TECH - Earnings call 1 2024 | Bio-Techne Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Bio-Techne Earnings Conference Call for the First Quarter of Fiscal Year 2024. [Operator Instructions] I would now like to turn the call over to David Clair, Bio-Techne's Vice President, Investor Relations.

David Clair

Good morning, and thank you for joining us.

On the call with me this morning are Chuck Kummeth, Bio-Techne's Chief Executive Officer; Jim Hippel, Chief Financial Officer; and Kim Kelderman, Chief Operating Officer.

Before we begin, let me briefly cover our safe harbor statement.

made including conference the beliefs results. comments considered may company's the statements, forward-looking and of during call this be future Some expectations about company's this materially from certain projected in XXXX the The statements actual those fiscal made forward-looking could during company's differ that cause identifies to results the for XX-K call. factors year developments. because information or new The not to undertake any company update events of or does any forward-looking statements future company's website The well the are the available other section. company's filings, its XX-K SEC within as as Relations Investor on

the provide Separately, Corporation these call, release press Stephens, to available participating business connecting website reconciling now non-GAAP used care During events. I www.bio-techne.com. are We financial we'll health measures Bio-Techne JPMorgan coming at company's Stifel, to measures turn information look performance. issued call be may in to earlier forward and these you most upcoming to the measures conferences of the ongoing in Chuck. comparable Evercore this the with over GAAP will the many months. pertinent morning to be in the at Tables on

Charles Kummeth

consistent during one our highest as from including well well The destocking our Thanks, X% first broader OEM challenges conference headwinds environment quarters, first Bio-Techne. remained sources The Dave, for team Thank recent geographies, as everyone. economic the XXXX that a Bio-Techne China. in as as in to relatively quarter organic delivered despite soft quarter growth these continues fiscal execute broad customers, industry for of as impacting call. of growing for environment, us we and challenging historically good biotech of headwinds are joining morning, our you a handful a the inventory several of funding have

were onerous we pillars challenges the the to transitory China many as remain intact primary saw not macroeconomic as of expectations continue our quarter, U.S. as in our funding of these same, biopharma as peers. well. environment culprits and the in growth than for impact the higher our albeit Despite evolving While well the perform the original the remain with challenges,

our Specifically, all Simple business, in delivered prostate Protein our and the GMP franchise quarter. impressive proteins growth ExoDx

Our portfolio and positioned our our and to tremendous strong capitalize continue gain financial the and to team strategic will end front high-growth incredibly company. unpenetrated markets, well playbook on leverage products several markets, innovative adjacent the of share, in solutions and and remains opportunity in position introduce enter

Officer into the like his Officer continue since a support Board X, on Kim advisory Diagnostics my the prior until in successfully segment as the lead Bio-Techne's from to retirement joining Chief deeper led will takes Before work dig Kim the as congratulate quarter, on and personally Kim role new incoming we Chief XXXX. the effective to Bio-Techne's capacity will Kim Executive Kelderman in appointment I X, CEO, July of Operating XXXX. Kim to continue February closely in and XXXX. February. CEO with I'd the company company his Bio-Techne's recent to in In reins I as performance meantime, Genomics the senior and the has

more ever this XX-year for forward revenue Day that Gus target at created markets. the to for tools a billion and an than and ThermoFisher During and is segment, as segment fastest-growing me XXXX, New Jim the can well both ready the future business Hippel, and was positions extra been assure tremendous is significant or in team leadership multiple with over to like Bio-Techne, Sustainability Report, [ Jim available too, making highlight prostate also journey opportunity, diagnostic I'd introductions me Bio-Techne's leading difficult The through is Kim's decision to corporate I ran ExoDx has of the life our recently and governance portfolio Bio-Techne latest showcases to like product acceptance on genetic financial social and Prior Scientific position best incredibly since and gained will joining environmental, in as outlined Bio-Techne's business its strengthened the Kim I've at $X-plus partnerships ASV website. I totaled the been thanks, of responsibility analysis novel of incredibly as person multiple which Board. initiatives. growth. taking since the everyone and the including in some team the so progress large working XXXX the market section ESG Kim as this the thank and the science to know businesses he, our an as and Kim is most our a he right talented and leadership company Investor in acquisitions ] revenue York. I'd worked be he Roll traction the is strong take partner portfolio test, recently Asuragen has and its new with Corporate who with. Separately, social continued for Lunaphore with report business unit. with of

the As our remains and committed to in will live we report, employees work. communities where Biotech you and see the

integrity. as our operational our cornerstone governance growth responsible We corporate well durable, proud of innovative and of and we are commitment the as strategy. culture Driving sustainable a built forward remains have to

had of the by into strong quarter region performance details Now the from mid-teens and strong grew including Europe quarter, overall, market. as geography get starting let's performance market. overview end with a an our our biopharma very particularly end the of

we the of high the momentum slowdown, European of our the decline new comparable and X experienced end academic the last has region last the quarter As the year. a quarter and worth It's COVID the the performance in single-digit this to businesses approach impact with in exhibit leadership the that America, continue markets to from the region That of delivered last stable, remain where noting growth biopharma in managing reminder, in disciplined rate is the these Europe the over last the in the the experienced noticing nearing fiscal as year. fiscal are region customers that expected first and environment. current a environment said, was the quarters. In biotech the funding experienced a positive North post as contributed we which effects team mid-single-digit we subset region region was maintained most growth the soft we a to

life region China. our institutions Now than is as the during everyone's and the let's low discuss teens hospitals at as last This quarter R&D academic climate expectations of significantly quarter, at deteriorating in the progressed. persisted last underperformed with original the the call top geography The business quarter Chinese and remains year. mind, the highlighted challenges lower funding the earnings in funding we for government sciences declined

very it China, funding stabilize the when macroeconomic and Given in difficult will to step back up challenging R&D conditions ascertain again. remains

which Additionally, private government region. We transitory large patterns health and trajectory cautious in the equity in biopharma near-term focused modernizing the creating on view the cash-dependent and for VC geography, spending growth as remains temporary is the areas rural China's communities. metropolitan funding more both in has as activity care slowed companies pause in

researchers analytical health spatial geography in biology well research solutions the rely advance extremely improve tools as on and care. and reagents positioned proteomics remains discoveries and our to scientific tools our this increasingly portfolio are Our

near that We but linger ever will long-term in these bullish the before we as likely term have are been our headwinds on opportunities as improving. acknowledge in China,

pillars the future, propel Protein that with segment, growth the in was highlight will I'll Now our [indiscernible] growth quarter. starting where Sciences the organic within X% current

next-generation one towards cornerstone quarter. GMP reagents of therapy development offering therapy During proteomics our as the to from their having make and to the but the cell for proteins in increased continued the these menu remains and that several Bio-Techne. the products advance portfolio including very quarter. portfolio Collectively, therapies our of proteins of workflow is also cell only working complex not broadest XX% commercialization into therapy offering to GMP services further and enable customers therapeutic we work our cell require gene therapy across medicine in especially XX% the point grew biotech suits. Overall, to to in in over difficult different gene the to quarter, right cell our of tend proteins of require Bio-Techne unique progress are several spectrum This therapies. proteins initiatives our manufacture, that of are customers continued our critical portfolio and these continue available, and cell of continues as the a solutions selling benefit portfolio regenerative nearly to playing workflow, and proteins strong broad

its and almost molecules. way with route key overall that portfolio business. our This and business significant traction small are to GMP gene quarter molecules that XX% self-renewal, a of therapy our in to the the is key these are also contributor workflows. to and on processes grew differentiation components storage cell small Recall in We to medicine programming, becoming regenerative continue gain

include gene this growing portfolio in We the leader are to to and industry. capabilities additional in G&P process media expanding of edit a formulations, positioning rapidly remain antibodies, Bio-Techne engineering our

Additionally, in GMP work closed our proteins, Wolf GMP therapy solution, Wilson pairs continues our a Media finalize solution. immune to which manufacturing cell manufacturing aseptic GRx and sterile

ProteinSimple our to tools. analytical on Moving portfolio branded or proteomic

recently biopharma on that an the system, remains base instrument for our QX the producing the a pull-through our commitment strong Wallingford, organic portfolio from applications. on ISO facility Europe. and We've XX% With by clinical important pull-through growth base grow consumable and that is this instrument led certification even It's delivered XXXX Connecticut these worth noting driving customers. quality Flex as our value installed assays, basis, Here, reflecting productivity our China, products certification our demand to who received including very and to in management opportunities impressive Ella, up diagnostic experienced excluding Ella, we now in Simple our are and academic of this opening clinical large hand, grew and menu growing over is growth. growing team demonstrating per platform. high installed more multiplexing Biologics in on X% pursue branded The instrument sensitive ProteinSimple strong easy-to-use to instruments. Momentum Consumable automated and immunoassay fast, XX%, in the consumables. of X continues for for a of as validated our including was we ready to market continued launches instruments highly Plex potential deliver multiplexing Maurice continued uptake ELISA business a performance gains expanding

note would next-gen legacy Maurice scientists enters the Pfizer legacy of a fractionation instrument Maurice into on opportunity a from of market variant there reminder, companies highlighted Maurice several including recent replacement This Maurice new Farm The Flex new CE capsid in from an spectromaty companies. presentation approximately As capabilities proteins charge with as well through this Flex position for AAV for doubling instrument. next-gen scientists fractionation. I peak collaborations instrument a additional including our the mass $XXX protein the is chromatography. market capabilities progress by ion capabilities million were exchange fractionation, addressable easy-to-use science Maurice Flex's top methods, Flex's top-tier application that identification at pharmaceutical recently as for are Maurice other conference, life the

to blot continues to The quarter. Our this share a [ demand drive messy fully within push branded our automated and platform's ability biopharma customer long blotting the Western ] X-hour as academic button, and increase X-day Western highly process manual its market Simple western reduce into solution also solution bases. continued to reproducible

for potency, the increasingly seeing full and product are for quarter protein Simple in cell of from and X/X cell in gene the ratio, in capsid therapy of almost system applications expression process therapy measure the account versus Simple associated also utilized robust revenue. right XX% Western impurity to being increased applications and Western adoption We of with and now gene detection. Revenue empty over

Genomics molecular reagents lab compared growth [indiscernible] OEM test start ExoDx quarter and as in Diagnostics within the I'll Next, as where Mostly we highlight orders I'll prostate an invasive valuable prostate PSA test for prior flat the test, prostate the in to segment, our revenue our due genetic of growth large was to where as current for diagnostics growth tests once prior business organic again timing year. with orders well our volume our on information business. with growth. within and significant in year-over-year our large drove to potentially an Adjusting dangerous while line should with cash man teens. our biopsy both quarter, nearly year physicians. a while XX% with adjustment, and quarter, year revenue patients approximately to accrual whether continues score increased to in resonate indeterminate with in the volume compared proceed increased growth ExoDx prior was revenue volume the upper diagnostic

As Day, than exosome-based recent we for our ExoDx applications highlighted test. much Investor during platform our diagnostic our broader current prostate are

a saliva-based colorectal well test colorectal of for designed children as look exciting this polyps. screening cancer for and cancers, a includes precancerous next-generation test detection Our pipeline monitoring early quarters. as coming sharing pipeline syndrome for gene single prostate on of additional cancer to several both We the mutation test in cancer a diagnosis forward data different test rule in

our for branded let's which business, includes our and discuss over Luna spatial as instrument portfolio. ACD-branded catalog XX,XXX Now assay the probes software as unique biology spatial of well biology

biology multi-omic neuroscience role business digits assays quarter an upper for research. in of as advancing cancer and spatial portfolio increased gene play organically our important broad Our single therapy, continue to the

Within the great embracing acquisition, portfolio, our and target is and and and visualization respectively, scope a the acid are acceptance in experiencing differences increasing in momentum we and are nucleotide to other experiencing the sequences XX%, base and latest therapy scope of targets. the nucleic one microRNA and new their enables of umbrella. traction for XX% which RNA down under start off continued are to of biotech almost home scope, the gene detection team micro efforts applications. Integration microRNA Lunaphore, BaseScope increased

[indiscernible] As which is value commercializing does with translational currently the primary of not for significant Lunaphore a interest require community, platform antibodies. in growth proposition conjugated high use installed and a Hyperflex resonating driving its its is automated, reminder, base. fully research that high-throughput the rapid is instrument, common

to a continues will Inspire fully visualization and workflow Bio-Techne our leverage RNAscope multiomic team summary, first as protein to this developing the plan automated as slide. In detection and the execute We continue spatial Lunaphore's that to environment. in strategic instruments, technology RNA enable well Hipple antibody common challenging on growth make and single ACD's panels progress

relative and our our have life science so of in of our reported to platforms. more at look that companies the this team's growth quarter, even we of performance As especially many the perseverance have confidence far proud execution I'm

these during squarely cell at it will analytical of over evolve, to highlighted tools diseases, and other shine biology Day, solutions, a our our gene for research to priority role social forward therapy and allowing $XX that, these and the tools, we vessel billion aimed once to diagnostics Bio-Techne's facing reagents, diseases develop and we am prospects. headwinds with with portfolio spatial cancer, liquid biopsy remain in I'll and cure our efforts. a the along products how Investor amazing growth long-term As recent market workflow proteomic are Initiatives neurodegenerative understanding to critical our when future, continue play foreseeable again high-value Jim. through. With a the I industry portfolio subside, transitory of looking growth turn to

James Hippel

then start X% year financial I'll performance, detail QX some over additional some quarter the was Thanks, to Chuck. the with decrease on EPS $X.XX our of the performance. quarter, compared Adjusted with $X.XX on financial first in prior last financial outlook. Starting thoughts give year. overall a

impact to basis year. revenue GAAP an had the million, the X% on a on quarter. exchange prior quarter $X.XX an immaterial X% organic QX and reported had Foreign was a increase basis. compared EPS of was an in EPS the $XXX.X on in year-over-year for $X.XX

to contributed growth. while translation an exchange acquisitions impact, Foreign reported X% immaterial had

by to region teens mid-single on QX. increased North digits. the grew in end quarter. declined growth Moving organic market and and mid-teens, in our low Europe China America

quarter Chuck previously last the comp region soft remained on American a single business, As also growth environment declined in saw less Europe funding had comparable the our the difficult digits strong a biotech mentioned, high drag while as but North year.

to funding For region. China, environment the impact continued the

role remains said, proteomic a fully overall, market biopharma single to point. care in Health government of timing outside of advancing analytical call intact. academia Japan for China challenging this play in spatial and top country. constraints Our China, the solutions more long-term APAC low That will both enthusiasm Meanwhile, tools digits. Korea. By government the this China on funding biology upper QX, health a and remains reagents, digits at care South grew priority single our increased and in incrementally remains end with this recovery excluding critical and

The partially by Below expense of revenue to the to increase was revenue adjusted in difficult total the revenue by [indiscernible] the Adjusted quarter margin in XX.X% X.X% However, compared prior foreign of acquisition. the less XX.X% productivity year, in the Europe while offset given in much primarily was biopharma in The growth comps. the QX driven P&L, the was in gains exchange on larger was gross year. was compared QX to impact XX.X% R&D impact the of SG&A position 'XX compared X.X% SG&A increases XX.X% and prior in in the company to prior of was also fiscal points of offsetting of was impact period. and, business the income year inflationary in from QX in lesser XXX growth. dollar strategic extent, for to margin XX.X%, the year to inflation largely increase year. prior to for during driven future by margin a continue operating first the investments our The decrease pricing primarily with the implemented operating Lunaphore acquisition price the operating the a half QX. Adjusted offset basis

Excluding the strategic year than adjusted the was which acquisition, was lower the which points beginning diligent at operating basis to by Lunaphore XXX cost investments, margin offset partially due of prior management. closed QX,

numbers $X.X our levels, income higher to and in Net offset million, deposits. $X increasing operating year by to QX at interest expense partially was higher Looking due cash million interest the debt below prior period compared income.

as last XX% by million, hand. Other QX Wolf's on and prior quarter, income impact $X.X exchange year, an to related our increase offset nonoperating reflecting net was million primarily of arrangements. to partially income cash our foreign Wilson share of in partially the Our of which stood $XXX adjusted $X.X million funded compared quarter, on the pooling of Lunaphore the of acquisition, compared balance an bank cash the debt at debt to end reflecting $XX adjusted increase by was sheet the million

XX%, mix. rate to our rate effective down sequential a further QX the adjusted due increase our in international tax from was P&L, QX Moving tax

of QX, capital. shareholders million diluted was average in investment capital shares in outstanding. of expenditures return cash to generated million way We capital with operations returned $XX.X flow the was the dividends. by and quarter quarter, to our net million. during finished and Turning $XX.X from cash XXX.X we in Also million $XX.X of

with Our strong position balance million in remained QX total a cash, Xx our below $XXX.X sheet finished ratio EBITDA. in leverage and

priority remains capital allocation. Going M&A a forward, top for

and our like expectations China more than segment the approximately of expected experienced initial our some headwind get in was impacted the we the XXX more difficult headwind, to the I'd headwinds Genomics impacts none business segment the the in couple biotech less, which into experienced points order primarily Diagnostics cautious especially to that timing and of we quantify points. XXX results, another in the funding A customers, from environment growth. The to weeks approximately our quarter organic while the of compared an unanticipated is of represented Before spending more basis basis U.S. for macro we additional from quantify quarter. in challenging last

of our million, performance Now period $XXX.X increasing reporting I'll last year. segments, X% and Sciences. with to with both starting compared QX same the discuss the reported were reported sales revenue Protein organic

reminder, as gains is quarter from investments. well geographic XX.X%, China increase strategic the points than an impact more productivity that the to to of region the As compared Protein management as basis the segment most Protein XX Sciences market. the cost was it segment our exposure to as and Sciences for Operating year offset margin has a prior biotech end the and

Organic million, having were X% a for flat to Genomics X%. exchange increasing Diagnostics growth summit the and having last quarter impact with impact and was of sales revenue foreign the acquisitions QX favorable same to $XX.X X% compared with growth a year. [ reported ] Turning segment. reported the

testing negatively for the Chuck orders OEM of and products. growth by controls mentioned, was As our certain diagnostic lab impacted timing and previously genetic organic

and as data LCD fortified strong and continued However, Diagnostics our volume with very our our BaseScope drove spatial business our clinical delivered business in upper Medicare the growth. lines. in growth updated strong Exosome quarter and revenue strong in performances marketing the product microRNA both in biology growth quarter test and RNA single-digit Also, scope message, the remained

traction the is efforts are pleased launch, very progressing comment Lunaphore highlighted well. integration with are Chuck with having initial as We its

are executing than grow to be for more not well for the on organic will fiscal plan the our in growth rates their Lunaphore year, While year. they XXX%

continue at reported least 'XX. We contribute growth Lunaphore to fiscal expect to to for overall X.X% company's our

prior the acquisition, investments Diagnostics the strategic on operating operating to mix. margin a X.X%, to as product to and compared segment growth Genomics and to the impact Moving segment's unfavorable year's extent, XX.X%, decreased Lunaphore primarily well lesser at of due margin as the

regarding we the Before get to some provide near-term color like on Q&A, outlook. I'd thoughts to our current

already in China and our the As science especially is many U.S. macro market end the biopharma weaken, have peers life softening, the of continues in environment to tools mentioned,

negatively in While are QX, our to to QX. to to scientist we expect the and Diagnostics OEM company accretive Net-net, we relative be overall orders headwinds to be lab Genomics growth anticipate impact QX. our organic protein we of these about timing in growth the and forecasting also segment relative growth flat segment to within

macro environment the any is QX, Beyond results. dynamic guidance to sort with provide of

and should overall China that all headwinds company's headwinds right will growth investing behind believed. fiscal and and into dedicated will us tailwind productivity a we of the environment be pillars that the the destocking once in term, employees second not will back now decide turn. the the the growth in half the the recovery be it macro accelerate at tailwinds, team turn year protect us bottom market management line, in winds our biopharma rate near 'XX, while continue While to and to selectively our OEM throws will as Whatever of drive when excellent appears

that, I'll future ready call to over operator said, line the to inevitable for prepared cure and open the disease need. That help back endless. society's in be customers the fulfill Chuck turn with concludes the our is now As comments more will societal the to priority and to and questions. my is even so Bio-Techne

Operator

the question SVB Our line with first of [Operator from Puneet Securities. Instructions] Souda comes

Puneet Souda

from here Leerink. Puneet

and year? we for we this that super I funding macro. could know said next quarter. in I overall Jim expect Chuck, the just, second growth that? mean know in you full recovery that of maybe lot and just with could us China on should sequential helpful. growth would but just year, from So And for clarify, continue right that to step up fiscal of elaborate the does help if should the now fiscal of flat half to But that, the you be a what expect terms a overall uncertainties

Charles Kummeth

Sure, Puneet.

money. is funding So we pretty came -- created, they're their back definitely else of we starting but saying did returning just -- talk We are and week this China was from about China, quarter much not on this quarter call out enough saying is are disappointing. or material. past everyone there next to quarter of -- glimmers that, and last some be what

next quarter same. this more of the So is

real we're The any but be be government hopeful, team very of at this hopeful. that any funding recovery evidence kind or looks now terms -- level. isn't a there's commercial V is a that There's is going for to of recovery second energy But to there think, we're see. there. I all, of honest. Streets right think right there's are great But full. and kind I the half, a segment, The a economy in wait now, consumer at anything

on bunch there's a is and say lot of forward their roll same [indiscernible]. it's planning, thing a government obviously. lot hope with coming, the there's important but Now They of KOLs, all they not don't doubt a that of the and very

I and going see. we've got we're all there for through segments to of So it, grind downtime we're to But wait It's look other guess. just biotech, kind and better. a

James Hippel

there's just V sign I'll even kind new Chuck to, mean, I or year. it, alluded in no right as now of fiscal recovery shape add, this putting And any

last other market the saw to U.S. soften playing it fairly the So into continued and quarter of The we as dynamic outlined, of October. weeks is, we're conservative. situation just starts thing China the was in has the Chuck that couple

that's continues So flattish whether reflected kind whether in for stabilizes. but guidance QX, that unknown beyond trend is it that our or what's of here

half the fiscal year So not hence, point. we're commenting of back 'XX this at on

Charles Kummeth

now. a to to a take growth, on single-digit our bad high China, They XX% right more big do I growth more won't All growing story. do alter that But couple in quarter, all actually had matter to stuff growth aren't X so it company -- not be instruments. at emphasize I right believe wait too that least, near -- But becoming a the or quarters, And out -- in enough a longer. a kind start we're right mid- much. or This too and won't is now, platform better cover of China be see. we just will want of less. plan quarter, for you much

So.

Puneet Souda

of Genomics could business, That's segment. just side Wolf Okay. contribution us of on sort showed up could And in second were Then half seeing and contribute how helpful. the unexpected I Maybe you're here as second growth of number of a bit much, on what any, a to Wilson bit sort and timing well. talk fiscal sort recovery the elaborate more therapy? in and the here the the cell you half? us then Diagnostics gene to about you the a if expecting that that And mean for of like little it seems in pressures

Charles Kummeth

And discuss overall Wilson the de but extremely That's of side, Wolf, with our in going bioreactors. on same, the We're has standard a John customers. ready, facto the Wolf more focusing out TGS. well. We've Okay. are been workflow carry let They've forward sister flattish. of kind scale Kim they that kind I'll grinding there also very XXX of will is our with through. lot protein them, customers. business not too. kind I'll Wilson any We've mention and got got lost XXX-plus of

to a sterile working bundle. type We guess, a of be of our launched towards new module, have versions a I just protein or bioreactor

of treading which okay going of not of kind operating but making now. is overall everything pushing So forward. a lots income they're uptick, of meager XX% We're still we're losing right water there. just kind ground. waiting It's kind for and just the means revenue, And

So keep to they're using all that income driving faster. investing and

So Kim to then follow -- up. and wants

Kim Kelderman

Puneet, question. the Yes, for thanks

want into a sell impacted and that which of us, larger and It their the optimizing into inventories calendar course, also their end the laboratories of laboratory MDD organization been also of mainly these we're affected we is the space companies surgeon. DRD going think destocking the obviously, testing see phase. temporal, in the optimize that sell legacy those So into large laboratory year. to bit, specifically we space for the the the they But larger genetic at the portfolio, as little IVD and back and the inventories, companies. mainly They have as end specifically

Operator

line of next comes Dan with Our the from question Arias Stifel.

Daniel Arias

the this environment you given year? And rate might sustainable Chuck, portion quarter, that What up you that do that? we're do particularly the Simple Western think stepped that growth this you of a portfolio think in. issue as see for be do reasonable nicely what growth drove

Charles Kummeth

a No, question. great that's

think kind of Simple back on we're type original I thinking Western. to

I coming still was new had knocking And Consumables that of on bunch we for X% of XX% like X,XXX including higher, there's using roughly or alone. Western diagnostic-related a with something under instruments applications the even growth applications. out much is the we're there, just instruments, application blot door think it. which the higher the penetration

in It's So on our early bullish we're -- super Simple platform. innings we're yet. Western

like long-term growth the going go a for decade decade. down. So up rate XX% to talk a a like still is It's think CAGR and for I this

we're type year, XX% last of And think last had year, I years. comps. last still fighting couple we growth

consumables. we're double-digit strong growth growth still we're showing now, in kind still growth that. through of right working And and So

automated going only I get of XX%, one's be average strong term, XX% going got ever this nightmare And this I to able of It's it's for to XX%, to it. We've bounce think Westerns, type to game an is close No long think. the to people. it's but a which around where technology. been town in is IP. So

but future. it's So great a nothing

James Hippel

Yes, that. to just Dan, I'll add

I with, been to should ended We've just help. about Chuck budgets speaks tightening productivity this of amazing tool. driving concerns And As growth nature the in That's what's time, think an there. the it consumable as and productivity it's all the funding instrument. along, saying

been So it truly saying is along. it the productivity all We've tool.

Daniel Arias

Yes.

along whether then during X-digit into just scale translational now is to those quarter. commercial you reasonable Okay. into said just of in you the that expectation range? Do things lines, one double-digit touch you X% on additional usage in that growth, think the back up And ACD, you number? in can the in get just back of you the can then are you maybe And get for think on where that terms a order And clinical the up think up there? need need then setting I

Kim Kelderman

Dan, it's Thanks Absolutely. for Kim. question. the

our pull-through to but the is going least, than not last portfolio more right? this of business been becoming boxes, keep Lunaphore product will was products. our us but That's will our then only to entitlement in boost well, as more just it's slowing And the XX% revenues be Apex we down bit portfolio normalizing, scope end Think mainly solution the not digits. markets it this have on quarter. clinical back overall about that the the has RNA also fixing think a the unique with specifically. definitely business little already or we double a comment of By for I And and portion. Lunaphore outpacing

yes, So I think it double be in answer back will digits. undoubtedly the is,

Daniel Arias

Okay.

Kim, Just your China of to similar the overall the from really spatial for -- percentage corporate average? quickly, in business revenues is

Kim Kelderman

No, it's much lower.

Operator

next Jacob of question the comes from Our with Stephens. line Johnson

Unknown Analyst

This organic If well your investment? XXXX, your Will manage on change profitability? this organic remains approach to Hannah the investment? you Or into on try how headwind macro this for does view is does impact to a Jacob.

Charles Kummeth

can Yes. Jim this. cover

James Hippel

is short productivity measures no. I The mean we Yes. are place. in putting answer in

this do We continue throughout the quarter, that. have and to been we anticipating

hold is our accordingly. intention investing the that growth We guidance our while are, that out manage But productivity to margin still our of and earlier in platforms. in course, gave pacing our the year. we investments to

the what current while So we're and manage the environment the for given do. still we're business of do future, the what support paid investing that's we is that's -- to to intend

Unknown Analyst

to And of then the the year? can you proteins bulk back? talk outlook about and in to the remainder end you coming Do antibodies be expect for the orders

Charles Kummeth

cover bulks that. meeting are Yes, had a I'll rise. on with I yesterday just team the the and

on OEM that Destocking, indicator of starting very large see in returning. Jim said, us. behind So early some be orders. very to largely as orders kind it's business that's a discussion now good We're

think I that. the So turning we're on corner

see We'll XX quarter Fisher we where of and of segment very and of see as great. inklings kind are first the think running call on that run start been these out. that to lives positioning the kind -- of talked it well, labs to out starting have and probably here. got of start buying it about mean had their as I that that. couldn't bottomed the business flattening we this mean worst and years they I rate I quarter, last that hopefully our is well. and But stuff. They've we're again,

not majority our will run I now, start And think So we improving think overall improving. revenue. start Remember that's our a our will of rate some. retail

here, in So all things takes together forward of they give matter. part finally. to it us And this growth. bullish all double-digit kind I'm But these looking the

Operator

from comes Our Donnelly Citi. question line of the Patrick with next

Patrick Donnelly

the Maybe the just how in the the quarter, kind then on versus Can as progress deteriorated things may about mid peers saw you what suggest what And maybe set performance? saw? just the curious talk and be linear between quarter biotech a biopharma trends, customer quarter. disaggregate of first smaller the just across and the guys few things pharma, went? large you throughout you that performance So

Charles Kummeth

Well, academic about our company, biopharma was the the versus for it even largely same, lopsided. but Yes. is overall

was in than stronger much for okay, almost was mid-single-digit U.S., it it was growth. U.S. So biopharma in low Europe

a the poorer us So usual than much for that's in performance U.S.

in, side. it past was then biopharma because be mean, bad. actually As too Jim didn't in I and All quarter, China, U.S. quarters we on to bad in honest. do our said, the of and was better most not pain academic than the was the probably too China many without

second biopharma is or to after that to that or is very third it's wins, conservative can and on going clinical dual just change, a quarter because move. of be to is softer. quick round that course, And clinicals a very going very, that see dime. careful give X, funding way a the next on sets, was They're going conservative It's they're part being of going their or waiting high just on be why and biotech, we're small ELISA, turn you I come growth. good the they of evidence companies is quarter medium looking, you and biotech out they're being back. still can the as that a that because just soft mentioned, to environment to biotech part case We there. The immunoassay, biopharma. Pharma think for biopharma So they're actually it's being very I'll or some quarter or rejuvenate on single-digit in, just all get tight. the the not but had our X money ago. way trying to that is because

driving mostly So business. be evidence that that of most things could because farmer early of flip starting to that's

So ELISA a is clinicals. still or standard less testing and for driving more

So.

Patrick Donnelly

talking maybe curious a helpful, guess terms improvement? follow-up second in point in Chuck. there's market? about a at the and see little constructive to China. recovery China what just into bit any this if half baking that year to visibility you guys Obviously, And little you're That's of get a you're a in guide, of level for Okay. do then need I on maybe more the what prior a

Charles Kummeth

row how -- went growth many a We a or so. quarters many Yes. XX% how in

it's of But growth is teens now. teens of coming So we're off the last negative quarter going lull be same. a definitely quarter to quarter. forward, This high right going a a in more

the to flattish or hopeful honest. think be quarter be would I X, next

right, -- big second our in it the overall. QX, So mean we're not half, that take wouldn't who China, knows? I

that But or growth. in to wouldn't the many and back We're it just wait evidence, of into very So any actually is that take lot rejuvenation a overpromise. we'll and going get attitude some orders not just to area see. be but have not cautious to There's high. much or

strength. is team Our at full

and couple actually, bullish they again they lot people, start for the lot they But still It China. And attrition. ago, care once waiting believe, about China. just to We're of of a with and weeks government in fairly We we've of favorably people is priority to do, for customers a usually have haven't talked they're looks well. still up do and to done Talked as April, great. here X a talking it. loosening you a to start what is #X got personally health here

of middle Shanghai. the in You're

start health care. the outside far too go to government the have city you seeing and don't still why concerned You about is

Operator

next from comes Schulte Our of question line Baird. Catherine the with

Thomas Peterson

region the to softness. dynamics This perhaps Catherine. a of on of little an indicator as organic from some I but is Obviously, Tom comp leading that understand the that of number, quarter had standpoint. strong a Wanted maybe within Europe growth a really into dig bit. are for kind there some flag

flag kind have the Europe? leading from of the within drivers what to indicator here? And to if anything curious were a So you standpoint

Charles Kummeth

you mentioned, easy. as first, Well, were comps Sure. quite the

helped a is We're quarter It's have to growth organic that that. about Europe So a growth. negative lot. organic right XX% not XX% great But a talking now.

into of quarters for X in part we're So story. real or us recovery That's X a Europe. the also

team salespeople biggest is The couple have new should invested be Germany have cross-selling. more They for change. evidence getting right with as in subsidiary a -- But a Germany getting correcting And pretty full already I wait of it's are strength. focused synergies. And new We think, There's not I'm working. that that. our German. frankly, We're in been regions. well. and quarters I guess now, if a quite Nordic place. to and a Europe great reorganization We're leader at be an see. more much on in going We're have in We've more and strong management nearly future, Things going not, ago. done the we're some too example, I'm Europe [indiscernible].

Thomas Peterson

kind M&A the if perspective? on I there But that look like of in Great. comments we that up you of any had more number then your That's any talked conversations popping of are helpful. from here? about does your given was where the thoughts Is funnel private around reports. those the throughout mean space macro enter willingness with a I we clearly, landscape? sort throughout what mind, maybe among And are a wondering headwinds

Charles Kummeth

we've year, this wanted Yes. is confidence never to to -- here I going and I M&A, deal Lunaphore. honest. it's said seems entire just in landed my all be year Lunaphore a -- where Well, Board, everybody been came in it's be I'm It's I to. deal. tenure on never back we've a It like great from received Aldo about the busier more

many We we it's partner, with thing good This personally were Thermo lots year-on-year, mean Olink a lot involved we that it's of look and there. about it be and going just platform a has close fronts well. is our asset they're forward and them to others. and lot been deal. partnership did continuing we a saw on It's [indiscernible]. sell Kim Link. mention I marvelous And know with We products. applications So We a going Fisher exploding. be as a XXX%. to We've in the growth of wonderful to

So any out few like it's Thermo see to with don't we'd relationship assets problems are a there, but more pick there. of great lots them that. sure we and like been a up There

been that price private. private You and pretty the takes is kind funding of deals, deals, core looking latest even up deals and mentioned This the be in multiples these smaller is at definitely The for and phone. seeing that gives picking hope the up. we're pick deals to year good, they have tight, owners

for good I'm here a M&A. pretty still year coming expecting So

and size, try team use soon, gone and it mean and but sure here that. Jim Kim and I'm we'll lots be I'll to will purchasing I power of have on the We the continue our for mission

Operator

Matt of from [Operator Instructions] line William Our Larew the next question Blair. with comes

Matthew Larew

was -- Chuck, last think funding. it the the headwind you of especially around as out the that I Jim couple you comments hurt weeks said in And quarter. biotech in his called something of

that been given pressure time. Bio-Techne has so for under And some

there if a the front? weeks on picked last or was you noticed curious in Just on anything up I've couple of sense that that

James Hippel

until that And to up don't are stable deals some biotech the saying of that thing. I We close, year was our pretty here continued the run initial that's relatively couple how in stabilization of October. I peers its much kind said in of saw of and larger say good as of to not the kind drop we've off. case, rates answer drop last We 'XX. part after consistent saying pretty weeks. fiscal the except was been all first why like have a same saw I the us Yes. mean, for

belt on get tightening biopharma, this get that So again, end once year that activity. approved to it into biotech. piping belt an another optimism budgets the but the like it's some as little in of year-end in at exercise But we're going the here, point. a we see appears year into to across level new round we'll tell we there's at 'XX, There's especially and pickup business get early calendar start bit the too of

Matthew Larew

comments, fair your And of that's continuing China not you're teens to ex Okay. out, it as and business say, aggregating we're low modeling this sounds but obviously, then sort we China, in though like be about growth should down thinking the providing guidance. even in

James Hippel

and say, to consistent fair is That that's QX. with

the think and I and so forth diagnostics one of of in biggest about the in half genomics. the terms second drivers, too,

talked been would part earlier, in from is for funding Sciences be our the The weren't the the view better. That in genomics is it teams issues out still a in Kim and of bounce forward. be the for if going our it it And just what quarter is -- there China. the that better is count to growth a calendar have does very is submit is going I diagnostics we nice QX to seen. back remains question can said get gets China, 'XX. dead that worse near visited Or reiterate so before hopefully term, see The bottom. those year a come China while? early snapback timing we Protein by this challenged about to in do So

Operator

question Alex with Nowak line Craig-Hallum. the of Our comes from next

Alexander Nowak

very think and board just because here? maybe expand Okay. work in we're process ultimately to what Great. team well the here with you Jim I decision Will internal expand the the CEO in whole But to excited the Kim, you led on maybe that search all as the position. considered

Charles Kummeth

years mean speak quite went Well, it's I but for the on we I that through announce can't early. going it's ago. X.X very carefully. I did Board,

have time process, which thoughtful enough was I at we the very was that give think uncommon why noncompetes through. to announced. in One, it is look might leading work clear to very executives to be

there extensive dozen said doing our from notch list in candidates, to think the on abilities point. do didn't was what internal at some fiduciary think or X I the and, longer went more Bob through half which say that the in decade but seem a versus less an thought external last there know externals X was Board of duty, what I a -- their X the levels they different had than difference more that cases, recently And experience be spent a top at to I list exhaustive I the companies. the meeting just and big a

Kim's we've a thrilled. their the and and And for I'm and but And of a I so a it here team are Jim view. And see point lot together. We've won't do. work think been -- was and with it we're why sure, as for to Kim, take where here, many continue. of risk came do happy years very tough good decision, and I externally I with both low all they're politics no Will, still reason why got Thermo from, Fisher, we mentioned,

path everybody see a than. the be to industry, like years. so my the much down revenue and guess a is XX is a stock else's potential company higher stock there's lot We upside. Our billion in of will $X And in

So they'll around. probably stick

Alexander Nowak

this with are news a on truly here then this more well-defined And focus Genomics. products bit this after is that sense. Kim, transition? of unique biotech is high-growth biotech total Or you Would the and a keeping that you a call Diagnostics very little been anticipate move Makes combination diagnostics Bio-Techne it and areas? focused always there's

Kim Kelderman

Absolutely.

latter, no either bias the to there's internal So one.

true of top true well the core going I have love potential that, be going of I'm our as in some them of platforms, all equally. our vertical going best the others, And as growth them than growth and that higher invest that's defined have on think to platforms, markets and we're platforms, shareholders. growth to company the we're to and for focused on, our we the way for

Operator

Paul the of with question next KeyBanc. from comes Our Knight line

Paul Knight

long-time what be interesting? look sector funding you do this demand kind of would guess, the the the last is of When at expert. government seeing a what you're Chuck, what's much. portion So perspective or and that, of very Thanks kind you the -- I portion funding biotech Yes. funding, developed private proportion in you're is super this your discussion years? X China

Charles Kummeth

question, It's answer a great a and answer definitively. difficult it's very really to probably

You're and or come government been away last government in absolutely that plans it's funding a and so, successful. mind BGI the years drift real on definitely the have very been right in to to some have from China. companies and definitely solely been have relying sector like companies biotech that come X the grown And become there has

grown. private has think equity, VC I money

models I taken Chinese have America, decent of business people home think gone you've business a and quite them got are principles that it's American lot and well. Chinese gone with and from and

venture well. The and done been I -- some records difficult of think, quite great have been We firms We at. some great doing have track to friends hard Chinese there. some know some percentage, though, that have there is

I think we direct going fulfill all just through -- we're there, the all of we but master more time, mainly and more in China. still us distributors still

I There's it well funded. run which driven little a coming bit hard are government a understand so And is it's component is by where institutions, already that largely to rate from. and as largely think

our that in -- size so overall, such as digit have the in to Array major there bigger and are successful very We been and companies taken business especially it's the growing us. a and segment but over time opportunities call double portion is still the like that there. of piece bigger long and going portion well, mine that pulse is a have DRD some growing and of have overall business with of and OEM drive economy the going government others around But it, the a of direct definitely the shrinking, our

James Hippel

Paul, add, that on perhaps VC funding does in in I it U.S. I the more if could, government U.S., has impact than unlike the the China would funding indirect

what of is funding follow the will accentuate China, often government does. or I fund funding what NIH in VC the the But does. think VC U.S. irrespective in

the lead, where following direction is our that's the believe really So with why there. we the on of -- government going space money

Paul Knight

-- there. clearly Yes. R&D be on that the appear is create some across government That government follow-up health it and fundamentally do me then core that is does care, behind think up hospitals But the picking to industry behind sector. the improvement numbers that you would to show still biotech

last that yes, be my would So follow-up.

Charles Kummeth

bullish think they're that. on I very

like leadership I position want. think in that's be as to they China and something sure. sciences semiconductor, not -- in definitely in [indiscernible] life a being they wants They in for can are biotech they best a

Operator

Our next from comes with the Deutsche of question line Bowers Justin Bank.

Justin Bowers

So just you sticking about next where jour, talked du with being topic China. the trough the quarter potentially for --

if of step mean, back, that XQ run I a in guys a little needed bit Is like market. and what's that's about place somewhat good outperforming business. And But of And Hope taking of rate? just are think philosophical the and in the you to infrastructure we funding sort to government exclude now just peers question. and reflection return sustain the a a

right? bone. into before quarters XX%, XX%, those sorts are of XX%, Some And have down start can drawdowns you the many only there's cutting so you

would... that on thoughts any just So

Charles Kummeth

programs, they're level the -- but but are rate our you're of about good They're to done, keep there. around the funding new in." they've playing sitting teams So he growth, waiting And the they it's there, and I institutions for to this "Well, and cutting And are there it's got got -- -- in come right, leader happening. the labs they've future said, [indiscernible] but from comment certain money about just a Yes, on money and it's is need. we about run -- not lights growth, week, think it's a a get really work good question. people. APAC for the in

So it's gone shrinking, not it's but away.

So in it I I perspective to got mean there, think. put

quarter, to working funding. money, -- going programs or with too. mean be isn't new they're companies people but down isn't going but Maybe work, were had no they're there's and flat, quarter. aren't no end there being will for like other think last doing XX% work, now. right we mid-teens. In work, growth I talked to I funding we it up There's this that, it

at So waiting everything standstill that. a is on kind of

know So that's tone forward. Don't of the going really layoffs. real any

right waiting a lot team that an but attrition. anyway, now, and full major much don't the they have of I We there kind rear isn't checks in. think to they're of economy playing our come long for

teams really from enjoy as China, have, if you'll you as more your times just from to are pretty they're back questions I team, many honest I and energized mean it's seeing just I'm honest So because and too. in it's always you've matter. and they for come China than or people, or get pretty that the just customers really will answers such never and authentic gone they're teams anyone happy -- hard-working you

just it. love So

Justin Bowers

ending it. a And then on and note. Got of more just one follow-up positive sort

XX% do comps the of Within needs happen platform? or in around ProteinSimple highly think you quarter had which sort up more this where you education And accounts growth have you lot to the sort attractive a franchise, so forward talk there's and runway and is where adoption of of you success, end about penetrating that of as left. the that well. the put going markets most which

So.

Charles Kummeth

XX% do because for this we've a a stable Well, but good well. X the We We year. most gene in We're new China nearly double-digit important. XX% in than growth accelerating factory of of spatial. therapy, factory quarters had actually -- had Exosome, in double and most had number proteins as we great in here, coming building Yes. platforms, going growth of more We're we or funding, so with our the proteins. are all GMP X proteins energy got businesses our nice out a of dozen them put in GMP demand growth solid that come cell is and there the to of

not is yes, be to money, and is be well. from in But a thinking that's we a that back we're definitely operate think us. all say now we -- quality time our So flight and to make and fast could now, -- recession. just us, A all, company our be of year it I industry. stock. be and short-term this lot and It's ahead the isn't to behind thinking we're We there's earnings, in going a are can in definitely a

rates would is In can we about talking waiting fact, waiting the world big a sciences, issue, to a obviously, there. interest the whether soft and in pivot landing the and say, and And going pull and are I I'm for economy. out not and whole missed for pit. rates or we hit a life

It a So in of landing. life terms sciences. was hard

the -- obesity, to but So it. are big not aging, get own. out that neuroscience, not getting going there, macro their And we're worse, just cancer. on going we'll better. away Disease, trends through They're like things

early. time our the smart again, come there and investors will will So be

So.

Operator

session. end turn the to would have floor closing now Kummeth, comments. I We like question-and-answer back over the you reached the for of to Mr.

Charles Kummeth

you time, or and for will we quarter. that. love next couple lead here having what of again, anyway, around Kim the quarter, energized thanks we'll last a Thanks. like more all and XX And more be a Well, love my so. # a next I'll pretty quarter. good the we we we're for still do, probably see and But This something science. Probably and take is like or full call. earnings

Operator

this conclude gentlemen, does teleconference. today's and Ladies

day. participation, may You for Thank have you and time. your a disconnect wonderful your lines at this

Bio-Techne (TECH) 31 Oct 232024 Q1 Earnings call transcript