			26,739			60,720			52,476
Operating income		17,998			16,852			34,422			31,594
Other income (expense)		1,055			(81	)		1,867			411
Income before tax		19,053			16,771			36,289			32,005
Income tax		1,900			5,600			7,200			10,900
Net income	$	17,153		$	11,171		$	29,089		$	21,105
Net (income) attributable to non-controlling interest		(53	)		(20	)		(75	)		(73	)
Net income attributable to Neogen Corp	$	17,100		$	11,151		$	29,014		$	21,032
Net income attributable to Neogen Corp per diluted share (1)	$	0.33		$	0.22		$	0.56		$	0.41
Other information:
Shares to calculate per share (1)		51,961			51,016			51,778			50,911
Depreciation & amortization	$	4,277		$	3,560		$	8,270		$	7,038
Interest income		429			296			798			419
Gross margin (% of sales)		48.4	%		48.1	%		48.3	%		48.2	%
Operating income (% of sales)		17.7	%		18.6	%		17.5	%		18.1	%
Revenue increase vs. FY 2017		12.2	%					13.0	%
Net income vs. FY 2017		53.3	%					38.0	%

(1) Reflects effect of Dec. 29, 2017, 4-for-3 stock split

NEOGEN CORPORATION SUMMARIZED CONSOLIDATED

BALANCE SHEET DATA

(In thousands)

	Nov. 30		May 31
	2017		2017
	(Unaudited)		(Audited)
Assets
Current assets
Cash & investments	$	175,835	$	143,635
Accounts receivable		74,859		68,576
Inventory		73,713		73,144
Other current assets		15,533		7,606
Total current assets		339,940		292,961
Property & equipment, net		66,874		61,748
Goodwill & other assets		174,214		173,700
Total assets	$	581,028	$	528,409
Liabilities & Equity
Current liabilities	$	37,945		36,002
Long-term liabilities		22,439		20,650
Equity: Shares outstanding 51,509 in Nov. & 50,932 in May (1)		520,644		471,757
Total liabilities & equity	$	581,028	$	528,409

(1) Reflects effect of Dec. 29, 2017, 4-for-3 stock split

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