Good morning. And welcome to the Bio-Techne Earnings Conference Call for the First Quarter fiscal 2016. At this time, all participants have been placed in a listen-only mode and the call will be open for the 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 for joining us. Also on the call this morning 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 2015 identifies certain factors that could cause the company's actual results to differ materially from those projected 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 early this morning or on the Bio-Techne Corporation website, at www.biotechne.com. Also you will notice this morning's press released the stock based compensation expense as an added as an adjustments to the company's non-GAAP measures. This will be an ongoing adjustment as stock based compensation expenses are recurring to increase transparency of these costs as well as to reflect net earring for more represented of the ongoing cash generated earnings of the company. All comparisons since the prior periods reflect this adjustment as well. With that, I will turn the call over to Chuck.

Thank you, Jim and good morning, everyone, thanks for joining us today for our first quarter call. This morning, we reported a 4% increase in revenue for the first quarter, with solid organic growth in most of our end markets. Total company organic growth was 2% for the quarter were mid single-digit organic growth from our biotechnology segment and 10% organic growth from our Protein Platforms segment were tempered by the timing of OEM shipment at our Clinical Control Segment. In our Biotech business our Bio Pharma end market continue performed very well but overall organic growth on a high single-digit. Europe Bio Pharma market was particularly strong seeing nice rebound even in Germany. Overall Europe organic growth was in a mid single-digit or Germany – Germany leading a way without team. An increasingly bigger driver of our growth and above for market has been our sort of efforts to marketing in customer region and ask this solutions for these customer. Our expertise are producing complex bioactive molecules and our reputation for quality it will increase be in recognize by our biopharma capital by choosing us to give us interesting producing results. Not only these arrangements contribute to our current role but we also further depending on our relationships with customers it should enabled collaboration on project and years to come. Many of these products developed as any incorporated into our standard catalogue. Meanwhile in our academic and government end markets we continue to experience our multi quarter trends to modest organic growth with first quarter growth in a low single-digit after the release of our new website at the end of Q4 fiscal year 2015 website traffic is increase. Our work improves the website experience with the ongoing especially as per teams to adding more product content in the…

Thank you, Jeff. As on prior earnings calls, I will provide an overview of our Q1 financial performance for the total company and then provide some color on each of our few study. As mentioned in this morning's press release, a slight modification of our stagnant reporting again this current quarter. This modification is the movement of the company's Bio-specific business and the biotech segment -- completely shows that the recent acquisition of Cliniqa and its commonality a customer end market for Bio-specific influence this management and the employee change. All comparisons to prior periods will reflect the new reporting structure as this existed in the prior reporting period. So starting with the overall financial performance for the first quarter. Adjusted earnings was down approximately 10% to prior year with 29.4 million, Bio adjusted EPS was $0.79 a share versus $0.88 in the prior year. The impact of currency translation was a headwind to EPS by about $0.03. Under GAAP EPS for the quarter was $0.61 compared to $0.64 prior year. On the top line Q1 reported sales were $112.4 million, an increase of 4% year-over-year with organic growth of 2%. First quarter sales include approximately 6% growth from acquisition and a 4% impact from foreign exchange. Moving on to the details of the P&L, total company adjusted gross margin came in at 70.6% in Q1, down 150 basis points from the prior year. Approximately one-third of this decrease is due to impact of currency translation and the remaining decrease is due to product mix exchange associated with the acquisition that occurred since last year. Excluding the impact of acquisitions and effect quarter gross margin modestly improve year-over-year in the first quarter. Adjusted SG&A in Q1 was 23.2% of revenue and R&D was 10.1% of revenue, 360 basis points and…

[Operator Instructions] Our first question is going to come from Dan Leonard from Leerink. Please go ahead.

Thank you. So first of on your operating margin, you've talked in past excluding further acquisition you expect this business to be about a 40% operating margin business. I just want to clarify is that – does that expectation now include or exclude stock on?

It excluded before and it excluded now. So..

So it's a cash number.

Right.

Okay. And then my follow-up question, Chuck can you give us some may be little bit more color about how we should think about the cadence of the Protein Platforms business throughout the year?

So -- ramp in the north direction ultimately here. So we had as we talked for last quarter earlier set back was commercial order base, and we lost roughly 50% of the sales force and in that transition in an operation. But half that was expected and startups in the Silicon Valley you know people move on and there is all that to think about. We definitely had some turn over, there is a lot of we grow as well. We definitely change our sales force. We have new leader and new overall operation leadership that I talked before. So we are kind of back full strength we need in quarter, sort to get back at it. We did much better job of leveraging the order invasion for instance that – using order invasion here R&D Systems since we have large customer base and loyal following and in the quality and how they help in collaboration and done together. There is more and more in that being put in to the models for how we go-to-market. Its – we also got get pretty good start this quarter. I think – I don't think it's going to take more than one quarter or maybe two when we get time back to I think we should this is mostly in the Western side, Biologic been strongest continued strong and no issues, as we see so far. So I think we should be ramping again that we had issues still a better quarter and in last quarter so we are on the way back I think. Obviously we want to get back 20% better kind of growth rate quarter-on-quarter and that's our goal and we do think that will achieve by year-end.

That's helpful. Thank you.

Our next question is going to come from Amy Wang from RJ. Please go ahead.

Amy good morning.

Yeah, me too. So I guess...

Ms. Wang do you have a question? [Operator Instructions] Our next question is going to come from Jeff Elliott from Robert W. Baird. Please go ahead.

Good morning guys. And thanks for the color on the segment the moving pieces there. But I guess can you give additional color on the margin progression by segment through the rest of the year. I think a lot of them kind of struggle to model the first quarter, but how should we think about the margins progression through the rest of the year?

I'll let Jim handle that.

Yeah. Hi, Jeff. So if you look at the price segment the way we think about it is our overall Biotech segment I think the margins where we are at today is consistent with where you are kind of expecting going forward, now they could go 100 basis points up perhaps in that range with no material difference in Biotech division going forward. From a CCD perspective, we have some of the OEM shipments come through that will have a nice pull through and leverage on margin. So I basically would say that our margin profile in that business should eventually creep up to the upper 20. It won't hit 30 because Clinic Care has the lower margin profile than other businesses did historically, but I'd say upper 20 a year is kind of our expectation. Jumping to Protein Platforms, again with the first quarter our national business team took to the lowest quarter, we should get some nice leverage pull through on that going forward. And margin expectation -- operating margin expectations would be in the mid-single digit I'd say.

Okay. That's helpful. And just on the revenue side given that the shift in revenue between the segments I guess can you give us an update on how we should think about the kind of the organic growth by segment over the next few quarters?

Organic growth I guess by Biotech we have been -- we've kind of been where we felt, we expect to be in mid-single digits, we will continue in that range for Biotech. There are other possible upside [indiscernible] new deals, new things we are working on, new products, new directional strategy, but mid-single digit is kind of there. I think again mid single-digits will be at or remain – slightly higher single digits in the clinical controls and that can take power pack with the OEM shipments. It's starting to hit already [indiscernible] this quarter, so I expect that to be kind of volumes set along. And the biggest and then of course is Protein Platforms as James just mentioned, it's about quarter come back here and it's the sales force where it gets back in here if we can hit back to them, the 20s are better and simple western platform, I think then we're back where we think, we need to be in mid teens to nearly 20 overall. It should be very possible, should be what we expect. We had a quarter last year at 30%. It fits so early in the cycle of this business of the company that it's hard to exactly to be. We expect 20 or better and we're issuing for more, we've got to get team in place the other time. It's a great platform. It's a great technology, before this business didn't even provide demos. It was just so kind of early adopter kind of driven the strategy and we have to get a change our policy. I think with more leverage with that phase and then agent's people involved with different types of models and demos and demos lastly put in place, the leverage we have – having 20 different sites [indiscernible] couple worldwide, we think we're going to have very good success.

Jeff, the only thing to add is that – that double digit kind of growth rate, I would – I think I wouldn't model that expectation [indiscernible] . It was flat last quarter, 10 this quarter. It's almost aligned there at two points.

Got it. And just one quick last one from me, on the Japan business, I guess what gives you confidence that that's going to see some recoveries? Is it just what you are seeing on the government funding side, or there is something else there?

Really good question and we've dug into that hard. Overall [indiscernible] take out Japan it looks great, the best quarter we had in a while even for [indiscernible] it tells you how negative Japan was. We've already had Peter in there digging in. He has strong contacts as well obviously with his experience. This whole AMED thing or the consolidation of their three organizations that act like NIH does here, are coming out and they are supposed bearing fruit, we are losing our funding and going forward the next quarter and maybe the second quarter, after that there the restart happening. That gives us confidence. Two, there aren't any incumbent supplier there, everybody has to import in. So, they are running out of stock. There was a de-stocking issue it really happened for two or three quarters with the massive change in currency, but that's going to change and that's going to correct itself and we see some of that already. But it is definitely taking longer than we thought, it's Japan it always takes longer than we think in Japan is. My whole crew had this issue with Japan. We business [indiscernible] so we have to wait it out and it will recover. They have – they actually have a very strong funding cycle coming [indiscernible] just a matter of them being able to use it. We think. I have notice on other calls already other peer companies they are not talking a lot about Japan and other things it is not very good. I think their numbers reflected probably like ours.

Okay. Our next question is going to come from Drew Jones from Stephens Incorporated. Please go ahead.

Thanks good morning guys.

Good morning.

Good morning.

PrimeGene you guys have obviously been pretty strong there for the past year when some other tools companies have struggled, can you walk us through the confidence on why that's going to be sustain and should we expect an acceleration backup to the 20% level?

Sure. I'll give you at least some color on that. In the last quarter we had a – we have a really great quarter in China 35% increment. So these things do balance try a little bit, win a definite teams. We have some shifting in our portfolios well. We've recent plans lot of products over there with lots of different source of naïve just rolling. PrimeGene piece is doing better than plan. It's doing wonderful, another quarter 40% fast growth China for China. Jim and I were just there month ago or so. We finish the new factory. It's GMP ready site. It's gorgeous. It is growing – their audits already happening, that's why people are going away. So it's going to continue to be like a R&D systems kind of branded that kind of organization there with quality been foremost. Although, it's PrimeGene China for China, people get it and we see no one up in that growth rate for that part of the business. Other part of PrimeGene is kind of OEM related and that's also been picking up. So we're very close to our acquisition model. We're right on release part on I think the PrimeGene going forward. Management, still although we haven't lost single person, we actually brought on one new scientist, very high level, very credited and we're building out and this is not the kind of site organization, everything is really going to attract more talent.

Okay. And then on the acquisition front, has there been enough multiple contraction over the past couple of months where there are some areas that you thought were out of reach that maybe are in play now?

This – no, I think this question has come up in lot of our peer calls and it's too early right. I mean, people absolutely better have. We're really happy that evaluation has come down a little bit and it is fixed year little change thinking but I think one or two quarters we are using enough for this kind of this kind of market memory to really integrated into our prices offering, prices expect this per acquisitions but overtime maybe there is still lot of deals up there we've got a lot – we've got a strong product and new offering and we are still looking and we are working on the always cautions and how we are – and however lot of these kind of synergies and they happy available cost and sales just more to come but we are not just pointing in the discounts we are seeing it now but we hope picture allowance.

Thanks, guys.

Our next question is going to come from Amanda -- Amanda Murphy from William Blair. Please go ahead.

Hey good morning guys. Just a follow-up question on ProteinSimple so in terms of that question as you know saw you talked about how some of that expected and obviously you've had some sales, you have some changes there but is there anything else that we should be aware of I don't know if there anything on a competitive landscape that's bring in terms of maybe people leaving before there or not is there anything else that might be driving any kind of equation?

That's really great question. We are asking here what else if you are worried about it's a Silicon Valley company I can tell you we talked and it was brought by actually two quarters or above you should help running buffer and those it will effected quality and then it maybe gave some scale to the market over already for active in this platform but already full result now for over a quarters but I think that's all behind it we don't see any issue around that we don't see any issue or roadmap the roadmap and all the platform we have are solid on track its more now since coming. The team, the development team is 100% intact. It's been intact nothing has changed, run by [indiscernible] vendors since beginning this company and its going extremely well. I don't see any other real catches or risks outside of the commercial risk right now. And I think even there we feel really very good. We have getting the team back to full strength with 6% reduction over six months period not a small task. Now it's not a big company the overall commercial innovation for 100 people, talking about 25 to 30 reps overall doing -- supporting and those are all back. We are also shifting around a little bit the way the organization is structured. So you have reps and you have technical service type people, work people and some of that varies by kind of phase you are in cycle, product cycle. You want to go to a more of a demo driven cycle and more support you change, so again some of the changes while we should get [indiscernible] I won't see .

Got it. Okay. Thanks. And then obviously the question usually one of these earnings is around kind of purchasing pattern that is some of the smaller buyer tech means and you talked about that segment generally being pretty strong. But I don't think you have kind of exposure to the techno companies, but can you just kind of refresh a memory there what you are seeing just going forward on some of the smaller biotech companies R&D type spending patterns?

For my understanding your question, here you are asking about the spending patterns in smaller biotech companies and we are seeing in respect of our own spending?

Yeah, just I mean, obviously given the volatility and there is just some concern that ultimately -- that would impact what types of dollars Biotech companies are spending and I don't think you guys have specifically a kind of exposure to those types of name but I just wanted to clarify that and like that.

There's not any real rate slide coming to offer new warnings [indiscernible] give us any cause to react.

Yes. Okay. And then just last one on the OEMs shipments. I think you said business deal [indiscernible] those come through the P&Ls but those going to be primarily in the next quarter or should we think about that as more of projected dynamic?

Nice trends [indiscernible] answer. Some couple of days this quarter, we better teach our brand new young hunk acquisition of what's likely to be in a public company.

Okay.

Miss your orders like two days in this quarter, so we're now -- we'll continuing got some more work to do there. So overall, if we try to get transparency, we're in the past we've talked about the new hematology control things seem so stable on such a stable grow and now it's to be lumpier because there's much more OEMs percentages in the business. So I think it will be a little more volatile, but still overall I think much less volatile like commission as far. At the end of this quarter we'll shift any more OEMs, the next quarter hope not. So hopefully this is availability to catch up quarter of fact. But I want to make a very clear the outlook with Clinical what we – what they hold this, what we bought, what we model this for what they have in their pipeline is all right on track and in fact they finished their business last year, their 40% organic growth rate and looking for being 10% or better like this year. So it should be helpful. It's going to take a sort of while to get their margins as where we like it and talked about being a little less, there's some work to do, but and may be long-term as its sales that maybe won't have margins of our hematology control, but it's a solid business with good potential to remain at double-digit growth.

Little more specific Amanda on the quarterly profile, I mean right now, the way the schedule looks that second quarter and the fourth quarter, will be stronger than the first and third by that – I don't know, it's always have to change there. And the more interesting things we bring in and it will be more and more like that.

And that the OEM lumpiness dynamic that's purely there Bio-Cliniqa?

Yeah, Cliniqa as well as our legacy diagnostic business.

Okay. Yeah. Okay. Thanks very much.

It's the same sign of reasons, big joint customers, big OEM orders.

Yeah.

Probably [indiscernible] taking order, right?

Got it, thank you.

[Operator Instruction] Our next question is going to come from Paul Knight from Janney Montgomery. Please go ahead.

Hi, Chuck, how are you?

Great, Paul, how are you doing?

Good, I don't need to press star one or just press one in the future. You'd mentioned Jim, the talk around the gross margin impact from these OEM – I am sorry, from the ProteinSimple costs and shipments et cetera, you've mentioned there is a gross margin impact number, what was that both from diagnostics and from ProteinSimple?

What I can – may help you with is that for the Protein platform segment, gross margin basis if we put margins by over 300 basis, the acquisitions in.

Okay.

In platforms. And then for our – for our clinical control division the gross margin impact of the acquisition was actually pretty nil. It's actually slightly positive impact on the gross margins but on the operating margin there was over 300 basis – almost 400 basis points.

Okay. Very helpful. Thank you. And then where do you think you are on your online capabilities right now, well Abcam is being doing this strategy a long time I know you've been building that capability up? Are you in the first innings the third innings what's your comfort level with this go to market strategy?

Let's start talking about our need two years ago that really get back in the game with website that gives a customer experiences that something better than it was. I would say we are probably a decade behind a good 10 years by Abcam because they had entered for the long-time. In these two years, we come a long way I would say we're probably only six years behind. We caught up two extra years probably. It's there, a long ways ahead. And it's not – it's not in the amount of products, we actually have more products but they've spend a long time winning data, reference citation, online and we've growing as best as we can, we actually thing our website is – our search kit is best out there right now. It's just the matter of now backing up those bones with the right content and that will take time. With the Novus Group here and they are in the overall doubling of our IT group in order to handle all this, we're on acceleration mode. But innings wise, if we are talking baseball it's probably third innings, fourth innings at best. The best is yet to come. And we've seen results I mean the Academia is definitely improving. And [indiscernible] which didn't have a greatest quarter by the way for us, but it is developing and it is noticeable and I mentioned our traffic is us the website had immediate effects there and it's early I think the opening is still really early to be honest.

And then lastly, the level of contribution from acquired revenue in remainder of the year, what's your round number on that?

[indiscernible]?

Right. Inclusion of the future numbers.

Are you referring to Cliniqa?

Yeah.

You know what we'll tell you about Cliniqa is that Cliniqa when we acquired it was approximately of the size of Meldas. So that's kind of based on -- you can think about in terms of year.

Okay. Thank you very much guys.

Our next question comes from [indiscernible] from Craig-Hallum Capital. Please go ahead.

Good morning, gentlemen. Just a couple of questions, first can you quantify or give us a ballpark for the OEM shipments that pushed from Q1 to Q2? You know we are talking about a couple million dollars or was it even more than that?

We are pointing 2% organic, 3, 5 it would have been in the – or it should have been in the quarter five at least in this [indiscernible] , so we are talking of couple of million or little less.

Okay. And then with those sitting here it sounds like a majority any way in Q2, is that simply on top of kind of how we had modeled Q2 or does the push out to Q2 then you see a some delays in the reorders in Q2, so it actually not an additive situation.

I will say in general that our profile right now for this division has a higher stake in revenue in Q2 and in Q4.

Okay. All right and then one last one, as far as the new antibody, I saw press release the other day, you are up for 1,000 there. How should we be thinking about how those, how the [indiscernible] antibodies will ramp, I mean is it much like your old model, I mean almost annuity based stream or is it going to be a little lumpier with those products?

I think it will be low and steady like we are known for.

Okay. Great. Thanks guys.

There are no questions in queue at this time. [Operator Instructions] There are no questions in queue.

All right. Well thank you everyone for attending. Should be interesting quarter going forward. And we will be talking I am sure throughout the day here as well. Thank you.