Jim Hippel - Chief Financial Officer Chuck Kummeth - President and Chief Executive Officer.

Dan Leonard - Leerink Partners Jeff Elliott - Robert W. Baird Paul Knight - Janney Montgomery Scott Amanda Murphy - William Blair & Company.

Welcome to the Bio-Techne Earnings Conference Call for the Second Quarter of Fiscal Year 2016. [Operator Instructions]. I would now like to turn the call over to Mr. Jim Hippel, Chief Financial Officer..

Good morning. 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 comments made during this conference call may be considered forward-looking statements, including beliefs and expectations about the Company's future results.

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 in the 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 the 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 and on the Bio-Techne Corporation website at www.bio-techne.com. And with that, I'll turn the call over to Chuck..

Thanks, Jim, and good morning, everyone. Thank you for joining us for our second quarter conference call. This morning we reported revenue growth of 8% for the second quarter, with the majority of our end markets remaining strong organically and a solid contribution from our recent acquisitions.

I'm extremely pleased with the achievement of 6% organic growth corporate-wide, with our core business growing organically at 7%. This reflects a strong contribution from both our biotechnology and clinical control segments. Protein Platforms remains in a recovery period.

Although we're seeing increased commercial traction, this segment remains on track for a reacceleration in the second half of fiscal 2016. Starting with our biotechnology business, our biopharma end markets remain strong, with revenue increasing in the upper single digits for the quarter.

Our biopharma customers continue to recognize the benefits of outsourcing the development of complex bioreactive molecules to Bio-Techne. Our reputation for high-quality proteins, antibodies and assays continues to drive additional custom reagent development for the biopharma customer set.

This enables a more sticky relationship with our customers, creating opportunities to meet additional client reagent needs as the relationship evolves. Our academia and government end market grew in the low single digits, as it has for several quarters now.

We believe one of the keys to driving long term growth within our academia customer base is the ongoing improvement of our website. Encouragingly, the recent enhancements to our Bio-Techne website are generating increased Internet traffic with both number of visits to our website and online ordering activity growing mid-single digits year over year.

In fact, our Novus Biologicals brand which was the first of our brands to use the enhanced website, observed revenue growth in the high single digits this quarter as a result of the improved Web experience.

The continued emphasis on search engine optimization and adding more product content to our website should continue to build revenue momentum from our academic markets going forward. Increases in NIH funding recently passed by Congress should also provide a modest tailwind.

Europe performed well in Q2, with mid-single-digit growth that was broad-based in the region. Our European biopharma business was particularly strong, with its research cycle returning in fiscal 2016 generating growth in the low teens.

Our commercial team has executed very well there, as this is the third consecutive quarter with mid-single-digit growth in Europe. China was a standout in the quarter, delivering another stellar performance with organic revenue increasing 30%.

We continue to view China as very much an emerging market for life science reagents, especially for those provided by Bio-Techne. The increasing demand for health care will drive further investments in life science research, benefiting our still relatively nascent business in this geography.

In the Pac Rim, Japan remains a drag on growth, with our Japanese business down mid-teens in the quarter, consistent with recent quarters where Japanese funding environment remains challenging.

These issues are taking longer than expected to improve, although we're hearing that funding will begin to be released in February, representing a potential catalyst to return our Japanese business to growth by the end of fiscal 2016. Excluding Japan, our Pac Rim revenue increased upper single digits in Q2.

Finally, I want to highlight the operational performance of our biotechnology segment, where we expanded operating margins in Q2 by over 150 basis points from the prior year. This expansion was driven by productivity actions and process improvements that still managed to find efficiencies in an already lean organization.

The improvement is even more impressive, considering it overcame over 100 basis points of margin headwind due to unfavorable currency exchange.

Overall, we're very pleased with the strong performance within our core biotech product portfolio, with Q2 representing the third consecutive quarter of at least mid-single-digit organic growth in our core business.

Getting our core back to consistent, mid-single-digit growth has been the most challenging and complex part of our five-year strategic plan and I'm proud of our team's effort to get us there and I have confidence in our ability to maintain this momentum.

Moving on to our clinical controls division, we experienced strong performance from both our organic and acquired businesses in the quarter. As a reminder, in Q1, our organic clinical controls division was unfavorably impacted by the timing of OEM delivery dates.

As expected, these OEM orders were delivered in Q2, contributing to 10% organic growth for the quarter.

Cliniqa, our controls and reagents supplier for the diagnostic market that we acquired last July, outperformed our expectations for the quarter and I believe we're in the early stages of leveraging the cross-selling opportunities that exist between this acquisition and our legacy clinical controls product line.

That said, the addition of Cliniqa's reagent-based products introduces additional products with longer shelf life similar to our existing chemistry-based Bionostics product, allowing OEM customers to buy in bulk and increasing the potential for a quarter-on quarter segment volatility.

Based on customer ordering patterns, we anticipate the revenue contribution from Cliniqa in Q3 and Q4 to look more like Q2 than Q1. Our legacy hematology controls business remains stable, growing mid-single digits.

Given the relatively shorter shelf life of our hematology controls products, we view growth of these products as an indicator of stable underlying demand within our clinical controls end market.

Based on stable underlying demand, our outlook for clinical controls remain unchanged and we anticipate annual segment growth to remain in the mid-single digits going forward.

Lastly, our protein platforms business remains in a recovery period, with a low-single-digit decline in our organic business for the quarter, although total segment revenue increased 18% sequentially over first quarter results.

I want to share some of the positive elements of our protein platforms segment that gives us additional confidence in this business during the second half of fiscal 2016.

In addition to now having a complete, industry-experienced Simple Western sales force, we're leveraging the entire R&D systems commercial team to generate leads, cross sell and demo this game-changing Western Blot technology.

In doing so, we expanded our pool of potential Simple Western customers by engaging with the vast majority of scientists who are more pragmatic about technology changes in their workflows versus the initial strategy of focusing on early technology adopters.

We still feel that this innovative technology will achieve significant share in the Western Blot market that is currently dominated by time-consuming, manual and poorly reproducible process.

Executing on our new commercial plan is beginning to bear fruit, with new lead generation growing 20% and a number of quotes increasing in the mid-teens year over year.

We view these metrics as indicators of building interest and awareness in our protein platforms workflow solutions as we continue to anticipate at least double-digit growth for this segment beginning in the third quarter 2016. We're very pleased with the performance of this Simple Plex product line within protein platforms segment this quarter.

As a reminder, this is the rebranded Cydex start-up business we acquired a year ago in November.

The revenue ramp of this business consisting of the Ella line of multiplex ELISA instruments and associated assay cartridges remains in early stages, but we're clearly seeing growing interest from our customers for the workflow enhancements the Simple Plex testing platform delivers.

During the quarter, we reached a milestone in the Simple Plex product line with Q2 representing the first quarter of double-digit Ella instrument placements. We believe we're in the very early stages of Ella instrument adoption and look to Simple Plex to become a significant revenue contributor in future quarters.

While the protein platforms business slightly declined organically year over year, we view the sequential increase as well as strengthening sales indicators as signs that our revised commercialization strategy is gaining traction. Nothing has changed with respect to our favorable outlook for the segment.

We're only one quarter into our upgraded sales force and new commercialization strategy and remain on track for a meaningful segment revenue acceleration beginning next quarter. With that, I will pass the call over to Jim for a more detailed review of the financials before we open up to Q&A.

Jim?.

Thank you, Chuck. As on our prior earnings calls, I will provide an overview of our Q2 financial performance for the total Company and then provide some color on each of our three segments.

Starting with the overall second quarter financial performance, adjusted earnings increased approximately 3% year over year to $32.8 million, while adjusted EPS was $0.88 a share versus $0.85 in the prior year. The impact of currency translation was a headwind to EPS by about $0.06.

GAAP EPS for the quarter was $0.69 compared to $0.89 in the prior year. Although excluding the prior-year $8.3 million gain on our initial CyVek investment, GAAP EPS improved by $0.02 over second quarter fiscal year 2015. On the top line, Q2 reported revenue was $120.9 million, an increase of 8% year over year, with overall organic growth of 6%.

Second quarter reported sales included 6% growth contribution from acquisition partially offset by a 4% unfavorable foreign exchange headwind. Moving on to details of the P&L, total Company adjusted gross margin was 70.8% in Q2, decreasing 20 basis points from the prior year.

The year-over-year decrease reflects an unfavorable product mix due to the CyVek and Cliniqa acquisition and unfavorable FX. These are partially offset by strong productivity gains, primarily in our biotech division. Excluding the impact of acquisitions and FX, core gross margins improved 150 basis points year over year in the second quarter.

In the near term, we anticipate gross margins to remain in the 70% to 71% range depending on the product mix. Adjusted SG&A in Q2 was 22.3% of revenue, 130 basis points higher than last year and R&D was consistent with the prior year at 9.1% of revenue.

The increase over prior year was driven primarily by the acquisitions made since the beginning of the second quarter of last year. Modest investments, largely for commercial activities in China and protein platforms, have also been made. The resulting adjusted operating margin for Q2 was 39.4%.

Excluding the impact of FX in acquisition, the operating margin in our organic business was 41.4%. This compares to an adjusted operating margin of 41% in the second quarter of last year, demonstrating the productivity and expansion of margins we delivered in our core businesses.

Looking at our numbers below operating income, net interest expense in Q2 was $0.3 million, essentially flat to last year. Other non-operating expense for the quarter was also $0.3 million. This compares to $0.1 million of non-operating expense in the prior-year quarter, with unfavorable transactional FX explaining the year-over-year variance.

Our adjusted FX tax rate in Q2 was 30.1%. That's down 20 basis points in the second quarter of last year. In terms of returning capital, we continue to pay our dividend and paid out $11.9 million in the quarter. Average diluted shares were up less than 100,000 shares over the year-ago period at 37.3 million shares outstanding.

Turning to cash flow on the balance sheet, a record $38.5 million of cash was generated from operations in the second quarter and our investment in capital expenditures was $4.9 million. We ended the quarter with $113.9 million of cash and short term available-for-sale investments of $26.6 million sequentially from the end of Q1.

Our long term debt obligations at the end of Q2 stood at $162.8 million, a decrease of $1.6 million from the end of Q1. Going forward, opportunistic M&A, our dividend and debt paydown remain our priorities for capital deployment. Now I will discuss the performance of our three business segments, starting with the biotechnology segment.

Q2 reported sales were $75.9 million for organic growth of 7%, exceeding our expectations for the quarter. Foreign exchange negatively impacted reported sales growth by approximately 5%. We anticipate the biotechnology segment to continue to grow organically in the mid-single digits going forward. By geography, the U.S.

grew upper single digits organically, with solid biopharma sales growth offsetting flattish academic results. Europe increased mid-single digits organically, with biopharma sales in this region increasing in the mid-teens, offsetting low single-digit growth in academia.

China experienced very strong growth of 30%, while the Pac Rim declined upper single digits year over year, reflecting a mid-teens decline in Japan. As Chuck noted earlier, excluding Japan, the Pacific Rim grew in the upper single digits.

Adjusted operating income for the biotech segment increased 5% in Q2 compared to the prior year and adjusted operating margin was 52.7%, an increase of 160 basis points year over year. Strong organic growth coupled with productivity initiatives more than cover the impact of negative foreign exchange to the bottom line.

Excluding the impact of FX, adjusted operating income increased 11%, topping the segment's 7% organic revenue growth rate and operating margin would've been 53.9%. Turning now to clinical controls, segment sales in Q2 were $25.7 million, with reported growth of 49% over last year.

The acquisition of Cliniqa contributed 39% to growth and organic revenue increased 10%. As expected, the timing of OEM shipment orders benefited the quarter, with some of the OEM order timing that impacted Q1 normalizing in the second quarter.

Going forward, we expect OEM shipment orders in Q3 and Q4 to be commensurate with Q2, although changes to OEM ordering patterns could introduce potential quarterly variability to segment performance. In the long term, we continue to expect clinical control segment annual organic growth to be in the mid-single digits.

Clinical control adjusted operating income increased 42% to -- in Q2, commensurate with the top-line growth. And adjusted operating margin was 28.4%, a decrease of 120 basis points from the prior year due to product mix. Moving on to our protein platforms segment, where net sales in Q2 were $19.3 million, declining 6% from the prior-year period.

As a reminder, we have now completely annualized the ProteinSimple acquisition, so any associated revenue from this business is now included in our organic results. Revenue from CyVek continues to ramp and we reached a milestone of double-digit instrument placements in the quarter.

Given the timing of the CyVek acquisition close last year, the contribution from acquisitions was less than 1% in the quarter. And favorable FX impacted revenues by 3%, leading to an organic segment revenue decline of 2%.

Despite this decline resulting from the transition of commercial strategy, consumables sales from existing Simple Western instrument placements increased 20% in Q2 compared to last year, demonstrating that our customers really do see the value our technology brings to their workflows.

This, together with a significant improvement in instrument sales lead generation and quote activity that Chuck mentioned earlier, gives us confidence in a return to double-digit growth in the back half of fiscal 2016. Adjusted operating income for this segment in Q2 was $1.5 million compared to $3.4 million one year ago.

With the CyVek acquisition, foreign exchange and the organic growth decline explain the year-over-year variance. We continue to expect additional improvement in protein platforms profitability as segment growth improves in the second half of the fiscal year. That concludes my prepared comments.

And with that, I'll turn the call back over to Katina to open the line for some questions..

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

Just want to dig into the protein platforms business a bit more.

First off, do you have a book-to-bill number you could offer for that segment?.

No, we don't offer that kind of data. It's not really a -- like a mass spec to the business, where there's really heavy bookings front-end with it. We pretty much ship what we've build pretty quickly..

And Chuck, can you characterize perhaps the new-product pipeline in that segment? Is there anything we should be looking forward to here in the next --?.

There is a lot of exciting news there. As you know, there are three different roadmaps of platforms in that company, that business,[indiscernible] with CyVek. And we just announced Maurice. We have a new biologics platform that allows us to look at size as well as charge. So it's a dramatic increase.

It comes after, I think, five or six years of -- since the last major upgrade in that product line. And we already were experiencing solid growth. We're in high single-digit growth in that platform anyway. So we're really excited about it.

And we just announced it last week, I think, maybe even two weeks ago, but initial interest has been nothing short of staggering..

Okay.

And then my final question, can you characterize the current M&A environment?.

Challenging. So, yes, I think we will need more time with this market. And with things settling back -- things have settled back for most biotechs in our space, but it takes more than a few months. Hopefully things will get a little cheaper. We participate in the Affy deal and hard to compete with big Thermo when they are interested.

But we remain very engaged with a strong pipeline, a strong hopper and we're active in deals at this very moment as we always are..

And our next question comes from Jeff Elliott from Robert W. Baird. Please go ahead. .

Good morning. Nice quarter guys. First question for me is on the biotech business. Could you talk about what you're doing to improve margins there? You had some really strong improvement in the quarter, even despite the FX headwind.

But what are the actions you are taking to drive margins there?.

Yes, you know, we've talked about this a lot in the past. And you know personally, when I joined a little less than [two] [ph] years ago, there was a lot to be done here operationally. I'm Six Sigma trained. We have a lot of people here that are, the new people that come in.

We have a lot of strong operational leaders that come from much bigger companies running much bigger businesses and we're rigorous in reworking this thing and organizing into -- like as an example, dividing development away from manufacturing. So we actually have a factory part of the organization now in biotech.

That allows the organization to work on productivity. And that part of the organization has done very well. We give them a challenge in every year's plan of how much productivity to find. And you break that down in creating projects to find it and then you work it every month. That's how everyone does it and that's how we do it, too.

I'll give you one example. There was a lot of -- we're known for quality. We're known for our high bioactivity. We're known for superiority of our products and we test and test and test and test here.

But we're probably bringing in a little of our testing theory, SC, statistical methods and that's also helping us out just to be a little more streamlined. There's just never been much done before. Even though it is very lean, there's still a lot of methodologies here that will help. We have brought in a lot of new systems, computers.

We have an online product mapping system. I wouldn't call it an ELN per se, but when you generate over 1500 or 2000 new products a year, you have to have a system to manage all those to the pipeline.

And that's an extensive internal IT system that we use and we've really improved that and made that much more -- just much more efficient for all employees to use in the lab, whether they are working in assays, whether they are working in antibodies, whether they are working in proteins and that's also helped.

So, a lot of programs, a lot of projects. But, all in all, it's a great quarter. And consistently, we have been improving margins, as you have seen that year over year here..

That's great. In the prepared remarks, I think you mentioned the NIH funding increase this year. And I think you described the potential tailwind as modest. I guess why modest? It is a pretty big increase that the NIH has seen.

Is that more of a timing impact or --?.

The budget is $31 billion, going up $2 billion. 3% last year to 6.5% this year. Some of that will find its way to us for sure. Everyone buys data on who gets what grants.

There's thousands of grants given and we're trying to map those grants by the customers that are getting them as to what who are our customers to see if one institution is getting x amount more grants per this, how big a customer they are for us. But it's hard to quantify. We're sure we're going to have some tailwind from it.

I would look at it as nothing more for now and be conservative. It's a nice buffer for us maintaining our mid-single-digit growth in this area. So at least we're not declining. We don't have to worry about compensating for any of that. It's definitely on the right direction.

And with a full 6.5% increase in the budget, something should find its way to us. Hard to quantify. As we get further along here, though, this next quarter, we will try to have more data on that..

[Operator Instructions]. And our next question is going to come from Paul Knight from Janney Montgomery. Please go ahead..

Couple of questions, number one, what steps are you taking in the ProteinSimple platform? Are you consolidating salespeople, hiring new ones, reassigning them, et cetera?.

All the above, but we have more or less overhauled our commercial organization. It was -- we had a lot of language in our prepared remarks today because of this situation. It's been an issue starting about two quarters ago. We're well over halfway through the process.

We're really excited about what we're seeing, so we have basically rehired 60% or so of our Simple Western sales force in the last three to four months. They are all in place. They're all trained.

We have everybody linked up through Salesforce.com and a pretty rigorous process for understanding how they are doing personally, individually, one by one in terms of lead generation and closing deals. And, as Jim put it in his remarks, we're seeing a lot of good evidence. Leads are up 20%. The pipeline is definitely filling again.

Numbers are improving. It's a nine-month selling cycle. So there isn't any way to try to shortcut this. When you hire new people, you've got to start over with the accounts. And there was a big change in philosophy and marketing, too. When we bought ProteinSimple, it was very much a young, hip Silicon Valley company.

And they are really focused on getting out this new, sexy technology and it was really marketed towards early adopters. But we both know early adopters more or less come to you. They're banging on your door to get the next thing. You don't have to sell to them. The marketing has now taken a turn. We have a new head of marketing in ProteinSimple.

And we're now trying to leverage, first of all, R&D systems so the broad commercial reach we have with a network globally of researchers, that's very extensive. And I think it will pay off. The cross-selling -- if anything, it's gotten them to open up and be much more collaborative with the rest of the Company and it's working quite well.

As you know, our head of sales on the biotech comes from the instrument space, a life-tech person and has been very instrumental in helping that team out there really also get back on track. But we're not only putting in process; we're also putting in systems that can give us evidence of how we're doing. And we will get it until we get it right.

It's one of the largest work streams for a life science professional. It's, we think, well over a $2 billion market space. But it's a hard process to crack. You've got to sell it to a lot of people.

It's a manual process and a lot of these labs have grad students anyway and it's kind of a Western blot is a bit of a rite of passage, I think, for a chemist.

You've got to break through all that and we're going to have to do more demos and a lot of classical methodologies for selling instruments which we have a lot of people here that know how to do it. And it's all beginning to work. As we have been careful to say, we're not through it yet.

It's on the way back and it's -- we're definitely well over halfway through this we think..

I know you had acquired the firm that was working on your Internet marketing capability on the reagent portfolio, your Denver-based asset.

Could you provide us an update on where you are in the progress with their offering lineup and the development of that business?.

I'll have to give you a dollar the next time I see you because it's a really good story. The website is fantastic. We launched it last summer on schedule, on budget. I've rarely been able to do that in my career with a website. That team is unbelievable.

And if you have taken a look at our new website, it is dramatically improved from what the deal website was. And we're talking about links to tens of thousands of products, links to citations, links to data. The Pathways section is unbelievable. So it's a dramatically improved user experience and our traffic is going up.

And on the retail side of our business, obviously more traffic. More time on the Web means more sales and it's happening. The Novus numbers are moving up more quickly than the rest of the portfolio.

Because of this, because it is -- they were already known in that space and that website was the first -- that business first to use the new website, we're in high single-digit growth safely. And I shouldn't comment further, but I think the future is even upside. So, especially here..

And then last, Chuck, on the reagent portfolio, you are trying to add to the simple protein product line -- the catalog you are trying to build on reagents for the Western blot.

How are we there?.

It's continuing to grow, well over 1,100 certified antibodies. We continue to build momentum as awareness is out there. Wow, we can buy antibodies that that actually will be proven to work with the system, so we don't have to waste half of what we bought trying to dial them in. That's what we hear a lot.

The comments that Jim talked about with the consumables being up 20%, even though we were down in the category, it tells you something that the consumables and the content are growing and that people are using the machines that are out there. So we like that a lot. The whole model in China is going quite well. This is a record quarter for us.

We've never had 30% growth for China. So I think that's going to bode well for the overall business as well. So it's coming together. People ask me all the time, how many is enough. Do we need 3,000 or 5000 certified antibodies? I think it's more important that we zone in on the antibodies that are of interest in the applied markets.

And it's probably -- we're probably getting close to really the majority of the distribution we have to have to really help the category. But we will keep doing it. It's the future. People want certified antibodies. They want antibodies that work. They want quality and they are tired of all the junk out there. And that is our strategy to provide quality..

[Operator Instructions]. And we have a question from Amanda Murphy from William Blair. Please go ahead..

Could you just talk a little bit about the three segments of the biologics business? So, thinking about proteins, antibodies and ELISA kits specifically. I think you talked in the past about having some price competition and maybe that has changed a bit over the past year or so.

So just looking for an update on how those two businesses are doing specifically..

You mean in biotech. Okay..

I'm sorry. Biotech..

They are all roughly in the same range in size. We don't give specifics, but they are not too far off. They are all important. The protein business was where we're the worldwide leader by far. It is certainly the smallest market and it's not growing north of 3% to 4%, we feel. We're working ahead of market right now.

And I think our strategy of going upstream, providing even more quality, doing -- continue to do the hard-to-do, only-offered-by-us proteins is kind of our strategy. We have PrimeGene for -- and Novus for fighter brands, so to speak and for China. For China -- and I can tell you the cytokine and the protein business -- China is growing north of 40%.

So it's extremely healthy. And the PrimeGene strategy is working; we have a brand-new factory there. It's all G&P approved and we love what we see. The biggest pond to go after here includes antibodies. And we bought Novus. It's many billions. It depends a lot by the applied markets you are in. We have 7% growth in that space which is about at market.

I think market, depending what you want to believe, is somewhere -- you read between 6% and 8%. So we're in the range. I think a lot of that has to do with this is what we're seeing really help with our website. We also introduced just a minor new portfolio last year, 8,000 new products of sample antibodies. And these are $99 apiece.

This is something we've never done before, coming down at lower packet sizes to reach the retail segment. You always had to buy a lot of Verity Systems' branded stuff to get anything. And clearly our competition was being much more flexible with customers. So we've done this and it's been a huge success. And then -- it's actually helped a lot.

So since a lot of these people are buying a sample that weren't customers before and then they're understanding who we're and what we have to offer, then they are ordering up. So that's all helping as well. One assay side, I think that's the newest -- that's the biggest unknown frontier.

I think with our Luminix association which is going very well, with strong growth, we also sell instruments there now, too. And we're selling in every region of the world. So, selling full solutions. We also sell content to a lot of people in this space. And we're the ELISA leader and, of course, that's why we bought CyVek.

With the platform of CyVek, we have a next-generation microfluidic parallel ELISA system ready to go. And as of last week, we just launched a whole new cartridge, a 72 x 1 which is essentially a super ELISA. It's the only way to explain it 4 to 5 logs of dynamic range, extremely sensitive, extremely accurate and extremely fast.

And a sample to data and answers in one hour. So we think we're on track for expanding our asset business. Again, this is a bigger -- much bigger market than the protein business and so all three segments are important. It's defend, expand and expand..

And on the pricing side, I know you have been looking at your book of business there from pricing perspective. Just curious what you're seeing, if any change. I think you've gotten a bit better from a competitive standpoint, if I recall correctly..

It was one of my big worries coming into this Company was that are we going to be really worried about price going forward with a strong [indiscernible] of R&D systems brand. But we've not had any price impact. We have been able to increase prices on important new to the world, where we stand alone as the only premier reagent supplier.

And, of course, we have to go to war in the low-end stuff and we have PrimeGene and other things to work with. The net of it all is our pricing is [Technical Difficulty] which I think is outstanding given the way these markets are..

Okay. And then on the biopharma side, obviously that's been quite strong. And you guys are a bit earlier in the process in terms of R&D. But is there any weakness potentially that you see just given the volatility that's in the market these days? Like I said -- go ahead, sorry..

Give you a dollar, too. It's also a really good story, especially we've had three very good quarters in a row. A lot of discussion a couple of quarters ago about was Germany back. Germany's really getting -- Europe is hitting on all cylinders, really. It's really looking great.

I think, all in all, there's nothing really to worry about along those lines for now..

Okay and then just last one. You talked about M&A a bit and ProteinSimple starting to turn around.

So just from a timing perspective, are you -- do you feel comfortable with ProteinSimple at this point such that you could pursue something if it arose? Or do you still feel you need a bit more time?.

It's a great question. We've done 6 acquisitions since I've been here. I would say 5 are pretty much integrated. I would say ProteinSimple's pretty much integrated. And in terms of ProteinSimple being on track, it really is three segments in ProteinSimple and two are doing great.

It's the Simple Western platform which is the biggest reason we bought it, of course. But that's the part that we're reengineering and it's on track. The biologics is a great story. And with the new Maurice platform being launched, we expect high growth to continue in that area. And are we ready for more? Absolutely.

We've always been ready for more and we probably have never been more ready than now. We have spent a lot of time on this process and we have participated in some that were heartbreakers that got away, but it doesn't stop us. We were on a rigorous process. We were on process that we have targets in parallel and deals will come when deals come.

And one thing we will not do, though, is overpay. We will remain very disciplined. And our process never allows us to fall in love with anything that we shouldn't be falling in love with too early..

And our next question is going to come from Matthew Hewitt from Craig-Hallum. Please go ahead..

This is Dylan on for Matt.

Two quick ones, could you guys quantify the OEM shipment that helped out the clinical controls in the quarter?.

We don't give data that specific. But they are large pharma-based customers, essentially. And they missed by just a few days last quarter. And are they material or do they carry this division with a strong tenet [Technical Difficulty] organic growth? Without them, we still would have had a good quarter.

You got to look at this as a more annualized business now, with the two segments being much more lumpy with the long shelf life and the bulk ordering that they do. And all in all, things -- I think you'll find that they net out right where we see they should net out..

And then I'll go fishing with this one as well.

Do you guys have a long term target to return to double-digit top-line organic growth? And if so, when could we expect that?.

Double-digit organic growth in the Company this size already, I think it would be good. We've always stressed the core of the Company which is now still over half by far, but it's mid-single-digit growth.

And with the markets growing the way they're growing and proteins being where they are with a large share, it's hard to get too over our skis on that. I think mid-single-digit growth is what we continue to say. Long term, we have our goals. We've given that. And the new spaces, yes, we want ProteinSimple.

We want the Simple Western back in a 20% growth area. CyVek is never going to be as large a business -- the ELISA platform. But it's a solid new business. It's all organic growth. It's all growth because it's a start-up. The net-net of it all, we've always said, should be high single digits is where we think will be.

And with PP -- with ProteinSimple back on track, we would be there. You can do your own math on our quarter and if you can do the math without ProteinSimple and what we would be at in [indiscernible]. And then do the math. If we'd been at plan with ProteinSimple, you can see the math and you can see we would be right where you're talking about..

[Operator Instructions]..

Give it a couple more seconds. Okay. Well, thanks, everyone, for joining in. A good quarter for us and we're looking forward already in this quarter and we're busy at it. And we will look forward to talking to you again very soon. Thank you..

Ladies and gentlemen, thanks for joining. This complete your conference call. You may all disconnect and have a great day..