QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification Number) |
Title of each Class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller Reporting Company | ||||
Emerging growth company |
NEOGEN CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
1
November 30, 2022 |
May 31, 2022 |
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Assets |
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Current Assets |
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Cash and cash equivalents |
$ | $ | ||||||
Marketable securities |
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Accounts receivable, net of allowance of $ |
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Inventories |
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Prepaid expenses and other current assets |
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Total Current Assets |
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Net Property and Equipment |
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Other Assets |
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Right of use assets |
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Goodwill |
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Other non-amortizable intangible assets |
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Amortizable intangible and other assets, net of accumulated amortization of $ |
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Other non-current assets |
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Total Assets |
$ | $ | ||||||
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Liabilities and Stockholders’ Equity |
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Current Liabilities |
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Accounts payable |
$ | $ | ||||||
Accrued compensation |
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Income tax payable |
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Accrued interest |
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Deferred revenue |
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Other accruals |
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Total Current Liabilities |
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Deferred Income Tax Liability |
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Non-current debt |
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Other non-current liabilities |
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Total Liabilities |
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Commitments and Contingencies (note 12) |
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Equity |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Retained earnings |
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Total Stockholders’ Equity |
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Total Liabilities and Stockholders’ Equity |
$ | |
$ | |
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Three Months Ended November 30, |
Six Months Ended November 30, |
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2022 |
2021 |
2022 |
2021 |
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Revenues |
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Product revenues |
$ | $ | $ | $ | ||||||||||||
Service revenues |
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Total Revenues |
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Cost of Revenues |
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Cost of product revenues |
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Cost of service revenues |
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Total Cost of Revenues |
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Gross Margin |
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Operating Expenses |
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Sales and marketing |
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General and administrative |
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Research and development |
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Total Operating Expenses |
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Operating Income (Loss) |
( |
) | ( |
) | ||||||||||||
Other Income (Expense) |
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Interest income |
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Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income (expense) |
( |
) | ( |
) | ||||||||||||
Total Other Income (Expense) |
( |
) | ( |
) | ||||||||||||
Income (Loss) Before Taxes |
( |
) | ( |
) | ||||||||||||
Provision for Income Taxes |
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Net Income (Loss) |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Net Income (Loss) Per Share |
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Basic |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Diluted |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Weighted Average Shares Outstanding |
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Basic |
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Diluted |
Three Months Ended November 30, |
Six Months Ended November 30, |
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2022 |
2021 |
2022 |
2021 |
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Net income (loss) |
$ | ( |
) | $ | |
$ | ( |
) | $ | |||||||
Foreign currency translations |
( |
) | ( |
) | ( |
) | ||||||||||
Unrealized gain (loss) on marketable securities, net of tax |
( |
) | ( |
) | ( |
) | ||||||||||
Unrealized loss on derivative instruments, net of tax |
( |
) | ( |
) | ||||||||||||
Total comprehensive income (loss) |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Additional |
Accumulated Other |
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Common Stock |
Paid-in |
Comprehensive |
Retained |
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Shares |
Amount |
Capital |
Loss |
Earnings |
Total |
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Balance, June 1, 2022 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation expense |
— | — | ||||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
— | — | ||||||||||||||||||||||
Net income for the three months ended August 31, 2022 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive loss for the three months ended August 31, 2022 |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance, August 31, 2022 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation expense |
— | — | ||||||||||||||||||||||
Issuance of shares for 3M transaction |
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Net loss for the three months ended November 30, 2022 |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
Other comprehensive loss for the three months ended November 30, 2022 |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance, November 30, 2022 |
$ |
$ |
$ |
( |
) |
$ |
$ |
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Accumulated |
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Additional |
Other |
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Common Stock |
Paid-in |
Comprehensive |
Retained |
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Shares |
Amount |
Capital |
Loss |
Earnings |
Total |
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Balance, June 1, 2021 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation expense |
— | — | ||||||||||||||||||||||
Issuance of shares under employee stock purchase plan |
— | — | ||||||||||||||||||||||
Net income for the three months ended August 31, 2021 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive loss for the three months ended August 31, 2021 |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance, August 31, 2021 |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||
Exercise of options and share-based compensation expense |
— | — | ||||||||||||||||||||||
Net income for the three months ended November 30, 2021 |
— | — | — | — | ||||||||||||||||||||
Other comprehensive loss for the three months ended November 30, 2021 |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
Balance, November 30, 2021 |
$ |
$ |
$ |
( |
) |
$ |
$ |
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Six Months Ended November 30, |
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2022 |
2021 |
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Cash Flows (For) From Operating Activities |
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Net Income (Loss) |
$ | ( |
) | $ | ||||
Adjustments to reconcile net income to net cash (for) from operating activities: |
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Depreciation and amortization |
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Deferred income taxes |
( |
) | ( |
) | ||||
Share-based compensation |
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Disposal of property and equipment |
( |
) | ||||||
Change in operating assets and liabilities, net of business acquisitions: |
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Accounts receivable |
( |
) | ( |
) | ||||
Inventories |
( |
) | ||||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Accounts payable, accruals and other changes |
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Financing fee amortization |
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Interest expense accrual |
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Net Cash (For) From Operating Activities |
( |
) | ||||||
Cash Flows (For) From Investing Activities |
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Purchases of property, equipment and other non-current intangible assets |
( |
) | ( |
) | ||||
Proceeds from the sale of marketable securities |
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Purchases of marketable securities |
( |
) | ( |
) | ||||
Proceeds from the sale of property and equipment |
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Business acquisitions, net of working capital adjustments and cash acquired |
( |
) | ||||||
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|
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Net Cash (For) From Investing Activities |
( |
) | ||||||
Cash Flows (For) From Financing Activities |
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Exercise of stock options and issuance of employee stock purchase plan shares |
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Financing fees paid |
( |
) | ||||||
Repayment of debt |
( |
) | ||||||
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Net Cash (For) From Financing Activities |
( |
) | ||||||
Effect of Foreign Exchange Rates on Cash |
( |
) | ( |
) | ||||
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Net Increase (Decrease) In Cash and Cash Equivalents |
( |
) | ||||||
Cash and Cash Equivalents, Beginning of Period |
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Cash and Cash Equivalents, End of Period |
$ | $ | ||||||
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|
(in thousands) |
Maturity |
November 30, 2022 |
May 31, 2022 |
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Commercial Paper & Corporate Bonds |
0 - 90 days | $ | $ | |||||||||
91 - 180 days | ||||||||||||
181 days - 1 year |
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1 - 2 years | ||||||||||||
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Total Marketable Securities |
$ | $ | ||||||||||
|
|
|
|
(in thousands) |
Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
||||||||||||
Commercial Paper & Corporate Bonds |
$ | $ | $ | ( |
) | $ |
(in thousands) |
Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value |
||||||||||||
Commercial Paper & Corporate Bonds |
$ | $ | $ | ( |
) | $ |
(in thousands) |
November 30, 2022 |
May 31, 2022 |
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Raw materials |
$ | $ | ||||||
Work-in-process |
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Finished and purchased goods |
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$ | $ | |||||||
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|
• | Identification of the contract with a customer; |
• | Identification of the performance obligations in the contract; |
• | Determination of the transaction price; |
• | Allocation of the transaction price to the performance obligations in the contract; and |
• | Recognition of revenue when, or as, the Company satisfies the performance obligations. |
• | Diagnostic test kits, dehydrated culture media and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation; |
• | Consumable products marketed to veterinarians, retailers, livestock producers and animal health product distributors; and |
• | Rodenticides, disinfectants and insecticides to assist in the control of rodents, insects and disease in and around agricultural, food production and other facilities. |
• | Genomic identification and related interpretive bioinformatic services; and |
• | Other commercial laboratory services. |
Three Months ended November 30, |
Six Months ended November 30, |
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(in thousands) |
2022 |
2021 |
2022 |
2021 |
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Food Safety |
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Natural Toxins, Allergens & Drug Residues |
$ | $ | $ | $ | ||||||||||||
Bacterial & General Sanitation |
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Culture Media & Other |
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Rodent Control, Insect Control & Disinfectants |
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Genomics Services |
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Animal Safety |
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Life Sciences |
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Veterinary Instruments & Disposables |
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Animal Care & Other |
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Rodent Control, Insect Control & Disinfectants |
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Genomics Services |
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|
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Total Revenues |
$ | $ | $ | $ | ||||||||||||
|
|
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|
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|
Three Months Ended November 30, |
Six Months Ended November 30, |
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(in thousands, except per share amounts) |
2022 |
2021 |
2022 |
2021 |
||||||||||||
Numerator for basic and diluted net income (loss) per share: |
||||||||||||||||
Net income (loss) attributable to Neogen |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Denominator for basic net income (loss) per share: |
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Weighted average shares |
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Effect of dilutive stock options and RSUs |
— | — | ||||||||||||||
|
|
|
|
|
|
|
|
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Denominator for diluted net income (loss) per share |
$ |
$ |
$ |
$ |
||||||||||||
Net income (loss) per share: |
||||||||||||||||
Basic |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Diluted |
$ | ( |
) | $ | $ | ( |
) | $ |
Note: |
Due to the net loss for the Three and Six month periods end November 30, 2022, the dilutive stock options and RSUs are anti-dilutive for those periods. |
(in thousands) |
Food Safety |
Animal Safety |
Corporate and Eliminations (1) |
Total |
||||||||||||
As of and for the three months ended November 30, 2022 |
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Product revenues to external customers |
$ | $ | $ | $ | ||||||||||||
Service revenues to external customers |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues to external customers |
$ |
$ |
$ |
$ |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
$ |
$ |
$ |
( |
) | $ |
( |
) | ||||||||
Total assets |
$ |
$ |
$ |
$ |
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|
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|
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|
|
As of and for the three months ended November 30, 2021 |
||||||||||||||||
Product revenues to external customers |
$ | $ | $ | — | $ | |||||||||||
Service revenues to external customers |
— | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues to external customers |
$ |
$ |
$ |
— | $ |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
$ |
$ |
$ |
( |
) | $ |
||||||||||
Total assets |
$ |
$ |
$ |
$ |
(1) | Includes corporate assets, consisting principally of cash and cash equivalents, marketable securities, current and deferred tax accounts and overhead expenses not allocated to specific business segments. Also includes the elimination of intersegment transactions. |
(in thousands) |
Food Safety |
Animal Safety |
Corporate and Eliminations (1) |
Total |
||||||||||||
As of and for the six months ended November 30, 2022 |
||||||||||||||||
Product revenues to external customers |
$ | $ | $ | $ | ||||||||||||
Service revenues to external customers |
||||||||||||||||
Total revenues to external customers |
$ |
$ |
$ |
$ |
||||||||||||
Operating income (loss) |
$ |
$ |
$ |
( |
) | $ |
( |
) | ||||||||
As of and for the six months ended November 30, 2021 |
||||||||||||||||
Product revenues to external customers |
$ | $ | $ | — | $ | |||||||||||
Service revenues to external customers |
— | |||||||||||||||
Total revenues to external customers |
$ |
$ |
$ |
— | $ |
|||||||||||
Operating income (loss) |
$ |
$ |
$ |
( |
) | $ |
(1) | Includes elimination of intersegment transactions. |
Three months ended November 30, |
Six months ended November 30, |
|||||||||||||||
(in thousands) |
2022 |
2021 |
2022 |
2021 |
||||||||||||
Domestic |
$ | $ | $ | $ | ||||||||||||
International |
||||||||||||||||
Total revenue |
$ | $ |
(options in thousands) |
Shares |
Weighted- Average Exercise Price |
||||||
Options outstanding June 1, 2022 |
$ | |||||||
Granted |
||||||||
Exercised |
( |
) | ||||||
Forfeited/Expired |
( |
) | ||||||
Options outstanding November 30, 2022 |
$ |
FY 2023 |
FY 2022 |
|||||||
Risk-free interest rate |
% | % | ||||||
Expected dividend yield |
% | % | ||||||
Expected stock price volatility |
% | % | ||||||
Expected option life |
(RSUs in thousands) |
Shares |
Weighted- Average Fair Value |
||||||
RSUs outstanding June 1, 2022 |
$ | |||||||
Granted |
||||||||
Released |
( |
) | ||||||
Forfeited/Cancelled |
( |
) | ||||||
RSUs outstanding November 30, 2022 |
$ |
(in thousands) |
||||
Cash and cash equivalents |
$ |
|||
Inventories |
||||
Other current assets |
||||
Property, plant and equipment |
||||
Intangible assets |
||||
Right of use asset |
||||
Lease liability |
( |
) | ||
Deferred tax liabilities |
( |
) | ||
Other liabil i ties |
( |
) | ||
Total identifiable assets and liabilities acquired |
||||
Goodwill |
||||
Total purchase consideration |
$ |
|||
(in thousands) |
Fair Value |
Useful Life in Years |
||||||
Trade Names and Trademarks |
$ |
|||||||
Developed Technology |
||||||||
Customer Relationships |
||||||||
Total intangible assets acquired |
$ |
|||||||
Three Months Ended | Six Months Ended | |||||||||||||||
November 30, | November 30, | |||||||||||||||
in thousands, unaudited |
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net sales |
$ | $ | $ | $ | ||||||||||||
Operating Income (loss) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ |