Neogen(NEOG) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended November 30, 2024, were $231.258 million, a slight increase from$229.629 million in the same period of 2023, representing a growth of 0.7%[12] - Product revenues for the six months ended November 30, 2024, were $400.067 million, down 2.9$408.270 million in the prior year[12] - The net loss for the three months ended November 30, 2024, was $456.282 million, compared to a net loss of$3.487 million for the same period in 2023, indicating a significant increase in losses[12] - The company reported a gross profit of $113.330 million for the three months ended November 30, 2024, down from$116.774 million in the same period of 2023, a decrease of 3.5%[12] - For the six months ended November 30, 2024, Neogen Corporation reported a net loss of $468,891 thousand, compared to a net loss of$1,984 thousand for the same period in 2023[21] - The company reported a total comprehensive loss of $456,282 thousand for the six months ended November 30, 2024[21] - The company reported a net loss attributable to Neogen of$456.282 million for the three months ended November 30, 2024, compared to a net loss of $3.487 million in the same period of 2023[36] - Basic net loss per share for the three months ended November 30, 2024, was$(2.10), significantly higher than $(0.02) in 2023[36] Assets and Liabilities - Total assets decreased to$4.054 billion as of November 30, 2024, down from $4.549 billion as of May 31, 2024, reflecting a decline of approximately 10.9$140.231 million from $170.611 million, a decline of 17.8$1.385 billion, slightly down from $1.405 billion as of May 31, 2024[9] - The ending balance of cash and cash equivalents as of November 30, 2024, was$140,231 thousand, a decrease from $205,765 thousand at the end of the same period in 2023[21] - Neogen's total assets as of November 30, 2024, were$2,669,070 thousand, reflecting a decrease from previous periods[18] Revenue Segments - The Food Safety segment generated $164.238 million in revenue for the three months ended November 30, 2024, compared to$164.403 million in 2023, reflecting a decrease of 0.1%[39] - The Animal Safety segment reported revenues of $67.020 million for the three months ended November 30, 2024, up from$65.226 million in 2023, representing an increase of 2.8%[39] - Domestic revenue for the three months ended November 30, 2024, was $113.761 million, slightly up from$113.554 million in 2023[42] - International revenue for the three months ended November 30, 2024, was $117.497 million, compared to$116.075 million in 2023, indicating a growth of 1.2%[42] - Food Safety segment revenue decreased by $7.1 million for the six months ended November 30, 2024, primarily due to a$14.9 million currency headwind, partially offset by $7.8 million growth in the business[97] - Animal Safety segment revenue increased by$1.8 million for the three months ended November 30, 2024, driven by $2.1 million growth in the business and a$0.2 million favorable currency impact[98] Expenses - Research and development expenses for the six months ended November 30, 2024, were $10.307 million, down from$12.478 million in the prior year, a decrease of 17.4%[12] - The company experienced a depreciation and amortization expense of $59,849 thousand for the six months ended November 30, 2024, slightly up from$58,203 thousand in 2023[21] - General and administrative expenses increased to $57.8 million for the three months ended November 30, 2024, compared to$51.7 million in the same period of 2023, largely due to restructuring charges[86] - Research and development expenses were $5.1 million for the three months ended November 30, 2024, a decrease from$5.8 million in the same period of 2023[90] - The company incurred $7.1 million in restructuring charges impacting the Animal Safety segment's operating income for the three months ended November 30, 2024[103] Goodwill and Impairments - Goodwill impairment of$461.390 million was recorded in the three months ended November 30, 2024, contributing to the overall net loss[12] - The company recorded a goodwill impairment charge of $461.175 million for the Food Safety segment as of November 30, 2024[43] - The company recorded a goodwill impairment charge of$461.4 million in the Food Safety reporting unit during the second quarter of fiscal year 2025[74] Cash Flow and Investments - Cash provided by operating activities for the six months ended November 30, 2024, was $22,339 thousand, down from$38,723 thousand in 2023[21] - Neogen's cash flows used for investing activities totaled $(50,819) thousand for the six months ended November 30, 2024, compared to$2,852 thousand in 2023[21] - Cash used for investing activities increased by $53.7 million during the six months ended November 30, 2024, primarily due to lower proceeds from marketable securities[123] Future Outlook and Risks - The Company anticipates reaching historical production levels in the second half of fiscal year 2025 after resolving delays in production[69] - The Company expects economic headwinds from softening consumer demand and higher interest rates to continue affecting operations throughout fiscal year 2025[65] - The company may need to issue additional equity securities or enter into financing arrangements to meet future capital needs[116] Internal Controls and Compliance - As of November 30, 2024, the company identified material weaknesses in internal control over financial reporting, indicating a reasonable possibility of material misstatements not being prevented or detected[134] - Management is implementing remediation efforts to address identified control deficiencies, including enhancing control activities and documentation, and developing a training program for control owners[139] - The company concluded that its consolidated financial statements fairly present its financial position and results of operations in accordance with US GAAP, despite the identified material weaknesses[135] - Management did not maintain effective controls over period-end invoice accruals, impacting the completeness and accuracy of accrued expenses and capital assets[133] - The company is in the process of hiring qualified personnel to support enhanced control ownership and internal communications[139] - No changes in internal control over financial reporting were identified during the quarter that materially affected the reporting[136] - The company continues to evaluate its risk factors, with no material changes reported since the last annual report[138]