Bio-Techne Corporation (NASDAQ:TECH) Q2 2023 Earnings Call Transcript

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They’re customers. We’re also seeing that with Wilson Wolf as well. It’s definitely slowed down, seeing the same thing. Area isn’t anybody who has a business that’s really in the CAR T, in the biotech side in clinical, I can’t say the same thing. It’s just honest to God, true. There are things have slowed down. There is less funding and there are less clinical starting, and that’s just reality. I don’t think it’s long term. I think it’s just a blip for this year, but it’s a reality.

Dan Arias: Okay. Okay. That’s helpful. And then I guess, I need to go back to the long-term targets here just because €“ in order to hit that 17% organic growth CAGR that you laid out for 2021 through 2026 and that gets you to the $2 billion at least by my math, you basically have to do a couple of years of 20% growth. And one of the things that we’re talking about is how hard comps can be. So apologies for beating a dead horse here, but I guess I just have to ask explicitly if that’s at all a decent way to think about out-year growth?

Chuck Kummeth : Well, the OEM side of things was bad enough and just on a handful of deals where it took our antibody and our protein business to near to about flat. And that’s a short-term blip. We need mid-level, mid-digit growth in that category. We’ve had way higher than that for the last two years, and in fact, double digit, so I’m not too worried about that. It’s more an issue about the back end and making sure that both cell and gene therapy and exosome as a platform can get to 45% to 50% growth in that range. That’s what’s got to happen. Everything else is within the air bars easily to hit there, but we’ve got to get to that level. And then we’ve got a couple more years to get to that point. I don’t think we’re shook about it. Things can only grow so fast, and we’re kind of growing pretty fast.

Jim Hippel : I’d say I just add that a little bit on. I mean, as I — we mentioned in the call earlier, in literally a handful of customers, biotech customers, smaller biotech customers was a difference between double-digit growth and mid single-digit growth for us this past quarter. So that’s how quickly it can flip the other direction as well when things come back online.

Operator: Our next question comes from Dan Leonard with Credit Suisse. Please proceed with your question.

Dan Leonard: Hi. Thank you. Chuck, in the past, you’ve talked about hiring challenges as being a gating factor to your growth and wanting to hire more. Can you give us an update on trends there? Are you still planning aggressive hiring, or have you moderated your ambitions there?

Chuck Kummeth : No, it’s a very insightful question. And I didn’t bring it up on the call, but it is more late-breaking news, but we definitely had turnover in our sales force in the biologic platform area. As you know, a lot of instrumentation, things that were not in pretty hot still, larger metal things. And there’s been a lot of attrition, and we lost a fair number of people. We’re at full strength again, but there’s definitely a component there. On spatial, we’ve come all the way back, I think, really down to one. Overall, we’re riding our attrition to kind of stay leaner here as we ride through it. You saw our margins are held pretty well. We’re on track. Part of that is that we’ve just not replaced everything through attrition.

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