Back to GetFilings.com



Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended February 28, 2005

 

or

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from              to             

 

Commission file number 0-17988

 

 

Neogen Corporation

(Exact name of registrant as specified in its charter)

 

 

Michigan   38-2364843

(State or other jurisdiction of

incorporation or organization)

  

(IRS Employer

Identification Number)

 

620 Lesher Place

Lansing, Michigan 48912

(Address of principal executive offices including zip code)

 

(517) 372-9200

(Registrant’s telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

 

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 reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  x    NO  ¨

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12B – 2 of the Exchange Act).    YES  x    NO  ¨

 

As of April 1, 2005, there were 8,149,542 outstanding shares of Common Stock.

 

Table of Contents

NEOGEN CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

 

         Page No.
PART I. Financial Information     
Item 1.   Interim Consolidated Financial Statements (unaudited)     
   

Consolidated Balance Sheets -
February 28, 2005 and May 31, 2004

    1
   

Consolidated Statements of Income –
Three months and nine months ended February 28, 2005 and February 29, 2004

    2
   

Consolidated Statements of Stockholders’ Equity –
Nine months ended February 28, 2005

    3
   

Consolidated Statements of Cash Flows –
Nine months ended February 28, 2005 and February 29, 2004

    4
    Notes to Interim Consolidated Financial Statements – February 28, 2005    5
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations    8
Item 3.   Quantitative and Qualitative Disclosures About Market Risk    12
Item 4.   Controls and Procedures    12
PART II. Other Information     
Item 1.   Legal Proceedings    13
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds    13
Item 3.   Defaults Upon Senior Securities    13
Item 4.   Submission of Matters to a Vote of Security Holders    13
Item 5.   Other Information    13
Item 6.   Exhibits    13
Signatures     
CEO Certification     
CFO Certification     
Section 906 Certification     

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. Interim Consolidated Financial Statements (Unaudited)

 

NEOGEN CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

    

February 28,

2005

   

May 31,

2004

     (In thousands, except share
and per share amounts)

ASSETS

              

CURRENT ASSETS

              

Cash

    $ 1,232    $ 1,365

Marketable securities

      140      331

Accounts receivable, less allowance of $ 556 and $ 571

      11,070      9,924

Inventories

      12,797      12,374

Deferred income taxes

      651      651

Prepaid expenses and other current assets

      1,440      1,630
    
  

TOTAL CURRENT ASSETS

      27,330      26,275

NET PROPERTY AND EQUIPMENT

      12,216      10,952

OTHER ASSETS

              

Goodwill

      19,232      18,617

Other non-amortizable intangible assets

      853      675

Other non-current assets, net of accumulated amortization of $ 1,076 and $ 864

      3,290      3,456
    
  
     $ 62,921    $ 59,975
    
  

LIABILITIES AND STOCKHOLDERS’ EQUITY

              

CURRENT LIABILITIES

              

Accounts payable

    $ 2,102    $ 3,063

Accrued compensation

      1,001      1,220

Other accruals

      1,699      1,373
    
  

TOTAL CURRENT LIABILITIES

      4,802      5,656

LONG-TERM DEBT

      2,250      3,900

OTHER LONG-TERM LIABILITIES

      2,550      2,577

STOCKHOLDERS’ EQUITY

              

Preferred stock, $1.00 par value, 100,000 shares authorized, none issued and outstanding

      —        —  

Common stock, $.16 par value, 20,000,000 shares authorized, 8,142,942 shares issued and outstanding at February 28, 2005; 8,010,222 shares issued and outstanding at May 31, 2004

      1,303      1,282

Additional paid-in capital

      26,647      25,785

Accumulated other comprehensive income

      222      99

Retained earnings

      25,147      20,676
    
  

TOTAL STOCKHOLDERS’ EQUITY

      53,319      47,842
    
  
     $ 62,921    $ 59,975
    
  

 

See notes to interim consolidated financial statements

 

1

Table of Contents

NEOGEN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

 

    

Three Months Ended

February 28/29,

    

Nine Months Ended

February 28/29,

  
     2005
     2004
     2005
     2004
  
    

(In thousands, except

per share amounts)

  

Net sales

    $ 14,403     $ 14,717     $ 46,748     $ 40,196  

Cost of goods sold

      7,445       7,791       24,191       20,007  
    
 
 
 

GROSS MARGIN

      6,958       6,926       22,557       20,189  

OPERATING EXPENSES

                                 

Sales and marketing

      3,308       3,001       9,987       8,727  

General and administrative

      1,169       1,368       3,849       3,423  

Research and development

      704       792       2,133       2,120  
    
 
 
 
       5,181       5,161       15,969       14,270  
    
 
 
 

OPERATING INCOME

      1,777       1,765       6,588       5,919  

OTHER INCOME (EXPENSE)

                                 

Interest income

      2       2       6       45  

Interest expense

      (23 )     (32 )     (75 )     (32 )

Other

      25       7       254       136  
    
 
 
 
       4       (23 )     185       149  
    
 
 
 

INCOME BEFORE INCOME TAXES

      1,781       1,742       6,773       6,068  

INCOME TAXES

      567       559       2,302       2,040  
    
 
 
 

NET INCOME

    $ 1,214     $ 1,183     $ 4,471     $ 4,028  
    
 
 
 

NET INCOME PER SHARE

                                 

Basic

    $ .15     $ .15     $ .55     $ .51  
    
 
 
 

Diluted

    $ .14     $ .14     $ .53     $ .48  
    
 
 
 

 

See notes to interim consolidated financial statements

 

2

Table of Contents

NEOGEN CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

 

                   

Additional

Paid-in

Capital

   

Accumulated

Other

Comprehensive
Income

   

Retained

Earnings

          Common Stock
         
     Total
    Shares
    Amount
         
     (In thousands)

Balance, June 1, 2004

    8,010    $ 1,282    $ 25,785    $ 99    $ 20,676    $ 47,842

Exercise of options and warrants

    133      21      862                    883

Comprehensive income:

                                        

Net income for the nine months ended February 28, 2005

                                4,471      4,471

Foreign currency translation adjustments

                         123             123
                                     

Total comprehensive income

                                       4,594
    
  
  
  
  
  

Balance, February 28, 2005

    8,143    $ 1,303    $ 26,647    $ 222    $ 25,147    $ 53,319
    
  
  
  
  
  

 

See notes to interim consolidated financial statements

 

3

Table of Contents

NEOGEN CORPORATION SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 

    

Nine Months Ended

February 28/29,

  
     2005
     2004
  
     (In thousands)  

CASH FLOWS FROM OPERATING ACTIVITIES:

                 

Net income

    $ 4,471     $ 4,028  

Adjustments to reconcile net income to net cash from operating activities:

                 

Depreciation and amortization

      1,356       907  

Changes in operating assets and liabilities:

                 

Accounts receivable

      (1,146 )     (1,912 )

Inventories

      (332 )     (1,152 )

Prepaid expenses and other current assets

      190       (278 )

Accounts payable and accruals

      (854 )     (668 )
    
 

NET CASH FROM OPERATING ACTIVITIES

      3,685       925  

CASH FLOWS USED IN INVESTING ACTIVITIES:

                 

Sales of marketable securities

      191       39,378  

Purchases of marketable securities

      —         (31,542 )

Purchases of property and equipment and other assets

      (2,341 )     (3,774 )

Business acquisitions

      (874 )     (10,034 )
    
 

NET CASH USED IN INVESTING ACTIVITIES

      (3,024 )     (5,972 )

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:

                 

Proceeds from (payments on) long-term debt and other liabilities

      (1,677 )     4,600  

Net proceeds from issuance of common stock

      883       983  
    
 

NET CASH FROM (USED IN) FINANCING ACTIVITIES

      (794 )     5,583  
    
 

INCREASE (DECREASE) IN CASH

      (133 )     536  

CASH AT BEGINNING OF PERIOD

      1,365       1,061  
    
 

CASH AT END OF PERIOD

    $ 1,232     $ 1,597  
    
 

 

See notes to interim consolidated financial statements

 

4

Table of Contents

NEOGEN CORPORATION AND SUBSIDIARIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENT (UNAUDITED)