Bio-Techne Releases Fourth Quarter Fiscal 2016 Results
MINNEAPOLIS, Aug. 17, 2016 /PRNewswire/ -- Bio-Techne Corporation (NASDAQ:TECH) today reported its financial results for the fourth quarter and full year ended June 30, 2016.
Fourth Quarter and Full Year FY2016 Highlights
- Fourth quarter organic revenue increased by 10% (15% reported) to $134.8 million. Fiscal year 2016 organic revenue grew 6% (10% reported) compared to prior year to $499.0 million.
- GAAP fully diluted earnings per share (EPS) for the fourth quarter decreased 3% to $0.69. Full Year GAAP fully diluted EPS was $2.80.
- Delivered adjusted EPS of $0.92 in the fourth quarter and $3.60 for the full year. This represents an increase of 2% and 3% respectively over the prior year, with unfavorable foreign currency exchange headwinds impacting results by ($0.06), or (7%) in Q4 and ($0.15), or (4%) over the entire year.
- Achieved Biotechnology segment fourth quarter organic growth of 8%, representing the fifth consecutive quarter of at least mid-single digit organic growth in this segment.
- Continued the trend of double-digit revenue growth in China, reporting mid-teens organic growth in this geography for the fourth quarter and 20% organic growth for fiscal 2016.
- Protein Platforms segment delivered double-digit growth in Q4, with year-over-year organic revenue increasing 29%, reflecting ongoing traction from all three of its major product categories including western blot, multiplex ELISA, and Biologics (ICE).
- Announced the acquisition of Advanced Cell Diagnostics (ACD), bolstering Bio-Techne's Biotechnology portfolio with the addition of RNA-ISH, a proprietary and innovative technology positioned to change pathology practices. Importantly, ACD represents Bio-Techne's initial entry into the genomics market, offering both clinical and research applications.
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, and adjusted operating margin are non-GAAP measures that exclude certain items detailed later in this press release under the heading "Use of Adjusted Financial Measures." A reconciliation of GAAP to non-GAAP financial measures is included in this press release.
"I am pleased to report our strong finish to the year," said Chuck Kummeth, President and Chief Executive Officer of Bio-Techne. "The fourth quarter's 10% organic growth represents the strongest organic top-line performance in the last several years. Sales were strong across all major geographies and Protein Platforms continued its trajectory back to double-digit growth with a 29% increase in revenue in Q4. On the bottom line, our EPS continued to be hampered by a volatile foreign exchange environment. In Q4, we incurred significant transactional foreign exchange losses due to the fall of the British Pound and our European commercial operations being based in the UK."
Kummeth added, "Our strong operational results in fiscal year 2016 are reflective of executing on our organic growth strategies. These include focusing our innovation on new products that can scale, improving our web experience so our customers can find the high-quality reagents they need, and aggressively pursuing emerging markets, especially those in China. In fiscal year 2016, we also bolstered our portfolio of solutions for our customers with a number of acquisitions. These included the addition and full integration of Cliniqa and its diagnostic reagent capabilities, the acquisition of Zephyrus and its single-cell western blot technology, and most recently, the announced acquisition of Advanced Cell Diagnostics which will further expand Bio-Techne's offering into the genomics market. The momentum of our strategic execution, together with the integration of our recent acquisitions, sets us up to deliver a successful fiscal year 2017."
Fourth Quarter Fiscal 2016
Revenue
Net sales for the fourth quarter increased 15% to $134.8 million, versus $117.7 million in the fourth quarter of fiscal 2015. Organic growth was 10% compared to the prior year, with currency translation having a negative impact of 1% and acquisitions contributing 6% to revenue growth.
GAAP Earnings Result
GAAP EPS decreased to $0.69 per diluted share, versus $0.71 in the same quarter last year. GAAP operating income for the fourth quarter of fiscal 2016 increased 6% to $40.0 million, compared with $37.8 million in the fourth quarter of fiscal 2015. GAAP operating margin was 29.7%, compared with 32.1% in the fourth quarter of fiscal 2015. GAAP operating margin compared to prior year was negatively impacted by the mix of lower-margin acquisitions made in fiscal 2016, investments made to drive long-term revenue growth, as well as higher stock based compensation. GAAP diluted EPS was lower than the prior year due to transactional foreign exchange losses recognized by our subsidiary in the U.K.
Non-GAAP Earnings Result
Adjusted EPS increased to $0.92 per diluted share, versus $0.90 in the same quarter last year. Adjusted operating income for the fourth quarter of fiscal 2016 increased 9% compared with the year-ago quarter. Adjusted operating margin was 39.1%, compared with 40.8% in the fourth quarter of fiscal 2015. Adjusted operating margin compared to prior year was negatively impacted by the mix of lower-margin acquisitions made in fiscal 2016 and investments made to drive long-term revenue growth. Adjusted EPS was negatively impacted by transactional foreign exchange losses recognized by our subsidiary in the U.K.
Full Fiscal Year 2016
Revenue
Net sales for the full year fiscal 2016 increased 10% to $499.0 million, versus $452.2 million in fiscal 2015. Organic growth was 6% compared to the prior year, with currency translation having a negative impact of 2% and acquisitions contributing 6% to revenue growth.
GAAP Earnings Result
GAAP EPS decreased to $2.80 per diluted share, versus $2.89 in fiscal 2015. GAAP operating income increased 2% to $150.6 million, compared with $147.0 million in fiscal 2015. GAAP operating margin was 30.2%, compared with 32.5% in fiscal 2015. GAAP operating margin compared to prior year was negatively impacted by the mix of lower-margin acquisitions made in fiscal years 2015 and 2016, the dilutive impact of negative foreign exchange translation, and higher stock based compensation. GAAP diluted EPS was lower than the prior year due to transactional foreign exchange losses recognized by our subsidiary in the U.K. as well as a non-recurring gain recorded in fiscal 2015 associated with the acquisition of CyVek.
Non-GAAP Earnings Result
Adjusted EPS increased to $3.60 per diluted share, versus $3.51 in fiscal 2015. Adjusted operating income for full fiscal year 2016 increased 4% compared with full year fiscal 2015. Adjusted operating margin was 39.7%, compared with 42.1% in fiscal 2015. Adjusted operating margin compared to prior year was negatively impacted by the mix of lower-margin acquisitions made in fiscal years 2015 and 2016 as well as the dilutive impact of negative foreign exchange translation. Adjusted EPS was negatively impacted by transactional foreign exchange losses recognized by our subsidiary in the U.K.
Segment Results
Management uses adjusted operating results to monitor and evaluate performance of the Company's three business segments, as highlighted below. The Clinical Controls segment includes the financial results of the Company's BiosPacific business. Prior to fiscal year 2016, this business unit was managed and reported as part of the Biotechnology segment. The acquisition of Cliniqa and its commonality of customer end markets with BiosPacific influenced this management and reporting change. All comparisons to prior periods reflect the new reporting structure as if it existed in those prior reporting periods.
Biotechnology Segment
The Company's Biotechnology segment includes proteins, antibodies, immunoassays, flow cytometry products, intracellular signaling products, and biologically active chemical compounds used in biological research. Biotechnology segment's fourth quarter 2016 net sales were $84.4 million, an increase of 7% from $79.1 million for the fourth quarter of 2015. Organic growth for the segment was 8% in the quarter, with currency translation having an unfavorable impact of 1% on revenue growth. Biotechnology segment adjusted operating margin was 52.4% in the fourth quarter of fiscal 2016 compared to 53.4% in the fourth quarter of fiscal 2015. The lower margin is the result of business investments partially offset by volume leverage and the impact of productivity initiatives.
Biotechnology segment's full fiscal year 2016 net sales were $317.3 million, an increase of 3% from $308.4 million for fiscal year 2015. Organic growth for the segment was 6% in for the fiscal year, with currency translation having an unfavorable impact of 3% on revenue growth. Biotechnology segment adjusted operating margin was 53.1% in full fiscal year 2016 compared to 53.6% in fiscal year 2015. The lower margin is the result of the dilutive impact of negative foreign exchange translation.
Clinical Controls Segment
The Company's Clinical Controls segment provides a range of controls and calibrators for various blood and blood chemistry clinical instruments, as well as quality controls, diagnostic immunoassays and other bulk and custom reagents for the in vitro diagnostic market. The Clinical Controls segment's fourth quarter fiscal 2016 net sales were $28.5 million, an increase of 33% compared to the fourth quarter of 2015. Clinical Controls organic revenue was flat with acquisitions adding 33% to segment growth. The Clinical Controls segment's adjusted operating margin was 31.3% in the fourth quarter of fiscal 2016 compared to 30.6% for the same period of 2015. The increase in operating margin was driven by strong productivity gains in the segment.
The Clinical Controls segment's full fiscal year 2016 net sales were $104.5 million, an increase of 34% compared to the fourth quarter of 2015. Clinical Controls organic revenue increased 3%, with acquisitions adding 30% to segment growth. The Clinical Controls segment's adjusted operating margin was 29.1% in the fiscal year of fiscal 2016 compared to 30.8% in the same period of fiscal 2015. The decrease in operating margin was driven by the acquisition of Cliniqa, which has a lower operating margin compared to the organic Clinical Controls segment.
Protein Platforms Segment
The Company's Protein Platforms segment develops proprietary systems and consumables for protein analysis. In the fourth quarter of fiscal 2016, segment revenue was $22.0 million, an increase of 28% compared to the fourth quarter of fiscal 2015. Protein Platforms organic revenue increased 29%, with an unfavorable currency impact of 1%. The Protein Platforms segment's adjusted operating margin was 7.5% in the fourth quarter of fiscal 2016 compared to 0% in the fourth quarter of fiscal 2015. The higher segment operating margin was primarily the result of volume leverage.
In the full fiscal year 2016, segment revenue was $77.3 million, an increase of 17% compared to the fourth quarter of fiscal 2015. Protein Platforms organic revenue increased 14%, with an unfavorable currency impact of 2% and acquisitions adding 5% to segment growth. The Protein Platforms segment's adjusted operating margin was 4.6% in full fiscal year 2016 compared to 6.7% in fiscal year 2015. The lower segment operating margin was due to acquisition mix.
Conference Call
Bio-Techne will host an earnings conference call today, August 17th, 2016 at 8:00 A.M. Central time. To listen, please dial (877) 874-1568 or (719) 325-7489 for international callers. A recorded rebroadcast will be available for interested parties unable to participate in the live conference call.
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