All right, we'll go ahead and get started. Everybody, good morning. Welcome to the Wells Fargo Healthcare Conference. I'm Brandon Couillard. I cover tools and diagnostics here at the firm. Thrilled to have Bio-Techne with us at the conference again this year. Joining us to my left, CEO Kim Kelderman and CFO Jim Hipple. Thank you both for being here. Great to be here. Thank you. Kim, you've been CEO for a little over six months now. You led DGS before. Just curious, to start off, you know, what has surprised you when you look at the company from a higher level perspective? Are there any synergies maybe you didn't notice before or holes in the portfolio that you maybe weren't aware of before? Yeah, thanks, Brandon, and thanks for the invite here in this great conference. We've, we are always happy, happy to join, and also got to work with your banking team over the last year, and it's a real delight. Thanks for the invite. Thanks for the question. Yeah, it's been seven, eight months, feels like a couple of years, but it's certainly interesting. The nice thing, though, is that, you know, being with the company a little over six and a half years in total, managing Diagnostics and Genomics. That segment has two growth verticals out of the four growth verticals in it. Building the spatial biology business as well as the liquid biopsy business, those were obviously very familiar to me. Becoming CEO, and it's obviously a great honor because it's a true unicorn in the field, right? Our, you know, mid-sized company with fantastic agility and in innovation as well as in M&A, and a great honor for me. What I did in the first couple of months, of course, is looking at the other two growth verticals I was not as familiar with. And, you know, as you ask about what is a surprise, to my surprise, those growth verticals are also positioned in very viable, very fast-growing, substantial markets, and they are also having a true competitive advantage. I say also, think about spatial biology, where we now have a, you know, great solution for RNA, we have antibodies for proteins, and we have a very competitive instrument that can pull through those reagents. Very similar situation in cell and gene therapy, which obviously has a different setup with a consumable, the G-Rex, which pulls through our core reagents, but a very competitive, competitive positioning that can pull through reagents. The same is also true for the protein analysis, right? Everybody knows that we had this era where we wanted to read RNA, and then we wanted to read DNA, and only some of that expresses. We started reading RNA, and then we started eventually exploring proteins, and it's a big move in the market, and our proteomic analysis instrumentation is very nicely aligned with understanding proteins better, and also pull through those reagents. That leaves us with the 5th, the 5th business, which is basically our core business, the former R&D Systems, which is 48 years in the making, with 6,000 proteins and 400,000 antibodies in its portfolio. There, it's also great to see that we have fantastic know-how internally, great R&D teams, real good customer understanding, and a selling team that is very familiar with the customers and can help them up to speed really quickly, getting the right ingredients and the right setup for their experiments and their projects. The surprise really was that I had hoped or expected that 3/4 would be very viable, but it's actually 4/4, and it is a positive surprise. I'm quite happy with that setup. Coming off your fiscal fourth quarter, what would be kind of top one or two themes you want to leave people with, and just remind us where you sort of see the forward year in terms of the guide? Talking about fourth quarter, fortunately, that quarter came in line with our expectation, and I think the street's expectation. You know, Jim and I always had to figure out on, you know, how, what are, what are the markets gonna do, how is our positioning, you know, will we continue to outperform our peers and the market by at least 500 basis points? The good news is, we have continuously done so over the last fiscal year. Our Q4 came in line because we had kind of forecasted that there would be one tough, one more tough comparable in China for Q4, and that's why we would continue to be low single digits. That became true. We came in at $306 million, which was 1% organic growth. Very strong performance in, you know, Diagnostics and Genomics, with 9% growth, reported 15%. And that's mainly the difference there is mainly the addition of Lunaphore revenues. And then, you know, the Protein Sciences segment was declining low single digits, - 3, and that was because this business is particularly hard hit by the slump in the China business, which influences the protein analytic instrumentation, as well as the lackluster funding levels in pharma, biopharma, which by now, actually, we've talked about our forecast, we will get through it probably. You know, we feel the funding in pharma, and specifically biopharma, is improving, so we think that we are coming out of those levels over time. Our Q4 was like we thought it was gonna be. Maybe just touching on, on China, I think it was down high single digits in the quarter. What are you expecting, you know, for the next 12 months, putting stimulus aside? And then in terms of stimulus, you talked about, you know, your exposure to that. I think you've pointed to a benefit in the second half of fiscal year. Are you starting to see orders yet, you know, from those accounts? Yep. Yeah, I did, thanks for the question on China. Overall, 8% of our revenues are linked to the business in China. Overall, we are very confident about the market, about that market specifically, because, you know, there are 1.4 billion people that deserve good healthcare, and China has really made a big push in trying to be independent of Western, you know, treatments and, and vaccines and/or medication. In order to do so, a certain investment is needed, and I think the government is committed, whether it is through a stimulus or whether it is through overall funding and creating opportunities for research and for pharma, biopharma, to make progress in that, you know, country's priority. We are essential in providing the tools to make that progress, and therefore, we believe it's going to be a strong, fast-growing market for us going forward. If I could, I'll just add a little bit to that. With regards to, you know, the stimulus, and... I mean, I think in some respects, we view the stimulus as less of a traditional, typical stimulus you see in China, where it's a short jolt, one quarter thing. They already announced, the government did, it's a multi-year program. We see it more as a return to funding in general, where frankly, this past year, they, the government choked back funding dramatically overall, and it's really more of a signal of, of, them having the money in the future to rejuvenate funding again in technology and specifically life sciences, and they're sitting on tools, at least out of the gate. We don't think this is, like, a return to the old growth rates of China right away, but I think we think it's the start of a gradual recovery in China. Maybe shifting gears, on your last call, you talked about continued softness in pharma, similar to other peers. Sounds like you expect that to continue into calendar 2024. If we look at your business mix, I don't know if you'd break it down this way, sort of between like preclinical, let's say Phase 1, Phase 2, and then later-stage exposure, how would you say tech- spreads across that pipeline, if you will, if you look at it that way? Yep. Minus what the biotech versus kind of large pharma, small molecules, but yes. Yeah, I think that, you know, just high level, 50% of our revenues are related to pharma, biopharma, 30% of that is large pharma, and 20% of that is small biopharma. You know, you mentioned that there was some constrained funding from pharma side, and yes, we saw that pretty much in our Q3, Q4, which is basically the beginning of the calendar year. Most pharma does budget in calendar cycles, and when they were creating their budgets at the end of last calendar year, obviously interest rates were super high. There was some uncertainty in the end markets. The IRA was looming, or is looming, was looming, and they had to think about, you know, what kind of approach do you take? You shuffle your product lines, your projects, and which ones do you invest behind and which ones you hold or stop. We feel that this is kind of a reshuffling the deck year where people are careful. We do feel, though, that some of the risk is out of the market. There's more clarity, and, you know, the majority of the pharma companies are actually doing really well, and we think that will translate in robust R&D budgets, and that will then translate into, you know, life science tools companies being able to continue to help their programs and see increased activity levels. That's what we're aiming at, and thinking those scenario would be as of the new budgeting year, which would be, you know, the budgets usually roll out in the first quarter of a new calendar year, and that's why we, you know, trying to be on the base case side, the safe side. We are assuming we see some of that trickling through in our second calendar quarter, but our fourth quarter. If it comes to the mix on, you know, what stage of funding, that was the second half of your question, I think generally, if there's a time of uncertainty, you would, you would reduce your early-stage discovery funding because it's, you know, it's not having any immediate impact on your, on your pipeline and your revenue short term. Then again, all those companies know that you can't mortgage the future, future too long. We do believe if, you know, R&D budgets normalizing, that, that, that the activity level there will pick up again as well. Fortunately, our product pipeline is, is, you know, various of our products are also, you know, focused on various stages of projects. You know, it's never fun if the original research gets squeezed a little bit, but we, you know, overall, we feel that we're nicely positioned across the life cycle of a project. I would just add to that, too, that I think our growth verticals in particular are nicely positioned across all phases of research, not just early discovery. Even if there is a shift in pharma, focusing, at least in the short term, on the more clinical stage or even later stage clinical, that still bodes well for our, you know, our key growth pillars, our instrumentation, our spatial franchise, and our cell and gene therapy franchise. If we look at life science reagents, you know, there's been weakness here across the industry, seems to be tied to pharma reallocating dollars, at least toward more clinical programs, perhaps away from discovery and kind of phase one. There's also been some competitive changes out there, obviously, with Abcam and, and Danaher. Can you just talk about how this business is positioned, you know, why you think there's been such weakness and maybe when you expect growth to rebound? Yeah, I think. I'm sorry, is this still, this still specific for pharma, for large pharma, or? Yeah, like, you know, reagents and antibodies in particular. Oh, reagents. Yeah. Yeah, so the reagents are more sensitive to, you know, to the early stage discovery. However, you know, we've obviously invested organically in all the, you know, GMP capabilities, and the GMP capabilities are more downstream, right? The moment you do your discovery, and you know which antibody or which protein you're going for with your therapy, then you wanna get to the GMP grade materials. As you're aware, we've made a big investment over the last couple of years in the GMP protein facility and saw such a success that we have added a specific facility for small molecules, which is also a very, very fast-growing part of our business. Now, this last couple of months, we've launched our first GMP antibodies. If you think about those GMP ones, they're obviously, you know, in, in, you know, the materials you use in the clinical stages, and, and therefore, they, they, those are, those are more robust throughout the, the usage of them are more robust and scaling throughout the clinical studies and into commercial. I'll just say, too, with regards to the consumables in general, concerning that we have a very large consumables portfolio, a smaller instrument portfolio, we see signs of momentum change happen at first within our consumables. For example, in large pharma, we saw drop-offs in our run rates right away in January and February, right after their budgets got enacted. We're hearing more about other CROs and other peer companies talking about pharma pressure right now. Whereas for us, pharma has been stable pretty much since January, February. We saw the drop-off in consumables, then we saw it level off. Likewise, when funding returns, whether that's pharma or small biotech or China, you typically start to see it in the reagents first. An example of that would be why we have some confidence in China recovering or on the road to recovery is the last couple of quarters in a row, we actually have seen double-digit growth within our core reagents in China, despite overall negative growth driven by the instruments. You know, as we think whether when the biotech funding turns into spend next year, pharma budgets start to normalize, we think we'll see it in our reagents first. Gotcha. Maybe switching gears over to Simple Western, it's historically been a 15%-20% grower. Do you think the business returned to that level, and where are you in terms of penetrating the academic portion of that market? Absolutely. I think on average, the overall addressable market, we are sub 20% penetrated, so there's still lots of ad space. The competitor really is the manual version of Simple Western. That is not very efficient, not very precise, not fun, not fast. Anyway, there is a huge opportunity for our Simple Western instrument to make a difference there. You know, some companies actually try to avoid doing Simple Western because of the clunkiness of the process, and are now coming back to it because there is finally an automated solution. That is why I think that the entitlement is to be double digits there. We have seen that. We've seen that our consumables related to the Simple Western are growing double digits. All indications are that there's a, you know, a rebound in, or normalizing, I should say, of funding, that we will be right back where historical growth rates have been. If you then look at, is it a stale product line as such? The answer is no, because we have continued to innovate in two directions. One is in the applications you can use it for, so we continue to work on applications that our customers can utilize. In the meantime, we've also announced the Leo, which is a next generation, very flexible, high throughput machine. Not everybody wants 100 samples at the same time, so it is flexible in that you can run 25-100 over 3 hours with 8 markers per channel. Very, very powerful innovation that, you know, should actually add to the attractiveness of that product line. Yeah, that was gonna be my next question, is, you announced the upcoming launch of the Leo platform. When's the last time you had a new instrument introduction there, and what does that add to the business, or, you know, the market opportunity at the high end? Yeah, so within Protein Simple franchise, we had the Maurice Flex earlier this calendar year. It's a launch where, you know, the instrument itself got much better at performing the things you could already expect from the Maurice, but we added the fractionation capability. And that basically means that a portion of the sample of interest, you can now directly inject on a mass spec, rather than having to do all kinds of transitions and transfers. It really opens up a much larger opportunity, and that was the Maurice Flex, which was half year ago. The Leo is coming in about at the beginning of the calendar year. There, I think it's the same market, where, as I mentioned, many people wanna get out of the manual, manual Western blot, and that this instrument provides that opportunity. Also, people that moved away from it and that other technologies can now come back and use, utilize the Leo, and for the automated Western blot part. There, I'm not sure if it's a market, a market increase or a different addressable market. It's the same addressable market, but it just makes it bigger, and it makes it more viable for high-volume users to now come back to Western blot. It does increase the addressable market, but it's not a new part of the new part of the market. If we look at the Simple Plex, you talk about the utilization across the installed base, and you want to return part of the way, and I think you get to a billion of revenue for diagnostics, is the usage and uptake of that, of Simple Plex in diagnostics. When do you think you, we start to see that coming through? Yeah, the nice thing there is that we have a corporate theme that I mentioned, that we want to be able, that our technologies can grow with the customer from discovery through translational into clinical applications. That's why we have the GMP reagents and so on and so forth, but this also is true for instrumentation. We picked the Ella, the Ella instrumentation to get 13485 approval, and therewith can be an instrument that is used closer to the patient in point-of-care situations. It's very fast, turnaround time, ninety minutes, very sensitive, so you can basically utilize it in diagnostic opportunities. The very first one that we publicly announced was Novo MolDX. They will utilize the Ella for a ocular inflammation and to determine who should go to surgery and what type of surgery. You know, that's the first publicly announced collaboration, but we're certainly having a hopper with other diagnostics opportunities. We see opportunities in neural and traumatic brain injury and other indications that would be important if somebody walks into the ER to quickly determine, you know, what's going on with the patient. Obviously, diagnostics is a patient space, so we'd have to collaborate and get the approvals and get the uptake of these different assays. But I... You know, we think we know that the first, the first revenues, the first true Ella applications will roll out in the coming year. And then we will bolt on the other opportunities with different diagnostic companies as we go. Maybe switching gears, over to spatial and Lunaphore. Could you talk about what markets Lunaphore plays in, how those are growing, who the competitors are, and kind of what separates Lunaphore from, you know, others? Yeah ... in the market? Yeah. Like I mentioned, we're really happy with the progress Lunaphore has made. Obviously, the integration was fantastic. The team is very high caliber. We have the instrument, it is very robust, and the capability of the instruments is unprecedented in the market. First of all, we really believe in the spatial biology market as such, because knowing what happens where, precisely and repeatably, is, for us, a given, especially with the up-and-coming cell and gene therapy and the wave in new technologies around neurosciences. We believe that this is going to be important. The instrument, one and the only in the market that can run both on the same slide, the proteomic, the proteomic, as well as the RNA, so multiomics really, indications. It can visualize on the same slide everything you wanna know about RNAs and everything you wanna know about what then therefore happens with the different proteins. 12 RNAs and 24 protein targets at the same time on one slide. Fully automated, runs overnight, and you don't have to move your slide from a stainer to a microscope, and then into some different software for visualization. It's basically, you know, set and forget. It runs overnight, and you can do four samples in parallel. That gives you a 20 sample capacity, which is also unique in the market. You can utilize our 50,000 RNA probes or any custom probe that you would like, and you can utilize your own antibodies that you like, or you can pick from our 400,000 antibody catalog and pull through these high margin, high margin, high quality antibodies. For us, it's truly, it's a very viable, very important market to enable research and progress towards diagnostics. It's the best instrument, and it has access and pulls through the best reagents, right? The RNAscope reagents right now are a $120 million run rate, and they're, therewith, you can do your comparison. They're with the largest spatial biology reagents franchise. Now we've just fortified it with antibodies as well as an instrument. I'm very, very excited about this, this end market. You talked about, about not being able to meet demand for Lunaphore. What needs to be done to rectify that? How big is the backlog, and how long will it take you to draw it down? Yeah. Fortunately, it was not the situation that... Like, we have certain model and certain uptake expectations, and it was not that we did not meet manufacturing capacity towards a model. We did, but what was above expectations was the original uptake in orders. We had to accelerate our ramp for manufacturing, and that, so far, we have worked really hard on that for the last two quarters. The current quarter we are in, we feel that we will be at the break-even point, and then we will work down the backlog in the coming quarters. It should not be a topic anymore going forward. Yeah, I think it's really an indication of how well the instrument is liked in the field, and we see some customers ordering a second box and some customers even ordering a third one. The first one, you just have to sell, and, you know, you'd have to convince a customer. The second one is basically sold because of the first one, right? The first one has the performance of it, and how it works is basically the true story. We're really happy to see that there is repeat orders because it just indicates that the instrument is doing well in use. How has Wilson Wolf performed in the current environment? How are they positioned for 25? Any chance you complete that acquisition before the end of 27? Yeah. So Wilson Wolf, obviously, is a company that has the G-Rex. Just as a quick reminder, the G-Rex is a bioreactor, a small bioreactor, that has a nifty solution in getting oxygen to the cells you would be growing in there. Wilson Wolf is important to us because this oxygen makes the cells grow fast, but they also need food, which are proteins, GMP proteins, and they need all kinds of cell signaling, and that's why we have our GMP small molecules. So it's a whole system that we're trying to boost there. The end markets, biotech, were really suppressed over the last year, and Wilson Wolf has had, therefore, flattish growth, which we're actually pretty happy with because that is still indicating that it's outperforming the market. Four of the last seven approvals in cell and gene therapy have been with using the G-Rex as the vehicle to grow your cells. Those four customers that are about to go commercial or are starting to go commercial have submitted their forecasts. Even though this year was not as planned, we, you know, with the forecast, Wilson Wolf itself thinks that they could still hit their milestones. To your question, like, when is it going to be yours? December 31, 2027 we would acquire the assets for 4.4 times 12 months trailing, basically the revenue in 2027. However, there are top line and bottom line milestones that can be achieved that would pull that deal in. You know, with... We thought that that would not be the case anymore with a lull in the markets, but seeing the forecast from those customers that are going commercial, it might well happen. Jim, if we look at the guide for 2025, you're looking for, I think, low to mid-single digit growth in the first half. Mm-hmm. High single digits in the back half. What's informing that view or that acceleration, and what parts of the portfolio do you expect to be, you know, above that level? Which ones might be lower? Let me get more specific around that, around that guide. It's really about the pace of recovery. We're the first ones sticking our necks out truly in 2025, so we had to really sit back and reflect on what does a recovery look like and how does that play out, you know, at least, you know, conceptually. The good news is that we're actually talking about recovery and not trying to catch a falling knife like we feel like we've all been doing in this industry for the past two years. We had a good fiscal year 2024, was a very stable year for us, albeit growth that we don't like to see. We did still grow at 1% for the year, with 1% for Q4, and not a whole lot of variation throughout the year, so it does suggest a bottoming. As we think about recovery, we talked about that we, you know, right, we're here and now, when we did our last earnings call for first month into the quarter, hadn't seen any real inflection points as of yet, so we called basically low single-digit growth to start the year. From there, you know, biotech funding's been strong the first six, seven months of the year, significantly over fiscal year 2023, and even higher than fiscal year 2019 by, like, 25%. At some point, that funding will turn into spending, and we're hopeful that will start to kick in, in our December quarter. That is what kind of elevates us up to the mid- low end of the mid-single digits, okay? From there, we think the next stage of recovery we will see from China, as we talked a lot about China already from the stimulus perspective. All indications are that will start to translate into revenues in the, you know, January, February timeframe, so we will call that our third quarter. That would get us cumulatively then into the high end of the mid-single digit growth. The last piece is the pharma recovery, and that is a little more ambiguous because there is not any outside data you can exactly point to, to say there is a leading indicator, except to say, and Kim has talked a lot about this already. When big pharma was doing their budgets back in October, November last year for this year, it was probably the darkest period for our space over the last many years, both from a macro perspective and understanding where inflation and rates were going, but also from a micro perspective, industries perspective with regards to the impact of Inflation Reduction Act and how that would play out. This has been a year of reset for pharma. We've talked a lot about that already, and pharma usually does that, you know, once and it's done. It's 'cause it's expensive and time-consuming to figure out how you're gonna adjust your pipeline, so this is the year of adjustment. We believe in 2025, things are a lot more clear now than they were nine months ago, and they'll get back to kind of resuming their budgets as normal on a new baseline, but resuming their kind of, kind of cadence of increasing budgets as normal going forward. We're predicting right now that we wouldn't see that until our June quarter, call it April, May, just because of the timing of how long it takes for budgets once they get approved by their boards, call it in late January, early February. These very large companies have to disseminate down to the individual researcher, who we actually sell to and buys from us on a day-to-day basis. That gets us to the high single digits by our Q4, cumulatively. Why we're not saying double digits is because I'm not gonna sit here and say we're the first ones to call for a full market recovery by June 2025, but we think we'll be well on our way. You know, we do think that by the end of 2025, it will be a normalized market, and we will be double digits as we talk about fiscal year 2026, a year from now. Kim, I mean, Bio-Techne has always been an inquisitive company. Where should we look for you to be active when it comes to M&A? How are you feeling about... What's your appetite for larger deals as opposed to more bolt-ons, and where are the biggest holes in the portfolio you'd like to be active in? You, Kimmy. Yeah, it is our favorite capital deployment mechanism. And we've been pretty good at it, right? I think the process of, you know, maintaining a list and maintaining relationships with possible targets, being able to evaluate their technologies, and to then have a successful integration is kind of our signature dish that we've become, that we became pretty proud of and that we're pretty good at. You know, we have a list with private, public, large, small companies, you know, as long as they fit our, either our core, and strengthen our core, because we know that's foundational to our long-term growth, or one of the growth verticals that would be important to me. I don't want to have yet another, you know, something that we have to, that would be outside of our current strategy. I think the four growth verticals that we've defined are very promising. We have great positions in there, and we should fortify those. Now, two years ago, if you would've asked me, like, "Where do you have a real gap? What do you need to do?" I would've said, "I need an instrument in spatial." That fortunately happened, and we executed on that. I don't see a huge gap for us to operate, so there's not like, Hey, there's a whole gear set missing in order to make, to make, to make Bio-Techne a viable, or a fantastic company going forward. However, strengthening or broadening the workflow in, for example, cell and gene therapy, making sure that we participate not only as the G-Rex of all the ingredients, but maybe in the steps before, maybe in the steps behind, that'd be very viable, investments and additions to me, in my mind. The core and cell and gene therapy are, would be most likely. Super. Unfortunately, we're out of time, so I have to leave it there. Yeah. Thanks so much for being here, everybody. Y'all have a great day. Thank you. Thank you. Have a good day.