On August 8, 2023 Bio-Techne Corporation (NASDAQ: TECH) reported its financial results for the fourth quarter ended June 30, 2023 (Press release, Bio-Techne, AUG 8, 2023, View Source [SID1234634009]).

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Fourth Quarter FY2023 Highlights

Fourth quarter organic revenue increased by 5% (5% reported) to $301.3 million. Full year organic revenue increased 5% (3% reported) to $1.1 billion.
GAAP earnings per share1) (EPS) was $0.47 versus $0.38 one year ago. Delivered adjusted EPS1) of $0.55 compared to $0.51 one year ago. Full year GAAP EPS was $1.76 versus $1.66 one year ago. Full year adjusted EPS was $1.99 versus $1.97 one year ago.
Strong commercial execution in Diagnostics and Genomics led to 10% organic segment growth (10% reported) in the fourth quarter and 8% organic segment growth (6% reported) for fiscal year 2023.
Our ExoDx prostate test and GMP proteins strategic growth platforms continued to deliver record performance with fourth quarter revenue growth of 68% and 58% and fiscal year 2023 revenue growth of 92% and 30%, respectively.
Enhanced Bio-Techne’s leading spatial biology franchise with the acquisition of Lunaphore whose fully automated, high-throughput COMET instrument enables the identification of spatial biomarkers in tumors and other tissues at single-cell and subcellular resolution.
1)On November 29, 2022, the company executed a four-for-one split of Bio-Techne’s common stock in the form of a stock dividend to all shareholders of record on November 14, 2022. All references made to share or per share amounts in this press release have been retroactively adjusted to reflect the effects of the stock split.

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 growth, 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.

"We finished fiscal 2023 largely in-line with our expectations, as the Bio-Techne team continued to successfully grow on top of high year-over-year comparisons and navigate dynamic end market conditions that included a lower biotech funding environment and soft macro-economic conditions in China," said Chuck Kummeth, President and Chief Executive Officer of Bio-Techne. "We delivered these results with a continued focus on operational efficiencies, leading to an adjusted operating margin of 37.1%."

Kummeth continued, "We finalized the acquisition of Lunaphore, which closed on July 7, adding the fully automated, high throughput COMET instrument to our portfolio of spatial biology solutions. The combination of Lunaphore and Bio-Techne will enable the first fully automated spatial multiomic solution capable of same-slide detection of protein and RNA biomarkers. This novel solution positions Bio-Techne to further its leadership position in the nascent and high growth spatial biology market."

Kummeth concluded, "In fiscal 2023, we demonstrated the strength of our portfolio to grow in even the most challenging of times, which this year included very high comps from the prior year, lower biotech funding, customer de-stocking, and unprecedented China economic malaise… all largely due to the "COVID hangover". Our differentiated platforms in Cell & Gene Therapy, Liquid Biopsy, Spatial Biology, and Analytical Instruments finished the year with double-digit growth and it will be these platforms that carry our company back to overall double-digit growth as the markets normalize."

Fourth Quarter Fiscal 2023

Revenue

Net sales for the fourth quarter increased 5% to $301.3 million. Organic growth was 5% compared to the prior year with foreign currency exchange and acquisitions having an immaterial impact.

GAAP Earnings Results

GAAP EPS was $0.47 per diluted share, versus $0.38 in the same quarter last year. GAAP operating income for the fourth quarter of fiscal 2023 increased 17% to $94.5 million, compared to $80.6 million in the fourth quarter of fiscal 2022. GAAP operating margin was 31.4%, compared to 28.0% in the fourth quarter of fiscal 2022. Current year GAAP operating margin was favorably impacted by changes in the fair value of performance-based stock compensation awards.

Non-GAAP Earnings Results

Adjusted EPS increased to $0.55 per diluted share compared to $0.51 in the same quarter last year. Adjusted operating income for the fourth quarter of fiscal 2023 increased 5% compared to the fourth quarter of fiscal 2022. Adjusted operating income growth was driven by organic revenue growth. Adjusted operating margin was 37.1%, compared to 37.4% in the fourth quarter of fiscal 2022. Adjusted operating margin decreased from the prior year primarily due to the acquisition of Namocell this year.

Full Year Fiscal 2023

Revenue

Net sales for the full year fiscal 2023 increased 3% to $1,136.7 million. Organic growth was 5% with foreign currency exchange having an unfavorable impact of 2% and acquisitions having an immaterial impact.

GAAP Earnings Results

GAAP EPS was $1.76 per diluted share compared to $1.66 last fiscal year. Current year GAAP EPS was favorably impacted by gains on the sale of our ChemoCentryx investment and our investment in Eminence. GAAP operating income for full year fiscal 2023 increased 1% to $298.9 million, compared with $296.6 million in the full year fiscal 2022. GAAP operating margin was 26.3%, compared to 26.8% in the full year fiscal 2022. GAAP operating margin was unfavorably impacted by foreign currency exchange and strategic growth investments including the Namocell acquisition.

Non-GAAP Earnings Results

Adjusted EPS increased to $1.99 per diluted share compared to $1.97 last year. Adjusted operating margin for full fiscal year 2023 decreased to 36.1%, compared with 38.3% in full year fiscal 2022. Adjusted operating margin compared to the prior year was unfavorably impacted by foreign currency exchange and strategic growth investments including the Namocell acquisition.

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 fourth quarter fiscal 2023 net sales were $223.0 million, an increase of 3% from $217.0 million for the fourth quarter of fiscal 2022. Organic growth for the segment was 4%, with foreign currency exchange having an unfavorable impact of 1% and acquisitions having an immaterial impact. Protein Sciences segment’s operating margin was 44.7% in the fourth quarter of fiscal 2023 compared to 44.9% in the fourth quarter of fiscal 2022. The segment’s operating margin compared to the prior year was negatively impacted by acquisitions.

Protein Sciences segment’s full year fiscal 2023 net sales were $845.7 million, an increase of 2% from $832.3 million for fiscal 2022. Organic growth for the segment was 4% for the fiscal year, with foreign currency exchange having an unfavorable 2% impact on revenue and acquisitions having an immaterial impact.

Protein Sciences segment’s operating margin was 44.2% in fiscal 2023 compared to 45.4% in fiscal 2022. Segment operating margin compared to the prior year was unfavorably impacted by foreign currency exchange and strategic growth investments including the Namocell acquisition.

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 spatial biology products as well as exosome-based diagnostics for various pathologies, including prostate cancer. The Diagnostics and Genomics segment’s fourth quarter fiscal 2023 net sales were $79.0 million, an increase of 10% from $71.7 million for the fourth quarter of fiscal 2022. Organic revenue for the segment increased by 10% from the prior year, with foreign exchange having an immaterial impact. The Diagnostics and Genomics segment’s operating margin was 18.5% in the fourth quarter of fiscal 2023 compared to 15.7% in the fourth quarter of fiscal 2022. The segment’s operating margin increased primarily due to volume leverage.

The Diagnostics and Genomics segment’s full year fiscal 2023 net sales were $292.6 million, an increase of 6% from $274.8 million for fiscal 2022. Organic growth for the segment was 8% with foreign currency exchange having an unfavorable impact of 2% on revenue growth. The Diagnostics and Genomics segment’s operating margin was 14.7% in fiscal 2023 compared to 17.8% in fiscal 2022. Fiscal 2023 operating margin was unfavorably impacted due to the prior year revenue related to the ExoTru kidney transplant rejection agreement as well as strategic investments to drive future revenue growth, which was partially offset by volume leverage.

Conference Call

Bio-Techne will host an earnings conference call today, August 8, 2023 at 8:00 a.m. CDT. To listen, please dial 1-877-300-8521 or 1-412-317-6026 for international callers, and reference conference ID 10180893. 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 10180893. The replay will be available from 11:00 a.m. CDT on Tuesday, August 8, 2023, until 11:00 p.m. CDT on Friday, September 8, 2023.