TECH - Earnings call 2 2024 | Bio-Techne Corporation

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Operator

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

You may begin.

David Clair

Good morning, and thank you for joining us.

the me Chuck are Executive Kummeth, current adviser with Chief Kelderman, Officer call Hippel, senior Officer; Jim Executive Bio-Techne's to the this Officer. Kim morning Bio-Techne's and Chief On Financial and company former Chief

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

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

the participating ongoing the X business upcoming measures During issued morning to most conferences reconciling events. www.bio-techne.com. press measures these available we the Biotech information Tables of in comparable these at forward many Health you We company's on Separately, Corporation to KeyBank may the look during will to to provide this website in and call, release be measures months. be performance. pertinent are used Barclays earlier next financial GAAP at Care the connecting with non-GAAP

over the I will now to Chuck. call turn

Charles Kummeth

second Thank Thanks, Dave, conference joining quarter good call. you us for our everyone. morning, and for

diagnostics is taking Bio-Techne, incredibly Prior of responsibilities he Kim Officer, the of a at positioned ended heard Fisher years company. Executive tenure all official leadership Diagnostics and company that for and Kim growth appointed role. operational assuming the you several end yesterday, He's As worked XXXX, for as XXXX, with over Chief I was know, my this many I and in highest X science Kelderman Kim in in to in Chief Genomics life Officer Thermo lead now the well and segment November Operating is Scientific. Biotechnics of markets.

time, $X.X of a execution for refer as our of and expanding revenue our business core grew excited over to to organic as the while a top-notch approximately business stalled its $X When smaller largely it This market. under in Bio-Techne has at prioritized and at joined X% leadership leverage TAM leadership. XXXX, $XXX flourish almost much legacy investments in these capabilities and Kim's I which future XXXX we and to were revenue grew from acquisitions, was $XXX legacy business in the core controls a company. Bio-Techne XXXX, organization, estimated the an combination total reagents, our period. fiscal research for I'm leader billion over CAGR continues and we in that Through the of team, products accounted million and million we Growth a diagnostic XX billion in calibrators, at immunoassays the addressable of billion. to $XX with fiscal

with franchises Bio-Techne molecular the instruments, market-leading gene this in Under and now analytical and diagnostics. spatial umbrella, core cell we biology therapy, augment high-growth, proteomics

many over to and to look the never of of today forward this Kim. X,XXX over team the maintaining last the its more growth have in under this and a been significant employees while I talented I'll the long-term accomplished Kim of over turn evolution pleasure this industry. profile growth With business on continued XX global leadership. the confident been that, potential years. leading in of have getting call It's you team Our attractive a one our most know profitability to call

Kim Kelderman

forward. going here us And you that word, very Thank of again, please note of best all for Bio-Techne Chuck. you the

Bio-Techne Now well a QX continued dynamic environment. market to execute results. team and our The constrained in to

has headwinds and Bio-Techne second sources quarter, those impacted over and organic the these of to long-term the broad be our all during OEM company very spatial which our continue growth challenge geography. portfolio our several biology resulted remains pharma environment X%. of also to negative our a such intact, these ProteinSimple our our as Our for year faced China, revenue delivered as as high-growth headwinds ExoDx business quarter. all happens funding the which analytical destocking now liquid well historically soft as a biopsy customers The of decline growth by tools potential for solid economic our pillars headwinds, about and industry of be in Despite an large the past a growth impact as strategic protein, franchise well branded from in

In business past the growth XXX,XXX continue antibodies a By reagents. been by the delivering the high-quality of to bolster than has high-growth and over average market-leading portfolio rate an with core our years solid these way, portfolio we by businesses will our X% proteins decade. from with growth over content X,XXX more of research itself ahead, about core

in will catalog our enable industry to as leverage existing core drive ultimately, pillars expertise and fortify growth discoveries, growth or global health well continue this portfolio as We to improve our care. product our unique

the we product I the well global as portfolio. as relatively become needs resource businesses understanding our overall to of footprint. across period analyzed spent categories transition evaluated importance of strategic operational my our CEO, efficiencies also We profitability all across During time various

of Bio-Techne the able environment, But show, been margins that Bio-Techne very while pillars model. efficiency increase we our on to a on remain the throughout we said, already focused driving operating growth opportunities. increase efficient have is executing current global identify aforementioned organization. opportunities those efficiencies the will to In our face As operating

was specifics to of acquisition leading quarter, he business molecular as McManus role, you might our the he the be was Chief Prior Genomics Matt Executive the Operating familiar he diagnostics and and Before CEO. was segment. formally Bio-Techne's Vice to like Bio-Techne following Ezenta. with of to Diagnostics name where proceed Asuragen, the President for welcome that of President I Officer officially I'd several as of to Matt

Matt his the strong to and team out We track knowledge excited the Diagnostics take experience. of Matt is new team experience driving to the the our next Bio-Techne cultural leadership and to growth proven are excited life stage that existing of given going of runs leader growth. a of fit have cycles back record business leadership through this business, Genomics breadth family, ideal science has He lead through deep the market and Bio-Techne and forward. talented at I'm

in Biopharma. markets Now let's start end our In our low the growth on quarter. a geographies. with declined and biopharma, single discussion digits

remainder call, trajectory for global continued of end the of the engaged part took biotech last cautious first a into very the quarter. in down in much at spending that trajectory throughout front sales on they The the early our more sales stepped customers quarter. our noted with This the we second our As But force. their biopharma and environment, the cycles. quarter funding XXXX second stance given budget of overall remain of the

On to market. academic the

and biopharma has grew the From academic remains market. though quarter. done academic the demand And an digits. job consistent Europe single-digit pursuing the geographies. team in geographic the a a side, saw upper On very even converting mid-single We challenging market, growth perspective, and we across drove excellent the in opportunities healthy

aforementioned The which experienced the Our behavior team we former over have despite quarters. the from well strengthened last customers. momentum, X European executed spending leadership team the continues positive our

In a from where that biotech the worth environment. year-over-year this North funding soft flattish performance. most experience is impact America, region continue we experienced the It's the to noting we significant

China. to on moving Now

where calendar that while for has as recall a Protein that Sciences in year, of exiting the decrease at a in geography following XX% You might quarter spend geography was good particularly our the China the over deceleration led of XXXX. rate year-over-year a fiscal experienced segment. headwinds The our October mostly within close is run impacting we and and year, the this trend a highlighted we These portfolio start stabilized as November, quarter. continued first calendar to of challenging the the news the

trends difficult portfolio prospects with product X Access researchers serving this the government current bullish region. to on remains China are to the our based very While for the it's encouraged long-term performance, remain call top improved of care in priority and months on the bottom of health stabilize. the we we

within tools across is had analytical discuss let's starting Sciences Protein comes growth when placements. a portfolio in productivity-driven related our pillars, constraints those segment. China. This to with our challenging it the instrument A Now budget evident biopharma novel quarter ProteinSimple of branded new to

namely of shoots green number portfolio, the that on consumables within were ProteinSimple used platforms. specifically the However, there a

in are even instruments fourth consumables quarter row, least our constrained. at customers a at which that levels For by XX%, have budgets grown when these are utilizing our means record the

as cell These CROs accounts, multiplexing increasingly and such automated therapy for an platform labs. platform, that needs. the of large translational our double-digit Overall, Another is the ELA their experienced rely the green instrument in growth Plex ELISA use ease sensitivity high has shoot as of and branded on studies been accounts QC ELISA platform go-to QX ELA. in platform perform high-volume the Simple becoming multiplexing

instrument. sensitive multiplexing certification recently reminder, we a ready received our this platform. this potential will this on a in up As large Wallingford, to and clinical XXXXX now market we are hand, end instrumentation highly pursue ISO opportunities certification diagnostic This for facility. With fast Connecticut easy-to-use immunoassay important open of

diagnostic potential we encouraged of choice number further high-value and are We application. the diagnostic discussions are partners, steps for we're the having, ELA to the position by platform of as taking

proteinsimple shoot green pillar branded third growth Marine. The our [ winero been has biologics ] platform,

of lot launch and of is This grew sense spectrometry platform makes traction replacement specifically this and production. over easy-to-use also China, chromatography. methods, legacy identity mass drug in Excluding in including this fractionation an recent charge, next-generation platform addition biological QX. see a Maurice size protein to the drug exchange We significant Flex, of capabilities, XX% an development in protein for the because

shift To were same impacted agents Flex and and towards vertical as as our we a last is pillars talked business our mainly proteomics cell workflow biotech which portfolio progress solutions within for results Following Maurice this funding the our major well and these companies therapies. seeing the other are next-generation awareness launch therapy. their publications, I of the This growth to that scalable gene to growing demand I'll by that for about of QX of earlier. driving customers includes and accelerate Protein customers equally gene and therefore in year, constraints our implement. number segment. Cell of enable March now Sciences commercialization the solutions

to However, short-term strains changed here cell that gene and have is therapy stay. not fund income conviction our

believe and pillar. growth strategic and a significant treating will In we that these curing we in will role in therefore, terrible the invest diseases, continue fact, technologies play to

joins filing a drug quarter, These when our an DMFs list our X for customers the the span way, math animal-free we This portfolio. into easier. their of DMF, customers' filed almost accelerate growing therapy IND filing effectively or enable that making product our This During GMP specked file expansion are submitting GMP cell to much filings our workflow. FDA, getting first products cross that to reference to process the medium.

our are growing and industry. engineering to market-leading include Bio-Techne's We further media will antibodies. in activities solidify also expanding GMP GMP gene rapidly additional market capabilities position These formulations, portfolio this

biopharma we among timing Overall, a than in customers quarter. finalizing closed indicate biotech the I Wolf for segment has the therapy accelerated macro the current growth sphero order solution, as our in the shoots positioned the is a decrease experienced GMP GX. as macro the addition, that proteins large cell [ green well been But manufacturing constrained funding handful It In environment this as already are impacted discussed landscape GMP organic our Sciences segment media by which China. the ] of abate. the a with and challenges revenue funding Protein pairs X% immune Wilson

spatial the discuss the Spatial automated decision ACD to ACD's Diagnostics well and This neurosciences experiencing products branded the Biology our challenging quarter. segment, play growing We're are recently as let's Genomics pillars starting as growth the Lunaphore includes RNA this Now an gene macro with about remains and platform. our also Despite demand, advancing solution. excited globally our franchise. in research. traction with we branded the high within Lunaphore for the continues biology scope environment, acquired mid-teens therapy, portfolio in role cancer important

interest is base. platform the a installed we conjugated use currently and are translational the not COMET's higher-plex reminder, antibodies. in which instrument require proposition is does fully high-value of research growth high significant As commercializing automated community, with primary that resonating rapid driving COMET our

a fact, instrument this which manufacturing for In the demand exceeded COMET our capacity, backlog created during quarter.

Lunaphore that note fully final multiomics the demand. RNAscope currently of meet next automated, with business COMET same are the we COMET capacity lounge protein Spatial solution technology We complete markers This we ACD's platform, with upcoming showcasing workflow is will our Biology bears at The automated scaling in recently announced to and have and this tissue around section. be upcoming detection on this workflow spatial RNA AGBT Orlando. production our week strong the fully

Now the DGS, let's growth molecular discuss our diagnostics within other pillar business.

prostate should With test dangerous test on proceed and with and both valuable a growth prostate with score physicians. a biopsy patients volume XX% ExoDx PSA provides or invasive whether of gray quarter, second our potentially zone Our information resonate value not. with their in this the continues to man

in segment pillars. We well by designed pipeline cancer Overall, organically forward Our single but was monitoring the strict for exosome-based for and destocking includes X% the cancer detection the colorectal and sharing pipeline both precancerous quarters. our markers to the in various as customers. by early G from additional of core development test test diagnostics screening exciting mutation look this as colorectal and on grew coming the muted management inventory Genomics OEM Diagnostics quarter, data cancer

customers level. and diagnostic molecular return growth buying pillars normalized at OEM Spatial segment from results these more become our patterns, visible to the Biology the will As

you extremely that [ tool sciences the ] I'm life cell Biology well the much. and molecular of sciences in proud life A of team's quality COLI to in impacting in proteomic our in portfolio analytical and by and Bio-Techne are challenges navigate to both and transitory catalyzing medicine. Thank ability summary, therapies, in growth very improve In tools, the advances the gene agent of pillars broader positioned diagnostics industry. are Spatial

that, Jim. over to it with And turn I'll Jim?

James Hippel

Thank performance. year $X.XX some prior was our to you, compared Starting start give with quarter. on the Kim. EPS thoughts the detail financial financial some Adjusted the quarter I'll then additional financial outlook. QX overall on with performance, in $X.XX second

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

had translation favorable while to growth. a contributed reported impact exchange Foreign X% X% acquisitions also

declined slightly and our market region and organic quarter. at QX Looking America by in North China over mid-single Europe digits, in year-over-year. increased end growth XX% declined the

to lesser the also mentioned, business, environment customers, biotech combined overall decreased with our growth India. government biopharma drag Kim outside performance China North American both overall, low a in European constraints and, single to As relative APAC our represented we're our to from Korea, funding with digits more recent a conservatism offset a South funding quarters. of partially and soft by on extent, in headwind Japan

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

growth of our achieved the still in rates stabilization Following going December. the will will but many kind Encouragingly, XXXX. of challenging continued that be headwinds It as that in call the over rate we we run to be region life It in remain we China geography return is rates decelerating a tools forward for we this while has major in begin business world we we stabilization science China, a run bottom dynamic optimistic that China, months in are likely experienced calendar the long less to that the term. be confident severe. fastest-growing before in will historically this

driven mix QX year decrease XX.X% was inflationary revenue also decrease year. partially business. prior in was QX. increases the R&D expense QX revenue the volume in unfavorable in margin impact By margin the was the of X.X% was grew acquisition, compared XX.X%, impact to operating end QX of the points The by the compared 'XX offsetting gross P&L, single The for of largely diligent impact acquisition. adjusted with XX.X% prior on excluding QX, leverage, pricing of biopharma offset period. academia to of margin XX.X% was increase in Below year income XX.X% the upper the our the in digits. low cost by operating while total basis operating SG&A in in to XXX the company single to X.X% year. digits the on quarter year declined the was Lunaphore Adjusted market prior by The driven across during Adjusted fiscal offset implemented revenue from primarily compared on inflation lower China, primarily Lunaphore continue while in product dollar price prior and management a SG&A in

product the Excluding at than operating the and Lunaphore impact volume acquisition, leverage basis closed which of adjusted the was due year QX, unfavorable XXX to beginning lower margin prior the mix. points of

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

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

Moving QX further basis our flat the tax to the rate and P&L, sequentially, down prior XXX in geographic compared up mix. points but XX% effective adjusted due year was to

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

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

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

which QX prior segment. year discuss revenue compared foreign reported the favorable revenue having starting our the X% a Organic of were performance impact. Sciences with X%, period. sales I'll exchange segments, X% the million, decreased $XXX.X decreasing Now with reported Protein to reporting

is As offset Protein the and segment volume as XX.X%, points product to mix by a geographic end was well a partially has Operating region compared year for initiatives. margin Protein the quarter the China exposure unfavorable XXX segment cost the reminder, as were our Sciences as biotech basis of most Sciences to market. prior management decrease

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

growth was and mentioned, Kim order customers. spatial destocking of partially reagent organic As by pillars, OEM by core the and muted timing diagnostic previously growth driven molecular biology our our diagnostic

the Moving X%, Diagnostics due to margin impact decreased segment's compared on primarily to year's of prior segment and the margin. At the Genomics Bloomfor acquisition. operating XX.X%, to operating the

However, mix. leverage margin due favorable volume from basis points XXX QX improved QX and operating sequentially improving to

reasons turn we As look but can our are also fiscal and on or there some ahead of to the the reasons optimism the in to remain green back for half QX shoots are cautious, term. year, near page still call them as there

not I revenue China generating tax for Chuck On starting the economy and of economy the to Biotech all to not has But life macro front, and in XXXX. back, since airports. economy to funding science move to government. shutdown, the strength. and their QX, some nor to pre-COVID inflation several After appear Chinese recently its reduced biotech COVID interest once already the funding the the and years have funding Having again rates crowded local regional research level started a and And busy returned and dramatically flooding reports, witnessed likely restaurants local has bustle been according is has analyst on streets seen stabilized. with bended Kim,

shine continuing for these growth are typical pillars Bio-Techne, our conditions. As to macro even

pervasive mean process. may determine experienced us. this sequential rates subsided. do decelerating so a are the that business in But trend months are does macroeconomic new cycle in like our the throughout at Down XX we we've may the the help over not encouraged we This cycles we or expect of have we quarter, has quick early far, the monitoring never closely are fun. [indiscernible] It's of reagents worst in acceleration growth that are been past growth. behind expect thus where but We that run to be

of us has markets rate throughout confidence a grow that when double-digit normalize at the the our in With longer greater resiliency cycle this term. growth company growth pillars given even our will

and to return start to diligently business cost future. markets invest our for the normalize, the continue inevitable in to manage prepare for the will growth, and As we our structure

grow opportunities concludes We'll fiscal his our efficiencies Kim the As margin identify operating comments. That the for remainder opening year. of mentioned in my protect opportunities. continue and executing for these even we prepared comments, on by to sequentially adjusted and

back line the the that, to over operator questions. with call turn to for the And I'll open

Operator

Partners. [Operator from come Instructions] Souda Our of Puneet first with line questions Leerink the

Puneet Souda

you look it really was with the to and really Chuck, at I'm have onboard Kim, to leading And back Matt, the you It's working role, glad good Bio-Techne in great company. again. you as ahead. welcome And have well. good

me my around is quarters. few let really So question maybe have that ask sort last headwinds the for existed the of

we known China, the have that have You biopharma. them seen across industry,

the think quarter what changed flat you in quarter, here the X%. is you were assumptions expecting up in a ended I this down your really within result question

this just customer the a So were well have through, in working is Is yielded orders? in walk there expecting? something And process to result you there the follow-up. portfolio? something is versus it not maybe that's what I that Or then forecasting specific us

Kim Kelderman

team. significant [ kind a good these of Thanks I, are towards every of words question. -- be our But which we going we for in mirror certainly of ones going an headwinds which on have have forward. your are most opinion more have ], course, Great significant. understanding to

about that. Jim So I'll let talk

James Hippel

called Puneet, X the speak. that is forecast, that so Yes, to

So speak I I to think to it. need

this the opened pharma trend. deceleration the last doesn't seen make QX in call closed we've weeks continued. as time of especially, and step biotech weeks, in bit a first various call, we've that the a the in we And a talked QX on ended of that weeks, had we couple few few pretty in conferences down we we that that, but necessarily quarter, As were reality last even transparent in our the so about a the trend is, throughout and as

So from view QX. they our were on ends and deeper longer growth in trend where a we a we obviously, anticipated. But that up being took than rates decelerating

quarter But quarter we being more will prior seeing we from even month out last in But momentum stabilization we saying why optimistic entered quarter. up and have we at relative of coming did. So last that's a and ended forward, this at said, quarter, we we kind bit of into view last how as where of look going quarter again, how weeks and That to into it than point as this few in definitely quarter we overall did enter QX. quarter like rate, shift as or see about, in versus stabilized And a trend talked just I we going just this our doesn't bit temper are least we that a by China. we're business this a a make that a where either. to an or run stabilization necessarily

Puneet Souda

rate -- quarters I here? your context where full us terms help in and the Maybe you the comments helpful. that. about the assumptions status sort X year, growth could just of for through are walk guide, models and think mentioned quarter and appreciate be us low expect Jim, there about to or early on based That's how next quo. I point Okay. on you you biopharma China you're clarify a remaining thinking any that stabilization Maybe on just a this of the signs wanted to just about if the

James Hippel

Sure. that I say Well, I talked the slowing a we about I this. have mean, and deceleration would sense that perhaps is stopping.

kind I by of is, be from you've this and expect I peers growth. in many similar QX what to our terms QX already organic our somewhat to that so And our mean heard that think of of

it obviously year second there months, call. Beyond process larger first pretty whole about out much this planning -- fiscal that, half been process who much that. much 'XX that 'XX the more following hearing with agree our I the we what's X has have of market X will the that's is pretty it's in to put like view our calendar bottoming -- talk to But by we'll -- difficult from our with than greater consistent companies But half. our more being into we get even access I difficult peer and have or with about overall pretty what our to you're feels companies. here call difficult be year But set

Operator

next come questions line Our the Johnson with from Jacob of Stephens.

Jacob Johnson

end Kind as What the first customer just biopharma ] seen year? that And release CFO, Jim? you you you calendar in that, are start has just the ahead think unpack then to talk commentary. in saw turned? behavior of as evil [ would kind just that we what from increase change look seeing headwinds to kind market what of of what the Have you Maybe maybe any kind The of the to Can December. those suggest caused or then? you caused

James Hippel

to in calendar and purchases been calendar larger next sense through and that of until But prior it start as then think is was customers let mentioned I'll there since the ever internal what it's budgets the their that's was. our the or highest partly off perhaps through I our particularly products. some if not off high, sense talking any was about interest in purchases year year you are the the that hold purchasing him getting difficult talked Evil in finance CFO conferences I comment, set. departments comment In a departments and

a quarter, materializes with say actually reports there's if basically biotech see those in so on and mid-teens quarter, all they the conversations by analysts over I in but quantitatively, down funding, like the going was think of -- put number even. December that definitely closely who we'll out file sequentially down very think our the biotech that funding that and was there there And I this been customers. But XX%

definitely that's there drop biotech in a and So of was funding, a chunk off decent business. our

So I clear occurred within think without for quarter. saying that that the was a I what -- goes think driver that's

Kim Kelderman

Yes.

than usual. have, that funding market highest that. give probably If could hit However, use lowest Let And portfolio right? XXXX. me core, well been you the products positioned, point has So our quality lower we will biopharma the and by not is to the add mistaken, we results. Obviously, best since constrained the in

So constrained is you repeat important have in this. like experiments, which, of environment a to your don't course,

insuentation optimize And efficiency. our portfolio to is secondly,

to you in people efficiencies So results the and to laboratory that clunky processes your have to you have in automate reproducibility give that need the will need. you fewer the

I environment strong, think, portfolio to constrained funding our overall, normalize. once a So this And come one. out that will like is tailored therefore, we

James Hippel

just reiterate comments year. quarter in up again, and XX% declining his platforms the they've to reinforce up our been in past what that for overall were XX%, nearly I'll Kim is quarters this or our And market quarter, in -- the more this about has been consumables on a every past X instrument opening that talked

environment think more our how instruments mention So I the funding prevalent. productivity need that it's tools once not new sign of -- that for becomes a demand this, an like provide our in clear customers potential to pent-up the

Jacob Johnson

your was could I -- the my this of as Can follow-up. well. earlier then how now? how And quarter the should impact mentioned of Jim, right environment, you that are call statement again footprint what on Kim, given on current margins? just we and and you more on that think this think internally those you there for And year kind elaborate efforts in look charge maybe a about taking efficiencies, restructuring at it. Got and you just then the

Kim Kelderman

Yes. Thanks, Jacob.

coming of protect tailor you're your but constrained such be most you're always about sure line also make in environment. make the sure think only to efficient that you I most Not to organization efficient such going constrained As out period. the to environment, to bottom that

have of volumes buckets, employees certain than loading level yes, certain our revenues over at more in others. So businesses down the we looked capacity and are

amount expectations of synergies So in strategic bottom a there and management to that our businesses course, businesses we, want a view. growth attention the core channels things of that and/or of to line look right financial profile not have fit businesses which make disproportional from to our case, that secondly, some point and current then a that is And or here found do strategies where And do good horsepower our and profile products. long-term sure are take at with and/or time doesn't a there we we it's you.

are we we'll those that will So And evaluate. divest. time, businesses over

Jacob Johnson

Jim. go ahead, Sorry,

Sorry.

James Hippel

regards impact say was to to with I margins. the to going

of some is point the gives actions we'll margins you're to the does higher for we sequentially for know a think of the be this much the me quarter going this confidence much low I level going QX. I by forward. And into taking us ask the we're the we're will of what So that year. the progress back year how get range mid-XX% to end and And targeting reported

Jacob Johnson

retirement Congrats that's Got it. sure Chuck on me. to just my retirement. not I'm of I day [indiscernible] first saw the

Operator

questions come Our Stifel. next line from the with Dan Arias of

Daniel Arias

you to great talk cetera. Chuck, little would comes et just can to of get what the just antibodies It spending, et share portfolio, decent the it be parts changes, think a Abcam or the relevant the given maybe in number comes you bit just is are when the to pharma Kim when moving pricing, a color about it antibodies market. that cetera. business some and mix there on deal,

Kim Kelderman

thank your question. Dan, much Yes, you so for

antibody has quite Our well. done business

digits the in low it's single I at been environment. think running this even

So of there, sales in focuses they and with to close and sure that markets sure get over make space. biopharma, certainly make we have in headwinds that we that the academic better force our deals and some on

at antibody able our with that will of are we really Our so. companies, even antibodies do we that world we higher be confident to compete other to renowned we quality know continue and is can prices we and

headwinds we shelf. on people antibodies or have less the some fewer in where course, had from destocking would addition Of have

is headwind confident now symptom so However, pace the towards abate. its feel of that that feel we end will that we

Daniel Arias

of Okay. to But Analyst Helpful. highlighted them is back And think I call. Day double-digit market tough guys to go hate then, second to platforms year the had Jim, this I XXXX X since if of half and them. about you ask growth or X attached growth about that I rates the the to

your in the So comes to more done comps growth growth number typical picture? the XX are ramped back what and from into X you've enough months does of it feel verticals like past, that's a up are favorable now, where to the X-digit enough

James Hippel

mid-single-digit long-term it, on pillars be double-digit of the well in course, of back will high once core our of that. growth environment. Yes. What is even our that I'd call the that top this, X%, performance level confidence to to its a is we our is have that and in growth X% the say market pillars trajectory growth back this relative we Dan, given once gets up there growth of then,

normalize. hopefully, But I 'XX takes to for crystal on a yes. is long overall get of get me it calendar there asking by and then, it the long it So into have takes market that. be would the we -- normalize the then to market as how And end does year answer how ball don't also ask assuming to

Operator

Our line with next come of the questions Citi. from Patrick Donnelly

Patrick Donnelly

how XQ I got on congrats organic terms number kind it think -- of term, the in Jim, term, kind amount it. you it second is growth up Is frame a be just there. my piece, right that of the If side. help kind organic flat And near us the on to Maybe, just XQ? we good of of year-over-year questions of helpful the Chuck, about is just think can near about would to

James Hippel

our be we in rate base saw I is mean, growth rate Yes. will right specifically, that the QX in to growth case experienced QX. we now, the similar

the X us. is our deceleration past growth we've our think of X in seen -- quarters, the seen that of we've behind that or we deceleration the rate rate growth So

Patrick Donnelly

Yes. Understood.

just the real Okay. and just there. it expectations time you that some some whether over saw snapbacks the region? the we for And Maybe I in chatted of saw it know next us guys and Jim, recovery. the then again, over we've past, past about China, talk over like chatted, little of maybe were your into a may like, you was last was few in what whatever less seen? likely, or expectations know about maybe recovery be, that cycles sounds a that it I you government obviously, to a But we in quarter-to-quarter stability more talk there sounded it maybe the to gradual little a quarters relative

James Hippel

recently going Patrick. was than feel we but exactly Thank Kim. same know I to more the he hand you, this, to this over way was. even I'm I there about actually

Kim. ahead, go So

Kim Kelderman

thanks revenues question. of for feel the China an Yes, What obviously, Patrick. is is our us, Well, from right? come that, we important XX% country to there.

increase And of to local pace going to we the truly last tough the fast-growing where also day, couple find not the to most used standstill. find moment. of stabilizing. feel been a that have the serve we pull-through with the quality automation future. building We But spot able of our peers -- a a it's the at over record it we funnel. China or the that decade. the at in China. are to China that China of that and bias We shows instruments, kind coming instruments in feel the for market. little quarters, the bit to our over though, of last we We made the And products And a are So -- comparables came We a the a but the good China market our is activity quarters China do that facility that outgrow the we'll efficiency clear then real continue and half right? that light yes, are towards local over will in Therefore, do that consumables is see in our GMP current have a do the a to of a I aspects at expect better think end be not high China. the that going getting a think, are hump. for at not be end will

and will to to normalized in care. China we get that And funding. long-term As believe I prioritize use are the health back China, mentioned, and we funds believers

we're So V-shape when able recovery over you We that a recovery ask what will or a be optimistic than to time. But it be answer. usually. think very slower trigger I if will won't

Operator

of UBS. from next Our with Leonard line questions come Dan the

Daniel Leonard

I business. Protein understand decline to make in the Sciences just sure want I the

core how Arias steep rate the growth the growth. aggregate, of so to commented You decline proteins, antibodies, revenue? the instrument and But antibody speak you -- on low in Dan trends to in was reagents single-digit your can ELISA

James Hippel

then And would I'll Yes. down instruments this level general, Thank on from We're for at detail. our in even the and particular question. But Kim in our say constraints were capital were that reagents well comment I give to specifics going Dan. of that not bodies overall, further, given can you any our year-over-year. is jump down as up. slightly customers. though were the what

of Cell reagents cartridges therapy However, again, on and up were XX%. is biotech consumables specifically as of customers. also a concentration again, the mention are and instruments and used big our that I'll high a nearly user gene our those

reagent that so we our sales quarter. And also impacted, within think, temporarily the

Daniel Leonard

GMP or you And points you on as portfolio, Understood. the the that CNG market? just measure for the possible all comment more specifically could either holistically in you Jim, touch growth have proteins rate therapy

James Hippel

going encouraging that not down an that all-time orders record Yes. was point sold the cetera, was actual Well, an of it to number et the But at I down. I'm was year-over-year. we it think give is how specifics to invoices much level. still

purchases active were tells their that very customers conservative being terms still their that the gene in what research in the is cell us quantities, in within of but So therapy. more and

Kim Kelderman

there. information some add can I

and Jim of I -- think do coming of we that more that orders did as as than so that the new have and that increase push the The volume but add portfolio X couple in to we and a we'll mentioned, team be released new serves product is the proteins was quarters share thing introductions we also company out. a orders we a wallet. have customers GMP have set higher make larger is that of to usual, sure broader can

Operator

of the line from come Blair. questions next Our Larew with Matt William

Matthew Larew

to release which you on the the sort quarter, of in obviously, go because, further in the mentioned deterioration you comments up biopharma last back conservatism the set referenced to had call. Just wanted press biotech of But from subset customers. a a

Or again, assets, the versus I may pretty So constructive conversations. related budget-related view perhaps commercial companies it that process. being there if put had just ] you but you to think [ is more waiting as more at do about have in gating be discussed now just factor? budget get place What headwind turnaround I and budget of guess the for might biopharma funding? more sources in the being funding of Are

James Hippel

Yes.

of given us, funding our for the weighting think biggest biotech driver. customer was base, I the

conservatism pharma from I think the and was transitory. more hopefully, much secondary

So think Kim? that's that's our view. -- I

Kim Kelderman

Yes. I No, would agree.

Matthew Larew

referenced starting continuing to you looks high Fair it deals get like M&A to are And Okay. then be done. priority, enough. some obviously, and a

that's Just are a size curious, there from obviously, you with you recently to either public here had starting the you move more what portfolio perspective, line valuations see And out are in markets? acquisition interesting? Lunaphore seeing

Kim Kelderman

fast-growing the quickly Yes. is position on acquisition. It's fantastic it No, in itself, question. team for is of obviously amazing. and To And very, jump a to thanks the happy Spatial Biology very Integration with assets. we for acquisition going lucrative -- the course, will the the Luna well. are give market. The us

portfolio will in that our Systems, here aspects unbelievable an combining R&D capabilities and comment we value same multiomic the and look As you RNA know, fully this slide, with the and proposition. instrument, antibodies where it's automated then the and us give in at proteins can ACD

would more those. do of love to We

lookout. we always So on are the

time, private to but that exceed or our expectations is on you if would there's That list, pulls as We get which disciplined always long really really don't set if we core therapy even select a have all know, core. opportunities meet differentiated. be over looking growth we've our talked maintain stronger between any positions that a about a our can will interest contributing basically this picking the to financial portfolios. We've list. on would X agents our make those we -- that opportunities expectations overall. bolt is at a filling Cell would verticals. we like And out to to in in our large and we Gene whether our Bio- would be or and strengthen public And -- And small we or more through company, And something Techne financial fantastic. be the opportunity that. a or

any I just any to -- open that We mall are target of that described. fits the

Operator

come from next of Catherine questions the with Baird. Our Schulte line

Catherine Ramsey

you in China. seeing retirement. biotech, you I you're what of and forward? first, single biotech how the low groups Congrats Maybe you large bit emerging just digits a kind talk think those see versus said little going Can customers X of from outside midsized to down playing and about Chuck on and pharma out

James Hippel

big whether in met around another JPMorgan cetera, haven't investment for firms of VC sniffing of difficult for was many and we more some would they the was out levels private equity it's question. generally it the But It's the you That many exactly are difficult the small, firms, I funding Jim. biotech, companies, whether that et knowing was in there. to kinds and just general Catherine, it seen ascertain it how are the know, Thanks activity perhaps, opportunities, biotech, determine. saw private say, tools years to highest all around always Yes. we conference, in call sometimes as biotechs, smaller that it in is usually speaking, need the level or is. situation larger said, the green to I've of shoot being smaller the but

our So will it's at come that year, is funding obviously biotech smaller encouraging point calendar this customers. back benefit drought low the again, and might in that perhaps its and

Kim Kelderman

Yes. And if I can add to that.

different a in biopharma and think smaller are companies I the that newer obviously life cycle.

-- out things. build to have they their labs measure still their typically and their validate way they the processes define and So

they our pull-through portfolio they of there we parallel, automation a because that we a a through ones capacity a little more bit of phase these just And placed. typically through might of are running, And instruments. has large have are in already see they off consumables. So where run oriented pharma gone certainly, we and that's by expansion there, buying consumables. platforms, And there's, the pulling a course, number projects we our repositioned have being consumable a in see then but that course, the And more So is well. mix, and right? then instrumentation positioned as and midsized where

the how look at that's So versus influence size. I

Catherine Ramsey

XQ behind return you about that growth to talked quarter. to looking Okay. could a likely think more positive second growth 'XX being fiscal event? Got is to Or decelerating hopefully then similar do here and see you these you be And it. organic we a trends, XQ? the going in organic

James Hippel

Catherine within Anything Sure. possibilities, it's mean, is yes. that possible, of I

sequential In I tides met probably, by say I'm encouraging. for fact, China our the it think saying turn but I stabilizes, in potential We're in -- it businesses, a momentum for it. that's there's it. not so would be a growth improvement in slight would there's I'd I seeing some potential think -- truly

Operator

line Our Nowak next with Alex questions Craig-Hallum. the come from of

Alexander Nowak

that Wolf Wilson since is How progressing you there. made investment

they where cash, Just environment? the how funding curious they're biotech just handling infusion the and cash deployed the

Kim Kelderman

Yes. Thank you the for question.

tremendous canceled. has this has because the year. year Overall, activities of hard them -- the early-stage now been or Wolf So last was in behind some the and have clinical Wilson projects

better where So they're see overall, do much, is phases. are various the pipeline. next see that But ] digits. in the GDX the into clinical we mid-single approval down progress last and [ black. upcoming the in. there even back an see a last We specked been we quarter rolling And And has studies much in

the doing that adoption G-Rex and So again. Wilson And Wolf the great will believe that be John know of franchise. that we Wilson overall, Wolf bolster invested has activities Wilson our we in

Wilson fully the and the of genius Wilson the part we Bio-Techne around know, latest at Wolf is As Wolf end very will structure calendar XXXX you be of have the family. year that deal a

James Hippel

did just I'll their from tough sequential 'XX there. financial significant continued But all we They quarter to have. they year improvement had in a regards expecting to calendar improvement see and with like are sequential their performance. add actually December

also. encouraging So that's

they the market Given have wider cell much than even therapy do. visibility there we and gene into

Operator

you. Thank

like our over question-and-answer We closing turn end I for now session. the to floor any to have back the remarks. reached Kelderman would of Kim

Kim Kelderman

and joining call. the Yes. Thank thanks, for you, everyone,

plus. over thank course, decade Chuck, time, last Of last you, X the for leadership your

As can long-term our a position I'm prospects you hear, excited the and about company. as

And team looking forward have forward this I'm environment. to very in so release. at speaking to well also executing next looking absolutely our place. Bio-Techne a navigating for constrained And proud I'm constraints. again We these of in I'm great strategy the earnings

Operator

That does participation. today's teleconference. conclude appreciate We your

You may disconnect this day. rest the your your of lines at Enjoy time.

Bio-Techne (TECH) 1 Feb 242024 Q2 Earnings call transcript