エドガーで原本を確認する
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) October 10, 2024
NEOGEN CORPORATION
(Exact name of registrant as specified in its charter)
Michigan |
0-17988 |
38-2367843 |
(State or other jurisdiction |
(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
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
|
Title of each Class
|
Trading
|
Name of each exchange
|
Common Stock, $0.16 par value per share |
NEOG |
NASDAQ Global Select Market |
N/A
(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 October 10, 2024, Neogen Corporation issued a press release announcing results of operations for its fiscal 2025 first quarter ended August 31, 2024. 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
|
|
99.1 |
|
|
|
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: October 10, 2024 |
|
|
/s/ David H. Naemura
|
|
|
|
David H. Naemura |
|
|
|
Chief Financial Officer |
Exhibit 99.1
Neogen Announces First-Quarter 2025 Results
LANSING, Mich., October 10, 2024 – Neogen Corporation (NASDAQ: NEOG) announced today the results of the first quarter ended August 31, 2024.
“During the first quarter, the focus of our teams shifted from managing through the initial complexity of exiting the transition service agreements from the 3M transaction to gaining market share,” said John Adent, Neogen’s President and Chief Executive Officer. “The system-related issues in our distribution center that impacted our order fulfillment rates were resolved and the business was not constrained by shipping. In our Food Safety segment, we saw encouraging initial traction from our targeted share-gain activities and generated positive core revenue growth while continuing to navigate soft end-market conditions. In our Animal Safety segment, the end market is near what we believe are cyclical lows. However, sales of our products to end users remained supportive, with the decline in core revenue driven by a combination of mixed channel inventory movements at our distribution partners and timing impacts. Operationally, our margins in the quarter were affected by the lower total volumes, as well as some higher costs in the area of shipping and distribution. We have mitigating initiatives currently underway and will be taking additional targeted actions to protect margins."
Adent continued, “The value proposition of Neogen’s food safety solutions and expertise has never been more relevant than it is today. We provide an important and relatively inexpensive line of defense in the rapid detection of contaminants in the production and distribution of food and beverages. As evidenced by some unfortunate higher-profile incidents recently, contaminated products reaching consumers is something we all work to avoid. Beyond the obvious tragic consequences that can result, the costs of any associated recalls, litigation, brand damage or even facility closures can be tremendous. In addition to our broad portfolio of globally validated products, we have longstanding experience as a trusted partner that we’re able to leverage in structuring robust food safety testing programs to help avoid these outcomes. Our commercial teams are having an increasing amount of constructive dialogue with customers on this front and we’re looking forward to continuing to demonstrate our capabilities as a reliable, knowledgeable source of leading food safety testing solutions.”
Financial and Business Highlights
Revenues for the first quarter were $217.0 million, a decrease of 5.3% compared to $229.0 million in the prior year. Core revenue, which excludes the impacts of foreign currency translation, as well as acquisitions completed and product lines discontinued in the last 12 months, declined by 1.4%. Acquisitions and discontinued product lines did not impact core growth this quarter, while foreign currency had a negative impact of 3.9%.
Net loss for the first quarter was $12.6 million, or $(0.06) per diluted share, compared to net income of $1.5 million, or $0.01 per diluted share, in the prior-year period. Adjusted Net Income was $14.4 million, or $0.07 per diluted share, compared to $23.7 million, or $0.11 per diluted share, in the prior-year period. The decline in Adjusted Net Income was driven primarily by the lower level of operating income.
Gross margin was 48.4% in the first quarter of fiscal 2025. This compares to a gross margin of 51.0% in the same quarter a year ago, with the decrease primarily due to lower volume and continued higher distribution costs. Adjusting for transaction- and integration-related costs, as well as discontinued product costs, gross margin was 50.7% in the first quarter compared to 51.6% in the prior-year quarter.
First-quarter Adjusted EBITDA was $43.7 million, representing an Adjusted EBITDA Margin of 20.1%, compared to $52.4 million and a margin of 22.9% in the prior-year period. The decline in Adjusted EBITDA Margin was driven by lower revenue and the lower gross margin, as well as additional negative impact from the full cost to exit the various transition service agreements that had been in place, including higher shipping costs.
Food Safety Segment
Revenues for the Food Safety segment were $159.3 million in the first quarter, a decrease of 4.2% compared to $166.3 million in the prior year, consisting of 1.1% core growth, a 0.1% contribution from acquisitions and discontinued product lines and a negative foreign currency impact of 5.4%. The core growth was driven by a solid performance in the biosecurity and indicator testing, culture media & other product categories, including Petrifilm, partially offset by lower sales in the bacterial & general sanitation and natural toxins & allergens product categories.
Animal Safety Segment
Revenues for the Animal Safety segment were $57.6 million in the first quarter, a decrease of 8.1% compared to $62.7 million in the prior year, consisting of a 7.8% core revenue decline and 0.3% headwind from discontinued product lines. The decline was driven primarily by lower sales in our animal care & other and biosecurity product categories.
On a global basis, the Company’s Genomics business experienced a core revenue decline in the mid-single-digit range, reflecting modest sequential improvement from the fourth quarter. Increased sales in international beef and dairy markets were offset by the impact of customer attrition in the U.S., a result of the shift in strategic focus towards larger production animals, as well as weakness on the companion animal side of the market.
Liquidity and Capital Resources
As of August 31, 2024, the Company had total cash of $120.5 million and total outstanding non-current debt of $900.0 million, as well as committed borrowing headroom of $150.0 million.
Fiscal Year 2025 Outlook
The Company is maintaining its full-year outlook. Revenue is expected to be in the range of $925 million to $955 million, with Adjusted EBITDA in the range of $215 million to $235 million. The Company continues to expect capital expenditures to be approximately $85 million, including approximately $55 million related specifically to the integration of the former 3M Food Safety Division.
Conference Call and Webcast
Neogen Corporation will host a conference call today at 8:00 a.m. Eastern Time to discuss the Company’s financial results. The live webcast of the conference call and accompanying presentation materials can be accessed through Neogen’s website at neogen.com/investor-relations. For those unable to access the webcast, the conference call can be accessed by dialing (800) 836-8184 (U.S.) or +1 (646) 357-8785 (International) and requesting the Neogen Corporation First Quarter 2025 Earnings Call. A replay of the conference call and webcast will be available shortly following the conclusion of the call, and can be accessed domestically or internationally by dialing (888) 660-6345 or +1 (646) 517-4150, respectively, and providing the entry code 28867, or through Neogen’s Investor Relations website at neogen.com/investor-relations.
About Neogen
Neogen is committed to fueling a brighter future for global food security through the advancement of human and animal well-being. Harnessing the power of science and technology, Neogen Corporation has developed comprehensive solutions spanning the Food Safety, Livestock and Pet Health & Wellness markets. A world leader in these fields, Neogen has a presence in over 140 countries with a dedicated network of scientists and technical experts focused on delivering optimized products and technology for its customers.
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 CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except for share and per share amounts)
|
|
Three months ended August 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Revenue |
|
|
|
|
|
|
||
Food Safety |
|
$ |
159,345 |
|
|
$ |
166,278 |
|
Animal Safety |
|
|
57,619 |
|
|
|
62,709 |
|
Total revenue |
|
|
216,964 |
|
|
|
228,987 |
|
Cost of revenues |
|
|
112,038 |
|
|
|
112,226 |
|
Gross profit |
|
|
104,926 |
|
|
|
116,761 |
|
Operating expenses |
|
|
|
|
|
|
||
Sales & marketing |
|
|
45,799 |
|
|
|
45,783 |
|
Administrative |
|
|
51,671 |
|
|
|
45,121 |
|
Research & development |
|
|
5,199 |
|
|
|
6,722 |
|
Total operating expenses |
|
|
102,669 |
|
|
|
97,626 |
|
Operating income |
|
|
2,257 |
|
|
|
19,135 |
|
Interest expense, net |
|
|
(17,622 |
) |
|
|
(16,666 |
) |
Other expense |
|
|
(244 |
) |
|
|
(806 |
) |
(Loss) income before tax |
|
|
(15,609 |
) |
|
|
1,663 |
|
Income tax (benefit) expense |
|
|
(3,000 |
) |
|
|
160 |
|
Net (loss) income |
|
$ |
(12,609 |
) |
|
$ |
1,503 |
|
Net (loss) earnings per diluted share |
|
$ |
(0.06 |
) |
|
$ |
0.01 |
|
Shares to calculate per share amount |
|
|
216,695,348 |
|
|
|
216,846,106 |
|
NEOGEN CORPORATION
UNAUDITED CONSOLIDATED BALANCE SHEET
(In thousands, except share amounts)
|
|
August 31, 2024 |
|
|
May 31, 2024 |
|
||
Assets |
|
|
|
|
|
|
||
Current Assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
120,477 |
|
|
$ |
170,611 |
|
Marketable securities |
|
|
— |
|
|
|
325 |
|
Accounts receivable, net of allowance of $4,137 and $4,140 |
|
|
167,639 |
|
|
|
173,005 |
|
Inventories, net of reserves of $17,209 and $12,361 |
|
|
198,596 |
|
|
|
189,267 |
|
Prepaid expenses and other current assets |
|
|
53,938 |
|
|
|
56,025 |
|
Total Current Assets |
|
|
540,650 |
|
|
|
589,233 |
|
Net Property and Equipment |
|
|
300,971 |
|
|
|
277,104 |
|
Other Assets |
|
|
|
|
|
|
||
Right of use assets |
|
|
14,311 |
|
|
|
14,785 |
|
Goodwill |
|
|
2,137,494 |
|
|
|
2,135,632 |
|
Intangible assets, net |
|
|
1,489,751 |
|
|
|
1,511,653 |
|
Other non-current assets |
|
|
19,996 |
|
|
|
20,426 |
|
Total Assets |
|
$ |
4,503,173 |
|
|
$ |
4,548,833 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current Liabilities |
|
|
|
|
|
|
||
Current portion of finance lease |
|
$ |
2,651 |
|
|
$ |
2,447 |
|
Accounts payable |
|
|
61,464 |
|
|
|
83,061 |
|
Accrued compensation |
|
|
15,803 |
|
|
|
19,949 |
|
Income tax payable |
|
|
11,102 |
|
|
|
10,449 |
|
Accrued interest |
|
|
3,554 |
|
|
|
10,985 |
|
Deferred revenue |
|
|
5,635 |
|
|
|
4,632 |
|
Other accruals |
|
|
22,480 |
|
|
|
22,800 |
|
Total Current Liabilities |
|
|
122,689 |
|
|
|
154,323 |
|
Deferred Income Tax Liability |
|
|
317,574 |
|
|
|
326,718 |
|
Non-current debt |
|
|
889,129 |
|
|
|
888,391 |
|
Other non-current liabilities |
|
|
38,589 |
|
|
|
35,259 |
|
Total Liabilities |
|
|
1,367,981 |
|
|
|
1,404,691 |
|
Commitments and Contingencies |
|
|
|
|
|
|
||
Equity |
|
|
|
|
|
|
||
Preferred stock, $1.00 par value, 100,000 shares authorized, none issued |
|
|
— |
|
|
|
— |
|
Common stock, $0.16 par value, 315,000,000 shares authorized, 216,698,138 and 216,614,407 shares issued and outstanding |
|
|
34,672 |
|
|
|
34,658 |
|
Additional paid-in capital |
|
|
2,588,930 |
|
|
|
2,583,885 |
|
Accumulated other comprehensive loss |
|
|
(31,421 |
) |
|
|
(30,021 |
) |
Retained earnings |
|
|
543,011 |
|
|
|
555,620 |
|
Total Stockholders’ Equity |
|
|
3,135,192 |
|
|
|
3,144,142 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
4,503,173 |
|
|
$ |
4,548,833 |
|
NEOGEN CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
Three months ended August 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Cash Flows (used for) provided by Operating Activities |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
(12,609 |
) |
|
$ |
1,503 |
|
Adjustments to reconcile net (loss) income to net cash from operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
29,800 |
|
|
|
28,734 |
|
Deferred income taxes |
|
|
(9,119 |
) |
|
|
998 |
|
Share-based compensation |
|
|
3,982 |
|
|
|
2,638 |
|
Loss on disposal of property and equipment |
|
|
77 |
|
|
|
— |
|
Amortization of debt issuance costs |
|
|
860 |
|
|
|
860 |
|
Other |
|
|
(261 |
) |
|
|
— |
|
Change in operating assets and liabilities, net of business acquisitions: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
4,796 |
|
|
|
16,242 |
|
Inventories, net |
|
|
(9,939 |
) |
|
|
(6,304 |
) |
Prepaid expenses and other current assets |
|
|
(1,733 |
) |
|
|
(12,925 |
) |
Accounts payable and accrued liabilities |
|
|
(15,881 |
) |
|
|
4,980 |
|
Interest expense accrual |
|
|
(7,431 |
) |
|
|
(7,711 |
) |
Change in other non-current assets and non-current liabilities |
|
|
(456 |
) |
|
|
(6,006 |
) |
Net Cash (used for) provided by Operating Activities |
|
|
(17,914 |
) |
|
|
23,009 |
|
Cash Flows used for Investing Activities |
|
|
|
|
|
|
||
Purchases of property, equipment and other non-current intangible assets |
|
|
(38,433 |
) |
|
|
(30,630 |
) |
Proceeds from the maturities of marketable securities |
|
|
325 |
|
|
|
21,905 |
|
Proceeds from the sale of property and equipment and other |
|
|
4,446 |
|
|
|
41 |
|
Net Cash used for Investing Activities |
|
|
(33,662 |
) |
|
|
(8,684 |
) |
Cash Flows provided by Financing Activities |
|
|
|
|
|
|
||
Exercise of stock options and issuance of employee stock purchase plan shares |
|
|
1,077 |
|
|
|
1,062 |
|
Repayment of long-term debt and finance lease |
|
|
(98 |
) |
|
|
— |
|
Net Cash provided by Financing Activities |
|
|
979 |
|
|
|
1,062 |
|
Effects of Foreign Exchange Rate on Cash |
|
|
463 |
|
|
|
205 |
|
Net (Decrease) Increase in Cash and Cash Equivalents |
|
|
(50,134 |
) |
|
|
15,592 |
|
Cash and Cash Equivalents, Beginning of Year |
|
|
170,611 |
|
|
|
163,240 |
|
Cash and Cash Equivalents, End of Year |
|
$ |
120,477 |
|
|
$ |
178,832 |
|
Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures, which management believes are useful to investors, securities analysts and other interested parties. Management uses Adjusted EBITDA as a key profitability measure. This is a non-GAAP measure that represents EBITDA before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses. Adjusted EBITDA Margin is Adjusted EBITDA for a particular period expressed as a percentage of revenues for that period.
Management uses Adjusted Net Income as an additional measure of profitability. Adjusted Net Income is a non-GAAP measure that represents net income before certain items that impact comparison of the performance of our business, either period-over-period or with other businesses.
Core revenue growth is a non-GAAP measure that represents net sales for the period excluding the effects of foreign currency translation rates and the first-year impacts of acquisitions and discontinued product lines, where applicable. Core revenue growth is presented to allow for a meaningful comparison of year-over-year performance without the volatility caused by foreign currency translation rates, or the incomparability that would be caused by the impact of an acquisition, disposal or product line discontinuation.
These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Please see below for a reconciliation of historical non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP.
NEOGEN CORPORATION
RECONCILIATION OF NET(LOSS) INCOME TO ADJUSTED EBITDA
(In thousands, except for percentages)
|
|
Three months ended August 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net (loss) income |
|
$ |
(12,609 |
) |
|
$ |
1,503 |
|
Income tax (benefit) expense |
|
|
(3,000 |
) |
|
|
160 |
|
Depreciation and amortization |
|
|
29,800 |
|
|
|
28,734 |
|
Interest expense, net |
|
|
17,622 |
|
|
|
16,666 |
|
EBITDA |
|
$ |
31,813 |
|
|
$ |
47,063 |
|
Share-based compensation |
|
|
3,982 |
|
|
|
2,638 |
|
FX transaction gain on loan and other revaluation (1) |
|
|
(320 |
) |
|
|
(290 |
) |
Certain transaction fees and integration costs (2) |
|
|
5,122 |
|
|
|
1,951 |
|
Severance and other employment costs |
|
|
370 |
|
|
|
559 |
|
Contingent consideration adjustments |
|
|
— |
|
|
|
300 |
|
ERP expense (3) |
|
|
1,835 |
|
|
|
128 |
|
Discontinued product line expense (4) |
|
|
912 |
|
|
|
20 |
|
Adjusted EBITDA |
|
$ |
43,714 |
|
|
$ |
52,369 |
|
Adjusted EBITDA margin (% of sales) |
|
|
20.1 |
% |
|
|
22.9 |
% |
NEOGEN CORPORATION
RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED NET INCOME
(In thousands, except for per share)
|
|
Three months ended August 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net (loss) income |
|
$ |
(12,609 |
) |
|
$ |
1,503 |
|
Amortization of acquisition-related intangibles |
|
|
23,138 |
|
|
|
23,325 |
|
Share-based compensation |
|
|
3,982 |
|
|
|
2,638 |
|
FX transaction gain on loan and other revaluation (1) |
|
|
(320 |
) |
|
|
(290 |
) |
Certain transaction fees and integration costs (2) |
|
|
5,122 |
|
|
|
1,951 |
|
Severance and other employment costs |
|
|
370 |
|
|
|
559 |
|
Contingent consideration adjustments |
|
|
— |
|
|
|
300 |
|
ERP expense (3) |
|
|
1,835 |
|
|
|
128 |
|
Discontinued product line expense (4) |
|
|
912 |
|
|
|
20 |
|
Estimated tax effect of above adjustments (5) |
|
|
(8,052 |
) |
|
|
(6,447 |
) |
Adjusted Net Income |
|
$ |
14,378 |
|
|
$ |
23,687 |
|
Adjusted Earnings per Share |
|
$ |
0.07 |
|
|
$ |
0.11 |
|
NEOGEN CORPORATION
RECONCILIATION OF GROWTH TO CORE GROWTH
(In thousands)
|
|
Q1 FY25 |
|
|
Q1 FY24 |
|
|
Growth |
|
Foreign Currency |
|
Acquisitions / Divestitures |
|
Core Revenue Growth |
||
Food Safety |
|
$ |
159,345 |
|
|
$ |
166,278 |
|
|
(4.2%) |
|
(5.4%) |
|
0.1% |
|
1.1% |
Animal Safety |
|
|
57,619 |
|
|
|
62,709 |
|
|
(8.1%) |
|
0.0% |
|
(0.3%) |
|
(7.8%) |
Total Neogen |
|
$ |
216,964 |
|
|
$ |
228,987 |
|
|
(5.3%) |
|
(3.9%) |
|
0.0% |
|
(1.4%) |
Source: Neogen Corporation
Contact
Bill Waelke
(517) 372-9200
ir@neogen.com