Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

​

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

Bio-Techne Corporation and Subsidiaries

(in thousands, except per share data)

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​	​	2024		​	2023		​	2022
​	​	​	​	​	​	​	​	​	​
Net sales	​	$	1,159,060	​	$	1,136,702	​	$	1,105,599
Cost of sales	​		389,335	​		366,887	​		349,103
Gross margin	​		769,725	​		769,815	​		756,496
​	​	​	​	​	​	​	​	​	​
Operating expenses:	​			​			​
Selling, general and administrative	​		466,375	​		378,378	​		372,766
Research and development	​		96,664	​		92,493	​		87,140
Total operating expenses	​		563,039	​		470,871	​		459,906
Operating income	​		206,686	​		298,944	​		296,590
​	​	​	​	​	​	​	​	​	​
Other income (expense)	​		​	​		​	​		​
Interest expense	​		(15,736)	​		(11,215)	​		(11,309)
Interest income	​		3,323	​		3,410	​		794
Other non-operating income (expense), net	​		(8,584)	​		47,520	​		15,311
Total other income (expense), net	​		(20,997)	​		39,715	​		4,796
Earnings before income taxes	​		185,689	​		338,659	​		301,386
Income taxes	​		17,584	​		53,217	​		38,287
Net earnings, including noncontrolling interest	​		168,105	​		285,442	​		263,099
Net earnings attributable to noncontrolling interest	​		—	​		179	​		(8,952)
Net earnings attributable to Bio-Techne	​	$	168,105	​	$	285,263	​	$	272,051
Other comprehensive income (loss):	​			​			​
Foreign currency translation income (loss)	​		(7,492)	​		4,191	​		(32,241)
Foreign currency translation reclassified to earnings with Eminence deconsolidation	​	​	—	​	​	119	​	​	—
Unrealized gains (losses) on derivative instruments - cash flow hedges, net of tax amounts disclosed in Note 8	​		(4,760)	​		4,793	​		14,262
Other comprehensive income (loss)	​		(12,252)	​		9,103	​		(17,979)
Other comprehensive income (loss) attributable to noncontrolling interest	​		—	​		(33)	​		(70)
Other comprehensive income (loss) attributable to Bio-Techne	​		(12,252)	​		9,136	​		(17,909)
Comprehensive income attributable to Bio-Techne	​	$	155,853	​	$	294,399	​	$	254,142
​	​	​	​	​	​	​	​	​	​
Earnings per share attributable to Bio-Techne:	​	​	​	​	​	​	​	​	​
Basic	​	$	1.07	​	$	1.81	​	$	1.73
Diluted	​	$	1.05	​	$	1.76	​	$	1.66
​	​	​	​	​	​	​	​	​	​
Weighted average common shares outstanding:	​			​			​
Basic	​		157,708	​		157,179	​		156,874
Diluted	​		160,774	​		161,855	​		164,114

​

See Notes to Consolidated Financial Statements.

​

CONSOLIDATED BALANCE SHEETS

Bio-Techne Corporation and Subsidiaries

(in thousands, except share and per share data)

​	​	​	​	​	​	​
​		​	​	​	​	​
​	​	June 30,
​	​	2024		​	2023
ASSETS		​			​
Current assets:		​			​
Cash and cash equivalents	​	$	151,791	​	$	180,571
Short-term available-for-sale investments	​		1,072	​		23,739
Accounts receivable, less allowance for doubtful accounts of $4,386 and $4,738, respectively	​		241,394	​		218,468
Inventories	​		179,731	​		171,638
Current assets held-for-sale	​	​	9,773	​	​	—
Other current assets	​		33,658	​		27,066
Total current assets	​		617,419	​		621,482
​	​	​	​	​	​	​
Property and equipment, net	​		251,154	​		226,200
Right-of-use assets	​		91,285	​		98,326
Goodwill	​		972,663	​		872,737
Intangible assets, net	​		507,081	​		534,645
Other assets	​		264,265	​		285,302
Total assets	​	$	2,703,867	​	$	2,638,692
LIABILITIES AND SHAREHOLDERS’ EQUITY	​			​
Current liabilities:	​			​
Trade accounts payable	​	$	37,968	​	$	25,679
Salaries, wages and related accruals	​		49,818	​		36,747
Accrued expenses	​		24,886	​		14,880
Contract liabilities	​		27,930	​		23,069
Income taxes payable	​		3,706	​		12,022
Operating lease liabilities - current	​		12,920	​		11,199
Contingent consideration payable	​		—	​		3,500
Other current liabilities	​		2,151	​		1,413
Total current liabilities	​		159,379	​		128,509
​	​	​	​	​	​	​
Deferred income taxes	​		55,863	​		88,982
Long-term debt obligations	​		319,000	​		350,000
Operating lease liabilities	​		87,618	​		93,766
Other long-term liabilities	​		13,157	​		10,919
​	​			​
Bio-Techne’s Shareholders’ equity:	​	​	​	​	​	​
Undesignated capital stock, no par; authorized 5,000,000 shares; none issued or outstanding	​		—	​		—
Common stock, par value $.01 per share; authorized 400,000,000; issued and outstanding 158,216,258 and 157,641,914 respectively	​		1,582	​		1,576
Additional paid-in capital	​		820,337	​		721,543
Retained earnings	​		1,325,247	​		1,309,461
Accumulated other comprehensive loss	​		(78,316)	​		(66,064)
Total Bio-Techne’s shareholders’ equity	​		2,068,850	​		1,966,516
Total liabilities and shareholders’ equity	​	$	2,703,867	​	$	2,638,692

​

​

See Notes to Consolidated Financial Statements.

​

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Bio-Techne Corporation and Subsidiaries

(in thousands)

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​		​		​	​		​	​		​	​		Accumulated			​	​			​
​	​	​	​	​	​	​	Additional		​	​	​	​	Other		​	​	​	​	​	​
​	​	Common Stock				​	Paid-in		​	Retained		​	Comprehensive		​	Noncontrolling		​	​	​
​	​	Shares	​	Amount		​	Capital		​	Earnings		​	Income (Loss)		​	Interest		​	Total
Balances at June 30, 2021		155,822	​	$	1,558	​	$	533,239	​	$	1,085,465	​	$	(57,291)	​	$	8,263	​	$	1,571,234
Net earnings		​	​	​	​	​	​	​	​		272,051	​		​	​	​	(8,952)	​		263,099
Other comprehensive income (loss)		​	​	​	​	​	​	​	​		​	​		(17,909)	​		(70)	​		(17,979)
Share repurchases		(1,577)	​		(16)	​		​	​		(160,934)	​		​	​	​	​	​		(160,950)
Common stock issued for exercise of options		2,282	​		23	​		74,354	​		(13,482)	​		​	​	​	​	​		60,895
Common stock issued for restricted stock awards		89	​		1	​		(1)	​		(9,978)	​		​	​	​	​	​		(9,978)
Cash dividends		​	​	​	​	​	​	​	​		(50,185)	​		​	​	​	​	​		(50,185)
Stock-based compensation expense		​	​	​	​	​		41,208	​		​	​		​	​	​	​	​		41,208
Common stock issued to employee stock purchase plan		28	​		0	​		2,694	​		​	​		​	​	​	​	​		2,694
Employee stock purchase plan expense		​	​	​	​	​		973	​		​	​		​	​	​	​	​		973
Balances at June 30, 2022		156,644	​	$	1,566	​	$	652,467	​	$	1,122,937	​	$	(75,200)	​	$	(759)	​	$	1,701,011
Reclassification of cumulative translation adjustment for Eminence to non-operating income		​	​	​	​	​	​	​	​	​	​	​	​	152	​	​	(33)	​		119
Elimination of noncontrolling equity interest from sale of Eminence	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	613	​		613
Net earnings		​	​	​	​	​	​	​	​	​	285,263	​	​	​	​	​	179	​		285,442
Other comprehensive income (loss)		​	​	​	​	​	​	​	​	​	​	​	​	8,984	​	​	​	​		8,984
Share repurchases		(222)	​	​	(2)	​	​	​	​	​	(19,560)	​	​	​	​	​	​	​		(19,562)
Common stock issued for exercise of options		1,083	​	​	10	​	​	24,942	​	​	(22,163)	​	​	​	​	​	​	​		2,789
Common stock issued for restricted stock awards		63	​	​	1	​	​	(1)	​	​	(6,731)	​	​	​	​	​	​	​		(6,731)
Cash dividends		​	​	​	​	​	​	​	​	​	(50,285)	​	​	​	​	​	​	​		(50,285)
Stock-based compensation expense		​	​	​	​	​	​	38,315	​	​	​	​	​	​	​	​	​	​		38,315
Common stock issued to employee stock purchase plan		74	​	​	1	​	​	4,905	​	​	​	​	​	​	​	​	​	​		4,906
Employee stock purchase plan expense		​	​	​	​	​	​	915	​	​	​	​	​	​	​	​	​	​		915
Balances at June 30, 2023		157,642	​	$	1,576	​	$	721,543	​	$	1,309,461	​	$	(66,064)	​	$	—	​	$	1,966,516
Net earnings		​	​	​	​	​	​	​	​	​	168,105	​	​	​	​	​	​	​	​	168,105
Other comprehensive income (loss)		​	​	​	​	​	​	​	​	​	​	​	​	(12,252)	​	​	​	​	​	(12,252)
Share repurchases		(1,397)	​	​	(14)	​	​	​	​	​	(80,028)	​	​	​	​	​	​	​	​	(80,042)
Common stock issued for exercise of options		1,811	​	​	18	​	​	56,409	​	​	(16,534)	​	​	​	​	​	​	​	​	39,893
Common stock issued for restricted stock awards		91	​	​	1	​	​	(1)	​	​	(5,338)	​	​	​	​	​	​	​	​	(5,338)
Cash dividends		​	​	​	​	​	​	​	​	​	(50,419)	​	​	​	​	​	​	​	​	(50,419)
Stock-based compensation expense		​	​	​	​	​	​	37,136	​	​	​	​	​	​	​	​	​	​	​	37,136
Common stock issued to employee stock purchase plan		69	​	​	1	​	​	4,344	​	​	​	​	​	​	​	​	​	​	​	4,345
Employee stock purchase plan expense		​	​	​	​	​	​	906	​	​	​	​	​	​	​	​	​	​	​	906
Balances at June 30, 2024		158,216	​	$	1,582	​	$	820,337	​	$	1,325,247	​	$	(78,316)	​	$	—	​	$	2,068,850

​

See Notes to Consolidated Financial Statements.

​

CONSOLIDATED STATEMENTS OF CASH FLOWS

Bio-Techne Corporation and Subsidiaries

(in thousands)

​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​	​	2024		2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:	​	​		​		​
Net earnings, including noncontrolling interest	​	$	168,105	$	285,442	$	263,099
Adjustments to reconcile net earnings to net cash provided by operating activities:	​		​
Depreciation and amortization	​		111,711		107,238		101,069
Costs recognized on sale of acquired inventory	​		729		400		1,596
Deferred income taxes	​		(39,447)		(29,567)		6,816
Stock-based compensation expense	​		38,042		39,230		42,183
Fair value adjustment to contingent consideration payable	​		(3,500)		(12,100)		(20,400)
Contingent consideration payments - operating	​	​	—	​	—	​	(3,300)
Gain on sale of CCXI investment	​		—		(37,176)		—
Fair value adjustment on available-for-sale investments	​		(283)		(472)		(15,002)
Loss on equity method investment	​	​	6,841	​	1,143	​	—
Asset impairment restructuring	​	​	2,634	​	—	​	546
Eminence impairment	​	​	—	​	—	​	18,715
Gain on sale of Eminence	​	​	—	​	(11,682)	​	—
Leases, net	​		1,708		2,059		(1,201)
Impairment of assets held-for-sale	​	​	21,963	​	—	​	—
Other operating activity	​		584		455		668
Change in operating assets and operating liabilities, net of acquisition:	​				​		​
Trade accounts and other receivables, net	​		(20,533)		(20,867)		(57,596)
Inventories	​		(14,215)		(30,167)		(32,007)
Prepaid expenses	​		(3,146)		(4,585)		(3,082)
Trade accounts payable, accrued expenses, contract liabilities, and other	​		25,769		(7,908)		12,741
Salaries, wages and related accruals	​		12,618		(24,558)		7,760
Income taxes payable	​		(10,599)		(2,492)		2,667
Net cash provided by (used in) operating activities	​		298,981		254,393		325,272
​	​	​	​	​	​	​	​
CASH FLOWS FROM INVESTING ACTIVITIES:	​		​
Proceeds from sale of available-for-sale investments	​		28,083		35,236		26,055
Purchases of available-for-sale investments	​		(5,526)		(20,500)		(52,998)
Proceeds from sale of CCXI investment	​	​	—	​	73,219	​	—
Additions to property and equipment	​		(62,877)		(38,244)		(44,908)
Acquisitions, net of cash acquired	​		(169,707)		(101,184)		—
Distributions from (Investments in) Wilson Wolf	​	​	6,997	​	(232,000)		—
Proceeds from sale of Eminence	​		—		17,824	​	—
Investment of forward purchase contract	​	​	—	​	—	​	(25,000)
Net cash provided by (used in) investing activities	​		(203,030)		(265,649)		(96,851)
​	​	​	​	​	​	​	​
CASH FLOWS FROM FINANCING ACTIVITIES:	​
Cash dividends	​		(50,419)		(50,285)		(50,185)
Proceeds from stock option exercises	​		60,935		29,813		77,155
Re-purchases of common stock	​		(80,042)		(19,562)		(160,950)
Borrowings under line-of-credit agreement	​		225,000		619,661		90,000
Repayments of long-term debt	​		(256,000)		(525,661)		(175,500)
Contingent consideration payments - financing	​	​	—	​	—	​	(700)
Taxes paid on RSUs and net share settlements	​	​	(21,872)	​	(28,893)	​	(23,461)
Other financing activity	​		—		(2,457)		788
Net cash provided by (used in) financing activities	​		(122,398)		22,616		(242,853)
​	​	​	​	​	​	​	​
Effect of exchange rate changes on cash and cash equivalents	​		(2,333)		(3,356)		(12,092)
Net change in cash and cash equivalents	​		(28,780)		8,004		(26,524)
Cash and cash equivalents at beginning of period	​		180,571		172,567		199,091
Cash and cash equivalents at end of period	​	$	151,791	$	180,571	$	172,567

​

See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Bio-Techne Corporation and Subsidiaries

Years ended June 30, 2024, 2023 and 2022

Note 1. Description of Business and Summary of Significant Accounting Policies:

Description of business: Bio-Techne and its subsidiaries, collectively doing business as Bio-Techne Corporation (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.

At the 2022 annual meeting of shareholders of the Company held on October 27, 2022, the shareholders approved an amendment and restatement of the Company’s articles of incorporation to increase the number of authorized shares of the Company’s common stock from 100,000,000 to 400,000,000. On November 1, 2022, the Company’s board of directors approved and declared a four-for-one split of the Company’s common stock in the form of a stock dividend. Each stockholder of record on November 14, 2022 received three additional shares of common stock for each then-held share, which were distributed after close of trading on November 29, 2022. All share and per share amounts presented herein have been retroactively adjusted to reflect the impact of the stock split.

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

Principles of consolidation: The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated. As Eminence met the criteria for consolidation, the transaction was accounted for in accordance with ASC 805, Business Combinations. In applying ASC 805 to the transaction, the Company has elected to include Eminence in our consolidated financial statements on a one month lag. As noted below, Eminence was sold during the first fiscal quarter of 2023.

Equity method investments: The company accounts for its equity method investments in accordance with ASC 323, Investments - Equity Method and Joint Ventures. The Company initially records its equity method investments at the amount of the Company’s investment and adjusts each period for the Company’s share of the investee’s income or loss and dividends paid. Distributions from the equity method investee are accounted for using the cumulative earnings approach on the Consolidated Statement of Cash Flows.

In December 2021, the Company paid $25 million to enter into a two-part forward contract which requires the Company to make an initial ownership investment followed by purchase of full equity interest in Wilson Wolf Corporation (Wilson Wolf) if certain annual revenue or annual earnings before interest, taxes, depreciation, and amortization (EBITDA) thresholds are met. Wilson Wolf is a leading manufacturer of cell culture devices, including the G-Rex product line. The first part of the forward contract was triggered upon Wilson Wolf achieving approximately $92 million in annual revenue or $55 million in EBITDA at any point prior to December 31, 2027. During the quarter ended March 31, 2023, the Company determined that Wilson Wolf had met the EBITDA target. On March 31, 2023, the Company paid an additional $232 million to acquire 19.9% of Wilson Wolf, which is accounted for as an equity method investment.

Since the first part of the forward contract has been triggered, the second part of the forward contract will automatically trigger, and requires the Company to acquire the remaining equity interest in Wilson Wolf on December 31, 2027 based on a revenue multiple of approximately 4.4 times trailing twelve month revenue. The second part of the contract would be accelerated in advance of December 31, 2027, if Wilson Wolf meets its second milestone of approximately $226 million

in annual revenue or $136 million in annual EBITDA. If the second milestone is achieved, the forward contract requires the Company to pay approximately $1 billion plus potential consideration for revenue in excess of the revenue milestone.

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

Revenue recognition: ASC 606 provides revenue recognition guidance for any entity that enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets, unless those contracts are within the scope of other accounting standards. The core principle of ASC 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Refer to Note 2 for additional information regarding our revenue recognition policy under ASC 606.

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

Advertising costs: Advertising expenses were $4.1 million, $4.8 million, and $4.6 million for fiscal 2024, 2023, and 2022 respectively. Advertising expenditures are expensed as incurred.

Income taxes: The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized to record the income tax effect of temporary differences between the tax basis and financial reporting basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Tax positions taken or expected to be taken in a tax return are recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. Refer to Note 12 for additional information regarding income taxes.

Comprehensive income: Comprehensive income includes charges and credits to shareholders’ equity that are not the result of transactions with shareholders. Our total comprehensive income consists of net income, unrealized gains and losses on cash flow hedges, and foreign currency translation adjustments. The items of comprehensive income, with the exception of net income, are included in accumulated other comprehensive loss in the consolidated balance sheets and statements of shareholders’ equity. Any tax effects, if applicable, associated with reclassifications of accumulated other comprehensive income to net income are reflected in the provision for income taxes.

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

Available-for-sale investments: Available-for-sale investments consist of debt instruments with original maturities of generally three months to less than one-year and equity securities. Available-for-sale investments are recorded based on trade-date. The Company considers all of its marketable securities available-for-sale and reports them at fair value. Unrealized gains and losses on our available-for-sale securities are included within other income (expense).

Trade accounts receivable and allowances: Trade accounts receivable are initially recorded at the invoiced amount upon the sale of goods or services to customers, and they do not bear interest. They are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of customers to make the required payments. When determining the allowances for doubtful accounts, we take several factors into consideration, including the overall

composition of accounts receivable aging, our prior history of accounts receivable write-offs, the type of customer and our day-to-day knowledge of specific customers. Changes in the allowances for doubtful accounts are included in selling, general and administrative (SG&A) expense in our consolidated statements of earnings and comprehensive income. The point at which uncollected accounts are written off varies by type of customer. The Company does not have material long-term customer receivables.

Inventories: Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The Company regularly reviews inventory on hand for slow-moving and obsolete inventory, inventory not meeting quality control standards and inventory subject to expiration.

For certain proteins, antibodies, and chemically based manufactured products, the Company produces larger batches of established products than current sales requirements due to economies of scale through a highly controlled manufacturing process. Accordingly, the manufacturing process for these products has and will continue to produce quantities in excess of forecasted usage. The Company forecasts usage for its products based on several factors including historical demand, current market dynamics, and technological advances. The Company forecasts product usage on an individual product level for a period that is consistent with our ability to reasonably forecast inventory usage for that product. There have been no material changes to the Company’s estimates of the net realizable value for excess and obsolete inventory or other types of inventory reserves and inventory cost adjustments in the fiscal years presented. Additionally, current and historical reserves recorded to reduce the cost of inventory to its net realizable value become part of the new cost basis for the inventory item in accordance with ASC 330 - Inventory.

Property and equipment: Property and equipment are recorded at cost. Equipment is depreciated using the straight-line method over an estimated useful life of 3 to 5 years. Buildings, building improvements and leasehold improvements are depreciated over estimated useful lives of 5 to 40 years.

Contingencies: The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better restimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and the amount may be reasonably estimated, the estimated loss or range of loss is disclosed.

Contingent Consideration: Contingent Consideration relates to the potential payment for an acquisition that is contingent upon the achievement of the acquired business meeting certain product development milestones and/or certain financial performance milestones. The Company records contingent consideration at fair value at the date of acquisition based on the consideration expected to be transferred. For potential payments related to financial performance milestones, we use a real option model in calculating the fair value of the contingent consideration liabilities. The assumptions utilized in the calculation based on financial performance milestones include projected revenue and/or EBITDA amounts, volatility and discount rates. For potential payments related to product development milestones, we estimated the fair value based on the probability of achievement of such milestones. The assumptions utilized in the calculation of the acquisition date fair value include probability of success and the discount rates. Contingent consideration involves certain assumptions requiring significant judgment and actual results may differ from assumed and estimated amounts. Contingent consideration is remeasured each reporting period, and subsequent changes in fair value, including accretion for the passage of time, are recognized within selling, general and administrative in the consolidated statement of earnings and comprehensive income.

Intangible assets: Intangible assets are stated at historical cost less accumulated amortization. Amortization expense is generally determined on the straight-line basis over periods ranging from 1 year to 20 years. Each reporting period, we evaluate the remaining useful lives of our amortizable intangibles to determine whether events or circumstances warrant a revision to the remaining period of amortization. If our estimate of an asset’s remaining useful life is revised, the remaining carrying amount of the asset is amortized prospectively over the revised remaining useful life.

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. Such circumstances could include, but are not limited to, (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used or in its physical condition,

or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset. We compare the carrying amount of the asset to the estimated undiscounted future cash flows associated with it. If the sum of the expected future net cash flows is less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset. As quoted market prices are not available for the majority of our assets, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows.

The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. During the second quarter of fiscal year 2024 there was a triggering event for the assets and liabilities associated with a disposal group in our Protein Sciences segment that were classified as held-for-sale. See the restructuring section of Note 1 below for additional details. No other triggering events were identified and no other impairments were recorded for property, plant, and equipment or amortizable intangibles during fiscal years 2024, 2023, and 2022.

Impairment of goodwill and indefinite-lived intangible assets: We evaluate the carrying value of goodwill and indefinite-lived intangible assets during the fourth quarter each year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. Such circumstances could include, but are not limited to, (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, (3) an adverse action or assessment by a regulator, or (4) an adverse change in market conditions that are indicative of a decline in the fair value of the assets.

To analyze goodwill, we must assign our goodwill to individual reporting units. Identification of reporting units includes an analysis of the components that comprise each of our operating segments, which considers, among other things, the manner in which we operate our business and the availability of discrete financial information. Components of an operating segment are aggregated to form one reporting unit if the components have similar economic characteristics. We periodically review our reporting units to ensure that they continue to reflect the manner in which we operate our business. The Company had five reporting units for our 2024, 2023, and 2022 goodwill impairment assessment performed on April 1 of each of the respective fiscal years, the date of our annual goodwill impairment assessment.

The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation for goodwill is an assessment of factors including reporting unit specific operating results as well as industry and market conditions, overall financial performance, and other relevant events and factors to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill. The Company may elect to bypass the qualitative assessment for its reporting units and perform a quantitative test.

The quantitative impairment test requires us to estimate the fair value of our reporting units based the income approach. The income approach is a valuation technique under which we estimate future cash flows using the reporting unit’s financial forecast from the perspective of an unrelated market participant. Using historical trending and internal forecasting techniques, we project revenue and apply our fixed and variable cost experience rate to the projected revenue to arrive at the future cash flows. A terminal value is then applied to the projected cash flow stream. Future estimated cash flows are discounted to their present value to calculate the estimated fair value. The discount rate used is the value-weighted average of our estimated cost of capital derived using both known and estimated customary market metrics. In determining the estimated fair value of a reporting unit, we are required to estimate a number of factors, including projected operating results, terminal growth rates, economic conditions, anticipated future cash flows, the discount rate and the allocation of shared or corporate items.

For fiscal 2024, we elected to perform a qualitative analysis for all five reporting units. The Company determined, after performing the qualitative analysis, there was no evidence that it is more likely than not that the fair value was less than the carrying amounts, therefore, it was not necessary to perform a quantitative impairment test in fiscal 2024. There was a triggering event related to a business held-for-sale described later in this note, leading to an impairment of allocated goodwill during the second half of fiscal 2024. The Company did not identify any triggering events after our annual goodwill impairment analysis through June 30, 2024, the date of our consolidated balance sheet, that would require an additional goodwill impairment assessment to be performed.

For fiscal 2024, the Company also performed a qualitative assessment of the acquired in-process research and development assets to determine whether changes in events, circumstances, or the probability of successful development and commercialization of the assets indicated that it is more likely than not that the fair value of the acquired assets are less than its carrying amount. Based on the analysis, the Company determined there was no indication of impairment of the indefinite-lived intangible asset. This in-process research and development was placed into service during the fourth quarter of fiscal 2024 and will begin amortization over its expected useful life.

In fiscal 2023, we elected to perform a qualitative analysis for all five reporting units. The Company determined, after performing the qualitative analysis, there was no evidence that it is more likely than not that the fair value was less than the carrying amounts, therefore, it was not necessary to perform a quantitative impairment test in fiscal 2023. The Company did not identify any triggering events after our annual goodwill impairment analysis through June 30, 2023, the date of our consolidated balance sheet, that would require an additional goodwill impairment assessment to be performed.

On September 1, 2022, the Company completed the sale of its equity shares of Eminence for approximately $17.8 million to a third party. Eminence was considered a variable-interest entity that was fully consolidated in our financial statements. Prior to the sale, Eminence had revenue of $2.0 million for the first fiscal quarter of 2023 within our Protein Sciences segment. Fiscal 2022 revenues were $4.6 million. As a result of the sale of the business, the Company recorded a gain of $11.7 million within the Other income (expense) line in the Consolidated Statement of Earnings. Prior to the sale of Eminence, a triggering event was identified in the second quarter of fiscal 2022 and impairment testing was performed as Eminence was forecasted to not have sufficient cash to execute on their growth plan combined with their inability to secure additional financing. Our impairment testing resulted in a full impairment of the Eminence goodwill and intangibles assets for charges of $8.3 million and $8.6 million, respectively, for the year ended June 30, 2022. The Company also recognized inventory and fixed asset impairment charges of $0.9 million and $0.9 million, respectively. These impairment charges were recorded within the General and Administrative line in the Consolidated Statement of Earnings for fiscal 2022. In the fourth quarter of fiscal 2022, Eminence was able to secure cash deposits on future orders to provide funding for their operations. This delay in liquidation allowed time for securing of additional investor financing which coincided with the sale of the Company's investment.

In the first quarter of fiscal 2022, the Company combined the management of the Exosome Diagnostics and Asuragen reporting units, both of which are included in the Diagnostics and Genomics operating segment. In conjunction with the combination of the reporting units, a qualitative goodwill impairment assessment was performed. The qualitative assessment identified no indicators of impairment.

In our fiscal 2022 annual goodwill impairment analysis, we elected to perform a quantitative assessment for all five of our reporting units. The result of our quantitative assessment indicated that all of the reporting units had a substantial amount of headroom as of April 1, 2022. The Company did not identify any triggering events after our annual goodwill impairment through June 30, 2022, the date of our consolidated balance sheet, that would require an additional goodwill impairment assessment to be performed.

Restructuring actions: Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and impairments and disposals of assets associated with such actions. Employee-related severance charges are based upon distributed employment policies and substantive severance plans. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Asset-related and other charges include impairment of right-of-use assets, leasehold improvements, other asset write-downs associated with combining operations, disposal of assets and other exit costs. Other costs also includes restructuring-related charges, which are incremental costs incurred directly supporting business transformation initiatives tied to the restructuring action.

Fiscal Year 2024 Restructuring Actions:

In the second quarter of fiscal 2024, the Company announced enterprise-wide restructuring focused on recovering operating margins, optimizing our distribution footprint, and enhancing our organization efficiency. These actions impacted approximately 4% of our global workforce. These actions continued through the end of fiscal 2024 as we incurred charges relating to the condensing of certain distribution centers and optimizing efficiency. The Company is expecting to

incur costs related to these actions through the first half of fiscal 2025, which will be recorded when specified criteria are met.

As part of these actions, certain assets and liabilities associated with a disposal group in our Protein Sciences segment were classified as held-for-sale as of December 31, 2023, including $1.4 million of goodwill allocated to the disposal group on a relative fair value basis. As a result of impairment tests performed over the disposal group during fiscal 2024, a cumulative impairment charge of $22.0 million which includes the allocated goodwill, was recorded in the Selling, general and administrative line in the Consolidated Statements of Earnings for the year ended June 30, 2024. As of June 30, 2024, the assets remaining within the disposal group primarily include inventory and property and equipment of $9.8 million, which is net of expected selling costs. These assets are actively marketed, and we believe their sale will be completed within 12 months of the held-for-sale classification date. The held-for-sale assets are recorded in Current assets held-for-sale in our Consolidated Balance Sheet as of June 30, 2024.

The restructuring and restructuring-related charges, including the impairment of assets held-for-sale, for periods presented were recorded in the Consolidated Statements of Earnings as follows (in thousands):

​	​	​	​
​	​	Year Ended
​	​	June 30,
​	​	2024
Cost of sales	​	$	3,349
Selling, general and administrative(1)	​	​	30,638
Total	​	$	33,987
​	​	​	​

(1) Restructuring actions impacting research and development are not material to separately disclose and have been included within Selling, general and administrative costs.

Restructuring and restructuring-related costs by segment are as follows (in thousands):

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Year ended June 30, 2024
​	​	​	Employee	​	​	Asset-related	​	​	Impairment of	​	​	​
​	​	​	severance	​	​	and other	​	​	assets held-for-sale	​	​	Total
Protein Sciences	​	$	3,483	​	$	5,130	​	$	21,963	​	$	30,576
Diagnostics and Genomics	​	​	1,007	​	​	224	​	​	—	​	​	1,231
Corporate	​	​	1,153	​	​	1,027	​	​	—	​	​	2,180
Total	​	$	5,643	​	$	6,381	​	$	21,963	​	$	33,987

​

The following table summarizes the changes in the Company’s accrued restructuring balance, which is included within Other current liabilities in the accompanying balance sheet. Other amounts reported as restructuring and restructuring-related costs in the accompanying statements of income have been summarized in the notes to the table (in thousands):

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	Employee	​	​	Asset-related	​	​	Impairment of	​	​	​
​	​	​	severance(1)	​	​	and other(2)	​	​	assets held-for-sale	​	​	Total
Expense incurred in the second quarter of 2024	​	​	4,882	​	​	504	​	​	6,038	​	​	11,424
Incremental expense incurred in the third quarter of 2024	​	​	133	​	​	1,140	​	​	—	​	​	1,273
Incremental expense incurred in the fourth quarter of 2024	​	​	409	​	​	4,737	​	​	15,926	​	​	21,072
Cash payments	​	​	(4,882)	​	​	(2,800)	​	​	—	​	​	(7,682)
Non-cash adjustments	​	​	—	​	​	(3,391)	​	​	(21,963)	​	​	(25,354)
Adjustments(3)	​	​	219	​	​	—	​	​	—	​	​	219
Accrued restructuring actions balance as of June 30, 2024	​	$	761	​	$	190	​	$	—	​	$	952

(1) Relates to impacted employees’ final paycheck, separation payments, outplacement services, legal fees, and retention packages related to the closure or sale of certain distribution and manufacturing sites.

(2) Primarily relates to impairment of right-of-use assets, lease termination fees, consulting fees, and expenses for changes to supporting IT systems that are enabling the Company to complete the restructuring initiatives.

(3) Relates to the refinement of the accrual recorded in the second quarter of fiscal 2024.

Fiscal Year 2023 Restructuring Actions:

QT Holdings Corporation (Quad)

In August 2022, the Company informed employees of our decision to close our Quad facility as part of a realignment of activities within our Reagent Solutions division. The closure of the site was completed in the fourth quarter of fiscal 2023. As a result of the restructuring activities, an estimated pre-tax charge of $2.2 million was recorded within our Protein Sciences segment for the year ended June 30, 2023. The related restructuring charges for the year ended June 30, 2023 were recorded in the income statement as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	Employee		​	Asset		​	​
​		severance			impairment and other			Total
Selling, general and administrative	​	$	1,328	​	$	842	​	$	2,170

​

​	​	​	​	​	​	​	​	​	​
​	​	Employee		​	Asset		​	​
​		severance			impairment and other			Total
Expense incurred in the first quarter of 2023	​	$	1,328	​	$	842	​	$	2,170
Cash payments	​	​	(1,233)	​	​	(772)	​	​	(2,005)
Adjustments	​	​	(95)	​	​	(70)	​	​	(165)
Accrued restructuring actions balances as of June 30, 2023	​	$	—	​	$	—	​	$	—

​

Protein Sciences realignment

In December 2022, the Company informed employees it would undertake certain actions to strategically reallocate operations resources to high growth areas of the business. Additional actions were taken in June 2023 primarily related to the sales organization. The actions impacted a limited number of employees and were completed in the fourth quarter of fiscal 2024. As a result of the realignment, a pre-tax charge of $1.7 million related to employee severance was recorded in the Selling, general and administrative line of operating income within our Protein Sciences segment during the year ended June 30, 2023. Adjustments in fiscal year 2024 relate to the refinement of employee severance payouts. Additional pre-

tax charges for the year ended June 30, 2024 were $0.2 million. Restructuring actions, including cash and non-cash impacts, are as follows (in thousands):

​	​	​	​
​	​	Employee
​	​	severance
Expense incurred in fiscal year 2023	​	$	1,677
Fiscal year 2023 cash payments	​	​	(762)
Fiscal year 2023 adjustments	​	​	(18)
Accrued restructuring actions balances as of June 30, 2023	​	$	897
Fiscal year 2024 cash payments	​	​	(1,118)
Fiscal year 2024 adjustments(1)	​	​	221
Accrued restructuring actions balances as of June 30, 2024	​	$	—

(1)Fiscal year 2024 adjustments relate to the refinement of the accrual recorded in fiscal year 2023.

​

Fiscal Year 2022 Restructuring Actions:

In September 2021, the Company informed employees of our decision to close our Exosome Diagnostics Germany facility, discontinuing lab and research occurring at the site, as part of a realignment of activities within our Exosome Diagnostics business. The restructuring activities were complete as of June 30, 2022. As a result of the restructuring activities, a pre-tax charge of $1.4 million was recorded within our Diagnostics and Genomics segment during the year ended June 30, 2022. Total restructuring charges for the closure of the Exosome Diagnostics Germany facility for the year ended June 30, 2022 were recorded within operating income on the income statement as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	Employee		​	Asset		​	​
​		severance			impairment and other			Total
Selling, general and administrative	​	$	649	​	$	750	​	$	1,399

​

​	​	​	​	​	​	​	​	​	​
​	​	Employee		​	Asset		​	​
​		severance			impairment and other			Total
Expense incurred in the first quarter of 2022	​	$	639	​	$	546	​	$	1,185
Incremental expense incurred during fiscal 2022	​	​	—	​	​	242	​	​	242
Cash payments	​	​	(589)	​	​	(554)	​	​	(1,143)
Adjustments	​	​	(50)	​	​	(234)	​	​	(284)
Accrued restructuring actions balances as of June 30, 2022	​	$	—	​	$	—	​	$	—

​

(1) Adjustments include refinements to our estimated close down costs as well as the impacts from foreign currency exchange.

​

During the second quarter of fiscal 2022, the Company also incurred a restructuring charge of $0.2 million related to employee severance for the relocation of a US plant. This was completed during fiscal 2023 and there are no remaining liabilities related to this relocation as of June 30, 2023. This charge was recorded within Other current liabilities as of June 30, 2022. Fiscal 2023 cash payments did not materially differ from the charge recorded in fiscal 2022.

​

Legal Matters: The Company and its affiliates are involved in a number of legal actions from time to time involving product liability, employment, intellectual property and commercial disputes, shareholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations. With respect to governmental proceedings and investigations, like other companies in our industry, the Company is subject to extensive regulation by national, state, and local governmental agencies in the United States and in other jurisdictions in which the Company and its affiliates operate. The Company’s standard practice is to cooperate with regulators and investigators in responding to inquiries. The outcomes of legal actions are not within the Company’s complete control and may not be known for prolonged periods of time. In some actions, the enforcement agencies or private claimants seek damages, as well as other remedies (including injunctions barring the sale of products that are the subject of the proceeding), that could require

significant expenditures, result in lost revenues, or limit the Company's ability to conduct business in the applicable jurisdictions.

​

The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required. Estimates of probable losses resulting from litigation and governmental proceedings involving the Company are inherently difficult to predict, particularly when the matters are in early procedural stages with incomplete scientific facts or legal discovery, involve unsubstantiated or indeterminate claims for damages, potentially involve penalties, fines or punitive damages, or could result in a change in business practice. The Company classifies certain specified litigation charges and gains related to significant legal matters as certain litigation charges in the consolidated statements of income.

​

During fiscal year 2024, the Company recognized $3.5 million of certain litigation charges. There was no comparable activity in the comparable periods. As of each of the balance sheet dates presented, there was no accrued litigation. The ultimate cost to the Company with respect to accrued litigation could be materially different than the amount of the current estimates and accruals and could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows. The Company includes accrued litigation in other current liabilities and other liabilities on the consolidated balance sheets. While it is not possible to predict the outcome for most of the legal matters discussed below, the Company believes it is possible that the costs associated with these matters could have a material adverse impact on the Company’s consolidated earnings, financial position, and/or cash flows.

​

Intellectual Property Matters: At any given time, the Company is involved in litigation relating to patents, trademarks, copyrights, trade secrets, and other intellectual property (IP) rights, and licenses, acquisitions or other agreements related to such rights. This litigation includes, but it not limited to, alleged infringement or misappropriation of IP rights, or breach of obligations related to IP rights, or other claims asserted by competitors, individuals, or entities created specifically to fund IP litigation. While the outcome of these litigation matters is inherently uncertain, it is possible that the results of such litigation could require the Company to pay significant monetary damages.

​

Other Significant Accounting Policies

The following table includes a reference to additional significant accounting policies that are described in other notes to the financial statements, including the note number:

​	​	​	​	​
Policy		Note
Fair value measurements			5
Leases	​	​	7	​
Earnings per share			9
Share-based compensation			10
Operating segments			13

​

Not Yet Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280), which requires incremental disclosures on reportable segments, primarily through enhanced disclosures on significant segment expenses. The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2025 for our annual report and for interim periods starting in fiscal year 2026. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which requires incremental annual disclosures on income taxes, including rate reconciliations, income taxes paid, and other disclosures.

The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2026 for our annual report. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

Other than the items noted above, there have been no new accounting pronouncements not yet effective or adopted in the current year that we believe have a significant impact, or potential significant impact, on our consolidated financial statements.

Note 2. Revenue Recognition:

Consumables revenues consist of specialized proteins, immunoassays, antibodies, reagents, blood chemistry and blood gas quality controls, and hematology instrument controls that are typically single-use products recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment. Instruments revenues typically consist of longer lived assets that, for the substantial majority of sales, are recognized at a point in time in a manner similar to consumables. Service revenues consist of extended warranty contracts, post contract support, and custom development projects that are recognized over time as either the customers receive and consume the benefits of such services simultaneously or the underlying asset being developed has no alternative use for the Company at contract inception and the Company has an enforceable right to payment for the portion of the performance completed. Service revenues also include laboratory services recognized at point in time.

We recognize royalty revenues in the period the sales occur using third party evidence. The Company elected the "right to invoice" practical expedient based on the Company's right to invoice a customer at an amount that approximates the value to the customer and the performance completed to date.

The Company elected the exemption to not disclose the unfulfilled performance obligations for contracts with an original length of one year or less and the exemption to exclude future performance obligations that are accounted under the sales-based or usage-based royalty guidance. The Company’s unfulfilled performance obligations for contracts with an original length greater than one year were not material as of June 30, 2024.

Contracts with customers that contain instruments may include multiple performance obligations. For these contracts, the Company allocates the contract’s transaction price to each performance obligation on a relative standalone selling price basis. Allocation of the transaction price is determined at the contracts’ inception.

Payment terms for shipments to end-users are generally net 30 days. Payment terms for distributor shipments may range from 30 to 90 days. Service arrangements commonly call for payments in advance of performing the work (e.g. extended warranty and service contracts), upon completion of the service (e.g. custom development manufacturing) or a mix of both.

Contract assets include revenues recognized in advance of billings. Contract assets are included within other current assets in the accompanying balance sheet as the amount of time expected to lapse until the company's right to consideration becomes unconditional is less than one year. We elected the practical expedient allowing us to expense contract costs that would otherwise be capitalized and amortized over a period of less than one year. Contract assets as of June 30, 2024 are not material. Contract liabilities include billings in excess of revenues recognized, such as those resulting from customer advances and deposits and unearned revenue on warranty contracts.

Contract liabilities as of June 30, 2024 and June 30, 2023 were approximately $30.2 million and $24.6 million, respectively. Contract liabilities as of June 30, 2023 subsequently recognized as revenue during the year ended June 30, 2024 were approximately $20.9 million. Contract liabilities as of June 30, 2022 subsequently recognized as revenue during the year ended June 30, 2023 were approximately $21.5 million. Contract liabilities in excess of one year are included in Other long-term liabilities on the consolidated balance sheet.

Any claims for credit or return of goods must be made within 10 days of receipt. Revenues are reduced to reflect estimated credits and returns. Although the amounts recorded for these revenue deductions are dependent on estimates and assumptions, historically our adjustments to actual results have not been material.

Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. We elected the practical expedient that allows us to account for shipping

and handling activities that occur after the customer has obtained control of a good as a fulfillment cost, and we accrue costs of shipping and handling when the related revenue is recognized. The following tables present our disaggregated revenue for the periods presented.

Revenue by type is as follows (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​	​	Year ended June 30,
​	​	2024			2023			2022
Consumables	​	$	928,180	​	$	917,733	​	$	890,874
Instruments	​		108,270	​		112,085	​		120,758
Services	​		99,265	​		85,784	​		71,988
Total product and services revenue, net	​		1,135,715	​	$	1,115,602	​		1,083,620
Royalty revenues	​		23,345	​		21,100	​		21,979
Total revenues, net	​	$	1,159,060	​	$	1,136,702	​	$	1,105,599

​

​

Revenue by geography (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​	​	2024			2023			2022
​	​	​			​			​
United States	​	$	657,747	​	$	642,465	​	$	614,107
EMEA, excluding United Kingdom	​		241,432	​		220,230	​		219,055
United Kingdom	​		50,012	​		49,457	​		48,637
APAC, excluding Greater China	​		73,904	​		73,190	​		76,139
Greater China	​		99,467	​		113,868	​		112,438
Rest of World	​		36,498	​		37,492	​		35,223
Net sales	​	$	1,159,060	​	$	1,136,702	​	$	1,105,599

​

​

Note 3. Supplemental Balance Sheet and Cash Flow Information*:*

Inventories:

Inventories consist of (in thousands):

​	​	​	​	​	​	​
​	​	June 30,
​	​	2024			2023
​	​	​	​	​	​	​
Raw materials	​	$	79,377	​	$	84,551
Finished goods(1)	​		106,072	​		92,474
Inventories, net	​	$	185,449	​	$	177,025

(1)	Finished goods inventory of $5,718 and $5,387 is included within Other assets in the June 30, 2024 and June 30, 2023 Balance Sheets, respectively, as it is forecasted to be sold after the 12 months subsequent to the consolidated balance sheet date.

Property and Equipment:

Property and equipment consist of (in thousands):

​	​	​	​	​	​	​
​	​	June 30,
​	​	2024			2023
Land	​	$	8,150	​	$	9,100
Buildings and improvements	​		243,863	​		245,302
Machinery and equipment	​	​	215,948	​		190,019
Construction in progress	​		39,749	​	​	15,491
Property and equipment, cost	​		507,710	​		459,912
Accumulated depreciation and amortization	​		(256,556)	​		(233,712)
Property and equipment, net	​	$	251,154	​	$	226,200

​

Intangibles assets were comprised of the following (in thousands):

​	​	​	​	​	​	​	​	​
​	​	Useful Life	​	June 30,
​	​	(years)	​	2024		​	2023
​	​	​	​	​	​	​	​	​
Developed technology		9 - 15	​	$	675,674	​	$	616,311
Tradenames		2 - 20	​		151,561	​		146,945
Customer relationships		7 - 16	​		211,276	​		213,878
Patents		10	​		4,343	​		3,815
Other intangibles		5 - 15	​		12,006	​		11,566
Definite-lived intangible assets	​	​	​		1,054,860	​		992,515
Accumulated amortization	​	​	​		(547,779)	​		(480,570)
Definite-lived intangibles assets, net	​	​	​		507,081	​		511,945
In process research and development(1)	​	​	​		—	​		22,700
Total intangible assets, net	​	​	​	$	507,081	​	$	534,645

​

(1)The in process research and development has been placed into service and is included within Developed technology. The amortization period for this developed technology asset is estimated to be 14 years.

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

​	​	​	​	​	​	​
​		June 30,
​	​	2024		​	2023
​	​	​	​	​	​	​
Beginning balance	​	$	534,645	​	$	531,522
Acquisitions	​		66,400	​		75,600
Other additions(1)	​		950	​		5,710
Held-for-sale intangibles(2)	​	​	(14,323)	​	​	—
Amortization expense	​		(79,854)	​		(77,491)
Currency translation	​	​	(737)	​	​	(696)
Ending balance	​	$	507,081	​	$	534,645

​

(1)Includes the purchase of a $4.6 million intangible asset from Wilson Wolf, an equity method investee of the Company during the year-ended June 30, 2023. This asset will be amortized over a life of 10 years.

(2)Refer to Note 1 for further detail on held-for-sale intangibles.

Amortization expense related to developed technologies included in cost of sales was $46.6 million, $44.3 million, and $40.6 million in fiscal 2024, 2023, and 2022, respectively. Amortization expense related to trade names, customer

relationships, non-compete agreements, and patents included in selling, general and administrative expense was $33.2 million, $33.2 million, and $33.5 million, in fiscal 2024, 2023, and 2022 respectively.

The estimated future amortization expense for intangible assets as of June 30, 2024 is as follows (in thousands):

​	​	​	​
2025		$	77,259
2026	​		73,297
2027	​		63,138
2028	​		59,491
2029	​		46,923
Thereafter	​		186,973
Total	​	$	507,081

​

Goodwill:

​

Changes in goodwill by segment and in total consist of (in thousands):

​	​	​	​	​	​	​	​	​	​
​		​			Diagnostics and			​
​	​	Protein Sciences		​	Genomics		​	Total
June 30, 2022		$	376,493	​	$	445,608	​	$	822,101
Acquisitions	​		51,257	​	​	—	​		51,257
Currency translation	​		(723)	​	​	102	​		(621)
June 30, 2023	​	$	427,027	​	$	445,710	​	$	872,737
Acquisitions	​		—	​	​	104,650	​	​	104,650
Held-for-sale goodwill(1)	​	​	(1,400)	​	​	—	​	​	(1,400)
Currency translation	​		(2,178)	​	​	(1,146)	​	​	(3,324)
June 30, 2024	​	$	423,449	​	$	549,214	​	$	972,663

​ (1) Refer to Note 1 for further detail on goodwill reclassified to current assets held-for-sale.

Other Assets:

​

Other assets consist of (in thousands):

​	​	​	​	​	​	​
​		June 30,
​		2024		​	2023
​	​	​	​	​	​	​
Equity method investment in Wilson Wolf	​	$	242,337	​	$	255,857
Derivative instruments	​	​	9,813	​	​	16,857
Long-term inventory	​	​	5,718	​	​	5,387
Other	​		6,397	​		7,201
Other assets	​	$	264,265	​	$	285,302

​

Supplemental Cash Flow Information:

Supplemental cash flow information was as follows (in thousands):

​	​	​	​	​	​	​	​	​	​
​		Year Ended June 30,
​		2024			2023			2022
Income taxes paid	​	$	65,254	​	$	88,428	​	$	30,341
Interest paid	​		14,502	​		8,368	​		11,027

​

​

Note 4. Acquisitions:

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.

Fiscal year 2024 Acquisitions

​

Lunaphore Technologies SA.

​

On July 7, 2023, the Company acquired all of the ownership interests of Lunaphore Technologies SA (“Lunaphore”) for $169.7 million, in a cash-free, debt-free acquisition. Lunaphore is a leading developer of fully automated spatial biology solutions. The Lunaphore acquisition adds spatial biology instruments to Bio-Techne’s portfolio to accelerate our leadership position in translational and clinical research markets. The transaction was accounted for in accordance with ASC 805, Business Combinations. The goodwill recorded as a result of the acquisition represents the strategic benefits of growing the Company’s product portfolio and the expected revenue growth from increased market penetration. The goodwill is not deductible for income tax purposes. The business became part of the Diagnostics and Genomics operating segment in the first quarter of fiscal year 2024_._

​

The allocation of purchase price consideration related to Lunaphore was completed in the fourth quarter of fiscal 2024. Net sales and operating loss of this business included in Bio-Techne's consolidated results of operations for the year ended June 30, 2024 were approximately $14.3 million and $24.0 million, respectively. The fair values of the assets acquired and liabilities assumed as of the acquisition date and the updated final amounts as of June 30, 2024 are as follows (in thousands):

​

​	​	​	​	​	​	​	​	​
​	​		​	​			​
​	Preliminary allocation at acquisition date		​	Adjustments to fair value		​	Final allocation at June 30, 2024
Current assets	$	12,512	​	$	(357)	​	$	12,155
Equipment and other long-term assets		1,470	​	​	​	​		1,470
Intangible assets:	​	​	​	​	​	​	​	​
Developed technologies		60,300	​	​	​	​		60,300
Tradenames		4,900	​	​	​	​		4,900
Customer relationships		1,200	​	​	​	​		1,200
Goodwill		102,560	​	​	2,090	​		104,650
Total assets acquired		182,942	​	​	1,733	​		184,675
​	​	​	​	​	​	​	​	​
Liabilities		7,096	​	​	​	​		7,096
Deferred income taxes, net		5,768	​	​	2,104	​		7,872
Net assets acquired	$	170,078	​	$	(371)	​	$	169,707
​	​	​	​	​	​	​	​	​
Cash paid		166,426	​	​	3,281	​		169,707
Estimated Net Working Capital	​	3,652	​	​	(3,652)	​	​	—
Net assets acquired	$	170,078	​	$	(371)	​	$	169,707

​

Tangible assets and liabilities acquired were recorded at fair value on the date of close based on management's assessment. The purchase price allocated to developed technology and customer relationships was based on management’s forecasted cash inflows and outflows and using a multiperiod excess earnings method to calculate the fair value of assets purchased. The purchase price allocated to trade names was based on management's forecasted cash inflows and outflows and using a relief from royalty method. The amount recorded for developed technology is being amortized with the expense reflected in cost of goods sold in the Consolidated Statement of Earnings and Comprehensive Income. The amortization period for developed technology is estimated to be 14 years. Amortization expense related to customer relationships is reflected in

selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income. The amortization period for customer relationships is estimated to be 8 years. The amount recorded for trade names is being amortized with the expense reflected in selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income. The amortization period for trade names ranges from 4 years to 8 years. The net deferred income tax liability represents the net amount of the estimated future impact of adjustments for costs to be recognized as intangible asset amortization, which is not deductible for income tax purposes, offset by the deferred tax asset for the preliminary calculation of acquired net operating losses.

Fiscal year 2023 Acquisitions

Namocell, Inc.

On July 1, 2022, the Company acquired all of the ownership interests of Namocell, Inc. (“Namocell”) for $101.2 million, net of cash acquired, plus contingent consideration of up to $25 million upon the achievement of certain future revenue thresholds. The Namocell acquisition adds easy-to-use single cell sorting and dispensing platforms that are gentle to cells and preserve cell viability and integrity. The transaction was accounted for in accordance with ASC 805, Business Combinations. The goodwill recorded as a result of the acquisition represents the strategic benefits of growing the Company’s product portfolio and the expected revenue growth from increased market penetration. The goodwill is not deductible for income tax purposes. The business became part of the Protein Sciences operating segment in the first quarter of fiscal year 2023.

The allocation of purchase price consideration related to Namocell was completed in the fourth quarter of fiscal 2023. Net sales and operating loss of this business included in Bio-Techne's consolidated results of operations for the twelve months ended June 30, 2023 were approximately $6.4 million and $9.3 million, respectively. The fair values of the assets acquired and liabilities assumed as of the acquisition date and the updated final amounts as of June 30, 2023 are as follows (in thousands):

​

​	​	​	​
​		​
​	​	Namocell Inc
Current assets, net of cash	​	$	3,248
Equipment and other long-term assets	​		405
Intangible assets:	​
Developed technology	​		73,900
Trade name	​		700
Customer relationships	​		900
Non-competition agreement	​	​	100
Goodwill	​		51,257
Total assets acquired	​		130,510
​	​	​	​
Liabilities	​		546
Deferred income taxes, net	​		18,180
Net assets acquired	​	$	111,784
​	​	​	​
Cash paid, net of cash acquired	​		101,184
Additional consideration	​		10,600
Net assets acquired	​	$	111,784

​

Tangible assets and liabilities acquired were recorded at fair value on the date of close based on management's assessment. The purchase price allocated to developed technology was based on management’s forecasted cash inflows and outflows and using a relief from royalty method to calculate the fair value of assets purchased. The purchase price allocated to customer relationships and trade names was based on management's forecasted cash inflows and outflows and using a multiperiod excess earnings method. The amount recorded for developed technology is being amortized with the expense reflected in Cost of goods sold in the Consolidated Statement of Earnings and Comprehensive Income. The amortization period for developed technology is estimated to be 13 years. Amortization expense related to customer relationships is reflected in Selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive

Income. The amortization period for customer relationships is estimated to be 4 years. The amount recorded for trade names and the non-competition agreement is being amortized with the expense reflected in Selling, general and administrative expenses in the Consolidated Statement of Earnings and Comprehensive Income. The amortization period for both trade names and the non-competition agreement is estimated to be 3 years. The net deferred income tax liability represents the net amount of the estimated future impact of adjustments for costs to be recognized as intangible asset amortization, which is not deductible for income tax purposes, offset by the deferred tax asset for the preliminary calculation of acquired net operating losses.

There were no acquisitions in fiscal 2022.

​

Note 5. Fair Value Measurements:

The Company’s financial instruments include cash and cash equivalents, available for sale investments, accounts receivable, accounts payable, contingent consideration obligations, derivative instruments, and long-term debt.

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. This standard also establishes a hierarchy for inputs used in measuring fair value. This standard maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available in the circumstances.

The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable for the asset or liability and their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. Level 3 may also include certain investment securities for which there is limited market activity or a decrease in the observability of market pricing for the investments, such that the determination of fair value requires significant judgment or estimation.

The following tables provide information by level for financial assets and liabilities that are measured at fair value on a recurring basis (in thousands):

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​		Total			​	​	​	​	​	​	​	​
​	​	​	carrying		​	​	​	​	​	​	​	​	​
​	​	​	value as of		​	Fair Value Measurements Using
​	Balance Sheet Location	​	June 30,		​	Inputs Considered as
​	​	​	2024		​	Level 1		​	Level 2		​	Level 3
​	​		​	​	​	​	​	​	​	​	​	​	​
Assets	​		​			​			​			​
Certificates of deposit(1)	Short-term available-for-sale investments	​	$	1,072	​	$	1,072	​	$	—	​	$	—
Derivatives designated as hedging instruments - cash flow hedges	Other current assets	​		805	​		—	​		805	​		—
Derivatives designated as hedging instruments - cash flow hedges	Other assets	​	​	9,813	​	​	—	​	​	9,813	​	​	—
Total assets	​	​	$	11,690	​	$	1,072	​	$	10,618	​	$	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities	​	​			​			​			​
Derivatives designated as hedging instruments - net investment hedge	Other long-term liabilities	​	$	2,051	​	$	—	​	$	2,051	​	$	—
Total liabilities	​	​	$	2,051	​	$	—	​	$	2,051	​	$	—

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​		Total			​	​	​	​	​	​	​	​
​	​	​	carrying		​	​	​	​	​	​	​	​	​
​	​	​	value as of		​	Fair Value Measurements Using
​	Balance Sheet Location	​	June 30,		​	Inputs Considered as
​	​		2023			Level 1			Level 2			Level 3
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Assets	​		​			​			​			​
Exchange traded securities(2)	Short-term available-for-sale investments	​	$	23,739	​	$	23,739	​	$	—	​	$	—
Derivative instruments - cash flow hedges	Other assets	​		16,857	​		—	​		16,857	​		—
Total assets	​	​	$	40,596	​	$	23,739	​	$	16,857	​	$	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities	​	​			​			​			​
Contingent consideration	Contingent consideration payable	​	$	3,500	​	$	—	​	$	—	​	$	3,500
Total liabilities	​	​	$	3,500	​	$	—	​	$	—	​	$	3,500

(1)	The certificates of deposit have contractual maturity dates within one year.

(2)	During the quarter ended September 30, 2023, the Company sold all of its exchange traded investment grade bond funds that it held at June 30, 2023. The costs basis and fair value of these exchange traded investment grade bond funds were $25.0 million and $23.7 million at June 30, 2023, respectively.

​

Fair value measurements of available for sale securities

Available for sale securities are measured at fair value using quoted market prices in active markets for identical assets and are therefore classified as Level 1 assets.

Fair value measurements of derivative instruments

The Company utilizes forward starting swaps designated as a cash flow hedge on forecasted debt. The forward starting swaps reduce the variability of cash flow payments for the Company by converting the variable interest rate on the Company’s forecasted variable interest long-term debt to that of a fixed interest rate. Accordingly, as part of the forward starting swaps, the Company exchanges, at specified intervals, the difference between floating and fixed interest amounts based on a notional principal amounts. The Company also uses a cross-currency swap contract to manage its exposure to foreign currency risk associated with the Company’s net investment in its Swiss subsidiary.

The following table presents the contractual amounts of the Company’s outstanding instruments (in millions):

​	​	​	​	​	​	​	​	​
​	​	​		June 30,		​	June 30,
Instruments	​	Designation		2024		​	2023
Forward starting swaps(1)	​	Cash flow hedge	​	$	300	​	$	300
Cross-currency swap(2)	​	Net investment hedge	​	​	150	​	​	—

​

(1)

In May 2021, the Company entered into a forward starting swap designated as a cash flow hedge on forecasted debt based on $200 million of notional principal. The effective date of the swap was November 2022 with the full swap maturing in November 2025. In March 2023, the Company entered into a forward starting swap designated as a cash flow hedge on forecasted debt based on $100 million of notional principal. The effective date of the swap was April 2023 with the full swap maturing in April 2025.

(2)

In July 2023, the Company entered into a pay-fixed rate, receive-fixed rate cross-currency swap contract with a total notional amount of $150 million that was designated as a hedge to lock in the Swiss franc (CHF) rate for a portion of the Company’s CHF net investment in its Lunaphore subsidiary in Switzerland. The objective of the hedge is to protect the net investment in the Company’s CHF-denominated operations against changes in the spot exchange rates, on a pre-tax basis. The hedging instrument has four interim settlement dates, which will reduce the notional on the hedging instrument by $10 million at each interim date, and will reduce the notional to $110 million at maturity.

The pretax amount of the gains and losses on our hedging instruments and the classification of those gains and losses with our Consolidated Financial Statements for the twelve months ended June 30, 2024 and 2023 were as follows (in thousands):

​	​	​	​	​	​	​	​	​	​	​
​	​	​	(Gain) Loss Recognized in Accumulated Other Comprehensive Loss
​		​	Year Ended
​	​	​	June 30,
​		​	2024		​	2023			2022
Cash flow hedges	​	​	​	​	​	​	​	​	​	​
Forward starting swaps	​	​	$	12,632	​	$	(1,340)		$	(19,121)
Net investment hedges	​	​	​	​	​	​	​	​	​	​
Cross-currency swap	​	​	​	4,015	​	​	—		​	—
Total	​	​	$	16,647	​	$	(1,340)	​	$	(19,121)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	(Gain) Loss Reclassified into Income								​	​	​	​	​	​
​		​	Year Ended								​	​	​	​	​	​
​	​	​	June 30,								​	Location of (Gain) Loss
​		​	2024		​	2023			2022		​	in Income Statement
Cash flow hedges	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Forward starting swaps	​	​	$	(10,317)	​	$	(4,526)		$	6,352	​	Interest expense
Net investment hedges	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Cross-currency swap	​	​	​	(3,210)	​	​	—		​	—	​	Interest expense
Total	​	​	$	(13,527)	​	$	(4,526)	​	$	6,352	​	​	​	​	​	​

​

Gains or losses related to the net investment hedges are classified as foreign currency translation adjustments in the schedule of changes in Accumulated Other Comprehensive Income (“AOCI”) in Note 8, as these items are attributable to the Company’s hedges of its net investment in foreign operations. Gains or losses related to the cash flow hedges are classified as Unrealized gains (losses) on cash flow hedges in the schedule of changes in AOCI in Note 8.

The instruments were valued using observable market inputs in active markets and therefore are classified as Level 2 liabilities.

Fair value measurements of contingent consideration

As of June 30, 2024, the Company does not have outstanding contingent consideration as the Asuragen and Namocell acquisitions did not meet their respective milestones as of December 31, 2023.

The Asuragen contingent agreement required the Company to make contingent consideration payments of up to $105.0 million if certain revenue thresholds were achieved by December 31, 2023. The opening balance sheet fair value of the liabilities was $18.3 million, which was determined using a Monte Carlo simulation-based model discounted to present value. Assumptions used in these calculations are units sold, expected revenue, expected expenses, discount rate, and various probability factors. The contingent consideration related to Asuragen was $2.0 million as of June 30, 2023.

The Namocell contingent agreement required the Company to make contingent consideration payments of up to $25.0 million if certain revenue thresholds were achieved by December 31, 2023. The opening balance sheet fair value of the liabilities was $10.6 million, which was determined using a Monte Carlo simulation-based model discounted to present value. Assumptions used in these calculations are units sold, expected revenue, expected expenses, discount rate, and various probability factors. The contingent consideration related to Namocell was $1.5 million as of June 30, 2023.

As of June 30, 2023_,_ the Company's obligation for potential contingent consideration payments related to the B-Mogen acquisitions was relieved as the likelihood that the revenue thresholds and product milestones would be achieved in the timeframe established within the purchase agreement was remote. As a result, the Company reversed an accrual for the fair value of the contingent liabilities at the date of settlement during fiscal 2022.

The following table presents a reconciliation of the liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):

​	​	​	​	​	​	​	​
​		​	​	​	​	​	​
​	​	​	June 30,
​	​	​	2024		​	2023
​	​	​	​	​	​	​	​
Fair value at the beginning of period	​	​	$	3,500	​	$	5,000
Purchase price contingent consideration (Note 4)	​	​		—	​		10,600
Change in fair value of contingent consideration	​	​		(3,500)	​		(12,100)
Payments	​	​		—	​		—
Fair value at the end of period	​	​	$	—	​	$	3,500

​

The use of different assumptions, applying different judgment to matters that inherently are subjective and changes in future market conditions could result in different estimates of fair value of our securities or contingent consideration, currently and in the future. If market conditions deteriorate, we may incur impairment charges for securities in our investment portfolio.

Fair value measurements of other financial instruments – The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate fair value.

Cash and cash equivalents, certificates of deposit, accounts receivable, and accounts payable – The carrying amounts reported in the consolidated balance sheets approximate fair value because of the short-term nature of these items.

Long-term debt – The carrying amounts reported in the consolidated balance sheets for the amount drawn on our line-of-credit facility and long-term debt approximates fair value because our interest rate is variable and reflects current market rates.

​

Note 6*. Debt and Other Financing Arrangements:*

On August 31, 2022, the Company entered into a revolving line-of-credit and term loan by a Credit Agreement (the Credit Agreement). The Credit Agreement provides for a revolving credit facility of $1 billion, which can be increased by an additional $400 million subject to certain conditions. Borrowings under the Credit Agreement may be used for working capital and expenditures of the Company and its subsidiaries, including financing permitted acquisitions. Borrowings under the Credit Agreement bear interest at a variable rate. The current outstanding debt is based on the one-month Secured Overnight Financing Rate (SOFR) plus an applicable margin. The applicable margin is determined from the total leverage ratio of the Company and updated on a quarterly basis. The annualized fee for any unused portion of the credit facility is currently 10 basis points.

The Credit Agreement matures on August 31, 2027 and contains customary restrictive and financial covenants and customary events of default. As of June 30, 2024, the outstanding balance under the Credit Agreement was $319.0 million.

Note 7. Leases:

As a lessee, the company leases offices, labs, and manufacturing facilities, as well as vehicles, copiers, and other equipment. The Company determines whether a contract is a lease or contains a lease at inception date. Upon commencement date, operating lease right-of-use assets and liabilities are recognized based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the Company’s incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term and the economic environment of the applicable country or region. The Company recognizes operating lease expense on a straight-line basis over the lease term. Further, as part of our adoption of ASC 842, the Company also made the accounting policy elections to not capitalize short term leases (defined as a lease with a lease term that is less than 12 months) and to combine lease and non-lease components for all asset classes in determining the lease payments.

Variable lease payments primarily include payments for non-lease components, such as maintenance costs and payments for non-components such as sales tax. During fiscal year 2024, the Company recognized $5.0 million in variable lease expense in the Consolidated Statements of Earnings and Comprehensive Income. During fiscal year 2024, the Company also recognized $18.2 million relating to fixed lease expense in the Consolidated Statements of Earnings and Comprehensive Income.

The following table summarizes the balance sheet classification of the Company’s operating leases, amounts of right of use assets and lease liabilities, the weighted average remaining lease term, and the weighted average discount rate for the Company’s operating leases (asset and liability amounts are in thousands):

​	​	​	​	​	​	​	​
​		​	​		As of
​	​	​	​	​	June 30,
​	​	Balance Sheet Classification		​	2024
Operating leases:		​			​		​
Operating lease right-of-use assets		​	Right-of-use asset	​	$	91,285
​	​	​	​	​	​	​	​
Current operating lease liabilities		​	Operating lease liabilities - current	​	$	12,920
Noncurrent operating lease liabilities		​	Operating lease liabilities	​		87,618
Total operating lease liabilities	​	​	​	​	$	100,538
​	​	​	​	​	​	​	​
Weighted average remaining lease term (in years):	​		​	​		8.45
​	​	​	​	​	​	​	​
Weighted average discount rate (%):	​		​	​		4.23

​

The following table summarizes the cash paid for amounts included in the measurement of operating lease liabilities and right of use assets obtained in exchange for new operating lease liabilities for the year ended June 30, 2024 (in thousands):

​

​	​	​	​
​	​	Year ended
​	​	June 30,
​		2024
Cash amounts paid on operating lease liabilities(1)	​	$	17,729
​	​	​	​
Right-of-use assets obtained in exchange for lease liabilities	​	$	11,051

(1)	Total cash paid for the Company’s operating leases during the year ended June 30, 2024 include cash amounts paid on operating lease liabilities and variable lease expenses. Cash flow impacts from right of use assets and lease liabilities are presented net on the cash flow statement in changes in other operating activity.

The following table summarizes payments by date for the Company’s operating leases, which is then reconciled to our total lease obligation (in thousands):

​	​	​	​
​		June 30, 2024
​	​	Operating
​	​	Leases
2025	​	$	16,331
2026	​		16,429
2027	​		13,577
2028	​		13,479
2029	​		12,967
Thereafter	​		48,211
Total	​	$	120,994
Less: Amounts representing interest	​		20,456
Total lease obligations	​	$	100,538

​

Certain leases include one or more options to renew, with terms that extend the lease term up to five years. The Company includes option to renew the lease as part of the right of use lease asset and liability when it is reasonably certain the Company will exercise the option. In addition, certain leases contain fair value purchase and termination options with an associated penalty. In general, the Company is not reasonably certain to exercise such options.

Note 8. Supplemental Equity and Accumulated Other Comprehensive Income (loss) Information:

Equity

The Company has declared cash dividends per share of $0.32 in each of the full fiscal years ended June 30, 2024, June 30, 2023, and June 30, 2022. During the years ended June 30, 2024, June 30, 2023, and June 30, 2022, the Company repurchased 1,397,471 shares at an average share price of $57.28, 222,000 shares at an average share price of $88.12, and 1,576,952 shares at an average share price of $102.06, respectively. The Company’s accounting policy is to record the portion of share repurchases in excess of the par value entirely in retained earnings. During fiscal year 2024, 2023 and 2022, the amounts within the Consolidated Statements of Shareholders’ Equity for the surrender and retirement of stock to exercise options due to net settlement stock options exercises and restricted stock units vesting were $21.9 million, $28.9 million, and $23.5 million, respectively.

Accumulated Other Comprehensive Income (loss)

The components of other comprehensive income (loss) consist of changes in foreign currency translation adjustments and changes in net unrealized gains (losses) on derivative instruments designated as cash flow hedges.

​

Changes in Accumulated Other Comprehensive Income (Loss) attributable to Bio-Techne by component (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	Unrealized		​	​	​	​	​	​
​	​	Gains		​	Foreign		​	​	​
​	​	(Losses) on		​	Currency		​	​	​
​	​	Derivative		​	Translation		​	​	​
​	​	Instruments			Adjustments			Total
Balance as of June 30, 2021, net of tax:	​	$	(6,193)	​	$	(51,098)	​	$	(57,291)
Other comprehensive income (loss), before tax, attributable to Bio-Techne:	​	​	​	​	​	​	​	​	​
Amounts before reclassifications (1)	​	​	19,121	​	​	(32,171)	​	​	(13,050)
Amounts reclassified out	​	​	(6,352)	​	​	—	​	​	(6,352)
Total other comprehensive income (loss), before tax, attributable to Bio-Techne:	​	​	12,769	​	​	(32,171)	​	​	(19,402)
Tax benefit	​	​	1,493	​	​	—	​	​	1,493
Total other comprehensive income (loss), net of tax, attributable to Bio-Techne:	​	​	14,262	​	​	(32,171)	​	​	(17,909)
Balance as of June 30, 2022, net of tax(2)	​	$	8,069	​	$	(83,269)	​	$	(75,200)
​	​	​	​	​	​	​	​	​	​
Other comprehensive income (loss), before tax, attributable to Bio-Techne: :	​	​	​	​	​	​	​	​	​
Amounts before reclassifications (1)	​	​	1,340	​	​	4,191	​	​	5,531
Amounts reclassified out	​	​	4,526	​	​	152	​	​	4,678
Total other comprehensive income (loss), before tax, attributable to Bio-Techne:	​	​	5,866	​	​	4,343	​	​	10,209
Tax expense	​	​	(1,073)	​	​	—	​	​	(1,073)
Total other comprehensive income (loss), net of tax, attributable to Bio-Techne:	​		4,793	​	​	4,343	​	​	9,136
Balance as of June 30, 2023, net of tax(2)	​	$	12,862	​	$	(78,926)	​	$	(66,064)
​	​	​	​	​	​	​	​	​	​
Other comprehensive income (loss), before tax:	​	​	​	​	​	​	​	​	​
Amounts before reclassifications	​	​	(12,632)	​	​	(9,941)	​	​	(22,573)
Amounts reclassified out	​	​	10,317	​	​	3,210	​	​	13,527
Total other comprehensive income (loss), before tax	​	​	(2,315)	​	​	(6,731)	​	​	(9,046)
Tax expense	​	​	(2,445)	​	​	(761)	​	​	(3,206)
Total other comprehensive income (loss), net of tax	​		(4,760)	​	​	(7,492)	​	​	(12,252)
Balance as of June 30, 2024, net of tax(2)	​	$	8,102	​	$	(86,418)	​	$	(78,316)

​

(1)	Amounts before reclassifications related to foreign currency translation adjustments in the table above includes the amount attributable to Bio-Techne and excludes the $33 thousand and $70 thousand attributable to the non-controlling interest in Eminence as of June 30, 2023, and June 30, 2022, respectively.

(2)	The Company had a net deferred tax liability for its cash flow hedge of $2.5 million, $4.0 million, and $2.5 million as of June 30, 2024, June 30, 2023 and June 30, 2022.

Income taxes are not provided for foreign translation relating to permanent investments in international subsidiaries, but tax effects within foreign currency translation adjustments do include impacts from the net investment hedge.

​

Note 9. Earnings Per Share:

The following table reflects the calculation of basic and diluted earnings per share (in thousands, except per share amounts):

​	​	​	​	​	​	​	​	​	​
​		​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2024			2023			2022
Earnings per share – basic:	​	​	​	​	​	​	​	​	​
Net earnings, including noncontrolling interest	​	$	168,105		$	285,442		$	263,099
Less net earnings (loss) attributable to noncontrolling interest	​	​	—		​	179		​	(8,952)
Net earnings attributable to Bio-Techne	​	$	168,105	​	$	285,263	​	$	272,051
Income allocated to participating securities	​		(33)	​		(70)	​		(121)
Income available to common shareholders	​	$	168,072	​	$	285,193	​	$	271,930
Weighted-average shares outstanding – basic	​		157,708	​		157,179	​		156,874
Earnings per share – basic	​	$	1.07	​	$	1.81	​	$	1.73
​	​	​	​	​	​	​	​	​	​
Earnings per share – diluted:	​			​			​
Net earnings, including noncontrolling interest	​	$	168,105	​	$	285,442	​	$	263,099
Less net earnings (loss) attributable to noncontrolling interest	​	​	-	​	​	179	​	​	(8,952)
Net earnings attributable to Bio-Techne	​	​	168,105	​	​	285,263	​	​	272,051
Income allocated to participating securities	​		(33)	​		(70)	​		(121)
Income available to common shareholders	​	$	168,072	​	$	285,193	​	$	271,930
Weighted-average shares outstanding – basic	​		157,708	​		157,179	​		156,874
Dilutive effect of stock options and restricted stock units	​		3,066	​		4,676	​		7,240
Weighted-average common shares outstanding – diluted	​		160,774	​		161,855	​		164,114
Earnings per share – diluted	​	$	1.05	​	$	1.76	​	$	1.66

​

Basic net income per common share is calculated based on the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares of our stock result from dilutive common stock options and restricted stock units. We use the treasury stock method to calculate the weighted-average shares used in the diluted earnings per share computation. Under the treasury stock method, the proceeds from exercise of an option, the amount of compensation cost, if any, for future service that we have not yet recognized, and the amount of estimated tax benefits that would be recorded in paid-in capital, if any, when the option is exercised are assumed to be used to repurchase shares in the current period.

The dilutive effect of stock options in the above table excludes all options for which the aggregate exercise proceeds exceeded the average market price for the period. The number of potentially dilutive option shares excluded from the calculation was 3.9 million, 4.5 million, and 2.8 million for the fiscal years ended June 30, 2024, 2023 and 2022, respectively.

​

Note 10. Share-based Compensation and Other Benefit Plans:

The cost of employee services received in exchange for the award of equity instruments is based on the fair value of the award at the date of grant. Compensation cost is recognized using a straight-line method over the vesting period and is net of estimated forfeitures. Stock option exercises and stock awards are satisfied through the issuance of new shares.

Equity incentive plan: The 2020 Equity Incentive Plan, which replaced the Company’s Second Amended and Restated 2010 Equity Incentive Plan, provides for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, performance shares, performance units and stock appreciation rights. There were 36.2 million shares of common stock authorized for grant under the Plan. The maximum aggregate number of shares of common stock reserved and available for awards under the Plan is 9,936,808 shares. At June 30, 2024, there were 6.3 million shares of common stock available for grant under the 2020 Equity Incentive Plan. The maximum term of incentive options granted under the 2020 Equity Incentive Plan is ten years. The 2020 Equity Incentive Plan replaced the Company’s second A&R 2010 Plan, which had previously amended and restated the Company’s Amended and Restated 2010 Equity Incentive Plan (the A&R 2010 Plan). The 2020 Equity Incentive Plan and Second A&R 2010 Plan (collectively, the Plans) are administered by the Board of Directors and its Executive Compensation Committee, which determine the persons who are to receive awards under the Plans, the number of shares subject to each award and the term and exercise price of each award. The number of shares of common stock subject to outstanding awards as of June 30, 2024 under the 2020 Equity Incentive Plan were 11.6 million.

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

​

​	​	​	​	​	​	​	​
​	​	Year Ended June 30,					​
​		2024	​	2023	​	2022	​
Dividend yield	​	0.41	%	0.34	%	0.27	%
Expected volatility	​	30%-37	%	30%-36	%	27%-33	%
Risk-free interest rates	​	3.8%-4.8	%	2.8%-4.4	%	0.6%-2.6	%
Expected lives (years)	​	4.4	​	4.7	​	4.3	​

​

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

​

Stock option activity under the Plans for the three years ended June 30, 2024, consists of the following (shares in thousands):

​	​	​	​	​	​	​	​	​	​	​
​		​		Weighted			Aggregate			Weighted
​	​	Number of	​	Average		​	Intrinsic		​	Average
​	​	Shares (in	​	Exercise		​	Value		​	Contractual
​	​	thousands)	​	Price		​	(millions)		​	Life (years)
​	​	​	​	​	​	​	​	​	​	​
Outstanding at June 30, 2021		14,868	​	$	43.16		​
Granted		1,390	​		120.15		​
Forfeited		(539)	​		87.05		​
Exercised		(2,450)	​		33.61		​
Outstanding at June 30, 2022		13,269	​	$	51.20		​
Granted		2,351	​		93.81		​
Forfeited		(118)	​		85.99		​
Exercised		(1,578)	​		29.48		​
Outstanding at June 30, 2023		13,924	​	$	60.56		​	​
Granted		1,060	​		79.69		​
Forfeited		(1,165)	​		90.86		​
Exercised		(2,240)	​		33.34		​
Outstanding at June 30, 2024		11,579	​	$	64.53	​	$	747.3		3.0
Exercisable at June 30, 2022:		7,797	​		36.99	​		​
Exercisable at June 30, 2023:		8,641	​		44.76	​		​
Exercisable at June 30, 2024:		8,208	​		53.57	​		439.7		2.1
​	​	​	​	​	​	​	​	​	​	​

​

The weighted average fair value of options granted during fiscal 2024, 2023, and 2022 was $27.27, $29.53, and $29.78, respectively. The total intrinsic value of options exercised during fiscal 2024, 2023, and 2022 were $100.8 million, $90.2 million, and $209.3 million, respectively. The total fair value of options exercised during fiscal 2024, 2023, and 2022 were $58.2 million, $46.5 million, and $82.3 million, respectively. The total fair value of options vested during fiscal 2024, 2023, and 2022 were $31.6 million, $31.0 million, and $29.2 million, respectively. Stock options vest over a four year period.

Restricted common stock activity under the Plans for the three years ended June 30, 2024, consists of the following (units in thousands):

​	​	​	​	​	​	​	​
​		​		​	​		Weighted
​	​	​	​	​	​	​	Average
​	​	​	​	​	Weighted	​	Remaining
​	​	Number of	​	​	Average Grant	​	Contractual
​	​	Shares (in	​	​	Date Fair	​	Term
​	​	thousands)	​	​	Value	​	(years)
Unvested at June 30, 2021		92	​	$	56.52
Granted		28	​		122.34
Vested		(54)	​		54.57
Forfeited		—	​		—
Unvested at June 30, 2022		66	​	$	85.83
Granted		11	​		73.94
Vested		(40)	​		78.85
Forfeited		—	​		—
Unvested at June 30, 2023		37	​	$	89.91
Granted		28	​		57.38
Vested		(30)	​		82.51
Forfeited		—	​		—
Unvested at June 30, 2024		35	​	$	70.22	​	6.60

​

The total fair value of restricted shares that vested was $2.4 million for fiscal 2024, $3.1 million for fiscal 2023, and $2.9 million for fiscal 2022.

Restricted stock unit activity under the Plans for the three years ended June 30, 2024, consists of the following (units in thousands):

​

​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	Weighted
​	​	​	​	​	​	​	Average
​	​	​	​	​	Weighted	​	Remaining
​	​	Number of	​	​	Average Grant	​	Contractual
​	​	Units	​	​	Date Fair	​	Term
​		(in thousands)		​	Value		(years)
Outstanding at June 30, 2021		382		$	55.13
Granted		110		​	117.60
Vested		(145)		​	44.62
Forfeited		(45)		​	104.34
Outstanding at June 30, 2022		302		$	75.54
Granted		107		​	90.96
Vested		(123)		​	52.34
Forfeited		(3)		​	106.13
Outstanding at June 30, 2023		283		$	91.10
Granted		374		​	78.16
Vested		(129)		​	76.42
Forfeited		(31)		​	99.96
Outstanding at June 30, 2024		497		$	84.62		5.71

​

The total fair value of restricted stock units that vested was $9.9 million for fiscal 2024, $6.4 million for fiscal 2023, and $6.5 million for fiscal 2022. The restricted stock units vest over a three-year period.

Stock-based compensation cost, inclusive of payroll taxes, of $38.5 million, $39.3 million, and $44.0 million was included in selling, general and administrative expense in fiscal 2024, 2023 and 2022, respectively. Additionally, stock-based

compensation costs, inclusive of payroll taxes, of $0.9 million, $1.0 million, and $1.4 million was included in cost of goods sold in 2024, 2023, and 2022, respectively. As of June 30, 2024, there was $35.8 million of unrecognized compensation cost related to non-vested stock options, non-vested restricted stock units and non-vested restricted stock which will be expensed in fiscal 2025 through 2028 using a 4.5% forfeiture rate. The weighted average period over which the compensation cost is expected to be recognized is 2.1 years.

Employee stock purchase plan: In fiscal year 2015, the Company established the Bio-Techne Corporation 2014 Employee Stock Purchase Plan (ESPP), which was approved by the Company’s shareholders on October 30, 2014, and which is designed to comply with IRS provisions governing employee stock purchase plans. 800,000 shares were allocated to the ESPP. The Company recorded expense of $0.9 million, $0.9 million, and $1.0 million for the ESPP in fiscal 2024, 2023, and 2022, respectively.

Profit sharing and savings plans: The Company has profit sharing and savings plans for its U.S. employees, which conform to IRS provisions for 401(k) plans. The Company makes matching contributions to the Plan. The Company has recorded an expense for contributions to the plans of $5.8 million, $4.9 million, and $4.3 million for the years ended June 30, 2024, 2023, and 2022, respectively. The Company operates defined contribution pension plans, which consists of primarily our U.K. and China employees. The Company’s contribution to the defined pension contribution plan was $5.5 million, $2.4 million, and $2.3 million for the years ended June 30, 2024, 2023 and 2022, respectively.

Performance incentive programs: In fiscal 2024, under certain employment agreements, a Management Incentive Plan, and a business incentive plan, available to executive officers, certain management personnel, and certain other professional employees, the Company recorded cash bonuses of $13.5 million, granted options for 1,060,126 shares of common stock, issued 27,876 restricted common shares and 374,448 restricted stock units. In fiscal 2023 and fiscal 2022, the Company recorded cash bonuses of $10.8 million and $26.5 million, granted options for 2,350,980 and 1,390,436 shares of common stock, issued 10,816 and 27,584 restricted common stock shares and 107,202 and 110,292 restricted stock units, respectively.

Note 11. Other Income / (Expense)

The components of other income (expense) in the accompanying Statement of Earnings and Comprehensive Income are as follows (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2024			2023			2022
Interest expense	​	$	(15,736)	​	$	(11,215)	​	$	(11,309)
Interest income	​	​	3,323	​	​	3,410	​	​	794
Gain (loss) on investment(1)	​	​	283	​	​	49,328	​	​	15,186
Gain (loss) on equity method investment	​	​	(6,841)	​	​	(1,143)	​	​	—
Other non-operating income (expense), net	​		(2,026)	​		(665)	​		125
Total other income (expense)	​	$	(20,997)	​	$	39,715	​	$	4,796

​

(1) For the year ended June 30, 2024, this is for a $0.3 million gain on the sale of our exchange trade investment grade bond funds. For the year ended June 30, 2023, this is for a $37.2 million gain on the sale of our CCXI investment, a $11.7 million gain on the sale of Eminence, and a gain of $0.4 million related to the change in fair value of our exchange traded bond funds. For the year ended June 30, 2022, this is for a $16.1 million gain in the fair value of our CCXI investment.

​

​

Note 12. Income Taxes:

Income before income taxes was comprised of the following (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2024			2023			2022
Domestic	​	$	174,806	​	$	288,458	​	$	255,118
Foreign	​		10,883	​		50,201	​		46,268
Earnings before income taxes	​	$	185,689	​	$	338,659	​	$	301,386

​

The provision for income taxes consisted of the following (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2024			2023			2022
Taxes on income consist of:	​	​	​	​	​	​	​	​	​
Current tax provision:		​			​			​
Federal		$	40,228		$	59,810		$	10,080
State		​	4,853		​	12,753		​	6,663
Foreign		​	12,664		​	10,453		​	14,481
Total current tax provision		​	57,745		​	83,016		​	31,224
Deferred tax provision:		​			​			​
Federal		​	(28,301)		​	(28,829)		​	8,130
State		​	(4,563)		​	(2,414)		​	1,477
Foreign		​	(7,297)		​	1,444		​	(2,544)
Total deferred tax provision		​	(40,161)		​	(29,799)		​	7,063
Total income tax provision		$	17,584		$	53,217		$	38,287

​

The Company’s effective income tax rate for fiscal 2024 was 9.5% vs 15.7% in the prior year. The change in the effective tax rate for fiscal 2024 and 2023 was driven by share-based compensation as the number of stock option exercises increased compared to the prior year comparative period.

The Company’s effective income tax rate for fiscal 2023 was 15.7% vs 12.7% in the prior year. The change in the effective tax rate for fiscal 2023 and 2022 was driven by share-based compensation as the number of stock option exercises decreased compared to the prior year comparative period.

The Company’s discrete tax benefits in fiscal 2024, 2023, and 2022 primarily related to share-based compensation excess tax benefits of $18.4 million, $12.3 million, and $29.3 million, respectively.

The following is a reconciliation of the federal tax calculated at the statutory rate to the actual income taxes provided:

​	​	​	​	​	​	​	​	​	​	​
​		Year Ended June 30,
​		2024			2023			2022		​
​	​	​	​	​	​	​	​	​	​	​
Income tax expense at federal statutory rate	​	​	21.0	%		21.0	%		21.0	%
State income taxes, net of federal benefit	​	​	(0.2)	​		2.5	​		2.2	​
Research and development tax credit	​	​	(2.2)	​		(1.3)	​		(1.0)	​
Contingent consideration adjustment	​	​	(0.4)	​		(0.8)	​		(1.4)	​
Foreign tax rate differences	​	​	3.1	​		(0.6)	​		0.4	​
(Gain)/loss on investment	​	​	—	​	​	(0.7)	​	​	1.1	​
Option exercises	​	​	(8.8)	​		(3.3)	​		(9.4)	​
U.S. taxation of foreign earnings	​	​	0.1	​		0.4	​		(0.1)	​
Foreign derived intangible income	​	​	(4.8)	​		(3.4)	​		(1.9)	​
Foreign withholding tax	​	​	(1.2)	​	​	1.5	​	​	—	​
Executive compensation limitations	​	​	2.7	​		0.8	​		1.9	​
Other, net	​	​	0.2	​		(0.4)	​		(0.10)	​
Effective tax rate	​	​	9.5	%		15.7	%		12.7	%

​

Deferred taxes on the Consolidated Balance Sheets consisted of the following temporary differences (in thousands):

​	​	​	​	​	​	​
​	​	June 30,
​		2024			2023
​	​	​	​	​	​	​
Inventory	​	$	9,675	​	$	10,906
Net operating loss carryovers	​		25,065	​		20,315
Tax credit carryovers	​		9,118	​		9,218
Excess tax basis in equity investments	​		1,115	​		939
Deferred compensation	​		16,628	​		16,528
Lease liability	​		19,501	​		21,001
Capitalized R&D	​	​	36,151	​	​	21,081
Held-for-sale asset impairment	​	​	5,216	​	​	—
Other	​		6,119	​		4,379
Valuation allowance	​		(19,265)	​		(9,344)
Deferred tax assets	​		109,323	​		95,023
​	​	​	​	​	​	​
Intangible asset amortization	​		(120,648)	​		(134,810)
Depreciation	​		(20,448)	​		(21,449)
Right of use asset	​		(17,876)	​		(20,021)
Derivative - cash flow hedge	​	​	(2,516)	​	​	(3,995)
Other	​		(3,698)	​		(3,730)
Deferred tax liabilities	​		(165,186)	​		(184,005)
Net deferred income tax liabilities	​	$	(55,863)	​	$	(88,982)

​

A deferred tax valuation allowance is required when it is more likely than not that all or a portion of deferred tax assets will not be realized. The valuation allowance as of June 30, 2024 was $19.3 million compared to $9.3 million in the prior year.

As of June 30, 2024, the $19.3 million valuation allowance relates to certain foreign and state tax net operating loss and state credit carryforwards that existed at the date the Company completed various previous acquisitions as well as immaterial amounts generated after the acquisitions. The Company believes it is more likely than not that these tax carryovers will not be realized.

As of June 30, 2024, the Company has federal operating loss carryforwards of approximately $34.0 million and state operating loss carryforwards of $146.8 million from its previous acquisitions, which are not limited under IRC Section 382. As of June 30, 2024, the Company has foreign net operating loss carryforwards of $77.5 million. Some of the net operating loss carryforwards expire between fiscal 2025 and 2036. Federal net operating loss carryforwards generated after December 31, 2017 have an indefinite carryforward period but the Company expects to be fully utilize these attributes by June 30, 2032. The Company has a deferred tax asset of $9.8 million, net of the valuation allowance discussed above, related to the net operating loss carryovers. As of June 30, 2024, the Company has federal and state tax credit carryforwards of $4.4 million and $5.6 million, respectively. The federal tax credit carryforwards expire between 2028 and 2040. The majority of the state credit carryforwards have no expiry date. The state credit carryforwards that have expiry dates have a full valuation allowance. The Company has a deferred tax asset of $5.5 million, net of the valuation allowance discussed above, related to the tax credit carryovers.

As of June 30, 2024, the Company has approximately $246 million of undistributed earnings in its foreign subsidiaries. Approximately $108 million of these earnings are no longer considered permanently reinvested and the Company expects to be able to repatriate earnings on a tax neutral basis. The Company has not provided deferred taxes on approximately $138 million of undistributed earnings from non-U.S. subsidiaries as of June 30, 2024 which are indefinitely reinvested in operations. Because of the multiple entities as well as the complexities of laws and regulations by which to repatriate the earnings to minimize tax cost, it is not practical to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely. A deferred tax liability will be recognized if the Company can no longer demonstrate that it plans to indefinitely reinvest the undistributed earnings.

We continue to analyze our global working capital requirements and the potential tax liabilities that would be incurred if the non-U.S. subsidiaries distribute cash to the U.S. parent, which include local country withholding tax and potential U.S. state taxation.

The following is a reconciliation of the beginning and ending balance of unrecognized tax benefits (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2024			2023			2022
Beginning balance	​	$	5,291	​	$	5,302	​	$	7,271
Additions due to acquisitions	​		—	​		—	​		960
Additions for tax positions of prior year	​		—			—	​		304
Decrease in unrecognized tax benefits for prior year positions	​		—			—	​		(357)
Settlements	​		—			—	​		(2,860)
FX impact	​	​	(13)	​	​	(11)	​	​	(16)
Ending balances	​	$	5,278	​	$	5,291	​	$	5,302

​

Included in the balance of unrecognized tax benefits at June 30, 2024 are potential benefits of $5.3 million that, if recognized, would affect the effective tax rate on income from continuing operations. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. The Company had $0.6 million of accrued interest and penalties as of June 30, 2024. The amount recorded for the periods ended June 30, 2023 and June 30, 2022, was $0.5 million and $0.3 million, respectively, in accrued interest and penalties. The Company does not believe it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase in the next twelve months. The Company files income tax returns in the U.S. federal and certain state tax jurisdictions, and several jurisdictions outside the U.S. The Company’s federal returns are subject to tax assessment for 2019 and subsequent years. State and foreign income tax returns are generally subject to examination for a period of three to five years after filing of the respective return. The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.

Note 13. Segment Information:

The Company operates under two operating segments, Protein Sciences and Diagnostics and Genomics.

The Company’s Protein Sciences segment is comprised of the reagent solutions division and analytical solutions division. Our Protein Sciences segment is a leading developer and manufacturer of high-quality biological reagents used in all

aspects of life science research, diagnostics and cell and gene therapy. This segment also includes proteomic analytical tools, both manual and automated, that offer researchers and pharmaceutical manufacturers efficient and streamlined options for automated western blot and multiplexed ELISA workflow. No customer in the Protein Sciences segment accounted for more than 10% of the segment’s net sales for the years ended June 30, 2024, 2023, and 2022.

The Company’s Diagnostics and Genomics segment is comprised of the diagnostics reagents division, spatial biology divsion, and molecular diagnostics division. Our Diagnostics and Genomics segment develops and manufactures diagnostic products, including controls, calibrators, and diagnostic assays for the regulated diagnostics market, exosome-based molecular diagnostic assays, advanced tissue-based in-situ hybridization assays for spatial genomic and tissue biopsy analysis, and genetic and oncology kits for research and clinical applications. No customer in the Diagnostics and Genomics segment accounted for more than 10% of the segment’s net sales for the fiscal years ended June 30, 2024, 2023, and 2022.

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

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

​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2024			2023			2022
Net sales:		​		​	​	​	​	​	​
Protein Sciences	​	$	830,902		$	845,747	​	$	832,311
Diagnostics and Genomics	​		326,392	​		292,602	​		274,843
Other revenue(1)	​	​	4,153	​	​	—	​	​	—
Intersegment	​		(2,387)	​		(1,647)	​		(1,555)
Consolidated net sales	​	$	1,159,060		$	1,136,702	​	$	1,105,599
​	​	​	​	​	​	​	​	​	​
Operating income:	​			​			​
Protein Sciences	​	$	354,775		$	373,684	​	$	377,623
Diagnostics and Genomics	​		24,546	​		43,037	​		48,977
Segment operating income	​		379,321	​		416,721	​		426,600
Costs recognized on sale of acquired inventory	​		(729)	​		(400)	​		(1,596)
Amortization of intangibles	​		(78,318)	​		(76,413)	​		(73,054)
Impact of partially-owned consolidated subsidiaries(2)	​		—	​		647	​		(2,393)
Acquisition related expenses and other	​		(6,980)	​		9,965	​		19,070
Certain Litigation Charges	​	​	(3,506)	​	​	—	​	​	—
Impairment of assets held-for-sale	​	​	(21,963)	​	​	—	​	​	—
Eminence impairment	​	​	—	​	​	—	​	​	(18,715)
Stock based compensation, inclusive of employer taxes	​		(40,277)	​		(41,217)	​		(46,401)
Restructuring and restructuring-related costs	​		(12,245)	​		(3,829)	​		(1,640)
Corporate general, selling, and administrative expenses	​		(9,142)	​		(6,530)	​		(5,281)
Impact of business held-for-sale(1)	​	​	525	​	​	—	​	​	—
Consolidated operating income	​	$	206,686		$	298,944	​	$	296,590

	(1)	Since December 31, 2023, the Company has a business that has met the held-for-sale criteria. For the year ended June 30, 2024, includes the six-month results of this business held-for-sale for the period starting December 31, 2023 through June 30, 2024 while the business has met the held-for-sale criteria.

	(2)	Includes the annual results of the partially-owned consolidated subsidiary prior to the sale of this partially-owned consolidated subsidiary to a third party in the first fiscal quarter of 2023.

​

The Company has some integrated facilities that serve both segments. As such, asset and capital expenditure information by operating segment has not been provided and is not available, since the Company does not produce or utilize such information internally. In addition, although depreciation and amortization expense is a component of each operating segment’s operating results, it is not discretely identifiable.

The Company has disclosed sales by geographic area based on the location of the customer or distributor in Note 2. The Company has disclosed dis-aggregated product and service revenue by consumables, instruments, and services in Note 2. The Company considers total instrument and total service revenue to represent similar groups of products in the fiscal years presented. The Company considers our consumables sold in the Protein Sciences and Diagnostics and Genomics segments to represent different groups of products and therefore have separately disclosed the related consumables revenue (in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended June 30,
​		2024			2023			2022
Consumables revenue - Protein Sciences	​	$	657,679	​	$	665,301	​	$	646,952
Consumables revenue - Diagnostics and Genomics	​		266,348	​		252,432	​		243,922
Consumables revenue - Other revenue(1)	​	​	4,153	​	​	—	​	​	—
Total consumable revenue	​	$	928,180	​	$	917,733	​	$	890,874

​

(1)Includes the results of a business that has met the held-for-sale criteria since December 31, 2023.

​

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

​

​	​	​	​	​	​	​
​	​	Year ended June 30,
​		2024			2023
Long-lived assets:	​	​	​	​	​	​
United States and Canada	​	$	211,597		$	203,657
Europe			27,862	​		19,263
Asia	​		11,695	​		3,280
Total long-lived assets	​	$	251,154		$	226,200
Intangible assets:	​			​
United States and Canada	​	$	443,740		$	529,652
Europe	​		63,138	​		4,553
Asia	​		203	​		440
Total intangible assets	​	$	507,081		$	534,645

​

Long-lived assets are comprised of land, buildings and improvements and equipment, net of accumulated depreciation.

Note 14. Subsequent Events:

On July 23, 2024, the Company invested $15 million in Spear Bio, an innovative leader in the development and manufacture of ultra-sensitive immunoassays capable of measuring protein biomarkers at attomolar level from sub-microliter sample volume.

​

​

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors

Bio-Techne Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Bio-Techne Corporation and subsidiaries (the Company) as of June 30, 2024 and June 30, 2023, the related consolidated statements of earnings and comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and June 30, 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended June 30, 2024, in conformity with U.S. generally accepted accounting principles.

​

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated August 22, 2024 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

​

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

​

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

​

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

​

Fair value measurement of the developed technology intangible asset acquired in the Lunaphore acquisition

As discussed in Note 4 to the consolidated financial statements, the Company acquired Lunaphore Technologies, SA. in July 2023, for total consideration of $169.7 million. As a result of the acquisition, the Company recognized intangible assets of $66.4 million, including developed technology of $60.3 million.

​

We identified the assessment of the fair value measurement of the acquired developed technology as a critical audit matter. There was a high degree of subjectivity in applying and evaluating certain key assumptions used to estimate the fair value of the acquired developed technology. Specifically, the revenue growth rates and the discount rate were challenging to test as they represented subjective determinations of future market and economic conditions. Changes to those assumptions could have had a significant effect on the determination of the fair value measurement.

​

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls related to the development of the revenue growth rates and discount rate. We performed sensitivity analyses over the revenue growth rates to assess the impact of changes in those assumptions on the Company’s determination of the fair value of the developed technology. We evaluated the reasonableness of the Company’s forecasted revenue growth rates used to determine forecasted revenues by comparing them to historical results and industry related third-party data. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

​

	●	evaluating the discount rate used by the Company by comparing it against a discount rate range that was independently developed using publicly available market data for comparable entities

	●	testing the estimate of the fair value of the developed technology using the Company’s cash flow forecasts and discount rates and comparing the results to the Company’s fair value estimates.

​

/s/ KPMG LLP

We have served as the Company’s auditor since 2002.

​

Minneapolis, Minnesota	​
August 22, 2024	​

​

​

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors

Bio-Techne Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited Bio-Techne Corporation and subsidiaries' (the Company) internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

​

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of June 30, 2024 and June 30, 2023, the related consolidated statements of earnings and comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended June 30, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated August 22, 2024 expressed an unqualified opinion on those consolidated financial statements.

​

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

​

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

​

Definition and Limitations of Internal Control Over Financial Reporting

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

​

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.

​

/s/ KPMG LLP

Minneapolis, Minnesota	​
August 22, 2024	​

​

​