-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IPiNmv1IiIzxArT/XNt0P6Tu3FB4X4msKrft5J9Fdsttg12N+N0Ba54OSOgRrXlX IiaPP8/em2EYh9DldRXaPg== 0000842023-04-000004.txt : 20040128 0000842023-04-000004.hdr.sgml : 20040128 20040128123804 ACCESSION NUMBER: 0000842023-04-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040127 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TECHNE CORP /MN/ CENTRAL INDEX KEY: 0000842023 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 411427402 STATE OF INCORPORATION: MN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17272 FILM NUMBER: 04548457 BUSINESS ADDRESS: STREET 1: 614 MCKINLEY PL N E CITY: MINNEAPOLIS STATE: MN ZIP: 55413 BUSINESS PHONE: 6123798854 MAIL ADDRESS: STREET 1: 614 MCKINLEY PLACE NE CITY: MINNEAPOLIS STATE: MN ZIP: 55413 8-K 1 k8.txt 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): January 27, 2004 TECHNE CORPORATION ------------------ (Exact Name of Registrant as Specified in Charter) Minnesota 0-17272 41-1427402 - - ---------------------------- ------- ---------- (State or Other Jurisdiction (Commission I.R.S. Employer of Incorporation) File Number) Identification No.) 614 Mckinley Place NE Minneapolis, MN 55413 --------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (612) 379-8854 Item 7. Financial Statements and Exhibits (c) Exhibits 99 Press Release dated January 27, 2004. 99.1 Segment information for the quarter and six months ended December 31, 2003. Item 12. Results of Operations and Financial Condition A copy of the press release issued by Techne Corporation on January 27, 2004, describing the results of operations for the quarter and six months ended December 31, 2003 and its financial condition as December 31, 2003, is attached hereto as Exhibit 99. Segment information for Techne Corporation for the quarter and six months ended December 31, 2003 which has been included on Techne Corporation's website (www.techne-corp.com), is attached hereto as Exhibit 99.1. The information in this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: January 28, 2004 TECHNE CORPORATION By: /S/ Thomas E. Oland --------------------------- Name: Thomas E. Oland Title: President and Chief Executive Officer EXHIBIT INDEX Exhibit No. Exhibit ----------- ------- 99 Press release of Techne Corporation dated January 27, 2004. 99.1 Segment information for Techne Corporation for the quarter and six months ended December 31, 2003. EX-99 3 release104.txt PRESS RELEASE 1/27/2004 TECHNE CORPORATION RELEASES UNAUDITED SECOND QUARTER RESULTS FOR FISCAL YEAR 2004 Minneapolis/January 27, 2004/--For the quarter ended December 31, 2003, Techne Corporation's consolidated net earnings were $12,370,000 or 30 cents per share (diluted), compared with $9,881,000 or 23 cents per share (diluted) for the quarter ended December 31, 2002. For the six months ended December 31, 2003, Techne's consolidated net earnings were $24,942,000 or 60 cents per share (diluted), compared with $20,326,000 or 48 cents per share (diluted) for the six months ended December 31, 2002. The improvement in profitability was the result of increased net sales and improved gross margins. Consolidated net sales for the quarter and six months ended December 31, 2003 were $38,264,000 and $76,257,000, respectively. This was an increase of $4,964,000 or 15% and $8,409,000 or 12% from the second quarter and first six months of last year. R&D Systems' Biotechnology Division net sales for the quarter and six months increased $2,345,000 (11%) and $3,890,000 (9%). R&D Systems' Hematology Division net sales for the quarter and six months increased $468,000 (12%) and $975,000 (13%), respectively. The higher than usual growth in Hematology was primarily due to a new distributor added in January 2003 and growth in OEM business. R&D Europe's net sales for the quarter and six months increased $2,151,000 (24%) and $3,544,000 (21%), respectively. In British pound sterling, R&D Europe's net sales increased 13% for both the quarter and six months ended December 31, 2003. Gross margins, as a percentage of net sales, increased from 74.9% in the second quarter of fiscal 2003 to 77.9% in the second quarter of fiscal 2004. For the six months ended December 31, 2003, gross margins, as a percentage of net sales, increased from 74.9% to 77.6%. The majority of the increase in margin percentage was the result of R&D Europe's gross margins increasing from 40.3% in the second quarter of fiscal 2003 to 50.4% in the second quarter of fiscal 2004. R&D Europe's gross margins for the six months ended December 31, 2003 increased from 40.1% to 49.8%. This increase was due to favorable exchange rates as a result of a weaker U.S. dollar to the British pound sterling and the expiration, on June 30, 2003, of a royalty agreement associated with the purchase of Genzyme, Inc's reagent business in fiscal 1999. R&D Europe expensed $436,000 and $844,000, respectively, in the quarter and six months ended December 31, 2002 under this agreement. Selling, general and administrative expenses for the quarter and six months ended December 31, 2003 increased $618,000 (13%) and $750,000 (8%), respectively. R&D Europe's selling, general and administrative expenses increased $328,000 (21%) and $415,000 (13%) for the quarter and six months. Most of this increase was the result of higher exchange rates used to convert R&D Europe's expenses from pounds to dollars. In British pound sterling, R&D Europe's selling, general and administrative expenses increased 10% and 6%, respectively. In addition, Techne's corporate expenses increased $165,000 and $280,000, respectively, for the quarter and six months ended December 31, 2003. This increase was the result of higher audit and related fees, directors' and officers' insurance premium increases and consulting fees associated with compliance with Sarbanes-Oxley. Research and development expenses for the quarter and six months ended December 31, 2003 increased $471,000 (9%) and $601,000 (6%), respectively. Included in research and development expenses for each period were the Company's share of losses by ChemoCentryx, Inc. (CCX) and Discovery Genomics, Inc. (DGI), development stage companies in which Techne has invested. The portion of the losses by these two companies included in Techne results for the quarter and six months ended December 31, 2003 were $953,000 and $1,561,000, respectively, compared to $659,000 and $1,356,000 for the quarter and six months ended December 31, 2002, respectively. R&D Systems' internal research and development expenses for the quarter and six months ended December 31, 2003 increased $177,000 (4%) and $396,000 (5%), respectively, from the quarter and six months ended December 31, 2002. Effective January 1, 2004, Techne purchased a 10% interest in Hemerus Medical, LLC for $3 million. Hemerus Medical, LLC was formed in March 2001 and has acquired and is developing technology for the separation of leukocytes from blood and blood components. Leukoreduced blood is important in blood transfusion. Hemerus owns two patents and has several others pending and is currently pursuing FDA approval to market its product in the U.S. In parallel with this investment, R&D Systems entered into a Joint Research Agreement with Hemerus. The research will involve joint projects to explore the use of Hemerus' filter technology to applications within R&D Systems' Hematology and Biotechnology Divisions. Such applications, if any, may have commercial potential in other laboratory environments. Statements in this earnings release and elsewhere which look forward in time involve risks and uncertainties which may affect the actual results of operations. The following important factors, among others, have affected and, in the future, could affect the Company's actual results: the introduction and acceptance of new biotechnology and hematology products, the levels and particular directions of research by the Company's customers, the impact of the growing number of producers of biotechnology research products and related price competition, the retention of hematology OEM and proficiency survey business, the impact of currency exchange rate fluctuations, and the costs and results of research and product development efforts of the Company and of companies in which the Company has invested or with which it has formed strategic relationships. For additional information concerning such factors, see the Company's annual report on Form 10-K and quarterly reports on Form 10-Q as filed with the Securities and Exchange Commission. * * * * * * * * * * * * * * Techne Corporation has two operating subsidiaries: Research and Diagnostic Systems, Inc. (R&D Systems) of Minneapolis, Minnesota and R&D Systems Europe, Ltd. (R&D Europe) of Abingdon, England. R&D Systems is a specialty manufacturer of biological products and R&D Europe is a distributor of biotechnology products. Contact: Kathy Backes, Controller (612) 379-8854 TECHNE CORPORATION 12/31/03 (In thousands, except per share data) (Unaudited) QUARTER ENDED SIX MONTHS ENDED ------------------ ------------------ 12/31/03 12/31/02 12/31/03 12/31/02 -------- -------- -------- -------- Net sales $ 38,264 $ 33,300 $ 76,257 $ 67,848 Cost of sales 8,441 8,371 17,104 17,061 -------- -------- -------- -------- Gross margin 29,823 24,929 59,153 50,787 Operating expenses: Selling, general and administrative 5,519 4,901 10,602 9,852 Research and development 5,450 4,979 10,413 9,812 Amortization of intangible assets 399 485 799 969 Interest expense 172 296 347 619 Interest income (762) (704) (1,488) (1,494) Other non-operating expense (income), net 20 (16) 98 134 -------- -------- -------- -------- 10,798 9,941 20,771 19,892 -------- -------- -------- -------- Earnings before income taxes 19,025 14,988 38,382 30,895 Income taxes 6,655 5,107 13,440 10,569 -------- -------- -------- -------- Net earnings $ 12,370 $ 9,881 $ 24,942 $ 20,326 ======== ======== ======== ======== Earnings per share: Basic $ 0.30 $ 0.24 $ 0.61 $ 0.49 Diluted $ 0.30 $ 0.23 $ 0.60 $ 0.48 Weighted average common shares outstanding: Basic 41,035 41,445 41,000 41,404 Diluted 41,653 42,316 41,627 42,300 12/31/03 6/30/03 -------- -------- ASSETS Cash and equivalents $ 47,972 $ 39,371 Short-term investments 102,347 78,130 Trade accounts receivable 16,950 18,387 Interest receivable 1,830 2,054 Inventory 7,144 6,332 Other current assets 5,651 5,241 Property and equipment, net 81,707 81,166 Goodwill, net 12,540 12,540 Intangible assets, net 3,619 4,418 Other non-current assets 14,021 15,638 -------- -------- Total assets $293,781 $263,277 ======== ======== LIABILITIES Current liabilities $ 12,572 $ 10,808 Long-term debt 15,219 15,852 Stockholders' equity 265,990 236,617 -------- -------- Total liabilities and equity $293,781 $263,277 ======== ======== EX-99.1 4 seg2ndqtr.txt SEGMENT RESULTS SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data)
Increase(Decrease) Fiscal 2004 From Fiscal 2003 ------------------------ --------------------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ----- Sales 37,993 38,264 76,257 100% 3,445 4,964 8,409 Cost of sales 8,663 8,441 17,104 22% (27) 70 43 ------- ------- ------ -------- ------- ------- ------ Gross margin 29,330 29,823 59,153 78% 3,472 4,894 8,366 Gross margin percentage 77.2% 77.9% 77.6% SG&A expense 5,083 5,519 10,602 14% 132 618 750 R&D expense 4,963 5,450 10,413 14% 130 471 601 Amortization expense 400 399 799 1% (84) (86) (170) Interest expense 175 172 347 -- (148) (124) (272) Interest income (726) (762) (1,488) (2%) 64 (58) 6 Other non-operating exp., net 78 20 98 -- (72) 36 (36) ------- ------- ------ -------- ------- ------- ------ 9,973 10,798 20,771 27% 22 857 879 ------- ------- ------ -------- ------- ------- ------ Earnings before income taxes 19,357 19,025 38,382 51% 3,450 4,037 7,487 Income taxes 6,785 6,655 13,440 18% 1,323 1,548 2,871 ------- ------- ------ -------- ------- ------- ------ 12,572 12,370 24,942 33% 2,127 2,489 4,616 ======= ======= ====== ======== ======= ======= ====== Diluted earnings per share 0.30 0.30 0.60 Weighted average diluted shares outstanding 41,600 41,653 41,627
HEMATOLOGY DIVISION (in thousands of $'s)
Increase(Decrease) Fiscal 2004 From Fiscal 2003 ------------------------ ---------------------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ------ Sales 4,281 4,454 8,735 100% 507 468 975 Cost of sales 2,346 2,344 4,690 54% 209 232 441 ------- ------- ------ -------- ------- ------- ------ Gross margin 1,935 2,110 4,045 46% 298 236 534 Gross margin percentage 45.2% 47.4% 46.3% SG&A expense 391 383 774 9% (9) 16 7 R&D expense 191 190 381 4% 18 (3) 15 Interest income (77) (74) (151) (2%) 24 9 33 ------- ------- ------ -------- ------- ------- ------ 505 499 1,004 11% 33 22 55 ------- ------- ------ -------- ------- ------- ------ Pretax result 1,430 1,611 3,041 35% 265 214 479 ======= ======= ====== ======== ======= ======= ======
BIOTECHNOLOGY DIVISION (in thousands of $'s)
Increase(Decrease) Fiscal 2004 From Fiscal 2003 ------------------------ ---------------------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ------ Sales 28,653 27,766 56,419 100% 2,016 2,811 4,827 Intersegment sales (4,621) (4,967) (9,588) (471) (466) (937) ------- ------- ------ ------- ------- ------ 24,032 22,799 46,831 1,545 2,345 3,890 Cost of sales 5,916 5,530 11,446 21% 191 70 261 Intersegment sales (4,521) (4,894) (9,415) (371) (411) (782) ------- ------- ------ ------- ------- ------ 1,395 636 2,031 (180) (341) (521) Gross margin 22,637 22,163 44,800 79% 1,725 2,686 4,411 Gross margin percentage 79.4% 80.1% 79.7% SG&A expense 2,651 2,949 5,600 10% (61) 109 48 R&D expense 4,164 4,307 8,471 15% 201 180 381 Amortization expense 400 399 799 1% (84) (86) (170) Interest income (406) (388) (794) (1%) 85 19 104 ------- ------- ------ -------- ------- ------- ------ 6,809 7,267 14,076 25% 141 222 363 ------- ------- ------ -------- ------- ------- ------ Pretax result 15,828 14,896 30,724 54% 1,584 2,464 4,048 ======= ======= ====== ======== ======= ======= ======
R&D SYSTEMS EUROPE (in thousands of Br. pounds)
Increase(Decrease) Fiscal 2004 From Fiscal 2003 ------------------------ ---------------------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ------ Sales 5,980 6,365 12,345 100% 663 732 1,395 Intersegment sales -- -- -- 9 6 15 ------- ------- ------ ------- ------- ------ 5,980 6,365 12,345 672 738 1,410 Cost of sales 3,040 3,157 6,197 50% (157) (203) (360) ------- ------- ------ -------- ------- ------- ------ Gross margin 2,940 3,208 6,148 50% 820 935 1,755 Gross margin percentage 49.2% 50.4% 49.8% SG&A expense 1,050 1,092 2,142 17% 17 101 118 Interest income (127) (150) (277) (2%) (23) (35) (58) Exchange loss/(gain) (49) (73) (122) (1%) (80) 6 (74) ------- ------- ------ -------- ------- ------- ------ 874 869 1,743 14% (86) 72 (14) ------- ------- ------ -------- ------- ------- ------ Pretax result 2,066 2,339 4,405 36% 906 863 1,769 ======= ======= ====== ======== ======= ======= ======
R&D SYSTEMS EUROPE (in thousands of $'s)
Increase(Decrease) Fiscal 2004 From Fiscal 2003 ------------------------ ---------------------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ------ Sales 9,680 11,011 20,691 100% 1,379 2,142 3,521 Intersegment sales -- -- -- 14 9 23 ------- ------- ------ ------- ------- ------ 9,680 11,011 20,691 1,393 2,151 3,544 Cost of sales 4,922 5,461 10,383 50% (70) 170 100 ------- ------- ------ -------- ------- ------- ------ Gross margin 4,758 5,550 10,308 50% 1,449 1,972 3,421 Gross margin percentage 49.2% 50.4% 49.8% SG&A expense 1,699 1,891 3,590 17% 87 328 415 Interest income (206) (260) (466) (2%) (43) (80) (123) Exchange loss/(gain) (84) (129) (213) (1%) (133) (1) (134) ------- ------- ------ -------- ------- ------- ------ 1,409 1,502 2,911 14% (89) 247 158 ------- ------- ------ -------- ------- ------- ------ Pretax result 3,349 4,048 7,397 36% 1,538 1,725 3,263 ======= ======= ====== ======== ======= ======= ======
CORPORATE AND OTHER (1) (in thousands of $'s)
Increase(Decrease) Fiscal 2004 From Fiscal 2003 ------------------------ ------------------------ First Second First Second Quarter Quarter YTD Quarter Quarter YTD ------- ------- ------ ------- ------- ------ Interest income 37 40 77 2 6 8 Rental income 19 46 65 19 40 59 ------- ------- ------ ------- ------- ------ 56 86 142 21 46 67 SG&A expense 342 296 638 115 165 280 R&D-CCX losses 436 828 1,264 (83) 332 249 R&D-DGI losses 172 125 297 (6) (38) (44) Interest expense 175 172 347 (148) (124) (272) Building expense 181 195 376 80 77 157 ------- ------- ------ ------- ------- ------ 1,306 1,616 2,922 (42) 410 370 ------- ------- ------ ------- ------- ------ Pretax result (1,250) (1,530) (2,780) 63 (366) (303) ======= ======= ====== ======= ======= ======
(1) Unallocated corporate expenses and Techne's share of losses by ChemoCentryx, Inc. (CCX) and Discovery Genomics, Inc. (DGI) -----END PRIVACY-ENHANCED MESSAGE-----