Exhibit 99.1

 

BIO-TECHNE RELEASES THIRD QUARTER FISCAL 2021 RESULTS

 

 

Minneapolis/May 6, 2021/ Bio-Techne Corporation (NASDAQ:TECH) today reported its financial results for the third quarter ended March 31, 2021.

 

Third Quarter FY2021 Snapshot

 

Third quarter organic revenue increased by 22% (25% reported) to $243.6 million and 17% (19% reported) in the first nine months of fiscal 2021 to $672.0 million.

   

GAAP EPS was $1.12 versus $0.92 one year ago. Delivered adjusted earnings per share (EPS) of $1.79 versus $1.39 one year ago.  

   

Adjusted Operating Margin increased to 40.1% in the third quarter of fiscal 2021 compared to 36.4% in the third quarter of fiscal 2020.

   

Excellent commercial execution in both operating segments with Protein Sciences achieving record organic growth of 24% and Diagnostics and Genomics delivering 17% organic growth.

   

Enhanced Bio-Techne’s Diagnostics and Genomics segment through the acquisition of Asuragen, Inc., which closed April 6th, 2021, adding a portfolio of best-in-class molecular diagnostic and research products and its experienced leadership team.

 

 

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). Adjusted EPS, adjusted earnings, adjusted gross margin, adjusted operating income, adjusted tax rate, organic growth, and adjusted operating margin are non-GAAP measures that exclude certain items detailed later in this press release under the heading “Use of non-GAAP Adjusted Financial Measures.” A reconciliation of GAAP to non-GAAP financial measures is included in this press release.

 

“Congratulations to the entire global Bio-Techne team for delivering another consecutive record quarter,” Said Chuck Kummeth, President and CEO of Bio-Techne. “Our 22% organic growth reflects strong execution across geographies and segments, while our financial discipline delivered an impressive adjusted operating margin of 40.1%. This strength speaks to increasing demand for our portfolio of life science tools and diagnostic solutions, delivering productivity enhancing solutions that are ideal for the current environment and positioning the Company for continued leadership in our platforms as we exit the pandemic.”

 

Kummeth added, “Our end-markets continued to improve during Q3, with biopharma remaining strong and academic labs continuing the reopening process. Our ProteinSimple brand of proteomic analytical tools and ACD brand of tissue biopsy products were standouts in the quarter, with these platforms growing approximately +50% and +40% year-over-year, respectively. The continued rapid adoption of these solutions, combined with our quality reagents and emerging Exosome Dx and Cell and Gene Therapy opportunities, gives us much excitement about what the future still brings for Bio-Techne and all of its stakeholders.”

 

 

 

 

Third Quarter Fiscal 2021

 

Revenue

 

Net sales for the third quarter increased 25% to $243.6 million. Organic growth was 22% compared to the prior year, with foreign currency exchange having a favorable impact of 3% and acquisitions contributing an immaterial amount to revenue growth.

 

GAAP Earnings Results

 

GAAP EPS increased to $1.12 per diluted share, versus $0.92 in the same quarter last year. GAAP operating income for the third quarter of fiscal 2021 increased 43.6% to $68.6 million, compared to $47.8 million in the third quarter of fiscal 2020. GAAP operating margin was 28.2%, compared to 24.5% in the third quarter of fiscal 2020. GAAP operating margin compared to prior year was positively impacted by volume leverage and cost management.

 

Non-GAAP Earnings Results

 

Adjusted EPS increased to $1.79 per diluted share, versus $1.39 in the same quarter last year, an increase of 29%. Adjusted EPS increased due to revenue growth and operating margin expansion. Adjusted operating income for the third quarter of fiscal 2021 increased 37% compared to the third quarter of fiscal 2020. Adjusted operating margin was 40.1%, compared to 36.4 % in the third quarter of fiscal 2020. Adjusted operating margin compared to the prior year was favorably impacted by volume leverage and cost management.

 

Segment Results

 

Management uses adjusted operating results to monitor and evaluate performance of the Company’s business segments, as highlighted below.

 

Protein Sciences Segment

 

The Company’s Protein Sciences segment is one of the world’s leading suppliers of specialized proteins such as cytokines and growth factors, immunoassays, antibodies and reagents, to the biotechnology and academic research communities. Additionally, the segment provides an array of platforms useful in various areas of protein analysis. Protein Sciences segment’s third quarter fiscal 2021 net sales were $185.6 million, an increase of 28% from $145.5 million for the third quarter of fiscal 2020. Organic growth for the segment was 24%, with foreign currency exchange having a favorable impact of 4% on revenue growth and acquisitions contributing an immaterial amount to revenue growth. Protein Sciences segment’s operating margin was 47.6% in the third quarter of fiscal 2021 compared to 44.7% in the third quarter of fiscal 2020. The segment’s operating margin compared to the prior year was positively impacted by volume leverage and cost management.

 

 

 

 

Diagnostics and Genomics Segment

 

The Company’s Diagnostics and Genomics segment provides blood chemistry and blood gas quality controls, hematology instrument controls, immunoassays and other bulk and custom reagents for the in vitro diagnostic market. The Diagnostics and Genomics segment also develops and provides in situ hybridization products as well as exosome-based diagnostics for various pathologies, including prostate cancer. The Diagnostics and Genomics segment’s third quarter fiscal 2021 net sales were $58.1 million, an increase of 18% from $49.4 million for the third quarter of fiscal 2020. Organic growth for the segment was 17% with foreign currency exchange having a 1% favorable impact on revenue. The Diagnostics and Genomics segment’s operating margin was 17.9% in the third quarter of fiscal 2021 compared to 14.3% in the third quarter of fiscal 2020. The segment’s operating margin was favorably impacted by volume leverage and cost management.

 

Conference Call

 

Bio-Techne will host an earnings conference call today, May 6, 2021 at 8:00 a.m. CDT. To listen, please dial 1-877-407-9208 or 1-201-493-6784 for international callers, and reference conference ID 13718437. The earnings call can also be accessed via webcast through the following link http://public.viavid.com/index.php?id=144241.

 

A recorded rebroadcast will be available for interested parties unable to participate in the live conference call by dialing 1-844-512-2921 or 1-412-317-6671 (for international callers) and referencing Conference ID 13718437. The replay will be available from 11:00 a.m. CDT on Thursday, May 6, 2021 until 11:00 p.m. CDT on Sunday, June 6, 2021.

 

Use of non-GAAP Adjusted Financial Measures:

 

This press release contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP measures include:

 

● Organic growth

● Adjusted diluted earnings per share

● Adjusted tax rate

● Adjusted gross margin

● Adjusted operating income

● Adjusted operating margin

 

 

 

 

We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.

 

Our non-GAAP financial measure of organic growth represents revenue growth excluding revenue from acquisitions within the preceding 12 months as well as the impact of foreign currency. Excluding these measures provides more useful period-to-period comparison of revenue results as it excludes the impact of foreign currency exchange rates, which can vary significantly from period to period, and revenue from acquisitions that would not be included in the comparable prior period.

 

Our non-GAAP financial measures for adjusted gross margin, adjusted operating margin, and adjusted net earnings, in total and on a per share basis, exclude the costs recognized upon the sale of acquired inventory, amortization of acquisition intangibles, acquisition related expenses inclusive of the changes in fair value of contingent consideration, and other non-recurring items including non-recurring costs and gains. The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses inclusive of the changes in fair value contingent consideration, and other non-recurring items including gains or losses on legal settlements and one-time assessments from this measure because they occur as a result of specific events, and are not reflective of our internal investments, the costs of developing, producing, supporting and selling our products, and the other ongoing costs to support our operating structure. Additionally, these amounts can vary significantly from period to period based on current activity.

 

The Company's non-GAAP adjusted operating margin and adjusted net earnings, in total and on a per share basis, also excludes stock-based compensation expense, which is inclusive of the employer portion of payroll taxes on those stock awards, restructuring, impairments of equity method investments, gain and losses from investments, and certain adjustments to income tax expense. Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjective assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations. Impairments of equity investments are excluded as they are not part of our day-to-day operating decisions. Additionally, gains and losses from other investments that are either isolated or cannot be expected to occur again with any predictability are excluded. Costs related to restructuring activities, including reducing overhead and consolidating facilities, are excluded because we believe they are not indicative of our normal operating costs. The Company independently calculates a non-GAAP adjusted tax rate to be applied to the identified non-GAAP adjustments considering the impact of discrete items on these adjustments and the jurisdictional mix of the adjustments. In addition, the tax impact of other discrete and non-recurring charges which impact our reported GAAP tax rate are adjusted from net earnings. We believe these tax items can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future results.

 

Investors are encouraged to review the reconciliations of adjusted financial measures used in this press release to their most directly comparable GAAP financial measures as provided with the financial statements attached to this press release.

 

 

 

 

Forward Looking Statements:

 

Our press releases may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements involve risks and uncertainties that may affect the actual results of operations. The following important factors, among others, have affected and, in the future, could affect the Company's actual results: the effect of new branding and marketing initiatives, the integration of new businesses and leadership, the introduction and acceptance of new products, the funding and focus of the types of research by the Company's customers, the impact of the growing number of producers of biotechnology research products and related price competition, general economic conditions, customer site closures or supply chain issues resulting from the COVID-19 pandemic, the impact of currency exchange rate fluctuations, and the costs and results of research and product development efforts of the Company and of companies in which the Company has invested or with which it has formed strategic relationships.

 

For additional information concerning such factors, see the section titled "Risk Factors" in the Company's annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission. We undertake no obligation to update or revise any forward-looking statements we make in our press releases due to new information or future events. Investors are cautioned not to place undue emphasis on these statements.

 

Bio-Techne Corporation (NASDAQ: TECH) is a global life sciences company providing innovative tools and bioactive reagents for the research and clinical diagnostic communities. Bio-Techne products assist scientific investigations into biological processes and the nature and progress of specific diseases. They aid in drug discovery efforts and provide the means for accurate clinical tests and diagnoses. With thousands of products in its portfolio, Bio-Techne generated approximately $739 million in net sales in fiscal 2020 and has over 2,300 employees worldwide. For more information on Bio-Techne and its brands, please visit www.bio-techne.com.

 

Contact:

David Clair, Senior Director, Investor Relations & Corporate Development

 

David.Clair@bio-techne.com

 

612-656-4416 

 

 

 

 

BIO-TECHNE CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)

 

   

QUARTER

ENDED

   

NINE MONTHS

ENDED

 
   

3/31/21

   

3/31/20

   

3/31/21

   

3/31/20

 

Net sales

  $ 243,552     $ 194,680     $ 672,004     $ 562,857  

Cost of sales

    75,278       64,617       215,098       192,977  

Gross margin

    168,274       130,063       456,906       369,880  

Operating expenses:

                               

Selling, general and administrative

    82,596       66,318       238,310       203,358  

Research and development

    17,052       15,954       49,882       48,413  

Total operating expenses

    99,648       82,272       288,192       251,771  

Operating income

    68,626       47,791       168,714       118,109  

Other income (expense)

    (23,272 )     (970

)

    (27,652

)

    96,843  

Earnings before income taxes

    45,354       46,821       141,062       214,952  

Income taxes

    (48

)

    10,389       16,121       44,501  

Net earnings, including noncontrolling interest

  $ 45,402     $ 36,432     $ 124,941     $ 170,451  

Net earnings attributable to noncontrolling interest

    (380

)

    -       (509

)

    -  

Net earnings attributable to Bio-Techne

    45,782       36,432       125,450       170,451  

Earnings per share:

                               

Basic

  $ 1.18     $ 0.95     $ 3.24     $ 4.46  

Diluted

  $ 1.12     $ 0.92     $ 3.11     $ 4.33  

Weighted average common shares outstanding:

                               

Basic

    38,856       38,303       38,693       38,167  

Diluted

    40,676       39,435       40,305       39,354  

 

 

 

 

BIO-TECHNE CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

(Unaudited)

 

   

3/31/21

   

6/30/20

 

ASSETS

               

Cash and equivalents

  $ 186,136     $ 146,625  

Short-term available-for-sale investments

    90,108       124,268  

Accounts receivable, net

    157,790       122,534  

Inventories

    109,990       103,152  

Other current assets

    22,582       24,341  

Total current assets

    566,606       520,920  
                 

Property and equipment, net

    198,975       176,829  

Right of use asset

    71,830       71,465  

Goodwill and intangible assets, net

    1,235,638       1,244,853  

Other assets

    11,593       13,522  

Total assets

  $ 2,084,642     $ 2,027,589  
                 

LIABILITIES AND STOCKHOLDERS EQUITY

               

Accounts payable and accrued expenses

  $ 84,799     $ 63,270  

Contract liabilities

    18,714       13,049  

Income taxes payable

    3,562       2,376  

Contingent consideration payable

    5,070       5,938  

Operating lease liabilities – current

    10,414       9,535  

Current portion of long-term debt obligations

    12,500       12,500  

Other current liabilities

    2,581       -  

Total current liabilities

    137,640       106,668  
                 

Deferred income taxes

    98,401       101,090  

Long-term debt obligations

    202,931       344,243  

Operating lease liabilities

    66,816       67,248  

Long-term contingent consideration payable

    7,100       199  

Other long-term liabilities

    23,812       26,949  

Stockholders’ equity

    1,547,942       1,381,192  

Total liabilities and stockholders’ equity

  $ 2,084,642     $ 2,027,589  

 

 

 

 

BIO-TECHNE CORPORATION

RECONCILIATION OF ADJUSTED GROSS MARGIN PERCENTAGE

(Unaudited)

 

   

QUARTER

ENDED

   

NINE MONTHS

ENDED

 
   

3/31/21

   

3/31/20

   

3/31/21

   

3/31/20

 

Gross margin percentage – GAAP

    69.1

%

    66.8

%

    68.0

%

    65.7

%

Identified adjustments:

                               

Costs recognized upon sale of acquired inventory

    0.0

%

    -

%

    0.0

%

    -

%

Amortization of intangibles

    3.6

%

    4.5

%

    3.9

%

    4.7

%

Stock compensation expense - COGS

    0.2

%

    0.2

%

    0.2

%

    0.2

%

Gross margin percentage - Adjusted

    72.9

%

    71.5

%

    72.1

%

    70.6

%

 

 

BIO-TECHNE CORPORATION

RECONCILIATION OF ADJUSTED OPERATING MARGIN PERCENTAGE

(Unaudited)

 

   

QUARTER

ENDED

   

NINE MONTHS

ENDED

 
   

3/31/21

   

3/31/20

   

3/31/21

   

3/31/20

 

Operating margin percentage – GAAP

    28.2

%

    24.5

%

    25.1

%

    21.0

%

Identified adjustments:

                               

Costs recognized upon sale of acquired inventory

    0.0

%

    -

%

    0.0

%

    -

%

Amortization of intangibles

    6.3

%

    7.9

%

    6.8

%

    8.1

%

Acquisition related expenses

    0.7

%

    -0.2

%

    1.0

%

    0.0

%

Stock-based compensation

    4.9

%

    4.2

%

    6.2

%

    4.9

%

Operating margin percentage - Adjusted

    40.1

%

    36.4

%

    39.1

%

    34.0

%

 

 

BIO-TECHNE CORPORATION

NON-GAAP ADJUSTED CONOLIDATED NET EARNINGS and EARNINGS per SHARE

(In thousands, except per share data)

(Unaudited)

 

   

QUARTER

ENDED

   

NINE MONTHS

ENDED

 
   

3/31/21

     

3/31/20

   

3/31/21

   

3/31/20

 

Net earnings before taxes - GAAP

  $ 45,354       $ 46,821     $ 141,062     $ 214,952  

Identified adjustments attributable to Bio-Techne:

                                 

Costs recognized upon sale of acquired inventory

    68         -       91       -  

Amortization of intangibles

    15,222         15,459       45,750       45,467  

Acquisition related expenses

    1,825         (228

)

    6,571       389  

Stock-based compensation, inclusive of employer taxes

    11,968         8,088       41,525       27,505  

Restructuring costs

    -         87       142       87  

Realized (gain) loss on investments and Other

    16,590         (410

)

    10,232       (110,458

)

Impact of non-controlling interest (pre-tax)

    445         -       598       -  

Net earnings before taxes - Adjusted

  $ 91,472       $ 69,817     $ 245,971     $ 177,942  
                                   

Non-GAAP tax rate

 

20.2

 

%

    21.3

%

    20.2

%

    21.6

%

Non-GAAP tax expense

    18,541         14,847       49,511       38,462  
                                   

Non-GAAP adjusted net earnings attributable to Bio-Techne

  $ 72,931       $ 54,970     $ 196,460     $ 139,480  
                                   

Earnings per share - diluted – Adjusted

  $ 1.79       $ 1.39     $ 4.87     $ 3.54  

 

 

 

BIO-TECHNE CORPORATION

NON-GAAP adjusted tax rate

(In percentages)

(Unaudited)

 

 

   

QUARTER

ENDED

   

NINE MONTHS

ENDED

 
   

3/31/21

   

3/31/20

   

3/31/21

   

3/31/20

 

GAAP effective tax rate

    (0.1

)%

    22.2

%

    11.4

%

    20.7

%

Discrete items

    25.7       3.1       13.8       3.8  

Annual tax forecast update

    (0.4

)

    (0.8

)

    -       -  

Long-term GAAP tax rate

    25.2

%

    24.5

%

    25.2

%

    24.5

%

                                 

Rate impact items

                               

Stock based compensation

    (5.6

)%

    (2.6

)%

    (5.6

)%

    (2.5

)%

Acquisition costs

    0.0       0.0       0.0       0.0  

Change in fair value of investments

    0.0       (0.5

)

    0.0       (0.3

)

Other1

    0.6       (0.1

)

    0.6       (0.1

)

Total rate impact items

    (5.0 )%     (3.2

)%

    (5.0

)%

    (2.9

)%

                                 

Non-GAAP tax rate

    20.2 %     21.3 %     20.2

%

    21.6

%

 

 

1)

For the quarter ended March 31, 2021, the other rate impact items includes a normalization of non-GAAP tax rate, which was included in our non-GAAP tax rate as the return to historical growth patterns seen prior to the onset of the COVID-19 pandemic occurred on a more condensed timeline than previously forecasted. The impact of re-casting the Non-GAAP tax rate for the third quarter of fiscal 2021 increased the non-GAAP tax rate by 0.6%.  

 

 

 

BIO-TECHNE CORPORATION

SEGMENT REVENUE

(In thousands)

(Unaudited)

 

   

QUARTER

ENDED

   

NINE MONTHS

ENDED

 
   

3/31/21

   

3/31/20

   

3/31/21

   

3/31/20

 

Protein Sciences segment revenue

  $ 185,623     $ 145,509     $ 512,248     $ 428,021  

Diagnostics and Genomics segment revenue

    58,093       49,411       160,687       135,808  

Intersegment revenue

    (164

)

    (240

)

    (931

)

    (972

)

Consolidated revenue

  $ 243,552     $ 194,680     $ 672,004     $ 562,857  

 

 

 

 

BIO-TECHNE CORPORATION

SEGMENT OPERATING INCOME

(In thousands)

(Unaudited)

 

   

QUARTER

ENDED

   

NINE MONTHS

ENDED

 
   

3/31/21

   

3/31/20

   

3/31/21

   

3/31/20

 

Protein Sciences segment operating income

  $ 88,392     $ 65,046     $ 238,991     $ 185,456  

Diagnostics and Genomics segment operating income

    10,417       7,062       27,197       8,937  

Segment operating income

    98,809       72,108       266,188       194,393  

Corporate general, selling, and administrative

    (1,194

)

    (1,092

)

    (3,677

)

    (3,205

)

Adjusted operating income

    97,615       71,016       262,511       191,188  

Cost recognized upon sale of acquired inventory

    (68

)

    -       (91

)

    -  

Amortization of intangibles

    (15,222

)

    (15,459

)

    (45,750

)

    (45,467

)

Acquisition related expenses

    (1,731

)

    322       (6,289

)

    (107

)

Stock-based compensation

    (11,968

)

    (8,088

)

    (41,525

)

    (27,505

)

Restructure costs

    -       -       (142

)

    -  

Operating income

  $ 68,626     $ 47,791     $ 168,714     $ 118,109