-----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, IGkhQIq6SWEPon25BFZaZf00bYHOh5xdep2zCC2U25WVQl5eWcA6d6LeElAvjrtr 26nrLpW/mjiYVQsqO6GxDA== 0000842023-07-000002.txt : 20070130 0000842023-07-000002.hdr.sgml : 20070130 20070130114627 ACCESSION NUMBER: 0000842023-07-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070130 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070130 DATE AS OF CHANGE: 20070130 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: 07563510 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 k8q2.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 30, 2007 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 January 30, 2007, describing the results of operations for the quarter and six months ended December 31, 2006 and its financial condition as of December 31, 2006, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter and six months ended December 31, 2006 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 (d) Exhibits 99.1 Press Release dated January 30, 2007. 99.2 Segment information for the quarter and six months ended December 31, 2006. 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 30, 2007 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 January 30, 2007. 99.2 Segment information for Techne Corporation for the quarter and six months ended December 31, 2006. EX-99.1 2 press107.txt PRESS RELEASE DATED JANUARY 30, 2007 TECHNE CORPORATION RELEASES UNAUDITED SECOND QUARTER RESULTS FOR FISCAL YEAR 2007 Minneapolis/January 30, 2007/--Techne Corporation's (NASDAQ: TECH) consolidated net earnings for the quarter ended December 31, 2006 increased 13.0% to $18.7 million or $0.47 per diluted share compared to $16.5 million and $0.42 per diluted share for the quarter ended December 31, 2005. For the six months ended December 31, 2006, Techne's consolidated net earnings increased 14.3% to $38.3 million or $0.97 per diluted share compared with $33.5 million or $0.84 per diluted share for the six months ended December 31, 2005. The improvement in results was mainly due to increased consolidated net sales and improved gross margin percentages. Consolidated net sales for the quarter and six months ended December 31, 2006 were $52.5 million and $104.9 million, respectively. This was an increase of 9.3% and 9.5% from the quarter and six months ended December 31, 2005. Biotechnology net sales, which includes sales by R&D Systems' Biotechnology Division, Fortron and BiosPacific, for the quarter and six months ended December 31, 2006 were $33.4 million and $69.3 million, increases of 7.3% and 9.3%, respectively, from the same prior-year periods. Net sales for the Biotechnology Division increased 11.1% and 10.9% for the quarter and six months ended December 31, 2006, respectively, mainly as a result of increased volume from the same prior-year periods. Approximately $500,000 and $1.2 million of the increase in Biotechnology Division net sales for the quarter and six months ended December 31, 2006, respectively, was the result of price increases. BiosPacific net sales increased for the quarter ended September 30, 2006 from the first quarter of the prior year, but decreased from the prior year for the quarter ended December 31, 2006 due to the timing of large shipments to diagnostic customers. R&D Europe's net sales for the quarter and six months ended December 31, 2006 were $15.3 million and $28.2 million, increases of 16.4% and 12.8%, respectively, from the same prior-year periods. In British pound sterling, R&D Europe's net sales increased 4.3% and 3.5% for the quarter and six months ended December 31, 2006. Hematology net sales for the quarter and six months ended December 31, 2006 were $3.8 million and $7.3 million, increases of 1.2% and 0.2%, respectively, compared to the quarter and six months ended December 31, 2005. Consolidated gross margins were 79.6% and 79.1% for the quarter and six months ended December 31, 2006, respectively, compared to 77.7% and 77.2% for the quarter and six months ended December 31, 2005. Biotechnology gross margins increased to 80.8% and 80.2% for the quarter and six months ended December 31, 2006 from 78.4% and 77.9% for the same prior-year periods mainly as a result of changes in product mix. Biotechnology gross margins were also affected by the sale of inventory acquired from Fortron and BiosPacific in fiscal 2006, which was valued at fair market under purchase accounting. Included in cost of sales for the quarter and six months ended December 31, 2006 were $64,000 and $355,000, respectively, related to the sale of acquired inventory compared to $281,000 and $856,000, respectively, for the same prior year periods. Consolidated net earnings and diluted earnings per share for the quarter and six months ended December 31, 2006 were favorably impacted by the change in exchange rates from the prior year used to convert R&D Europe results from British pound sterling to U.S. dollars. The change in exchange rates from the prior year increased consolidated net earnings approximately $466,000 and $672,000 for the quarter and six months ended December 31, 2006, respectively. In October 2006, the Company repaid its mortgage debt. The total payment of $13.8 million included the mortgage principal balance, accrued interest and a 5% prepayment penalty of $651,000. The prepayment penalty and $78,000 of unamortized loan origination fees were included in interest expense for the quarter ended December 31, 2006. Forward Looking Statements: This earnings release may contain forward-looking statements within the meaning of the Private Litigation Reform Act. These statements 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 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. (BiosPacific), 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 SIX MONTHS ENDED ------------------ ------------------ 12/31/06 12/31/05 12/31/06 12/31/05 -------- -------- -------- -------- Net sales $52,509 $48,029 $104,860 $95,738 Cost of sales 10,714 10,695 21,951 21,791 -------- -------- -------- -------- Gross margin 41,795 37,334 82,909 73,947 Operating expenses: Selling, general and administrative 8,830 7,980 15,897 14,434 Research and development 5,044 4,574 9,899 9,291 Amortization of intangible assets 404 492 807 984 -------- -------- -------- -------- Total operating expenses 14,278 13,046 26,603 24,709 -------- -------- -------- -------- Operating income 27,517 24,288 56,306 49,238 Other expense (income): Interest expense 815 238 1,083 461 Interest income (1,956) (1,130) (3,632) (2,104) Other non-operating expense (income), net 428 281 913 492 -------- -------- -------- -------- Total other expense (income) (713) (611) (1,636) (1,151) -------- -------- -------- -------- Earnings before income taxes 28,230 24,899 57,942 50,389 Income taxes 9,567 8,385 19,648 16,874 -------- -------- -------- -------- Net earnings $18,663 $16,514 $38,294 $33,515 ======== ======== ======== ======== Earnings per share: Basic $ 0.47 $ 0.42 $ 0.97 $ 0.86 Diluted $ 0.47 $ 0.42 $ 0.97 $ 0.84 Weighted average common shares outstanding: Basic 39,387 38,877 39,383 38,815 Diluted 39,511 39,761 39,483 39,730 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 12/31/06 6/30/06 -------- -------- ASSETS Cash and equivalents $102,558 $ 89,634 Short-term available-for-sale investments 23,751 19,212 Trade accounts receivable 22,923 23,769 Other receivables 1,355 1,309 Inventory 9,210 9,024 Other current assets 7,426 6,874 -------- -------- Current assets 167,223 149,822 Available-for-sale investments 80,205 77,660 Property and equipment, net 90,045 88,772 Goodwill and intangible assets, net 31,215 32,021 Other non-current assets 28,954 22,237 -------- -------- Total assets $397,642 $370,512 ======== ======== LIABILITIES Current liabilities $ 12,160 $ 17,966 Long-term debt -- 12,198 Stockholders' equity 385,482 340,348 -------- -------- Total liabilities and equity $397,642 $370,512 ======== ======== EX-99.2 3 seg1206.txt SEGMENT RESULTS SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data) Increase (Decrease) Fiscal 2007 From Fiscal 2006 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 52,351 52,509 104,860 100% 4,642 4,480 9,122 Cost of sales 11,237 10,714 21,951 21% 141 19 160 ------ ------ ------- ------- ------ ------ ------ Gross margin 41,114 41,795 82,909 79% 4,501 4,461 8,962 Gross margin percentage 78.5% 79.6% 79.1% SG&A expense 7,067 8,830 15,897 15% 613 850 1,463 R&D expense 4,855 5,044 9,899 9% 138 470 608 Amortization expense 403 404 807 1% (89) (88) (177) Interest expense 268 815 1,083 1% 45 577 622 Interest income (1,676) (1,956) (3,632) (3%) (702) (826) (1,528) Other non-operating ex., net 485 428 913 1% 274 147 421 ------ ------ ------- ------- ------ ------ ------ 11,402 13,565 24,967 24% 279 1,130 1,409 ------ ------ ------- ------- ------ ------ ------ Earnings before income taxes 29,712 28,230 57,942 55% 4,222 3,331 7,553 Income taxes 10,081 9,567 19,648 18% 1,592 1,182 2,774 ------ ------ ------- ------- ------ ------ ------ 19,631 18,663 38,294 37% 2,630 2,149 4,779 ====== ====== ======= ======= ====== ====== ====== Diluted earnings per share 0.50 0.47 0.97 Weighted average diluted shares outstanding 39,469 39,511 39,483 BIOTECHNOLOGY (1) (in thousands of $'s) Increase (Decrease) Fiscal 2007 From Fiscal 2006 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 41,621 40,073 81,694 100% 4,022 2,376 6,398 Intersegment sales (5,699) (6,647)(12,346) (400) (92) (492) ------ ------ ------- ------- ------ ------ ------ 35,922 33,426 69,348 3,622 2,284 5,906 Cost of sales 8,482 7,683 16,165 20% 12 (464) (452) Intersegment sales (5,524) (6,435)(11,959) (201) (295) (496) ------ ------ ------- ------- ------ ------ ------ 2,958 1,248 4,206 (189) (759) (948) Gross margin 32,964 32,178 65,142 80% 3,811 3,043 6,854 Gross margin percentage 79.6% 80.8% 80.2% SG&A expense 4,013 4,664 8,677 11% 374 470 844 R&D expense 4,675 4,854 9,529 12% 143 450 593 Amortization expense 403 404 807 1% (89) (88) (177) Interest, net (595) (722) (1,317) (2%) (327) (349) (676) ------ ------ ------- ------- ------ ------ ------ 8,496 9,200 17,696 22% 101 483 584 ------ ------ ------- ------- ------ ------ ------ Pretax result 24,468 22,978 47,446 58% 3,710 2,560 6,270 ====== ====== ======= ======= ====== ====== ====== (1) 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 2007 From Fiscal 2006 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 6,870 7,851 14,721 100% 180 322 502 Cost of sales 3,285 3,766 7,051 48% (7) 1 (6) ------ ------ ------- ------- ------ ------ ------ Gross margin 3,585 4,085 7,670 52% 187 321 508 Gross margin percentage 52.2% 52.0% 52.1% SG&A expense 1,074 1,236 2,310 16% 70 51 121 Interest income (410) (480) (890) (6%) (84) (151) (235) Exchange loss/(gain) 78 (64) 14 -- 63 (90) (27) ------ ------ ------- ------- ------ ------ ------ 742 692 1,434 10% 49 (190) (141) ------ ------ ------- ------- ------ ------ ------ Pretax result 2,843 3,393 6,236 42% 138 511 649 ====== ====== ======= ======= ====== ====== ====== R&D SYSTEMS EUROPE (in thousands of $'s) Increase (Decrease) Fiscal 2007 From Fiscal 2006 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 12,927 15,257 28,184 100% 1,052 2,151 3,203 Cost of sales 6,181 7,319 13,500 48% 337 765 1,102 ------ ------ ------- ------- ------ ------ ------ Gross margin 6,746 7,938 14,684 52% 715 1,386 2,101 Gross margin percentage 52.2% 52.0% 52.1% SG&A expense 2,020 2,405 4,425 16% 238 346 584 Interest income (771) (933) (1,704) (6%) (192) (361) (553) Exchange loss 147 (126) 21 -- 119 (172) (53) ------ ------ ------- ------- ------ ------ ------ 1,396 1,346 2,742 10% 165 (187) (22) ------ ------ ------- ------- ------ ------ ------ Pretax result 5,350 6,592 11,942 42% 550 1,573 2,123 ====== ====== ======= ======= ====== ====== ====== HEMATOLOGY (in thousands of $'s) Increase (Decrease) Fiscal 2007 From Fiscal 2006 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 3,502 3,826 7,328 100% (32) 45 13 Cost of sales 2,098 2,147 4,245 58% (7) 13 6 ------- ------- ------- -------- ------- ------- ------- Gross margin 1,404 1,679 3,083 42% (25) 32 7 Gross margin percentage 40.1% 43.9% 42.1% SG&A expense 398 439 837 11% 14 15 29 R&D expense 180 190 370 5% (5) 20 15 Interest, net (81) (95) (176) (2%) (44) (45) (89) ------- ------- ------- -------- ------- ------- ------- 497 534 1,031 14% (35) (10) (45) ------- ------- ------- -------- ------- ------- ------- Pretax result 907 1,145 2,052 28% 10 42 52 ====== ====== ======= ======= ====== ====== ====== CORPORATE AND OTHER (2) (in thousands of $'s) Increase (Decrease) Fiscal 2007 From Fiscal 2006 ----------------------- ----------------------- First Second First Second Quarter Quarter YTD Quarter Quarter YTD ------- ------- ------- ------- ------- ------- Interest income 229 206 435 139 71 210 Rental income 299 241 540 (43) (96) (139) ------- ------- ------- ------- ------- ------- 528 447 975 96 (25) 71 SG&A expense 636 1,322 1,958 (13) 19 6 Interest expense 268 815 1,083 45 577 622 Other-Building expenses 510 549 1,059 67 59 126 Other-Hemerus losses 127 123 250 45 41 86 Other-Nephromics losses -- 123 123 -- 123 123 ------- ------- ------- ------- ------- ------- 1,541 2,932 4,473 144 819 963 ------- ------- ------- ------- ------- ------- Pretax result (1,013) (2,485) (3,498) (48) (844) (892) ======= ======= ======= ======= ======= ======= (2) Unallocated corporate expenses and Techne's share of losses by Hemerus Medical, LLC and Nephromics, LLC. -----END PRIVACY-ENHANCED MESSAGE-----