What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-08-22 compared with 2023-08-23 · 301 added, 258 removed, 836 unchanged (40% of the section changed)

16 unchanged sentences

Earnings before income taxes

Income taxes (benefit)

Net earnings, including noncontrolling interest

Net earnings (loss) attributable to noncontrolling interest

Net earnings attributable to noncontrolling interest

Net earnings attributable to Bio-Techne

Other comprehensive income (loss):

Foreign currency translation adjustments

Foreign currency translation income (loss)

Foreign currency translation reclassified to earnings with Eminence deconsolidation

6 unchanged sentences

Weighted average common shares outstanding:

(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.

See Note 1 for details.

See Notes to Consolidated Financial Statements.

6 unchanged sentences

Accounts receivable, less allowance for doubtful accounts of $ 4,386 and $ 4,738 , respectively

Current assets held-for-sale

Other current assets

1 unchanged sentence

Property and equipment, net

Right of use asset

Right-of-use assets

Intangible assets, net

8 unchanged sentences

Contingent consideration payable

Current portion of long-term debt obligations

Other current liabilities

2 unchanged sentences

Long-term debt obligations

Long-term contingent consideration payable

Operating lease liabilities

11 unchanged sentences

Total Bio-Techne’s shareholders’ equity

Noncontrolling interest

Total shareholders’ equity

Total liabilities and shareholders’ equity

(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.

See Note 1 for details.

See Notes to Consolidated Financial Statements.

4 unchanged sentences

Noncontrolling

Income (Loss)

Balances at June 30, 2021

Cumulative effect adjustments due to adoption of new accounting standards and other

Non-controlling interest in Eminence

Other comprehensive income (loss)

7 unchanged sentences

Balances at June 30, 2022

Reclassification of cumulative translation adjustment for Eminence to non-operating income

Elimination of noncontrolling equity interest from sale of Eminence

Other comprehensive income (loss)

7 unchanged sentences

Balances at June 30, 2023

Reclassification of cumulative translation adjustment for Eminence to non-operating income

Elimination of noncontrolling equity interest from sale of Eminence

Other comprehensive income (loss)

7 unchanged sentences

Balances at June 30, 2024

(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.

See Note 1 for details.

See Notes to Consolidated Financial Statements.

14 unchanged sentences

Fair value adjustment on available-for-sale investments

(Gain) loss on equity method investment

Loss on equity method investment

Asset impairment restructuring

1 unchanged sentence

Gain on sale of Eminence

Impairment of assets held-for-sale

Other operating activity

7 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from maturities of available-for-sale investments

Proceeds from sale of available-for-sale investments

Purchases of available-for-sale investments

2 unchanged sentences

Acquisitions, net of cash acquired

Investment in unconsolidated entity, net

Distributions from (Investments in) Wilson Wolf

Proceeds from sale of Eminence

Investment of forward purchase contract

Investment in Wilson Wolf

Net cash provided by (used in) investing activities

36 unchanged sentences

As noted below, Eminence was sold during the first fiscal quarter of 2023.

Equity method investments:

The company accounts for its equity method investments in accordance with ASC 323, Investments - Equity Method and Joint Ventures.

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.

Distributions from the equity method investee are accounted for using the cumulative earnings approach on the Consolidated Statement of Cash Flows.

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 annual earnings before interest, taxes, depreciation, and amortization (EBITDA) thresholds are met.

Wilson Wolf is a leading manufacturer of cell culture devices, including the G-Rex product line.

The first part of the forward contract was triggered upon Wilson Wolf achieving approximately $ 92 million in annual revenue or $ 55 million in EBITDA at any point prior to December 31, 2027.

During the quarter ended March 31, 2023, the Company determined that Wilson Wolf had met the EBITDA target.

On March 31, 2023, the Company paid an additional $ 232 million to acquire 19.9 % of Wilson Wolf, which is accounted for as an equity method investment.

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.

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.

Translation of foreign financial statements :

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Advertising expenses were $ 4.1 million, $ 4.8 million, and $ 4.6 million for fiscal 2024, 2023, and 2022 respectively.

The Company expenses advertising expenses as incurred.

Advertising expenditures are expensed as incurred.

Income taxes:

11 unchanged sentences

The items of comprehensive income, with the exception of net income, are included in accumulated other comprehensive loss in the consolidated balance sheets and statements of shareholders’ equity.

Any tax effects, if applicable, associated with reclassifications of accumulated other comprehensive income to net income are reflected in the provision for income taxes.

Cash and cash equivalents:

1 unchanged sentence

Available-for-sale investments:

Available-for-sale investments consist of debt instruments with original maturities of generally three months to six months and equity securities.

Available-for-sale investments consist of debt instruments with original maturities of generally three months to less than one-year and equity securities.

Available-for-sale investments are recorded based on trade-date.

4 unchanged sentences

They are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of customers to make the required payments.

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.

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.

Changes in the allowances for doubtful accounts are included in selling, general and administrative (SG&A) expense in our consolidated statements of earnings and comprehensive income.

12 unchanged sentences

Equipment is depreciated using the straight-line method over an estimated useful life of 3 to 5 years .

Buildings, building improvements and leasehold improvements are amortized over estimated useful lives of 5 to 40 years .

Buildings, building improvements and leasehold improvements are depreciated over estimated useful lives of 5 to 40 years .

Contingencies:

The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated.

If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better restimate than any other, the minimum amount of the range is accrued.

If a loss is reasonably possible but not known or probable, and the amount may be reasonably estimated, the estimated loss or range of loss is disclosed.

Contingent Consideration:

12 unchanged sentences

If our estimate of an asset’s remaining useful life is revised, the remaining carrying amount of the asset is amortized prospectively over the revised remaining useful life.

Given the anticipated liquidation process to dispose of the Eminence assets, the Company identified a triggering event in the second quarter of fiscal 2022 and performed impairment testing.

The impairment testing resulted in a full impairment of the Eminence intangible assets.

Refer to the Impairment of Goodwill section as part of Note 1 for further details related to the triggering event and related impairment recorded.

In conjunction with the Asuragen acquisition that occurred in fiscal year 2021, the Company reassessed the useful life of a tradename from a previous acquisition due to the planned integration and cobranding strategy developed with the most recent transaction.

As a result, the Company accelerated the amortization of the trade name to be consistent with the life used for the Asuragen trade name.

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:

We evaluate the recoverability of property, plant, equipment and amortizable intangibles whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable.

Such circumstances could include, but are not limited to, (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used or in its physical condition, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset.

or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset.

We compare the carrying amount of the asset to the estimated undiscounted future cash flows associated with it.

4 unchanged sentences

These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.

During the second quarter of fiscal year 2024 there was a triggering event for the assets and liabilities associated with a disposal group in our Protein Sciences segment that were classified as held-for-sale.

See the restructuring section of Note 1 below for additional details.

No other triggering events were identified and no other impairments were recorded for property, plant, and equipment or amortizable intangibles during fiscal years 2024, 2023, and 2022.

19 unchanged sentences

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 2024.

There was a triggering event related to a business held-for-sale described later in this note, leading to an impairment of allocated goodwill during the second half of fiscal 2024.

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

For fiscal 2024, 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.

Based on the analysis, the Company determined there was no indication of impairment of the indefinite-lived intangible assets.

Based on the analysis, the Company determined there was no indication of impairment of the indefinite-lived intangible asset.

This in-process research and development was placed into service during the fourth quarter of fiscal 2024 and will begin amortization over its expected useful life.

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

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.

On September 1, 2022, the Company completed the sale of its equity shares of Eminence for approximately $ 17.8 million to a third party.

10 unchanged sentences

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.

In conjunction with the

combination of the reporting units, a qualitative goodwill impairment assessment was performed.

In conjunction with the combination of the reporting units, a qualitative goodwill impairment assessment was performed.

The qualitative assessment identified no indicators of impairment.

2 unchanged sentences

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.

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.

The quantitative assessment completed as of April 1, 2021 indicated that all of the reporting units had a substantial amount of headroom.

Accordingly, the Company determined there was no indication of impairment of goodwill in our annual goodwill impairment analysis.

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.

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.

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.

During the quarter ended March 31, 2023, the Company determined that Wilson Wolf had met the EBITDA target.

On March 31, 2023, the Company paid an additional $ 232 million to acquire 19.9 % of Wilson Wolf.

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.

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.

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.

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.

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:

2 unchanged sentences

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.

Asset-related and other charges include impairment of right-of-use assets, leasehold improvements, other asset write-downs associated with combining operations, disposal of assets and other exit costs.

Other costs also includes restructuring-related charges, which are incremental costs incurred directly supporting business transformation initiatives tied to the restructuring action.

Fiscal Year 2024 Restructuring Actions:

In the second quarter of fiscal 2024, the Company announced enterprise-wide restructuring focused on recovering operating margins, optimizing our distribution footprint, and enhancing our organization efficiency.

These actions impacted approximately 4 % of our global workforce.

These actions continued through the end of fiscal 2024 as we incurred charges relating to the condensing of certain distribution centers and optimizing efficiency.

The Company is expecting to

incur costs related to these actions through the first half of fiscal 2025, which will be recorded when specified criteria are met.

As part of these actions, certain assets and liabilities associated with a disposal group in our Protein Sciences segment were classified as held-for-sale as of December 31, 2023, including $ 1.4 million of goodwill allocated to the disposal group on a relative fair value basis.

As a result of impairment tests performed over the disposal group during fiscal 2024, a cumulative impairment charge of $ 22.0 million which includes the allocated goodwill, was recorded in the Selling, general and administrative line in the Consolidated Statements of Earnings for the year ended June 30, 2024.

As of June 30, 2024, the assets remaining within the disposal group primarily include inventory and property and equipment of $ 9.8 million, which is net of expected selling costs.

These assets are actively marketed, and we believe their sale will be completed within 12 months of the held-for-sale classification date.

The held-for-sale assets are recorded in Current assets held-for-sale in our Consolidated Balance Sheet as of June 30, 2024.

The restructuring and restructuring-related charges, including the impairment of assets held-for-sale, for periods presented were recorded in the Consolidated Statements of Earnings as follows (in thousands):

Cost of sales

Selling, general and administrative (1)

(1) Restructuring actions impacting research and development are not material to separately disclose and have been included within Selling, general and administrative costs.

Restructuring and restructuring-related costs by segment are as follows (in thousands):

Year ended June 30, 2024

Asset-related

Impairment of

assets held-for-sale

Protein Sciences

Diagnostics and Genomics

The following table summarizes the changes in the Company’s accrued restructuring balance, which is included within Other current liabilities in the accompanying balance sheet.

Other amounts reported as restructuring and restructuring-related costs in the accompanying statements of income have been summarized in the notes to the table (in thousands):

Asset-related

Impairment of

severance (1)

and other (2)

assets held-for-sale

Expense incurred in the second quarter of 2024

Incremental expense incurred in the third quarter of 2024

Incremental expense incurred in the fourth quarter of 2024

Cash payments

Non-cash adjustments

Adjustments (3)

Accrued restructuring actions balance as of June 30, 2024

(1) Relates to impacted employees’ final paycheck, separation payments, outplacement services, legal fees, and retention packages related to the closure or sale of certain distribution and manufacturing sites.

(2) Primarily relates to impairment of right-of-use assets, lease termination fees, consulting fees, and expenses for changes to supporting IT systems that are enabling the Company to complete the restructuring initiatives.

(3) Relates to the refinement of the accrual recorded in the second quarter of fiscal 2024.

Fiscal Year 2023 Restructuring Actions:

QT Holdings Corporation (Quad)

12 unchanged sentences

Additional actions were taken in June 2023 primarily related to the sales organization.

The actions impacted a limited number of employees and are expected to be completed in the first quarter of fiscal 2024.

The actions impacted a limited number of employees and were completed in the fourth quarter of fiscal 2024.

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.

Adjustments in fiscal year 2024 relate to the refinement of employee severance payouts.

Additional pre-

tax charges for the year ended June 30, 2024 were $ 0.2 million.

Restructuring actions, including cash and non-cash impacts, are as follows (in thousands):

Expense incurred in the second quarter of 2023

Expense incurred in the fourth quarter of 2023

Cash payments

Expense incurred in fiscal year 2023

Fiscal year 2023 cash payments

Fiscal year 2023 adjustments

Accrued restructuring actions balances as of June 30, 2023

Fiscal year 2024 cash payments

Fiscal year 2024 adjustments (1)

Accrued restructuring actions balances as of June 30, 2024

(1) Fiscal year 2024 adjustments relate to the refinement of the accrual recorded in fiscal year 2023.

Fiscal Year 2022 Restructuring Actions:

9 unchanged sentences

Cash payments

Adjustments (1)

Accrued restructuring actions balances as of June 30, 2022

4 unchanged sentences

Fiscal 2023 cash payments did not materially differ from the charge recorded in fiscal 2022.

Legal Matters:

The Company and its affiliates are involved in a number of legal actions from time to time involving product liability, employment, intellectual property and commercial disputes, shareholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations.

With respect to governmental proceedings and investigations, like other companies in our industry, the Company is subject to extensive regulation by national, state, and local governmental agencies in the United States and in other jurisdictions in which the Company and its affiliates operate.

The Company’s standard practice is to cooperate with regulators and investigators in responding to inquiries.

The outcomes of legal actions are not within the Company’s complete control and may not be known for prolonged periods of time.

In some actions, the enforcement agencies or private claimants seek damages, as well as other remedies (including injunctions barring the sale of products that are the subject of the proceeding), that could require

significant expenditures, result in lost revenues, or limit the Company's ability to conduct business in the applicable jurisdictions.

If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued.

If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed.

When determining the estimated loss or range of loss, significant judgment is required.

Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages with incomplete scientific facts or legal discovery, involve unsubstantiated or indeterminate claims for damages, potentially involve penalties, fines or punitive damages, or could result in a change in business practice.

The Company classifies certain specified litigation charges and gains related to significant legal matters as certain litigation charges in the consolidated statements of income.

During fiscal year 2024, the Company recognized $ 3.5 million of certain litigation charges.

There was no comparable activity in the comparable periods.

As of each of the balance sheet dates presented, there was no accrued litigation.

The ultimate cost to the Company with respect to accrued litigation could be materially different than the amount of the current estimates and accruals and could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

The Company includes accrued litigation in other current liabilities and other liabilities on the consolidated balance sheets.

While it is not possible to predict the outcome for most of the legal matters discussed below, the Company believes it is possible that the costs associated with these matters could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

Intellectual Property Matters:

At any given time, the Company is involved in litigation relating to patents, trademarks, copyrights, trade secrets, and other intellectual property (IP) rights, and licenses, acquisitions or other agreements related to such rights.

This litigation includes, but it not limited to, alleged infringement or misappropriation of IP rights, or breach of obligations related to IP rights, or other claims asserted by competitors, individuals, or entities created specifically to fund IP litigation.

While the outcome of these litigation matters is inherently uncertain, it is possible that the results of such litigation could require the Company to pay significant monetary damages.

Other Significant Accounting Policies

4 unchanged sentences

Operating segments

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.

The amendment in this update replaced the previous incurred loss impairment methodology with a methodology that reflects expected credit losses on financial instruments within its scope, including trade and loan receivables and available-for-sale debt securities.

This update is intended to provide financial statement users with more decision-useful information about the expected credit losses.

The Company adopted this standard on July 1, 2020 using a modified retrospective transition approach with a cumulative impact of $ 0.3 million to retained earnings.

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.

In March 2020 , the FASB issued ASU No.

2020-04 , Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021 issued ASU No.

2021-01, Reference Rate Reform (Topic 848):

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.

The Company adopted the optional relief guidance provided within these ASUs in the fourth quarter of fiscal 2021.

The Company’s current debt and derivative instruments utilize SOFR as the reference rate.

The adoption of the standard did not impact our financial results for fiscal 2022 or fiscal 2023.

Not Yet Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280), which requires incremental disclosures on reportable segments, primarily through enhanced disclosures on significant segment expenses.

The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2025 for our annual report and for interim periods starting in fiscal year 2026.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which requires incremental annual disclosures on income taxes, including rate reconciliations, income taxes paid, and other disclosures.

The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2026 for our annual report.

We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

Other than the items noted above, there have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a significant impact, or potential significant impact, on our consolidated financial statements.

Revenue Recognition:

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.

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.

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 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.

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 Medicare.

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.

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.

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.

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.

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.

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 "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.

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Contract liabilities as of June 30, 2023 subsequently recognized as revenue during the year ended June 30, 2024 were approximately $ 20.9 million.

Contract liabilities as of June 30, 2022 subsequently recognized as revenue during the year ended June 30, 2023 were approximately $ 21.5 million.

Contract liabilities in excess of one year are included in Other long-term liabilities on the consolidated balance sheet.

4 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.

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.

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:

Revenue by type is as follows (in thousands):

Year ended June 30,

2 unchanged sentences

Total revenues, net

Revenue by geography is as follows:

Revenue by geography (in thousands):

Year Ended June 30,

28 unchanged sentences

Total intangible assets, net

(1) The in process research and development has been placed into service and is included within Developed technology.

The amortization period for this developed technology asset is estimated to be 14 years .

Changes to the carrying amount of net intangible assets consist of (in thousands):

1 unchanged sentence

Other additions (1)

Held-for-sale intangibles (2)

Amortization expense

Currency translation

Eminence impairment

Ending balance

1 unchanged sentence

This asset will be amortized over a life of 10 years .

(2) Refer to Note 1 for further detail on held-for-sale intangibles.

Amortization expense related to developed technologies included in cost of sales was $ 46.6 million, $ 44.3 million, and $ 40.6 million in fiscal 2024, 2023, and 2022, 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.

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):

Amortization expense related to trade names, customer

relationships, non-compete agreements, and patents included in selling, general and administrative expense was $ 33.2 million, $ 33.2 million, and $ 33.5 million, in fiscal 2024, 2023, and 2022 respectively.

The estimated future amortization expense for intangible assets as of June 30, 2024 is as follows (in thousands):

Changes in goodwill by segment and in total consist of (in thousands):

2 unchanged sentences

June 30, 2022

Eminence impairment

Currency translation

June 30, 2023

Held-for-sale goodwill (1)

Currency translation

June 30, 2024

(1) Refer to Note 1 for further detail on goodwill reclassified to current assets held-for-sale.

Other Assets:

Other assets consist of (in thousands):

Investment in Wilson Wolf

Equity method investment in Wilson Wolf

Derivative instruments

5 unchanged sentences

Interest paid

Non-cash activities:

Acquisition-related liabilities (1)

Other intangibles (2)

(1) Consists of holdback payments due at future dates and liabilities for contingent consideration.

Amounts disclosed above represent the total non-cash change in the liability from the prior fiscal year.

Further information regarding liabilities for contingent consideration can be found in Notes 4 and 5.

(2) $ 4.0 million of the third party patented technology acquired in fiscal 2021 was a non-cash activity within the consolidated statement of cash flows as a cash payment was not made within the fiscal year ended June 30, 2021.

Acquisitions:

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Fiscal year 2024 Acquisitions

Namocell, Inc.

On July 1, 2022, the Company acquired all of the ownership interests of Namocell, Inc.

for $ 101.2 million, net of cash acquired, plus contingent consideration of up to $ 25 million upon the achievement of certain future revenue thresholds.

The Namocell acquisition adds easy-to-use single cell sorting and dispensing platforms that are gentle to cells and preserve cell viability and integrity.

Lunaphore Technologies SA.

On July 7, 2023, the Company acquired all of the ownership interests of Lunaphore Technologies SA (“Lunaphore”) for $ 169.7 million, in a cash-free, debt-free acquisition.

Lunaphore is a leading developer of fully automated spatial biology solutions.

The Lunaphore acquisition adds spatial biology instruments to Bio-Techne’s portfolio to accelerate our leadership position in translational and clinical research markets.

The transaction was accounted for in accordance with ASC 805, Business Combinations .

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The goodwill is not deductible for income tax purposes.

The business became part of the Protein Sciences operating segment in the first quarter of fiscal year 2023.

The allocation of purchase price consideration related to Namocell, Inc was completed in the fourth quarter of fiscal 2023.

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.

The business became part of the Diagnostics and Genomics operating segment in the first quarter of fiscal year 2024 .

The allocation of purchase price consideration related to Lunaphore was completed in the fourth quarter of fiscal 2024.

Net sales and operating loss of this business included in Bio-Techne's consolidated results of operations for the year ended June 30, 2024 were approximately $ 14.3 million and $ 24.0 million, respectively.

The fair values of the assets acquired and liabilities assumed as of the acquisition date and the updated final amounts as of June 30, 2024 are as follows (in thousands):

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Final allocation at June 30, 2024

Current assets, net of cash

Current assets

Equipment and other long-term assets

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Customer relationships

Non-competition agreement

Total assets acquired

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Net assets acquired

Cash paid, net of cash acquired

Contingent consideration payable

Estimated Net Working Capital

Net assets acquired

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 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.

The purchase price allocated to customer relationships and trade names was based on management's preliminary forecasted

cash inflows and outflows and using a multiperiod excess earnings method.

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 .

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 4 years .

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 both trade names and the non-competition agreement is estimated to be 3 years .

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.

There were no acquisitions in fiscal 2022.

Fiscal year 2021 Acquisitions

Eminence Biotechnology

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.

Eminence is considered a variable interest entity as it is an early stage biotechnology company that required additional funding through a subsequent equity investment, which was used to fund Eminence’s expansion and GMP manufacturing capabilities within China.

On April 2, 2021, the Company invested approximately $ 6 million of additional funding into Eminence, increasing our percentage of outstanding equity shares to 57.4 %.

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.

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.

The goodwill recorded as result of the acquisition represents the strategic benefits of growing the Company’s product portfolio and the expected revenue growth from increased market penetration.

The fair value of the noncontrolling interest in Eminence was calculated utilizing cash flow projections discounted to the acquisition date and control premiums calculated using market data.

Acquired goodwill is not deductible for income tax purposes.

The business became part of the Protein Sciences reportable segment in the second quarter of fiscal year 2021.

Purchase accounting was finalized during fiscal 2021.

Tangible assets and liabilities acquired were recorded at fair value on the date of close based on management's assessment.

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.

The purchase price allocated to trade names was based on management's forecasted cash inflows and outflows and using a relief from royalty method.

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 .

Amortization expense related to customer relationships is reflected in selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income.

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 8 years .

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.

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.

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.

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 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 amount recorded for trade names 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 ranges from 4 years to 8 years .

Fiscal year 2023 Acquisitions

Namocell, Inc.

On July 1, 2022, the Company acquired all of the ownership interests of Namocell, Inc.

(“Namocell”) for $ 101.2 million, net of cash acquired, plus contingent consideration of up to $ 25 million upon the achievement of certain future revenue thresholds.

The Namocell acquisition adds easy-to-use single cell sorting and dispensing platforms that are gentle to cells and preserve cell viability and integrity.

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’s 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 2021.

Purchase accounting was finalized during fiscal 2022 with an adjustment of $ 4.4 million to deferred tax amounts and goodwill.

Tangible assets and liabilities acquired were recorded at fair value on the date of close based on management's assessment.

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.

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 .

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 .

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.

The aggregate purchase price of the acquisitions was allocated to the assets acquired and liabilities assumed based on their fair values as of the acquisition date.

The following table summarizes the fair values of the assets acquired and liabilities assumed for the fiscal year 2021 acquisitions (in thousands):

The business became part of the Protein Sciences operating segment in the first quarter of fiscal year 2023.

The allocation of purchase price consideration related to Namocell was completed in the fourth quarter of fiscal 2023.

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):

Current assets, net of cash

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Developed technology

In-process research and development

Customer relationships

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Cash paid, net of cash acquired

Contingent consideration payable

Additional consideration

Net assets acquired

Tangible assets and liabilities acquired were recorded at fair value on the date of close based on management's assessment.

The purchase price allocated to developed technology was based on management’s forecasted cash inflows and outflows and using a relief from royalty method to calculate the fair value of assets purchased.

The purchase price allocated to customer relationships and trade names was based on management's forecasted cash inflows and outflows and using a multiperiod excess earnings method.

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 .

Amortization expense related to customer relationships is reflected in Selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive

The amortization period for customer relationships is estimated to be 4 years .

The amortization period for both trade names and the non-competition agreement is estimated to be 3 years .

There were no acquisitions in fiscal 2022.

Fair Value Measurements:

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Fair Value Measurements Using

Balance Sheet Location

Inputs Considered as

Exchange traded securities (1)

Derivative instruments - cash flow hedges (3)

Contingent consideration

Certificates of deposit (1)

Short-term available-for-sale investments

Derivatives designated as hedging instruments - cash flow hedges

Other current assets

Derivatives designated as hedging instruments - cash flow hedges

Derivatives designated as hedging instruments - net investment hedge

Other long-term liabilities

Total liabilities

Fair Value Measurements Using

Balance Sheet Location

Inputs Considered as

Exchange traded securities (2)

Certificates of deposit (2)

Short-term available-for-sale investments

Derivative instruments - cash flow hedges

Contingent consideration

Derivative instruments - cash flow hedges (3)

Contingent consideration payable

Total liabilities

(1) Included in available-for-sale investments on the balance sheet.

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.

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.

During the quarter ended September 30, 2022, the Company sold all of its outstanding shares of ChemoCentryx Inc (CCXI).

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.

(1) The certificates of deposit have contractual maturity dates within one year.

(3) Derivative assets are included in other assets on the balance sheet as of June 30, 2023 and June 30, 2022.

Derivative liabilities as of June 30, 2022 are included in other current liabilities on the balance sheet.

(2) During the quarter ended September 30, 2023, the Company sold all of its ex change traded investment grade bond funds that it held at June 30, 2023.

The costs basis and fair value of these exchange traded investment grade bond funds were $ 25.0 million and $ 23.7 million at June 30, 2023, respectively.

Fair value measurements of available for sale securities

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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 agreement matured in October 2022 and there was no fair value recorded on the Consolidated Balance Sheet as of June 30, 2023.

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.

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.

The Company utilizes forward starting swaps designated as a cash flow hedge on forecasted 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 forecasted variable interest long-term debt 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 a notional principal amounts.

The Company also uses a cross-currency swap contract to manage its exposure to foreign currency risk associated with the Company’s net investment in its Swiss subsidiary.

The following table presents the contractual amounts of the Company’s outstanding instruments (in millions):

Forward starting swaps (1)

Cash flow hedge

Cross-currency swap (2)

Net investment hedge

(1) In May 2021, the Company entered into a forward starting swap designated as a cash flow hedge on forecasted debt based on $ 200 million of notional principal.

The effective date of the swap was November 2022 with the full swap maturing in November 2025.

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.

In March 2023, the Company entered into a new forward starting swap designated as a cash flow hedge on forecasted debt.

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.

In March 2023, the Company entered into a forward starting swap designated as a cash flow hedge on forecasted debt based on $ 100 million of notional principal.

The effective date of the swap was April 2023 with the full swap maturing in April 2025.

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.

The Company reclassified $ 4.5 million to interest income and related tax expense of $ 1.1 million during the year ended June 30, 2023.

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.

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.

(2) In July 2023, the Company entered into a pay-fixed rate, receive-fixed rate cross-currency swap contract with a total notional amount of $ 150 million that was designated as a hedge to lock in the Swiss franc (CHF) rate for a portion of the Company’s CHF net investment in its Lunaphore subsidiary in Switzerland.

The objective of the hedge is to protect the net investment in the Company’s CHF-denominated operations against changes in the spot exchange rates, on a pre-tax basis.

The hedging instrument has four interim settlement dates, which will reduce the notional on the hedging instrument by $ 10 million at each interim date, and will reduce the notional to $ 110 million at maturity.

The pretax amount of the gains and losses on our hedging instruments and the classification of those gains and losses with our Consolidated Financial Statements for the twelve months ended June 30, 2024 and 2023 were as follows (in thousands):

(Gain) Loss Recognized in Accumulated Other Comprehensive Loss

Cash flow hedges

Forward starting swaps

Net investment hedges

Cross-currency swap

(Gain) Loss Reclassified into Income

Location of (Gain) Loss

in Income Statement

Cash flow hedges

Forward starting swaps

Interest expense

Net investment hedges

Cross-currency swap

Interest expense

Gains or losses related to the net investment hedges are classified as foreign currency translation adjustments in the schedule of changes in Accumulated Other Comprehensive Income (“AOCI”) in Note 8, as these items are attributable to the Company’s hedges of its net investment in foreign operations.

Gains or losses related to the cash flow hedges are classified as Unrealized gains (losses) on cash flow hedges in the schedule of changes in AOCI in Note 8.

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

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.

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.

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.

The Asuragen contingent agreement is based on achieving certain revenue thresholds by December 31, 2022 and December 31, 2023.

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.

As of June 30, 2024, the Company does not have outstanding contingent consideration as the Asuragen and Namocell acquisitions did not meet their respective milestones as of December 31, 2023.

The Asuragen contingent agreement required the Company to make contingent consideration payments of up to $ 105.0 million if certain revenue thresholds were achieved by December 31, 2023.

The opening balance sheet fair value of the liabilities 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.

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.

The contingent consideration related to the December 31, 2023 Asuragen threshold was $ 2.0 million as of June 30, 2023.

Contingent consideration was $ 5.0 million as of June 30, 2022.

The Namocell contingent agreement is based on achieving certain revenue thresholds by December 31, 2022 and December 31, 2023.

The contingent consideration related to Asuragen was $ 2.0 million as of June 30, 2023.

The Namocell contingent agreement required the Company to make contingent consideration payments of up to $ 25.0 million if certain revenue thresholds were achieved by December 31, 2023.

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.

Assumptions used in these calculations are units sold, expected revenue, expected expenses, discount rate, and various probability factors.

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.

As of June 30, 2023, the remaining contingent consideration related to Namocell was $ 1.5 million.

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.

The contingent consideration related to Namocell was $ 1.5 million as of June 30, 2023.

As of June 30, 2023 , the Company's obligation for potential contingent consideration payments related to the B-Mogen acquisitions was relieved as the likelihood that the revenue thresholds and product milestones would be achieved in the timeframe established within the purchase agreement was remote.

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 .

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.

The change in fair value of contingent consideration for these acquisitions is included in general and administrative expense.

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):

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Debt and Other Financing Arrangements:

On August 31, 2022, the Company entered into an amended and restated Credit Agreement (the Amended Credit Agreement).

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

conditions, and a term loan of $ 250.0 million.

The prior Credit Agreement was bearing interest at a variable rate and would have matured on August 1, 2023.

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.

Borrowings under the Amended Credit Agreement may be used for working capital and expenditures of the Company and its subsidiaries, including financing permitted acquisitions.

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.

Borrowings under the Amended Credit Agreement bear interest at a variable rate.

On August 31, 2022, the Company entered into a revolving line-of-credit and term loan by a Credit Agreement (the Credit Agreement).

The Credit Agreement provides for a revolving credit facility of $ 1 billion, which can be increased by an additional $ 400 million subject to certain conditions.

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 one-month Secured Overnight Financing Rate (SOFR) plus an applicable margin.

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The annualized fee for any unused portion of the credit facility is currently 10 basis points.

The amended and restated Credit Agreement matures on August 1, 2027 and contains customary restrictive and financial covenants and customary events of default.

The Credit Agreement matures on August 31, 2027 and contains customary restrictive and financial covenants and customary events of default.

As of June 30, 2024, the outstanding balance under the Credit Agreement was $ 319.0 million.

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The Company’s accounting policy is to record the portion of share repurchases in excess of the par value entirely in retained earnings.

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.

During fiscal year 2024, 2023 and 2022, 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 and restricted stock units vesting were $ 21.9 million, $ 28.9 million, and $ 23.5 million, respectively.

Accumulated Other Comprehensive Income (loss)

Changes in accumulated other comprehensive income (loss) attributable to Bio-Techne, net of tax, are summarized as follows (in thousands):

Balance June 30, 2020 (3)

Other comprehensive income (loss) before reclassifications

Reclassification from loss on derivatives to interest expense, net of taxes (1)

Balance June 30, 2021 (3)

Other comprehensive income (loss) before reclassifications, net of taxes, attributable to Bio-Techne (2)

Reclassification from loss on derivatives to interest expense, net of taxes, attributable to Bio-Techne (1)

Balance as of June 30, 2022

Other comprehensive income (loss) before reclassifications, net of taxes, attributable to Bio-Techne (2)

Reclassification from (gain) loss on derivatives to interest expense, net of taxes, attributable to Bio-Techne (1)

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.

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.

The Company reclassified $ 8,598 to interest expense and $ 512 to non-operating income relating to variable interest payments that were probable not to occur for the fiscal year ended June 30, 2021.

The Company also recorded a related tax benefit of $ 2,150 during fiscal 2021 .

(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.

(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.

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.

Changes in Accumulated Other Comprehensive Income (Loss) attributable to Bio-Techne by component (in thousands):

Balance as of June 30, 2021, net of tax:

Other comprehensive income (loss), before tax, attributable to Bio-Techne:

Amounts before reclassifications (1)

Amounts reclassified out

Total other comprehensive income (loss), before tax, attributable to Bio-Techne:

Total other comprehensive income (loss), net of tax, attributable to Bio-Techne:

Balance as of June 30, 2022, net of tax (2)

Other comprehensive income (loss), before tax, attributable to Bio-Techne:

Amounts before reclassifications (1)

Amounts reclassified out

Total other comprehensive income (loss), before tax, attributable to Bio-Techne:

Total other comprehensive income (loss), net of tax, attributable to Bio-Techne:

Balance as of June 30, 2023, net of tax (2)

Other comprehensive income (loss), before tax:

Amounts before reclassifications

Amounts reclassified out

Total other comprehensive income (loss), before tax

Total other comprehensive income (loss), net of tax

Balance as of June 30, 2024, net of tax (2)

(1) Amounts before reclassifications related to foreign currency translation adjustments in the table above includes the amount attributable to Bio-Techne and excludes the $ 33 thousand and $ 70 thousand attributable to the non-controlling interest in Eminence as of June 30, 2023, and June 30, 2022, respectively.

(2) The Company had a net deferred tax liability for its cash flow hedge of $ 2.5 million, $ 4.0 million, and $ 2.5 million as of June 30, 2024, June 30, 2023 and June 30, 2022.

Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within foreign currency translation adjustments do include impacts from the net investment hedge.

Earnings Per Share:

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Outstanding at June 30, 2023

Forfeited and Expired

Outstanding at June 30, 2024

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The total intrinsic value of options exercised during fiscal 2024, 2023, and 2022 were $ 100.8 million, $ 90.2 million, and $ 209.3 million, respectively.

The total fair value of options exercised during fiscal 2024, 2023, and 2022 were $ 58.2 million, $ 46.5 million, and $ 82.3 million, respectively.

The total fair value of options vested during fiscal 2024, 2023, and 2022 were $ 31.6 million, $ 31.0 million, and $ 29.2 million, respectively.

Stock options vest over a four year period.

Restricted common stock activity under the Plans for the three years ended June 30, 2024, consists of the following (units in thousands):

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Stock-based compensation cost, inclusive of payroll taxes, of $ 38.5 million, $ 39.3 million, and $ 44.0 million was included in selling, general and administrative expense in fiscal 2024, 2023 and 2022, respectively.

Additionally, stock-based compensation costs, inclusive of payroll taxes, of $ 1.0 million, $ 1.4 million, and $ 1.6 million was included in cost of goods sold in 2023, 2022, and 2021, respectively.

Additionally, stock-based

compensation costs, inclusive of payroll taxes, of $ 0.9 million, $ 1.0 million, and $ 1.4 million was included in cost of goods sold in 2024, 2023, and 2022, respectively.

As of June 30, 2024, there was $ 35.8 million of unrecognized compensation cost related to non-vested stock options, non-vested restricted stock units and non-vested restricted stock which will be expensed in fiscal 2025 through 2028 using a 4.5 % forfeiture rate.

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The components of other income (expense) in the accompanying Statement of Earnings and Comprehensive Income are as follows (in thousands):

Year Ended June 30,

Interest expense

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Total other income (expense)

(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.

(1) For the year ended June 30, 2024, this is for a $ 0.3 million gain on the sale of our exchange trade investment grade bond funds.

For the year ended June 30, 2023, this is for 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.

For the year ended June 30, 2022, this is for a $ 16.1 million gain in the fair value of our CCXI investment.

Income Taxes:

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The Company’s effective income tax rate for fiscal 2024 was 9.5 % vs 15.7 % in the prior year.

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 change in the effective tax rate for fiscal 2024 and 2023 was driven by share-based compensation as the number of stock option exercises increased compared to the prior year comparative period.

The Company’s effective income tax rate for fiscal 2023 was 15.7 % vs 12.7 % in the prior year.

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 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 discrete tax benefits in fiscal 2024, 2023, and 2022 primarily related to share-based compensation excess tax benefits of $ 18.4 million, $ 12.3 million, and $ 29.3 million, respectively.

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Capitalized R&D

Held-for-sale asset impairment

Valuation allowance

Deferred tax assets

Net unrealized gain on available-for-sale investments

Intangible asset amortization

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The Company had $ 0.6 million of accrued interest and penalties as of June 30, 2024.

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 amount recorded for the periods ended June 30, 2023 and June 30, 2022, was $ 0.5 million and $ 0.3 million, respectively, in accrued interest and penalties.

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.

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The Company’s federal returns are subject to tax assessment for 2019 and subsequent years.

State and foreign income tax returns are generally subject to examination for a period of three to five years after filing of the respective

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.

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.

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The Company operates under two operating segments, Protein Sciences and Diagnostics and Genomics.

The Company’s Protein Sciences segment is comprised of the reagent solutions and analytical solutions.

These businesses manufacture consumables used for conducting laboratory experiments by both industry and academic scientists within the biotechnology and biomedical life science fields.

The Company’s Protein Sciences segment is comprised of the reagent solutions division and analytical solutions division.

Our Protein Sciences segment is a leading developer and manufacturer of high-quality biological reagents used in all

aspects of life science research, diagnostics and cell and gene therapy.

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

No customer in the Protein Sciences segment accounted for more than 10% of the segment’s net sales for the years ended June 30, 2024, 2023, and 2022.

The Company’s Diagnostics and Genomics segment is comprised of diagnostics reagents, genomics, and molecular diagnostics, which includes our Exosome and Asuragen acquisitions.

Diagnostics reagents develops and manufactures a range of controls and calibrators used with diagnostic equipment and as proficiency testing tools, as well as other reagents incorporated into diagnostic kits.

Genomics and molecular diagnostics consists of exosome-based diagnostics products for various pathologies, as well as tissue-based in-situ hybridization assays for research in clinical use.

The Company’s Diagnostics and Genomics segment is comprised of the diagnostics reagents division, spatial biology divsion, and molecular diagnostics division.

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

No customer in the Diagnostics and Genomics segment accounted for more than 10% of the segment’s net sales for the fiscal years ended June 30, 2024, 2023, and 2022.

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Diagnostics and Genomics

Other revenue (1)

Consolidated net sales

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Acquisition related expenses and other

Certain Litigation Charges

Impairment of assets held-for-sale

Eminence impairment

Stock based compensation, inclusive of employer taxes

Restructuring costs

Restructuring and restructuring-related costs

Corporate general, selling, and administrative expenses

Impact of business held-for-sale (1)

Consolidated operating income

(1) Adjusted operating income for fiscal 2021 have been updated for comparability to fiscal 2022 for the inclusion of the impact of partially-owned consolidated subsidiaries on the Company’s adjusted operating income.

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

For the year ended June 30, 2024, includes the six-month results of this business held-for-sale for the period starting December 31, 2023 through June 30, 2024 while the business has met the held-for-sale criteria.

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

The Company has some integrated facilities that serve both segments.

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The Company considers total instrument and total service revenue to represent similar groups of products in the fiscal years presented.

The Company considered our consumables sold in the Protein Sciences and Diagnostics and Genomics segments to represent different groups of products and therefore have separately disclosed the related consumables revenue (in thousands) :

The Company considers our consumables sold in the Protein Sciences and Diagnostics and Genomics segments to represent different groups of products and therefore have separately disclosed the related consumables revenue (in thousands):

Year Ended June 30,

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Consumables revenue - Diagnostics and Genomics

Consumables revenue - Other revenue (1)

Total consumable revenue

(1) Includes the results of a business that has met the held-for-sale criteria since December 31, 2023.

The following is financial information relating to geographic areas (in thousands):

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Subsequent Events:

On July 7, 2023, the Company completed the acquisition of Lunaphore Technologies SA for approximately $ 165 million, net of cash acquired.

On July 23, 2024, the Company invested $ 15 million in Spear Bio, an innovative leader in the development and manufacture of ultra-sensitive immunoassays capable of measuring protein biomarkers at attomolar level from sub-microliter sample volume.

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

To the Shareholders and the Board of Directors

Bio-Techne Corporation:

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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.

Fair value measurement of the developed technology intangible asset acquired in the Namocell acquisition

As discussed in Note 4 to the consolidated financial statements, the Company acquired Namocell, Inc.

in July 2022, for total consideration of $101.2 million, net of cash acquired.

Fair value measurement of the developed technology intangible asset acquired in the Lunaphore acquisition

As discussed in Note 4 to the consolidated financial statements, the Company acquired Lunaphore Technologies, SA.

in July 2023, for total consideration of $169.7 million.

As a result of the acquisition, the Company recognized intangible assets of $66.4 million, including developed technology of $60.3 million.

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Specifically, the revenue growth rates and the discount rate were challenging to test as they represented subjective determinations of future market and economic conditions.

Changes to those assumptions could have had a significant effect on the determination of the fair value measurements.

Changes to those assumptions could have had a significant effect on the determination of the fair value measurement.

The following are the primary procedures we performed to address this critical audit matter.

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

To the Shareholders and the Board of Directors

Bio-Techne Corporation:

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data