-----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, EIKuxuBUqPBPQH2eKMnbGkYF8r1mFZvhyl4KmcEDcbTus2htDeD1++FqPiCUq+xj 6jvYhy7CmgQzNT4v4rPtjg== 0000842023-04-000020.txt : 20040811 0000842023-04-000020.hdr.sgml : 20040811 20040811105813 ACCESSION NUMBER: 0000842023-04-000020 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040810 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040811 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: 04966074 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): August 10, 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 August 10, 2004. 99.1 Segment information for the quarter and fiscal year ended June 30, 2004. Item 12. Results of Operations and Financial Condition A copy of the press release issued by Techne Corporation on August 10, 2004, describing the results of operations for the quarter and fiscal year ended June 30, 2004 and its financial condition as of June 30, 2004, is attached hereto as Exhibit 99. Segment information for Techne Corporation for the quarter and fiscal year ended June 30, 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: August 11, 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 August 10, 2004. 99.1 Segment information for Techne Corporation for the quarter and fiscal year ended June 30, 2004. EX-99 2 earnings8-04.txt PRESS RELEASE DATED AUGUST 10, 2004 TECHNE CORPORATION RELEASES UNAUDITED FOURTH QUARTER RESULTS FOR FISCAL YEAR 2004 Minneapolis/August 10, 2004/--For the quarter ended June 30, 2004, Techne Corporation's consolidated net earnings were $13.4 million or 32 cents per share (diluted), including the effect of a one-time $1.5 million write-down (4 cents per share) of the Company's investment in Discovery Genomics, Inc. (DGI). This compares with $12.7 million or 31 cents per share (diluted) for the quarter ended June 30, 2003. For the fiscal year ended June 30, 2004, Techne's consolidated net earnings were $52.9 million or $1.27 per share (diluted), (including the effect of the 4 cents per share DGI write-down), compared with $45.4 million or $1.08 per share (diluted) for the fiscal year ended June 30, 2003. Fiscal 2004 results were favorably effected by the strength of the British pound as compared to the U.S. dollar. The impact on consolidated net earnings of the change in exchange rates used to convert R&D Europe results from British pounds to U.S. dollars was $226,000 and $1.1 million for the quarter and year ended June 30, 2004, respectively. Consolidated net sales for the quarter and fiscal year ended June 30, 2004 were $42.5 million and $161.3 million, respectively, an increase of 8% and 11%, respectively. R&D Systems' Biotechnology Division net sales for the quarter and fiscal year ended June 30, 2004 were a record $26.5 million and $99.4 million, respectively, increases of 9% for both periods. R&D Europe's net sales for the quarter and fiscal year were $11.3 million and $44.4 million, increases of 12% and 19%, respectively. In British pound sterling, R&D Europe's net sales increased 1% for the quarter and 8% for the fiscal year ended June 30, 2004, respectively. R&D Systems' Hematology Division net sales for the quarter ended June 30, 2004, decreased 5%, but increased 5% for the fiscal year. Gross margins, as a percentage of net sales, increased from 75.7% in the fourth quarter of fiscal 2003 to 79.2% in the fourth quarter of fiscal 2004. For the fiscal year ended June 30, 2004, gross margins, as a percentage of net sales, increased from 75.6% to 78.4%. The majority of the increase in margin percentage was the result of R&D Europe's gross margins increasing from 43.3% in the fourth quarter of fiscal 2003 to 51.6% in the fourth quarter of fiscal 2004. R&D Europe's gross margins for the fiscal year ended June 30, 2004 increased from 41.8% to 51.4%. 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 $498,000 and $1,838,000, respectively, in the quarter and fiscal year ended June 30, 2003 under this agreement. Selling, general and administrative expenses for the quarter and fiscal year ended June 30, 2004 increased $849,000 (18%) and $2,349,000 (12%), respectively. R&D Systems' selling, general and administrative expenses increased $727,000 (24%) and $1,126,000 (9%) for the quarter and fiscal year ended June 30, 2004, respectively. The majority of the increase for the quarter and fiscal year was a result of an increase in profit sharing accrual in the third and fourth quarters of fiscal 2004. In addition, Techne's corporate expenses increased $383,000 for the fiscal year ended June 30, 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 $163,000 (10%) and $839,000 (13%) for the quarter and fiscal year. Most of this increase was the result of the change in 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 decreased 2% for the quarter and increased 3% for the fiscal year. Research and development expenses for the quarter ended June 30, 2004 decreased $206,000 (4%), but increased $191,000 (1%) for the fiscal year ended June 30, 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 fiscal year ended June 30, 2004 were $703,000 and $2,853,000, respectively, compared to $908,000 and $3,188,000 for the quarter and fiscal year ended June 30, 2003, respectively. R&D Systems' internal research and development expenses were flat for the quarter ended June 30, 2004, but increased $526,000 (3%) for fiscal year 2004. In fiscal 2002 Techne invested $3 million in DGI. Currently, DGI has cash available for approximately three months of operation and has been unsuccessful to-date in raising additional equity. As a result, during the fourth quarter of fiscal 2004, Techne determined that its investment in DGI is other than temporarily impaired and has written off the remaining net investment of $1.5 million as a one-time charge in the fourth quarter of fiscal 2004. The write-off of the DGI investment is not currently deductible for tax purposes, however, the total $3 million capital loss may be used to offset future taxable capital gains on other investments. 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 6/30/04 (In thousands, except per share data) (Unaudited) QUARTER ENDED FISCAL YEAR ENDED ------------------ ------------------ 6/30/04 6/30/03 6/30/04 6/30/03 -------- -------- -------- -------- Net sales $ 42,459 $ 39,426 $161,257 $145,011 Cost of sales 8,837 9,579 34,887 35,396 -------- -------- -------- -------- Gross margin 33,622 29,847 126,370 109,615 Operating expenses: Selling, general and administrative 5,667 4,819 21,725 19,377 Research and development 5,278 5,483 20,773 20,581 Amortization of intangible assets 400 485 1,599 1,939 Interest expense 164 177 678 974 Interest income (910) (707) (3,251) (2,933) Impairment loss on equity investment 1,523 -- 1,523 -- Other non-operating expense (income), net 269 48 782 122 -------- -------- -------- -------- 12,391 10,305 43,829 40,060 -------- -------- -------- -------- Earnings before income taxes 21,231 19,542 82,541 69,555 Income taxes 7,864 6,866 29,613 24,159 -------- -------- -------- -------- Net earnings $ 13,367 $ 12,676 $ 52,928 $ 45,396 ======== ======== ======== ======== Earnings per share: Basic $ 0.33 $ 0.31 $ 1.29 $ 1.10 Diluted $ 0.32 $ 0.31 $ 1.27 $ 1.08 Weighted average common shares outstanding: Basic 41,114 40,807 41,046 41,237 Diluted 41,785 41,496 41,697 42,031 6/30/04 6/30/03 -------- -------- ASSETS Cash and equivalents $ 51,201 $ 39,371 Short-term investments 125,392 79,392 Trade accounts receivable 20,262 18,387 Interest receivable 837 792 Inventory 7,457 6,332 Other current assets 5,774 5,241 Property and equipment, net 80,504 81,166 Goodwill, net 12,540 12,540 Intangible assets, net 2,819 4,418 Other non-current assets 18,674 15,638 -------- -------- Total assets $325,460 $263,277 ======== ======== LIABILITIES Current liabilities $ 13,459 $ 10,808 Long-term debt 14,576 15,852 Stockholders' equity 297,425 236,617 -------- -------- Total liabilities and equity $325,460 $263,277 ======== ======== EX-99.1 3 segment.txt SEGMENT INFORMATION SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data)
Fiscal 2004 Increase(Decrease) From Fiscal 2003 --------------------------------------------------- -------------------------------------- First Second Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 37,993 38,264 42,541 42,459 161,257 100% 3,445 4,964 4,804 3,033 16,246 Cost of sales 8,663 8,441 8,946 8,837 34,887 22% (27) 70 190 (742) (509) ------- ------- ------- ------- ------- ----- ------ ------ ------ ------ ------ Gross margin 29,330 29,823 33,595 33,622 126,370 78% 3,472 4,894 4,614 3,775 16,755 Gross margin percentage 77.2% 77.9% 79.0% 79.2% 78.4% SG&A expense 5,083 5,519 5,456 5,667 21,725 14% 132 618 750 848 2,348 R&D expense 4,963 5,450 5,082 5,278 20,773 13% 130 471 (204) (205) 192 Amortization expense 400 399 400 400 1,599 1% (84) (86) (85) (85) (340) Interest expense 175 172 167 164 678 -- (148) (124) (11) (13) (296) Interest income (726) (762) (853) (910) (3,251) (2%) 64 (58) (121) (203) (318) Impairment loss on equity investment in DGI -- -- -- 1,523 1,523 1% -- -- -- 1,523 1,523 Other non-operating exp., net 78 20 415 269 782 -- (72) 36 475 221 660 ------- ------- ------- ------- ------- ----- ------ ------ ------ ------ ------ 9,973 10,798 10,667 12,391 43,829 27% 22 857 804 2,086 3,769 ------- ------- ------- ------- ------- ----- ------ ------ ------ ------ ------ Earnings before income taxes 19,357 19,025 22,928 21,231 82,541 51% 3,450 4,037 3,810 1,689 12,986 Income taxes 6,785 6,655 8,309 7,864 29,613 18% 1,323 1,548 1,585 998 5,454 ------- ------- ------- ------- ------- ----- ------ ------ ------ ------ ------ 12,572 12,370 14,619 13,367 52,928 33% 2,127 2,489 2,225 691 7,532 ======= ======= ======= ======= ======= ===== ====== ====== ====== ====== ====== Diluted earnings per share 0.30 0.30 0.35 0.32 1.27 Weighted average diluted shares outstanding 41,600 41,653 41,752 41,785 41,697
HEMATOLOGY DIVISION (in thousands of $'s)
Fiscal 2004 Fiscal 2004 Increase(Decrease) From Fiscal 2003 --------------------------------------------------- --------------------------------------- First Second Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 4,281 4,454 4,069 4,674 17,478 100% 507 468 72 (235) 812 Cost of sales 2,346 2,344 2,234 2,487 9,411 54% 209 232 53 113 607 ------ ------- ------- ------- ------- ------ ------ ------ ------ ------ ----- Gross margin 1,935 2,110 1,835 2,187 8,067 46% 298 236 19 (348) 205 Gross margin percentage 45.2% 47.4% 45.1% 46.8% 46.2% SG&A expense 391 383 439 484 1,697 10% (9) 16 74 109 190 R&D expense 191 190 203 197 781 4% 18 (3) 4 (8) 11 Interest income (77) (74) (79) (82) (312) (2%) 24 9 8 0 41 ------ ------- ------- ------- ------- ------ ------ ------ ------ ------ ----- 505 499 563 599 2,166 12% 33 22 86 101 242 ------ ------- ------- ------- ------- ------ ------ ------ ------ ------ ----- Pretax result 1,430 1,611 1,272 1,588 5,901 34% 265 214 (67) (449) (37) ====== ======= ======= ======= ======= ====== ====== ====== ====== ====== =====
BIOTECHNOLOGY DIVISION (in thousands of $'s)
Fiscal 2004 Fiscal 2004 Increase(Decrease) From Fiscal 2003 ---------------------------------------------------- --------------------------------------- First Second Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 28,653 27,766 31,214 31,435 119,068 100% 2,016 2,811 2,697 2,449 9,973 Intersegment sales (4,621) (4,967) (5,145) (4,953) (19,686) (471) (466) (270) (348) (1,555) ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ 24,032 22,799 26,069 26,482 99,382 1,545 2,345 2,427 2,101 8,418 Cost of sales 5,916 5,530 6,121 5,774 23,341 20% 191 70 429 (292) 398 Intersegment sales (4,521) (4,894) (5,140) (4,897) (19,452) (371) (411) (272) (290) (1,344) ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ 1,398 636 981 877 3,889 (180) (341) 157 (582) (946) Gross margin 22,637 22,163 25,088 25,605 95,493 80% 1,725 2,686 2,270 2,683 9,364 Gross margin percentage 79.4% 80.1% 80.4% 81.6% 80.4% SG&A expense 2,651 2,949 2,917 3,244 11,761 10% (61) 109 271 617 936 R&D expense 4,164 4,307 4,290 4,378 17,139 14% 201 180 127 8 516 Amortization expense 400 399 400 400 1,599 1% (84) (86) (85) (85) (340) Interest income (406) (388) (411) (431) (1,636) (1%) 85 19 14 (28) 90 ------ ------ ------ ------ ------- ----- ------ ------ ------ ------ ------ 6,809 7,267 7,196 7,591 28,863 24% 141 222 327 512 1,202 ------ ------ ------ ------ ------- ----- ------ ------ ------ ------ ------ Pretax result 15,828 14,896 17,892 18,014 66,630 56% 1,584 2,464 1,943 2,171 8,162 ====== ====== ====== ====== ======= ===== ====== ====== ====== ====== ======
R&D SYSTEMS EUROPE (in thousands of Br. pounds)
Fiscal 2004 Fiscal 2004 Increase(Decrease) From Fiscal 2003 ---------------------------------------------------- --------------------------------------- First Second Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 5,980 6,365 6,721 6,284 25,350 100% 663 732 397 56 1,848 Intersegment sales -- -- -- -- -- 9 6 8 2 25 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ 5,980 6,365 6,721 6,284 25,350 672 738 405 58 1,873 Cost of sales 3,040 3,157 3,107 3,022 12,326 49% (157) (203) (498) (505) (1,363) ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ Gross margin 2,940 3,208 3,614 3,262 13,024 51% 820 935 895 561 3,211 Gross margin percentage 49.2% 50.4% 53.8% 51.9% 51.4% SG&A expense 1,050 1,092 978 987 4,107 16% 17 101 13 (16) 115 Interest income (127) (150) (175) (202) (654) (3%) (23) (35) (60) (87) (205) Exchange loss/(gain) (49) (73) 46 40 (36) -- (80) 6 171 91 188 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------ 874 869 849 825 3,417 13% (86) 72 124 (12) 98 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ Pretax result 2,066 2,339 2,765 2,437 9,607 38% 906 863 771 573 3,113 ====== ====== ====== ====== ======= ===== ====== ====== ====== ====== ======
R&D SYSTEMS EUROPE (in thousands of $'s)
Fiscal 2004 Fiscal 2004 Increase(Decrease) From Fiscal 2003 ---------------------------------------------------- --------------------------------------- First Second Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 9,680 11,011 12,403 11,303 44,397 100% 1,379 2,142 2,291 1,164 6,976 Intersegment sales -- -- -- -- -- 14 9 14 3 40 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ 9,680 11,011 12,403 11,303 44,397 1,393 2,151 2,305 1,167 7,016 Cost of sales 4,922 5,461 5,731 5,473 21,587 49% (70) 170 (34) (276) (210) ------ ------ ------ ------ ------- ----- ------ ------ ------ ------ ------ Gross margin 4,758 5,550 6,672 5,830 22,810 51% 1,449 1,972 2,325 1,440 7,186 Gross margin percentage 49.2% 50.4% 53.8% 51.6% 51.4% SG&A expense 1,699 1,891 1,805 1,799 7,194 16% 87 328 261 163 839 Interest income (206) (260) (323) (357) (1,146) (3%) (43) (80) (138) (171) (432) Exchange loss/(gain) (84) (129) 85 65 (63) -- (133) (1) 285 142 293 ------ ------ ------ ------ ------- ----- ------ ------ ------ ------ ------ 1,409 1,502 1,567 1,507 5,985 13% (89) 247 408 134 700 ------ ------ ------ ------ ------- ----- ------ ------ ------ ------ ------ Pretax result 3,349 4,048 5,105 4,323 16,825 38% 1,538 1,725 1,917 1,306 6,486 ====== ====== ====== ====== ======= ===== ====== ====== ====== ====== ======
CORPORATE AND OTHER (1) (in thousands of $'s)
Fiscal 2004 Fiscal 2004 Increase(Decrease) From Fiscal 2003 --------------------------------------------- --------------------------------------- First Second Third Fourth First Second Third Fourth Quarter Quarter Quarter Quarter YTD Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ Interest income 37 40 40 40 157 2 6 5 4 17 Rental income 19 46 20 47 132 19 40 1 0 60 ------ ------ ------ ------ ------ ----- ----- ----- ----- ----- 56 86 60 87 289 21 46 6 4 77 SG&A expense 342 296 295 140 1,073 115 165 144 (41) 383 R&D-CCX losses 436 828 519 654 2,437 (83) 332 (274) (118) (143) R&D-DGI losses 172 125 47 20 364 (6) (38) (84) (116) (244) R&D-Hemerus losses -- -- 23 29 52 -- -- 23 29 52 Impairment loss on equity Investment in DGI -- -- -- 1,523 1,523 -- -- -- 1,523 1,523 Interest expense 175 172 167 164 678 (148) (124) (11) (13) (296) Building expense 181 195 350 251 977 80 77 191 79 427 ------ ------ ------ ------ ------ ----- ----- ----- ----- ----- 1,306 1,616 1,401 2,781 7,104 (42) 412 (11) 1,343 1,702 ------ ------ ------ ------ ------ ----- ----- ----- ----- ----- Pretax result (1,250) (1,530) (1,341) (2,694) (6,815) 63 (366) 17 (1,339) (1,625) ====== ====== ====== ====== ====== ===== ===== ===== ====== ======
(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-----