BIO-TECHNE Corp

Note 1. Basis of Presentation and Summary of Significant Accounting Policies:

The interim Condensed Consolidated Financial Statements of Bio-Techne Corporation and subsidiaries, (the Company) presented here have been prepared by the Company and are unaudited. They have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) and with instructions to Form 10-Q and Article 10 of Regulation S-X. They reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. All such adjustments are of a normal recurring nature.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These interim unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company's Consolidated Financial Statements and Notes thereto for the fiscal year ended June 30, 2026, included in the Company's Annual Report on Form 10-K for fiscal 2026. A summary of significant accounting policies followed by the Company is detailed in the Company's Annual Report on Form 10-K for fiscal 2026. The Company follows these policies in preparation of the interim unaudited Condensed Consolidated Financial Statements.

Contingencies: In June 2026, the Company entered into the Agreement and Plan of Merger (the “Merger Agreement”), with Merck KGaA, Darmstadt, Germany, a German corporation with general partners (“Parent”), and EMD Holdings NewCo, Inc., a Minnesota corporation and a wholly-owned subsidiary of Parent (“Merger Sub”). The Merger Agreement provides that, on the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving as a wholly-owned subsidiary of Parent. On September 23, 2026, the Company’s shareholders voted to approve the Merger Agreement under which Parent proposes to acquire the Company. The Merger is expected to close by late 2026 or early 2027, subject to satisfaction of additional customary closing conditions. For further information regarding this contingency, refer to Note 1 of the Company’s Annual Report on Form 10-K for the year ended June 30, 2026.

Investments: In September 2025, the Company received MDxHealth SA (“MDxHealth”) stock as part of our divestiture of Exosome Diagnostics. The fair value of the stock is included within Other current assets on the Condensed Consolidated Balance Sheets. Refer to Note 5 for the fair market valuation for the periods presented.

In July 2024, the Company paid $15 million to enter into an investment in Spear Bio. This investment is accounted for under the cost-method as we own less than 20% of the outstanding stock and we concluded that we do not have significant influence. Under the cost-method, the fair value is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. No such events or changes in circumstances were identified in the period ended September 30, 2026 and 2025. The Company’s total investment of $15 million is included within Other assets on the Condensed Consolidated Balance Sheets.

Equity method investments: 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 is 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.

Since the first part of the forward contract has been triggered, the second part of the forward contract will automatically trigger, which 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.

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. There have been no material changes since the filing of the Company's Annual Report on Form 10-K for fiscal 2026.

Litigation charges were immaterial during the quarters ended September 30, 2026 and 2025. 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 Condensed 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.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issuedASU 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 adopted this guidance beginning with our annual report for fiscal 2026 and thereafter on a prospective basis. Refer to Note 12 for income tax reporting disclosures on the Company’s Annual Report on Form 10-K for fiscal 2026.

Relevant New Standards Issued Not Yet Adopted

In November 2024, the FASB issuedASU 2024-03, Income Statement –Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires incremental disclosures on purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other expenses. The Company will adopt this guidance beginning with our annual report for fiscal 2028. This accounting standard will increase disclosures in the Company’s annual reporting but will have no impact on reported income statement expenses.

In August 2025, the FASB issuedASU 2025-05, Financial Instruments–Credit Losses (Topic 326), which requires incremental disclosures on estimating expected credit losses. The Company will adopt this guidance beginning with our annual report for fiscal 2027. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In September 2025, the FASB issuedASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), which requires incremental disclosures on recording intangibles for internal-use software. The Company will adopt this guidance beginning with our annual report for fiscal 2029. 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 unaudited Condensed 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 September 30, 2026 and June 30, 2026.

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 Condensed Consolidated Balance Sheets 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 September 30, 2026 and June 30, 2026 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 September 30, 2026 and June 30, 2026 were approximately $34.7 million and $38.4 million, respectively. Contract liabilities as of June 30, 2026 subsequently recognized as revenue during the quarter ended September 30, 2026 were approximately $15.1 million. Contract liabilities as of June 30, 2025 subsequently recognized as revenue during the quarter ended September 30, 2025 were approximately $13.2 million. Contract liabilities in excess of one year are included in Other long-term liabilities on the Condensed Consolidated Balance Sheets.

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):

Revenue by geography is as follows (in thousands):

Note 3. Selected Balance Sheet Data:

Inventories:

Inventories consist of (in thousands):

Property and Equipment:

Property and equipment consist of (in thousands):

Intangible Assets:

Intangible assets consist of (in thousands):

Changes to the carrying amount of net intangible assets for the period ended September 30, 2026 consist of (in thousands):

The estimated future amortization expense for intangible assets as of September 30, 2026 is as follows (in thousands):

Goodwill:

Changes to the carrying amount of goodwill for the period ended September 30, 2026 consist of (in thousands):

We evaluate the carrying value of goodwill in the fourth quarter of each fiscal year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. The Company performed a qualitative goodwill impairment assessment for all of its reporting units during the fourth quarter of fiscal 2026. No indicators of impairment were identified as part of our assessment.

Other assets:

Other assets consist of (in thousands):

Note** 4**. Fair Value Measurements:

The Company’s financial instruments include cash and cash equivalents, available for sale investments, derivative instruments, accounts receivable, notes receivable, accounts payable, 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):

(1)Exchange traded securities received from the buyer in the sale of Exosome Diagnostics.

(2)Notes receivable relate to the divestiture of our businesses held-for-sale.

(2)Notes receivable relate to the divestiture of our businesses held-for-sale.

Fair value measurements of available for sale securities

Exchange traded 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 notes receivable

The Company had $10.3 million and $11.5 million in notes receivable as of September 30, 2026 and June 30, 2026, respectively, for the businesses held-for-sale in the Protein Sciences segment and Diagnostics and Spatial Biology segment. The change in fair value is included in Other non-operating income (expense) within our Consolidated Statements of Earnings and Comprehensive Income.

The following table presents a reconciliation of the notes receivable measured on a recurring basis using significant unobservable inputs (Level 3) (in thousands):

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 notes receivable, currently and in the future. The Company primarily estimates the fair value of its notes receivable using a discounted cash flow model that has been internally developed. The models use inputs, such as estimated losses and discount rates, that are unobservable but reflect the Company’s best estimates of the assumptions a market participant would use to calculate fair value. For additional information on the Company’s policy on fair value assessments, refer to Note 1 of the Company’s Annual Report on Form 10-K for the year ended June 30, 2026.

Fair value measurements of derivative instruments

The Company 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):

The pretax amount of the gains and losses on our hedging instruments and the classification of those gains and losses within our Condensed Consolidated Financial Statements for the quarters ended September 30, 2026 and 2025 were as follows (in thousands):

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 7, 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 7.

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 Condensed Consolidated Balance Sheets approximate fair value because of the short-term nature of these items.

Short-term and long-term debt – The carrying amounts reported in the Condensed Consolidated Balance Sheets for the amount drawn on our line-of-credit facility and short-term and long-term debt approximates fair value because our interest rate is variable and reflects current market rates.

Note 5. Debt and Other Financing Arrangements:

On August 31, 2022, the Company entered into a revolving line-of-credit and term loan governed 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 September 30, 2026 and June 30, 2026, the outstanding balance under the Credit Agreement was $200.0 million.

Note 6. 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 ofASC 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.

The Condensed Consolidated Financial Statements include the following amounts related to operating leases where the Company is the lessee (in thousands, except weighted average):

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

Certain leases include one or more options to renew, with terms that extend the lease term up tofive years. Bio-Techne includes the 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, Bio-Techne is not reasonably certain to exercise such options.

Note 7. Supplemental Equity and Accumulated Other Comprehensive Income (Loss):

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. The accumulated balances related to each component of Other comprehensive income (loss) are summarized as follows (in thousands):

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 8. Earnings Per Share:

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

The dilutive effect of stock options and restricted stock units 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 3.0 million and 6.5 million for the quarters ended September 30, 2026 and 2025, respectively.

Note 9. Share-based Compensation:

During the quarter ended September 30, 2026, no stock options were granted. During the quarter ended September 30, 2025, the Company granted 0.9 million stock options at a weighted average grant price of $53.60 and a weighted average fair value of $18.86. During the quarters ended September 30, 2026 and 2025, the Company granted 0.7 million and 0.6 million restricted stock units at a weighted average fair value of $72.39 and $53.60, respectively. During the quarters ended September 30, 2026 and 2025, the Company didnot grant restricted common stock awards.

Stock options for 0.9 million and 1.4 million shares of common stock with total intrinsic values of $21.1 million and $18.8 million were exercised during the quarters ended September 30, 2026 and 2025, respectively.

Stock-based compensation expense, inclusive of payroll taxes, of $14.0 million and $11.7 million was included in Selling, general and administrative expenses for the quarters ended September 30, 2026 and 2025, respectively. Additionally, the Company recognized $0.4 million of stock-based compensation costs, inclusive of payroll taxes, in Cost of sales for the quarters ended September 30, 2026 and 2025. As of September 30, 2026, there was $66.8 million of unrecognized compensation cost related to non-vested stock options, non-vested restricted stock units and non-vested restricted stock. The weighted average period over which the compensation cost is expected to be recognized is 1.7 years.

Note 10. Other Income / (Expense):

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

Note 11. Income Taxes:

The Company’s effective income tax rate for the first quarter of fiscal 2027 and 2026 was 18.4% and 20.4%, respectively, of consolidated earnings before income taxes, inclusive of discrete items. The change in the Company’s tax rate for the quarter ended September 30, 2026 compared to September 30, 2025 was driven by a mix of net income and timing of discrete items. The Company recognized total net benefits related to discrete tax items of $1.8 million during the quarter ended September 30, 2026, compared to $3.6 million of net benefits during the quarter ended September 30, 2025. Share-based compensation excess tax benefit contributed $1.9 million in the quarter ended September 30, 2026, compared to $0.5 million in the quarter ended September 30, 2025.

Note 12. Segment Information:

The Company's management evaluates segment operating performance based on Operating income before certain charges to Cost of sales and Selling, general and administrative expenses, principally associated with the impact of partially-owned consolidated subsidiaries as well as acquisition accounting related to inventory, amortization of acquisition-related intangible assets and other acquisition-related expenses. The Protein Sciences and Diagnostics and Spatial Biology segments both include consumables, instruments, services, and royalty revenue.

The following is financial information relating to the Company's reportable segments (in thousands):

(1)Includes the quarterly results of a business that has met the held-for-sale criteria as of June 30, 2025.

Note 13. Restructuring:

Fiscal 2026 Restructuring Actions:

During the fourth quarter, management engaged in a series of restructuring activities to optimize certain reporting structures and internal functions. These activities included a focus on a streamlined brand architecture, realignment of functions supporting the different brands, including operations, and our people. The Company is expecting to incur costs related to these actions through fiscal 2027, which will be recorded when specified criteria are met.

The restructuring and restructuring-related changes for periods presented were recorded in the Consolidated Statements of Earnings and Comprehensive Income as follows (in thousands):

(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):

The following table summarizes the changes in the Company’s accrued restructuring balance, which is included within Accrued expenses in the accompanying Consolidated Balance Sheets. Other amounts reported as restructuring and restructuring-related costs in the accompanying Consolidated Statements of Earnings and Comprehensive Income have been summarized in the notes to the table (in thousands):

Fiscal 2025 Restructuring Actions:

During the fourth quarter of fiscal 2025, management engaged in a series of restructuring activities to optimize components of our global manufacturing processes. These activities included adjusting manufacturing locations and protocols of certain products to better align with geographical and customer demand. The Company is expecting to incur costs related to these actions through fiscal 2027, which will be recorded when specified criteria are met.

As part of these actions, certain assets and liabilities associated with the Exosome Diagnostics business were classified as held-for-sale, including $4.5 million of goodwill allocated on a relative fair value basis at June 30, 2025. As a result of an impairment test performed during fiscal 2025, a cumulative impairment charge of $83.1 million was recorded. During the quarter ended September 30, 2025, the Company entered into an agreement with a buyer to purchase the Exosome Diagnostics business for approximately $15.0 million, with approximately $6.8 million in stock received at closing. Additionally, we recognized a recovery of assets held-for-sale of $6.8 million during the quarter ended September 30, 2025 recorded within Selling, general, and administrative on the Condensed Consolidated Statements of Earnings. As part of the agreement, the Company and the buyer entered into a promissory note that will mature in September 2029 that requires the buyer to payfour annual installments of $2.5 million, of which up to $5.0 million is payable in the stock of the buyer, MDxHealth. The fair value of the note receivable is included within Other current assets and Other assets on the Condensed Consolidated Balance Sheets.

The restructuring and restructuring-related charges for periods presented were recorded in the Condensed Consolidated Statements of Earnings and Comprehensive Income as follows (in thousands):

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

The following table summarizes the changes in the Company’s accrued restructuring balance, which is included within Accrued expenses in the accompanying Condensed Consolidated Balance Sheets. Other amounts reported as restructuring and restructuring-related costs in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income have been summarized in the notes to the table (in thousands):

(1)Relates to impacted employees’ final paycheck, separation payments, outplacement services, legal fees, and retention packages.

Note 14. Subsequent Events:

None.