BIO-TECHNE RELEASES SECOND QUARTER FISCAL 2022 RESULTS
MINNEAPOLIS, Feb. 1, 2022 /PRNewswire/ -- Bio-Techne (NASDAQ: TECH) today reported its financial results for the second quarter ended December 31, 2021.
Second Quarter FY2022 Snapshot
The Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). Adjusted diluted EPS, adjusted earnings, adjusted gross margin, adjusted operating income, adjusted tax rate, 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.
"Our second quarter continued where our first quarter left off, with the Bio-Techne team delivering strong growth on an even more challenging year-over-year comparison," said Chuck Kummeth, President and Chief Executive Officer of Bio-Techne. "We are extremely proud of achieving 17% organic growth for the quarter and see continued momentum in the business, especially in our biopharma end-markets."
Kummeth added, "Our teams continue to innovate and execute in amazing ways which is contributing to our ever-improving bottom line, with our adjusted operating margin now over 38%. This quarter marks the first time in our 44-year history where we have achieved over $1 billion in trailing twelve-month revenue. The Wilson Wolf future investment and acquisition agreement we signed in December has the potential to further extend our 2026 revenue target beyond $2 billion and positions our Cell and Gene Therapy workflow with the strongest global footprint in this exploding new market."
Second Quarter Fiscal 2022
Net sales for the second quarter increased 20% to $269.3 million. Organic growth was 17% compared to the prior year, with acquisitions contributing 3% to revenue growth and foreign currency exchange having an immaterial impact.
GAAP Earnings Results
GAAP EPS was $1.94 per diluted share, versus $1.15 in the same quarter last year. GAAP EPS was favorably impacted by a non-recurring gain of approximately $28.4 million on our ChemoCentryx investment. GAAP operating income for the second quarter of fiscal 2022 increased 22.3% to $62.3 million, compared to $51.0 million in the second quarter of fiscal 2021. GAAP operating margin was 23.2%, compared to 22.7% in the second quarter of fiscal 2021. GAAP operating margin compared to prior year was positively impacted by volume leverage.
Non-GAAP Earnings Results
Adjusted EPS increased to $1.88 per diluted share, versus $1.62 in the same quarter last year, an increase of 16%. Adjusted EPS increased primarily due to revenue growth. Adjusted operating income for the second quarter of fiscal 2022 increased 18% compared to the second quarter of fiscal 2021. Adjusted operating margin was 38.3%, compared to 38.8% in the second quarter of fiscal 2021. Adjusted operating margin compared to the prior year was unfavorably impacted by acquisitions and strategic investments to support future growth, which were partially offset by volume leverage.
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 2022 net sales were $205.0 million, an increase of 19% from $172.2 million for the second quarter of fiscal 2021. Organic growth for the segment was 19%, with foreign currency exchange having an immaterial impact on revenue. Protein Sciences segment's operating margin was 45.5% in the second quarter of fiscal 2022 compared to 46.7% in the second quarter of fiscal 2021. The segment's operating margin compared to the prior year was negatively impacted by strategic investments to support future growth.
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 2022 net sales were $64.5 million, an increase of 23% from $52.5 million for the second quarter of fiscal 2021. Organic growth for the segment was 7%, with acquisitions contributing 16% to revenue growth and foreign currency exchange having an immaterial impact. The Diagnostics and Genomics segment's operating margin was 16.9% in the second quarter of fiscal 2022 compared to 15.5% in the second quarter of fiscal 2021. The segment's operating margin was favorably impacted by volume leverage and product mix, which were partially offset by additional investments made in the business to support future growth.
Bio-Techne will host an earnings conference call today, February 1, 2022 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 13726340. The earnings call can also be accessed via webcast through the following link https://investors.bio-techne.com/ir-calendar.
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 13726340. The replay will be available from 11:00 a.m. CST on Tuesday, February 1, 2022 until 11:00 p.m. CST on Tuesday, March 1, 2022.
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:
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, the impact of foreign currency, as well as the impact of partially owned consolidated subsidiaries. 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. Revenues from partially owned subsidiaries consolidated in our financial statements are also excluded from our organic revenue calculation, as those revenues are not fully attributable to the Company. Revenue from partially owned subsidiaries was $0.5 million and $0.9 million for the quarter and six months ended December 31, 2021, respectively.
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 stock-based compensation, 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, goodwill and long-lived asset impairments, and gains. Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjection assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations. 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, goodwill and long-lived asset impairment charges, 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 also excludes revenue and expense attributable to partially owned consolidated subsidiaries in the calculation of our non-GAAP financial measures as the revenues and expenses are not fully attributable to the Company.
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. 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. 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 $931 million in net sales in fiscal 2021 and has approximately 2,700 employees worldwide. For more information on Bio-Techne and its brands, please visit www.bio-techne.com.
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SOURCE Bio-Techne Corporation
Company Codes: NASDAQ-NMS:TECH