Bio-Techne(TECH) - 2025 Q2 - Quarterly Results

BIO-TECHNE RELEASES SECOND QUARTER FISCAL 2025 RESULTS Second Quarter FY2025 Highlights Bio-Techne reported strong Q2 FY2025 results with significant organic revenue growth and improved GAAP and adjusted EPS. Key Financial Highlights | Metric | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :-------------------------------- | :-------- | :-------- | :----------- | | Organic Revenue Growth | 9% | - | +9% | | Reported Revenue | $297.0M | - | +9% | | GAAP EPS | $0.22 | $0.17 | +29.4% | | Adjusted EPS | $0.42 | $0.40 | +5.0% | | Protein Sciences Organic Growth | 8% | - | +8% | | Diagnostics & Spatial Biology Organic Growth | 12% | - | +12% | CEO Commentary CEO Kim Kelderman highlighted strong Q2 execution, noting biopharma market improvements and improved adjusted operating margin. - Early signs of improvement observed in the biopharma end-market, specifically in cell and gene therapy and protein analysis instrumentation businesses[5] - Achieved a 30.1% adjusted operating margin, representing an increase of 110 basis points sequentially[5] - Bio-Techne's portfolio empowers discovery of novel biological insights, development and manufacturing of advanced therapeutics, and enables precision diagnostics, playing a key role in healthy aging[5] Conference Call Information Bio-Techne hosted an earnings conference call on February 5, 2025, with a rebroadcast available for a month. - Earnings conference call held on February 5, 2025, at 8:00 a.m. CST[5] - A recorded rebroadcast is available from February 5, 2025, until March 5, 2025[6] Second Quarter Fiscal 2025 Financial Performance Bio-Techne demonstrated strong Q2 FY2025 financial performance with increases in GAAP and non-GAAP metrics. Revenue Net sales and organic revenue showed robust growth in Q2 FY2025. Net Sales and Organic Revenue Growth | Metric | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :--------- | :-------- | :-------- | :----------- | | Net Sales | $297.0M | $272.6M | +9% | | Organic Revenue | +9% | - | +9% | GAAP Earnings Results GAAP EPS and operating income significantly improved in Q2 FY2025, favorably impacting operating margin. GAAP Earnings Performance | Metric | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :---------------- | :-------- | :-------- | :----------- | | GAAP EPS | $0.22 | $0.17 | +29.4% | | GAAP Operating Income | $47.4M | $38.0M | +25% | | GAAP Operating Margin | 16.0% | 13.9% | +2.1 pp | - GAAP operating margin was favorably impacted by volume leverage and a non-recurring prior year impairment of a business held-for-sale[9] Non-GAAP Earnings Results Adjusted EPS increased, while adjusted operating margin remained flat due to incentive compensation accruals. Non-GAAP Earnings Performance | Metric | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :------------------- | :-------- | :-------- | :----------- | | Adjusted EPS | $0.42 | $0.40 | +5.0% | | Adjusted Operating Income | $88.7M | $81.9M | +8% | | Adjusted Operating Margin | 30.1% | 30.1% | 0.0 pp | - Adjusted operating margin remained flat, impacted by favorable volume leverage offset by re-instatement of incentive compensation accruals[10] Segment Results Bio-Techne's segments showed varied performance, with Protein Sciences growing and Diagnostics & Spatial Biology sales increasing. Protein Sciences Segment The Protein Sciences segment reported solid growth in net sales and organic revenue, improving its operating margin. - Leading supplier of specialized proteins, immunoassays, antibodies, and reagents to biopharma and academic research[12] Protein Sciences Segment Performance | Metric | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :---------------- | :-------- | :-------- | :----------- | | Net Sales | $211.6M | $197.7M | +7% | | Organic Revenue Growth | 8% | - | +8% | | Operating Margin | 41.2% | 40.3% | +0.9 pp | - Operating margin increased primarily due to volume leverage, offset by re-instatement of incentive compensation accruals[12] Diagnostics and Spatial Biology Segment The Diagnostics and Spatial Biology segment achieved strong sales growth but experienced a decreased operating margin. - Develops spatial biology products, carrier screening and oncology kits, exosome-based diagnostics, and various reagents for the in vitro diagnostic market[13] Diagnostics and Spatial Biology Segment Performance | Metric | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :---------------- | :-------- | :-------- | :----------- | | Net Sales | $84.1M | $75.4M | +12% | | Organic Revenue Growth | 12% | - | +12% | | Operating Margin | 3.9% | 6.0% | -2.1 pp | - Operating margin decreased primarily due to re-instatement of incentive compensation accruals, partially offset by favorable volume leverage[13] Use of non-GAAP Adjusted Financial Measures Bio-Techne uses non-GAAP measures for additional operating insights and internal performance evaluation. - Non-GAAP measures are provided as additional information for operating results, internal performance evaluation, financial and operational decisions, and incentive compensation[14] - Organic revenue excludes revenue from acquisitions within the preceding 12 months, foreign currency impact, businesses held-for-sale, and partially-owned consolidated subsidiaries[15] - Adjusted gross margin, operating margin, EBITDA, and net earnings exclude stock-based compensation, costs from acquired inventory sales, amortization of acquisition intangibles, restructuring costs, acquisition-related expenses, certain litigation charges, investment gains/losses, and specific income tax adjustments[16][17][18] - Key non-GAAP measures include Organic revenue, Adjusted diluted EPS, Adjusted net earnings, Adjusted tax rate, Adjusted gross margin, Adjusted operating income, Adjusted operating margin, EBITDA, and Adjusted EBITDA[19] Forward Looking Statements This press release contains forward-looking statements subject to risks and uncertainties impacting actual results. - Forward-looking statements involve risks and uncertainties that may affect the actual results of operations[21] - Important factors include new branding, business integration, product acceptance, customer research funding, competition, economic conditions, currency fluctuations, and R&D efforts[21] - Investors are advised to review 'Risk Factors' in the Company's Form 10-K and 10-Q reports and are cautioned not to place undue emphasis on these statements, as the company undertakes no obligation to update them[22] Company Overview Bio-Techne is a global life sciences company providing innovative tools and reagents for research and diagnostics. - Bio-Techne is a global life sciences company providing innovative tools and bioactive reagents for research and clinical diagnostic communities[23] - Products assist in scientific investigations into biological processes and the nature and progress of specific diseases, aiding in drug discovery and providing means for accurate clinical tests and diagnoses[23] Company Key Statistics | Metric | Value | | :---------------- | :------------ | | FY2024 Net Sales | ~$1.2 billion | | Employees Worldwide | ~3,100 | Consolidated Financial Statements (Unaudited) This section presents Bio-Techne's unaudited consolidated financial statements, detailing earnings, balance sheets, and cash flow. Consolidated Statements of Earnings This table details the company's consolidated statements of earnings for Q2 and six months of FY2025 and FY2024. Consolidated Statements of Earnings (Unaudited) | Metric (in thousands) | Q2 FY2025 (12/31/2024) | Q2 FY2024 (12/31/2023) | 6 Months FY2025 (12/31/2024) | 6 Months FY2024 (12/31/2023) | | :---------------------- | :--------------------- | :--------------------- | :--------------------------- | :--------------------------- | | Net Sales | $297,031 | $272,598 | $586,489 | $549,533 | | Cost of sales | $103,145 | $96,011 | $209,586 | $187,755 | | Gross margin | $193,886 | $176,587 | $376,903 | $361,778 | | Total Operating Expenses | $146,467 | $138,583 | $289,497 | $267,912 | | Operating income | $47,419 | $38,004 | $87,406 | $93,866 | | Net earnings | $34,890 | $27,465 | $68,490 | $78,459 | | Diluted EPS | $0.22 | $0.17 | $0.42 | $0.49 | Consolidated Condensed Balance Sheets This table presents the company's consolidated condensed balance sheets as of December 31, 2024, and June 30, 2024. Consolidated Condensed Balance Sheets (Unaudited) | Metric (in thousands) | 12/31/2024 | 6/30/2024 | | :---------------------- | :--------- | :-------- | | Total current assets | $634,640 | $617,419 | | Total assets | $2,670,424 | $2,703,867| | Total current liabilities | $161,256 | $159,379 | | Long-term debt obligations | $300,000 | $319,000 | | Stockholders' equity | $2,078,492 | $2,068,850| | Total liabilities and stockholders' equity | $2,670,424 | $2,703,867| Condensed Cash Flow This table outlines the company's condensed cash flow for the six months ended December 31, 2024, and 2023. Condensed Cash Flow (Unaudited) | Metric (in thousands) | 6 Months FY2025 (12/31/2024) | 6 Months FY2024 (12/31/2023) | | :------------------------------------ | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $148,235 | $142,499 | | Net cash used in investing activities | $(26,716) | $(177,781) | | Net cash used in financing activities | $(95,408) | $(9,887) | | Net increase (decrease) in cash and cash equivalents | $25,758 | $(50,439) | | Cash and cash equivalents at end of period | $177,549 | $130,132 | Reconciliation of Non-GAAP Financial Measures (Unaudited) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, enhancing investor transparency. Reconciliation of Adjusted Gross Margin Percentage This table reconciles GAAP gross margin to adjusted gross margin percentage for Q2 and six months of FY2025 and FY2024. Reconciliation of Adjusted Gross Margin Percentage | Metric (in thousands) | Q2 FY2025 (12/31/2024) | Q2 FY2024 (12/31/2023) | 6 Months FY2025 (12/31/2024) | 6 Months FY2024 (12/31/2023) | | :---------------------- | :--------------------- | :--------------------- | :--------------------------- | :--------------------------- | | Gross margin - GAAP | $193,886 | $176,587 | $376,903 | $361,778 | | Gross margin percentage - GAAP | 65.3% | 64.8% | 64.3% | 65.8% | | Adjusted gross margin | $208,163 | $189,990 | $407,760 | $387,442 | | Adjusted gross margin percentage | 70.5% | 69.7% | 70.0% | 70.5% | Reconciliation of Adjusted Operating Margin Percentage This table reconciles GAAP operating income to adjusted operating margin percentage for Q2 and six months of FY2025 and FY2024. Reconciliation of Adjusted Operating Margin Percentage | Metric (in thousands) | Q2 FY2025 (12/31/2024) | Q2 FY2024 (12/31/2023) | 6 Months FY2025 (12/31/2024) | 6 Months FY2024 (12/31/2023) | | :---------------------- | :--------------------- | :--------------------- | :--------------------------- | :--------------------------- | | Operating income - GAAP | $47,419 | $38,004 | $87,406 | $93,866 | | Operating income percentage - GAAP | 16.0% | 13.9% | 14.9% | 17.1% | | Adjusted operating income | $88,711 | $81,945 | $171,943 | $168,834 | | Adjusted operating margin percentage | 30.1% | 30.1% | 29.5% | 30.7% | Non-GAAP Adjusted Consolidated Net Earnings and Earnings per Share This table reconciles GAAP net earnings to non-GAAP adjusted net earnings and EPS for Q2 and six months of FY2025 and FY2024. Non-GAAP Adjusted Consolidated Net Earnings and EPS | Metric (in thousands, except per share) | Q2 FY2025 (12/31/2024) | Q2 FY2024 (12/31/2023) | 6 Months FY2025 (12/31/2024) | 6 Months FY2024 (12/31/2023) | | :-------------------------------------- | :--------------------- | :--------------------- | :--------------------------- | :--------------------------- | | Net earnings before taxes - GAAP | $42,876 | $33,387 | $83,047 | $82,945 | | Non-GAAP adjusted net earnings | $68,127 | $63,716 | $135,658 | $129,759 | | Earnings per share - diluted - Adjusted | $0.42 | $0.40 | $0.84 | $0.81 | Non-GAAP Adjusted Tax Rate This table compares GAAP effective tax rate with non-GAAP adjusted tax rate for Q2 and six months of FY2025 and FY2024. Non-GAAP Adjusted Tax Rate | Metric | Q2 FY2025 (12/31/2024) | Q2 FY2024 (12/31/2023) | 6 Months FY2025 (12/31/2024) | 6 Months FY2024 (12/31/2023) | | :-------------------- | :--------------------- | :--------------------- | :--------------------------- | :--------------------------- | | GAAP effective tax rate | 18.6% | 17.7% | 17.5% | 5.4% | | Non-GAAP adjusted tax rate | 21.5% | 22.0% | 21.5% | 22.0% | Segment Revenue This table presents revenue breakdown by Protein Sciences and Diagnostics and Spatial Biology segments for Q2 and six months of FY2025 and FY2024. Segment Revenue (Unaudited) | Segment (in thousands) | Q2 FY2025 (12/31/2024) | Q2 FY2024 (12/31/2023) | 6 Months FY2025 (12/31/2024) | 6 Months FY2024 (12/31/2023) | | :----------------------- | :--------------------- | :--------------------- | :--------------------------- | :--------------------------- | | Protein Sciences segment revenue | $211,551 | $197,670 | $416,086 | $402,325 | | Diagnostics and Spatial Biology segment revenue | $84,135 | $75,408 | $167,327 | $148,204 | | Consolidated revenue | $297,031 | $272,598 | $586,489 | $549,533 | Segment Operating Income This table details operating income for Protein Sciences and Diagnostics and Spatial Biology segments for Q2 and six months of FY2025 and FY2024. Segment Operating Income (Unaudited) | Segment (in thousands) | Q2 FY2025 (12/31/2024) | Q2 FY2024 (12/31/2023) | 6 Months FY2025 (12/31/2024) | 6 Months FY2024 (12/31/2023) | | :----------------------- | :--------------------- | :--------------------- | :--------------------------- | :--------------------------- | | Protein Sciences segment operating income | $87,112 | $79,586 | $167,653 | $167,947 | | Diagnostics and Spatial Biology segment operating income | $3,240 | $4,556 | $7,517 | $5,082 | | Adjusted operating income | $88,711 | $81,945 | $171,943 | $168,834 | | Operating income | $47,419 | $38,004 | $87,406 | $93,866 | Reconciliation of GAAP Net Income to Adjusted EBITDA This table reconciles GAAP net earnings to EBITDA and adjusted EBITDA for Q2 and six months of FY2025 and FY2024. Reconciliation of GAAP Net Income to Adjusted EBITDA | Metric (in thousands) | Q2 FY2025 (12/31/2024) | Q2 FY2024 (12/31/2023) | 6 Months FY2025 (12/31/2024) | 6 Months FY2024 (12/31/2023) | | :---------------------- | :--------------------- | :--------------------- | :--------------------------- | :--------------------------- | | Net earnings | $34,890 | $27,465 | $68,490 | $78,459 | | EBITDA | $70,760 | $64,704 | $140,318 | $146,804 | | Adjusted EBITDA | $96,111 | $93,228 | $191,824 | $190,577 |