Good morning and welcome to the Bio-Techne earnings conference call for the first quarter of the full fiscal year 2015. At this time, all participants have been placed in a listen-only mode and the floor will be open for questions following management’s prepared remarks. I would now like to turn the call over to Mr. Jim Hippel, Chief Financial Officer.

Good morning, and thank you all for joining us as we discuss the results of our first quarter of fiscal year 2015. Also on the call today is Chuck Kummeth, Chief Executive Officer of Bio-Techne. Before we begin, let me briefly cover our Safe Harbor statement. Some of the remarks made during this conference call may be considered forward-looking statements. The company’s 10-K for fiscal year 2014 identifies certain factors that could cause the company’s actual results to differ materially from those projected in any forward-looking statements made during this call. The company does not undertake to update any forward-looking statements as a result of any new information or future events or developments. The 10-K as well as the company’s other SEC filings are available on the company’s website within its Investor Relations section. During the call, non-GAAP financial measures may be used to provide information pertinent to ongoing business performance. Tables reconciling these measures to most comparable GAAP measures are available in the company’s press release issued earlier this morning or on the Bio-Techne Corporation website at www.biotechne.com. With that said, I will turn the call over to Chuck.

Thanks Jim. Good morning everyone. Thank you for joining us today for our first quarter earnings call. We started our fiscal year 2015 on solid footing with 3% overall organic growth and all of our segments reporting higher sales. Our team has executed very well in an environment where Europe’s economy appears to be slowing and where here in the U.S. our academic market is still very price sensitive, given the multiple past years of lower NIH funding. We completed our previously announced acquisitions of Novus and ProteinSimple in quarter one, and together with prior acquisitions made in fiscal year 2014, the contributed another 24% of revenue growth on top of our base business, and they're building a foundation for future higher organic growth. The integration of these recent acquisitions has been a big focus for our teams early in fiscal year 2015, and they are progressing right on track. The legacy Novus and PrimeGene teams, together with the R&D Systems team have identified hundreds of products that are candidates for rebranding in different markets, such as (indiscernible) with academic, and/or different regions such as China versus North America and Europe to take advantage of each brand’s value proposition in those markets. This rebranding is already happening and a full roll-out is expected in quarter two. Also with the acquisition of Novus, teams have already been established and are working to enhance the customer web experience with Bio-Techne. A powerful web interface was a key enabler for making Novus a supplier of choice in the antibody market and enabler for growth that we see as transferrable to the rest of Bio-Techne’s portfolio. With Novus, we also recruited their founder, Karen Padgett, as VP of marketing, and she is spearheading both the branding and web-enabling projects. With the completion of our…

All right, thanks Chuck. I’ll begin with an overview of our Q1 financial performance for the total company, then provide some color on each of our three segments. Before I get into details of our results, I want to reaffirm that our financial results for the quarter include three months of performance from the Novus acquisition, which occurred on July 1, and two months of performance from the ProteinSimple acquisition, which occurred July 31. At the total company level, we are reporting organic revenue growth using our standard methodology, therefore excluding the results of these recent acquisitions, as well as PrimeGene which was acquired in the fourth quarter of fiscal year 2014, and excluding the impact of any year-over-year fluctuations in foreign exchange rates. However, for the protein platform segment, which consists entirely of the newly acquired ProteinSimple business, we are reporting organic revenue growth and operating margin on a pro forma basis as if we had owned ProteinSimple for all of fiscal year 2014 and 2015. We are doing this to provide insight into the performance of this segment. Starting with the overall financial performance, we delivered a solid first quarter resulting in a 4% increase in adjusted earnings to $31.7 million with adjusted EPS at $0.85. Under GAAP, EPS was $0.64 in Q1 compared to $0.74 in Q1 of 2014, with the decrease due to acquisition-related costs and amortization of intangibles. On the top line, Q1 net sales were $108.5 million, an increase of 27% year-over-year and organic growth was 3%. Q1 reported net sales include 24% net growth from acquisitions and a nominal impact from foreign exchange. By geography, North America increased in the low single digits organically. Biopharma sales were particularly strong in North America with growth nearly 10%, partially offset by mid-single digit declines in…

[Operator instructions] Our first question comes from Paul Knight with Janney Capital. Please go ahead, sir. Bryan Kipp – Janney Capital: Hi guys, it’s actually Bryan Kipp on behalf of Paul. Congrats on the quarter, and thanks for taking the questions. Just want to start off here on the protein platform. I think that the $12.9 million contribution, the 33% adjusted growth, did you guys see any pull-through in backlog? Was there something there? Any dynamics there on pull-through in backlog, or was revenue synergies a contribution there because of your existing platform? Just want some color there on the top line—

Yeah, I understand. It’s a little bit probably if you deduct it, it’d be hotter than the S1, but there was no real pull-through or pull-ahead. It’s just going very well.

Yeah, it was a bit early to say there was any kind of synergies there, and frankly their backlog is struggling to keep up with demand so they actually ended—you know, they started the quarter and ended the quarter with fairly little backlog because they are producing the machines pretty much as fast as they can. Bryan Kipp – Janney Capital: Okay, and then strong op margin, the 20.2, similar gross margin dynamic there that we saw last year in the S1? And then I have one more quick one after that.

Yeah, keep in mind that that gross margin, it was artificially high because of the last two months that that was included for revenue versus expenses. They tend—in insurance-type business, revenues tend to be a bit higher the last month of the quarter, so the pro forma numbers are a better go-forward margin rate to think about. Bryan Kipp – Janney Capital: Okay. Then on a geographic basis, just kind of want to think about benchtop time. I think some reagents peers of yours cited some strength in Europe, which was surprising. You guys said there was some soft weakness, especially in Germany. Is that all attributed to in your mind the weakness that we’re starting to see at the end of 3Q here, or is it something that kind of worked its way through because of vacations and seasonality?

It’s a bit seasonality, some timing. I was just over there personally in Germany and participated in our sales conferences over there, and it’s really a softening in Germany particularly. It isn’t really Europe, all across Europe. U.K. is actually pretty strong and is just, we think, a sense of what’s coming. We’re pretty quick on those leading indicators as a business, so reagents purchases happen pretty fast, up or down with the ebbs and flow of the markets. Bryan Kipp – Janney Capital: Okay, and you said you were just there, so the sentiment still hasn’t really improved?

The sentiment has not improved. We were—you know, we were expecting a better year this year, and I think all what’s been going on in Europe here and Russia and stuff is definitely—everybody’s talking about it, right, but Germany is definitely the softest of the bunch. We’re not seeing anything really too far off track for the rest of the year. Bryan Kipp – Janney Capital: All right, appreciate it. Thanks for the color.

Our next question comes from Matt Hewitt with Craig Hallum Capital. Please go ahead, sir. Matt Hewitt – Craig Hallum Capital: Morning gentlemen. Little help – you normally have provided this table in your press release that gives—and I know that you gave some broad increases, decreases for the segments, but I’m wondering if you could give us the specific numbers for the industrial, academic, Europe, China and Pacific Rim segments, or are you done with that going forward?

Yeah, we’re done with that going forward just because of the complexity of the business now, with the added segment and so forth. We are looking at it from a company-wide perspective geographically and not just by a particular segment. Also, given the variability to get that precise on a specific region, it’s a bit problematic, so I think the directional numbers we provided are what we’re prepared to give at this point. Matt Hewitt – Craig Hallum Capital: All right. China – you mentioned there was a bit of an issue this quarter with some of the funding. You expect that to pick up. Have you seen that already, or are you still waiting to see that?

We’re still kind of waiting to see that, but that’s what everyone’s expectation is. We actually hit our plan in China for this quarter; we’re doing fine, but we do think that things need to—we were expecting acceleration. Our plan was a little more back end loaded, so this whole crackdown, I think has caught everyone but a little bit of surprise. I mean, other larger companies and more instrumentation have seen a couple quarters of softness, and we didn’t really see that last quarter but now we’re seeing a little. We think it will accelerate again, and overall we’re looking pretty good. We’ve got a lot of new things coming in China. We’re still really building, in a real building mode there, so we have that going for us too. So we’re still expanding with more people, more reps, more everything. Matt Hewitt – Craig Hallum Capital: Okay, so if I’m hearing you correctly, you’re still pushing ahead with your plans versus kind of holding off to wait and see when that funding is going to come back?

We’re still pushing ahead. We still expect to see at least mid-20s for the year in growth. Matt Hewitt – Craig Hallum Capital: Okay, great. One last one from me and then I’ll hop back in the queue. As far as the M&A landscape is concerned, I know that you guys have a number of targets that you’re looking at. Has the recent volatility in the stock market created any opportunities for you, or is it kind of status quo waiting for the right fit?

Not really for us. Not a whole lot of surprises there. We’re always hunting, but we’re hunting smart. We’re pretty busy digesting and integrating correctly too, so we’re not in any hurry to rush. We have a strong pipeline, as I’ve mentioned more than once, and we’re talking all the time to people, potential partners. We expect to close on Cyvek very shortly here, as an example. Matt Hewitt – Craig Hallum Capital: Okay, great. Thank you very much.

Our next question comes from Amanda Murphy with William Blair. Please go ahead, ma’am. JP McKim – William Blair: Hi everybody, it’s actually JP in for Amanda. Thanks for taking the question. Mine was just more broadly about what you’re thinking about for the remainder of the year. This quarter you grew 3% organically. What’s kind of your internal target for fiscal ’15?

Well, we don’t really give guidance, so we’ve talked about our goals. I think you can deduce we have goals to get to a little better than we’re at – we’re 3% organic growth, but we’re not giving guidance. There’s a lot of—you know, we’re coming from a year and a half ago, two years ago negative territory, so we’re trying to rebuild and do things and get really a foundation set for much stronger organic numbers a year out, say, once these acquisitions are organic. I think from a year from now onward, it should be in the 8 to 12 for sure, if things all go well. Until then, I think it’s in this—3 to 5 is probably what you can expect, and we’ve been very clear about that. It could be better, could be worse given a lot of macro factors. I think without Europe and Germany this quarter, it’d have been a little bit better. That was kind of a surprise. There’s always something, right? It’s biotech. JP McKim – William Blair: Yeah. What about this rebranding strategy that you kind of talked about? Is that going to be more a lot of private label, lower cost options, or what’s going on there?

This is a really good question. This is actually a really good lever to where there could be better than expected upside in the core, because we’re doing these acquisitions to try and create synergies. So the fact we’re working 24/7 speed with ProteinSimple’s systems in-house here, trying to qualify antibodies at the level of, like, a thousand of them, so we have new tuned antibodies for these platforms. When you talk to researchers and you ask about antibodies, they’ll tell you. When you ask them, what’s the biggest annoyance you have about buying antibodies? They’ll say, frankly, mostly they don’t work. We’d sure like you buy them and they work, and antibodies are tough. It’s a tough business – everybody knows this, and we think that as we are one of the leaders now for sure with Novus, we can tune whole portfolios, panels of different antibodies, (indiscernible) instruments for full solutions that were—you know, customers can really be assured they’re going to kind of work. That’s going to be synergies, and that brand is going to be differentiated between R&D Systems versus Novus, all right, so we’re going to have a tiered approach here with proteins and antibodies, with Novus being more this fighter level. As you know, we have had some ankle-biting competition the last few years, and we are dealing with it; and I think between PrimeGene and Novus on board here, we’re going to be able to launch and have different value propositions, also different support for everything. But we’re going to be able to tier the approach from R&D Systems related quality, the usual support, integrity, et cetera, all the way to more of a lesser position where maybe academia is looking for a deal before they get to their final papers and such, and things we have talked about. Biotech pharma, we don’t see a whole lot of change. They want the best, they want quality. We intend to keep building our portfolio of R&D Systems brand. We’ve added hundreds of products again this quarter, so we’re continuing to pound away. We added three more GMP-related proteins – we had 29 brand-new proteins enter our portfolio. We have 77 new small molecule products in Tocris. We have 83 new antibodies developed, so we’re still acting as the leader we are with new products, and now we have the added advantage of trying to tier these into different brands or positions, where Karen Padgett from Novus is going to be an extreme help to us in terms of that positioning. Does that help? JP McKim – William Blair: Yes, it was very helpful. Can I say one more on clinical controls? Is there seasonality in that business, or was there anything in the cost or the sequential step down from Q4 and Q3 last year?

Well actually, remember last year we had a really, really good first quarter because there was some timing with our controls. I think we reported 13% in our core. I think given the integrated Bionostics being around 10, we’re right on track. We’re really happy with the results here and we don’t see a whole lot of variance. That’s one reason we bought Bionostics – you can put a ruler on this business over time. They always deliver, it’s great cash flow, and we’re right on track. JP McKim – William Blair: Great, thank you guys.

Ladies and gentlemen, if you would like to ask a question, please press the number one key. Again, if there are any further questions, please press the number one key. Our next question comes from Jeff Elliott with Robert Baird. Please go ahead. Jeff Elliott – Robert W. Baird: Good morning, guys. Thanks for the question. First one is on U.S. (indiscernible). Others have called out improvement in that (indiscernible) geography and end market. What are you seeing? It sounds like you’re calling our mid-single digit decline (indiscernible).

Jeff, you’re breaking up. I apologize – you’re going to have to repeat that or change your location of your mic or something. Jeff Elliott – Robert W. Baird: Yes, what are you seeing in the U.S. academic market? Others have talked about strength in that market. You’re mentioned a mid-single digit decline. What are you seeing there?

Yeah, we’re seeing modest improvements. As you know, anywhere from five quarters ago through (indiscernible) quarters ago, we were negative double-digit, right? In the last quarter, we reported negative 8%. We’re negative mid single digits now this quarter, so we’re having—we’re seeing progress. We don’t see it as a whole lot of, like, new spending coming off NIH funding. I think academia is still very timid in their spending. They’re not through the pain yet in terms of their memory, but we are seeing some help from Fisher so there is some—we’re starting to see more accelerated help there by a point or two. So the direction is the right direction, and we continue and hope to see progress. Jeff Elliott – Robert W. Baird: On Fisher, can you give any more color on how that relationship is progressing?

It’s going great. As you know, we’ve got 30 technical specialists that were trained here, and they’re continuing to get stronger and deeper into our business, because we have thousands and thousands of products, right, so it’s a hard bag to carry around. The rest of their army, of course, you do what you can. You manage in the field. Our field reps manage a lot of them, and you’re trying to get their mind share. You do that by, one, being platinum – you’re paying them, but the other is you try to spend time with them, you have webinars and seminars locally, you treat them with doughnuts. You do all of the above and you try to get them to really work on your behalf with their million product portfolio. And you know, it’s coming together, it’s working, and we have a great commercial team now led by some great experienced people, a lot of people with ex-Fisher experience, me included. We have relationships to the highest levels of the company, so we’re all in and we’re pushing them. I think they’re very happy with things, how they’re going, and we’re making modest improvements quarter-on-quarter, so. Jeff Elliott – Robert W. Baird: Great. One last modeling question for me here – on FX, I guess you mentioned modest impact on the quarter, but the impact to margins, and how should we think about the FX impact over the next year?

None of this has impacted our margins, so as I stated in my opening remarks, if you actually strip out all the acquisition activity, our baseline margins are amazingly flat, within 10 basis points flat year-over-year, both in our biotechnology segment as well as in our clinical control segment.

And that’s really exciting too, when you think we had 3% organic growth. That’s offsetting—there’s continued erosion in a lot of areas too, which we’re still battling, which is the reason for these different strategies we’re talking about. So you could think that with Fisher and the promotions and the other added promotions and different new commercial tactics we’re doing, what you guys asked about when I came 18 months ago, is all this going to have a big impact to margins? And you’re seeing it is, and we’re really holding well. I think that just reflects strong brand in R&D Systems, primarily the strength in the biotech pharm market. It isn’t about saving nickels, it’s about quality, and (indiscernible) really offset, mitigate any potential margin erosion due to commercial tactics. Jeff Elliott – Robert W. Baird: Excellent, thanks guys.

It’s something we’re watching, for sure, especially with Fisher because the more they sell, they get—they do really, really well, they get paid more, and we’re watching it. So far, so good.

Our next question comes from Dan Leonard with Leerink. Please go ahead, sir. Justin Bowers – Leerink Swann: Hi, good morning. This is Justin on for Dan. Just going back to China, was just curious if you saw any change in kind of the order pace throughout the quarter, especially towards the end – increase, decrease, kind of stable activity there.

Well, there’s not a long lead time with our orders, so pretty much the order translates to revenue very, very quickly in our business. Having said that, as we closed out the quarter and into the early part of October here, our sales reps there were reporting a lot more activity, a lot more customer inquiry, et cetera, which again leads us to believe that some of the funding is starting to get released there. So the activity definitely picked up, but not in terms of order intake towards of the end of the quarter. Most of it would have represented—would have been showing revenue. So when you look at it on a monthly basis, yeah, we did end the quarter with higher growth than we started the quarter, so I guess that would suggest that that order intake was higher.

We also had a pretty good comp from last year – we had 38% growth in China this quarter last year. Justin Bowers – Leerink Swann: That’s right, that’s right. Is most of the China business isolated to biotech, the biotech segment?

Well, our biggest piece is definitely there, but even our protein platform segment now has about—I had that number here. I want to say it’s around 7 or 8% of the revenue is in China, and it’s growing as fast there as it is here.

Yeah, it’s growing just as fast. Now, if your question is more about academia versus biotech, then yeah – I think there’s a lot of academia, obviously, in China, but it’s very strong academia, it’s well funded. Justin Bowers – Leerink Swann: Got it. Any comment on PacRim, or Japan specifically?

Japan had a great quarter. They were up near—close to 10% gross. (Indiscernible) in PacRim, a lot of timing issues, and again it was very strong last year, so it’s mid-single digit, as was reported by Jim.

The overall PacRim was in the low single digits, but Japan did particularly strong. Justin Bowers – Leerink Swann: Okay, great. The just—go ahead?

We do expect that to accelerate here as well. We think there’s some timing there in that. Justin Bowers – Leerink Swann: All right. Then maybe just a little more color on the 2Q launch for Novus and PrimeGene, and kind of maybe scope of the portfolio and timing?

Well as I mentioned, we’re working on hundreds of things – antibodies for the West machines. We’re busy requalifying proteins that were more commodity-level R&D Systems to be rebranded as Novus. We’re in the dozens of those at this point, and they are actually out. We are already selling some PrimeGene made products as R&D Systems brand – they’re already on the catalog and selling. So it’s all coming. It’s never enough for me, but this is unfortunately a business that is sold by—you know, you have to have a catalog and a portfolio of many, not a few, so you have to get to critical mass. We’re getting there. We’re definitely on track. I would say in terms of the integration schedule, Novus has been spectacular. As you know, we’ve got Karen on board. The other general manager there is on board here, is also someone I’ve known from my Thermo Fisher days. We know each other well, he knows our model real well, so we’re moving very quickly. We’re in the midst of actually harmonizing and integrating distribution in the PacRim – that’s coming together very, very well. We have shared histories there as well, so we see potential upside in not only just Japan but the rest of Asia. We’re direct in China, so it’s a matter of combining, getting teams working together – the ProteinSimple team there which is growing and doing very well along with our core team out of Shanghai. Justin Bowers – Leerink Swann: Okay, and just one last quick one. On capex, I know you guys were expecting a bump in capex this year, but are we going to see that moderate through the rest of the year, I guess on a quarterly basis, or do you expect those levels to sustain?

Yeah, Justin, I think it will fluctuate a bit throughout the year. Again, the major piece of our capex this quarter actually was a result of our new acquisition, ProteinSimple, which of course we knew about going in, where they actually moved into a new building this quarter to expand their capacity, so the lion’s share of that capex this quarter was associated with that. We also had some building activity for a facility in the U.K. that requires some expansion that was in our plan, and that will start to occur in the second half of the fiscal year. I expect there will be a bit of a dip in capex and then it will kind of get back up to the levels we’re seeing right now.

The cost in the Tocris U.K. will actually span two budget cycles. We did that on purpose, but it’s expensive stuff doing this high-end chemistry there, so we’ll get started on that second half. We’ve literally been out of capacity. That’s been a great business and growing also very faithfully in mid to upper single digits, and it’s actually past time to make that investment so we’re working on it now. Justin Bowers – Leerink Swann: Good problem to have. Thanks a lot.

Our final question comes from Paul Knight with Janney Capital. Please go ahead, sir. Bryan Kipp – Janney Capital: Hi guys, it’s Bryan again. Just wanted to do a quick follow-up on the Novus commentary you guys gave earlier on the ecommerce roll-out and leveraging your existing platform. Are you launching beta – I don’t know if you had announced this or went into it in depth here, but are you launching beta in the U.S. for broader Bio-Techne, and then what’s your plans on launching it ex-U.S. as you kind of continue to scale up that ecommerce channel?

Yeah, we were busy and kind of, I would say, mid-project on an overall comprehensive Bio-Techne website to improve the user experience. Now with Novus and ProteinSimple, we’re really looking at that and now we’ve got, I’ll say, a better pro with Karen coming on board, and Novus’ site is fantastic and their overall digital platforms and how they enable and drive content through their site is also, I think, amazing, another reason we wanted this deal. They are working through 60 suppliers, 200,000-plus products, and they’ve got on-time delivery as good as ours, and we make everything we sell. So we want to integrate kind of all that, so we’re taking a fresh look at what we do there. We’re probably expanding the R&D site first, I think, enabling with some of the tools and tricks that come with the Novus people, and then we’ll be expanding the Bio-Techne level umbrella second. And think about that as that’s where we’ll improve the SEO, so the search engine capability, so now our ultimate vision is that customers will be online searching, looking for proteins, and get all the varieties for the different tiered brands they have (indiscernible), so they walk away shopping and coming up with something. So it will take quite a few months to get all that put together. I don’t see a beta for things coming out on the R&D site improvement until probably spring-ish, in that range, but we’re right in the middle of trying to figure that out with the new team from Novus involved with our IT team. So more on that in the coming quarters, but all good stuff. We’re actually seeing great activity on our site as well as others. We’ve been doing a lot more metrics and measuring and surveying on our site, given with Karen on board and trying to figure out what else we should look at. Boy, the data is looking pretty good. Our site is actually working fairly well. Bryan Kipp – Janney Capital: Okay, thanks for the color. Just a last one, not to beat it up, but China again – your confidence on pacing. Do you have any view on whether it might be sort of a budget flush end of the year for them, or any conviction into the strength to start next year? Is it something that you guys remain positive on with underlying dynamics going on there?

Yeah, well man, I’m praying just like everybody else. If there was ever a table being set for a budget flush, it was this one in China coming up, so we’ll see. I’m sure all our peers are hoping and praying for the same thing. You know, you would say historically, given the way they act as a market and what’s happened with the crackdown, everybody getting kind of lean this last quarter or two, it should occur; but it’s hard to say. We don’t know how deep this crackdown will go either, but if it does lift and people get happier again, then I think you’ll see that. But I think we’ve got to see more happen on the political front there, probably.

The good news is that we know in their five-year plan, the funding is there.

Yeah, it’s a matter of timing. It’s there.

And when do they release the floodgates.

It’s going to pop sometime. Bryan Kipp – Janney Capital: Yes, sure. Appreciate it again.

Again ladies and gentlemen, if there are any further questions, please press the number one key. There are no more questions in queue.

Well okay, just want to thank everybody for being on. I know we have quite a few people on, more than usual, so if you’ve got a last question you can give it a try, or you can call us offline and have a more private question as well on certain topics. But anyway, thank you all. We think it was a very reasonable quarter for us. We’re more or less on track. We’re pretty excited about how the integration is going. We’re still hunting for more things to check off, more boxes for our ultimate vision, which most of you know of. We’ll be back next quarter to tell you more about how that goes with our progress. Thank you.

Ladies and gentlemen, this concludes the conference. You may all disconnect.