Bio-Techne(TECH) - 2025 Q4 - Annual Report

PART I Item 1. Business Bio-Techne develops, manufactures, and sells life science reagents, instruments, and services globally, operating in Protein Sciences and Diagnostics & Spatial Biology segments with strategic growth pillars - Bio-Techne develops, manufactures, and sells life science reagents, instruments, and services for research, diagnostics, and bioprocessing markets worldwide[14] - The company manages its business in two operating segments: Protein Sciences and Diagnostics and Spatial Biology[15] - Strategic pillars include: Grow & Leverage the Core, Capitalize on High Potential Markets, Market Expansion Through Innovation & Acquisition, Deliver Best-in-Class Customer Experience, and Develop People Through a Transformative Culture[18][19][20][22][23] Overview Bio-Techne, founded in 1976, operates globally, manufacturing diverse products, and has recently made strategic investments and acquisitions - Bio-Techne was founded in 1976 as Research and Diagnostic Systems, Inc. and became publicly traded in 1985[16] - The company operates globally with offices in North America, Europe, and Asia, manufacturing hundreds of thousands of diverse products[16] - Recent strategic investments and acquisitions include Spear Bio (fiscal 2025), Lunaphore SA (fiscal 2024), and a 19.9% investment in Wilson Wolf Corporation (fiscal 2023) with plans for full acquisition by 2027[17] Protein Sciences Segment This segment, accounting for 72% of fiscal 2025 net sales, offers specialized proteins, antibodies, and analytical solutions to academic and industry researchers - The Protein Sciences segment accounted for approximately 72% of net sales in fiscal 2025[24] - It comprises two divisions: Reagent Solutions (specialized proteins, antibodies, small molecules, cell selection technologies) and Analytical Solutions (manual and automated protein analysis instruments and immunoassays)[25][26] - Customers include researchers in academia and industry (pharmaceutical, biotech, CROs), as well as diagnostic and therapeutic customers[27] Diagnostics and Spatial Biology Segment Representing 28% of fiscal 2025 net revenues, this segment provides spatial biology, molecular diagnostics, and diagnostic reagents to researchers and physicians - The Diagnostics and Spatial Biology segment represented approximately 28% of net revenues in fiscal 2025[30] - This segment includes three divisions: Spatial Biology (in-situ hybridization assays, Lunaphore's automated solutions), Molecular Diagnostics (exosome-based liquid biopsy, genetic/oncology kits), and Diagnostic Reagents (regulated calibrators, controls, OEM products)[31][32][33] - Customers range from academic and industry researchers to physicians (for ExoDx Prostate test) and OEM partners[34][35][36] Manufacturing and Materials The company manages supply chain risks through safety stock and multiple sources for raw materials, with most products shipping within one to two weeks - Manufacturing operations use a wide variety of raw materials and components, with techniques like safety stock and multiple supply sources to mitigate supply chain risks[38] - Most products are shipped within one day, while instruments and cartridges typically ship within one to two weeks[39] Competition Bio-Techne operates in highly competitive markets, competing on factors such as price, quality, performance, and technology against diverse players - The company operates in highly competitive markets with diverse competitors, from large global companies to smaller niche players[40] - Key competitive factors include price, quality, performance, delivery speed, application expertise, service, technology, distribution, and brand recognition[40] Seasonality of Business The business experiences some seasonality due to academic and vacation schedules, particularly affecting the Protein Sciences segment and certain diagnostic tests - Some seasonality exists due to vacation and academic schedules, particularly for the Protein Sciences segment and the ExosomeDx Prostate test[41][42] - Sales for the Diagnostics Reagents division can be unpredictable due to bulk lot manufacturing and customer-set schedules[42] Government Contracts The company transacts with government entities, but no single contract is material enough to cause an adverse effect if altered - The company transacts business with various government entities, but no single contract is material enough to cause an adverse effect if renegotiated or terminated[43] New Products and Research and Development Future success relies on continuous R&D to keep pace with evolving technologies and market needs, with over 400 new products introduced in fiscal 2025 - Future success depends on keeping pace with changing technologies and market needs through continuous R&D[44] - In fiscal 2025, over 400 new products were introduced[45] Human Capital Bio-Techne employed approximately 3,100 individuals globally as of June 30, 2025, focusing on talent development and fostering an 'EPIC' culture - As of June 30, 2025, Bio-Techne employed approximately 3,100 full-time and part-time employees globally[47] - The company is committed to attracting, developing, engaging, and retaining talent, fostering an 'EPIC' culture (Empowerment, Passion, Innovation, Collaboration)[48][49] - In 2025, 48% of the total employee population and 43% of managerial employees were female; 39% of total employees and 28% of managerial employees identified as nonwhite[55] Intellectual Property The company protects its core technologies and intellectual property through patents, trade secrets, and trademarks, holding rights to approximately 1,340 granted patents - The company relies on patents, trade secrets, and trademarks to protect its core technologies and intellectual property[64] - As of June 30, 2025, Bio-Techne had rights to approximately 1,340 granted patents and 270 pending patent applications[65] Laws and Regulations Bio-Techne's operations and products are subject to complex laws and regulations, including medical device, healthcare, data privacy, environmental, and anti-corruption laws - Operations and products are subject to complex laws and regulations, including medical device regulations (FDCA, FDA, cGMP, EU IVDR), healthcare laws (Anti-Kickback Statute, False Claims Act, HIPAA), data privacy laws (CCPA, GDPR), environmental health and safety laws, and anti-corruption laws (FCPA, UK Bribery Act)[68][69][70][71][72][73][74][75][76][77][78][79][80][81][82][83][84] Investor Information The company files periodic reports with the SEC and provides financial information on its investor relations website - The company files periodic reports with the SEC and makes financial information available on its investor relations website[85][86] Executive Officers of the Registrant This section lists the key executive officers of Bio-Techne Corporation as of August 22, 2025, including their positions and tenure Executive Officers as of August 22, 2025 | Name | Age | Position | Officer Since | | :------------- | :-- | :---------------------------------------- | :------------ | | Kim Kelderman | 58 | President, Chief Executive Officer and Director | 2018 | | James Hippel | 54 | Executive Vice President and Chief Financial Officer | 2014 | | William Geist | 56 | President, Protein Sciences | 2022 | | Matthew McManus | 56 | President, Diagnostics and Spatial Biology | 2024 | | Shane Bohnen | 50 | Senior Vice President, General Counsel & Corp. Secretary | 2023 | Item 1A. Risk Factors Bio-Techne faces risks from global economic conditions, political instability, healthcare cost pressures, acquisition integration, operational challenges, IP disputes, and extensive regulatory compliance - Global economic conditions, including inflation, recession, and market volatility, can adversely affect business and financial results[95][96][97] - International political and business factors, such as conflicts in Ukraine and Gaza, and trade tensions (e.g., U.S. and China), can negatively impact global operations and financial results, especially with 44% of fiscal 2025 sales from outside the U.S.[98][101][102] - The healthcare and life sciences industries face constant pressures to reduce costs, which may adversely affect demand for products and services, particularly in the Diagnostics and Spatial Biology segment[105][106] - Growth through acquisitions is a key strategy, but inability to complete acquisitions at appropriate prices or integrate them effectively could negatively impact growth and financial results[107][108][109][110][111] - Dependence on recruiting and retaining highly qualified and diverse personnel, timely development of new products, and effective competition are critical for growth[112][115][117] - Significant disruption or breach of information technology systems or data, or violation of data privacy laws (e.g., HIPAA, CCPA, GDPR), could lead to reputational damage, costs, fines, or lawsuits[120][121][122][123] - The company relies heavily on internal manufacturing and third-party package-delivery services, making it vulnerable to disruptions from catastrophes, manufacturing problems, or supply chain issues[124][125][126][127][128][129][133] - Maintaining intellectual property rights is crucial, and disputes over infringement or inability to adequately protect IP could result in competitive injury or significant legal costs[134][135][136][137][138][139] - Exposure to foreign currency exchange rates and changes in tax laws can adversely affect financial results, especially with substantial international revenues[143][145][146] - Extensive regulation across medical devices, healthcare, import/export, anti-corruption, and privacy, along with government contracts, poses compliance risks that could lead to penalties or operational restrictions[148][149][150][151][152][153][154][155][157][158][160][161][162] Item 1B. Unresolved Staff Comments As of the report date, there are no unresolved staff comments from the SEC - There are no unresolved staff comments as of the date of this report[164] Item 1C. Cybersecurity Bio-Techne maintains a cybersecurity program led by the CIO, with oversight from the Board's Audit Committee, following industry standards for threat prevention and mitigation - Bio-Techne's cybersecurity program is led by the Chief Information Officer (CIO) and managed by the Director of IT Infrastructure and Security and the IT Security Operations team[166] - The Board of Directors, through its Audit Committee, provides overall oversight for cybersecurity risk management[168][169] - The cybersecurity strategy focuses on maintaining a secure, actively-monitored environment, following industry standards for preventing, detecting, remediating, and mitigating threats[171] - The company conducts periodic risk assessments, regular security testing, vulnerability management, and annual employee cybersecurity training[173] - As of the report date, no cybersecurity threats are believed to have materially affected or are reasonably likely to materially affect Bio-Techne's business strategy, results of operations, or financial condition[170] Item 2. Properties Bio-Techne owns and leases various global facilities for administrative, research, manufacturing, and warehousing, including its Minneapolis headquarters and sites in Europe and Asia - The company owns its global headquarters and R&D Systems subsidiary facilities in Minneapolis, Minnesota, totaling approximately 800,000 square feet, used for administrative, research, manufacturing, shipping, and warehousing[176][177] - Other owned facilities include Saint Paul, Minnesota (61,000 sq ft), Flowery Branch, Georgia (34,000 sq ft, held-for-sale), Abingdon, England (16,000 sq ft), Toronto, Canada (9,000 sq ft), and Wallingford, Connecticut (53,000 sq ft)[177][178][179] - The company leases material facilities in various locations, including Shanghai and Beijing (China), Bristol (UK), Devens and Waltham (MA), Centennial and San Marcos (CA), San Jose (CA), Ottawa (Canada), Rennes (France), Austin (TX), Dublin (Ireland), and Tolochenaz (Switzerland)[181][182] Item 3. Legal Proceedings As of August 22, 2025, Bio-Techne is not involved in any legal proceedings expected to have a material adverse effect on its business or financial results - As of August 22, 2025, the Company is not involved in any legal proceedings expected to have a material adverse effect on its business, results of operations, financial condition, or cash flows[184] Item 4. Mine Safety Disclosures This item is not applicable to Bio-Techne Corporation - This item is not applicable[186] PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Bio-Techne's common stock trades on NASDAQ under 'TECH', with over 170,000 beneficial shareholders, consistent annual dividends, and significant share repurchases in recent fiscal years - The Company's common stock is listed on the NASDAQ under the symbol 'TECH'[188] - As of August 12, 2025, there were over 170,000 beneficial shareholders[189] Annual Cash Dividends Paid | Fiscal Year | Dividends Paid (millions) | | :---------- | :------------------------ | | 2025 | $50.4 | | 2024 | $50.4 | | 2023 | $50.3 | Issuer Purchases of Equity Securities (Fiscal 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Total Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Amount of Shares That May Yet Be Purchased Under the Plans or Programs | | :------------------------- | :--------------------- | :--------------------------- | :------------------------------------------------------------------- | :---------------------------------------------------------------------------------- | | July 1 - September 30, 2024| — | — | — | 180,739,094 | | October 1 - December 31, 2024| 1,118,492 | $67.62 | 1,118,492 | 105,110,738 | | January 1 - March 31, 2025 | 1,488,563 | $67.21 | 1,488,563 | 5,066,126 | | April 1 - June 30, 2025 | 1,943,140 | $51.49 | 1,943,140 | 405,007,867 | | Total FY2025 | 4,550,195 | $60.60 | 4,550,195 | | Item 6. Selected Financial Data This section is reserved and contains no specific financial data Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Bio-Techne's fiscal 2025 net sales grew 5% to $1.2 billion, driven by Protein Sciences, while GAAP net earnings decreased 56% due to non-recurring charges, though adjusted net earnings rose 8% Consolidated Net Sales Growth (YoY) | Metric | FY2025 | FY2024 | FY2023 | | :------------------------- | :----- | :----- | :----- | | Organic sales growth | 5 % | 1 % | 5 % | | Acquisitions sales growth | 0 % | 1 % | 0 % | | Impact of foreign currency | 0 % | 0 % | (2)% | | Impact of business held for sale | 0 % | 0 % | — % | | Consolidated net sales growth | 5 % | 2 % | 3 % | Consolidated Net Sales by Segment (in thousands) | Segment | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | Protein Sciences | $870,245 | $830,902 | $845,747 | | Diagnostics and Spatial Biology | $346,263 | $326,392 | $292,602 | | Other revenue | $4,152 | $4,153 | — | | Intersegment | $(1,025) | $(2,387) | $(1,647) | | Consolidated net sales | $1,219,635 | $1,159,060 | $1,136,702 | - Consolidated net earnings for fiscal 2025 decreased 56% compared to fiscal 2024, impacted by a non-recurring arbitration award, impairment of assets held-for-sale, and restructuring charges[202] - Adjusted net earnings increased 8% in fiscal 2025, primarily due to favorable volume leverage within Protein Sciences[204] Overview Bio-Techne develops, manufactures, and sells life science reagents, instruments, and services globally, managed through Protein Sciences and Diagnostics & Spatial Biology segments - Bio-Techne develops, manufactures, and sells life science reagents, instruments, and services for research and clinical diagnostic markets globally[198] - The business is managed in two operating segments: Protein Sciences and Diagnostics and Spatial Biology[199] Recent Acquisitions Strategic acquisitions augment internal growth, including Lunaphore in fiscal 2024 and a planned full acquisition of Wilson Wolf by 2027 - A key strategy is to augment internal growth with complementary acquisitions[200] - Acquired Lunaphore in fiscal 2024 for $169.7 million and made a 19.9% investment in Wilson Wolf in fiscal 2023, with plans to acquire the remaining shares by 2027[200] Overall Results Consolidated net sales increased 5% to $1.2 billion in fiscal 2025, while GAAP net earnings decreased 56% due to non-recurring charges, though adjusted net earnings rose 8% Consolidated Financial Performance (FY2025 vs FY2024) | Metric | FY2025 | FY2024 | Change (%) | | :----------------- | :---------- | :---------- | :--------- | | Net Sales | $1.2 billion| $1.16 billion| +5% | | Organic Growth | 5% | 1% | +4 pp | | Consolidated Net Earnings | Decreased 56% | | | | Adjusted Net Earnings | Increased 8% | | | - The decrease in GAAP net earnings in FY2025 was due to a non-recurring arbitration award, impairment of assets held-for-sale, and restructuring charges[202] - FY2024 net earnings decreased 41% compared to FY2023, primarily due to non-recurring gains in FY2023 from the sale of CCXI and Eminence investments, and a contingent consideration benefit[206] Results of Operations This section details consolidated net sales growth drivers, segment net sales, gross margins, operating expenses, and net earnings for fiscal years 2023-2025 Consolidated Net Sales Growth Drivers | Metric | FY2025 | FY2024 | FY2023 | | :------------------------- | :----- | :----- | :----- | | Organic sales growth | 5 % | 1 % | 5 % | | Acquisitions sales growth | 0 % | 1 % | 0 % | | Impact of foreign currency | 0 % | 0 % | (2)% | | Impact of business held for sale | 0 % | 0 % | — % | | Consolidated net sales growth | 5 % | 2 % | 3 % | Segment Net Sales (in thousands) | Segment | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | Protein Sciences | $870,245 | $830,902 | $845,747 | | Diagnostics and Spatial Biology | $346,263 | $326,392 | $292,602 | | Total Consolidated Net Sales | $1,219,635 | $1,159,060 | $1,136,702 | Gross Margins (GAAP and Adjusted) | Metric | FY2025 | FY2024 | FY2023 | | :------------------------- | :------ | :------ | :------ | | GAAP Gross Margin | 64.8 % | 66.4 % | 67.7 % | | Adjusted Gross Margin | 70.4 % | 71.0 % | 71.7 % | Selling, General and Administrative Expenses (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :---------- | :---------- | :---------- | | Total SG&A | $588,521 | $466,375 | $378,378 | | YoY Change | +26% | +23% | | Research and Development Expenses (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :---------- | :---------- | :---------- | | Total R&D | $99,496 | $96,664 | $92,493 | | YoY Change | +3% | +5% | | Net Interest Income / (Expense) (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :---------- | :---------- | :---------- | | Net Interest Income / (Expense) | $(4,623) | $(12,413) | $(7,805) | Other Non-Operating Income / (Expense), Net (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :---------- | :---------- | :---------- | | Other Non-Operating Income / (Expense), Net | $831 | $(8,584) | $47,520 | Income Taxes and Effective Tax Rate | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :------ | :------ | :------ | | GAAP Effective Tax Rate | 25.5 % | 9.5 % | 15.7 % | | Non-GAAP Adjusted Tax Rate | 21.5 % | 22.0 % | 20.5 % | Net Earnings (GAAP and Adjusted, in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :---------- | :---------- | :---------- | | Net Earnings (GAAP) | $73,400 | $168,105 | $285,442 | | Adjusted Net Earnings (Non-GAAP) | $306,457 | $284,749 | $321,480 | | Adjusted Diluted EPS (Non-GAAP) | $1.92 | $1.77 | $1.99 | Liquidity and Capital Resources Bio-Techne maintains liquidity through cash and cash equivalents, operating cash flows, and a $1 billion revolving credit facility, with details on cash flow activities Cash and Cash Equivalents (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Cash and Cash Equivalents | $162,186 | $151,791 | - As of June 30, 2025, approximately 34% of cash and cash equivalents were in the U.S., with the remainder in Canada, China, the U.K., and other European countries[233] - The company had $346.0 million in borrowings under its $1 billion revolving credit facility as of June 30, 2025, leaving $654.0 million unutilized[233] Cash Flows from Operating Activities (in thousands) | Fiscal Year | Cash from Operations | | :---------- | :------------------- | | 2025 | $287,556 | | 2024 | $298,981 | | 2023 | $254,393 | Cash Flows from Investing Activities (in thousands) | Activity | FY2025 | FY2024 | FY2023 | | :------------------------------------- | :---------- | :---------- | :---------- | | Acquisitions, net of cash acquired | — | $(169,707) | $(101,184) | | Investment in Spear Bio | $(15,000) | — | — | | Proceeds from sale of assets held-for-sale | $2,447 | — | — | | Capital additions | $(31,006) | $(62,877) | $(38,244) | | Distributions from Wilson Wolf | $7,291 | $6,997 | $(232,000) | | Proceeds from sale of CCXI investment | — | — | $73,219 | | Proceeds from sale of Eminence | — | — | $17,824 | Cash Flows from Financing Activities (in thousands) | Activity | FY2025 | FY2024 | FY2023 | | :------------------------------------- | :---------- | :---------- | :---------- | | Cash dividends | $(50,391) | $(50,419) | $(50,285) | | Proceeds from stock option exercises | $51,739 | $60,935 | $29,813 | | Repurchases of common stock | $(275,731) | $(80,042) | $(19,562) | | Borrowings under line-of-credit | $104,000 | $225,000 | $619,661 | | Repayments of long-term debt | $(77,000) | $(256,000) | $(525,661) | | Taxes paid on RSUs and net share settlements | $(6,522) | $(21,872) | $(28,893) | Critical Accounting Policies Key accounting policies include Business Combinations (purchase price allocation, contingent consideration) and Impairment of Goodwill, with specific impairment charges noted in fiscal 2024 and 2025 - Critical accounting policies include Business Combinations (purchase price allocation, fair value of acquired assets/liabilities, contingent consideration) and Impairment of Goodwill (annual testing, qualitative/quantitative assessment, fair value estimation of reporting units)[247][248][249][250][251][252][255][256][257][258][259][260][261][264][265] - In fiscal 2025, a quantitative analysis for goodwill impairment was performed for all five reporting units, with no impairment identified, except for a triggering event related to a held-for-sale business in the Diagnostics and Spatial Biology segment, resulting in an $83.1 million impairment charge[261] - In fiscal 2024, a qualitative analysis was performed for goodwill impairment, with no impairment identified, except for a triggering event related to a held-for-sale business in the Protein Sciences segment, resulting in a $22.0 million impairment charge[264] New Accounting Pronouncements Bio-Techne adopted ASU 2023-07 in fiscal 2025 for enhanced segment disclosures and will adopt ASU 2023-09 and ASU 2024-03 in future fiscal years - Adopted ASU 2023-07 (Improvements to Reportable Segment Disclosures) in fiscal 2025, requiring enhanced disclosures on significant segment expenses[355] - Will adopt ASU 2023-09 (Improvements to Income Tax Disclosures) in fiscal 2026 and ASU 2024-03 (Expense Disaggregation Disclosures) in fiscal 2027, both increasing disclosures but with no impact on reported financial expenses[356][359][360] Subsequent Events On August 5, 2025, the company announced an agreement to sell the Exosome Diagnostics business for $15 million, expected to close in Q1 fiscal 2026 - On August 5, 2025, the company announced an agreement to sell the Exosome Diagnostics business for $15 million, expected to close in Q1 fiscal 2026[267][471] Non-GAAP Financial Measures Non-GAAP measures, including Organic growth and Adjusted net earnings, exclude specific items to provide greater transparency and comparability of financial performance - Non-GAAP measures include Organic growth, Adjusted gross margin, Adjusted operating margin, Adjusted net earnings, and Adjusted effective tax rate[269] - These measures exclude items like acquisition-related revenue/costs, foreign currency impact, stock-based compensation, amortization of intangibles, restructuring costs, and non-recurring gains/losses to provide greater transparency and comparability[270][271][272] Item 7A. Quantitative and Qualitative Disclosures about Market Risk Bio-Techne's primary market risk stems from foreign currency fluctuations, with 32% of fiscal 2025 net sales in foreign currencies, and uses derivative instruments for hedging - Approximately 32% of consolidated net sales in fiscal 2025 were made in foreign currencies, primarily euro (15%), British pound sterling (4%), Chinese yuan (5%), Canadian dollars (3%), and Swiss francs (1%)[276] - The company does not use foreign currency forward contracts for forecasted intercompany sales or balance sheet positions[278] Hypothetical 10% USD Appreciation Impact (in thousands) | Impact | Amount | | :---------------------------------------- | :---------- | | Decrease in translation of earnings of foreign subsidiaries | $4,166 | | Decrease in translation of net assets of foreign subsidiaries | $60,580 | | Additional transaction gain | $(698) | Item 8. Financial Statements and Supplementary Data This section presents the audited consolidated financial statements for Bio-Techne Corporation for fiscal years 2023-2025, including the Independent Registered Public Accounting Firm's reports and detailed notes - The consolidated financial statements for the years ended June 30, 2025, 2024, and 2023 are presented, including statements of earnings, balance sheets, shareholders' equity, and cash flows[281][491] - KPMG LLP provided an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of June 30, 2025[283][284][293][294] - A critical audit matter identified was the sufficiency of audit evidence over net sales due to the dispersion of sales-generating activities across locations[287][288][289] Reports of Independent Registered Public Accounting Firm KPMG LLP issued an unqualified opinion on Bio-Techne's consolidated financial statements and internal control over financial reporting, noting net sales audit evidence as a critical matter - KPMG LLP issued an unqualified opinion on the consolidated financial statements for the three-year period ended June 30, 2025, and on the effectiveness of internal control over financial reporting as of June 30, 2025[283][284][293][294] - The critical audit matter identified was the evaluation of the sufficiency of audit evidence over net sales, due to the dispersion of the Company's net sales generating activities across locations[287][288][289] Consolidated Statements of Earnings and Comprehensive Income This section presents the consolidated statements of earnings and comprehensive income for Bio-Techne for fiscal years 2023-2025, including net sales, operating income, and EPS Consolidated Statements of Earnings and Comprehensive Income (in thousands, except per share data) | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :---------- | :---------- | :---------- | | Net sales | $1,219,635 | $1,159,060 | $1,136,702 | | Gross margin | $790,272 | $769,725 | $769,815 | | Operating income | $102,255 | $206,686 | $298,944 | | Earnings before income taxes | $98,463 | $185,689 | $338,659 | | Net earnings attributable to Bio-Techne | $73,400 | $168,105 | $285,263 | | Diluted EPS | $0.46 | $1.05 | $1.76 | | Other comprehensive income (loss) | $18,436 | $(12,252) | $9,103 | | Comprehensive income | $91,836 | $155,853 | $294,399 | Consolidated Balance Sheets This section provides the consolidated balance sheets for Bio-Techne as of June 30, 2025, and 2024, detailing assets, liabilities, and equity Consolidated Balance Sheets (in thousands) | Asset/Liability/Equity | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Total current assets | $608,300 | $617,419 | | Property and equipment, net | $245,719 | $251,154 | | Goodwill | $980,935 | $972,663 | | Intangible assets, net | $365,599 | $507,081 | | Total assets | $2,557,868 | $2,703,867 | | Total current liabilities | $175,849 | $159,379 | | Long-term debt obligations | $346,000 | $319,000 | | Total shareholders' equity | $1,918,808 | $2,068,850 | Consolidated Statements of Shareholders' Equity This section presents the consolidated statements of shareholders' equity for Bio-Techne for fiscal years 2023-2025, detailing changes in equity balances Consolidated Statements of Shareholders' Equity (in thousands) | Metric | June 30, 2025 | June 30, 2024 | June 30, 2023 | | :----------------------------------- | :------------ | :------------ | :------------ | | Balances at beginning of period | $2,068,850 | $1,966,516 | $1,701,011 | | Net earnings | $73,400 | $168,105 | $285,442 | | Other comprehensive income (loss) | $18,436 | $(12,252) | $9,136 | | Share repurchases | $(277,538) | $(80,042) | $(19,562) | | Common stock issued for exercise of options | $44,911 | $39,893 | $2,789 | | Cash dividends | $(50,391) | $(50,419) | $(50,285) | | Stock-based compensation expense | $40,008 | $37,136 | $38,315 | | Balances at end of period | $1,918,808 | $2,068,850 | $1,966,516 | Consolidated Statements of Cash Flows This section provides the consolidated statements of cash flows for Bio-Techne for fiscal years 2023-2025, detailing operating, investing, and financing activities Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :---------- | :---------- | :---------- | | Net cash provided by operating activities | $287,556 | $298,981 | $254,393 | | Net cash provided by (used in) investing activities | $(35,183) | $(203,030) | $(265,649) | | Net cash provided by (used in) financing activities | $(253,905) | $(122,398) | $22,616 | | Net change in cash and cash equivalents | $10,395 | $(28,780) | $8,004 | | Cash and cash equivalents at end of period | $162,186 | $151,791 | $180,571 | Notes to Consolidated Financial Statements This section provides detailed notes to Bio-Techne's consolidated financial statements, covering accounting policies, revenue, balance sheet items, acquisitions, and other financial disclosures Note 1. Description of Business and Summary of Significant Accounting Policies This note describes Bio-Techne's business and outlines significant accounting policies, including equity method investments, revenue recognition, and impairment testing - Bio-Techne develops, manufactures, and sells life science reagents, instruments, and services for research and clinical diagnostic markets worldwide[308] - A four-for-one stock split was effected on November 29, 2022, retroactively adjusting all share and per share amounts[309] - The company accounts for its 19.9% investment in Wilson Wolf as an equity method investment, with a future obligation to acquire the remaining 80.1% by December 31, 2027, or earlier if certain financial milestones are met[313][314][316] - Key accounting policies include use of estimates, principles of consolidation, equity method investments, translation of foreign financial statements, revenue recognition (ASC 606), research and development expensing, income taxes (asset and liability method), comprehensive income, cash and cash equivalents, available-for-sale investments, trade accounts receivable, inventories (FIFO, lower of cost or net realizable value), property and equipment (straight-line depreciation), contingencies, contingent consideration (fair value, remeasured each period), intangible assets (amortized over 1-20 years), and impairment of long-lived assets, goodwill, and indefinite-lived intangible assets[310][311][312][317][318][319][320][321][322][323][324][327][329][330][331][332][333][336][337][338][339][340][341][342][343][344][345][346][347][348][350][351][352][353][354] Note 2. Revenue Recognition This note details Bio-Techne's revenue recognition policies, distinguishing between point-in-time recognition for consumables and instruments, and over-time recognition for services - Revenue is recognized when promised goods or services are transferred to customers, reflecting the consideration expected[318] - Consumables and instruments revenue is recognized at a point in time upon transfer of control, while service revenues (extended warranty, custom development) are recognized over time[362] Revenue by Type (in thousands) | Revenue Type | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | Consumables | $972,286 | $928,180 | $917,733 | | Instruments | $112,086 | $108,270 | $112,085 | | Services | $111,570 | $99,265 | $85,784 | | Royalty revenues | $23,693 | $23,345 | $21,100 | | Total revenues, net | $1,219,635 | $1,159,060 | $1,136,702 | Revenue by Geography (in thousands) | Geography | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | United States | $683,230 | $657,747 | $642,465 | | EMEA, excluding United Kingdom | $266,305 | $241,432 | $220,230 | | United Kingdom | $54,827 | $50,012 | $49,457 | | APAC, excluding Greater China | $77,263 | $73,904 | $73,190 | | Greater China | $100,463 | $99,467 | $113,868 | | Rest of World | $37,547 | $36,498 | $37,492 | | Net sales | $1,219,635 | $1,159,060 | $1,136,702 | Note 3. Supplemental Balance Sheet and Cash Flow Information This note provides supplemental balance sheet details for inventories, property and equipment, intangible assets, goodwill by segment, and other assets Inventories (in thousands) | Inventory Type | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Raw materials | $89,080 | $79,377 | | Finished goods | $106,188 | $106,072 | | Inventories, net | $195,268 | $185,449 | Property and Equipment, Net (in thousands) | Asset Type | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Land | $8,151 | $8,150 | | Buildings and improvements | $254,355 | $243,863 | | Machinery and equipment | $245,924 | $215,948 | | Construction in progress | $23,420 | $39,749 | | Accumulated depreciation and amortization | $(286,131) | $(256,556) | | Property and equipment, net | $245,719 | $251,154 | Intangible Assets, Net (in thousands) | Intangible Type | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Developed technology | $620,062 | $675,674 | | Trade names | $152,648 | $151,561 | | Customer relationships | $212,800 | $211,276 | | Patents | $4,967 | $4,343 | | Other intangibles | $7,174 | $12,006 | | Accumulated amortization | $(632,052) | $(547,779) | | Total intangible assets, net | $365,599 | $507,081 | Goodwill by Segment (in thousands) | Segment | June 30, 2025 | June 30, 2024 | June 30, 2023 | | :--------------------------- | :------------ | :------------ | :------------ | | Protein Sciences | $426,776 | $423,449 | $427,027 | | Diagnostics and Spatial Biology | $554,159 | $549,214 | $445,710 | | Total Goodwill | $980,935 | $972,663 | $872,737 | Other Assets (in thousands) | Asset Type | June 30, 2025 | June 30, 2024 | | :--------------------------- | :------------ | :------------ | | Equity method investment in Wilson Wolf | $235,983 | $242,337 | | Investment in Spear Bio | $15,000 | — | | Total Other Assets | $273,609 | $264,265 | Note 4. Acquisitions This note details Bio-Techne's acquisitions, including Lunaphore in fiscal 2024 and Namocell in fiscal 2023, with their respective purchase price allocations - No acquisitions were made in fiscal 2025[381] - In fiscal 2024, Bio-Techne acquired Lunaphore Technologies SA for $169.7 million, adding fully automated spatial biology solutions to the Diagnostics and Spatial Biology segment[383] Lunaphore Acquisition Purchase Price Allocation (in thousands) | Asset Acquired | Amount | | :--------------------------- | :---------- | | Goodwill | $104,650 | | Developed technologies | $60,300 | | Trade names | $4,900 | | Customer relationships | $1,200 | | Net assets acquired | $169,707 | - In fiscal 2023, Bio-Techne acquired Namocell, Inc. for $101.2 million (net of cash acquired) plus contingent consideration, adding single-cell sorting and dispensing platforms to the Protein Sciences segment[388] Namocell Acquisition Purchase Price Allocation (in thousands) | Asset Acquired | Amount | | :--------------------------- | :---------- | | Goodwill | $51,257 | | Developed technologies | $73,900 | | Trade names | $700 | | Customer relationships | $900 | | Non-competition agreement | $100 | | Net assets acquired | $111,784 | Note 5. Fair Value Measurements This note describes Bio-Techne's fair value measurements for financial instruments, including cash flow and net investment hedges, and contingent consideration - Financial instruments include cash, investments, receivables, payables, contingent consideration, derivative instruments, and long-term debt[391] - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[392][393] - The company uses forward starting swaps as cash flow hedges for forecasted debt and a cross-currency swap contract as a net investment hedge for its Swiss subsidiary[397] Derivative Instruments Contractual Amounts (in millions) | Instrument | Designation | June 30, 2025 | June 30, 2024 | | :------------------- | :------------------ | :------------ | :------------ | | Forward starting swaps | Cash flow hedge | $200 | $300 | | Cross-currency swap | Net investment hedge | $140 | $150 | - Contingent consideration obligations for Namocell and Asuragen acquisitions were relieved in fiscal 2024 as achievement of milestones became remote, resulting in no contingent consideration in fiscal 2025[402][403] Note 6. Debt and Other Financing Arrangements This note details Bio-Techne's debt, including its $1 billion revolving credit facility maturing in August 2027, with $346.0 million outstanding as of June 30, 2025 - The company has a revolving credit facility of $1 billion (expandable by $400 million) maturing on August 31, 2027[407] - As of June 30, 2025, the outstanding balance was $346.0 million, compared to $319.0 million at June 30, 2024[408] Note 7. Leases This note outlines Bio-Techne's operating lease arrangements for offices, facilities, and equipment, recognizing right-of-use assets and liabilities - The company leases offices, labs, manufacturing facilities, vehicles, copiers, and other equipment, recognizing operating lease right-of-use assets and liabilities[409] Operating Lease Information (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :---------- | :---------- | :---------- | | Total operating lease expense | $22,840 | $23,183 | $20,378 | | Cash paid for operating lease liabilities | $16,320 | $17,729 | $14,934 | | Operating lease ROU assets | $73,399 | $91,285 | | | Total operating lease liabilities | $98,058 | $100,538 | | | Weighted average remaining lease term | 7.6 years | 8.5 years | | | Weighted average discount rate | 4.3 % | 4.2 % | | Note 8. Supplemental Equity and Accumulated Other Comprehensive Income (Loss) Information This note provides supplemental information on Bio-Techne's equity, including cash dividends, share repurchases, and accumulated other comprehensive income (loss) components - Cash dividends per share were $0.32 in fiscal 2025, 2024, and 2023[411] Share Repurchases | Fiscal Year | Shares Repurchased | Average Share Price | | :---------- | :----------------- | :------------------ | | 2025 | 4,550,195 | $60.60 | | 2024 | 1,397,471 | $57.28 | | 2023 | 222,000 | $88.12 | - Accumulated other comprehensive income (loss) includes foreign currency translation adjustments and changes in net unrealized gains (losses) on derivative instruments[412] Accumulated Other Comprehensive Income (Loss) (in thousands) | Component | June 30, 2025 | June 30, 2024 | June 30, 2023 | | :-------------------------------------- | :------------ | :------------ | :------------ | | Unrealized Gains (Losses) on Derivative Instruments | $2,536 | $8,102 | $12,862 | | Foreign Currency Translation Adjustments | $(62,416) | $(86,418) | $(78,926) | | Total | $(59,880) | $(78,316) | $(66,064) | Note 9. Earnings Per Share This note presents Bio-Techne's basic and diluted earnings per share calculations for fiscal years 2023-2025, including weighted-average shares outstanding Earnings Per Share (in thousands, except per share amounts) | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :------ | :------ | :------ | | Net earnings attributable to Bio-Techne | $73,400 | $168,105| $285,263| | Weighted-average shares outstanding – basic | 157,521 | 157,708 | 157,179 | | Earnings per share – basic | $0.47 | $1.07 | $1.81 | | Weighted-average common shares outstanding – diluted | 159,717 | 160,774 | 161,855 | | Earnings per share – diluted | $0.46 | $1.05 | $1.76 | - The dilutive effect of stock options excluded 3.8 million, 3.9 million, and 4.5 million shares for fiscal 2025, 2024, and 2023, respectively[417] Note 10. Share-based Compensation and Other Benefit Plans This note details Bio-Techne's share-based compensation plans, including the 2020 Equity Incentive Plan, stock option activity, and related compensation costs - The 2020 Equity Incentive Plan authorizes 9,936,808 shares for awards, with 6.8 million shares available for grant as of June 30, 2025[419] Stock Option Activity (shares in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :--------------------------- | :------ | :------ | :------ | | Outstanding at June 30 | 9,460 | 11,579 | 13,924 | | Granted | 913 | 1,060 | 2,351 | | Exercised | (1,209) | (2,240) | (1,578) | | Weighted Average Exercise Price (Outstanding) | $67.83 | $64.53 | $60.56 | Stock-based Compensation Cost (in thousands) | Expense Category | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | Selling, general and administrative | $40,000 | $38,500 | $39,300 | | Cost of sales | $1,300 | $900 | $1,000 | | Total | $41,300 | $39,400 | $40,300 | - As of June 30, 2025, $39.3 million of unrecognized compensation cost related to non-vested awards is expected to be expensed through fiscal 2029[427] - The company also has an Employee Stock Purchase Plan (ESPP) and profit sharing/savings plans, with contributions of $6.3 million (US) and $5.6 million (UK/China) in fiscal 2025[428][429] Note 11. Other Income / (Expense) This note presents Bio-Techne's other income and expense items, including interest, investment gains/losses, and non-operating income for fiscal years 2023-2025 Other Income / (Expense) (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :---------- | :---------- | :---------- | | Interest expense | $(8,509) | $(15,736) | $(11,215) | | Interest income | $3,886 | $3,323 | $3,410 | | Gain (loss) on investment | — | $283 | $49,328 | | Gain (loss) on equity method investment | $938 | $(6,841) | $(1,143) | | Other non-operating income (expense), net | $(107) | $(2,026) | $(665) | | Total other income (expense) | $(3,792) | $(20,997) | $39,715 | - Fiscal 2023 included significant gains from the sale of CCXI investment ($37.2 million) and Eminence ($11.7 million)[431] Note 12. Income Taxes This note details Bio-Techne's income tax provision, effective tax rate reconciliation, deferred tax valuation allowance, and unrecognized tax benefits for fiscal years 2023-2025 Income Before Income Taxes (in thousands) | Source | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | Domestic | $86,814 | $174,806 | $288,458 | | Foreign | $11,649 | $10,883 | $50,201 | | Total | $98,463 | $185,689 | $338,659 | Total Income Tax Provision (in thousands) | Tax Type | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | Current tax provision | $76,215 | $57,745 | $83,016 | | Deferred tax provision | $(51,152) | $(40,161) | $(29,799) | | Total income tax provision | $25,063 | $17,584 | $53,217 | - Discrete tax benefits primarily related to share-based compensation excess tax benefits were $4.5 million in FY2025, $18.4 million in FY2024, and $12.3 million in FY2023[435] Effective Tax Rate Reconciliation | Factor | FY2025 | FY2024 | FY2023 | | :----------------------------------- | :------ | :------ | :------ | | Income tax expense at federal statutory rate | 21.0 % | 21.0 % | 21.0 % | | State income taxes, net of federal benefit | 2.2 | (0.2) | 2.5 | | Research and development tax credit | (3.3) | (2.2) | (1.3) | | Foreign tax rate differences | 6.2 | 3.1 | (0.6) | | Option exercises | (3.9) | (8.8) | (3.3) | | Foreign derived intangible income | (12.0) | (4.8) | (3.4) | | Executive compensation limitations | 12.5 | 2.7 | 0.8 | | Valuation allowance | 17.4 | — | — | | Effective tax rate | 25.5 % | 9.5 % | 15.7 % | - A deferred tax valuation allowance of $33.8 million was recorded as of June 30, 2025, up from $19.3 million in the prior year, primarily related to foreign and state net operating loss and state credit carryforwards[436][437] - The company has approximately $179 million of undistributed foreign earnings, with $106 million indefinitely reinvested and no deferred taxes provided[439] Unrecognized Tax Benefits (in thousands) | Metric | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | Beginning balance | $5,278 | $5,291 | $5,302 | | Ending balances | $3,329 | $5,278 | $5,291 | Note 13. Segment Information This note provides financial information by Bio-Techne's two operating segments: Protein Sciences and Diagnostics & Spatial Biology, including operating income and revenue by type and geography - Bio-Techne operates under two segments: Protein Sciences and Diagnostics and Spatial Biology[442] - Segment operating income is the measure of segment profit used by the Chief Operating Decision Maker (CEO) to allocate resources[446] Segment Operating Income (in thousands) | Segment | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | Protein Sciences | $370,353 | $354,775 | $373,684 | | Diagnostics and Spatial Biology | $21,324 | $24,546 | $43,037 | | Total Segment Operating Income | $391,677 | $379,321 | $416,721 | Consumables Revenue by Segment (in thousands) | Segment | FY2025 | FY2024 | FY2023 | | :--------------------------- | :---------- | :---------- | :---------- | | Protein Sciences | $684,165 | $657,679 | $665,301 | | Diagnostics and Spatial Biology | $283,969 | $266,348 | $252,432 | | Other revenue | $4,152 | $4,153 | — | | Total consumable revenue | $972,286 | $928,180 | $917,733 | Long-Lived Assets by Geographic Area (in thousands) | Geographic Area | FY2025 | FY2024 | | :--------------------------- | :---------- | :---------- | | United States and Canada | $202,800 | $211,597 | | Europe | $36,030 | $27,862 | | Asia | $6,889 | $11,695 | | Total long-lived assets | $245,719 | $251,154 | Note 14. Restructurings This note details Bio-Techne's restructuring actions and related charges in fiscal years 2023-2025, including manufacturing optimization, divestitures, and workforce adjustments - Fiscal 2025 restructuring actions included optimizing global manufacturing processes and the strategic divestiture of the Exosome Diagnostics business[459] - A cumulative impairment charge of $83.1 million was recorded in fiscal 2025 for a disposal group in the Diagnostics and Spatial Biology segment classified as held-for-sale[460] Fiscal 2025 Restructuring and Restructuring-Related Charges (in thousands) | Expense Category | Amount | | :--------------------------- | :---------- | | Cost of sales | $11,471 | | Selling, general and administrative | $84,160 | | Total | $95,631 | - Fiscal 2024 restructuring actions focused on recovering operating margins, optimizing distribution, and enhancing organizational efficiency, impacting approximately 4% of the global workforce[465] - A cumulative impairment charge of $22.0 million was recorded in fiscal 2024 for a disposal group in the Protein Sciences segment classified as held-for-sale, with a $2.6 million recovery in fiscal 2025[466] Fiscal 2024 Restructuring and Restructuring-Related Charges (in thousands) | Expense Category | FY2025 | FY2024 | | :--------------------------- | :---------- | :---------- | | Cost of sales | — | $3,349 | | Selling, general and administrative | $(1,191) | $30,638 | | Total | $(1,191) | $33,987 | - Fiscal 2023 restructuring actions included closing the Quad facility ($2.2 million charge) and realigning Protein Sciences operations ($1.7 million charge)[469][470] Note 15. Subsequent Events On August 5, 2025, the company announced an agreement to sell the Exosome Diagnostics business for $15 million, expected to close in Q1 fiscal 2026 - On August 5, 2025, the company announced the execution of a definitive agreement to sell the Exosome Diagnostics business for $15 million, with the transaction expected to close in the first quarter of fiscal 2026[471] Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There have been no changes in or disagreements with accountants on accounting and financial disclosure - None[472] Item 9A. Controls and Procedures Management concluded that Bio-Techne's disclosure controls and internal control over financial reporting were effective as of June 30, 2025 - As of June 30, 2025, disclosure controls and procedures were effective[474] - Internal control over financial reporting was effective as of June 30, 2025, based on COSO criteria[477] - There were no changes in internal control over financial reporting during fiscal 2025 that materially affected or are reasonably likely to materially affect it[478] Item 9B. Other Information No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[481] PART III Item 10. Directors, Executive Officers and Corporate Governance Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2025 Annual Meeting of Shareholders Proxy Statement - Information is incorporated by reference from the Company's Proxy Statement for its 2025 Annual Meeting of Shareholders[483] - The company has an insider trading policy to ensure compliance with relevant laws and regulations[484] Item 11. Executive Compensation Information on executive compensation is incorporated by reference from the 2025 Annual Meeting of Shareholders Proxy Statement - Information is incorporated by reference to the sections entitled 'Election of Directors' and 'Executive Compensation' in the Company's Proxy Statement for its 2025 Annual Meeting of Shareholders[486] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters Information regarding security ownership of beneficial owners and management is incorporated by reference from the 2025 Annual Meeting of Shareholders Proxy Statement - Information is incorporated by reference to the sections entitled 'Principal Shareholders' and 'Management Shareholdings' in the Company's Proxy Statement for its 2025 Annual Meeting of Shareholders[487] Item 13. Certain Relationships and Related Transactions, and Director Independence Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2025 Annual Meeting of Shareholders Proxy Statement - Information is incorporated by reference to the sections entitled 'Election of Directors' and 'Additional Corporate Governance Matters' in the Company's Proxy Statement for its 2025 Annual Meeting of Shareholders[488] Item 14. Principal Accounting Fees and Services Information regarding principal accounting fees and services is incorporated by reference from the 2025 Annual Meeting of Shareholders Proxy Statement - Information is incorporated by reference to the section entitled 'Audit Matters' in the Company's Proxy Statement for its 2025 Annual Meeting of Shareholders[489]