What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-08-22 compared with 2024-08-22 · 102 added, 124 removed, 260 unchanged (47% of the section changed)

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Our products aid in drug discovery efforts and provide the means for accurate clinical tests and diagnoses.

We manage the business in two operating segments – our Protein Sciences segment and our Diagnostics and Genomics segment.

We manage the business in two operating segments – our Protein Sciences segment and our Diagnostics and Spatial Biology segment.

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.

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.

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

RECENT ACQUISITIONS

A key component of the Company's strategy is to augment internal growth at existing businesses with complementary acquisitions.

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

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

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

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

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

Organic revenue growth was primarily driven by strong commercial execution in our Protein Sciences segment .

Consolidated net earnings for fiscal 2025 decreased 56% compared to fiscal 2024.

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

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

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

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

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

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

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

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

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

The decrease in earnings was driven by a non-recurring gain on the sale of our ChemoCentryx investment, a non-recurring gain on the sale of our investment in Changzhou Eminence Biotechnology Co., Ltd.

(Eminence), and a non-recurring benefit related to the fair value of contingent consideration during fiscal 2023.

The decrease in fiscal 2024 was also impacted by impairment of assets held-for-sale, restructuring charges, and CEO transition related charges.

After adjusting for cost recognized upon

sale of acquired inventory, intangibles amortization, acquisition-related costs, certain litigation charges, gain on sale of investments, stock-based compensation, restructuring and restructuring-related costs, impairment of assets held-for-sale, impact of business held-for-sale, and impact from partially-owned consolidated subsidiaries, adjusted net earnings attributable to Bio-Techne decreased 11% in fiscal 2024 as compared to fiscal 2023.

Adjusted net earnings attributable to Bio-Techne was primarily impacted by the acquisition of Lunaphore and unfavorable volume leverage within Protein Sciences.

For fiscal 2023, consolidated net sales increased 3% as compared to fiscal 2022.

Organic growth was 5%, with foreign currency translation having an unfavorable impact of 2% and acquisitions having an immaterial impact.

Organic revenue growth was primarily driven by consumable growth in both our Diagnostics and Genomics and Protein Sciences segments .

Consolidated earnings, including non-controlling interest, increased 8% compared to fiscal 2022.

The increase in earnings was driven by a gain on the sale of our ChemoCentryx investment and a gain on the sale of our investment in Eminence.

After adjusting for acquisition related costs, intangibles amortization, stock-based compensation, restructuring costs, gain on investments, and impact from partially-owned consolidated subsidiaries, adjusted net earnings attributable to Bio-Techne decreased 1% in fiscal 2023 as compared to fiscal 2022.

Adjusted net earnings attributable to Bio-Techne was primarily impacted by foreign currency exchange and strategic growth investments including the Namocell acquisition.

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

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

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

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

RESULTS OF OPERATIONS

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Protein Sciences

Diagnostics and Genomics

Diagnostics and Spatial Biology

Other revenue (1)

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

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.

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

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

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

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

Organic revenue for the segment increased 5% for the

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

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

In fiscal 2025, Diagnostics and Spatial Biology segment net sales increased 6% compared to fiscal 2024.

Organic growth for the segment was 6% and foreign currency exchange did not have a material impact on revenue growth.

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

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

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

The exclusion of third and fourth quarter of

fiscal 2024 sales related to a held-for-sale business reduced sales by 1%.

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

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

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

Segment revenue was impacted by broad based headwinds.

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

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

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

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

In fiscal 2023, Protein Sciences segment net sales increased 2% compared to fiscal 2022.

Organic growth for the segment was 4% for the fiscal year, with currency translation having an unfavorable impact of 2% on revenue and acquisitions having an immaterial impact on revenue growth.

Segment growth was driven by growth in consumable revenue to BioPharma (especially those developing cell and gene therapies) and Academic customers within the Americas and Europe.

In fiscal 2023, Diagnostics and Genomics segment net sales increased 6% compared to fiscal 2022.

Organic growth for the segment was 8% with currency translation having an unfavorable impact of 2%.

Segment growth was driven by growth in consumable revenue from our Spatial Biology platform and an increase in service revenue related to our ExoDx Prostate test.

Gross Margins

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

Consolidated gross margins were impacted by revenue.

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

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

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

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

Fiscal 2023 consolidated gross margin was unfavorably impacted by foreign currency exchange and strategic growth investments including the Namocell acquisition when compared to fiscal 2022.

Consolidated gross margins for fiscal 2022 were impacted as a result of volume leverage and product mix, partially offset by additional investments made in the business to support future growth.

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

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

Year Ended June 30,

Consolidated gross margin percentage

Total consolidated net sales

Business held-for-sale (2)

Revenue from recurring operations

Gross margin - GAAP

Gross margin percentage - GAAP

Identified adjustments:

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Amortization of intangibles

Stock compensation expense - COGS

Stock-based compensation, inclusive of employer taxes

Restructuring and restructuring-related costs

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Impact of business held-for-sale (2)

Non-GAAP adjusted gross margin percentage

(1) Includes the quarterly results of the partially-owned consolidated subsidiary prior to the sale of this partially-owned consolidated subsidiary to a third party in the first fiscal quarter of 2023 and the full fiscal year of 2022.

Adjusted gross margin

Adjusted gross margin percentage (3)

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

Fiscal year 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.

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

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

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

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Protein Sciences

Diagnostics and Genomics

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

The change in the Protein Sciences segment’s gross margin percentage for fiscal 2023 compared to fiscal 2022 was primarily attributable to mix of product sales within the segment.

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

The change in the Diagnostics and Genomics segment’s gross margin percentage for fiscal 2023 as compared to fiscal 2022 is due to fiscal 2022 revenue related to the ExoTru kidney transplant rejection agreement that did not reoccur in fiscal 2023.

Fiscal 2023 compared to fiscal 2022 was also impacted by strategic investments to drive future growth that was partially offset by volume leverage.

Diagnostics and Spatial Biology

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

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

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

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

Selling, General and Administrative Expenses

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

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

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

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

Selling, general, and administrative expenses increased primarily due to strategic investments made in the business to support future growth including the Namocell acquisition.

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

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Protein Sciences

Diagnostics and Genomics

Diagnostics and Spatial Biology

Total segment expenses

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Acquisition related expenses

Eminence impairment (1)

Certain litigation charges

Restructuring and restructuring-related costs

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Total selling, general and administrative expenses

(1) Refer to the Goodwill Impairment section within the Critical Accounting Policies for further details on the Eminence impairment.

Research and Development Expenses

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

The increase in research and development expenses in fiscal 2024 and fiscal 2023 compared to the prior periods was primarily attributable to strategic growth investments including the acquisitions of Lunaphore and Namocell in fiscal 2024 and fiscal 2023, respectively.

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

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

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Protein Sciences

Diagnostics and Genomics

Diagnostics and Spatial Biology

Total research and development expenses

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

During fiscal 2024, average monthly outstanding debt was higher than fiscal 2023 leading to increased interest expense compared to fiscal 2023.

Net interest expense in fiscal 2023 decreased when compared to fiscal 2022 due to a favorable rate on a forward starting interest rate swap as disclosed in Note 5 that went into effect in fiscal year 2023.

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

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

Other Non-Operating Income / (Expense), Net

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Real estate taxes, depreciation and utilities

Gain on investment

Loss on equity method investment

Gain (Loss) on investment

Gain (Loss) on equity method investment

Miscellaneous (expense) income

Other non-operating income (expense), net

During fiscal 2024, the Company recognized a gain of $0.3 million related to the sale of our exchange traded bond funds.

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

During fiscal 2023, the Company recognized gains of $37.2 million related to the sale of our ChemoCentryx, Inc.

(CCXI) investment, $11.7 million related to the sale of our Eminence investment, and a gain of $0.4 million related to the change in fair value of our exchange traded bond funds.

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

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

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

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

During fiscal 2022, the Company recognized gains of $16.1 million related to changes in fair value associated with changes in the stock price of our CCXI investment.

Additionally, the Company recognized losses of $1.1 million related to changes in fair value associated with changes in the stock price of our exchange traded investment grade bond funds.

On August 4, 2022, the Company sold all of its shares in CCXI.

Income taxes for fiscal 2025, 2024, and 2023 were at effective rates of 25.5%, 9.5%, and 15.7%, respectively, of consolidated earnings before income taxes.

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Certain litigation charges

Eminence impairment

Gain on sale of partially-owned consolidated subsidiaries

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

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

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

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jurisdictional mix of the identified non-GAAP adjustments.

The following table summarizes the reported GAAP tax rate and the effective Non-GAAP adjusted tax rate for the periods ended June 30, 2024, 2023, and 2022.

The following table summarizes the reported GAAP tax rate and the effective Non-GAAP adjusted tax rate for fiscal 2025, 2024, and 2023.

Year Ended June 30,

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Cash, cash equivalents and available-for-sale investments at June 30, 2025 were $162.2 million compared to $152.9 million at June 30, 2024.

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

There were no certificiates of deposit in the prior comparable period.

As of June 30, 2023, there was $23.7 million included in the available-for-sale investments related to the fair value of the Company’s investment in exchange traded investment grade bond funds.

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

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

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

and other European countries.

At June 30, 2024, all of the Company’s available-for-sale investment account balances of $1.1 million were located in Europe.

At June 30, 2025, we had $346.0 million in borrowings under the revolving credit facility, resulting in $654.0 million of unutilized availability under our revolving credit facility.

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The Company generated cash from operations of $287.6 million, $299.0 million, and $254.4 million in fiscal 2025, 2024, and 2023, respectively.

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

The increase in cash generated from operating activities in fiscal 2024 as compared to fiscal 2023 was mainly a result of changes in the timing of cash payments on certain operating assets and liabilities.

The decrease in cash generated from operating activities in fiscal 2023 as compared to fiscal 2022 was mainly a result of changes in net earnings and changes in the timing of cash payments on certain operating assets and liabilities.

Cash Flows From Investing Activities

We continue to make investments in our business, including capital expenditures to enable revenue growth.

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

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

There were no acquisitions in fiscal year 2022.

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

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

There were no acquisitions in fiscal 2025.

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

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

There were no comparable activities in fiscal 2024 and 2023.

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

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There were no comparable activities in fiscal 2025 and 2024.

The Company’s net proceeds (outflow) from the purchase, sale and maturity of available-for-sale investments in fiscal 2024, 2023, and 2022 were $22.6 million, $14.7 million, and $(26.9) million, respectively.

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

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

The outflow of cash in fiscal year 2022 compared to fiscal year 2024 and fiscal year 2023 was driven by the purchase of the exchange traded investment grade bond funds in fiscal year 2022, which had a cost basis of $25.0 million, that did not reoccur in the comparative periods.

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

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

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

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

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

Capital additions in fiscal year 2024, 2023, and 2022 were $62.9 million, $38.2 million, and $44.9 million.

Capital additions in fiscal 2025, 2024, and 2023 were $31.0 million, $62.9 million, and $38.2 million.

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

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

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

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

During the year ended June 30, 2022, the Company paid $25 million to enter into a two-part forward contract which requires the Company to purchase the full equity interest in Wilson Wolf if certain annual revenue or EBITDA thresholds are met.

During fiscal year 2023, Wilson Wolf met the EBITDA target and the Company paid an additional $232 million to acquire 19.9% of Wilson Wolf.

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

During fiscal 2023, Wilson Wolf met the EBITDA target and the Company paid an additional $232 million to acquire 19.9% of Wilson Wolf.

Since the first part of the forward contract has been triggered, the second part of the forward contract will automatically trigger, which requires the Company to acquire the remaining 80.1% of Wilson Wolf on December 31, 2027.

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The second option payment of approximately $1 billion plus potential contingent consideration is forecasted to occur between fiscal 2026 and fiscal 2028.

During fiscal 2024, the Company received tax distributions from Wilson Wolf of $7.0 million.

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

Cash Flows From Financing Activities

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Repayments of $77.0 million, $256.0 million, and $525.7 million were made on its line-of-credit in fiscal 2025, 2024, and 2023, respectively.

There were no payments during fiscal 2024 nor fiscal 2023 for contingent consideration.

During fiscal 2022, the Company made $4.0 million in cash payments towards the Quad contingent consideration liability.

Of the $4.0 million in total

payments, $0.7 million is classified as financing on the statement of cash flows.

The remaining $3.3 million was recorded as operating on the statement of cash flows as it represents the consideration liability that exceeds the amount of the contingent consideration liability recognized at the acquisition date.

During fiscal 2024, 2023 and 2022, the Company paid $21.9 million, $28.9 million and $23.5 million, respectively, for taxes remitted on behalf of participants in net share settlement transactions and restricted stock units.

During fiscal 2025, 2024 and 2023, the Company paid $6.5 million, $21.9 million and $28.9 million, respectively, for taxes remitted on behalf of participants in net share settlement transactions, restricted stock, and restricted stock units.

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

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The resulting cash flow, which is attributable solely to the primary asset acquired, is then discounted at a rate of return commensurate with the risk of the asset to calculate a present value.

The Trade Name is generally calculated using the relief from royalty method, which calculates the cost savings associated with owning rather than licensing the technology.

The trade name fair value is generally calculated using the relief from royalty method, which calculates the cost savings associated with owning rather than licensing the technology.

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

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For potential payments related to financial performance based milestones, projected revenue and/or EBITDA amounts, volatility and discount rates assumptions are included in the estimated amounts.

For potential payments related to product development milestones, the fair value is based on the

probability of achievement of such milestones.

For potential payments related to product development milestones, the fair value is based on the probability of achievement of such milestones.

The excess of the purchase price over the estimated fair value of the net assets acquired is recorded as goodwill.

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

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

Each reporting period, we evaluate the remaining

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

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

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The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative test.

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.

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 value of a reporting unit is less than its carrying amount, including goodwill.

The Company may elect to bypass the qualitative assessment for its reporting units and perform a quantitative test.

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

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

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

During the fourth quarter of fiscal 2025, as part of restructuring actions, certain assets and liabilities associated with a disposal group in our Diagnostics and Spatial Biology segment were classified as held-for-sale as of May 31, 2025.

Given the upcoming divestiture, the Company identified a triggering event and performed impairment testing during May 2025.

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

The Company did not identify any additional triggering events

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

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

The Company determined, after performing the qualitative analysis, there was no evidence that it 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.

second quarter of fiscal 2024, as part of restructuring 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.

During the second quarter of fiscal 2024, as part of restructuring 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.

Given the upcoming divestiture, the Company identified a triggering event and performed impairment testing during the second half of fiscal 2024.

The impairment test resulted in a total impairment charge of $22.0 million, which includes the allocated goodwill, which we have further described within Note 14.

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.

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

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

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

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

In the first quarter of fiscal 2022, the Company combined the management of the Exosome Diagnostics and Asuragen reporting units, both of which were included in the Diagnostics and Genomics operating segment.

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

The qualitative assessment identified no indicators of impairment.

In the second quarter of fiscal 2022 Eminence notified the Company of its need for additional capital to execute its growth plan.

The Company first attempted to find outside equity financing support for the Eminence investment but was unable to do so.

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.

Therefore, the Company did not provide additional funding to Eminence.

As a result of not obtaining additional financing, Eminence notified the Company of its plans to cease operations and liquidate its business.

Given the upcoming 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.

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.

The Company also recognized inventory and fixed asset impairment charges of $0.9 million and $0.9 million, respectively.

The Company recorded the impairment charges within the General and Administrative line in the Consolidated Income Statement.

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.

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.

The Company also had $4.5 million related to current liabilities.

The Company held a financial interest of approximately 57.4% in those tangible assets in the liquidation process.

As described in Note 1, in the fourth quarter of fiscal 2022, Eminence was able to secure cash deposits on future orders to provide funding for their operations.

This delay in liquidation allowed time for securing of additional investor financing which coincided with the sale of the Company's equity shares of Eminence in the first quarter of fiscal 2023.

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.

The qualitative assessment identified no indicators of impairment.

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.

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.

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

NEW ACCOUNTING PRONOUNCEMENTS

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SUBSEQUENT EVENTS

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.

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

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

NON-GAAP FINANCIAL MEASURES

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

There was no revenue from partially-owned consolidated subsidiaries in fiscal year 2024 due to the sale of Changzhou Eminence Biotechnology Co., Ltd.

(Eminence) in the first quarter of fiscal 2023.

Revenue from partially-owned consolidated subsidiaries was $2.0 million for the year ended June 30, 2023.

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

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

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

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The Company periodically reassesses the components of our non-GAAP adjustments for changes in how we evaluate our performance, changes in how we make financial and operational decisions, and considers the use of these measures by our competitors and peers to ensure the adjustments are still relevant and meaningful.

Readers are encouraged to review the reconciliations of the adjusted financial measures used in management’s discussion and analysis of the financial condition of the Company to their most directly comparable GAAP financial measures provided within the Company’s consolidated financial statements.

Readers are encouraged to review the reconciliations of the adjusted financial measures used in management’s discussion and analysis of the financial condition of the Company to the most directly comparable GAAP financial measures provided within the Company’s Consolidated Financial Statements.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis