Bio-Techne (TECH) 10-K risk factor changes: FY2015 vs FY2014

The Company’s biotechnology [added: and protein platforms] products are sold primarily to research scientists at pharmaceutical and biotechnology companies and at university and government research institutions.

The U.S. and global economies [removed: have] [added: recently] experienced a period of economic [removed: downturn.][added: downturn and have been slow to recover.]

There can be no assurance that the Company will engage in any [added: additional] acquisitions or divestitures or that the Company will be able to do so on terms that will result in any expected benefits.

The Company engages in business globally, with approximately [removed: 47%] [added: 46%] of the Company’s sales revenue in fiscal [removed: 2014] [added: 2015] coming from outside the U.S. This subjects the Company to a number of risks, including international economic, political, and labor conditions; tax laws (including U.S. taxes on foreign subsidiaries); increased financial accounting and reporting burdens and complexities; unexpected changes in, or impositions of, legislative or regulatory requirements; failure of laws to protect intellectual property rights adequately; inadequate local infrastructure and difficulties in managing and staffing international operations; delays resulting from difficulty in obtaining export licenses for certain technology; tariffs, quotas and other trade barriers and restrictions; transportation delays; operating in locations with a higher incidence of corruption and fraudulent business practices; and other factors beyond the Company’s control, including terrorism, war, natural disasters, climate change and diseases.

Non-compliance could also result in fines, damages, criminal sanctions, [removed: prohibitions] [added: prohibited] business conduct, and damage to the Company’s reputation.

The Company conducts and plans to grow its business in developing [removed: markets.][added: markets, which may cause additional operational and legal risk.]

Approximately [removed: 30%] [added: 24%] of the Company’s net sales in fiscal [removed: 2014] [added: 2015] were made through its foreign subsidiaries, which transact their sales in foreign currencies.

The Company may incur losses as a result of its investments in ChemoCentryx, [removed: Inc., CyVek, Inc. and] [added: Inc. and] other companies in which [removed: is does] [added: it does] not have a majority interest, the success of which is largely out of the Company’s control.

The Company has an approximate 14% equity investment in ChemoCentryx, Inc. (CCXI) that is valued at [removed: $37.1] [added: $52.3] million on the Company’s June 30, [removed: 2014] [added: 2015] Consolidated Balance Sheet.

CCXI is dependent on a limited number of products, must achieve favorable clinical trial results, obtain regulatory and marketing approval for these [removed: products and is reliant on a strategic alliance with GlaxoSmithKline.][added: products.]

These factors make it possible that the Company could experience future dilution or a decline in the [removed: $7.6] [added: $22.8] million unrealized gain it has on its CCXI investment and/or its original $29.5 million investment in CCXI.

At August [removed: 22, 2014,] [added: 26, 2015,] the market value of the Company’s investment in CCXI was [removed: $30.9] [added: approximately $44] million.

Recruiting and retaining qualified scientific, [removed: production] [added: production, sales] and [added: marketing, and] management personnel are critical to the Company’s success.

[removed: In addition, the] [added: The] Company’s success depends in part on its ability to operate without infringing the proprietary rights of others, and to obtain licenses where necessary or appropriate.

As of July 31, [removed: 2014,] [added: 2015,] the Company had drawn [removed: $125] [added: $73] million under the Credit Agreement.

| | [removed: • |] [added: ■] | limiting our ability to obtain additional financing to fund our working capital, capital expenditures, debt service requirements, expansion strategy, or other needs; |

| | [removed: • |] [added: ■] | increasing the Company’s vulnerability to, and reducing its flexibility in planning for, adverse changes in economic, industry and competitive conditions; and |

| | [removed: • |] [added: ■] | increasing the Company’s vulnerability to increases in interest rates. |

The approval process applicable to clinical control products [removed: of the type] [added: and certain immunoassay kits] that may be developed by the Company may take a year or more.

[removed: Quality] [added: The Company’s internal quality] control, packaging and distribution operations support [removed: all] [added: the majority] of the Company’s sales.

Since [added: certain Company products must comply with Food and Drug Administration Quality System Regulations and because in all instances,] the Company creates value for its customers through the development of high-quality products, any significant decline in quality or disruption of operations for any reason, particularly at the Minneapolis facility, could adversely affect sales and customer relationships, and therefore adversely affect the business.

During fiscal 2015, the Company acquired Novus, ProteinSimple, and CyVek, In July 2016, we acquired Cliniqa Corporation.

In fiscal 2015, for example, the exchange rate between the Euro and the US dollar changed materially, resulting in consolidated net sales that were approximately $8.5 million lower in fiscal 2015 when compared to fiscal 2014.

If we fail to protect our intellectual property, third parties may be able to compete more effectively against us, we may lose our technological or competitive advantage, or we may incur substantial litigation costs in our attempts to recover or restrict use of our intellectual property.

The Company also attempts to protect and maintain intellectual property through the patent process.

As of June 30, 2015, we owned or exclusively licensed 45 granted U.S. patents and approximately 50 pending patent applications.

We cannot be confident that any of our currently pending or future patent applications will result in granted patents, and we cannot predict how long it will take for such patents to be granted.

It is possible that, if patents are granted to us, others will design around our patented technologies.

Further, other parties may challenge any patents granted to us and courts or regulatory agencies may hold our patents to be invalid or unenforceable.

We may not be successful in defending challenges made against our patents and patent applications.

Any successful third-party challenge to our patents could result in the unenforceability or invalidity of such patents.

Our ability to establish or maintain a technological or competitive advantage over our competitors may be diminished because of these uncertainties.

To the extent our intellectual property offers inadequate protection, or is found to be invalid or unenforceable, we would be exposed to a greater risk of direct competition.

If our intellectual property does not provide adequate coverage of our competitors’ products, our competitive position could be adversely affected, as could our business.

Both the patent application process and the process of managing patent disputes can be time consuming and expensive.

We may be involved in lawsuits to determine the scope, coverage and validity of others’ proprietary rights, or to defend against third-party claims of intellectual property infringement, any of which could be time-intensive and costly and may adversely impact our business.

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

We may experience difficulties implementing our enterprise resource planning system.

We are implementing a new enterprise resource planning (“ERP”) system.

Our ERP system is critical to our ability to accurately maintain books and records, record transactions, provide important information to our management and prepare our financial statements.

The implementation of the new ERP system requires the investment of significant financial and human resources.

In addition, we may not be able to successfully complete the implementation of the new ERP system without experiencing difficulties.

Any disruptions, delays or deficiencies in the design and implementation of the new ERP system could adversely affect our ability to process orders, ship products, provide services and customer support, send invoices and track payments, fulfill contractual obligations or otherwise operate our business.

We are now subject to regulations related to “conflict minerals” which may cause us to incur additional expenses and could limit the supply and increase the cost of certain metals used in manufacturing our products.

With our acquisitions of ProteinSimple and CyVek in 2014, we now manufacture and sell products that may be covered under the Securities and Exchange Commission’s (SEC) rule regarding “conflict minerals.” We are now required to determine whether these products contain conflict minerals, and, if so, to perform an extensive inquiry into our supply chain in an effort to determine whether or not such conflict minerals originate from the Democratic Republic of Congo (DRC) or an adjoining country.

Under the regulations, we are required to file a report with the SEC by May 31, 2017, to disclose and report whether or not such conflict minerals originate from the DRC or an adjoining country.

Complying with this regulation could affect sourcing at competitive prices and availability in sufficient quantities of certain minerals used in the manufacture of our products, including tantalum, tin, gold and tungsten.

The number of suppliers who provide conflict-free minerals may be limited.

In addition, there may be material costs associated with complying with the disclosure requirements, such as costs related to determining the source of certain minerals used in our products, as well as costs of possible changes to products, processes, or sources of supply as a consequence of such verification activities.

We may not be able to sufficiently verify the origins of the relevant minerals used in our products through the due diligence procedures that we implement, which may harm our reputation.

In addition, we may encounter challenges to satisfy those customers who require that all of the components of our products be certified as conflict-free, which could place us at a competitive disadvantage if we are unable to do so.

##### [Table of Contents](#toc)

In early fiscal 2014, the Company finalized the acquisition of Bionostics.

In the last quarter of fiscal 2014, the Company acquired PrimeGene and announced its investment in CyVek and its intention to acquire the remaining shares of CyVek in the event certain milestones were met.

Subsequent to the close of fiscal 2014, the Company also acquired Novus and ProteinSimple.

On April 1, 2014, the Company invested $10 million in CyVek, Inc. in exchange for shares of CyVek’s common stock representing approximately 19.9% of the outstanding voting stock of CyVek.

In connection with this investment, the Company also became a party to CyVek’s existing investor agreements and has an observer seat on CyVek’s board of directors.

CyVek is an instrument company that has developed a microfluidics instrument platform and related reagents for performing immunoassays and other assays for the research market.

Cyvek has incurred significant losses and has not yet achieved profitability.

There is no assurance that the Company’s investment in CyVek will bring sufficient returns, and may in fact result in losses.

| --- | --- | --- | --- |

The Company manufactures the majority of the products it sells at its Minneapolis, Minnesota facility.

The principal forward-looking statements in this report [removed: include:] [added: include] the Company’s expectations regarding product releases and strategy, [added: future financial results,] acquisition activity, [removed: governmental license renewals,] [added: the competitive environment, currency fluctuation and exchange rates,] capital expenditures, the performance of the Company’s investments, future dividend declarations, the construction and lease of certain facilities, the adequacy of owned and leased property for future operations, anticipated financial results and sufficiency of capital resources to meet the Company’s foreseeable future cash and working capital requirements.

The adjusted financial measures used in this Annual Report on Form 10-K quantify the impact the following events had on reported net sales, gross margin percentages and net earnings for fiscal [removed: 2014] [added: 2015] as compared to fiscal [removed: 2013] [added: 2014] and [removed: 2012:][added: 2013:]

| | [removed: • |] [added: ■] | fluctuations in exchange rates used to convert transactions in foreign currencies (primarily the Euro, British pound sterling and Chinese yuan) to U.S. dollars; |

| | [removed: • |] [added: ■] | the [removed: acquisition] [added: acquisitions in fiscal 2015] of [removed: Bionostics Holdings, Ltd. (Bionostics)] [added: CyVek, Inc. (CyVek)] on [added: November 4, 2014, ProteinSimple on] July [removed: 22, 2013] [added: 31, 2014,] and [removed: Shanghai] [added: Novus Biologicals, LLC (Novus) on July 1, 2014 and in fiscal 2014 of Shanghai-based] PrimeGene Bio-Tech Co. (PrimeGene) on April 30, [removed: 2014,] [added: 2014 and Bionostics Holdings, Ltd. (Bionostics) on July 22, 2013] including the impact of amortizing intangible assets and the recognition of costs upon the sale of inventory written-up to fair value; |

| | [removed: • |] [added: ■] | professional fees and other costs incurred as part of the [removed: acquisition] [added: acquisitions] of [removed: Bionostics] [added: CyVek, ProteinSimple,] and [removed: PrimeGene] [added: Novus] in fiscal [removed: 2014, the acquisitions] [added: 2015 and] of [removed: Novus Biologicals LLC (Novus)] [added: Bionostics] and [removed: ProteinSimple, which closed] [added: PrimeGene] in [removed: July 2014, and on-going acquisition activity;] [added: fiscal 2014;] |

| | [removed: • |] [added: ■] | income tax adjustments related to the reinstatement of the U.S. credit for research and development expenditures in fiscal 2013, the expiration of the credit on December 31, 2013, and the reversal of valuation allowances on deferred tax assets in fiscal 2012; and |

Bio-Techne operates worldwide and has [removed: two] [added: three] reportable [removed: business segments, Biotechnology and Clinical Controls, both of which service] [added: segments based on] the [removed: life science] [added: nature of products; they are Biotechnology, Clinical Controls] and [removed: diagnostic markets.][added: Protein Platforms.]

After adjusting for the [added: 11%] impact of the Bionostics and PrimeGene acquisitions in fiscal 2014, as well as [added: 2% positive impact of] foreign currency fluctuations, organic sales for the year increased 3%.

The growth was broad-based, with the Company achieving organic growth in both [added: the Biotechnology and Clinical Controls] reporting segments and in most regions of the world.

For fiscal [removed: 2013,] [added: 2015,] consolidated net sales [removed: decreased 1%] [added: increased 26%] as compared to fiscal [removed: 2012.][added: 2014.]

Consolidated GAAP net earnings [removed: were flat] [added: decreased 3%] for fiscal [removed: 2013] [added: 2015] as compared to fiscal [removed: 2012.][added: 2014.]

After adjusting for acquisition related costs and certain income tax [removed: and impairment] items in both years, adjusted net earnings [removed: decreased 3%] [added: increased 1%] in fiscal [removed: 2013] [added: 2015] as compared to fiscal [removed: 2012.][added: 2014.]

The [removed: lower earnings in fiscal 2013 resulted from lower revenue coupled with a 5% increase in research and development investment and a 4%] [added: remaining] increase in selling, general and administrative [removed: costs primarily related to] [added: expenses in fiscal 2014 included] investments made in global commercial resources, administrative infrastructure, and annual wage, salary and benefits increases.

Consolidated organic net [removed: sales, excluding] [added: sales exclude] the impact of net sales contributed by companies acquired during the fiscal year and the effect of the change from the prior year in exchange rates used to convert sales in foreign currencies (primarily British pound sterling, euros and Chinese yuan) into U.S. [removed: dollars, were as follows (in thousands):][added: dollars.]

| Consolidated net sales | | $ | [added: 452,247 | | | $ |] 357,763 | | | $ | 310,575 | |

| Organic sales [removed: adjustments:] [added: growth] | | | [added: 4] | [added: %] | | | [added: 3] | [added: %] |

| Impact of foreign currency fluctuations | | | [removed: (3,500] [added: \-2] | [removed: )] [added: %] | | | [removed: 0] [added: 2] | [added: %] |

| [removed: Organic] [added: Acquisitions] sales growth | | | [removed: 3] [added: 25] | % | | | [added: 11] | [added: %] |

[removed: Net] [added: Consolidated net] sales by reportable segment were as follows (in thousands):

| Biotechnology | | $ | [removed: 300,578] [added: 325,897] | | | $ | [removed: 288,156] [added: 300,578] | | | $ | [removed: 293,274] [added: 288,156] | |

| Clinical Controls | | | [removed: 57,185] [added: 60,377] | | | | [removed: 22,419] [added: 57,185] | | | | [removed: 21,286] [added: 22,419] | |

In fiscal [removed: 2013,] [added: 2015,] Biotechnology segment net sales [removed: decreased 2%] [added: increased 8%] from the prior fiscal year.

[added: In fiscal 2014,] Clinical Controls segment net sales increased $34.8 [removed: million in] [added: million, or 61% from the prior] fiscal [removed: 2014.][added: year.]

Clinical Controls segment organic net sales increased 7% [removed: and 5%, respectively,] in fiscal 2014 [removed: and 2013] from each of the prior fiscal [removed: years,] [added: year,] primarily as a result of strong end-market demand and operational execution.

[removed: _Gross Margins_][added: _Gross Margins_]

Consolidated gross margins were [removed: 70%, 74%] [added: 68%, 70%] and [removed: 75%] [added: 74%] in fiscal [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012,] [added: 2013,] respectively.

GAAP reported consolidated gross margins were negatively impacted as a result of purchase accounting related to inventory and intangible assets acquired during fiscal [removed: 2014] [added: 2015, 2014, 2013] and prior years.

Excluding the impact of acquired inventory sold and amortization of intangibles, adjusted gross margins were [removed: 74%, 77%] [added: 72%, 74%] and [removed: 78%] [added: 77%] in fiscal [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012,] [added: 2013,] respectively.

| Consolidated gross margin percentage | | | [removed: 70.3] [added: 67.9] | % | | | [removed: 74.4] [added: 70.3] | % | | | [removed: 75.0] [added: 74.4] | % |

| Costs recognized upon sale of acquired inventory | | | [removed: 2.1] [added: 1.5] | % | | | [removed: 1.4] [added: 2.1] | % | | | [removed: 2.4] [added: 1.4] | % |

| Amortization of intangibles | | | [removed: 1.1] [added: 2.1] | % | | | [removed: 1.0] [added: 1.1] | % | | | 1.0 | % |

| Adjusted gross margin percentage | | | [removed: 73.5] [added: 71.6] | % | | | [removed: 76.8] [added: 73.5] | % | | | [removed: 78.4] [added: 76.8] | % |

| Biotechnology | | | [removed: 76.3] [added: 77.8] | % | | | [removed: 76.4] [added: 76.3] | % | | | [removed: 76.9] [added: 76.4] | % |

| Clinical Controls | | | [removed: 38.5] [added: 40.1] | % | | | [removed: 49.0] [added: 38.5] | % | | | [removed: 48.6] [added: 49.0] | % |

| Consolidated | | | [removed: 70.3] [added: 67.9] | % | | | [removed: 74.4] [added: 70.3] | % | | | [removed: 75.0] [added: 74.4] | % |

The Clinical Controls segment gross margin percentage for fiscal [added: 2015 and] 2014 was negatively impacted by purchase accounting and intangible asset amortization related to the acquisition of Bionostics in July 2013, as discussed [removed: above.][added: above, as well as reduced pricing for it’s glucose-based control products]

[removed: _Selling,] [added: _Selling,] General and Administrative [removed: Expenses_][added: Expenses_]

Selling, general and administrative expenses increased [removed: $17.3] [added: $58.7] million [removed: (40%)] [added: (97%)] and [removed: $1.7] [added: $17.3] million [removed: (4%)] [added: (40%)] in fiscal [removed: 2014] [added: 2015] and [removed: 2013,] [added: 2014,] respectively.

Selling, general and administrative expenses in fiscal 2014 also included $2.2 million of acquisition related professional [removed: fees compared to $0.6 million in fiscal 2013.][added: fees.]

The remaining increase in selling, general and administrative expenses in fiscal [removed: 2014 and in fiscal 2013] [added: 2015] included investments made in global commercial resources, administrative infrastructure, [added: non-cash stock based compensation,] and annual wage, salary and benefits increases.

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| | ■ | the gain on the purchase of CyVek |

| --- | --- | --- |

The Protein Platforms reporting segment includes the product lines associated with the acquisitions of ProteinSimple in July, 2014 and CyVek in November, 2014, both of which expand the Company’s solutions that it can offer its customers by developing and commercializing proprietary systems and consumables for protein analysis.

After adjusting for the impact of the Novus, ProteinSimple and CyVek acquisitions in fiscal 2015, as well as foreign currency fluctuations, organic sales for the year increased 4% with currency translation having a negative impact of 2% and acquisitions contributing 25% to the revenue growth.

The organic growth was broad-based, with the Company achieving growth in both the Biotechnology and Clinical Controls reporting segments.

A strong bio-pharma end-market in the US and significant government funding of life science research in China were the biggest contributing factors impacting organic growth.

Adjusted earnings growth was driven by increased organic sales and contribution from acquisitions partially offset by a negative impact from foreign currency translation.

_Net_ _S__ales_

Consolidated net sales growth was as follows:

| | | _201__5_ | | | | _201__4_ | | |

| Consolidated net sales growth (may not foot due to rounding) | | | 26 | % | | | 15 | % |

| | | _201__5_ | | | | _201__4_ | | | | _20__13_ | | |

| Protein Platforms | | | 66,247 | | | | 0 | | | | 0 | |

| Intersegment | | | (273 | ) | | | 0 | | | | 0 | |

Included in fiscal 2015 Biotechnology segment net sales was $18.5 million generated by the acquisition of Novus Biologicals in July 2014 and the negative impact of foreign currency fluctuations of $8.5 million.

Excluding these amounts, organic net sales for the segment increased 3% in fiscal 2015, driven by a strong bio-pharma end-market in the US and significant government funding of life science research in China.

The academia and government end-market in the U.S. continued to improve sequentially each quarter in 2015, which the Company capitalized on through its distribution partnership with Fisher Scientific.

In Europe, most countries experienced growth in 2015, but this growth was negated by the timing of research cycles experienced by the Company’s large pharma customers located in Germany.

The Pacific Rim regions delivered modest growth, with the exception of Japan, where the devaluation of the yen versus the US dollar encouraged local distributors to hold lower levels of inventory than in the prior year.

In fiscal 2015, Clinical Controls segment net sales increased 6%, with organic sales contributing 5% to growth and the acquisition of Bionostics contributing 1% to growth.

Growth came equally from solid demand for both the segment’s hematology-based controls and blood glucose/gas-based controls attributable to close relationships with our OEM customers.

In fiscal 2015, the new Protein Platforms segment generated net sales of $66.2 million.

This segment includes the ProteinSimple product lines associated with the acquisitions of ProteinSimple in July, 2014 and CyVek in November, 2014, both of which expand the Company’s solutions that it can offer its customers by developing and commercializing proprietary systems and consumables for protein analysis.

| | | _201__5_ | | | | _201__4_ | | | | _20__13_ | | |

In fiscal 2015, the biggest impact to gross margin, as compared to fiscal 2014, was the change in product mix associated with the acquisitions of Novus, ProteinSimple, and CyVek.

| | | _201__5_ | | | | _201__4_ | | | | _20__13_ | | |

| Protein Platforms | | | 57.8 | % | | | | | | | | |

The Biotechnology segment gross margin percentage for fiscal 2015 was negatively impacted by purchase accounting and intangible asset amortization related to the Novus acquisition in July 2014, as well as foreign currency translation, as discussed above.

The increase in fiscal 2015 was mainly the result of the acquisitions of Novus, ProteinSimple, and CyVek including $37.1 million of selling, general and administrative expenses by the acquired companies and an increase of $10.5 million of intangible amortization compared to fiscal 2014.

Selling, general and administrative expenses in fiscal 2015 also included $4.5 million of acquisition related professional fees.

| | | _201__5_ | | | | _20__14_ | | | | _20__13_ | | |

| Protein Platforms | | | 39,144 | | | | | | | | | |

| | | _201__5_ | | | | _20__14_ | | | | _20__13_ | | |

| Protein Platforms | | | 11,023 | | | | | | | | | |

| | | _201__5_ | | | | _20__14_ | | | | _20__13_ | | |

Other non-operating expenses, net for the twelve months ended June 30, 2015 included a non-taxable gain of $8.3 million on the Company’s previous investment in CyVek discussed above.

| --- | --- | --- | --- |

| | • | | impairment losses related to the Company’s investments in unconsolidated entities. |

##### [Table of Contents](#toc)

There were no acquisitions made in fiscal 2013 or fiscal 2012 and the impact from foreign currency fluctuation was minimal.

The U.S. market in the Biotechnology segment was particularly soft in 2013, with lower National Institute of Health (NIH) funding for our academic customers coupled with industry consolidation in the pharma and biotech markets.

_Net Sales_

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | _Year Ended June 30,_ | | | | | | |

| | | _2014_ | | | | _2013_ | | |

| Acquisitions | | | (33,879 | ) | | | 0 | |

| Consolidated organic net sales | | $ | 320,384 | | | $ | 310,575 | |

| | | _2013_ | | | | _2012_ | | |

| Consolidated net sales | | $ | 310,575 | | | $ | 314,560 | |

| Impact of foreign currency fluctuations | | | 2,637 | | | | 0 | |

| Consolidated organic net sales | | $ | 313,212 | | | $ | 314,560 | |

| Organic sales growth (decline) | | | (0.4 | %) | | | | |

| | | | | | | | | | | | | |

| | | _2014_ | | | | _2013_ | | | | _2012_ | | |

| | | $ | 357,763 | | | $ | 310,575 | | | $ | 314,560 | |

Biotechnology segment organic net sales, excluding the negative impact of foreign currency fluctuations of $2.6 million, decreased 1% in fiscal 2013, primarily as a result of lower NIH funding and pharma consolidation in the U.S. Included in fiscal 2013 net sales were $2.8 million of sales of new biotechnology products during the fiscal year.

Interest income in fiscal 2013 remained flat from fiscal 2012 as a result of increased cash balances offset by lower interest rates.

Included in income taxes in fiscal 2012 was a $3.0 million benefit due to the reversal of a deferred tax valuation allowance on the excess tax basis in the Company’s investments in unconsolidated entities.

The Company determined such valuation allowance was no longer necessary and included the benefit in fiscal 2012 income taxes.

In addition, the fiscal 2012 consolidated tax rate was negatively impacted by the expiration of the U.S. research and development credit on December 31, 2011.

| Impairment loss on investments | | | 0 | | | | 0 | | | | 3,254 | |

| Tax impact of foreign source income | | | 165 | | | | (710 | ) | | | 1,058 | |

| Tax benefit from reversal of valuation allowance | | | 0 | | | | 0 | | | | (3,016 | ) |

The decrease in cash generated from operating activities in fiscal 2013 as compared to fiscal 2012 was mainly the result of decrease in net earnings and changes in working capital.

_Cash Flows From Investing Activities_

On April 1, 2014, the Company entered into an Agreement of Investment and Merger (the Agreement) with CyVek.

Pursuant to the terms of the Agreement, the Company invested $10.0 million in CyVek and received shares of common stock representing approximately 19.9% of the outstanding voting stock of CyVek.

If, within twelve months of the date of the Agreement, CyVek meets commercial milestones related to the sale of its products and certain other conditions, the Company will acquire CyVek through a merger, with CyVek surviving as a wholly-owned subsidiary of the Company.

If the merger is consummated, the Company will make an initial payment of $60.0 million to the other stockholders of CyVek.

The purchase price payable at the closing of the merger may be adjusted based on the final levels of cash, indebtedness and transaction expenses of CyVek as of the closing.

The Company will also pay CyVek’s other stockholders up to $35.0 million based on the revenue generated by CyVek’s products and related products before the date that is 30 months from the closing of the Merger.

The Company will also pay CyVek’s other stockholders 50% of the amount, if any, by which the revenue from CyVek’s products and related products exceeds $100 million in calendar year 2020.

In fiscal 2015, this policy will be more applicable in non-U.S. jurisdictions as the Company intends to use excess cash from U.S. operation primarily to minimize the outstanding balance on the Company’s revolving credit facility.

_Cash Flows From Financing Activities_

| | | | | | | | | | | | | | | | | | | | | |

At the end of fiscal [removed: 2014,] [added: 2015,] the Company had a portfolio of [removed: fixed income debt] [added: equity] securities, excluding those classified as cash and cash equivalents, of [removed: $11.3] [added: $56.4] million (see Note [removed: C] [added: 3] to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K).

As the Company’s [removed: fixed income] securities are classified as available-for-sale, unrealized gains or losses are recognized by the Company in “Other comprehensive income (loss)” on the Consolidated Statement of Earnings and Comprehensive Income.

Approximately [removed: 30%] [added: 18%] of [added: the Company’s] consolidated net sales [removed: are] [added: in fiscal 2015 were] made in foreign currencies, including [removed: 14%] [added: 6%] in euro, [removed: 6%] [added: 4%] in British pound sterling, 5% in Chinese yuan and the remaining [removed: 5%] [added: 3%] in other European [added: and Asian] currencies.

| High | | $ | [removed: 1.71] [added: 1.69] | | | $ | [removed: 1.62] [added: 1.71] | | | $ | [removed: 1.64] [added: 1.62] | |

| Low | | | [removed: 1.52] [added: 1.48] | | | | 1.52 | | | | [removed: 1.54] [added: 1.52] | |

| Average | | | [removed: 1.64] [added: 1.57] | | | | [removed: 1.57] [added: 1.64] | | | | [removed: 1.59] [added: 1.57] | |

| High | | $ | [removed: 1.39] [added: 1.34] | | | $ | [removed: 1.36] [added: 1.39] | | | $ | [removed: 1.44] [added: 1.36] | |

| Low | | | [removed: 1.32] [added: 1.08] | | | | [removed: 1.23] [added: 1.32] | | | | [removed: 1.24] [added: 1.23] | |

| Average | | | [removed: 1.36] [added: 1.19] | | | | [removed: 1.30] [added: 1.36] | | | | [removed: 1.34] [added: 1.30] | |

| High | | $ | [removed: .165] [added: .164] | | | $ | [removed: .163] [added: .165] | | | $ | [removed: .159] [added: .163] | |

| Low | | | [removed: .160] [added: .162] | | | | [removed: .157] [added: .160] | | | | [removed: .155] [added: .157] | |

| Average | | | .163 | | | | [removed: .160] [added: .163] | | | | [removed: .158] [added: .160] | |

At June 30, [removed: 2014,] [added: 2015,] the Company had the following trade receivable and intercompany payables denominated in one currency but receivable or payable in another currency (in thousands):

| | | [added: |] _Denominated Currency_ | | | | _U. S. Dollar Equivalent_ | | [removed: |]

The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from June 30, [removed: 2014] [added: 2015] levels against the euro, British pound sterling and Chinese yuan are as follows (in thousands):

| Decrease in translation of [removed: 2014] [added: 2015] earnings into U.S. dollars | | $ | [removed: 2,577] [added: 3,352] | |

| Decrease in translation of net assets of foreign subsidiaries | | | [removed: 17,849] [added: 26,808] | |

| Additional transaction losses | | | [removed: 836] [added: 409] | |

In fiscal 2015, for example, the exchange rate between the Euro and the US dollar changed materially, resulting in consolidated net sales that were approximately $8.5 million lower in fiscal 2015 compared to fiscal 2014.

| | | _2015_ | | | | _20__14_ | | | | _20__13_ | | |

| Euros | | £ | 451 | | | $ | 709 | |

| British Pound Sterling | | £ | 1,529 | | | $ | 2,402 | |

These securities, like all fixed income instruments, are subject to interest rate risk and will decline in value if market interest rates increase.

The Company’s investment policy requires all investment in short-term and long-term securities to have at least debt ratings of A1 or A3 (or the equivalent), respectively.

The Company generally holds its fixed income securities until maturity and, historically, has not recorded any material gains or losses on any sale prior to maturity.

In late fiscal 2014, the Company liquidated the majority of its fixed income debt securities in anticipation of acquisitions made in July 2014.

Gains and losses recorded on the liquidation were not material.

##### [Table of Contents](#toc)

| | | | | | | | | | | | | |

| | | _2014_ | | | | _2013_ | | | | _2012_ | | |

| Euros | | £ | 1,296 | | | $ | 2,217 | |

| Other European currencies | | £ | 1,135 | | | $ | 1,942 | |

| | | | | |

[removed: Techne] [added: Bio-Techne] and its subsidiaries, collectively doing business as Bio-Techne (Bio-Techne, we, our, us or the Company) develop, manufacture and sell biotechnology [removed: products] [added: reagents, instruments] and clinical diagnostic [removed: controls] [added: products] worldwide.

With our deep product portfolio and application expertise, Bio-Techne is a leader in providing specialized proteins, including cytokines and growth factors, [removed: and] [added: antibodies,] related immunoassays, [added: biologically active] small molecules and other reagents to the research, diagnostics and clinical controls markets.

A Minneapolis, Minnesota-based company, Bio-Techne originally was founded as Research and Diagnostic Systems, Inc. (R&D Systems) in [removed: 1976, initially producing hematology controls and calibrators for primary use in clinical settings.][added: 1976.]

Techne Corporation, a public entity at the [removed: time and currently the parent company,] [added: time,] acquired R&D Systems in [removed: 1984] [added: 1985] and through this action made R&D Systems a public company.

The initial products focused on the hematology blood controls and calibrators market but soon expanded through the creation of the Biotechnology [removed: Division,] [added: Division] to include reagents used in life science research.

[removed: These included] [added: We further expanded] the [added: product portfolio through a series of acquisitions, including, the] Amgen [added: Inc.] research business in 1991, the Genzyme [added: Corporation] research business in [removed: 1997,] [added: 1998,] Fortron Bio Science, Inc. and BiosPacific, Inc. (BiosPacific) in 2005, and Boston Biochem, Inc. and Tocris Holdings Limited (Tocris) in 2011.

With these recent investments, we [removed: will be] [added: are] able to scale our business and expand [removed: into new] [added: our] product [removed: and] [added: portfilio as well as] geographic markets.

The Bio-Techne [removed: brand] [added: name] is derived from the Greek words “Bio,” or “life,” and “Techne,” or “the application of knowledge to practical matters.” The combination of these words and their meanings capture the essence of Bio-Techne, its products and mission.

The Bio-Techne name solidifies the new strategic direction for the [removed: Company along with unifying] [added: Company,] and [removed: positioning] [added: also unifies] all of our brands under one complete portfolio.

[removed: With these strategic efforts, as well as the establishment of dedicated subsidiaries in Europe and Asia, we now] [added: We] operate [removed: globally along] [added: globally,] with offices in [removed: several] [added: multiple] locations in the United States, Europe and China.

We intend to build on Bio-Techne’s past accomplishments, [removed: strong] [added: high quality] reputation and [added: sound] financial position by executing strategies that position us to become the standard for biological content in the research market, and to leverage that leadership position to enter the diagnostics and other adjacent markets.

| | [removed: •] | [removed: |] _Continued innovation in core products._ Through collaborations with key opinion leaders and participation in scientific discussions and associations, we expect to leverage our continued significant investment in our research and development activities to be first-to-market with quality products that are at the leading edge of life science researchers’ needs. |

| | [removed: •] | [removed: |] _Investments in targeted acquisitions._ We intend to leverage our strong balance sheet to gain access to new technologies and products that improve our competitiveness in the current [removed: market] [added: market, meet customers’ expanding work flow needs] and allow us to enter adjacent markets. |

| | [removed: •] | [removed: |] _Expansion of geographic footprint._ We will continue to expand our sales staff and distribution channels globally in order to increase our global presence and make it easier for customers to transact with us. |

| | [removed: •] | [removed: |] _Realignment of resources._ In recognition of the increased size and scale of the organization, we intend to redesign our development and operational resources to create greater efficiencies throughout the organization. |

| | [removed: •] | [removed: |] _Talent recruitment and retention._ We will recruit, train and retain the most talented staff to implement all of our strategies effectively. |

Currently Bio-Techne operates worldwide and has [removed: two] [added: three] reportable business segments, [removed: Biotechnology and Clinical Controls, both of which serve] the [removed: life science] [added: Biotechnology, Clinical Controls] and [removed: diagnostic markets.][added: Protein Platforms divisions.]

[removed: _Biotechnology Segment_][added: _Biotechnology Segment_]

[removed: The proteins are produced naturally in minute amounts by different cell types] [added: We isolate] and [removed: can be isolated] [added: produce proteins] in a pure form either from the [removed: same] [added: native] cells or [removed: produced] through recombinant DNA technology.

[removed: Cytokines,] [added: We develop and manufacture in-house a range of cytokines,] growth factors and enzymes, extracted from natural sources or produced using recombinant DNA [removed: technology, are developed and manufactured in house.][added: technology.]

The growing interest by academic and commercial researchers in cytokines is largely due to the profound effect that tiny amounts of a cytokine can have on [removed: cells] [added: cell’s] and tissues.

[removed: Bio-Techne’s] [added: We produce our] polyclonal antibodies [removed: are produced] in animals (primarily goats, sheep and [removed: rabbits) and purified] [added: rabbits), purifying them] from the animals’ blood.

[removed: Monoclonal] [added: We derive monoclonal] antibodies [removed: are derived] from immortalized rodent cell lines using hybridoma [removed: technology and are isolated] [added: technology, isolating them] from cell culture [removed: medium.][added: medium, or we manufacture them through recombinant DNA technology.]

We market a variety of immunoassays on different testing platforms, including [removed: a] microtiter-plate based [removed: kit] [added: kits] sold under the trade name Quantikine®, multiplex immunoassays based on encoded bead technology and immunoassays based on planar spotted surfaces.

[removed: All of] [added: Researchers use] these immunoassay products [removed: are used by researchers] to quantify the level of a specific protein in biological fluids, such as serum, plasma, or urine.

We have received Food and Drug Administration (FDA) marketing clearance for erythropoietin (EPO), transferrin receptor (TfR) and Beta2-microglobulin [removed: (ß2M)] [added: (b2M)] immunoassays for use as _in vitro_ diagnostic devices.

[removed: In January 2014, we entered into] [added: We have] a sales and marketing partnership agreement with Fisher Scientific in order to bolster our market presence in North America and leverage the transactional efficiencies offered by the large Fisher organization.

We also sell through third party distributors in China, southern Europe and [removed: in] the rest of the world.

Our sales are widely distributed, and no single end-user customer accounted for more than 10% of Biotechnology’s net sales during fiscal [removed: 2014, 2013] [added: 2015, 2014] or [removed: 2012.][added: 2013.]

[removed: The] [added: A number of companies supply the] worldwide market for protein related and chemically-based research [removed: reagents is being supplied by a number of companies,] [added: reagents,] including GE Healthcare Life Sciences, BD Biosciences, Merck KGaA/EMD Chemicals, Inc., PeproTech, Inc., Santa Cruz Biotechnology, Inc., Abcam plc., [removed: Sigma-Aldrich Corporation,] Thermo Fisher Scientific, Inc., Cayman Chemical Company and Enzo Biochem, Inc. Market success is primarily dependent upon product quality, selection and [removed: reputation, and we believe we are one of the leading world-wide suppliers of cytokine related products in the research market.][added: reputation.]

[removed: Our Biotechnology segment develops] [added: We develop] and [removed: manufactures] [added: manufacture] the majority of [removed: its] [added: our] cytokines using recombinant DNA technology, thus significantly reducing our reliance on outside resources.

The majority of [removed: Bio-Techne’s biotechnology] [added: our Biotechnology] products are shipped within one day of receipt of the customers’ orders.

Consequently, we had no significant backlog of orders for our Biotechnology segment products as of the date of this Annual Report on Form 10-K or as of a comparable date for fiscal [removed: 2013.][added: 2014.]

[removed: _Clinical] [added: _Clinical] Controls [removed: Segment_][added: Segment_]

[removed: Hematology] [added: We derive our hematology] controls and calibrators [removed: are products derived] from various cellular components of blood which have been stabilized.

[removed: Control] [added: These control] and calibrator products [removed: can be utilized to] ensure that hematology instruments are performing accurately and reliably.

[removed: Our Clinical Controls segment offers] [added: We offer] a wide range of hematology controls and calibrators for both impedance and laser type cell counters.

[removed: Hematology] [added: We also supply hematology] control products [removed: are also supplied] for use as proficiency testing tools by laboratory certifying authorities in a number of states and countries.

In fiscal [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012,] [added: 2013,] OEM agreements accounted for [added: $41.1 million,] $41.2 million, [removed: $10.8 million] and [removed: $9.7] [added: $10.8] million, respectively, or [added: 9%,] 12%, [removed: 3%] and 3% of total consolidated net sales in each fiscal year, respectively.

We sell our clinical control products directly to customers in the United States and [added: primarily] through distributors in the rest of the world.

With recent acquisitions, we also support our customers with instrumentation designed to simplify key protein analysis processes.

In fiscal 2014, we strengthened our Clinical Controls solutions by acquiring Bionostics Holdings Limited (Bionostics).

We also increased our Biotechnology segment offerings through the acquisition of Shanghai-based PrimeGene Bio-Tech Co. (PrimeGene) and Novus Biologicals LLC (Novus Biologicals) in 2014.

Also in 2014, we acquired ProteinSimple and CyVek, Inc., both with innovative instrument platforms useful for protein analysis, and which together form our new Protein Platforms segment.

Following the 2015 fiscal year, in July 2015, we acquired Cliniqa Corporation, which specializes in the manufacturing and commercialization of quality controls and calibrators as well as bulk reagents used in the clinical diagnostic market to further expand and complement our Clinical Controls solutions.

In November 2014 we also changed the name of the parent corporation from Techne Corporation to Bio-Techne Corporation.

Today, our product line extends to over 275,000 products with state of the art facilities to accommodate many of our manufacturing needs.

| --- | --- | --- |

| --- | --- | --- |

| --- | --- | --- |

| | | |

| --- | --- | --- |

| --- | --- | --- |

And the Protein Platforms reporting segment develops and commercializes proprietary systems and consumables for protein analysis.

In fiscal 2015, net sales from Bio-Techne’s Biotechnology, Clinical Controls and Protein Platforms segments represented 72.1%, 13.3% and 14.6% of consolidated net sales, respectively.

We produce and characterize all protein products to a high degree of purity and biological activity.

We also sell through third party distributors in China, Japan, southern Europe and the rest of the world.

We believe we are one of the leading world-wide suppliers of cytokine related products in the research market.

We also offer clinical controls for blood glucose and blood gas devices, as well as coagulation device control products.

After we receive raw blood, we separate it into its cellular components, and then process and stabilize it.

_Protein Platforms_ _Segment_

Proteins are important for understanding disease because they are the functional units that carry out specific tasks in every cell.

Without them, the cell cannot perform its intended function, produce the energy it requires, maintain its shape or survive in its environment.

However, proteins are difficult to interrogate because they are large, complex and unique.

Our Protein Platforms segment develops, manufactures and sells tools to make protein analysis simpler, more quantitative and reproduceable.

Protein Platforms Segment Products

The Simple Western Platform.

The Western blot, or Western, is one of the most widely-used assay for protein analysis and identification today.

Unchanged since its invention in 1979, the Western assay is used by molecular biologists, biochemists and clinicians to determine if a specific protein is present in a sample.

This assay is an immunoassay, meaning that it requires a specific antibody in order to correctly identify the protein of interest.

The Western blot also shows the researcher the size of the protein identified.

Our Simple Western platform is a fully-automated, analytical technique that can identify and quantify a protein of interest in a sample.

Like the Western blot, our Simple Western also provides the user with the size of the protein and utilizes antibodies to identify specific proteins in the sample.

The Simple Western automates the entire workflow and transforms the Western blot into a gel-free, blot-free assay requiring just 30 minutes of sample prep time.

Not only does the Simple Western simplify the workflow, it transforms the Western into a real analytical tool for protein analysis, providing truly quantitative, high quality data.

The reproducibility of the assay enables researchers to determine quantitatively how much protein exists in a given sample.

As has been demonstrated in numerous experiments conducted by us and our customers, each of our Simple Western products is more sensitive than a traditional Western, meaning that the Simple Western will detect a lower level of target protein in a given sample or allow a researcher to use less sample to run the assay.

Multiple proteins can also be assessed in every sample allowing a more holistic view of protein function.

SimplePlex Platform.

A common assay used in research and clinical diagnostics is the ELISA, or enzyme-linked immunosorbent assay.

A series of acquisitions further expanded the product portfolio.

In fiscal 2014, we further strengthened our clinical controls solutions by acquiring Bionostics Holdings Limited (Bionostics), and our biotechnology segment offerings were increased by the recent acquisition of Shanghai PrimeGene Bio-Tech Co. (PrimeGene), and an agreement to invest in and possibly acquire CyVek, Inc. (CyVek).

The acquisition of various brands over the years drove the need for an umbrella branding strategy that could hold all of the acquired assets.

Today, our product line extends to over 24,000 products, 95% of which are manufactured in-house.

While maintaining our core strengths in cytokines and immunoassays, we also develop antibodies, cell selection and multicolor flow cytometry kits, multiplex assays, biologically active compounds, and stem cell products and kits.

| --- | --- | --- | --- |

##### [Table of Contents](#toc)

In fiscal 2014, net sales from Bio-Techne’s Biotechnology segment were 84% of consolidated net sales.

Bio-Techne’s Clinical Controls segment net sales were 16% of consolidated net sales for fiscal 2014.

These small compounds, sold in highly purified forms typically with agonistic or antagonistic properties in a variety of biological processes, allow customers access to a broad range of compounds and biological reagents to meet their life science research needs.

Currently, the majority of the protein products are produced by laboratory processes that use recombinant DNA technology, while our chemically-based products are produced using available chemicals.

Consequently, raw materials are readily available for most of our products in the Biotechnology segment.

All protein products are produced to the highest possible purity and characterized to ensure the highest level of biological activity.

For example, cytokines can induce cells to acquire more specialized functions and features (differentiation) or can play a key role in attracting cells at the site of injury, inducing them to grow and initiate the healing process.

Unregulated cytokine production and action can have non-beneficial effects and lead to various pathologies.

Recent acquisitions and investments made in fiscal 2014 and 2015 will further expand and complement Bio-Techne’s current product offerings in the Biotechnology segment.

For additional information regarding our investments and acquisitions, see “Acquisitions and Investments” under this Item 1.

Ordinarily, a hematology control is used once to several times a day to make sure the instrument is reading accurately.

In addition, most instruments need to be calibrated periodically.

Hematology calibrators are similar to controls, but undergo additional testing to ensure that the calibration values assigned are within tight specifications and can be used to calibrate the instrument.

Cell-based whole blood controls.

Chemistry-based blood controls.

The acquisition of Bionostics early in fiscal 2014 expanded our product offerings in the Clinical Controls segment through their chemistry-based blood controls.

Controls for blood glucose and blood gas devices are the largest portion of Bionostics’ business.

Bionostics recently launched coagulation device control products which extend its product portfolio and allow it to enter an adjacent market segment in the controls business.

The first control products were developed in response to the rapid advances in electronic instrumentation used in hospital and clinical laboratories for blood cell counting.

Historically, most of the instrument manufacturing companies made controls for use on their own instruments.

With rapid expansion of the instrument market, however, a need for more versatile controls enabled non-instrument manufacturers to gain a foothold.

After raw blood is received, it is separated into its components, processed and stabilized.

| | | | | | | | | | | | | |

We are planning to release new proteins, antibodies, immunoassay products and small molecules in the coming year.

On April 1, 2014, Bio-Techne, through its wholly-owned subsidiary R&D Systems, Inc., entered into an agreement to invest $10.0 million in CyVek, Inc. in return for shares of CyVek common stock representing approximately 19.9% of the outstanding voting stock of CyVek.

In connection with this investment, R&D Systems became a party to CyVek’s existing investor agreements and has an observer seat on CyVek’s board of directors.

If, within 12 months of the date of the agreement, CyVek meets commercial milestones related to the sale of its CyPlex analyzer products, Bio-Techne will acquire all of the remaining stock of CyVek through a merger.

If the merger is consummated, Bio-Techne will make an initial payment of $60.0 million to the other stockholders of CyVek.

The purchase price payable at the closing may be adjusted based on the final levels of CyVek’s net working capital.

The combination of Bio-Techne’s reagents on CyVek’s multiplex testing platform, CyPlex™, will provide researchers with powerful tools to develop, validate and test biomarker panels so as to expedite life sciences research and enable biomarker-based diagnostics.

_Fiscal 2013 and 2012 Acquisitions_

We did not complete any material acquisitions or make any material strategic investments during fiscal 2013 and 2012.

Bio-Techne may seek patent protection for new or existing products it manufactures.

As of August [removed: 22, 2014,] [added: 26, 2015,] the Company is not a party to any legal proceedings that, individually or in the aggregate, are reasonably expected to have a material adverse effect on the Company’s business, results of operations, financial condition or cash flows.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II

[removed: ##### [Table of Contents](#toc)][added: | TABLE OF CONTENTS | | | |]

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] DC [removed: 20549][added: 20549]

[removed: | x | ANNUAL] [added: X ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE [removed: SECURITIES EXCHANGE ACT OF 1934 |]

For the fiscal year ended June 30, [removed: 2014][added: 2015]

[removed: | ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)] OF THE SECURITIES EXCHANGE ACT OF [removed: 1934 |][added: 1934]

[removed: For] [added: For] the transition period from [removed: to][added: ________to __________]

[removed: Commission] [added: Commission] File Number: [removed: 000-17272][added: 000-17272]

[removed: TECHNE] [added: BIO-TECHNE] CORPORATION

[removed: (Exact] [added: (Exact] name of Registrant as specified in its [removed: charter)][added: charter)]

| [removed: Minnesota] | [added: Minnesota] | 41-1427402 |

| [removed: (State of Incorporation)] | [added: (State of Incorporation)] | [removed: (IRS] [added: (IRS] Employer Identification [removed: No.)] [added: No.)] |

| [added: |] 614 McKinley Place N.E., Minneapolis, MN | [removed: |] 55413-2610 |

| [removed: (Address] [added: | (Address] of principal executive [removed: offices) |] [added: offices)] | [removed: (Zip Code)] [added: (Zip Code)] |

[removed: Registrant’s] [added: Registrant’s] telephone number: [removed: (612)] [added: (612)] 379-8854

Yes [removed: x] [added: (X)] No [removed: ¨][added: ( )]

Yes [removed: ¨] [added: ( )] No [removed: x][added: (X)]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes [removed: x] [added: (X)] No [removed: ¨][added: ( )]

[removed: |] Large accelerated filer [removed: | | x | |] [added: (X)] Accelerated filer [removed: | | ¨ |][added: ( ) Non-accelerated filer ( ) Small reporting company ( )]

The aggregate market value of the Common Stock held by non-affiliates of the Registrant, based upon the closing sale price on December 31, [removed: 2013] [added: 2014] as reported on The Nasdaq Stock Market [removed: ($94.67] [added: ($92.40] per share) was approximately [removed: $2.7] [added: $3.4] billion.

Shares of $0.01 par value Common Stock outstanding at August [removed: 22, 2014: 37,007,203][added: 26, 2015: 37,167,171]

[removed: DOCUMENTS] [added: DOCUMENTS] INCORPORATED BY [removed: REFERENCE][added: REFERENCE]

Portions of the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Shareholders are incorporated by reference into Part III.

| | | [removed: | | Page |] [added: Page] | |

| [removed: [PART I](#toc744730_1) | | |] [added: PART I] | | | |

[removed: | Item] [added: Item] 1A. [removed: | | [Risk Factors](#toc744730_3) | | | 10 | |]

[removed: | Item 1B. | | [Unresolved] [added: Unresolved] Staff [removed: Comments](#toc744730_4) | | | 15 | |][added: Comments 18]

[removed: | Item 3. | | [Legal Proceedings](#toc744730_6) | | | 16 | |][added: Legal Proceedings 19]

10-K 1 tech20150630_10k.htm FORM 10-K

SECURITIES EXCHANGE ACT OF 1934

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

Yes (X) No ( )

( )

Yes ( ) No (X)

| --- | --- | --- | --- |

| | | | |

Item 1.

Business 1

| | | | |

Risk Factors 12

| | | | |

Item 1B.

| | | | |

Item 2.

Properties 18

| | | | |

Item 3.

| | | | |

10-K 1 d744730d10k.htm 10-K

| --- | --- |

| | | |

| --- | --- | --- |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Non-accelerated filer | | ¨ | | Smaller reporting company | | ¨ |

TABLE OF CONTENTS

| Item 1. | | [Business](#toc744730_2) | | | 1 | |

| Item 2. | | [Properties](#toc744730_5) | | | 15 | |

| Item 4. | | [Mine Safety Disclosures](#toc744730_7) | | | 16 | |

| [PART II](#toc744730_8) | | | | | | |

| Item 5. | | [Market for the Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](#toc744730_9) | | | 16 | |

| Item 6. | | [Selected Financial Data](#toc744730_10) | | | 18 | |

| Item 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#toc744730_11) | | | 19 | |

| Item 7A. | | [Quantitative and Qualitative Disclosures about Market Risk](#toc744730_12) | | | 28 | |

| Item 8. | | [Financial Statements and Supplementary Data](#toc744730_13) | | | 30 | |

| Item 9. | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#toc744730_14) | | | 48 | |

| Item 9A. | | [Controls and Procedures](#toc744730_15) | | | 48 | |

| Item 9B. | | [Other Information](#toc744730_16) | | | 49 | |

| [PART III](#toc744730_17) | | | | | | |

| Item 10. | | [Directors, Executive Officers and Corporate Governance](#toc744730_18) | | | 50 | |

| Item 11. | | [Executive Compensation](#toc744730_19) | | | 50 | |

| Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](#toc744730_20) | | | 50 | |

| Item 13. | | [Certain Relationships and Related Transactions, and Director Independence](#toc744730_21) | | | 50 | |

| Item 14. | | [Principal Accounting Fees and Services](#toc744730_22) | | | 51 | |

| [PART IV](#toc744730_23) | | | | | | |

| Item 15. | | [Exhibits, Financial Statement Schedules](#toc744730_24) | | | 51 | |

| [SIGNATURES](#toc744730_25) | | | | | 52 | |

PART I

[removed: PART II][added: | PART II | | | |]

| | | | |

Item 5.

Market for the Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 20

| | | | |

Item 6.

Selected Financial Data 22

| | | | |

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations 23

| | | | |

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk 33

| | | | |

Item 8.

Financial Statements and Supplementary Data 34

| | | | |

Not applicable.

| | | | |

Item 9A.

Controls and Procedures 56

| | | | |

ACCOUNTING AND FINANCIAL DISCLOSURE

None.

[removed: PART III][added: | PART III | | | |]

| | | | |

Item 10.

Directors, Executive Officers and Corporate Governance 57

| | | | |

Item 11.

Executive Compensation 57

| | | | |

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 57

| | | | |

Item 13.

Certain Relationships and Related Transactions, and Director Independence 58

| | | | |

Item 14.

Principal Accounting Fees and Services 59

| | | | |

| PART IV | | | |

Item 15.

Exhibits, Financial Statement Schedules 59

| | | | |

| | | | |

| SIGNATURES | | 60 | |

PART I

On April 24, 2014, the Board of Directors of Techne Corporation (the “Company”), approved a form of indemnification agreement (the “Indemnification Agreement”) and authorized the Company to enter into an Indemnification Agreement with each of the Company’s directors and executive officers and certain other employees as determined by the Company’s chief executive officer (each an “Indemnitee”).

The Indemnification Agreement clarifies the process and conditions under which the Company will advance expenses and indemnify each Indemnitee against costs incurred in connection with a proceeding to which an Indemnitee is made party to, or threatened to be made party to, by reason of anything done or not done by the Indemnitee in his or her official capacity, or in which he or she serves as a witness by reason of such official capacity.

The indemnification rights provided for in the Indemnification Agreement supersede other agreements on the topics of indemnification and advancement, including the Company’s Bylaws, and supplement indemnification and advancement rights provided for under applicable law.

This foregoing description of the material terms of the Indemnification Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Indemnification Agreement, which is attached as Exhibit 10.27 hereto and is incorporated by reference herein.

On August 27, 2014, the Company, Research and Diagnostic Systems, Inc. (“R&D”), a Minnesota corporation and wholly-owned subsidiary of the Company, and Cayenne Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and wholly-owned subsidiary of R&D, entered into a letter agreement (the “Agreement”) with CyVek, Inc., a Delaware corporation (“CyVek”), relating to the Agreement of Investment and Merger, dated as of April 1, 2014, among such parties and Citron Capital Limited, as Stockholders’ Agent (the “Merger Agreement”).

Under the Agreement, the parties agreed that they have no obligations under Section 5.5 of the Merger Agreement to enter into any agreement relating to certain pre-merger services.

In addition, the Agreement clarifies that certain leases or licenses of the CyPlex analyzer solely for binding commitments to purchase cartridges will constitute valid leases or licenses for purposes of the Commercial Milestone Achievement set forth in Section 7.8 of the Merger Agreement, and that certain related customers will be considered separate, independent, unaffiliated third-party customers for purposes of meeting the Commercial Milestone Achievement set forth in Section 7.8 of the Merger Agreement.

This description of the material terms of the Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2014.

##### [Table of Contents](#toc)

Rental income from the above properties was $1.0 million, [removed: $0.8 million] [added: $1.0 million,] and [removed: $0.7] [added: $0.8] million in fiscal [added: 2015,] 2014, [removed: 2013] and [removed: 2012,] [added: 2013,] respectively.

This facility is utilized by the Company’s Biotechnology [removed: segment.][added: and Protein Platforms segments.]

The Company leases the following facilities, all of which are utilized by the Company’s Biotechnology segment with the exception of the location used by the Company’s Bionostics subsidiary (Clinical Control [removed: segment):][added: segment), and the ProteinSimple and CyVek sites which support the Protein Platforms segment:]

| _Subsidiary_ | | _Location_ | | _Type_ | | [removed: _Square Feet_ |] [added: _Square_ _Feet_] | |

| R&D [added: Systems] Europe [added: Ltd.] | | Langely, U.K. | | Warehouse | | [removed: |] 14,300 | |

| R&D [added: Systems] GmbH | | Wiesbaden-Nordenstadt, Germany | | Office space | | [removed: |] 4,200 | |

| [removed: BiosPacific] [added: BiosPacific, Inc.] | | Emeryville, California | | Office space | | [removed: |] 3,000 | |

| R&D [added: Systems] China [added: Co., Ltd.] | | Shanghai and Bejing, China | | Office/warehouse | | [removed: | 8,200] [added: 5,700] | |

| [removed: R&D] [added: Bio-Techne] Hong [removed: Kong] [added: Kong, Ltd.] | | Hong Kong | | Office space | | [removed: |] 1,200 | |

| Boston [removed: Biochem] [added: Biochem, Inc.] | | Cambridge, Massachusetts | | Office/lab | | [removed: |] 7,400 | |

| Tocris [added: Crookson Limited] | | Bristol, United Kingdom | | Office/manufacturing/lab/warehouse | | [removed: | 11,000] [added: 40,900] | |

| [added: Shanghai] PrimeGene [added: Bio-Tech Co., Ltd.] | | Shanghai, China | | Office/manufacturing/lab | | [removed: |] 13,700 | |

| [removed: Bionostics] [added: Bionostics, Inc.] | | Devens, Massachusetts | | Office/manufacturing | | [removed: |] 48,000 | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| Novus Biologicals, LLC | | Littleton, Colorado | | Office/warehouse | | 22,500 | |

| ProteinSimple | | Santa Clara, California | | Office/manufacturing/warehouse | | 167,000 | |

| ProteinSimple Canada | | Ottawa and Toronto, Canada | | Office/manufacturing/warehouse | | 10,000 | |

| ProteinSimple Japan | | Tokyo, Japan | | Office | | 3,500 | |

| CyVek Inc. | | Wallingford, Connecticut | | Office/manufacturing/warehouse | | 17,500 | |

##### [Table of Contents](#toc)

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

[removed: _Market] [added: _Market] Price of Common [removed: Stock_][added: Stock_]

| | | _Fiscal [removed: 2014] [added: 2015] Price_ | | | | | | | | _Fiscal [removed: 2013] [added: 2014] Price_ | | | | | | |

| 1st Quarter | | $ | [removed: 83.83] [added: 97.15] | | | $ | [removed: 69.30] [added: 89.03] | | | $ | [removed: 76.02] [added: 83.83] | | | $ | [removed: 66.26] [added: 69.30] | |

| 2nd Quarter | | | [removed: 94.78] [added: 95.89] | | | | [removed: 77.14] [added: 86.01] | | | | [removed: 74.17] [added: 94.78] | | | | [removed: 65.37] [added: 77.14] | |

| 3rd Quarter | | | [removed: 96.96] [added: 101.60] | | | | [removed: 82.51] [added: 87.24] | | | | [removed: 72.20] [added: 96.96] | | | | [removed: 65.67] [added: 82.51] | |

| 4th Quarter | | | [removed: 93.06] [added: 103.56] | | | | [removed: 82.63] [added: 95.37] | | | | [removed: 70.00] [added: 93.06] | | | | [removed: 62.55] [added: 82.63] | |

[removed: _Holders] [added: _Holders] of Common Stock and Dividends [removed: Paid_][added: Paid_]

As of August [removed: 22, 2014,] [added: 26, 2015,] there were over 31,000 beneficial shareholders of the Company’s common stock and over 150 shareholders of record.

The Company paid quarterly cash dividends totaling [removed: $45.4] [added: $47.1] million, [removed: $43.5] [added: $45.4] million and [removed: $41.0] [added: $43.5] million in fiscal [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012,] [added: 2013,] respectively.

[removed: _Issuer] [added: _Issuer] Purchases of Equity [removed: Securities_][added: Securities_]

There was no share repurchase activity by the Company in fiscal [removed: 2014.][added: 2015.]

[removed: _Stock] [added: _Stock] Performance [removed: Graph_][added: Graph_]

The comparison assumes $100 was invested on the last trading day before July 1, [removed: 2009] [added: 2010] in the Company’s common stock and in each of the foregoing indices and assumes reinvestment of dividends.

[removed: ][added: ]

##### [Table of Contents](#toc)

| _Income and Share Data:_ | | [removed: _2014 (1)_] [added: _2015_ _(1)_] | | | | [removed: _2013_] [added: _2014_ _(__2__)_] | | | | [removed: _2012_] [added: _201__3_] | | | | [removed: _2011 (2)_] [added: _201__2_] | | | | [removed: _2010_] [added: _201__1_ _(__3)_] | | |

| Net sales | | $ | [removed: 357,763] [added: 452,246] | | | $ | [removed: 310,575] [added: 357,763] | | | $ | [removed: 314,560] [added: 310,575] | | | $ | [removed: 289,962] [added: 314,560] | | | $ | [removed: 269,047] [added: 289,962] | |

| Operating income | | | [removed: 159,750] [added: 147,023] | | | | [removed: 158,469] [added: 159,750] | | | | [removed: 166,209] [added: 158,469] | | | | [removed: 163,055] [added: 166,209] | | | | [removed: 156,328] [added: 163,055] | |

| Earnings before income taxes [removed: (3)] [added: (4)] | | | [removed: 161,392] [added: 154,162] | | | | [removed: 160,662] [added: 161,392] | | | | [removed: 162,195] [added: 160,662] | | | | [removed: 164,981] [added: 162,195] | | | | [removed: 156,446] [added: 164,981] | |

| Net earnings | | | [removed: 110,948] [added: 107,735] | | | | [removed: 112,561] [added: 110,948] | | | | [removed: 112,331] [added: 112,561] | | | | [removed: 112,302] [added: 112,331] | | | | [removed: 109,776] [added: 112,302] | |

| Diluted earnings per share | | | [removed: 3.00] [added: 2.89] | | | | [removed: 3.05] [added: 3.00] | | | | [removed: 3.04] [added: 3.05] | | | | [removed: 3.02] [added: 3.04] | | | | [removed: 2.94] [added: 3.02] | |

| Average common and common equivalent shares [removed: –] [added: -] diluted (in thousands) | | | [removed: 37,005] [added: 37,231] | | | | [removed: 36,900] [added: 37,005] | | | | [removed: 37,006] [added: 36,900] | | | | [removed: 37,172] [added: 37,006] | | | | [removed: 37,347] [added: 37,172] | |

| Cash, cash equivalents and short-term available-for-sale investments | | [removed: $] | [removed: 363,354] [added: 110,921] | | | $ | [removed: 332,937] [added: 363,354] | | | $ | [removed: 268,986] [added: 332,937] | | | $ | [removed: 140,813] [added: 268,986] | | | $ | [removed: 138,811] [added: 140,813] | |

| Working capital | | | [removed: 443,022] [added: 208,515] | | | | [removed: 377,432] [added: 443,022] | | | | [removed: 310,757] [added: 377,432] | | | | [removed: 212,229] [added: 310,757] | | | | [removed: 184,016] [added: 212,229] | |

| Total assets | | | [removed: 862,491] [added: 1,063,360] | | | | [removed: 778,098] [added: 862,491] | | | | [removed: 719,324] [added: 778,098] | | | | [removed: 617,670] [added: 719,324] | | | | [removed: 518,816] [added: 617,670] | |

| Total shareholders’ equity | | | [removed: 795,265] [added: 846,935] | | | | [removed: 737,541] [added: 795,265] | | | | [removed: 674,442] [added: 737,541] | | | | [removed: 586,122] [added: 674,442] | | | | [removed: 501,792] [added: 586,122] | |

| Net cash provided by operating activities | | $ | [removed: 136,762] [added: 139,359] | | | $ | [removed: 123,562] [added: 136,762] | | | $ | [removed: 126,746] [added: 123,562] | | | $ | [removed: 127,194] [added: 126,746] | | | $ | [removed: 111,260] [added: 127,194] | |

| Capital expenditures | | | [removed: 13,821] [added: 19,904] | | | | [removed: 22,454] [added: 13,821] | | | | [removed: 6,017] [added: 22,454] | | | | [removed: 3,630] [added: 6,017] | | | | [removed: 4,644] [added: 3,630] | |

| Cash dividends declared per share | | | [removed: 1.23] [added: 1.27] | | | | [removed: 1.18] [added: 1.23] | | | | [removed: 1.11] [added: 1.18] | | | | [removed: 1.07] [added: 1.11] | | | | [removed: 1.03] [added: 1.07] | |

| [removed: Full-time employees] [added: Employees] | | | [removed: 967] [added: 1,356] | | | | [removed: 789] [added: 967] | | | | [removed: 783] [added: 789] | | | | [removed: 763] [added: 783] | | | | [removed: 684] [added: 763] | |

| [removed: (1)] [added: (2)] | The Company acquired Bionostics Holdings, Ltd on July 22, 2013 and Shanghai PrimeGene Bio-Tech Co. on April 30, 2014. |

| [removed: (2)] [added: (3)] | The Company acquired Boston Biochem, Inc. on April 1, 2011 and Tocris Holdings Limited and subsidiaries on April 28, 2011. |

| [removed: (3)] [added: (4)] | Earnings before income taxes included acquisition related expenses related to amortization of intangibles, costs recognized on sale of acquired inventories and professional fees associated with acquisition activity, as follows: [added: 2015 - $37.6 million;] 2014 [removed: –] [added: -] $20.0 million; 2013 [removed: –] [added: -] $10.2 million; 2012 [removed: –] [added: -] $12.7 million; 2011 [removed: –] [added: -] $5.0 million; [removed: 2010 – $1.0 million.] [added: 2010.] |

| _Balance Sheet Data as of June 30:_ | | _2015_ | | | | _201__4_ | | | | _201__3_ | | | | _201__2_ | | | | _201__1_ | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| _Cash Flow Data:_ | | _2015_ | | | | _201__4_ | | | | _201__3_ | | | | _201__2_ | | | | _201__1_ | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| _Employee Data as of June 30:_ | | _2015_ | | | | _201__4_ | | | | _201__3_ | | | | _201__2_ | | | | _201__1_ | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (1) | The Company acquired Novus Holdings LLC (Novus) on July 2, 2014, ProteinSimple on July 31, 2014, and CyVek Inc. on November 3, 2014. |

| --- | --- |

| _Balance Sheet Data as of June 30:_ | | _2014_ | | | | _2013_ | | | | _2012_ | | | | _2011_ | | | | _2010_ | | |

| _Cash Flow Data:_ | | _2014_ | | | | _2013_ | | | | _2012_ | | | | _2011_ | | | | _2010_ | | |

| _Employee Data as of June 30:_ | | _2014_ | | | | _2013_ | | | | _2012_ | | | | _2011_ | | | | _2010_ | | |

##### [Table of Contents](#toc)

CONSOLIDATED STATEMENTS OF [removed: EARNINGS AND] [added: EARNINGS AND] COMPREHENSIVE INCOME

[removed: _Techne Corporation] [added: _Bio-__T__echne_ _Corporation] and [removed: Subsidiaries_][added: Subsidiaries]

[removed: _(in] [added: (in] thousands, except per share data)_

| | | _Year Ended June 30,_ | | | | | | | [removed: | | | |]

| | | [removed: _2014_] [added: _2015_] | | | | [removed: _2013_] [added: _2014_] | | | | [removed: _2012_] [added: _2013_] | | |

| Net sales | | $ | [removed: 357,763] [added: 452,246] | | | $ | [removed: 310,575] [added: 357,763] | | | $ | [removed: 314,560] [added: 310,575] | |

| Cost of sales | | | [removed: 106,352] [added: 144,969] | | | | [removed: 79,465] [added: 106,352] | | | | [removed: 78,756] [added: 79,465] | |

| Gross margin | | | [removed: 251,411] [added: 307,277] | | | | [removed: 231,110] [added: 251,411] | | | | [removed: 235,804] [added: 231,110] | |

| Selling, general and administrative | | | [removed: 60,716] [added: 119,401] | | | | [removed: 43,384] [added: 60,716] | | | | [removed: 41,683] [added: 43,384] | |

| Research and development | | | [removed: 30,945] [added: 40,853] | | | | [removed: 29,257] [added: 30,945] | | | | [removed: 27,912] [added: 29,257] | |

| Total operating expenses | | | [removed: 91,661] [added: 160,254] | | | | [removed: 72,641] [added: 91,661] | | | | [removed: 69,595] [added: 72,641] | |

| Operating income | | | [removed: 159,750] [added: 147,023] | | | | [removed: 158,469] [added: 159,750] | | | | [removed: 166,209] [added: 158,469] | |

| Interest income | | | [removed: 2,684] [added: 634] | | | | [removed: 2,646] [added: 2,684] | | | | [removed: 2,639] [added: 2,646] | |

| Other non-operating [removed: expense,] [added: income (expense),] net | | | [removed: (1,042] [added: 8,049] | [removed: )] | | | [removed: (453] [added: (1,042] | ) | | | [removed: (3,399] [added: (453] | ) |

| Total other income (expense) | | | [removed: 1,642] [added: 7,139] | | | | [removed: 2,193] [added: 1,642] | | | | [removed: (4,014] [added: 2,193] | [removed: )] |

| Earnings before income taxes | | | [removed: 161,392] [added: 154,162] | | | | [removed: 160,662] [added: 161,392] | | | | [removed: 162,195] [added: 160,662] | |

| Income taxes | | | [removed: 50,444] [added: 46,427] | | | | [removed: 48,101] [added: 50,444] | | | | [removed: 49,864] [added: 48,101] | |

| Net earnings | | | [removed: 110,948] [added: 107,735] | | | | [removed: 112,561] [added: 110,948] | | | | [removed: 112,331] [added: 112,561] | |

| Foreign currency translation adjustments | | | [removed: 15,819] [added: (36,513] | [added: )] | | | [removed: (3,538] [added: 15,819] | [removed: )] | | | [removed: (3,804] [added: (3,538] | ) |

| Unrealized (losses) gains on available-for-sale investments, net of tax of [removed: ($17,110), ($2,129)] [added: 3,895, ($17,110)] and [removed: $23,422,] [added: ($2,129),] respectively | | | [removed: (35,760] [added: 11,308] | [removed: )] | | | [removed: (3,684] [added: (35,760] | ) | | | [removed: 41,870] [added: (3,684] | [added: )] |

| Other comprehensive (loss) income | | | [removed: (19,941] [added: (25,205] | ) | | | [removed: (7,222] [added: (19,941] | ) | | | [removed: 38,066] [added: (7,222] | [added: )] |

| Comprehensive income | | $ | [removed: 91,007] [added: 82,530] | | | $ | [removed: 105,339] [added: 91,007] | | | $ | [removed: 150,397] [added: 105,339] | |

| Basic | | $ | [removed: 3.01] [added: 2.90] | | | $ | [removed: 3.06] [added: 3.01] | | | $ | [removed: 3.04] [added: 3.06] | |

| Diluted | | $ | [removed: 3.00] [added: 2.89] | | | $ | [removed: 3.05] [added: 3.00] | | | $ | [removed: 3.04] [added: 3.05] | |

| Cash dividends per common share: | | $ | [removed: 1.23] [added: 1.27] | | | $ | [removed: 1.18] [added: 1.23] | | | $ | [removed: 1.11] [added: 1.18] | |

| Basic | | | [removed: 36,890] [added: 37,096] | | | | [removed: 36,836] [added: 36,890] | | | | [removed: 36,939] [added: 36,836] | |

| Diluted | | | [removed: 37,005] [added: 37,231] | | | | [removed: 36,900] [added: 37,005] | | | | [removed: 37,006] [added: 36,900] | |

[removed: CONSOLIDATED BALANCE] [added: CONSOLIDATED BALANCE] SHEETS

[removed: _(in] [added: _Bio-__T__echne_ _Corporation and Subsidiaries__(in] thousands, except share and per share data)_

| | | [added: _2015_ | | | |] _2014_ | | | | _2013_ | | |

| Cash and cash equivalents [added: at end of year] | | $ | [added: 54,532 | | | $ |] 318,568 | | | $ | 163,786 | |

| Short-term available-for-sale investments | | | [removed: 44,786] [added: 56,389] | | | | [removed: 169,151] [added: 44,786] | |

| [removed: Trade accounts] [added: Accounts] receivable, less allowance for doubtful accounts of [removed: $487] [added: $555] and [removed: $428,] [added: $487,] respectively | | | [removed: 47,874] [added: 70,034] | | | | [removed: 38,183] [added: 55,001] | |

| Deferred income taxes | | | [removed: 9,623] [added: 11,511] | | | | [removed: 0] [added: 9,623] | |

| Inventories | | | [removed: 38,847] [added: 49,577] | | | | [removed: 34,877] [added: 38,847] | |

| Total current assets | | | [removed: 469,413] [added: 248,283] | | | | [removed: 409,516] [added: 469,413] | |

| Available-for-sale investments | | | [removed: 3,575] [added: 0] | | | | [removed: 132,376] [added: 3,575] | |

| Property and equipment, net | | | [removed: 117,120] [added: 129,749] | | | | [removed: 108,756] [added: 117,120] | |

| [removed: Goodwill] [added: Consolidated goodwill] | | [added: $] | [added: 390,638 | | | $ |] 151,473 | | | [added: $] | 84,336 | |

| [removed: Intangible] [added: Consolidated intangible] assets, net | | [added: $] | [added: 292,839 | | | $ |] 108,776 | | | [added: $] | 40,552 | |

| | | _201__5_ | | | | _20__14_ | | | | _20__13_ | | |

| Interest expense | | | (1,544 | ) | | | 0 | | | | 0 | |

| | | _201__5_ | | | | _20__14_ | | |

| Other current assets | | | 6,240 | | | | 2,588 | |

| | | $ | 1,063,360 | | | $ | 862,491 | |

| Deferred revenue | | | 3,380 | | | | 0 | |

| Long-term debt obligations | | | 73,000 | | | | 0 | |

| Contingent consideration payable | | | 39,024 | | | | 0 | |

| Other long-term liabilities | | | 3,204 | | | | 0 | |

| | | $ | 1,063,360 | | | $ | 862,491 | |

_Bio-__T__echne_ _Corporation and Subsidiaries

| | | _Shares_ | | | | _Amount_ | | | | _Capital_ | | | | _Earnings_ | | | | _Income__(Loss)_ | | | | _Total_ | | |

| Net earnings | | | | | | | | | | | | | | | 107,735 | | | | | | | | 107,735 | |

| Other comprehensive loss | | | | | | | | | | | | | | | | | | | (25,205 | ) | | | (25,205 | ) |

| Surrender and retirement of stock to exercise options | | | (0 | ) | | | (0 | ) | | | (31 | ) | | | | | | | | | | | (31 | ) |

| Common stock issued for restricted stock awards | | | 10 | | | | 0 | | | | | | | | (57 | ) | | | | | | | (57 | ) |

| Employee stock purchase plan expense | | | | | | | | | | | 39 | | | | | | | | | | | | 39 | |

| Balances at June 30, 2015 | | | 37,153 | | | $ | 371 | | | $ | 163,306 | | | $ | 713,851 | | | $ | (30,593 | ) | | | 846,935 | |

_Bio-__T__echne_ _Corporation and Subsidiaries

(in thousands)_

| | | _201__5_ | | | | _20__14_ | | | | _20__13_ | | |

| Gain on sale of CyVek | | | (8,300 | ) | | | 0 | | | | 0 | |

| Borrowings under line-of-credit agreement | | | 163,000 | | | | 0 | | | | 0 | |

| Payment on line-of-credit and other | | | (94,964 | ) | | | 0 | | | | 0 | |

_Bio-__T__echne_ _Corporation and Subsidiaries_

_Note 1._ _Description of_ _B__usiness and_ _S__ummary of_ _S__ignificant_ _A__ccounting_ _P__olicies:_

Novus is included in the Company’s Biotechnology segment.

In connection with the Novus acquisition, the Company recorded $5.0 million of developed technology intangible assets that have estimated useful lives of 4-12 years, $5.3 million of trade name intangible assets that have an estimated useful life of 20 years, and $14.4 million related to customer relationships that have an estimated useful life of 15 years.

The majority of the intangible asset amortization is not deductible for income tax purposes.

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

The majority of the goodwill is not deductible for income tax purposes.

Transaction costs of $0.1 million were included in the Company’s selling, general and administrative costs during fiscal 2015 related to the Novus acquisition.

ProteinSimple expands the Company’s solutions that it can offer its customers by developing and commercializing proprietary systems and consumables for protein analysis.

The Company opened a line-of-credit (Note 7) to partially fund the acquisition.

The purchase price of ProteinSimple exceeded the fair value of the identifiable net assets and, accordingly, the difference was allocated to goodwill.

ProteinSimple is included in the Company’s Protein Platform segment.

In connection with the ProteinSimple acquisition, the Company recorded $40.5 million of developed technology intangible assets that have an estimated useful lives of 9-10 years, $35.8 million of trade name intangible assets that have an estimated useful lives of 18-20 years, $100.6 million related to customer relationships that have estimated useful lives of 14-16 years, and $0.2 million related to non-compete agreements that have an estimated useful life of 3 years.

The intangible asset amortization is not deductible for income tax purposes.

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

The goodwill is not deductible for income tax purposes.

| | | | | | | | | | | | | |

| Impairment losses on investments | | | 0 | | | | 0 | | | | (3,254 | ) |

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| | | | | | | | | |

| Other receivables | | | 7,127 | | | | 1,992 | |

| Prepaid expenses | | | 2,588 | | | | 1,527 | |

| Deferred income taxes | | | 33,838 | | | | 8,473 | |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| | | _Shares_ | | | | _Amount_ | | | | | | | | | | | | | | | | | | |

| Balances at June 30, 2011 | | | 37,153 | | | $ | 371 | | | $ | 129,312 | | | $ | 472,730 | | | $ | (16,291 | ) | | $ | 586,122 | |

| Net earnings | | | | | | | | | | | | | | | 112,331 | | | | | | | | 112,331 | |

| Impairment losses on investments | | | 0 | | | | 0 | | | | 3,254 | |

| Proceeds from sale of available-for-sale investments | | | 229,975 | | | | 41,507 | | | | 64,291 | |

| Repurchase of common stock | | | 0 | | | | (1,821 | ) | | | (23,598 | ) |

_A.

Description of Business and Summary of Significant Accounting Policies:_

_B.

| | | _Bionostics_ | | | | _PrimeGene_ | | |

| Goodwill | | | 56,349 | | | | 5,518 | |

| Note payable | | | 0 | | | | 12,730 | |

The Company’s consolidated financial statements for fiscal 2014 include Bionostics and PrimeGene net sales of $33.1 million and $0.7 million, respectively and net income of $2.1 million and net loss of $0.1 million, respectively.

Included in Bionostics and PrimeGene results for fiscal 2014 were amortization of intangibles of $5.5 million and $0.3 million, respectively, and costs recognized on the sales of acquired inventory of $1.5 million and $0.2 million, respectively.

_C.

| | | | | | | | | | | | | | | | | |

| | | _2014_ | | | | | | | | _2013_ | | | | | | |

| Foreign corporate debt securities | | | 0 | | | | 0 | | | | 4,484 | | | | 4,490 | |

| | | $ | 40,736 | | | $ | 48,361 | | | $ | 241,032 | | | $ | 301,527 | |

Gross unrealized gains and unrealized losses on available-for-sale investments were $60.7 million and $0.2 million, respectively, at June 30, 2013.

Contractual maturities of available-for-sale debt securities are shown below (in thousands).

Expected maturities may differ from contractual maturities because borrowers may have the right to recall or prepay obligations with or without call or prepayment penalties.

| | | | | |

| --- | --- | --- | --- | --- |

| Due within one year | | $ | 7,689 | |

| Due one to five years | | | 3,575 | |

| | | $ | 11,264 | |

_D.

| | | $ | 38,847 | | | $ | 34,877 | |

_E.

| | | | 209,977 | | | | 189,800 | |

| | | $ | 117,120 | | | $ | 108,756 | |

[removed: _Evaluation] [added: _Evaluation] of Disclosure Controls and [removed: Procedures_][added: Procedures_]

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, [removed: 2014.][added: 2015.]

Management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of June 30, [removed: 2014.][added: 2015.]

In making this assessment, our management used the criteria for effective internal control over financial reporting described in “Internal [removed: Control – Integrated] [added: Control—Integrated] Framework (1992)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management has determined that our internal control over financial reporting was effective as of June 30, [removed: 2014.][added: 2015.]

The Company’s internal control over financial reporting as of June 30, [removed: 2014] [added: 2015] has been audited by KPMG LLP, as stated in their report which is included elsewhere herein.

[removed: _Changes] [added: _Changes] in Internal Control over Financial [removed: Reporting_][added: Reporting_]

There was no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

As previously announced, we acquired Novus on July 2, 2014, ProtienSimple on July 31, 2014, and CyVek on November 3, 2014.

Novus, ProteinSimple, and CyVek accounted for approximately $21 million, $66 million, and $1 million of fiscal 2015 consolidated net sales.

We have not fully evaluated any changes in internal control over financial reporting associated with these acquisitions.

Therefore, management's assessment of internal control over financial reporting as of June 30, 2015 excluded a portion of internal control over financial reporting related to these acquisitions.

We intend to disclose all material changes resulting from these acquisitions within or prior to the time of our first annual assessment of internal control over financial reporting that is required to include these entities.

The results reported in this quarterly report include those of Novus, ProteinSimple, and CyVek.

ITEM 9B.

OTHER INFORMATION

None.

PART III

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

At June 30, 2013, the Company identified a material weakness in the design, implementation and operating effectiveness of general IT controls (GITCs) intended to ensure that access to financial applications and data was adequately restricted to appropriate personnel, and that program changes to particular financial applications are documented, tested, and moved into the production environment only by individuals separate from the development function.

As a result, certain classes of transactions subject to controls that rely upon information generated by the Company’s IT systems that are subject to the operation of the GITCs, including the completeness, existence, and accuracy of revenue and accounts receivable, allow for a reasonable possibility that a misstatement is not adequately prevented or detected through the operation of management’s system of internal control over financial reporting.

In light of the material weakness identified above, at June 30, 2013, the Company performed additional analysis and other post-closing procedures to ensure that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles and accurately reflect its financial position and results of operation as of and for the year ended June 30, 2013.

During fiscal 2014, the Company enhanced its internal testing approach, including performing additional procedures and expanding the documentation for select controls, to ensure the completeness, existence and accuracy of system generated information used to support the operation of the controls.

As of June 30, 2014, the Company’s management has concluded that the enhanced testing and the expansion of human resources to improve segregation of duties have remediated the material weakness.

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Other than the remediation actions described above, there were no other material changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than “Executive Officers of the Registrant” which is set forth at the end of Item 1 in Part I of this report, the information required by Item 10 is incorporated herein by reference to the sections entitled [removed: “Election] [added: "Election] of [removed: Directors,” “Corporate Governance”] [added: Directors," "Additional Corporate Governance Matters"] and [removed: “Compliance With Section 16(a) of the Exchange Act”] [added: "Principal Shareholders"] in the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

The information required by Item 11 is incorporated herein by reference to the [removed: section] [added: sections] entitled [removed: “Corporate Governance” and “Executive Compensation Discussion] [added: “Election of Directors”] and [removed: Analysis”] [added: "Executive Compensation"] in the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

OWNERS AND MANAGEMENT AND [removed: RELATED SHAREHOLDER] [added: RELATED SHAREHOLDER] MATTERS

Information about the Company’s equity compensation plans at June 30, [removed: 2014] [added: 2015] is as follows:

| _Plan Category_ | | _Number of Securities to be Issued Upon Exercise of Outstanding Options, [removed: Warrants and] [added: Warrants_ _and] Rights_ | | [removed: _Weighted- Average] [added: | | _Weighted-Average] Exercise Price of Outstanding Options, [removed: Warrants and] [added: Warrants_ _and] Rights_ | | [added: | |] _Number of Securities Remaining Available for Future Issuance Under [removed: Equity Compensation] [added: Equity_ _Compensation] Plans_ | [added: | |]

| Equity compensation plans approved by Shareholders (1) | | [removed: 816,000] | [added: 1,166] | [removed: $72.11] | | [removed: 2.3] [added: $ | 81.57 | | | 1.1] million | [added: | |]

| Equity compensation plans not approved by Shareholders | | [added: |] 0 | | [added: | |] 0 | | [added: | |] 0 | [added: |]

The remaining information required by Item 12 is incorporated by reference to the sections entitled [removed: “Principal Shareholders”] [added: "Principal Shareholders"] and [removed: “Management Shareholdings”] [added: "Management Shareholdings"] in the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

The information required by Item 13 is incorporated by reference to the sections entitled [removed: “Corporate Governance”] [added: "Election of Directors" and "Additional Corporate Governance Matters"] in the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

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The information required by Item 14 is incorporated herein by reference to the section entitled [removed: “Audit Matters”] [added: "Audit Matters"] in the Company’s Proxy Statement for its [removed: 2014] [added: 2015] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

Consolidated Statements of Earnings and Comprehensive Income for the Years Ended June 30, [added: 2015,] 2014, [added: and] 2013

Consolidated Balance Sheets as of June 30, [removed: 2014] [added: 2015] and [removed: 2013][added: 2014]

Consolidated Statements of Shareholders’ Equity for the Years Ended June 30, [removed: 2014, 2013] [added: 2015, 2014] and [removed: 2012][added: 2013]