-----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, NVYI0NVFbNdQWfBo1oyK80M6WZrxajnp1OfJ9O8+YUUjxrkpzJT4fKd5G9AQ2Zqg xzD0T7y+pABXq+ESmPON7g== 0000842023-05-000048.txt : 20051028 0000842023-05-000048.hdr.sgml : 20051028 20051028120954 ACCESSION NUMBER: 0000842023-05-000048 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20051027 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051028 DATE AS OF CHANGE: 20051028 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: 051162130 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): October 27, 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 October 27, 2005, describing the results of operations for the quarter ended September 30, 2005 and its financial condition as of September 30, 2005, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter ended September 30, 2005 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 October 27, 2005. 99.2 Segment information for the quarter ended September 30, 2005. 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: October 28, 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 October 27, 2005. 99.2 Segment information for Techne Corporation for the quarter ended September 30, 2005. EX-99.1 2 press1005.txt PRESS RELEASE TECHNE CORPORATION RELEASES UNAUDITED FIRST QUARTER RESULTS FOR FISCAL YEAR 2006 Minneapolis/October 27, 2005/--Techne Corporation's (NASDAQ: TECH) consolidated net earnings increased 20% to $17.0 million or $.43 per diluted share for the quarter ended September 30, 2005 compared with $14.2 million or $.34 per diluted share for the quarter ended September 30, 2004. Net earnings as a percentage of net sales improved from 34.7% in the first quarter of last year to 35.6% for the quarter ended September 30, 2005. Consolidated net sales for the quarter ended September 30, 2005 were $47.7 million, an increase of 17% from the quarter ended September 30, 2004. Included in net sales for the quarter ended September 30, 2005 was $2.6 million of net sales from Fortron Bio Science, Inc. and BiosPacific, Inc., which were acquired effective July 1, 2005. Excluding these sales and the effect of changes in exchange rates, consolidated net sales increased 11% for the quarter. R&D Systems' Biotechnology Division net sales for the quarter ended September 30, 2005 were $29.7 million, an increase of 15%. R&D Europe's net sales for the quarter were $11.9 million, an increase of 8%. In British pound sterling, R&D Europe's net sales increased 10% for the quarter ended September 30, 2005. R&D Systems' Hematology Division net sales for the quarter were $3.5 million, a decrease of 12%, mainly as a result of a large OEM customer changing to a new primary vendor in January 2005. The negative impact on consolidated net sales and net earnings of the change in exchange rates used to convert R&D Europe results from British pounds to U.S. dollars was not significant (approximately $245,000 and $68,000 for the quarter ended September 30, 2005, respectively). Consolidated gross margins were 76.7% in the first quarter of fiscal 2006. Excluding Fortron and BiosPacific, gross margins were 79.1% compared to 78.3% in the first quarter of fiscal 2005. This increase was the result of a favorable mix of higher margin Biotechnology Division sales as compared to Hematology and R&D Europe sales. Gross margins for Fortron and BiosPacific operations of 35.5% for the quarter ended September 30, 2005 were negatively affected by purchase accounting related to inventory acquired. Selling, general and administrative expense as a percent of net sales improved to 13.5% for the quarter ended September 30, 2005 from 13.8% for the quarter ended September 30, 2004, despite additional expenses as a result of the acquisitions, additional profit sharing, and stock option related compensation expense from the adoption of Financial Accounting Standards Board (FASB) Statement of Accounting Standards No. 123 (Revised 2004), Share- Based Payments (SFAS No. 123R). Selling, general and administrative expenses for the quarter ended September 30, 2005 increased $820,000 (15%) from the quarter ended September 30, 2004. Excluding Fortron and BiosPacific operations, these expenses increased $453,000 (8%) for the quarter. The increase was mainly a result of an increase in profit sharing accrual of $172,000 and the adoption, on July 1, 2005, of SFAS No. 123R which resulted in $270,000 of additional compensation expense in the quarter. Estimated total compensation expense of approximately $1.5 million or $.03 per diluted share is anticipated for fiscal 2006 as a result of the adoption of the Statement. The Company allocated approximately $12.8 million to goodwill and $7.1 million to other intangible assets arising from the acquisition of Fortron and BiosPacific. The intangible assets, mainly trade names and customer and supplier relationships, are being amortized over lives of one to eight years and amortization expense of $272,000 was recorded for the quarter ended September 30, 2005 related to these assets. In March 2005, the Company repurchased approximately 2.9 million shares of its common stock under an accelerated stock buyback transaction ("ASB") for an initial value of approximately $100 million. The ASB agreement is subject to a market price adjustment provision based upon the volume weighted average price during the nine-month period ending in December 2005. The market price adjustment may be settled in cash or stock at the Company's option. Based on the volume weighted average price per share through September 30, 2005, the settlement amount for the contract would have been approximately $23.3 million or about 489,000 shares at September 30, 2005. The effect of the reduction in outstanding shares on earnings per diluted share was $.03 for the quarter ended September 30, 2005. In July 2005, the Company acquired Fortron Bio Science, Inc. and BiosPacific, Inc. for an aggregate $20 million in cash. The acquisitions will help the Company expand into the diagnostic market by offering research reagents that may have future diagnostic application and/or developing products specifically for diagnostic markets. Fortron and BiosPacific generated combined revenues of approximately $8.7 million in calendar 2004. The acquisitions are expected to be slightly accretive to the Company's earnings per share in fiscal year 2006. Forward Looking Statements: This earnings release contains forward-looking statements within the meaning of the Private Litigation Reform Act. These statements, including our expectations as to the estimated compensation expense resulting from stock option expensing and the accretive impact of the recent Fortron and BiosPacific acquisitions, involve risks and uncertainties that 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 integration of the recent acquisitions, 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. We undertake no obligation to update or revise any forward-looking statements we make in this release due to new information or future events. Investors are cautioned not to place undue emphasis on these statements. * * * * * * * * * * * * * * 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. R&D Systems has two subsidiaries, Fortron Bio Science, Inc. (Fortron), located in Minneapolis, and BiosPacific, Inc., located in Emeryville, California. Fortron develops and manufactures antibodies and BiosPacific is a worldwide supplier of biologics to manufacturers of in vitro diagnostic systems and immunodiagnostic kits. 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 9/30/05 9/30/04 -------- -------- Net sales $ 47,709 $ 40,919 Cost of sales 11,096 8,887 -------- -------- Gross margin 36,613 32,032 Operating expenses: Selling, general and administrative 6,454 5,634 Research and development 4,717 4,688 Amortization of intangible assets 492 305 -------- -------- Total operating expenses 11,663 10,627 -------- -------- Operating income 24,950 21,405 Other expense (income): Interest expense 223 245 Interest income (974) (1,053) Other non-operating expense (income), net 211 466 -------- -------- Total other expense (income) (540) (342) -------- -------- Earnings before income taxes 25,490 21,747 Income taxes 8,489 7,555 -------- -------- Net earnings $ 17,001 $ 14,192 ======== ======== Earnings per share: Basic $ 0.44 $ 0.34 Diluted $ 0.43 $ 0.34 Weighted average common shares outstanding: Basic 38,754 41,169 Diluted 39,669 41,676 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 9/30/05 6/30/05 -------- -------- ASSETS Cash and equivalents $ 76,516 $ 80,344 Short-term available-for-sale investments 18,725 16,790 Trade accounts receivable 22,460 22,041 Other receivables 652 1,681 Inventory 9,982 7,758 Other current assets 6,099 6,367 -------- -------- Current assets 134,434 134,981 Available-for-sale investments 48,452 41,871 Property and equipment, net 88,640 89,036 Goodwill and intangible assets, net 33,505 14,138 Other non-current assets 13,454 15,237 -------- -------- Total assets $318,485 $295,263 ======== ======== LIABILITIES Current liabilities $ 12,730 $ 14,016 Long-term debt 13,078 13,378 Stockholders' equity 292,677 267,869 -------- -------- Total liabilities and equity $318,485 $295,263 ======== ======== EX-99.2 3 segment.txt SEGMENT RESULTS SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data) Increase(Decrease) Fiscal 2006 From Fiscal 2005 --------------------- ------------------ First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 47,709 100% 6,790 Cost of sales 11,096 23% 2,209 ------- ---- ------- Gross margin 36,613 77% 4,581 Gross margin percentage 76.7% SG&A expense 6,454 14% 820 R&D expense 4,717 10% 29 Amortization expense 492 1% 187 Interest expense 223 -- (22) Interest income (974) (2%) 79 Other non-operating ex., net 211 -- (255) ------- -------- ------- 11,123 23% 838 ------- -------- ------- Earnings before income taxes 25,490 54% 3,743 Income taxes 8,489 18% 934 ------- -------- ------- 17,001 36% 2,809 ======= ======== ======= Diluted earnings per share 0.43 Weighted average diluted shares outstanding 39,669 BIOTECHNOLOGY (1) (in thousands of $'s) Increase(Decrease) Fiscal 2006 From Fiscal 2005 --------------------- ------------------ First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 37,599 100% 6,908 Intersegment sales (5,299) (495) ------- ------- 32,300 6,413 Cost of sales 8,470 23% 2,359 Intersegment sales (5,323) (567) ------- -------- ------- 3,147 1,792 Gross margin 29,153 77% 4,621 Gross margin percentage 77.5% SG&A expense 3,639 10% 666 R&D expense 4,532 12% 32 Amortization expense 492 1% 187 Interest, net (268) (1%) 146 ------- -------- ------- 8,395 22% 1,031 ------- -------- ------- Pretax result 20,758 55% 3,590 ======= ======== ======= (1) Fiscal 2006 includes R&D Systems' Biotechnology Division, Fortron Bio Science, Inc., and BiosPacific, Inc. R&D SYSTEMS EUROPE (in thousands of British pounds) Increase(Decrease) Fiscal 2006 From Fiscal 2005 --------------------- ------------------ First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 6,690 100% 610 Cost of sales 3,292 50% 361 ------- -------- ------- Gross margin 3,398 50% 249 Gross margin percentage 50.8% SG&A expense 1,004 15% 54 Interest income (326) (5%) (72) Exchange loss/(gain) 15 -- (11) ------- -------- ------- 693 10% (29) ------- -------- ------- Pretax result 2,705 40% 278 ======= ======== ======= R&D SYSTEMS EUROPE (in thousands of $'s) Increase(Decrease) Fiscal 2006 From Fiscal 2005 --------------------- ------------------ First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 11,875 100% 856 Cost of sales 5,844 50% 532 ------- -------- ------- Gross margin 6,031 50% 324 Gross margin percentage 50.8% SG&A expense 1,782 15% 60 Interest income (579) (5%) (119) Exchange loss 28 -- (19) ------- -------- ------- 1,231 10% (78) ------- -------- ------- Pretax result 4,800 40% 402 ======= ======== ======= HEMATOLOGY (in thousands of $'s) Increase(Decrease) Fiscal 2006 From Fiscal 2005 --------------------- ------------------ First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 3,534 100% (479) Cost of sales 2,105 60% (115) ------- -------- ------- Gross margin 1,429 40% (364) Gross margin percentage 40.4% SG&A expense 384 11% (25) R&D expense 185 5% (3) Interest, net (37) (1%) 19 ------- -------- ------- 532 15% (9) ------- -------- ------- Pretax result 897 25% (355) ======= ======== ======= CORPORATE AND OTHER (2) (in thousands of $'s) Increase(Decrease) Fiscal 2006 From Fiscal 2005 ----------- ------------------ First First Quarter Quarter ------- ------- Interest income 90 48 Rental income 342 323 ------- ------- 432 371 SG&A expense 649 119 Interest expense 223 59 Other-Hemerus losses 82 79 Other-Building expenses 443 8 ------- ------- 1,397 265 ------- ------- Pretax result (965) 106 ======= ======= (2) Unallocated corporate expenses and Techne's share of losses by Hemerus Medical, LLC. -----END PRIVACY-ENHANCED MESSAGE-----