On February 5, 2025 Bio-Techne Corporation (NASDAQ: TECH) reported its financial results for the second quarter ending December 31, 2024 (Press release, Bio-Techne, FEB 5, 2025, View Source [SID1234650063]).
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Second Quarter FY2025 Highlights
Second quarter organic revenue increased by 9% (9% reported) to $297.0 million.
GAAP earnings per share (EPS) was $0.22 versus $0.17 one year ago. Delivered adjusted EPS of $0.42 compared to $0.40 one year ago.
Improving biopharma end-market conditions combined with continued momentum of our cell and gene therapy workflow solutions, led to 8% organic growth in our Protein Sciences Segment (7% reported).
Strong commercial execution in Diagnostics & Spatial Biology led to 12% organic growth (12% reported) in the segment.
The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). Adjusted diluted EPS, adjusted net earnings, adjusted gross margin, adjusted operating income, adjusted tax rate, organic revenue, adjusted operating margin, earnings before interest, taxes, depreciation, and amortization (EBITDA), and adjusted EBITDA 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.
"The Bio-Techne team once again executed at a high level and delivered strong second quarter results," said Kim Kelderman, President and Chief Executive Officer of Bio-Techne. "It is encouraging to see early signs of improvement in the biopharma end-market, which was evident in our cell and gene therapy and protein analysis instrumentation businesses. We delivered this top-line result with a continued focus on profitability, which resulted in a 30.1% adjusted operating margin, an increase of 110 basis points sequentially."
Kelderman added, "The Bio-Techne growth vectors empower the discovery of novel biological insights, the development and manufacturing of advanced therapeutics and, enable precision diagnostics. Our portfolio plays a key role in the healthy aging of global populations. The combination of this unique portfolio with the talented Bio-Techne team positions the Company for continued differentiated financial performance."
Bio-Techne will host an earnings conference call today, February 5, 2025, 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 13751305. The earnings call can also be accessed via webcast through the following link View Source
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 13751305. The replay will be available from 11:00 a.m. CST on Wednesday, February 5, 2025, until 11:00 p.m. CST on Wednesday, March 5, 2025.
Second Quarter Fiscal 2025
Revenue
Net sales for the second quarter increased 9% to $297.0 million. Organic revenue increased 9% compared to the prior year. Foreign currency exchange and a business held-for-sale did not have a material impact.
GAAP Earnings Results
GAAP EPS was $0.22 per diluted share, versus $0.17 in the same quarter last year. GAAP operating income for the second quarter of fiscal 2025 increased 25% to $47.4 million, compared to $38.0 million in the second quarter of fiscal 2024. GAAP operating margin was 16.0%, compared to 13.9% in the second quarter of fiscal 2024. Current year GAAP operating margin was favorably impacted by volume leverage and a non-recurring prior year impairment of a business held-for-sale.
Non-GAAP Earnings Results
Adjusted EPS increased to $0.42 per diluted share compared to $0.40 in the same quarter last year. Adjusted operating income for the second quarter of fiscal 2025 increased 8% to $88.7 million, compared to $81.9 million in the second quarter of fiscal 2024. Adjusted operating margin remained flat at 30.1% for the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. Adjusted operating margin was impacted by favorable volume leverage offset by re-instatement of incentive compensation accruals.
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 biopharma 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 2025 net sales were $211.6 million, an increase of 7% from $197.7 million for the second quarter of fiscal 2024. 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 second quarter fiscal 2025 operating results. The exclusion of fiscal 2025 sales related to this held-for-sale business reduced sales by 1%. Organic revenue growth was 8% for the second quarter of fiscal 2025, with foreign currency exchange not having a material impact. The Protein Sciences segment’s operating margin increased to 41.2% in the second quarter of fiscal 2025 compared to 40.3% in the second quarter of fiscal 2024. The segment’s operating margin increased primarily due to volume leverage offset by re-instatement of incentive compensation accruals.
Diagnostics and Spatial Biology Segment
The Company’s Diagnostics and Spatial Biology segment develops and provides spatial biology products, carrier screening and oncology kits, as well as exosome-based diagnostics for various pathologies, including prostate cancer. The Diagnostics and Spatial Biology segment also 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 Spatial Biology segment’s second quarter fiscal 2025 net sales were $84.1 million, an increase of 12% from $75.4 million for the second quarter of fiscal 2024. Organic revenue growth was 12% for the second quarter of fiscal 2025, with foreign exchange not having a material impact. The Diagnostics and Spatial Biology segment’s operating margin was 3.9% in the second quarter of fiscal 2025 compared to 6.0% in the second quarter of fiscal 2024. The segment’s operating margin decreased primarily due to re-instatement of incentive compensation accruals, partially offset by favorable volume leverage.