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Bio-Techne Q4 Revenues Drop 8 Percent

The story has been updated to include comments from the company's conference call.

NEW YORK – Bio-Techne said on Tuesday morning that its total fiscal fourth quarter sales declined 8 percent year over year while its Diagnostics and Genomics segment was essentially flat.

For the three months ended June 30, the Minneapolis-based company reported sales of $175.8 million, down from $191.7 million a year ago. It beat the consensus Wall Street estimate of $163.9 million. Organically, sales in Q4 2020 also declined 8 percent.

Diagnostics and Genomics sales grew a fraction of 1 percent to $48.7 million from $48.5 million with organic growth at 1 percent. Protein Sciences segment sales were $127.3 million, an 11 percent drop-off from $143.4 million in Q4 2019. Organically, sales in the segment were down 11 percent.

In a statement, Bio-Techne said that coronavirus-related customer site shutdowns in its academic and biopharma end markets that started in Q3 and continued into Q4 negatively affected sales growth in the quarter, as well as in full-year 2020. While more customer sites began to open at the end of the fourth quarter, the company said it is unable to forecast the impact of customer site closures moving forward "given the uncertainty that some customer sites may reclose due to increases in COVID-19 cases. … We are anticipating a positive long-term outlook for sales growth resulting from expected future funding increases within life-science research in response to the current pandemic."

"With the COVID-19 pandemic in full swing, we just finished the most challenging quarter in my tenure at Bio-Techne and perhaps the most challenging in the history of the company," the firm's CEO and President Chuck Kummeth said in a conference call to discuss the financial results.

"We persevered through the last quarter of our fiscal year 2020 by outperforming the expectations we set one quarter ago and maintaining a high level of profitability and positive cash flow, all while pivoting a large number of our technical resources toward developing products that will help our customers and society at large to eventually defeat this virus," Kummeth added.

Prior to the pandemic, the firm was on track to post double-digit organic growth in fiscal 2020 and it anticipates returning to the level of growth when its customers "eventually return to their labs and clinics," he said.

In Q4, Bio-Techne's products in China performed well, Kummeth said, posting organic growth greater than 20 percent after falling to mid-single digits early in the pandemic. "Over the long term, our China business remains in the early innings of its growth trajectory and there is runway for many more years of 20 percent annual growth ahead," he added.

Kummeth noted that Bio-Techne and Mount Sinai Health System recently announced a partnership to initiate further development, scaled manufacturing, and distribution of a Mount Sinai-developed serology testing kit for SARS-CoV-2.

As part of the deal, Bio-Techne is collaborating with Kantaro Biosciences, a joint venture of New York-based Mount Sinai and Renalytix AI, a London-based developer of artificial intelligence-based in vitro diagnostic products for kidney disease. Kantaro Biosciences on Monday submitted a request to the US Food and Drug Administration for an Emergency Use Authorization for use of the serological assay.

"We anticipate the EUA process to be complete in mid to late August," Kummeth said. "We believe serology test volumes will increase as a second wave of testing emerges, focusing on the surveillance activities necessary to reopen the economy and to help better manage vaccination programs once available."

Bio-Techne reported a profit of $58.8 million, or $1.48 per share, in Q4 2020, compared to a profit of $16.5 million, or $.42 per share, a year ago. Adjusted EPS was $1 and beat the consensus Wall Street estimate of $.75.

Its R&D costs grew 3 percent year over year to $16.8 million from $16.3 million, while its SG&A costs retreated almost 17 percent to $57.2 million in Q4 2020 from $68.7 million in Q4 2019. 

For full fiscal year 2020, Bio-Techne's sales were up 3 percent to $738.7 million from $714.0 million in 2019. Sales grew 4 percent organically. The company beat the analysts' average estimate of $726.8 million.

Diagnostics and Genomics had sales of $184.5 million in fiscal 2020, an increase of 8 percent from $171.7 in 2019, with organic growth at 8 percent also. Protein Sciences sales rose 2 percent to $555.4 million from $543.2 million a year ago with organic growth at 3 percent. 

The firm's profit rose to $229.3 million, or $5.82 per share, from $96.1 million, or $2.47 per share, in 2019. Adjusted EPS of $4.55 beat the consensus Wall Street estimate of $4.29.

Bio-Techne ended fiscal 2020 with $146.6 million in cash and cash equivalents and $124.3 million in short-term available-for-sale investments.

The company also said on Tuesday that its board of directors has approved a dividend of $.32 per share, payable on Aug. 28 to shareholders of record on Aug. 18.

In afternoon trading on the Nasdaq, Bio-Techne's shares were down more than 4 percent at $266.53.

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