Bio-Techne (TECH) 10-K risk factor changes: FY2018 vs FY2017

Certain of these risks and [removed: uncertainties] [added: uncertainties,] which have affected and, in the future, could affect the Company's actual results are discussed below.

It may be difficult for us to implement our strategies [removed: for maintaining organic growth.][added: for revenue growth in light of competitive challenges.]

[removed: Some of the markets in which we compete are experiencing slower growth and we] [added: We] face significant competition across many of our product lines.

In addition, consolidation trends in the [removed: pharmaceutical and] [added: pharmaceutical,] biotechnology and diagnostics industries have served to create fewer customer accounts and to concentrate purchasing decisions for some customers, resulting in increased pricing pressure on the Company.

To address this issue, we are pursuing a number of strategies to [added: maintain and] improve our [removed: internal] [added: revenue] growth, including:

| | • | finding new markets for our products; [removed: and] |

Our acquisition growth strategy [removed: pose financial,] [added: poses financial,] management and other risks and challenges.

We routinely explore acquiring other businesses and assets, and have completed [removed: nine] [added: fifteen] acquisitions and several investments in the last [removed: three] [added: six] years.

For example, the Company has an approximate [removed: 13%] [added: 8%] equity investment in publicly traded ChemoCentryx, Inc. (Nasdaq: CCXI) that is valued at [removed: $59.6] [added: $54.3] million as of June 30, [removed: 2017.][added: 2018.]

In fiscal 2017, we also invested and [removed: hold] [added: held] a minority interest in privately-held Astute Medical, [removed: Inc.,] [added: Inc. (Astute),] a diagnostics company developing new diagnostics tests relating to kidney injury.

Significant developments stemming from the [removed: recent] U.S. [removed: elections and the] [added: administration or the] U.K.’s referendum on membership in the EU could have an adverse effect on us.

The [removed: current] [added: administration has also indicated an intention to ask] Congress [removed: is considering] [added: to make] significant [removed: changes to, or] [added: changes,] replacement or elimination of the Patient Protection and Affordable Care Act, and government negotiation/regulation of drug prices paid by government programs.

The [removed: new] U.S. administration has called for substantial changes to trade [removed: agreements] [added: agreements, such as the North American Free Trade Agreement (NAFTA),] and has [removed: raised the possibility of imposing] [added: imposed] significant increases on tariffs on goods imported into the United States, particularly from [removed: China and Mexico.][added: China.]

[removed: In] [added: Additionally, in] a referendum vote held on June 23, 2016, the United Kingdom (UK) voted to leave the European Union (EU).

We engage in business globally, with approximately [removed: 31%] [added: 46%] of our sales revenue in fiscal [removed: 2017] [added: 2018] coming from outside the U.S. In addition, one of our strategies is to expand geographically, particularly in [removed: China] [added: China, India] and in developing countries, both through distribution and through direct operations.

We incur additional legal compliance costs associated with our global operations and could become subject to legal penalties in foreign countries if [removed: it does] [added: we do] not comply with local laws and regulations, which may be substantially different from those in the U.S.

Changes in economic conditions [removed: for our customers] could negatively impact our revenues and earnings.

Changes in government reimbursement for certain diagnostic tests or reductions in overall healthcare spending could negatively impact [added: us directly or] our customers and, correspondingly, our sales to them.

[removed: The] [added: Several years ago, the] U.S. and global economies [removed: recently] experienced a period of economic downturn and have been slow to recover in some parts of the world.

[removed: We have] [added: Over the past two years we] identified [removed: a] [added: and remediated] material [removed: weakness] [added: weaknesses] in our internal control over financial reporting [removed: which could,] [added: which,] if [removed: not remediated,] [added: recurring, could] harm our operating results or cause us to fail to meet our reporting obligations.

As a result of these material weaknesses, our management concluded that our internal control over financial reporting was not effective based on criteria set forth by the Committee of Sponsoring Organization of the Treadway Commission in Internal Control-An Integrated Framework (2013 [removed: Framework).][added: Framework) for the years ended June 30, 2016 and 2017.]

Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common [removed: stock, and may require us to incur additional costs to improve our internal control system.][added: shares.]

Although our computer and communications hardware [removed: is] [added: are] protected through physical and software safeguards, it is still vulnerable to fire, storm, flood, power loss, earthquakes, telecommunications failures, physical or software break-ins, software viruses, and similar events.

As of June 30, [removed: 2017,] [added: 2018,] we owned or exclusively licensed [removed: 115] [added: 152] granted U.S. patents and approximately [removed: 100] [added: 82] pending patent applications.

This [removed: would] [added: could] cause unexpected costs and delays which may have a material adverse effect on us.

In connection with the acquisition of [removed: Advanced Cell] [added: Exosome] Diagnostics on August 1, [removed: 2016,] [added: 2018,] we [removed: modified our revolving] [added: used a new] credit [removed: facility,] [added: facility] governed by a Credit Agreement [added: entered into] on July 28, [removed: 2016.][added: 2018.]

As of August [removed: 30, 2017,] [added: 24, 2018,] the Company had drawn [removed: $368.5] [added: $330] million under the Credit Agreement.

For the past [removed: 9] [added: 10] years, our Board has consistently declared quarterly dividends of $0.25 to $0.32 cents per share.

| | • | acquiring new products and business in growing or novel markets; and |

Our inability to complete acquisitions or to successfully integrate any new or previous acquisitions could have a material adverse effect on our business.

Our business strategy includes the acquisition of technologies and businesses that complement or augment our existing products and services.

Certain acquisitions may be difficult to complete for a number of reasons, including the need for antitrust and/or other regulatory approvals.

Any acquisition we may complete may be made at a substantial premium over the fair value of the net identifiable assets of the acquired company.

Further, we may not be able to integrate acquired businesses successfully into our existing businesses, make such businesses profitable, or realize anticipated cost savings or synergies, if any, from these acquisitions, which could adversely affect our business.

In fiscal 2018, Astute was acquired by a third party and we realized a loss $16.2 million on our investment.

Changes in U.S. social, political, regulatory and economic conditions or laws and policies governing the health care system and drug prices, foreign trade, manufacturing, and development and investment in the territories and countries where we or our customers operate could adversely affect our operating results and our business.

Changes in governmental regulations may reduce demand for our products or increase our expenses.

We compete in many markets in which we and our customers must comply with federal, state, local and international regulations, such as environmental, health and safety and food and drug regulations.

We develop, configure and market our products to meet customer needs created by those regulations.

Any significant change in regulations could reduce demand for our products or increase our expenses.

For example, many of our instruments are marketed to the pharmaceutical industry for use in discovering and developing drugs.

Changes in the U.S. Food and Drug Administration’s regulation of the drug discovery and development process could have an adverse effect on the demand for these products.

We are subject to laws and regulations governing government contracts, and failure to address these laws and regulations or comply with government contracts could harm our business by leading to a reduction in revenue associated with these customers.

We have agreements relating to the sale of our products to government entities in the U.S. and elsewhere and, as a result, we are subject to various statutes and regulations that apply to companies doing business with the government.

The laws governing government contracts differ from the laws governing private contracts and government contracts may contain pricing terms and conditions that are not applicable to private contracts.

We are also subject to investigation for compliance with the regulations governing government contracts.

A failure to comply with these regulations could result in suspension of these contracts, criminal, civil and administrative penalties or debarment.

We are required to comply with a wide variety of laws and regulations, and are subject to regulation by various federal, state and foreign agencies.

We are subject to various local, state, federal, foreign and transnational laws and regulations, which include the operating and security standards of the U.S. Federal Drug Administration (the FDA), the U.S. Drug Enforcement Agency (the DEA), the U.S. Department of Health and Human Services (the DHHS), and other comparable agencies and, in the future, any changes to such laws and regulations could adversely affect us.

In particular, we are subject to laws and regulations concerning current good manufacturing practices and drug safety.

Our subsidiaries may be required to register for permits and/or licenses with, and may be required to comply with the laws and regulations of, the DEA, the FDA, the DHHS, foreign agencies and/or comparable state agencies as well as certain accrediting bodies depending upon the type of operations and location of product distribution, manufacturing and sale.

The manufacture, distribution and marketing of many of our products and services, including medical devices and pharma services, are subject to extensive ongoing regulation by the FDA, the DEA, and other equivalent local, state, federal and non-U.S. regulatory authorities.

In addition, we are subject to inspections by these regulatory authorities.

Failure by us or by our customers to comply with the requirements of these regulatory authorities, including without limitation, remediating any inspectional observations to the satisfaction of these regulatory authorities, could result in warning letters, product recalls or seizures, monetary sanctions, injunctions to halt manufacture and distribution, restrictions on our operations, civil or criminal sanctions, or withdrawal of existing or denial of pending approvals, including those relating to products or facilities.

In addition, such a failure could expose us to contractual or product liability claims, contractual claims from our customers, including claims for reimbursement for lost or damaged active pharmaceutical ingredients, as well as ongoing remediation and increased compliance costs, any or all of which could be significant.

We are the sole manufacturer of a number of products for many of our customers and a negative regulatory event could impact our customers' ability to provide products to their customers.

We are also subject to a variety of federal, state, local and international laws and regulations that govern, among other things, the importation and exportation of products, the handling, transportation and manufacture of substances that could be classified as hazardous, and our business practices in the U.S. and abroad such as anti-corruption and anti-competition laws.

Any noncompliance by us with applicable laws and regulations or the failure to maintain, renew or obtain necessary permits and licenses could result in criminal, civil and administrative penalties and could have an adverse effect on our results of operations.

At the beginning of fiscal 2017 management identified material weaknesses in our internal control over financial reporting.

In fiscal 2018 we completed a remediation plan that addressed these material weaknesses.

As we continue to grow and acquire additional business, we may fail to implement effective internal controls for our recently acquired operations that result in additional material weaknesses, and harm our operating results or cause us to fail to meet our reporting obligations.

For example, some of our fastest growing businesses are located in northern California and eastern Massachusetts, both of which currently are experiencing low unemployment and a competitive environment for finding and retaining talent.

Our business could be adversely affected by disruptions at our sites.

We rely upon our manufacturing operations to produce many of the products we sell and our warehouse facilities to store products, pending sale.

Any significant disruption of those operations for any reason, such as strikes or other labor unrest, power interruptions, fire, hurricanes or other events beyond our control could adversely affect our sales and customer relationships and therefore adversely affect our business.

We have significant operations in California, near major earthquake faults, which make us susceptible to earthquake risk.

Although most of our raw materials are available from a number of potential suppliers, our operations also depend upon our ability to obtain raw materials at reasonable prices.

If we are unable to obtain the materials we need at a reasonable price, we may not be able to produce certain of our products or we may not be able to produce certain of these products at a marketable price, which could have an adverse effect on our results of operations.

While their initial product is on the market, its adoption and success is highly uncertain, and our initial investment may be significantly impaired if it does not have market success.

Any diminution in the value of these investments could result in future dilution of our investments or materially impact our financial statements.

These and other potential shifts in law, regulation and policy could adversely affect operating results and our business.

In Japan, government investment in biotechnology research remains weak.

As disclosed in Item 9A, at the beginning of fiscal 2017 management identified material weaknesses in our internal control over financial reporting involving the effectiveness of the information and communication, and monitoring processes resulting in a lack of effective controls over general information technology controls (GITC) for certain applications.

We have developed and implemented a remediation plan designed to address these material weaknesses, but have not yet had sufficient time to fully and effective implement and test the additional controls established in that plan.

Any failure to complete the implementation of effective internal controls could harm our operating results or cause us to fail to meet our reporting obligations.

The Credit Agreement provides for a revolving credit facility of $400 million.

The Biotechnology reporting segment provides [added: consumables used for conducting laboratory experiments by both industry and academic scientists within the biotechnology and biomedical life science fields including] proteins, antibodies, immunoassays, flow cytometry products, intracellular signaling products, and biologically active chemical [removed: compounds used in biological research.][added: compounds.]

After adjusting for the impacts of the Space and [removed: ACD] [added: Advanced Cell Diagnostics (ACD)] acquisitions in fiscal [removed: 2016,] [added: 2017,] as well as foreign currency fluctuations, organic sales for the year increased 6% with currency translation having a negative impact of 1% and acquisitions contributing 8%.

A strong [removed: BioPharma] [added: Bio-Pharma] end-market in the US and Europe and additional market demand for Protein Platforms instruments were the biggest contributing factors to organic growth.

After adjusting for acquisition related costs, [removed: stock based] [added: stock-based] compensation, and certain income tax items in both years, adjusted net earnings increased 4% in fiscal 2017 as compared to fiscal 2016.

Adjusted earnings growth was driven by [removed: increased revenue partially] [added: strong volume leverage, which was] offset by negative mix and a negative impact from foreign [removed: currency.][added: currency translation.]

For fiscal [removed: 2016,] [added: 2018,] consolidated net sales increased [removed: 10%] [added: 14%] as compared to fiscal [removed: 2015.][added: 2017.]

After adjusting for the [removed: impact] [added: impacts] of the [removed: Cliniqa acquisition] [added: Trevigen, Atlanta Biologicals and Eurocell acquisitions] in fiscal [removed: 2016,] [added: 2018,] as well as foreign currency fluctuations, organic sales for the year increased [removed: 6%] [added: 9%] with currency translation [removed: having a negative impact of] [added: contributing] 2% and acquisitions contributing [removed: 6%.][added: 3%.]

Consolidated GAAP net earnings [removed: decreased 3%] [added: increased 65%] for fiscal [removed: 2016] [added: 2018] as compared to fiscal [removed: 2015.][added: 2017.]

After adjusting for acquisition related costs, [removed: stock based] [added: stock-based] compensation, and certain income tax items in both years, adjusted net earnings increased [removed: 3%] [added: 24%] in fiscal [removed: 2016] [added: 2018] as compared to fiscal [removed: 2015.][added: 2017.]

| | | [removed: _Year] [added: __Year] Ended June [removed: 30,_] [added: 30,__] | | | | | | | | | | |

| | | [removed: _2017_] [added: __2018__] | | | | [removed: _2016_] [added: __2017__] | | | | [removed: _2015_] [added: __2016__] | | |

| Organic sales growth | | | [removed: 6] [added: 9] | % | | | 6 | % | | | [removed: 4] [added: 6] | % |

| Acquisitions sales growth | | | [removed: 8] [added: 3] | % | | | [removed: 6] [added: 8] | % | | | [removed: 25] [added: 6] | % |

| Impact of foreign currency fluctuations | | | [removed: (1] [added: 2] | [removed: )%] [added: %] | | | [removed: (2] [added: (1] | )% | | | (2 | )% |

| Consolidated net sales growth | | | [removed: 13] [added: 14] | % | | | [removed: 10] [added: 13] | % | | | [removed: 26] [added: 10] | % |

| Biotechnology | | $ | [removed: 364,504] [added: 421,536] | | | $ | [removed: 317,340] [added: 364,504] | | | $ | [removed: 308,437] [added: 317,340] | |

| Protein Platforms | | | [removed: 91,464] [added: 111,885] | | | | [removed: 77,324] [added: 91,464] | | | | [removed: 66,249] [added: 77,324] | |

| Diagnostics | | | [removed: 107,139] [added: 110,108] | | | | [removed: 104,484] [added: 107,139] | | | | [removed: 77,866] [added: 104,484] | |

| Intersegment | | | [removed: (104] [added: (536] | ) | | | [removed: (125] [added: (104] | ) | | | [removed: (306] [added: (125] | ) |

| Consolidated net sales | | $ | [removed: 563,003] [added: 642,993] | | | $ | [removed: 499,023] [added: 563,003] | | | $ | [removed: 452,246] [added: 499,023] | |

The growth in assays was [added: led] by Luminex-based products the Company makes and sells and royalties received from Luminex assay suppliers who use the Company’s content in the production of their assays.

All results for fiscal 2017 [removed: are] [added: were] organic.

In fiscal [removed: 2016,] [added: 2018,] Biotechnology segment net sales increased [removed: 3%] [added: 16%] compared to fiscal [removed: 2015.][added: 2017.]

Organic growth for the segment was [removed: 6%] [added: 9%] for the fiscal year, with [added: acquisitions contributing 4% and] foreign currency translation having [removed: an unfavorable] [added: a favorable] impact of 3%.

In fiscal [removed: 2016,] [added: 2018,] the Protein Platforms segment net sales increased [removed: 17%] [added: 22%] compared to fiscal [removed: 2015.][added: 2017.]

Organic growth for the segment was [removed: 14%] [added: 20%] with [removed: acquisitions contributing 5% and] foreign currency translation having [removed: an unfavorable] [added: a favorable] impact of 2%.

In fiscal [removed: 2016,] [added: 2018,] Diagnostics segment net sales increased [removed: 34%] [added: 3%] compared to fiscal [removed: 2015.][added: 2017.]

Consolidated gross margins were [removed: 67%, 67%] [added: 67.2%, 66.5%] and [removed: 68%] [added: 67.5%] in fiscal [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015,] [added: 2016,] respectively.

Consolidated gross margins were negatively impacted as a result of purchase accounting related to inventory and intangible assets acquired during fiscal [added: 2018,] 2017, [removed: 2016, 2015] [added: 2016] and prior years.

Excluding the impact of acquired inventory sold and amortization of intangibles, adjusted gross margins were [removed: 71%, 71%] [added: 71.5%, 71.2%] and [removed: 72%] [added: 70.8%] in fiscal [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015,] [added: 2016,] respectively.

| Consolidated gross margin percentage | | | [removed: 66.5] [added: 67.2] | % | | | [removed: 67.5] [added: 66.5] | % | | | [removed: 67.9] [added: 67.5] | % |

| Costs recognized upon sale of acquired inventory | | | [removed: 0.6] [added: 0.4] | % | | | [removed: 1.1] [added: 0.6] | % | | | [removed: 1.5] [added: 1.1] | % |

| Amortization of intangibles | | | [removed: 4.1] [added: 3.9] | % | | | [removed: 2.2] [added: 4.1] | % | | | 2.2 | % |

| [removed: Adjusted] [added: Non-GAAP adjusted] gross margin percentage | | | [removed: 71.2] [added: 71.5] | % | | | [removed: 70.8] [added: 71.2] | % | | | [removed: 71.6] [added: 70.8] | % |

| Biotechnology | | | [removed: 80.5] [added: 79.4] | % | | | [removed: 80.0] [added: 80.5] | % | | | [removed: 79.8] [added: 80.0] | % |

| Protein Platforms | | | [removed: 67.6] [added: 69.6] | % | | | [removed: 67.8] [added: 67.6] | % | | | [removed: 66.9] [added: 67.8] | % |

| Diagnostics | | | [removed: 42.3] [added: 43.5] | % | | | [removed: 44.8] [added: 42.3] | % | | | [removed: 42.7] [added: 44.8] | % |

The Biotechnology [removed: segment and the Protein Platforms segment gross margin percentage improvements] [added: improvement] for fiscal 2017 [removed: and 2016] as compared to fiscal [removed: 2015] [added: 2016] was primarily attributable to higher volume leverage and operational productivity.

The Diagnostics [added: and Protein Platforms] segment gross margin [removed: percentage] [added: percentages] for fiscal 2017 [removed: was] [added: as compared to fiscal 2016 were] negatively impacted by lower volume leverage and margin mix of product sales.

Selling, general and administrative expenses increased [removed: $59.6] [added: $40.2] million [removed: (42%)] [added: (20%)] and [removed: $21.5] [added: $59.6] million [removed: (18%)] [added: (42%)] in fiscal [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] respectively.

The organic growth was broad-based as the Company achieved high-single digit growth in the US with contributions from both the Academic and Bio-Pharma end-markets.

Europe sales grew in the mid-teens with growth in both the Academic and Bio-Pharma end-markets.

China sales grew nearly 25% and Japan sales grew in the mid-teens while the rest of the Asia-Pacific region grew in the high-teens.

Adjusted earnings growth was driven by strong volume leverage and the benefit from tax reform, which was partially offset by negative business mix, lower margin acquisitions, and investments in global commercial resources and administrative infrastructure.

| | | __Year Ended June 30,__ | | | | | | | | | | |

| | | __201__8__ | | | | __2017__ | | | | __201__6__ | | |

Continued strength from ACD, a fiscal 2017 acquisition, and the proteins and assays product categories drove growth.

Growth was broad-based and led by continued market demand for Simple Western (Wes) instruments and consumables and the Simple Plex (Ella) product lines.

Organic growth for the segment was 1% with acquisitions contributing 2%.

| | | __Year Ended June 30,__ | | | | | | | | | | |

| | | __2018__ | | | | __2017__ | | | | __2016__ | | |

| | | __Year Ended June 30,__ | | | | | | | | | | |

| | | __2018__ | | | | __2017__ | | | | __2016__ | | |

The decrease in the Biotechnology segment’s gross margin percentage for fiscal 2018 was primarily attributable to mix of product sales made in this segment.

The improvements in the Protein Platforms and Diagnostics gross margin percentages for fiscal 2018 as compared to fiscal 2017 were due to higher volume leverage and operational productivity.

The increase in fiscal 2018 was driven by additional investments in global commercial resources and administrative infrastructure, a larger cost base due to acquisitions and $13.6 million of additional stock-based compensation expense of which $8.3 million is from a new retirement policy that permits retirees to continue vesting in certain time-based stock options granted during employment, resulting in accelerated stock compensation expense for those employees meeting the definition of retirement eligible.

| | | __Year Ended June 30,__ | | | | | | | | | | |

| | | __2018__ | | | | __201__7__ | | | | __201__6__ | | |

| Restructuring costs | | | 376 | | | | \- | | | | \- | |

| Total selling, general and administrative expenses | | $ | 240,636 | | | $ | 200,443 | | | $ | 140,879 | |

| | | __Year Ended June 30,__ | | | | | | | | | | |

| | | __2018__ | | | | __201__7__ | | | | __2016__ | | |

| Total segment expenses | | | 55,091 | | | | 53,514 | | | | 45,187 | |

| Unallocated corporate expenses | | | 238 | | | | \- | | | | \- | |

| Total research and development expenses | | $ | 55,329 | | | $ | 53,514 | | | $ | 45,187 | |

Net interest expense in fiscal 2018 increased due to changes in interest rates.

| | | __Year Ended June 30,__ | | | | | | | | | | |

| | | __2018__ | | | | __201__7__ | | | | __201__6__ | | |

| Gain (loss) on investment | | | 397 | | | | \- | | | | \- | |

During the third quarter fiscal 2018, the Company recognized a $16.2 million impairment on the write-down of its investment in Astute Medical, Inc. (Astute) in anticipation of the amount of cash to be received upon completion of the sale of Astute to a third party.

The Astute sale closed in the fourth quarter of fiscal 2018 at the anticipated amount.

This loss was offset by a $16.1 million gain on the sale of a portion of the Company’s investment in ChemoCentryx, Inc. (CCXI) and a $0.5 million gain on the sale of investment property in the fourth quarter of fiscal 2018.

These gains and losses are included in other income (expense) in the accompanying Consolidated Statements of Earnings and Comprehensive Income.

The effective rate for June 30, 2018 decreased by 32.2% compared to the prior year.

The decrease in the Company’s tax rate for fiscal 2018 was due to the impact of discrete items, primarily the net tax benefit of $33.0 million related to government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).

This net tax benefit consisted of $36.5 million due to the re-measurement of the Company’s deferred tax accounts to reflect the U.S. federal corporate tax rate reduction impact to our net deferred tax balances offset by expense for the repatriation tax of $3.3 million.

Also impacting the Company’s fiscal 2018 effective tax rate was a $2.2 million tax benefit related to stock option exercises offset by a net discrete tax expense of $4.2 million related to the revaluation of contingent consideration, which is not a tax deductible expense.

| | | __Year Ended June 30,__ | | | | | | | | | | |

| | | __2018__ | | | | __2017__ | | | | __201__6__ | | |

| Acquisition related expenses | | | 24,774 | | | | 25,789 | | | | 2,761 | |

The organic growth was broad-based, with the Company achieving growth in all three of its segments reporting segments.

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

We grew in all major geographies, most notably in China and from BioPharma customers in the U.S. and Europe.

Japan was the only notable exception, where demand was weak due to delayed funding from Japanese government agencies.

Additional market demand for Simple Western instruments and consumables, a new instrument product launch in the Biologics (Maurice) product line, and Simple Plex (Ella) instrument and consumable sales, the Elisa-multiplexing solution that was the key technology acquired as part of the CyVek acquisition in fiscal 2015, all drove growth in this segment.

There was no revenue from the Zephyrus acquisition in fiscal 2016.

Included in fiscal 2016 Diagnostics segment net sales was $26.6 million generated by the acquisition of Cliniqa in July 2015, contributing essentially all of the growth.

Solid organic growth in the hematology controls product line was offset by customer delayed projects in the glucose controls product line due to reimbursement pricing pressures in that particular market segment.

In fiscal 2017, the biggest impact to gross margin as compared to fiscal 2016, was the change in product mix associated with the acquisition of ACD.

In fiscal 2016, the biggest impact to gross margin, as compared to fiscal 2015, was the change in product mix associated with the acquisition of Cliniqa.

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.

| Consolidated adjusted gross margin percentage | | | 71.2 | % | | | 70.8 | % | | | 71.6 | % |

Increased operational productivity in fiscal 2016 increased margins compared to fiscal 2015

The increase in fiscal 2016 was primarily from $5.4 million added as a result of the Cliniqa acquisition, including $3.4 million of increased costs associated with stock based compensation.

The remaining increase in selling, general and administrative expenses in fiscal 2016 included investments made in global commercial resources, administrative infrastructure, stock compensation, and annual wage, salary and benefits increases.

| | | $ | 200,443 | | | $ | 140,879 | | | $ | 119,401 | |

The remaining increase in research and development expenses for fiscal 2016 was primarily related to the development of new products associated with our Protein Platforms segment.

| | | $ | 53,514 | | | $ | 45,187 | | | $ | 40,853 | |

Net interest expense in fiscal 2016 and 2015 resulted from the opening of a debt facility in July 2014 to partially fund the acquisitions of Novus Biologicals, ProteinSimple, CyVek, and Cliniqa.

| Net gain (loss) from equity method investees | | | \- | | | | \- | | | | 8,300 | |

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

The Novus acquisition was financed through cash on hand.

Our $400 million line-of-credit facility was modified in July 2016 in connection with the acquisition of ACD.

The senior unsecured revolving credit facility has a term of five years with an adjustable interest 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 EBITDA (as defined in the Credit Agreement governing the revolving credit facility).

The financial covenants of the revolving credit facility require the Company to maintain a minimum Interest Coverage Ratio, defined as the ratio of EBIT to cash interest expense, of 3.0x and a maximum total leverage ratio of 3.5x.

The annualized fee for any unused portion of the credit facility is variable based upon the Company’s leverage ratio at each pricing date.

The increase in cash generated from operating activities in fiscal 2017 as compared to fiscal 2016 and in fiscal 2016 as compared to fiscal 2015 were mainly the result of an increase in net earnings after adjusting for non-cash expenses related to depreciation, amortization, costs recognized on sale of acquired inventory, and stock based compensation expense.

In fiscal 2015, the Company paid net cash of $420.1 million for the CyVek, ProteinSimple and Novus acquisitions.

The Company made payments on the line-of-credit and other debt of $95.0 million.

Cash payments totaling $28.5 million ($3.5 million for Zephyrus and $25 million for ACD) were made during the third quarter.

In fiscal 2013, the Company purchased and retired 28,000 and shares of common stock at market values of $1.8 million.

| Operating leases | | $ | 68,656 | | | $ | 9,123 | | | $ | 16,808 | | | $ | 15,996 | | | $ | 26,729 | |

| ACD acquisition (1) | | | 30,100 | | | | 30,100 | | | | \- | | | | \- | | | | \- | |

| CyVek acquisition (1) | | | 35,000 | | | | 35,000 | | | | \- | | | | \- | | | | \- | |

| Zephyrus acquisition (1) | | | 3,300 | | | | 3,300 | | | | \- | | | | \- | | | | \- | |

| | | $ | 137,056 | | | $ | 77,523 | | | $ | 16,808 | | | $ | 15,996 | | | $ | 26,729 | |

| (1) | Amounts represent the fair values of contingent liabilities under the ACD merger agreement, the CyVek merger agreement and the Zephyrus merger agreement. In addition, the Company will pay CyVek's other stockholders up to 50% of the amount, if any, by which revenues of CyVek's products and related products exceeds $100 million in calendar year 2020. |

| --- | --- |

_2016 and 2015 Goodwill Impairment Analysis_

_Amortizable Intangible Assets_

Approximately [removed: 27%] [added: 28%] of the Company's consolidated net sales in fiscal [removed: 2017] [added: 2018] were made in foreign currencies, including [removed: 14%] [added: 15%] in euro, [removed: 4%] [added: 5%] in British pound sterling, [removed: 4%] [added: 3%] in Chinese yuan and the remaining 5% in other currencies.

| | | [removed: _Year] [added: __Year] Ended June [removed: 30,_] [added: 30,__] | | | | | | | | | | |

| High | | $ | [removed: 1.14] [added: 1.24] | | | $ | [removed: 1.13] [added: 1.14] | | | $ | [removed: 1.34] [added: 1.13] | |

| Low | | | [removed: 1.05] [added: 1.16] | | | | [removed: 1.10] [added: 1.05] | | | | [removed: 1.08] [added: 1.10] | |

| Average | | | [removed: 1.09] [added: 1.20] | | | | [removed: 1.12] [added: 1.09] | | | | [removed: 1.19] [added: 1.12] | |

| High | | $ | [removed: 1.32] [added: 1.42] | | | $ | [removed: 1.48] [added: 1.32] | | | $ | [removed: 1.69] [added: 1.48] | |

| Low | | | [removed: 1.22] [added: 1.29] | | | | [removed: 1.33] [added: 1.22] | | | | [removed: 1.48] [added: 1.33] | |

| Average | | | [removed: 1.27] [added: 1.35] | | | | [removed: 1.42] [added: 1.27] | | | | [removed: 1.57] [added: 1.42] | |

The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from June 30, [removed: 2017] [added: 2018] levels against the euro, British pound sterling, Chinese yuan and Canadian dollar are as follows (in thousands):

| Decrease in translation of [removed: 2017] [added: 2018] earnings into U.S. dollars | | $ | [removed: 2,540] [added: 3,750] | |

| Decrease in translation of net assets of foreign subsidiaries | | | [removed: 37,356] [added: 40,782] | |

| Additional transaction losses | | | [removed: 1,158] [added: 1,928] | |

| | | __2018__ | | | | __2017__ | | | | __201__6__ | | |

| High | | $ | 0.16 | | | $ | 0.15 | | | $ | 0.15 | |

| Low | | | 0.15 | | | | 0.14 | | | | 0.15 | |

| Average | | | 0.15 | | | | 0.15 | | | | 0.15 | |

| High | | $ | 0.81 | | | $ | 0.77 | | | $ | 0.78 | |

| Low | | | 0.76 | | | | 0.73 | | | | 0.71 | |

| Average | | | 0.79 | | | | 0.75 | | | | 0.76 | |

| | | _2017_ | | | | _2016_ | | | | _2015_ | | |

| High | | $ | .150 | | | $ | .152 | | | $ | .164 | |

| Low | | | .144 | | | | .150 | | | | .162 | |

| Average | | | .147 | | | | .152 | | | | .163 | |

| High | | $ | .770 | | | $ | .781 | | | $ | .933 | |

| Low | | | .733 | | | | .706 | | | | .793 | |

| Average | | | .754 | | | | .755 | | | | .855 | |

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

With our deep product portfolio and application expertise, we strive to provide the life sciences community with innovative, high-quality scientific tools to better understand biological processes and drive [removed: discovery.][added: discovery of diagnostic and therapeutic products.]

[removed: We currently operate] [added: During our fiscal year 2018, we operated] with three reporting segments – our Biotechnology, Protein Platforms and Diagnostics Divisions.

Our historical focus was on providing high quality proteins, antibodies and immunoassays to the life science research market and hematology controls [removed: for] [added: to] the diagnostics market.

Recognizing the importance of an integrated, global approach to meeting our mission and accomplishing our strategies, we have [added: over the past several years] unified our brands and recent acquisitions under a single global brand, Bio-Techne.

We are committed to providing the life sciences community with innovative, high-quality scientific tools [added: that allow our customers] to [removed: better understand biological processes and drive discovery.][added: make extraordinary discoveries.]

Our mission is to [removed: “build epic] [added: build “epic] tools for epic science.” We intend to build on Bio-Techne’s past accomplishments, high product quality reputation and sound financial position by executing strategies that position us to serve as the standard for biological content in the research market, and to leverage that leadership position to enter the diagnostics and other adjacent markets.

[removed: _Expansion_ _of_] [added: _Market and_] _geographic_ [removed: _footprint._] [added: _expansion__._] 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: _Realign__m__ent_ _of_ _resources._] [added: _Operational excellence__._] In recognition of the increased size and scale of the organization, we continue to redesign our development and operational processes to [removed: create greater efficiencies throughout the organization.][added: effectively and efficiently support our expanding businesses.]

In fiscal [removed: 2017,] [added: 2018,] net sales from Bio-Techne’s Biotechnology, Protein Platforms and Diagnostics segments represented [removed: 65%, 16%,] [added: 66%, 17%,] and [removed: 19%] [added: 17%] of consolidated net sales, respectively.

Our combined chemical and biological reagents portfolio provides high quality tools which customers can use in solving the complexity of important biological pathways and glean knowledge that may lead to a more complete understanding of biological processes, [removed: and ultimately] [added: and, ultimately,] to the development of novel strategies to address different pathologies.

[removed: In addition,] [added: Additionally,] a number of our products have the potential to serve as predictive biomarkers and therapeutic targets for a variety of human diseases and conditions including cancer, autoimmunity, diabetes, hypertension, obesity, inflammation, neurological disorders, and kidney failure.

In addition to being useful research tools, our RNA [removed: in situ] [added: _in situ_] hybridization assays have diagnostics applications as well, and several are currently being cleared with the FDA in partnership with diagnostics instrument manufacturers and pharmaceutical companies.

We sell our Biotechnology products directly to customers who are primarily located in North America, [removed: western] Europe and China.

We also sell through third party distributors in China, Japan, [added: certain] eastern [removed: Europe] [added: European countries] and 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: 2017, 2016] [added: 2018, 2017] or [removed: 2015.][added: 2016.]

We believe we are one of the leading world-wide suppliers of cytokine [removed: related products] [added: and growth factors] in the research market.

We further believe that the expansion of our product offering, [removed: their] [added: the] recognized [removed: quality,] [added: quality of our products,] and the continued demand for protein-related and chemically-based research reagents will allow us to remain competitive in the growing biotechnology research and diagnostic markets.

Our [added: _in situ_ hybridization and] chemical-based small molecule products are synthesized from widely available products.

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: 2016.][added: 2017.]

Developers of [removed: biologics] [added: biologics-based drugs] are required by regulatory agencies, such as FDA, to develop robust processes to ensure that the specific biologic of interest can be identified and characterized accurately and then consistently and reliably produced.

Our Biologics tools help researchers interrogate protein purity and identify contaminants during the development and production of [removed: biologics.][added: biologics by measuring some elements of protein identity, purity and heterogeneity.]

The Western blot, or Western, is one of the most widely-used assays for protein analysis and identification [removed: today.][added: today, and is used by molecular biologists, biochemists and clinicians to determine if a specific protein is present in a sample.]

Our Simple Western platform is a fully-automated Western blot analytical technique that can identify and quantify a protein of interest in a more sensitive, automated and less [removed: time intensive] [added: time-intensive] manner.

The SimplePlex platform is a transformative immunoassay technology which integrates an innovatively designed microfluidic cartridge with a state-of-the-art analyzer to deliver a bench-top immunoassay system that is more sensitive than [added: a manual multi-well place based] ELISA with none of the traditional challenges of assay design or repeatability.

The [removed: Milo] [added: Single Cell Western] platform and related reagents perform western blot assays on individual cells versus an entire cell population.

Our customers for this segment include researchers in academia as well as [removed: commercial researchers.][added: by investigators in industry, such as pharmaceutical and biotech companies.]

Our sales are widely distributed, and no single end-user customer accounted for more than 10% of Protein Platforms' net sales during fiscal [removed: 2017, 2016] [added: 2018, 2017] or [removed: 2015.][added: 2016.]

[removed: _Protei__n] [added: _Protein] Platforms Segment Competitors_

Our Simple Western platform is a complete replacement for the traditional [added: manual] Western blot.

Similarly, our SimplePlex platform replaces the traditional [added: manual] ELISA assay as well as some [removed: flow-based] [added: flow cytometry-based] multiplex [removed: assays;] [added: immunoassays;] competitors include those who supply instruments and reagents for ELISAs, including Meso Scale Discovery, PerkinElmer, Thermo Fisher, Luminex, Millipore, [removed: Quanterix,] [added: Molecular Devices, Tecan BioTek,] and Bio-Rad Laboratories.

There was no significant backlog of orders for our Protein Platforms products as of the date of this Annual Report on Form 10-K or as of a comparable date for fiscal [removed: 2016.][added: 2017.]

_Diagnostics [removed: Segment (formerly Clinical Controls)_][added: Segment_]

[removed: With the acquisition of Bionostics in fiscal 2014 and Cliniqa in fiscal 2016, we expanded this] [added: This] segment [removed: to include] [added: includes] blood chemistry and blood gas quality controls, [added: hematology instrument controls,] diagnostic immunoassays, and other bulk and custom reagents for the _in vitro_ diagnostic [removed: market.][added: market worldwide.]

We supply these reagents in various formats including liquid, [added: frozen, or in] lyophilized [removed: and powder] form.

Original Equipment Manufacturer (OEM) agreements represent the largest market for our [added: historical] diagnostics products.

In fiscal [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015,] [added: 2016,] OEM agreements accounted for [removed: $60.7] [added: $62.8] million, [removed: $54.2] [added: $60.7] million, and [removed: $41.1] [added: $54.2] million, or 57%, [removed: 52%,] [added: 57%,] and [removed: 53%] [added: 52%] of division net sales in each fiscal year, respectively.

One OEM customer accounted for approximately 12% [removed: and 13%] of the Diagnostics Division's net sales during fiscal [removed: 2017 and 2015, respectively.][added: year 2017.]

This customer did not amount to 10% or more of the Company's consolidated [removed: revenue] [added: net sales] during [removed: these years.][added: fiscal year 2017.]

No [removed: customers] [added: customer] accounted for more than 10% of the Diagnostics Division’s net sales during fiscal [removed: year] [added: years 2018 or] 2016.

Our Biotechnology Division is a leader in providing high quality consumables and services used for conducting laboratory experiments by both industry and academic scientists within the biotechnology and biomedical life sciences fields, all under the primary brands of R&D Systems, Novus Biologicals, Tocris Bioscience, Atlanta Biologicals, Trevigen, and Advanced Cell Diagnostics.

From 2012 through August 27, 2018 we have acquired 15 companies, eight of which expanded our Biotechnology segment both geographically and through product diversification, three that formed our Protein Platforms segment, and four of which expanded the reach of our Diagnostics segment.

We will also leverage our existing portfolio to expand our product offerings into novel research fields and further into diagnostics and therapeutics markets.

We also sell _in situ_ hybridization, media and other cell culture products and reagents.

Our Protein Platforms business has an array of platforms useful in various areas of protein analysis.

All of these vendors provide elements of the traditional work flow.

| | | __2018__ | | | | __2017__ | | | | __201__6__ | | |

| Net sales: | | | | | | | | | | | | |

| | | _Year ended June 30,_ | | | | | | |

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

| | | __2018__ | | | | __2017__ | | |

| Intangible assets: | | | | | | | | |

| United States and Canada | | $ | 417,430 | | | $ | 424,579 | |

| Europe | | | 21,386 | | | | 18,710 | |

| China | | | 7,516 | | | | 8,753 | |

| Total intangible assets | | $ | 446,332 | | | $ | 452,042 | |

In fiscal 2018, Bio-Techne introduced approximately 1,500 new products.

| | | __Year Ended June 30,__ | | | | | | | | | | |

| Corporate | | | 238 | | | | \- | | | | \- | |

LAWS AND REGULATIONS

Our operations, and some of the products we offer, are subject to a number of complex and stringent laws and regulations governing the production, marketing, handling, transportation and distribution of chemicals, drugs and other similar products, including the operating and security standards of the Food and Drug Administration, the Drug Enforcement Administration, and various comparable state and foreign agencies.

As Bio-Techne’s businesses also include export and import activities, we are subject to pertinent laws enforced by the U.S. Departments of Commerce, State and Treasury.

While we believe we are in compliance in all material respects with such laws and regulations, any noncompliance could result in substantial fines or otherwise restrict our ability to provide competitive distribution services and thereby have an adverse effect on our financial condition.

To date, none has had a material impact on our operations.

We are subject to laws and regulations governing government contracts, and failure to address these laws and regulations or comply with government contracts could harm our business by a reduction in revenue associated with these customers.

We have agreements relating to the sale of our products to government entities and, as a result, we are subject to various statutes and regulations that apply to companies doing business with the government.

We are also subject to investigation for compliance with the regulations governing government contracts.

A failure to comply with these regulations could result in suspension of these contracts, criminal, civil and administrative penalties or debarment.

| Kim Kelderman | | 50 | | President, Diagnostics and Genomics | | 2018 |

David Eansor is President, Protein Sciences, effective July 1, 2018.

Kim Kelderman joined Bio-Techne on April 30, 2018 as President, Diagnostics and Genomics.

Prior to Bio-Techne, Mr. Kelderman was employed at Thermo Fisher Scientific where he led three different businesses of increasing scale and complexity.

For the last three years, Mr. Kelderman managed the Platforms and Content of the Genetic Sciences Division, where he was responsible for the Instrumentation, Software, Consumables and Assays businesses, and brands such as Applied Biosystems and legacy Affymetrix.

Before joining Thermo Fisher, Kim served as Senior Segment Leader at Becton Dickinson, managing the global Blood Tubes “Vacutainer” business.

Our Biotechnology Division is a leader in providing high quality proteins and antibodies, and related immunoassays, as well as biologically active small molecules and other reagents for the research and clinical diagnostics markets, all under the primary brands of R&D Systems, Novus Biologicals and Tocris Bioscience.

Through our most recent acquisition, Advanced Cell Diagnostics, we also sell products for RNA in situ hybridization.

_Growth Through Acquisition_

| _Acquisition_ | _Year Acquired (Fiscal)_ | _Reporting Segment_ | _Primary Product Portfolios_ |

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

| Tocris | 2012 | Biotechnology | Biologically active small molecules |

| Bionostics | 2014 | Diagnostics | Blood chemistry and packaging |

| PrimeGene | 2014 | Biotechnology | Bulk and GMP proteins manufacturing for China |

| Novus Biologicals | 2015 | Biotechnology | Antibodies |

| ProteinSimple | 2015 | Protein Platforms | Protein analysis, including automated western blot, ELISAs and biologics instrumentation |

| CyVek | 2015 | Protein Platforms | Automated ELISA systems |

| Cliniqa | 2016 | Diagnostics | Blood chemistry quality controls and bulk immunochemistry reagents |

| Zephyrus BioSciences | 2016 | Protein Platforms | Single cell western blotting |

| Space Import-Export | 2017 | Biotechnology | Geographic expansion |

| Advanced Cell Diagnostics | 2017 | Biotechnology | Genomic _in situ_ hybridization |

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

The Bio-Techne name solidifies the new strategic direction for the Company, and also unifies all of our brands under one complete corporate umbrella.

The portfolio in this segment includes five main product lines: native and recombinant proteins, monoclonal and polyclonal antibodies, immunoassays, biologically active chemical compounds and, through our most recent acquisition, Advanced Cell Diagnostics, _in situ_ genomic hybridization.

As mentioned above, all are useful in a wide variety of important biomedical research activities.

Biologics Platform.

Biologics are complex protein-based therapeutics, and are transforming the pharmaceutical industry and treatment of many diseases.

Biologic drugs are very effective targeted therapeutics for diseases such as arthritis, cancer and diabetes, and their number in development is increasing because of a variety of advances in biochemistry, immunology and biotechnology.

Our Maurice, iCE3 and MFI platforms all measure some elements of protein identity, purity and heterogeneity.

The Simple Western Platform.

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.

SimplePlex Platform.

SimplePlex assays are fully automated, multi-analyte immunoassays that permit the customer to run multiple samples while interrogating multiple analytes in approximately one hour while leveraging the large biological content menu that has been developed over 30 years.

We believe the SimplePlex technology, along with other immunoassay platforms offered by Bio-Techne, represents the most comprehensive line of immunoassay products to meet customers' complete workflow in their research and clinical protein applications.

Single Cell Western Platform.

Beginning in the first quarter of fiscal 2017, the Clinical Controls segment has been renamed Diagnostics.

Our original business in this segment was focused primarily on controls and calibrators for hematology clinical instruments.

We renamed the operating segment to reflect this expanded portfolio of products.

Our hematology controls and calibrators ensure that hematology instruments are performing accurately and reliably.

We believe our products have improved stability and versatility and a longer shelf life than most of those of our competitors.

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

We also develop and supply bulk purified proteins, enzymes, disease-state plasmas, infectious disease antigens and processed serums to the clinical diagnostic industry worldwide.

In fiscal 2017, we launched the Paratest® product, a novel and convenient stool collection and test device for the veterinary market, utilizing our expertise in packaging and reagents from our Devens, Massachusetts site.

| External sales | | | | | | | | | | | | |

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

In fiscal 2017, aside from the large number of products added through the acquisition of Advanced Cell Diagnostics, Bio-Techne introduced approximately 1,500 new products.

As of August [removed: 30, 2017,] [added: 27, 2018,] 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

10-K 1 [removed: tech20170630_10k.htm] [added: tech20180630_10k.htm] FORM 10-K

For the fiscal year ended June 30, [removed: 2017,] [added: 2018,] or

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or a] smaller reporting [added: company or an emerging growth] company.

As of December 31, [removed: 2016] [added: 2017] the aggregate market value of the Common Stock held by non-affiliates of the Registrant was [removed: $3.8] [added: $3.4] billion based upon the closing sale price as reported on The Nasdaq Stock Market [removed: ($102.83] [added: ($129.55] per share).

As of August [removed: 30, 2017, 37,382,025] [added: 23, 2018, 37,731,348] shares of the Company’s Common Stock ($0.01 par value) were outstanding.

Portions of the Company’s Proxy Statement for its [removed: 2017] [added: 2018] Annual Meeting of Shareholders are incorporated by reference into Part III.

| [removed: PART I] [added: [PART I](#p1)] | | |

[removed: Item] [added: | Item] 1. [added: | [Business](#i1) | 1 |]

[removed: Item] [added: | Item] 1A. [added: | [Risk Factors](#i1a) | 10 |]

[removed: Unresolved] [added: | Item 1B. | [Unresolved] Staff [removed: Comments 16][added: Comments](#i1b) | 18 |]

[removed: Item] [added: | Item] 2. [added: | [Properties](#i2) | 18 |]

[removed: Legal Proceedings 16][added: | Item 3. | [Legal Proceedings](#i3) | 18 |]

| | | |

| Item 4. | [Mine Safety Disclosures](#i4) | 18 |

| | | |

| [PART II](#p2) | | |

| | | |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#i5) | 19 |

| | | |

| Item 6. | [Selected Financial Data](#i6) | 21 |

| | | |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#i7) | 22 |

| | | |

| Item 7A. | [Quantitative and Qualitative Disclosures about Market Risk](#i7a) | 34 |

| | | |

| Item 8. | [Financial Statements and Supplementary Data](#i8) | 35 |

| | | |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#i9) | 67 |

| | | |

| Item 9A. | [Controls and Procedures](#i9a) | 67 |

| | | |

| Item 9B. | [Other Information](#i9b) | 68 |

| | | |

| [PART III](#p3) | | |

| | | |

| Item 10. | [Directors, Executive Officers](#i10) | 69 |

| | | |

| Item 11. | [Executive Compensation](#i11) | 69 |

| | | |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](#i12) | 69 |

| | | |

| Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#i13) | 69 |

| | | |

| Item 14. | [Principal Accounting Fees and Services](#i14) | 69 |

| | | |

| [PART IV](#p4) | | |

| Item 15. | [Exhibits, Financial Statement Schedules](#i15) | 70 |

| | | |

| | [SIGNATURES](#sigs) | 71 |

PART I

Business 1

Risk Factors 10

Item 1B.

Properties 16

Item 3.

The Company owns [removed: the] [added: a] 17,000 square foot facility that its Bio-Techne Europe subsidiary occupies in Abingdon, England.

The Company leases the following material facilities, all of which are [added: primarily] utilized by the Company's Biotechnology segment with the exception of the locations used by the Company's ProteinSimple and CyVek [removed: sites,] [added: subsidiaries,] which support the Protein Platforms segment and the [removed: Bionostics and] [added: Bionostics,] Cliniqa [added: and Exosome Diagnostics] subsidiaries (Diagnostics segment).

| Cliniqa | | San Marcos, California | | Office/manufacturing/warehouse | | [removed: 87,200] [added: 62,200] | |

| Advanced Cell Diagnostics | | Newark, California | | Office/manufacturing/warehouse | | [removed: 35,100] [added: 46,500] | |

Additionally, the Company owns a 34,000 square foot facility that its Atlanta Biologicals subsidiary occupies in Flowery Branch, Georgia.

This facility is utilized by the Company’s Biotechnology segment.

| Eurocell Diagnostics | | Rennes, France | | Office/warehouse | | 11,000 | |

The Company is currently in the process of transitioning into new lease space for its Cliniqa operations.

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

Not applicable.

| | | |

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 17

Item 6.

Selected Financial Data 19

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations 20

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk 32

Item 8.

Financial Statements and Supplementary Data 33

| | | [removed: _Fiscal 2017_ _Price_] [added: __Fiscal 201__8_ _Price__] | | | | | | | | [removed: _Fiscal 2016_ _Price_] [added: __Fiscal 201__7_ _Price__] | | | | | | |

| | | [removed: _High_] [added: __High__] | | | | [removed: _Low_] [added: __Low__] | | | | [removed: _High_] [added: __High__] | | | | [removed: _Low_] [added: __Low__] | | |

| First Quarter | | $ | [removed: 117.42] [added: 124.00] | | | $ | [removed: 103.99] [added: 112.33] | | | $ | [removed: 114.56] [added: 117.42] | | | $ | [removed: 87.49] [added: 103.99] | |

| Second Quarter | | | [removed: 112.20] [added: 136.39] | | | | [removed: 98.92] [added: 120.61] | | | | [removed: 96.81] [added: 112.20] | | | | [removed: 83.90] [added: 98.92] | |

| Third Quarter | | | [removed: 108.58] [added: 151.89] | | | | [removed: 95.68] [added: 128.06] | | | | [removed: 96.83] [added: 108.58] | | | | [removed: 79.95] [added: 95.68] | |

| Fourth Quarter | | | [removed: 119.98] [added: 166.81] | | | | [removed: 98.22] [added: 142.66] | | | | [removed: 114.62] [added: 119.98] | | | | [removed: 91.45] [added: 98.22] | |

As of August [removed: 30, 2017,] [added: 17, 2018,] there were over [removed: 29,000] [added: 40,000] beneficial shareholders of the Company's common stock and over [removed: 165] [added: 425] shareholders of record.

The Company paid quarterly cash dividends totaling [removed: $47.7] [added: $48.0] million, [removed: $47.6] [added: $47.7] million and [removed: $47.1] [added: $47.6] million in fiscal [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015,] [added: 2016,] respectively.

There was no share repurchase activity by the Company in fiscal [removed: 2017.][added: 2018.]

[removed: The] [added: As of June 30, 2018, the] maximum approximate dollar value of shares that may yet be purchased under the Company's existing stock repurchase plan is approximately $125 million.

The following chart compares the cumulative total shareholder return on the Company's common stock with the S&P Midcap 400 [removed: Index and] [added: Index,] the S&P 400 Biotechnology [added: Index, and the S&P 400 MidCap Life Sciences Tools and Services] Index.

The comparison assumes $100 was invested on the last trading day before July 1, [removed: 2012] [added: 2013] in the Company's common stock and in each of the foregoing indices and assumes reinvestment of dividends.

[removed: |  |][added: ]

In connection with the acquisition of Exosome Diagnostics, Inc. on August 1, 2018, the Company entered into a new credit facility that provides for a revolving credit facility of $600 million, which can be increased by an additional $200 million subject to certain conditions, and a term loan of $250 million.

The credit facility is governed by a Credit Agreement dated August 1, 2018 and matures on August 1, 2023.

The Credit Agreement that governs the revolving line of credit contains customary events of default and would prohibit payment of dividends to Company shareholders in the event of a default thereunder.

We have included in the chart the S&P 400 MidCap Life Sciences Tools and Services Index, which we expect will replace the S&P 400 Biotechnology Index in our chart in future years as this index now only includes one company.

| --- |

| _Income and Share Data:_ | | [removed: _2017__(1)_] [added: __2018__(1)__] | | | | [removed: _2016__(2)_] [added: __2017__(2)__] | | | | [removed: _2015__(3)_] [added: __2016__(3)__] | | | | [removed: _2014__(4)_] [added: __2015__(4)__] | | | | [removed: _2013_] [added: __2014__(5)__] | | |

| Net sales | | $ | [removed: 563,003] [added: 642,993] | | | $ | [removed: 499,023] [added: 563,003] | | | $ | [removed: 452,246] [added: 499,023] | | | $ | [removed: 357,763] [added: 452,246] | | | $ | [removed: 310,575] [added: 357,763] | |

| Operating income | | | [removed: 120,584] [added: 136,178] | | | | [removed: 150,593] [added: 120,584] | | | | [removed: 147,023] [added: 150,593] | | | | [removed: 159,750] [added: 147,023] | | | | [removed: 158,469] [added: 159,750] | |

| Earnings before income taxes [removed: (5)] [added: (6)] | | | [removed: 111,961] [added: 125,952] | | | | [removed: 147,481] [added: 111,961] | | | | [removed: 154,162] [added: 147,481] | | | | [removed: 161,392] [added: 154,162] | | | | [removed: 160,662] [added: 161,392] | |

| Net earnings | | | [removed: 76,086] [added: 126,150] | | | | [removed: 104,476] [added: 76,086] | | | | [removed: 107,735] [added: 104,476] | | | | [removed: 110,948] [added: 107,735] | | | | [removed: 112,561] [added: 110,948] | |

| Diluted earnings per share | | | [removed: 2.03] [added: 3.31] | | | | [removed: 2.80] [added: 2.03] | | | | [removed: 2.89] [added: 2.80] | | | | [removed: 3.00] [added: 2.89] | | | | [removed: 3.05] [added: 3.00] | |

| Average common and common equivalent shares - diluted (in thousands) | | | [removed: 37,500] [added: 38,055] | | | | [removed: 37,326] [added: 37,500] | | | | [removed: 37,231] [added: 37,326] | | | | [removed: 37,005] [added: 37,231] | | | | [removed: 36,900] [added: 37,005] | |

| _Balance Sheet Data as of June 30:_ | | [removed: _2017_] [added: __2018__] | | | | [removed: _2016_] [added: __2017__] | | | | [removed: _2015_] [added: __2016__] | | | | [removed: _2014_] [added: __2015__] | | | | [removed: _2013_] [added: __2014__] | | |

| Cash, cash equivalents and short-term available-for-sale investments | | | [removed: 157,714] [added: 181,754] | | | $ | [removed: 95,835] [added: 157,714] | | | $ | [removed: 110,921] [added: 95,835] | | | $ | [removed: 363,354] [added: 110,921] | | | $ | [removed: 332,937] [added: 363,354] | |

| Working capital | | | [removed: 212,503] [added: 318,856] | | | | [removed: 199,744] [added: 212,503] | | | | [removed: 208,515] [added: 199,744] | | | | [removed: 443,022] [added: 208,515] | | | | [removed: 377,432] [added: 443,022] | |

| Total assets | | | [removed: 1,558,219] [added: 1,593,202] | | | | [removed: 1,129,581] [added: 1,558,219] | | | | [removed: 1,063,360] [added: 1,129,581] | | | | [removed: 862,491] [added: 1,063,360] | | | | [removed: 778,098] [added: 862,491] | |

| Total shareholders' equity | | | [removed: 949,627] [added: 1,079,061] | | | | [removed: 879,280] [added: 949,627] | | | | [removed: 846,935] [added: 879,280] | | | | [removed: 795,265] [added: 846,935] | | | | [removed: 737,541] [added: 795,265] | |

| _Cash Flow Data:_ | | [removed: _2017_] [added: __2018__] | | | | [removed: _2016_] [added: __2017__] | | | | [removed: _2015_] [added: __2016__] | | | | [removed: _2014_] [added: __2015__] | | | | [removed: _2013_] [added: __2014__] | | |

| Net cash provided by operating activities | | $ | [removed: 143,811] [added: 170,367] | | | $ | [removed: 143,870] [added: 143,721] | | | $ | [removed: 139,359] [added: 144,157] | | | $ | [removed: 136,762] [added: 139,359] | | | $ | [removed: 123,562] [added: 136,762] | |

| Capital expenditures | | | [removed: 15,179] [added: 20,934] | | | | [removed: 16,898] [added: 15,179] | | | | [removed: 19,905] [added: 16,898] | | | | [removed: 13,821] [added: 19,905] | | | | [removed: 22,454] [added: 13,821] | |

| Cash dividends declared per share | | | 1.28 | | | | 1.28 | | | | [removed: 1.27] [added: 1.28] | | | | [removed: 1.23] [added: 1.27] | | | | [removed: 1.18] [added: 1.23] | |

| _Employee Data as of June 30:_ | | [removed: _2017_] [added: __2018__] | | | | [removed: _2016_] [added: __2017__] | | | | [removed: _2015_] [added: __2016__] | | | | [removed: _2014_] [added: __2015__] | | | | [removed: _2013_] [added: __2014__] | | |

| Employees | | | [removed: 1,789] [added: 1,943] | | | | [removed: 1,560] [added: 1,789] | | | | [removed: 1,356] [added: 1,560] | | | | [removed: 967] [added: 1,356] | | | | [removed: 789] [added: 967] | |

| [removed: (1)] [added: (2)] | The Company acquired Space on July 1, 2016, and Advanced Cell Diagnostics on August 1, 2016. |

| [removed: (2)] [added: (3)] | The Company acquired Cliniqa on July 8, 2015, and Zephyrus on March 21, 2016. |

| [removed: (3)] [added: (4)] | The Company acquired Novus Biologicals on July 2, 2014, ProteinSimple on July 31, 2014, and CyVek on November 3, 2014. |

| [removed: (4)] [added: (5)] | The Company acquired Bionostics on July 22, 2013, and PrimeGene on April 30, 2014. |

| [removed: (5)] [added: (6)] | 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: 2018 - $74.2 million;] 2017 - $73.2 million; 2016 - $37.6 million; 2015 - $37.6 million; 2014 - $20.0 [removed: million; 2013 - $10.2] million. |

| (1) | The Company acquired Trevigen on September 5, 2017, Atlanta Biologicals on January 2, 2018, and Eurocell Diagnostics on February 1, 2018. |

| --- | --- |

| | | [removed: _Year] [added: __Year] Ended June [removed: 30,_] [added: 30,__] | | | | | | | | | | |

| | | [removed: _2017_ | | | | _2016_] [added: __2017__] | | | | [removed: _2015_] [added: __2016__] | | |

| Net sales | | $ | [removed: 563,003] [added: _642,993_] | | | $ | [removed: 499,023] [added: _563,003_] | | | $ | [removed: 452,246] [added: _499,023_] | |

| Cost of sales | | | [removed: 188,462] [added: _210,850_] | | | | [removed: 162,364] [added: _188,462_] | | | | [removed: 144,969] [added: _162,364_] | |

| Gross margin | | | [removed: 374,541] [added: _432,143_] | | | | [removed: 336,659] [added: _374,541_] | | | | [removed: 307,277] [added: _336,659_] | |

| Selling, general and administrative | | | [removed: 200,443] [added: _240,636_] | | | | [removed: 140,879] [added: _200,443_] | | | | [removed: 119,401] [added: _140,879_] | |

| Research and development | | | [removed: 53,514] [added: _55,329_] | | | | [removed: 45,187] [added: _53,514_] | | | | [removed: 40,853] [added: _45,187_] | |

| Total operating expenses | | | [removed: 253,957] [added: _295,965_] | | | | [removed: 186,066] [added: _253,957_] | | | | [removed: 160,254] [added: _186,066_] | |

| Operating income | | | [removed: 120,584] [added: _136,178_] | | | | [removed: 150,593] [added: _120,584_] | | | | [removed: 147,023] [added: _150,593_] | |

| Interest expense | | | [removed: (7,361] [added: _(10,188_] | ) | | | [removed: (1,748] [added: _(7,361_] | ) | | | [removed: (1,544] [added: _(1,748_] | ) |

| Interest income | | | [removed: 304] [added: _409_] | | | | [removed: 249] [added: _304_] | | | | [removed: 634] [added: _249_] | |

| Other non-operating income (expense), net | | | [removed: (1,566] [added: _(447_] | ) | | | [removed: (1,613] [added: _(1,566_] | ) | | | [removed: 8,049] [added: _(1,613_] | [added: )] |

| Total other income (expense) | | | [removed: (8,623] [added: _(10,226_] | ) | | | [removed: (3,112] [added: _(8,623_] | ) | | | [removed: 7,139] [added: _(3,112_] | [added: )] |

| Earnings before income taxes | | | [removed: 111,961] [added: _125,952_] | | | | [removed: 147,481] [added: _111,961_] | | | | [removed: 154,162] [added: _147,481_] | |

| Income taxes | | | [removed: 35,875] [added: _(198_] | [added: )] | | | [removed: 43,005] [added: _35,875_] | | | | [removed: 46,427] [added: _43,005_] | |

| Net earnings | | | [removed: 76,086] | | | | [removed: 104,476] | | | | [removed: 107,735] | | [added: | | _104,476_ | | | | | | | | _104,476_ | |]

| Foreign currency translation adjustments | | | [removed: (3,061] [added: _(1,572_] | ) | | | [removed: (19,888] [added: _(3,061_] | ) | | | [removed: (36,513] [added: _(19,888_] | ) |

| Unrealized gains (losses) on available-for-sale investments, net of tax of [added: $398,] $(6,501), [removed: $3,794,] and [removed: $(3,895),] [added: $3,794,] respectively | | | [removed: 24,531] [added: _5,693_] | | | | [removed: (19,924] [added: _24,531_] | [removed: )] | | | [removed: 11,308] [added: _(19,924_] | [added: )] |

| Other comprehensive income (loss) | | | [removed: 21,470] [added: _4,121_] | | | | [removed: (39,812] [added: _21,470_] | [removed: )] | | | [removed: (25,205] [added: _(39,812_] | ) |

| Comprehensive income | | $ | [removed: 97,556] [added: _130,271_] | | | $ | [removed: 64,664] [added: _97,556_] | | | $ | [removed: 82,530] [added: _64,664_] | |

| Basic | | $ | [removed: 2.04] [added: _3.36_] | | | $ | [removed: 2.81] [added: _2.04_] | | | $ | [removed: 2.90] [added: _2.81_] | |

| Diluted | | $ | [removed: 2.03] [added: _3.31_] | | | $ | [removed: 2.80] [added: _2.03_] | | | $ | [removed: 2.89] [added: _2.80_] | |

| Cash dividends per common share: | | $ | [removed: 1.28] [added: _1.28_] | | | $ | [removed: 1.28] [added: _1.28_] | | | $ | [removed: 1.27] [added: _1.28_] | |

| Basic | | | [removed: 37,313] [added: _37,476_] | | | | [removed: 37,194] [added: _37,313_] | | | | [removed: 37,096] [added: _37,194_] | |

| Diluted | | | [removed: 37,500] [added: _38,055_] | | | | [removed: 37,326] [added: _37,500_] | | | | [removed: 37,231] [added: _37,326_] | |

| | | [removed: _June 30,_] [added: __June 30,__] | | | | | | |

| | | [removed: _2017_] [added: __201__8__] | | | | [removed: _2016_] [added: __2017__] | | | [added: | __2016__ | | |]

| Cash and cash equivalents [added: at beginning of year] | | [removed: $] | [removed: 91,612] [added: _91,612_] | | | [removed: $] | [removed: 64,237] [added: _64,237_] | | [added: | | _54,532_ | |]

| Short-term available-for-sale investments | | | [removed: 66,102] [added: _59,764_] | | | | [removed: 31,598] [added: _66,102_] | |

| Accounts receivable, less allowance for doubtful accounts of [removed: $696] [added: $839] and [removed: $555,] [added: $696,] respectively | | | [removed: 116,830] [added: _120,296_] | | | | [removed: 93,393] [added: _116,830_] | |

| Inventories | | | [removed: 60,151] [added: _85,648_] | | | | [removed: 57,102] [added: _60,151_] | |

| Other current assets | | | [removed: 13,330] [added: _10,668_] | | | | [removed: 7,561] [added: _13,330_] | |

| Total current assets | | | [removed: 348,025] [added: _398,366_] | | | | [removed: 253,891] [added: _348,025_] | |

| Property and equipment, net | | | [removed: 135,124] [added: _145,348_] | | | | [removed: 132,362] [added: _135,124_] | |

| Goodwill | | | [removed: 579,026] [added: _597,890_] | | | | [removed: 430,882] [added: _579,026_] | |

| Intangible assets, net | | | [removed: 452,042] [added: _446,332_] | | | | [removed: 310,524] [added: _452,042_] | |

| Other assets | | | [removed: 44,002] [added: _5,266_] | | | | [removed: 1,922] [added: _44,002_] | |

| Total assets | | $ | [removed: 1,558,219] [added: _1,593,202_] | | | $ | [removed: 1,129,581] [added: _1,558,219_] | |

| Trade accounts payable | | $ | [removed: 16,856] [added: _18,452_] | | | $ | [removed: 20,653] [added: _16,856_] | |

| Salaries, wages and related accruals | | | [removed: 26,602] [added: _23,710_] | | | | [removed: 14,868] [added: _26,602_] | |

| Cash and cash equivalents | | $ | _121,990_ | | | $ | _91,612_ | |

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

| Net earnings | | | | | | | | | | | | | | | _126,150_ | | | | | | | | _126,150_ | |

| Other comprehensive income | | | | | | | | | | | | | | | | | | | _4,121_ | | | | _4,121_ | |

| Cash dividends | | | | | | | | | | | | | | | _(47,973_ | ) | | | | | | | _(47,973_ | ) |

| Common stock issued to employee stock purchase plan | | | _14_ | | | | _\-_ | | | | _1,506_ | | | | | | | | | | | | _1,506_ | |

| Balances at June 30, 2018 | | | _37,608_ | | | $ | _376_ | | | $ | _246,568_ | | | $ | _876,931_ | | | $ | _(44,814_ | ) | | $ | _1,079,061_ | |

| | | __201__8__ | | | | __2017__ | | | | __201__6__ | | |

| Contingent consideration | | | _(26,600_ | ) | | | _(11,800_ | ) | | | _\-_ | |

| Gain on investment, net | | | _(397_ | ) | | | _\-_ | | | | _\-_ | |

| Other operating activity | | | _776_ | | | | _2,215_ | | | | _(279_ | ) |

| Contingent consideration | | | _(61,900_ | ) | | | _(20,316_ | ) | | | _\-_ | |

| Other financing activities | | | _(3,985_ | ) | | | _(1,017_ | ) | | | _(287_ | ) |

For contracts with multiple element arrangements, the Company allocates the contract’s transaction price to each element on a relative standalone selling price basis using the Company’s best estimate of the standalone selling price of each distinct product or service in the contract.

The primary method used to estimate standalone selling price is the list price of each distinct product or service as this represents the best estimate of selling price.

Allocation of the transaction price is determined at the contracts’ inception.

Royalty revenues are based on net sales of the Company’s licensed products by a _third_ party.

We recognize royalty revenues in the period the sales occur based on _third_ party evidence received.

Deferred revenues include billings in excess of revenues recognized, such as those resulting from customer advances and deposits and unearned revenue on service contracts.

__2018_ and _2017_ Goodwill Impairment Analyses_

In _March 2018,_ the FASB issued ASU _No._ _2018_\-_05,_ _Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) _No._ _118__.

The standard added to the FASB Codification the guidance provided by the SEC in _December 2017_ regarding the accounting for the Tax Cuts and Jobs Act ("Tax Act").

We complied with SAB _No._ _118_ when preparing our annual consolidated financial statements for the year ended _June 30, 2018._ Reasonable estimates were used in determining several of the components of the impact of the Tax Act, including our fiscal _2018_ deferred income tax activity and the amount of post-_1986_ foreign deferred earnings subject to the repatriation transition tax.

We are still analyzing certain aspects of the Tax Act and refining our calculations, which could potentially affect the measurement of our deferred tax balances and the amount of the repatriation toll charge liability, and ultimately cause us to revise our initial estimates in future periods.

In addition, changes in interpretations, assumptions and guidance regarding the Tax Act, as well as the potential for technical corrections, could have a material impact on our effective tax rate in future periods.

The standard provides guidance about which changes to the terms or conditions of a share-based payment award require modification accounting, which _may_ result in a different fair value for the award.

We elected to early adopt this guidance on _April 1, 2018_ in advance of a modification that occurred during the _fourth_ quarter.

A majority of the Company’s revenue arrangements are routine sales transactions, which generally consist of a single performance obligation to transfer promised goods or service.

Therefore, the application of the new guidance including the cumulative effect of the change in the _first_ quarter of fiscal year _2019_ will _not_ have a material impact to the Company’s consolidated financial statements.

Among other changes, there will _no_ longer be an available-for-sale classification for which changes in fair value are currently reported in other comprehensive income for equity securities with readily determinable fair values.

This ASU is effective using the modified retrospective approach for annual periods and interim periods within those annual periods beginning after _December 15, 2017,_ which for us is _July 1, 2018._ This ASU could increase income statement volatility, as changes in the fair value of our equity investments will flow through earnings after adoption.

In _July 2018,_ the FASB issued ASU _No._ _2018_\-_10,_ _Codification Improvements to Topic _842,_ Leases_, which amends narrow aspects of the guidance in ASU _No._ _2016_\-_02._ We have established an implementation team to evaluate and identify the impact of the standard on our financial position, results of operations and cash flows.

We are currently assessing our leasing arrangements and evaluating the impact of practical expedients.

We are _not_ able to quantify the impact of the standard at this time.

In _February 2018,_ the FASB issued ASU _No._ _2018_\-_02,_ _Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income_.

The standard allows companies to make an election to reclassify from accumulated other comprehensive income to retained earnings the stranded tax effects resulting from the Tax Cuts and Jobs Act of _2017._ This ASU is effective for annual and interim periods beginning after _December 15, 2018,_ which for us is _July 1, 2019._ Early adoption is permitted.

We are currently evaluating this ASU and have _not_ yet made a decision regarding our policy election or early adoption.

We periodically complete business combinations that align with our business strategy.

Acquisitions are accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date and that the results of operations of each acquired business be included in our consolidated statements of comprehensive income from their respective dates of acquisitions.

Acquisition costs are recorded in selling, general and administrative expenses as incurred.

| Related party note payable, current | | | \- | | | | 3,759 | |

| Balances at June 30, 2014 | | | 37,002 | | | $ | 370 | | | $ | 147,004 | | | $ | 653,279 | | | $ | (5,388 | ) | | $ | 795,265 | |

| Gain on sale of CyVek | | | \- | | | | \- | | | | (8,300 | ) |

| Contingent consideration and ACD compensation, operating | | | (13,322 | ) | | | | | | | | |

| Other operating activity | | | 1,942 | | | | (566 | ) | | | (157 | ) |

| Cash dividends | | | (47,325 | ) | | | (47,607 | ) | | | (47,107 | ) |

| Excess tax benefit from stock option exercises | | | 514 | | | | 566 | | | | 615 | |

| Contingent consideration and ACD compensation, financing | | | (21,060 | ) | | | \- | | | | \- | |

| Cash and cash equivalents at beginning of year | | | 64,237 | | | | 54,532 | | | | 318,568 | |

_Impairment of long-lived assets and amortizable intangibles:_ We evaluate the recoverability of property, plant, equipment and amortizable intangibles whenever events or changes in circumstances indicate that an asset's carrying amount may not be recoverable.

_2016 and 2015 Goodwill Impairment Analysis_

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

In April 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-05, _Customer's Accounting for Fees Paid in a Cloud Computing Arrangement_.

The standard provides guidance to customers about whether a cloud computing arrangement includes a software license.

If the arrangement does include a software license, the software license element of the arrangement should be accounted for in the same manner as the acquisition of other software licenses.

We adopted this standard on July 1, 2016, applying it prospectively to all arrangements entered into or materially modified on or after July 1, 2016.

In September 2015, the FASB issued ASU No. 2015-16, _Simplifying the Accounting for Measurement-Period Adjustments._ When recording the purchase price allocation for a business combination in the financial statements, an acquirer may record preliminary amounts when measurements are incomplete as of the end of a reporting period.

When the required information is received to finalize the purchase price allocation, the preliminary amounts are adjusted.

These adjustments are referred to as measurement-period adjustments.

This standard eliminates the requirement to restate prior period financial statements for measurement-period adjustments.

Instead, it requires that the cumulative impact of a measurement-period adjustment be recognized in the reporting period in which the adjustment is identified.

We adopted this standard on July 1, 2016, applying it prospectively.

In August 2016, the FASB issued ASU No. 2016-15, _Classification of Certain Cash Receipts and Cash Payments_.

The standard is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows.

We elected to early adopt this standard as of July 1, 2016.

As our consolidated statement of cash flows presentation was in compliance with the new guidance, adoption of this standard had no impact on our consolidated financial statements.

The standard removes Step 2 of the goodwill impairment test, which requires a company to perform procedures to determine the fair value of a reporting unit's assets and liabilities following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination.

Instead, a goodwill impairment charge will now be measured as the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

We elected to early adopt this standard on January 1, 2017.

As we have not been required to complete Step 2 of the goodwill impairment test, this standard did not have an impact on our consolidated financial statements.

The new guidance is effective for us on July 1, 2018.

In addition to expanded disclosures associated with the new standard, the Company is continuing to assess the impact on the Company’s consolidated financial statements.

The amendments in this guidance should be applied prospectively with earlier application permitted as of the beginning of an interim or annual period.

The Company does not expect the updated guidance to have a significant impact on future financial statements.

Early adoption is permitted.

We do not expect the application of this standard to have a significant impact on our result of operations or financial position.

We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements.

This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, which for us is July 1, 2020.

Entities may early adopt beginning after December 15, 2018.

We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

None.

| | | |

Item 9A.

Controls and Procedures 63

| [removed: _a._] [added: (a)] | [removed: _Evaluation] [added: Evaluation] of Disclosure Controls and [removed: Procedures_] [added: Procedures] |

Based [removed: upon] [added: on] that evaluation, our Chief Executive Officer and Chief Financial Officer concluded [removed: that due to material weaknesses in our internal control over financial reporting described below in Management's Report on Internal Control over Financial Reporting,] [added: that, as of June 30, 2018,] our disclosure controls and procedures were [removed: not effective as of June 30, 2017.][added: effective.]

| [removed: _b._] [added: (b)] | [removed: __Management's_ _Report_ _on_ _Internal_ _Control_ _over_ _Financial_ _Reporting__] [added: Management's Annual Report on Internal Control Over Financial Reporting] |

[removed: Management, including] [added: Based on] our [added: assessment and those criteria, our] Chief Executive Officer and Chief Financial [removed: Officer, assessed the effectiveness of] [added: Officer concluded that] our internal control over financial reporting [added: was effective] as of June 30, [removed: 2017.][added: 2018]

[removed: In making this assessment,] [added: Under the supervision of the Audit Committee of the Board of Directors and with the participation of] our [removed: management used] [added: management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of] the [removed: criteria for effective] [added: effectiveness of our] internal control over financial reporting [removed: described] [added: using the criteria established] in [removed: "Internal Control-Integrated] [added: _Internal Control - Integrated] Framework [removed: (2013),"] [added: (2013)_] issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

[removed: A company's] [added: The Company's] internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting [added: and the preparation of financial statements] for external purposes in accordance with [removed: U.S.] generally accepted accounting principles.

[removed: 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] [added: | (ii) | 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 [removed: (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.][added: |]

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial [removed: reporting,] [added: 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.

We acquired Space Import-Export, Srl [removed: ("Space")] [added: (“Space”)] on July 1, 2016 and Advanced Cell Diagnostics [removed: ("ACD")] [added: (“ACD”] on August 1, [removed: 2016.][added: 2016, and we have implemented our internal control structure over these and incorporated its operations into our assessment of internal control over financial reporting as of June 30, 2018.]

[removed: Space] [added: Trevigen, Atlanta,] and [removed: ACD] [added: Eurocell] represented approximately [removed: 22.9%] [added: 5.3%] of our total assets and [removed: 7.5%] [added: 1.7%] of our total revenues as of and for the year ended June 30, [removed: 2017.][added: 2018.]

We excluded internal control over financial reporting associated with [removed: Space] [added: Trevigen, Atlanta,] and [removed: ACD] [added: Eurocell] from our assessment of the effectiveness of our internal control over financial reporting as of June 30, [removed: 2017.][added: 2018.]

[removed: Due to] [added: As a consequence, we did not have effective control activities over] the [removed: impact] [added: establishment] of [removed: these ineffective GITCs,] [added: GITCs for] certain [removed: control activities including] [added: Information Technology (IT) platforms primarily at recently acquired locations, and which impacted] manual controls that rely on data produced by [removed: and] [added: or] maintained within these IT system [removed: applications,] [added: applications] were also [removed: ineffective, potentially impacting all financial statement accounts.][added: ineffective.]

[removed: KPMG LLP's] [added: The attestation] report [removed: contains an adverse opinion] on [removed: the effectiveness of] our internal control over financial [removed: reporting, which is included] [added: reporting issued by KPMG LLP appears] in Item 8 [removed: in] [added: of] this [removed: Form 10-K.][added: report.]

| [removed: _d._] [added: (d)] | [removed: _Changes] [added: Changes] in Internal Control [removed: over] [added: Over] Financial [removed: Reporting_] [added: Reporting] |

[removed: There] [added: Other than the acquisitions discussed above and the actions described under "Remediation of Material Weakness in Internal Control Over Financial Reporting," there] were no [added: other] changes in the Company's internal control over financial reporting [removed: (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)] during the [removed: Company's most recently completed fiscal] [added: fourth] quarter [removed: other than those described in the Remedial Measures section above] [added: of fiscal year 2018] that [removed: has] [added: have] materially affected, or [removed: is] [added: are] reasonably likely to materially affect, the Company's internal control over financial reporting.

The evaluation was based upon reports and certifications provided by a number of executives.

A company's internal control over financial reporting also includes those policies and procedures that:

| (i) | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; |

| | |

| | |

| (iii) | 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. |

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.

We acquired Trevigen Inc (Trevigen) on September 5, 2017, Atlanta Biologicals (Atlanta) on January 2, 2018, and Eurocell Diagnostics SAS (Eurocell) on February 1, 2018.

| (c) | Remediation of Material Weaknesses in Internal Control Over Financial Reporting |

| --- | --- |

As previously disclosed in Item 9A of Part II of our Annual Report on Form 10-K for fiscal year 2017, management determined that our internal control over financial reporting was not effective as of June 30, 2017 due to material weaknesses over monitoring and information and communication with respect to General Information Technology Controls (GITCs) for certain of our information technology platforms and flow of information from the component locations to allow for effective monitoring.

To remediate the material weaknesses in our internal control over financial reporting described in Item 9A of Part II of our Annual Report on Form 10-K for fiscal year 2017, we performed a comprehensive review of procedures and related controls.

We hired a new Internal Audit Director and expanded the existing Internal Audit to improve our monitoring processes.

We conducted various trainings and meetings to ensure there was clear flow of information from subsidiaries to the corporate headquarters.

As a result of our procedures, new process controls were designed and implemented during fiscal year 2018.

In addition, management focused on frequent testing of Information Technology General Controls to validate continued operating effectiveness.

Management has determined that the remediation actions discussed above were effectively designed and demonstrated effective operation for a sufficient period of time to enable us to conclude that the material weaknesses related to our monitoring and information and communication processes as well as the aforementioned internal control activities have been remediated as of June 30, 2018.

| --- | --- |

We have extended our oversight and monitoring processes that support internal control over financial reporting to include the operations of these entities.

Notwithstanding the identified material weaknesses, management believes the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with U.S. generally accepted accounting principles.

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act).

Accordingly, even effective internal control over financial reporting can only provide reasonable assurance of achieving its control objectives.

Based on our assessment which used the criteria noted above, management has concluded that our internal control over financial reporting was not effective as of June 30, 2017 due to the material weaknesses described as follows:

The Company did not maintain effective monitoring or information and communication processes.

Specifically, the Company did not have:

| | ● | Sufficient monitoring of the operation of internal control related to general information technology controls (GITCs) at the locations we have acquired since fiscal year 2013 that are subject to management's assessment. |

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

| | ● | Effective GITCs implemented timely at every location to allow adequate time for the effective operation of certain IT dependent manual controls primarily in the revenue process, inventory process, and expenditures process. |

| | ● | Sufficient flow of information from all components, including information regarding the progress made on control implementation and control testing results to allow for effective monitoring. |

As a consequence, the Company did not have effective control activities over the establishment of GITCs for certain of its information technology ("IT") platforms primarily at the locations it has acquired since fiscal year 2013 that are subject to management's assessment, including instances of ineffective application change controls, user access provisioning, and user access rights review.

Although no material misstatements were identified in our consolidated financial statements, these control deficiencies create a reasonable possibility that a material misstatement of the Company's consolidated financial statements will not be prevented or detected on a timely basis.

We have concluded that the deficiencies represent material weaknesses in our internal control over financial reporting and our internal control over financial reporting was not effective as of June 30, 2017.

The Company's internal control over financial reporting as of June 30, 2017 has been audited by KPMG LLP, an independent registered public company accounting firm.

| _c._ | _Remedial Measures_ |

During the current year, management implemented significant changes to improve procedures relating to our internal control structure, including our ability to rely on system generated information.

These changes included the implementation of a new ERP system in Minneapolis on July 1, 2016.

Additional corporate resources were added to the Controllership function during the second quarter to strengthen the controls within the corporate financial reporting processes as well as controls over complex transactions and to the Internal Audit function during the third quarter to increase our level of control monitoring.

Management also completed a full reassessment of risk which resulted in the design and global rollout of a new GITC control framework with updated standard operating procedures, a redesign and reassessment of all manual controls, including IT dependent manual controls, identification of automated configuration controls, and a reassessment of users' access rights to each of our IT systems.

Newly designed controls began to be implemented during the second quarter of the fiscal year.

However, the complete design reassessment was not completed until the end of the third quarter, which resulted in certain controls and certain access right changes not being implemented until the fourth quarter.

Therefore, although we believe we have made significant progress in changing the design of our controls as of June 30, 2017, we have not had adequate time to validate the design and operating effectiveness of all of our controls in accordance with our internal policies.

With the oversight of the Company's Audit Committee, management is taking steps intended to address the underlying causes of the material weaknesses identified in Management's Report on Internal Control over Financial Reporting primarily through the following remediation activities:

| | ● | Expanding our Internal Audit function to provide additional resources for internal control monitoring with a focus on our GITC controls, especially for the locations we have acquired since fiscal year 2013, as these entities often have less sophisticated IT systems which increases the need for oversight and additional controls. |

| | ● | Increasing the frequency of control testing to validate that we have achieved a sustained level of operating effectiveness in accordance with our internal policies. |

| | ● | Providing additional training to local management teams regarding the flow of information and expectations for timely reporting of the status of control implementation, as well as documentation expectations for key controls that involve IT dependent information and/or involve judgment and estimates. These efforts will improve consistency of communications across our components as well as standardization of our documentation to allow for better monitoring. |

| | ● | Reorganizing responsibilities within the Corporate Accounting team to 1) allow for the implementation of additional quarterly procedures designed to promote improvements in the flow of information between component locations and Corporate management and 2) support the transition of newly acquired entities, currently not within the scope of management's assessment, into our control framework. |

The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

We believe this remediation will occur in fiscal year 2018 and will strengthen our internal control over financial reporting and will prevent a reoccurrence of the material weaknesses described above.

ITEM 9B.

OTHER INFORMATION

None.

PART III

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

None.

| | | |

Item 10.

Directors, Executive Officers 66

Item 11.

Executive Compensation 66

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 66

Item 13.

Certain Relationships and Related Transactions, and Director Independence 66

Item 14.

Principal Accounting Fees and Services 66

| PART IV | | |

Item 15.

Exhibits, Financial Statement Schedules 67

| | SIGNATURES | 67 |

PART I

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 "Election of Directors," "Principle Shareholders" and "Additional Corporate Governance Matters" in the Company's Proxy Statement for its [removed: 2017] [added: 2018] 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 sections entitled "Election of Directors" and "Executive Compensation" in the Company's Proxy Statement for its [removed: 2017] [added: 2018] 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 12 is incorporated by reference to the sections entitled "Principal Shareholders" and "Management Shareholdings" in the Company's Proxy Statement for its [removed: 2017] [added: 2018] 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 "Election of Directors" and "Additional Corporate Governance Matters" in the Company's Proxy Statement for its [removed: 2017] [added: 2018] 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 14 is incorporated herein by reference to the section entitled "Audit Matters" in the Company's Proxy Statement for its [removed: 2017] [added: 2018] 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: 2018,] 2017, [removed: 2016,] and [removed: 2015][added: 2016]

Consolidated Balance Sheets as of June 30, [removed: 2017] [added: 2018] and [removed: 2016][added: 2017]

Consolidated Statements of Shareholders' Equity for the Years Ended June 30, [added: 2018,] 2017, [removed: 2016,] and [removed: 2015][added: 2016]

Consolidated Statements of Cash Flows for the Years Ended June 30, [added: 2018,] 2017, [removed: 2016] and [removed: 2015][added: 2016]

Notes to Consolidated Financial Statements for the Years Ended June 30, [added: 2018,] 2017, [removed: 2016] and [removed: 2015][added: 2016]

| Date: [removed: September 7, 2017] [added: August 27, 2018] | | /s/ Charles Kummeth | |

| | | Its: President [added: and CEO] | |

| [removed: September 7, 2017] [added: August 27, 2018] | /s/ Randolph C. Steer, Ph.D., M.D. |

| [removed: September 7, 2017] [added: August 27, 2018] | /s/ Charles A. Dinarello, M.D. |

| [removed: September 7, 2017] [added: August 27, 2018] | /s/ Roeland Nusse, Ph.D. |