Bio-Techne (TECH) 10-K risk factor changes: FY2020 vs FY2019

Statements in this Annual Report on Form 10-K and elsewhere that are forward-looking involve risks and uncertainties which may affect the Company's actual results of operations.

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

The Company undertakes no obligation to update or revise any forward-looking statements made due to new information or future events.

Investors are cautioned not to place undue emphasis on these statements.

The following risk factors should be read carefully in connection with evaluation of the Company's business and any forward-looking statements made in this Annual Report on Form 10-K and elsewhere.

See the section entitled “forward-looking statements” set forth above.

Any of the following risks or others discussed in this Annual Report on Form 10-K or the Company's other SEC filings could materially adversely affect the Company's business, operating results and financial condition.

It may be difficult for us to implement our strategies for revenue growth in light of competitive challenges.

We face significant competition across many of our product lines.

Competitors include companies ranging from start-up companies, which may be able to more quickly respond to customers' needs, to large multinational companies, which may have greater financial, marketing, operational, and research and development resources than the Company.

In addition, consolidation trends in the 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.

Moreover, customers may believe that consolidated businesses are better able to compete as sole source vendors, and therefore prefer to purchase from such businesses.

The entry into the market by manufacturers in China, India and other low-cost manufacturing locations is also creating increased pricing and competitive pressures, particularly in developing markets.

Failure to anticipate and respond to competitors' actions may impact the Company's future sales and earnings.

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

| | • | strengthening our presence in selected geographic markets; |

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

| | • | allocating research and development funding to products with higher growth prospects; |

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

| | • | developing new applications for our technologies; |

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

| | • | continuing key opinion leader initiatives; |

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

| | • | finding new markets for our products; |

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

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

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

| | • | continuing the development of commercial tools and infrastructure to increase and support cross-selling opportunities of products and services to take advantage of our depth in product offerings. |

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

We may not be able to successfully implement these strategies, and these strategies may not result in the expected growth of our business.

Our acquisition growth strategy poses financial, management and other risks and challenges.

We routinely explore acquiring other businesses and assets, and have completed sixteen acquisitions and several investments in the last seven years.

However, we may be unable to identify or complete promising acquisitions for many reasons, including competition among buyers, the high valuations of businesses in our industry, the need for regulatory and other approvals, and availability of capital.

There can be no assurance that we will engage in any additional acquisitions or that we will be able to do so on terms that will result in any expected benefits.

In addition, acquisitions financed with borrowings could make us more vulnerable to business downturns and could negatively affect our earnings due to higher leverage and interest expense.

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.

When we do identify and consummate acquisitions, we may face financial, managerial and operational challenges, including diversion of management attention, difficulty with integrating acquired businesses, integration of different corporate cultures, increased expenses, assumption of unknown liabilities, indemnities, potential disputes with the sellers, and the need to evaluate the financial systems of and establish internal controls for acquired entities.

CONDITION AND RESULTS OF OPERATIONS

The following management discussion and analysis (“MD&A”) provides information that we believe is useful in understanding our operating results, cash flows and financial condition.

We provide quantitative information about the material sales drivers including the effect of acquisitions and changes in foreign currency at the corporate and segment level.

We also provide quantitative information about discrete tax items and other significant factors we believe are useful for understanding our results.

The MD&A should be read in conjunction with the consolidated financial information and related notes included in this Form 10-K.

This discussion contains various “Non-GAAP Financial Measures” and also contains various “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

We refer readers to the statements entitled “Non-GAAP Financial Measures” located at the end of this MD&A and “Forward-Looking Information and Cautionary Statements” and “Risk Factors” within Items 1 and 1A of this Form 10-K.

OVERVIEW

Bio-Techne develops, manufactures and sells life science reagents, instruments and services for the research and clinical diagnostic markets worldwide.

With our deep product portfolio and application expertise, we sell integral components of scientific investigations into biological processes and molecular diagnostics, revealing the nature, diagnosis, etiology and progression of specific diseases.

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

During our fiscal year 2019, we operated with two reporting segments – our Protein Sciences segment and our Diagnostics and Genomics segment.

Our Protein Sciences segment is a leading developer and manufacturer of high-quality purified proteins and reagent solutions, most notably cytokines and growth factors, antibodies, immunoassays, biologically active small molecule compounds, tissue culture reagents and T-Cell activation technologies.

This segment also includes protein analysis solutions that offer researchers efficient and streamlined options for automated western blot and multiplexed ELISA workflow.

Our Genomics and Diagnostics segment develops and manufactures diagnostic products, including FDA-regulated controls, calibrators, blood gas and clinical chemistry controls and other reagents for OEM and clinical customers, as well as a portfolio of clinical molecular diagnostic oncology assays, including the ExoDx®_Prostate(IntelliScore)_ test (EPI) for prostate cancer diagnosis.

This segment also manufactures and sells advanced tissue-based in-situ hybridization assays (ISH) for research and clinical use.

OVERALL RESULTS

For fiscal 2019, consolidated net sales increased 11% as compared to fiscal 2018.

Organic growth for the year was 10% with currency translation having an unfavorable impact of 1% and acquisitions contributing 2%.

The organic growth was broad-based with double digit organic growth in the United States, high single digit organic growth in Europe, and over 25% organic growth in China.

Consolidated GAAP net earnings decreased 24% for fiscal 2019 as compared to fiscal 2018.

After adjusting for acquisition related costs, stock-based compensation, and certain income tax items in both years, adjusted net earnings increased 2% in fiscal 2019 as compared to fiscal 2018.

Adjusted earnings growth was driven by volume leverage, which was partially offset by negative margin acquisitions.

For fiscal 2018, consolidated net sales increased 14% as compared to fiscal 2017.

Organic sales for the year increased 9% with currency translation contributing 2% and acquisitions contributing 3%.

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.

Consolidated GAAP net earnings increased 65% for fiscal 2018 as compared to fiscal 2017.

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

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.

RESULTS OF OPERATIONS

_Net Sales_

Consolidated organic net sales exclude the impact of net sales contributed by companies acquired during the fiscal year and the effect of the change from the prior year in exchange rates used to convert sales in foreign currencies (primarily the euro, British pound sterling, and Chinese yuan) into U.S. dollars.

Consolidated net sales growth was as follows:

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

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

| | | __201__9__ | | | | __201__8__ | | | | __201__7__ | | |

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

| Organic sales growth | | | 10 | % | | | 9 | % | | | 6 | % |

ABOUT MARKET RISK

The Company operates internationally, and thus is subject to potentially adverse movements in foreign currency exchange rates.

Approximately 27% of the Company's consolidated net sales in fiscal 2019 were made in foreign currencies, including 13% in euro, 4% in British pound sterling, 4% in Chinese yuan and the remaining 6% in other currencies.

The Company is exposed to market risk primarily from foreign exchange rate fluctuations of the euro, British pound sterling, Chinese yuan and Canadian dollar as compared to the U.S. dollar as the financial position and operating results of the Company's foreign operations are translated into U.S. dollars for consolidation.

Month-end exchange rates between the euro, British pound sterling, Chinese yuan, Canadian dollar and the U.S. dollar, which have not been weighted for actual sales volume in the applicable months in the periods, were as follows:

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

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

| | | __201__9__ | | | | __201__8__ | | | | __201__7__ | | |

| Euro: | | | | | | | | | | | | |

| High | | $ | 1.17 | | | $ | 1.24 | | | $ | 1.14 | |

| Low | | | 1.12 | | | | 1.16 | | | | 1.05 | |

| Average | | | 1.14 | | | | 1.20 | | | | 1.09 | |

| British pound sterling: | | | | | | | | | | | | |

| High | | $ | 1.32 | | | $ | 1.42 | | | $ | 1.32 | |

| Low | | | 1.27 | | | | 1.29 | | | | 1.22 | |

| Average | | | 1.29 | | | | 1.35 | | | | 1.27 | |

| Chinese yuan: | | | | | | | | | | | | |

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

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

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

| Canadian dollar: | | | | | | | | | | | | |

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

| Low | | | 0.74 | | | | 0.76 | | | | 0.73 | |

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

The Company's exposure to foreign exchange rate fluctuations also arises from trade receivables and intercompany payables denominated in one currency in the financial statements, but receivable or payable in another currency.

The Company does not enter into foreign currency forward contracts to reduce its exposure to foreign currency rate changes on forecasted intercompany sales transactions or on intercompany foreign currency denominated balance sheet positions.

Foreign currency transaction gains and losses are included in "Other non-operating expense, net" in the Consolidated Statement of Earnings and Comprehensive Income.

The effect of translating net assets of foreign subsidiaries into U.S. dollars are recorded on the Consolidated Balance Sheet as part of "Accumulated other comprehensive income (loss)."

The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from June 30, 2019 levels against the euro, British pound sterling, Chinese yuan and Canadian dollar are as follows (in thousands):

| Decrease in translation of 2019 earnings into U.S. dollars | | $ | 3,810 | |

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

| Decrease in translation of net assets of foreign subsidiaries | | | 43,242 | |

| Additional transaction losses | | | 4,484 | |

OVERVIEW

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

With our deep product portfolio and application expertise, we sell integral components of scientific investigations into biological processes and molecular diagnostics, revealing the nature, diagnosis, etiology and progression of specific diseases.

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

During our fiscal year 2019, we operated with two reporting segments – our Protein Sciences segment and our Diagnostics and Genomics segment.

Our Protein Sciences segment is a leading developer and manufacturer of high-quality purified proteins and reagent solutions, most notably cytokines and growth factors, antibodies, immunoassays, biologically active small molecule compounds, tissue culture reagents and T-Cell activation technologies.

This segment also includes protein analysis solutions that offer researchers efficient and streamlined options for automated western blot and multiplexed ELISA workflow.

Our Genomics and Diagnostics segment develops and manufactures diagnostic products, including FDA-regulated controls, calibrators, blood gas and clinical chemistry controls and other reagents for OEM and clinical customers, as well as a portfolio of clinical molecular diagnostic oncology assays, including the ExoDx®_Prostate(IntelliScore)_ test (EPI) for prostate cancer diagnosis.

This segment also manufactures and sells advanced tissue-based in-situ hybridization assays (ISH) for research and clinical use.

We are a Minnesota corporation with our global headquarters in Minneapolis, Minnesota.

We were founded over forty years ago, in 1976, as Research and Diagnostic Systems, Inc. We became a publicly traded company in 1985 through a merger with Techne Corporation, now Bio-Techne Corporation.

Our common stock is listed on the NASDAQ under the symbol “TECH.” We operate globally, with offices in many locations throughout North America, Europe and Asia.

Today, our product line extends to over 300,000 products, most of which we manufacture ourselves in multiple locations in North America, England and China.

Our historical focus was on providing high quality proteins, antibodies and immunoassays to the life science research market and hematology controls to the diagnostics market.

Over the last six years, we implemented a disciplined strategy to accelerate growth in part by acquiring businesses and product portfolios that leveraged and diversified our existing product lines, filled portfolio gaps with differentiated high growth businesses, and expanded our geographic scope.

From fiscal years 2013 through 2019 we have acquired fifteen companies that have expanded the product offerings and geographic footprint of both reporting segments.

Recognizing the importance of an integrated, global approach to meeting our mission and accomplishing our strategies, we have maintained many of the brands of the companies we have acquired, but unified under a single global brand -- Bio-Techne.

We are committed to providing the life sciences community with innovative, high-quality scientific tools that allow our customers to make extraordinary discoveries.

Our mission is to 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.

Our strategies include:

_Continued innovation in core products._ Through collaborations with key opinion leaders, participation in scientific discussions and societies, and leveraging our internal talent, we expect to be able to convert our continued significant investment in our research and development activities to be first-to-market with quality products that are at the leading edge of life science researchers’ needs, including expansion of our assay portfolios and products for cancer diagnostics and therapeutics.

_Market and geographic 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.

We will also leverage our existing portfolio to expand our product offerings into novel research fields and further into diagnostics and therapeutics markets, including in cell and gene therapy.

_Culture development and talent recruitment and retention._ As we continue to grow both organically and through acquisition, we are intentionally fostering an “epic” culture based on the ideals of empowerment, passion, innovation and collaboration.

We strive to recruit, train and retain the most talented staff, who will live out those epic ideals and implement our strategies effectively.

_Targeted acquisitions and investments._ We will continue to leverage our strong balance sheet to gain access to new and differentiated technologies and products that improve our competitiveness in the current market, meet customers’ expanding work flow needs and allow us to enter adjacent markets, and to make investments in key technologies and product lines such as the manufacture of GMP grade reagents to support rapidly expanding immunotherapy markets.

OUR PRODUCTS AND MARKETS

In fiscal 2019, net sales from Bio-Techne’s Protein Sciences and Diagnostics and Genomics segments represented 76% and 24% of consolidated net sales, respectively.

Financial information relating to Bio-Techne’s segments is incorporated herein by reference to Note 12 to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

_Protein Sciences_ _Segment_

The Protein Sciences segment is comprised of divisions with complementary product offerings serving many of the same customers – the Reagent Solutions division and the Analytical Solutions division.

_Protein Sciences Segment Products_

The Reagents Solutions division consists of specialized proteins, such as cytokines and growth factors, antibodies, small molecules, tissue culture sera and cell selection technologies traditionally used by researchers to further their life science experimental activities and by companies developing next generation diagnostics and therapeutics, especially companies developing cell and gene-based therapeutics.

Key product brands include R&D Systems, Tocris Biosciences, Novus Biologicals, Atlanta Biologicals and Quad Technologies.

Most recently, we acquired B-MoGen Technologies, which has a non-viral, transposon-based technology for gene editing, a key technology targeted for the cell and gene therapy market.

Our combined chemical and biological reagents portfolio provides high quality tools that customers can use in solving the complex biological pathways and glean knowledge that may lead to a more complete understanding of biological processes, and, ultimately, to the development of novel therapeutic strategies to address different pathologies.

The Analytical Solutions division includes manual and automated protein analysis instruments and immunoassays that are used in quantifying proteins in a variety of biological fluids.

Products in this division include traditional manual plate-based immunoassays, fully automated multiplex immunoassays on various instrument platforms, and automated western blotting and isoelectric focusing analysis of complex protein samples.

Key product brands include R&D Systems and ProteinSimple.

A number of our products have been demonstrated to 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.

As of August 28, 2019, 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.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| --- | --- |

For the fiscal year ended June 30, 2020, or

| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| --- | --- |

For the transition period

from                      to

Commission file number 0-17272

BIO-TECHNE CORPORATION

(Exact name of registrant as specified in its charter)

| Minnesota | | 41-1427402 |

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

| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |

| | | |

| 614 McKinley Place N.E. Minneapolis, MN 55413 | | (612) 379-8854 |

| (Address of principal executive offices) (Zip Code) | | (Registrant's telephone number, including area code) |

Securities registered pursuant to Section 12(b) of the Act:

| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |

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

| Common Stock, $0.01 par value | TECH | The NASDAQ Stock Market LLC |

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒  No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐  No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒  No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

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

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

(Check one):

| Large accelerated filer | | ☒ | | Accelerated filer | | ☐ |

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

| | | | | | | |

10-K 1 tech20190630_10k.htm FORM 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| --- | --- |

For the fiscal year ended June 30, 2019, or

| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| --- | --- |

For the transition period

from to

Commission file number 0-17272

BIO-TECHNE CORPORATION

(Exact name of registrant as specified in its charter)

| Minnesota | | 41-1427402 |

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

| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |

| | | |

| 614 McKinley Place N.E. Minneapolis, MN 55413 | | (612) 379-8854 |

| (Address of principal executive offices) (Zip Code) | | (Registrant's telephone number, including area code) |

Securities registered pursuant to Section 12(b) of the Act:

| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |

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

| Common Stock, $0.01 par value | TECH | The NASDAQ Stock Market LLC |

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

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

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

(Check one):

| Large accelerated filer | | ☒ | | Accelerated filer | | ☐ |

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

There are no unresolved staff comments as of the date of this report.

The Company owns the facilities that its headquarters and R&D Systems subsidiary occupy in Minneapolis, Minnesota.

The Minneapolis facilities are utilized by both the Company's Protein Sciences and Diagnostics and Genomics segments.

The Minneapolis complex includes approximately 800,000 square feet of space in several adjoining buildings.

Bio-Techne uses approximately 625,000 square feet of the complex for administrative, research, manufacturing, shipping and warehousing activities.

The Company is currently leasing the remaining space in the complex as retail and office space.

The Company owns a 17,000 square foot facility that its Bio-Techne Europe subsidiary occupies in Abingdon, England.

This facility is utilized by the Company's Protein Sciences and Diagnostics and Genomics segments.

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 Protein Sciences.

The Company leases the following material facilities, all of which are primarily utilized by the Company's Protein Sciences segment with the exception of the locations used by the Company's ProteinSimple and CyVek subsidiaries, which support both the Protein Sciences segment and the Diagnostics & Genomics segment).

Certain locations are not named because they were not significant individually or in the aggregate as of the date of this report.

| _Subsidiary_ | | _Location_ | | _Type_ | | _Square Feet_ | |

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

| | | | | | | | |

| Bio-Techne Europe | | Langley, United Kingdom | | Warehouse | | 14,300 | |

| Bio-Techne China | | Shanghai and Beijing, China | | Office/warehouse | | 10,700 | |

| Boston Biochem | | Cambridge, Massachusetts | | Office/lab | | 7,400 | |

| Tocris | | Bristol, United Kingdom | | Office/manufacturing/lab/warehouse | | 30,000 | |

| PrimeGene | | Shanghai, China | | Office/manufacturing/lab | | 20,600 | |

| Bionostics | | Devens, Massachusetts | | Office/manufacturing | | 48,000 | |

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

| ProteinSimple | | San Jose, California | | Office/manufacturing/warehouse | | 167,000 | |

| ProteinSimple Canada | | Ottawa and Toronto, Canada | | Office/manufacturing/warehouse | | 13,900 | |

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

| Cliniqa | | San Marcos, California | | Office/manufacturing/warehouse | | 62,200 | |

| Advanced Cell Diagnostics | | Newark, California | | Office/manufacturing/warehouse | | 46,500 | |

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

| Exosome Diagnostics | | Waltham, Massachusetts | | Office/manufacturing/warehouse | | 28,000 | |

The Company believes the owned and leased properties are adequate to meet its occupancy needs in the foreseeable future.

Not applicable.

PART II

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

_Holders of Common Stock and Dividends Paid_

As of August 26, 2019, there were over 43,000 beneficial shareholders of the Company's common stock and over 150 shareholders of record.

The Company paid annual cash dividends totaling $48.4 million, $48.0 million, and $47.7 million in fiscal 2019, 2018 and 2017, respectively.

The Board of Directors periodically considers the payment of cash dividends, and there is no guarantee that the Company will pay comparable cash dividends, or any cash dividends, in the future.

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.

_Issuer Purchases of Equity Securities_

The Company repurchased 95,000 shares during fiscal 2019 for $15.4 million at an average share price of $162.15.

The Company did not repurchase any shares in fiscal 2018 or 2017.

As of June 30, 2018, the maximum approximate dollar value of shares that could have been purchased under the Company's then existing stock repurchase plan was approximately $125 million, with no specified end period.

During fiscal 2019, the Board rescinded the existing stock repurchase plan and implemented a new repurchase plan, which grants management the discretion to mitigate the dilutive effect of stock option exercises by authorizing repurchase of shares up to the amount of stock returned to the corporation through stock option exercises of $19.2 million, the dilutive effect of stock option exercises in fiscal 2018, which is then adjusted for the dilutive effect of additional stock option exercises occurring subsequent to June 30, 2018.

As of June 30, 2019, we have authorization of approximately $42 million that may yet be used to purchase additional shares under the newly implemented stock repurchase program.

_Stock Performance Graph_

The following chart compares the cumulative total shareholder return on the Company's common stock with the S&P Midcap 400 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, 2014 in the Company's common stock and in each of the foregoing indices and assumes reinvestment of dividends.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

Among Bio-Techne Corporation, the S&P Midcap 400 Index,

and S&P 400 Mid-Cap Life Sciences Tools and Services Index

| |  | |

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

| | | |

| | *$100 invested on 6/30/14 in stock or index, including reinvestment of dividends. Fiscal year ending June 30. Copyright© 2019 Standard & Poor's, a division of S&P Global. All rights reserved. | |

_(dollars in thousands, except per share data)_

| _Income and Share Data:_ | | _2019(1)_ | | | | _2018(2)_ | | | | _2017(3)_ | | | | _2016(4)_ | | | | _2015(5)_ | | |

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

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

| Net sales | | $ | 714,006 | | | $ | 642,993 | | | $ | 563,003 | | | $ | 499,023 | | | $ | 452,246 | |

| Operating income | | | 146,719 | | | | 136,178 | | | | 120,584 | | | | 150,593 | | | | 147,023 | |

| Earnings before income taxes (6) | | | 112,015 | | | | 125,952 | | | | 111,961 | | | | 147,481 | | | | 154,162 | |

| Net earnings | | | 96,072 | | | | 126,150 | | | | 76,086 | | | | 104,476 | | | | 107,735 | |

| Diluted earnings per share | | | 2.47 | | | | 3.31 | | | | 2.03 | | | | 2.80 | | | | 2.89 | |

| Average common and common equivalent shares - diluted (in thousands) | | | 38,892 | | | | 38,055 | | | | 37,500 | | | | 37,326 | | | | 37,231 | |

| _Balance Sheet Data as of June 30:_ | | __2019__ | | | | __2018__ | | | | __2017__ | | | | __2016__ | | | | __2015__ | | |

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

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

| Cash, cash equivalents and short-term available-for-sale investments | | $ | 166,033 | | | $ | 181,754 | | | $ | 157,714 | | | $ | 95,835 | | | $ | 110,921 | |

| Working capital | | | 310,622 | | | | 318,856 | | | | 212,503 | | | | 199,744 | | | | 208,515 | |

| Total assets | | | 1,884,410 | | | | 1,593,202 | | | | 1,558,219 | | | | 1,129,581 | | | | 1,063,360 | |

| Total shareholders' equity | | | 1,165,589 | | | | 1,079,061 | | | | 949,627 | | | | 879,280 | | | | 846,935 | |

| _Cash Flow Data:_ | | __2019__ | | | | __2018__ | | | | __2017__ | | | | __2016__ | | | | __2015__ | | |

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

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

| Net cash provided by operating activities | | | 181,619 | | | $ | 170,367 | | | $ | 143,721 | | | $ | 144,157 | | | $ | 139,359 | |

| Capital expenditures | | | 25,411 | | | | 20,934 | | | | 15,179 | | | | 16,898 | | | | 19,905 | |

| Cash dividends declared per share | | | 1.28 | | | | 1.28 | | | | 1.28 | | | | 1.28 | | | | 1.27 | |

| _Employee Data as of June 30:_ | | __2019__ | | | | __2018__ | | | | __2017__ | | | | __2016__ | | | | __2015__ | | |

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

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

| Employees | | | 2,255 | | | | 1,943 | | | | 1,789 | | | | 1,560 | | | | 1,356 | |

| (1) (2) | The Company acquired Quad Technologies on July 2, 2018, Exosome Diagnostics on August 1, 2018 and B-Mogen on June 4, 2019. The Company acquired Trevigen on September 5, 2017, Atlanta Biologicals on January 2, 2018, and Eurocell Diagnostics on February 1, 2018. |

| --- | --- |

| (3) | The Company acquired Space on July 1, 2016, and Advanced Cell Diagnostics on August 1, 2016. |

| --- | --- |

| (4) | The Company acquired Cliniqa on July 8, 2015, and Zephyrus on March 21, 2016. |

| --- | --- |

| (5) | The Company acquired Novus Biologicals on July 2, 2014, ProteinSimple on July 31, 2014, and CyVek on November 3, 2014. |

| --- | --- |

| (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: 2019 - $64.9 million; 2018 - $74.2 million; 2017 - $73.2 million; 2016 - $37.6 million; 2015 - $37.6 million. |

| --- | --- |

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

_Bio-Techne Corporation and Subsidiaries

(in thousands, except per share data)_

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

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

| | | __201__9__ | | | | __201__8__ | | | | __201__7__ | | |

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

| Net sales | | $ | 714,006 | | | $ | 642,993 | | | $ | 563,003 | |

| Cost of sales | | | 240,515 | | | | 210,850 | | | | 188,462 | |

| Gross margin | | | 473,491 | | | | 432,143 | | | | 374,541 | |

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

| Operating expenses: | | | | | | | | | | | | |

| Selling, general and administrative | | | 264,359 | | | | 240,636 | | | | 200,443 | |

| Research and development | | | 62,413 | | | | 55,329 | | | | 53,514 | |

| Total operating expenses | | | 326,772 | | | | 295,965 | | | | 253,957 | |

| Operating income | | | 146,719 | | | | 136,178 | | | | 120,584 | |

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

| Other income (expense): | | | | | | | | | | | | |

| Interest expense | | | (21,705 | ) | | | (10,188 | ) | | | (7,361 | ) |

| Interest income | | | 569 | | | | 409 | | | | 304 | |

| Other non-operating income (expense), net | | | (13,568 | ) | | | (447 | ) | | | (1,566 | ) |

| Total other income (expense), net | | | (34,704 | ) | | | (10,226 | ) | | | (8,623 | ) |

| Earnings before income taxes | | | 112,015 | | | | 125,952 | | | | 111,961 | |

| Income taxes (benefit) | | | 15,943 | | | | (198) | | | | 35,875 | |

| Net earnings | | | 96,072 | | | | 126,150 | | | | 76,086 | |

| Other comprehensive income (loss): | | | | | | | | | | | | |

| Foreign currency translation adjustments | | | (4,487 | ) | | | (1,572 | ) | | | (3,061 | ) |

| Unrealized gains (losses) on derivative instruments - cash flow hedges, net of tax of $2,921 in FY19 | | | (9,537 | ) | | | \- | | | | \- | |

| Unrealized gains (losses) on available-for-sale investments, net of tax of $398 in FY18 and $(6,501) in FY17 | | | \- | | | | 5,693 | | | | 24,531 | |

| Other comprehensive income (loss) | | | (14,024 | ) | | | 4,121 | | | | 21,470 | |

| Comprehensive income | | $ | 82,048 | | | | 130,271 | | | $ | 97,556 | |

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

| Earnings per share: | | | | | | | | | | | | |

| Basic | | $ | 2.54 | | | $ | 3.36 | | | $ | 2.04 | |

| Diluted | | $ | 2.47 | | | $ | 3.31 | | | $ | 2.03 | |

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

| Weighted average common shares outstanding: | | | | | | | | | | | | |

| Basic | | | 37,781 | | | | 37,476 | | | | 37,313 | |

| Diluted | | | 38,892 | | | | 38,055 | | | | 37,500 | |

See Notes to Consolidated Financial Statements.

None.

| (a) | Evaluation of Disclosure Controls and Procedures |

| --- | --- |

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the "Exchange Act"), management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e).

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

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2019, our disclosure controls and procedures were effective.

| (b) | Management's Annual Report on Internal Control Over Financial Reporting |

| --- | --- |

The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting 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; |

| --- | --- |

| | |

| (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 |

| | |

| (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.

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.

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

We acquired QT Holding Corporation (Quad) on July 2, 2018, Exosome Diagnostics Inc. (Exosome) on August 1, 2018, and BMG Merger Sub, Inc (B-Mogen) on June 4, 2019 .

Quad, Exosome, and B-Mogen represented approximately 17.2% of our total assets and 0.5% of our total revenues as of and for the year ended June 30, 2019.

We excluded internal control over financial reporting associated with Quad, Exosome, and B-Mogen from our assessment of the effectiveness of our internal control over financial reporting as of June 30, 2019.

Under the supervision of the Audit Committee of the Board of Directors and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting using the criteria established in _Internal Control - Integrated Framework (2013)_ issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on our assessment and those criteria, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was effective as of June 30, 2019.

The attestation report on our internal control over financial reporting issued by KPMG LLP appears in Item 8 of this report.

| (c) | Changes in Internal Control Over Financial Reporting |

| --- | --- |

As previously announced, we acquired Quad on July 2, 2018, Exosome on August 1, 2018, and B-Mogen on June 4, 2019.

We have not fully evaluated any changes in internal control over financial reporting associated with these acquisitions and therefore any material changes that may result from these acquisitions have not been disclosed in this report.

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

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, 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, 2019.

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

There were no other changes in the Company's internal control over financial reporting during fiscal year 2019 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

None.

PART III

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 2019 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 2019 Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

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 2019 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 2019 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 2019 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.

PART IV

A.

(1) List of Financial Statements.

The following Consolidated Financial Statements are filed as part of this Annual Report on Form 10-K:

Consolidated Statements of Earnings and Comprehensive Income for the Years Ended June 30, 2019, 2018, and 2017

Consolidated Balance Sheets as of June 30, 2019 and 2018

Consolidated Statements of Shareholders' Equity for the Years Ended June 30, 2019, 2018, and 2017

Consolidated Statements of Cash Flows for the Years Ended June 30, 2019, 2018, and 2017

Notes to Consolidated Financial Statements for the Years Ended June 30, 2019, 2018, and 2017

Reports of Independent Registered Public Accounting Firm

A.

(2) Financial Statement Schedules.

All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the Consolidated Financial Statements or Notes thereto.

A.

(3) Exhibits.

EXHIBIT INDEX

for Form 10-K for the 2019 Fiscal Year

| Exhibit Number | Description |

| --- | --- |

| 3.1 | [Amended and Restated Articles of Incorporation of the Company--incorporated by reference to Exhibit 3.1 of the Company's Form 10-Q dated February 9, 2015*](http://www.sec.gov/Archives/edgar/data/842023/000143774915002131/ex3-1.htm) |

| | |

| 3.2 | [Third Amended and Restated Bylaws of the Company--incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K dated February 1, 2018*](http://www.sec.gov/Archives/edgar/data/842023/000143774918001755/ex_104373.htm) |

| | |

| 10.1 | [Management Incentive Plan--incorporated by reference to Exhibit 10.13 of the Company's Form 10-K for the year ended June 30, 2013*](http://www.sec.gov/Archives/edgar/data/842023/000119312513351961/d545574dex1013.htm) |

| | |

| 10.2 | [Second Amended and Restated 2010 Equity Incentive Plan--incorporated by reference to Exhibit 10.1 of the Company's Form 8-K dated October 26, 2017*](http://www.sec.gov/Archives/edgar/data/842023/000143774917017673/ex_97613.htm) |

| | |

| 10.3 | [Form of Restricted Stock Award Agreement for Second Amended and Restated 2010 Equity Incentive Plan--incorporated by reference to Exhibit 10.6 of the Company's Form 8-K dated October 26, 2017*](http://www.sec.gov/Archives/edgar/data/842023/000143774917017673/ex_97618.htm) |

| | |

| 10.4 | [Form of Restricted Stock Unit Award Agreement for Second Amended and Restated 2010 Equity Incentive Plan attached as Exhibit 10.4 hereto](https://www.sec.gov/Archives/edgar/data/842023/000143774919017565/ex_156203.htm) |

| | |

| 10.5 | [Form of the Performance Unit Award Agreement for Second Amended and Restated 2010 Equity Incentive Plan attached as Exhibit 10.5 hereto](https://www.sec.gov/Archives/edgar/data/842023/000143774919017565/ex_156204.htm) |

| | |

| 10.6 | [Form of Incentive Stock Option Agreement for Second Amended and Restated 2010 Equity Incentive Plan--attached as Exhibit 10.6 hereto.](https://www.sec.gov/Archives/edgar/data/842023/000143774919017565/ex_156205.htm) |

| | |

| 10.7 | [Form of Employee Non-Qualified Stock Option Agreement for Second Amended and Restated 2010 Equity Incentive Plan--attached as Exhibit 10.7 hereto.](https://www.sec.gov/Archives/edgar/data/842023/000143774919017565/ex_156206.htm) |

| | |

| 10.8 | [Form of Director Non-Qualified Stock Option Agreement for Second Amended and Restated 2010 Equity Incentive Plan--incorporated by reference to Exhibit 10.2 of the Company's Form 8-K dated October 26, 2017*](http://www.sec.gov/Archives/edgar/data/842023/000143774917017673/ex_97614.htm) |

| | |

| 10.9 | [Employment Agreement by and between the Company and Charles Kummeth--incorporated by reference to Exhibit 10.11 of the Company's Form 10-K dated September 7, 2017*](http://www.sec.gov/Archives/edgar/data/842023/000143774917015711/ex10-11.htm) |

| Exhibit Number | Description |

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

| | BIO-TECHNE CORPORATION | | |

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

| | | | |

| | | | |

| Date: August 28, 2019 | | /s/ Charles Kummeth | |

| | | By: Charles Kummeth | |

| | | Its: President and CEO | |

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

| Date | Signature and Title |

| --- | --- |

| | |

| August 28, 2019 | /s/ Robert V. Baumgartner |

| | Robert V. Baumgartner |

| | Chairman of the Board and Director |

| | |

| August 28, 2019 | /s/ Rupert Vessey |

| | Dr. Rupert Vessey, Director |

| | |

| August 28, 2019 | /s/ Joseph Keegan, Ph.D. |

| | Dr. Joseph Keegan, Director |

| | |

| August 28, 2019 | /s/ John L. Higgins |

| | John L. Higgins, Director |

| | |

| August 28, 2019 | /s/ Roeland Nusse, Ph.D. |

| | Dr. Roeland Nusse, Director |

| | |

| August 28, 2019 | /s/ Alpna Seth, Ph.D. |

| | Dr. Alpna Seth, Director |

| | |

| August 28, 2019 | /s/ Randolph C. Steer, Ph.D., M.D. |

| | Dr. Randolph C. Steer, Director |

| | |

| August 28, 2019 | /s/ Harold J. Wiens |

| | Harold J. Wiens, Director |

| | |

| August 28, 2019 | /s/ Charles Kummeth |