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Item 7. Management’s Discussion and Analysis

2026-08-24 compared with 2025-08-22 · 114 added, 129 removed, 233 unchanged (51% of the section changed)

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This segment also includes proteomic analytical tools, both manual and automated, that offer researchers and pharmaceutical manufacturers efficient and streamlined options for automated western blot and multiplexed ELISA workflow.

Our Diagnostics and Spatial Biology segment develops and manufactures diagnostic products, including controls, calibrators, and diagnostic assays for the regulated diagnostics market, exosome-based molecular diagnostic assays, advanced tissue-based in-situ hybridization assays and instrumentation for spatial genomic and tissue biopsy analysis, and genetic and oncology kits for research and clinical applications.

Our Diagnostics and Spatial Biology segment develops and manufactures diagnostic products, including controls, calibrators, and diagnostic assays for the regulated diagnostics market, advanced tissue-based in-situ hybridization assays and instrumentation for spatial genomic and tissue biopsy analysis, and genetic and oncology kits for research and clinical applications.

PENDING MERGER WITH MERCK KGAA, DARMSTADT, GERMANY

On June 25, 2026, the Company entered into the Agreement and Plan of Merger (the “Merger Agreement”), with Merck KGaA, Darmstadt, Germany, a German corporation with general partners (“Parent”), and EMD Holdings NewCo, Inc., a Minnesota corporation and a wholly-owned subsidiary of Parent (“Merger Sub”).

The Merger Agreement provides that, on the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving as a wholly-owned subsidiary of Parent.

At the effective time of the Merger (the “Effective Time”), each share of the Company’s common stock, par value $0.01 per share, (each, a “Share”) (other than Company Restricted Stock (as defined in the Merger Agreement)) issued and outstanding immediately prior to the Effective Time (other than Excluded Shares (as defined in the Merger Agreement)) will automatically be converted into the right to receive $73.00 in cash (the “Merger Consideration”), without any interest thereon and less any required tax withholdings and all of such Shares will cease to be outstanding and cease to exist.

If the Merger Agreement is terminated under certain specified circumstances, we or Parent will be required to pay a termination fee to the other party.

The Company will be required to pay Parent a termination fee of approximately $230.5 million under specified circumstances, including termination of the Merger Agreement in connection with our entry into an agreement with respect to a Superior Proposal (as defined in the Merger Agreement) at any time prior to us receiving shareholder approval of the Merger Agreement, or termination by Parent if the Company’s Board of Directors effects a Change of Company Recommendation (as defined in the Merger Agreement).

Parent will be required to pay the Company a termination fee of approximately $576.1 million under specified circumstances, including termination of the Merger Agreement due to the failure to consummate the Merger by the Outside Date (as defined in the Merger Agreement) as a

result of the failure to obtain certain required regulatory approvals or due to a permanent injunction arising from Antitrust Laws or Investment Screening Laws (each as defined in the Merger Agreement) if certain other conditions are met.

Consummation of the Merger is subject to customary closing conditions, including:

(i) the approval of the Merger Agreement (including the “plan of merger” for purposes of the Minnesota Business Corporation Act) by the affirmative vote of the holders of a majority of the voting power of all of the Shares outstanding and entitled to vote thereon at the meeting of the Company’s shareholders held for the purpose of voting upon the approval of the Merger Agreement ;

(ii) the expiration or termination of the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and all other scheduled antitrust or investment screening law approvals having been obtained (or the applicable waiting periods having expired or terminated) (such approvals, collectively, the “Required Approvals”);

(iii) no governmental entity of competent jurisdiction having issued or entered any order, injunction or decree or enacted, enforced, issued, promulgated, entered or adopted any law, in each case, that is continuing in effect and that prohibits, enjoins or otherwise prevents the consummation of the Merger;

(iv) accuracy of the other party’s representations and warranties, subject to certain customary materiality or de minimis standards set forth in the Merger Agreement;

(v) the other party’s compliance with its obligations and covenants required under the Merger Agreement, subject to certain materiality standards;

and (vi) with respect to the obligations of Parent and Merger Sub, the Required Approvals not containing, individually or in the aggregate, a Burdensome Condition (as defined in the Merger Agreement) .

The Merger is expected to close by late 2026 or early 2027.

RECENT ACQUISITIONS

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As disclosed in Note 4, the Company completed the acquisition of Lunaphore in fiscal 2024 for $169.7 million, in a cash-free, debt-free acquisition.

We also purchased a 19.9% investment in Wilson Wolf in fiscal 2023 and, as disclosed in Note 1, will acquire the remaining shares in Wilson Wolf by the end of calendar year 2027, or earlier depending on the achievement of certain future milestones.

OVERALL RESULTS

Operational Update

For fiscal 2025, consolidated net sales increased 5% to $1.2 billion as compared to fiscal 2024.

For fiscal 2026, consolidated net sales remained flat at $1.2 billion as compared to fiscal 2025.

Organic revenue remained flat from the prior year.

Foreign currency translation had a favorable impact of 2% and a business held-for-sale had an unfavorable impact of 2%.

Consolidated net earnings for fiscal 2026 increased 148% compared to fiscal 2025.

The increase in earnings was favorably impacted by a non-recurring impairment charge in the prior year, a non-recurring arbitration award in the prior year, and a recovery of assets held-for-sale.

After adjusting for cost recognized upon sale of acquired inventory, intangibles amortization, acquisition-related costs, certain litigation charges, investment loss and other non-operating loss, stock-based compensation, restructuring and restructuring-related costs, impairment (recovery) of assets held-for-sale, and impact of businesses held-for-sale, adjusted net earnings decreased 1% in fiscal 2026 as compared to fiscal 2025.

Adjusted net earnings was primarily impacted by unfavorable product mix and pricing pressures.

For fiscal 2025, consolidated net sales increased 5% as compared to fiscal 2024.

Organic growth was 5% and foreign currency translation and a business held-for-sale did not have a material impact.

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The decrease in earnings was impacted by a non-recurring loss on an arbitration award, impairment of assets held-for-sale, and restructuring and restructuring-related charges.

After adjusting for cost recognized upon sale of acquired inventory, intangibles amortization, acquisition-related costs, certain litigation charges, gain on sale of investments, stock-based compensation, restructuring and restructuring-related costs, impairment of assets held-for-sale, and impact of business held-for-sale, adjusted net earnings

increased 8% in fiscal 2025 as compared to fiscal 2024.

Adjusted net earnings was primarily impacted by favorable volume leverage within Protein Sciences.

For fiscal 2024, consolidated net sales increased 2% as compared to fiscal 2023.

Organic growth was 1%, with acquisitions having a favorable impact of 1%.

Foreign currency translation and a business held-for-sale did not have a material impact.

Organic revenue growth was primarily driven by strong commercial execution in our Diagnostics and Spatial Biology segment .

Consolidated net earnings for fiscal 2024, including non-controlling interest, decreased 41% compared to fiscal 2023.

The decrease in earnings was driven by a non-recurring gain on the sale of our ChemoCentryx, Inc.

(CCXI) investment, a non-recurring gain on the sale of our investment in Eminence, and a non-recurring benefit related to the fair value of contingent consideration during fiscal 2023.

RESULTS OF OPERATIONS

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Consolidated net sales growth

(1) Fiscal 2026 relates to the Diagnostics and Spatial Biology segment business that met the held-for-sale criteria on June 30, 2025.

Fiscal 2025 and 2024 relate to the Protein Sciences segment business that met the held-for-sale criteria on December 31, 2023

Consolidated net sales by segment were as follows (in thousands):

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Consolidated net sales

(1) Since December 31, 2023, the Company has a business that has met the held-for-sale criteria.

The years ended June 30, 2025 and 2024 include the twelve and six month results, respectively, while the business has met the held-for-sale criteria.

(1) Fiscal 2026 amount relates to the Diagnostics and Spatial Biology segment business that met the held-for-sale criteria on June 30, 2025.

Fiscal 2025 and 2024 amounts relate to the Protein Sciences segment business that met the held-for-sale criteria on December 31, 2023, and includes the twelve-month and six-month results, respectively, while the business met the held-for-sale criteria.

In fiscal 2026, Protein Sciences segment net sales increased 1% compared to fiscal 2025.

Organic revenue for the segment decreased 1% for the fiscal year, and foreign currency exchange had a favorable impact of 2%.

Segment revenue was impacted by unfavorable product mix and pricing pressures.

In fiscal 2026, Diagnostics and Spatial Biology segment net sales decreased 3% compared to fiscal 2025.

A business within the Diagnostics and Spatial Biology Segment met the criteria as held-for-sale since June 30, 2025.

The exclusion of fiscal 2026 sales related to the held-for-sale business had an unfavorable impact of 8% on sales.

Organic growth for the segment was 4% and foreign currency exchange had a favorable impact of 1% on revenue growth.

Segment revenue was impacted by the Exosome Diagnostics divestiture partially offset by favorable volume growth.

In fiscal 2025, Protein Sciences segment net sales increased 5% compared to fiscal 2024.

A business within the Protein Sciences segment met the criteria as held-for-sale since December 31, 2023.

The exclusion of fiscal 2025 sales related to the held-for-sale business did not have a material impact on sales.

Organic revenue for the segment increased 5% for the

fiscal year, and foreign currency exchange did not have a material impact on revenue growth.

The exclusion of fiscal 2025 sales related to a held-for-sale business did not have a material impact on sales.

Organic revenue for the segment increased 5% for the fiscal year, and foreign currency exchange did not have a material impact on revenue growth.

Segment revenue was driven by strong proteomic analytical solutions and cell therapy performance and commercial execution.

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Segment growth was driven by broad based molecular diagnostics performance and Lunaphore’s organic growth.

In fiscal 2024, Protein Sciences segment net sales decreased 2% compared to fiscal 2023.

A business within the Protein Sciences Segment met the criteria as held-for-sale since December 31, 2023.

The exclusion of third and fourth quarter of fiscal 2024 sales related to a held-for-sale business reduced sales by 1%.

Organic revenue for the segment declined 2% for the fiscal year, with foreign currency exchange having a favorable impact of 1% on revenue.

Segment revenue was impacted by broad based headwinds.

In fiscal 2024, Diagnostics and Spatial Biology segment net sales increased 12% compared to fiscal 2023.

Organic growth for the segment was 6% with acquisitions having a 5% impact and foreign currency exchange having a favorable impact of 1% on revenue growth.

Segment growth was driven by broad based molecular diagnostics performance and Lunaphore.

Gross Margins

Consolidated gross margins were 64.8%, 66.4%, and 67.7% in fiscal 2025, 2024, and 2023.

Consolidated gross margin in fiscal year 2025 was impacted by the reinstatement of incentive accruals and product mix.

Excluding the impact of acquired inventory sold, amortization of intangibles, stock compensation expense, restructuring and restructuring-related costs, impact of business held-for-sale, and the impact of partially-owned consolidated subsidiaries, adjusted gross margins were 70.4%, 71.0%, and 71.7% in fiscal 2025, 2024, and 2023, respectively.

Fiscal 2025 consolidated gross margin was impacted by the resinstatement of incentive accruals and an unfavorable product mix when compared to the prior period.

Fiscal 2024 consolidated gross margin was impacted by the Lunaphore acquisition when compared to the prior period.

Fiscal 2023 consolidated gross margin was unfavorably impacted by foreign currency exchange and strategic growth investments including the Namocell acquisition.

A reconciliation of the reported consolidated gross margin percentages, adjusted for acquired inventory sold, intangible amortization included in Cost of sales, restructuring and restructuring-related expenses, and impact of business held-for-sale is as follows:

Consolidated gross margins were 65.8%, 64.8%, and 66.4% in fiscal 2026, 2025, and 2024, respectively.

Consolidated gross margin in fiscal 2026 was impacted by decreased restructuring-related costs for manufacturing optimization from the prior period.

Excluding the impact of acquired inventory sold, amortization of intangibles, stock compensation expense, restructuring and restructuring-related costs, and the impact of businesses held-for-sale, adjusted gross margins were 69.6%, 70.4%, and 71.0% in fiscal 2026, 2025, and 2024, respectively.

Fiscal 2026 consolidated adjusted gross margin was impacted by unfavorable product mix when compared to the prior period.

Fiscal 2025 consolidated adjusted gross margin was impacted by the reinstatement of incentive accruals and an unfavorable product mix when compared to the prior period.

A reconciliation of the reported consolidated gross margin percentages, adjusted for acquired inventory sold, intangible amortization included in cost of sales, stock compensation expense included in cost of sales, restructuring and restructuring-related expenses, and impact of business held-for-sale is as follows ($ in thousands):

Year Ended June 30,

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Amortization of intangibles

Stock-based compensation, inclusive of employer taxes

Stock compensation expense - COGS

Restructuring and restructuring-related costs

Impact of partially-owned consolidated subsidiaries (1)

Impact of business held-for-sale (1)

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Adjusted gross margin percentage (2)

(1) Includes the quarterly results of the partially-owned consolidated subsidiary prior to the sale of this partially-owned consolidated subsidiary to a third party in the first fiscal quarter of 2023.

(2) Since December 31, 2023, the Company has a business that has met the held-for-sale criteria.

The years ended June 30, 2025 and 2024 include the twelve and six month results, respectively, while the business has met the held-for-sale criteria.

(3) Adjusted gross margin percentage excludes the revenue and the gross margin of the business held-for-sale.

Fluctuations in adjusted gross margins, as a percentage of net sales, have primarily resulted from changes in foreign currency exchange rates and changes in product mix.

We expect that, in the future, gross margins will continue to be impacted by the mix of our portfolio growing at different rates as well as future acquisitions.

Fiscal 2026 amounts relate to the Diagnostics and Spatial Biology segment business that met the held-for-sale criteria on June 30, 2025.

Fiscal 2025 and 2024 amounts relate to the Protein Sciences segment business that met the held for sale criteria on December 31, 2023.

Fiscal 2025 and 2024 amounts include the twelve-month and six-month results, respectively, while the business met the held-for-sale criteria.

Adjusted gross margin percentage excludes both revenue and gross margin of the businesses that met the held-for-sale criteria during the respective periods.

Management uses adjusted operating results to monitor and evaluate performance of the Company’s two segments.

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Diagnostics and Spatial Biology

The decrease in the Protein Sciences segment’s gross margin percentage for fiscal 2025 as compared to fiscal 2024 was primarily attributable to the mix of product sales within the segment.

The change in the Protein Sciences segment’s gross margin percentage for fiscal 2024 compared to fiscal 2023 was primarily attributable to the exclusion of a business held-for-sale.

The decrease in the Diagnostics and Spatial Biology segment’s gross margin percentage for fiscal 2025 as compared to fiscal 2024 is primarily attributable to reinstatement of incentive accruals and an unfavorable mix of product sales within the segment.

The change in the Diagnostics and Spatial Biology segment’s gross margin percentage for fiscal 2024 as compared to fiscal 2023 is due to the Lunaphore acquisition.

The decrease in the Protein Sciences segment’s gross margin percentage for fiscal 2026 as compared to fiscal 2025 was primarily attributable to unfavorable product mix and pricing pressure within the segment.

The change in the Protein Sciences segment’s gross margin percentage for fiscal 2025 compared to fiscal 2024 was primarily attributable to the mix of product sales within the segment.

The decrease in the Diagnostics and Spatial Biology segment’s gross margin percentage for fiscal 2026 as compared to fiscal 2025 is primarily attributable to unfavorable product mix within the segment.

The change in the Diagnostics and

Spatial Biology segment’s gross margin percentage for fiscal 2025 as compared to fiscal 2024 is primarily attributable to reinstatement of incentive accruals and an unfavorable mix of product sales within the segment.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased $136.1 million (23%) in fiscal 2026 when compared to fiscal 2025.

Selling, general, and administrative expenses decreased primarily due to an impairment of assets held-for sale in the prior year and a non-recurring loss on an arbitration award in the prior year.

Selling, general and administrative expenses increased $122.1 million (26%) in fiscal 2025 when compared to fiscal 2024.

Selling, general, and administrative expenses increased primarily due to a non-recurring arbitration award and impairment of assets held-for-sale.

Selling, general and administrative expenses increased $88.0 million (23%) in fiscal 2024 when compared to fiscal 2023.

Selling, general, and administrative expenses increased primarily due to the Lunaphore acquisition, impairment of assets held-for-sale, certain litigation charges, restructuring and restructuring-related charges, and CEO transition charges.

Consolidated Selling, general and administrative expenses were composed of the following (in thousands):

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Acquisition related expenses

Certain litigation charges

Restructuring and restructuring-related costs

Stock-based compensation

Impairment of assets held-for-sale

(Recovery) Impairment of assets held-for-sale

Corporate selling, general and administrative expenses

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Research and Development Expenses

Research and development expenses increased $2.8 million (3%) and $4.2 million (5%) in fiscal 2025 and 2024, respectively, as compared to prior year periods.

The increase in research and development expenses in fiscal 2025 and fiscal 2024 compared to the prior periods was primarily attributable to strategic growth investments including the acquisition of Lunaphore in fiscal 2024.

Research and development expenses decreased $4.7 million (5%) and increased $2.8 million (3%) in fiscal 2026 and 2025, respectively, as compared to prior year periods.

The decrease in research and development expenses in fiscal 2026 compared to the prior period was primarily attributable to the divestiture of the Exosome Diagnostics business in our Diagnostics and Spatial Biology segment.

The increase in research and development expenses in fiscal 2025 compared to the prior period was primarily attributable to strategic growth investments including the acquisition of Lunaphore in fiscal 2024.

Consolidated Research and development expenses were composed of the following (in thousands):

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Total research and development expenses

Net Interest Income / (Expense)

Net interest income/(expense) for fiscal 2025, 2024, and 2023 was ($4.6) million, ($12.4) million, and ($7.8) million, respectively.

During fiscal 2025, average monthly outstanding debt was lower than fiscal 2024 leading to decreased interest expense compared to fiscal 2024.

Net interest expense in fiscal 2024 increased when compared to fiscal 2023 as average monthly outstanding debt was higher than fiscal 2023, leading to increased interest expense compared to fiscal 2023.

Net Interest Expense

Net interest expense for fiscal 2026, 2025, and 2024 was $5.4 million, $4.6 million, and $12.4 million, respectively.

During fiscal 2026, our cash flow swap matured, leading to increased interest expense compared to fiscal 2025.

Net interest expense in fiscal 2025 decreased when compared to fiscal 2024 as average monthly outstanding debt was lower than fiscal 2024, leading to decreased interest expense compared to fiscal 2024.

Other Non-Operating Income / (Expense), Net

Other non-operating income/(expense), net, consists of foreign currency transaction gains and losses, rental income, building expenses related to rental property and the Company’s gains and losses on investments as follows (in thousands):

Other non-operating income/(expense), net, consists of foreign currency transaction gains and losses, building expenses related to rental property and the Company’s gains and losses on investments as follows (in thousands):

Year Ended June 30,

Foreign currency gains (losses)

Rental income

Real estate taxes, depreciation and utilities

Gain (Loss) on investment

Gain (Loss) on investments (1)

Gain (Loss) on equity method investment

Miscellaneous (expense) income

Miscellaneous income (expense)

Other non-operating income (expense), net

During fiscal 2025, the Company recognized a gain of $0.9 million related to our equity method investment in Wilson Wolf.

During fiscal 2024, the Company recognized losses of $6.8 million related to our equity method investment in Wilson Wolf.

During fiscal 2023, the Company recognized gains of $37 million related to the sale of our CCXI investment, $11.7 million related to the sale of our Eminence investment, and a gain of $0.4 million related to the change in fair value of our exchange traded bond funds.

Additionally, the Company recognized losses of $1.1 million related to our equity method investment in Wilson Wolf.

(1) In fiscal 2026, the Company recognized a loss of $5.9 million related to our investment in MDxHealth.

Income taxes for fiscal 2026, 2025, and 2024 were at effective rates of 24.4%, 25.5%, and 9.5%, respectively, of consolidated earnings before income taxes.

The change in the effective tax rate for fiscal 2025 compared to fiscal 2024 was driven by share-based compensation as the number of stock option exercises increased compared to the prior year comparative period.

The Company had share-based compensation excess tax benefits of $4.5 million in fiscal 2025.

The Company’s discrete tax benefits in fiscal 2024 primarily related to share-based compensation excess tax benefits of $18.4 million.

The Company’s discrete tax benefits in fiscal 2023 primarily related to share-based compensation excess tax benefits of $12.3 million.

Non-GAAP adjusted consolidated net earnings and earnings per share are as follows (in thousands):

The change in the effective tax rate for fiscal 2026 compared to fiscal 2025 was driven by discrete tax items.

Non-GAAP adjusted consolidated net earnings and earnings per share are as follows ($ in thousands, except per share data):

Year Ended June 30,

Net earnings before taxes - GAAP

Identified adjustments attributable to Bio-Techne:

Costs recognized upon sale of acquired inventory

Identified adjustments:

Amortization of intangibles

Amortization of Wilson Wolf intangible assets and acquired inventory

Amortization of Wilson Wolf intangible assets

Acquisition related expenses and other

Certain litigation charges

Gain on sale of partially-owned consolidated subsidiaries

Stock based compensation, inclusive of employer taxes

Restructuring and restructuring-related costs

Investment gain and other non-operating

Impairment of assets held-for-sale

Impact of partially-owned subsidiaries (1)

Investment (gain) loss and other non-operating (income) loss

Impairment (Recovery) of assets held-for-sale

Impact of business held-for-sale (1)

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Non-GAAP tax expense

Non-GAAP adjusted net earnings attributable to Bio-Techne (1,2)

Non-GAAP adjusted net earnings (1)

Earnings per share - diluted - Adjusted (1)

(2) Since December 31, 2023, the Company has a business that has met the held-for-sale criteria.

The years ended June 30, 2025 and 2024 include the twelve and six month results, respectively, while the business has met the held-for-sale criteria.

Fiscal 2025 and 2024 amounts relate to the Protein Sciences segment business that met the held for sale criteria on December 31, 2023.

Fiscal 2025 and 2024 amounts include the twelve-month and six-month results, respectively, while the business met the held-for-sale criteria.

Fiscal 2026 amounts relate to the Diagnostics and Spatial Biology segment business that met the held-for-sale criteria on June 30, 2025.

Depending on the nature of discrete tax items, our reported tax rate may not be consistent on a period to period basis.

The Company independently calculates a non-GAAP adjusted tax rate considering the impact of discrete items and

jurisdictional mix of the identified non-GAAP adjustments.

The Company independently calculates a non-GAAP adjusted tax rate considering the impact of discrete items and jurisdictional mix of the identified non-GAAP adjustments.

The following table summarizes the reported GAAP tax rate and the effective Non-GAAP adjusted tax rate for fiscal 2026, 2025, and 2024.

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Discrete items

Impact of non-taxable net gain

Long-term GAAP tax rate

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Non-GAAP adjusted tax rate

Refer to Note 12 for additional discussion relating to the change in discrete tax items between fiscal 2025 and fiscal 2024.

Refer to Note 12 for additional discussion relating to the change in discrete tax items between fiscal 2026 and 2025.

LIQUIDITY AND CAPITAL RESOURCES

Cash, cash equivalents and available-for-sale investments at June 30, 2026 were $264.7 million compared to $162.2 million at June 30, 2025.

Included in the available-for-sale investments were certificates of deposit that have contractual maturity dates within one year of $1.1 million as of June 30, 2024.

There were no certificiates of deposit as of June 30, 2025.

At June 30, 2025, approximately 34% of the Company’s cash and cash equivalent account balances of $55.2 million were located in the U.S., with the remainder located in primarily in Canada, China, the U.K.

At June 30, 2026, $139.8 million of the Company’s cash and cash equivalents were located in the U.S., with the remainder located primarily in Canada, China, the U.K.

and other European countries.

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The Company generated cash from operations of $292.1 million, $287.6 million, and $299.0 million in fiscal 2026, 2025, and 2024, respectively.

The decrease in cash generated from operating activities in fiscal 2025 as compared to fiscal 2024 was mainly a result of changes in the timing of cash payments on certain operating assets and liabilities.

The increase in cash generated from operating activities in fiscal 2026 as compared to fiscal 2025 was mainly a result of changes in the timing of cash payments on certain operating assets and liabilities.

Cash Flows From Investing Activities

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During fiscal 2024, the Company acquired Lunaphore for $169.7 million in cash-free, debt-free acquisition.

During fiscal 2023, the Company acquired Namocell for $101.2 million, net of cash acquired.

There were no acquisitions in fiscal 2025.

There were no acquisitions in fiscal 2026 and 2025.

During fiscal 2025, the Company invested $15.0 million into Spear Bio.

Additionally in fiscal 2025, the Company received $2.4 million from the sale of assets held-for-sale.

There were no comparable activities in fiscal 2026 and 2024.

During the first fiscal quarter of 2023, the Company sold its remaining shares in Eminence, its partially-owned consolidated subsidiary, for $17.8 million.

There were no sales of businesses in fiscal 2025 or 2024.

In the first fiscal quarter of 2023, the Company sold its remaining shares in its investment in CCXI for $73.2 million.

There were no comparable activities in fiscal 2025 and 2024.

The Company’s net proceeds from the purchase, sale and maturity of available-for-sale investments in fiscal 2025, 2024, and 2023 were $1.1 million, $22.6 million, and $14.7 million, respectively.

During fiscal 2025, the Company’s proceeds in available-for-sale investments relates to our certificates of deposits maturing.

During fiscal 2026 and 2025, the Company received $4.6 million and $2.4 million from the sale of assets held-for-sale, respectively.

There were no comparable activities in fiscal 2024.

The Company’s net proceeds from the purchase, sale and maturity of available-for-sale investments in fiscal 2025 and 2024 were $1.1 million and $22.6 million, respectively.

There was no comparable activity in fiscal 2026.

During fiscal 2025, the Company’s proceeds in available-for-sale investments relates to the maturity of our certificates of deposits.

During fiscal 2024, the Company’s proceeds in available-for-sale investments relates to the sale of our exchange traded investment grade bond funds.

The proceeds during fiscal 2023 relates to the sale of excess cash in certificates of deposit that matured.

The Company’s investment policy is to place excess cash in certificates of deposit with the objective of obtaining the highest possible return while minimizing risk and keeping the funds accessible.

Capital additions in fiscal 2026, 2025, and 2024 were $28.9 million, $31.0 million, and $62.9 million.

Fiscal 2025 capital expenditures related to investments in new buildings, machinery, construction in progress, and IT equipment.

Fiscal 2024 capital expenditures related to investments in new buildings, machinery, construction in progress, and IT equipment.

Fiscal 2023 capital expenditures related to investments in new buildings, machinery, and IT equipment.

Capital additions planned for fiscal 2026 are approximately $42 million and are expected to be financed through currently available cash and cash generated from operations.

Fiscal 2026, 2025, and 2024 capital expenditures related to investments in new buildings, machinery, construction in progress, and IT equipment.

During fiscal 2022, the Company paid $25 million to enter into a two-part forward contract which requires the Company to purchase the full equity interest in Wilson Wolf if certain annual revenue or EBITDA thresholds are met.

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The second option payment of approximately $1 billion plus potential contingent consideration is forecasted to occur between fiscal 2027 and fiscal 2028.

During fiscal 2025 and 2024, the Company received distributions from Wilson Wolf of $7.3 million and $7.0 million, repectively.

During fiscal 2026, 2025, and 2024, the Company received distributions from Wilson Wolf of $6.0 million, $7.3 million, and $7.0 million, respectively.

Cash Flows From Financing Activities

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The Company received $80.6 million, $51.7 million, $60.9 million, for the exercise of options for 2,785,000, 1,209,000, and 2,240,000 shares of common stock in fiscal 2026, 2025 and 2024, respectively.

During fiscal 2025, 2024, and 2023, the Company repurchased $275.7 million, $80.0 million, and $19.6 million, respectively, in share repurchases included as a cash outflow within Financing Activities.

During fiscal 2025, 2024, and 2023, the Company drew $104.0 million, $225.0 million, and $619.7 million, respectively, under its revolving line-of-credit facility.

During fiscal 2026, 2025, and 2024, the Company repurchased $41.7 million, $275.7 million, and $80.0 million, respectively, in share repurchases included as a cash outflow.

During fiscal 2025, and 2024, the Company drew $104.0 million, and $225.0 million, respectively, under its revolving line-of-credit facility.

There were no comparable activities in fiscal 2026.

Repayments of $146.0 million, $77.0 million, and $256.0 million were made on its line-of-credit in fiscal 2026, 2025, and 2024, respectively.

During fiscal 2026, 2025 and 2024, the Company paid $12.1 million, $6.5 million and $21.9 million, respectively, for taxes remitted on behalf of participants in net share settlement transactions, restricted stock, and restricted stock units.

The other financing activity during fiscal 2023 is primarily related to fees for the amended Credit Agreement that occurred in the first fiscal quarter.

There was no comparable activity in fiscal 2025 or fiscal 2024.

CRITICAL ACCOUNTING POLICIES

Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.

The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

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Assumed royalty rates are applied to the projected revenues for the remaining useful life of the technology to estimate the royalty savings.

In-process research and development assets are valued using the multi-period excess earnings method when the cash flows from the in-process research and development assets are separately identifiable from the primary asset.

In-process research and development assets are valued using the multi-period excess earnings method when the

cash flows from the in-process research and development assets are separately identifiable from the primary asset.

In circumstances that customer relationship assets are identified that are not the primary asset, they are valued using the distributor model income approach, which isolates revenues and cash flow associated with the sales and distribution function of the entity and attributable to customer-related assets, which are then discounted at a rate of return commensurate with the risk of the asset to calculate a present value.

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We are also required to estimate the useful lives of the acquired intangible assets, which determines the amount of acquisition-related amortization expense we will record in future periods.

Each reporting period, we evaluate the remaining

useful lives of our amortizable intangibles to determine whether events or circumstances warrant a revision to the remaining period of amortization.

Each reporting period, we evaluate the remaining useful lives of our amortizable intangibles to determine whether events or circumstances warrant a revision to the remaining period of amortization.

While we use our best estimates and assumptions, our fair value estimates are inherently uncertain and subject to refinement.

As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Any adjustments required after the measurement period are recorded in the Consolidated Statements of Earnings.

Any adjustments required after the measurement period are recorded in the Consolidated Statements of Earnings and Comprehensive Income.

The judgments required in determining the estimated fair values and expected useful lives assigned to each class of assets and liabilities acquired can significantly affect net income.

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Impairment of Goodwill

Goodwill was $980.9 million as of June 30, 2025, which represented 38% of total assets.

Goodwill was $975.4 million as of June 30, 2026, which represented approximately 38% of total assets.

Goodwill is tested for impairment on an annual basis in the fourth quarter of each year, or more frequently if events occur or circumstances change that could indicate a possible impairment.

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The income approach is a valuation technique under which we estimate future cash flows using the reporting unit’s financial forecast from the perspective of an unrelated market participant.

Using historical trending and internal forecasting techniques, we project revenue and apply our fixed and variable cost experience rate to the projected revenue to arrive at the future cash flows.

Using historical trending and internal forecasting techniques, we project revenue and apply our fixed and variable cost experience rate to the projected revenue to arrive at

the future cash flows.

A terminal value is then applied to the projected cash flow stream.

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In determining the estimated fair value of a reporting unit, we are required to estimate a number of factors, including projected operating results, terminal growth rates, economic conditions, anticipated future cash flows, the discount rate and the allocation of shared or corporate items.

For fiscal 2026, we elected to perform a qualitative analysis for all four reporting units.

The Company determined, after performing the qualitative analysis, there was no evidence that it is more likely than not that the fair value was less than the carrying amounts.

The Company did not identify any triggering events after our annual goodwill impairment analysis through June 30, 2026, the date of our Consolidated Balance Sheets, that would require an additional goodwill impairment assessment to be performed.

For fiscal 2025, we elected to perform a quantitative analysis for all five reporting units.

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The impairment test resulted in a total impairment charge of $83.1 million, which includes the allocated goodwill, which we have further described within Note 14.

The Company did not identify any additional triggering events

after our annual goodwill impairment analysis through June 30, 2025, the date of our Consolidated Balance Sheets, that would require an additional goodwill impairment assessment to be performed.

The Company did not identify any additional triggering events after our annual goodwill impairment analysis through June 30, 2025, the date of our Consolidated Balance Sheets, that would require an additional goodwill impairment assessment to be performed.

For fiscal 2024, we elected to perform a qualitative analysis for all five reporting units.

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The Company did not identify any triggering events after our annual goodwill impairment analysis through June 30, 2024, the date of our Consolidated Balance Sheets, that would require an additional goodwill impairment assessment to be performed.

For fiscal 2023, we elected to perform a qualitative analysis for all five reporting units.

The Company determined, after performing the qualitative analysis, there was no evidence that it was more likely than not that the fair value was less than the carrying amounts, therefore, it was not necessary to perform a quantitative impairment test in fiscal 2023.

The Company did not identify any triggering events after our annual goodwill impairment analysis through June 30, 2023, the date of our Consolidated Balance Sheets, that would require an additional goodwill impairment assessment to be performed.

NEW ACCOUNTING PRONOUNCEMENTS

Information regarding the accounting policies adopted during fiscal 2026 and those not yet adopted can be found under caption “Note 1:

Description of Business and Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements appear in Item 8 of this report.

Description of Business and Summary of Significant Accounting Policies” of the Notes to the Consolidated Financial Statements appearing in Item 8 of this report.

SUBSEQUENT EVENTS

On August 5, 2025, the Company announced the execution of a definitive agreement to sell the Exosome Diagnostics business for $15 million including $5 million of stock of the acquiring company at closing with the remainder received over the following four years.

The transaction is expected to close during the first quarter of fiscal 2026.

NON-GAAP FINANCIAL MEASURES

This Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7, contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S.

These non-GAAP measures include:

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We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.

Our non-GAAP financial measure of organic revenue represents revenue growth excluding revenue from acquisitions within the preceding 12 months, the impact of foreign currency, the impact of businesses held-for-sale, as well as the impact of partially-owned consolidated subsidiaries.

Excluding these measures provides more useful period-to-period comparison of revenue results as it excludes the impact of foreign currency exchange rates, which can vary significantly from period to period, and revenue from acquisitions that would not be included in the comparable prior period.

Revenues from businesses held-for-sale are excluded from our organic revenue calculation starting on the date they become held-for-sale as those revenues will not be comparative in future periods.

Revenues from partially-owned subsidiaries consolidated in our financial statements are also excluded from our organic revenue calculation, as those revenues are not fully attributable to the Company.

There was no revenue from partially-owned consolidated subsidiaries in fiscal 2025 and 2024 due to the sale of Eminence in the first quarter of fiscal 2023.

Revenue from partially-owned consolidated subsidiaries was $2.0 million for fiscal 2023.

Our non-GAAP financial measures for adjusted gross margin, adjusted operating margin, and adjusted net earnings, in total and on a per share basis, exclude stock-based compensation, which is inclusive of the employer portion of payroll taxes on those stock awards, the costs recognized upon the sale of acquired inventory, amortization of acquisition intangibles, restructuring and restructuring-related costs, and other non-recurring items including non-recurring costs, goodwill and long-lived asset impairments, and gains.

Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjection assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations.

The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses inclusive of the changes in fair value contingent consideration, and other non-recurring items including gains or losses on goodwill and long-lived asset impairment charges, and one-time assessments from this measure because they occur as a result of specific events, and are not reflective of our internal investments, the costs of developing, producing, supporting and selling our products, and the other ongoing costs to support our operating structure.

Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjective assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations.

The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses inclusive of retention costs, severance costs, and changes in fair value contingent consideration, and other non-recurring items including gains or losses on goodwill and long-lived asset impairment charges, and one-time assessments from this measure because they occur as a result of specific events, and are not reflective of our internal investments, the costs of developing, producing, supporting and selling our products, and the other ongoing costs to support our operating structure.

We also exclude certain litigation charges which are facts and circumstances specific including costs to resolve litigation and legal settlement (gains and losses).

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Additionally, these amounts can vary significantly from period to period based on current activity.

The Company also excludes revenue and expense attributable to partially-owned consolidated subsidiaries as well as revenue and expense attributable to businesses held-for-sale in the calculation of our non-GAAP financial measures.

The Company’s non-GAAP adjusted operating margin and adjusted net earnings, in total and on a per share basis, also excludes acquisition related expenses inclusive of the changes in fair value of contingent consideration, gain and losses from investments, as they are not part of our day-to-day operating decisions (excluding our equity method investment in Wilson Wolf as it is certain to be acquired in the future), certain adjustments to income tax expense, and other non-recurring items including certain costs related to the transition to a new CEO.

The Company also excludes revenue and expense attributable to businesses held-for-sale in the calculation of our non-GAAP financial measures.

Additionally, gains and losses from investments that are either isolated or cannot be expected to occur again with any predictability are excluded.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis