BIO-TECHNE Corp_December 31, 2024

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2024, or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-17272

BIO-TECHNE CORPORATION

(Exact name of registrant as specified in its charter)


Minnesota	41-1427402
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

614 McKinley Place N.E. Minneapolis, MN 55413	(612) 379-8854
(Address of principal executive offices) (Zip Code)	(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	TECH	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b- 2). ☐ Yes ☒ No

At February 3, 2025, 158,087,683 shares of the Company's Common Stock (par value $0.01) were outstanding.

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TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36

Item 4.	Controls and Procedures	37

PART II: OTHER INFORMATION

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults Upon Senior Securities	38

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

	SIGNATURES	42

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PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

AND COMPREHENSIVE INCOME

Bio-Techne Corporation and Subsidiaries

(in thousands, except per share data)

(unaudited)


	Quarter Ended				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023

Net sales	$	297,031	$	272,598	$	586,489	$	549,533
Cost of sales		103,145		96,011		209,586		187,755
Gross margin		193,886		176,587		376,903		361,778

Operating expenses:
Selling, general and administrative		121,451		115,667		240,612		220,998
Research and development		25,016		22,916		48,885		46,914
Total operating expenses		146,467		138,583		289,497		267,912
Operating income		47,419		38,004		87,406		93,866

Other income (expense)		(4,543)		(4,617)		(4,359)		(10,921)
Earnings before income taxes		42,876		33,387		83,047		82,945
Income taxes		7,986		5,922		14,557		4,486
Net earnings	$	34,890	$	27,465	$	68,490	$	78,459
Other comprehensive income (loss):
Foreign currency translation income (loss)		(25,518)		18,025		(4,262)		6,423
Unrealized gains (losses) on derivative instruments - cash flow hedges, net of tax amounts disclosed in Note 8		(45)		(3,670)		(3,072)		(4,020)
Other comprehensive income (loss)		(25,563)		14,355		(7,334)		2,403
Comprehensive income	$	9,327	$	41,820	$	61,156	$	80,862

Earnings per share:
Basic	$	0.22	$	0.17	$	0.43	$	0.50
Diluted	$	0.22	$	0.17	$	0.42	$	0.49

Weighted average common shares outstanding:
Basic		158,431		157,533		158,481		157,826
Diluted		160,626		160,060		161,353		161,001

See Notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED BALANCE SHEETS

Bio-Techne Corporation and Subsidiaries

(in thousands, except share and per share data)


	December 31,
	2024		June 30,
	(unaudited)		2024
ASSETS
Current assets:
Cash and cash equivalents	$	177,549	$	151,791
Short-term available-for-sale investments		—		1,072
Accounts receivable, less allowance for doubtful accounts of $5,632 and $4,386, respectively		217,940		241,394
Inventories		188,373		179,731
Current assets held-for-sale		1,047		9,773
Other current assets		49,731		33,658
Total current assets		634,640		617,419

Property and equipment, net		249,753		251,154
Right-of-use assets		85,383		91,285
Goodwill		964,607		972,663
Intangible assets, net		461,051		507,081
Other assets		274,990		264,265
Total assets	$	2,670,424	$	2,703,867
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	33,120	$	37,968
Salaries, wages and related accruals		53,594		49,818
Accrued expenses		27,543		24,886
Contract liabilities		27,715		27,930
Income taxes payable		3,141		3,706
Operating lease liabilities - current		13,511		12,920
Other current liabilities		2,632		2,151
Total current liabilities		161,256		159,379

Deferred income taxes		37,723		55,863
Long-term debt obligations		300,000		319,000
Operating lease liabilities		81,616		87,618
Other long-term liabilities		11,337		13,157

Bio-Techne’s Shareholders’ equity:
Undesignated capital stock, no par; authorized 5,000,000 shares; none issued or outstanding		—		—
Common stock, par value $.01 per share; authorized 400,000,000; issued and outstanding 157,915,999 and 158,216,258 respectively		1,579		1,582
Additional paid-in capital		875,864		820,337
Retained earnings		1,286,699		1,325,247
Accumulated other comprehensive loss		(85,650)		(78,316)
Total Bio-Techne’s shareholders’ equity		2,078,492		2,068,850
Total liabilities and shareholders’ equity	$	2,670,424	$	2,703,867

See Notes to Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Bio-Techne Corporation and Subsidiaries

(in thousands)

(unaudited)


	Six Months Ended
	December 31,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	68,490	$	78,459
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		55,221		56,343
Costs recognized on sale of acquired inventory		373		364
Deferred income taxes		(13,417)		(22,314)
Stock-based compensation expense		24,892		22,846
Fair value adjustment to contingent consideration payable		—		(3,500)
Fair value adjustment on available-for-sale investments		—		(283)
(Gain) Loss on equity method investment		(420)		4,295
Asset impairment restructuring		9,841		—
Leases, net		492		1,196
Impairment of assets held-for-sale		—		6,038
Other operating activity		305		256
Change in operating assets and operating liabilities, net of acquisition:
Trade accounts and other receivables, net		20,940		20,333
Inventories		(11,713)		(9,577)
Prepaid expenses		(405)		(3,149)
Trade accounts payable, accrued expenses, contract liabilities, and other		(29)		5,382
Salaries, wages and related accruals		3,882		(4,305)
Income taxes payable		(10,217)		(9,885)
Net cash provided by (used in) operating activities		148,235		142,499

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of available-for-sale investments		1,085		23,759
Purchases of available-for-sale investments		—		(5,526)
Additions to property and equipment		(15,993)		(28,456)
Acquisitions, net of cash acquired		—		(169,707)
Distributions from (Investments in) Wilson Wolf		1,403		2,149
Investment in Spear Bio		(15,000)		—
Proceeds from sale of assets held-for-sale		1,789		—
Net cash provided by (used in) investing activities		(26,716)		(177,781)

CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends		(25,424)		(25,213)
Proceeds from stock option exercises		30,641		19,670
Re-purchases of common stock		(75,628)		(80,042)
Borrowings under line-of-credit agreement		—		225,000
Repayments of long-term debt		(19,000)		(128,000)
Taxes paid on RSUs and net share settlements		(5,997)		(21,302)
Net cash provided by (used in) financing activities		(95,408)		(9,887)

Effect of exchange rate changes on cash and cash equivalents		(353)		(5,270)
Net change in cash and cash equivalents		25,758		(50,439)
Cash and cash equivalents at beginning of period		151,791		180,571
Cash and cash equivalents at end of period	$	177,549	$	130,132

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	37,593	$	37,645
Cash paid for interest	$	9,831	$	8,586

See Notes to Condensed Consolidated Financial Statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Bio-Techne Corporation and Subsidiaries

(unaudited)

Note 1. Basis of Presentation and Summary of Significant Accounting Policies:

The interim consolidated financial statements of Bio-Techne Corporation and subsidiaries, (the Company) presented here have been prepared by the Company and are unaudited. They have been prepared in accordance with accounting principles generally accepted in the United States of America and with instructions to Form 10-Q and Article 10 of Regulation S-X. They reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These interim unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company's Consolidated Financial Statements and Notes thereto for the fiscal year ended June 30, 2024, included in the Company's Annual Report on Form 10-K for fiscal 2024. A summary of significant accounting policies followed by the Company is detailed in the Company's Annual Report on Form 10-K for fiscal 2024. The Company follows these policies in preparation of the interim unaudited Condensed Consolidated Financial Statements.

The Company manages its business under two operating segments, Protein Sciences and Diagnostics and Spatial Biology (formerly Diagnostics and Genomics). The name change is intended to better reflect the focus and scope of our offerings. The manner in which we operate our business and review discrete financial information did not change. Segment information presented herein reflects the updated name of the operating segment. The operating segments the Company operated under were consistent with the Company's operating segments disclosed in the Company's Annual Report on Form 10-K for fiscal 2024.

Investments: In July 2024, the Company paid $15 million to enter into an investment in Spear Bio. This investment is accounted for under the cost-method as we own less than 20% of the outstanding stock and we concluded that we do not have significant influence. Under the cost-method, the fair value is not estimated if there are no identified events or changes in circumstances. No such events or changes in circumstances were identified in the period ended December 31, 2024. The Company’s total investment of $15 million is included within Other assets on the Condensed Consolidated Balance Sheet.

In December 2021, the Company paid $25 million to enter into a two-part forward contract which requires the Company to make an initial ownership investment followed by purchase of full equity interest in Wilson Wolf Corporation (Wilson Wolf) if certain annual revenue or annual earnings before interest, taxes, depreciation, and amortization (EBITDA) thresholds are met. Wilson Wolf is a leading manufacturer of cell culture devices, including the G-Rex product line. The first part of the forward contract is triggered upon Wilson Wolf achieving approximately $92 million in annual revenue or $55 million in EBITDA at any point prior to December 31, 2027. During the quarter ended March 31, 2023, the Company determined that Wilson Wolf had met the EBITDA target. On March 31, 2023, the Company paid an additional $232 million to acquire 19.9% of Wilson Wolf.

Since the first part of the forward contract has been triggered, the second part of the forward contract will automatically trigger, and requires the Company to acquire the remaining equity interest in Wilson Wolf on December 31, 2027 based on a revenue multiple of approximately 4.4 times trailing twelve month revenue. The second part of the contract would be accelerated in advance of December 31, 2027, if Wilson Wolf meets its second milestone of approximately $226 million in annual revenue or $136 million in annual EBITDA. If the second milestone is achieved, the forward contract requires the Company to pay approximately $1 billion plus potential consideration for revenue in excess of the revenue milestone.

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The investment in Wilson Wolf is accounted for as an equity method investment under ASC 323. The Company initially records its equity method investments at the amount of the Company’s investment and adjusts each period for the Company’s share of the investee’s income or loss and dividends paid. Distributions from the equity method investee are accounted for using the cumulative earnings approach on the Consolidated Statement of Cash Flows. For the quarter ended December 31, 2024, the gain on the investment in Wilson Wolf was not material. In the six months ended December 31, 2024, there was $0.4 million of gain recorded on the Company’s Consolidated Statement of Earnings and Comprehensive Income related to the investment. The Company’s total investment of $241 million is included within Other assets on the Consolidated Balance Sheet.

Restructuring actions: Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and impairments and disposals of assets associated with such actions. Employee-related severance charges are based upon distributed employment policies and substantive severance plans. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Asset-related and other charges include impairment of right-of-use assets, leasehold improvements, other asset write-downs associated with combining operations, disposal of assets and other exit costs. Other costs also includes restructuring-related charges, which are incremental costs incurred directly supporting business transformation initiatives tied to the restructuring action.

Fiscal Year 2025 Restructuring Actions:

In the first quarter of fiscal 2025, the Company announced enterprise-wide restructuring focused on recovering operating margins and optimizing our manufacturing footprint. The Company is expecting to incur costs related to these actions through fiscal 2026, which will be recorded when specified criteria are met. The restructuring and restructuring-related charges for periods presented were recorded in the Consolidated Statements of Earnings as follows (in thousands):


	Quarter Ended		Six Months Ended
	December 31,		December 31,
	2024		2024
Cost of sales	$	2,691	$	7,589
Selling, general and administrative⁽¹⁾		273		5,644
Total	$	2,964	$	13,233

⁽¹⁾Restructuring actions impacting research and development are not material to separately disclose and have been included within Selling, general and administrative costs.

Restructuring and restructuring-related costs by segment are as follows (in thousands):


	Three months ended December 31, 2024
		Employee		Asset-related
		severance		and other		Total
Protein Sciences	$	39	$	2,755	$	2,794
Diagnostics and Spatial Biology		(19)		—		(19)
Corporate		185		4		189
Total	$	205	$	2,759	$	2,964


	Six months ended December 31, 2024
		Employee		Asset-related
		severance		and other		Total
Protein Sciences	$	2,313	$	10,172	$	12,485
Diagnostics and Spatial Biology		425		—		425
Corporate		319		4		323
Total	$	3,057	$	10,176	$	13,233

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The following table summarizes the changes in the Company’s accrued restructuring balance, which is included within Other current liabilities in the accompanying balance sheet. Other amounts reported as restructuring and restructuring-related costs in the accompanying statements of income have been summarized in the notes to the table (in thousands):


	Employee		Asset
	severance⁽¹⁾		impairment and other⁽²⁾		Total
Expense incurred in the first quarter of 2025	$	2,852	$	7,417	$	10,269
Cash payments		(189)		—		(189)
Non-cash adjustments		—		(7,417)		(7,417)
Accrued restructuring actions balance as of September 30, 2024	$	2,663	$	—	$	2,663
Expense incurred in the second quarter of 2025		205		2,759		2,964
Cash payments		(1,211)		(335)		(1,546)
Non-cash adjustments		—		(2,424)		(2,424)
Accrued restructuring actions balance as of December 31, 2024	$	1,657	$	—	$	1,657

⁽¹⁾Relates to impacted employees’ final paycheck, separation payments, outplacement services, legal fees, and retention packages related to the closure or relocation of certain manufacturing sites.

⁽²⁾Primarily relates to impairment of intangibles and inventory as a result of the closure and relocation of certain manufacturing sites.

Fiscal Year 2024 Restructuring Actions:

In the second quarter of fiscal 2024, the Company announced enterprise-wide restructuring focused on recovering operating margins, optimizing our distribution footprint, and enhancing our organization efficiency. These actions impacted approximately 4% of our global workforce. These actions continued through the second quarter of fiscal 2025 as we incurred charges relating to our business held-for-sale and consulting fees related to optimizing efficiency. The Company is expecting to incur costs related to these actions through the end of fiscal 2025, which will be recorded when specified criteria are met.

As part of these actions, certain assets and liabilities associated with a disposal group in our Protein Sciences segment were classified as held-for-sale as of December 31, 2023, including $1.4 million of goodwill allocated to the disposal group on a relative fair value basis. As a result of an impairment test performed over the disposal group during fiscal 2024, a cumulative impairment charge of $22.0 million which includes the allocated goodwill, was recorded in the Selling, general and administrative line in the Consolidated Statements of Earnings for the year ended June 30, 2024. There were no impairment charges related to the disposal group during the first half of fiscal 2025. During the quarter ended December 31, 2024, the Company entered into an agreement with a buyer to purchase the remaining inventory for approximately $8 million. As part of the arrangement, the Company and the buyer entered into a promissory note that will mature in February 2027 and agrees that the buyer shall pay in quarterly installments. As of December 31, 2024, the fair value of the note receivable was approximately $6 million and is included within Other current assets and Other assets on the Condensed Consolidated Balance Sheet. As of December 31, 2024, the assets remaining within the disposal group primarily include the land and building of $1.0 million, which is net of expected selling costs. These assets are actively marketed at a fair value based on market conditions such that the held-for-sale criterion are still met. The held-for-sale assets are recorded in Current assets held-for-sale in our Consolidated Balance sheet as of December 31, 2024 and June 30, 2024.

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The restructuring and restructuring-related charges, including the impairment of assets held-for-sale, for periods presented were recorded in the Condensed Consolidated Statements of Earnings as follows (in thousands):


	Quarter Ended				Six Months Ended
	December 31,				December 31,
		2024		2023		2024		2023
Cost of sales	$	—	$	1,174	$	—	$	1,174
Selling, general and administrative⁽¹⁾		323		10,250		1,076		10,250
Total	$	323	$	11,424	$	1,076	$	11,424

⁽¹⁾Restructuring actions impacting research and development are not material to separately disclose and have been included within Selling, general and administrative costs.

Restructuring and restructuring-related costs by segment are as follows (in thousands):


	Three months ended December 31,
	2024								2023
		Employee		Asset-related		Impairment of				Employee		Asset-related		Impairment of
		severance		and other		assets held-for-sale		Total		severance		and other		assets held-for-sale		Total
Protein Sciences	$	(33)	$	10	$	—	$	(23)	$	2,950	$	472	$	6,038	$	9,460
Diagnostics and Spatial Biology		—		—		—		—		739		—		—		739
Corporate		—		346		—		346		1,193		32		—		1,225
Total	$	(33)	$	356	$	—	$	323	$	4,882	$	504	$	6,038	$	11,424


	Six months ended December 31,
	2024								2023
		Employee		Asset-related		Impairment of				Employee		Asset-related		Impairment of
		severance		and other		assets held-for-sale		Total		severance		and other		assets held-for-sale		Total
Protein Sciences	$	(19)	$	50	$	—	$	31	$	2,950	$	472	$	6,038	$	9,460
Diagnostics and Spatial Biology		—		—		—		—		739		—		—		739
Corporate		(3)		1,048		—		1,045		1,193		32		—		1,225
Total	$	(22)	$	1,098	$	—	$	1,076	$	4,882	$	504	$	6,038	$	11,424


		Employee		Asset-related		Impairment of
		severance⁽¹⁾		and other⁽²⁾		assets held-for-sale		Total
Expense incurred in the second quarter of 2024		4,882		504		6,038		11,424
Incremental expense incurred in the third quarter of 2024		133		1,140		—		1,273
Incremental expense incurred in the fourth quarter of 2024		409		4,737		15,926		21,072
Cash payments		(4,882)		(2,800)		—		(7,682)
Non-cash adjustments		—		(3,391)		(21,963)		(25,354)
Adjustments⁽³⁾		219		—		—		219
Accrued restructuring actions balance as of June 30, 2024	$	761	$	190	$	—	$	952
Incremental expense incurred in the first quarter of 2025		—		753		—		753
Incremental expense incurred in the second quarter of 2025		(33)		356		—		323
Cash payments		(551)		(1,208)		—		(1,759)
Accrued restructuring actions balance as of December 31, 2024	$	177	$	92	$	—	$	269

⁽¹⁾Relates to impacted employees’ final paycheck, separation payments, outplacement services, legal fees, and retention packages related to the closure or sale of certain distribution and manufacturing sites.

⁽²⁾Primarily relates to impairment of right-of-use assets, lease termination fees, consulting fees, and expenses for changes to supporting IT systems that are enabling the Company to complete the restructuring initiatives.

⁽³⁾Relates to the refinement of the accrual recorded in the second quarter of fiscal 2024.

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Protein Sciences Realignment

In December 2022, the Company informed employees it would undertake certain actions to strategically reallocate operations resources to high growth areas of the business. Additional actions were taken in June 2023 primarily related to the sales organization. The actions impacted a limited number of employees and were completed in the fourth quarter of fiscal 2024. As a result of the realignment, a pre-tax charge of $1.7 million related to employee severance was recorded in the Selling, general and administrative line of operating income within our Protein Sciences segment during the year ended June 30, 2023. Adjustments in fiscal year 2024 related to the refinement of employee severance payouts. Additional pre-tax charges for the year ended June 30, 2024 were $0.2 million. Restructuring actions, including cash and non-cash impacts, were as follows (in thousands):


	Employee
	severance
Accrued restructuring actions balance as of June 30, 2023	$	897
Fiscal year 2024 cash payments		(1,118)
First quarter fiscal year 2024 adjustments⁽¹⁾		89
Second quarter fiscal year 2024 adjustments⁽¹⁾		132
Accrued restructuring actions balance as of June 30, 2024	$	—

⁽¹⁾Fiscal year 2024 adjustments relate to the refinement of the accrual recorded in fiscal year 2023.

Legal Matters: The Company and its affiliates are involved in a number of legal actions from time to time involving product liability, employment, intellectual property and commercial disputes, shareholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations. With respect to governmental proceedings and investigations, like other companies in our industry, the Company is subject to extensive regulation by national, state, and local governmental agencies in the United States and in other jurisdictions in which the Company and its affiliates operate. The Company’s standard practice is to cooperate with regulators and investigators in responding to inquiries. The outcomes of legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the enforcement agencies or private claimants seek damages, as well as other remedies (including injunctions barring the sale of products that are the subject of the proceeding), that could require significant expenditures, result in lost revenues, or limit the Company's ability to conduct business in the applicable jurisdictions.

The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages with incomplete scientific facts or legal discovery, involve unsubstantiated or indeterminate claims for damages, potentially involve penalties, fines or punitive damages, or could result in a change in business practice. The Company classifies certain specified litigation charges and gains related to significant legal matters as certain litigation charges in the consolidated statements of income.

In August 2024, 794,400 shares of outstanding vested stock options related to former employees expired which have now been excluded from the Company’s dilutive EPS calculation for the period ended December 31, 2024. The expiration date of these options is currently under dispute. The total net pre-tax value of these options on the expiration date was approximately $32 million. As of December 31, 2024, the matter is under review and the Company is unable to estimate any future exposure related to this matter at this time.

The Company recognized $1.4 million and $1.7 million of certain litigation charges during the quarter and six months ended December 31, 2024. There was no comparable activity during the quarter and six months ended December 31, 2023. As of each of the balance sheet dates presented, there was no accrued litigation. The ultimate cost to the Company with respect to accrued litigation could be materially different than the amount of the current estimates and accruals and could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows. The Company includes accrued litigation in Other current liabilities and Other liabilities on the consolidated balance sheets. While it is not possible to predict the outcome for the legal matters included within our litigation charges line, the Company believes it is possible that the costs associated with these matters could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

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Recently Adopted Accounting Pronouncements

There were no accounting pronouncements adopted in the quarter ended December 31, 2024. Refer to the Form 10-K for accounting pronouncements adopted prior to June 30, 2024.

Relevant New Standards Issued Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280), which requires incremental disclosures on reportable segments, primarily through enhanced disclosures on significant segment expenses. The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2025 for our annual report and for interim periods starting in fiscal year 2026. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which requires incremental annual disclosures on income taxes, including rate reconciliations, income taxes paid, and other disclosures. The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2026 for our annual report. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement –Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires incremental disclosures on purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other expenses. The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2027 for our annual report. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

Other than the items noted above, there have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a significant impact, or potential significant impact, on our unaudited condensed consolidated financial statements.

Note 2. Revenue Recognition:

Consumables revenues consist of specialized proteins, immunoassays, antibodies, reagents, blood chemistry and blood gas quality controls, and hematology instrument controls that are typically single-use products recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment. Instruments revenues typically consist of longer-lived assets that, for the substantial majority of sales, are recognized at a point in time in a manner similar to consumables. Service revenues consist of extended warranty contracts, post contract support, and custom development projects that are recognized over time as either the customers receive and consume the benefits of such services simultaneously or the underlying asset being developed has no alternative use for the Company at contract inception and the Company has an enforceable right to payment for the portion of the performance completed. Service revenues also include laboratory services recognized at point in time.

We recognize royalty revenues in the period the sales occur using third party evidence. The Company elected the "right to invoice" practical expedient based on the Company's right to invoice a customer at an amount that approximates the value to the customer and the performance completed to date.

The Company elected the exemption to not disclose the unfulfilled performance obligations for contracts with an original length of one year or less and the exemption to exclude future performance obligations that are accounted under the sales-based or usage-based royalty guidance. The Company’s unfulfilled performance obligations for contracts with an original length greater than one year were not material as of December 31, 2024.

Contracts with customers that contain instruments may include multiple performance obligations. For these contracts, the Company allocates the contract’s transaction price to each performance obligation on a relative standalone selling price basis. Allocation of the transaction price is determined at the contracts’ inception.

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Payment terms for shipments to end-users are generally net 30 days. Payment terms for distributor shipments may range from 30 to 90 days. Service arrangements commonly call for payments in advance of performing the work (e.g. extended warranty and service contracts), upon completion of the service (e.g. custom development manufacturing) or a mix of both.

Contract assets include revenues recognized in advance of billings. Contract assets are included within Other current assets in the accompanying balance sheet as the amount of time expected to lapse until the Company's right to consideration becomes unconditional is less than one year. We elected the practical expedient allowing us to expense contract costs that would otherwise be capitalized and amortized over a period of less than one year. Contract assets as of December 31, 2024 are not material.

Contract liabilities include billings in excess of revenues recognized, such as those resulting from customer advances and deposits and unearned revenue on warranty contracts. Contract liabilities as of December 31, 2024 and June 30, 2024 were approximately $30.4 million and $30.2 million, respectively. Contract liabilities as of June 30, 2024 subsequently recognized as revenue during the quarter and six month period ended December 31, 2024 were approximately $8.0 million and $19.9 million, respectively. Contract liabilities as of June 30, 2023 subsequently recognized as revenue during the quarter and six months ended December 31, 2023 were approximately $7.1 million and $18.8 million, respectively. Contract liabilities in excess of one year are included in Other long-term liabilities on the Consolidated Balance Sheet.

Any claims for credit or return of goods must be made within 10 days of receipt. Revenues are reduced to reflect estimated credits and returns. Although the amounts recorded for these revenue deductions are dependent on estimates and assumptions, historically our adjustments to actual results have not been material.

Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. We elected the practical expedient that allows us to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost, and we accrue costs of shipping and handling when the related revenue is recognized.

The following tables present our disaggregated revenue for the periods presented.

Revenue by type is as follows (in thousands):


	Quarter Ended				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023
Consumables	$	230,715	$	211,126	$	461,560	$	435,673
Instruments		30,868		29,825		57,074		54,685
Services		27,350		24,129		54,707		45,583
Total product and services revenue, net	$	288,933	$	265,080	$	573,341	$	535,941
Royalty revenues		8,098		7,518		13,148		13,592
Total revenues, net	$	297,031	$	272,598	$	586,489	$	549,533

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Revenue by geography is as follows (in thousands):


	Quarter Ended				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023

United States	$	159,906	$	147,793	$	324,921	$	306,898
EMEA, excluding United Kingdom		70,392		62,538		129,455		117,334
United Kingdom		13,243		10,675		27,187		23,126
APAC, excluding Greater China		19,010		19,042		37,131		36,392
Greater China		24,754		24,459		49,074		49,944
Rest of World		9,726		8,091		18,721		15,839
Net sales	$	297,031	$	272,598	$	586,489	$	549,533

Note 3. Selected Balance Sheet Data:

Inventories:

Inventories consist of (in thousands):


	December 31,		June 30,
	2024		2024

Raw materials	$	83,960	$	79,377
Finished goods⁽¹⁾		110,153		106,072
Inventories, net	$	194,113	$	185,449

⁽¹⁾Finished goods inventory of $5,740 and $5,718 included within Other long-term assets in the respective December 31, 2024 and June 30, 2024, Consolidated Balance Sheet. The inventory is included in long-term assets as it is forecasted to be sold after the 12 months subsequent to the Consolidated Balance Sheet date.

Property and Equipment:

Property and equipment consist of (in thousands):


	December 31,		June 30,
	2024		2024
Land	$	8,104	$	8,150
Buildings and improvements		249,193		243,863
Machinery and equipment		235,984		215,948
Construction in progress		26,785		39,749
Property and equipment, cost		520,066		507,710
Accumulated depreciation and amortization		(270,313)		(256,556)
Property and equipment, net	$	249,753	$	251,154

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Intangible Assets:

Intangible assets consist of (in thousands):


	December 31,		June 30,
	2024		2024

Developed technology	$	675,072	$	675,674
Tradenames		151,066		151,561
Customer relationships		210,881		211,276
Patents		4,736		4,343
Other intangibles		7,161		12,006
Definite-lived intangible assets		1,048,916		1,054,860
Accumulated amortization		(587,865)		(547,779)
Total intangible assets, net	$	461,051	$	507,081

Changes to the carrying amount of net intangible assets for the period ended December 31, 2024 consist of (in thousands):


	December 31,
	2024

Beginning balance	$	507,081
Other additions		249
Amortization expense		(38,911)
Restructuring impairment		(7,050)
Currency translation		(318)
Ending balance	$	461,051

The estimated future amortization expense for intangible assets as of December 31, 2024 is as follows (in thousands):


Remainder 2025	$	37,819
2026		72,318
2027		62,182
2028		58,478
2029		45,912
Thereafter		184,342
Total	$	461,051

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Goodwill:

Changes to the carrying amount of goodwill for the period ended December 31, 2024 consist of (in thousands):


			Diagnostics and
	Protein Sciences		Spatial Biology		Total
June 30, 2024	$	423,449	$	549,214	$	972,663
Currency translation		(3,642)		(4,414)		(8,056)
December 31, 2024	$	419,807	$	544,800	$	964,607

We evaluate the carrying value of goodwill in the fourth quarter of each fiscal year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. The Company performed a qualitative goodwill impairment assessment for all of its reporting units during the fourth quarter of fiscal 2024. No indicators of impairment were identified as part of our assessment.

Other Assets:

Other assets consist of (in thousands):


	December 31,		June 30,
	2024		2024

Equity method investment in Wilson Wolf	$	241,354	$	242,337
Derivative instruments		3,227		9,813
Long-term inventory		5,740		5,718
Investment in Spear Bio		15,000		—
Other		9,669		6,397
Other assets	$	274,990	$	264,265

Note 4. Acquisitions:

We periodically complete business combinations that align with our business strategy. Acquisitions are accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date and that the results of operations of each acquired business be included in our Consolidated Statements of Earnings and Comprehensive Income from their respective dates of acquisitions. Acquisition costs are recorded in selling, general and administrative expenses as incurred.

There were no acquisitions in the first half of fiscal 2025.

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Fiscal year 2024 Acquisitions

Lunaphore Technologies SA.

On July 7, 2023, the Company acquired all of the ownership interests of Lunaphore Technologies SA (“Lunaphore”) for $169.7 million, in a cash-free, debt-free acquisition. Lunaphore is a leading developer of fully automated spatial biology solutions. The Lunaphore acquisition adds spatial biology instruments to Bio-Techne’s portfolio to accelerate our leadership position in translational and clinical research markets. The transaction was accounted for in accordance with ASC 805, Business Combinations. The goodwill recorded as a result of the acquisition represents the strategic benefits of growing the Company’s product portfolio and the expected revenue growth from increased market penetration. The goodwill is not deductible for income tax purposes. The business became part of the Diagnostics and Spatial Biology operating segment in the first quarter of fiscal year 2024.

The allocation of purchase price consideration related to Lunaphore was completed in the fourth quarter of fiscal 2024. The fair values of the assets acquired and liabilities assumed as of June 30, 2024 are as follows (in thousands):



	Final allocation at June 30, 2024
Current assets	$	12,155
Equipment and other long-term assets		1,470
Goodwill		104,650
Intangible assets:
Developed technologies		60,300
Tradenames		4,900
Customer relationships		1,200
Total assets acquired		184,675

Liabilities		7,096
Deferred income taxes, net		7,872
Net assets acquired	$	169,707

Cash paid		169,707

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Tangible assets and liabilities acquired were recorded at fair value on the date of close based on management's assessment. The purchase price allocated to developed technology and customer relationships was based on management’s forecasted cash inflows and outflows and using a multiperiod excess earnings method to calculate the fair value of assets purchased. The purchase price allocated to trade names was based on management's forecasted cash inflows and outflows and using a relief from royalty method. The amount recorded for developed technology is being amortized with the expense reflected in cost of goods sold in the Condensed Consolidated Statement of Earnings and Comprehensive Income. The amortization period for developed technology is 14 years. Amortization expense related to customer relationships is reflected in selling, general and administrative expenses in the Condensed Consolidated Statement of Earnings and Comprehensive Income. The amortization period for customer relationships is 8 years. The amount recorded for trade names is being amortized with the expense reflected in selling, general and administrative expenses in the Condensed Consolidated Statement of Earnings and Comprehensive Income. The amortization period for trade names ranges from 4 years to 8 years. The net deferred income tax liability represents the net amount of the estimated future impact of adjustments for costs to be recognized as intangible asset amortization, which is not deductible for income tax purposes, offset by the deferred tax asset for the calculation of acquired net operating losses.

Note 5. Fair Value Measurements:

The Company’s financial instruments include cash and cash equivalents, available-for-sale investments, derivative instruments, accounts receivable, accounts payable, contingent consideration obligations, and long-term debt.

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. This standard also establishes a hierarchy for inputs used in measuring fair value. This standard maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available in the circumstances.

The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable for the asset or liability and their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 may also include certain investment securities for which there is limited market activity or a decrease in the observability of market pricing for the investments, such that the determination of fair value requires significant judgment or estimation.

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The following tables provide information by level for financial assets and liabilities that are measured at fair value on a recurring basis (in thousands).


		Total
		carrying
		value as of		Fair Value Measurements Using
	Balance Sheet Location	December 31,		Inputs Considered as
		2024		Level 1		Level 2		Level 3

Assets
Derivatives designated as hedging instruments - cash flow hedges	Other current assets	$	6,063	$	—	$	6,063	$	—
Derivatives designated as hedging instruments - cash flow hedges	Other assets		528		—		528		—
Derivatives designated as hedging instruments - net investment hedge	Other assets		2,699		—		2,699		—
Total assets		$	9,290	$	—	$	9,290	$	—


		Total
		carrying
		value as of		Fair Value Measurements Using
	Balance Sheet Location	June 30,		Inputs Considered as
		2024		Level 1		Level 2		Level 3

Assets
Certificates of deposit⁽¹⁾	Short-term available-for-sale investments	$	1,072	$	1,072	$	—	$	—
Derivatives designated as hedging instruments - cash flow hedges	Other current assets		805		—		805		—
Derivatives designated as hedging instruments - cash flow hedges	Other assets		9,813		—		9,813		—
Total assets		$	11,690	$	1,072	$	10,618	$	—

Liabilities
Derivatives designated as hedging instruments - net investment hedge	Other long-term liabilities	$	2,051	$	—	$	2,051	$	—
Total liabilities		$	2,051	$	—	$	2,051	$	—

(1)	The certificates of deposit have contractual maturity dates within one year.

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Fair value measurements of derivative instruments

The Company utilizes forward starting swaps designated as a cash flow hedge on forecasted debt. The forward starting swaps reduce the variability of cash flow payments for the Company by converting the variable interest rate on the Company’s forecasted variable interest long-term debt to that of a fixed interest rate. Accordingly, as part of the forward starting swaps, the Company exchanges, at specified intervals, the difference between floating and fixed interest amounts based on a notional principal amount. The Company also uses a cross-currency swap contract to manage its exposure to foreign currency risk associated with the Company's net investment in its Swiss subsidiary.

The following table presents the contractual amounts of the Company's outstanding instruments (in millions):


		December 31,		June 30,
Instruments	Designation	2024		2024
Forward starting swaps⁽¹⁾	Cash flow hedge	$	300	$	300
Cross-currency swap⁽²⁾	Net investment hedge		140		150

⁽¹⁾ In May 2021, the Company entered into a forward starting swap designated as a cash flow hedge on forecasted debt based on $200 million of notional principal. The effective date of the swap was November 2022 with the full swap maturing in November 2025. In March 2023, the Company entered into a forward starting swap designated as a cash flow hedge on forecasted debt based on $100 million of notional principal. The effective date of the swap was April 2023 with the full swap maturing in April 2025. In August 2024, the Company entered into a new forward starting swap designated as a cash flow hedge on forecasted debt based on $100 million of notional principal that will go into effect in April 2025 to replace a swap that matures in April 2025. The effective date of the new swap is April 2025 with the full swap maturing in April 2026.

⁽²⁾ In July 2023, the Company entered into a pay-fixed rate, receive-fixed rate cross-currency swap contract with a total notional amount of $150 million that was designated as a hedge to lock in the Swiss franc (CHF) rate for a portion of the Company's CHF net investment in its Lunaphore subsidiary in Switzerland. The objective of the hedge is to protect the net investment in the Company's CHF-denominated operations against changes in the spot exchange rates, on a pre-tax basis. The hedging instrument has three interim settlement dates, which will reduce the notional on the hedging instrument by $10 million at each interim date, and will reduce the notional to $110 million at maturity.

The pretax amount of the gains and losses on our hedging instruments and the classification of those gains and losses within our Consolidated Financial Statements for the three and six months ended December 31, 2024 and 2023 were as follows (in thousands):


	(Gain) Loss Recognized in Accumulated Other Comprehensive Loss
	Quarter Ended				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023
Cash flow hedges
Forward starting swaps	$	1,689	$	5,669	$	6,699	$	7,956
Net investment hedges
Cross-currency swap		(7,690)		7,545		(2,525)		7,243
Total	$	(6,001)	$	13,214	$	4,174	$	15,199

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	(Gain) Loss Reclassified into Income
	Quarter Ended				Six Months Ended
	December 31,				December 31,				Location of (Gain) Loss
	2024		2023		2024		2023		in Income Statement
Cash flow hedges
Forward starting swaps	$	(2,155)	$	(2,620)	$	(4,754)	$	(5,159)	Interest expense
Net investment hedges
Cross-currency swap		(660)		(837)		(1,442)		(1,535)	Interest expense
Total	$	(2,815)	$	(3,457)	$	(6,196)	$	(6,694)

Gains or losses related to the net investment hedges are classified as foreign currency translation adjustments in the schedule of changes in Accumulated Other Comprehensive Income (“AOCI”) in Note 8, as these items are attributable to the Company’s hedges of its net investment in foreign operations. Gains or losses related to the cash flow hedges are classified as Unrealized gains (losses) on cash flow hedges in the schedule of changes in AOCI in Note 8.

Fair value measurements of other financial instruments – The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate fair value.

Cash and cash equivalents, certificates of deposit, accounts receivable, and accounts payable – The carrying amounts reported in the Consolidated Balance Sheets approximate fair value because of the short-term nature of these items.

Long-term debt – The carrying amounts reported in the Consolidated Balance Sheets for the amount drawn on our line-of-credit facility and long-term debt approximates fair value because our interest rate is variable and reflects current market rates.

Note 6. Debt and Other Financing Arrangements:

On August 31, 2022, the Company entered into a revolving line-of-credit and term loan by a Credit Agreement (the Credit Agreement). The Credit Agreement provides for a revolving credit facility of $1 billion, which can be increased by an additional $400 million subject to certain conditions. Borrowings under the Credit Agreement may be used for working capital and expenditures of the Company and its subsidiaries, including financing permitted acquisitions. Borrowings under the Credit Agreement bear interest at a variable rate. The current outstanding debt is based on the one-month Secured Overnight Financing Rate (SOFR) plus an applicable margin. The applicable margin is determined from the total leverage ratio of the Company and updated on a quarterly basis. The annualized fee for any unused portion of the credit facility is currently 10 basis points.

The Credit Agreement matures on August 31, 2027 and contains customary restrictive and financial covenants and customary events of default. As of December 31, 2024, the outstanding balance under the Credit Agreement was $300.0 million.

Note 7. Leases:

As a lessee, the Company leases offices, labs, and manufacturing facilities, as well as vehicles, copiers, and other equipment. The Company recognizes operating lease expense on a straight-line basis over the lease term. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is Bio-Techne’s incremental borrowing rate or, if available, the rate implicit in the lease. Bio-Techne determines the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region. During the six months ended December 31, 2024, the Company recognized $2.6 million in variable lease expense and $8.7 million relating to fixed lease expense in the Condensed Consolidated Statements of Earnings and Comprehensive Income.

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The following table summarizes the balance sheet classification of the Company’s operating leases and amounts of right-of-use assets and lease liabilities and the weighted average remaining lease term and weighted average discount rate for the Company’s operating leases (in thousands):


			As of
			December 31,
	Balance Sheet Classification		2024
Operating leases:
Operating lease right-of-use assets		Right-of-use asset	$	85,383

Current operating lease liabilities		Operating lease liabilities - current	$	13,511
Noncurrent operating lease liabilities		Operating lease liabilities		81,616
Total operating lease liabilities			$	95,127

Weighted average remaining lease term (in years):				8.09

Weighted average discount rate (%):				4.26

The following table summarizes the cash paid for amounts included in the measurement of operating lease liabilities and right-of-use assets obtained in exchange for new operating lease liabilities for the six months ended December 31, 2024 (in thousands):


	Six months ended
	December 31,
	2024
Cash amounts paid on operating lease liabilities	$	8,068

Right-of-use assets obtained in exchange for lease liabilities	$	1,321

The following table summarizes the fair value of the lease liability by payment date for the Company’s operating leases by fiscal year (in thousands):



	December 31,
	2024
Remainder 2025	$	8,399
2026		16,568
2027		13,732
2028		13,569
2029		13,115
Thereafter		48,159
Total	$	113,542
Less: Amounts representing interest		18,415
Total lease obligations	$	95,127

Certain leases include one or more options to renew, with terms that extend the lease term up to five years. Bio-Techne includes the option to renew the lease as part of the right-of-use lease asset and liability when it is reasonably certain the Company will exercise the option. In addition, certain leases contain fair value purchase and termination options with an associated penalty. In general, Bio-Techne is not reasonably certain to exercise such options.

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Note 8. Supplemental Equity and Accumulated Other Comprehensive Income (Loss):

Supplemental Equity

The Company has declared cash dividends per share of $0.08 and $0.16 in the three and six months ended December 31, 2024 and 2023, respectively.

Consolidated Changes in Equity (amounts in thousands):


	Bio-Techne Shareholders
								Accumulated
				Additional				Other
	Common Stock			Paid-in		Retained		Comprehensive
	Shares	Amount		Capital		Earnings		Income(Loss)		Total
Balances at June 30, 2024	158,216	$	1,582	$	820,337	$	1,325,247	$	(78,316)	$	2,068,850
Net earnings							33,600				33,600
Other comprehensive income (loss)									18,229		18,229
Common stock issued for exercise of options	577		6		23,224		(2,338)				20,892
Common stock issued for restricted stock awards	50		1		1		(2,646)				(2,644)
Cash dividends							(12,688)				(12,688)
Stock-based compensation expense					10,146						10,146
Common stock issued to employee stock purchase plan	35		0		2,227						2,227
Employee stock purchase plan expense					38						38
Balances at September 30, 2024	158,878	$	1,589	$	855,973	$	1,341,175	$	(60,087)	$	2,138,650
Net earnings							34,890				34,890
Other comprehensive income (loss)									(25,563)		(25,563)
Share repurchases	(1,118)		(11)				(75,617)				(75,628)
Common stock issued for exercise of options	132		1		5,183		(20)				5,164
Common stock issued for restricted stock awards	24		0		0		(993)				(993)
Cash dividends							(12,736)				(12,736)
Stock-based compensation expense					14,335						14,335
Employee stock purchase plan expense					373						373
Balances at December 31, 2024	157,916	$	1,579	$	875,864	$	1,286,699	$	(85,650)	$	2,078,492

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	Bio-Techne Shareholders
								Accumulated
				Additional				Other
	Common Stock			Paid-in		Retained		Comprehensive
	Shares	Amount		Capital		Earnings		Income(Loss)		Total
Balances at June 30, 2023	157,642	$	1,576	$	721,543	$	1,309,461	$	(66,064)	$	1,966,516
Net earnings							50,993				50,993
Other comprehensive income (loss)									(11,952)		(11,952)
Common stock issued for exercise of options	633		6		12,877		(15,460)				(2,577)
Common stock issued for restricted stock awards	47		1		0		(4,768)				(4,767)
Cash dividends							(12,654)				(12,654)
Stock-based compensation expense					9,981						9,981
Common stock issued to employee stock purchase plan	33		1		2,093						2,094
Employee stock purchase plan expense					112						112
Balances at September 30, 2023	158,355	$	1,584	$	746,606	$	1,327,572	$	(78,016)	$	1,997,746
Net earnings							27,465				27,465
Other comprehensive income (loss)									14,355		14,355
Share repurchases	(1,397)		(14)				(80,028)				(80,042)
Common stock issued for exercise of options	157		1		4,914		(1,074)				3,841
Common stock issued for restricted stock awards	27		0		0						0
Cash dividends							(12,559)				(12,559)
Stock-based compensation expense					12,413						12,413
Employee stock purchase plan expense					340						340
Balances at December 31, 2023	157,142	$	1,571	$	764,273	$	1,261,376	$	(63,661)	$	1,963,559

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Accumulated Other Comprehensive Income

The components of Other comprehensive income (loss) consist of changes in foreign currency translation adjustments and changes in net unrealized gains (losses) on derivative instruments designated as cash flow hedges. The accumulated balances related to each component of Other comprehensive income (loss) are summarized as follows:


Three months ended December 31, 2024 (in thousands):	Unrealized
	Gains		Foreign
	(Losses) on		Currency
	Derivative		Translation
	Instruments		Adjustments		Total
Balance as of September 30, 2024, net of tax	$	5,075	$	(65,162)	$	(60,087)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		(1,689)		(26,021)		(27,710)
Amounts reclassified out		2,155		660		2,815
Total other comprehensive income (loss), before tax		466		(25,361)		(24,895)
Tax (expense)/benefit		(511)		(157)		(668)
Total other comprehensive income (loss), net of tax		(45)		(25,518)		(25,563)
Balance as of December 31, 2024, net of tax	$	5,030	$	(90,680)	$	(85,650)


Three months ended December 31, 2023 (in thousands):	Unrealized
	Gains		Foreign
	(Losses) on		Currency
	Derivative		Translation
	Instruments		Adjustments		Total
Balance as of September 30, 2023 net of tax:	$	12,512	$	(90,528)	$	(78,016)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		(5,669)		17,387		11,718
Amounts reclassified out		2,620		837		3,457
Total other comprehensive income (loss), before tax		(3,049)		18,224		15,175
Tax (expense)/benefit		(621)		(199)		(820)
Total other comprehensive income (loss), net of tax		(3,670)		18,025		14,355
Balance as of December 31, 2023, net of tax	$	8,842	$	(72,503)	$	(63,661)

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Six months ended December 31, 2024 (in thousands):	Unrealized
	Gains		Foreign
	(Losses) on		Currency
	Derivative		Translation
	Instruments		Adjustments		Total
Balance as of June 30, 2024, net of tax:	$	8,102	$	(86,418)	$	(78,316)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		(6,699)		(5,362)		(12,061)
Amounts reclassified out		4,754		1,442		6,196
Total other comprehensive income (loss), before tax		(1,945)		(3,920)		(5,865)
Tax (expense)/benefit		(1,127)		(342)		(1,469)
Total other comprehensive income (loss), net of tax		(3,072)		(4,262)		(7,334)
Balance as of December 31, 2024, net of tax⁽¹⁾	$	5,030	$	(90,680)	$	(85,650)


Six months ended December 31, 2023 (in thousands):	Unrealized
	Gains		Foreign
	(Losses) on		Currency
	Derivative		Translation
	Instruments		Adjustments		Total
Balance as of June 30, 2023, net of tax:	$	12,862	$	(78,926)	$	(66,064)
Other comprehensive income (loss), before tax:
Amounts before reclassifications		(7,956)		5,252		(2,704)
Amounts reclassified out		5,159		1,535		6,694
Total other comprehensive income (loss), before tax		(2,797)		6,787		3,990
Tax (expense)/benefit		(1,223)		(364)		(1,587)
Total other comprehensive income (loss), net of tax		(4,020)		6,423		2,403
Balance as of December 31, 2023, net of tax⁽¹⁾	$	8,842	$	(72,503)	$	(63,661)

⁽¹⁾ The Company had a net deferred tax liability for its cash flow hedge of $1.6 million and $2.7 million as of December 31, 2024 and 2023, respectively.

Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within foreign currency translation adjustments do include impacts from the net investment hedge.

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Note 9. Earnings Per Share:

The following table reflects the calculation of basic and diluted earnings per share (in thousands, except per share amounts):


	Quarter Ended				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023
Earnings per share – basic:
Net earnings	$	34,890	$	27,465	$	68,490	$	78,459
Income allocated to participating securities		(3)		(3)		(12)		(13)
Income available to common shareholders	$	34,887	$	27,462	$	68,478	$	78,446
Weighted-average shares outstanding – basic		158,431		157,533		158,481		157,826
Earnings per share – basic	$	0.22	$	0.17	$	0.43	$	0.50

Earnings per share – diluted:
Net earnings	$	34,890	$	27,465	$	68,490	$	78,459
Income allocated to participating securities		(3)		(3)		(12)		(13)
Income available to common shareholders	$	34,887	$	27,462	$	68,478	$	78,446
Weighted-average shares outstanding – basic		158,431		157,533		158,481		157,826
Dilutive effect of stock options and restricted stock units		2,195		2,527		2,872		3,175
Weighted-average common shares outstanding – diluted		160,626		160,060		161,353		161,001
Earnings per share – diluted	$	0.22	$	0.17	$	0.42	$	0.49

The dilutive effect of stock options and restricted stock units in the above table excludes all options for which the aggregate exercise proceeds exceeded the average market price for the period. The number of potentially dilutive option shares excluded from the calculation was 4.1 million and 6.2 million for the quarter ended December 31, 2024 and 2023, respectively, and 3.6 million and 4.1 million for the six months ended December 31, 2024 and 2023, respectively.

Note 10. Share-based Compensation:

During the six months ended December 31, 2024 and 2023, the Company granted 0.8 million and 0.9 million stock options at weighted average grant prices of $74.65 and $81.49 and weighted average fair values of $25.43 and $27.83, respectively. During the six months ended December 31, 2024 and 2023, the Company granted 0.5 million and 0.3 million restricted stock units at a weighted average fair value of $74.96 and $79.26, respectively. During the six months ended December 31, 2024 and 2023, the Company granted 11,696 and 27,196 shares of restricted common stock shares at a weighted average fair value of $68.37 and $56.98.

Stock options for 0.8 million and 1.2 million shares of common stock with total intrinsic values of $28.3 million and $61.6 million were exercised during the six months ended December 31, 2024 and 2023, respectively.

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Stock-based compensation expense, inclusive of payroll taxes, of $14.5 million and $12.4 million was included in selling, general and administrative expenses for the quarter ended December 31, 2024 and 2023, respectively. Stock-based compensation expenses, inclusive of payroll taxes, of $24.8 million and $23.5 million was included in selling, general, and administrative expenses for the six months ended December 31, 2024 and 2023, respectively. Additionally, the Company recognized $0.4 million and $0.7 million of stock-based compensation costs in cost of goods sold in the quarter and six months ended December 31, 2024, respectively, compared to $0.3 million and $0.5 million in cost of goods sold in the comparative prior year periods. As of December 31, 2024, there was $62.6 million of unrecognized compensation cost related to non-vested stock options, non-vested restricted stock units and non-vested restricted stock. The weighted average period over which the compensation cost is expected to be recognized is 2.1 years.

In fiscal 2015, the Company established the Bio-Techne Corporation 2014 Employee Stock Purchase Plan (ESPP), which was approved by the Company's shareholders on October 30, 2014, and which is designed to comply with IRS provisions governing employee stock purchase plans. 800,000 shares were allocated to the ESPP. The Company recorded expense of $0.4 million for the quarter ended December 31, 2024 and $0.3 million for the quarter ended December 31, 2023. The Company recorded expense of $0.4 million and $0.5 million for the six months ended December 31, 2024 and 2023, respectively.

Note 11. Other Income / (Expense):

The components of other income (expense) in the accompanying Statement of Earnings and Comprehensive Income are as follows (in thousands):


	Quarter Ended					Six Months Ended
	December 31,					December 31,
	2024		2023		2024		2023
Interest expense	$	(2,148)	$	(4,329)	$	(4,324)	$	(9,222)
Interest income		1,348		816		2,274		1,706
Gain (loss) on investment		—		—		—		283
Gain (loss) on equity method investment		46		(1,914)		420		(4,204)
Other non-operating income (expense), net		(3,789)		810		(2,729)		516
Total other income (expense)	$	(4,543)	$	(4,617)	$	(4,359)	$	(10,921)

Note 12. Income Taxes:

The Company’s effective income tax rate for the second quarter of fiscal 2025 and 2024 was 18.6% and 17.7%, respectively, of consolidated earnings before income taxes, inclusive of discrete items, and 17.5% and 5.4% for the first six months of fiscal 2025 and 2024, respectively. The change in the Company’s tax rate for the quarter and six months ended December 31, 2024 compared to the quarter and six months ended December 31, 2023 was driven by discrete tax items.

The Company recognized total net benefits related to discrete tax items of $2.2 million and $5.2 million during the quarter and six months ended December 31, 2024, respectively, compared to total net benefits of $2.8 million and $16.3 million during the quarter and six months ended December 31, 2023, respectively. Share-based compensation excess tax benefit contributed $1.0 million and $4.3 million in the quarter and six months ended December 31, 2024, respectively, compared to $1.3 million and $11.7 million in the quarter and six months, ended December 31, 2023, respectively. During the quarter and six months ended December 31, 2024, the Company had total other immaterial discrete tax benefits of $1.2 million and $0.9 million, respectively. The Company recognized total other immaterial net discrete tax benefits of $1.5 million and $4.6 million in the quarter and six months ended December 31, 2023, respectively.

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Note 13. Segment Information:

The Company's management evaluates segment operating performance based on operating income before certain charges to cost of sales and selling, general and administrative expenses, principally associated with the impact of partially-owned consolidated subsidiaries as well as acquisition accounting related to inventory, amortization of acquisition-related intangible assets and other acquisition-related expenses. The Protein Sciences and Diagnostics and Spatial Biology segments both include consumables, instruments, services and royalty revenue.

The following is financial information relating to the Company's reportable segments (in thousands):


	Quarter Ended				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023
Net sales:
Protein Sciences	$	211,551	$	197,670	$	416,086	$	402,325
Diagnostics and Spatial Biology		84,135		75,408		167,327		148,204
Other revenue⁽¹⁾		1,849		—		4,152		—
Intersegment		(504)		(480)		(1,076)		(996)
Consolidated net sales	$	297,031	$	272,598	$	586,489	$	549,533

Operating income:
Protein Sciences	$	87,112	$	79,586	$	167,653	$	167,947
Diagnostics and Spatial Biology		3,240		4,556		7,517		5,082
Segment operating income	$	90,352	$	84,142	$	175,170	$	173,029
Costs recognized on sale of acquired inventory		(185)		(183)		(373)		(364)
Amortization of intangibles		(18,559)		(19,769)		(38,300)		(39,620)
Acquisition related expenses and other		(2,010)		525		(3,523)		1,114
Certain litigation charges		(1,386)		—		(1,678)		—
Impairment of assets held-for-sale		—		(6,038)		—		(6,038)
Stock based compensation, inclusive of employer taxes		(15,238)		(12,958)		(25,875)		(24,453)
Restructuring and restructuring-related costs		(3,287)		(5,518)		(14,309)		(5,607)
Corporate general, selling, and administrative expenses		(1,641)		(2,197)		(3,227)		(4,195)
Impact of business held-for-sale⁽¹⁾		(627)		—		(479)		—
Consolidated operating income	$	47,419	$	38,004	$	87,406	$	93,866

⁽¹⁾ Includes the quarterly results of a business that has met the held-for-sale criteria since December 31, 2023.

Note 14. Subsequent Events:

None.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following management discussion and analysis (“MD&A”) provides information that we believe is useful in understanding our operating results, cash flows and financial condition. We provide quantitative information about the material sales drivers including the effect of acquisitions and changes in foreign currency at the corporate and segment level. We also provide quantitative information about discrete tax items and other significant factors we believe are useful for understanding our results. The MD&A should be read in conjunction with both the unaudited condensed consolidated financial information and related notes included in this Form 10-Q, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended June 30, 2024. This discussion contains various “Non-GAAP Financial Measures” and also contains various “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We refer readers to the statements entitled “Non-GAAP Financial Measures” and “Forward-Looking Information and Cautionary Statements” located at the end of Item 2 of this report.

OVERVIEW

Bio-Techne and its subsidiaries, collectively doing business as Bio-Techne Corporation (Bio-Techne, we, our, us or the Company) develop, manufacture and sell biotechnology reagents, instruments and services for the research and clinical diagnostic markets worldwide. We use our deep product portfolio and application expertise to develop and sell integral components of scientific investigations into biological processes and molecular diagnostics, revealing the nature, diagnosis, etiology and progression of specific diseases. Our products aid in drug discovery efforts and provide the means for accurate clinical tests and diagnoses.

We are committed to providing the life sciences community with innovative, high-quality scientific tools that allow our customers to make extraordinary discoveries and treat and diagnose diseases. We intend to build on Bio-Techne’s past accomplishments, high product quality reputation and sound financial position by executing strategies that position us to serve as the standard for biological content in the research market, and to leverage that leadership position to enter the diagnostics and other adjacent markets. The Company’s strategic pillars for long-term growth and profitability are to grow and leverage the core, capitalize on high potential markets, market expansion through innovation and acquisition, deliver best-in-class customer experience, and develop people through a transformative culture.

Our Protein Sciences segment is a leading developer and manufacturer of high-quality purified proteins and reagent solutions, most notably cytokines and growth factors, antibodies, immunoassays, biologically active small molecule compounds, tissue culture reagents and T-Cell activation technologies. This segment also includes protein analysis solutions that offer researchers efficient and streamlined options for automated western blot and multiplexed ELISA workflow. Our Diagnostics and Spatial Biology segment develops and manufactures diagnostic products, including FDA-regulated controls, calibrators, blood gas and clinical chemistry controls and other reagents for OEM and clinical customers, as well as a portfolio of clinical molecular diagnostic oncology assays, including the ExoDx®Prostate (IntelliScore) test (EPI) for prostate cancer diagnosis. This segment also manufactures and sells advanced tissue-based in-situ hybridization assays (ISH) for research and clinical use.

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RECENT ACQUISITIONS

A key component of the Company's strategy is to augment internal growth at existing businesses with complementary acquisitions. The Company did not make any acquisitions in the first half of fiscal 2025.

RESULTS OF OPERATIONS

Operational Update

Consolidated net sales increased 9% and 7% for the quarter and six months ended December 31, 2024, respectively, compared to the same prior year periods. Organic revenue for the quarter ended December 31, 2024 increased 9% compared to the prior year. Foreign currency exchange and a business held-for-sale did not have a material impact. Organic revenue for the six months ended December 31, 2024 increased 7% compared to the same prior year period. Foreign currency exchange and a business held-for-sale did not have a material impact.

Consolidated net earnings increased to $34.9 million for the quarter ended December 31, 2024 as compared to $27.5 million for the quarter ended December 31, 2023. The increase in net earnings is primarily due to favorable volume leverage and a non-recurring prior year impairment of a business held-for-sale. Consolidated net earnings decreased to $68.5 million for the six months ended December 31, 2024 as compared to $78.5 million for the six months ended December 31, 2023. The decrease in net earnings is primarily due to restructuring and restructuring-related costs.

Net Sales

Consolidated net sales for the quarter ended December 31, 2024 increased 9% at $297.0 million compared to the same prior year period. Consolidated net sales for the six months ended December 31, 2024 were $586.5 million, an increase of 7% from the same prior year period. Organic revenue for the quarter ended December 31, 2024 increased 9% compared to the prior year. Foreign currency exchange and a business held-for-sale did not have a material impact. Organic revenue for the six months ended December 31, 2024 increased 7% compared to the prior year same period. Foreign currency exchange and a business held-for-sale did not have a material impact. Organic revenue for the quarter and six months ended December 31, 2024 was primarily driven by broad based performance of our Diagnostics and Spatial Biology portfolio as well as improving biopharma end market conditions and continued uptake of our cell and gene therapy workflow solutions in our Protein Sciences segment.

Gross Margins

Consolidated gross margins for the quarter and six months ended December 31, 2024 were 65.3% and 64.3%, respectively, compared to 64.8% and 65.8% for the same prior year periods. Under purchase accounting, inventory is valued at fair value less expected selling and marketing costs, resulting in reduced margins in future periods as the inventory is sold. Excluding the impact of costs recognized upon the sale of acquired inventory, amortization of intangibles, stock-based compensation expense, restructuring and restructuring-related expenses, and the impact of a business held-for-sale, adjusted gross margins for the quarter and six months ended December 31, 2024 were 70.5% and 70.0%, respectively, compared to 69.7% and 70.5% for the quarter and six months ended December 31, 2023, respectively. Fluctuations in consolidated gross margin and adjusted gross margin, as a percentage of sales, have primarily resulted from changes in product mix. We expect that, in the future, gross margins will continue to be impacted by the mix of our portfolio growing at different rates as well as future acquisitions.

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A reconciliation of the reported consolidated gross margin percentages, adjusted for acquired inventory sold, intangible amortization, stock compensation expense, restructuring and restructuring-related charges, and the impact of a business held-for-sale included in cost of sales, is as follows (in thousands):


	QUARTER						SIX MONTHS
	ENDED						ENDED
	12/31/2024			12/31/2023			12/31/2024			12/31/2023
Total consolidated net sales	$	297,031		$	272,598		$	586,489		$	549,533
Business held-for-sale¹⁾		1,849			—			4,152			—
Revenue from recurring operations	$	295,182		$	272,598		$	582,337		$	549,533

Gross margin - GAAP	$	193,886		$	176,587		$	376,903		$	361,778
Gross margin percentage - GAAP		65.3	%		64.8	%		64.3	%		65.8	%

Identified adjustments:
Costs recognized upon sale of acquired inventory	$	185		$	183		$	373		$	364
Amortization of intangibles		10,630			11,790			22,410			23,656
Stock-based compensation, inclusive of employer taxes		395			256			667			470
Restructuring and restructuring-related costs		2,691			1,174			7,589			1,174
Impact of business held-for-sale¹⁾		376			—			(182)			—
Adjusted gross margin	$	208,163		$	189,990		$	407,760		$	387,442
Adjusted gross margin percentage²⁾		70.5	%		69.7	%		70.0	%		70.5	%

¹⁾ Since December 31, 2023, the Company has a business that has met the held-for-sale criteria.

²⁾ Adjusted gross margin percentage excludes both $1,849 and $4,152 of revenue and $(376) and $182 of gross margin for the three and six months ended for a business that has met the held-for-sale criteria.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 5% to $121.5 million and increased 9% to $240.6 million for the quarter and six months ended December 31, 2024, respectively, from the same prior year periods. The increase in expense for the quarter and six months ended December 31, 2024 was primarily due to restructuring and restructuring-related charges, and the re-instatement of incentive compensation accruals, partially offset by cost management initiatives.

Research and Development Expenses

Research and development expenses increased 9% to $25.0 million and increased 4% to $48.9 million for the quarter and six months ended December 31, 2024, respectively, from the same prior year periods. The increase in expense was due to timing of strategic growth investments, offset by cost management initiatives.

Segment Results

Protein Sciences


	Quarter Ended						Six Months Ended
	December 31,						December 31,
	2024			2023			2024			2023
Net sales (in thousands)	$	211,551		$	197,670		$	416,086		$	402,325
Operating margin percentage		41.2	%		40.3	%		40.3	%		41.7	%

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Protein Sciences’ net sales for the quarter and six months ended December 31, 2024 were $211.6 million and $416.1 million, respectively, with results increasing 7% and 3%, respectively, compared to the same respective prior year periods. As of December 31, 2023, a business within the Protein Sciences Segment met the criteria as held-for-sale; this held-for-sale business has been excluded from the segment’s fiscal 2025 operating results. The exclusion of fiscal 2025 sales related to this business held-for-sale reduced sales by 1% and 1% for the quarter and six months ended December 31, 2024, respectively. Organic revenue for the segment increased 8% and foreign currency exchange did not have a material impact for the quarter ended December 31, 2024. Organic growth for the segment increased 4% for the six months ended December 31, 2024. Foreign currency exchange did not have a material impact.

The operating margin was 41.2% and 40.3% for the quarter and six months ended December 31, 2024, respectively, compared to 40.3% and 41.7% in both comparative prior year periods. The segment’s operating margin was impacted by volume leverage offset by re-instatement of incentive compensation accruals.

Diagnostics and Spatial Biology (formerly Diagnostics and Genomics)


	Quarter Ended						Six Months Ended
	December 31,						December 31,
	2024			2023			2024			2023
Net sales (in thousands)	$	84,135		$	75,408		$	167,327		$	148,204
Operating margin percentage		3.9	%		6.0	%		4.5	%		3.4	%

Diagnostics and Spatial Biology’s net sales for the quarter and six months ended December 31, 2024 were $84.1 million and $167.3 million, respectively, with increased net sales of 12% and 13% compared to the same respective prior year periods. Organic growth for the segment for the quarter ended December 31, 2024 was 12% from the prior year, with foreign currency exchange not having a material impact. Organic revenue growth for the six months ended December 31, 2024 was 13% compared to the prior year, with foreign currency exchange not having a material impact.

The operating margin for the segment was 3.9% and 4.5% for the quarter and six months ended December 31, 2024, respectively, compared to 6.0% and 3.4% in both comparative prior year periods. The segment’s operating margin was impacted by volume leverage offset by re-instatement of incentive compensation accruals.

Income Taxes

Income taxes were at an effective rate of 18.6% and 17.5% of consolidated earnings for the quarter and six month period ended December 31, 2024, respectively, compared to 17.7% and 5.4% for the same respective prior year periods. The change in the Company’s tax rate for the quarter and six months ended December 31, 2024 was driven by the composition and amount of net income across periods and the impact of discrete tax benefits of $2.2 million and $5.2 million, respectively, compared to prior year discrete tax benefits of $2.8 million and $16.3 million as further discussed in Note 12.

The forecasted tax rate as of the second fiscal quarter of 2025 before discrete items is 23.6% compared to the prior year forecasted tax rate before discrete items of 23.4%. Excluding the impact of discrete items, the Company expects the consolidated income tax rate for the remainder of fiscal 2025 to range from 23% to 27%.

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Net Earnings

Non-GAAP adjusted consolidated net earnings are as follows (in thousands):


	QUARTER						SIX MONTHS
	ENDED						ENDED
	12/31/2024			12/31/2023			12/31/2024			12/31/2023
Net earnings before taxes - GAAP	$	42,876		$	33,387		$	83,047		$	82,945
Identified adjustments:
Costs recognized upon sale of acquired inventory		185			183			373			364
Amortization of intangibles		18,559			19,769			38,300			39,620
Amortization of Wilson Wolf intangible assets and acquired inventory		2,489			4,208			4,979			8,416
Acquisition related expenses and other		2,139			(381)			3,813			(822)
Certain litigation charges		1,386			—			1,678			—
Stock-based compensation, inclusive of employer taxes		15,238			12,958			25,875			24,453
Restructuring and restructuring-related costs		3,287			5,518			14,309			5,607
Investment (gain) loss and other non-operating		—			—			—			(283)
Impairment of assets held-for-sale		—			6,038			—			6,038
Impact of business held-for-sale¹⁾		627			—			479			—
Net earnings before taxes - Adjusted	$	86,786		$	81,680		$	172,853		$	166,338
Non-GAAP tax rate		21.5	%		22.0	%		21.5	%		22.0	%
Non-GAAP tax expense	$	18,659		$	17,964		$	37,195		$	36,579
Non-GAAP adjusted net earnings	$	68,127		$	63,716		$	135,658		$	129,759
Earnings per share - diluted - Adjusted	$	0.42		$	0.40		$	0.84		$	0.81

⁽¹⁾Since December 31, 2023, the Company has a business that has met the held-for-sale criteria.

Depending on the nature of discrete tax items, our reported tax rate may not be consistent on a period-to-period basis. The Company independently calculates a non-GAAP adjusted tax rate considering the impact of discrete items and jurisdictional mix of the identified non-GAAP adjustments. The following table summarizes the reported GAAP tax rate and the effective non-GAAP adjusted tax rate for the quarter and six months ended December 31, 2024 and December 31, 2023.


	QUARTER				SIX MONTHS
	ENDED				ENDED
	12/31/2024		12/31/2023		12/31/2024		12/31/2023
GAAP effective tax rate	18.6	%	17.7	%	17.5	%	5.4	%
Discrete items	5.1		8.3		6.1		18.0
Annual forecast update	(0.1)		(2.6)		—		—
Long-term GAAP tax rate	23.6	%	23.4	%	23.6	%	23.4	%
Rate impact items
Stock based compensation	(2.8)	%	(2.1)	%	(2.9)	%	(2.4)	%
Other	0.7		0.7		0.8		1.0
Total rate impact items	(2.1)	%	(1.4)	%	(2.1)	%	(1.4)	%
Non-GAAP adjusted tax rate	21.5	%	22.0	%	21.5	%	22.0	%

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The difference between the reported GAAP tax rate and non-GAAP tax rate applied to the identified non-GAAP adjustments for the quarter ended December 31, 2024 is primarily a result of discrete tax items, including the tax benefit of stock option exercises.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents and available-for-sale investments were $177.5 million as of December 31, 2024, compared to $152.9 million as of June 30, 2024. Included in the available-for-sale-investments as of June 30, 2024 were certificates of deposit that have maturity dates within one year of $1.1 million. During the first fiscal quarter of 2025, the certificates of deposit reached maturity. The Company had no available-for-sale investments as of December 31, 2024.

The Company has a line-of-credit governed by a Credit Agreement dated August 31, 2022 that will mature on August 31, 2027. As of December 31, 2024, there is $700 million available on the line-of-credit. See Note 6 to the Condensed Consolidated Financial Statements for a description of the Credit Agreement.

During fiscal year 2022, the Company paid $25 million to enter into a two-part forward contract which requires the Company to purchase the full equity interest in Wilson Wolf if certain annual revenue or EBITDA thresholds are met. During fiscal year 2023, Wilson Wolf met the EBITDA target and the Company paid an additional $232 million to acquire 19.9% of Wilson Wolf. Since the first part of the forward contract has been triggered, the second part of the forward contract will automatically trigger, which requires the Company to acquire the remaining 80.1% of Wilson Wolf on December 31, 2027. The second part of the contract would be accelerated in advance of December 31, 2027 if Wilson Wolf meets certain financial milestones. As of December 31, 2024, the second milestones have not been met. The second option payment of approximately $1 billion plus potential contingent consideration is forecasted to occur between fiscal 2026 and fiscal 2028.

Management of the Company expects to be able to meet its cash and working capital requirements for operations, facility expansion, capital additions, and cash dividends for the foreseeable future, and at least the next 12 months, through currently available cash, cash generated from operations, and remaining credit available on its existing revolving line of credit.

Cash Flows From Operating Activities

The Company generated cash of $148.2 million from operating activities in the six months ended December 31, 2024 compared to $142.5 million in the six months ended December 31, 2023. The increase from the prior year was primarily due to favorable timing of payments on certain operating assets and liabilities.

Cash Flows From Investing Activities

We continue to make investments in our business, including capital expenditures.

Capital expenditures for fixed assets for the six months ended December 31, 2024 and December 31, 2023 were $16.0 million and $28.5 million, respectively. Capital expenditures for the remainder of fiscal 2025 are expected to be approximately $20 million. Capital expenditures are expected to be financed through currently available funds and cash generated from operating activities. Expected additions in fiscal 2025 are related to increasing capacity to meet expected sales growth across the Company.

During the six months ended December 31, 2024, the Company invested $15.0 million into Spear Bio. There was no comparable activity in fiscal 2024.

During the first six months of 2025, certificates of deposit reached maturity for $1.1 million. In the first six months of 2024, the Company sold its exchange traded investment grade bond funds for $23.8 million.

The Company received tax distributions of $1.4 million and $2.1 million from its equity method investee during the first quarter of 2025 and 2024, respectively.

During the six months ended December 31, 2024, the Company received $1.8 million for the purchase of assets held-for-sale. As part of the asset sale, the Company entered into a promissory note whereby the remainder of the funds will be received from the buyer in quarterly installments through fiscal 2027. There was no comparable activity in fiscal 2024.

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During the six months ended December 31, 2023, the Company paid $169.7 million to acquire Lunaphore Technologies SA. There was no comparable activity in fiscal 2025.

During the six months ended December 31, 2023, there was a purchase of available-for-sale investments for $5.5 million. There was no comparable activity in fiscal 2025.

Cash Flows From Financing Activities

During the six months ended December 31, 2024 and December 31, 2023, the Company paid cash dividends of $25.4 million and $25.2 million, respectively, to all common shareholders. On February 5, 2025, the Company announced the payment of an $0.08 per share cash dividend, or approximately $12.6 million, will be payable February 28, 2025, to all common shareholders of record on February 17, 2025.

Cash of $30.6 million and $19.7 million was received during the six months ended December 31, 2024 and December 31, 2023, respectively, from the exercise of stock options.

During the six months ended December 31, 2024 and December 31, 2023, the Company made repayments of $19.0 million and $128.0 million, respectively, on its long-term debt balance. The Company drew $225.0 million under its revolving line-of-credit facility during the six months ended December 31, 2023. There was no comparable activity in fiscal 2025.

There were $75.6 million and $80.0 million of share repurchases during the six months ended December 31, 2024 and December 31, 2023, respectively, included as a cash outflow within financing activities.

During the six months ended December 31, 2024 and December 31, 2023, the Company paid $6.0 million and $21.3 million related to taxes on restricted stock units and stock options exercised through net share settlements classified as financing activities.

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CRITICAL ACCOUNTING POLICIES

The Company's significant accounting policies are discussed in the Company's Annual Report on Form 10-K for fiscal 2024 and are incorporated herein by reference. The application of certain of these policies requires judgments and estimates that can affect the results of operations and financial position of the Company. Judgments and estimates are used for, but not limited to, valuation of available-for-sale investments, inventory valuation and allowances, valuation of intangible assets and goodwill and valuation of investments in unconsolidated entities. There have been no significant changes in estimates in the quarter or six months ended December 31, 2024 that would require disclosure nor have there been any changes to the Company's policies.

NON-GAAP FINANCIAL MEASURES

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in Item 2, 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 revenue

●Adjusted gross margin

●Adjusted operating margin

●Adjusted net earnings and diluted earnings per share

●Adjusted effective tax rate

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 revenue represents revenue growth excluding revenue from acquisitions within the preceding 12 months, the impact of foreign currency, the impact of businesses held-for-sale, as well as the impact of partially-owned consolidated subsidiaries. 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. Revenues from businesses held-for-sale are excluded from our organic revenue calculation starting on the date they become held-for-sale as those revenues will not be comparative in future periods. Revenues from partially-owned subsidiaries consolidated in our financial statements are also excluded from our organic revenue calculation, as those revenues are not fully attributable to the Company. There was no revenue from partially-owned consolidated subsidiaries in fiscal year 2024 or fiscal year 2025.

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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 stock-based compensation, which is inclusive of the employer portion of payroll taxes on those stock awards, the costs recognized upon the sale of acquired inventory, amortization of acquisition intangibles, restructuring and restructuring-related costs. Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjection assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations. The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and other non-recurring items including gains or losses on goodwill and long-lived asset impairment charges, 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. Costs related to restructuring and restructuring-related activities, including reducing overhead and consolidating facilities, are excluded because we believe they are not indicative of our normal operating costs. Additionally, these amounts can vary significantly from period to period based on current activity. The Company also excludes revenue and expense attributable to partially-owned consolidated subsidiaries as well as revenue and expense attributable to businesses held-for-sale in the calculation of our non-GAAP financial measures.

The Company’s non-GAAP adjusted operating margin and adjusted net earnings, in total and on a per share basis, also excludes acquisition related expenses inclusive of the changes in fair value of contingent consideration, and other non-recurring items including certain costs related to the transition to a new CEO, goodwill and long-lived asset impairments, and gains. We also exclude certain litigation charges which are facts and circumstances specific including costs to resolve litigation and legal settlement (gains and losses). In some cases, these costs may be a result of litigation matters at acquired companies that were not probable, inestimable, or unresolved at the time of acquisition.

The Company’s non-GAAP adjusted net earnings, in total and on a per share basis, also excludes gain and losses from investments, as they are not part of our day-to-day operating decisions (excluding our equity method investment in Wilson Wolf as it is certain to be acquired in the future) and certain adjustments to income tax expense. Additionally, gains and losses from investments that are either isolated or cannot be expected to occur again with any predictability are excluded. 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.

The Company periodically reassesses the components of our non-GAAP adjustments for changes in how we evaluate our performance, changes in how we make financial and operational decisions, and considers the use of these measures by our competitors and peers to ensure the adjustments are still relevant and meaningful.

Readers are encouraged to review the reconciliations of the adjusted financial measures used in management's discussion and analysis of the financial condition of the Company to their most directly comparable GAAP financial measures provided within the Company's consolidated financial statements.

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FORWARD LOOKING INFORMATION AND CAUTIONARY STATEMENTS

This quarterly report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those regarding the Company's expectations as to the effect of changes to accounting policies, the amount of capital expenditures for the remainder of the fiscal year, the source of funding for capital expenditure requirements, the sufficiency of currently available funds for meeting the Company's needs, the impact of fluctuations in foreign currency exchange rates, and expectations regarding gross margin fluctuations, increasing research and development expenses, increasing selling, general and administrative expenses and income tax rates. These 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: integration of newly acquired businesses, the introduction and acceptance of new products, general national and international economic, political, regulatory, and other conditions, increased competition, the reliance on internal manufacturing and related operations, supply chain challenges, the impact of currency exchange rate fluctuations, the recruitment and retention of qualified personnel, the impact of governmental regulation, maintenance of intellectual property rights, credit risk and fluctuation in the market value of the Company's investment portfolio, and unseen delays and expenses related to facility construction and improvements. For additional information concerning such factors, see the Company's Annual Report on Form 10-K for fiscal 2024 as filed with the Securities and Exchange Commission and Part II. Item 1A below.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s exposure to market risk from changes in interest rates and currency exchange rates has not changed materially from its exposure discussed in the Company’s Annual Report on Form 10-K for the year ended June 30, 2024.

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ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

The Company maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). The Company's management has evaluated, with the participation of its Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered in this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, our disclosure controls and procedures were effective.

(b) Changes in internal controls over financial reporting.

There were no changes in the Company's internal control over financial reporting during the second quarter of fiscal 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of February 6, 2025, the Company is not a party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company's business, results of operations, financial condition or cash flows.

ITEM 1A. RISK FACTORS

During the quarter and six months ended December 31, 2024, there have been no material changes from the risk factors found in Part I, Item 1A, "Risk Factors," of the Company's Annual Report on Form 10-K for the year ended June 30, 2024.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company’s repurchase plan approved by the Board on February 2, 2022, granted management the discretion to mitigate the dilutive effect of stock option exercises. The plan authorizes the Company to purchase up to $400 million in stock. The table below sets forth certain information regarding our purchases of common stock in open market transactions during fiscal year 2025.


Period	Total Number of Shares Purchased		Average Price Paid per Share	Total Number of 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 - July 31, 2024	—	$	—	—	$	180,739,094
August 1 - August 31, 2024	—		—	—		180,739,094
September 1 - September 30, 2024	—		—	—		180,739,094
July 1 - September 30, 2024	—		—	—
October 1 - 31, 2024	—		—	—		180,739,094
November 1 - 30, 2024	1,118,492		67.62	1,118,492		105,110,738
December 1 - 31, 2024	—		—	—		105,110,738
October 1 - December 31, 2024	1,118,492		67.62	1,118,492

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the three months ended December 31, 2024, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in item 408(a) of Regulation S-K.

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ITEM 6. EXHIBITS

EXHIBIT INDEX

FORM 10-Q

BIO-TECHNE CORPORATION


Exhibit Number		Description

3.1		Amended and Restated Articles of Incorporation of the Company--incorporated by reference to Exhibit 3.1 of the Company's 8-K dated November 1, 2022*

3.2		Fourth Amended and Restated Bylaws of the Company--incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K dated April 27, 2022*

4.1		Description of Capital Stock -- incorporated by reference to Exhibit 4.1 of the Company's Form 10-K dated August 22, 2024*

10.1**		Management Incentive Plan--incorporated by reference to Exhibit 10.13 of the Company's Form 10-K for the year ended June 30, 2013*

10.2**		Second Amended and Restated 2010 Equity Incentive Plan--incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K dated October 26, 2017*

10.3**		Form of Time Vesting Restricted Stock Award Agreement for Second Amended and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.3 of the Company's Form 10-K dated August 25, 2021*

10.4**		Form of Performance Vesting Restricted Stock Award Agreement for Second Amended and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.4 of the Company's Form 10-K dated August 25, 2021*

10.5**		Form of Time Vesting Restricted Stock Unit Award Agreement for Second Amended and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.5 of the Company's Form 10-K dated August 25, 2021*

10.6**		Form of Performance Vesting Restricted Stock Unit Award Agreement for Second Amended and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.6 of the Company's Form 10-K dated August 25, 2021*

10.7**		Form of the Time Vesting Performance Unit Award Agreement for Second Amended and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.7 of the Company's Form 10-K dated August 25, 2021*

10.8**		Form of Performance Vesting Performance Unit Award Agreement for Second Amended and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.8 of the Company's Form 10-K dated August 25, 2021*

10.9**		Form of Time Vesting Incentive Stock Option Agreement for Second Amended and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.9 of the Company's Form 10-K dated August 25, 2021*

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10.10**		Form of Performance Vesting Incentive Stock Option Agreement for Second Amended and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.10 of the Company's Form 10-K dated August 25, 2021*

Exhibit Number		Description

10.11**		Form of Employee Non-Qualified Stock Option Agreement for Second Amended and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.11 of the Company's Form 10-K dated August 25, 2021*

10.12**		Form of Director Non-Qualified Stock Option Agreement for Second Amendment and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.2 of the Company's Form 8-K dated October 26, 2017*

10.13**		Employment Agreement by and between the Company and Charles Kummeth - incorporated by reference to Exhibit 10.11 of the Company's Form 10-K dated September 7, 2017*

10.14**		Form of Employment Agreement by and between the Company and Executive Officers of the Company other than the CEO --incorporated by reference to Exhibit 10.12 of the Company's Form 10-K dated September 7, 2017*

10.15**		Form of Amendment No. 1 to Executive Employment Agreement – incorporated by reference to Exhibit 10.15 of the Company’s Form 10-Q dated May 11, 2020*

10.16		Amended and Restated Credit Agreement by and among the Company, the Guarantors party thereto, the Lenders party thereto, and BMO Harris Bank N.A., as Administrative Agent, dated August 31, 2022--incorporated by reference to Exhibit 10.1 of the Company's Form 8-K dated September 7, 2022*

10.17**		Form of Indemnification Agreement entered into with each director and executive officer of the Company - incorporated by reference to Exhibit 10.1 of the Company's Form 10-Q dated February 8, 2018*

10.18**		Bio-Techne 2020 Equity Incentive Plan – incorporated by reference to Exhibit 10.1 of the Company’s Form 8-k dated November 3, 2020*

10.20		Form of Director Non-Qualified Stock Option Agreement – incorporated by reference to Exhibit 10.2 of the Company’s Form 8-k dated November 3, 2020*

10.21**		Form of Employee Non-Qualified Stock Option Agreement (Global) – incorporated by reference to Exhibit 10.3 of the Company’s Form 8-k dated November 3, 2020*

10.22**		Form of Performance Vesting Cash Unit Agreement– incorporated by reference to Exhibit 10.4 of the Company’s Form 8-k dated November 3, 2020*

10.23**		Form of Performance Vesting Incentive Stock Option Agreement– incorporated by reference to Exhibit 10.5 of the Company’s Form 8-k dated November 3, 2020*

10.24**		Form of Performance Vesting Restricted Stock Agreement– incorporated by reference to Exhibit 10.6 of the Company’s Form 8-k dated November 3, 2020*

10.25**		Form of Performance Vesting Restricted Stock Unit Agreement– incorporated by reference to Exhibit 10.7 of the Company’s Form 8-k dated November 3, 2020*

10.26**		Form of Time Vesting Incentive Stock Option Agreement– incorporated by reference to Exhibit 10.8 of the Company’s Form 8-k dated November 3, 2020*

10.27**		Form of Time Vesting Cash Unit Agreement– incorporated by reference to Exhibit 10.9 of the Company’s Form 8-k dated November 3, 2020*

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Exhibit Number		Description

10.28**		Form of Time Vesting Restricted Stock Agreement– incorporated by reference to Exhibit 10.10 of the Company’s Form 8-k dated November 3, 2020*

10.29**		Form of Time Vesting Restricted Stock Unit Agreement (Global) – incorporated by reference to Exhibit 10.11 of the Company’s Form 8-k dated November 3, 2020*
10.30**		Form of Executive Employment Agreement by and between the Company and Kim Kelderman – incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K dated October 19, 2023*
21		Subsidiaries of the Company – incorporated by reference to Exhibit 21 of the Company’s Form 10-K dated August 22, 2024*

31.1		Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter and six months ended December 31, 2024, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Earnings and Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) Notes to the Condensed Consolidated Financial Statements.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Incorporated by reference; SEC File No. 000-17272

** Management contract or compensatory plan or arrangement

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		BIO-TECHNE CORPORATION
		(Company)

Date: February 6, 2025		/s/ Kim Kelderman
		Kim Kelderman
		President and Chief Executive Officer

Date: February 6, 2025		/s/ James Hippel
		James Hippel
		Executive Vice President, Chief Financial Officer