Press Releases

BIO-TECHNE RELEASES FIRST QUARTER FISCAL 2023 RESULTS

MINNEAPOLIS, Nov. 1, 2022 /PRNewswire/ — Bio-Techne Corporation (NASDAQ: TECH) today reported its financial results for the first quarter ended September 30, 2022.

First Quarter FY2023 Highlights

  • First quarter organic revenue increased by 7% (5% reported) to $269.7 million.
  • GAAP EPS was $2.21 versus $1.69 one year ago. Current year adjusted earnings per share (EPS) of $1.78 was negatively impacted by $0.12 of unfavorable foreign currency exchange when compared to prior year adjusted earnings per share of $1.83.
  • Diagnostics and Genomics achieved 17% organic growth with strong execution across its entire portfolio.
  • Delivered operating cash flow of $56.1 million, an increase of 16% when compared to the prior year.
  • Continued acceleration of the ExoDx Prostate test resulting in a third consecutive record quarter, as tests performed grew over 70% and revenue increased over 100% year-over-year.

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). Adjusted diluted EPS, adjusted earnings, adjusted gross margin, adjusted operating income, adjusted tax rate, organic growth, and adjusted operating margin are non-GAAP measures that exclude certain items detailed later in this press release under the heading “Use of non-GAAP Adjusted Financial Measures.” A reconciliation of GAAP to non-GAAP financial measures is included in this press release.TECH

“I am very pleased with the performance of the Diagnostics and Genomics segment (D&GS), which helped offset the tough year-over-year comparisons we faced in our Protein Sciences segment in Europe and China,” said Chuck Kummeth, President and CEO of Bio-Techne. “In D&GS, we saw increased traction across our portfolio of Spatial Biology solutions, ramping ExoDx Prostate test volume, increased adoption of our Asuragen genetic carrier screening kits, and strength in our Diagnostics Reagents business which led to 17% organic segment growth. For ExoDx Prostate, we delivered a third consecutive record test volume quarter, as year over year test volume increased over 70% and revenue grew over 100% for the quarter. With increasing doctor ordering patterns and a growing base of new physicians ordering the test, I believe fiscal 2023 will be a breakout year for ExoDx Prostate.”

Kummeth continued, “Long-term, we remain incredibly well positioned and under penetrated in some of the highest growth life science tools and diagnostic end markets.  Our leading portfolio of proteomic research reagents and analytical tools, cell and gene therapy workflow solutions, spatial biology products, liquid biopsy technologies and diagnostic reagents position Bio-Techne to successfully penetrate these markets. We will continue to execute our strategic growth plan, manage through any shorter-term regional economic turbulence, and create value for our stakeholders.”

First Quarter Fiscal 2023

Revenue

Net sales for the first quarter increased 5% to $269.7 million. Organic growth was 7% compared to the prior year, with acquisitions contributing 1% and foreign currency exchange having an unfavorable impact of 3%.

GAAP Earnings Results

GAAP EPS was $2.21 per diluted share, versus $1.69 in the same quarter last year. GAAP EPS was positively impacted in the current year by a gain on the sale of our ChemoCentryx investment and a gain on the sale of our Eminence investment, a partially-owned consolidated subsidiary. GAAP operating income for the first quarter of fiscal 2023 decreased  11% to $56.3 million, compared to $63.2 million in the first quarter of fiscal 2022. GAAP operating margin was 20.9%, compared to 24.5% in the first quarter of fiscal 2022. GAAP operating margin compared to prior year was negatively impacted by foreign currency impacts, year-over-year changes in acquisition related expenses, and unfavorable product mix.

Non-GAAP Earnings Results

Adjusted EPS was $1.78 per diluted share, versus $1.83 in the same quarter last year, a decrease of 3%. Adjusted EPS was negatively impacted by $0.12 due to unfavorable foreign currency exchange, which was partially offset by revenue growth. Adjusted operating income for the first quarter of fiscal 2023 decreased 4% compared to the first quarter of fiscal 2022. Adjusted operating margin was 34.8%, compared to 37.8% in the first quarter of fiscal 2022. Adjusted operating margin decreased compared to the prior year due to unfavorable foreign currency exchange and timing of strategic growth investments, including the acquisition of Namocell.

Segment Results

Management uses adjusted operating results to monitor and evaluate performance of the Company’s business segments, as highlighted below.

Protein Sciences Segment

The Company’s Protein Sciences segment is one of the world’s leading suppliers of specialized proteins such as cytokines and growth factors, immunoassays, antibodies and reagents, to the biotechnology and academic research communities. Additionally, the segment provides an array of platforms useful in various areas of protein analysis. Protein Sciences segment’s first quarter fiscal 2023 net sales were $199.9 million, an increase of 1% from $197.2 million for the first quarter of fiscal 2022. Organic growth for the segment was 3%, with acquisitions contributing 1% and foreign currency exchange having an unfavorable impact of 3%. Protein Sciences segment’s operating margin was 43.0% in the first quarter of fiscal 2023 compared to 45.7% in the first quarter of fiscal 2022. The segment’s operating margin compared to the prior year was negatively impacted by unfavorable foreign currency exchange, timing of strategic growth investments, and acquisitions.  

Diagnostics and Genomics Segment

The Company’s Diagnostics and Genomics segment provides blood chemistry and blood gas quality controls, hematology instrument controls, immunoassays and other bulk and custom reagents for the in vitro diagnostic market. The Diagnostics and Genomics segment also develops and provides in situ hybridization products as well as exosome-based diagnostics for various pathologies, including prostate cancer. The Diagnostics and Genomics segment’s first quarter fiscal 2023 net sales were $69.9 million, an increase of 15% from $61.0 million for the first quarter of fiscal 2022. Organic growth for the segment was 17%, with foreign currency exchange having an unfavorable 2% impact. The Diagnostics and Genomics segment’s operating margin was 12.4% in the first quarter of fiscal 2023 compared to 12.2% in the first quarter of fiscal 2022. The segment’s operating margin was positively impacted by volume leverage, which was partially offset by unfavorable foreign currency exchange.

Conference Call

Bio-Techne will host an earnings conference call today, November 1, 2022 at 8:00 a.m. CDT. To listen, please dial 1-877-407-9208 or 1-201-493-6784 for international callers, and reference conference ID 13733551. The earnings call can also be accessed via webcast through the following link https://investors.bio-techne.com/ir-calendar.

A recorded rebroadcast will be available for interested parties unable to participate in the live conference call by dialing 1-844-512- 2921 or 1-412-317-6671 (for international callers) and referencing Conference ID 13733551. The replay will be available from 11:00 a.m. CDT on Tuesday, November 1, 2022 until 11:00 p.m. CST on Thursday, December 1, 2022.

Use of non-GAAP Adjusted Financial Measures:

This press release contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP measures include:

  • Organic growth
  • Adjusted diluted earnings per share
  • Adjusted earnings
  • Adjusted tax rate
  • Adjusted gross margin
  • Adjusted operating income
  • Adjusted operating margin
  • Earnings before interest, taxes, depreciation, and amortization (EBITDA)
  • Adjusted EBITDA

We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.

Our non-GAAP financial measure of organic growth represents revenue growth excluding revenue from acquisitions within the preceding 12 months, the impact of foreign currency, as well as the impact of partially-owned consolidated subsidiaries. Excluding these measures provides more useful period-to-period comparison of revenue results as it excludes the impact of foreign currency exchange rates, which can vary significantly from period to period, and revenue from acquisitions that would not be included in the comparable prior period. Revenues from partially-owned subsidiaries consolidated in our financial statements are also excluded from our organic revenue calculation, as those revenues are not fully attributable to the Company. Revenue from partially-owned consolidated subsidiaries was $2.0 million for the quarter ended September 30, 2022.

Our non-GAAP financial measures for adjusted gross margin, adjusted operating margin, adjusted EBITDA, and adjusted net earnings, in total and on a per share basis, exclude stock-based compensation, the costs recognized upon the sale of acquired inventory, amortization of acquisition intangibles, acquisition related expenses inclusive of the changes in fair value of contingent consideration, and other non-recurring items including non-recurring costs, goodwill and long-lived asset impairments, and gains. Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjection assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations. The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses inclusive of the changes in fair value contingent consideration, and other non-recurring items including gains or losses on legal settlements, goodwill and long-lived asset impairment charges, and one-time assessments from this measure because they occur as a result of specific events, and are not reflective of our internal investments, the costs of developing, producing, supporting and selling our products, and the other ongoing costs to support our operating structure. Additionally, these amounts can vary significantly from period to period based on current activity. The Company also excludes revenue and expense attributable to partially-owned consolidated subsidiaries in the calculation of our non-GAAP financial measures as the revenues and expenses are not fully attributable to the Company.

The Company’s non-GAAP adjusted operating margin and adjusted net earnings, in total and on a per share basis, also excludes stock-based compensation expense, which is inclusive of the employer portion of payroll taxes on those stock awards, restructuring, impairments of equity method investments, gain and losses from investments, and certain adjustments to income tax expense.

Impairments of equity investments are excluded as they are not part of our day-to-day operating decisions. Additionally, gains and losses from other investments that are either isolated or cannot be expected to occur again with any predictability are excluded.

Costs related to restructuring activities, including reducing overhead and consolidating facilities, are excluded because we believe they are not indicative of our normal operating costs. The Company independently calculates a non-GAAP adjusted tax rate to be applied to the identified non-GAAP adjustments considering the impact of discrete items on these adjustments and the jurisdictional mix of the adjustments. In addition, the tax impact of other discrete and non-recurring charges which impact our reported GAAP tax rate are adjusted from net earnings. We believe these tax items can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future results.

Investors are encouraged to review the reconciliations of adjusted financial measures used in this press release to their most directly comparable GAAP financial measures as provided with the financial statements attached to this press release.

Forward Looking Statements:

Our press releases may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements involve risks and uncertainties that may affect the actual results of operations. The following important factors, among others, have affected and, in the future, could affect the Company’s actual results: the effect of new branding and marketing initiatives, the integration of new businesses and leadership, the introduction and acceptance of new products, the funding and focus of the types of research by the Company’s customers, the impact of the growing number of producers of biotechnology research products and related price competition,  general economic conditions, customer site closures or supply chain issues resulting from the COVID-19 pandemic, the impact of currency exchange rate fluctuations, and the costs and results of research and product development efforts of the Company and of companies in which the Company has invested or with which it has formed strategic relationships.

For additional information concerning such factors, see the section titled “Risk Factors” in the Company’s annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements we make in our press releases due to new information or future events. Investors are cautioned not to place undue emphasis on these statements.

Bio-Techne Corporation (NASDAQ: TECH) is a global life sciences company providing innovative tools and bioactive reagents for the research and clinical diagnostic communities. Bio-Techne products assist scientific investigations into biological processes and the nature and progress of specific diseases. They aid in drug discovery efforts and provide the means for accurate clinical tests and diagnoses. With thousands of products in its portfolio, Bio-Techne generated approximately $1.1 billion in net sales in fiscal 2022 and has approximately 3,000 employees worldwide. For more information on Bio-Techne and its brands, please visit www.bio­ techne.com.

Contact:

David Clair, Vice President, Investor Relations


David.Clair@bio-techne.com


612-656-4416




BIO-TECHNE CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)










QUARTER



ENDED



9/30/2022


9/30/2021

Net sales


$

269,655


$

257,719

Cost of sales



90,060



86,722

Gross margin



179,595



170,997

Operating expenses:







Selling, general and administrative



99,375



86,175

Research and development



23,903



21,600

Total operating expenses



123,278



107,775

Operating income



56,317



63,222

Other income (expense)



47,399



4,161

Earnings before income taxes



103,716



67,383

Income taxes



13,982



(1,598)

Net earnings, including noncontrolling interest


$

89,734


$

68,981

Net earnings (loss) attributable to noncontrolling interest



179



(634)

Net earnings attributable to Bio-Techne



89,555



69,615

Earnings per share:







Basic


$

2.28


$

1.78

Diluted


$

2.21


$

1.69

Weighted average common shares outstanding







Basic



39,232



39,094

Diluted



40,543



41,158




BIO-TECHNE CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

(Unaudited)










9/30/2022


6/30/2022

ASSETS







Cash and equivalents


$

165,257


$

172,567

Short-term available-for-sale investments



37,818



74,462

Accounts receivable, net



174,174



194,548

Inventories



150,009



141,123

Other current assets



24,773



22,856

Total current assets



552,031



605,556








Property and equipment, net



224,098



223,242

Right of use asset



69,745



65,556

Goodwill and intangible assets, net



1,450,952



1,353,623

Other assets



53,895



46,828

Total assets


$

2,350,721


$

2,294,805








LIABILITIES AND STOCKHOLDERS’ EQUITY







Accounts payable and accrued expenses


$

76,822


$

113,704

Contract liabilities



22,059



23,406

Income taxes payable



17,270



13,237

Contingent consideration payable



7,400



Operating lease liabilities – current



12,115



11,928

Current portion of long-term debt obligations





12,500

Other current liabilities



1,963



1,243

Total current liabilities



137,629



176,018








Deferred income taxes



112,920



98,994

Long-term debt obligations



264,661



243,410

Operating lease liabilities



64,756



58,133

Long-term contingent consideration payable



8,100



5,000

Other long-term liabilities



11,501



12,239

Stockholders’ equity



1,751,154



1,701,011

Total liabilities and stockholders’ equity


$

2,350,721


$

2,294,805




BIO-TECHNE CORPORATION

RECONCILIATION OF ADJUSTED GROSS MARGIN PERCENTAGE

(Unaudited)










QUARTER



ENDED



9/30/2022


9/30/2021

Gross margin percentage – GAAP


66.6

%


66.4

%

Identified adjustments:







Costs recognized upon sale of acquired inventory


0.1

%


0.6

%

Amortization of intangibles


4.1

%


4.0

%

Stock-based compensation, inclusive of employer taxes


0.1

%


0.1

%

Impact of partially-owned consolidated subsidiaries(1)


0.0

%


0.1

%

Gross margin percentage – Adjusted


70.9

%


71.2

%


1) Includes the quarterly results of the partially-owned consolidated subsidiary prior to the sale of this partially-owned consolidated subsidiary to a third party.




BIO-TECHNE CORPORATION

RECONCILIATION OF ADJUSTED OPERATING MARGIN PERCENTAGE

(Unaudited)










QUARTER



ENDED



9/30/2022


9/30/2021

Operating margin percentage – GAAP


20.9

%


24.5

%

Identified adjustments:







Costs recognized upon sale of acquired inventory


0.1

%


0.6

%

Amortization of intangibles


7.2

%


7.1

%

Acquisition related expenses


0.1

%


(0.9)

%

Stock-based compensation, inclusive of employer taxes


5.8

%


5.4

%

Restructuring costs


0.8

%


0.5

%

Impact of partially owned-consolidated subsidiaries(1)


(0.1)

%


0.6

%

Operating margin percentage – Adjusted


34.8

%


37.8

%


1) Includes the quarterly results of the partially-owned consolidated subsidiary prior to the sale of this partially-owned consolidated subsidiary to a third party. As disclosed in our use of Non-GAAP Adjusted Financial Measures, the adjusted operating margin percentages excludes partially-owned consolidated revenue and expense amounts. The excluded revenue attributable to partially-owned consolidated subsidiaries impacted the operating margin by (0.3%) for the first quarter of fiscal 2023, and 0.6% for the comparative prior year.  The excluded operating (income)/loss impacted the operating margin by 0.2% for the first quarter of fiscal 2023, and did not materially impact the first quarter of fiscal 2022.




BIO-TECHNE CORPORATION

NON-GAAP ADJUSTED CONSOLIDATED NET EARNINGS and EARNINGS per SHARE

(In thousands, except per share data) (Unaudited)











QUARTER



ENDED



9/30/2022


9/30/2021

Net earnings before taxes- GAAP


$

103,716


$

67,383


Identified adjustments attributable to Bio-Techne:








Costs recognized upon sale of acquired inventory



300



1,512


Amortization of intangibles



19,283



18,389


Acquisition related expenses



678



(2,262)


Gain on sale of partially owned consolidated subsidiaries



(11,682)




Stock-based compensation, inclusive of employer taxes



15,458



13,860


Restructuring costs



2,170



1,185


Investment (gain) loss and other



(38,087)



(6,235)


Impact of partially-owned consolidated subsidiaries(1)



(420)



1,562


Net earnings before taxes – Adjusted(1)


$

91,416


$

95,394


Non-GAAP tax rate



21.0

%


21.0

%

Non-GAAP tax expense



19,197



20,033


Non-GAAP adjusted net earnings attributable to Bio-Techne(1)


$

72,219


$

75,361


Earnings per share – diluted – Adjusted(1)


$

1.78


$

1.83



1) Includes the quarterly results of the partially-owned consolidated subsidiary prior to the sale of this partially-owned consolidated subsidiary to a third party.




BIO-TECHNE CORPORATION

NON-GAAP ADJUSTED TAX RATE (In percentages)

(Unaudited)










QUARTER



ENDED



9/30/2022


9/30/2021

GAAP effective tax rate


13.5

%


(2.4)

%

Discrete items


8.4

%


26.3

%

Impact of non-taxable net gain


1.6

%


%

Long-term GAAP tax rate


23.5

%


23.9

%

Rate impact items







Stock based compensation


(3.1)

%


(2.1)

%

Other


0.6

%


(0.8)

%

Total rate impact items


(2.5)

%


(2.9)

%

Non-GAAP adjusted tax rate


21.0

%


21.0

%




BIO-TECHNE CORPORATION

SEGMENT REVENUE

(In thousands)

(Unaudited)










QUARTER



ENDED



9/30/2022


9/30/2021

Protein Sciences segment revenue


$

199,949


$

197,186

Diagnostics and Genomics segment revenue



69,904



60,985

lntersegment revenue



(198)



(452)

Consolidated revenue


$

269,655


$

257,719




BIO-TECHNE CORPORATION

SEGMENT OPERATING INCOME

(In thousands)

(Unaudited)










QUARTER



ENDED



9/30/2022


9/30/2021

Protein Sciences segment operating income


$

85,942


$

90,100

Diagnostics and Genomics segment operating income



8,638



7,463

Segment operating income



94,580



97,563

Corporate general, selling, and administrative



(1,402)



(210)

Adjusted operating income



93,178



97,353

Cost recognized upon sale of acquired inventory



(300)



(1,512)

Amortization of intangibles



(19,283)



(18,389)

Acquisition related expenses



(297)



2,377

Impact of partially owned-consolidated subsidiaries(1)



647



(1,562)

Stock-based compensation, inclusive of employer taxes



(15,458)



(13,860)

Restructuring costs



(2,170)



(1,185)

Operating income


$

56,317


$

63,222


1) Includes the quarterly results of the partially-owned consolidated subsidiary prior to the sale of this partially-owned consolidated subsidiary to a third party.




BIO-TECHNE CORPORATION

RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

(In thousands)

(Unaudited)








QUARTER


ENDED


9/30/2022


9/30/2021

Net earnings attributable to Bio-Techne

$

89,555


$

69,615

Net interest expense (income)


3,357



3,216

Depreciation and amortization


26,641



24,734

Income taxes (benefit)


13,982



(1,598)

EBITDA


133,535



95,967

Costs recognized upon sale of acquired inventory


300



1,512

Acquisition related expenses


678



(2,262)

Gain on sale of partially owned consolidated subsidiaries


(11,682)



Stock-based compensation, inclusive of employer taxes


15,458



13,860

Restructuring costs


2,170



1,185

Investment (gain) loss and other


(38,087)



(6,235)

Impact of partially-owned consolidated subsidiaries(1)


(420)



1,562

Adjusted EBITDA

$

101,952


$

105,589


1) Includes the quarterly results of the partially-owned consolidated subsidiary prior to the sale of this partially-owned consolidated subsidiary to a third party.




BIO-TECHNE CORPORATION

CONDENSED CASH FLOW

(In thousands)

(Unaudited)










QUARTER



ENDED



9/30/2022


9/30/2021

CASH FLOWS FROM OPERATING ACTIVITIES







Net earnings


$

89,734


$

68,981

Adjustments to reconcile net earnings to net cash provided by operating activities







Depreciation and amortization



26,641



24,734

Costs recognized on sale of acquired inventory



300



1,512

Stock-based compensation expense



14,461



11,737

Gain on sale of CCXI investment



(37,176)



(5,277)

Fair value adjustment to available for sale investments



(911)



Contingent consideration payments – operating





(3,300)

Fair value adjustment to contingent consideration payable



(100)



(2,800)

Gain on sale of Eminence



(11,682)



Other operating activities



(25,186)



(47,153)

Net cash provided by operating activities



56,081



48,434

CASH FLOWS FROM INVESTING ACTIVITIES







Additions to property and equipment



(9,556)



(6,070)

Acquisitions, net of cash acquired



(101,184)



Proceeds from sale of Eminence



17,824



Proceeds from sale of CCXI investment



73,219



Other investing activities



9



(1,050)

Net cash provided by (used in) investing activities



(19,688)



(7,120)

CASH FLOWS FROM FINANCING ACTIVITIES







Cash dividends



(12,545)



(12,493)

Proceeds from stock option exercises



11,950



37,880

Long-term debt activity, net



8,661



(41,125)

Contingent consideration payments – financing





(700)

Share repurchases



(19,562)



Other financing activities



(20,310)



(23,246)

Net cash provided by (used in) financing activities



(31,806)



(39,684)

Effect of exchange rate changes on cash and cash equivalents



(11,897)



(4,400)

Net increase (decrease)in cash and cash equivalents



(7,310)



(2,770)

Cash and cash equivalents at beginning of period



172,567



199,091

Cash and cash equivalents at end of period


$

165,257


$

196,321

 

Bio-Techne

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/bio-techne-releases-first-quarter-fiscal-2023-results-301664140.html

SOURCE Bio-Techne Corporation

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