22 unchanged sentences
Foreign currency translation adjustments
+Added: Foreign currency translation reclassified to earnings with Eminence deconsolidation
Unrealized gains (losses) on derivative instruments - cash flow hedges, net of tax amounts disclosed in Note 8
5 unchanged sentences
Weighted average common shares outstanding (1) :
+Added: (1) Prior period results have been adjusted to reflect the four -for-one stock split effected in the form of a stock dividend on November 29, 2022.
+Added: See Note 1 for details.
See Notes to Consolidated Financial Statements.
42 unchanged sentences
Total liabilities and shareholders’ equity
+Added: (1) Prior period results have been adjusted to reflect the four -for-one stock split effected in the form of a stock dividend on November 29, 2022.
+Added: See Note 1 for details.
See Notes to Consolidated Financial Statements.
6 unchanged sentences
Cumulative effect adjustments due to adoption of new accounting standards and other
+Added: Non-controlling interest in Eminence
Other comprehensive income (loss)
Share repurchases
−Removed: Surrender and retirement of stock to exercise option
Common stock issued for exercise of options
5 unchanged sentences
Balances at June 30, 2021
−Removed: Cumulative effect adjustments due to adoption of new accounting standards and other
−Removed: Non-controlling interest in Eminence
Other comprehensive income (loss)
7 unchanged sentences
Balances at June 30, 2022
−Removed: Non-controlling interest in Eminence
+Added: Reclassification of cumulative translation adjustment for Eminence to non-operating income
+Added: Elimination of noncontrolling equity interest from sale of Eminence
Other comprehensive income (loss)
7 unchanged sentences
Balances at June 30, 2023
+Added: (1) Prior period results have been adjusted to reflect the four -for-one stock split effected in the form of a stock dividend on November 29, 2022.
+Added: See Note 1 for details.
See Notes to Consolidated Financial Statements.
12 unchanged sentences
Contingent consideration payments - operating
+Added: Gain on sale of CCXI investment
Fair value adjustment on available-for-sale investments
+Added: (Gain) loss on equity method investment
Asset impairment restructuring
Eminence impairment
−Removed: Gain on escrow settlement
+Added: Gain on sale of Eminence
Other operating activity
9 unchanged sentences
Purchases of available-for-sale investments
+Added: Proceeds from sale of CCXI investment
Additions to property and equipment
1 unchanged sentence
Investment in unconsolidated entity, net
+Added: Proceeds from sale of Eminence
Investment of forward purchase contract
+Added: Investment in Wilson Wolf
Net cash provided by (used in) investing activities
4 unchanged sentences
Borrowings under line-of-credit agreement
−Removed: Payments on line-of-credit
+Added: Repayments of long-term debt
Contingent consideration payments - financing
15 unchanged sentences
Our products aid in drug discovery efforts and provide the means for accurate clinical tests and diagnoses.
+Added: At the 2022 annual meeting of shareholders of the Company held on October 27, 2022, the shareholders approved an amendment and restatement of the Company’s articles of incorporation to increase the number of authorized shares of the Company’s common stock from 100,000,000 to 400,000,000 .
+Added: On November 1, 2022, the Company’s board of directors approved and declared a four -for-one split of the Company’s common stock in the form of a stock dividend.
+Added: Each stockholder of record on November 14, 2022 received three additional shares of common stock for each then-held share, which were distributed after close of trading on November 29, 2022.
+Added: All share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the stock split.
Use of estimates:
5 unchanged sentences
All intercompany accounts and transactions have been eliminated.
−Removed: As Changzhou Eminence Biotechnology Co., Ltd.
−Removed: (“Eminence”) met the criteria for consolidation, the transaction was accounted for in accordance with ASC 805, Business Combinations .
+Added: As Eminence met the criteria for consolidation, the transaction was accounted for in accordance with ASC 805, Business Combinations .
In applying ASC 805 to the transaction, the Company has elected to include Eminence in our consolidated financial statements on a one month lag.
+Added: As noted below, Eminence was sold during the first fiscal quarter of 2023.
Translation of foreign financial statements :
20 unchanged sentences
Tax positions taken or expected to be taken in a tax return are recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities.
−Removed: A recognized tax
−Removed: position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.
+Added: A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.
The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.
10 unchanged sentences
The Company considers all of its marketable securities available-for-sale and reports them at fair value.
−Removed: Unrealized gains and losses on our available-for-sale securities are included within other income (expense) in accordance with ASU 2018-02, which the Company adopted on July 1, 2018.
+Added: Unrealized gains and losses on our available-for-sale securities are included within other income (expense).
Trade accounts receivable and allowances:
1 unchanged sentence
They are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of customers to make the required payments.
−Removed: The Company adopted ASU 2016-13 on July 1, 2020, which reflects the expected credit losses on financial instruments within its scope, including trade receivables.
When determining the allowances for doubtful accounts, we take several factors into consideration, including the overall composition of accounts receivable aging, our prior history of accounts receivable write-offs, the type of customer and our day-to-day knowledge of specific customers.
2 unchanged sentences
The Company does not have material long-term customer receivables.
−Removed: Refer to the Recently Adopted Accounting Pronouncements section of Note 1 for further details.
Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value.
13 unchanged sentences
The Company records contingent consideration at fair value at the date of acquisition based on the consideration expected to be transferred.
−Removed: For potential payments related to financial performance milestones, we use a real option model in calculating the fair value of the contingent consideration
+Added: For potential payments related to financial performance milestones, we use a real option model in calculating the fair value of the contingent consideration liabilities.
The assumptions utilized in the calculation based on financial performance milestones include projected revenue and/or EBITDA amounts, volatility and discount rates.
13 unchanged sentences
As a result, the Company accelerated the amortization of the trade name to be consistent with the life used for the Asuragen trade name.
−Removed: The accelerated amortization resulted in a $ 1.4 million impact in fiscal 2021, a $ 5.7 million impact in fiscal years 2022 through 2025, and a $ 4.3 impact in fiscal year 2026.
−Removed: In fiscal year 2020, the Company accelerated the amortization of a certain trade name based on the Company’s planned integration of the products under that acquired trade name into a legacy brand.
−Removed: The accelerated amortization resulted in $ 1.3 million in additional amortization expense in fiscal 2020 and $ 0.6 million in fiscal 2021.
+Added: The accelerated amortization resulted in a $ 1.4 million impact in fiscal 2021, a $ 5.7 million impact in fiscal years 2022 through 2025, and a $ 4.3 million impact in fiscal year 2026.
Impairment of long-lived assets and amortizable intangibles:
11 unchanged sentences
Such circumstances could include, but are not limited to, (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, (3) an adverse action or assessment by a regulator, or (4) an adverse change in market conditions that are indicative of a decline in the fair value of the assets.
−Removed: During the fourth quarter of fiscal 2022, the Company performed a qualitative assessment of the acquired in-process research and development assets to determine whether changes in events, circumstances, or the probability of successful
−Removed: development and commercialization of the assets indicated that it is more likely than not that the fair value of the acquired assets are less than its carrying amount.
−Removed: Based on the analysis, the Company determined there was no indication of impairment of the indefinite-lived intangible assets.
To analyze goodwill, we must assign our goodwill to individual reporting units.
3 unchanged sentences
The Company had five reporting units for our 2023, 2022, and 2021 goodwill impairment assessment performed on April 1 of each of the respective fiscal years, the date of our annual goodwill impairment assessment.
+Added: The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative test.
+Added: The qualitative evaluation for goodwill is an assessment of factors including reporting unit specific operating results as well as industry and market conditions, overall financial performance, and other relevant events and factors to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill.
+Added: The Company may elect to bypass the qualitative assessment for its reporting units and perform a quantitative test.
+Added: The quantitative impairment test requires us to estimate the fair value of our reporting units based the income approach.
+Added: The income approach is a valuation technique under which we estimate future cash flows using the reporting unit’s financial forecast from the perspective of an unrelated market participant.
+Added: Using historical trending and internal forecasting techniques, we project revenue and apply our fixed and variable cost experience rate to the projected revenue to arrive at the future cash flows.
+Added: A terminal value is then applied to the projected cash flow stream.
+Added: Future estimated cash flows are discounted to their present value to calculate the estimated fair value.
+Added: The discount rate used is the value-weighted average of our estimated cost of capital derived using both known and estimated customary market metrics.
+Added: In determining the estimated fair value of a reporting unit, we are required to estimate a number of factors, including projected operating results, terminal growth rates, economic conditions, anticipated future cash flows, the discount rate and the allocation of shared or corporate items.
+Added: For fiscal 2023, we elected to perform a qualitative analysis for all five reporting units.
+Added: The Company determined, after performing the qualitative analysis, there was no evidence that it is more likely than not that the fair value was less than the carrying amounts, therefore, it was not necessary to perform a quantitative impairment test in fiscal 2023.
+Added: The Company did not identify any triggering events after our annual goodwill impairment analysis through June 30, 2023, the date of our consolidated balance sheet, that would require an additional goodwill impairment assessment to be performed.
+Added: For fiscal 2023, the Company also performed a qualitative assessment of the acquired in-process research and development assets to determine whether changes in events, circumstances, or the probability of successful development and commercialization of the assets indicated that it is more likely than not that the fair value of the acquired assets are less than its carrying amount.
+Added: Based on the analysis, the Company determined there was no indication of impairment of the indefinite-lived intangible assets.
+Added: On September 1, 2022, the Company completed the sale of its equity shares of Eminence for approximately $ 17.8 million to a third party.
+Added: Eminence was considered a variable-interest entity that was fully consolidated in our financial statements.
+Added: Prior to the sale, Eminence had revenue of $ 2.0 million for the first fiscal quarter of 2023 within our Protein Sciences segment.
+Added: Fiscal 2022 revenues were $ 4.6 million.
+Added: As a result of the sale of the business, the Company recorded a gain of $ 11.7 million within the Other income (expense) line in the Consolidated Statement of Earnings.
+Added: Prior to the sale of Eminence, a triggering event was identified in the second quarter of fiscal 2022 and impairment testing was performed as Eminence was forecasted to not have sufficient cash to execute on their growth plan combined with their inability to secure additional financing.
+Added: Our impairment testing resulted in a full impairment of the Eminence goodwill and intangibles assets for charges of $ 8.3 million and $ 8.6 million, respectively , for the year ended June 30, 2022.
+Added: The Company also recognized inventory and fixed asset impairment charges of $ 0.9 million and $ 0.9 million, respectively.
+Added: These impairment charges were recorded within the General and Administrative line in the Consolidated Statement of Earnings for fiscal 2022.
+Added: In the fourth quarter of fiscal 2022, Eminence was able to secure cash deposits on future orders to provide funding for their operations.
+Added: This delay in liquidation allowed time for securing of additional investor financing which coincided with the sale of the Company's investment.
In the first quarter of fiscal 2022, the Company combined the management of the Exosome Diagnostics and Asuragen reporting units, both of which are included in the Diagnostics and Genomics operating segment.
−Removed: In conjunction with the combination of the reporting units, a qualitative goodwill impairment assessment was performed.
+Added: In conjunction with the
+Added: combination of the reporting units, a qualitative goodwill impairment assessment was performed.
The qualitative assessment identified no indicators of impairment.
−Removed: In the second quarter of fiscal 2022, Eminence notified the Company of its need for additional capital to execute its growth plan.
−Removed: The Company first attempted to find outside equity financing support for the Eminence investment but was unable to do so.
−Removed: The Company then reviewed the additional financing needs required to successfully ramp Eminence’s business, which ultimately did not meet the Company’s return on capital requirements.
−Removed: Therefore, the Company did not provide additional funding to Eminence.
−Removed: As a result of not obtaining additional financing, Eminence notified the Company of its plans to cease operations and liquidate its business.
−Removed: Given the anticipated liquidation process to dispose of the Eminence assets, the Company identified a triggering event and performed impairment testing during the second quarter of fiscal 2022.
−Removed: The impairment testing resulted in a full impairment of the Eminence goodwill and intangible assets, which resulted in charges of $ 8.3 million and $ 8.6 million, respectively, for the year ended June 30, 2022.
−Removed: The Company also recognized inventory and fixed asset impairment charges of $ 0.9 million and $ 0.9 million, respectively.
−Removed: The Company recorded the impairment charges within the General and Administrative line in the Consolidated Income Statement.
−Removed: The impairment charges recorded within Net Earnings Attributable to Bio-Techne were reduced by approximately $ 8 million recorded within Net Earnings Attributable to Noncontrolling Interests.
−Removed: The remaining net tangible assets of Eminence included in our Consolidated Balance Sheet as of June 30, 2022, were $ 4.3 million and primarily consisted of fixed assets and related deposits of $ 3.1 million, inventory of $ 0.6 million, receivables of $ 0.4 million, and other current assets of $ 0.1 million.
−Removed: The Company also had $ 4.5 million related to current liabilities.
−Removed: The Company holds a financial interest of approximately 57.4 % in those tangible assets in the upcoming liquidation process.
−Removed: 2022 Goodwill Impairment Analyses
−Removed: In completing our 2022 annual goodwill impairment analyses, we elected to perform a quantitative assessment for all of our reporting units.
−Removed: A quantitative assessment involves comparing the carrying value of the reporting unit, including goodwill, to its estimated fair value.
−Removed: Carrying value is based on the assets and liabilities associated with the operations of the reporting unit, which often requires the allocation of shared or corporate items among reporting units.
−Removed: In accordance with ASU 2017‑04, a goodwill impairment charge is recorded for the amount by which the carrying value of a reporting unit exceeds the fair value of the reporting unit.
−Removed: In determining the fair values of our reporting units, we utilized the income approach.
−Removed: The income approach is a valuation technique under which we estimated future cash flows using the reporting unit’s financial forecast from the perspective of an unrelated market participant.
−Removed: Using historical trending and internal forecasting techniques, we projected revenue and applied our fixed and variable cost experience rates to the projected revenue to arrive at the future cash flows.
−Removed: A terminal value was then applied to the projected cash flow stream.
−Removed: Future estimated cash flows were discounted to their present value to calculate the estimated fair value.
−Removed: The discount rate used was the value- weighted average of our estimated cost of capital derived using both known and estimated customary market metrics.
−Removed: In determining the estimated fair value of a reporting unit, we were required to estimate a number of factors, including projected operating results, terminal growth rates, economic conditions, anticipated future cash flows, the discount rate and the allocation of shared or corporate items.
−Removed: The result of our quantitative assessment indicated that all of the reporting units had a substantial amount of headroom as of April 1, 2022.
−Removed: This impairment assessment is sensitive to changes in forecasted cash flows, as well as our selected discount rate.
−Removed: Changes in the reporting unit’s results, forecast assumptions and estimates could materially affect the estimation of the fair value of the reporting units.
−Removed: The Company did not identify any triggering events after our annual goodwill impairment through June 30, 2022, the date of our consolidated balance sheet, that would require an additional goodwill impairment assessment to be performed.
−Removed: 2021 Goodwill Impairment Analyses
−Removed: In completing our 2021 annual goodwill impairment analyses, we elected to perform a quantitative assessment for all of our reporting units.
−Removed: A quantitative assessment involves comparing the carrying value of the reporting unit, including goodwill, to its estimated fair value.
−Removed: Carrying value is based on the assets and liabilities associated with the operations of the reporting unit, which often requires the allocation of shared or corporate items among reporting units.
−Removed: In accordance with ASU 2017-04, a goodwill impairment charge is recorded for the amount by which the carrying value of a reporting unit exceeds the fair value of the reporting unit.
−Removed: In determining the fair values of our reporting units, we utilized the income approach.
−Removed: The income approach is a valuation technique under which we estimated future cash flows using the reporting unit’s financial forecast from the perspective of an unrelated market participant.
−Removed: Using historical trending and internal forecasting techniques, we projected revenue and applied our fixed and variable cost experience rates to the projected revenue to arrive at the future cash flows.
−Removed: A terminal value was then applied to the projected cash flow stream.
−Removed: Future estimated cash flows were discounted to their present value to calculate the estimated fair value.
−Removed: The discount rate used was the value- weighted average of our estimated cost of capital derived using both known and estimated customary market metrics.
−Removed: In determining the estimated fair value of a reporting unit, we were required to estimate a number of factors, including projected operating results, terminal growth rates, economic conditions, anticipated future cash flows, the discount rate and the allocation of shared or corporate items.
+Added: In our fiscal 2022 annual goodwill impairment analysis, we elected to perform a quantitative assessment for all five of our reporting units.
The result of our quantitative assessment indicated that all of the reporting units had a substantial amount of headroom as of April 1, 2022.
−Removed: This impairment assessment is sensitive to changes in forecasted cash flows, as well as our selected discount rate.
−Removed: Changes in the reporting unit’s results, forecast assumptions and estimates could materially affect the estimation of the fair value of the reporting units.
The Company did not identify any triggering events after our annual goodwill impairment through June 30, 2022, the date of our consolidated balance sheet, that would require an additional goodwill impairment assessment to be performed.
−Removed: 2020 Goodwill Impairment Analyses
−Removed: The Company elected to perform a quantitative assessment for all of our reporting units in our 2020 goodwill impairment analysis.
−Removed: The quantitative assessment completed utilized a consistent process and methodology to the 2021 goodwill impairment assessment.
−Removed: The result of our quantitative assessment, where we compared the discounted cash flows of each reporting unit to its carrying value, indicated that all of the reporting units had a substantial amount of headroom as of April 1, 2020.
+Added: In fiscal 2021, because our 2021 quantitative analyses included all of our reporting units, the summation of our reporting units’ fair values, as indicated by our discounted cash flow calculations, were compared to our consolidated fair value, as indicated by our market capitalization, to evaluate the reasonableness of our calculations.
This impairment assessment is sensitive to changes in forecasted cash flows, as well as our selected discount rate.
Changes in the reporting unit’s results, forecast assumptions and estimates could materially affect the estimation of the fair value of the reporting units.
−Removed: The Company did not identify any triggering events after our annual goodwill impairment through June 30, 2020, the date of our consolidated balance sheet, that would require an additional goodwill impairment assessment to be performed.
−Removed: In December 2021, the Company paid $ 25 million to enter into a two-part forward contract which requires the Company to make an initial ownership investment followed by purchase of full equity interest in Wilson Wolf Corporation (Wilson Wolf) if certain annual revenue or EBITDA thresholds are met.
+Added: The quantitative assessment completed as of April 1, 2021 indicated that all of the reporting units had a substantial amount of headroom.
+Added: Accordingly, the Company determined there was no indication of impairment of goodwill in our annual goodwill impairment analysis.
+Added: Further, no triggering events were identified in the year ended June 30, 2021 that would require an additional goodwill impairment assessment beyond our required annual goodwill impairment assessment.
+Added: In December 2021, the Company paid $ 25 million to enter into a two-part forward contract which requires the Company to make an initial ownership investment followed by purchase of full equity interest in Wilson Wolf if certain annual revenue or annual EBITDA thresholds are met.
Wilson Wolf is a leading manufacturer of cell culture devices, including the G-Rex product line.
−Removed: The first part of the forward contract is triggered upon Wilson Wolf achieving approximately $ 92 million in annual revenue or $ 55 million in annual earnings before interest, taxes, depreciation, and amortization (EBITDA) at any point prior to December 31, 2027.
−Removed: Once triggered, the Company is required to make a payment of $ 231 million in exchange for a 19.9 % ownership stake.
−Removed: If Wilson Wolf doesn’t achieve the revenue and EBITDA targets by December 31, 2027, the agreement will expire.
−Removed: Once the first part of the forward contract is triggered, the second part of the forward contract will automatically trigger, and requires the Company to acquire the remaining equity interest in Wilson Wolf on December 31, 2027 based on a revenue multiple of approximately 4.4 times revenue.
+Added: The first part of the forward contract is triggered upon Wilson Wolf achieving approximately $ 92 million in annual revenue or $ 55 million in EBITDA at any point prior to December 31, 2027.
+Added: During the quarter ended March 31, 2023, the Company determined that Wilson Wolf had met the EBITDA target.
+Added: On March 31, 2023, the Company paid an additional $ 232 million to acquire 19.9 % of Wilson Wolf.
+Added: Since the first part of the forward contract has been triggered, the second part of the forward contract will automatically trigger, and requires the Company to acquire the remaining equity interest in Wilson Wolf on December 31, 2027 based on a revenue multiple of approximately 4.4 times trailing twelve month revenue.
The second part of the contract would be accelerated in advance of December 31, 2027, if Wilson Wolf meets its second milestone of approximately $ 226 million in annual revenue or $ 136 million in annual EBITDA.
−Removed: If the second milestone is achieved, the forward contract requires the Company to pay approximately $ 1 billion plus potential contingent consideration for revenue in excess of the revenue milestone.
−Removed: The Company has elected to apply the measurement alternative as detailed under ASC 321-10-35-2 for the Wilson Wolf investment.
−Removed: The Company recorded the $ 25 million payment as a cost basis investment within Other long-term assets on the Consolidated Balance Sheet.
+Added: If the second milestone is achieved, the forward contract requires the Company to pay approximately $ 1 billion plus potential consideration for revenue in excess of the revenue milestone.
+Added: The investment in Wilson Wolf is accounted for as an equity method investment under ASC 323 and included within our consolidated financials on a one month lag.
+Added: The Company initially records its equity method investments at the amount of the Company’s investment and adjusts each period for the Company’s share of the investee’s income or loss and dividends paid.
+Added: For the year ended June 30, 2023, there was $ 1.1 million of loss recorded on the Company’s Consolidated Statement of Earnings and Comprehensive Income related to the investment.
+Added: The Company’s total investment of $ 256 million as of June 30, 2023 is included within Other assets on the Consolidated Balance Sheet.
Restructuring actions:
3 unchanged sentences
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.
+Added: Fiscal Year 2023 Restructuring Actions:
+Added: QT Holdings Corporation (Quad)
+Added: In August 2022, the Company informed employees of our decision to close our Quad facility as part of a realignment of activities within our Reagent Solutions division.
+Added: The closure of the site was completed in the fourth quarter of fiscal 2023.
+Added: As a result of the restructuring activities, an estimated pre-tax charge of $ 2.2 million was recorded within our Protein Sciences segment for the year ended June 30, 2023.
+Added: The related restructuring charges for the year ended June 30, 2023 were recorded in the income statement as follows (in thousands):
+Added: impairment and other
+Added: Selling, general and administrative
+Added: impairment and other
+Added: Expense incurred in the first quarter of 2023
+Added: Cash payments
+Added: Accrued restructuring actions balances as of June 30, 2023
+Added: Protein Sciences realignment
+Added: In December 2022, the Company informed employees it would undertake certain actions to strategically reallocate operations resources to high growth areas of the business.
+Added: Additional actions were taken in June 2023 primarily related to the sales organization.
+Added: The actions impacted a limited number of employees and are expected to be completed in the first quarter of fiscal 2024.
+Added: As a result of the realignment, a pre-tax charge of $ 1.7 million related to employee severance was recorded in the Selling, general and administrative line of operating income within our Protein Sciences segment during the year ended June 30, 2023.
+Added: Restructuring actions, including cash and non-cash impacts, are as follows (in thousands):
+Added: Expense incurred in the second quarter of 2023
+Added: Expense incurred in the fourth quarter of 2023
+Added: Cash payments
+Added: Accrued restructuring actions balances as of June 30, 2023
+Added: Fiscal Year 2022 Restructuring Actions:
In September 2021, the Company informed employees of our decision to close our Exosome Diagnostics Germany facility, discontinuing lab and research occurring at the site, as part of a realignment of activities within our Exosome Diagnostics business.
12 unchanged sentences
During the second quarter of fiscal 2022, the Company also incurred a restructuring charge of $ 0.2 million related to employee severance for the relocation of a US plant.
−Removed: This charge is recorded within Other current liabilities as of June 30, 2022.
−Removed: There were no cash payments or adjustments related to this restructuring during the year ended June 30, 2022.
+Added: This was completed during fiscal 2023 and there are no remaining liabilities related to this relocation as of June 30, 2023.
+Added: This charge was recorded within Other current liabilities as of June 30, 2022.
+Added: Fiscal 2023 cash payments did not materially differ from the charge recorded in fiscal 2022.
Other Significant Accounting Policies
10 unchanged sentences
The adoption of this ASU did not have a material impact on the Company's financial statements as the Company's primary financial instruments impacted by the ASU were trade accounts receivable, where we have high historical and expected future collections due to the length of receivables and the credit quality of our customers.
−Removed: In August 2018, the FASB issued ASU No.
−Removed: 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract .
−Removed: The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.
−Removed: The accounting for the service element of a hosting arrangement that is a service contract is not affected by the new standard.
−Removed: The Company adopted this standard on a prospective basis on July 1, 2020.
−Removed: Accordingly, as of July 1, 2020, the Company records eligible costs to be capitalized within prepaid assets or other non-current assets depending on the nature of the duration of the asset.
In March 2020 , the FASB issued ASU No.
1 unchanged sentence
2021-01, Reference Rate Reform (Topic 848):
−Removed: These ASUs provide expedients and exceptions to existing guidance on contract modifications and hedge accounting that is optional to facilitate the market transition from a reference rate, including LIBOR which is being phased out in 2021 , to a new reference rate.
+Added: These ASUs provide expedients and exceptions to existing guidance on contract modifications and hedge accounting that is optional to facilitate the market transition from a reference rate, including LIBOR which was phased out in 2021 , to a new reference rate.
The provisions of the ASUs impact contract modifications and other changes that occur while LIBOR is phased out.
−Removed: The Company adopted the optional relief guidance provided within these ASUs in the fourth quarter of fiscal 2021 and continues to monitor its debt and derivative instruments that utilize LIBOR as the reference rate.
−Removed: The adoption of the standard did not impact our financial results for fiscal 2022.
+Added: The Company adopted the optional relief guidance provided within these ASUs in the fourth quarter of fiscal 2021.
+Added: The Company’s current debt and derivative instruments utilize SOFR as the reference rate.
+Added: The adoption of the standard did not impact our financial results for fiscal 2022 or fiscal 2023.
Revenue Recognition:
−Removed: 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.
−Removed: 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.
−Removed: Service revenues consist of extended warranty contracts, post contract support (“PCS”), 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.
−Removed: Service revenues also include laboratory services recognized at a point in time.
−Removed: 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.
−Removed: 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
−Removed: would not need to be reversed in future periods for the services provided.
−Removed: Given Medicare coverage for our laboratory services became effective on December 1, 2019, the Company considered that it had sufficient data to estimate variable consideration as of July 1, 2020 for laboratory services that are reimbursed by Medicare.
−Removed: 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.
−Removed: The Company continues to record revenue based on cash receipts for laboratory services not reimbursed by Medicare, as the variable consideration remains constrained.
+Added: Consumables revenues consist of specialized proteins, immunoassays, antibodies, reagents, blood chemistry and blood gas quality controls, and hematology instrument controls that are typically single-use products recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment.
+Added: 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.
+Added: 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.
+Added: Service revenues also include laboratory services recognized at point in time.
+Added: Prior to fiscal year 2021, the Company had 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.
+Added: 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.
+Added: 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 Medicare.
+Added: The amount of cash received in fiscal 2021 for laboratory services reimbursed by Medicare that were performed prior to July 1, 2020 was approximately $ 0.5 million.
+Added: Prior to fiscal year 2023, the Company recorded revenue based on cash receipts for laboratory services not reimbursed by Medicare, as the variable consideration was constrained since we did not have significant historical experience collecting payments not reimbursed by Medicare or other insurance providers and it would not be probable that a significant amount of revenue would not need to be reversed in future periods for the services provided.
+Added: During the first half of fiscal 2022, we began to see an increase in claim volume due to strategic initiatives, including broader messaging around the importance of cancer screenings during the COVID-19 pandemic, and the acute phase of the COVID-19 pandemic subsiding.
+Added: Given these factors, the Company considered it to have sufficient data to estimate variable consideration as of July 1, 2022 for laboratory services that are not reimbursed by Medicare.
+Added: The amount of cash received in fiscal 2023 for non-Medicare laboratory services that were performed prior to July 1, 2022 was approximately $ 0.9 million.
We recognize royalty revenues in the period the sales occur using third party evidence.
2 unchanged sentences
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.
−Removed: The Company’s unfulfilled performance obligations for contracts with an original length greater than one year were not material as of June 30, 2022 and June 30, 2021.
+Added: The Company’s unfulfilled performance obligations for contracts with an original length greater than one year were not material as of June 30, 2023.
Contracts with customers that contain instruments may include multiple performance obligations.
8 unchanged sentences
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.
−Removed: We elected the practical expedient allowing us to expense contract costs that would otherwise be capitalized and amortized over the contract period.
+Added: 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 June 30, 2023 are not material.
2 unchanged sentences
Contract liabilities as of June 30, 2022 subsequently recognized as revenue during the year ended June 30, 2023 were approximately $ 21.5 million.
−Removed: Contract liabilities in excess of one year are included in Other long-term liabilities on the balance sheet.
+Added: Contract liabilities in excess of one year are included in Other long-term liabilities on the consolidated balance sheet.
Any claims for credit or return of goods must be made within 10 days of receipt.
3 unchanged sentences
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.
−Removed: We have 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.
+Added: 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.
17 unchanged sentences
Inventories, net
−Removed: (1) Finished goods inventory of $ 5,111 and $ 5,456 is included within other long-term assets in the June 30, 2022 and June 30, 2021 Balance Sheets, respectively, as it forecasted to be sold after the 12 months subsequent to the consolidated balance sheet date.
+Added: (1) Finished goods inventory of $ 5,387 and $ 5,111 is included within other assets in the June 30, 2023 and June 30, 2022 Balance Sheets, respectively, as it is forecasted to be sold after the 12 months subsequent to the consolidated balance sheet date.
Property and Equipment:
22 unchanged sentences
Ending balance
−Removed: (1) As disclosed in Note 1, the Company recorded an impairment charge of $ 8.6 million related to Eminence in Q2 of fiscal 2022.
+Added: (1) Includes the purchase of a $ 4.6 million intangible asset from Wilson Wolf, an equity method investee of the Company during the year-ended June 30, 2023.
+Added: This asset will be amortized over a life of 10 years .
Amortization expense related to developed technologies included in cost of sales was $ 44.3 million, $ 40.6 million, and $ 36.5 million in fiscal 2023, 2022, and 2021, respectively.
Amortization expense related to trade names, customer relationships, non-compete agreements, and patents included in selling, general and administrative expense was $ 33.2 million, $ 33.5 million, and $ 28.4 million, in fiscal 2023, 2022, and 2021 respectively.
−Removed: The estimated future amortization expense for intangible assets as of June 30, 2022, excluding any possible future amortization associated with acquired IPR&D which has not met technological feasibility, is as follows (in thousands):
+Added: The estimated future amortization expense for intangible assets as of June 30, 2023, excluding any possible future amortization associated with acquired in-process research and development (IPR&D) which has not met technological feasibility, is as follows (in thousands):
Changes in goodwill by segment and in total consist of (in thousands):
2 unchanged sentences
June 30, 2021
−Removed: Acquisitions (Note 4)
+Added: Eminence impairment
Currency translation
June 30, 2022
−Removed: Acquisitions (1)
−Removed: Eminence impairment
Currency translation
June 30, 2023
−Removed: (1) As discussed in Note 4, there was an adjustment to the preliminary allocation of the Asuragen acquisition opening balance sheet during the measurement period.
+Added: Other Assets:
+Added: Other assets consist of (in thousands):
+Added: Investment in Wilson Wolf
+Added: Derivative instruments
+Added: Long-term inventory
Supplemental Cash Flow Information:
14 unchanged sentences
Acquisition costs are recorded in selling, general and administrative expenses as incurred.
−Removed: There were no acquisitions in fiscal 2022 or fiscal 2020.
−Removed: 2021 Acquisitions
+Added: Fiscal year 2023 Acquisitions
+Added: Namocell, Inc.
+Added: On July 1, 2022, the Company acquired all of the ownership interests of Namocell, Inc.
+Added: for $ 101.2 million, net of cash acquired, plus contingent consideration of up to $ 25 million upon the achievement of certain future revenue thresholds.
+Added: The Namocell acquisition adds easy-to-use single cell sorting and dispensing platforms that are gentle to cells and preserve cell viability and integrity.
+Added: The transaction was accounted for in accordance with ASC 805, Business Combinations.
+Added: The goodwill recorded as a result of the acquisition represents the strategic benefits of growing the Company’s product portfolio and the expected revenue growth from increased market penetration.
+Added: The goodwill is not deductible for income tax purposes.
+Added: The business became part of the Protein Sciences operating segment in the first quarter of fiscal year 2023.
+Added: The allocation of purchase price consideration related to Namocell, Inc was completed in the fourth quarter of fiscal 2023.
+Added: Net sales and operating loss of this business included in Bio-Techne's consolidated results of operations for the twelve months ended June 30, 2023 were approximately $ 6.4 million and $ 9.3 million, respectively.
+Added: The fair values of the assets acquired and liabilities assumed as of the acquisition date and the updated final amounts as of June 30, 2023 are as follows (in thousands):
+Added: Preliminary allocation at acquisition date
+Added: Adjustments to fair value
+Added: Final allocation at June 30, 2023
+Added: Current assets, net of cash
+Added: Equipment and other long-term assets
+Added: Intangible assets:
+Added: Developed technologies
+Added: Customer relationships
+Added: Non-competition agreement
+Added: Total assets acquired
+Added: Deferred income taxes, net
+Added: Net assets acquired
+Added: Cash paid, net of cash acquired
+Added: Contingent consideration payable
+Added: Net assets acquired
+Added: Tangible assets and liabilities acquired were recorded at fair value on the date of close based on management's preliminary assessment.
+Added: The purchase price allocated to developed technology was based on management’s preliminary forecasted cash inflows and outflows and using a relief from royalty method to calculate the fair value of assets purchased.
+Added: The purchase price allocated to customer relationships and trade names was based on management's preliminary forecasted
+Added: cash inflows and outflows and using a multiperiod excess earnings method.
+Added: The amount recorded for developed technology is being amortized with the expense reflected in Cost of goods sold in the Consolidated Statement of Earnings and Comprehensive Income.
+Added: The amortization period for developed technology is estimated to be 13 years .
+Added: Amortization expense related to customer relationships is reflected in Selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income.
+Added: The amortization period for customer relationships is estimated to be 4 years .
+Added: The amount recorded for trade names and the non-competition agreement is being amortized with the expense reflected in Selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income.
+Added: The amortization period for both trade names and the non-competition agreement is estimated to be 3 years .
+Added: 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 net operating losses.
+Added: There were no acquisitions in fiscal 2022.
+Added: Fiscal year 2021 Acquisitions
Eminence Biotechnology
−Removed: On October 20, 2020, the Company acquired 47.6 % of the outstanding equity shares of Changzhou Eminence Biotechnology Co., Ltd.
−Removed: (Eminence) for approximately $ 9.8 million, net of cash acquired.
+Added: On October 20, 2020, the Company acquired 47.6 % of the outstanding equity shares of Eminence for approximately $ 9.8 million, net of cash acquired.
The fair value of the noncontrolling interest of $ 9.0 million included in the consolidated balance sheet was a non-cash activity within the statement of cash flows.
2 unchanged sentences
The Company was considered the primary beneficiary at the time of initial acquisition given the Company was the largest shareholder coupled with its ability to exercise significant influence over the entity.
−Removed: As of June 30, 2022, the Company’s investment at risk is limited to its $ 15.8 million in investments.
As Eminence met the criteria for consolidation, the transaction was accounted for in accordance with ASC 805, Business Combinations .
7 unchanged sentences
The purchase price allocated to developed technology and customer relationships was based on management’s forecasted cash inflows and outflows and using a multiperiod excess earnings method to calculate the fair value of assets purchased.
−Removed: 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.
+Added: The amount recorded for developed technology is being amortized with the expense reflected in cost of goods sold in the Consolidated Statement of Earnings and Comprehensive Income.
The amortization period for developed technology is estimated to be 13 years .
2 unchanged sentences
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 calculation of acquired NOLs.
−Removed: The Company identified a triggering event related to Eminence during the second quarter of fiscal 2022.
−Removed: Refer to Note 1 for further details relating to the triggering event and related impairment recorded.
+Added: The Company identified a triggering event related to Eminence during the second quarter of fiscal 2022 and further sold our outstanding shares of Eminence in the first quarter of fiscal 2023.
+Added: Refer to Note 1 for further details relating to the triggering event and related impairment recorded as well as the details of the sale.
Asuragen, Inc.
7 unchanged sentences
The purchase price allocated to developed technology, in-process research and development, and customer relationships was based on management's forecasted cash inflows and outflows and using a multiperiod excess earnings method to calculate the fair value of assets purchased.
−Removed: 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.
+Added: The amount recorded for developed technology is being amortized with the expense reflected in cost of goods sold in the Consolidated Statement of Earnings and Comprehensive Income.
The amortization period for developed technology is estimated to be 14 years .
−Removed: Amortization expense related to customer relationships is reflected in selling, general and administrative expenses in the Condensed Consolidated Statement of Earnings and Comprehensive Income.
+Added: Amortization expense related to customer relationships is reflected in selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income.
The amortization period for customer relationships is estimated to be 16 years .
−Removed: The amount recorded for trade names 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.
+Added: The amount recorded for trade names and the non-competition agreement is being amortized with the expense reflected in selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income.
The amortization period for trade names and the non-competition agreement is estimated to be 5 years and 3 years , respectively.
26 unchanged sentences
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.
−Removed: Level 3 inputs are unobservable
−Removed: 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.
+Added: 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.
3 unchanged sentences
Exchange traded securities (1)
−Removed: Certificates of deposit (2)
Derivative instruments - cash flow hedges (3)
Contingent consideration
−Removed: Derivative instruments - cash flow hedges
Total liabilities
8 unchanged sentences
(1) Included in available-for-sale investments on the balance sheet.
−Removed: The fair value of the Company’s available-for-sale equity investment in CCXI as of June 30, 2022 and June 30, 2021 was $ 36.0 million and $ 20.0 million, respectively.
−Removed: The cost basis in the Company’s investment in CCXI at June 30, 2022 and June 30, 2021 was $ 6.6 million and $ 6.6 million respectively.
−Removed: The Company exercised the warrant via net share settlement to acquire 66,833 additional shares of CCXI equity shares during the year ended June 30, 2022.
−Removed: The warrant was valued at $ 1.4 million as of June 30, 2021.
−Removed: The Company also purchased exchange traded investment grade bond funds during the year ended June 30, 2022.
−Removed: The cost basis and fair value of these exchange traded investment grade bond funds as of June 30, 2022 was $ 25.0 million and $ 23.9 million, respectively.
+Added: The cost basis of these exchange traded investment grade bond funds as of both June 30, 2023 and June 30, 2022 was $ 25.0 million.
+Added: The fair value of these exchange traded investment grade bond funds as of June 30, 2023, and June 30, 2022, was $ 23.7 million and $ 23.9 million, respectively.
+Added: During the quarter ended September 30, 2022, the Company sold all of its outstanding shares of ChemoCentryx Inc (CCXI).
+Added: The cost basis and fair value of the Company’s available-for-sale equity investment in CCXI was $ 6.6 million and $ 36.0 million at June 30, 2022, respectively.
(2) Included in available-for-sale investments on the balance sheet.
The certificates of deposit have contractual maturity dates within one year.
+Added: (3) Derivative assets are included in other assets on the balance sheet as of June 30, 2023 and June 30, 2022.
+Added: Derivative liabilities as of June 30, 2022 are included in other current liabilities on the balance sheet.
Fair value measurements of available for sale securities
−Removed: Available for sale securities excluding warrants are measured at fair value using quoted market prices in active markets for identical assets and are therefore classified as Level 1 assets.
−Removed: 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.
+Added: 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.
Fair value measurements of derivative instruments
In October 2018, the Company entered into forward starting swaps designated as cash flow hedges on outstanding debt.
−Removed: 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.
−Removed: 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.
−Removed: The notional amount decreased by $ 100 million in October 2020, $ 80 million in October 2021 and will further decrease by $ 200 million in October 2022.
−Removed: In June 2020, the Company de-designated $ 80 million of the notional amount set to expire in October 2020.
−Removed: 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.
−Removed: In December 2020, the Company de-designated an additional $ 80 million of notional amount set to expire in October 2021.
−Removed: The net loss associated with the December 2020 de-designated portion of the derivative instrument was recorded as 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 was not expected to occur.
−Removed: The fair value of the designated derivative instrument is $ 0.5 million and is recorded within short-term liabilities on the Consolidated Balance Sheet as of June 30, 2022.
−Removed: The fair value of the designated derivative instrument was $ 7.6 million as of June 30, 2021 and was recorded within other long-term liabilities on the Consolidated Balance Sheet.
−Removed: In May 2021, the Company entered into a new forward starting swap designated as a cash flow hedge on forecasted debt.
+Added: The agreement matured in October 2022 and there was no fair value recorded on the Consolidated Balance Sheet as of June 30, 2023.
+Added: The fair value of the designated derivative instrument was $ 0.5 million, and was recorded within short-term liabilities on the Consolidated Balance Sheet as of June 30, 2022.
+Added: In May 2021, the Company entered into a 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.
−Removed: The effective date of the swap is November 2022 with the full swap maturing in November 2025.
−Removed: The fair value of the derivative instrument was $ 11.0 million and $ 0.3 million as of June 30, 2022 and June 30, 2021, respectively, which is recorded within other long-term assets on the Consolidated Balance Sheet.
+Added: The effective date of the swap was November 2022 with the full swap maturing in November 2025.
+Added: The fair value of the derivative instrument was $ 15.4 million and $ 11.0 million as of June 30, 2023 and June 30, 2022, respectively, which is recorded within other assets on the Consolidated Balance Sheet.
+Added: In March 2023, the Company entered into a new forward starting swap designated as a cash flow hedge on forecasted debt.
+Added: 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.
+Added: Accordingly, as part of the forward starting swap, the Company exchanges, at specified intervals, the difference between floating and fixed interest amounts based on $ 100 million of notional principal amount.
+Added: The effective date of the swap was April 2023 with the full swap maturing in April 2025.
+Added: The fair value of the derivative instrument was $ 1.5 million as of June 30, 2023, and is recorded within other 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.
−Removed: The Company reclassified $ 6.4 million to interest expense and related tax benefits of $ 1.5 million during the year ended June 30, 2022.
+Added: The Company reclassified $ 4.5 million to interest income and related tax expense of $ 1.1 million during the year ended June 30, 2023.
+Added: The Company reclassified $ 6.4 million to interest expense and related tax benefits of $ 1.5 million during the fiscal year ended June 30, 2022.
The Company reclassified $ 8.6 million to interest expense, $ 0.5 million to non-operating income for the portion of de-designated variable payments considered probable to not occur, and related tax benefits of $ 2.1 million during the fiscal year ended June 30, 2021, relating to the cash flow hedge entered into in October 2018.
−Removed: No amounts were reclassified relating to the cash flow hedge entered into in May 2021 as they will be recorded within the effective period of the cash flow hedge.
−Removed: The Company reclassified $ 3.5 million, net of taxes, to interest expense during the fiscal year ended June 30, 2020.
−Removed: The change in the fair value of the de-designated notional hedged amount was not material as of June 30, 2020.
+Added: No amounts were reclassified relating to the cash flow hedge entered into in May 2021 as they are only recorded within the effective period of the cash flow hedge.
The instruments were valued using observable market inputs in active markets and therefore are classified as Level 2 liabilities.
Fair value measurements of contingent consideration
−Removed: The Company has $ 5.0 million in contingent consideration recorded as of June 30, 2022, which is the fair value of contingent consideration related to the Asuragen acquisition.
−Removed: The Company is required to make contingent consideration payments of up to $ 105.0 million as part of the acquisition agreement.
−Removed: The contingent agreement is based on achieving certain revenue thresholds by December 31, 2022 and December 31, 2023.
−Removed: The opening balance sheet fair value of the
−Removed: liabilities for the Asuragen acquisition was $ 18.3 million, as discussed in Note 4.
−Removed: The fair value amount recorded on the opening balance sheet of the revenue milestone payments was determined using a Monte Carlo simulation-based model discounted to present value.
+Added: The Company has $ 3.5 million in contingent consideration recorded as of June 30, 2023, which is the fair value of contingent consideration related to the Asuragen and Namocell acquisitions.
+Added: The Company is required to make contingent consideration payments of up to $ 105.0 million as part of the Asuragen acquisition agreement and up to $ 25.0 million as part of the Namocell acquisition agreement.
+Added: As of June 30, 2023, the maximum payout for the Asuragen and Namocell agreements is $ 100.0 million as both Asuragen and Namocell did not achieve their respective December 31, 2022 revenue milestones.
+Added: The Asuragen contingent agreement is based on achieving certain revenue thresholds by December 31, 2022 and December 31, 2023.
+Added: The opening balance sheet fair value of the liabilities for the Asuragen acquisition was $ 18.3 million, which 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.
−Removed: As of June 30, 2022 , the Company's obligation for potential contingent consideration payments related to the Quad and B-Mogen acquisitions were relieved as the revenue thresholds and product milestones were not achieved or there is a remote likelihood of achievement in the timeframe established within the purchase agreements.
−Removed: As the result, the Company reversed an accrual for the fair value of the contingent liabilities at the date of settlement.
+Added: The Company reversed an accrual for the fair value of the contingent liabilities associated with the December 31, 2022 threshold during the second quarter of fiscal 2023.
+Added: The contingent consideration related to the December 31, 2023 Asuragen threshold was $ 2.0 million as of June 30, 2023.
+Added: Contingent consideration was $ 5.0 million as of June 30, 2022.
+Added: The Namocell contingent agreement is based on achieving certain revenue thresholds by December 31, 2022 and December 31, 2023.
+Added: The opening balance sheet fair value of the liabilities was $ 10.6 million, which was determined using a Monte Carlo simulation-based model discounted to present value.
+Added: Assumptions used in these calculations are units sold, expected revenue, expected expenses, discount rate, and various probability factors.
+Added: The Company reversed an accrual for the fair value of the contingent liabilities associated with the December 31, 2022 threshold during the second quarter of fiscal 2023.
+Added: As of June 30, 2023, the remaining contingent consideration related to Namocell was $ 1.5 million.
+Added: As of June 30, 2023 , the Company's obligation for potential contingent consideration payments related to the B-Mogen acquisitions was relieved as there is a remote likelihood that the revenue thresholds and product milestones would be achieved in the timeframe established within the purchase agreement.
+Added: As a result, the Company reversed an accrual for the fair value of the contingent liabilities at the date of settlement during fiscal 2022.
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 for QT Holdings Corporation as of June 30, 2021 .
−Removed: The ultimate settlement of contingent consideration liabilities for the Asuragen acquisition could deviate from current estimates based on the actual results of the financial measures described above.
+Added: The ultimate settlement of contingent consideration liabilities for the Asuragen and Namocell 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.
11 unchanged sentences
Debt and Other Financing Arrangements:
−Removed: On August 1, 2018, the Company entered into a new uncollateralized revolving line-of-credit and term loan governed by a Credit Agreement (the Credit Agreement).
−Removed: 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.
−Removed: Borrowings under the Credit Agreement may be used for working capital and expenditures of the Company and its subsidiaries, including financing permitted acquisitions.
−Removed: Borrowings under the Credit Agreement bear interest at a variable rate.
−Removed: 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.
−Removed: The applicable margin is determined for the total leverage ratio of the Company and updated on a quarterly basis.
+Added: On August 31, 2022, the Company entered into an amended and restated Credit Agreement (the Amended Credit Agreement).
+Added: This replaced the revolving line-of-credit and term loan (the prior Credit Agreement), which provided for a revolving credit facility of $ 600.0 million and could be increased by an additional $ 200.0 million subject to certain
+Added: conditions, and a term loan of $ 250.0 million.
+Added: The prior Credit Agreement was bearing interest at a variable rate and would have matured on August 1, 2023.
+Added: The Amended Credit Agreement provides for a revolving credit facility of $ 1 billion, which can be increased by an additional $ 400 million subject to certain conditions.
+Added: Borrowings under the Amended Credit Agreement may be used for working capital and expenditures of the Company and its subsidiaries, including financing permitted acquisitions.
+Added: At the closing on August 31, 2022, the Company borrowed approximately $ 350 million pursuant to the Amended Credit Agreement for working capital and for payment of outstanding debt under the Company’s prior credit agreement that was entered into on August 1, 2018.
+Added: Borrowings under the Amended Credit Agreement bear interest at a variable rate.
+Added: The current outstanding debt is based on the one-month Secured Overnight Financing Rate (SOFR) plus an applicable margin.
+Added: 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 10 basis points.
−Removed: The Company has recorded $ 12.5 million of our outstanding borrowings under the Credit Agreement as a current liability in our Consolidated Balance sheet, which represents our required quarterly debt payments to be made in fiscal year 2022.
−Removed: The Credit Agreement matures on August 1, 2023 and contains customary restrictive and financial covenants and customary events of default.
−Removed: At the closing on August 1, 2018 the company borrowed $ 250.0 million under the term loan and $ 330.0 million under the revolving credit facility.
−Removed: As of June 30, 2022 and 2021, the outstanding balance under the Credit Agreement was $ 256 million and $ 341 million respectively.
+Added: The amended and restated Credit Agreement matures on August 1, 2027 and contains customary restrictive and financial covenants and customary events of default.
+Added: As of June 30, 2023, the outstanding balance under the Credit Agreement was $ 350.0 million.
As a lessee, the company leases offices, labs, and manufacturing facilities, as well as vehicles, copiers, and other equipment.
20 unchanged sentences
Weighted average discount rate (%):
−Removed: (1) The right of use asset, current operating lease liabilities, and noncurrent lease liabilities on the Consolidated Balance Sheet exclude a definitive agreement entered into by the Company in November 2021 for a 74,000 square foot facility in Centennial, Colorado for the next 12.5 years with approximate annual rental impact of $ 0.9 million.
−Removed: Construction is underway and once complete, the commencement of the lease will occur, which is expected to be in the first half of fiscal 2023.
−Removed: The facility replaces a current leased facility in the same location that will terminate upon completion of construction of the new facility.
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 year ended June 30, 2023 (in thousands):
15 unchanged sentences
The Company’s accounting policy is to record the portion of share repurchases in excess of the par value entirely in retained earnings.
−Removed: During fiscal year 2022, 2021 and 2020, the amounts within the Consolidated Statements of Shareholders’ Equity for the surrender and retirement of stock to exercise options due to net settlement stock options exercises were not material.
+Added: During fiscal year 2023, 2022 and 2021, the amounts within the Consolidated Statements of Shareholders’ Equity for the surrender and retirement of stock to exercise options due to net settlement stock options exercises were $ 28.9 million, $ 23.5 million, and $ 19.3 million, respectively.
Accumulated Other Comprehensive Income (loss)
8 unchanged sentences
Other comprehensive income (loss) before reclassifications, net of taxes, attributable to Bio-Techne (2)
−Removed: Reclassification from loss on derivatives to interest expense, net of taxes, attributable to Bio-Techne (1)
+Added: Reclassification from (gain) loss on derivatives to interest expense, net of taxes, attributable to Bio-Techne (1)
+Added: Reclassification of cumulative translation adjustment for Eminence to non-operating income, net of taxes, attributable to Bio-Techne
Balance as of June 30, 2023 (2)
(1) Gains (losses) on the interest swap will be reclassified into interest expense as payments on the derivative agreement are made.
+Added: The Company reclassified $ 4,526 to interest income and recorded a related tax expense of $ 1,073 during fiscal 2023.
The Company reclassified $ 6,352 to interest expense and recorded a related tax benefit of $ 1,493 during fiscal 2022.
1 unchanged sentence
The Company also recorded a related tax benefit of $ 2,150 during fiscal 2021 .
−Removed: The Company reclassified $ 4,503 to interest expense and a related tax benefit tax of $ 1,040 during fiscal 2020.
(2) Other comprehensive income related to foreign currency translation adjustments in the table above includes the amount attributable to Bio-Techne and excludes the $ 33 and $ 70 attributable to the non-controlling interest in Eminence as of June 30, 2023, and June 30, 2022, respectively.
−Removed: (3) The Company had a net deferred tax liability of $ 2,480 as of June 30, 2022, and net deferred tax benefits of $ 1,908 and $ 4,058 as of June 30, 2021, and June 30, 2020, respectively.
+Added: (3) The Company had a net deferred tax liability of $ 3,995 and $ 2,480 as of June 30, 2023, and June 30, 2022, respectively, and a net deferred tax benefit of $ 1,908 as of June 30, 2021.
Earnings Per Share:
36 unchanged sentences
The maximum term of incentive options granted under the 2020 Equity Incentive Plan is ten years .
−Removed: The 2020 Equity Incentive Plan replaced the Company’s second A&R 2010 Plan, which had previously amended and restated the Company’s Amended and Restate 2010 Equity Incentive Plan (the A&R 2010 Plan).
+Added: The 2020 Equity Incentive Plan replaced the Company’s second A&R 2010 Plan, which had previously amended and restated the Company’s Amended and Restated 2010 Equity Incentive Plan (the A&R 2010 Plan).
The 2020 Equity Incentive Plan and Second A&R 2010 Plan (collectively, the Plans) are administered by the Board of Directors and its Executive Compensation Committee, which determine the persons who are to receive awards under the Plans, the number of shares subject to each award and the term and exercise price of each award.
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Outstanding at June 30, 2022
+Added: Forfeited and Expired
Outstanding at June 30, 2023
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In fiscal 2023, under certain employment agreements, a Management Incentive Plan, and a business incentive plan, available to executive officers, certain management personnel, and certain other professional employees, the Company recorded cash bonuses of $ 10.8 million, granted options for 2,350,980 shares of common stock, issued 10,816 restricted common shares and 107,202 restricted stock units.
−Removed: In fiscal 2021 and fiscal 2020, the Company recorded cash bonuses of $ 21.1 million and $ 10.5 million, granted options for 762,761 and 751,499 shares of common stock, and issued 11,803 and 15,398 restricted common stock shares and 30,823 and 30,858 restricted stock, respectively.
+Added: In fiscal 2022 and fiscal 2021, the Company recorded cash bonuses of $ 26.5 million and $ 21.1 million, granted options for 1,390,436 and 3,051,044 shares of common stock, issued 27,584 and 47,212 restricted common stock shares and 110,292 and 123,292 restricted stock units, respectively.
+Added: Other Income / (Expense)
+Added: The components of other income (expense) in the accompanying Statement of Earnings and Comprehensive Income are as follows (in thousands):
+Added: Interest expense
+Added: Interest income
+Added: Gain (loss) on investment (1)
+Added: Gain (loss) on equity method investment
+Added: Other non-operating income (expense), net (1)
+Added: Total other income (expense)
+Added: (1) For the year ended June 30, 2023, primarily due to a $ 37.2 million gain on the sale of our CCXI investment, a $ 11.7 million gain on the sale of Eminence, and a gain of $ 0.4 million related to the change in fair value of our exchange traded bond funds, compared to a $ 16.1 million gain in the fair value of our CCXI investment for the year ended June 30, 2022 and a loss of $ 67.9 million in the fair value of our CCXI investment in the year ended June 30, 2021.
Income Taxes:
1 unchanged sentence
Year Ended June 30,
−Removed: Income before income taxes
+Added: Earnings before income taxes
The provision for income taxes consisted of the following (in thousands):
1 unchanged sentence
Taxes on income consist of:
−Removed: Currently tax provision:
+Added: Current tax provision:
Total current tax provision
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The Company’s effective income tax rate for fiscal 2023 was 15.7 % vs 12.7 % in the prior year.
−Removed: The change in the effective tax rate for fiscal 2022 and 2021 was driven by a mix of increased net income and the dilutive effect the increased net income has on the favorable rate benefits, primarily related to share-based compensation excess tax benefits of $ 29.3 million in fiscal 2022.
+Added: The change in the effective tax rate for fiscal 2023 and 2022 was driven by share-based compensation as the number of stock option exercises decreased compared to the prior year comparative period.
The Company’s effective income tax rate for fiscal 2022 was 12.7 % vs 5.8 % in the prior year.
−Removed: The change in the effective tax rate for fiscal 2021 and 2020 was driven by changes in net discrete tax benefits of $ 28.1 million and $ 19.4 million for fiscal year 2021 and 2020 , respectively.
+Added: The change in the effective tax rate for fiscal 2022 and 2021 was driven by a mix of increased net income and the dilutive effect that the increased net income has on the favorable rate benefits, primarily related to share-based compensation excess tax benefits of $ 29.3 million in fiscal 2022.
The Company’s discrete tax benefits in fiscal 2023, 2022, and 2021 primarily related to share-based compensation excess tax benefits of $ 12.3 million, $ 29.3 million, and $ 28.1 million, respectively.
−Removed: The following is a reconciliation of the federal tax calculated at the statutory rate of to the actual income taxes provided:
+Added: The following is a reconciliation of the federal tax calculated at the statutory rate to the actual income taxes provided:
Year Ended June 30,
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Foreign tax rate differences
+Added: (Gain)/loss on investment
Option exercises
1 unchanged sentence
Foreign derived intangible income
+Added: Foreign withholding tax
Executive compensation limitations
5 unchanged sentences
Deferred compensation
−Removed: Derivative - cash flow hedge
Lease liability
+Added: Capitalized R&D
Valuation allowance
5 unchanged sentences
Deferred tax liabilities
−Removed: Net deferred tax liabilities
+Added: Net deferred income tax liabilities
A deferred tax valuation allowance is required when it is more likely than not that all or a portion of deferred tax assets will not be realized.
2 unchanged sentences
The Company believes it is more likely than not that these tax carryovers will not be realized.
−Removed: As of June 30, 2022, the Company has federal operating loss carryforwards of approximately $ 72.2 million and state operating loss carryforwards of $ 161.7 million from its previous acquisitions, which are not limited under IRC
+Added: As of June 30, 2023, the Company has federal operating loss carryforwards of approximately $ 52.7 million and state operating loss carryforwards of $ 142.7 million from its previous acquisitions, which are not limited under IRC Section 382.
As of June 30, 2023, the Company has foreign net operating loss carryforwards of $ 3.2 million.
8 unchanged sentences
As of June 30, 2023, the Company has approximately $ 219 million of undistributed earnings in its foreign subsidiaries.
−Removed: Approximately $ 97 million of these earnings are no longer considered permanently reinvested.
−Removed: The Company expects to be able to repatriate earnings without incurring any withholding taxes and expects to be tax neutral.
+Added: Approximately $ 99 million of these earnings are no longer considered permanently reinvested and the Company expects to be able to repatriate earnings on a tax neutral basis.
The Company has not provided deferred taxes on approximately $ 120 million of undistributed earnings from non-U.S.
16 unchanged sentences
The Company had $ 0.5 million of accrued interest and penalties as of June 30, 2023.
−Removed: The amount recorded for the periods ended June 30, 2021 and 2020 was immaterial.
+Added: The amount recorded for the periods ended June 30, 2022 was $ 0.3 million in accrued interest and penalties and for 2021 was immaterial.
The Company does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase in the next twelve months.
2 unchanged sentences
The Company’s federal returns are subject to tax assessment for 2018 and subsequent years.
−Removed: State and foreign income tax returns are generally subject to examination for a period of three to five years after filing of the respective return.
+Added: State and foreign income tax returns are generally subject to examination for a period of three to five years after filing of the respective
The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.
19 unchanged sentences
Costs recognized on sale of acquired inventory
−Removed: Amortization of acquisition related intangible assets
+Added: Amortization of intangibles
Impact of partially-owned consolidated subsidiaries (1)
−Removed: Gain on escrow settlement
−Removed: Acquisition related expenses
+Added: Acquisition related expenses and other
Eminence impairment
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Subsequent Events:
−Removed: On July 1, 2022 , the Company completed the acquisition of Namocell, Inc.
−Removed: for approximately $ 100 million, plus contingent consideration of up to $ 25 million upon the achievement of certain future milestones.
−Removed: On August 4, 2022, the Company sold its remaining shares in CCXI for $ 73.3 million.
−Removed: The Company’s cost basis in the shares was $ 6.6 million.
+Added: On July 7, 2023, the Company completed the acquisition of Lunaphore Technologies SA for approximately $ 165 million, net of cash acquired.
Report of Independent Registered Public Accounting Firm
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Opinion on the Consolidated Financial Statements
−Removed: We have audited the accompanying consolidated balance sheets of Bio-Techne Corporation and subsidiaries (the Company) as of June 30, 2022 and 2021, the related consolidated statements of earnings and comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2022, and the related notes (collectively, the consolidated financial statements).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2022, in conformity with U.S.
+Added: We have audited the accompanying consolidated balance sheets of Bio-Techne Corporation and subsidiaries (the Company) as of June 30, 2023 and June 30, 2022, the related consolidated statements of earnings and comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2023, and the related notes (collectively, the consolidated financial statements).
+Added: In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023 and June 30, 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2023, in conformity with U.S.
generally accepted accounting principles.
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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
−Removed: Goodwill impairment analysis for the Molecular Diagnostics Division reporting unit
−Removed: As discussed in Note 1 to the consolidated financial statements, the goodwill balance as of June 30, 2022 was $822.1 million, of which $195.9 million related to the Molecular Diagnostics Division (MDD) reporting unit.
−Removed: The Company performs goodwill impairment testing on an annual basis and whenever events or changes in circumstances indicate that the carrying value of a reporting unit likely exceeds its fair value.
−Removed: This involves estimating the fair value of the reporting units using discounted cash flow models.
−Removed: We identified the evaluation of the goodwill impairment analysis for the MDD reporting unit as a critical audit matter.
−Removed: There was a high degree of subjectivity in applying and evaluating certain key assumptions used in the discounted cash flow model to estimate the fair value of the MDD reporting unit.
+Added: Fair value measurement of the developed technology intangible asset acquired in the Namocell acquisition
+Added: As discussed in Note 4 to the consolidated financial statements, the Company acquired Namocell, Inc.
+Added: in July 2022, for total consideration of $101.2 million, net of cash acquired.
+Added: As a result of the acquisition, the Company recognized intangible assets of $75.6 million, including developed technology of $73.9 million.
+Added: We identified the assessment of the fair value measurement of the acquired developed technology as a critical audit matter.
+Added: There was a high degree of subjectivity in applying and evaluating certain key assumptions used to estimate the fair value of the acquired developed technology.
Specifically, the revenue growth rates and the discount rate were challenging to test as they represented subjective determinations of future market and economic conditions.
−Removed: Changes to those assumptions could have had a significant effect on the Company’s assessment of the fair value of the MDD reporting unit.
+Added: Changes to those assumptions could have had a significant effect on the determination of the fair value measurements.
The following are the primary procedures we performed to address this critical audit matter.
−Removed: We evaluated the design and tested the operating effectiveness of certain internal controls related to the goodwill impairment process.
−Removed: This included controls related to the Company’s determination of the estimated fair value of the MDD reporting unit, including controls related to the development of the assumptions for the revenue growth rates and discount rate.
−Removed: We performed sensitivity analyses over the revenue growth rates and discount rate assumptions to assess their impact on the Company’s determination that the fair value of the MDD reporting unit exceeded its carrying value.
−Removed: We evaluated the reasonableness of the Company’s forecasted revenue growth rates for the MDD reporting unit by comparing the growth rate assumptions to historical results and industry related third-party data.
−Removed: We also compared the Company’s historical revenue forecasts to actual results to assess the Company’s ability to accurately forecast.
−Removed: In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the discount rate used in the valuation, by comparing it against a discount rate range that was independently developed using publicly available market data for comparable entities.
+Added: We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls related to the development of the revenue growth rates and discount rate.
+Added: We performed sensitivity analyses over the revenue growth rates to assess the impact of changes in those assumptions on the Company’s determination of the fair value of the developed technology.
+Added: We evaluated the reasonableness of the Company’s forecasted revenue growth rates used to determine forecasted revenues by comparing them to historical results and industry related third-party data.
+Added: In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:
+Added: ● evaluating the discount rate used by the Company by comparing it against a discount rate range that was independently developed using publicly available market data for comparable entities.
+Added: ● testing the estimate of the fair value of the developed technology using the Company’s cash flow forecasts and discount rates and comparing the results to the Company’s fair value estimates.
We have served as the Company’s auditor since 2002.
29 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.