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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the Fiscal Year Ended May 31, 2003

For The Transition Period From                 To                 .

COMMISSION FILE NUMBER 0-17988

NEOGEN CORPORATION

(Exact name of registrant as specified in its charter)

620 Lesher Place

Lansing, Michigan 48912

(Address of principal executive offices including zip code)

517-372-9200

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

COMMON STOCK, $0.16 par value per share

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x    No ¨

Based on the closing sale price on May 31, 2003, the aggregate market value of the voting stock held by non-affiliates of the registrant was $89,508,635. For these purposes, the registrant considers its Directors and executive officers to be its only affiliates.

The number of shares outstanding of the registrant’s Common Stock was 6,215,342 on July 31, 2003.

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DOCUMENTS INCORPORATED BY REFERENCE

The Registrant’s definitive proxy statement to be prepared pursuant to regulation 14a and filed in connection with solicitation of proxies for its October 2, 2003 annual meeting of shareholders is incorporated by reference into part III of this Form 10-K.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, are made throughout this Annual Report on Form 10-K, including statements relating to management’s expectations regarding new product introductions; the adequacy of the Company’s sources for certain components, raw materials and finished products; and the Company’s ability to utilize certain inventory. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause Neogen Corporation’s results to differ materially from those indicated by such forward-looking statements, including those detailed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” and “- Future Operating Results.”

In addition, any forward-looking statements represent management’s views only as of the day this Annual Report on Form 10-K was first filed with the Securities and Exchange Commission and should not be relied upon as representing management’s views as of any subsequent date. While management may elect to update forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if its views change.

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PART I

ITEM 1. BUSINESS

Neogen Corporation and subsidiary (Neogen or the Company) develops, manufactures, and markets a diverse line of products dedicated to food and animal safety. The Company’s food safety segment consists primarily of diagnostic test kits and complementary products (e.g., dehydrated culture media) marketed to food producers and processors to detect dangerous and/or unintended substances in food and animal feed, such as foodborne pathogens, natural toxins, food allergens, genetic modifications, ruminant by-products, drug residues, pesticide residues and general sanitation concerns. The diagnostic test kits are generally less expensive, easier to use and provide greater accuracy and speed than conventional diagnostic methods. The majority of the tests are disposable, single-use, immunoassay products that rely on the Company’s proprietary antibodies to produce rapid and accurate test results. The Company’s expanding line of food safety products also includes gene-probes and bioluminescence-based diagnostic technologies.

Neogen’s animal safety segment is primarily engaged in the development, manufacture and marketing of pharmaceuticals, vaccines, veterinary instruments, topicals and diagnostic products for the worldwide animal safety market. The majority of these consumable products are marketed through a network of national and international distributors, as well as a number of large farm supply retail chains in the United States and Canada. The Company’s USDA-licensed facility in Tampa, Fla., produces immunostimulant products for horses and dogs, and its unique equine botulism vaccine. The Company’s line of drug detection products are sold worldwide for the detection of abused and therapeutic drugs in animals and animal products.

Management’s vision is for Neogen to become a world leader in development and marketing of products dedicated to food and animal safety. To meet this vision, a growth strategy consisting of the following elements has been developed: (i) increasing sales of existing products; (ii) introducing new products and product lines; (iii) expanding international sales; and (iv) acquiring businesses and forming strategic alliances. While the elements of the strategy are stated in order of importance over the long term, management understands and believes that strategic acquisitions will provide the best opportunity for more rapid growth in the short term. For that reason, an active acquisition program is maintained and financial and other resources are retained to capitalize on opportunities as they arise.

Neogen Corporation was formed as a Michigan corporation in June 1981 and actual operations began in 1982. The Company’s principal executive offices are located at 620 Lesher Place, Lansing, Michigan 48912-1595 and its telephone number is (517) 372-9200.

Neogen’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports are available free of charge via our Internet website (www.neogen.com) as soon as reasonably practicable after such information is filed with, or furnished to, the United States Securities and Exchange Commission.

Trademarks and registered trademarks Neogen markets its products under include: Corporate: Neogen^®, Neogen flask^®; Food Safety: Acumedia^® and logo^®, Agri-Scan^®, Agri-Screen^®, Agri-Screen Ticket^®, Alert^®, EnviroCaster^®, Gene-Trak^®, ISO-GRID^™, Reveal^®, Revive^®, Veratox^®; Animal Safety: AluShield^™, AmVet^®, BottomHoof^™, BotVax^®, Calf Eze^™, D3 Needles^™, Dr. Frank’s^®, ElectroJac^®, ELISA Technologies^®, EqStim^®, EquiMax^™, Gnat-Away^™, GNatural^™, Gold Nugget^® and logo^®, Gold Wrap^™, Ideal^®, ImmunoRegulin^®, ImmunoVet^®, Injecto-Stik^™, Insight^®, Iso-Prine^™, K-Blue^®, K-Gold^®, MegaShot^™, Mini-Shot^®, MycAseptic^®, NeedleGard^®, Paddock & Pasture^®, PanaKare^™, Poridon^®, Pro-Pistol^™, Pyril-Pam^®, RenaKare^™, Shine N’ Glo^™, Spec-Tuss^™, Squire^®, Stam-N-Aid^™, Stress-Dex^®, TCA Paint^™, ThrushCrusher^™, TopHoof^™, Tri-Hist^®, Tri-Seal^™, Triple Block^™, Triple Cast^™, Triple Crown^™, Triple Heat^™, Tri-Soxsuprine^™, UriKare^™, Vita-15^™.

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PRODUCTS

Neogen operates in two primary business areas: products for the detection of pathogens, natural toxins and other unwanted substances in food products, the Food Safety segment, and products dedicated to animal health, the Animal Safety segment. See Note 10 to Consolidated Financial Statements for financial information about the Company’s business segments and international operations.

FOOD SAFETY SEGMENT

The products of Neogen’s food safety segment consist primarily of diagnostic test kits and complementary products (e.g., dehydrated culture media) marketed to food producers and processors to detect dangerous and/or unintended substances in food and animal feed, such as foodborne pathogens, natural toxins, food allergens, genetic modifications, ruminant by-products, drug residues, pesticide residues and general sanitation concerns.

Most of the Neogen’s food safety test kits use immunoassay technology to rapidly detect target substances. The Company’s ability to produce superior antibodies, the most sensitive and specific available, sets its products apart from immunoassay test kits produced and sold by other companies. The Company’s test kits are available in microwell formats, which allow for the rapid processing of a large number of samples and automated procedures, and lateral flow devices that provide distinct visual results. Each test kit uses antibody-coated test devices and chemical reagents to produce a color change to indicate a positive or negative result for the presence of a target substance in a test sample. The simplicity of the tests, similar in technology to home pregnancy tests, make them accessible to all levels of food producers, processors and handlers with minimal equipment and training.

Neogen’s test kits are used to detect potential hazards in food and animal feed by testers ranging from small hometown grain elevators to the largest, best-known food and feed processors in the world, and numerous regulatory agencies. Every year since 1994, the USDA’s Federal Grain Inspection Service has awarded the Company a contract for the exclusive use of its quantitative test for aflatoxin (a toxic mold by-product) in grain commodities. Similarly, the USDA’s Food Safety Inspection Service has renewed its contract every year since 1994 to use the Company’s rapid test for E. coli O157:H7 to assist in screening the nation’s beef supply for the deadly bacterium.

Meat and poultry processors, seafood processors, fruit and vegetable producers and many other market segments are the primary users of the Neogen’s Reveal^® and Alert^® tests for foodborne bacteria, including E. coli O157:H7, Salmonella, Listeria and Campylobacter. Grain producers and processors of all types and sizes use the Company’s Veratox^® and Agri-Screen^® tests for mycotoxins, including aflatoxin, deoxynivalenol, fumonisin, ochratoxin, zearalenone and T-2 toxin, to help ensure product safety and quality. The world’s largest producers of cookies, crackers, candy, ice cream, and many other foods, use the Company’s market-best Veratox^® and Alert^® testing products for food allergens to protect their food-allergenic customers from the inadvertent contamination of products with food allergens, such as peanut, milk, egg and almond residues.

Neogen developed the first rapid immunoassay test kits to detect ruminant by-products in animal feed ingredients and finished feed. The Agri-Screen^® tests were designed to help prevent ruminants (cattle, sheep and goats) from being fed rendered materials containing ruminant by-products in an effort to prevent the spread of BSE (a.k.a., “mad cow” disease) from animal to animal. The Company’s specialty products for the seafood market include tests for histamine, a highly allergenic substance that occurs when certain species of fish begin to decay; chloramphenicol, a banned antibiotic in most of the world, but still used by some shrimp farmers to improve the yield of their product; and sulfites, an effective but potentially allergenic shrimp preservative.

Neogen also offers other test methods and products to complement its immunoassay tests. The Company’s line of Gene-Trak^® assays utilize DNA probe hybridization technology to create exceptionally sensitive and specific tests to detect foodborne bacteria. Instead of using antibodies as in an immunoassay to “capture” a target pathogen that may be present in a sample, the Gene-Trak technology uses a portion of the target pathogen’s unique ribosomal RNA (rRNA) sequence to bind to complementary rRNA strands of the pathogen in a sample. The result is a test with the ease and speed of a rapid test method, but the specificity of a time-consuming conventional laboratory method (specificity is a test’s ability to distinguish between a target pathogen, and a closely-related but innocuous bacterium).

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Neogen’s Acumedia^® subsidiary offers dehydrated culture media for varied purposes, including traditional bacterial testing, and growing beneficial bacteria, such as cultures for sausages and beer. The Company’s customers for dehydrated culture media also include commercial and research laboratories and producers of pharmaceuticals, cosmetics and veterinary vaccines.

Neogen markets rapid sanitation test for adenosine triphosphate (ATP), a chemical found in all living cells, uses bioluminescence to quickly (in less than 10 seconds) determine if a food contact surface has been sanitized completely prior to reuse. When ATP comes into contact with the firefly reagent luciferin luciferase contained in the test device, a reaction takes place that produces light. The more light, the more present ATP and the greater the need for more thorough sanitation. The Company’s wide-ranging customer base for its ATP sanitation testing products in the United States includes food and beverage processors and the foodservice industry.

Revenues from Neogen’s Food Safety Division accounted for 54.8%, 49.2%, and 47.9% of the Company’s total revenues for fiscal years ended May 31, 2003, 2002 and 2001, respectively.

ANIMAL SAFETY SEGMENT

Neogen’s animal safety segment is primarily engaged in the development, manufacture and marketing of pharmaceuticals, vaccines, veterinary instruments, topicals and diagnostic products to the worldwide animal safety market.

Neogen’s AmVet^® product line provides innovative, value-added, high quality products to the veterinary market. Top AmVet products include PanaKare^™, a digestive aid that serves as a replacement therapy where digestion of protein, carbohydrate and fat is inadequate due to exocrine pancreatic insufficiency; Natural Vitamin E-AD, which aids in the prevention and treatment of vitamin deficiencies in swine, cattle and sheep; and RenaKare^™, a supplement for potassium deficiency in cats and dogs. The Company’s Triple Crown^™ line has been synonymous with quality equine veterinary care since 1971. Products sold under the Triple Crown brand include Vita-15^™ and Liver 7, which are used in the treatment and prevention of nutritional deficiencies in horses.

Neogen’s in-house equine protozoal myeloencephalitis (EPM) testing service offers veterinarians accurate, timely results for early diagnosis of the disease that can devastate a horse’s central nervous system. In addition, the Company’s BotVax^® B vaccine has successfully protected hundreds of thousands of horses and foals against type B botulism, commonly known as Shaker Foal Syndrome. The Company’s product is the only USDA-approved vaccine for the prevention of Type B botulism in horses.

Years of research and many thousands of doses have proven Neogen’s EqStim^® immunostimulant to be safe and effective as a veterinarian-administered adjunct to conventional treatment of equine bacterial and viral respiratory infections. The Company’s ImmunoRegulin^® product uses similar immunostimulant technology to aid in the treatment of pyoderma (a bacterial skin inflammation) in dogs.

Through its wholly-owned subsidiary Ideal Instruments, Inc., Neogen markets a complete line of veterinary instruments and animal health delivery systems. Ideal offers approximately 250 different products, many of which are used to deliver animal health products, such as antibiotics and vaccines. Ideal’s new D3 Needles^™ are three times stronger than conventional veterinary needles, and are uniquely detectable by common meat processing facility metal detectors—a big market advantage in the safety-conscious beef and swine industries.

Animal safety products offered by Neogen to the retail over-the-counter market include many of the Ideal brand veterinary instruments and products sold under the Squire^® and Gold Nugget^® brands. Squire products include Stress-Dex^®, the No. 1 oral electrolyte for performance horses for more than 30 years, and Fura-Zone, for the prevention and treatment of surface bacterial infections in wounds, burns and cutaneous ulcers. Gold Nugget OTC products include GNatural^™ Spray, to protect horses from biting insects, and Poridon^®, a pour-on insecticide for horses.

Neogen’s line of 80 drug detection immunoassay test kits are sold worldwide for the detection of approximately 200 abused and therapeutic drugs in racing animals, such as horses, greyhounds and camels, as well as for

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testing fair animals and drug residues in meat and meat products. The test kits are also used for human forensic toxicology drug screening applications. This line includes tests for narcotics, analgesics, stimulants, depressants, tranquilizers, anesthetics, steroids and diuretics.

Neogen also has several products used by researchers for the detection of biologically-active substances. These products include tests for cyclic nucleotides, hormones, leukotrienes, prostaglandins and steroids. Marketed under the trademarks of K-Blue and K-Gold, Neogen offers certain test kit components it uses in its own testing products to other diagnostic test kit manufacturers.

Revenues from Neogen’s Animal Safety Division accounted for 45.2%, 50.8%, and 52.1% of the Company’s total revenues for fiscal years ended May 31, 2003, 2002 and 2001 respectively.

GENERAL SALES AND MARKETING

Neogen’s domestic sales efforts are organized by market segments, rather than by products or geography. During the fiscal year that ended May 31, 2003, the Company had more than 5,000 customers for its products. Since many of these customers are distributors, and certain animal safety products are offered to the general retail market, the total number of end users of the Company’s products is considerably larger. A total of 93 employees are assigned to sales and marketing functions within the Company. No single distributor or customer accounted for 10% or more of the Company’s revenues in any of the past three years.

FOOD SAFETY SALES AND MARKETING

To reach each customer and prospect with expertise and experience, Neogen has a staff of specialized food safety sales representatives assigned to specific markets. This staff sells Company products directly to end users, and also handles many technical support issues that arise with customers.

Neogen’s food safety markets are comprised of: feed and agriculture, including grain elevators, feed mills, pet food manufacturers, grain inspection companies and the USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA); meat and poultry, including meat and poultry processors, producers of ready-to-eat meat and poultry products, and the USDA’s Food Safety Inspection Service (FSIS); milling and grocery, including flour millers, malters, bakeries, candy and confection manufacturers, manufacturers of prepared meals, nuts, spices, cookies, crackers and other snack foods; fruits and vegetables, including growers and processors of juice and packaged fresh cut grocery items; seafood, including harvesters and processors of a wide variety of seafood products; dairy and beverage, including milk processors and soft drink bottlers; and Acumedia dehydrated culture media, including commercial and research laboratories and producers of pharmaceuticals, cosmetics and veterinary vaccines.

ANIMAL SAFETY SALES AND MARKETING

Neogen markets pharmaceuticals, vaccines, supplements, topicals, veterinary instruments and diagnostic products to the professional veterinary market. Neogen’s sales force services equine veterinarians directly and supports the efforts of a network of domestic and international distributors who service the companion (horses, dogs and cats) and food animal markets. Neogen supports its distribution channels through training, field support, promotions and technical service.

To reach the vast over-the-counter marketplace with its animal health products, Neogen works with a network of professional distributors and retailers to supply animal owners with premium-quality, yet affordable products. This network includes traditional two-step distributors, retailers and catalogers. The Company’s retail presence for certain of its veterinary care products now includes approximately 430 stores in the United States-based Tractor Supply Company (TSC) farm supply retail chain, 30 Canadian TSC locations, and the 116-store Orschlen’s retail chain with locations throughout the Midwestern United States.

Neogen uses its own sales representatives to market its tests for the detection of abused and therapeutic drugs in racing and food animals to laboratories and through distributors worldwide. Similarly, the Company’s own sales

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staff markets its Life Sciences testing products and diagnostic testing components to independent researchers and diagnostic test kit manufacturers.

INTERNATIONAL SALES AND MARKETING

Internationally, Neogen uses its own sales managers to work closely with and coordinate the efforts of a network of more than 100 distributors in 65 countries. The distributors provide local training and technical support, perform market research, and promote Company products around the world.

Neogen’s March 2003 acquisition of Adgen Ltd., a private company based in Ayr, Scotland, provides the Company better access to the European Union, and allows it to better serve its network of customers and distributors throughout the EU. Prior to the acquisition, Adgen had been a major distributor of Neogen products in Europe, as well as a producer and marketer of its own agricultural diagnostic testing products. Adding Adgen’s experienced research and development team will be a strong asset to Neogen as it works toward developing the next generation of food safety diagnostic testing products, especially products tailored to meet certain unique requirements of the European market.

In 2002, Neogen opened an office in Shanghai, China, to better serve the expanding food safety market, as well as more closely manage its Chinese animal safety manufacturing. The principal purpose of the Chinese personnel will be to manage the local distributors who have been appointed by the Company to introduce the Company’s products in the Chinese market.

Revenues from Neogen’s international sales have accounted for 21%, 23%, and 21% of the Company’s total revenues for fiscal years ended May 31, 2003, 2002 and 2001, respectively.

Risks associated with foreign operations include the need for additional regulatory approvals, possible disruptions of product delivery, the differing product needs of foreign customers, difficulties in building and managing foreign operations, fluctuations in the value of foreign currencies, import/export duties and quotas, and unexpected regulatory, economic or political changes in foreign markets. The level of foreign activities does not currently require hedging to reduce the effect of currency fluctuations.

RESEARCH AND DEVELOPMENT

Management maintains a strong commitment to Neogen’s research and development activities. The Company’s product development efforts are focused on the enhancement of existing product lines and in development of new products that fit its business strategy. The Company employs 28 individuals, in its research and development department, including immunologists, chemists, engineers and microbiologists. Research and development expenditures were approximately $2.9 million, $2.3 million and $1.8 million, representing 6%, 5% and 5%, of total revenues in fiscal 2003, 2002 and 2001, respectively. Management currently intends to maintain the Company’s research and development expenditures at approximately 5% to 6% of total revenues.

Neogen has ongoing development projects for new immunoassay diagnostic tests for the food safety, animal safety and pharmacologics markets, as well as engineering projects for new and improved veterinary instruments. Management expects that these products will be available for marketing in fiscal years 2004 to 2006.

Portions of certain technologies utilized in some products marketed by Neogen were acquired from or developed in collaboration with affiliated partnerships, independent scientists, governmental units, universities and other third parties. The Company has entered into agreements with these parties that provide for the payment of royalties based upon sales of products that utilize the pertinent technology. For fiscal 2003, 2002 and 2001, royalty expense under these agreements amounted to $1,523,822, $1,215,000 and $987,000, respectively.

PROPRIETARY PROTECTION AND APPROVALS

Patents and trademarks are applied for whenever appropriate. Since its inception, Neogen has acquired and received more than 50 patents and trademarks, and has several pending patents and trademarks. The patents expire at various times over the next 20 years.

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Management believes that Neogen has adequate protection as to proprietary rights for its products. However, it is aware that substantial research has taken place at universities, governmental agencies and other companies throughout the world and that numerous patent applications have been filed and that numerous patents have been issued. To the extent some of the Company’s products may now, or in the future, embody technologies protected by patents, copyrights or trade secrets of others, licenses to use such technologies may need to be obtained in order to continue to sell the products. These licenses may not be available on commercially reasonable terms. Failure to obtain any such licenses may delay or prevent the sale of certain new or existing products. In addition, patent litigation is not uncommon. Accordingly, there can be no assurance that the Company’s existing patents will be sufficient to completely protect its proprietary rights.

Neogen uses trade secrets as proprietary protection in numerous of its food and animal safety products. In many cases, the Company has developed unique antibodies capable of detecting microorganisms and residues at minute levels. The supply of these antibodies, and the proprietary techniques utilized for their development, may offer better protection than the filing of patents. Such proprietary reagents are maintained in secure facilities and stored in more than one location to reduce exposure to complete destruction by natural disaster or other means.

One of the major areas affecting the success of biotechnology development involves the time, costs and uncertainty surrounding regulatory approvals. Currently, Neogen products requiring regulatory approval include BotVax B, EqStim and ImmunoRegulin. The Company’s general strategy is to select technical and proprietary products that do not require mandatory approval to be marketed. In China nine of the Company’s immunoassay based test kits are listed in the GB, or National Standard. Listings of these products are expected to give enhanced sales potential into Government and other laboratories in China.

Neogen utilizes third party validations on many of its disposable test kits as a marketing tool to provide its customers with the proper assurances. These include validation by the Association of Official Analytical Chemists, independently administered third-party, multi-laboratory collaborative studies and approvals by the U.S. Federal Grain Inspection Service and the U.S. Food Safety Inspection Service for the use of Company products in their operations.

PRODUCTION AND SUPPLY

Neogen manufactures its products in Lansing, Michigan; Lexington, Kentucky; Schiller Park, Illinois; Baltimore, Maryland; Tampa, Florida; and Ayr, Scotland. There are currently approximately 106 full-time employees assigned to manufacturing in these six locations. All locations generally operate on a one-shift basis, but could be increased to a two-shift basis. Management believes it could increase the current output of its primary product lines by more than 50% using the current space available with a minimum of additional capital equipment.

Manufacturing diagnostic tests for natural toxins, pathogens, food allergen and pesticides takes place in Lansing, Michigan. Proprietary monoclonal and polyclonal antibodies for the Neogen’s diagnostic kits are produced on a regular schedule in the Company’s immunology laboratories. Other reagents are similarly prepared by the chemistry group. Final kit assembly, quality assurance and shipping are completed in a nearby dedicated manufacturing facility.

Manufacture of pharmacological diagnostic test kits, test kits for drug residues and of animal health products takes place in Lexington, Kentucky. In general, manufacturing operations including blending preparation of other reagents, quality assurance, final kit assembly and packaging are performed by Neogen personnel. Certain animal health products are toll manufactured by third party vendors.

Neogen’s Schiller Park, Illinois, facility distributes veterinary instruments that are purchased as finished parts and require no additional procedures prior to sale and other instruments assembled in the facility from parts produced by local or international suppliers.

The Baltimore, Maryland, facility is a FDA-approved manufacturing plant devoted to the production of dehydrated culture media products. Products are blended following strict formulations or custom blended to customer specification and shipped directly to customers from the Baltimore facility.

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The Tampa, Florida, facility is an USDA-approved manufacturing plant devoted to the production of the biologic products EqStim^® and ImmunoRegulin^®. P.acnes seed cultures are added to media and then subjected to several stages of further processing resulting in a product that is filled and packaged within the Tampa facility. The Company’s BoxVax B vaccine is also produced in the Tampa facility, utilizing Type B botulism seed cultures and a traditional fermentation process. All completed product is then shipped to Neogen’s Lexington facilities for inventory and distribution to customers.

Neogen purchases component parts and raw materials from more than 200 suppliers. Though many of these supplies are purchased from a single source in order to achieve the greatest volume discounts, the Company believes it has identified acceptable alternative suppliers for all of its components and raw materials.

Shipments of products are generally accomplished within a 48-hour turnaround time. As a result of this quick response time, Neogen’s backlog of unshipped orders at any given time is not significant.

COMPETITION

Although competitors vary in individual markets, management knows of no competitor that is pursuing the Neogen’s fundamental strategy of developing a full line of products, ranging from disposable tests and dehydrated culture media to veterinary pharmaceuticals and veterinary instruments for a large number of food safety and animal safety concerns. For each of its individual products, the Company faces intense competition from companies ranging from small businesses to divisions of large international companies. Some of these organizations have substantially greater financial resources than the Company. The Company competes primarily on the basis of ease of use, speed, accuracy, and other similar performance characteristics of its products. The breadth of the Company’s product line, the effectiveness of its sales and customer service organizations and pricing are also components in management’s competitive plan. Management is not aware of any factors within its product lines that place the Company in a negative competitive position relative to its competitors.

Future competition may become even more intense, including the development of changing technologies, which could affect the marketability of the Neogen’s products. The Company’s competitive position also will depend on management’s ability to develop proprietary products, attract and retain qualified scientific and other personnel, develop and implement production and marketing plans and obtain patent protection and adequate capital resources.

FOOD SAFETY

Neogen’s Food Safety Division has strong distribution of its products using Company employees domestically and from an active and aggressive distributor group outside of North America. With one of the largest professional sales organizations in the industry, management believes that it maintains a general competitive advantage as sales personnel are in a position to be with customers and prospects more frequently than those of its competitors. Additionally, as an agriculturally based company, Neogen has what is believed to be a unique insight into the food industry as opposed to its clinically based competition.

Competition for pathogen detection products includes traditional methods and antibody and genetic based platforms. Neogen’s product offerings compete across the entire spectrum of methods. Competition for natural toxins and allergen detection products include instrumentation and antibody based tests. Generally, the Company’s products fall within the non-instrument category. While for these and other food safety products the Company’s offerings will not always compete on all platforms in all markets, the products that are offered provide tests that can be well utilized by most customers to meet their testing needs.

Besides its strong product offerings and its superior distribution, the Company focuses its competitive advantage in the areas of customer service and speed and ease of use of its products. Additionally, by aggressively maintaining itself as a low cost producer, Neogen assures that it can be competitive with new market entrants that may choose a low pricing strategy in an attempt to gain market share.

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ANIMAL SAFETY

Neogen’s Animal Safety Division faces no one competitor across the products and markets it serves. In the racing industry market, the Company holds the position of dominant market share, facing only one other significant company in the marketplace. In the Life Sciences market, the Company competes against a few other diagnostic and reagent companies but none with the same breadth of product offering.

In the veterinary market, Neogen markets BotVax B, the only USDA approved vaccine for the prevention of botulism Type B in horses. The Company competes on other key products through differentiated product performance and superior customer and technical support. With some of its products, the Company provides a generic drug solution as a lower cost alternative and offers a private label option for its distributors.

Neogen competes in the retail market by providing solutions to common retail problems – stock outs, wasted floor space, and inconsistent brand identity. The Company offers plan-o-grams and reordering systems to maximize turns and profitability for its customers.

GOVERNMENT REGULATION

A significant portion of the Neogen’s products and revenues are affected by the regulations of various domestic and foreign government agencies, including the U.S. Department of Agriculture and the U.S. Food and Drug Administration. Changes in these regulations could affect revenues and/or costs or production and distribution.

Neogen’s development and manufacturing processes involve the use of certain hazardous material, chemicals and compounds. Management believes that the Company’s safety features for handling and disposing of such commodities comply with the standards prescribed by local, state and federal regulations. The Company’s cost to comply with these regulations is not significant and the Company has no reason to believe that any such future legislation or rules would be materially adverse to its business.

EMPLOYEES

Currently, the Company employs approximately 280 full-time persons. None of the employees are covered by collective bargaining agreements. There have been no work stoppages or slow downs due to labor-related problems. Management believes that its relationship with its employees is good. All employees having access to proprietary information have executed confidentially agreements with the Company.

ITEM 2. PROPERTIES

Neogen owns six separate buildings located in Lansing, Michigan. A 26,000 square foot building located at 620 Lesher Place includes senior corporate administrative offices, food safety sales and marketing offices and research facilities. A 12,000 square foot building located at 600 Lesher Place is used for corporate accounting, human resources, and communications functions. Two adjacent buildings, located nearby at 703 and 720 Shiawassee, total 25,000 square feet and are to be used for manufacture of food safety products. Remaining buildings in Lansing, with a total of 2,500 square feet, are held out for rental pending future expansion.

Animal safety sales and marketing and research are located in 23,000 square feet of leased space in a three-story building at 628 Winchester in Lexington, Kentucky. The lease agreement on this property, which expires December 31, 2003, provides for monthly lease payments of $9,500. Upon expiration of the lease, management believes that a move to a larger facility in the general vicinity of the current facility will be necessary. It is expected that the square foot cost for a different facility will be higher. At the current time no estimate of additional costs that may be incurred related to these facility changes is available. No significant disruption of operations is expected in a move from the current facility.

Animal Safety manufacturing takes place in 16,000 square feet of leased space at 2040 Creative Drive in Lexington, Kentucky. The lease covering the space is a non-cancelable operating lease through December 31, 2007 currently requiring monthly payments of $6,059.

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Dehydrated culture media manufacturing takes place in a FDA licensed facility. The operations are located in 14,400 square feet of leased space at 9601 Pulaski Park Drive, Baltimore, Maryland. The lease, which expires January 15, 2004, provides for monthly payments of $6,784. Upon expiration of the lease on this facility, management believes it can renegotiate a lease on the current facility or relocate to a comparable facility with materially similar lease terms. No significant disruption of operations would be expected in the event of a move to an alternate facility.

Veterinary instrument manufacturing operations are housed in a 34,000 square foot building located at 9355 West Byron Street in Schiller Park, Illinois. The lease agreement, which expires December 31, 2003, provides for monthly lease payments of $12,550. Upon expiration of the lease on this facility, management believes it can renegotiate a lease on the current facility or relocate to a comparable facility with materially similar lease terms. No significant disruption of operations would be expected in the event of a move to an alternate facility.

The Company leases 5,200 square feet at 5910 Breckenridge Center Parkway in Tampa, Florida where the manufacturing of three animal safety products takes place. This USDA-approved facility is subject to a non-cancelable lease through September 2004. The current rental rate is $5,237 monthly.

Adgen Ltd. operations take place in 12,948 square feet in the Cunningham Building at Auchincruive Ayrshire Scotland (on the campus of The Scottish Agricultural College at Ayr). The lease agreement on this property expires May 31, 2018, however, Adgen may terminate the lease after 5 years or 10 years from inception with a payment of 6 months or 3 months rent, respectively. The current rental rate is £34,650 annually increasing to £63,000 in year five (all plus value added tax).

These properties are in good condition, well maintained, and generally suitable and adequate to carry on the Company’s business.

ITEM 3. LEGAL PROCEEDINGS

Neogen is subject to certain legal proceedings in the normal course of business that, in the opinion of management, will not have a material effect on its future results of operations or financial position.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Neogen Common Stock is traded on the NASDAQ National Market under the symbol “NEOG”. The following table sets for, the fiscal periods indicated, the high and low sales prices for the Common Stock as reported on the NASDAQ National Market.

As of July 31, 2003, there were approximately 500 stockholders of record of Common Stock that management believes represents a total of approximately 6,000 beneficial holders. Neogen has never paid any cash dividends on its Common Stock and does not anticipate paying any cash dividends in the foreseeable future.

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ITEM 6. SELECTED FINANCIAL DATA

The following tables sets forth selected consolidated financial data of Neogen for each of the five years ended May 31, 2003. The selected consolidated financial data presented below have been derived from the Company’s consolidated financial statements. These financial data should be read in conjunction with the consolidated financial statements, related notes and other financial information appearing elsewhere in this Form 10-K.