BIO-TECHNE Corp

Previous wording

Consistent with the prior year, we have operated with two segments – our Protein Sciences segment and our Diagnostics and Genomics segment – during the second quarter of fiscal 2024. Our Protein Sciences segment is a leading developer and manufacturer of high-quality purified proteins and reagent solutions, most notably cytokines and growth factors, antibodies, immunoassays, biologically active small molecule compounds, tissue culture reagents and T-Cell activation technologies. This segment also includes protein analysis solutions that offer researchers efficient and streamlined options for automated western blot and multiplexed ELISA workflow. Our Diagnostics and Genomics segment develops and manufactures diagnostic products, including FDA-regulated controls, calibrators, blood gas and clinical chemistry controls and other reagents for OEM and clinical customers, as well as a portfolio of clinical molecular diagnostic oncology assays, including the ExoDx®Prostate (IntelliScore) test (EPI) for prostate cancer diagnosis. This segment also manufactures and sells advanced tissue-based in-situ hybridization assays (ISH) for research and clinical use.

Current wording

Consistent with the prior year, we have operated with two segments – our Protein Sciences segment and our Diagnostics and Genomics segment – during the third quarter of fiscal 2024. Our Protein Sciences segment is a leading developer and manufacturer of high-quality purified proteins and reagent solutions, most notably cytokines and growth factors, antibodies, immunoassays, biologically active small molecule compounds, tissue culture reagents and T-Cell activation technologies. This segment also includes protein analysis solutions that offer researchers efficient and streamlined options for automated western blot and multiplexed ELISA workflow. Our Diagnostics and Genomics segment develops and provides spatial biology products, including advanced tissue-based in-situ hybridization assays (ISH) and instrumentation for research and clinical use. This segment also develops and manufactures diagnostic products, including FDA-regulated controls, calibrators, blood gas and clinical chemistry controls and other reagents for OEM and clinical customers, as well as a portfolio of clinical molecular diagnostic oncology assays, including the ExoDx®Prostate (IntelliScore) test (EPI) for prostate cancer diagnosis.

Previous wording

Consolidated net sales remained flat and increased 2% for the quarter and six months ended December 31, 2023, respectively, compared to the same prior year periods. Organic revenue for the quarter ended December 31, 2023 declined 2% compared to the prior year with acquisitions and foreign currency exchange both having a favorable 1% impact. Organic revenue for the six months ended December

Current wording

Consolidated net sales increased 3% and 2% for the quarter and nine months ended March 31, 2024, respectively, compared to the same prior year periods. Organic revenue for the quarter ended March 31, 2024 increased 2% compared to the prior year with acquisitions contributing 1% impact. Foreign currency exchange and a business held-for-sale did not have a material impact. Organic revenue for the nine months ended March 31, 2024 remained flat compared to the same prior year period with acquisitions and foreign currency exchange each having a favorable impact of 1%. A business held-for-sale did not have a material impact.

Previous wording

Consolidated net earnings attributable to Bio-Techne decreased to $27.5 million for the quarter ended December 31, 2023 as compared to $50.0 million for the quarter ended December 31, 2022. The decrease in net earnings attributable to Bio-Techne is primarily due to an impairment of assets held-for-sale, restructuring charges, the Lunaphore acquisition, unfavorable volume, and product mix. Consolidated net earnings attributable to Bio-Techne decreased to $78.5 million for the six months ended December 31, 2023 as compared to $139.6 million for the six months ended December 31, 2022. Prior year net earnings attributable to Bio-Techne was favorably impacted by a non-recurring gain of $37.2 million on the sale of our ChemoCentryx investment and a non-recurring gain of $11.7 million on the sale of our Eminence investment.

Current wording

Consolidated net earnings attributable to Bio-Techne decreased to $49.1 million for the quarter ended March 31, 2024 as compared to $70.2 million for the quarter ended March 31, 2023. The decrease in net earnings attributable to Bio-Techne is primarily due to the acquisition of Lunaphore, CEO transition and restructuring charges, and unfavorable volume within Protein Sciences. Consolidated net earnings attributable to Bio-Techne decreased to $127.5 million for the nine months ended March 31, 2024 as compared to $209.8 million for the nine months ended March 31, 2023. Prior year net earnings attributable to Bio-Techne was favorably impacted by a non-recurring gain of $37.2 million on the sale of our ChemoCentryx investment and a non-recurring gain of $11.7 million on the sale of our Eminence investment.

Previous wording

Consolidated net sales for the quarter ended December 31, 2023 remained flat at $272.6 million compared to the same prior year period. Consolidated net sales for the six months ended December 31, 2023 were $549.5 million, an increase of 2% from the same prior year period. Organic revenue for the quarter ended December 31, 2023 declined 2% compared to the prior year with acquisitions and foreign currency exchange both having favorable impact of 1%. Organic revenue for the six months ended December 31, 2023 remained flat compared to the prior year same period with acquisitions and foreign currency exchange both having a favorable impact of 1%. Organic revenue for the quarter and six months ended December 31, 2023 was primarily driven by lower sales from biotech customers and from customers in China.

Current wording

Consolidated net sales for the quarter ended March 31, 2024 increased 3% at $303.4 million compared to the same prior year period. Consolidated net sales for the nine months ended March 31, 2024 were $853.0 million, an increase of 2% from the same prior year period. Organic revenue for the quarter ended March 31, 2024 increased 2% compared to the prior year with acquisitions contributing 1%. Foreign currency exchange and a business held-for-sale did not have a material impact. Organic revenue for the nine months ended March 31, 2024 remained flat compared to the prior year same period with acquisitions and foreign currency exchange each having a favorable impact of 1%. A business held-for-sale did not have a material impact. Organic revenue for the quarter and nine months ended March 31, 2024 was primarily driven by higher sales within the Diagnostics & Genomics segment, partially offset by lower sales from customers in China and Europe within the Protein Sciences segment.

Previous wording

Consolidated gross margins for the quarter and six months ended December 31, 2023 were 64.8% and 65.8% respectively, compared to 67.5% and 67.1% for the same prior year periods. Under purchase accounting, inventory is valued at fair value less expected selling and marketing costs, resulting in reduced margins in future periods as the inventory is sold. Excluding the impact of costs recognized upon the sale of acquired inventory, stock compensation expense, amortization of intangibles, restructuring and restructuring-related expenses, and impact of partially-owned consolidated subsidiaries, adjusted gross margins for the quarter and six months ended December 31, 2023 were 69.7% and 70.5%, respectively compared to 71.7% and 71.3% for the quarter and six months ended December 31, 2022, respectively. Both consolidated gross margins and non-GAAP adjusted gross margins for the quarter and six months ended December 31, 2023 were impacted by unfavorable volume and product mix as well as the acquisition of Lunaphore.

Current wording

Consolidated gross margins for the quarter and nine months ended March 31, 2024 were 67.4% and 66.4% respectively, compared to 68.7% and 67.6% for the same prior year periods. Under purchase accounting, inventory is valued at fair value less expected selling and marketing costs, resulting in reduced margins in future periods as the inventory is sold. Excluding the impact of costs recognized upon the sale of acquired inventory, amortization of intangibles, stock compensation expense, restructuring and restructuring-related expenses, impact of partially-owned consolidated subsidiaries, and the impact of a business held-for-sale, adjusted gross margins for the quarter and nine months ended March 31, 2024 were 71.9% and 71.0%, respectively compared to 72.6% and 71.8% for the quarter and nine months ended March 31, 2023, respectively. Both consolidated gross margins and non-GAAP adjusted gross margins for the quarter and nine months ended March 31, 2024 were impacted by unfavorable volume and the acquisition of Lunaphore.

Previous wording

A reconciliation of the reported consolidated gross margin percentages, adjusted for acquired inventory sold, intangible amortization, stock compensation expense, and impact of partially-owned consolidated subsidiaries included in cost of sales, is as follows:

Current wording

A reconciliation of the reported consolidated gross margin percentages, adjusted for acquired inventory sold, intangible amortization, stock compensation expense, restructuring and restructuring-related charges, the impact of partially-owned consolidated subsidiaries, and the impact of a business held-for-sale included in cost of sales, is as follows:

Previous wording

Selling, general and administrative expenses increased 24% to $115.7 million and increased 15% to $221.0 million for the quarter and six months ended December 31, 2023, respectively, from the same prior year periods. The increase in expense for the quarter and six

Current wording

Selling, general and administrative expenses increased 13% to $111.8 million and increased 14% to $332.8 million for the quarter and nine months ended March 31, 2024, respectively, from the same prior year periods. The increase in expense for the quarter and nine months ended March 31, 2024 was primarily due to the Lunaphore acquisition, CEO transition costs, and restructuring-related charges. The nine months ended March 31, 2024 was also impacted by an impairment of assets held-for-sale.

Previous wording

Research and development expenses increased 2% to $22.9 million and increased 1% to $46.9 million for the quarter and six months ended December 31, 2023, respectively, from the same prior year periods. The increase in expense was due to the timing of strategic growth investments.

Current wording

Research and development expenses increased 13% to $25.8 million and increased 5% to $72.7 million for the quarter and nine months ended March 31, 2024, respectively, from the same prior year periods. The increase in expense was due to the acquisition of Lunaphore and timing of strategic growth investments.

Previous wording

Protein Sciences’ net sales for the quarter and six months ended December 31, 2023 were $197.7 million and $402.3 million, respectively, with results decreasing 3% and remaining flat, respectively, compared to the same respective prior year periods. Organic revenue for the segment declined 4% for the quarter ended December 31, 2023, with foreign currency exchange having a favorable impact of 1%. Organic growth for the segment declined 1% for the six months ended December 31, 2023, with foreign currency exchange having a favorable impact of 1%. Segment revenue was impacted by unfavorable volume.

Current wording

Protein Sciences’ net sales for the quarter and nine months ended March 31, 2024 were $214.6 million and $616.9 million, respectively, with results decreasing 2% and 1%, respectively, compared to the same respective prior year periods. As of December 31, 2023, a business within the Protein Sciences Segment met the criteria as held-for-sale; this held-for-sale business has been excluded from the segment’s third quarter fiscal operating results. The exclusion of current period sales related to this business held-for-sale reduced sales by 1%. Organic revenue for the segment declined 1% and foreign currency exchange did not have a material impact for the quarter ended March 31, 2024. Organic growth for the segment declined 1% for the nine months ended March 31, 2024. The held-for-sale business and foreign currency exchange did not have a material impact. Segment revenue was impacted by lower sales from customers in China and Europe.

Previous wording

The operating margin was 40.3% and 41.7% for the quarter and six months ended December 31, 2023, respectively, compared to 43.8% and 43.6% in both comparative prior year periods. The segment’s operating margin impacted by unfavorable volume and product mix.

Current wording

The operating margin was 44.2% and 42.6% for the quarter and nine months ended March 31, 2024, respectively, compared to 45.1% and 44.1% in both comparative prior year periods. The segment’s operating margin was impacted by unfavorable volume leverage and product mix.

Previous wording

Diagnostics and Genomics' net sales for the quarter and six months ended December 31, 2023 were $75.4 million and $148.2 million, respectively, with increased net sales of 11% and 7% compared to the same respective prior year periods. Organic growth for the segment for the quarter ended December 31, 2023 was 5% from the prior year, with acquisitions contributing 5% and foreign currency exchange having a favorable impact of 1%. Organic growth for the six months ended December 31, 2023 was 3% compared to the prior year, with acquisitions contributing 4% and foreign currency exchange having an immaterial impact. Segment results were driven by Spatial Biology and Molecular Diagnostics products, as well as the Lunaphore acquisition.

Current wording

Diagnostics and Genomics' net sales for the quarter and nine months ended March 31, 2024 were $87.5 million and $235.7 million, respectively, with increased net sales of 16% and 10% compared to the same respective prior year periods. Organic growth for the segment for the quarter ended March 31, 2024 was 10% from the prior year, with acquisitions contributing 6% and foreign currency exchange not having a material impact. Organic growth for the nine months ended March 31, 2024 was 5% compared to the prior year, with acquisitions contributing 5% and foreign currency exchange not having a material impact. Segment results were driven by Spatial Biology and Molecular Diagnostics products, as well as the Lunaphore acquisition.

Previous wording

The operating margin for the segment was 6.0% and 3.4% for the quarter and six months ended December 31, 2023, respectively, compared to 12.2% and 12.3% in both comparative prior year periods. The segment’s operating margin was unfavorably impacted due to the acquisition of Lunaphore.

Current wording

The operating margin for the segment was 9.3% and 5.6% for the quarter and nine months ended March 31, 2024, respectively, compared to 15.2% and 13.3% in both comparative prior year periods. The segment’s operating margin was unfavorably impacted due to the acquisition of Lunaphore.

Previous wording

Income taxes were at an effective rate of 17.7% and 5.4% of consolidated earnings for the quarter and six month period ended December 31, 2023, respectively, compared to 24.7% and 17.9% for the same respective prior year periods. The change in the Company’s tax rate for the quarter and six months ended December 31, 2023 was driven by the composition and amount of net income across periods and the impact of discrete tax benefits of $2.8 million and $16.3 million, respectively, compared to prior year discrete tax expense of $4.6 million and benefit of $3.2 million as further discussed in Note 12.

Current wording

Income taxes were at an effective rate of 19.7% and 11.5% of consolidated earnings for the quarter and nine month period ended March 31, 2024, respectively, compared to 12.4% and 16.1% for the same respective prior year periods. The change in the Company’s tax rate for the quarter and nine months ended March 31, 2024 was driven by the composition and amount of net income across periods and the impact of discrete tax benefits of $1.8 million and $16.6 million, respectively, compared to prior year discrete tax benefits of $5.7 million and $8.9 million as further discussed in Note 12.

Previous wording

The forecasted tax rate as of the second fiscal quarter of 2024 before discrete items is 23.4% compared to the prior year forecasted tax rate before discrete items of 21.2%. Excluding the impact of discrete items, the Company expects the consolidated income tax rate for the remainder of fiscal 2024 to range from 23% to 27%.

Current wording

The forecasted tax rate as of the third fiscal quarter of 2024 before discrete items is 23.0% compared to the prior year forecasted tax rate before discrete items of 20.6%. Excluding the impact of discrete items, the Company expects the consolidated income tax rate for the remainder of fiscal 2024 to range from 23% to 27%.

Previous wording

Depending on the nature of discrete tax items, our reported tax rate may not be consistent on a period-to-period basis. The Company independently calculates a non-GAAP adjusted tax rate considering the impact of discrete items and jurisdictional mix of the identified non-GAAP adjustments. The following table summarizes the reported GAAP tax rate and the effective non-GAAP adjusted tax rate for the quarter and six months ended December 31, 2023 and December 31, 2022.

Current wording

Depending on the nature of discrete tax items, our reported tax rate may not be consistent on a period-to-period basis. The Company independently calculates a non-GAAP adjusted tax rate considering the impact of discrete items and jurisdictional mix of the identified non-GAAP adjustments. The following table summarizes the reported GAAP tax rate and the effective non-GAAP adjusted tax rate for the quarter and nine months ended March 31, 2024 and March 31, 2023.

Previous wording

Cash and cash equivalents and available-for-sale investments were $135.7 million as of December 31, 2023, compared to $204.3 million as of June 30, 2023. Included in the available-for-sale-investments as December 31, 2023 is $5.5 million of short-term certificates of deposit. Included in the available-for-sale investments as of June 30, 2023 was the fair value of the Company’s investment in exchange traded investment grade bond funds of $23.7 million. During the first fiscal quarter of 2024, the Company sold its investment in exchange traded investment grade bond funds.

Current wording

Cash and cash equivalents and available-for-sale investments were $145.3 million as of March 31, 2024, compared to $204.3 million as of June 30, 2023. Included in the available-for-sale-investments as March 31, 2024 is $5.4 million of short-term certificates of deposit. Included in the available-for-sale investments as of June 30, 2023 was the fair value of the Company’s investment in exchange traded investment grade bond funds of $23.7 million. During the first fiscal quarter of 2024, the Company sold its investment in exchange traded investment grade bond funds.

Previous wording

The Company has a line-of-credit governed by a Credit Agreement dated August 31, 2022 that will mature on August 1, 2027. This Credit Agreement amended and restated the Company’s previous credit agreement that was entered into on August 1, 2018 and would have matured on August 1, 2023. As of December 31, 2023, there is $553 million available on the line-of-credit. See Note 6 to the Condensed Consolidated Financial Statements for a description of the Credit Agreement.

Current wording

The Company has a line-of-credit governed by a Credit Agreement dated August 31, 2022 that will mature on August 1, 2027. This Credit Agreement amended and restated the Company’s previous credit agreement that was entered into on August 1, 2018 and would have matured on August 1, 2023. As of March 31, 2024, there is $611 million available on the line-of-credit. See Note 6 to the Condensed Consolidated Financial Statements for a description of the Credit Agreement.

Previous wording

The Company generated cash of $142.5 million from operating activities in the six months ended December 31, 2023 compared to $120.5 million in the six months ended December 31, 2022. The increase from the prior year was primarily due to favorable timing of payments on certain operating assets and liabilities.

Current wording

The Company generated cash of $223.5 million from operating activities in the nine months ended March 31, 2024 compared to $171.0 million in the nine months ended March 31, 2023. The increase from the prior year was primarily due to favorable timing of payments on certain operating assets and liabilities.

Previous wording

Capital expenditures for fixed assets for the six months ended December 31, 2023 and December 31, 2022 were $28.5 million and $15.7 million, respectively. Capital expenditures for the remainder of fiscal 2024 are expected to be approximately $26 million. Capital expenditures are expected to be financed through currently available funds and cash generated from operating activities. Expected additions in fiscal 2024 are related to increasing capacity to meet expected sales growth across the Company.

Current wording

Capital expenditures for fixed assets for the nine months ended March 31, 2024 and March 31, 2023 were $44.9 million and $27.4 million, respectively. Capital expenditures for the remainder of fiscal 2024 are expected to be approximately $16 million. Capital expenditures are expected to be financed through currently available funds and cash generated from operating activities. Expected additions in fiscal 2024 are related to increasing capacity to meet expected sales growth across the Company.

Previous wording

During the first fiscal quarter of 2024, the Company acquired Lunaphore Technologies SA for $169.7 million, compared to the acquisition of Namocell, Inc for $101.2 million, net of cash acquired, in the comparative prior year period. There was a net working capital payment to the Lunaphore shareholders as part of the acquisition of $3.3 million during the quarter ended December 31, 2023.

Current wording

During the first fiscal quarter of 2024, the Company acquired Lunaphore Technologies SA for $169.7 million, compared to the acquisition of Namocell, Inc for $101.2 million, net of cash acquired, in the comparative prior year period.

Previous wording

During the six months ended December 31, 2022, the Company sold its remaining shares in Eminence, its partially-owned consolidated subsidiary, for $17.8 million. There were no comparable transactions in the six months ended December 31, 2023.

Current wording

During the nine months ended March 31, 2023, the Company sold its remaining shares in Eminence, its partially-owned consolidated subsidiary, for $17.8 million. There were no comparable transactions in the nine months ended March 31, 2024.

Previous wording

During the first fiscal quarter of 2024, the Company sold itsexchange traded investment grade bond funds for $23.8 million. In the first fiscal quarter of 2023, the Company sold its remaining shares in its investment in CCXI for $73.2 million. The Company also sold certificates of deposit for $26.5 million during the six months ended December 31, 2022.

Current wording

During the first fiscal quarter of 2024, the Company sold itsexchange traded investment grade bond funds for $23.8 million. In the first fiscal quarter of 2023, the Company sold its remaining shares in its investment in CCXI for $73.2 million. The Company also sold certificates of deposit for $29.2 million during the nine months ended March 31, 2023.

Previous wording

During the six months ended December 31, 2023 and December 31, 2022, purchase of available-for-sale investments was $5.5 million and $20.5 million, respectively.

Current wording

During the nine months ended March 31, 2024 and March 31, 2023, purchase of available-for-sale investments was $5.5 million and $20.5 million, respectively.

Previous wording

During the first fiscal quarter of 2024, the Company received a $2.1 million tax distribution from its equity method investee. There were no comparable activities in the comparative period.

Current wording

During the first fiscal quarter of 2024, the Company received a $2.1 million tax distribution from Wilson Wolf, its equity method investee. In the comparative prior period, the Company made its first option payment of $232 million to purchase 19.9% ownership in Wilson Wolf.

Previous wording

During the six months ended December 31, 2023 and December 31, 2022, the Company paid cash dividends of $25.2 million and $25.1 million, respectively, to all common shareholders. On February 1, 2024, the Company announced the payment of an $0.08 per share cash dividend, or approximately $12.6 million, will be payable February 26, 2024, to all common shareholders of record on February 12, 2024.

Current wording

During the nine months ended March 31, 2024 and March 31, 2023, the Company paid cash dividends of $37.8 million and $37.7 million, respectively, to all common shareholders. On May 1, 2024, the Company announced the payment of an $0.08 per share cash dividend, or approximately $12.6 million, will be payable May 24, 2024, to all common shareholders of record on May 13, 2024.

Previous wording

Cash of $19.7 million and $17.0 million was received during the six months ended December 31, 2023 and December 31, 2022, respectively, from the exercise of stock options.

Current wording

Cash of $38.0 million and $21.4 million was received during the nine months ended March 31, 2024 and March 31, 2023, respectively, from the exercise of stock options.

Previous wording

During the six months ended December 31, 2023 and December 31, 2022, the Company made repayments of $128.0 million and $505.7 million, respectively, on its long-term debt balance. The Company drew $225.0 million and $449.7 million under its revolving line-of-credit facility during the six months ended December 31, 2023 and December 31, 2022, respectively.

Current wording

During the nine months ended March 31, 2024 and March 31, 2023, the Company made repayments of $186.0 million and $505.7 million, respectively, on its long-term debt balance. The Company drew $225.0 million and $619.7 million under its revolving line-of-credit facility during the nine months ended March 31, 2024 and March 31, 2023, respectively.

Previous wording

There were $80.0 million of share repurchases during the six months ended December 31, 2023 included as a cash outflow within financing activities. During the six months ended December 31, 2022, the Company repurchased $19.6 million in share repurchases included as a cash outflow within financing activities.

Current wording

There were $80.0 million of share repurchases during the nine months ended March 31, 2024 included as a cash outflow within financing activities. During the nine months ended March 31, 2023, the Company repurchased $19.6 million in share repurchases included as a cash outflow within financing activities.

Previous wording

During the six months ended December 31, 2023 and December 31, 2022, the Company paid $21.3 million and $17.9 million related to taxes on restricted stock units and stock options exercised through net share settlements classified as financing activities.

Current wording

During the nine months ended March 31, 2024 and March 31, 2023, the Company paid $21.5 million and $28.9 million related to taxes on restricted stock units and stock options exercised through net share settlements classified as financing activities.

Previous wording

The decrease in other financing activity during the six months ended December 31, 2023 compared to the six months ended December 31, 2022 is primarily related to fees for the amended Credit Agreement that occurred in the first quarter of fiscal 2023. There were no such payments during the six months ended December 31, 2023.

Current wording

The decrease in other financing activity during the nine months ended March 31, 2024 compared to the nine months ended March 31, 2023 is primarily related to fees for the amended Credit Agreement that occurred in the first quarter of fiscal 2023. There were no such payments during the nine months ended March 31, 2024.

Previous wording

The Company's significant accounting policies are discussed in the Company's Annual Report on Form 10-K for fiscal 2023 and are incorporated herein by reference. The application of certain of these policies requires judgments and estimates that can affect the results of operations and financial position of the Company. Judgments and estimates are used for, but not limited to, valuation of available-for-sale investments, inventory valuation and allowances, valuation of intangible assets and goodwill and valuation of investments in unconsolidated entities. There have been no significant changes in estimates in the quarter or six months ended December 31, 2023 that would require disclosure nor have there been any changes to the Company's policies.

Current wording

The Company's significant accounting policies are discussed in the Company's Annual Report on Form 10-K for fiscal 2023 and are incorporated herein by reference. The application of certain of these policies requires judgments and estimates that can affect the results of operations and financial position of the Company. Judgments and estimates are used for, but not limited to, valuation of available-for-sale investments, inventory valuation and allowances, valuation of intangible assets and goodwill and valuation of investments in unconsolidated entities. There have been no significant changes in estimates in the quarter or nine months ended March 31, 2024 that would require disclosure nor have there been any changes to the Company's policies.

Previous wording

We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We

Current wording

We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.

Previous wording

Our non-GAAP financial measure of organic revenue represents revenue growth excluding revenue from acquisitions within the preceding 12 months, the impact of foreign currency, as well as the impact of partially-owned consolidated subsidiaries. Excluding these measures provides more useful period-to-period comparison of revenue results as it excludes the impact of foreign currency exchange rates, which can vary significantly from period to period, and revenue from acquisitions that would not be included in the comparable prior period. Revenues from partially-owned subsidiaries consolidated in our financial statements are also excluded from our organic revenue calculation, as those revenues are not fully attributable to the Company. There was no revenue from partially-owned consolidated subsidiaries for the quarter ended December 31, 2023 due to the sale of Changzhou Eminence Biotechnology Co., Ltd. (Eminence) in the first quarter of fiscal 2023. Revenue from partially-owned consolidated subsidiaries was $2.0 million for the six months ended December 31, 2022.

Current wording

Our non-GAAP financial measure of organic revenue represents revenue growth excluding revenue from acquisitions within the preceding 12 months, the impact of foreign currency, the impact of businesses held-for-sale, as well as the impact of partially-owned consolidated subsidiaries. Excluding these measures provides more useful period-to-period comparison of revenue results as it excludes the impact of foreign currency exchange rates, which can vary significantly from period to period, and revenue from acquisitions that would not be included in the comparable prior period. Revenues from businesses held-for-sale are excluded from our organic revenue calculation starting on the date they become held-for-sale as those revenues will not be comparative in future periods. Revenues from partially-owned subsidiaries consolidated in our financial statements are also excluded from our organic revenue calculation, as those revenues are not fully attributable to the Company. There was no revenue from partially-owned consolidated subsidiaries for the quarter ended March 31, 2024 due to the sale of Changzhou Eminence Biotechnology Co., Ltd. (Eminence) in the first quarter of fiscal 2023. Revenue from partially-owned consolidated subsidiaries was $2.0 million for the nine months ended March 31, 2023.

Previous wording

Our non-GAAP financial measures for adjusted gross margin, adjusted operating margin, and adjusted net earnings, in total and on a per share basis, exclude stock-based compensation, which is inclusive of the employer portion of payroll taxes on those stock awards, the costs recognized upon the sale of acquired inventory, amortization of acquisition intangibles, restructuring and restructuring-related costs, and other non-recurring items including non-recurring costs, goodwill and long-lived asset impairments, and gains. Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjection assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations. The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses inclusive of the changes in fair value contingent consideration, and other non-recurring items including gains or losses on legal settlements, goodwill and long-lived asset impairment charges, and one-time assessments from this measure because they occur as a result of specific events, and are not reflective of our internal investments, the costs of developing, producing, supporting and selling our products, and the other ongoing costs to support our operating structure. Additionally, these amounts can vary significantly from period to period based on current activity. Costs related to restructuring and restructuring-related activities, including reducing overhead and consolidating facilities, are excluded because we believe they are not indicative of our normal operating costs. The Company also excludes revenue and expense attributable to partially-owned consolidated subsidiaries in the calculation of our non-GAAP financial measures as the revenues and expenses are not fully attributable to the Company.

Current wording

Our non-GAAP financial measures for adjusted gross margin, adjusted operating margin, and adjusted net earnings, in total and on a per share basis, exclude stock-based compensation, which is inclusive of the employer portion of payroll taxes on those stock awards, the costs recognized upon the sale of acquired inventory, amortization of acquisition intangibles, restructuring and restructuring-related costs, and other non-recurring items including non-recurring costs, goodwill and long-lived asset impairments, and gains. Stock-based compensation is excluded from non-GAAP adjusted net earnings because of the nature of this charge, specifically the varying available valuation methodologies, subjection assumptions, variety of award types, and unpredictability of amount and timing of employer related tax obligations. The Company excludes amortization of purchased intangible assets, purchase accounting adjustments, including costs recognized upon the sale of acquired inventory and acquisition-related expenses inclusive of the changes in fair value contingent consideration, and other non-recurring items including gains or losses on legal settlements, goodwill and long-lived asset impairment charges, and one-time assessments from this measure because they occur as a result of specific events, and are not reflective of our internal investments, the costs of developing, producing, supporting and selling our products, and the other ongoing costs to support our operating structure. Costs related to restructuring and restructuring-related activities, including reducing overhead and consolidating facilities, are excluded because we believe they are not indicative of our normal operating costs. Additionally, these amounts can vary significantly from period to period based on current activity. The Company also excludes revenue and expense attributable to partially-owned consolidated subsidiaries as well as revenue and expense attributable to businesses held-for-sale in the calculation of our non-GAAP financial measures.

Previous wording

The Company’s non-GAAP adjusted operating margin and adjusted net earnings, in total and on a per share basis, also excludes acquisition related expenses inclusive of the changes in fair value of contingent consideration, gain and losses from investments, as they are not part of our day-to-day operating decisions (excluding our equity method investment in Wilson Wolf as it is certain to be acquired in the future) and certain adjustments to income tax expense. Additionally, gains and losses from other investments that are either isolated or cannot be expected to occur again with any predictability are excluded. The Company independently calculates a non-GAAP adjusted tax rate to be applied to the identified non-GAAP adjustments considering the impact of discrete items on these adjustments and the jurisdictional mix of the adjustments. In addition, the tax impact of other discrete and non-recurring charges which impact our reported GAAP tax rate are adjusted from net earnings. We believe these tax items can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future results.

Current wording

The Company’s non-GAAP adjusted operating margin and adjusted net earnings, in total and on a per share basis, also excludes acquisition related expenses inclusive of the changes in fair value of contingent consideration, gain and losses from investments, as they are not part of our day-to-day operating decisions (excluding our equity method investment in Wilson Wolf as it is certain to be acquired in the future), certain adjustments to income tax expense, and other non-recurring items including certain costs related to the transition to a new CEO. Additionally, gains and losses from investments that are either isolated or cannot be expected to occur again with any predictability are excluded. The Company independently calculates a non-GAAP adjusted tax rate to be applied to the identified non-GAAP adjustments considering the impact of discrete items on these adjustments and the jurisdictional mix of the adjustments. In addition, the tax impact of other discrete and non-recurring charges which impact our reported GAAP tax rate are adjusted from net earnings. We believe these tax items can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future results.

Previous wording

administrative expenses and income tax rates. These statements involve risks and uncertainties that may affect the actual results of operations. The following important factors, among others, have affected and, in the future, could affect the Company's actual results: integration of newly acquired businesses, the introduction and acceptance of new products, general national and international economic, political, regulatory, and other conditions, increased competition, the reliance on internal manufacturing and related operations, supply chain challenges, the impact of currency exchange rate fluctuations, the recruitment and retention of qualified personnel, the impact of governmental regulation, maintenance of intellectual property rights, credit risk and fluctuation in the market value of the Company's investment portfolio, and unseen delays and expenses related to facility construction and improvements. For additional information concerning such factors, see the Company's Annual Report on Form 10-K for fiscal 2023 as filed with the Securities and Exchange Commission and Part II. Item 1A below.

Current wording

This quarterly report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those regarding the Company's expectations as to the effect of changes to accounting policies, the amount of capital expenditures for the remainder of the fiscal year, the source of funding for capital expenditure requirements, the sufficiency of currently available funds for meeting the Company's needs, the impact of fluctuations in foreign currency exchange rates, and expectations regarding gross margin fluctuations, increasing research and development expenses, increasing selling, general and administrative expenses and income tax rates. These statements involve risks and uncertainties that may affect the actual results of operations. The following important factors, among others, have affected and, in the future, could affect the Company's actual results: integration of newly acquired businesses, the introduction and acceptance of new products, general national and international economic, political, regulatory, and other conditions, increased competition, the reliance on internal manufacturing and related operations, supply chain challenges, the impact of currency exchange rate fluctuations, the recruitment and retention of qualified personnel, the impact of governmental regulation, maintenance of intellectual property rights, credit risk and fluctuation in the market value of the Company's investment portfolio, and unseen delays and expenses related to facility construction and improvements. For additional information concerning such factors, see the Company's Annual Report on Form 10-K for fiscal 2023 as filed with the Securities and Exchange Commission and Part II. Item 1A below.