Street Calls of the Week
Bio-Techne Corp (NASDAQ:TECH), a biological products company with a market capitalization of $9.48 billion and annual revenue of $1.2 billion, has been ordered to pay approximately $37 million to its former CEO, Charles R. Kummeth, following an arbitration decision. The dispute centered around stock options that were subject to an administrative error regarding their expiration date. According to InvestingPro data, the company maintains a strong financial health score, suggesting resilience to such unexpected expenses.
The arbitrator’s ruling, issued on February 26, 2025, favored Kummeth, who contended that he would have exercised his options for 779,084 shares of common stock timely if the company’s stock plan administration platform had not mistakenly extended the expiration date from August 9, 2024, to October 26, 2024. Kummeth attempted to exercise the options in September 2024, but the company notified him that the options had already expired. The timing of this dispute coincides with Bio-Techne’s stock trading near its 52-week low of $60.39, down significantly from its high of $85.57.
As a result of the arbitrator’s order, Bio-Techne is required to compensate Kummeth with approximately $35.978 million, calculated based on the average closing price of the company’s common stock over the 30 days prior to the original expiration date. Additionally, the company must pay interest of around $980,000 and cover legal fees and costs amounting to approximately $234,000, as stipulated in the award agreements. InvestingPro analysis shows the company maintains a healthy current ratio of 3.94, indicating sufficient liquid assets to cover such obligations.
Bio-Techne, headquartered in Minneapolis, Minnesota, and incorporated under the laws of the state, had previously disclosed the dispute in its Quarterly Report filed on November 5, 2024. The recent development may impact the company’s financial position, as reflected in the substantial payout ordered by the arbitrator.
This news comes from a recent SEC filing by Bio-Techne, providing investors with the latest developments in the company’s legal and financial affairs.
In other recent news, Bio-Techne Corporation reported its Q4 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.42 compared to the forecast of $0.39. The company also exceeded revenue expectations, reporting $297 million against the anticipated $286.14 million. Additionally, Bio-Techne introduced a Good Manufacturing Practice (GMP) grade transposase mRNA for its TcBuster genome engineering system, which aims to improve the development of cell-based therapies. This new product is expected to streamline gene editing in immune and stem cell therapies without using viral vectors. Bio-Techne highlighted that its TcBuster system offers several advantages, including a reduced insertional risk profile and the elimination of viral clearance needs. The company reported a 4% year-over-year revenue growth and a 5% increase in net gross profit, reaching $95 million. Bio-Techne also noted a significant rise in EBITDA, which increased to $21.3 million, up $11 million from the previous year. Despite potential guidance revisions being a topic of interest, Bio-Techne remains committed to its strategic goals and growth trajectory.
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