Company: NEOG
Filing Date: 2025-07-30
Form Type: 10-K
Source: 0000950170-25-100064
Chunk: 33

Company: NEOGEN CORP
Filing Date: 2025-07-30
Form: 10-K
Item: Item 6
Chunk 33
---
’s Food Safety reporting unit and $0.068 billion to the Animal Safety reporting unit. Management reviews the carrying amounts of goodwill annually at the reporting unit level, or when indications of impairment exist, to determine if goodwill 

56

may be impaired. Goodwill is tested for impairment annually in the fourth quarter of the Company’s fiscal year. The Company estimates the fair value of its reporting units using a combination of discounted cash flows and market-based approaches. As disclosed by management, the discounted cash flows approach is based on the reporting unit’s forecasted cash flows, including forecasted revenue growth rates and gross margins assumptions, that are discounted to present value using the reporting unit’s weighted average cost of capital (“WACC”) as the discount rate. The Company recognized $1.059 billion of impairment during the year ended May 31, 2025.We identified the Goodwill Impairment Assessment related to the Food Safety and Animal Safety reporting units as a critical audit matter. The determination of fair value of each reporting unit requires management to make assumptions used in the discounted cash flows approach, including the assumptions of forecasted revenue growth rates, gross margins, and the discount rate. Auditing management’s assumptions used in the calculation of the fair value of reporting units involved especially challenging and subjective auditor judgment, including the extent of specialized knowledge or skill needed. The primary procedures we performed to address this critical audit matter included:•Evaluating the reasonableness of the forecasted revenue growth rates used by management by: (i) comparing the forecasted revenue growth rates to historical operating performance and (ii) evaluating the forecasted revenue growth rates for consistency with external peer company financial data and other industry information.•Evaluating the reasonableness of the gross margins by comparing to historical operating performance. •Utilizing personnel with specialized knowledge and skill in valuation to assist in evaluating the reasonableness of the discount rates.  /s/ BDO USA, P.C. We have served as the Company’s auditor since 2014. Grand Rapids, Michigan July 30, 2025 

57

Neogen Corporation Consolidated Balance Sheets(in thousands, except shares)   

     May 31

     2025

     2024

     Assets

     Current Assets

     Cash and cash equivalents
      
     $
     129,004

     $
     170,611

     Marketable securities

     —

     325

     Accounts receivable, net

     153,384

     173,005

     Inventory