Full Press Release Details
MINNEAPOLIS , April 30, 2019 /PRNewswire/ -- Bio-Techne Corporation (NASDAQ: TECH ) today reported its financial results for the third quarter ended March 31, 2019 .
Third Quarter FY2019 Snapshot
The company's consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). Adjusted dilutive EPS, adjusted net earnings, adjusted gross margin, adjusted operating income, 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.
"Our recent fiscal third quarter was a record quarter for Bio-Techne. Just a few years ago we were envisioning a time with results we are now reporting," said Chuck Kummeth , President and Chief Executive Officer of Bio-Techne. "Our businesses, led by our antibody portfolio and Simple Western instruments, all performed well. Our Genomics division also recovered, just as we said it would, with strong double-digit growth in the quarter. Our results all year have shown that our acquisitions are integrating well, and providing increased organic growth now on top of an ever improving core reagent business."
Kummeth concluded, "I am extremely pleased with the execution of our plan this quarter. I am delighted with the results so far this year, which sets us up for the potential of the first full fiscal year of double-digit organic growth as Bio-Techne. We have an outstanding team!"
Third Quarter Fiscal 2019
Net sales for the third quarter increased 13% to $184.9 million . Organic growth was 14%, with currency translation having an unfavorable impact of 2% and acquisitions contributing 1% to revenue growth.
GAAP Earnings Results
GAAP EPS increased to $1.15 per diluted share, versus $0.52 in the same quarter last year. GAAP operating income for the third quarter of fiscal 2019 increased 2% to $44.1 million , compared with $43.1 million in the third quarter of fiscal 2018. GAAP operating margin was 23.9%, compared to 26.3% in the third quarter of fiscal 2018. GAAP operating margin compared to prior year was impacted by unfavorable foreign currency exchange rates and acquisitions, namely ExosomeDx.
Non-GAAP Earnings Results
Adjusted EPS was $1.21 per diluted share, consistent with this quarter last year. Adjusted operating margin for the third quarter of fiscal 2019 decreased to 35.2%, compared with 38.1% in the third quarter of fiscal 2018. Adjusted operating margin compared to prior year was impacted by unfavorable foreign currency exchange rates and acquisitions, namely ExosomeDx.
Segment Results
Management uses adjusted operating results to monitor and evaluate performance of the Company's business segments, as highlighted below. Since these results are used for this purpose, they are also considered to be prepared in accordance with GAAP.
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 community. Additionally, the segment provides an array of platforms useful in various areas of protein analysis. Protein Sciences segment's third quarter fiscal 2019 net sales were $137.9 million , an increase of 12% from $123.2 million for the third quarter of fiscal 2018. Organic growth for the segment was 15%, with currency translation having an unfavorable impact of 3% on revenue growth. Protein Sciences segment's operating margin was 45.1% in the third quarter of fiscal 2019 compared to 43.7% in the third quarter of fiscal 2018. Segment operating margin compared to the prior year was positively impacted by volume leverage and operational productivity.
Diagnostics and Genomics Segment
The Company's Diagnostics and Genomics segment provides blood chemistry and blood gas quality controls, hematology instrument controls, diagnostics immunoassays and other bulk and custom reagents for the in vitro diagnostic market. The Diagnostics and Genomics segment also develops and commercializes in situ hybridization products, as well as exosome-based diagnostics for various pathologies including prostate cancer. The Diagnostics and Genomics segment's third quarter fiscal 2019 net sales were $47.1 million , an increase of 15% from $40.9 million for the third quarter of fiscal 2018. Organic growth for the segment was 13%, with currency translation having an unfavorable impact of 1% on revenue growth and acquisitions contributing 3% to revenue growth. The Diagnostics and Genomics segment operating margin was 7.6% in the third quarter of fiscal 2019 compared to 23.6% in the third quarter of fiscal 2018. Segment operating margin compared to the prior year was impacted by negative operating margins for acquisitions made in the segment, namely ExosomeDx.
Conference Call
Bio-Techne will host an earnings conference call today, April 30, 2019 at 8:00 a.m. CDT . To listen, please dial 1-866-548-4713 or 1-323-794-2093 for international callers, and reference conference ID 9482573. A recorded rebroadcast will be available for interested parties unable to participate in the live conference call. To access the replay, U.S. callers should dial 1-844-512-2921 or international callers should dial 1-412-317-6671, and enter the replay access code 9482573. The replay can also be accessed by going to: http://audio.viavid.com/20190430-133952-bio-techne.mp3
The replay will be available from 11:00 a.m. CDT on Tuesday , April 30, 2019 until 11:00 p.m. CDT on Thursday , May 30, 2019.
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:
Our non-GAAP financial measure of organic growth represents revenue growth excluding revenue from acquisitions within the preceeding 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, and acquisition related expenses. The Company excludes amortization of purchased intangible assets and purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses, 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.
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, 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 $643 million in net sales in fiscal 2018 and has over 2,100 employees worldwide. For more information on Bio-Techne and its brands, please visit www.bio-techne.com .
| Contact: | David Clair, Investor Relations |
| [email protected] | |
| 646-277-1266 |
| BIO-TECHNE CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share data) (Unaudited) | ||||
| QUARTER ENDED | NINE MONTHS ENDED | |||
| 03/31/19 | 03/31/18 | 03/31/19 | 03/31/18 | |
| Net sales | $184,861 | $163,973 | $522,341 | $462,739 |
| Cost of sales | 60,251 | 53,712 | 177,110 | 152,777 |
| Gross margin | 124,610 | 110,261 | 345,231 | 309,962 |
| Operating expenses: | ||||
| Selling, general and administrative | 64,968 | 53,285 | 195,622 | 175,349 |
| Research and development | 15,552 | 13,892 | 46,154 | 41,350 |
| Total operating expenses | 80,520 | 67,177 | 241,776 | 216,699 |
| Operating income | 44,090 | 43,084 | 103,455 | 93,263 |
| Other income (expense) | 5,787 | (18,102) | (14,226) | (23,581) |
| Earnings before income taxes | 49,877 | 24,982 | 89,229 | 69,682 |
| Income taxes (benefit) | 5,223 | 5,244 | 9,617 | (14,767) |
| Net earnings | $44,654 | $19,738 | $79,612 | $84,449 |
| Earnings per share: | ||||
| Basic | $1.18 | $0.53 | $2.11 | $2.25 |
| Diluted | $1.15 | $0.52 | $2.05 | $2.22 |
| Weighted average common shares outstanding: | ||||
| Basic | 37,772 | 37,503 | 37,745 | 37,450 |
| Diluted | 38,861 | 38,142 | 38,813 | 37,933 |
| BIO-TECHNE CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) (Unaudited) | ||
| ASSETS | 03/31/19 | 6/30/18 |
| Cash and equivalents | $95,561 | $121,990 |
| Short-term available-for-sale investments | 83,229 | 59,764 |
| Accounts receivable, net | 133,927 | 120,296 |
| Inventory | 93,839 | 85,648 |
| Other current assets | 16,877 | 10,668 |
| Total current assets | 423,433 | 398,366 |
| Property and equipment, net | 145,319 | 145,348 |
| Goodwill and intangible assets, net | 1,298,750 | 1,044,222 |
| Other assets | 5,116 | 5,266 |
| Total assets | $1,872,618 | $1,593,202 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Trade accounts payable and accrued expense | $66,717 | $62,523 |
| Short-term contingent consideration payable | 3,400 | - |
| Contract liabilities | 10,112 | 8,109 |
| Income taxes payable | 5,318 | 8,878 |
| Current portion of long-term debt obligations | 12,500 | - |
| Total current liabilities | 98,047 | 79,510 |
| Deferred income taxes | 96,844 | 86,293 |
| Long-term debt obligations, net | 509,765 | 339,000 |
| Long-term contingent consideration payable | 2,200 | - |
| Other long-term liabilities | 19,496 | 9,338 |
| Shareholders' equity | 1,146,266 | 1,079,061 |
| Total liabilities and shareholders' equity | $1,872,618 | $1,593,202 |
| BIO-TECHNE CORPORATION RECONCILIATION OF GROSS MARGIN PERCENTAGE (Unaudited) | ||||
| QUARTER ENDED | NINE MONTHS ENDED | |||
| 03/31/19 | 03/31/18 | 03/31/19 | 03/31/18 | |
| Gross margin percentage – GAAP | 67.4% | 67.2% | 66.1% | 67.0% |
| Identified adjustments: | ||||
| Costs recognized upon sale of acquired inventory | 0.5% | 0.9% | 0.5% | 0.4% |
| Amortization of intangibles | 3.4% | 3.9% | 4.7% | 4.0% |
| Gross margin percentage - Adjusted | 71.3% | 72.0% | 71.3% | 71.4% |
| BIO-TECHNE CORPORATION RECONCILIATION OF OPERATING MARGIN PERCENTAGE (Unaudited) | ||||
| QUARTER ENDED | NINE MONTHS ENDED | |||
| 03/31/19 | 03/31/18 | 03/31/19 | 03/31/18 | |
| Operating margin percentage – GAAP | 23.9% | 26.3% | 19.8% | 20.2% |
| Identified adjustments: | ||||
| Costs recognized upon sale of acquired inventory | 0.5% | 0.9% | 0.5% | 0.4% |
| Amortization of intangibles | 7.7% | 7.2% | 8.4% | 7.5% |
| Acquisition related expenses | 0.0% | 0.8% | 0.6% | 5.2% |
| Stock-based compensation | 3.1% | 2.9% | 4.6% | 2.9% |
| Operating margin percentage - Adjusted | 35.2% | 38.1% | 33.9% | 36.2% |
| BIO-TECHNE CORPORATION RECONCILIATION OF NET EARNINGS and EARNINGS per SHARE (In thousands, except per share data) (Unaudited) | ||||
| QUARTER ENDED | NINE MONTHS ENDED | |||
| 03/31/19 | 03/31/18 | 03/31/19 | 03/31/18 | |
| Net earnings – GAAP | $44,654 | $19,738 | $79,612 | $84,449 |
| Identified adjustments: | ||||
| Costs recognized upon sale of acquired inventory | 935 | 1,431 | 2,804 | 2,013 |
| Amortization of intangibles | 14,400 | 11,872 | 43,678 | 34,547 |
| Acquisition related expenses | 100 | 1,398 | 3,263 | 24,253 |
| Stock-based compensation | 5,725 | 4,748 | 24,151 | 13,587 |
| Realized and unrealized loss (gain) on investments | (12,279) | 16,246 | (2,907) | 16,246 |
| Tax impact of above adjustments | (323) | (8,565) | (12,683) | (17,210) |
| Tax impact of discrete items and other adjustments | (6,152) | (726) | (11,439) | (36,667) |
| Net earnings - Adjusted | $47,060 | $46,142 | $126,479 | $121,218 |
| Earnings per share - diluted – Adjusted | $1.21 | $1.21 | $3.26 | $3.20 |
| BIO-TECHNE CORPORATION SEGMENT REVENUE (In thousands) (Unaudited) | ||||
| QUARTER ENDED | NINE MONTHS ENDED | |||
| 03/31/19 | 03/31/18 | 03/31/19 | 03/31/18 | |
| Protein Sciences segment revenue | $137,935 | $123,187 | $399,787 | $348,442 |
| Diagnostics and Genomics segment revenue | 47,134 | 40,929 | 123,144 | 114,604 |
| Intersegment revenue | (208) | (143) | (590) | (307) |
| Consolidated revenue | $184,861 | $163,973 | $522,341 | $462,739 |
| BIO-TECHNE CORPORATION SEGMENT OPERATING INCOME (In thousands) (Unaudited) | ||||
| QUARTER ENDED | NINE MONTHS ENDED | |||
| 03/31/19 | 03/31/18 | 03/31/19 | 03/31/18 | |
| Protein Sciences segment operating income | $62,256 | $53,813 | $175,821 | $150,240 |
| Diagnostics and Genomics segment operating income | 3,579 | 9,649 | 5,061 | 22,816 |
| Segment operating income | 65,835 | 63,462 | 180,882 | 173,056 |
| Costs recognized upon sale of acquired inventory | (935) | (1,431) | (2,804) | (2,013) |
| Amortization of intangibles | (14,400) | (11,872) | (43,678) | (34,547) |
| Acquisition related expenses | - | (1,312) | (2,973) | (23,994) |
| Stock-based compensation | (5,725) | (4,748) | (24,151) | (13,587) |
| Corporate general, selling, and administrative | (685) | (1,015) | (3,821) | (5,652) |
| Operating income | $44,090 | $43,084 | $103,455 | $93,263 |
SOURCE Bio-Techne Corporation