This story has been updated with comments from a conference call discussing the firm's financial results.
NEW YORK – Bio-Techne on Tuesday said its fiscal year 2023 first quarter revenues rose 5 percent year over year.
For the three months ended Sept. 30, the firm reported revenues of $269.7 million compared to $257.7 million in Q1 2022, missing analysts' average estimate of $281.7 million. Revenues rose 7 percent on an organic basis, with acquisitions contributing 1 percent and foreign currency exchange having an unfavorable impact of 3 percent.
Minneapolis-based Bio-Techne said its Q1 Diagnostics and Genomics segment revenues rose 15 percent to $69.9 million from $61.0 million in the prior-year quarter. In a statement, Bio-Techne President and CEO Chuck Kummeth said the firm saw "increased traction across our portfolio of Spatial Biology solutions, ramping ExoDx Prostate test volume, increased adoption of our Asuragen genetic carrier screening kits, and strength in our Diagnostics Reagents business." Year-over-year test volume for ExoDx Prostate grew more than 70 percent with revenue doubling for the quarter, he said.
Its Q1 Protein Sciences segment revenues rose 1 percent to $199.9 million from $197.2 million a year earlier. Kummeth noted that the segment faced "tough year-over-year comparisons" in Europe and China.
During a conference call to discuss the firm's financial results, Kummeth expanded on the regional difficulties the company experienced in China and Europe, saying that there was a significant seasonal dip in Europe, with revenue growth declining in the mid-single digits. While there was strong double-digit growth in Europe during September, it wasn't enough to counteract the downturns in July and August, he said.
There has also been caution in Europe surrounding instrument purchases, Kummeth said. Many companies that had been unable to deliver instruments due to supply chain issues overcame those concerns, and buying previously unavailable instruments from those firms was a priority for many customers rather than buying Bio-Techne machines that had been available, Kummeth said.
"I think it really has been an issue of competing for dollars with other suppliers having finally enough inventory to support things, and I think we were maybe pushed down a little bit this quarter," he said. "Our funnel is massive … and demand is solid, and it's just taking longer to get to capital signatures."
Ongoing COVID-19-related lockdowns in China also contributed to lower growth in the region but it is "rapidly returning to its historical growth rates" as customers are better able to navigate the COVID-19-related restrictions, Kummeth said. The firm expects growth in China in the mid-teens for fiscal Q2 as the country is "drifting slowly towards opening overall," he said.
CFO Jim Hippel added that year-over-year comparisons will be less of a hurdle for the rest of the fiscal year and that he is "hopeful that the regional headwinds we faced mainly in China as well as in Europe … will continue to improve." Had those two regions not underperformed, he said Bio-Techne likely would have seen double-digit growth in the quarter.
He said the company anticipates a return to double-digit organic revenue growth for the rest of the fiscal year, although "Europe is still the biggest question mark," because the "macro picture there is a bit cloudy for everyone." Europe "could be the one flag that could deter us from achieving" double-digit growth, he said.
Bio-Techne reported net income of $89.6 million, or $2.21 per share, for the quarter compared to $69.6 million, or $1.69 per share, in the prior-year quarter. The company reported adjusted EPS of $1.78 per share, missing analysts' average estimate of $1.83 per share.
Bio-Techne finished the quarter with $165.3 million in cash and cash equivalents and $37.8 million in short-term investments.
"Long-term, we remain incredibly well positioned and underpenetrated in some of the highest-growth life science tools and diagnostic end markets," Kummeth said in the company statement. "Our leading portfolio of proteomic research reagents and analytical tools, cell and gene therapy workflow solutions, spatial biology products, liquid biopsy technologies, and diagnostic reagents position Bio-Techne to successfully penetrate these markets. We will continue to execute our strategic growth plan, manage through any shorter-term regional economic turbulence, and create value for our stakeholders."
The firm also announced a fiscal Q1 dividend of $.32 per share, payable Nov. 28 to common shareholders of record on Nov. 14. The board of directors approved a 4-for-1 split of Bio-Techne's common stock in the form of a stock dividend to make stock ownership more accessible to employees and investors, the company said in a statement. Each stockholder of record on Nov. 14 will receive a dividend of three additional shares of common stock for each then-held share, to be distributed after the close of the market on Nov. 29. Trading will begin on a stock split-adjusted basis on Nov. 30.
In Tuesday afternoon trading on the Nasdaq, Bio-Techne shares were up around 3 percent at $305.69.