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

The interim consolidated financial statements of Bio-Techne Corporation (formerly 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, 2014, included in the Company’s Annual Report on Form 10-K for fiscal 2014. A summary of significant accounting policies followed by the Company is detailed in the Company’s Annual Report on Form 10-K for fiscal 2014. The Company follows these policies in preparation of the interim unaudited condensed consolidated financial statements.

Available-For-Sale Investments:

The Company’s available-for-sale securities are carried at fair value using Level 1 and Level 2 inputs. The fair value of the Company’s available-for-sale investments at September 30, 2014 and June 30, 2014 were $36.1 million and $48.4 million, respectively. The decrease was primarily due to the change in the fair value of the Company’s investment in ChemoCentryx, Inc. (CCXI). The amortized cost basis of the Company’s available-for-sale investments at September 30, 2014 and June 30, 2014 were $37.1 million and $40.7 million, respectively.

Included in the Company’s available-for-sale securities is an investment in the common stock and warrants of CCXI. The fair value of the Company’s investment was $28.5 million and $37.1 million at September 30, 2014 and June 30, 2014, respectively. The cost basis of the Company’s investment in CCXI was $29.5 million at both September 30, 2014 and June 30, 2014.

Inventories:

Inventories consist of (in thousands):

 

		September 30,				June 30,
		2014				2014
Raw materials		$	15,346			$	9,852
Finished goods			36,849				28,995
Inventories, net		$	52,195			$	38,847

At both September 30, 2014 and June 30, 2014, the Company had approximately $30 million of excess protein, antibody and chemically-based inventory on hand which was not valued.

 

Property and Equipment:

Property and equipment consist of (in thousands):

 

		September 30,				June 30,
		2014				2014
Land		$	7,405			$	7,468
Buildings and improvements			153,728				149,442
Machinery and equipment			55,898				53,067
Property and equipment, cost			217,031				209,977
Accumulated depreciation and amortization			(95,025	)			(92,857	)
Property and equipment, net		$	122,006			$	117,120

Intangible Assets:

Intangible assets consist of (in thousands):

 

		September 30				June 30,
		2014				2014
Developed technology		$	93,109			$	48,166
Trade names			65,995				24,280
Customer relationships			176,262				59,240
Non-compete agreements			3,309				3,109
Intangible assets			338,675				134,795
Accumulated amortization			(31,167	)			(26,019	)
Intangible assets, net		$	307,508			$	108,776

Changes to the carrying amount of net intangible assets for the quarter ended September 30, 2014 consist of (in thousands):

 

Beginning balance		$	108,776
Acquisitions			205,810
Amortization expense			(5,726	)
Currency translation			(1,352	)
Ending balance		$	307,508

The estimated future amortization expense for intangible assets as of September 30, 2014 is as follows (in thousands):

 

Period Ending June 30:
2015		$	20,380
2016			27,153
2017			26,326
2018			26,129
2019			25,515
Thereafter			182,005
		$	307,508

 

Goodwill:

Changes to the carrying amount of goodwill for the quarter ended September 30, 2014 consist of (in thousands):

 

Beginning balance		$	151,473
Acquisitions			156,200
Currency translation			(2,439	)
Ending balance		$	305,234