Bio-Techne(US:TECH)2020-05-01 20:59Financial Data and Key Metrics Changes - Adjusted EPS for Q3 was $1.39, up from $1.21 year-over-year, with foreign exchange positively impacting EPS by $0.07 [36] - GAAP EPS decreased to $0.92 from $1.15 in the prior year, primarily due to a significant drop in realized and unrealized gains from investments [36] - Q3 revenue was $194.7 million, a 5% increase year-over-year, with organic revenue growth of 6% [36][37] - Adjusted operating margin for Q3 was 36.5%, an increase of 130 basis points from the prior year [39] Performance by Business Line - Protein Sciences segment reported sales of $145.5 million, with organic growth of 6% driven by strong demand for protein reagents [43] - Diagnostics and Genomics segment sales were $49.4 million, also a 5% increase, with solid double-digit growth in the Genomics division [44][45] Performance by Market - North America experienced low double-digit organic growth, with biopharma growth over 20% and academia increasing mid-single digits [10] - Europe saw a revenue decline of 7%, primarily due to COVID-19 impacts on academic labs [13] - Asia had a surprisingly strong Q3, with mid-single digit growth in China and mid-teens growth in the rest of Asia [14][15] Company Strategy and Industry Competition - The company is focusing on digital marketing efforts to enhance online engagement and drive growth, especially during the pandemic [12] - Strategic growth initiatives include ramping up production of proteins and antibodies for COVID-19 research and developing a new GMP protein factory [21][22] - The company is well-positioned to capture increased demand in life sciences research post-pandemic, with a strong product portfolio [33] Management's Comments on Operating Environment and Future Outlook - Management noted that while COVID-19 negatively impacted business, they ended Q3 with 6% organic growth, which could have been closer to 9% without the pandemic [9] - The company anticipates a gradual recovery in academic and biopharma segments as labs reopen [60] - Management expressed optimism about increased funding for life sciences research post-pandemic, which could lead to stronger demand for their products [62] Other Important Information - The company has a strong cash position with over $250 million in cash and short-term investments and a leverage ratio of 1.4 times [52] - The company is actively involved in various COVID-19 initiatives, including developing tests and reagents for research [20] Q&A Session Summary Question: Recovery expectations for academic and biopharma segments - Management indicated that biopharma remains resilient, with expectations for a V-shaped recovery as labs reopen [56][60] Question: Impact of COVID-19 funding on the portfolio - Management believes all parts of the portfolio will benefit from increased interest in infectious diseases and COVID-19 related research [64][66] Question: Performance in China and sustainability of growth - Management reported that China never experienced negative growth during the quarter and expects continued strong performance as labs remain operational [76][78]