Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

_Bio-_T__echne Corporation and Subsidiaries (in thousands, except per share data)

		Year Ended June 30,
		201__5				20__14				20__13
Net sales		$	452,246			$	357,763			$	310,575
Cost of sales			144,969				106,352				79,465
Gross margin			307,277				251,411				231,110
Operating expenses:
Selling, general and administrative			119,401				60,716				43,384
Research and development			40,853				30,945				29,257
Total operating expenses			160,254				91,661				72,641
Operating income			147,023				159,750				158,469
Other income (expense):
Interest expense			(1,544	)			0				0
Interest income			634				2,684				2,646
Other non-operating income (expense), net			8,049				(1,042	)			(453	)
Total other income (expense)			7,139				1,642				2,193
Earnings before income taxes			154,162				161,392				160,662
Income taxes			46,427				50,444				48,101
Net earnings			107,735				110,948				112,561
Other comprehensive income (loss):
Foreign currency translation adjustments			(36,513	)			15,819				(3,538	)
Unrealized (losses) gains on available-for-sale investments, net of tax of 3,895, ($17,110) and ($2,129), respectively			11,308				(35,760	)			(3,684	)
Other comprehensive (loss) income			(25,205	)			(19,941	)			(7,222	)
Comprehensive income		$	82,530			$	91,007			$	105,339
Earnings per share:
Basic		$	2.90			$	3.01			$	3.06
Diluted		$	2.89			$	3.00			$	3.05
Cash dividends per common share:		$	1.27			$	1.23			$	1.18
Weighted average common shares outstanding:
Basic			37,096				36,890				36,836
Diluted			37,231				37,005				36,900

See Notes to Consolidated Financial Statements.

CONSOLIDATED BALANCE SHEETS

Bio-T__echne Corporation and Subsidiaries(in thousands, except share and per share data)

		June 30,
		201__5				20__14
ASSETS
Current assets:
Cash and cash equivalents		$	54,532			$	318,568
Short-term available-for-sale investments			56,389				44,786
Accounts receivable, less allowance for doubtful accounts of $555 and $487, respectively			70,034				55,001
Deferred income taxes			11,511				9,623
Inventories			49,577				38,847
Other current assets			6,240				2,588
Total current assets			248,283				469,413
Available-for-sale investments			0				3,575
Property and equipment, net			129,749				117,120
Goodwill			390,638				151,473
Intangible assets, net			292,839				108,776
Investments in unconsolidated entities			0				10,446
Other assets			1,851				1,688
		$	1,063,360			$	862,491
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable		$	13,443			$	9,652
Salaries, wages and related accruals			10,344				6,158
Accrued expenses			6,604				4,136
Deferred revenue			3,380				0
Income taxes payable			1,972				496
Related party note payable, current			4,024				5,949
Total current liabilities			39,768				26,391
Deferred income taxes			61,429				33,838
Related party note payable, long-term			0				6,997
Long-term debt obligations			73,000				0
Contingent consideration payable			39,024				0
Other long-term liabilities			3,204				0
Shareholders’ equity:
Undesignated capital stock, no par; authorized 5,000,000 shares; none issued or outstanding			0				0
Common stock, par value $.01 a share; authorized 100,000,000 shares; issued and outstanding 37,152,979 and 37,002,203 shares, respectively			371				370
Additional paid-in capital			163,306				147,004
Retained earnings			713,851				653,279
Accumulated other comprehensive (loss) income			(30,593	)			(5,388	)
Total shareholders’ equity			846,935				795,265
		$	1,063,360			$	862,491

See Notes to Consolidated Financial Statements.

CONSOLIDATED **STATEMENTS OF SHAREHOLDERS’ EQUITY **_Bio-_T__echne Corporation and Subsidiaries (in thousands)

		Common Stock								Additional Paid-in				Retained				Accumulated Other Compre- hensive
		Shares				Amount				Capital				Earnings				Income_(Loss)_				Total
Balances at June 30, 2012			36,826			$	368			$	131,851			$	520,448			$	21,775			$	674,442
Net earnings															112,561								112,561
Other comprehensive loss																			(7,222	)			(7,222	)
Common stock issued for exercise of options			22				0				1,105												1,105
Common stock issued for restricted stock award			15				0																0
Repurchase of common stock			(28	)			(0	)							(1,821	)							(1,821	)
Cash dividends															(43,463	)							(43,463	)
Stock-based compensation expense											1,864												1,864
Tax benefit from exercise of stock options											75												75
Balances at June 30, 2013			36,835				368				134,895				587,725				14,553				737,541
Net earnings															110,948								110,948
Other comprehensive loss																			(19,941	)			(19,941	)
Surrender and retirement of stock to exercise options			(1	)			(0	)			(56	)											(56	)
Common stock issued for exercise of options			142				2				8,380												8,382
Common stock issued for restricted stock awards			26				0																0
Cash dividends															(45,394	)							(45,394	)
Stock-based compensation expense											3,523												3,523
Tax benefit from exercise of stock options											262												262
Balances at June 30, 2014			37,002				370				147,004				653,279				(5,388	)			795,265
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 exercise of options			141				1				9,761												9,762
Common stock issued for restricted stock awards			10				0								(57	)							(57	)
Cash dividends															(47,106	)							(47,106	)
Stock-based compensation expense											5,918												5,918
Tax benefit from exercise of stock options											615												615
Employee stock purchase plan expense											39												39
Balances at June 30, 2015			37,153			$	371			$	163,306			$	713,851			$	(30,593	)			846,935

See Notes to Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

_Bio-_T__echne Corporation and Subsidiaries (in thousands)

		Year Ended June 30,
		201__5				20__14				20__13
Cash flows from operating activities:
Net earnings		$	107,735			$	110,948			$	112,561
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			37,226				19,175				12,321
Costs recognized on sale of acquired inventory			6,961				7,480				4,501
Deferred income taxes			1,304				(2,853	)			(2,534	)
Stock-based compensation expense			5,957				3,523				1,864
Gain on sale of CyVek			(8,300	)			0				0
Excess tax benefit from stock option exercises			(615	)			(262	)			(75	)
Net (gain) loss from equity method investees			0				0				(570	)
Other			458				592				763
Change in operating assets and liabilities, net of acquisitions:
Trade accounts and other receivables			(11,747	)			1,145				(2,334	)
Inventories			(4,714	)			(2,895	)			(2,216	)
Prepaid expenses			(620	)			(554	)			(33	)
Trade accounts payable and accrued expenses			2,154				1,368				243
Salaries, wages and related accruals			1,679				1,034				(92	)
Income taxes payable			1,881				(1,939	)			(837	)
Net cash provided by operating activities			139,359				136,762				123,562
Cash flows from investing activities:
Purchase of available-for-sale investments			0				(106,746	)			(112,712	)
Proceeds from sale and maturities of available-for-sale investments			13,466				289,410				103,610
Additions to property and equipment			(19,905	)			(13,821	)			(22,454	)
Acquisitions, net of cash acquired			(420,102	)			(109,180	)			0
Investment in unconsolidated entity			0				(10,000	)			0
Other			48				25				352
Net cash provided by (used in) investing activities			(426,493	)			49,688				(31,204	)
Cash flows from financing activities:
Cash dividends			(47,106	)			(45,394	)			(43,463	)
Proceeds from stock option exercises			9,731				8,326				1,105
Excess tax benefit from stock option exercises			615				262				75
Purchase of common stock for stock bonus plans			0				0				(573	)
Repurchase of common stock			0				0				(1,821	)
Borrowings under line-of-credit agreement			163,000				0				0
Payment on line-of-credit and other			(94,964	)			0				0
Net cash used in financing activities			31,276				(36,806	)			(44,677	)
Effect of exchange rate changes on cash and cash equivalents			(8,178	)			5,138				(570	)
Net change in cash and cash equivalents			(264,036	)			154,782				47,111
Cash and cash equivalents at beginning of year			318,568				163,786				116,675
Cash and cash equivalents at end of year		$	54,532			$	318,568			$	163,786

See Notes to Consolidated Financial Statements.

NOTES TO C****ONSOLIDATED FINANCIAL STATEMENTS

_Bio-_T__echne Corporation and Subsidiaries

Years ended June 30, 2015, 2014 and 2013

Note 1. Description of B__usiness and S__ummary of S__ignificant A__ccounting P__olicies:

Description of business: Bio-Techne Corporation and subsidiaries, collectively doing business as Bio-Techne (the Company) develop, manufacture and sell biotechnology products and clinical diagnostic controls worldwide. With its deep product portfolio and application expertise, Bio-Techne is a leader in providing specialized proteins, including cytokines and growth factors, and related immunoassays, small molecules and other reagents to the research, diagnostics and clinical controls markets.

Estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates include the valuation of accounts receivable, available-for-sale investments, inventory, intangible assets, stock based compensation and income taxes. Actual results could differ from these estimates.

Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Translation of foreign financial statements: Assets and liabilities of the Company’s foreign operations are translated at year-end rates of exchange and the resulting gains and losses arising from the translation of net assets located outside the U.S. are recorded as other comprehensive income (loss) on the consolidated statement of earnings and comprehensive income. The cumulative translation adjustment is a component of accumulated other comprehensive income (loss) on the consolidated balance sheets. Foreign statements of earnings are translated at the average rate of exchange for the year. Foreign currency transaction gains and losses are included in other non-operating expense in the consolidated statements of earnings.

Revenue recognition: The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Payment terms for shipments to end-users are generally net 30 days. Payment terms for distributor shipments may range from 30 to 90 days. Freight charges billed to end-users are included in net sales and freight costs are included in cost of sales. Freight charges on shipments to distributors are paid directly by the distributor. Any claims for credit or return of goods must be made within 10 days of receipt. Revenues are reduced to reflect estimated credits and returns. Sales, use, value-added and other excise taxes are not included in revenue.

Research and development: Research and development expenditures are expensed as incurred. Development activities generally relate to creating new products, improving or creating variations of existing products, or modifying existing products to meet new applications.

Advertising costs: Advertising expenses (including production and communication costs) were $4.1 million, $3.4 million, and $3.2 million for fiscal 2015, 2014, and 2013, respectively. The Company expenses advertising expenses as incurred.

Share-based compensation: The cost of employee services received in exchange for the award of equity instruments is based on the fair value of the award at the date of grant. Separate groups of employees that have similar historical exercise behavior with regard to option exercise timing and forfeiture rates are considered separately in determining option fair value. Compensation cost is recognized using a straight-line method over the vesting period and is net of estimated forfeitures. Stock option exercises and stock awards are satisfied through the issuance of new shares.

Income taxes: The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized to record the income tax effect of temporary differences between the tax basis and financial reporting basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Tax positions taken or expected to be taken in a tax return are recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.

Financial instruments not measured at fair value_:_ Certain of the Company’s financial instruments are not measured at fair value but nevertheless are recorded at carrying amounts approximating fair value, based on their short-term nature. These financial instruments include cash and cash equivalents, accounts receivable, accounts payable and other current liabilities.

Cash and equivalents: Cash and cash equivalents include cash on hand and highly-liquid investments with original maturities of three months or less.

_Available-for-_sale investments: Available-for-sale investments consist of debt instruments with original maturities of generally three months to three years and equity securities. Available-for-sale investments are recorded based on trade-date. The Company considers all of its marketable securities available-for-sale and reports them at fair value. The Company utilizes valuation techniques for determining fair market value which maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

Unrealized gains and losses on available-for-sale securities are excluded from income, but are included, net of taxes, in other comprehensive income. If an “other-than-temporary” impairment is determined to exist, the difference between the value of the investment security recorded in the financial statements and the Company’s current estimate of the fair value is recognized as a charge to earnings in the period in which the impairment is determined.

Inventories: Inventories are stated at the lower of cost (first-in, first-out method) or market. The Company regularly reviews inventory on hand for slow-moving and obsolete inventory, inventory not meeting quality control standards and inventory subject to expiration. To meet strict customer quality standards, the Company has established a highly controlled manufacturing process for proteins, antibodies and its chemically-based products. These products require the initial manufacture of multiple batches to determine if quality standards can be consistently met. In addition, the Company will produce larger batches of established products than current sales requirements due to economies of scale. The manufacturing process for these products, therefore, has and will continue to produce quantities in excess of forecasted usage. The Company values its manufactured protein and antibody inventory based on a two-year forecast and its chemically-based products on a five-year forecast. Inventory quantities in excess of the forecast are not valued due to uncertainty over salability. Sales of previously unvalued protein, antibody and chemically-based inventory for fiscal years 2015, 2014, and 2013 were not material.

Property and equipment: Property and equipment are recorded at cost. Equipment is depreciated using the straight-line method over an estimated useful life of five years. Buildings, building improvements and leasehold improvements are amortized over estimated useful lives of 5 to 40 years. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In the current year, the Company has identified no such events.

Goodwill: At June 30, 2015 and 2014, the Company had recorded goodwill of $390.6 million and $151.5 million, respectively. The Company tests goodwill at least annually for impairment. The Company completed its annual impairment testing of goodwill and concluded that no impairment existed as of June 30, 2015.

Intangible assets: Intangible assets are being amortized over their estimated useful lives. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In the current year, the Company has identified no such events.

Investments in unconsolidated entities: The Company has equity investments in several start-up and early development stage companies. The accounting treatment of each investment (cost method or equity method) is dependent upon a number of factors, including, but not limited to, the Company’s share in the equity of the investee and the Company’s ability to exercise significant influence over the operating and financial policies of the investee.

Note 2. Acquisitions:

Bionostics Holdings_,_ Ltd.: On July 22, 2013, the Company acquired for cash all of the outstanding shares of Bionostics Holdings, Ltd. (Bionostics) and its U.S. operating subsidiary, Bionostics, Inc. Bionostics is a global leader in the development, manufacture and distribution of control solutions that verify the proper operation of in-vitro diagnostic devices primarily utilized in point of care blood glucose and blood gas testing. Bionostics is included in the Company’s Clinical Controls segment.

In connection with the Bionostics acquisition, the Company recorded $14.4 million of developed technology intangible assets that have an estimated useful life of 9 years, $2.7 million of trade name intangible assets that have an estimated useful life of 5 years, $2.4 million related to non-compete agreements that have an estimated useful life of 3 years, and $41.0 million related to customer relationships that have an estimated useful life of 14 years. The intangible asset amortization is not deductible for income tax purposes.

The goodwill recorded as a result of the Bionostics 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.

Transaction costs of $0.5 million and $0.6 million were included in the Company’s selling, general and administrative costs during fiscal 2014 and 2013, respectively, related to the Bionostics acquisition.

Shanghai Prime__G__ene Bio-Tech Co.: On April 30, 2014, the Company acquired all of the ownership interest of Shanghai PrimeGene Bio-Tech Co. (PrimeGene). PrimeGene manufactures recombinant proteins and is included in the Company’s Biotechnology segment. The Company paid approximately $6.0 million at closing, with the remaining purchase price payable over fiscal years 2015 to 2017. The note payable is due to individuals who are currently employed by PrimeGene.

In connection with the PrimeGene acquisition, the Company recorded $2.2 million of developed technology intangible assets that have an estimated useful life of 9 years, $3.0 million of trade name intangible assets that have an estimated useful life of 11 years, $0.3 million related to non-compete agreements that have an estimated useful life of 3 years, and $9.1 million related to customer relationships that have an estimated useful life of 9 years. The intangible asset amortization is not deductible for income tax purposes.

The goodwill recorded as a result of the PrimeGene 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.

Transaction costs of $0.4 million were included in the Company’s selling, general and administrative costs during fiscal 2014, related to the PrimeGene acquisition.

Novus Holdings LLC: On July 2, 2014, the Company acquired all of the issued and outstanding equity interests of Novus Holdings LLC (Novus). Novus broadens the Company’s antibody offerings by being a supplier of a large portfolio of both outsourced and in-house developed antibodies and other reagents for life science research. 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.

Protein__Simple: On July 31, 2014, the Company acquired ProteinSimple. 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.

Transaction costs of $0.8 million were included in the Company’s selling, general and administrative costs during fiscal 2015 related to the ProteinSimple acquisition.

CyVek Inc.__: On November 3, 2014, the Company acquired CyVek, Inc. (CyVek) through a merger. CyVek has developed a transformative immunoassay technology which integrates an innovatively designed microfluidic cartridge with a state-of-the-art analyzer to deliver the most advanced and efficient bench top immunoassay system. In fiscal 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. Between the time of the Company’s initial investment and November 3, 2014, CyVek met certain commercial milestones related to the sale of its products, which obligated the Company to acquire CyVek through a merger, with CyVek surviving as a wholly-owned subsidiary of the Company.

The Company made an initial payment of approximately $62.0 million to the other stockholders of CyVek on November 3, 2014. Such purchase price was adjusted after closing based on the final levels of cash, indebtedness and transaction expenses of CyVek as of the closing. The Company will also pay CyVek’s previous stockholders up to $35.0 million based on the revenue generated by CyVek’s products before May 3, 2017 (30 months from the closing of the Merger). The Company will also pay CyVek’s previous 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. The Company has recorded the present value of these contingent payments as a long-term liability of $35.0 million at June 30, 2015. In addition, at November 3, 2014, the Company re-measured its previous investment in CyVek to acquisition-date fair value, resulting in a gain on the investment of $8.3 million which is included in Other income on the Condensed Consolidated Statements of Earnings and Comprehensive Income. The purchase price of CyVek exceeded the fair value of the identifiable net assets and, accordingly, the difference was allocated to goodwill, substantially all of which is not tax deductible. CyVek is included in the Company’s Protein Platforms segment.

In connection with the CyVek acquisition, the Company recorded $20.2 million of developed technology intangible assets that have an estimated useful life of 15 years, $0.1 million of trade name intangible assets that have an estimated useful life of 1.5 years, and $0.6 million related to customer relationships that have an estimated useful life of 10 years. The intangible asset amortization is not deductible for income tax purposes.

The goodwill recorded as a result of the CyVek 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.

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

The aggregate purchase price of the acquisitions was allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The estimate of the excess of purchase price over the fair value of net tangible assets acquired was allocated to identifiable intangible assets and goodwill. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as a result of the acquisitions (in thousands):

		Novus				Protein_-_ Simple				CyVek				Bionostics				PrimeGene
Current assets		$	10,739			$	19,660			$	1,206			$	9,605			$	1,272
Equipment			1,266				1,983				971				2,180				546
Other long-term assets			40				554				19
Intangible Assets:
Developed technology			5,010				39,200				20,200				14,400				2,200
Trade name			5,300				36,100				100				2,700				3,000
Customer relationships			14,400				101,600				600				41,000				9,100
Non-compete agreements			-				200				-				2,400				322
Goodwill			28,408				134,074				91,658				56,349				5.518
Total assets acquired			65,163				333,371				114,754				128,634				21,958
Liabilities			2,166				11,644				1,965				3,007				887
Deferred income taxes, net			2,875				21,674				(438	)			22,478				2,310
Net assets		$	60,122			$	300,053			$	113,327			$	103,149			$	18,761
Less fair-value of previous investment			-				-				18,300				-				-
Net assets acquired			60,122				300,053				94,927				103,149				18,761
Cash paid, net of cash acquired		$	60,122			$	300,053			$	59,927			$	103,149			$	6,031
Contingent consideration payable			-				-				35,000				-				12,730
Net purchase price		$	60,122			$	300,053			$	94,927			$	103,149			$	18,761

Tangible assets acquired, net of liabilities assumed, were stated at fair value at the date of acquisition based on management’s assessment. The purchase price allocated to developed technology, trade names, non-compete agreements and customer relationships was based on management’s forecasted cash inflows and outflows and using a relief-from-royalty and a multi-period excess earnings method to calculate the fair value of assets purchased. The developed technology is being amortized with the expense reflected in cost of goods sold in the Consolidated Statement of Earnings and Comprehensive Income. Amortization expense related to trade names, the non-compete agreement and customer relationships is reflected in selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income. The deferred income tax liability represents the estimated future impact of adjustments for the cost to be recognized upon the sale of acquired inventory that was written up to fair value and intangible asset amortization, of which are not deductible for income tax purposes, and the future tax benefit of net operating loss and tax credit carryforwards which will be deductible by the Company in future periods.

The Company’s Condensed Consolidated Financial Statements include the following from the above acquisitions:

		Novus				Protein_-_ Simple				CyVek
Net sales		$	21,092			$	65,512			$	735
Net income (loss)			(610	)			(3,624	)			(4,196	)
Amortization expense			1,898				11,364				981
Costs recognized on sale of acquired inventory			1,946				1,444				64

The unaudited pro forma financial information below summarizes the combined results of operations for Bio-Techne and the above acquisitions as though the companies were combined as of the beginning fiscal 2014. The pro forma financial information for all periods presented includes the purchase accounting effects resulting from these acquisitions. The pro forma financial information as presented below is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of fiscal 2014.

		For the Year Ended June, 30
		2015				2014
Net sales		$	457,270			$	433,034
Net income			104,132				100,958

See Note 15. Subsequent Events. for information regarding the Company’s acquisition of Cliniqa Corporation in July 2015.

Note 3. Available-For-Sale Investments:

At June 30, 2015 and 2014, the amortized cost and market value of the Company’s available-for-sale securities by major security type were as follows (in thousands):

		June 30,
		2015								20__14
		Cost				Market				Cost				Market
State and municipal debt securities		$	0			$	0			$	3,525			$	3,525
Corporate debt securities			0				0				100				100
Certificates of deposit			4,089				4,089				7,639				7,639
Equity securities			29,472				52,300				29,472				37,097
		$	33,561				56,389			$	40,736			$	48,361

At June 30, 2015 and 2014, all of the Company’s available-for-sale debt securities were valued using Level 2 inputs, while its equity securities were valued using Level 1 inputs. Certificates of deposit are carried at cost and are not subject to the fair value hierarchy. There were no transfers between Level 1 and Level 2 securities during fiscal 2015. Gross unrealized gains on available-for-sale investments were $22.8 million and $7.6 million at June 30, 2015, and June 30, 2014, respectively.

The Company’s investment in equity securities consists of investments in the common stock and warrants of ChemoCentryx, Inc. (CCXI). The warrants are to purchase 150,000 shares of CCXI common stock at $20 per share and expire in February, 2022. The fair value of the warrants as of June 30, 2015 and 2014 were $52.3 million and $37.1 million, respectively, and were valued using Level 2 inputs. At June 30, 2015, the Company holds an approximate 14% interest in CCXI.

Proceeds from maturities or sales of available-for-sale securities were $13.5 million, $289 million, and $104 million during fiscal 2015, 2014, and 2013, respectively. There were no material realized gains or losses on these sales. Realized gains and losses are determined on the specific identification method.

Note 4. Inventories:

Inventories consist of (in thousands):

		June 30,
		2015				20__14
Raw materials		$	15,892			$	9,852
Finished goods			33,685				28,995
		$	49,577			$	38,847

At June 30, 2015 and 2014, the Company had $24.0 million and $30.3 million, respectively, of excess protein, antibody and chemically-based inventory on hand which was not valued.

Note 5. Property and Equipment:

Property and equipment consist of (in thousands):

		June 30,
		2015				20__14
Cost:
Land		$	7,370			$	7,468
Buildings and improvements			156,965				149,442
Machinery, equipment and other			74,385				53,067
			238,720				209,977
Accumulated depreciation and amortization			(108,967	)			(92,857	)
		$	129,749			$	117,120

Note 6. Intangible Assets and Goodwill:

Intangible assets and goodwill consist of (in thousands):

						June 30,
		Useful Life (years)				2015				20__14
Developed technology		8	-	15		$	108,887			$	48,166
Trade names		5	-	20			63,867				24,280
Customer relationships		8	-	16			167,494				59,240
Non-compete agreement		3	-	5			3,298				3,109
							343,546				134,795
Accumulated amortization							(50,707	)			(26,019	)
						$	292,839			$	108,776
Goodwill						$	390,638			$	151,473

Changes to the carrying amount of goodwill consists of (in thousands):

		Year Ended June 30,
		2015				20__14
Beginning balance		$	151,473			$	84,336
Acquisitions			254,140				61,867
Currency translation			(14,975	)			5,270
Ending balance		$	390,638			$	151,473

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

		Year Ended June 30,
		2015				20__14
Beginning balance		$	108,776			$	40,552
Acquisitions			222,710				75,122
Amortization expense			(26,170	)			(10,267	)
Currency translation			(12,777	)			(3,369	)
Ending balance		$	292,839			$	108,776

Amortization expense related to technologies included in cost of sales was $9.5 million, $4.2 million, and $3.0 million in fiscal 2015, 2014, and 2013, respectively. Amortization expense related to trade names, customer relationships, and the non-compete agreement included in selling, general and administrative expense was $16.7 million, $6.1 million, and $2.1 million in fiscal 2015, 2014, and 2013, respectively.

The estimated future amortization expense for intangible assets as of June 30, 2015 is as follows (in thousands):

Year Ending June 30:
2016			28,416
2017			27,532
2018			27,335
2019			26,721
2020			26,401
Thereafter			156,434
		$	292,839

Note 7. Debt and Other Financing Arrangements:

On July 28, 2014, the Company entered into a revolving line-of-credit facility governed by a Credit Agreement (the Credit Agreement). The Credit Agreement provides for a revolving credit facility of $150 million, which can be increased by an additional $150 million subject to certain conditions. Borrowings under the Credit Agreement may be used for working capital and expenditures of the Company and its subsidiaries, including financing permitted acquisitions. Borrowings under the Credit Agreement for base rate loans bear interest at a variable rate equal to the greater of (i) the prime commercial rate, (ii) the per annum federal funds rate plus 0.5%, or (iii) LIBOR + 1.00% - 1.75% depending on the existing total leverage ratio of Debt to Earnings Before Interest, Taxes, Depreciation and Amortization (as defined in the Credit Agreement). The annualized fee for any unused portion of the credit facility is 15 basis points.

The Credit Agreement matures on July 31, 2019 and contains customary restrictive and financial covenants and customary events of default. As of June 30, 2015, the outstanding balance under the Credit Agreement was $73 million.

Note 8. Commitments and Contingencies:

The Company leases office and warehouse space, vehicles and various office equipment under operating leases. At June 30, 2015, aggregate net minimum rental commitments under non-cancelable leases having an initial or remaining term of more than one year are payable as follows (in thousands):

Year Ending June 30:
2016			5,289
2017			5,463
2018			4,964
2019			4,270
2020			4,212
Thereafter			22,490
		$	46,688

Total rent expense was approximately $4.9 million, $1.6 million, and $0.7 million for the years ended June 30, 2015, 2014, and 2013, respectively.

The Company is routinely subject to claims and involved in legal actions which are incidental to the business of the Company. Although it is difficult to predict the ultimate outcome of these matters, management believes that any ultimate liability will not materially affect the consolidated financial position or results of operations of the Company.

Note 9. Share-based Compensation and Other Benefit Plans:

Equity incentive plan: The Company’s 2010 Equity Incentive Plan (the 2010 Plan) provides for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, performance shares, performance units and stock appreciation rights. There are 3.0 million shares of common stock authorized for grant under the 2010 Plan. At June 30, 2015, there were 1.8 million shares of common stock available for grant under the 2010 Plan. The maximum term of incentive options granted under the 2010 Plan is ten years. The 2010 Plan replaced the Company’s 1998 Nonqualified Stock Option Plan (the 1998 Plan) and 1997 Incentive Stock Option Plan (the 1997 Plan). The 2010 Plan, the 1998 Plan and the 1997 Plan (collectively, the Plans) are administered by the Board of Directors and its Compensation Committee, which determine the persons who are to receive awards under the Plans, the number of shares subject to each award and the term and exercise price of each award. The number of shares of common stock subject to outstanding awards at June 30, 2015 under the 2010 Plan, the 1998 Plan and the 1997 Plan were 1.1 million, 98,000, and 9,000, respectively.

Stock option activity under the Plans for the three years ended June 30, 2015, consists of the following (shares in thousands):

		Shares				Weighted Average Exercise Price				Weighted Avg. Contractual Life (Yrs.)			Aggregate Intrinsic Value
Outstanding at June 30, 2012			575			$	65.78
Granted			175				67.80
Exercised			(22	)			51.17
Outstanding at June 30, 2013			728				66.70
Granted			251				80.88
Forfeited			(26	)			76.23
Exercised			(142	)			59.07
Outstanding at June 30, 2014			811				72.11
Granted			600				93.98
Forfeited			(133	)			92.85
Exercised			(141	)			69.31
Outstanding at June 30, 2015			1,137			$	81.57				5.4		$19.2 million
Exercisable at June 30:
2013			497			$	65.04
2014			534				69.49
2015			547				72.72				5.0		$14.1 million

The fair values of options granted under the Plans were estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used:

		Year Ended June 30,
		2015				20__14				20__13
Dividend yield			1.3%				1.5%				1.8%
Expected volatility		18%	-	21%		18%	-	22%		18%	-	23%
Risk-free interest rates		1.3%	-	2.2%		1.4%	-	2.1%		0.4%	-	1.4%
Expected lives (years)			5				6				5

The dividend yield is based on the Company’s historical annual cash dividend divided by the market value of the Company’s common stock. The expected annualized volatility is based on the Company’s historical stock price over a period equivalent to the expected life of the option granted. The risk-free interest rate is based on U.S. Treasury constant maturity interest rates with a term consistent with the expected life of the options granted.

The weighted average fair value of options granted during fiscal 2015, 2014 and 2013 was $15.01, $14.77 and $9.72, respectively. The total intrinsic value of options exercised during fiscal 2015, 2014 and 2013 were $3.5 million, $3.7 million, and $0.4, respectively. The total fair value of options vested during fiscal 2015, 2014 and 2013 were $2.3 million, $2.2 million, and $1.5 million, respectively.

In fiscal 2015, 2014 and fiscal 2013, 9,000, 26,355 and 15,000 restricted common stock shares were granted at weighted average grant date fair values of $91.78, $86.60 and $67.46 per share, respectively. Non-vested restricted common stock shares at June 30, 2015, 2014 and 2013 were 19,102, 36,355 and 15,000, respectively.

In fiscal 2015 and 2014, 36,192 and 5,000 restricted stock units were granted at a weighted average grant date fair value of $94.13 and $86.25, respectively. The restricted stock units vest over a three year period. In fiscal 2015, 10,000 restricted stock units were forfeited.

Stock-based compensation cost of $5.9 million, $3.5 million, and $1.9 million was included in selling, general and administrative expense in fiscal 2015, 2014 and 2013, respectively. As of June 30, 2015, there was $7.9 million of unrecognized compensation cost related to non-vested stock options, non-vested restricted stock units and non-vested restricted stock which will be expensed in fiscal 2016 through 2019. The weighted average period over which the compensation cost is expected to be recognized is 1.2 years.

Employee stock purchase plan: In fiscal year 2015, the Company established the Bio-Techne Corporation 2014 Employee Stock Purchase Plan, which was approved by the Company’s shareholders on October 30, 2014, and which is designed to comply with IRS provisions governing employee stock purchase plans. Two hundred thousand shares were allocated to the Plan. The initial participation period for the plan began March 1, 2015 and ended on August 31, 2015. The Company recorded $39,000 expense for the plan in fiscal year 2015.

Profit sharing and savings plans: The Company has profit sharing and savings plans for its U.S. employees, which conform to IRS provisions for 401(k) plans. The Company may makes matching contributions to the Plan. The Company has recorded an expense for contributions to the plans of $1.1 million and $0.7 million for the years ended June 30, 2015, and 2014, respectively. No contribution was charged to operations for fiscal 2013. The Company operates defined contribution pension plans for its U.K. employees. The Company has recorded an expense for contributions to the plans of $0.7 million, $0.6 million, and $0.6 million for the years ended June 30, 2015, 2014 and 2013, respectively.

Performance incentive program__s_:_ In fiscal 2015, under certain employment agreements and a Management Incentive Plan available to executives officers and certain management personnel, the Company recorded cash bonuses of $1.9 million and granted options for 322,000 shares of common stock and issued 11,129 restricted stock units. The Company recorded cash bonuses of $0.9 and $0.3 million and granted options for 216,000 and 132,852 shares of common stock for the years ended June 30, 2014 and 2013, respectively. In addition, 5,000 restricted stock units and 17,855 shares of restricted common stock were issued in fiscal 2014 and 15,000 restricted common stock shares were issued to an executive officer in fiscal 2013.

Note 10. Income Taxes:

The provisions for income taxes consist of the following (in thousands):

		Year Ended June 30,
		2015				2014				2013
Earnings before income taxes consist of:
Domestic		$	121,765			$	127,681			$	127,491
Foreign			32,397				33,711				33,171
		$	154,162			$	161,392			$	160,662
Taxes on income consist of:
Currently payable:
Federal		$	28,220			$	40,967			$	37,666
State			6,165				1,709				2,012
Foreign			10,704				10,668				10,758
Net deferred:
Federal			4,401				(1,137	)			(595	)
State			292				(41	)			(7	)
Foreign			(3,355	)			(1,722	)			(1,733	)
		$	46,427			$	50,444			$	48,101

The following is a reconciliation of the federal tax calculated at the statutory rate of 35% to the actual income taxes provided (in thousands):

		Year Ended June 30,
		2015				2014				2013
Computed expected federal income tax expense		$	53,957			$	56,487			$	56,232
State income taxes, net of federal benefit			4,762				1,048				1,300
Qualified production activity deduction			(3,140	)			(3,823	)			(3,774	)
Non-taxable gain on investment			(2,905	)			0				0
Research and development tax credit			(912	)			(476	)			(1,392	)
Tax-exempt interest			0				(654	)			(568	)
Foreign tax rate differences			(4,059	)			(2,857	)			(2,587	)
Other			(1,276	)			719				(1,110	)
		$	46,427			$	50,444			$	48,101

In the year ended June 30, 2015, as a result of the recent acquisitions, the rate reflects an increase for state tax expense as well as a resulting provision to return true up from fiscal 2014. This increase is offset by the non-taxable gain which was a result of purchasing the remaining interest in CyVek. In addition the Company‘s R&D Europe subsidiary declared and paid a dividend of £46.6 million which resulted in a tax benefit of approximately $1.7 million.

Temporary differences comprising deferred taxes on the Consolidated Balance Sheets are as follows (in thousands):

		June 30
		2015				2014
Inventory		$	8,753			$	9,932
Net operating loss carryovers			34,767				0
Tax credit carryovers			3,872				0
Excess tax basis in equity investments			4,496				4,344
Deferred compensation			3,747				3,295
Other			4,712				3,088
Valuation allowance			(2,558	)			(1,806	)
Net deferred tax assets			57,789				18,853
Net unrealized gain on available-for-sale investments			(8,446	)			(2,745	)
Goodwill and intangible asset amortization			(96,401	)			(37,641	)
Depreciation			(2,394	)			(2,166	)
Other			(466	)			(516	)
Deferred tax liabilities			(107,707	)			(43,068	)
Net deferred tax liabilities		$	(49,918	)		$	(24,215	)

A deferred tax valuation allowance is required when it is more likely than not that all or a portion of deferred tax assets will not be realized. At June 30, 2015, a valuation allowance for potential capital loss carryovers on equity investments was zero as a result of improved performance of available-for-sale investments. Approximately $2.4 million of the valuation allowance at June 30, 2015 is for certain foreign and state tax net operating loss and state credit carryforwards that existed at the date the Company acquired Novus, ProteinSimple, and CyVek. The remainder of the valuation allowance is for certain state tax credit carryovers generated in fiscal 2015. The Company believes it is more likely than not that these tax carryovers will not be realized. At June 30, 2014, the Company had provided a valuation allowance for potential capital loss carryovers resulting from excess tax basis in certain of its equity investments. The Company believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the remaining deferred tax assets.

At June 30, 2015, the Company has federal and state net operating loss carryforwards of approximately $86.3 million and $77.8 million, respectively, from its fiscal 2015 acquisitions of ProteinSimple and CyVek, which are not limited under IRC Section 382. At June 30, 2015, the company has foreign net operating loss carryforwards of $2.5 million from its fiscal 2015 acquisition of Novus. The net operating loss carryforwards expire between fiscal 2016 and 2034. The Company has a deferred tax asset of $32.6 million, net of the valuation allowance discussed above, related to the net operating loss carryovers. At June 30, 2015, the Company has federal and state tax credit carryforwards of $2.5 million and $1.3 million, respectively. The federal tax credit carryforwards expire between 2018 and 2035. The state credit carryforwards have no expiry date. The Company has a deferred tax asset of $3.5 million, net of the valuation allowance discussed above, related to the tax credit carryovers.

The Company has not recognized a deferred tax liability for unremitted earnings of approximately $43.0 million from its foreign operations because its subsidiaries have invested or will invest the undistributed earnings indefinitely, or the earnings will be remitted in a tax-neutral transaction.

The Company’s unrecognized tax benefits at June 30, 2015, 2014 and 2013, including accrued interest and penalties, were not material. The Company does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase in the next twelve months. The Company files income tax returns in the U.S federal and certain state tax jurisdictions, and several jurisdictions outside the U.S. The Company’s federal returns are subject to tax assessment for 2012 and subsequent years. State and foreign income tax returns are generally subject to examination for a period of three to five years after filing of the respective return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.

Note 11. Earnings Per Share:

The number of shares used to calculate earnings per share are as follows (in thousands, except per share data):

		Year Ended June 30,
		2015				20__14				20__13
Net earnings used for basic and diluted earnings per share		$	107,735			$	110,948			$	112,561
Weighted average shares used in basic computation			37,096				36,890				36,836
Dilutive stock options			135				115				64
Weighted average shares used in diluted computation			37,231				37,005				36,900
Basic EPS		$	2.90			$	3.01			$	3.06
Diluted EPS		$	2.89			$	3.00			$	3.05

The dilutive effect of stock options in the above table excludes all options for which the aggregate exercise proceeds exceeded the average market price for the period. The number of potentially dilutive option shares excluded from the calculation was 516,000, 196,000, and 329,000 at June 30, 2015, 2014 and 2013, respectively.

Note 12. Segment Information:

The Company has three reportable segments based on the nature of its products; they are Biotechnology, Clinical Controls, and Protein Platforms.

The Company’s Biotechnology reporting segment develops, manufactures and sells biotechnology research and diagnostic products world-wide. No customer in the Biotechnology segment accounted for more than 10% of the segments net sales for the years ended June 30, 2015, 2014 and 2013.

The Company’s Clinical Controls reporting segment develops and manufactures controls and calibrators for sale world-wide. One customer accounted for approximately 13% and 14% of Clinical Controls’ net sales during fiscal 2015 and 2014 respectively. No single customer accounted for more than 10% of Clinical Controls’ net sales in fiscal 2013.

The Company’s Protein Platforms segment develops and commercializes proprietary systems and consumables for protein analysis. This segment was formed from the fiscal 2015 acquisitions of ProteinSimple and CyVek. No customer in the Protein Platforms segment accounted for more than 10% of the segments net sales for the years ended June 30, 2015.

There are no concentrations of business transacted with a particular customer or supplier or concentrations of revenue from a particular product or geographic area that would severely impact the Company in the near term.

Following is financial information relating to the operating segments (in thousands):

		Year Ended June 30,
		2015				20__14				20__13
External sales
Biotechnology		$	325,897			$	300,578			$	288,156
Clinical Controls			60,377				57,185				22,419
Protein Platforms			66,247				0				0
Inter segment			(273	)			0				0
Consolidated net sales		$	452,246			$	357,763			$	310,575

		Year Ended June 30,
		2015				20__14				20__13
Operating Income
Biotechnology		$	171,059			$	168,041			$	164,886
Clinical Controls			18,148				17,556				8,746
Protein Platforms			4,469				0				0
Segment operating income			193,675				185,597				173,632
Costs recognized upon sale of acquired inventory			(6,958	)			(7,480	)			(4,501	)
Amortization of intangibles			(26,169	)			(10,276	)			(5,061	)
Acquisition related expenses			(4,519	)			(2,247	)			(607	)
Corporate general, selling and administrative expenses			(9,007	)			(5,845	)			(4,994	)
Consolidated operating income		$	147,022			$	159,750			$	158,469
Goodwill
Biotechnology		$	119,450			$	95,124			$	84,336
Clinical Controls			56,349				56,349				0
Protein Platforms			214,839				0				0
Consolidated goodwill		$	390,638			$	151,473			$	84,336
Intangible assets, net
Biotechnology		$	68,777			$	53,778			$	40,552
Clinical Controls			49,130				54,998				0
Protein Platforms			174,932				0				0
Consolidated intangible assets, net		$	292,839			$	108,776			$	40,552
Assets
Biotechnology		$	439,377			$	685,302			$	580,085
Clinical Controls			66,101				55,615				24,887
Protein Platforms			444,899				0				0
Segment assets			950,378				740,917				604,972
Corporate cash and available- for- sale investments			52,800				60,142				108,504
Corporate property and equipment			58,270				60,350				61,296
Corporate, other			1,912				1,082				3,326
Consolidated assets		$	1,063,360			$	862,491			$	778,098
Depreciation and amortization
Biotechnology		$	13,820			$	10,879			$	10,781
Clinical Controls			7,963				7,205				389
Protein Platforms			13,364				0				0
Segment depreciation and amortization			35,147				18,084				11,170
Corporate			2,079				1,091				1,151
Consolidated depreciation and amortization		$	37,226			$	19,175			$	12,321
Capital purchases
Biotechnology		$	9,794			$	4,157			$	3,248
Clinical Controls			1,932				5,687				6,914
Protein Platforms			8,179
Segment capital purchases			19,905				9,844				10,162
Corporate			0				3,977				12,292
Consolidated capital purchases		$	19,905			$	13,821			$	22,454

The other reconciling items include the results of unallocated corporate expenses and the Company’s share of gain (losses) from its equity method investees.

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

		Year Ended June 30,
		2015				20__14				20__13
External sales
United States		$	245,217			$	190,359			$	164,308
Europe			134,077				97,157				88,297
China			26,105				18,878				14,106
Other Asia			23,806				32,704				28,608
Rest of world			23,041				18,665				15,256
Total external sales		$	452,246			$	357,763			$	310,575
Long-lived assets
United States and Canada		$	119,075			$	109,790			$	103,541
Europe			11,239				8,340				7,129
China			1,286				678				117
Total long-lived assets		$	131,600			$	118,808			$	110,787

External sales are attributed to countries based on the location of the customer or distributor. Long-lived assets are comprised of land, buildings and improvements and equipment, net of accumulated depreciation and other assets.

Note 13. Supplemental Disclosures of Cash Flow Information and Noncash Investing and Financing Activities:

In fiscal 2015, the Company acquired Novus, ProteinSimple, and CyVek for approximately $60 million, $300 million and $95 million, respectively. CyVek was acquired for approximately $62 million in cash and the Company will also pay CyVek’s previous stockholders up to $35.0 million based on the revenue generated by CyVek’s products before May 3, 2017 (30 months from the closing of the Merger).

In fiscal 2015, the Company opened a line of credit from which it borrowed a net amount of $73 million.

In fiscal 2014, the Company acquired Bionostics for approximately $103 million. PrimeGene was acquired for approximately $18.7 million. Approximately $6.0 million was paid at closing with approximately $12.7 million payable over fiscal years 2015 through 2017.

In fiscal 2015, 2014 and 2013, the Company paid cash for income taxes of $42.6 million, $55.2 million and $51.6 million, respectively.

In fiscal 2015, stock options for 385 shares of common stock were exercised by the surrender of 309 shares of common stock at fair market value of $31,000. In fiscal 2014, stock options for 1,077 shares of common stock were exercised by the surrender of 733 shares of common stock at fair market value of $56,000.

Note 14. Accumulated Other Comprehensive Income:

Changes in accumulated other comprehensive income (loss), net of tax, for the year ended June 30, 2015 consists of (in thousands):

		Unrealized Gains (Losses) on Available-for-Sale Investments				Foreign Currency Translation Adjustments				Total
Beginning balance		$	3,074			$	(8,462	)		$	(5,388	)
Other comprehensive income			11,308				(36,513	)			(25,205	)
Ending balance		$	14,382				(44,975	)		$	(30,593	)

Note 15. Subsequent Events:

On July 8, 2015, the Company acquired all of the outstanding equity of Cliniqa Corporation. Cliniqa, based in San Marcos, California, specializes in the manufacturing and commercialization of quality controls and calibrators as well as bulk reagents used in the clinical diagnostic market. Its controls and reagents are used in a wide variety of diagnostic tests for such pathologies as cardiac disease, diabetes, cancer, immunological disorders, therapeutic drug monitoring, urine analysis and toxicology. The acquisition further expanded and complemented our clinical controls product lines.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Bio-Techne Corporation:

We have audited the accompanying consolidated balance sheets of Bio-Techne Corporation and subsidiaries (the Company) as of June 30, 2015 and 2014, and the related consolidated statements of earnings and comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2015. We also have audited the Company’s internal control over financial reporting as of June 30, 2015, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Bio-Techne Corporation

August 31, 2015

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bio-Techne Corporation and subsidiaries as of June 30, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2015, in conformity with U.S. generally accepted accounting principles. Also in our opinion, Bio-Techne Corporation maintained, in all material respects, effective internal control over financial reporting as of June 30, 2015, based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

During the year ended June 30, 2015, the Company acquired Protein Platforms and Novus. Management excluded from its assessment of the effectiveness of internal control over financial reporting as of June 30, 2015, Protein Platforms and Novus’ internal control over financial reporting that comprise 47.9 % of total assets and 18.7% of total revenues included in the consolidated financial statements of Bio-Techne Corporation and subsidiaries as of and for the year ended June 30, 2015. Our audit of internal control over financial reporting of Bio-Techne Corporation also excluded an evaluation of the internal control over financial reporting of Protein Platforms and Novus.

(signed) KPMG LLP

Minneapolis, Minnesota August 31, 2015

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

None.