-----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, JKXFNKshWWPbSMS5N8AFW622wYhYu+ZjcsWO3kfBo5gi9aL7qsFhJm6XSeeeSKfj QblM+NP7Z4QOTie8Mg1n0w== 0000842023-05-000003.txt : 20050201 0000842023-05-000003.hdr.sgml : 20050201 20050201113115 ACCESSION NUMBER: 0000842023-05-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050201 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050201 DATE AS OF CHANGE: 20050201 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: 05564478 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): February 1, 2005 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 Not Applicable (Former Name or Former Address, if changed since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions: / / Written communications pursuant to Rule 425 under the Securities Act 17 CFR 230.425) / / Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) / / Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) / / Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition A copy of the press release issued by Techne Corporation on February 1, 2005, describing the results of operations for the quarter and six months ended December 31, 2004 and its financial condition as of December 31, 2004, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter and six months ended December 31, 2004 which has been included on Techne Corporation's website (www.techne-corp.com), is attached hereto as Exhibit 99.2. 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, as amended (the "Exchange 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. Item 9.01 Financial Statements and Exhibits (c) Exhibits 99.1 Press Release dated February 1, 2005. 99.2 Segment information for the quarter and six months ended December 31, 2004. 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: February 1, 2005 TECHNE CORPORATION By: /s/ Thomas E. Oland --------------------------- Name: Thomas E. Oland Title: President and Chief Executive Officer EXHIBIT INDEX Exhibit No. Description ----------- ----------- 99.1 Press release of Techne Corporation dated February 1, 2005. 99.2 Segment information for Techne Corporation for the quarter and six months ended December 31, 2004. EX-99.1 2 press205.txt PRESS RELEASE 2-1-05 TECHNE CORPORATION RELEASES UNAUDITED SECOND QUARTER RESULTS FOR FISCAL YEAR 2005 Minneapolis/February 1, 2005/--For the quarter ended December 31, 2004, Techne Corporation's consolidated net earnings were a record $14.9 million or $.36 per share (diluted) compared with $12.4 million or $.30 per share (diluted) for the quarter ended December 31, 2003. Net earnings as a percentage of sales improved from 32.3% in the second quarter of last year to 35.3% for the quarter ended December 31, 2004. For the six months ended December 31, 2004, Techne's consolidated net earnings were $29.1 million or $.70 per share (diluted) compared with $24.9 million or $.60 per share (diluted) for the six months ended December 31, 2003. Net earnings as a percentage of sales improved from 32.7% in the first six months of last year to 35.0% for the six months ended December 31, 2004. Consolidated net sales for the quarter and six months ended December 31, 2004 were $42.2 million and $83.2 million, respectively. This was an increase of 10% and 9% from the second quarter and first six months of last year. Excluding the effect of changes in foreign currency exchange rates, consolidated net sales increased 7% and 6% for the quarter and six months ended December 31, 2004, respectively. R&D Systems' Biotechnology Division net sales for the quarter and six months ended December 31, 2004 were $24.9 million and $50.8 million, increases of 9% and 8%, respectively. R&D Europe's net sales for the quarter and six months were $12.9 million and $23.9 million, increases of 17% and 15%, respectively. In British pound sterling, R&D Europe's net sales increased 7% and 4% for the quarter and six months ended December 31, 2004, respectively. R&D Systems' Hematology Division net sales for the quarter were $4.5 million, an increase of 1%, while net sales for the six months ended December 31, 2004 were $8.5 million, a decrease of 2% from the prior year. Selling, general and administrative expenses for the quarter and six months ended December 31, 2004 increased $771,000 (14%) and $1.3 million (12%), respectively. The majority of the increase for the quarter and six months was a result of increased personnel costs, including additional sales and marketing personnel. Foreign currency exchange rate changes also increased selling, general and administrative expenses by approximately $200,000 and $400,000 for the quarter and six-month period, respectively. Second quarter expenses are higher than first quarter costs because of seasonal advertising and promotion expenses. Research and development expenses for the quarter and six months ended December 31, 2004 decreased $831,000 (15%) and $1.1 million (11%), respectively. Included in research and development expenses for the prior year periods 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 losses by these companies included in Techne results for the quarter and six months ended December 31, 2003 were $953,000 and $1.6 million, respectively. In the fourth quarter of fiscal 2004, the Company wrote off its investment in DGI as an impairment loss. The Company also converted from the equity method to the cost method for accounting for its investment in CCX in the fourth quarter of fiscal 2004. Excluding the losses by CCX and DGI, research and development expenses increased $122,000 (3%) and $455,000 (5%) for the quarter and six months ended December 31, 2004, respectively, mainly as a result of increased personnel. Other non-operating expenses increased $396,000 and $784,000 for the quarter and six months ended December 31, 2004, respectively, mainly as a result of non-operating building expenses. Fiscal 2005 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 approximately $300,000 and $620,000 for the quarter and six months ended December 31, 2004. During the second quarter of fiscal 2005 a large OEM customer notified the Hematology Division that they will be changing to a new primary vendor for certain controls and calibrators. Although the Hematology Division will continue to manufacture products for this customer as a secondary supplier, it is anticipated that the effect on revenues will be a reduction of approximately $450,000 and $850,000 in the third and fourth quarters of fiscal 2005, respectively. The reduction in Hematology Division revenues is not expected to have a significant impact on consolidated earnings and revenues. Statements in this earnings release and elsewhere, which look forward in time, including anticipated lower revenues in the Hematology Division, 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: Greg Melsen, Chief Financial Officer Kathy Backes, Controller (612) 379-8854 TECHNE CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share data) (Unaudited) QUARTER ENDED SIX MONTHS ENDED ------------------ ------------------ 12/31/04 12/31/03 12/31/04 12/31/03 -------- -------- -------- -------- Net sales $ 42,247 $ 38,264 $ 83,166 $ 76,257 Cost of sales 8,941 8,441 17,828 17,104 -------- -------- -------- -------- Gross margin 33,306 29,823 65,338 59,153 Operating expenses: Selling, general and administrative 6,290 5,519 11,924 10,602 Research and development 4,619 5,450 9,307 10,413 Amortization of intangible assets 306 399 611 799 -------- -------- -------- -------- Total operating expenses 11,215 11,368 21,842 21,814 -------- -------- -------- -------- Operating income 22,091 18,455 43,496 37,339 Other expense (income): Interest expense 178 172 423 347 Interest income (1,189) (762) (2,242) (1,488) Other non-operating expense (income), net 416 20 882 98 -------- -------- -------- -------- Total other income (595) (570) (937) (1,043) -------- -------- -------- -------- Earnings before income taxes 22,686 19,025 44,433 38,382 Income taxes 7,752 6,655 15,307 13,440 -------- -------- -------- -------- Net earnings $ 14,934 $ 12,370 $ 29,126 $ 24,942 ======== ======== ======== ======== Earnings per share: Basic $ 0.36 $ 0.30 $ 0.71 $ 0.61 Diluted $ 0.36 $ 0.30 $ 0.70 $ 0.60 Weighted average common shares outstanding: Basic 41,279 41,035 41,224 41,000 Diluted 41,681 41,653 41,678 41,627 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 12/31/04 6/30/04 -------- -------- ASSETS Cash and equivalents $ 69,626 $ 51,201 Short-term available-for-sale investments 47,104 42,534 Trade accounts receivable 18,801 20,262 Interest receivable 944 837 Inventory 8,079 7,457 Other current assets 6,017 5,774 -------- -------- Current assets 150,571 128,065 -------- -------- Available-for-sale investments 97,033 82,858 Property and equipment, net 79,119 80,504 Goodwill and intangible assets, net 14,748 15,359 Other non-current assets 18,016 18,674 -------- -------- Total assets $359,487 $325,460 ======== ======== LIABILITIES Current liabilities $ 13,214 $ 13,459 Long-term debt 13,958 14,576 Stockholders' equity 332,315 297,425 -------- -------- Total liabilities and equity $359,487 $325,460 ======== ======== EX-99.2 3 segment.txt SEGMENT INFORMATION SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data) Increase (Decrease) Fiscal 2005 From Fiscal 2004 ---------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ------ Sales 40,919 42,247 83,166 100% 2,926 3,983 6,909 Cost of sales 8,887 8,941 17,828 22% 224 500 724 ------- ------- ------ --- ----- ----- ----- Gross margin 32,032 33,306 65,338 78% 2,702 3,483 6,185 Gross margin percentage 78.3% 78.8% 78.6% SG&A expense 5,634 6,290 11,924 14% 551 771 1,322 R&D expense 4,688 4,619 9,307 11% (275) (831) (1,106) Amortization expense 305 306 611 1% (95) (93) (188) Interest expense 245 178 423 1% 70 6 76 Interest income (1,053) (1,189) (2,242) (3%) (327) (427) (754) Other non- operating exp., net 466 416 882 1% 388 396 784 ------- ------- ------ --- ----- ----- ----- 10,285 10,620 20,905 25% 312 (178) 134 ------- ------- ------ --- ----- ----- ----- Earnings before income taxes 21,747 22,686 44,433 53% 2,390 3,661 6,051 Income taxes 7,555 7,752 15,307 18% 770 1,097 1,867 ------- ------- ------ --- ----- ----- ----- 14,192 14,934 29,126 35% 1,620 2,564 4,184 ======= ======= ====== === ===== ===== ===== Diluted earnings per share 0.34 0.36 0.70 Weighted average diluted shares outstanding 41,676 41,681 41,678 HEMATOLOGY DIVISION (in thousands of $'s) Increase (Decrease) Fiscal 2005 From Fiscal 2004 ---------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ------ Sales 4,013 4,515 8,528 100% (268) 61 (207) Cost of sales 2,220 2,163 4,383 51% (126) (181) (307) ------- ------- ------ --- ------ ------ ------ Gross margin 1,793 2,352 4,145 49% (142) 242 100 Gross margin percentage 44.7% 52.1% 48.6% SG&A expense 409 436 845 10% 18 53 71 R&D expense 188 189 377 4% (3) (1) (4) Interest, net (56) (77) (133) (1%) 21 (3) 18 ------- ------- ------ --- ----- ----- ------ 541 548 1,089 13% 36 49 85 ------- ------- ------ --- ----- ----- ------ Pretax result 1,252 1,804 3,056 36% (178) 193 15 ======= ======= ====== === ===== ===== ====== BIOTECHNOLOGY DIVISION (in thousands of $'s) Increase (Decrease) Fiscal 2005 From Fiscal 2004 ---------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ------ Sales 30,691 30,072 60,763 100% 2,038 2,306 4,344 Intersegment sales (4,804) (5,204)(10,008) (183) (237) (420) ------- ------- ------ ------ ----- ------ 25,887 24,868 50,755 1,855 2,069 3,924 Cost of sales 6,111 6,070 12,181 20% 195 540 735 Intersegment sales (4,756) (5,210) (9,966) (235) (316) (551) ------- ------- ------ ------ ----- ------ 1,355 860 2,215 (40) 224 184 Gross margin 24,532 24,008 48,540 80% 1,895 1,845 3,740 Gross margin percentage 80.1% 79.8% 80.0% SG&A expense 2,973 3,415 6,388 11% 322 466 788 R&D expense 4,500 4,430 8,930 15% 336 123 459 Amortization expense 305 306 611 1% (95) (93) (188) Interest, net (414) (564) (978) (2%) (8) (176) (184) ------- ------- ------ --- ------ ----- ------ 7,364 7,587 14,951 25% 555 320 875 ------- ------- ------ --- ------ ----- ------ Pretax result 17,168 16,421 33,589 55% 1,340 1,525 2,865 ======= ======= ====== === ====== ===== ====== R&D SYSTEMS EUROPE (in thousands of Br. pounds) Increase (Decrease) Fiscal 2005 From Fiscal 2004 ---------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ------ Sales 6,080 6,808 12,888 100% 100 443 543 Cost of sales 2,931 3,133 6,064 47% (109) (24) (133) ------- ------- ------ --- ----- ----- ------ Gross margin 3,149 3,675 6,824 53% 209 467 676 Gross margin Percentage 51.8% 54.0% 53.0% SG&A expense 950 1,161 2,111 16% (100) 69 (31) Interest income (254) (263) (517) (4%) (127) (113) (240) Exchange loss/ (gain) 26 (44) (18) -- 75 29 104 ------- ------- ------ --- ------ ----- ------ 722 854 1,576 12% (152) (15) (167) ------- ------- ------ --- ------ ----- ------ Pretax result 2,427 2,821 5,248 41% 361 482 843 ======= ======= ====== === ====== ===== ====== R&D SYSTEMS EUROPE (in thousands of $'s) Increase (Decrease) Fiscal 2005 From Fiscal 2004 ---------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------ -------- ------- ------- ------ Sales 11,019 12,864 23,883 100% 1,339 1,853 3,192 Cost of sales 5,312 5,918 11,230 47% 390 457 847 ------- ------- ------ --- ------ ----- ------ Gross margin 5,707 6,946 12,653 53% 949 1,396 2,345 Gross margin percentage 51.8% 54.0% 53.0% SG&A expense 1,722 2,194 3,916 16% 23 303 326 Interest income (460) (497) (957) (4%) (254) (237) (491) Exchange loss/ (gain) 47 (82) (35) -- 131 47 178 ------- ------- ------ --- ------ ----- ------ 1,309 1,615 2,924 12% (100) 113 13 ------- ------- ------ --- ------ ----- ------ Pretax result 4,398 5,331 9,729 41% 1,049 1,283 2,332 ======= ======= ====== === ====== ===== ====== CORPORATE AND OTHER (1) (in thousands of $'s) Increase (Decrease) Fiscal 2005 From Fiscal 2004 ------------------------ ----------------------- First Second First Second Quarter Quarter YTD Quarter Quarter YTD ------- ------- ------ ------- ------- ------ Interest income 42 51 93 5 11 16 Rental income 19 53 72 -- 7 7 ------- ------- ------ ------- ------- ------ 61 104 165 5 18 23 SG&A expense 530 245 775 188 (51) 137 R&D-CCX losses -- -- -- (436) (828) (1,264) R&D-DGI losses -- -- -- (172) (125) (297) Other-Hemerus losses 74 73 147 74 73 147 Interest expense 164 178 342 (11) 6 (5) Building expense 364 478 842 183 283 466 ------- ------- ------ ------- ------- ------ 1,132 974 2,106 (174) (642) (816) ------- ------- ------ ------- ------- ------ Pretax result (1,071) (870) (1,941) 179 660 839 ======= ======= ====== ======= ======= ====== (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-----