-----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, CyQsreXVVbrvVZxE+qEORj33c60eGFIYdltdnlIXzKUpDpBtm9w1pX079EaZ114V CctoaQwD4d69qaK8FEcMJQ== 0000842023-04-000011.txt : 20040428 0000842023-04-000011.hdr.sgml : 20040428 20040428123055 ACCESSION NUMBER: 0000842023-04-000011 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040427 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040428 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: 04759520 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): April 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 April 27, 2004. 99.1 Segment information for the quarter and nine months ended March 31, 2004. Item 12. Results of Operations and Financial Condition A copy of the press release issued by Techne Corporation on April 27, 2004, describing the results of operations for the quarter and nine months ended March 31, 2004 and its financial condition as of March 31, 2004, is attached hereto as Exhibit 99. Segment information for Techne Corporation for the quarter and nine months ended March 31, 2004 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: April 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 April 27, 2004. 99.1 Segment information for Techne Corporation for the quarter and nine months ended March 31, 2004. EX-99 2 earnings4-04.txt PRESS RELEASE DATED APRIL 27, 2004 TECHNE CORPORATION RELEASES UNAUDITED THIRD QUARTER RESULTS FOR FISCAL YEAR 2004 Minneapolis/April 27, 2004/--For the quarter ended March 31, 2004, Techne Corporation's consolidated net earnings were $14.6 million or 35 cents per share (diluted), compared with $12.4 million or 30 cents per share (diluted) for the quarter ended March 31, 2003. For the nine months ended March 31, 2004, Techne's consolidated net earnings were $39.6 million or 95 cents per share (diluted), compared with $32.7 million or 78 cents per share (diluted) for the nine months ended March 31, 2003. The improvement in profitability was the result of increased net sales and improved gross margins. Consolidated net sales for the quarter and nine months ended March 31, 2004 were $42.5 million and $118.8 million, respectively, an increase of 13% from both the third quarter and first nine months of last year. Both R&D Systems' Biotechnology Division and R&D Europe had record sales quarters. R&D Systems' Biotechnology Division net sales for the quarter and nine months were $26.1 million and $72.9 million, increases of 10% and 9%, respectively. R&D Europe's net sales for the quarter and nine months were $12.4 million and $33.1 million, increases of 23% and 21%, respectively. In British pound sterling, R&D Europe's net sales increased 6% for the quarter and 11% for the nine months ended March 31, 2004, respectively. R&D Systems' Hematology Division net sales for the quarter and nine months increased 2% and 9%, respectively. Gross margins, as a percentage of net sales, increased from 76.8% in the third quarter of fiscal 2003 to 79.0% in the third quarter of fiscal 2004. For the nine months ended March 31, 2004, gross margins, as a percentage of net sales, increased from 75.5% to 78.1%. The majority of the increase in margin percentage was the result of R&D Europe's gross margins increasing from 43.0% in the third quarter of fiscal 2003 to 53.8% in the third quarter of fiscal 2004. R&D Europe's gross margins for the nine months ended March 31, 2004 increased from 41.2% to 51.3%. These increases were 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 $496,000 and $1,340,000, respectively, in the quarter and nine months ended March 31, 2003 under this agreement. Selling, general and administrative expenses for the quarter and nine months ended March 31, 2004 increased $750,000 (16%) and $1,500,000 (10%), respectively. R&D Systems' selling, general and administrative expenses increased $345,000 (11%) and $400,000 (4%) for the quarter and nine months ended March 31, 2004, respectively. The majority of the increase for the quarter and nine months was a result of an increase in profit sharing accrual in the third quarter of fiscal 2004. In addition, Techne's corporate expenses increased $144,000 and $424,000, respectively, for the quarter and nine months ended March 31, 2004. This increase was the result of higher audit and related fees, directors' and officers' liability insurance premium increases and consulting fees associated with compliance with Sarbanes-Oxley. R&D Europe's selling, general and administrative expenses increased $261,000 (17%) and $676,000 (14%) for the quarter and nine 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 1% and 4%, respectively. Research and development expenses for the quarter ended March 31, 2004 decreased $204,000 (4%), but increased $397,000 (3%) for the nine months ended March 31, 2004. 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 and the Company's share of losses by Hemerus Medical, LLC in which the Company invested on January 1, 2004. The portion of the losses by these companies included in Techne results for the quarter and nine months ended March 31, 2004 were $589,000 and $2,150,000, respectively, compared to $924,000 and $2,280,000 for the quarter and nine months ended March 31, 2003, respectively. R&D Systems' internal research and development expenses for the quarter and nine months ended March 31, 2004 increased $131,000 (3%) and $527,000 (4%), respectively, from the quarter and nine months ended March 31, 2003. 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 3/31/04 (In thousands, except per share data) (Unaudited) QUARTER ENDED NINE MONTHS ENDED ------------------ ------------------ 3/31/04 3/31/03 3/31/04 3/31/03 -------- -------- -------- -------- Net sales $ 42,541 $ 37,737 $118,798 $105,585 Cost of sales 8,946 8,756 26,050 25,817 -------- -------- -------- -------- Gross margin 33,595 28,981 92,748 79,768 Operating expenses: Selling, general and administrative 5,456 4,706 16,058 14,558 Research and development 5,082 5,286 15,495 15,098 Amortization of intangible assets 400 485 1,199 1,454 Interest expense 167 178 514 797 Interest income (853) (732) (2,341) (2,226) Other non-operating expense (income), net 415 (60) 513 74 -------- -------- -------- -------- 10,667 9,863 31,438 29,755 -------- -------- -------- -------- Earnings before income taxes 22,928 19,118 61,310 50,013 Income taxes 8,309 6,724 21,749 17,293 -------- -------- -------- -------- Net earnings $ 14,619 $ 12,394 $ 39,561 $ 32,720 ======== ======== ======== ======== Earnings per share: Basic $ 0.36 $ 0.30 $ 0.96 $ 0.79 Diluted $ 0.35 $ 0.30 $ 0.95 $ 0.78 Weighted average common shares outstanding: Basic 41,072 41,297 41,024 41,369 Diluted 41,752 41,991 41,668 42,198 3/31/04 6/30/03 -------- -------- ASSETS Cash and equivalents $ 51,726 $ 39,371 Short-term investments 111,871 78,130 Trade accounts receivable 20,562 18,387 Interest receivable 1,986 2,054 Inventory 7,295 6,332 Other current assets 5,868 5,241 Property and equipment, net 81,354 81,166 Goodwill, net 12,540 12,540 Intangible assets, net 3,219 4,418 Other non-current assets 16,182 15,638 -------- -------- Total assets $312,603 $263,277 ======== ======== LIABILITIES Current liabilities $ 14,300 $ 10,808 Long-term debt 14,900 15,852 Stockholders' equity 283,403 236,617 -------- -------- Total liabilities and equity $312,603 $263,277 ======== ======== EX-99.1 3 segment.txt SEGMENT INFORMATION SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data)
Increase (Decrease) Fiscal 2004 From Fiscal 2003 ---------------------------------------- ------------------------------ First Second Third Percent First Second Third Quarter Quarter Quarter YTD of Sales Quarter Quarter Quarter YTD ------- ------- ------- ------- -------- ------- ------- ------- ------ Sales 37,993 38,264 42,541 118,798 100% 3,445 4,964 4,804 13,213 Cost of sales 8,663 8,441 8,946 26,050 22% (27) 70 190 233 ------ ------ ------ ------- ------- ------ ------ ------ ------ Gross margin 29,330 29,823 33,595 92,748 78% 3,472 4,894 4,614 12,980 Gross margin percentage 77.2% 77.9% 79.0% 78.1% SG&A expense 5,083 5,519 5,456 16,058 14% 132 618 750 1,500 R&D expense 4,963 5,450 5,082 15,495 13% 130 471 (204) 397 Amortization expense 400 399 400 1,199 1% (84) (86) (85) (255) Interest expense 175 172 167 514 -- (148) (124) (11) (283) Interest income (726) (762) (853) (2,341) (2%) 64 (58) (121) (115) Other non-operating exp., net 78 20 415 513 -- (72) 36 475 439 ------ ------ ------ ------- ------- ------ ------ ------ ------ 9,973 10,798 10,667 31,438 26% 22 857 804 1,683 ------ ------ ------ ------- ------- ------ ------ ------ ------ Earnings before income taxes 19,357 19,025 22,928 61,310 52% 3,450 4,037 3,810 11,297 Income taxes 6,785 6,655 8,309 21,749 19% 1,323 1,548 1,585 4,456 ------ ------ ------ ------- ------- ------ ------ ------ ------ 12,572 12,370 14,619 39,561 33% 2,127 2,489 2,225 6,841 ====== ====== ====== ======= ======= ====== ====== ====== ====== Diluted earnings per share 0.30 0.30 0.35 0.95 Weighted average diluted shares outstanding 41,600 41,653 41,752 41,668
HEMATOLOGY DIVISION (in thousands of $'s)
Increase (Decrease) Fiscal 2004 From Fiscal 2003 ---------------------------------------- ------------------------------ First Second Third Percent First Second Third Quarter Quarter Quarter YTD of Sales Quarter Quarter Quarter YTD ------- ------- ------- ------- -------- ------- ------- ------- ------ Sales 4,281 4,454 4,069 12,804 100% 507 468 72 1,047 Cost of sales 2,346 2,344 2,234 6,924 54% 209 232 53 494 ------- ------- ------- ------- -------- ------- ------- ------- ------ Gross margin 1,935 2,110 1,835 5,880 46% 298 236 19 553 Gross margin percentage 45.2% 47.4% 45.1% 45.9% SG&A expense 391 383 439 1,213 9% (9) 16 74 81 R&D expense 191 190 203 584 5% 18 (3) 4 19 Interest income (77) (74) (79) (230) (2%) 24 9 8 41 ------- ------- ------- ------- -------- ------- ------- ------- ------ 505 499 563 1,567 12% 33 22 86 141 ------- ------- ------- ------- -------- ------- ------- ------- ------ Pretax result 1,430 1,611 1,272 4,313 34% 265 214 (67) 412 ======= ======= ======= ======= ======== ======= ======= ======= ======
BIOTECHNOLOGY DIVISION (in thousands of $'s)
Increase (Decrease) Fiscal 2004 From Fiscal 2003 ----------------------------------------- ------------------------------ First Second Third Percent First Second Third Quarter Quarter Quarter YTD of Sales Quarter Quarter Quarter YTD ------- ------- ------- ------- -------- ------- ------- ------- ------ Sales 28,653 27,766 31,214 87,633 100% 2,016 2,811 2,697 7,524 Intersegment sales (4,621) (4,967) (5,145) (14,733) (471) (466) (270) (1,207) ------ ------ ------ ------- ------ ------ ------ ------ 24,032 22,799 26,069 72,900 1,545 2,345 2,427 6,317 Cost of sales 5,916 5,530 6,121 17,567 20% 191 70 429 690 Intersegment sales (4,521) (4,894) (5,140) (14,555) (371) (411) (272) (1,054) ------ ------ ------ ------- ------ ------ ------ ------ 1,395 636 981 3,012 (180) (341) 157 (364) Gross margin 22,637 22,163 25,088 69,888 80% 1,725 2,686 2,270 6,681 Gross margin percentage 79.4% 80.1% 80.4% 80.0% SG&A expense 2,651 2,949 2,917 8,517 10% (61) 109 271 319 R&D expense 4,164 4,307 4,290 12,761 15% 201 180 127 508 Amortization expense 400 399 400 1,199 1% (84) (86) (85) (255) Interest income (406) (388) (411) (1,205) (1%) 85 19 14 118 ------ ------ ------ ------- ------- ------ ------ ------ ------ 6,809 7,267 7,196 21,272 25% 141 222 327 690 ------ ------ ------ ------- ------- ------ ------ ------ ------ Pretax result 15,828 14,896 17,892 48,616 55% 1,584 2,464 1,943 5,991 ====== ====== ====== ======= ======= ====== ====== ====== ======
R&D SYSTEMS EUROPE (in thousands of Br. pounds)
Increase (Decrease) Fiscal 2004 From Fiscal 2003 ---------------------------------------- ------------------------------ First Second Third Percent First Second Third Quarter Quarter Quarter YTD of Sales Quarter Quarter Quarter YTD ------- ------- ------- ------- -------- ------- ------- ------- ------ Sales 5,980 6,365 6,721 19,066 100% 663 732 397 1,792 Intersegment sales -- -- -- -- 9 6 8 23 ------- ------- ------- ------- ------- ------- ------- ------ 5,980 6,365 6,721 19,066 672 738 405 1,815 Cost of sales 3,040 3,157 3,107 9,304 49% (157) (203) (498) (858) ------- ------- ------- ------- ------ ------- ------- ------- ------ Gross margin 2,940 3,208 3,614 9,762 51% 820 935 895 2,650 Gross margin percentage 49.2% 50.4% 53.8% 51.2% SG&A expense 1,050 1,092 978 3,120 16% 17 101 13 131 Interest income (127) (150) (175) (452) (2%) (23) (35) (60) (118) Exchange loss/(gain) (49) (73) 46 (76) -- (80) 6 171 97 ------- ------- ------- ------- ------ ------- ------- ------- ------ 874 869 849 2,592 14% (86) 72 124 110 ------- ------- ------- ------- ------ ------- ------- ------- ------ Pretax result 2,066 2,339 2,765 7,170 37% 906 863 771 2,540 ======= ======= ======= ======= ====== ======= ======= ======= ======
R&D SYSTEMS EUROPE (in thousands of $'s)
Increase (Decrease) Fiscal 2004 From Fiscal 2003 ---------------------------------------- ------------------------------ First Second Third Percent First Second Third Quarter Quarter Quarter YTD of Sales Quarter Quarter Quarter YTD ------- ------- ------- ------- -------- ------- ------- ------- ------ Sales 9,680 11,011 12,403 33,094 100% 1,379 2,142 2,291 5,812 Intersegment sales -- -- -- -- 14 9 14 37 ------- ------- ------- ------- ------- ------- ------- ------ 9,680 11,011 12,403 33,094 1,393 2,151 2,305 5,849 Cost of sales 4,922 5,461 5,731 16,114 49% (70) 170 (34) 66 ------- ------- ------- ------- -------- ------- ------- ------- ------ Gross margin 4,758 5,550 6,672 16,980 51% 1,449 1,972 2,325 5,746 Gross margin percentage 49.2% 50.4% 53.8% 51.3% SG&A expense 1,699 1,891 1,805 5,395 16% 87 328 261 676 Interest income (206) (260) (323) (789) (2%) (43) (80) (138) (261) Exchange loss/(gain) (84) (129) 85 (128) -- (133) (1) 285 151 ------- ------- ------- ------- -------- ------- ------- ------- ------ 1,409 1,502 1,567 4,478 14% (89) 247 408 566 ------- ------- ------- ------- -------- ------- ------- ------- ------ Pretax result 3,349 4,048 5,105 12,502 37% 1,538 1,725 1,917 5,180 ======= ======= ======= ======= ======== ======= ======= ======= ======
CORPORATE AND OTHER (1) (in thousands of $'s)
Increase (Decrease) Fiscal 2004 From Fiscal 2003 ------------------------------- ------------------------------ First Second Third First Second Third Quarter Quarter Quarter YTD Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- ------- ------- ------- Interest income 37 40 40 117 2 6 5 13 Rental income 19 46 20 85 19 40 1 60 ------- ------- ------- ------- ------- ------- ------- ------- 56 86 60 202 21 46 6 73 SG&A expense 342 296 295 933 115 165 144 424 R&D-CCX losses 436 828 519 1,783 (83) 332 (274) (25) R&D-DGI losses 172 125 47 344 (6) (38) (84) (128) R&D-Hemerus losses -- -- 23 23 -- -- 23 23 Interest expense 175 172 167 514 (148) (124) (11) (283) Building expense 181 195 350 726 80 77 191 348 ------- ------- ------- ------- ------- ------- ------- ------- 1,306 1,616 1,401 4,323 (42) 412 (11) 359 ------- ------- ------- ------- ------- ------- ------- ------- Pretax result (1,250) (1,530) (1,341) (4,121) 63 (366) 17 (286) ======= ======= ======= ======= ======= ======= ======= =======
(1) Unallocated corporate expenses and Techne's share of losses by ChemoCentryx, Inc. (CCX), Discovery Genomics, Inc. (DGI) and Hemerus Medical, LLC. -----END PRIVACY-ENHANCED MESSAGE-----