BIO-TECHNE Corp (Form: 8-K, Received: 02/02/2021 06:35:27)
false 0000842023 0000842023 2021-02-02 2021-02-02
 


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 

 
FORM 8-K
 

 
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): February 2, 2021
 
 

 
BIO-TECHNE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
 
Minnesota
0-17272
41-1427402
(State or Other Jurisdiction of
Incorporation)
(Commission File Number)
(I.R.S. Employer Identification
Number)
 
614 McKinley Place NE
Minneapolis, Minnesota 55413
(Address of Principal Executive Offices) (Zip Code)
 
(612) 379-8854
(Registrant’s Telephone Number, Including Area Code)
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
TECH
NASDAQ
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 


 
 

 
Item 2.02 Results of Operations and Financial Condition
 
A copy of the press release issued by Bio-Techne Corporation on February 2, 2021, describing the results of operations for the quarter ended December 31, 2020 and its financial condition as of December 31, 2020, is attached hereto as Exhibit 99.1.
 
The information in this Form 8-K and the Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
 
 
Item 8.01 Other Events
 
A copy of the press release issued by Bio-Techne Corporation on February 2, 2021, announcing a cash dividend is attached hereto as Exhibit 99.2.
 
 
Item 9.01 Financial Statements and Exhibits
 
  (d) Exhibits  
     
 
99.1
 
 
 
 
99.2
 
 
 
 
104 -
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

 
SIGNATURE
 
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 hereunto duly authorized.
 
 
BIO-TECHNE CORPORATION
 
 
 
 
 
Date: February 2, 2021
By:
/s/ Brenda S. Furlow
 
 
Brenda S. Furlow
 
 
Senior Vice President, General Counsel and Secretary
 
 

 
EXHIBIT INDEX
 
 
Exhibit No.
Description
 
 
 
 
99.1
Press Release, dated February 2, 2021, announcing results of operations
 
 
 
 
99.2
Press Release, dated February 2, 2021, announcing cash dividend.
 
 
 
 
104 -
Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

Exhibit 99.1

 

 

BIO-TECHNE RELEASES SECOND QUARTER FISCAL 2021 RESULTS

 

 

Minneapolis/February 2, 2021/ Bio-Techne Corporation (NASDAQ:TECH) today reported its financial results for the second quarter ended December 31, 2020.

 

Second Quarter FY2021 Snapshot

 

Second quarter organic revenue increased by 19% (21% reported) to $224.3 million and 15% (16% reported) in the first half of fiscal 2021 to $428.5 million.  

 

GAAP EPS was $1.15 versus $3.02 one year ago primarily relating to a non-recurring gain of approximately $121 million in our ChemoCentryx investment in the second quarter of fiscal 2020. Delivered record adjusted earnings per share (EPS) of $1.62 versus $1.08 one year ago.  

 

Adjusted Operating Margin increased to 38.7% in the second quarter of fiscal 2021 compared to 33.4% in the second quarter of fiscal 2020.

 

Excellent commercial execution in both the Protein Sciences and Diagnostics and Genomics segments, with each delivering record organic growth of 19%. 

 

Delivered record operating cash flows in the first half of fiscal 2021 while paying down approximately $125 million in outstanding debt.

   

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

 

“I would like to thank the entire global Bio-Techne team for delivering such a stellar quarter,” said Chuck Kummeth, President and Chief Executive Officer of Bio-Techne. “To achieve 19% organic growth, with only 3% attributed to Covid tailwinds, attests to the strong execution of our strategy we have implemented in recent years. It’s great to see this planning succeed in virtually all areas of our business. We delivered this organic growth with a continued focus on profitability, as our adjusted operating margin improved over 500 basis points year over year to 38.7%.”

 

Kummeth added, “The continued ramp of our high-growth platforms including Exosome Dx, Cell and Gene Therapy, GMP Proteins, proteomics instrumentation and genomics will be exciting to watch as we strive for continued double-digit organic growth. Our expanded digital platform, increased global brand presence, and world class customer relationships has brought our renowned protein and antibody products (as well as our new platforms) to the forefront of the life science tools and diagnostics industry.”

 

 

 

Second Quarter Fiscal 2021

 

Revenue

 

Net sales for the second quarter increased 21% to $224.3 million. Organic growth was 19% compared to the prior year, with foreign currency exchange having a favorable impact of 2% and acquisitions contributing an immaterial amount to revenue growth.

 

GAAP Earnings Results

 

GAAP EPS decreased to $1.15 per diluted share, versus $3.02 in the same quarter last year. GAAP EPS was favorably impacted by a non-recurring gain of approximately $121 million on our ChemoCentryx investment in the second quarter of fiscal 2020. GAAP operating income for the second quarter of fiscal 2021 increased 37.9% to $51.0 million, compared to $37.0 million in the second quarter of fiscal 2020. GAAP operating margin was 22.7%, compared to 20.0% in the second quarter of fiscal 2020. GAAP operating margin compared to prior year was positively impacted by volume leverage and cost management.

 

Non-GAAP Earnings Results

 

Adjusted EPS increased to $1.62 per diluted share, versus $1.08 in the same quarter last year, an increase of 50%. Adjusted EPS increased due to revenue growth and operating margin expansion. Adjusted operating income for the second quarter of fiscal 2021 increased 40% compared to the second quarter of fiscal 2020. Adjusted operating margin was 38.7%, compared to 33.4% in the second quarter of fiscal 2020. Adjusted operating margin compared to the prior year was favorably impacted by volume leverage and cost management.

 

Segment Results

 

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

 

Protein Sciences Segment

 

The Company’s Protein Sciences segment is one of the world’s leading suppliers of specialized proteins such as cytokines and growth factors, immunoassays, antibodies and reagents, to the biotechnology and academic research communities. Additionally, the segment provides an array of platforms useful in various areas of protein analysis. Protein Sciences segment’s second quarter fiscal 2021 net sales were $172.2 million, an increase of 22% from $141.5 million for the second quarter of fiscal 2020. Organic growth for the segment was 19%, with foreign currency exchange having a favorable impact of 3% on revenue growth and acquisitions contributing an immaterial amount to revenue growth. Protein Sciences segment’s operating margin was 46.6% in the second quarter of fiscal 2021 compared to 43.0% in the second quarter of fiscal 2020. The segment’s operating margin compared to the prior year was positively impacted by volume leverage and cost management.

 

 

 

Diagnostics and Genomics Segment

 

The Company’s Diagnostics and Genomics segment provides blood chemistry and blood gas quality controls, hematology instrument controls, immunoassays and other bulk and custom reagents for the in vitro diagnostic market. The Diagnostics and Genomics segment also develops and provides in situ hybridization products as well as exosome-based diagnostics for various pathologies, including prostate cancer. The Diagnostics and Genomics segment’s second quarter fiscal 2021 net sales were $52.5 million, an increase of 20% from $43.8 million for the second quarter of fiscal 2020. Organic growth for the segment was 19% with foreign currency exchange having a 1% impact on revenue. The Diagnostics and Genomics segment’s operating margin was 15.5% in the second quarter of fiscal 2021 compared to 2.2% in the second quarter of fiscal 2020. The segment’s operating margin was favorably impacted by volume leverage and cost management.

 

Conference Call

 

Bio-Techne will host an earnings conference call today, February 2, 2021 at 8:00 a.m. CST. To listen, please dial 1-877-407-9208 or 1-201-493-6784 for international callers, and reference conference ID 13715028. The earnings call can also be accessed via webcast through the following link http://public.viavid.com/index.php?id=143031.

 

A recorded rebroadcast will be available for interested parties unable to participate in the live conference call by dialing 1-844-512-2921 or 1-412-317-6671 (for international callers) and referencing Conference ID 13715028. The replay will be available from 11:00 a.m. CST on Tuesday, February 2, 2021 until 11:00 p.m. CST on Tuesday, March 2, 2021.

 

Use of non-GAAP Adjusted Financial Measures:

 

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

 

● Organic growth

● Adjusted diluted earnings per share

● Adjusted net earnings

● Adjusted gross margin

● Adjusted operating income

● Adjusted operating margin

 

 

 

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

 

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

 

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

 

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

 

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

 

 

 

Forward Looking Statements:

 

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

 

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

 

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

 

Contact:

David Clair, Senior Director, Investor Relations & Corporate Development

 

David.Clair@bio-techne.com

 

612-656-4416 

 

 

 

BIO-TECHNE CORPORATION

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)

 

   

QUARTER

ENDED

   

SIX MONTHS

ENDED

 
   

12/31/20

   

12/31/19

   

12/31/20

   

12/31/19

 

Net sales

  $ 224,253     $ 184,934     $ 428,452     $ 368,177  

Cost of sales

    73,353       63,531       139,821       128,361  

Gross margin

    150,900       121,403       288,631       239,816  

Operating expenses:

                               

Selling, general and administrative

    83,116       68,030       155,714       137,040  

Research and development

    16,789       16,381       32,830       32,459  

Total operating expenses

    99,905       84,411       188,544       169,499  

Operating income

    50,995       36,992       100,087       70,317  

Other income (expense)

    5,373       113,334       (4,381

)

    97,812  

Earnings before income taxes

    56,368       150,326       95,706       168,129  

Income taxes

    10,224       30,704       16,168       34,111  

Net earnings, including noncontrolling interest

  $ 46,144     $ 119,622     $ 79,538     $ 134,018  

Net earnings attributable to noncontrolling interest

    (130

)

    -       (130

)

    -  

Net earnings attributable to Bio-Techne

    46,274       119,622       79,668       134,018  

Earnings per share:

                               

Basic

  $ 1.20     $ 3.13     $ 2.06     $ 3.51  

Diluted

  $ 1.15     $ 3.02     $ 1.98     $ 3.40  

Weighted average common shares outstanding:

                               

Basic

    38,691       38,167       38,614       38,100  

Diluted

    40,257       39,550       40,135       39,370  

 

 

 

BIO-TECHNE CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

12/31/20

   

6/30/20

 
ASSETS                

Cash and equivalents

  $ 165,526     $ 146,625  

Short-term available-for-sale investments

    117,426       124,268  

Accounts receivable, net

    128,243       122,534  

Inventories

    106,590       103,152  

Other current assets

    24,148       24,341  

Total current assets

    541,933       520,920  
                 

Property and equipment, net

    195,602       176,829  

Right of use asset

    68,154       71,465  

Goodwill and intangible assets, net

    1,250,838       1,244,853  

Other assets

    11,339       13,522  

Total assets

  $ 2,067,866     $ 2,027,589  
                 

LIABILITIES AND STOCKHOLDERS’ EQUITY

               

Accounts payable and accrued expenses

  $ 70,132     $ 63,270  

Contract liabilities

    13,217       13,049  

Income taxes payable

    3,658       2,376  

Contingent consideration payable

    4,983       5,938  

Operating lease liabilities – current

    9,912       9,535  

Current portion of long-term debt obligations

    12,500       12,500  

Other current liabilities

    3,166       -  

Total current liabilities

    117,568       106,668  
                 

Deferred income taxes

    105,342       101,090  

Long-term debt obligations

    219,035       344,243  

Operating lease liabilities

    63,672       67,248  

Long-term contingent consideration payable

    5,599       199  

Other long-term liabilities

    25,796       26,949  

Stockholders’ equity

    1,530,854       1,381,192  

Total liabilities and stockholders’ equity

  $ 2,067,866     $ 2,027,589  

 

 

 

BIO-TECHNE CORPORATION

RECONCILIATION OF ADJUSTED GROSS MARGIN PERCENTAGE

(Unaudited)

 

   

QUARTER

ENDED

   

SIX MONTHS

ENDED

 
   

12/31/20

   

12/31/19

   

12/31/20

   

12/31/19

 

Gross margin percentage – GAAP

    67.3

%

    65.6

%

    67.4

%

    65.1

%

Identified adjustments:

                               

Costs recognized upon sale of acquired inventory

    -       -

%

    -       -

%

Amortization of intangibles

    3.9

%

    4.7

%

    4.0

%

    4.7

%

Stock compensation expense - COGS

    0.3

%

    0.3       0.3

%

    0.2  

Gross margin percentage - Adjusted

    71.5

%

    70.6

%

    71.7

%

    70.0

%

 

 

BIO-TECHNE CORPORATION

RECONCILIATION OF ADJUSTED OPERATING MARGIN PERCENTAGE

(Unaudited)

 

   

QUARTER

ENDED

   

SIX MONTHS

ENDED

 
   

12/31/20

   

12/31/19

   

12/31/20

   

12/31/19

 

Operating margin percentage – GAAP

    22.7

%

    20.0

%

    23.4

%

    19.1

%

Identified adjustments:

                               

Costs recognized upon sale of acquired inventory

    -       -

%

    -       -

%

Amortization of intangibles

    6.8

%

    8.2

%

    7.1

%

    8.2

%

Acquisition related expenses

    2.0

%

    -0.5

%

    1.1

%

    0.1

%

Stock-based compensation

    7.2

%

    5.7

%

    6.9

%

    5.3

%

Operating margin percentage - Adjusted

    38.7

%

    33.4

%

    38.5

%

    32.7

%

 

 

BIO-TECHNE CORPORATION

RECONCILIATION OF ADJUSTED NET EARNINGS and EARNINGS per SHARE

(In thousands, except per share data)

(Unaudited)

 

   

QUARTER

ENDED

   

SIX MONTHS

ENDED

 
   

12/31/20

   

12/31/19

   

12/31/20

   

12/31/19

 

Net earnings – GAAP attributable to Bio-Techne

  $ 46,274     $ 119,622     $ 79,668     $ 134,018  

Identified adjustments attributable to Bio-Techne:

                               

Costs recognized upon sale of acquired inventory

    11       -       11       -  

Amortization of intangibles

    14,994       15,108       30,495       30,008  

Acquisition related expenses

    4,514       (787

)

    4,746       617  

Stock-based compensation

    16,225       10,618       29,558       19,418  

Restructuring costs

    142       -       142       -  

Realized and unrealized loss (gain) on investments and Other

    (10,197

)

    (120,449

)

    (5,846

)

    (110,048

)

Tax impact of above adjustments

    (3,041

)

    24,132       (7,936

)

    17,151  

Tax impact of discrete items

    (3,674

)

    (5,384

)

    (7,826

)

    (6,655

)

Net earnings - Adjusted

  $ 65,248     $ 42,860     $ 123,012     $ 84,510  
                                 

Earnings per share - diluted – Adjusted

  $ 1.62     $ 1.08     $ 3.06     $ 2.15  

 

 

 

BIO-TECHNE CORPORATION

SEGMENT REVENUE

(In thousands)

(Unaudited)

 

   

QUARTER

ENDED

   

SIX MONTHS

ENDED

 
   

12/31/20

   

12/31/19

   

12/31/20

   

12/31/19

 

Protein Sciences segment revenue

  $ 172,179     $ 141,517     $ 326,625     $ 282,512  

Diagnostics and Genomics segment revenue

    52,469       43,846       102,595       86,397  

Intersegment revenue

    (395

)

    (429

)

    (768

)

    (732

)

Consolidated revenue

  $ 224,253     $ 184,934     $ 428,452     $ 368,177  

 

 

BIO-TECHNE CORPORATION

SEGMENT OPERATING INCOME

(In thousands)

(Unaudited)

 

   

QUARTER

ENDED

   

SIX MONTHS

ENDED

 
   

12/31/20

   

12/31/19

   

12/31/20

   

12/31/19

 

Protein Sciences segment operating income

  $ 80,246     $ 60,872     $ 150,598     $ 120,410  

Diagnostics and Genomics segment operating income

    8,107       975       16,781       1,875  

Segment operating income

    88,353       61,847       167,379       122,285  

Corporate general, selling, and administrative

    (1,520

)

    (12

)

    (2,482

)

    (2,113

)

Adjusted operating income

    86,833       61,835       164,897       120,172  

Cost recognized upon sale of acquired inventory

    (23 )     -       (23 )     -  

Amortization of intangibles

    (15,027

)

    (15,108

)

    (30,528

)

    (30,008

)

Acquisition related expenses

    (4,421

)

    881       (4,558

)

    (429

)

Stock-based compensation

    (16,225

)

    (10,618

)

    (29,557

)

    (19,418

)

Restructure costs

    (142 )     -       (142 )     -  

Operating income

  $ 50,995     $ 36,990     $ 100,087     $ 70,317  

 

 

 

Exhibit 99.2

 

BIO-TECHNE DECLARES DIVIDEND

 

 

MINNEAPOLIS, February 2, 2021/PRNewswire/ -- Bio-Techne Corporation (NASDAQ: TECH) announced that its Board of Directors has decided to pay a dividend of $0.32 per share for the quarter ended December 31, 2020. The quarterly dividend will be payable February 26, 2021 to all common shareholders of record on February 12, 2021. Future cash dividends will be considered by the Board of Directors on a quarterly basis.

 

 

 

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

 

Contact:

David Clair, Senior Director, Investor Relations & Corporate Development

 

David.Clair@bio-techne.com

 

612-656-4416

 

 

 

 

 

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