BIO-TECHNE Corp 10-Q for FY2026 Q1
BIO-TECHNE Corp (TECH)
About this 10-Q
BIO-TECHNE Corp filed this 10-Q on November 5, 2025, covering the quarter ended September 30, 2025 (FY2026 Q1).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $286.56M
- down 1.0% from $289.46M a year earlier
- Net income
- $38.19M
- up 13.6% from net income of $33.6M a year earlier
- Diluted EPS
- $0.24
- up 14.3% from $0.21 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
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(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 |
The |
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.
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).
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.
☒ | Accelerated filer | ☐ | |
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Non-accelerated filer | ☐ | Smaller reporting company | |
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| 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).
At October 30, 2025,
TABLE OF CONTENTS
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| Condensed Consolidated Statements of Earnings and Comprehensive Income | 1 |
| 2 | |
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| 4 | |
| 5 | |
| Note 1. Basis of Presentation and Summary of Significant Accounting Policies | 5 |
| 6 | |
| 8 | |
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| 12 | |
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| Note 7. Supplemental Equity and Accumulated Other Comprehensive Income (Loss) | 14 |
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Management's Discussion and Analysis of Financial Condition and Results of Operations | 21 | |
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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 | ||||
| | September 30, | ||||
| | 2025 | | 2024 | ||
Net sales | | $ | | | $ | |
Cost of sales | |
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Gross margin | |
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Operating expenses: | |
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Selling, general and administrative | |
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Research and development | |
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Total operating expenses | |
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Operating income | |
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Other income (expense) | |
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Earnings before income taxes | |
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Income taxes | |
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Net earnings | | $ | | | $ | |
Other comprehensive income (loss): | |
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Foreign currency translation income (loss) | |
| ( | |
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Unrealized gains (losses) on derivative instruments | |
| ( | |
| ( |
Other comprehensive income (loss) | |
| ( | |
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Comprehensive income | | $ | | | $ | |
| | | | | | |
Earnings per share: | |
| | | | |
Basic | | $ | | | $ | |
Diluted | | $ | | | $ | |
| | | | | | |
Weighted average common shares outstanding: | |
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Basic | |
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Diluted | |
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See Notes to Condensed Consolidated Financial Statements.
1
CONDENSED CONSOLIDATED BALANCE SHEETS
Bio-Techne Corporation and Subsidiaries
(in thousands, except share and per share data)
|
| September 30, | | | | |
| | 2025 | | June 30, | ||
| | (unaudited) | | 2025 | ||
ASSETS |
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Current assets: |
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Cash and cash equivalents | | $ | | | $ | |
Accounts receivable, less allowances of $ | |
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Inventories | |
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Current assets held-for-sale | | | — | | | |
Other current assets | | | | |
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Total current assets | |
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Property and equipment, net | |
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Right-of-use assets | |
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Goodwill | |
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Intangible assets, net | |
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Other assets | |
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Total assets | | $ | | | $ | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |
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Current liabilities: | |
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Trade accounts payable | | $ | | | $ | |
Salaries, wages and related accruals | |
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Accrued expenses | |
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Contract liabilities | |
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Income taxes payable | |
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Operating lease liabilities - current | |
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Other current liabilities | |
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Total current liabilities | |
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Deferred income taxes | |
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Long-term debt obligations | |
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Operating lease liabilities | |
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Other long-term liabilities | |
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Shareholders’ equity: | | | | | | |
Undesignated capital stock, | |
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Common stock, par value $ | |
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Additional paid-in capital | |
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Retained earnings | |
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Accumulated other comprehensive loss | |
| ( | |
| ( |
Total shareholders’ equity | |
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Total liabilities and shareholders’ equity | | $ | | | $ | |
See Notes to Condensed Consolidated Financial Statements.
2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Bio-Techne Corporation and Subsidiaries
(in thousands)
(unaudited)
|
| Quarter Ended | ||||
| | September 30, | ||||
| | 2025 | | 2024 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net earnings | | $ | | | $ | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |
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Depreciation and amortization | |
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Deferred income taxes | |
| | |
| ( |
Stock-based compensation expense | |
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(Gain) Loss on equity method investment | | | ( | | | ( |
(Gain) Loss on investments | | | ( | | | — |
Asset impairment restructuring | | | — | | | |
Leases, net | |
| ( | |
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Recovery of assets held-for-sale | | | ( | | | — |
Other operating activity | |
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Change in operating assets and operating liabilities, net of acquisition: | |
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Trade accounts and other receivables, net | |
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Inventories | |
| ( | |
| ( |
Prepaid expenses | |
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| ( |
Trade accounts payable, accrued expenses, contract liabilities, and other | |
| ( | |
| ( |
Salaries, wages and related accruals | |
| ( | |
| ( |
Income taxes payable | |
| ( | |
| ( |
Net cash provided by (used in) operating activities | |
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CASH FLOWS FROM INVESTING ACTIVITIES: | |
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Proceeds from sale of available-for-sale investments | |
| — | |
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Additions to property and equipment | |
| ( | |
| ( |
Distributions from Wilson Wolf | | | | | | |
Investment in Spear Bio | | | — | | | ( |
Proceeds from sale of assets held-for-sale | | | | | | — |
Net cash provided by (used in) investing activities | |
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| ( |
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CASH FLOWS FROM FINANCING ACTIVITIES: | |
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Cash dividends | |
| ( | |
| ( |
Proceeds from stock option exercises | |
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Repurchases of common stock | |
| ( | |
| — |
Repayments of long-term debt | |
| ( | |
| ( |
Taxes paid on RSUs and net share settlements | | | ( | | | ( |
Net cash provided by (used in) financing activities | |
| ( | |
| ( |
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Effect of exchange rate changes on cash and cash equivalents | |
| ( | |
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Net change in cash and cash equivalents | |
| ( | |
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Cash and cash equivalents at beginning of period | |
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Cash and cash equivalents at end of period | | $ | | | $ | |
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Supplemental disclosure of cash flow information: | | | | | | |
Cash paid for income taxes | | $ | | | $ | |
Cash paid for interest | | $ | | | $ | |
See Notes to Condensed Consolidated Financial Statements.
3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Bio-Techne Corporation and Subsidiaries
(in thousands)
(unaudited)
| | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | Additional | | | | | Other | | | | ||
| | Common Stock | | Paid-in | | Retained | | Comprehensive | | | |||||||
Three months ended September 30, 2025 | | Shares | | Amount | | Capital | | Earnings | | Loss | | Total | |||||
Balances at June 30, 2025 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | |
Net earnings |
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Other comprehensive income |
| | | | | |
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| ( | |
| ( |
Share repurchases |
| ( | | | |
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| ( | |
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| ( | |
Common stock issued for exercise of options |
| | | | | | | | | | ( | |
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Common stock issued for restricted stock awards |
| | | | | | ( | | | ( | |
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| ( | |
Cash dividends ($ |
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| ( |
Stock-based compensation expense |
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Common stock issued to employee stock purchase plan |
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Employee stock purchase plan expense | | | | | | | | ( | | | | | | | | | ( |
Balances at September 30, 2025 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | | Accumulated | | | | |
| | | | | | | Additional | | | | | Other | | | | ||
| | Common Stock | | Paid-in | | Retained | | Comprehensive | | | |||||||
Three months ended September 30, 2024 | | Shares | | Amount | | Capital | | Earnings | | Loss | | Total | |||||
Balances at June 30, 2024 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | |
Net earnings |
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Other comprehensive income |
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Common stock issued for exercise of options |
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| ( | |
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Common stock issued for restricted stock awards |
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| ( | |
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| ( | ||
Cash dividends ($ |
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| ( | |
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| ( |
Stock-based compensation expense |
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Common stock issued to employee stock purchase plan |
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Employee stock purchase plan expense | | | | | | | | | | | | | | | | | |
Balances at September 30, 2024 |
| | | $ | | | $ | | | $ | | | $ | ( | | $ | |
See Notes to the Condensed Consolidated Financial Statements.
4
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 Condensed 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 U.S. (GAAP) 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 GAAP 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, 2025, included in the Company's Annual Report on Form 10-K for fiscal 2025. A summary of significant accounting policies followed by the Company is detailed in the Company's Annual Report on Form 10-K for fiscal 2025. The Company follows these policies in preparation of the interim unaudited Condensed Consolidated Financial Statements.
Investments: In September 2025, the Company received MDxHealth SA (“MDxHealth”) stock as part of our divestiture of Exosome Diagnostics. The fair value of the stock was $
In July 2024, the Company paid $
In December 2021, the Company paid $
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 equity interest in Wilson Wolf on December 31, 2027 based on a revenue multiple of approximately
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. There have been no material changes since the filing of the Company's Annual Report on Form 10-K for fiscal 2025.
5
In August 2024,
Litigation charges were immaterial during the quarters ended September 30, 2025 and 2024. 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 Condensed Consolidated Balance Sheets. While it is not possible to predict the outcome for most of the legal matters discussed below, 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.
Recently Adopted Accounting Pronouncements
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 adopted this guidance beginning with our annual report for fiscal 2025 and interim periods thereafter on a retrospective basis.
Relevant New Standards Issued Not Yet Adopted
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 with our annual report for fiscal 2027. This accounting standard will increase disclosures in the Company’s annual reporting but will have no impact on reported income statement expenses.
In August 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326), which requires incremental disclosures on estimating expected credit losses. The Company will adopt this guidance beginning with our annual report for fiscal 2027. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), which requires incremental disclosures on recording intangibles for internal-use software. The Company will adopt this guidance beginning with our annual report for fiscal 2029. 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.
6
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 September 30, 2025 and June 30, 2025.
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.
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 Condensed Consolidated Balance Sheets 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 September 30, 2025 and June 30, 2025 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 September 30, 2025 and June 30, 2025 were approximately $
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 | ||||
| | September 30, | ||||
|
| 2025 |
| 2024 | ||
Consumables | | $ | | | $ | |
Instruments | |
| | |
| |
Services | |
| | |
| |
Total product and services revenue, net | | $ | | | $ | |
Royalty revenues | |
| | |
| |
Total revenues, net | | $ | | | $ | |
7
Revenue by geography is as follows (in thousands):
|
| Quarter Ended | | ||||
| | September 30, | | ||||
|
| 2025 |
| 2024 | | ||
United States | | $ | | | $ | | |
EMEA, excluding United Kingdom | |
| | |
| | |
United Kingdom | |
| | |
| | |
APAC, excluding Greater China | |
| | |
| | |
Greater China | |
| | |
| | |
Rest of World | |
| | |
| | |
Net sales | | $ | | | $ | | |
Note 3. Selected Balance Sheet Data:
Inventories:
Inventories consist of (in thousands):
|
| September 30, | | June 30, | | ||
|
| 2025 |
| 2025 | | ||
Raw materials | | $ | | | $ | | |
Finished goods(1) | |
| | |
| | |
Inventories | | $ | | | $ | | |
| (1) | Finished goods inventory of $ |
Property and Equipment:
Property and equipment consist of (in thousands):
|
| September 30, | | June 30, | | ||
|
| 2025 |
| 2025 | | ||
Land | | $ | | | $ | | |
Buildings and improvements | |
| | |
| | |
Machinery and equipment | | | | | | | |
Construction in progress | |
| | |
| | |
Property and equipment, cost | |
| | |
| | |
Accumulated depreciation and amortization | |
| ( | |
| ( | |
Property and equipment, net | | $ | | | $ | | |
Intangible Assets:
Intangible assets consist of (in thousands):
| September 30, | | June 30, | | ||
| 2025 | | 2025 | | ||
Developed technology | $ | | | $ | | |
Tradenames |
| | |
| | |
Customer relationships |
| | |
| | |
Patents |
| | |
| | |
Other intangibles |
| | |
| | |
Definite-lived intangible assets |
| | |
| | |
Accumulated amortization |
| ( | |
| ( | |
Total intangible assets, net | $ | | | $ | | |
8
Changes to the carrying amount of net intangible assets for the period ended September 30, 2025 consist of (in thousands):
|
| September 30, | |
| | 2025 | |
Beginning balance | | $ | |
Other additions | |
| |
Amortization expense | |
| ( |
Currency translation | | | ( |
Ending balance | | $ | |
The estimated future amortization expense for intangible assets as of September 30, 2025 is as follows (in thousands):
Remainder 2026 |
| $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | |
| |
Thereafter | |
| |
Total | | $ | |
Goodwill:
Changes to the carrying amount of goodwill for the period ended September 30, 2025 consist of (in thousands):
|
| |
| Diagnostics and |
| | |||
| | Protein Sciences | | Spatial Biology | | Total | |||
June 30, 2025 | | $ | | | $ | | | $ | |
Currency translation | |
| ( | | | ( | | | ( |
September 30, 2025 | | $ | | | $ | | | $ | |
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 quantitative goodwill impairment assessment for all of its reporting units during the fourth quarter of fiscal 2025. No indicators of impairment were identified as part of our assessment.
Other assets:
Other assets consist of (in thousands):
|
| September 30, | | June 30, | ||
|
| 2025 | | 2025 | ||
Equity method investment in Wilson Wolf | | $ | | | $ | |
Long-term inventory | | | | | | |
Investment in Spear Bio | | | | | | |
Investment in MDxHealth(1) | | | | | | — |
Notes receivable(1) | | | | | | |
Other | |
| | |
| |
Other assets | | $ | | | $ | |
| (1) | Amounts relate to the completed divestitures of the Company’s held-for-sale assets. |
9
Note 4. Fair Value Measurements:
The Company’s financial instruments include cash and cash equivalents, available for sale investments, derivative instruments, accounts receivable, notes receivable, accounts payable, 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.
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 | | September 30, | | Inputs Considered as | ||||||||
| | | 2025 | | Level 1 | | Level 2 | | Level 3 | ||||
Assets | |
| |
|
| |
|
| |
|
| |
|
Exchange traded securities(1) | Other assets | | $ | | | $ | | | $ | — | | $ | — |
Derivatives designated as hedging instruments - cash flow hedges | Other current assets | | | | | | — | | | | | | — |
Notes receivable(2) | Other current assets | | | | | | — | | | — | | | |
Notes receivable(2) | Other assets | |
| | |
| — | |
| — | |
| |
Total assets | | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | |
Liabilities | | |
|
| |
|
| |
|
| |
|
|
Derivatives designated as hedging instruments - net investment hedge | Other long-term liabilities | | $ | | | $ | — | | $ | | | $ | — |
Total liabilities | | | $ | | | $ | — | | $ | | | $ | — |
10
| |
| Total |
| | | | | | | | | |
| | | carrying | | | | | | | | | | |
| | | value as of | | Fair Value Measurements Using | ||||||||
| Balance Sheet Location | | June 30, | | Inputs Considered as | ||||||||
| |
| 2025 |
| Level 1 |
| Level 2 |
| Level 3 | ||||
Assets | |
| |
|
| |
|
| |
|
| |
|
Derivatives designated as hedging instruments - cash flow hedges | Other current assets | | $ | | | $ | — | | $ | | | $ | — |
Note receivable(1) | Other current assets | | | | | | — | | | — | | | |
Note receivable(1) | Other assets | | | | | | — | | | — | | | |
Total assets | | | $ | | | $ | — | | $ | | | $ | |
| | | | | | | | | | | | | |
Liabilities | | |
|
| |
|
| |
|
| |
|
|
Derivatives designated as hedging instruments - net investment hedge | Other long-term liabilities | | $ | | | $ | — | | $ | | | $ | — |
Total liabilities | | | $ | | | $ | — | | $ | | | $ | — |
| (1) | Note receivable relates to the divestiture of our business held-for-sale. |
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):
| | |
| September 30, | | June 30, | ||
Instruments | | Designation |
| 2025 | | 2025 | ||
Forward starting swaps(1) | | Cash flow hedge | | $ | | | $ | |
Cross-currency swap(2) | | Net investment hedge | | | | | | |
(1) | In May 2021, the Company entered into a forward starting swap designated as a cash flow hedge on forecasted debt based on $ |
(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 $ |
The pretax amount of the gains and losses on our hedging instruments and the classification of those gains and losses within our Condensed Consolidated Financial Statements for the quarters ended September 30, 2025 and 2024 were as follows (in thousands):
| | | (Gain) Loss Recognized in Accumulated Other Comprehensive Loss | ||||
|
| | Quarter Ended | ||||
| | | September 30, | ||||
|
| | 2025 |
| 2024 | ||
Cash flow hedges | | | | | | | |
Forward starting swaps | | | $ | |
| $ | |
Net investment hedges | | | | | | | |
Cross-currency swap | | | | ( |
| | |
Total | | | $ | | | $ | |
11
| | | (Gain) Loss Reclassified into Income | | | | | | | ||||
|
| | Quarter Ended | | | | | | | ||||
| | | September 30, | | Income Statement | ||||||||
|
| | 2025 |
| 2024 | | Classification | ||||||
Cash flow hedges | | | | | | | | | | | | | |
Forward starting swaps | | | $ | ( |
| $ | ( | | Interest expense | ||||
Net investment hedges | | | | | | | | | | | | | |
Cross-currency swap | | | | ( |
| | ( | | Interest expense | ||||
Total | | | $ | ( | | $ | ( | | | | | | |
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 7, 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 7.
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 Condensed Consolidated Balance Sheets approximate fair value because of the short-term nature of these items.
Long-term debt – The carrying amounts reported in the Condensed 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 5. Debt and Other Financing Arrangements:
On August 31, 2022, the Company entered into a revolving line-of-credit and term loan governed by a Credit Agreement (the Credit Agreement). The Credit Agreement provides for a revolving credit facility of $
The Credit Agreement matures on August 31, 2027 and contains customary restrictive and financial covenants and customary events of default. As of September 30, 2025 and June 30, 2025, the outstanding balance under the Credit Agreement was $
Note 6. Leases:
As a lessee, the Company leases offices, labs, and manufacturing facilities, as well as vehicles, copiers, and other equipment. The Company determines whether a contract is a lease or contains a lease at inception date. Upon commencement date, operating lease right-of-use assets and liabilities are recognized based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the Company’s incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region. The Company recognizes operating lease expense on a straight-line basis over the lease term. Further, as part of our adoption of ASC 842, the Company also made the accounting policy elections to not capitalize short term leases (defined as a lease with a lease term that is less than 12 months) and to combine lease and non-lease components for all asset classes in determining the lease payments.
12
The Condensed Consolidated Financial Statements include the following amounts related to operating leases where the Company is the lessee ($ in thousands):
| | Quarter Ended | | ||||||
| | September, 30 | | ||||||
| | | | 2025 | | | 2024 | | |
Condensed Consolidated Statements of Earnings | | | | | | | | | |
Fixed operating lease expense | | | $ | | | $ | | | |
Variable operating lease expense | | | | | | | | | |
Total operating lease expense | | | $ | | | $ | | | |
| | | | | | | | | |
Condensed Consolidated Statements of Cash Flows | | | | | | | | | |
Cash paid for amounts included in the measurement of operating lease liabilities | | | $ | | | $ | | | |
ROU assets obtained in exchange for operating lease obligations | | | | | | | | | |
| | | | | | | | | |
| | As of | | ||||||
Condensed Consolidated Balance Sheets | | | September 30, | | June 30, | | | ||
Lease Assets and Liabilities | Balance Sheet Classification | | 2025 | | 2025 | | | ||
Operating lease ROU assets | Right-of-use asset | | $ | | | $ | | | |
| | | | | | | | | |
Operating lease liabilities - current | Operating lease liabilities - current | | $ | | | $ | | | |
Operating lease liabilities - long-term | Operating lease liabilities | | | | | | | | |
Total operating lease liabilities | | | $ | | | $ | | | |
| | | | | | | | | |
Weighted average remaining lease term: | | | | | | | | ||
Weighted average discount rate: | | | | | % | | | % | |
The following table summarizes payments by date for the Company’s operating leases, which is then reconciled to our total lease obligation (in thousands):
|
| | |
| | September 30, | |
| | 2025 | |
Remaining 2026 | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
2030 | |
| |
Thereafter | |
| |
Total | | $ | |
Less: Amounts representing interest | |
| |
Total lease obligations | | $ | |
Certain leases include one or more options to renew, with terms that extend the lease term up to
13
Note 7. Supplemental Equity and Accumulated Other Comprehensive Income (Loss):
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 (in thousands):
Quarter ended September 30, 2025 (in thousands): | | Unrealized | | | | | | | |
| | Gains | | Foreign | | | | ||
| | (Losses) on | | Currency | | | | ||
| | Derivative | | Translation | | | | ||
|
| Instruments |
| Adjustments |
| Total | |||
Balance as of June 30, 2025, net of tax: | | $ | | | $ | ( | | $ | ( |
Other comprehensive income (loss), before tax: | | | | | | | | | |
Amounts before reclassifications | | | ( | | | ( | | | ( |
Amounts reclassified out | | | | | | | | | |
Total other comprehensive income (loss), before tax | | | ( | | | ( | | | ( |
Tax (expense)/benefit | | | ( | | | ( | | | ( |
Total other comprehensive income (loss), net of tax | |
| ( | | | ( | | | ( |
Balance as of September 30, 2025, net of tax(1) | | $ | | | $ | ( | | $ | ( |
| (1) | The Company had a net deferred tax liability for its cash flow hedges of $ |
Quarter ended September 30, 2024 (in thousands): | | Unrealized | | | | | | | |
| | Gains | | Foreign | | | | ||
| | (Losses) on | | Currency | | | | ||
| | Derivative | | Translation | | | | ||
|
| Instruments |
| Adjustments |
| Total | |||
Balance as of June 30, 2024, net of tax: | | $ | | | $ | ( | | $ | ( |
Other comprehensive income (loss), before tax: | | | | | | | | | |
Amounts before reclassifications | | | ( | | | | | | |
Amounts reclassified out | | | | | | | | | |
Total other comprehensive income (loss), before tax | | | ( | | | | | | |
Tax (expense)/benefit | | | ( | | | ( | | | ( |
Total other comprehensive income (loss), net of tax | |
| ( | | | | | | |
Balance as of September 30, 2024, net of tax(1) | | $ | | | $ | ( | | $ | ( |
| (1) | The Company had a net deferred tax liability for its cash flow hedges of $ |
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.
14
Note 8. Earnings Per Share:
The following table reflects the calculation of basic and diluted earnings per share (in thousands, except per share amounts):
|
| Quarter Ended | | ||||
| | September 30, | | ||||
|
| 2025 |
| 2024 | | ||
Earnings per share – basic: | | | | | | | |
Net earnings | | $ | |
| $ | | |
Income allocated to participating securities | |
| ( | |
| ( | |
Income available to common shareholders | | $ | | | $ | | |
Weighted-average shares outstanding – basic | |
| | |
| | |
Earnings per share – basic | | $ | | | $ | | |
| | | | | | | |
Earnings per share – diluted: | |
|
| |
|
| |
Net earnings | | $ | | | $ | | |
Income allocated to participating securities | |
| ( | |
| ( | |
Income available to common shareholders | | $ | | | $ | | |
Weighted-average shares outstanding – basic | |
| | |
| | |
Dilutive effect of stock options and restricted stock units | |
| | |
| | |
Weighted-average common shares outstanding – diluted | |
| | |
| | |
Earnings per share – diluted | | $ | | | $ | | |
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
Note 9. Share-based Compensation:
During the quarters ended September 30, 2025 and 2024, the Company granted
Stock options for
Stock-based compensation expense, inclusive of payroll taxes, of $
15
Note 10. Other Income / (Expense):
The components of Other income (expense) in the accompanying Condensed Consolidated Statement of Earnings and Comprehensive Income are as follows (in thousands):
| | Quarter Ended | |
| ||||
| | September 30, | | | ||||
|
| 2025 |
| 2024 | |
| ||
Interest expense | | $ | ( | | $ | ( | | |
Interest income | | | | | | | | |
Gain (loss) on equity method investment | | | | | | | | |
Other non-operating income (expense), net | |
| | |
| | | |
Total other income (expense) | | $ | | | $ | | | |
Note 11. Income Taxes:
The Company’s effective income tax rate for the first quarter of fiscal 2026 and 2025 was
The Company recognized total net benefits related to discrete tax items of $
Note 12. Segment Information:
The Company's management evaluates segment operating performance based on
16
The following is financial information relating to the Company's reportable segments (in thousands):
For the Quarter Ended September 30, 2025 | ||||||||
| | Protein Sciences | | | Diagnostics and Spatial Biology | | | Total |
Net sales | $ | | | $ | | | $ | |
Other revenue(1) | | | | | | | | |
Intersegment | | | | | | | | ( |
Consolidated net sales | | | | | | | $ | |
Segment operating income | | | | | | | | |
Cost of sales | | | | | | | | |
Selling, general and administrative | | | | | | | | |
Research and development | | | | | | | | |
Segment operating income | $ | | | $ | | | $ | |
Unallocated amounts | | | | | | | | |
Amortization of intangibles | | | | | | | | ( |
Acquisition related expenses and other | | | | | | | | ( |
Certain litigation charges | | | | | | | | ( |
Stock based compensation, inclusive of employer taxes | | | | | | | | ( |
Restructuring and restructuring-related costs | | | | | | | | ( |
Recovery of assets held-for-sale | | | | | | | | |
Corporate general, selling, and administrative expenses | | | | | | | | ( |
Impact of business held-for-sale(1) | | | | | | | | ( |
Consolidated operating income | | | | | | | $ | |
For the Quarter Ended September 30, 2024 | ||||||||
| | Protein Sciences | | | Diagnostics and Spatial Biology | | | Total |
Net sales | $ | | | $ | | | $ | |
Other revenue(1) | | | | | | | | |
Intersegment | | | | | | | | ( |
Consolidated net sales | | | | | | | $ | |
Segment operating income | | | | | | | | |
Cost of sales | | | | | | | | |
Selling, general and administrative | | | | | | | | |
Research and development | | | | | | | | |
Segment operating income | $ | | | $ | | | $ | |
Unallocated amounts | | | | | | | | |
Amortization of intangibles | | | | | | | | ( |
Acquisition related expenses and other | | | | | | | | ( |
Certain litigation charges | | | | | | | | ( |
Stock based compensation, inclusive of employer taxes | | | | | | | | ( |
Restructuring and restructuring-related costs | | | | | | | | ( |
Corporate general, selling, and administrative expenses | | | | | | | | ( |
Impact of business held-for-sale(1) | | | | | | | | |
Consolidated operating income | | | | | | | $ | |
(1)Includes the quarterly results of a business that has met the held-for-sale criteria as of December 31, 2023.
17
Note 13. Restructuring:
Fiscal 2025 Restructuring Actions:
During the fourth quarter of fiscal 2025, management engaged in a series of restructuring activities to optimize components of our global manufacturing processes. These activities included adjusting manufacturing locations and protocols of certain products to better align with geographical and customer demand. The Company is expecting to incur costs related to these actions through fiscal 2027, which will be recorded when specified criteria are met.
As part of these actions, certain assets and liabilities associated with the Exosome Diagnostics business were classified as held-for-sale, including $
The restructuring and restructuring-related charges for periods presented were recorded in the Condensed Consolidated Statements of Earnings and Comprehensive Income as follows (in thousands):
| | Quarter Ended | |
| | September 30, | |
| | 2025 | |
Cost of sales | | $ | |
Selling, general and administrative(1) | | | ( |
Total | | $ | |
(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):
| | Quarter ended September 30, 2025 | ||||||||||
| | | Employee | | | Asset-related | | | Recovery | | | |
| | | severance | | | and other | | | of assets held-for-sale | | | Total |
Protein Sciences | | $ | | | $ | | | $ | — | | $ | |
Diagnostics and Spatial Biology | | | | | | — | | | ( | | | ( |
Corporate | | | | | | — | | | — | | | |
Total | | $ | | | $ | | | $ | ( | | $ | |
18
The following table summarizes the changes in the Company’s accrued restructuring balance, which is included within Accrued expenses in the accompanying Condensed Consolidated Balance Sheets.
| | | | | | | | | Impairment (Recovery) | | | |
| | Employee | | Asset | | | of assets | | | |||
|
| severance(1) |
| impairment and other(2) | | | held-for-sale |
| Total | |||
Expense incurred in the fourth quarter of 2025 | | $ | | | $ | | | $ | | | $ | |
Cash payments | | | — | | | — | | | — | | | — |
Non-cash adjustments | | | — | | | ( | | | ( | | | ( |
Accrued restructuring actions balance as of June 30, 2025 | | $ | | | $ | | | $ | — | | $ | |
Expense incurred in the first quarter of 2026 | | $ | | | $ | | | $ | ( | | $ | |
Cash payments | | | ( | | | ( | | | — | | | ( |
Non-cash adjustments | | | — | | | — | | | | | | |
Accrued restructuring actions balance as of September 30, 2025 | | $ | | | $ | — | | $ | — | | $ | |
(1)Relates to impacted employees’ final paycheck, separation payments, outplacement services, legal fees, and retention packages.
(2)Primarily relates to impairment of inventory and equipment.
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.
| | Quarter Ended | | Quarter Ended | ||
| | September 30, | | September 30, | ||
| | 2025 | | 2024 | ||
| $ | | | $ | | |
Selling, general and administrative(1) | | | — | | | |
Total | | $ | | | $ | |
(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 September 30, | ||||||||||||||||
| | 2025 | | 2024 | ||||||||||||||
| | | Employee | | | Asset-related | | | | | | Employee | | | Asset-related | | | |
| | | severance | | | and other | | | Total | | | severance | | | and other | | | Total |
Protein Sciences | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Diagnostics and Spatial Biology | | | — | | | — | | | — | | | | | | — | | | |
Corporate | | | — | | | — | | | — | | | | | | — | | | |
Total | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
19
The following table summarizes the changes in the Company’s accrued restructuring balance, which is included within Other current liabilities in the accompanying Condensed Consolidated Balance Sheets.
| | Employee | | Asset | | | |||
|
| severance(1) |
| impairment and other(2) |
| Total | |||
Expense incurred in the first quarter of 2025 | | $ | | | $ | | | $ | |
Incremental expense incurred in remainder of 2025 | | | | | | | | | |
Cash payments | | | ( | | | ( | | | ( |
Non-cash adjustments | | $ | — | | $ | ( | | $ | ( |
Accrued restructuring actions balance as of June 30, 2025 | | $ | | | $ | — | | $ | |
Incremental expense incurred in the first quarter of 2026 | | | | | | | | | |
Cash payments | | | ( | | | ( | | | ( |
Accrued restructuring actions balance as of September 30, 2025 | | $ | | | $ | — | | $ | |
(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. |
Note 14. Subsequent Events:
None.
20
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 MD&A of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended June 30, 2025. 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. With our deep product portfolio and application expertise, we 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 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. This segment also manufactures and sells advanced tissue-based in-situ hybridization assays (ISH) for research and clinical use.
RESULTS OF OPERATIONS
Net Sales
Consolidated net sales for the quarter ended September 30, 2025 were $286.6 million, a decrease of 1% compared to the same prior year period. Organic revenue for the quarter ended September 30, 2025 decreased 1% compared to the prior year, with foreign currency exchange having a favorable impact of 1% and businesses held-for-sale having an unfavorable impact of 1%. Organic revenue for the quarter ended September 30, 2025 was primarily driven by favorable performance by our Diagnostics and Spatial Biology portfolio offset by volume pressure in our Protein Sciences segment.
Gross Margins
Consolidated gross margin for the quarter ended September 30, 2025 was 65.6% compared to 63.2% for the same prior year period. Excluding the impact of costs recognized upon the sale of acquired inventory, amortization of intangibles, stock-based compensation expense, restructuring and restructuring-related costs, and the impact of businesses held-for-sale, adjusted gross margin for the quarter ended September 30, 2025 was 70.2% compared to 69.5% for the quarter ended September 30, 2024. Fluctuations in consolidated gross margin and adjusted gross margin, as a percentage of sales, have primarily resulted from changes in product mix and a reduction in restructuring charges. 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.
21
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 businesses held-for-sale included in Cost of sales, is as follows (in thousands):
| | Quarter Ended | | ||||
| | September 30, | | ||||
| | 2025 | | 2024 | | ||
Total consolidated net sales | | $ | 286,555 | | $ | 289,458 | |
Business held-for-sale(1) | | | 5,439 | | | 2,303 | |
Revenue from recurring operations | | $ | 281,116 | | $ | 287,155 | |
| | | | | | | |
Gross margin - GAAP | | $ | 188,112 | | $ | 183,017 | |
Gross margin percentage - GAAP | | | 65.6 | % | | 63.2 | % |
| | | | | | | |
Identified adjustments: |
| |
| | |
| |
Costs recognized upon sale of acquired inventory |
| $ | — | | $ | 188 | |
Amortization of intangibles |
| | 9,439 | | | 11,779 | |
Stock-based compensation, inclusive of employer taxes |
| | 385 | | | 272 | |
Restructuring and restructuring-related costs | | | 2,079 | | | 4,898 | |
Impact of business held-for-sale(1) | | | (2,581) | | | (558) | |
Adjusted gross margin |
| $ | 197,434 | | $ | 199,596 | |
Adjusted gross margin percentage(2) | | | 70.2 | % | | 69.5 | % |
| | | | | | | |
| (1) | September 30, 2024 amounts relate to the Protein Sciences segment business that met the held-for-sale criteria on December 31, 2023. September 30, 2025 amounts relate to the Diagnostics and Spatial Biology segment business that met the held-for-sale criteria on June 30, 2025. |
| (2) | Adjusted gross margin percentage excludes both revenue and gross margin for the businesses that met the held-for-sale criteria during the respective periods. |
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased 2% to $116.2 million for the quarter ended September 30, 2025 from the same prior year period. The decrease in expenses was due to cost management initiatives.
Research and Development Expenses
Research and development expenses increased 2% to $24.2 million for the quarter ended September 30, 2025 from the same prior year period. The increase in expenses was due to timing of strategic growth investments, offset by cost management initiatives.
Segment Results
Protein Sciences
|
| Quarter Ended | | ||||
| | September 30, | | ||||
| | 2025 |
| 2024 |
| ||
Net sales (in thousands) |
| $ | 202,188 | | $ | 204,535 | |
Operating margin percentage |
|
| 38.4 | % |
| 39.4 | % |
The Protein Sciences segment’s net sales for the quarter ended September 30, 2025 was $202.2 million, which decreased 1% compared to the same respective prior year period. 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 2026 and 2025 operating results. Organic revenue for the segment decreased 3%, and foreign currency exchange had a favorable impact of 2%.
The operating margin was 38.4% for the quarter ended September 30, 2025 compared to 39.4% in the comparative prior year period. The segment’s operating margin was unfavorably impacted by a reduction in volume leverage.
22
Diagnostics and Spatial Biology
|
| Quarter Ended | | ||||
| | September 30, | | ||||
| | 2025 |
| 2024 |
| ||
Net sales (in thousands) |
| $ | 79,458 | | $ | 83,192 | |
Operating margin percentage |
|
| 11.2 | % |
| 5.1 | % |
The Diagnostics and Spatial Biology segment’s net sales for the quarter ended September 30, 2025 was $79.5 million, with a reported decrease of 4% compared to the same respective prior year period. Organic revenue growth was 3% for the first quarter of fiscal 2026, with foreign currency exchange having an immaterial impact. As of June 30, 2025, a business within the Diagnostics and Spatial Biology segment met the criteria as held-for-sale; this held-for-sale business has been excluded from the segment’s fiscal 2026 operating results and had an unfavorable impact of 7%.
The operating margin for the segment was 11.2% for the quarter ended September 30, 2025 compared to 5.1% in the comparative prior year period. The segment’s operating margin was favorably impacted by the Exosome Diagnostics divestiture and productivity initiatives.
Income Taxes
Income taxes were at an effective rate of 20.4% of consolidated earnings for the quarter ended September 30, 2025, compared to 16.4% for the same respective prior year period. The change in the Company’s tax rate for the quarter ended September 30, 2025 was driven by the mix of net income.
The forecasted tax rate as of the first fiscal quarter of 2026 before discrete items is 26.5% compared to the prior year forecasted tax rate before discrete items of 23.6%. Excluding the impact of discrete items, the Company expects the consolidated income tax rate for the remainder of fiscal 2026 to range from 26% to 30%.
23
Net Earnings
Non-GAAP adjusted consolidated net earnings are as follows (in thousands):
| | Quarter Ended | |||||
| | September 30, | |||||
|
| 2025 | | 2024 | | ||
Net earnings before taxes - GAAP |
| $ | 47,991 | | $ | 40,171 | |
Identified adjustments: | |
| | | | | |
Amortization of intangibles | |
| 15,350 | |
| 19,741 | |
Amortization of Wilson Wolf intangible assets | | | 2,490 | | | 2,490 | |
Acquisition related expenses and other | |
| 3,508 | |
| 1,862 | |
Certain litigation charges | | | 2,408 | | | 292 | |
Stock-based compensation, inclusive of employer taxes | |
| 12,096 | |
| 10,637 | |
Restructuring and restructuring-related costs | |
| 7,511 | |
| 11,022 | |
Investment gain and other non-operating income | | | (2,146) | | | — | |
Recovery of assets held-for-sale | | | (6,789) | | | — | |
Impact of business held-for-sale(1) | | | 2,573 | | | (148) | |
Net earnings before taxes - Adjusted | | $ | 84,992 | | $ | 86,067 | |
Non-GAAP tax rate | |
| 22.3 | % |
| 21.5 | % |
Non-GAAP tax expense | | $ | 18,953 | | $ | 18,536 | |
Non-GAAP adjusted net earnings | | $ | 66,039 | $ | 67,531 | | |
Earnings per share - diluted - Adjusted | | $ | 0.42 | | $ | 0.42 | |
| (1) | September 30, 2024 amounts relate to the Protein Sciences segment business that met the held-for-sale criteria on December 31, 2023. September 30, 2025 amounts relate to the Diagnostics and Spatial Biology segment business that met the held-for-sale criteria on June 30, 2025. |
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 quarters ended September 30, 2025 and 2024.
| | Quarter Ended | ||||
| | September 30, | ||||
|
| 2025 | | 2024 | ||
GAAP effective tax rate |
| 20.4 | % | | 16.4 | % |
Discrete items | | 6.1 | | | 7.2 | |
Long-term GAAP tax rate |
| 26.5 | % | | 23.6 | % |
Rate impact items | | | | | | |
Stock based compensation |
| (2.7) | % | | (2.8) | % |
Other | | (1.5) | | | 0.7 | |
Total rate impact items |
| (4.2) | % | | (2.1) | % |
Non-GAAP adjusted tax rate |
| 22.3 | % | | 21.5 | % |
The difference between the reported GAAP tax rate and non-GAAP tax rate applied to the identified non-GAAP adjustments for the quarter ended September 30, 2025 is primarily a result of discrete tax items, including the tax benefit of stock option exercises.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $145.0 million as of September 30, 2025, compared to $162.2 million as of June 30, 2025.
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 September 30, 2025, there is $700 million available on the line-of-credit. See Note 5 to the Condensed Consolidated Financial Statements for a description of the Credit Agreement.
24
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 September 30, 2025, 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 $27.6 million from operating activities in the first quarter of fiscal 2026 compared to $63.9 million in the first quarter of fiscal 2025. The decrease from the prior year was primarily due to changes in the timing of cash 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 first quarter of fiscal 2026 and 2025 were $5.4 million and $9.2 million, respectively. Capital expenditures for the remainder of fiscal 2026 are expected to be approximately $27 million. Capital expenditures are expected to be financed through currently available funds and cash generated from operating activities. Expected additions in fiscal 2026 are related to increasing capacity to meet expected sales growth across the Company.
During the first quarter of fiscal 2026, the Company received $4.6 million for assets held-for-sale. There was no comparable activity in the first quarter of fiscal 2025.
During the first quarter of fiscal 2025, the Company invested $15.0 million into Spear Bio. There was no comparable activity in the first quarter of fiscal 2026.
During the first quarter of fiscal 2025, certificates of deposit reached maturity for $1.1 million. There was no comparable activity in the first quarter of fiscal 2026.
The Company received tax distributions of $1.4 million from its equity method investee during the first quarter of both fiscal 2026 and 2025.
Cash Flows From Financing Activities
During the first quarter of fiscal 2026 and 2025, the Company paid cash dividends of $12.4 million and $12.7 million, respectively, to all common shareholders. On November 5, 2025, the Company announced the payment of a $0.08 per share cash dividend, or approximately $12.5 million, will be payable November 28, 2025 to all common shareholders of record on November 17, 2025.
Cash of $23.5 million and $25.1 million was received during the first quarter of fiscal 2026 and 2025, respectively, from the exercise of stock options.
During the first quarter of fiscal 2026 and 2025, the Company made repayments of $46.0 million and $19.0 million, respectively, on its long-term debt balance. The Company did not draw under its revolving line-of-credit facility during the first quarter of fiscal 2026 and 2025.
During the first quarter of fiscal 2026 and 2025, the Company paid taxes of $9.2 million and $5.0 million related to taxes on restricted stock, restricted stock units and stock options exercised through a net share settlement.
25
CRITICAL ACCOUNTING POLICIES
The Company's significant accounting policies are discussed in the Company's Annual Report on Form 10-K for fiscal 2025 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 ended September 30, 2025 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:
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 years 2026 or 2025.
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).
26
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 Condensed Consolidated Financial Statements.
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 2025 as filed with the Securities and Exchange Commission and Part II. Item 1A below.
27
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, 2025.
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 September 30, 2025, 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 first quarter of fiscal 2026 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 November 5, 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 ended September 30, 2025, 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, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The Company’s repurchase plan approved by the Board on April 30, 2025, granted management the discretion to mitigate the dilutive effect of stock option exercises. The plan authorizes the Company to purchase up to $505 million in stock. As of September 30, 2025, the Company had $405.0 million available to repurchase under our existing plan.
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, 2025 | | — | | $ | — | | — | | $ | 405,007,867 |
August 1 - August 31, 2025 | | 500 | | | 48.01 | | 500 | | | 404,983,864 |
September 1 - September 30, 2025 | | — | | | — | | — | | | 404,983,864 |
July 1 - September 30, 2025 | | 500 | | | 48.01 | | 500 | | | |
28
ITEM 3. DEFAULT ON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the quarter ended September 30, 2025, no director or officer of the Company
29
ITEM 6. EXHIBITS
EXHIBIT INDEX
TO
FORM 10-Q
BIO-TECHNE CORPORATION
| ||
|---|---|---|
Exhibit Number |
| Description |
3.1 | | |
| |
|
3.2 | | |
| | |
31.1 | | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| |
|
31.2 | | Certification 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 ended September 30, 2025, 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) |
30
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: November 5, 2025 | | /s/ Kim Kelderman |
| | Kim Kelderman |
| | President and Chief Executive Officer |
| | |
Date: November 5, 2025 | | /s/ James Hippel |
| | James Hippel |
| | Executive Vice President, Chief Financial Officer |
31
Exhibit 31.1
CERTIFICATION
I, Kim Kelderman, certify that:
Date: November 5, 2025
/s/ Kim Kelderman
Kim Kelderman
President and Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, James Hippel, certify that:
Date: November 5, 2025
/s/ James Hippel
James Hippel
Executive Vice President, Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Bio-Techne Corporation (the “Company”) On Form 10-Q for the quarter ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kim Kelderman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Kim Kelderman |
| Kim Kelderman |
| President and Chief Executive Officer November 5, 2025 |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Bio-Techne Corporation (the “Company”) On Form 10-Q for the quarter ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James Hippel, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ James Hippel |
| James Hippel |
| Executive Vice President, Chief Financial Officer November 5, 2025 |