<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended: FEBRUARY 28, 1997
[ ]TRANSITION REPORT UNDER 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 small business issuer as specified in its charter)
MICHIGAN 38-2367843
(State or other jurisdiction of (IRS employer
incorporation or organization) Identification No.)
620 LESHER PLACE, LANSING, MICHIGAN 48912
(Address of principal executive offices)
(517)372-9200
(Issuer's telephone number)
NONE
(Former name, former address and former
fiscal year, if changed since last report.)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.
Yes_x_ No___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934
after distribution of securities under a plan confirmed by a court.
Yes___ No___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date.
6,110,008 SHARES WERE OUTSTANDING ON APRIL 1, 1997
<PAGE> 2
INDEX
NEOGEN CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Interim Financial Statements (unaudited)
Consolidated balance sheets--February 28, 1997 and May 31, 1996.
Consolidated statements of operations--Three months ended February 28,
1997 and 1996; nine months ended February 28, 1997 and 1996.
Consolidated statements of stockholders' equity--Nine months ended
February 28, 1997 and 1996.
Consolidated statements of cash flows--Nine months ended February 28,
1997 and 1996.
Notes to consolidated financial statements--February 28, 1997.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. INTERIM FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
NEOGEN CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
ASSETS FEBRUARY 28 MAY 31
1997 1996
---------------- ----------------
<S> <C> <C>
CURRENT ASSETS
Cash and equivalents $ 342,656 $ 625,992
Marketable securities 12,190,304 1,557,041
Net accounts receivable 2,033,267 1,643,181
Inventories 3,556,705 3,378,671
Other current assets 350,636 318,882
---------------- ----------------
TOTAL CURRENT ASSETS 18,473,568 7,523,767
NET PROPERTY AND EQUIPMENT 1,519,968 1,381,788
INTANGIBLE AND OTHER ASSETS
Goodwill, net of accumulated amortization 2,011,303 2,034,153
Other assets, net of accumulated amortization 516,903 591,436
---------------- ----------------
$ 22,521,742 $ 11,531,144
================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable and current maturities
of long-term notes payable $ 71,147 $ 1,115,093
Accounts payable 759,819 497,502
Restructuring charges 49,647 217,794
Accrued compensation and benefits 546,909 369,788
Accrued liabilities 245,131 88,878
---------------- ----------------
TOTAL CURRENT LIABILITIES 1,672,653 2,289,055
LONG-TERM NOTES PAYABLE 225,557 278,918
OTHER LONG-TERM LIABILITIES 105,467 105,467
STOCKHOLDERS' EQUITY
Common stock:
Par value $.16 per share, 10,000,000
shares authorized, 6,110,008 shares
issued at February 28, 1997; 4,559,260
shares issued at May 31, 1996 977,601 729,482
Additional paid in capital 23,936,029 13,841,617
Retained-earnings deficit (4,395,565) (5,713,395)
---------------- ----------------
20,518,065 8,857,704
---------------- ----------------
$ 22,521,742 $ 11,531,144
================ ================
</TABLE>
See notes to consolidated financial statements.
<PAGE> 4
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
NEOGEN CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended February 28 Nine Months Ended February 28
1997 1996 1997 1996
------------ ------------ ------------- --------------
REVENUES
<S> <C> <C> <C> <C>
Sales $ 3,579,457 $ 3,306,602 $ 11,360,260 $ 9,353,068
Contract revenues 7,253 23,473 22,535 137,766
------------ ------------ ------------- --------------
3,586,710 3,330,075 11,382,795 9,490,834
EXPENSES
Cost of goods sold 1,478,867 1,621,178 4,512,765 4,177,957
Sales and marketing 977,236 856,802 3,226,684 2,636,311
General and administrative 520,724 444,273 1,614,669 1,343,566
Research and development 321,655 269,531 988,004 939,073
------------ ------------ ------------- --------------
3,298,482 3,191,784 10,342,122 9,096,907
------------ ------------ ------------- --------------
INCOME FROM OPERATIONS 288,228 138,291 1,040,673 393,927
OTHER INCOME (EXPENSE)
Interest income 165,948 19,241 267,004 52,558
Interest expense (6,720) (40,926) (59,880) (116,666)
Other 80,175 21,576 127,933 79,841
------------ ------------ ------------- --------------
239,403 (109) 335,057 15,733
------------ ------------ ------------- --------------
INCOME BEFORE INCOME TAXES 527,631 138,182 1,375,730 409,660
INCOME TAXES 23,300 12,800 57,900 26,400
------------ ------------ ------------- --------------
NET INCOME $ 504,331 $ 125,382 $ 1,317,830 $ 383,260
============ ============ ============= ==============
NET INCOME PER SHARE - (NOTE B) $ 0.08 $ 0.03 $ 0.24 $ 0.08
============ ============ ============= ==============
</TABLE>
See notes to consolidated financial statements.
<PAGE> 5
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
NEOGEN CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Common Stock
------------------------------- Additional Retained-
Number Paid-In Earnings
of Shares Amount Capital Deficit
--------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Balance at June 1, 1996 4,559,260 $ 729,482 $ 13,841,617 $ (5,713,395)
Exercise of warrants 1,782 285 8,304
Exercise of options 47,866 7,658 124,928
Public offering - (Note C) 1,500,000 240,000 10,075,090
Issuance of common shares 1,100 176 4,840
Repurchase of warrants (118,750)
Net income for the
nine months ended
February 28, 1997 1,317,830
--------- ---------- ------------ ------------
Balance at February 28, 1997 6,110,008 $ 977,601 $ 23,936,029 $ (4,395,565)
========= ========== ============ ============
Balance at June 1, 1995 4,460,027 $ 713,604 $ 13,592,684 $ (5,469,856)
Exercise of warrants 39,933 6,389 118,601
Exercise of options 55,500 8,880 118,540
Net income for the
nine months ended
February 28, 1996 383,260
--------- ---------- ------------ ------------
Balance at February 28, 1996 4,555,460 $ 728,873 $ 13,829,825 $ (5,086,596)
========= ========== ============ ============
</TABLE>
See notes to consolidated financial statements.
<PAGE> 6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NEOGEN CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Nine Months Ended February 28
1997 1996
----------- ------------
OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 1,317,830 $ 383,260
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation and amortization 418,042 407,492
Changes in operating assets and
liabilities:
Accounts receivable (390,086) (425,927)
Inventories (178,034) 160
Other current assets (31,754) 38,902
Accounts payable 262,317 14,104
Other accrued expenses 165,227 42,296
----------- ------------
NET CASH PROVIDED FROM OPERATING ACTIVITIES: 1,563,542 460,287
INVESTING ACTIVITIES:
Purchase of property and equipment
and other assets (405,717) (392,988)
Purchase of marketable securities (32,985,923) (2,684,616)
Proceeds from sale of marketable securities 22,352,660 2,750,047
Acquisition of business (53,122) (680,056)
----------- ------------
NET CASH USED IN INVESTING ACTIVITIES (11,092,102) (1,007,613)
FINANCING ACTIVITIES:
Net proceeds (payments) on short-term borrowings (1,043,946) 260,000
Payments on long-term borrowings (53,361) (67,439)
Proceeds from issuance of common stock - (Note C) 10,342,531 252,411
----------- ------------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 9,245,224 444,972
----------- ------------
DECREASE IN CASH AND EQUIVALENTS (283,336) (102,354)
Cash and equivalents at beginning of period 625,992 992,281
----------- ------------
CASH AND EQUIVALENTS AT END OF PERIOD $ 342,656 $ 889,927
=========== ============
</TABLE>
See notes to consolidated financial statements.
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NEOGEN CORPORATION AND SUBSIDIARIES
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form-10QSB and Item
310 of Regulation S-B. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary for a fair
presentation have been included. Certain amounts in the 1996 Unaudited
Consolidated Financial Statements have been reclassified to conform to the 1997
presentation. The results of operations for the nine months ended February 28,
1997 are not necessarily indicative of the results to be expected for the
fiscal year ending May 31, 1997. For more complete financial information,
these consolidated financial statements should be read in conjunction with the
May 31, 1996 audited consolidated financial statements and the notes thereto
included in the Company's annual report on Form 10-KSB for the year ended May
31, 1996.
NOTE B - NET INCOME PER SHARE
The net income per share amounts for 1997 and 1996 are based on the weighted
average number of common shares outstanding adjusted to reflect the assumed
exercise of outstanding stock options and warrants, to the extent these items
had a dilutive effect on the computations.
NOTE C - STOCKHOLDERS EQUITY
On October 22, 1996, the Company sold to the public 1,500,000 shares of common
stock at a price of $7.50 per share. The net proceeds to the Company, after
deducting underwriting commissions and other expenses of the offering were
approximately $10,315,000.
<PAGE> 8
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
THREE MONTHS ENDED FEBRUARY 28, 1997 COMPARED TO THREE MONTHS ENDED FEBRUARY
28, 1996.
Total revenues for the quarter ended February 28, 1997 were $257,000 or 8%
higher than the same quarter in 1996. A 23% increase in sales of diagnostic
products was partially offset by an 18% decline in veterinary instrument sales
and lower research revenues.
The increase in diagnostic sales for the quarter was primarily due to a
$334,000 or 31% increase in demand for test kits sold to the grain, feed, and
nuts market to detect naturally occurring toxins such as vomitoxin and
aflatoxin. Sales of diagnostic test kits to detect human infections
contributed $91,000 to sales growth, an increase of 69% over same quarter last
year.
Diagnostic test systems sold to the meat and poultry markets for the detection
of bacteria increased approximately $72,000 or 78% in the quarter. Management
believes that sales to the meat and poultry industry will continue to grow
partially as a result of new safety and inspection regulations scheduled to be
implemented over the next several years.
Veterinary instrument sales were down $211,000 in the quarter, primarily due to
lower demand for obstetrical products compared to the prior year. In
management's opinion, lower grain prices and higher cattle prices should result
in improved economic conditions for the cattle markets within the next 3 to 6
months and have a positive impact on instrument sales. Contract revenues
declined $16,000 compared to last year because the Company has had fewer
research grants in 1997 than in 1996.
Cost of goods sold actually declined for the quarter despite an overall
increase in sales. This was primarily due to a high mix of diagnostic products
with very low manufacturing costs. As a result, cost of goods sold was 41% in
the quarter compared to 49% in the same quarter last year.
Sales and marketing expenses increased $121,000 or 14% in the three months
ended February 28, 1997 compared to the same period in 1996. Commissions and
royalties expense for diagnostic products increased $51,000 in the quarter due
to increased sales volume. Salaries, fringe, and travel costs for new sales
and technical support personnel hired in the current fiscal year were $97,000
higher than last year. The increases in these areas were partially offset by
$29,000 lower expense for printing, advertising and promotion.
<PAGE> 9
General and administrative expenses were $76,000 higher in the quarter ended
February 28, 1997 than the quarter ended February 28, 1996. Improved operating
performance, increased sales volume, and an overall increase in corporate
business activity resulted in higher expense for several categories including
salaries and wages ($20,000), travel cost ($3,000), investor relations
($12,000), telephone ($4,000), Michigan Single Business Tax ($7,000), and legal
and professional fees ($26,000).
Research and development expense increased $52,000 in the third quarter
compared to the prior year. A total of $20,000 of the increase pertained to
higher salaries, fringe and supplies for the development of new diagnostics
kits to be sold to the meat and poultry industry. The remaining increase was
the result of higher costs in support of various research projects for
diagnostic products and veterinary instruments. Higher expense was incurred in
several categories including consulting ($5,000), regulatory approvals
($6,000), supplies ($6,000), consulting ($4,000), contracted services ($4,000)
and salaries ($5,000).
Other income increased $240,000 in the third quarter compared to the same
period last year. A portion of the proceeds from a public offering completed
in the second quarter was used to pay down short-term bank borrowings resulting
in lower interest expense. The remaining proceeds were invested in short-term
marketable securities resulting in an increase in interest income. In
addition, the Company's share of royalties paid to an affiliated partnership
was higher in the third quarter than last year.
Due to higher gross margins from increased sales volume for diagnostic products
and an increase in other income in the third quarter, the Company posted net
income of $.08 per share compared to $.03 per share in the same period last
year.
NINE MONTHS ENDED FEBRUARY 28, 1997 COMPARED TO NINE MONTHS ENDED FEBRUARY 28,
1996.
Total revenues for the nine months ended February 28, 1997 were $1,892,000 or
20% higher than the same period in 1996. Sales of diagnostic products were up
$2,301,000 in the first nine months representing an increase of 35% while sales
of veterinary instruments declined $293,000 or 11%. Contract revenues
decreased $115,000.
The significant increase in diagnostic product sales was primarily due to a
$1,045,000 or 60% increase in sales of the Company's diagnostic test kits for
the detection of vomitoxin. In early July, 1996, a large portion of midwest
winter wheat was found to contain high levels of vomitoxin due to cool, rainy
weather conditions during the flowering stages of the grain. Although sales of
vomitoxin test kits should continue to run higher than the prior year for the
remainder of fiscal 1997, it is unlikely that sales will continue at the pace
experienced in the first nine months. Sales of other diagnostic test kits to
detect natural toxins increased $605,000 or 30% during the first nine months
due to overall market growth in the grain, feed, and nut markets for these
products.
<PAGE> 10
The Company also experienced an increase in sales of $292,000 or 148% for test
systems to detect E. coli 0157:H7 and salmonella as a result of a growing
demand for test kits to detect micro-organisms. Management believes that new
inspection and safety regulations for the meat and poultry industry scheduled
to be implemented over the next several years will have a positive effect on
future sales.
During the first nine months, the Company also generated increases in sales of
diagnostic tests to detect human infections ($188,000) and increases in sales
of a product line sold to the professional equine market ($209,000).
The decline in veterinary instrument sales was due to depressed economic
conditions in cattle markets resulting in lower overall demand for durable
veterinary instruments. Recently, cattle prices have improved while grain
prices have decreased. Management believes that the combination of these
factors will result in improved markets for its veterinary instrument division
within the next 3 to 6 months.
The decline in contract revenues for the first nine months of this year was
primarily due to scheduled completion in the second quarter of last year of two
contracts with the United States Department of Agriculture. It is common for
contract revenues to fluctuate from year to year depending on timing and terms
of the contracts.
Costs of goods sold increased $335,000 or 8% as a direct result of the overall
increase in product sales. Expressed as a percentage of sales, cost of goods
sold was 40% in the first nine months of fiscal 1997 compared to 45% in the
first nine months of fiscal 1996. This improvement was due to a higher sales
mix of diagnostic test kits, increased labor productivity, and better
utilization of fixed overhead costs for diagnostic products.
Sales and marketing expenses increased $591,000 in the first nine months
compared to the prior year. Commissions and royalties expense for diagnostic
products increased $274,000 in the first nine months due to increased sales
volume. A total of $205,000 was due to higher salaries, fringe, and travel
cost associated with the hiring of new salesmen and technical support personnel
in anticipation of an increase in diagnostic sales. The remaining increase is
primarily due to an increase in the provision for doubtful accounts.
General and administrative expenses were $271,000 higher in the nine months
ended February 28, 1997 than the nine months ended February 28, 1996. Bonus
accruals increased $87,000 compared to last year based on improved operating
performance. Michigan Single Business Tax was $23,000 higher than the prior
year due to increased profitability at the Company's Lansing, Michigan
operations. Salaries and fringe for clerical and accounting personnel
increased $53,000 due to higher sales volume. Several other categories of
expense also increased in the first nine months including telephone ($18,000),
travel ($17,000), consulting ($12,000), legal and professional fees ($50,000)
and investor relations ($19,000).
<PAGE> 11
The $49,000 increase in research and development expense is primarily due to
higher salaries as a result of increased staffing to support the Company's
overall research activities. Management believes that research and development
is critical to the Company's future. Accordingly, the Company expects its
annual research and development expense will approximate the same levels,
expressed as a percentage of revenue, as experienced in prior years.
Other income for the first nine months increased $319,000 all of which occurred
in the second and third quarters. During the second quarter, the Company
completed a public offering of common stock. A portion of the proceeds from
the offering was used to pay down short-term bank borrowings resulting in lower
interest expense. The remaining proceeds were invested in short-term
marketable securities which resulted in higher interest income. In addition,
the Company's share of royalties paid to an affiliated partnership increased
significantly in the second and third quarter.
The Company earned $.24 per share in the nine months ended February, 28, 1997
compared to $.08 per share in the same period last year. This significant
improvement is primarily due to the substantial increase in sales volume
compared to the prior year along with the increase in other income.
<PAGE> 12
FINANCIAL CONDITION AND LIQUIDITY
At February 28, 1997, the Company had $12,533,000 in cash and marketable
securities, working capital of $16,801,000, and stockholders' equity of
$20,518,000. In addition, the Company has bank lines of credit totaling
$2,500,000 with nothing borrowed against these lines as of February 28, 1997.
Cash and marketable securities increased $10,350,000 during the first nine
months primarily as a result of the public offering of the Company's common
stock completed on October 22, 1996 (See Note C to Unaudited Consolidated
Financial Statements).
Accounts receivable were $390,000 higher at February 28, 1997 than at May 31,
1996. A total of $ 292,000 of the increase is due to increased sales volume of
diagnostic products. Receivables for veterinary instruments were up $98,000 at
February 28, 1997 due exclusively to strong sales during the last week of
February. Inventories increased only 5% at February 28, 1997, partially due to
an increase in veterinary instrument inventory levels for obstetrical products
during the third quarter, and partially due to increased inventory levels to
handle the higher sales volume for diagnostic products. The increase in other
current assets was primarily the result of an increase in prepaid insurance and
professional fees at February 28, 1997.
The increase in accounts payable is partially due to higher trade payables for
inventory at February 28, 1997 compared to May 31, 1996 and also the result of
an overall increase in vendor activity due to increased sales volume. Accruals
for restructuring charges are expected to decline throughout fiscal 1997 as the
Company pays or settles these liabilities. Other accrued liabilities increased
$333,000 primarily due to increased accruals for taxes, royalties, commissions
and bonuses, all of which are the result of increased sales and improved
operating performance.
The Company did not borrow any additional funds during the first nine months
and made scheduled payments on long-term debt totaling $53,361. In addition,
the Company used $1,029,000 of proceeds from a public offering of its common
stock to pay off existing short-term borrowings on two separate bank lines of
credit at the end of October, 1996. Neogen expended approximately $406,000 in
the first nine months for additions to property, equipment, and other assets.
At February 28, 1997, the Company had no material commitments for capital
expenditures. Inflation and changing prices are not expected to have a
material effect on the Company's operations.
Neogen has been profitable for fifteen of its last sixteen quarters and has
generated positive cash flows from operations during this period. Management
believes that the Company's existing cash and marketable securities at February
28, 1997, along with its available bank lines of credit, will be sufficient to
fund activities for the foreseeable future.
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit Index
Exhibit 4 - Instruments defining the rights of security holders
- incorporated by reference from Exhibit 3 (a) (2) of the Second
Amendment to the Form S-18 Registration Statement filed on August 22,
1989.
Exhibit 11 - Statement regarding computation of earnings per share.
Exhibit 27 - Financial Data Schedule
(b) Reports On Form 8-K Filed In Quarterly Period Ended February 28,
1997.
The Company did not file any reports on Form 8-K in the quarterly
period ended February 28, 1997.
<PAGE> 14
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 thereunto duly authorized.
NEOGEN CORPORATION
April 9, 1997 /s/ James L. Herbert
- ------------- ----------------------------------------
Date James L. Herbert
President
April 9, 1997 /s/ Lon M. Bohannon
- ------------- ----------------------------------------
Date Lon M. Bohannon
Vice President - Chief Financial Officer
<PAGE> 15
EXHIBIT INDEX
Exhibits Filed Herewith
Exhibit No. Description
- ----------- -----------
11 Statement Regarding Computation Of Earnings Per
Share
27 Financial Data Schedule
<PAGE> 1
(11) - STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
NEOGEN CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
February 28 February 28
1997 1996 1997 1996
--------------------------- -------------------------
<S> <C> <C> <C> <C>
Weighted average common and common
equivalent shares outstanding:
Average shares outstanding 6,104,726 4,547,950 5,311,279 4,499,623
Net effect of dilutive stock
warrants based on the treasury
stock method using average
market price which is greater
than quarter-end market price 17,876 21,857 17,876 30,108
Net effect of dilutive stock
options-based on the treasury
stock method using average
market price which is greater
than quarter-end market price 120,507 107,226 124,737 141,466
---------- ---------- ----------- ----------
TOTALS 6,243,109 4,677,033 5,453,892 4,671,197
========== ========== =========== ==========
Net income $ 504,331 $ 125,382 $ 1,317,830 $ 383,260
=========== =========== ============ ===========
Net income per share $ 0.08 $ 0.03 $ 0.24 $ 0.08
=========== =========== ============ ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE NEOGEN
CORPORATION FORM 10-QSB FOR THE NINE MONTHS ENDED FEBRUARY 28, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10Q-SB
</LEGEND>
<CIK> 0000711377
<NAME> NEOGEN CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 342,656
<SECURITIES> 12,190,304
<RECEIVABLES> 2,343,267
<ALLOWANCES> 310,000
<INVENTORY> 3,556,705
<CURRENT-ASSETS> 18,473,568
<PP&E> 4,388,921
<DEPRECIATION> 2,868,953
<TOTAL-ASSETS> 22,521,742
<CURRENT-LIABILITIES> 1,672,653
<BONDS> 0
0
0
<COMMON> 977,601
<OTHER-SE> 19,540,464
<TOTAL-LIABILITY-AND-EQUITY> 22,521,742
<SALES> 11,360,260
<TOTAL-REVENUES> 11,382,795
<CGS> 4,512,765
<TOTAL-COSTS> 10,342,122
<OTHER-EXPENSES> (394,937)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 59,880
<INCOME-PRETAX> 1,375,730
<INCOME-TAX> 57,900
<INCOME-CONTINUING> 1,317,830
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,317,830
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
