Bio-Techne Corporation
CEO : Mr. Charles R. Kummeth
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2023 Q4 | 4.5% YoY | 17.3% | 23.1% | 2023-08-08 |
Chuck Kummeth says,
Key Points From Q4 2023 Earning Call Transcript
- Largely as expected with 5% fourth quarter organic growth
- Transitory headwinds faced due to softer biotech funding environment, inventory destocking, and macroeconomic challenges in China
- Double-digit growth in key growth platforms: ProteinSimple branded instrument portfolio, spatial biology ACD platform, cell and gene therapy workflow solutions, and liquid biopsy exosome platform
- North America grew mid-single digits, facing headwinds from lower biotech funding
- Europe had a great quarter with low double-digit growth
- China experienced volatility but delivered mid-teens growth in Q4. Government funding of new programs in life sciences is currently delayed
- Protein Sciences segment grew 4% in both the quarter and the fiscal year
- Cell and gene therapy initiatives showed almost 30% growth in Q4 and over 20% growth for the full year
- GMP proteins experienced almost 60% growth in Q4 and showed strong cross-selling opportunities
- GMP small molecules had over 250% growth in the quarter
- R&D Systems prevailed on a claim against Miltenyi Biosciences for commercializing antibodies obtained through reverse engineering
- ProteinSimple branded portfolio had low double-digit growth, led by 20% growth in Simple Western
- MauriceFlex instrument experienced strong demand and initial sales, doubling the addressable market opportunity
- Ella, the Simple Plex automated multiplexing ELISA instrument, continues to build the menu of assays and is being positioned as a clinical diagnostics platform
- Diagnostics and Genomics segment had 10% organic revenue growth for the quarter
- ExoDx prostate test had significant growth with nearly 70% increase in volume and revenue compared to the prior year quarter
- Interim results from a randomized study further solidified the clinical utility of the ExoDx prostate test
- Fiscal 2024 is expected to be another record year for the ExoDx prostate test
Jim Hippel says,
Financial Performance
- Q4 adjusted EPS was $0.55, an increase of 8% compared to the prior year
- Q4 revenue was $301.3 million, a 5% increase year-over-year
- Full fiscal year 2023 revenue was over $1.1 billion, a 3% increase on a reported basis and 5% increase on an organic basis
- Organic growth by region: North America grew mid-single digits, Europe increased low-double digits, China grew mid-teens, APAC outside of China declined low-single digits overall
Segment Performance
- Protein Sciences segment reported sales of $223 million, with 3% reported revenue growth and 4% organic growth
- Diagnostics and Genomics segment reported sales of $79 million, with 10% reported and organic revenue growth
Operating Margins
- Total company adjusted gross margin was 71.6% in Q4, a decrease driven by unfavorable product mix
- Adjusted operating margin for Q4 was 37.1%, a decrease of 30 basis points from the prior year period
- Protein Sciences segment’s operating margin was 44.7%, a decrease of 20 basis points year-over-year
- Diagnostics and Genomics segment’s operating margin was 18.5%, an increase of 280 basis points compared to the prior year
Cash Flow and Capital Allocation
- $83.4 million of cash generated from operations in Q4
- $10.8 million net investment in capital expenditures in Q4
- $12.5 million returned to shareholders through dividends in Q4
- $204.3 million in cash and short-term investments on the balance sheet at the end of Q4
Outlook for Fiscal Year 2024
- Expecting primarily organic revenue growth in the first half of fiscal year 2024, similar to fiscal year 2023
- Anticipating a path to accelerating growth rates in the back half of fiscal year 2024 if OEM purchasing returns and China government funding of life sciences resumes
- Estimating adjusted operating margins to be down approximately 300 basis points from fiscal year 2023, driven by Lunaphore acquisition and selective investments
Q & A sessions,
China’s Impact on Revenue
- China’s performance in the last quarter was a surprise, starting strong but experiencing a significant decline in the second half.
- The government shutdown and lack of funding have affected the overall performance of the healthcare industry.
- However, the company expects the situation to improve by the end of the calendar year, with healthcare remaining a top priority for the government.
- The company’s strong ratio of instrument sales in China has been impacted, especially in the core business segment.
Company Restructuring and New Hires
- The company has hired three senior executives and made organizational changes in Europe and North America to prepare for future growth.
- Efforts have been made to improve inventory and efficiency, particularly in Europe.
- The company has invested in digital solutions and ERP to enhance the customer experience, resulting in significant improvements in the last quarter.
Positive Performance in Other Segments
- The company’s three major investment platforms (spatial, cell and gene therapy, exosome) have had a successful quarter, exceeding expectations.
- These segments are expected to continue growing and potentially offset any headwinds in the core business.
Acquisitions and M&A Activity
- The company recently acquired Lunaphore, a highly sought-after asset in the spatial field, which is expected to contribute to growth in research and pathology.
- The company is actively pursuing further mergers and acquisitions, targeting areas like cell and gene therapy and proteomics.
- Current market conditions, with smaller companies facing funding issues, provide opportunities for partnerships and acquisitions.
OEM Customer Performance and Outlook
- The company has experienced fluctuations in growth due to the purchasing patterns of OEM customers, especially in the antibodies sector.
- Overall, there is a positive outlook for the recovery of OEM areas by the end of the calendar year.
No bad stock 