Bio-Techne(US:TECH)2019-08-06 19:39Financial 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]