SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2000
Neogen Corporation
(Exact name of registrant as specified in its charter)
Michigan 0-17988 38-2367843
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) 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
--------------------------------------------------------------
(Former name or former address, if changed since last report.)
This Form 8-K/A amends the Form 8-K filed with the Securities and Exchange
Commission on March 2, 2000 by including the financial statements and pro
forma information referred to below.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 17, 2000, Neogen Corporation purchased 100% of the common stock
of Acumedia Manufacturers, Inc. The consideration for the purchase was
$2,850,000, which included cash at the closing of $2,400,000 and a one year
7% note of $450,000 and up to an additional $1,000,000 based on levels of
post closing revenues.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) Financial Statements of Business to be Acquired
Report of Independent Public Accountants of Acumedia Manufacturers, Inc.
Balance Sheet of Acumedia Manufacturers, Inc. as of December 31,1999
Statement of Operations of Acumedia Manufactures, Inc. for the year ended
December 31, 1999
Statement of Stockholders' Equity for the year ended December 31, 1999
Statement of Cash Flows for the year ended December 31, 1999
Notes to the Financial Statements of Acumedia Manufacturers, Inc.
(b) Pro Forma Financial Information
The following Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the periods of one year ended May 31, 1999 and nine months
ended February 29, 2000 present results of operations for Neogen Corporation
as if the acquisition of Acumedia Manufacturers, Inc. occurred at the
beginning of the periods presented.
The acquisition will be accounted for under the purchase method of
accounting. Accordingly, the acquisition cost will be allocated to Acumedia
assets acquired based on their estimated fair values. Preliminarily the
excess of acquisition costs over the estimated fair value of acquired assets
has been allocated to goodwill. This allocation may be adjusted following
final valuations of Acumedia's assets but the effect of such adjustments is
not expected to be significant. The Unaudited Pro Forma Condensed
Consolidated Statements of Operations were derived from the annual financial
statements of Acumedia and do not give effect to any synergies or
operational changes that may occur as a result of or following the
acquisition.
2
The Unaudited Pro Forma Condensed Statements of Operations is for
informational purposes only. This information does not purport to present the
results of operations had the acquisition occurred on the dates specified,
nor are they necessarily indicative of the expected future results of
operations. The Unaudited Pro Forma Consolidated Statements of Operations
should be read in conjunction with the historical financial statements and
accompanying notes included in Neogen Corporation's filing with the
Securities and Exchange Commission or with the historical financial
statements of Acumedia Manufacturers, Inc. included with this Form 8-K/A.
(c) Exhibits
3
ITEM 7 (a) FINANCIAL STATEMENTS OF BUSINESS TO BE ACQUIRED
4
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Acumedia Manufacturers, Inc.:
We have audited the accompanying balance sheet of Acumedia
Manufacturers, Inc. (a Maryland corporation) as of December 31, 1999, and the
related statements of operations, stockholder's equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards in the 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
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Acumedia
Manufacturers, Inc. as of December 31, 1999, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles in the United States.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
March 31, 2000
5
ACUMEDIA MANUFACTURERS, INC.
BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Current Assets:
Cash ................................................... $ 60,595
Accounts receivable, less reserves of $79,578 .......... 947,803
Inventories ............................................ 1,229,727
Deferred income taxes .................................. 140,912
Other current assets ................................... 6,686
-----------
Total current assets ................................. 2,385,723
Property and Equipment, at cost:
Leasehold improvements ................................. 310,945
Machinery and equipment ................................ 162,727
Office furniture and equipment ......................... 76,023
-----------
549,695
Less-- Accumulated depreciation and amortization ....... 142,878
-----------
406,817
Deferred income taxes ...................................... 120,530
Goodwill, net .............................................. 2,581,127
-----------
$ 5,494,197
===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable ....................................... $ 135,252
Accrued expenses ....................................... 80,436
-----------
Total current liabilities ............................ 215,688
Due to affiliates .......................................... 2,874,146
Commitments and Contingencies (Note 3)
Stockholder's Equity:
Common stock, No par value - Authorized -- 5,000 shares
Issued 4,998 shares ................................... 4,558,872
Accumulated deficit .................................... (2,154,509)
-----------
Total stockholder's equity ........................... 2,404,363
-----------
$ 5,494,197
===========
The accompanying notes are an integral part of these financial statements.
6
ACUMEDIA MANUFACTURERS, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
Revenue ........................................ $ 3,495,443
Cost of revenue ................................ 2,783,471
-----------
Gross profit ................................ 711,972
Expenses:
Sales and marketing ......................... 235,931
General and administrative .................. 537,550
Research and development .................... 91,991
Amortization of goodwill .................... 405,818
-----------
Loss from operations ..................... (559,318)
Interest expense ............................ 139,099
-----------
Net loss before benefit of income taxes .. (698,417)
Benefit of income taxes ........................ 113,745
-----------
Net loss ................................. $ (584,672)
===========
The accompanying notes are an integral part of these financial statements.
7
<TABLE>
<CAPTION>
ACUMEDIA MANUFACTURERS, INC.
STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999
COMMON STOCK
-------------------
TOTAL
NO ACCUMULATED STOCKHOLDER'S
SHARES PAR VALUE DEFICIT EQUITY
------ --------- ----------- -------------
<S> <C> <C> <C> <C>
BALANCE, December 31, 1998 .... 4,998 $ 4,558,872 $(1,569,836) $2,989,036
Net loss ...................... -- -- (584,672) (584,672)
----- ----------- ----------- ----------
BALANCE, December 31, 1999 .... 4,998 $ 4,558,872 $(2,154,509) $2,404,363
===== =========== =========== ==========
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
8
ACUMEDIA MANUFACTURERS, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
Cash Flows From Operating Activities:
Net loss ............................................. $(584,672)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization .................... 507,325
Benefit of deferred income tax ................... (56,856)
Provision for doubtful accounts .................. 98,188
Changes in assets and liabilities
Accounts receivable ............................. (101,254)
Inventories ..................................... (359,756)
Other current assets ............................ (6,686)
Accounts payable ................................ (131,079)
Accrued expenses ................................ (344,895)
---------
Net cash used in operating activities .......... (979,685)
Cash Flows From Investing Activities:
Purchases of property and equipment .................. (107,816)
---------
Net cash used in investing activities .......... (107,816)
Cash Flows From Financing Activities:
Cash transferred from affiliates ..................... 748,562
---------
Net cash provided by financing activities ...... 748,562
Net Decrease in Cash ................................... (338,939)
Cash, Beginning of Year ................................ 399,534
---------
Cash, End of Year ...................................... $ 60,595
=========
Supplemental Disclosure of Cash Flow Information:
Interest paid during the year ........................ $ 139,099
=========
Income taxes paid during the year .................... $ --
=========
The accompanying notes are an integral part of these financial statements
9
ACUMEDIA MANUFACTURERS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
Acumedia Manufacturers, Inc. (the "Company") develops, manufactures and
distributes dehydrated cultured media to the food industry. The Company's
products are sold worldwide. The Company was acquired by IDEXX Laboratories,
Inc. (the "Parent Company") in January 1997 in an acquisition accounted for
under the purchase method of accounting. The purchase accounting was "pushed
down" to the Company as of the acquisition date and the accompanying
financial statements reflect the results of this accounting.
The accompanying financial statements reflect the application of certain
significant accounting policies, as discussed below and elsewhere in the
notes to the financial statements. The preparation of these financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(a) Inventories
Inventories include material, labor and overhead, and are stated at the
lower of cost (first-in, first-out) or market. The components of inventories
as of December 31, 1999 are as follows:
Raw materials ........... $ 597,033
Work-in-process ......... 71,324
Finished goods .......... 561,370
----------
$1,229,727
==========
(b) Depreciation and Amortization
The Company provides for depreciation and amortization using the
straight-line method by charges to operations in amounts that allocate the
cost of property and equipment over their estimated useful lives as follows:
ESTIMATED
ASSET CLASSIFICATION USEFUL LIFE
- ----------------------------------- -------------
Leasehold improvements ............ Life of lease
Machinery and equipment ........... 3-5 Years
Office furniture and equipment .... 5-7 Years
Depreciation expense was $101,507 for the year ended December 31, 1999.
10
(c) Goodwill
The Company continually assesses the realizability of its long-lived
assets, including goodwill, in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets To Be Disposed Of. As of December
31, 1999, the Company determined that no impairment has occurred. The Company
is amortizing its goodwill over ten years. Accumulated amortization was
$1,020,465 as of December 31, 1999.
(d) Stock-Based Compensation Plans
The Company accounts for stock-based compensation plans under the
provisions of SFAS No. 123, Accounting for Stock-Based Compensation (SFAS No.
123). Under SFAS No. 123, the Company elected the disclosure only method and
will continue to account for employee stock-based compensation plans under
Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock
Issued to Employees (See Note 5).
(e) Income Taxes
The Company accounts for income taxes under SFAS No. 109, Accounting for
Income Taxes. This statement requires that the Company recognize a current
tax liability or asset for current taxes payable or refundable and a deferred
tax liability or asset for the estimated future tax effects of temporary
differences and carryforwards to the extent they are realizable (See Note 2).
(f) Revenue Recognition
The Company recognizes product revenue at the time of shipment.
(g) Disclosure of Fair Value of Financial Instruments and Concentration of
Credit Risk
Financial instruments consist mainly of cash, accounts receivable and
accounts payable. The Company does not believe significant credit risk exists
at December 31, 1999. The carrying amounts of the Company's financial
instruments approximate fair market value.
(2) INCOME TAXES
The Company's results have been included in the consolidated federal tax
returns of the Parent Company since the acquisition date. The Company has
filed separate state tax returns since the acquisition date. For purposes of
these financial statements, the Company is using the separate return method
to allocate income tax benefit. Under this method, the income tax benefit
reflects what the Company's current and deferred tax benefit would have been
had the Company filed separate tax returns. For purposes of these financial
statements, the Parent Company benefit of the Company's losses for federal
tax purposes is reflected as a reduction in the amount due from affiliates
and the state net operating losses are presented as a long-term deferred tax
asset. The current and long-term tax assets reflect taxable differences
between loss recorded for financial reporting purposes and tax return
purposes for both the federal and state tax returns.
11
The benefit of income taxes for the year ended December 31, 1999 is
comprised of the following:
Current
Federal .............. $ (63,390)
State ................ 6,500
---------
(56,890)
---------
Deferred
Federal .............. (30,223)
State ................ (26,632)
---------
(56,855)
---------
$(113,745)
=========
The benefit of income taxes differs from the amount computed by applying
the statutory federal income tax rate as follows:
U.S. federal statutory rate ....... 35.0%
State income tax, net of federal
tax benefit .................... 1.9
Amortization of goodwill .......... (20.3)
Other, net ........................ (0.3)
----
Effective tax rate ................ 16.3%
====
The components of the net deferred tax assets included in the
accompanying balance sheet are as follows:
CURRENT LONG-TERM
------- ---------
ASSETS:
Accruals ............................. $ 22,846 $ --
Receivable reserves .................. 89,857 --
Inventory basis differences .......... 28,209 --
Property basis differences ........... -- 16,292
Net operating loss carry forwards .... -- 104,238
-------- --------
Total assets ........................ 140,912 120,530
LIABILITIES:
Total liabilities ................... -- --
-------- --------
Net asset ............................ $140,912 $120,530
======== ========
At December 31, 1999, the Company had state net operating loss
carryforwards of approximately $1.5 million available to offset future
taxable income. Net operating loss carryforwards expire at various dates from
2012 to 2014.
12
(3) COMMITMENTS AND CONTINGENCIES
The Company leases its facility under an operating lease, which expires
in 2003. In addition, the Company is responsible for the real estate taxes
and operating expenses related to these facilities. Minimum annual rental
payments under this agreement are as follows:
YEARS ENDING
DECEMBER 31
2000 ................... $ 75,758
2001 ................... 77,648
2002 ................... 79,549
2003 ................... 74,629
--------
$307,584
========
Rent expense, charged to operations under this operating lease, was
approximately $72,450 for the year ended December 31, 1999.
The Company also entered into a consulting agreement with a former owner
to provide certain consulting services through December 31, 2000 for a
monthly fee of $4,167. The Company included $50,000 in general and
administrative expense in the accompanying statement of operations related to
this agreement for the year ended December 31, 1999.
The Parent Company has several lawsuits that are not deemed to relate to
the Company, and accordingly, no disclosure or accrual for any potential loss
related to these lawsuits has been made in these financial statements.
(4) RELATED PARTY TRANSACTIONS
The Parent Company performs certain services and functions for the
Company, as discussed below. Fees charged for these services are included in
the results of operations and any unpaid service fees are reflected in due to
affiliate on the accompanying balance sheet.
(a) Employee Benefits
The Company participates in the Parent Company's health, life and dental
insurance plans and other miscellaneous employee benefits programs. The
Parent Company allocated benefit costs for these programs to the Company. The
allocation represents approximately 10% of salaries, which the Parent Company
believes approximates the fair market value of these benefit costs.
(b) Administrative Services
The Parent Company performs certain administrative services for the
Company including purchase order generation, vendor payment, cash management,
payroll processing, human resource management and cash collections. The
Parent Company charged the Company approximately $25,000 for these services.
Management believes that the service fee charged by the Parent Company is
reasonable and that such fees are representative of the expenses the Company
would have incurred on a stand-alone basis.
13
(c) Due to Affiliates
The Company borrows funds from the Parent Company to fund operations. The
Parent Company charges interest at the applicable federal rate, which is the
rate prescribed by the Internal Revenue Service for such transactions. The
interest rate ranged from approximately 4.5% to 5.7% during the year ended
December 31, 1999. Total interest expense paid to the Parent Company for the
year ended December 31, 1999 was $139,099.
(5) STOCKHOLDER'S EQUITY
Stockholder's equity consists of 4,998 shares of no par value common
stock, which was acquired by the Parent Company in 1997, and accumulated
deficit. The Company recorded the purchase price paid by the Parent Company
as common stock and eliminated retained earnings prior to acquisition.
(6) STOCK-BASED COMPENSATION PLANS
The Parent Company maintains various employee stock-based compensation
plans and certain employees of the Company participate in these plans. The
Parent Company and Company accounts for these plans under the provisions of
SFAS No. 123. Under SFAS No. 123 the Company elected the disclosure method
and will continue to account for employee stock-based compensation plans
under APB Opinion No. 25. Accordingly, no compensation cost has been
recognized for these plans. Had compensation cost for the employee
stock-based compensation plans been determined consistent with the provisions
of SFAS No. 123, the Company's net loss would have been increased to the
following pro forma amounts:
Year Ended
December 31, 1999
Net loss:
As reported .................. $584,672
Pro forma .................... $595,208
SFAS No. 123 has not been applied to options granted prior to January 1,
1995; therefore the resulting pro forma compensation costs may not be
representative of that expected in future years.
The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model with the following
weighted-average assumptions used for the grants, respectively: no dividend
yield; expected volatility of 54%; risk-free interest rates of 5.28%,
respectively; and expected lives of 4.62 years.
The employees of the Company participate in the Parent Company's 1991
Stock Option Plan and 1998 Stock Option Plan. The 1991 Stock Option Plan and
the 1998 Stock Option Plan provides for grants of incentive and nonqualified
stock options at the discretion of the Parent Company's Compensation
Committee of the Board of Directors. Incentive stock options are granted at
the fair market value on the date of grant and expire 10 years from the date
of grant. Nonqualified options may be granted at no less than 100% of the
fair market value on the date of grant. The vesting schedule of all options
is determined by the Parent Company's Compensation Committee of the Board of
Directors at the time of grant.
14
A summary of the status of the Company's stock option plans as of
December 31, 1999 and changes during the year then ended is presented in the
table below:
WEIGHTED
NUMBER AVERAGE
OF EXERCISE
SHARES PRICE
------ --------
Outstanding, December 31, 1998 .................. 7,331 $17.03
Granted ..................................... 1,150 23.44
Exercised ................................... (200) 20.83
-----
Outstanding, December 31, 1999 .................. 8,281 17.83
=====
Exercisable, December 31, 1999 .................. 2,969 17.62
=====
Weighted average fair value of options
granted in 1999 ............................. $11.21
======
At December 31, 1999, the options outstanding have the following
characteristics:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------- -------------------
WEIGHTED
WEIGHTED AVERAGE WEIGHTED
EXERCISE PRICE NUMBER AVERAGE REMAINING NUMBER AVERAGE
RANGE OF EXERCISE CONTRACT OF EXERCISE
OPTIONS PRICE LIFE OPTIONS PRICE
---------------- ------ -------- --------- ------- --------
$13.69 -- $15.25 3,000 $14.21 7.85 800 $14.47
17.35 -- 17.75 2,990 17.38 7.10 1,588 17.36
21.03 -- 25.50 2,291 23.17 7.97 581 22.65
During 1994, the Board of Directors of the Parent Company approved the
1994 Employee Stock Purchase Plan whereby the Parent Company had reserved up
to an aggregate of 300,000 shares of Common Stock for issuance in semiannual
offerings over a three-year period. During 1997, the Board of Directors of
the Parent Company approved the 1997 Employee Stock Purchase Plan whereby the
Parent Company has reserved and may issue up to an aggregate of 420,000
shares of Common Stock in semiannual offerings. Stock is sold under each of
these plans at 85% of fair market value, as defined. Shares subscribed to and
issued under the plans were 66,887 in 1999.
Under SFAS No. 123, pro forma compensation cost is recognized for the
fair value of the employees' purchase rights, which was estimated using the
Black-Scholes model with the following assumptions for 1999, no dividend
yield; an expected life of one year; expected volatility of 54%; and
risk-free interest rates of 5.45%. The weighted-average fair value of those
purchase rights granted in 1999 was $7.40 per share.
(7) IDEXX RETIREMENT AND INCENTIVE SAVINGS PLAN
The Parent Company has established the IDEXX Retirement and Incentive
Savings Plan (the "401(k) Plan"). Employees eligible to participate in the
401(k) Plan may contribute specified percentages of their salaries, a portion
of which will be matched by the Company. In addition, the Company may make
contributions to the 401(k) Plan at the discretion of the Board of Directors.
There were no discretionary contributions in 1999.
15
(8) SIGNIFICANT CUSTOMERS
During the year ended December 31, 1999 one customer accounted for 19%
of the Company's revenue, while another customer accounted for 10% of the
Company's revenue. Both significant customers distributed the Company's
products and used the Company's products to produce prepared media.
(9) ACCRUED EXPENSES
Accrued expenses consists of the following at December 31, 1999:
Payroll and related benefits ........... $19,736
Accrued lease termination costs ........ 57,765
Other .................................. 2,935
-------
$80,436
=======
Accrued lease termination costs represents rental expense and the costs
associated with terminating the Company's lease on its former facility. The
Company settled this obligation in the first quarter 2000.
(10) SALE OF THE COMPANY
On February 17, 2000, the Company was sold to Neogen Corporation for
$2.4 million in cash, a $450,000 note payable and contingent purchase price
of up to $1.0 million. The note payable is due on February 17, 2001 and bears
interest at 7%. The contingent purchase price is based on the revenue of the
Company during the period February 18, 2000 to February 17, 2001.
16
ITEM 7 (b) PROFORMA FINANCIAL INFORMATION
17
<TABLE>
<CAPTION>
NEOGEN CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MAY 31, 1999
Historical Pro-Forma
Neogen Acumedia Adjustments Combined
<S> <C> <C> <C> <C>
Net Sales ...................................... $22,179,000 $3,677,000 $ 25,856,000
Costs of Goods Sold ............................ 9,477,000 2,661,000 (a) $ 136,000 12,274,000
----------- ---------- ------------
Gross Margin ................................... 12,702,000 1,016,000 13,582,000
Sales and Marketing ............................ 5,311,000 808,000 (a) (136,000) 5,983,000
General and Administrative ..................... 3,207,000 842,000 (b) (376,000) 3,673,000
Research and Development ....................... 1,640,000 287,000 1,927,000
----------- ---------- ------------
Operating Income (Loss) ........................ 2,544,000 (921,000) 1,999,000
Other Income (Expense) ......................... 104,000 (64,000) 40,000
----------- ---------- ------------
Income Before Income Taxes (Loss) .............. 2,648,000 (985,000) 2,039,000
Income Taxes (Credit) .......................... 393,000 (275,000)(c) 78,000 196,000
----------- ---------- ------------
Net Income (Loss) .............................. $ 2,255,000 $ (710,000) $ 1,843,000
=========== ========== ============
Diluted Net Income (Loss) per share ............ $ 0.30
============
(a) Reclassify freight-in to Cost of Goods Sold
(b) Recognize the difference in goodwill
amortization
Goodwill Amortization in Acumedia historical
statements ............................... $ (406,000)
Goodwill Amortization in the combined
statements ($600,000/240 months) ......... 30,000
------------
Difference ............................. $ (376,000)
============
(c) Recognize the tax effect of
goodwill and other items
Income before tax .......................... $ 2,039,000
Effect of Acumedia Goodwill Amortization . 30,000
Effect of credits and other adjustments .. (1,510,000)
------------
559,000
Income tax rate .......................... 35%
------------
196,000
Income tax historically recorded
Neogen ................................. (393,000)
Acumedia (credit) ...................... 275,000
------------
Adjustment required .................. $ 78,000
============
</TABLE>
18
<TABLE>
<CAPTION>
NEOGEN CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED FEBRUARY 29, 2000
Historical Pro-Forma
Neogen Acumedia Adjustments Combined
<S> <C> <C> <C> <C>
Net Sales ...................................... $17,042,000 $2,569,000 $ 19,611,000
Costs of Goods Sold ............................ 7,436,000 2,046,000 (a) $ 109,000 9,591,000
----------- ---------- ------------
Gross Margin ................................... 9,606,000 523,000 10,020,000
Sales and Marketing ............................ 4,289,000 177,000 (a) (109,000) 4,357,000
General and Administrative ..................... 2,472,000 708,000 (b) (282,000) 2,898,000
Research and Development ....................... 1,185,000 69,000 1,254,000
----------- ---------- ------------
Operating Income (Loss) ........................ 1,660,000 (431,000) 1,511,000
Other Income (Expense) ......................... 623,000 (101,000) 522,000
----------- ---------- ------------
Income Before Income Taxes (Loss) .............. 2,283,000 (532,000) 2,033,000
Income Taxes (Credit) .......................... 510,000 (109,000)(c) 32,000 433,000
----------- ---------- ------------
Net Income (Loss) .............................. $ 1,773,000 $ (423,000) $ 1,600,000
=========== ========== ============
Diluted Net Income (Loss) per share ............ $ 0.27
============
(a) Reclassify freight-in to Cost of Goods Sold
(b) Recognize the difference in goodwill
amortization
Goodwill Amortization in Acumedia historical
statements ............................... $ (304,500)
Goodwill Amortization in the combined
statements ($600,000/240 months) ......... 22,500
------------
Difference ............................. $ (282,000)
============
(c) Recognize the tax effect of
goodwill and other items
Income before tax .......................... $ 2,033,000
Effect of Acumedia Goodwill Amortization . 22,500
Effect of credits and other adjustments .. (820,000)
------------
1,235,500
Income tax rate .......................... 35%
------------
433,000
Income tax historically recorded
Neogen ................................. (510,000)
Acumedia (credit) ...................... 109,000
------------
Adjustment required .................. $ 32,000
============
</TABLE>
19
ITEM 7 (c) EXHIBITS
20
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report, included in this Form 8-K, into the Company's
previously filed Registration Statement File
Nos. 033-62987 and 333-66357.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
April 25, 2000
21
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
(Registrant)
Date: April 27, 2000 By: s/ Richard R. Current
-------------------------
Richard R. Current
Vice President and CFO
