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) July 20, 2021

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
	N/A

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 July 20, 2021, Neogen Corporation issued a press release announcing results of operations for its fiscal 2021 fourth quarter and full year periods ended May 31, 2021. 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 July 20, 2021
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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: July 21, 2021	/s/ Steven J. Quinlan
	Steven J. Quinlan
	Vice President & CFO

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT: Steve Quinlan, Vice President and Chief Financial Officer

                    (517) 372-9200, squinlan@neogen.com

Neogen Reports Record Revenues for Fiscal 2021

LANSING, Mich., July 20, 2021 — Neogen Corporation (NASDAQ: NEOG) announced today the results for its fourth quarter and full 2021 fiscal year, which ended May 31, 2021. Revenues for the fourth quarter increased 17% to $127,425,000, compared to $109,074,000 in the prior year, and revenues for the full fiscal year were $468,459,000, compared to the prior year’s $418,170,000, an increase of 12%.

The fourth quarter was the 116th of the past 122 quarters that Neogen reported revenue increases as compared to the same period in the previous year.

Fourth-quarter net income was $15,760,000, or $0.15 per share, compared to the prior year’s $16,347,000, or $0.15 per share. Net income for the full 2021 fiscal year was $60,882,000, or $0.57 per share, compared to the prior year’s $59,475,000, or $0.56 per share. Prior year fourth quarter results benefitted from temporary cost actions taken to mitigate the impact of COVID-19, which amounted to approximately $2 million pre-tax ($0.01 per share); additionally, non-recurring corporate development expenditures of approximately $3.1 million pre-tax ($0.02 per share) were incurred in the second and third quarters of the current fiscal year. Adjusting for these items, earnings per share would have increased $0.01 for the current quarter and $0.04 for the year. For all comparative periods, earnings per share amounts have been adjusted to reflect the company’s 2-for-1 stock split on June 4, 2021.

“The past year has been full of uncertainty, but these strong top-line results demonstrate the resiliency of the entire Neogen team and their dedication to protecting the global food supply,” said John Adent, Neogen’s President and Chief Executive Officer. “I am pleased to report this solid growth across our entire business, both domestically and internationally. Our success this year reflects the strength and diversity of our product portfolio, which allows us to offer comprehensive solutions under extremely challenging market conditions.”

Gross margins for the company were 45.3% of sales for the fourth quarter of 2021, compared to 47.4% in the prior year’s fourth quarter. This decrease can be attributed to significantly higher supply chain costs, including freight, customs and duties, and increased personnel costs. Operating expenses were 18% higher in the fourth quarter of fiscal 2021 than in the same period last year. It is important to note that in the prior year’s fourth quarter, the company reduced expenses by $2 million as the COVID-19 pandemic began to impact the business. Operating income for the current year fourth quarter was $20,255,000, or 15.9% of sales, compared to $19,944,000, or 18.3% in the fourth quarter of the company’s 2020 fiscal year.

For fiscal year 2021, the overall gross margin as a percentage of sales was 45.9%, a decrease from 46.9% in the prior fiscal year. Margins were negatively impacted during the year by product mix shifts towards lower margin products, such as cleaners and disinfectants, and increases in supply chain costs, particularly on both domestic and international shipments. Operating expenses increased 9% for the full fiscal year. This includes $3.1 million in consulting and legal expenses incurred for targeted acquisitions, which the company was ultimately unsuccessful in closing, and was partially offset by a decline in travel and customer-facing events during the year. For the entire 2021 fiscal year, operating income was $74,169,000, or 15.8% of sales, compared to $67,523,000, or 16.1% in the company’s 2020 fiscal year. Interest income declined $1.6 million for the quarter and was down $4.4 million for the year, as yields on the company’s marketable securities portfolio dropped precipitously due to efforts by the U.S. Federal Reserve to stimulate the economy during the pandemic.

“The currency headwinds we had been facing for most of the fiscal year reversed in the fourth quarter, resulting in comparative revenues which were $3.3 million higher on a constant currency basis,” said Steve Quinlan, Neogen’s Vice President and Chief Financial Officer. “However, as the year has progressed, we have absorbed some significant cost increases, in part the result of the COVID-19 pandemic. The cost of container shipments has been dramatically affected by supply chain issues caused by capacity constraints, which have adversely impacted our margins and earnings. We are taking a number of actions to offset these increased costs. Despite this, I am pleased that we recorded a 10% increase in operating income during a very challenging year.”

Revenues for Neogen’s Food Safety segment were $64,101,000 in the fourth quarter of fiscal 2021, an increase of 18% compared to $54,318,000 in last year’s fourth quarter. Organic growth for the segment was 12%, with Megazyme providing most of the acquisition revenue. Strong sales of the recently launched Soleris^® Next Generation (NG) rapid microbial testing solution continued as the system gained acceptance within the commercial lab and dietary supplement markets. The segment also benefitted as businesses began to rebound from the COVID-19 pandemic, with sales of natural toxin (10%) and allergen (19%) test kits both increasing.

For the year, the Food Safety segment reported revenues of $234,244,000, an increase of 10%, compared to the prior year’s $212,691,000. Organic growth in this segment was 6% for the full year. Sales of the Soleris product line increased 19%, while sales of natural toxin test kits were up 6% and allergen test kits rose 5% for the full fiscal year. Partially offsetting these gains was a 30% decline in the sale of drug residue test kits from competitive pressure and lower demand due to poor economic conditions in European markets.

The company recorded solid results at its international operations, which primarily report through the Food Safety segment, with sales increasing 11% in fiscal 2021 compared to the prior year. Revenues at Neogen’s U.K. operations increased by 10% (4% in British pounds) for fiscal 2021, with strong sales of cleaners and disinfectants partially offset by sluggish sales of the company’s diagnostic test kits, as many customers were forced to reduce or close operations due to the COVID-19 pandemic. Neogen Latinoamerica’s revenues increased 9% (13% in pesos) on the strength of biosecurity products, veterinary instruments and diagnostic test kits. Neogen China’s revenues doubled year over year (89% in yuan), a result of increased demand for biosecurity products due to African swine fever outbreaks in that country and the COVID-19 pandemic. Revenues from the company’s Brazilian operations increased by 15% in local currency, with solid increases in mycotoxin test kits, but declined by 8% when translated to the U.S. dollar.

Neogen’s Animal Safety segment reported revenues of $63,324,000 in the fourth quarter, an increase of 16% compared to $54,756,000 in the previous year’s fourth quarter. This increase was driven by strong growth in the veterinary instruments line (50%), primarily needles and syringes, as well as in the animal care line (51%) of antibiotics, vitamin injectables and supplements, as companion animal spending has increased significantly during the COVID-19 pandemic. Rodent control products rose 33%, the result of continued rodent pressure across the U.S., and insect control products increased 26%, enhanced by revenues from the company’s acquisition of the StandGuard^® product line in July 2020. Sales of cleaners and disinfectants sold through this segment declined 39% and protective wear, such as gloves, declined 43% as the prior year fourth quarter results reflected the extraordinarily high demand seen early in the COVID-19 pandemic.

For the full fiscal year, the Animal Safety segment reported revenues of $234,215,000, compared to $205,479,000 in fiscal year 2020, an increase of 14%, on strength of the animal care (31%), veterinary instruments (16%), and rodent control (42%) lines, partially offset by lower sales of cleaners, disinfectants and protective wear from the prior year.

Neogen’s worldwide genomics business, reported through both the Food Safety and Animal Safety segments, recorded an increase of 21% in the fourth quarter of fiscal year 2021 and a 13% overall increase in fiscal year 2021, each compared to the same period a year ago. These increases were driven by continued strength in companion animal testing services in the U.S. and Australia and new bovine and porcine business in China. Aquaculture sales also increased significantly in fiscal 2021, driven by a partnership with a large customer and a new test for whiteleg shrimp.

Neogen Corporation develops and markets comprehensive solutions dedicated to food and animal safety. The company’s Food Safety segment 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 segment is a leader in the development of genomic solutions along with the manufacturing and distribution of a variety of animal healthcare products, including diagnostics, pharmaceuticals, veterinary instruments, wound care, and disinfectants.

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 May 31						12 months ended May 31
	2021			2020			2021			2020
Revenue
Food Safety	$	64,101		$	54,318		$	234,244		$	212,691
Animal Safety		63,324			54,756			234,215			205,479
Total revenue		127,425			109,074			468,459			418,170
Cost of sales		69,734			57,345			253,403			221,891
Gross margin		57,691			51,729			215,056			196,279
Operating expenses
Sales & marketing		20,505			16,468			73,443			69,675
Administrative		12,854			11,859			51,197			44,331
Research & development		4,077			3,458			16,247			14,750
Total operating expenses		37,436			31,785			140,887			128,756
Operating income		20,255			19,944			74,169			67,523
Other income (loss)		(109	)		1,233			1,099			4,782
Income before tax		20,146			21,177			75,268			72,305
Income tax		4,386			4,830			14,386			12,830
Net income	$	15,760		$	16,347		$	60,882		$	59,475
Net income per diluted share	$	0.15		$	0.15		$	0.57		$	0.56
Other information:
Shares to calculate per share		108,044			106,244			107,120			105,720
Depreciation & amortization	$	5,884		$	4,854		$	21,041		$	18,396
Interest income		42			1,611			1,614			5,992
Gross margin (% of sales)		45.3	%		47.4	%		45.9	%		46.9	%
Operating income (% of sales)		15.9	%		18.3	%		15.8	%		16.1	%
Revenue increase vs. FY 2020		16.8	%					12.0	%
Net income vs. FY 2020		(3.6	%)					2.4	%

NEOGEN CORPORATION UNAUDITED SUMMARIZED

CONSOLIDATED BALANCE SHEET DATA

(In thousands)

	May 31		May 31
	2021		2020
Assets
Current assets
Cash & investments	$	381,087	$	343,673
Accounts receivable		91,823		84,681
Inventory		100,701		95,053
Other current assets		17,840		13,999
Total current assets		591,451		537,406
Property & equipment, net		100,453		78,671
Goodwill & other assets		228,288		181,105
Total assets	$	920,192	$	797,182
Liabilities & Equity
Current liabilities	$	53,599	$	48,489
Non-current liabilities		26,216		23,516
Equity: Shares outstanding 107,468,304 at May 31, 2021 & 105,891,682 at May 31, 2020		840,377		725,177
Total liabilities & equity	$	920,192	$	797,182

XML

Document and Entity Information	Jul. 20, 2021
Cover [Abstract]
Entity Registrant Name	NEOGEN CORP
Entity Incorporation State Country Code	MI
Amendment Flag	false
Entity Central Index Key	0000711377
Document Type	8-K
Document Period End Date	Jul. 20, 2021
Entity File Number	0-17988
Entity Tax Identification Number	38-2367843
Entity Address, Address Line One	620 Lesher Place
Entity Address, City or Town	Lansing
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	48912
City Area Code	517
Local Phone Number	372-9200
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false