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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024, or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to

Commission file number 0-17272

BIO-TECHNE CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota

41-1427402

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

614 McKinley Place N.E.

Minneapolis, MN 55413

(612) 379-8854

(Address of principal executive offices) (Zip Code)

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

TECH

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b- 2).      Yes      No

At May 1, 2024, 157,584,637 shares of the Company's Common Stock (par value $0.01) were outstanding.

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

AND COMPREHENSIVE INCOME

Bio-Techne Corporation and Subsidiaries

(in thousands, except per share data)

(unaudited)

    

Quarter Ended

Nine Months Ended

March 31, 

March 31, 

2024

2023

2024

2023

Net sales

$

303,428

$

294,146

$

852,961

$

835,382

Cost of sales

 

98,829

 

91,984

 

286,584

 

270,265

Gross margin

 

204,599

 

202,162

 

566,377

 

565,117

Operating expenses:

 

 

  

Selling, general and administrative

 

111,840

 

99,238

 

332,839

 

291,624

Research and development

 

25,761

 

22,713

 

72,675

 

69,074

Total operating expenses

 

137,601

 

121,951

 

405,514

 

360,698

Operating income

 

66,998

 

80,211

 

160,863

 

204,419

Other income (expense)

 

(5,914)

(15)

(16,835)

45,924

Earnings before income taxes

 

61,084

 

80,196

 

144,028

 

250,343

Income taxes

 

12,025

 

9,978

 

16,511

 

40,385

Net earnings, including noncontrolling interest

 

49,059

 

70,218

 

127,517

 

209,958

Net earnings attributable to noncontrolling interest

 

 

 

 

179

Net earnings attributable to Bio-Techne

$

49,059

$

70,218

$

127,517

$

209,779

Other comprehensive income (loss):

 

  

 

  

 

  

 

  

Foreign currency translation income (loss)

 

(11,981)

 

3,282

 

(5,558)

 

(805)

Foreign currency translation reclassified to earnings with Eminence deconsolidation

119

Unrealized gains (losses) on derivative instruments - cash flow hedges, net of tax amounts disclosed in Note 8

 

335

 

(1,708)

 

(3,685)

 

2,302

Other comprehensive income (loss)

 

(11,646)

 

1,574

 

(9,243)

 

1,616

Other comprehensive income (loss) attributable to noncontrolling interest

 

 

 

 

(33)

Other comprehensive income (loss) attributable to Bio-Techne

 

(11,646)

 

1,574

 

(9,243)

 

1,649

Comprehensive income attributable to Bio-Techne

$

37,413

$

71,792

$

118,274

$

211,428

Earnings per share attributable to Bio-Techne:

 

Basic

$

0.31

$

0.45

$

0.81

$

1.34

Diluted

$

0.31

$

0.43

$

0.79

$

1.30

Weighted average common shares outstanding:

 

 

  

 

  

 

  

Basic

 

157,309

 

157,311

 

157,655

 

157,071

Diluted

 

160,496

 

161,615

 

160,817

 

161,768

See Notes to Condensed Consolidated Financial Statements.

1

CONDENSED CONSOLIDATED BALANCE SHEETS

Bio-Techne Corporation and Subsidiaries

(in thousands, except share and per share data)

    

March 31, 

2024

June 30, 

(unaudited)

2023

ASSETS

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

139,915

$

180,571

Short-term available-for-sale investments

 

5,397

 

23,739

Accounts receivable, less allowance for doubtful accounts of $3,293 and $4,738, respectively

 

227,887

 

218,468

Inventories

 

179,496

 

171,638

Current assets held-for-sale

26,669

Other current assets

 

31,286

 

27,066

Total current assets

 

610,650

 

621,482

Property and equipment, net

 

243,728

 

226,200

Right-of-use assets

 

97,258

 

98,326

Goodwill

 

970,966

 

872,737

Intangible assets, net

 

526,428

 

534,645

Other assets

 

272,140

 

285,302

Total assets

$

2,721,170

$

2,638,692

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

  

 

  

Current liabilities:

 

  

 

  

Trade accounts payable

$

28,895

$

25,679

Salaries, wages and related accruals

 

44,313

 

36,747

Accrued expenses

 

17,806

 

14,880

Contract liabilities

 

30,108

 

23,069

Income taxes payable

 

12,082

 

12,022

Operating lease liabilities - current

 

12,978

 

11,199

Contingent consideration payable

 

 

3,500

Current liabilities held-for-sale

 

689

 

Other current liabilities

 

2,949

 

1,413

Total current liabilities

 

149,820

 

128,509

Deferred income taxes

 

63,666

 

88,982

Long-term debt obligations

 

389,000

 

350,000

Operating lease liabilities

 

92,752

 

93,766

Other long-term liabilities

 

11,557

 

10,919

 

  

 

  

Bio-Techne’s Shareholders’ equity:

Undesignated capital stock, no par; authorized 5,000,000 shares; none issued or outstanding

 

 

Common stock, par value $.01 per share; authorized 400,000,000; issued and outstanding 157,554,366 and 157,641,914 respectively

 

1,576

 

1,576

Additional paid-in capital

 

790,418

 

721,543

Retained earnings

 

1,297,688

 

1,309,461

Accumulated other comprehensive loss

 

(75,307)

 

(66,064)

Total Bio-Techne’s shareholders’ equity

 

2,014,375

 

1,966,516

Total liabilities and shareholders’ equity

$

2,721,170

$

2,638,692

See Notes to Condensed Consolidated Financial Statements.

2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Bio-Techne Corporation and Subsidiaries

(in thousands)

(unaudited)

    

Nine Months Ended

March 31, 

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

 

  

 

  

Net earnings, including noncontrolling interest

$

127,517

$

209,958

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

  

 

  

Depreciation and amortization

 

83,654

 

80,315

Costs recognized on sale of acquired inventory

 

550

 

400

Deferred income taxes

 

(29,896)

 

(22,651)

Stock-based compensation expense

 

30,979

 

41,315

Fair value adjustment to contingent consideration payable

 

(3,500)

 

(10,350)

Gain on sale of CCXI investment

 

 

(37,176)

Fair value adjustment on available-for-sale investments

 

(283)

 

(1,153)

(Gain) loss on equity method investment

6,042

Gain on sale of Eminence

(11,682)

Leases, net

 

1,832

 

1,434

Impairment of assets held-for-sale

6,038

Other operating activity

 

422

 

296

Change in operating assets and operating liabilities, net of acquisition:

 

  

 

  

Trade accounts and other receivables, net

 

(2,611)

 

(20,775)

Inventories

 

(9,599)

 

(28,816)

Prepaid expenses

 

(1,983)

 

(5,557)

Trade accounts payable, accrued expenses, contract liabilities, and other

 

7,160

 

(5,647)

Salaries, wages and related accruals

 

7,163

 

(22,759)

Income taxes payable

 

0

 

3,848

Net cash provided by (used in) operating activities

 

223,485

 

171,000

CASH FLOWS FROM INVESTING ACTIVITIES:

 

  

 

  

Proceeds from sale of available-for-sale investments

 

23,759

 

29,161

Purchases of available-for-sale investments

 

(5,526)

 

(20,500)

Proceeds from sale of CCXI investment

73,219

Additions to property and equipment

 

(44,897)

 

(27,413)

Acquisitions, net of cash acquired

 

(169,707)

 

(101,184)

Distributions from (Investments in) Wilson Wolf

2,149

(232,000)

Proceeds from sale of Eminence

 

 

17,824

Net cash provided by (used in) investing activities

 

(194,222)

 

(260,893)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

  

 

  

Cash dividends

 

(37,792)

 

(37,688)

Proceeds from stock option exercises

 

38,001

 

21,399

Re-purchases of common stock

 

(80,042)

 

(19,562)

Borrowings under line-of-credit agreement

 

225,000

 

619,661

Repayments of long-term debt

 

(186,000)

 

(505,661)

Taxes paid on RSUs and net share settlements

(21,470)

(28,854)

Other financing activity

 

 

(2,457)

Net cash provided by (used in) financing activities

 

(62,303)

 

46,838

Effect of exchange rate changes on cash and cash equivalents

 

(7,616)

 

(2,230)

Net change in cash and cash equivalents

 

(40,656)

 

(45,285)

Cash and cash equivalents at beginning of period

 

180,571

 

172,567

Cash and cash equivalents at end of period

$

139,915

$

127,282

Supplemental disclosure of cash flow information:

Cash paid for income taxes

$

44,846

$

62,583

Cash paid for interest

$

12,393

$

5,773

See Notes to Condensed Consolidated Financial Statements.

3

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Bio-Techne Corporation and Subsidiaries

(unaudited)

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

The interim 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 United States of America 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 accounting principles generally accepted in the United States of America 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, 2023, included in the Company's Annual Report on Form 10-K for fiscal 2023. A summary of significant accounting policies followed by the Company is detailed in the Company's Annual Report on Form 10-K for fiscal 2023. The Company follows these policies in preparation of the interim unaudited Condensed Consolidated Financial Statements.

During the quarter ended March 31, 2024, the Company operated under two operating segments, Protein Sciences and Diagnostics and Genomics. The operating segments the Company operated under were consistent with the Company's operating segments disclosed in the Company's Annual Report on Form 10-K for fiscal 2023.

Partially-owned consolidated subsidiary: On September 1, 2022, the Company completed the sale of its equity shares of Changzhou Eminence Biotechnology Co., Ltd. (Eminence) for approximately $17.8 million to a third party. Eminence was considered a variable-interest entity that was fully consolidated in our financial statements. Prior to the sale, Eminence had revenue of $2.0 million for the first fiscal quarter of 2023 within our Protein Sciences segment. As a result of the sale of the business, the Company recorded a gain of $11.7 million within the Other income (expense) line in the Condensed Consolidated Statement of Earnings.

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, and 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.

4

The investment in Wilson Wolf is accounted for as an equity method investment under ASC 323. The Company initially records its equity method investments at the amount of the Company’s investment and adjusts each period for the Company’s share of the investee’s income or loss and dividends paid. Distributions from the equity method investee are accounted for using the cumulative earnings approach on the Consolidated Statement of Cash Flows. There was $1.7 million and $6.0 million of loss for the quarter and nine months ended March 31, 2024, respectively, recorded on the Company’s Consolidated Statement of Earnings and Comprehensive Income related to the investment. There was not material income or loss during the quarter and nine months ended March 31, 2023. The Company’s total investment of $248 million is included within Other long-term assets on the Consolidated Balance Sheet as of March 31, 2024. There was $256 million included within Other long-term assets on the Consolidated Balance Sheet as of June 30, 2023.

Restructuring actions: Restructuring actions generally include significant actions involving employee-related severance charges, contract termination costs, and impairments and disposals of assets associated with such actions. Employee-related severance charges are based upon distributed employment policies and substantive severance plans. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the associated actions. Asset-related and other charges include impairment of right-of-use assets, leasehold improvements, other asset write-downs associated with combining operations, disposal of assets and other exit costs. Other costs also includes restructuring-related charges, which are incremental costs incurred directly supporting business transformation initiatives tied to the restructuring action.

Fiscal Year 2024 Restructuring Actions:

In the second quarter of fiscal 2024, the Company announced enterprise-wide restructuring focused on recovering operating margins, optimizing our distribution footprint, and enhancing our organization efficiency. These actions impacted approximately 4% of our global workforce. The Company is expecting to incur costs related to these actions through the first half of fiscal 2025, which will be recorded when specified criteria are met.

As part of these actions, certain assets and liabilities associated with a disposal group in our Protein Sciences segment were classified as held-for-sale as of December 31, 2023, including $1.4 million of goodwill allocated to the disposal group on a relative fair value basis. As a result of an impairment test performed over the disposal group in the second quarter of fiscal 2024, an impairment charge of $6.0 million which includes the allocated goodwill, was recorded in the Selling, general and administrative line in the Condensed Consolidated Statements of Earnings for the nine months ended March 31, 2024. As of March 31, 2024, the assets remaining within the disposal group primarily include inventory of $11.2 million, property and equipment of $5.6 million, intangibles of $14.3 million, and current liabilities of $0.7 million. These assets are actively marketed and we believe their sale will be completed within 12 months of the held-for-sale classification date. The held-for-sale assets and liabilities are recorded in Current assets held-for-sale and Current liabilities held-for-sale in our Condensed Consolidated Balance Sheet as of March 31, 2024.

The restructuring and restructuring-related charges, including the impairment of assets held-for-sale, for periods presented were recorded in the Condensed Consolidated Statements of Earnings as follows (in thousands):

Quarter Ended

Nine Months Ended

March 31, 

March 31, 

2024

2024

Cost of sales

$

647

$

1,821

Selling, general and administrative(1)

903

11,153

Total

$

1,550

$

12,974

(1) Restructuring actions impacting research and development are not material to separately disclose and have been included within Selling, general and administrative costs.

5

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

Three months ended March 31, 2024

Employee

Asset-related

Impairment of

severance

and other

assets held-for-sale

Total

Protein Sciences

$

28

$

914

$

$

942

Diagnostics and Genomics

265

90

355

Corporate

117

136

253

Total

$

410

$

1,140

$

$

1,550

Nine months ended March 31, 2024

Employee

Asset-related

Impairment of

severance

and other

assets held-for-sale

Total

Protein Sciences

$

2,978

$

1,386

$

6,038

$

10,402

Diagnostics and Genomics

1,004

90

1,094

Corporate

1,310

168

1,478

Total

$

5,292

$

1,644

$

6,038

$

12,974

The following table summarizes the changes in the Company’s accrued restructuring balance, which is included within Other current liabilities in the accompanying balance sheet. Other amounts reported as restructuring and restructuring-related costs in the accompanying statements of income have been summarized in the notes to the table (in thousands):

Employee

Asset-related

Impairment of

severance(1)

and other(2)

assets held-for-sale

Total

Expense incurred in the second quarter of 2024

$

4,882

$

504

$

6,038

$

11,424

Cash payments

(1,257)

(177)

(1,434)

Non-cash adjustments

(191)

(6,038)

(6,229)

Accrued restructuring actions balance as of December 31, 2023

$

3,625

$

136

$

$

3,761

Incremental expense incurred in the third quarter of 2024

133

1,140

1,273

Cash payments

(2,806)

(433)

(3,239)

Non-cash adjustments

(843)

(843)

Adjustments(3)

277

277

Accrued restructuring actions balance as of March 31, 2024

$

1,229

$

$

$

1,229

(1) Relates to impacted employees’ final paycheck, separation payments, outplacement services, legal fees, and retention packages related to the closure or sale of certain distribution and manufacturing sites.

(2) Primarily relates to impairment of right-of-use assets, lease termination fees, consulting fees, and expenses for changes to supporting IT systems that are enabling the Company to complete the restructuring initiatives.

(3) Relates to the refinement of the accrual recorded in the second quarter of fiscal 2024.

6

Fiscal Year 2023 Restructuring Actions:

QT Holdings Corporation (Quad)

In August 2022, the Company informed employees of our decision to close our QT Holdings Corporation (Quad) facility as part of a realignment of activities within our Reagent Solutions division. The closure of the site was completed in the fourth quarter of fiscal 2023. As a result of the restructuring activities, a pre-tax charge of $2.2 million was recorded within our Protein Sciences segment. The related restructuring charges for the year ended June 30, 2023 were recorded in the income statement as follows (in thousands):

Employee

Asset

    

severance

    

impairment and other

    

Total

Selling, general and administrative

$

1,328

$

842

$

2,170

Employee

Asset

    

severance

    

impairment and other

    

Total

Expense incurred in the first quarter of 2023

$

1,328

$

842

$

2,170

Cash payments

(1,233)

(772)

(2,005)

Adjustments

(95)

(70)

(165)

Accrued restructuring actions balances as of June 30, 2023

$

$

$

Protein Sciences Realignment

In December 2022, the Company informed employees it would undertake certain actions to strategically reallocate operations resources to high growth areas of the business. Additional actions were taken in June 2023 primarily related to the sales organization. The actions impacted a limited number of employees and are expected to be completed in the fourth quarter of fiscal 2024. As a result of the realignment, a pre-tax charge of $1.7 million related to employee severance was recorded in the Selling, general and administrative line of operating income within our Protein Sciences segment during the year ended June 30, 2023. Adjustments in fiscal year 2024 relate to the refinement of employee severance payouts. Additional pre-tax charges for the nine months ended March 31, 2024 were approximately $0.22 million. There were no additional charges in the quarter ended March 31, 2024. Restructuring actions, including cash and non-cash impacts, are as follows (in thousands):

Employee

severance

Expense incurred in fiscal year 2023

$

1,677

Fiscal year 2023 cash payments

(762)

Fiscal year 2023 adjustments

(18)

Accrued restructuring actions balances as of June 30, 2023

$

897

Fiscal year 2024 cash payments

(1,006)

Fiscal year 2024 adjustments(1)

221

Accrued restructuring actions balances as of March 31, 2024(2)

$

112

(1) Fiscal year 2024 adjustments relate to the refinement of the accrual recorded in fiscal year 2023.

(2) The remaining balance as of March 31, 2024 relates to employee severance that is paid out over a one-year period.

7

Recently Adopted Accounting Pronouncements

There were no accounting pronouncements adopted in the quarter ended March 31, 2024. Refer to the Form 10-K for accounting pronouncements adopted prior to June 30, 2023.

Relevant New Standards Issued Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures (Topic 280), which requires incremental disclosures on reportable segments, primarily through enhanced disclosures on significant segment expenses. The Company will adopt this guidance beginning in the fourth quarter of fiscal year 2025 for our annual report and for interim periods starting in fiscal year 2026. We are currently evaluating the potential effect that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued ASU 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 will adopt this guidance beginning in the fourth quarter of fiscal year 2026 for our annual report. 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 March 31, 2024.

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.

8

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 balance sheet 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 March 31, 2024 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 March 31, 2024 and June 30, 2023 were approximately $32.0 million and $24.6 million, respectively. Contract liabilities as of June 30, 2023 subsequently recognized as revenue during the quarter and nine month period ended March 31, 2024 were approximately $3.2 million and $19.5 million, respectively. Contract liabilities in excess of one year are included in Other long-term liabilities on the Consolidated Balance Sheet.

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):

    

Quarter Ended

Nine Months Ended

March 31, 

March 31, 

    

2024

    

2023

2024

    

2023

Consumables

$

246,732

$

240,659

$

682,405

$

674,419

Instruments

 

26,493

 

25,449

 

81,178

 

84,208

Services

 

25,501

 

23,312

 

71,084

 

60,609

Total product and services revenue, net

$

298,726

$

289,420

$

834,667

$

819,236

Royalty revenues

 

4,702

 

4,726

 

18,294

 

16,146

Total revenues, net

$

303,428

$

294,146

$

852,961

$

835,382

9

Revenue by geography is as follows (in thousands):

    

Quarter Ended

Nine Months Ended

March 31, 

March 31, 

    

2024

    

2023

2024

    

2023

 

  

 

  

  

 

  

United States

$

173,315

$

163,197

$

480,213

$

467,633

EMEA, excluding United Kingdom

 

60,533

 

59,702

 

177,866

 

160,246

United Kingdom

 

15,122

 

13,811

 

38,249

 

36,385

APAC, excluding Greater China

 

18,253

 

20,159

 

54,645

 

55,592

Greater China

 

25,598

 

26,256

 

75,542

 

88,103

Rest of World

 

10,607

 

11,021

 

26,446

 

27,423

Net sales

$

303,428

$

294,146

$

852,961

$

835,382

Note 3. Selected Balance Sheet Data:

Inventories:

Inventories consist of (in thousands):

    

March 31, 

June 30, 

    

2024

    

2023

Raw materials

$

80,524

$

84,551

Finished goods(1)

 

104,376

 

92,474

Inventories, net

$

184,900

$

177,025

(1) Finished goods inventory of $5,404 and $5,387 included within Other long-term assets in the respective March 31, 2024 and June 30, 2023, Consolidated Balance Sheet. The inventory is included in long-term assets as it is forecasted to be sold after the 12 months subsequent to the consolidated balance sheet date.

Property and Equipment:

Property and equipment consist of (in thousands):

    

March 31, 

June 30, 

    

2024

    

2023

Land

$

8,159

$

9,100

Buildings and improvements

 

243,567

 

245,302

Machinery and equipment

209,252

190,019

Construction in progress

 

34,649

 

15,491

Property and equipment, cost

 

495,627

 

459,912

Accumulated depreciation and amortization

 

(251,899)

 

(233,712)

Property and equipment, net

$

243,728

$

226,200

10

Intangible Assets:

Intangible assets consist of (in thousands):

March 31, 

June 30, 

2024

2023

Developed technology

$

652,788

$

616,311

Trade names

 

151,631

 

146,945

Customer relationships

 

211,354

 

213,878

Patents

 

4,149

 

3,815

Other intangibles

 

11,872

 

11,566

Definite-lived intangible assets

 

1,031,794

 

992,515

Accumulated amortization

 

(528,066)

 

(480,570)

Definite-lived intangibles assets, net

 

503,728

 

511,945

In process research and development

 

22,700

 

22,700

Total intangible assets, net

$

526,428

$

534,645

Changes to the carrying amount of net intangible assets for the period ended March 31, 2024 consist of (in thousands):

Beginning balance

$

534,645

Acquisitions

 

66,400

Other additions

 

619

Held-for-sale intangibles(1)

(14,323)

Amortization expense

 

(60,056)

Currency translation

(857)

Ending balance

$

526,428

(1) Refer to Note 1 for further detail on held-for-sale intangibles.

The estimated future amortization expense for intangible assets as of March 31, 2024 is as follows (in thousands):

Remainder 2024

    

$

19,525

2025

 

75,156

2026

 

71,191

2027

 

61,027

2028

 

57,380

Thereafter

 

219,449

Total

$

503,728

11

Goodwill:

Changes to the carrying amount of goodwill for the period ended March 31, 2024 consist of (in thousands):

    

    

Diagnostics and

    

Protein Sciences

 Genomics

Total

June 30, 2023

$

427,027

$

445,710

$

872,737

Acquisitions

 

102,546

102,546

Held-for-sale goodwill(1)

(1,400)