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Summary of Significant Accounting Policies (Tables) | 12 Months Ended
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May 31, 2020
Schedule Of Classification And Maturities Of Marketable Securities | Marketable Securities as of May 31, 2020 and 2019 are listed below by classification and remaining maturities.
|  |  |  |  |  | Year ended May 31 |
(in thousands) |  | Maturity |  |  |  | 2020 |  |  | 2019 |
US Treasuries |  | 0 – 90 days |  |  |  | $ | — |  |  | $ | 2,470 |
|  | 91 –180 days |  |  |  |  | — |  |  |  | — |
|  | 181 days –1 year |  |  |  |  | 2,532 |  |  |  | 2,435 |
|  | 1 – 2 years |  |  |  |  | — |  |  |  | 2,505 |
Commercial Paper & Corporate Bonds |  | 0 – 90 days |  |  |  |  | 133,130 |  |  |  | 84,338 |
|  | 91 – 180 days |  |  |  |  | 73,824 |  |  |  | 47,960 |
|  | 181 days –1 year |  |  |  |  | 43,231 |  |  |  | 34,369 |
|  | 1 – 2 years |  |  |  |  | 7,839 |  |  |  | 34,078 |
Certificates of Deposit |  | 0 – 90 days |  |  |  |  | 1,003 |  |  |  | 7,732 |
|  | 91 – 180 days |  |  |  |  | 5,184 |  |  |  | 5,000 |
|  | 181 days –1 year |  |  |  |  | 6,069 |  |  |  | 750 |
|  | 1 – 2 years |  |  |  |  | 4,592 |  |  |  | 4,199 |
Total Marketable Securities |  |  |  | $ | 277,404 |  |  | $ | 225,836 |
Summary of components of marketable securities | The components of marketable securities at May 31, 2020 are as follows:
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  |  |
(in thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
US Treasuries |  | $ | 2,502 |  |  | $ | 30 |  |  | $ | — |  |  | $ | 2,532 |
Commercial Paper & Corporate Bonds |  |  | 257,700 |  |  |  | 347 |  |  |  | (23 | ) |  |  | 258,024 |
Certificates of Deposit |  |  | 16,648 |  |  |  | 200 |  |  |  | — |  |  |  | 16,848 |
Total Marketable Securities |  | $ | 276,850 |  |  | $ | 577 |  |  | $ | (23 | ) |  | $ | 277,404 |
Allowance for Doubtful Accounts | The activity in the allowance for doubtful accounts was as follows:
|  | Year ended May 31 |
(in thousands) |  | 2020 |  |  | 2019 |  |  | 2018 |
Beginning Balance |  | $ | 1,700 |  |  | $ | 1,550 |  |  | $ | 2,000 |
Provision |  |  | 393 |  |  |  | 263 |  |  |  | 152 |
Recoveries |  |  | 49 |  |  |  | 38 |  |  |  | 40 |
Write-offs |  |  | (792 | ) |  |  | (151 | ) |  |  | (642 | )
Ending Balance |  | $ | 1,350 |  |  | $ | 1,700 |  |  | $ | 1,550 |
Inventories |
|  | Year ended May 31 |
(in thousands) |  | 2020 |  |  | 2019 |
Raw Materials |  | $ | 45,058 |  |  | $ | 41,594 |
Work-in-process |  |  | 6,887 |  |  |  | 5,581 |
Finished goods |  |  | 43,108 |  |  |  | 38,817 |
|  | $ | 95,053 |  |  | $ | 85,992 |
Fair Value of Stock Options Granted, Estimated using Weighted-Average Assumptions | The fair value of stock options granted was estimated using the following weighted-average assumptions:
|  | Year ended May 31 |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Risk-free interest rate |  |  | 1.9% |  |  |  | 2.6% |  |  |  | 1.6% |
Expected dividend yield |  |  | 0.0% |  |  |  | 0.0% |  |  |  | 0.0% |
Expected stock volatility |  |  | 29.4% |  |  |  | 27.0% |  |  |  | 27.7% |
Expected option life |  |  | 3.5 years |  |  |  | 3.5 years |  |  |  | 4.0 years |
Calculation of Net Income Per Share | The following table presents the net income per share calculations:
|  | Year ended May 31 |
(in thousands, except per share) |  | 2020 |  |  | 2019 |  |  | 2018 |
Numerator for basic and diluted net income per share - Net Income attributable to Neogen |  | $ | 59,475 |  |  | $ | 60,176 |  |  | $ | 63,145 |
Denominator for basic net income per share - Weighted average shares |  |  | 52,550 |  |  |  | 51,888 |  |  |  | 51,358 |
Effect of dilutive stock options |  |  | 310 |  |  |  | 537 |  |  |  | 791 |
Denominator for diluted net income per share |  |  | 52,860 |  |  |  | 52,425 |  |  |  | 52,149 |
Net income attributable to Neogen per share |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 1.13 |  |  | $ | 1.16 |  |  | $ | 1.23 |
Diluted |  | $ | 1.13 |  |  | $ | 1.15 |  |  | $ | 1.21 |
Supplemental balance sheet information related to operating leases | Supplemental balance sheet information related to operating leases was as follows:
(in thousands) |  | May 31, 2020 |
Right of use – assets |  | $ | 1,952 |
Lease liabilities – current |  |  | 1,054 |
Lease liabilities – non-current |  |  | 913 |
Weighted average remaining lease term and weighted average discount rate | The weighted average remaining lease term and weighted average discount rate were as follows:
|  | May 31, 2020 |
Weighted average remaining lease term |  |  | 2.5 years |
Weighted average discount rate |  |  | 3.2 | %
Components of lease expense | The components of lease expense were as follows:
(in thousands) |  | Year Ended May 31, 2020 |
Operating leases |  | $ | 1,207 |
Short term leases |  |  | 166 |
Total lease expense |  | $ | 1,373 |
Undiscounted minimum lease payments | Undiscounted fut u re minimum lease payments as of May 31, 2020 were as follows:
(in thousands) |  | Amount |
Years ending May 31, 2021 |  | $ | 1,080 |
2022 |  |  | 546 |
2023 |  |  | 286 |
2024 |  |  | 141 |
2025 and thereafter |  |  | 41 |
Total lease payments |  |  | 2,094 |
Less: imputed interest |  |  | (112 | )
Total lease liabilities |  | $ | 1,982 |
Disaggregated Revenue | The following table presents the Company’s revenue disaggregated by geographical location:
|  | Year ended May 31 |
(in thousands) |  | 2020 |  |  | 2019 |
Domestic |  | $ | 253,458 |  |  | $ | 248,304 |
International |  |  | 164,712 |  |  |  | 165,882 |
Total revenue |  |  | 418,170 |  |  |  | 414,186 |
Summary of Impact of Adoption of New Accounting Pronouncements on Unaudited Consolidated Statement of Income | Presented below are the effects of the revisions on the line items within our previously issued consolidated statements of income for the year ended May 31, 2018. Revised consolidated statements of income related to these periods are presented in this Form 10-K.​​​​​​​
|  | Year Ended May 31, 2018 |
|  | As Previously Reported |  |  | Adjustments |  |  | As Revised |
(in thousands) |  |  |  |  |  |  |  |  |
Revenues |  |  |  |  |  |  |  |  |  |  |  |
Product revenues |  | $ | 335,554 |  |  | $ | (4,266 | ) |  | $ | 331,288 |
Service revenues |  |  | 66,698 |  |  |  | (56 | ) |  |  | 66,642 |
Total revenues |  |  | 402,252 |  |  |  | (4,322 | ) |  |  | 397,930 |
Cost of revenues |  |  |  |  |  |  |  |  |  |  |  |
Cost of product revenues |  |  | 174,067 |  |  |  | (342 | ) |  |  | 173,725 |
Cost of service revenues |  |  | 37,933 |  |  |  | — |  |  |  | 37,933 |
Total cost of revenues |  |  | 212,000 |  |  |  | (342 | ) |  |  | 211,658 |
Gross margin |  |  | 190,252 |  |  |  | (3,980 | ) |  |  | 186,272 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |
Sales and marketing |  |  | 70,909 |  |  |  | (3,980 | ) |  |  | 66,929 |
Total operating expenses |  |  | 120,058 |  |  |  | (3,980 | ) |  |  | 116,078 |
Operating income |  |  | 70,194 |  |  |  | — |  |  |  | 70,194 |
The revisions had no impact our audited consolidated statement of equity or audited consolidated statement of cash flows for the year ended May 31, 2018.
Operating Segments |
Disaggregated Revenue | The following table presents disaggregated revenue by major product and service categories for the years ended May 31, 2020, 2019 and 2018:
|  | Year Ended |
|  |  |  |  | Increase/ |  |  |  |  |  | Increase/ |  |  |  |
(dollars in thousands) |  | May 31, 2020 |  |  | (Decrease) |  |  | May 31, 2019 |  |  | (Decrease) |  |  | May 31, 2018 |
Food Safety: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Natural Toxins, Allergens & Drug Residues |  | $ | 76,207 |  |  |  | (3 | )% |  | $ | 78,373 |  |  |  | 7 | % |  | $ | 72,962 |
Bacterial & General Sanitation |  |  | 41,780 |  |  |  | (0 | )% |  |  | 41,966 |  |  |  | 10 | % |  |  | 38,156 |
Culture Media & Other |  |  | 47,847 |  |  |  | (4 | )% |  |  | 49,857 |  |  |  | 13 | % |  |  | 44,271 |
Rodenticides, Insecticides & Disinfectants |  |  | 28,890 |  |  |  | 13 | % |  |  | 25,584 |  |  |  | 7 | % |  |  | 23,821 |
Genomics Services |  |  | 17,967 |  |  |  | 2 | % |  |  | 17,694 |  |  |  | 16 | % |  |  | 15,267 |
|  |  | 212,691 |  |  |  | (0 | )% |  |  | 213,474 |  |  |  | 10 | % |  |  | 194,477 |
Animal Safety: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Life Sciences |  |  | 6,322 |  |  |  | (20 | )% |  |  | 7,858 |  |  |  | (25 | )% |  |  | 10,411 |
Veterinary Instruments & Disposables |  |  | 42,941 |  |  |  | (4 | )% |  |  | 44,582 |  |  |  | (7 | )% |  |  | 47,749 |
Animal Care & Other |  |  | 28,389 |  |  |  | (5 | )% |  |  | 29,941 |  |  |  | (3 | )% |  |  | 30,930 |
Rodenticides, Insecticides & Disinfectants |  |  | 68,815 |  |  |  | 4 | % |  |  | 66,389 |  |  |  | (2 | )% |  |  | 67,646 |
Genomics Services |  |  | 59,012 |  |  |  | 14 | % |  |  | 51,942 |  |  |  | 11 | % |  |  | 46,717 |
|  |  | 205,479 |  |  |  | 2 | % |  |  | 200,712 |  |  |  | (1 | )% |  |  | 203,453 |
Total Revenue |  | $ | 418,170 |  |  |  | 1 | % |  | $ | 414,186 |  |  |  | 4 | % |  | $ | 397,930 |

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