Bio-Techne(US:TECH)2021-05-09 18:12Financial Performance - Bio-Techne reported a Q3 revenue of $243.6 million, representing a 25% year-over-year increase and a 22% organic growth [32][34] - Adjusted EPS was $1.79, a 29% increase from $1.39 in the previous year, marking a new company record [32][34] - The adjusted operating margin for the quarter was 40.1%, an increase of 360 basis points year-over-year [34][36] Business Segment Performance - The Protein Sciences segment reported sales of $185.6 million, with organic growth of 24% [39] - The Diagnostics and Genomics segment had reported sales of $58.1 million, with organic growth of 17% [40] - Simple Plex saw a 90% increase in revenue globally, driven by its application in biomarker discovery and quality control processes [17][19] Market Performance - China experienced nearly 50% growth, while EMEA grew over 30% and the Americas saw growth north of 20% [32] - The biopharma market continued to show strength with year-over-year growth well over 25% [33] - The academic sector improved significantly, growing approximately 20% for the quarter compared to last year [33] Company Strategy and Industry Competition - The acquisition of Asuragen is expected to enhance Bio-Techne's portfolio in genetic carrier screening and oncology research products [10] - The company is focusing on expanding its GMP protein capabilities and has a strong pipeline for cell and gene therapy solutions [14][16] - Bio-Techne aims to leverage its broad product offerings to create synergistic solutions for biopharma companies [16] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in sustaining high operating margins due to strong positioning in high-growth markets [9][36] - The company anticipates continued momentum in Q4, with expectations for revenue to be similar to Q3 [43] - Management noted that the COVID-19 pandemic has elevated the profile of their tools and solutions, positioning the company for stronger growth post-pandemic [28] Other Important Information - The company generated $74.9 million in cash from operations, a more than 50% increase over the prior year [37] - Bio-Techne's balance sheet remains strong with $276.2 million in cash and short-term investments and essentially zero net debt [38] - The company is expanding its manufacturing capacity to meet the high demand for its Simple Plex solution [19] Q&A Session Summary Question: Can you discuss the early days of servicing customers with expanded GMP capabilities? - Management indicated that the catalog is not a limitation, and they are making progress with several customers, expecting to meet their needs effectively [48] Question: How sustainable is the strong operating margin? - Management expressed confidence in sustaining the operating margin, noting that they are ahead of their previous guidance and expect continued strong performance [56][59] Question: What is the size of the end market for cell and gene therapy? - Management estimated the current run rate across the portfolio at about $50 million, with potential to grow to over $500 million in the next five years [74]