Item is incorporated by reference to Neogen’s Proxy Statement to be filed within 120 days of May 31, 2008.

 

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated by reference to Neogen’s Proxy Statement to be filed within 120 days of May 31, 2008.

 

ITEM 13.

CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Jack C. Parnell, a Director of the Company, is a governmental relations advisor to the law firm of Kahn, Soares & Conway. Kahn, Soares & Conway has been retained by Neogen to represent it in governmental relations matters. The Company pays Kahn, Soares & Conway a monthly fee of $750 for up to ten hours of consulting. The agreement with Kahn, Soares & Conway is terminable by either party at the end of any month.

 

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

During the year ended May 31, 2008 and 2007, Ernst & Young billed Neogen for its services as follows:

Audit Fees: Fees for audit services totaled $242,000 in 2008 and $239,000 in 2007 including fees incurred for the annual audit of the Company’s consolidated financial statements, internal control over financial reporting, interim reviews of quarterly financial information, and consultations concerning accounting matters associated with the acquisitions and annual audit.

Audit-Related Fees: Fees for audit-related services totaled $6,000 in 2008 and $0 in 2007. Audit–related fees consist of services associated with accounting consultations that were not related to the annual audit.

Tax Fees: Fees associated with tax matters were incurred with the principal auditing firm in the amount of $5,000 and $12,000 in 2008 and 2007, respectively.

All Other Fees: There were no other fees incurred with the principal auditing firm in 2008 or 2007.

PART IV

 

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULE

(a) (1) and (2) and (c). The response to this portion of ITEM 15 is submitted as a separate section of this report.

(a) (3). The Exhibits listed on the accompanying Exhibits Index, which immediately follows the signature page, is incorporated herein by reference.

 

31

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		NEOGEN CORPORATION
		/s/ James L. Herbert				/s/ Richard R. Current
		James L. Herbert, Chairman &				Richard R. Current, Vice President &
		Chief Executive Officer				Chief Financial Officer

Dated: August 14, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

Signature				Title		Date
/s/ James L. Herbert James L. Herbert				Chairman of the Board of Directors & Chief Executive Officer, (Principal Executive Officer)		August 14, 2008
/s/ Lon M. Bohannon Lon M. Bohannon				President & Chief Operating Officer		August 14, 2008
* Robert M. Book				Director
* A. Charles Fischer				Director
* Gordon E. Guyer, Ph.D.				Director
* G. Bruce Papesh				Director
* Jack C. Parnell				Director
* Thomas H. Reed				Director
* Clayton K. Yeutter, Ph.D.				Director

 

*By:		/s/ James L. Herbert				August 14, 2008
		James L. Herbert, Attorney-in-fact

 

32

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Neogen Corporation

Annual Report on Form 10-K

Year Ended May 31, 2008

EXHIBIT INDEX

 

EXHIBIT NO.		DESCRIPTION
4.1		Articles of Incorporation, as restated (Incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q dated February 29, 2000).
4.2		By-Laws, as amended (Incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q dated February 29, 2000).
10.2		Loan Agreement between Registrant and LaSalle Bank dated December 16, 2005 (Incorporated by reference to Exhibit 10.AC to the Registrant’s Current Report on Form 8-K dated December 16, 2005).
10.3		Amendment to LaSalle Bank Agreement dated April 25, 2007 (Incorporated by reference to exhibit 10.3 to the registrants annual report on form 10-K filed August 14, 2007).
10.4		Amendment to LaSalle Bank agreement dated January 9, 2008.
10.5		Neogen Corporation 2002 Employee Stock Purchase Plan Agreement (Incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (No. 333-101638) filed December 4, 2002).
10.6		Neogen Corporation 401(k) Retirement Savings Plan Agreement (Incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (No. 333-101639) filed December 4, 2002).
10.7		Neogen Corporation 1997 Stock Option Plan, as amended (Incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-8 (No. 333-122110) filed January 18, 2005).
10.8		Sale and purchase agreement between Registrant and UCB S.A. dated July 1, 2005, related to agreement to purchase of UCB’s food diagnostic business (Incorporated by reference to Exhibit 10.(H) to the Registrant’s Annual Report on Form 10-K filed August 15, 2005).
10.9		Neogen Corporation 2007 Stock Option Plan, (Incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-8 (No. 333-148283) filed December 21, 2007).
10.10		Asset purchase agreement between Neogen and Kane Enterprises dated August 24, 2007 (Incorporated by reference to Exhibit 10.9 to the Registrants current report on Form 8-K dated August 29, 2007).
21		Subsidiaries of the Registrant.
23(a)		Consent of Independent Registered Public Accounting Firm Ernst & Young LLP.
24.2		Power of Attorney.
31.1		Section 302 Certification of Principal Executive Officer.
31.2		Section 302 Certification of Principal Financial Officer.
32		Certification Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

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ANNUAL REPORT ON FORM 10-K

ITEM 15 (a)(1)(2) (3) (a) and (c)

LIST OF FINANCIAL STATEMENTS, EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

YEAR ENDED MAY 31, 2008

NEOGEN CORPORATION

LANSING, MICHIGAN

FORM 10-K—ITEM 15(a)(1) AND (2)

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

The following consolidated financial statements of Neogen Corporation and subsidiaries are included in ITEM 8:

Report of Independent Registered Public Accounting Firm on Financial Statements

Consolidated Balance Sheets—May 31, 2008 and 2007

Consolidated Statements of Income—Years ended May 31, 2008, 2007 and 2006

Consolidated Statements of Stockholders’ Equity—Years ended May 31, 2008, 2007 and 2006

Consolidated Statements of Cash Flows—Years ended May 31, 2008, 2007 and 2006

Notes to Consolidated Financial Statements

The following consolidated financial statement schedule of Neogen Corporation and subsidiaries is included in Item 15(a) (2) and 15 (c)

Schedule II—Valuation and qualifying accounts and reserves

All other schedules for which provision is made in the applicable accounting regulation of the United States Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.

FORM 10-K – Item 15 (a) (3)

A list of Exhibits required to be filed as a part of this report is set forth in the Exhibit Index, which immediately follows the signature page, and is incorporated herein by reference.

 

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of Neogen Corporation

We have audited the accompanying consolidated balance sheets of Neogen Corporation and subsidiaries (the Company) as of May 31, 2008 and 2007, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended May 31, 2008. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Neogen Corporation and subsidiaries at May 31, 2008 and 2007, and the consolidated results of their operations and their cash flows for each of the three years in the period ended May 31, 2008, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note 1, the Company adopted the Financial Accounting Standards Board statement No. 123 (R), Share-Based Payment following the modified retrospective method. As a result, prior year financial statements have been restated.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Neogen Corporation’s internal control over financial reporting as of May 31, 2008, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 12, 2008 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Grand Rapids Michigan

August 12, 2008

Table of Contents

Neogen Corporation and Subsidiaries

Consolidated Balance Sheets

 

		May 31,
		2008				2007
Assets
Current Assets
Cash and cash equivalents		$	14,270,000			$	13,424,000
Accounts receivable, less allowance of $500,000 at May 31, 2008 and 2007			19,384,000				14,914,000
Inventories			27,799,000				19,116,000
Deferred income taxes			1,225,000				787,000
Prepaid expenses and other current assets			2,953,000				2,857,000
Total Current Assets			65,631,000				51,098,000
Property and Equipment
Land and improvements			1,146,000				1,057,000
Buildings and improvements			10,735,000				10,196,000
Machinery and equipment			15,295,000				14,000,000
Furniture and fixtures			818,000				745,000
			27,994,000				25,998,000
Less accumulated depreciation			(11,105,000	)			(9,596,000	)
Net Property and Equipment			16,889,000				16,402,000
Other Assets
Goodwill			30,617,000				24,448,000
Other non-amortizable intangible assets			3,435,000				3,181,000
Customer based intangibles, net of accumulated amortization of $1,988,000 and $1,215,000 at May 31, 2008 and 2007			6,139,000				6,182,000
Other non-current assets, net of accumulated amortization of $ 1,373,000 and $1,290,000 at May 31, 2008 and 2007			3,646,000				3,973,000
Total Other Assets			43,837,000				37,784,000
		$	126,357,000			$	105,284,000

See accompanying notes to consolidated financial statements.

 

-F1-

Table of Contents

Neogen Corporation and Subsidiaries

Consolidated Balance Sheets

 

		May 31,
		2008			2007
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable		$	6,505,000		$	4,507,000
Accruals
Compensation and benefits			2,025,000			1,737,000
Federal income taxes			302,000			1,377,000
Other			2,304,000			2,417,000
Total Current Liabilities			11,136,000			10,038,000
Deferred Income Taxes			2,329,000			1,441,000
Other Long-Term Liabilities			1,644,000			1,860,000
Total Liabilities			15,109,000			13,339,000
Stockholders’ Equity
Preferred stock, $1.00 par value - shares authorized 100,000; none issued and outstanding			—			—
Common stock, $0.16 par value - shares authorized 20,000,000; 14,518,277 and 14,020,806 shares issued and outstanding			2,323,000			2,243,000
Additional paid-in capital			58,789,000			51,699,000
Accumulated other comprehensive income			421,000			386,000
Retained earnings			49,715,000			37,617,000
Total Stockholders’ Equity			111,248,000			91,945,000
		$	126,357,000		$	105,284,000

See accompanying notes to consolidated financial statements.

 

-F2-

Table of Contents

Neogen Corporation and Subsidiaries

Consolidated Statements of Income

 

		Year Ended May 31
		2008			2007				2006
Net Sales		$	102,418,000		$	86,138,000			$	72,433,000
Cost of Goods Sold			49,185,000			41,575,000				35,427,000
Gross Margin			53,233,000			44,563,000				37,006,000
Operating Expenses
Sales and marketing			20,648,000			18,463,000				15,799,000
General and administrative			10,927,000			9,301,000				7,414,000
Research and development			3,639,000			3,295,000				2,988,000
			35,214,000			31,059,000				26,201,000
Operating Income			18,019,000			13,504,000				10,805,000
Other Income (Expense)
Interest income			442,000			373,000				80,000
Interest expense			—			(15,000	)			(283,000	)
Grant income and other			37,000			13,000				249,000
			479,000			371,000				46,000
Income Before Income Taxes			18,498,000			13,875,000				10,851,000
Income Taxes			6,400,000			4,750,000				3,822,000
Net Income		$	12,098,000		$	9,125,000			$	7,029,000
Net Income Per Share
Basic		$	0.84		$	0.66			$	0.57
Diluted		$	0.81		$	0.64			$	0.55

See accompanying notes to consolidated financial statements.

 

-F3-

Table of Contents

Neogen Corporation and Subsidiaries

Consolidated Statements of Stockholders’ Equity

 

		Common Stock							Additional Paid-in Capital				Other Income (1)				Retained Earnings			Total Stockholders’ Equity
		Shares			Amount
Balance, June 1, 2005		12,220,517			$	1,955,000			$	33,069,000			$	136,000			$	21,463,000		$	56,623,000
Exercise of options and warrants, net of share based compensation, including $328,000 income tax benefit		232,179				38,000				1,664,000											1,702,000
Issuance of shares under Employee Stock Purchase Plan		16,297				3,000				147,000											150,000
Repurchase of common stock		(3,057	)			(2,000	)			(27,000	)										(29,000	)
Comprehensive income:
Net income for 2006																		7,029,000			7,029,000
Foreign currency translation adjustments														(51,000	)						(51,000	)
Total comprehensive income																					6,978,000
Balance, May 31, 2006		12,465,936				1,994,000				34,853,000				85,000				28,492,000			65,424,000
Issuance of Common Stock		975,000				156,000				12,838,000											12,994,000
Exercise of options and warrants, net of share based compensation, including $460,000 income tax benefit		565,586				90,000				3,825,000											3,915,000
Issuance of shares under Employee Stock Purchase Plan		14,284				3,000				183,000											186,000
Comprehensive income:
Net income for 2007																		9,125,000			9,125,000
Foreign currency translation adjustments														301,000							301,000
Total comprehensive income																					9,426,000
Balance, May 31, 2007		14,020,806				2,243,000				51,699,000	<