Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2019, or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-17272 BIO-TECHNE CORPORATION (Exact name of registrant as specified in its charter) Minnesota 41-1427402 (State or other ...

Bio-Techne Corporation (NASDAQ:TECH) Q2 2020 Earnings Conference Call February 4, 2020 9:00 AM ET Company Participants David Clair - Senior Director, Corporate Development Charles Kummeth - President and CEO Jim Hippel - CFO Conference Call Participants Dan Arias - Stifel Catherine Schulte - Baird Jacob Johnson - Stephens John Leonard - Wells Fargo Patrick Donnelly - Citi Alex Nowak - Craig Hallum Partners Operator Good morning and welcome to the Bio-Techne Earnings Conference Call for the Second Quarter of ...

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PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Presents Bio-Techne's unaudited Q1 FY2020 financial statements, showing **$183.2 million** net sales and **$14.4 million** net earnings [Condensed Consolidated Statements of Earnings and Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20and%20Comprehensive%20Income) Net sales rose **12.4%** to **$183.2 million**, while net earnings decreased **17.3%** to **$14.4 million** Condensed Consolidated Statements of Earnings and Comprehensive Income | Financial Metric | Q1 2020 (ended Sep 30, 2019, in millions) | Q1 2019 (ended Sep 30, 2018, in millions) | YoY Change | | :--- | :--- | :--- | :--- | | Net sales | $183.2 | $163.0 | +12.4% | | Gross margin | $118.4 | $107.6 | +10.1% | | Operating income | $33.3 | $25.8 | +29.4% | | Net earnings | $14.4 | $17.4 | -17.3% | | Diluted EPS | $0.37 | $0.45 | -17.8% | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached **$1.925 billion**, with liabilities at **$750.8 million** and equity at **$1.174 billion** Condensed Consolidated Balance Sheets | Balance Sheet Item | Sep 30, 2019 (unaudited, in millions) | June 30, 2019 (in millions) | | :--- | :--- | :--- | | **Total Current Assets** | $391.9 | $412.6 | | **Total Assets** | $1,925.0 | $1,884.4 | | **Total Current Liabilities** | $88.3 | $102.0 | | **Total Liabilities** | $750.8 | $718.8 | | **Total Shareholders' Equity** | $1,174.2 | $1,165.6 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was **$40.5 million**, with **$15.1 million** used in investing and **$24.3 million** in financing Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Quarter Ended Sep 30, 2019 (in millions) | Quarter Ended Sep 30, 2018 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $40.5 | $39.4 | | Net cash used in investing activities | ($15.1) | ($288.1) | | Net cash provided by (used in) financing activities | ($24.3) | $222.5 | | Net decrease in cash and cash equivalents | ($1.0) | ($27.3) | | Cash and cash equivalents at end of period | $99.9 | $94.7 | [Notes to Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail ASC 842 adoption, disaggregated revenue, segment performance, and a **19.1%** effective tax rate - The company adopted the new lease accounting standard, Leases (Topic 842), effective July 1, 2019, resulting in the recognition of incremental operating lease liabilities of **$80.6 million** and a right-of-use lease asset of **$79.5 million**[19](index=19&type=chunk) Revenue by Type (Q1 2020) | Revenue by Type (Q1 2020) | Amount (in millions) | | :--- | :--- | | Consumables | $151.4 | | Instruments | $17.0 | | Services | $10.6 | | Royalty revenues | $4.2 | | **Total revenues, net** | **$183.2** | Revenue by Geography (Q1 2020) | Revenue by Geography (Q1 2020) | Amount (in millions) | | :--- | :--- | | United States | $102.4 | | EMEA, excluding UK | $38.8 | | Greater China | $16.1 | | APAC, excluding Greater China | $14.0 | | United Kingdom | $7.6 | | Rest of World | $4.4 | | **Total revenues, net** | **$183.2** | Segment Performance (Q1 2020) | Segment Performance (Q1 2020) | Net Sales (in millions) | Operating Income (in millions) | | :--- | :--- | :--- | | Protein Sciences | $141.0 | $59.5 | | Diagnostics and Genomics | $42.6 | $0.9 | | **Total Segment** | **$183.5** | **$60.4** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses **12%** consolidated net sales growth, offset by a **17%** net earnings decrease from an investment loss - Consolidated net sales increased **12%** for the quarter, with organic growth of **13%**, while foreign currency exchange had an unfavorable impact of **1%**[80](index=80&type=chunk) - Consolidated net earnings decreased **17%** compared to the prior year period, primarily due to an unrealized loss on the company's CCXI investment[81](index=81&type=chunk) - Geographically, the company saw broad-based revenue growth, with each major region achieving double-digit organic growth and China reaching nearly **20%** organic growth[83](index=83&type=chunk) - Non-GAAP adjusted net earnings grew **9.0%** to **$41.7 million** from **$38.2 million** in the prior year[95](index=95&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Consolidated net sales reached **$183.2 million** with **13%** organic growth, while gross margin declined Gross Margin Performance | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Consolidated Gross Margin % | 64.6% | 66.0% | | Non-GAAP Adjusted Gross Margin % | 69.5% | 72.0% | - SG&A expenses increased by **$2.0 million** (**3%**), driven by recent acquisitions but partially offset by the timing of stock compensation expense[86](index=86&type=chunk) - R&D expenses increased by **$1.3 million** (**9%**), primarily due to additional expenses from the ExosomeDx acquisition[87](index=87&type=chunk) [Segment Results](index=23&type=section&id=Segment%20Results) Protein Sciences net sales grew **12%** to **$141.0 million**, while Diagnostics and Genomics saw **16%** organic growth - Protein Sciences segment net sales grew **12%** (**12%** organic) to **$141.0 million**, with an operating margin of **42.2%**[88](index=88&type=chunk)[89](index=89&type=chunk) - Diagnostics and Genomics segment net sales grew with **16%** organic growth to **$42.6 million**, though its operating margin declined to **2.1%** from **6.9%** YoY due to the ExosomeDx acquisition[91](index=91&type=chunk)[92](index=92&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$158.4 million** in cash and investments, generated **$40.5 million** from operations - Cash and cash equivalents and available-for-sale investments totaled **$158.4 million** as of September 30, 2019[97](index=97&type=chunk) - Capital expenditures for the remainder of fiscal 2020 are expected to be approximately **$50 million**[103](index=103&type=chunk) - The company paid cash dividends of **$12.2 million** during the quarter and announced a further dividend of **$0.32** per share payable in November 2019[104](index=104&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risk from its **$28 million** CCXI equity investment and foreign currency exposure - The company holds an investment in CCXI common stock valued at **$28 million**, where a **10%** decrease in its market value would result in a **$2.8 million** loss in fair value[116](index=116&type=chunk) - Approximately **28%** of consolidated net sales were made in foreign currencies, primarily the euro (**13%**), British pound sterling (**4%**), and Chinese yuan (**5%**)[117](index=117&type=chunk) - A hypothetical **10%** appreciation in the U.S. dollar would decrease the annualized translation of earnings from foreign subsidiaries by approximately **$2.7 million**[118](index=118&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2019, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2019[120](index=120&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[121](index=121&type=chunk) PART II: OTHER INFORMATION [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) The company was not involved in any legal proceedings expected to have a material adverse effect on its business - The Company is not a party to any legal proceedings that are reasonably expected to have a material adverse effect on its business, results of operations, financial condition or cash flows[123](index=123&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.Risk%20Factors) No material changes occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K - During the three months ended September 30, 2019, there were no material changes from the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended June 30, 2019[125](index=125&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=28&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not engage in any share repurchase activities during the quarter ended September 30, 2019 - There was no share repurchase activity by the Company in the quarter ended September 30, 2019[126](index=126&type=chunk) [Item 3. Defaults Upon Senior Securities](index=28&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None[128](index=128&type=chunk) [Item 4. Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[130](index=130&type=chunk) [Item 5. Other Information](index=28&type=section&id=Item%205.%20Other%20Information) There was no other information to report for the period - None[132](index=132&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including corporate governance documents and certifications [Signatures](index=29&type=section&id=SIGNATURES)

Bio-Techne Corporation (NASDAQ:TECH) Q1 2020 Earnings Conference Call October 29, 2019 9:00 AM ET Company Participants David Clair - Senior Director, Corporate Development Charles Kummeth - President and CEO Jim Hippel - CFO Conference Call Participants Puneet Souda - SVB Leerink Catherine Schulte - Robert W. Baird Unidentified Analyst - Craig-Hallum Capital Group Paul Knight - Janney Montgomery Operator Good morning and welcome to the Bio-Techne Earnings Conference Call for the First Quarter of Fiscal Year ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) Bio-Techne develops and sells life science reagents, instruments, and services across two segments, Protein Sciences and Diagnostics and Genomics, with a strategy focused on innovation, market expansion, and acquisitions - Bio-Techne operates through two primary segments: Protein Sciences and Diagnostics and Genomics[15](index=15&type=chunk) FY2019 Net Sales by Segment | Segment | % of Consolidated Net Sales | | :--- | :--- | | Protein Sciences | 76% | | Diagnostics and Genomics | 24% | - The company's growth strategy includes innovation in core products, market expansion (especially in cell and gene therapy), talent retention, and targeted acquisitions[18](index=18&type=chunk)[20](index=20&type=chunk)[22](index=22&type=chunk) Net Sales by Geographic Area (in thousands of US dollars) | Region | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | United States | $391,191 | $346,293 | $313,195 | | EMEA, excluding U.K. | $155,821 | $148,599 | $125,126 | | U.K. | $34,975 | $33,704 | $28,401 | | APAC, excluding Greater China | $52,913 | $48,392 | $41,463 | | Greater China | $57,799 | $47,950 | $39,078 | | Rest of world | $21,307 | $18,055 | $15,740 | | **Total net sales** | **$714,006** | **$642,993** | **$563,003** | Research and Development Expense (in thousands of US dollars) | Segment | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Protein Sciences Segment | $40,735 | $40,996 | $41,334 | | Diagnostics & Genomics Segment | $21,678 | $14,095 | $12,180 | | **Total R&D Expense** | **$62,413** | **$55,329** | **$53,514** | | **Percent of net sales** | **9%** | **9%** | **10%** | - As of June 30, 2019, the company employed approximately **2,250** full-time and part-time employees[57](index=57&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from intense competition, acquisition integration, political and regulatory changes, global operations, cybersecurity, and financial market volatility - The company faces significant competition from both small, agile start-ups and large multinational corporations with greater resources, leading to pricing pressure[75](index=75&type=chunk) - The acquisition growth strategy presents risks, including difficulty in identifying and integrating targets, potential for goodwill impairment, and financial strain from borrowings[77](index=77&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) - Political and economic uncertainty, particularly from the U.S. administration's trade policies and the UK's withdrawal from the EU (Brexit), could adversely affect business operations and financial results[82](index=82&type=chunk)[83](index=83&type=chunk) - Global operations (approximately **45%** of FY2019 sales from outside the U.S.) expose the company to risks such as currency fluctuations, complex tax laws, regulatory changes, and compliance with laws like the Foreign Corrupt Practices Act[89](index=89&type=chunk)[91](index=91&type=chunk) - The company's Exosome Diagnostics' EPI test faces risks related to securing and maintaining reimbursement coverage from government and private payers, and compliance with healthcare regulations like CLIA and HIPAA[102](index=102&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk) - Cybersecurity threats and failure to protect customer and employee data could result in reputational damage, fines, and lawsuits, with increased risk due to evolving data privacy laws like the EU's GDPR[96](index=96&type=chunk)[97](index=97&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments as of the report date - There are no unresolved staff comments as of the report date[123](index=123&type=chunk) [Properties](index=24&type=section&id=Item%202.%20Properties) Bio-Techne owns its Minneapolis headquarters and other key facilities, leasing additional global sites for operations, all considered adequate for future needs - The company owns its main facilities in Minneapolis, MN, which total approximately **800,000** square feet and are used for administrative, research, manufacturing, and warehousing activities[125](index=125&type=chunk)[126](index=126&type=chunk) Material Leased Facilities | Subsidiary | Location | Type | Square Feet | | :--- | :--- | :--- | :--- | | ProteinSimple | San Jose, California | Office/manufacturing/warehouse | 167,000 | | Cliniqa | San Marcos, California | Office/manufacturing/warehouse | 62,200 | | Bionostics | Devens, Massachusetts | Office/manufacturing | 48,000 | | Advanced Cell Diagnostics | Newark, California | Office/manufacturing/warehouse | 46,500 | | Tocris | Bristol, United Kingdom | Office/manufacturing/lab/warehouse | 30,000 | [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) As of August 28, 2019, the company is not involved in any legal proceedings expected to materially adversely affect its business or financial condition - The Company is not currently a party to any legal proceedings expected to have a material adverse effect on its business[131](index=131&type=chunk) [Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[133](index=133&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) As of August 2019, Bio-Techne had over 43,000 shareholders, paid $48.4 million in dividends, and repurchased shares to offset dilution from stock options Annual Cash Dividends Paid (in millions of US dollars) | Fiscal Year | Total Dividends Paid (millions) | | :--- | :--- | | 2019 | $48.4 | | 2018 | $48.0 | | 2017 | $47.7 | - In fiscal 2019, the company repurchased **95,000** shares for **$15.4 million** at an average price of **$162.15** per share[137](index=137&type=chunk) - As of June 30, 2019, approximately **$42 million** was authorized for future share purchases under a new stock repurchase program designed to offset dilution from stock option exercises[137](index=137&type=chunk) [Selected Financial Data](index=27&type=section&id=Item%206.%20Selected%20Financial%20Data) A five-year financial summary highlights net sales growth to $714.0 million, fluctuating net earnings, total assets increasing to $1.88 billion, and a growing employee count Five-Year Selected Financial Data (dollars in thousands, except per share data) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net sales | $714,006 | $642,993 | $563,003 | $499,023 | $452,246 | | Operating income | $146,719 | $136,178 | $120,584 | $150,593 | $147,023 | | Net earnings | $96,072 | $126,150 | $76,086 | $104,476 | $107,735 | | Diluted EPS | $2.47 | $3.31 | $2.03 | $2.80 | $2.89 | | Total assets | $1,884,410 | $1,593,202 | $1,558,219 | $1,129,581 | $1,063,360 | | Net cash from ops | $181,619 | $170,367 | $143,721 | $144,157 | $139,359 | | Employees | 2,255 | 1,943 | 1,789 | 1,560 | 1,356 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2019 consolidated net sales grew 11% to $714.0 million, driven by organic growth and acquisitions, while GAAP net earnings decreased due to investment losses and acquisition expenses Consolidated Net Sales Growth Breakdown | Component | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Organic sales growth | 10% | 9% | 6% | | Acquisitions sales growth | 2% | 3% | 8% | | Impact of foreign currency | (1)% | 2% | (1)% | | **Consolidated net sales growth** | **11%** | **14%** | **13%** | - The Protein Sciences segment's net sales increased **13%** in FY2019, with **13%** organic growth, driven by strong performance in antibodies, cell therapy consumables, and instrument product categories[154](index=154&type=chunk) - The Diagnostics and Genomics segment's net sales increased **7%** in FY2019, with **4%** organic growth, primarily driven by strong RNAscope product sales[155](index=155&type=chunk) Gross Margin Reconciliation (GAAP to Non-GAAP) | Metric | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Consolidated gross margin % | 66.3% | 67.2% | 66.5% | | Costs recognized upon sale of acquired inventory | 0.5% | 0.4% | 0.6% | | Amortization of intangibles | 4.7% | 3.9% | 4.1% | | **Non-GAAP adjusted gross margin %** | **71.5%** | **71.5%** | **71.2%** | - In fiscal 2019, the company recognized a **$16.1 million** unrealized loss on its ChemoCentryx (CCXI) investment, which was a primary driver of the **$13.6 million** in 'Other non-operating expense, net'[170](index=170&type=chunk) - The company's effective tax rate was **14.2%** in FY2019, compared to **(0.2)%** in FY2018, with the change driven by a significant one-time net tax benefit of **$33.0 million** related to the Tax Act in 2018[172](index=172&type=chunk) - During fiscal 2019, the company acquired Quad Technologies, Exosome Diagnostics, and B-MoGen, financing the transactions partly through a new credit facility that includes a **$600 million** revolver and a **$250 million** term loan[182](index=182&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risk from foreign currency fluctuations, with 27% of FY2019 net sales in foreign currencies, where a 10% USD appreciation would significantly impact earnings and net assets - Approximately **27%** of consolidated net sales in fiscal 2019 were made in foreign currencies, exposing the company to market risk from exchange rate fluctuations[228](index=228&type=chunk) Impact of Hypothetical 10% U.S. Dollar Appreciation (in thousands of US dollars) | Impact Area | Decrease in Value | | :--- | :--- | | Decrease in translation of 2019 earnings into U.S. dollars | $3,810 | | Decrease in translation of net assets of foreign subsidiaries | $43,242 | | Additional transaction losses | $4,484 | [Financial Statements and Supplementary Data](index=42&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for FY2017-2019, with notes on accounting policies and acquisitions, and an unqualified auditor's opinion on financial statements and internal controls [Consolidated Financial Statements](index=42&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements show FY2019 net sales of $714.0 million, net earnings of $96.1 million, total assets of $1.88 billion, and $181.6 million in operating cash flow Consolidated Statement of Earnings Highlights - FY2019 (in thousands of US dollars) | Line Item | Amount | | :--- | :--- | | Net sales | $714,006 | | Gross margin | $473,491 | | Operating income | $146,719 | | Net earnings | $96,072 | | Diluted EPS | $2.47 | Consolidated Balance Sheet Highlights - June 30, 2019 (in thousands of US dollars) | Line Item | Amount | | :--- | :--- | | Total current assets | $412,607 | | Goodwill | $732,667 | | Total assets | $1,884,410 | | Total current liabilities | $101,985 | | Long-term debt obligations | $492,660 | | Total shareholders' equity | $1,165,589 | Consolidated Statement of Cash Flows Highlights - FY2019 (in thousands of US dollars) | Line Item | Amount | | :--- | :--- | | Net cash provided by operating activities | $181,619 | | Net cash used in investing activities | ($336,799) | | Net cash provided by financing activities | $134,384 | [Notes to Consolidated Financial Statements](index=46&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including ASC 606 adoption, FY2019 acquisitions, fair value measurements for contingent consideration, the new credit facility, income tax provisions, and segment performance - The company adopted ASC 606 (Revenue from Contracts with Customers) on July 1, 2018, with no material impact on the consolidated financial statements[272](index=272&type=chunk) - In fiscal 2019, the company acquired Quad Technologies, Exosome Diagnostics, and B-MoGen, with the acquisition of Exosome Diagnostics involving approximately **$251.6 million** in cash and up to **$325.0 million** in contingent consideration[301](index=301&type=chunk)[302](index=302&type=chunk)[307](index=307&type=chunk) - As of June 30, 2019, the company had a contingent consideration liability of **$12.6 million**, measured at fair value using significant unobservable (Level 3) inputs[329](index=329&type=chunk)[335](index=335&type=chunk) - On August 1, 2018, the company entered into a new credit agreement providing a **$600 million** revolving credit facility and a **$250 million** term loan, with an outstanding balance of **$505.2 million** as of June 30, 2019[338](index=338&type=chunk)[339](index=339&type=chunk) Segment Operating Income (in thousands of US dollars) | Segment | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Protein Sciences | $240,919 | $209,880 | $184,095 | | Diagnostics and Genomics | $10,079 | $35,496 | $29,291 | | **Total Segment Operating Income** | **$250,998** | **$245,376** | **$213,386** | [Report of Independent Registered Public Accounting Firm](index=82&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued an unqualified opinion on Bio-Techne's FY2019 financial statements and internal controls, highlighting fair value measurements of acquired intangibles and contingent consideration as critical audit matters - The auditor, KPMG LLP, issued an unqualified opinion, concluding that the financial statements are presented fairly in conformity with U.S. GAAP[384](index=384&type=chunk) - KPMG LLP issued an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of June 30, 2019[385](index=385&type=chunk)[400](index=400&type=chunk) - Critical audit matters identified were the initial fair value measurement of developed technology and trade name intangible assets, and the fair value measurement of contingent consideration liabilities related to the fiscal 2019 acquisitions, due to the high degree of subjectivity and judgment required[390](index=390&type=chunk)[391](index=391&type=chunk)[395](index=395&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=86&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None reported[407](index=407&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2019, excluding recently acquired entities from the internal control assessment - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2019[409](index=409&type=chunk) - Management concluded that internal control over financial reporting was effective as of June 30, 2019, based on the COSO framework[414](index=414&type=chunk) - The assessment of internal control over financial reporting excluded the fiscal 2019 acquisitions of Quad, Exosome, and B-Mogen, as permitted[413](index=413&type=chunk) [Other Information](index=87&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[420](index=420&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=88&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2019 Proxy Statement - Information is incorporated by reference from the Company's 2019 Proxy Statement[423](index=423&type=chunk) [Executive Compensation](index=88&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's 2019 Proxy Statement - Information is incorporated by reference from the Company's 2019 Proxy Statement[425](index=425&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=88&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) Information for this item is incorporated by reference from the company's 2019 Proxy Statement - Information is incorporated by reference from the Company's 2019 Proxy Statement[426](index=426&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=88&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's 2019 Proxy Statement - Information is incorporated by reference from the Company's 2019 Proxy Statement[427](index=427&type=chunk) [Principal Accounting Fees and Services](index=88&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information for this item is incorporated by reference from the company's 2019 Proxy Statement - Information is incorporated by reference from the Company's 2019 Proxy Statement[429](index=429&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=89&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements, schedules, and exhibits filed as part of the Form 10-K, with most schedules omitted and many exhibits incorporated by reference - This section lists the Consolidated Financial Statements filed as part of the report[433](index=433&type=chunk) - All financial statement schedules have been omitted because they are not applicable, not material, or the information is already present in the financial statements or notes[434](index=434&type=chunk) - An index of exhibits is provided, including governance documents, credit agreements, and certifications by the CEO and CFO[437](index=437&type=chunk)[439](index=439&type=chunk)

Financial Performance - The company achieved a record fiscal year with double-digit annual organic growth of 10.5% for fiscal 2019, marking the first year of such growth [7][50] - In Q4, reported revenue was $191.7 million, an increase of 6% year-over-year, with organic revenue growth of 7% [49][50] - Adjusted EPS for Q4 was $1.25, down from $1.34 a year ago, while GAAP EPS was $0.42 compared to $1.08 in the prior year [49][50] - Total company adjusted gross margin was 71.9% in Q4, relatively flat compared to the prior year [52] Business Segment Performance - The Protein Sciences segment reported Q4 sales of $143.4 million, with organic growth of 9% and operating margin of 45.4% [60][61] - The Diagnostics and Genomics segment had Q4 sales of $48.5 million, an increase of 4%, with organic growth of 2% [62] - The Simple Plex platform achieved growth rates of nearly 50% in the past year, becoming increasingly material to the company [20] Geographic Performance - North America experienced mid-teens organic growth for both the quarter and the full year, while Europe faced challenges with low-single-digit growth [10][50] - China saw over 20% growth in Q4 and over 25% for the full year, driven by strong demand and government support [14][98] Company Strategy and Industry Competition - The company plans to build a $50 million GMP proteins factory in Minnesota to support the growing cell and gene therapy market, expecting this division to reach at least $200 million in revenue in five years [27][75] - The company is focused on expanding its presence in the diagnostics market through acquisitions and new product offerings, including the Exosome Diagnostics platform [35][36] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit organic growth in fiscal 2020, despite headwinds from foreign exchange and investments in new business segments [119][122] - The company anticipates that the operating margin will remain flat year-over-year due to various headwinds, but core businesses are expected to continue improving productivity [119][122] Other Important Information - The company has made significant progress with its EPI test for prostate cancer, achieving over 25,000 tests performed and receiving breakthrough device designation from the FDA [41][42] - The company is actively working on expanding its product offerings in the cell and gene therapy space, with several preclinical studies underway [114] Q&A Session Summary Question: Long-term expectations for Europe - Management expects high-single-digit growth in Europe moving forward, despite recent challenges [81][82] Question: Outlook for glucose products - The glucose controls business is not strategic and is expected to stabilize at under $10 million, with mid to high-single-digit growth anticipated in other segments [83][85] Question: EPI test market opportunity - Management is optimistic about the EPI test's potential, with ongoing discussions for reimbursement and a strong growth trajectory expected [94][102] Question: Performance in China - The company anticipates continued strong growth in China, potentially exceeding 20% [98] Question: Future of cell and gene therapy - Management sees the cell and gene therapy division potentially generating $200 million to $300 million in revenue within five years, with ongoing investments to support this growth [107][117]

Click to edit Master title style biotechne® Corporate Presentation June 2019 Business Overview B U S I N E S S O V E R V I E W C O R P O R A T E Legacy Revenue At a Glance: | --- | --- | --- | |------------------------------------|-------|-------| | | | | | | | | | President and CEO: Chuck Kummeth | | | | Headquarters: Minneapolis, MN | 25% | | | Number of Employees: ~2,100 | | | | World Wide Presence: 35 Locations | | | | FY2018 Revenues: $643 million | | | | NASDAQ: TECH | 10% | | | Market Cap: ~$7B | | 6 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019, or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-17272 BIO-TECHNE CORPORATION (Exact name of registrant as specified in its charter) Minnesota 41-1427402 (State or other jur ...