NEOGEN CORP

Previous wording

In addition, any forward-looking statements represent management’s views only as of the date this Quarterly Report on Form 10-Q was first filed with the Securities and Exchange Commission and should not be relied upon as representing management’s views as of any subsequent date. While management may elect to update forward-looking statements at some point in the future, it specifically disclaims any obligation to do so, even if its views change.

Current wording

In addition, any forward-looking statements represent management’s views only as of the date this Quarterly Report on Form 10-Q was first filed with the Securities and Exchange Commission and should not be relied upon as representing management’s views as of any subsequent date. Except to the extent legally required to do so, the Company specifically disclaims any obligation to update forward-looking statements, even if its views change.

Previous wording

In prior years, production was negatively impacted by broad supply chain challenges and labor market disruptions. Additionally, input cost inflation, including increases in certain raw materials, negatively impacted operating results. In fiscal 2024, despite a slowing rate of inflation, there were economic headwinds of softening consumer demand and higher interest rates, coupled with ongoing geopolitical tension in certain regions.

Current wording

In prior years, production was negatively impacted by broad supply chain challenges and labor market disruptions. Additionally, input cost inflation, including increases in certain raw materials, negatively impacted operating results. In fiscal year 2024, despite a slowing rate of inflation, there were economic headwinds of softening consumer demand and higher interest rates, coupled with ongoing geopolitical tension in certain regions.

Previous wording

Interest rates have risen sharply, particularly in fiscal 2023, as a way to combat inflation. This increased our borrowing costs and raised the overall cost of capital. Although the federal funds rate was reduced in 2024 and there are indications of future rate cuts, the overall interest rate we pay on our Credit Facilities remains higher than when the debt was incurred in 2022, which increases interest expense on the unhedged portion of our Term Loan. In response to the historically high inflationary environment, we took pricing actions to mitigate the impacts on the business in the prior two fiscal years. The impact of inflation continues to affect us in the current fiscal year, although at a lower rate compared to prior fiscal years.

Current wording

Interest rates have risen sharply, particularly in fiscal year 2023, as a way to combat inflation. This increased our borrowing costs and raised the overall cost of capital. Although the federal funds rate was reduced in 2024 and there are indications of future rate cuts, the overall interest rate we pay on our Credit Facilities remains higher than when the debt was incurred in 2022, which increases interest expense on the unhedged portion of our Term Loan. In response to the historically high inflationary environment, we took pricing actions to mitigate the impacts on the business in the prior two fiscal years. The impact of inflation continues to affect us in the current fiscal year, although at a lower rate compared to prior fiscal years.

Previous wording

Beginning in the first half of fiscal year 2024, we implemented a new enterprise resource planning system and exited our transition distribution agreements with 3M, which led to certain shipment delays and an elevated backlog of open orders, specifically in the Food Safety segment. At the conclusion of fiscal year 2024, order fulfillment issues were largely resolved, however, the impact of lost market share stemming from these fulfillment issues has continued in fiscal year 2025. Also in fiscal year 2025, we have experienced negative impacts from delays in restarting full production of our sample collection product line, which we relocated from 3M into a Neogen facility.

Current wording

Beginning in the first half of fiscal year 2024, we implemented a new enterprise resource planning system and exited our transition distribution agreements with 3M, which led to certain shipment delays and an elevated backlog of open orders, specifically in the Food Safety segment. At the conclusion of fiscal year 2024, order fulfillment issues were largely resolved, however, the impact of lost market share stemming from these fulfillment issues has continued in fiscal year 2025. Also in fiscal year 2025, we have experienced negative impacts from delays in restarting full production of our sample collection product line, which we relocated from 3M into a Neogen facility. However, at the end of the third quarter of this fiscal year, we resolved these delays, with production having returned to the prior normal levels. With a change in administration in fiscal year 2025, there has been an economic policy shift towards increasing tariffs, which in turn has led and could lead to further retaliatory tariffs. These have the potential to negatively impact our international sales, as the majority of our purchases and production is done within the U.S.

Previous wording

Within the Food Safety industry, the end market continues to have a resulting lower level of food production, partly due to significant inflation in food prices. However, there has been gradual end market improvement that has coincided with an increasing focus on food safety from both consumers and regulators. Within Animal Safety, the industry is at or near cyclical lows in the end market and. As a result, we are optimistic about future growth of revenue in the segment, particularly if the distribution channel begins to meaningfully restock inventory.

Current wording

Within the Food Safety industry, the end market continues to have a lower level of food production, partly due to significant inflation in food prices. However, there has generally been gradual end market improvement that has coincided with an increasing focus on food safety from both consumers and regulators. Within Animal Safety, the end market is at or near cyclical lows. As a result, we are optimistic about future revenue growth in the segment, particularly if the distribution channel begins to meaningfully restock inventory.

Previous wording

The restructuring actions undertaken in our Genomics business have resulted in the voluntary attrition of additional revenue, following the shift in focus already made away from smaller production animals. A portion of our Genomics business also serves the companion animal market, which has been experiencing weakness recently, primarily due to the impact of continued inflation and a lower number of pet adoptions.

Current wording

The restructuring actions undertaken in our genomics business have resulted in the voluntary attrition of revenue, following the shift in focus already made away from smaller production animals. A portion of our genomics business also serves the companion animal market, which has been experiencing weakness recently, primarily due to the impact of continued inflation, a lower number of pet adoptions, and a higher level of customer in-sourcing.

Previous wording

We continue to evaluate the nature and extent to which these issues impact our business, including consolidated results of operations, financial condition and liquidity. We expect these issues to continue to impact us throughout fiscal year 2025.

Current wording

We continue to evaluate the nature and extent to which these issues impact our business, including consolidated results of operations, financial condition and liquidity. We expect these issues to continue to impact us throughout the remainder of fiscal year 2025.

Previous wording

Revenue increased $1.6 million during the three months ended November 30, 2024 compared to the three months ended November 30, 2023. The increase included $8.1 million growth in the business offset by a $5.8 million unfavorable foreign exchange rate impact and a $0.7 million unfavorable impact due to discontinued product lines. The increase in the business was driven by new sales in the food quality and nutritional analysis product line paired with continued strength in indicator testing and rodent control product lines and higher sales of our hygiene monitoring product line. These were partially offset by reduced sales of sample collection products due to production constraints and lower genomics volume due primarily to weakness in the companion animal market.

Current wording

Revenue decreased $7.8 million during the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The decrease included a $7.1 million unfavorable foreign exchange rate impact and a $1.2 million unfavorable impact due to discontinued product lines, offset by $0.5 million of growth in the business. The increase in the business was driven by new sales in the food quality and nutritional analysis product line paired with continued strength in indicator testing and pathogens product lines. These were partially offset by reduced sales of sample collection products due to production constraints, lower genomics volume due primarily to weakness in the companion animal market and a decline in sales of veterinary instruments, which have been impacted by tariffs.

Previous wording

Revenue decreased $10.4 million during the six months ended November 30, 2024 compared to the six months ended November 30, 2023. The decrease included a $14.7 million unfavorable foreign exchange rate impact and a $0.6 million unfavorable impact due to discontinued product lines, offset by $4.9 million growth in the business. The year-to-date increase in the business was driven by continued strength in indicator testing paired with new sales in the food quality and nutritional analysis product line. These increases were partially offset by production constraints within the sample collection product line and lower genomics volume, which was impacted by a shift to focus on large production animals and weakness in the companion animal market.

Current wording

Revenue decreased $18.2 million during the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024. The decrease included a $21.9 million unfavorable foreign exchange rate impact and a $1.8 million unfavorable impact due to discontinued product lines, offset by $5.5 million of growth in the business. The year-to-date increase was driven by continued strength in indicator testing paired with new sales in the food quality and nutritional analysis product line. These increases were partially offset by production constraints within the sample collection product line and lower genomics volume, which was impacted by a shift to focus on large production animals and weakness in the companion animal market.

Previous wording

Service revenue, which consists primarily of genomics services provided to animal production and companion animal markets, was $23.7 million and $48.2 million during the three and six months ended November 30, 2024 and $25.8 million and $50.3 million during the three and six months ended November 30, 2023, respectively. The decrease in the three and six months ended November 30, 2024 was primarily due to lower genomics sales into the companion animal market, as well as lower sales into the domestic poultry market, primarily due to a shift in focus towards large production animals, offset by an increase in genomics sales into beef markets.

Current wording

Service revenue, which consists primarily of genomics services provided to animal production and companion animal markets, was $24.5 million and $72.6 million during the three and nine months ended February 28, 2025 and $26.6 million and $77.0 million during the three and nine months ended February 29, 2024, respectively. The decrease in the three and nine months ended February 28, 2025 was primarily due to lower genomics sales into the companion animal market, as well as lower sales into the domestic poultry market, primarily due to a shift in focus towards large production animals, offset by an increase in genomics sales into beef markets.

Previous wording

International sales were $117.5 million and $230.1 million during the three and six months ended November 30, 2024 and $116.1 million and $234.0 million during the three and six months ended November 30, 2023, respectively. The increase during the three months ended November 30, 2024 was driven by increases in the Asia Pacific and European regions, partially offset by decreases in the Latin American and South American regions. The decrease during the six months ended November 30, 2024 was due to $14.7 million of currency headwinds, partially offset by strength in Petrifilm® indicator sales.

Current wording

International sales were $105.6 million and $335.7 million during the three and nine months ended February 28, 2025 and $104.6 million and $338.6 million during the three and nine months ended February 29, 2024, respectively. The increase during the three months ended February 28, 2025 was driven by increases in the Latin American countries, partially offset by a $7.1 million currency headwind and decreases in the Europe region. The decrease during the nine months ended February 28, 2025 was due to $21.9 million of currency headwinds, partially offset by an increase in the Latin American countries and to a lesser extent, countries within Asia Pacific and Europe.

Previous wording

Gross margin was 49.0% and 48.7% during the three and six months ended November 30, 2024 and 50.9% during the three and six months ended November 30, 2023, respectively. The decrease in margin during the three month period was primarily due to $4.8 million of restructuring charges. The decrease in margin during the six month period was primarily due to higher freight costs in the current year and $4.8 million of restructuring charges. Additionally, a volume decline in the first quarter contributed to the lower gross margin for the year-to-date period.

Current wording

Gross margin was 49.9% and 49.1% during the three and nine months ended February 28, 2025 and 51.1% and 51.0% during the three and nine months ended February 29, 2024, respectively. The decrease in margin during the three month period was primarily due to lower volume and higher manufacturing costs related to our sample collection product line. The decrease in margin during the nine month period was primarily due to higher freight costs in the current year and $4.6 million of restructuring charges. Additionally, a sales decline in the first and third quarters contributed to lower gross margin for the year-to-date period.

Previous wording

Sales and marketing expenses were $46.5 million and $92.3 million during the three and six months ended November 30, 2024 and $44.8 million and $90.6 million during the three and six months ended November 30, 2023, respectively. We experienced higher shipping costs in the current year, as we experienced higher shipping rates and took over distribution of FSD products from 3M during the second and third quarters of the prior fiscal year. This increase was partially offset by a decrease in fees paid to 3M for distribution services and lower royalty expense.

Current wording

Sales and marketing expenses were $44.6 million and $136.9 million during the three and nine months ended February 28, 2025 and $47.9 million and $138.5 million during the three and nine months ended February 29, 2024, respectively. While we experienced higher shipping costs in the current year, as we took over distribution of FSD products from 3M during the second and third quarters of the prior fiscal year, these increased costs were more than offset by a decrease in fees paid to 3M for distribution services and lower royalty expense.

Previous wording

General and administrative were $57.8 million and $109.4 million during the three and six months ended November 30, 2024 and $51.7 million and $96.8 million during the three and six months ended November 30, 2023, respectively. For the Food Safety segment, expenses were relatively consistent compared to the prior-year comparable periods. For the Animal Safety segment, an increase in expense was attributable to restructuring charges, which were primarily incurred in the second quarter of the current fiscal year. Corporate expense has increased primarily due to additional headcount and higher costs associated with our prior-year enterprise resource planning system implementation.

Current wording

General and administrative expenses were $55.8 million and $165.2 million during the three and nine months ended February 28, 2025 and $52.1 million and $148.9 million during the three and nine months ended February 29, 2024, respectively. For the Food Safety segment, increases compared to the prior year comparable periods were driven by a fixed asset impairment charge of $2.1 million. For the Animal Safety segment, an increase in expense for the full year was attributable to restructuring charges, which included $6.9 million of charges that were primarily incurred in the second quarter of the current fiscal year. Corporate expense has increased primarily due to additional headcount and higher costs associated with our prior year enterprise resource planning system implementation.

Previous wording

General and administrative expenses includes amortization expense relating to definite-lived intangible assets of $23.6 million and $47.2 million during the three and six months ended November 30, 2024 and $23.7 million and $47.4 million during the three and six months ended November 30, 2023, respectively. Estimated amortization expense for fiscal years 2025 through 2029 is expected to be in the range of approximately $91 million to $96 million per year.

Current wording

General and administrative expenses include amortization expense relating to definite-lived intangible assets of $23.3 million and $70.4 million during the three and nine months ended February 28, 2025 and $23.7 million and $71.1 million during the three and nine months ended February 29, 2024, respectively. Estimated amortization expense for fiscal years 2025 through 2029 is expected to be in the range of approximately $90 million to $96 million per year.

Previous wording

Research and development expense was $5.1 million and $10.3 million during the three and six months ended November 30, 2024 and $5.8 million and $12.5 million during the three and six months ended November 30, 2023, respectively. The decrease during the three and six months ended November 30, 2024 is primarily the result of lower contracted services and employee costs in the Food Safety segment, as we continue to integrate the 3M FSD business and realize synergies in certain areas.

Current wording

Research and development expense was $4.5 million and $14.8 million during the three and nine months ended February 28, 2025 and $4.9 million and $17.3 million during the three and nine months ended February 29, 2024, respectively. The decrease during the three and nine months ended February 28, 2025 is primarily the result of lower contracted services and employee costs in the Food Safety segment, as we continue to realize synergies in certain areas from the 3M FSD business.

Previous wording

Income tax benefit was $20.3 million and $23.3 million during the three and six months ended November 30, 2024 compared to income tax benefit of $0.3 million and $0.1 million during the three and six months ended November 30, 2023. The net tax benefit for the quarter is primarily related to pre-tax losses due to amortization expense and interest expense from the 3M FSD acquisition. Additionally, we recognized an income tax benefit of $9.2 million during the quarter as a result of a goodwill impairment charge. The OECD Pillar 2 global minimum tax rules, which generally provide for a minimum effective tax rate of 15%, are intended to apply for tax years beginning in 2024. We are closely monitoring developments and evaluating the impact these new rules will have on our tax rate, including eligibility to qualify for certain safe harbors. Where no safe harbor is met, we have included a forecasted amount of “top-up” tax for its foreign subsidiaries as required under the applicable rules of the countries that have adopted the Pillar Two directives, in our income tax benefit for the three and six months ended November 30, 2024.

Current wording

Income tax expense was $1.2 million during the three months ended February 28, 2025 and income tax benefit was $22.1 million during the nine months ended February 28, 2025 compared to income tax benefit of $3.8 million and $3.9 million during the three and nine months ended February 29, 2024. Income tax expense for the quarter is related to changes in the Company’s forecasted pre-tax income using an estimated annualized effective tax rate. The net tax benefit for the nine month period is primarily related to pre-tax losses due to amortization expense and interest expense from the 3M FSD acquisition as well as an income tax benefit of $9.2 million associated with goodwill impairment charges. The Organization for Economic Cooperation and Development (“OECD”) Pillar 2 global minimum tax rules, which generally provide for a minimum effective tax rate of 15%, are intended to apply for tax years beginning in 2024. We are closely monitoring developments and evaluating the impact these new rules will have on our tax rate, including eligibility to qualify for certain safe harbors. Where no safe harbor is met, we have included in our income tax for the three and nine months ended February 28, 2025, a forecasted amount of “top-up” tax for our foreign subsidiaries as required under the applicable rules of the countries that have adopted the Pillar Two directives.

Previous wording

Revenue for the Food Safety segment decreased $0.2 million during the three months ended November 30, 2024 compared to the three months ended November 30, 2023. The decrease was primarily due to $5.9 million of currency headwind and $0.3 million from discontinued product lines, partially offset by $6.0 million of growth in the business. The increase in the business was driven by new sales in the food quality and nutritional analysis product line, continued strength in sales of indicator products and higher sales of hygiene monitoring products. These increases were partially offset by lower sales from the sample collection product line due to production constraints.

Current wording

Revenue for the Food Safety segment decreased $5.0 million during the three months ended February 28, 2025 compared to the three months ended February 29, 2024. The decrease was primarily due to $6.9 million of currency headwind and $0.5 million from discontinued product lines, partially offset by $2.4 million of growth in the business. The increase in the business was driven by new sales in the food quality and nutritional analysis product line and strong sales in the indicator and pathogens product lines. These increases were partially offset by lower sales from the sample collection product line due to production constraints and lower sales in the culture media and general sanitation product lines.

Previous wording

Revenue for the Food Safety segment decreased $7.1 million during the six months ended November 30, 2024 compared to the six months ended November 30, 2023. The decrease was primarily due to $14.9 million of currency headwind, partially offset by $7.8 million of growth in the business. The growth in the business was driven by continued strength in indicator testing paired with new sales in the food quality and nutritional analysis product line and was partially offset by production constraints impacting the sample collection product line.

Current wording

Revenue for the Food Safety segment decreased $12.1 million during the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024. The decrease was primarily due to $21.8 million of currency headwind and $0.5 million from discontinued product lines, partially offset by $10.2 million of growth in the business. The growth was driven by continued strength in indicator testing, new sales in the food quality and nutritional analysis product line and higher sales of cleaner and disinfectant products in the Europe and Latin America regions. These increases were partially offset by production constraints impacting the sample collection product line and lower sales in the natural toxins product line.

Previous wording

Revenue for the Animal Safety segment decreased $3.3 million during the six months ended November 30, 2024 compared to the six months ended November 30, 2023. The decrease was primarily due to $2.8 million decline in the business and a $0.7 million impact from discontinued product lines, partially offset by a $0.2 million favorable currency impact. The decline in the business driven by lower genomics volume due to a shift to focus primarily on large production animals and weakness in the companion animal market, and lower sales in the first quarter of insect control and cleaners and disinfectants product lines. These decreases were partially offset by strength in rodent control products.

Current wording

Revenue for the Animal Safety segment decreased $6.1 million during the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024. The decrease was primarily due to a $4.7 million decline in the business, a $1.3 million impact from discontinued product lines and a $0.1 million unfavorable currency impact. The decline in the business was driven by lower genomics volume due to a shift to focus primarily on large production animals and weakness in the companion animal market paired with lower sales in the insect control and veterinary instruments product lines. These decreases were partially offset by strength in rodent control products.

Previous wording

Operating income for the Animal Safety segment decreased $13.9 million during the six months ended November 30, 2024 compared to the six months ended November 30, 2023.The decline was due to a decrease in sales in the first quarter of the fiscal year and restructuring charges incurred primarily in the second quarter of the fiscal year, which impacted both gross profit and operating expenses.

Current wording

Operating income for the Animal Safety segment decreased $21.9 million during the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024. The decline was due to a decrease in sales and restructuring charges incurred primarily in the second quarter of the current fiscal year, which impacted both gross profit and operating expenses.

Previous wording

This report includes certain financial information for the Company that differs from what is reported in accordance with U.S. GAAP. These non-GAAP financial measures consist of EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin. These non-GAAP financial measures are included in this report because management believes that they provide investors with additional useful information to measure the performance of the Company, and because these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties as common performance measures to compare results or estimate valuations across companies in industries the Company operates in. The Company also uses Adjusted EBITDA as a performance target to establish and award certain executive compensation awards, as disclosed in our proxy statement filed with the Securities and Exchange Commission filed on September 13, 2024.

Current wording

This report includes certain financial information for the Company that differs from what is reported in accordance with U.S. GAAP. These non-GAAP financial measures consist of EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin. These non-GAAP financial measures are included in this report because management believes that they provide investors with additional useful information to measure the performance of the Company, and because these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties as common performance measures to compare results or estimate valuations across companies in industries the Company operates in. The Company also uses Adjusted EBITDA as a performance target to establish and award certain executive compensation awards, as disclosed in our proxy statement filed with the Securities and Exchange Commission on September 13, 2024.

Previous wording

We define Adjusted EBITDA as EBITDA, adjusted for share-based compensation and certain transaction fees and expenses. We present Adjusted EBITDA because it provides an understanding of underlying business performance by excluding the following:

Current wording

We define Adjusted EBITDA as EBITDA, adjusted for share-based compensation and certain other fees and expenses. We present Adjusted EBITDA because it provides an understanding of underlying business performance by excluding the following:

Previous wording

Net foreign currency transaction gain associated with the revaluation of foreign denominated intercompany loans established in connection with the 3M Food Safety transaction and other non-hedged foreign currency revaluation resulting from 3M agreements.

Current wording

Net foreign currency transaction (gain) loss associated with the revaluation of foreign denominated intercompany loans and certain 3M agreements.

Previous wording

Includes costs associated with the 3M transaction, including various transition agreements and other related integration costs.

Current wording

Includes costs associated with 3M transition agreements and related integration costs.

Previous wording

Severance, non-cash impairment, and other related exit costs primarily associated with a reduction in our global genomics business.

Current wording

Severance, non-cash impairment, and other related exit costs primarily associated with a reduction in our global genomics business and consolidation of certain facilities.

Previous wording

Adjusted EBITDA decreased $3.7 million and $12.4 million during the three and six months ended November 30, 2024. Expressed as a percentage of revenue, Adjusted EBITDA was 22.2% and 21.2% during the three and six months ended November 30, 2024 and 24.0% and 23.4% during the three and six months ended November 30, 2023 2023, respectively. The lower Adjusted EBITDA in the current year was driven primarily by lower sales and higher operating expenses compared to the prior-year period.

Current wording

Adjusted EBITDA decreased $4.2 million and $16.6 million during the three and nine months ended February 28, 2025. Expressed as a percentage of revenue, Adjusted EBITDA was 22.0% and 21.5% during the three and nine months ended February 28, 2025 and 23.0% and 23.3% during the three and nine months ended February 29, 2024 2024, respectively. The lower Adjusted EBITDA in the current year was driven primarily by lower sales and higher operating expenses compared to the prior year period.

Previous wording

As of November 30, 2024, we had cash and cash equivalents of $140.2 million, and borrowings available under our revolving line of credit of $150.0 million.

Current wording

As of February 28, 2025, we had cash and cash equivalents of $127.7 million, and borrowings available under our revolving line of credit of $150.0 million.

Previous wording

In June 2022, Neogen Food Safety Corporation entered into a credit agreement consisting of a five-year senior secured term loan facility (“term loan facility”) in the amount of $650 million and a five-year senior secured revolving facility (“revolving facility”) in the amount of $150 million (collectively, the “Credit Facilities”). The term loan facility was drawn on August 31, 2022 while the revolving facility remained undrawn and continues to be undrawn as of November 30, 2024. The term loan facility matures on June 30, 2027 and the revolving facility matures at the earlier of June 30, 2027 and the termination of the revolving commitments.

Current wording

In June 2022, Neogen Food Safety Corporation entered into a credit agreement consisting of a five-year senior secured term loan facility (“term loan facility”) in the amount of $650 million and a five-year senior secured revolving facility (“revolving facility”) in the amount of $150 million (collectively, the “Credit Facilities”). The term loan facility was drawn on August 31, 2022 while the revolving facility remained undrawn and continues to be undrawn as of February 28, 2025. In accordance with the prepayment feature, the Company paid $100 million of the term loan facility’s principal in fiscal year 2023. The term loan facility matures on June 30, 2027 and the revolving facility matures at the earlier of June 30, 2027 or the termination of the revolving commitments.

Previous wording

There are no required principal payments through fiscal year 2026. Financial covenants include maintaining specified levels of funded debt to EBITDA, and debt service coverage. As of November 30, 2024, the Company was in compliance with all financial covenants under the Credit Facilities.

Current wording

There are no required principal payments on our Credit Facilities through fiscal year 2026. Financial covenants include maintaining specified levels of funded debt to EBITDA, and debt service coverage. As of February 28, 2025, the Company was in compliance with all financial covenants under the Credit Facilities.

Previous wording

Cash used for investing activities increased $53.7 million during the six months ended November 30, 2024, compared to the six months ended November 30, 2023. The increase was primarily the result of lower proceeds from marketable securities in the current year periods. Capital expenditures were $55.6 million and $55.0 million during the six months ended November 30, 2024 and 2023, respectively.

Current wording

Cash used for investing activities increased $71.5 million during the nine months ended February 28, 2025, compared to the nine months ended February 29, 2024. The increase was primarily the result of lower proceeds from marketable securities in the current year period and an increase in capital expenditures of $1.3 million, partially offset by $4.9 million in proceeds from the sale of a building. Capital expenditures were $88.5 million and $87.2 million during the nine months ended February 28, 2025 and 2024, respectively.

Previous wording

Net Cash (used for) provided by Financing Activities

Current wording

Net Cash provided by Financing Activities

Previous wording

Cash used by financing activities increased $1.2 million during the six months ended November 30, 2024 compared to the six months ended November 30, 2023. The net outflow was primarily due to taxes paid on employees' share-based compensation.

Current wording

Cash provided by financing activities decreased $1.5 million during the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024. The net outflow was primarily due to taxes paid on employees' share-based compensation.

Previous wording

We continue to make investments in our business and operating facilities. Our estimate for capital expenditures in fiscal 2025 is $85 million. This includes approximately $55 million in capital expenditures related to integration of the acquired 3M FSD products, the most significant portion of which is related to the construction of, and acquisition of equipment for, our new manufacturing facility in Lansing, Michigan.

Current wording

We continue to make investments in our business and operating facilities. Our estimate for capital expenditures in fiscal year 2025 is $100 million. This includes approximately $70 million in capital expenditures related to integration of the acquired 3M FSD products, the most significant portion of which is related to the construction of, and acquisition of equipment for, our new manufacturing facility in Lansing, Michigan.