BIO-TECHNE Corp 10-Q

tech20210930_10q.htm     Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549       FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the quarterly period ended September   30, 2021 , or   ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   For the transition period from                      to                        Commission file number 0-17272       BIO-TECHNE CORPORATION (Exact name of registrant as specified in its charter)     Minnesota 41-1427402 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)     614 McKinley Place N.E.   Minneapolis , MN 55413 ( 612 ) 379-8854 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code)     Securities registered pursuant to Section 12(b) of the Exchange Act:   Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value TECH The NASDAQ Stock Market LLC   Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes   ☒    No  ☐   Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes   ☒    No  ☐   Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.   Large accelerated filer ☒ Accelerated filer ☐         Non-accelerated filer ☐ Smaller reporting company ☐             Emerging growth company ☐   If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐   Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b- 2).     ☐   Yes    ☒  No   At November 1, 2021, 39,295,289  shares of the Company's Common Stock (par value $0.01) were outstanding.     Table of Contents       TABLE OF CONTENTS       Page PART I. FINANCIAL INFORMATION       Item 1. Condensed Consolidated Financial Statements (Unaudited) 1       Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 18       Item 3. Quantitative and Qualitative Disclosures about Market Risk 24       Item 4. Controls and Procedures 25       PART II: OTHER INFORMATION       Item 1. Legal Proceedings 26       Item 1A. Risk Factors 26       Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 27       Item 3. Defaults Upon Senior Securities 27       Item 4. Mine Safety Disclosures 27       Item 5. Other Information 27       Item 6. Exhibits 28         SIGNATURES 30     Table of Contents       PART I. FINANCIAL INFORMATION   ITEM   1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS   CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME Bio-Techne Corporation and Subsidiaries (in thousands, except per share data) (unaudited)               Quarter Ended           September 30,           2021     2020     Net sales   $ 257,719   $ 204,199     Cost of sales     86,722       66,468       Gross margin     170,997       137,731                             Operating expenses:                     Selling, general and administrative     86,175       72,598       Research and development     21,600       16,041       Total operating expenses     107,775       88,639                             Operating income     63,222       49,092       Other income (expense)     4,161       ( 9,753 )     Earnings before income taxes     67,383       39,339       Income taxes (benefit)     ( 1,598 )     5,944       Net earnings, including noncontrolling interest   $ 68,981     $ 33,395       Net earnings (loss) attributable to noncontrolling interest     ( 634 )     -       Net earnings attributable to Bio-Techne     69,615       33,395       Other comprehensive income (loss):                     Foreign currency translation adjustments     ( 8,646 )     11,914       Unrealized gains (losses) on derivative instruments - cash flow hedges, net of tax amounts disclosed in Note 8     1,682       2,143       Other comprehensive income (loss)     ( 6,964 )     14,057       Other comprehensive income (loss) attributable to noncontrolling interest     ( 39 )     -       Other comprehensive income (loss) attributable to Bio-Techne     ( 6,925 )     14,057                             Comprehensive income attributable to Bio-Techne   $ 62,690     $ 47,452                             Earnings per share attributable to Bio-Techne:                     Basic   $ 1.78     $ 0.87       Diluted   $ 1.69     $ 0.83                             Weighted average common shares outstanding:                     Basic     39,094       38,536       Diluted     41,158       40,025         See Notes to Condensed Consolidated Financial Statements.   1 Table of Contents     CONDENSED CONSOLIDATED BALANCE SHEETS Bio-Techne Corporation and Subsidiaries (in thousands, except share and per share data)       September 30, 2021 (unaudited)     June 30, 2021   ASSETS                 Current assets:                 Cash and cash equivalents   $ 196,321     $ 199,091   Short-term available-for-sale investments     38,740       32,463   Accounts receivable, less allowance for doubtful accounts of $ 1,273  and $ 1,229 , respectively     147,548       145,385   Inventories     117,366       116,748   Other current assets     43,773       16,919   Total current assets     543,748       510,606                     Property and equipment, net     207,134       207,907   Right of use asset     71,396       73,834   Goodwill     840,020       843,067   Intangible assets, net     596,300       615,968   Other assets     11,589       11,575   Total assets   $ 2,270,187     $ 2,262,957   LIABILITIES AND SHAREHOLDERS' EQUITY                 Current liabilities:                 Trade accounts payable   $ 25,621     $ 29,384   Salaries, wages and related accruals     32,213       51,294   Accrued expenses     17,419       15,282   Contract liabilities     19,121       18,995   Income taxes payable     6,505       5,336   Operating lease liabilities - current     12,001       11,602   Contingent consideration payable     5,000       4,000   Current portion of long-term debt obligations     12,500       12,500   Other current liabilities     3,612       3,891   Total current liabilities     133,992       152,284                     Deferred income taxes     98,812       93,125   Long-term debt obligations     287,723       328,827   Long-term contingent consideration payable     17,600       25,400   Operating lease liabilities     65,059       67,625   Other long-term liabilities     20,046       24,462                     Bio-Techne's Shareholders' equity:                 Undesignated capital stock, no par; authorized 5,000,000 shares; none issued or outstanding     -       -   Common stock, par value $.01 per share; authorized 100,000,000 ; issued and outstanding 39,273,057  and 38,955,484 , respectively     393       390   Additional paid-in capital     583,851       534,411   Retained earnings     1,119,337       1,085,461   Accumulated other comprehensive loss     ( 64,216 )     ( 57,291 ) Total Bio-Techne's shareholders' equity     1,639,365       1,562,971   Noncontrolling interest     7,590       8,263   Total shareholder's equity     1,646,955       1,571,234   Total liabilities and shareholders’ equity   $ 2,270,187     $ 2,262,957     See Notes to Condensed Consolidated Financial Statements.   2 Table of Contents     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Bio-Techne Corporation and Subsidiaries (in thousands) (unaudited)       Quarter Ended       September 30,       2021     2020   CASH FLOWS FROM OPERATING ACTIVITIES:                 Net earnings, including noncontrolling interest   $ 68,981     $ 33,395   Adjustments to reconcile net earnings to net cash provided by operating activities:                 Depreciation and amortization     24,734       21,088   Costs recognized on sale of acquired inventory     1,512       -   Deferred income taxes     5,407       ( 452 ) Stock-based compensation expense     11,737       12,953   Fair value adjustment to contingent consideration payable     ( 2,800 )     ( 150 ) Contingent consideration payments     ( 3,300 )     -   Fair value adjustment on available for sale investments     ( 5,277 )     4,351   Asset impairment restructuring     546       -   Leases, net     ( 79 )     -   Other operating activity     497       195   Change in operating assets and operating liabilities, net of acquisition:                 Trade accounts and other receivables, net     ( 3,637 )     910   Inventories     ( 2,981 )     ( 1,968 ) Prepaid expenses     ( 5,852 )     1,632   Trade accounts payable, accrued expenses, contract liabilities, and other     ( 2,303 )     6,918   Salaries, wages and related accruals     ( 18,933 )     ( 11,480 ) Income taxes payable     ( 19,818 )     ( 1,383 ) Net cash provided by operating activities     48,434       66,009                     CASH FLOWS FROM INVESTING ACTIVITIES:                 Proceeds from maturities of available-for-sale investments     12,450       29,039   Purchases of available-for-sale investments     ( 13,500 )     ( 26,239 ) Additions to property and equipment     ( 6,070 )     ( 10,938 ) Net cash provided by (used in) investing activities     ( 7,120 )     ( 8,138 )                   CASH FLOWS FROM FINANCING ACTIVITIES:                 Cash dividends     ( 12,493 )     ( 12,336 ) Proceeds from stock option exercises     37,880       15,418   Borrowings under line-of-credit agreement     10,000       -   Repayments of long-term debt     ( 51,125 )     (33,125)   Contingent consideration payments     ( 700 )     -   Other financing activity     ( 23,246 )     ( 4,890 ) Net cash provided by (used in) financing activities     ( 39,684 )     ( 34,933 )                   Effect of exchange rate changes on cash and cash equivalents     ( 4,400 )     ( 159 ) Net change in cash and cash equivalents     ( 2,770 )     22,779   Cash and cash equivalents at beginning of period     199,091       146,625   Cash and cash equivalents at end of period   $ 196,321     $ 169,404                     Supplemental disclosure of cash flow information:                 Cash paid for income taxes   $ 12,070     $ 6,034   Cash paid for interest   $ 3,107     $ 4,237     See Notes to Condensed Consolidated Financial Statements.   3 Table of Contents   NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Bio-Techne Corporation and Subsidiaries (unaudited)       Note 1. Basis of Presentation and Summary of Significant Accounting Policies:   The interim consolidated financial statements of Bio-Techne Corporation and subsidiaries, (the Company) presented here have been prepared by the Company and are unaudited. They have been prepared in accordance with accounting principles generally accepted in the United States of America and with instructions to Form 10 -Q and Article 10 of Regulation S- X. They reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature.   Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These interim unaudited condensed consolidated financial statements should be read in conjunction with the Company's Consolidated Financial Statements and Notes thereto for the fiscal year ended June  30, 2021, included in the Company's Annual Report on Form 10 -K for fiscal year 2021. A summary of significant accounting policies followed by the Company is detailed in the Company's Annual Report on Form 10 -K for fiscal year 2021. The Company follows these policies in preparation of the interim unaudited condensed consolidated financial statements.   During the first quarter of fiscal 2022, the Company operated under two operating segments, Protein Sciences and Diagnostics and Genomics. The operating segments the Company operated under were consistent with the Company's operating segments disclosed in the Company's Annual Report on Form 10 -K for fiscal 2021.     Restructuring actions : Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and impairments and disposals of assets associated with such actions. Employee-related severance charges are based upon distributed employment policies and substantive severance plans. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Asset impairment and disposal charges include right of use assets, leasehold improvements, and other asset write-downs associated with combining operations and disposal of assets.   In September 2021, the Company informed employees of our decision to close our Exosome Germany facility, discontinuing lab and research occurring at the site, as part of a realignment of activities within our Exosome business. The closure of the site is expected to be completed in the third quarter of fiscal 2022. As a result of the restructuring activities, an estimated pre-tax charge of $ 1.2 million was recorded within our Diagnostics and Genomics segment. The related first quarter of fiscal 2022 restructuring charges were recorded in the income statement as follows (in thousands):         Employee Severance Asset Impairment      Total   Selling, general and administrative $ 639 $ 546     $ 1,185   Total operating income impact ( 1)   639   546       1,185     ( 1 ) The charges recorded above are accrued within Other current liabilities as of September 30, 2021. There were no cash payments or adjustments to the initial accrual during the period ended September 30, 2021.     Recently Adopted Accounting Pronouncements   There were no accounting pronouncements adopted in the first fiscal quarter of 2022. Refer to the Form 10 -K for accounting pronouncements adopted prior to June 30, 2021.    4 Table of Contents       Note 2. Revenue Recognition:   Consumables revenues consist of single-use products and are recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment. Instruments revenues typically consist of longer-lived assets that, for the substantial majority of sales, are recognized at a point in time in a manner similar to consumables. Service revenues consist of extended warranty contracts, post contract support, and custom development projects that are recognized over time as either the customers receive and consume the benefits of such services simultaneously or the underlying asset being developed has no alternative use for the Company at contract inception and the Company has an enforceable right to payment for the portion of the performance completed. Service revenues also include laboratory services recognized at point in time. Prior to fiscal year 2021, the Company has not  recognized revenue upon completion of the performance obligation for laboratory services, but rather upon cash receipt, which was subsequent to the performance obligation being satisfied. The Company accounted for these services based on cash receipts as we did  not have significant historical experience collecting payments from Medicare or other insurance providers and considered the variable consideration for such services to be constrained as it would not be probable that a significant amount of revenue would not need to be reversed in future periods for the services provided. Given Medicare coverage for our laboratory services became effective on December 1, 2019, the Company considered it to have sufficient data to estimate variable consideration as of  July 1, 2020 for laboratory services that are reimbursed by Medica re. The amount of cash received in fiscal year 2021 for laboratory services reimbursed by Medicare that were performed prior to July 1, 2020 was approximately $ 0.5  million. T he Company continues to record revenue based on cash receipts for laboratory services not reimbursed by Medicare, as the variable consideration remains constrained. We recognize royalty revenues in the period the sales occur using  third party evidence. The Company elected the "right to invoice" practical expedient based on the Company's right to invoice a customer at an amount that approximates the value to the customer and the performance completed to date.    The Company elected the exemption to not disclose the unfulfilled performance obligations for contracts with an original length of one year or less and the exemption to exclude future performance obligations that are accounted under the sales-based or usage-based royalty guidance. The Company’s unfulfilled performance obligations were not material as of September 30, 2021.   Contracts with customers that contain instruments may include multiple performance obligations. For these contracts, the Company allocates the contract’s transaction price to each performance obligation on a relative standalone selling price basis. Allocation of the transaction price is determined at the contracts’ inception.   Payment terms for shipments to end-users are generally net 30 days. Payment terms for distributor shipments may range from 30 to 90 days. Service arrangements commonly call for payments in advance of performing the work (e.g. extended warranty and service contracts), upon completion of the service (e.g. custom development manufacturing) or a mix of both.   Contract assets include revenues recognized in advance of billings. Contract assets are included within other current assets in the accompanying balance sheet as the amount of time expected to lapse until the company's right to consideration becomes unconditional is less than one year. We elected the practical expedient allowing us to expense contract costs that would otherwise be capitalized and amortized over a period of less than one year. Contract assets as of September 30, 20 21  are not material.   Contract liabilities include billings in excess of revenues recognized, such as those resulting from customer advances and deposits and unearned revenue on warranty contracts. Contract liabilities as of September 30, 2021  and June 30, 2021  were approximately $ 20.1  million and $ 20.0  million, respectively. Contract liabilities as of June 30, 2021  subsequently recognized as revenue during the quarter period end ed September 30, 2021  were $ 9.7 million. Contract lia bilities in excess of one year are included in other long-term liabilities in the consolidated balance sheet.   5 Table of Contents   Any claims for credit or return of goods must be made within 10 days of receipt. Revenues are reduced to reflect estimated credits and returns. Although the amounts recorded for these revenue deductions are dependent on estimates and assumptions, historically our adjustments to actual results have not been material.   Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. We elected the practical expedient that allows us to account for shipping and handling activities that occur after the customer has obtained control of a good as a fulfillment cost, and we accrue costs of shipping and handling when the related revenue is recognized.   The following tables present our disaggregated revenue for the periods presented.   Revenue by type is as follows:       Quarter Ended       September 30,       2021     2020   Consumables   $ 205,691     $ 166,627   Instruments     29,869       19,572   Services     16,257       15,464   Total product and services revenue, net   $ 251,817     $ 201,663   Royalty revenues     5,902       2,536   Total revenues, net   $ 257,719     $ 204,199     Revenue by geography is as follows:       Quarter Ended       September 30,       2021     2020   United States   $ 140,702     $ 113,561   EMEA, excluding United Kingdom     51,543       43,134   United Kingdom     12,478       8,534   APAC, excluding Greater China     17,501       15,734   Greater China     28,433       18,052   Rest of World     7,062       5,184   Net sales   $ 257,719     $ 204,199     6 Table of Contents       Note 3. Selected Balance Sheet Data:   Inventories:   Inventories consist of (in thousands):       September 30,     June 30,       2021     2021   Raw materials   $ 58,001     $ 55,096   Finished goods (1)     64,740       67,108   Inventories, net   $ 122,741     $ 122,204     ( 1 )  Finished goods inventory of $ 5,375  and $ 5,456  included within other long-term assets in the respective September 30, 2021  and June 30, 2021, consolidated balance sheet. The inventory is included in long-term assets as it is forecasted to be sold after the 12 months subsequent to the consolidated balance sheet date.     Property and Equipment:   Property and equipment consist of (in thousands):       September 30,     June 30,       2021     2021   Land   $ 8,586     $ 8,612   Buildings and improvements     191,284       190,661   Machinery and equipment     202,792       198,483   Property and equipment, cost     402,662       397,756   Accumulated depreciation and amortization     ( 195,528 )     ( 189,849 ) Property and equipment, net   $ 207,134     $ 207,907     Intangible Assets:   Intangible assets consist of (in thousands):       September 30,     June 30,       2021     2021   Developed technology   $ 551,289     $ 552,160   Trade names     147,245       147,640   Customer relationships     230,695       232,493   Patents      2,989       2,926   Other intangibles     6,309       6,316   Definite-lived intangible assets     938,527       941,535   Accumulated amortization     ( 364,927 )     ( 348,267 ) Definite-lived intangibles assets, net     573,600       593,268   In process research and development     22,700       22,700   Total intangible assets, net   $ 596,300     $ 615,968           7 Table of Contents   Changes to the carrying amount of net intangible assets for the quarter ended September  30, 2021  consist of (in thousands):   Beginning balance   $ 615,968   Acquisitions     -   Other additions     43   Amortization expense     ( 18,606 ) Currency translation     ( 1,105 ) Ending balance   $ 596,300     The estimated future amortization expense for intangible assets as of September  30, 2021  is as follows (in thousands):   2022 remainder   $ 55,714   2023     72,454   2024     69,618   2025     66,372   2026     62,606   Thereafter     246,836   Total   $ 573,600     Goodwill:   Changes to the carrying amount of goodwill for the quarter ended September  30, 2021  consist of (in thousands):       Protein Sciences     Diagnostics and Genomics     Total   Beginning balance   $ 392,717       450,350     $ 843,067   Currency translation     ( 2,979 )     ( 68 )     ( 3,047 ) Ending balance   $ 389,738     $ 450,282     $ 840,020     We evaluate the carrying value of goodwill in the fourth quarter of each fiscal year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. The Company performed a quantitative goodwill impairment assessment for all of its reporting units during the fourth quarter of fiscal 2021. No indicators of impairment were identified as part of our assessment.    During the quarter ended September 30, 2021, the Company combined the management of the Exosome and Asuragen reporting units, both of which are included in the Diagnostics and Genomics operating segment. In conjunction with the combination of the reporting units, a qualitative goodwill impairment assessment was performed. The qualitative assessment identified no indicators of impairment. No triggering events or items beyond the reporting unit combination that would require a goodwill impairment assessment were identified during the quarter ended September 30, 2021. There has been no impairment of goodwill since the adoption of Financial Accounting Standards Board (“FASB”) ASC 350 guidance for goodwill and other intangibles on July 1, 2002.   8 Table of Contents       Note 4. Acquisitions:   We periodically complete business combinations that align with our business strategy. Acquisitions are accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date and that the results of operations of each acquired business be included in our consolidated statements of comprehensive income from their respective dates of acquisitions. Acquisition costs are recorded in selling, general and administrative expenses as incurred.   2021  Acquisitions   Asuragen, Inc.   On April 6, 2021, the Company acquired all of the ownership interests of Asuragen, Inc. (Asuragen) for approximately $ 216  million, net of cash acquired, plus contingent consideration of up to $ 105.0 million, subject to certain revenue thresholds. The Asuragen acquisition adds a leading portfolio of best in-class molecular diagnostic and research products, including genetic screening, oncology testing kits, molecular controls, a GMP compliant manufacturing facility, and a CLIA-certified laboratory. The transaction was accounted for in accordance with ASC 805, Business Combinations . The goodwill recorded as a result of the acquisition represents the strategic benefits of growing the Company’ product portfolio and the expected revenue growth from increased market penetration. The goodwill is not deductible for income tax purposes. The business became part of the Diagnostics and Genomics operating segment in the fourth quarter of fiscal year 2021.     The allocation of purchase consideration related to Asuragen Inc is considered preliminary with provisional amounts primarily related to goodwill and income tax assessment of acquired net operating losses. The Company expects to finalize the allocation of purchase price within the one -year measurement-period following the acquisition. Net sales and operating loss of this business included in Bio-Techne's consolidated results of operations as of September 30, 2021  were approximately $ 7.6  million and $ 3.2  million, respectively. The preliminary estimated fair values of the assets acquired and liabilities assumed as of the acquisition date and at September  30, 2021 are as follows (in thousands):       Preliminary allocation at acquisition date and at September 30, 2021   Current assets, net of cash   $ 10,422   Equipment and other long-term assets     3,762   Intangible assets:         Developed technology     107,000   In-process research and development     22,700   Customer relationships     11,700   Tradenames     2,000   Non-competition agreement     1,000   Goodwill     94,970   Total assets acquired     253,554             Liabilities     4,003   Deferred income taxes, net     15,664   Net assets acquired   $ 233,887             Cash paid, net of cash acquired     215,587   Contingent consideration payable     18,300   Net assets acquired   $ 233,887     Tangible assets and liabilities acquired were recorded at fair value on the date of close based on management's preliminary assessment. The purchase price allocated to developed technology, in-process research and development, and customer relationships was based on management's preliminary forecasted cash inflows and outflows and using a multiperiod excess earnings method to calculate the fair value of assets purchased. The amount recorded for developed technology is being amortized with the expense reflected in cost of goods sold in the Condensed Consolidated Statement of Earnings and Comprehensive Income. The amortization period for developed technology is estimated to be 14  years. Amortization expense related to customer relationships is reflected in selling, general and administrative expenses in the Condensed Consolidated Statement of Earnings and Comprehensive Income. The amortization period for customer relationships is estimated to be 16  years.  The amount recorded for tradenames and the non-competition agreement is being amortized with the expense reflected in selling, general and administrative expenses in the Condensed Consolidated Statement of Earnings and Comprehensive Income. The amortization period for tradenames and the non-competition agreement is estimated to be 5 years and 3 years, respectively. The net deferred income tax liability represents the net amount of the estimated future impact of adjustments for costs to be recognized as intangible asset amortization, which is not deductible for income tax purposes offset by the deferred tax asset for the preliminary calculation of acquired NOLs.     9 Table of Contents       Note   5 . Fair Value Measurements:   The Company’s financial instruments include cash and cash equivalents, available for sale investments, derivative instruments, accounts receivable, accounts payable, contingent consideration obligations, and long-term debt.   Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. This standard also establishes a hierarchy for inputs used in measuring fair value. This standard maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available in the circumstances.   The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable for the asset or liability and their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 may also include certain investment securities for which there is limited market activity or a decrease in the observability of market pricing for the investments, such that the determination of fair value requires significant judgment or estimation.   The following tables provide information by level for financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):       Total carrying value as of     Fair Value Measurements Using Inputs Considered as       September 30, 2021     Level 1     Level 2       Level 3   Assets                                   Equity securities (1)   $ 25,240     $ 23,729     $ 1,511       $ -   Certificates of deposit (2)     13,500       13,500       -         -   Derivative instruments - cash flow hedges     533       -       533         -   Total assets   $ 39,273     $ 37,229     $ 2,044       $ -                                       Liabilities                                   Contingent consideration   $ 22,600     $ -     $ -       $ 22,600   Derivative instruments - cash flow hedges     6,435       -       6,435         -   Total liabilities   $ 29,035     $ -     $ 6,435       $ 22,600         Total carrying value as of     Fair Value Measurements Using Inputs Considered as       June 30, 2021     Level 1     Level 2     Level 3   Assets                                 Equity securities (1)   $ 19,963     $ 18,581     $ 1,382     $ -   Certificates of deposit (2)     12,500       12,500       -       -   Derivative instruments - cash flow hedges     275       -       275         Total assets   $ 32,738     $ 31,081     $ 1,657     $ -                                     Liabilities                                 Contingent consideration   $ 29,400     $ -     $ -     $ 29,400   Derivative instruments - cash flow hedges     8,376       -       8,376       -   Total liabilities   $ 37,776     $ -     $ 8,376     $ 29,400       ( 1 ) Included in available-for-sale investments on the balance sheet.   The cost basis in the Company's investment in ChemoCentryx Inc (CCXI) at September 30, 2021  and June 30, 2021  was $ 6.6 million and $ 6.6 million, respectively. The Company has a warrant to purchase additional CCXI equity shares which was valued at $ 1.5 million and $ 1.4  million as of September 30, 2021  and  June 30 2021, respectively.   ( 2 ) Included in available-for-sale investments on the balance sheet.  The certificates of deposit have contractual maturity dates within one year.   10 Table of Contents   Fair value measurements of available for sale securities Our available for sale securities are measured at fair value using quoted market prices in active markets for identical assets and are therefore classified as Level 1 assets. The Company's warrant to purchase additional shares at a specified future price was valued using a Black-Scholes model with observable inputs in active markets and therefore was classified as a Level  2  asset.    Fair value measurements of derivative instruments, In  October 2018,  the Company entered into forward starting swaps designated as cash flow hedges on outstanding debt. The forward starting swaps reduce the variability of cash flow payments for the Company by converting the variable interest rate on the Company’s long-term debt described in Note  6  to that of a fixed interest rate. Accordingly, as part of the forward starting swaps, the Company exchanges, at specified intervals, the difference between floating and fixed interest amounts based on an initial $ 380  million of notional principal amount. The notional amount decreased by $ 100  million in  October  2020  and further decreased by $ 80  million in  October 2021  and $ 200  million in  October 2022.  In  June 2020,  the Company de-designated $ 80  million of the notional amount set to expire in  October 2020.  The net loss associated with the  June 2020  de-designated portion of the derivative instrument was  not  reclassified into earnings based on the amount of probable variable interest payments to occur within a  two  month time period of the forecasted hedged transaction. In  December 2020,  the Company de-designated an additional $ 80  million of notional amount set to expire in  October 2021. During fiscal year 2021, the Company recorded a loss in other non-operating income related to variable interest debt payments in certain months on a portion of the de-designated derivative that is not expected to occur. The remaining variable interest payments for the portion of the de-designated derivative are considered probable of occurring and therefore remain in accumulated other comprehensive income as of September 30, 2021 . The fair value of the portion of the de-designated derivative was $ 0.2  million and $ 0.8 million as of September 30, 2021 and June 30, 2021, respectively, which is recorded within short-term liabilities on the Consolidated Balance Sheet. The fair value of the designated derivative instrument is $ 6.2 million and $ 7.6 million as of September 30, 2021 and June 30, 2021, respectively, and is recorded within other long-term liabilities on the Consolidated Balance Sheet.    In  May 2021,  the Company entered into a new forward starting swap designated as a cash flow hedge on forecasted debt. The forward starting swap reduces the variability of cash flow payments for the Company by converting the variable interest rate on the Company’s forecasted variable interest long-term debt to that of a fixed interest rate. Accordingly, as part of the forward starting swap, the Company exchanges, at specified intervals, the difference between floating and fixed interest amounts based on $ 200  million of notional principal amount. The effective date of the swap is  November 2022  with the full swap maturing in  November 2025.  The fair value of the derivative instrument was $ 0.5 million  and $ 0.3  million as of September 30, 2021 and June 30, 2021, respectively, which is recorded within other long-term assets on the Consolidated Balance Sheet.   Changes in the fair value of the designated hedged instrument are reported as a component of other comprehensive income and reclassified into interest expense over the corresponding term of the cash flow hedge. The Company reclassifie d $ 2.1  mill ion to interest expense and related tax benefits of $ 0.5   million during the three   months ended  September 30, 2021 and 2020, respectively .  The instruments were valued using observable market inputs in active markets and therefore are classified as Level  2  liabilities.     11 Table of Contents   Fair value measurements of contingent consideration The Company has $ 22.6 million in contingent consideration recorded as of September 30, 2021, which is the fair value of contingent consideration related to the Asuragen and B-MoGen Biotechnologies Inc ("B-MoGen") acquisitions. The Company is required to make contingent consideration payments of up to $ 105.0  million and $ 38.0  million, respectively, as part of these acquisition agreements. The contingent agreement with Asuragen is based on achieving certain revenue thresholds. The preliminary fair value of the liabilities for the Asuragen acquisition is $ 18.3  million as discussed in Note  4.  The contingent agreement with B-MoGen is based on meeting certain product development milestones and revenue thresholds.  The preliminary fair value of the revenue milestone payments was determined using a Monte Carlo simulation-based model discounted to present value. Assumptions used in these calculations are units sold, expected revenue, expected expenses, discount rate, and various probability factors.   The ultimate settlement of contingent consideration liabilities for the Asuragen and B-Mogen acquisitions could deviate from current estimates based on the actual results of the financial measures described above. This liability is considered to be a Level  3  financial liability that is re-measured each reporting period. The change in fair value of contingent consideration for these acquisitions is included in general and administrative expense.   During the first quarter of fiscal 2022, the Company made a $ 4.0 million payment on the QT Holdings Corporation contingent consideration agreement relating to certain product development milestones. The cash paid was consistent with the related accrual as of June 30, 2021.    The following table presents a reconciliation of the liability measured at fair value on a recurring basis using significant unobservable inputs (Level  3 ) (in thousands):       Quarter Ended       September 30, 2021   Fair value at the beginning of period   $ 29,400   Payments     ( 4,000 ) Change in fair value of contingent consideration     ( 2,800 ) Fair value at the end of period   $ 22,600     The use of different assumptions, applying different judgment to matters that inherently are subjective and changes in future market conditions could result in different estimates of fair value of our securities or contingent consideration, currently and in the future. If market conditions deteriorate, we may incur impairment charges for securities in our investment portfolio. We may also incur changes to our contingent consideration liability as discussed below.   Fair value measurements of other financial instruments – The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate fair value.   Cash and cash equivalents, certificates of deposit, accounts receivable, and accounts payable – The carrying amounts reported in the consolidated balance sheets approximate fair value because of the short-term nature of these items.   Long-term debt – The carrying amounts reported in the consolidated balance sheets for the amount drawn on our line-of-credit facility and long-term debt approximates fair value because our interest rate is variable and reflects current market rates.      Note 6. Debt and Other Financing Arrangements:   On August 1, 2018, the Company entered into a new revolving line-of-credit and term loan governed by a Credit Agreement (the Credit Agreement). The Credit Agreement provides for a revolving credit facility of $ 600.0 million, which can be increased by an additional $ 200.0 million subject to certain conditions, and a term loan of $ 250.0 million. Borrowings under the Credit Agreement may be used for working capital and expenditures of the Company and its subsidiaries, including financing permitted acquisitions. Borrowings under the Credit Agreement bear interest at a variable rate. The current outstanding debt is based on the Eurodollar Loans term for which the interest rate is calculated as the sum of LIBOR plus an applicable margin. The applicable margin is determined from the total leverage ratio of the Company and updated on a quarterly basis. The annualized fee for any unused portion of the credit facility is currently 15  basis points.   The Credit Agreement matures on August 1, 2023 and contains customary restrictive and financial covenants and customary events of default. As of September 30, 2021, the outstanding balance under the Credit Agreement was $ 300.2  million.   12 Table of Contents       Note 7. Leases:     As a lessee, the company leases offices, labs, and manufacturing facilities, as well as vehicles, copiers, and other equipment. The Company adopted ASU No. 2016 - 02 and related standards (collectively ASC 842, Leases ), which replaced previous lease accounting guidance, on July 1, 2019.    The Company recognizes operating lease expense on a straight-line basis over the lease term. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is Bio-Techne’s incremental borrowing rate or, if available, the rate implicit in the lease. Bio-Techne determines the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region. During the three months ended September 30, 2021, the Company recognized $ 1.1  million in variable lease exp ense and $ 3.7  mi llion relating to fixed lease expense in the Condensed Consolidated Statements of Earnings and Comprehensive Income.    The following table summarizes the balance sheet classification of the Company’s operating leases and amounts of right of use assets and lease liabilities and the weighted average remaining lease term and weighted average discount rate for the Company’s operating leases (asset and liability amounts are in thousands):     Balance Sheet Classification   As of September 30, 2021   Operating leases:           Operating lease right of use assets Right of Use Asset   $ 71,396               Current operating lease liabilities Operating lease liabilities current   $ 12,001   Noncurrent operating lease liabilities Operating lease liabilities     65,059   Total operating lease liabilities   $ 77,060               Weighted average remaining lease term (in years):     7.77               Weighted average discount rate:     3.93 %   The following table summarizes the cash paid for amounts included in the measurement of operating lease liabilities and right of use assets obtained in exchange for new operating lease liabilities for the three months ended (in thousands):       Three months ended September 30, 2021   Cash amounts paid on operating lease liabilities   $ 3,758             Right of use assets obtained in exchange for lease liabilities     278     The following table summarizes the fair value of the lease liability by payment date for the Company’s operating leases by fiscal year (in thousands):       Operating Leases   Remainder of 2022   $ 10,865   2023     13,566   2024     11,897   2025     10,805   2026     10,148   Thereafter     32,236   Total   $ 89,517   Less: Amounts representing interest     12,457   Total Lease obligations   $ 77,060     Certain leases include one or more options to renew, with terms that extend the lease term up to five years. Bio-Techne includes option to renew the lease as part of the right of use lease asset and liability when it is reasonably certain the Company will exercise the option. In addition, certain leases contain fair value purchase and termination options with an associated penalty. In general, Bio-Techne is not reasonably certain to exercise such options.   13 Table of Contents       Note 8.   Supplemental Equity and Accumulated Other Comprehensive Income (Loss):   Supplemental Equity   The Company has declared cash dividends per share of $ 0.32  in both the three months ended September 30, 2021  and 2020.     Consolidated Changes in Equity (amounts in thousands)                                       Accumulated                                       Additional             Other                       Common Stock     Paid-in     Retained     Comprehensive     Non-Controlling               Shares     Amount     Capital     Earnings     Income(Loss)     Interest     Total   Balances at June 30, 2021     38,955     $ 390     $ 534,411     $ 1,085,461     $ ( 57,291 )   $ 8,263     $ 1,571,234   Net earnings                             69,615               (634 )     68,981   Other comprehensive income                                     ( 6,925 )     (39 )     ( 6,964 ) Common stock issued for exercise of options     295       3       36,345       (13,481 )                     22,867   Common stock issued for restricted stock awards     20       0       0       ( 9,765 )                     ( 9,765 ) Cash dividends                             ( 12,493 )                     ( 12,493 ) Stock-based compensation expense                     11,396                               11,396   Common stock issued to employee stock purchase plan     3       0       1,358                               1,358   Employee stock purchase plan expense                     341                               341   Balances at September 30, 2021     39,273     $ 393     $ 583,851     $ 1,119,337     $ ( 64,216 )   $ 7,590     $ 1,646,955                                           Accumulated                               Additional             Other               Common Stock     Paid-in     Retained     Comprehensive               Shares     Amount     Capital     Earnings     Income(Loss)     Total   Balances at June 30, 2020     38,453     $ 385     $ 420,536     $ 1,057,470     $ ( 97,199 )   $ 1,381,192   Cumulative effect adjustments due to adoption of new accounting standards and other                             ( 276 )             ( 276 ) Net earnings                             33,395               33,395   Other comprehensive loss                                     14,057       14,057   Common stock issued for exercise of options     117       1       13,727                       13,728   Common stock issued for restricted stock awards     25       0               ( 4,890 )             ( 4,890 ) Cash dividends                             ( 12,336 )             ( 12,336 ) Stock-based compensation expense                     12,667                       12,667   Common stock issued to employee stock purchase plan     6       0       1,463                       1,463   Employee stock purchase plan expense                     286                       286   Balances at September 30, 2020     38,601     $ 386     $ 448,679     $ 1,073,362     $ ( 83,142 )   $ 1,439,285     14 Table of Contents   Accumulated Other Comprehensive Income   The components of other comprehensive income (loss) consist of changes in foreign currency translation adjustments and changes in net unrealized gains (losses) on derivative instruments designated as cash flow hedges. The Company reclassified $ 1.6 million from accumulated other comprehensive income (loss) to earnings during the three months ended September 30, 2021.    The accumulated balances related to each component of other comprehensive income (loss), net of tax, are summarized as follows:       Unrealized Gains (Losses) on Derivative Instruments     Foreign Currency Translation Adjustments     Total   Balance as of June 30, 2021   $ ( 6,193 )   $ ( 51,098 )   $ ( 57,291 ) Other comprehensive income (loss) before reclassifications, net of taxes, attributable to Bio-Techne     84       ( 8,607 )     ( 8,523 ) Reclassification from loss on derivatives to interest expense, net of taxes, attributable to Bio-Techne (1)     1,598       -       1,598   Balance as of September 30, 2021 (2)   $ ( 4,511 )   $ ( 59,705 )   $ ( 64,216 )         Unrealized Gains (Losses) on Derivative Instruments     Foreign Currency Translation Adjustments     Total   Balance as of June 30, 2020   $ ( 13,253 )   $ ( 83,946 )   $ ( 97,199 ) Other comprehensive income (loss), net of tax before reclassifications, attributable to Bio-Techne     11       11,914       11,925   Reclassification from loss on derivatives to interest expense, net of taxes, attributable to Bio-Techne  (3)     2,132       -       2,132   Balance as of September 30, 2020 (2)   $ ( 11,110 )   $ ( 72,032 )   $ ( 83,142 )   ( 1 ) Gains (losses) on the interest swap are reclassified into interest expense as payments on the derivative agreement are made. The Company reclassified ($ 2,091 ) to interest expense and a related tax benefit of $ 493  during the quarter ended September 30, 2021. ( 2 ) The Company had net deferred tax benefi ts of $ 1,391 and $ 3,413 incl uded in the accumulated other comprehensive income loss as of September 30, 2021  and 2020,  respectively. ( 3 ) Gains (losses) on the interest swap are reclassified into interest expense as payments on the derivative agreement are made. The Company reclassified ($ 2,769 ) to interest expense and a related tax benefit of $ 637 during the quarter ended September 30, 2020.    15 Table of Contents       Note 9. Earnings Per Share:   The following table reflects the calculation of basic and diluted earnings per share (in thousands, except per share amounts):       Quarter Ended September 30,       2021     2020   Earnings per share – basic:                 Net earnings, including noncontrolling interest   $ 68,981     $ 33,395   Less net earnings (loss) attributable to noncontrolling interest     ( 634 )     -   Net earnings attributable to Bio-Techne   $ 69,615     $ 33,395   Income allocated to participating securities     ( 36 )     (21)   Income available to common shareholders   $ 69,579     $ 33,374                     Weighted-average shares outstanding - basic     39,094       38,536   Earnings per share - basic   $ 1.78     $ 0.87                     Earnings per share – diluted:                 Net earnings, including noncontrolling interest   $ 68,981     $ 33,395   Less net earnings (loss) attributable to noncontrolling interest     ( 634 )     -   Net earnings attributable to Bio-Techne   $ 69,615     $ 33,395   Income allocated to participating securities     ( 36 )     ( 21 ) Income available to common shareholders   $ 69,579     $ 33,374                     Weighted average shares outstanding - basic     39,094       38,536   Dilutive effect of stock options and restricted stock units     2,064       1,489   Weighted average common shares outstanding - diluted     41,158       40,025   Earnings per share - diluted   $ 1.69     $ 0.83     The dilutive effect of stock options and restricted stock units in the above table excludes all options for which the aggregate exercise proceeds exceeded the average market price for the period. The number of potentially dilutive option shares excluded from the calculation was 0.4  million and 1.5  million for the quarter ended September 30, 2021  and 2020, respectively.   Note 10. Share-based Compensation:   During the quarter ended September 30, 2021  and 2020, the Company granted  0.3  million and 0.7 million stock options at weighted average grant prices of $ 481.84 and $ 267.79 and weighted average fair values of $ 118.47 and $ 56.71 , respectively. During the quarter ended September 30, 2021  and 2020, the Company granted 13,929  and 22,367 restricted stock units at a weighted average fair value of $ 481.82 and $ 267.87 , respectively. During the quarter ended September 30, 2021  and 2020, the Company granted 5,344  and 8,675  shares of restricted common stock shares at a weighted average fair value of $ 481.82  and $ 267.98 .   Stock options for  336,565 and 116,816  shares of common stock with total intrinsic values of $ 122.8  million and $ 16.9  million were exercised during the quarter ended September 30, 2021  and 2020, respectively.   Stock-based compensation expense, inclusive of payroll taxes, of $ 13.2  million and $ 12.9  million was included in selling, general and administrative expenses for the quarter ended September 30, 2021  and 2020, respectively. Additionally, stock-based compensation costs, inclusive of payroll taxes, of $ 0.4  million and $ 0.5 million was included in cost of goods sold for quarter ended September 30, 2021  and 2020, respectively. As of September 30, 2021, there was $ 61.2  million of unrecognized compensation cost related to non-vested stock options, non-vested restricted stock units and non-vested restricted stock. The weighted average period over which the compensation cost is expected to be recognized is  2.2  years.   In fiscal year 2015, the Company established the Bio-Techne Corporation 2014 Employee Stock Purchase Plan (ESPP), which was approved by the Company's shareholders on October 30, 2014, and which is designed to comply with IRS provisions governing employee stock purchase plans. 200,000 shares were allocated to the ESPP. The Company recorded expense of $ 0.3 million, and $ 0.3  million for the ESPP for the quarter ended September 30, 2021 and 2020, respectively.    Note 11. Other Income / (Expense):     The components of other income (expense) in the accompanying Statement of Earnings and Comprehensive Income are as follows:      Quarter Ended       September 30,       2021     2020   Interest expense   $ ( 3,409 )   $ ( 4,416 ) Interest income     193       114   Other non-operating income (expense), net (1)     7,377       ( 5,451 ) Total other income (expense)   $ 4,161     $ ( 9,753 )   ( 1 ) Primarily due to a $ 5.3 million gain in the fair value of our CCXI investment for the quarter ended September 30, 2021 as comp ared to a $ 4.4  m illion loss in the comparative period.   16 Table of Contents       Note 12. Income Taxes:   The Company’s effective income tax rate for the first quarter of fiscal 2022  and 2021  was ( 2.4 )%  an d 15.1 % of consolidated earnings before income taxes, respectively. The change in the company’s tax rate for the first quarter of fiscal 2022  compared to first quarter of fiscal 2021  was driven by discrete tax items.   The Company recognized total net benefits related to discrete tax items of $ 17.7  mill ion during the  three months ended September 30, 2021  compared to $ 4.2  million during the three months ended September 30, 2020. Share-based compensation excess tax benefit contribute d $ 18.3  m illion and $ 3.3  million in the three months ended September 30, 2021  and 2020, respectively. The Company recognized total other immaterial net discrete tax expense of $ 0.6  million in the quarter compared to $ 0.9  millio n other immaterial net discrete tax benefits in the three months ended September 30, 2020.      Note 13. Segment Information:   The Company's management evaluates segment operating performance based on operating income before certain charges to cost of sales and selling, general and administrative expenses, principally associated with the impact of partially owned consolidated subsidiaries as well as acquisition accounting related to inventory, amortization of acquisition-related intangible assets and other acquisition-related expenses. The Protein Sciences and Diagnostics and Genomics segments both include consumables, instruments, services and royalty revenue.   The following is financial information relating to the Company's reportable segments (in thousands):       Quarter Ended       September 30,       2021     2020   Net sales:                 Protein Sciences   $ 197,186     $ 154,446   Diagnostics and Genomics     60,985       50,125   Intersegment     ( 452 )     ( 372 ) Consolidated net sales   $ 257,719     $ 204,199   Operating income:                 Protein Sciences   $ 90,100     $ 70,352   Diagnostics and Genomics     7,463       8,674   Segment operating income     97,563       79,026   Costs recognized on sale of acquired inventory     (1,512)       -   Amortization of acquisition related intangible assets     ( 18,389 )     ( 15,501 ) Impact of partially owned consolidated subsidiaries     ( 1,562 )     -   Acquisition related expenses     2,377       ( 136 ) Stock-based compensation, inclusive of employer taxes     ( 13,860 )     ( 13,333 ) Restructuring costs     ( 1,185 )     -   Corporate general, selling, and administrative expenses     ( 210 )     ( 964 ) Consolidated operating income   $ 63,222     $ 49,092       Note 14. Subsequent Events:   None.     17 Table of Contents       ITEM   2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   The following management discussion and analysis (“MD&A”) provides information that we believe is useful in understanding our operating results, cash flows and financial condition. We provide quantitative information about the material sales drivers including the effect of acquisitions and changes in foreign currency at the corporate and segment level. We also provide quantitative information about discrete tax items and other significant factors we believe are useful for understanding our results. The MD&A should be read in conjunction with both the unaudited condensed consolidated financial information and related notes included in this Form 10-Q, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended June 30, 2021. This discussion contains various “Non-GAAP Financial Measures” and also contains various “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We refer readers to the statements entitled “Non-GAAP Financial Measures” and “Forward-Looking Information and Cautionary Statements” located at the end of Item 2 of this report.   OVERVIEW   Bio-Techne and its subsidiaries, collectively doing business as Bio-Techne Corporation (Bio-Techne, we, our, us or the Company) develop, manufacture and sell biotechnology reagents, instruments and services for the research and clinical diagnostic markets worldwide. With our deep product portfolio and application expertise, we sell integral components of scientific investigations into biological processes and molecular diagnostics, revealing the nature, diagnosis, etiology and progression of specific diseases. Our products aid in drug discovery efforts and provide the means for accurate clinical tests and diagnoses.    Consistent with prior year, we have operated with two segments – our Protein Sciences segment and our Diagnostics and Genomics segment during the first quarter of fiscal year 2022. Our Protein Sciences segment is a leading developer and manufacturer of high-quality purified proteins and reagent solutions, most notably cytokines and growth factors, antibodies, immunoassays, biologically active small molecule compounds, tissue culture reagents and T-Cell activation technologies. This segment also includes protein analysis solutions that offer researchers efficient and streamlined options for automated western blot and multiplexed ELISA workflow. Our Genomics and Diagnostics segment develops and manufactures diagnostic products, including FDA-regulated controls, calibrators, blood gas and clinical chemistry controls and other reagents for OEM and clinical customers, as well as a portfolio of clinical molecular diagnostic oncology assays, including the ExoDx® Prostate (IntelliScore) test (EPI) for prostate cancer diagnosis. This segment also manufactures and sells advanced tissue-based in-situ hybridization assays (ISH) for research and clinical use.   RECENT ACQUISITIONS   A key component of the Company's strategy is to augment internal growth at existing businesses with complementary acquisitions. The Company did not make any acquisitions in the three months ended September 30, 2021. Refer to the prior year Annual Report on form 10-K for additional disclosure regarding the Company's recent acquisitions.      RESULTS OF OPERATIONS   Operational Update   Consolidated net sales increased 26% for the quarter ended September 30, 2021 compared to the same prior year period. Organic growth was 21% for the quarter ended September 30, 2021 compared to the same prior year period, with foreign currency exchange having a favorable impact of 1% on revenue growth and acquisitions contributing a favorable impact of 4% to revenue growth.   Consolidated net earnings attributable to Bio-Techne increased to $69.6 million for the quarter ended September 30, 2021 compared to the $33.4 million in same prior year period. The increase in net earnings attributable to Bio-Techne for the quarter ended September 30, 2021 is primarily due to an increase in net sales and changes in the fair value of our ChemoCentryx investment.    Business Strategy Update   The Company’s key business strategies for long-term growth and profitability continue to be geographic expansion, core product innovation, acquisitions and talent retention and development. In fiscal year 2022, the Company is also focused on evaluating how climate change impacts from our business operations might be measured and mitigated, with the plan of integrating consideration of greenhouse gas emissions and other climate variables into those key business strategies. The financial impact of this initiative is not expected to materially alter the Company’s financial results in the fiscal year, but we expect it to provide positive long-term financial benefit.     Net Sales   Consolidated net sales for the quarter ended September 30, 2021 were $257.7 million, an increase of 26% from the same prior year period. Organic growth was 21% for the quarter ended September 30, 2021 compared to the same prior year period, with foreign currency exchange having a favorable impact of 1% on sales growth and  acquisitions contributing a favorable impact of 4% to revenue growth. Organic revenue growth was mainly driven by strong biopharma demand, especially for products, services and solutions from the Protein Sciences segment and by overall execution of the Company's long-term growth strategy.    18 Table of Contents   Gross Margins   Consolidated gross margins for the quarter ended September 30, 2021 and September 30, 2020 were 66.4% and 67.4%, respectively. Under purchase accounting, inventory is valued at fair value less expected selling and marketing costs, resulting in reduced margins in future periods as the inventory is sold. Excluding the impact of costs recognized upon the sale of acquired inventory, stock compensation expense, amortization of intangibles, and impact of partially owned consolidated subsidiaries, adjusted gross margins were 71.2% and 71.9% for the quarter ended Septe mber 30, 2021 and 2020, respectively. Both consolidated gross margins and non-GAAP adjusted gross margins were negatively impacted by product mix and additional investments made in the business to support future growth for the quarter ended September 30, 2021 as compared to the prior year.   A reconciliation of the reported consolidated gross margin percentages, adjusted for acquired inventory sold, intangible amortization, stock compensation expense, and impact of partially owned consolidated subsidiaries included in cost of sales, is as follows:       Quarter Ended       September 30,       2021     2020   Consolidated gross margin percentage     66.4 %     67.4 % Identified adjustments:                 Costs recognized upon sale of acquired inventory     0.6 %     - % Amortization of intangibles      4.0 %     4.2 % Stock compensation expense - COGS     0.1 %     0.3 % Impact of partially owned consolidated subsidiaries     0.1 %     - % Non-GAAP adjusted gross margin percentage     71.2 %     71.9 %   Selling, General and Administrative Expenses   Selling, general and administrative expenses increased $13.6 million (19%) for the quarter ended September 30, 2021 from the same prior year period . The increase in expense was due to strategic growth investments and the Asuragen acquisition in the fourth quarter of fiscal year 2021.   Research and Development Expenses   Research and development expenses were $21.6 million for the quarter ended September 30, 2021 compared to $16.0 milli on from the same prior year period. The increase in expense was due to strategic growth investments and the Asuragen acquisition in the fourth quarter of fiscal year 2021.     Segment Results   Protein Sciences       Quarter Ended       September 30,       2021     2020   Net sales (in thousands)   $ 197,186     $ 154,446   Operating margin percentage     45.7 %     45.6 %   Protein Science’s net sales for the quarter ended September 30, 2021 were $197.2 million with reported growth of 28% com pared to the same prior year period. Organic growth for the quarter ended September 30, 2021 was 26% with foreign currency having a favorable impact of 2%. Segment growth was driven by strong BioPharma demand resulting in  broad-based growth across our proteomic research reagents and analytical tools.    The operating margin for the quarter ended September 30, 2021 was 45.7% compared to 45.6 % for the same prior year period. Operating income margin was positively impacted by volume leverage largely offset by strategic investments to support future growth.     19 Table of Contents   Diagnostics and Genomics       Quarter Ended       September 30,       2021     2020   Net sales (in thousands)   $ 60,985     $ 50,125   Operating margin percentage     12.2 %     17.3 %   Diagnostics and Genomics’ net sales for the quarter ended September 30, 2021 were $61.0 million with reported growth of 22% compared to the same prior year period. Organic growth for the quarter ended September 30, 2021 was 6% with acquisitions contributing 15% to revenue growth and foreign currency exchange having a favorable impact of 1%. Total segment revenue increased primarily due to the Asuragen acquisition in the fourth quarter of fiscal year 2021. Organic growth was driven by continued strength in our diagnostic reagent product lines.   The operating margin for the segment was 12.2% for the quarter ended September 30, 2021 compared to 17.3% for the same prior year period. The segment’s operating margin was negatively impacted by acquisitions and additional investments made in the business to support future growth.   Income Taxes   Income taxes for the quarter ended September 30, 2021 were at an effective rate of (2.4)% of consolidated earnings before income taxes compared to 15.1% for the quarter ended September 30, 2020. The change in the Company’s tax rate for the quarter ended September 30, 2021 was driven by discrete tax items of $17.7  million compared to prior year discrete tax items of $4.2 million as further discussed in Note 12.    The forecasted tax rate as of the first fiscal quarter of 2022 before discrete items is 23.9% co mpared to the prior year forecasted tax rate before discrete items of 25.7%. Excluding the impact of discrete items, the Company expects the consolidated income tax rate for the remainder of fiscal 2022 to range from 23% to 28%.   Net Earnings   Non-GAAP adjusted consolidated net earnings are as follows:       Quarter Ended       September 30,       2021     2020   Net earnings before taxes - GAAP   $ 67,383     $ 39,339   Identified adjustments attributable to Bio-Techne:                 Costs recognized upon sale of acquired inventory     1,512       -   Amortization of intangibles     18,389       15,501   Acquisition related expenses     (2,262 )     230   Stock-based compensation, inclusive of employer taxes     13,860       13,333   Restructuring costs     1,185       -   Realized (gain) loss on investments and other     (6,235 )     4,351   Impact of non-controlling interest (pre-tax)     1,562           Non-GAAP adjusted net earnings attributable to Bio-Techne   $ 95,394     $ 72,754                     Non-GAAP tax rate     21.0 %     21.5 % Non-GAAP tax expense     20,033       15,609                     Non-GAAP adjusted net earnings attributable to Bio-Techne     75,361       57,145                     Earnings per share - diluted - Adjusted   $ 1.83     $ 1.43     20 Table of Contents   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 following table summarizes the reported GAAP tax rate and the effective Non-GAAP adjusted tax rate for the quarter ended September 30, 2021 and September 30, 2020.       Quarter Ended         September 30,         2021     2020     GAAP effective tax rate     (2.4 )%     15.1 %   Discrete items     26.3       10.6     Annual tax forecast update     -       -     Long-term GAAP tax rate     23.9 %     25.7 %                       Rate impact items                   Stock based compensation     (2.1 )     (3.7 )%   Other     (0.8 )     (0.5 )   Total rate impact items     (2.9 )%     (4.2 )%                       Non-GAAP adjusted tax rate     21.0 %     21.5 %     The difference between the reported GAAP tax rate and non-GAAP tax rate applied to the identified non-GAAP adjustments for the quarter ended September 30, 2021 is primarily a result of discrete tax items, including the tax benefit of stock option exercises.   LIQUIDITY AND CAPITAL RESOURCES   As of September 30, 2021, cash and cash equivalents and available-for-sale inv estments were $235.1 million compared to $231.6 million as of June 30, 2021. Included in available-for-sale-investments as of September 30, 2021 was the fair value of the Company's investment in CCXI of $25.2 million. The fair value of the Company's CCXI investment at June 30, 2021 was $20.0 million.   The Company has a line-of-credit and term loan governed by the Credit Agreement . See Note 5 to the Co ndensed Consolidated Financial Statements for a description of the Credit Agreement.   The Company has contingent consideration payments of up to  $105 million and $38 m illion relating to the Asuragen and B-MoGen acquisitions, respectively. The fair value of the remaining payments is $22.6  million as of September 30, 2021.   Management of the Company expects to be able to meet its cash and working capital requirements for operations, facility expansion, capital additions, and cash dividends for the foreseeable future, and at least the next 12 months, through currently available cash, cash generated from operations, and remaining credit available on its existing revolving line of credit.   Cash Flows From Operating Activities   The Company generated cash of $48.4  million from operating activities in the first quarter of fiscal 2022 compared to $66.0 million in the first quarter of fiscal 2021 . The decrease from the prior year was primarily due to the timing of cash payments on certain operating assets and liabilities, partial ly offset by an increase in year over year net earnings.   Cash Flows From Investing Activities   We continue to make investments in our business, including capital expenditures.    Capital expenditures for fixed assets for the first quarter of fiscal 2022 and 2021 were $6.1 m illion and $10.9 million, respectively. Capital expenditures for the remainder of fiscal 2022 are expected to be approxima tely $60 m illion. Capital expenditures are expected to be financed through currently available funds and cash generated from operating activities. Expected additions in fiscal 2022 is related to increasing capacity to meet expected sales growth across the Company.   Cash Flows From Financing Activities   During the first quarter of fiscal 2022 and 2021, the Company paid cash dividends of $12.5 m illion and $12.3 million, respectively, to all common shar eholders. On November 2, 2021, the Company announced the payment of a $0.32 per share cash divid end, or approxima tely $12.6 millio n, will be pa yable November 26, 2021 to all common shareholders of record on November 12, 2021.   Cash of $37.9  million and $15.4 million was received during the first quarter of fiscal 2022 and 2021, respectively, from the exercise of stock options.   During the first quarter of fiscal 2022 and 2021, the Company made repayments of $51.1  million and $33.1 million, respectively, on its long-term debt balance. The Company drew $10.0 million under its revolving line-of-credit facility during the first quarter of fiscal 2022. There were no withdrawals on the line-of-credit facility during the first quarter of fiscal 2021.    During the first quarter of fiscal 2022, the Company made payments of $0.7 million of contingent consideration payments classified as financing activities. The Company made $3.3 million in contingent consideration payments, which were classified within operating activities. No contingent consideration payments classified as either financing or operating activities were made in the first quarter of fiscal 2021.     During the first quarter of fiscal 2022 and 2021, the Company ma de $23.2 mill ion and $4.9 million in other financing payments, respe ctively, related to taxes paid on restricted stock units and stock options exercised through a net share settlement.      21 Table of Contents   CRITICAL ACCOUNTING POLICIES   The Company's significant accounting policies are discussed in the Company's Annual Report on Form 10-K for fiscal 2021 and are incorporated herein by reference. The application of certain of these policies requires judgments and estimates that can affect the results of operations and financial position of the Company. Judgments and estimates are used for, but not limited to, valuation of available-for-sale investments, inventory valuation and allowances, valuation of intangible assets and goodwill and valuation of investments in unconsolidated entities. There have been no significant changes in estimates in the first quarter of fiscal 2022 that would require disclosure nor have there been any changes to the Company's policies.   NON-GAAP FINANCIAL MEASURES   This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in Item 2, contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP measures include:     • Organic Growth   • Adjusted gross margin   • Adjusted net earnings   • Adjusted effective tax rate   We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.   Our non-GAAP financial measure of organic growth represents revenue growth excluding revenue from acquisitions within the preceding 12 months, the impact of foreign currency, as well as the impact of partially owned consolidated subsidiaries. Excluding these measures provides more useful period-to-period comparison of revenue results as it excludes the impact of foreign currency exchange rates, which can vary significantly from period to period, and revenue from acquisitions that would not be included in the comparable prior period. Revenues from partially owned subsidiaries consolidated in our financial statements are also excluded from our organic revenue calculation, as those revenues are not fully attributable to the Company. Revenue from partially owned subsidiaries was $413 thousand for the quarter ended September 30, 2021.   Our non-GAAP financial measures for adjusted gross margin, adjusted operating margin, and adjusted net earnings, in total and on a per share basis, exclude stock-based compensation, the costs recognized upon the sale of acquired inventory, amortization of acquisition intangibles, acquisition related expenses inclusive of the changes in fair value of contingent consideration, and other non-recurring items including non-recurring costs and gains. Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjection assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations. The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses inclusive of the changes in fair value contingent consideration, and other non-recurring items including gains or losses on legal settlements and one-time assessments from this measure because they occur as a result of specific events, and are not reflective of our internal investments, the costs of developing, producing, supporting and selling our products, and the other ongoing costs to support our operating structure. Additionally, these amounts can vary significantly from period to period based on current activity. The Company also excludes revenue and expense attributable to partially owned consolidated subsidiaries in the calculation of our non-GAAP financial measures as the revenues and expenses are not fully attributable to the Company.    The Company’s non-GAAP adjusted operating margin and adjusted net earnings, in total and on a per share basis, also excludes stock-based compensation expense, which is inclusive of the employer portion of payroll taxes on those stock awards, restructuring, impairments of equity method investments, gain and losses from investments, and certain adjustments to income tax expense. Impairments of equity investments are excluded as they are not part of our day-to-day operating decisions. Additionally, gains and losses from other investments that are either isolated or cannot be expected to occur again with any predictability are excluded. Costs related to restructuring activities, including reducing overhead and consolidating facilities, are excluded because we believe they are not indicative of our normal operating costs. The Company independently calculates a non-GAAP adjusted tax rate to be applied to the identified non-GAAP adjustments considering the impact of discrete items on these adjustments and the jurisdictional mix of the adjustments. In addition, the tax impact of other discrete and non-recurring charges which impact our reported GAAP tax rate are adjusted from net earnings. We believe these tax items can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future results.   The Company periodically reassesses the components of our non-GAAP adjustments for changes in how we evaluate our performance, changes in how we make financial and operational decisions, and considers the use of these measures by our competitors and peers to ensure the adjustments are still relevant and meaningful.   Readers are encouraged to review the reconciliations of the adjusted financial measures used in management's discussion and analysis of the financial condition of the Company to their most directly comparable GAAP financial measures provided within the Company's consolidated financial statements.   22 Table of Contents   FORWARD LOOKING INFORMATION AND CAUTIONARY STATEMENTS   This quarterly report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those regarding the Company's expectations as to the effect of changes to accounting policies, the amount of capital expenditures for the remainder of the fiscal year, the source of funding for capital expenditure requirements, the sufficiency of currently available funds for meeting the Company's needs, the impact of fluctuations in foreign currency exchange rates, and expectations regarding gross margin fluctuations, increasing research and development expenses, increasing selling, general and administrative expenses and income tax rates. These statements involve risks and uncertainties that may affect the actual results of operations. The following important factors, among others, have affected and, in the future, could affect the Company's actual results: integration of newly acquired businesses, the introduction and acceptance of new products, general national and international economic, political, regulatory, and other conditions, increased competition, the reliance on internal manufacturing and related operations, the impact of currency exchange rate fluctuations, the recruitment and retention of qualified personnel, the impact of governmental regulation, maintenance of intellectual property rights, credit risk and fluctuation in the market value of the Company's investment portfolio, and unseen delays and expenses related to facility construction and improvements. For additional information concerning such factors, see the Company's Annual Report on Form 10-K for fiscal 2021 as filed with the Securities and Exchange Commission and Part II. Item 1A below.    23 Table of Contents   ITEM   3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   As of September 30, 2021, the Company held an investment in the common stock of CCXI. The investment was included in short-term available-for-sale investments at its fair value of $25.2 million. As of September 30, 2021, the potential loss in fair value due to a 10% decrease in the market value of CCXI was $2.5 million.     The Company operates internationally, and thus is subject to potentially adverse movements in foreign currency exchange rates. For the quarter ended September 30, 2021, approximately 35.0% of consolidated net sales were made in foreign currencies, including 12% in euros, 5% in British pound sterling, 8% in Chinese yuan and the remaining 10% in other currencies. The Company is exposed to market risk mainly from foreign exchange rate fluctuations of the euro, British pound sterling, the Chinese yuan, and the Canadian dollar, as compared to the U.S. dollar as the financial position and operating results of the Company's foreign operations are translated into U.S. dollars for consolidation.   Month-end average exchange rates between the British pound sterling, euro, Chinese yuan and Canadian dollar, which have not been weighted for actual sales volume in the applicable months in the periods, to the U.S. dollar were as follows:       Quarter Ended       September 30,       2021     2020   Euro   $ 1.18     $ 1.18   British pound sterling     1.37       1.31   Chinese yuan     0.15       0.15   Canadian dollar     0.79       0.75     The Company's exposure to foreign exchange rate fluctuations also arises from trade receivables, trade payables and intercompany payables denominated in one currency in the financial statements, but receivable or payable in another currency. The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from September 30, 2021 levels against the euro, British pound sterling, Chinese yuan and Canadian dollar are as follows (in thousands):   Decrease in translation of earnings of foreign subsidiaries (annualized)   $ 6,250   Decrease in translation of net assets of foreign subsidiaries     81,990   Additional transaction losses     2,947     24 Table of Contents   ITEM   4. CONTROLS AND PROCEDURES   (a) Evaluation of disclosure controls and procedures.   The Company maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). The Company's management has evaluated, with the participation of its Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered in this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2021, our disclosure controls and procedures were effective.   (b) Changes in internal controls over financial reporting.   There were no changes in the Company's internal control over financial reporting during the first quarter of fiscal year 2022 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.   25 Table of Contents   PART II. OTHER INFORMATION   ITEM   1. LEGAL PROCEEDINGS   As of November 8, 2021, the Company is not a party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company's business, results of operations, financial condition or cash flows.   ITEM   1A. RISK FACTORS   During the three months ended September 30, 2021, there have been no material changes from the risk factors found in Part I, Item 1A, "Risk Factors," of the Company's Annual Report on Form 10-K for the year ended June 30, 2021.    26 Table of Contents   ITEM   2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS   There was no share repurchase activity by the Company in the quarter ended September 30, 2021.   ITEM 3. DEFAULT ON SENIOR SECURITIES   None.   ITEM 4. MINE SAFETY DISCLOSURES   Not applicable.   ITEM 5. OTHER INFORMATION   None.   27 Table of Contents   ITEM   6. EXHIBITS   EXHIBIT INDEX TO FORM 10-Q   BIO-TECHNE CORPORATION   Exhibit Number    Description 3.1 Amended and Restated Articles of Incorporation of the Company--incorporated by reference to Exhibit 3.1 of the Company's Form 10-Q dated February 9, 2015*     3.2 Third Amended and Restated Bylaws of the Company--incorporated by reference to Exhibit 3.1   of the Company ’ s Form 8-K dated February 1, 2018*     4.1 Description of Capital Stock -- incorporated by reference to Exhibit 4.1 of the Company's Form 10-K dated August 25, 2021*     10.1** Management Incentive Plan--incorporated by reference to Exhibit 10.13 of the Company's Form 10-K for the year ended June 30, 2013*     10.2** Second Amended and Restated  2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.1 of the Company's Form 8-K dated October 26, 2017*     10.3** Form of Time Vesting Restricted Stock Award Agreement - incorporated by reference to Exhibit 10.3 of the Company's Form 10-K dated August 25, 2021*     10.4** Form of Performance Vesting Restricted Stock Unit Award Agreement - incorporated by reference to Exhibit 10.4 of the Company's Form 10-K dated August 25, 2021*     10.5** Form of Time Vesting Restricted Stock Unit Award Agreement - incorporated by reference to Exhibit 10.5 of the Company's Form 10-K dated August 25, 2021*     10.6** Form of Performance Vesting Restricted Stock Unit Award Agreement - incorporated by reference to Exhibit 10.6 of the Company's Form 10-K dated August 25, 2021*     10.7** Form of the Time Vesting Performance Unit Award Agreement - incorporated by reference to Exhibit 10.7 of the Company's Form 10-K dated August 25, 2021*     10.8** Form of Performance Vesting Performance Unit Award Agreement - incorporated by reference to Exhibit 10.8 of the Company's Form 10-K dated August 25, 2021*     10.9** Form of Time Vesting Incentive Stock Option Agreement - incorporated by reference to Exhibit 10.9 of the Company's Form 10-K dated August 25, 2021*     10.10** Form of Performance Vesting Incentive Stock Option Agreement - incorporated by reference to Exhibit 10.10 of the Company's Form 10-K dated August 25, 2021*     10.11** Form of Employee Non-Qualified Stock Option Agreement - incorporated by reference to Exhibit 10.11 of the Company's Form 10-K dated August 25, 2021*     10.12** Form of Director Non-Qualified Stock Option Agreement for Second Amendment and Restated 2010 Equity Incentive Plan - incorporated by reference to Exhibit 10.2 of the Company's Form 8-K dated October 26, 2017*     10.13** Employment Agreement by and between the Company and Charles Kummeth - incorporated by reference to Exhibit 10.11 of the Company's Form-K dated September 7, 2017*     10.14** Form of  Employment Agreement by and between the Company and Executive Officers of the Company other than the CEO --incorporated by reference to Exhibit 10.12 of the Company's Form 10-K dated September 7, 2017*     10.15** Form of Amendment No. 1 to Executive Employment Agreement –  incorporated by reference to Exhibit 10.15 of the Company ’ s Form 10-Q dated May 11, 2020*       10.16 Credit Agreement by and among the Company, the Guarantors party thereto, the Lenders party thereto, and BMO Harris Bank N.A., as Administrative Agent, dated August 1, 2018--incorporated by reference to Exhibit 10.1 of the Company's Form 8-K dated August 2, 2018*       28       Exhibit Number Description 10.17** Form of Indemnification Agreement entered into with each director and executive officer of the Company - incorporated by reference to Exhibit 10.1 of the Company's Form 10-Q dated February 8, 2018*     10.20 Development, Supply and Commercialization Agreement by and between the Company and Kantaro Biosciences, LLC dated May 18, 2020 (portions of which have been redacted as noted, subject to confidential treatment) –  incorporated by reference to Exhibit   10.1 of the Company's Form 8-K dated May 19, 2020*     21 Subsidiaries of the Company - incorporated by reference to Exhibit 21 of the Company's Form 10-K dated August 25, 2021*     31.1 Certificate of Chief Executive Officer pursuant to section 302 of the Sarbanes Oxley Act of 2002     31.2 Certificate of Chief Financial Officer pursuant to section 302 of the Sarbanes Oxley Act of 2002     32.1 Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes Oxley Act of 2002     32.2 Certification of Chief Financial Officer pursuant to section 906 of the Sarbanes Oxley Act of 2002     101 The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Earnings and Comprehensive Income, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) Notes to the Condensed Consolidated Financial Statements.     104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)   ------------- *     Incorporated by reference; SEC File No. 000-17272 **   Management contract or compensatory plan or arrangement   29 Table of Contents   SIGNATURES   Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.     BIO-TECHNE CORPORATION     (Company)       Date: November 8, 2021  /s/ Charles R. Kummeth         Charles R. Kummeth     Principal Executive Officer       Date: November 8, 2021 /s/ James T. Hippel         James T. Hippel     Principal Financial Officer     30