NEOGEN CORP | 2013 | FY | 3


9. Segment Information

The Company has two reportable segments: Food Safety and Animal Safety. The Food Safety segment is primarily engaged in the development, production and marketing of diagnostic test kits and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation. The Animal Safety segment is primarily engaged in the development, production and marketing of products dedicated to animal safety, including a complete line of consumable products marketed to veterinarians and animal health product distributors; this segment also provides genetic identification and related interpretive bioinformatic services. Additionally, the Animal Safety segment produces and markets rodenticides and disinfectants to assist in control of rodents and disease in and around agricultural, food production and other facilities.

These segments are managed separately because they represent strategic business units that offer different products and require different marketing strategies. The Company evaluates performance based on total sales and operating income of the respective segments. The accounting policies of the segments are the same as those described in Note 1.

Segment information is as follows:

 

(In thousands)    Food Safety      Animal Safety      Corporate and
Eliminations (1)
    Total  

2013

          

Product revenues to external customers

   $ 102,971       $ 81,163       $ 0      $ 184,134   

Service revenues to external customers

     3,187         20,207         0        23,394   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total revenues to external customers

     106,158         101,370         0        207,528   

Operating income (loss)

     27,366         15,858         (2,518     40,706   

Depreciation and amortization

     3,874         3,537         0        7,411   

Interest income

     0         0         144        144   

Income taxes

     9,182         4,770         148        14,100   

Total assets

     93,079         121,908         75,571        290,558   

Expenditures for long-lived assets

     6,046         2,851         0        8,897   

2012

          

Product revenues to external customers

   $ 90,460       $ 74,450       $ 0      $ 164,910   

Service revenues to external customers

     644         18,492         0        19,136   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total revenues to external customers

     91,104         92,942         0        184,046   

Operating income (loss)

     23,932         12,039         (2,232     33,739   

Depreciation and amortization

     3,500         2,673         0        6,173   

Interest income

     0         0         107        107   

Income taxes

     7,795         3,589         66        11,450   

Total assets

     62,227         106,987         82,386        251,600   

Expenditures for long-lived assets

     4,633         7,780         0        12,413   

2011

          

Product revenues to external customers

   $ 85,514       $ 69,150       $ 0      $ 154,664   

Service revenues to external customers

     0         18,019         0        18,019   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total revenues to external customers

     85,514         87,169         0        172,683   

Operating income (loss)

     24,305         13,342         (1,812     35,835   

Depreciation and amortization

     3,251         2,078         0        5,329   

Interest income

     0         0         95        95   

Income taxes (benefit)

     8,410         4,617         (627     12,400   

Total assets

     78,373         90,832         50,457        219,662   

Expenditures for long-lived assets

     4,908         2,888         0        7,796   

 

(1) Includes corporate assets, including 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 and noncontrolling interests.

Revenues to customers located outside the United States amounted to $83,171,000 or 40.1% of consolidated revenues in 2013, $76,672,000 or 41.7% in 2012 and $72,724,000 or 42.1% in 2011 and were derived primarily in various countries throughout Europe, Canada, and the geographic areas of South and Central America and Asia. No customer represented revenues in excess of 10% of consolidated net sales in any of the three years. The United States based operations represent 95% of the Company’s long-lived assets as of May 31, 2013 and 96% as May 31, 2012.


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