Company: NEOG
Filing Date: 2025-07-30
Form Type: 10-K
Source: 0000950170-25-100064
Chunk: 61

Company: NEOGEN CORP
Filing Date: 2025-07-30
Form: 10-K
Item: Item 6
Chunk 61
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 are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for 

84

income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. The Company’s policy is to recognize both accrued interest expense and penalties related to unrecognized tax benefits in income tax expense. The amount of interest and penalties included in the unrecognized tax benefits reserve was $385 at May 31, 2025, $246 at May 31, 2024, and $145 at May 31, 2023. Of the total unrecognized tax benefits at May 31, 2025 and 2024, $3,849 and $2,739, respectively, comprise unrecognized tax positions that would, if recognized, affect our effective tax rate.The reconciliation of our unrecognized tax benefits is as follows:  

         Year Ended May 31,

         2025

         2024

         2023

         Beginning balance
          
         $
         2,739

         $
         946

         $
         741

         Increase/(decrease) related to prior periods

         136

         (47
         )

         2

         Increase related to current period

         1,128

         2,004

         479

         Lapses of applicable statute of limitations

         (154
         )

         (164
         )

         (276
         )

         Ending balance
          
         $
         3,849

         $
         2,739

         $
         946

        The Company is no longer subject to examination by the Internal Revenue Service for fiscal year 2021 and preceding years. As of May 31, 2025, the Company has approximately $294,933 of undistributed earnings in its foreign subsidiaries. Approximately $124,734 of these earnings are no longer considered permanently reinvested. The incremental tax cost to repatriate these earnings to the US is insignificant. The Company has not provided deferred taxes on approximately $170,199 of undistributed earnings from non-U.S. subsidiaries as of May 31, 2025 which are indefinitely reinvested in operations. Based on historical experience, as well as management’s future plans, earnings from these subsidiaries will continue to be re-invested indefinitely for future expansion and working capital needs. On an annual basis, we evaluate the current business environment and whether any new events or other external changes might require future