-----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, Ws+CHdkfqyzAxUyWLjr9Kjcv3dwINtUG0cUugaj512lBG7nYPHBSHQS354tBo6sg MKPof3GUPgILd6lePMMszA== 0000842023-07-000024.txt : 20070807 0000842023-07-000024.hdr.sgml : 20070807 20070807102642 ACCESSION NUMBER: 0000842023-07-000024 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070807 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070807 DATE AS OF CHANGE: 20070807 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: 071030266 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 k8q.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 7, 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 August 7, 2007, describing the results of operations for the quarter and fiscal year ended June 30, 2007 and its financial condition as of June 30, 2007, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter and fiscal year ended June 30, 2007 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 August 7, 2007. 99.2 Segment information for the quarter and fiscal year ended June 30, 2007. 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 7, 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 August 7, 2007. 99.2 Segment information for Techne Corporation for the quarter and fiscal year ended June 30, 2007. EX-99.1 2 press807.txt EARNINGS RELEASE DATED AUGUST 7, 2007 TECHNE CORPORATION RELEASES UNAUDITED FOURTH QUARTER RESULTS FOR FISCAL YEAR 2007 Minneapolis/August 7, 2007/--Techne Corporation's (NASDAQ: TECH) consolidated net earnings for the quarter ended June 30, 2007 increased 17.6% to $22.9 million or $.58 per diluted share compared with $19.5 million or $.49 per diluted share for the quarter ended June 30, 2006. Net earnings as a percentage of net sales improved from 37.4% in the fourth quarter of last year to 39.2% for the quarter ended June 30, 2007. For the fiscal year ended June 30, 2007, Techne's consolidated net earnings increased 16.0% to $85.1 million or $2.15 per diluted share compared with $73.4 million or $1.85 per diluted share for the fiscal year ended June 30, 2006. Net earnings as a percentage of net sales improved from 36.2% last year to 38.1% for fiscal 2007. The improvement in net earnings was mainly due to increased consolidated net sales. Consolidated net sales for the quarter and fiscal year ended June 30, 2007 were $58.4 million and $223.5 million, respectively. This was an increase of 12.2% and 10.3% from the fourth quarter and fiscal year ended June 30, 2006, respectively. Fiscal 2007 net sales and earnings were favorably affected by the strength of the British pound as compared to the U.S. dollar. Excluding the effect of changes in foreign currency exchange rates, consolidated net sales increased 10.1% and 7.7% for the quarter and fiscal year ended June 30, 2007, respectively. Biotechnology net sales, which include sales by R&D Systems' Biotechnology Division, Fortron and BiosPacific, for the quarter and fiscal year ended June 30, 2007 were $38.1 million and $146.6 million, increases of 11.0% and 9.1%, respectively, from the same prior-year periods. R&D Europe's net sales for the quarter and fiscal year were $16.2 million and $61.8 million, increases of 20.1% and 16.6%, respectively, from the same prior-year periods. In British pound sterling, R&D Europe's net sales increased 12.0% and 6.6% for the quarter and fiscal year ended June 30, 2007, respectively. Hematology net sales for the quarter and fiscal year were $4.1 million and $15.2 million, decreases of 2.7% and 0.9%, respectively. Gross margins were 78.3% and 77.3% in the fourth quarter of fiscal 2007 and 2006, respectively, and 79.1% and 77.4% for the fiscal years 2007 and 2006, respectively. The improvement in gross margins resulted from lower cost of goods sold related to inventories acquired from Fortron and BiosPacific that were valued at fair market value under purchase accounting, higher margins in Europe due to favorable exchange rates and changes in sales mix as a result of sales growth in the Biotechnology Division as compared to sales declines in the lower margin Hematology Division. Fourth quarter fiscal 2007 margins declined from the third quarter of fiscal 2007 mainly due to changes in product mix and valuation estimates in the Biotechnology Division. Selling, general and administrative expenses for the quarter and fiscal year ended June 30, 2007 increased $1.6 million (25.1%) and $3.4 million (12.2%), respectively. The fiscal year expense increase resulted from the change in foreign currency exchange rates (approximately$750,000) and increases in personnel and benefit costs, profit sharing and professional fee expenses. Fourth quarter expenses increased approximately $600,000 from the third quarter of fiscal 2007 due primarily to the timing of promotional marketing costs (approximately $300,000) and increased profit sharing costs (approximately $125,000). The effective tax rate was 32.9% for the quarter ended June 30, 2007 as compared to 35.2% for the prior quarter ended March 31, 2007. The fourth quarter fiscal 2007 effective tax rate was lower than in the third quarter of fiscal 2007 due to changes in state apportionment estimates that were made in the third quarter and a $420,000 reduction in estimated tax contingency reserves made in the fourth quarter. The effective tax rate was 34.0% for the fiscal years ended both June 30, 2006 and 2007. Without significant business developments, the Company expects its fiscal 2008 effective income tax rate to range from approximately 33.5% to 34.5%. 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 $368,000 ($.01 per diluted share) and $1.6 million ($.04 per diluted share) for the quarter and fiscal year ended June 30, 2007, respectively. Forward Looking Statements: This earnings release contains forward-looking statements within the meaning of the Private Litigation Reform Act. These statements, including the Company's expectations as to income tax rates, 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 to subsidiaries, BiosPacific, Inc. (BiosPacific), located in Emeryville, California and R&D Systems China Co. Ltd., (R&D China), located in Shanghai, China. BiosPacific is a worldwide supplier of biologics to manufacturers of in vitro diagnostic systems and immunodiagnostic kits. R&D China and R&D Europe distribute 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 FISCAL YEAR ENDED ---------------- ------------------ 6/30/07 6/30/06 6/30/07 6/30/06 ------- ------- -------- -------- Net sales $58,425 $52,066 $223,482 $202,617 Cost of sales 12,697 11,822 46,667 45,718 ------- ------- -------- -------- Gross margin 45,728 40,244 176,815 156,899 ------- ------- -------- -------- Operating expenses: Selling, general and administrative 7,839 6,269 30,965 27,604 Research and development 5,014 4,773 20,082 18,825 Amortization of intangible assets 404 491 1,614 1,967 ------- ------- -------- -------- Total operating expenses 13,257 11,533 52,661 48,396 ------- ------- -------- -------- Operating income 32,471 28,711 124,154 108,503 Other expense (income): Interest expense -- 258 1,083 964 Interest income (2,565) (1,522) (8,434) (4,708) Other non-operating expense, net 894 363 2,574 1,084 ------- ------- -------- -------- Total other income (1,671) (901) (4,777) (2,660) ------- ------- -------- -------- Earnings before income taxes 34,142 29,612 128,931 111,163 Income taxes 11,218 10,123 43,820 37,812 ------- ------- -------- -------- Net earnings $22,924 $19,489 $ 85,111 $ 73,351 ======= ======= ======== ======== Earnings per share: Basic $ 0.58 $ 0.50 $ 2.16 $ 1.88 Diluted $ 0.58 $ 0.49 $ 2.15 $ 1.85 Weighted average common shares outstanding: Basic 39,444 39,374 39,406 39,049 Diluted 39,555 39,487 39,513 39,594 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 6/30/07 6/30/06 -------- -------- ASSETS Cash and equivalents $135,485 $ 89,634 Short-term available-for-sale investments 29,289 19,212 Trade accounts receivable 29,559 23,769 Other receivables 1,407 1,309 Inventory 8,757 9,024 Other current assets 8,341 6,874 -------- -------- Current assets 212,838 149,822 Available-for-sale investments 91,433 77,660 Property and equipment, net 91,535 88,772 Goodwill and intangible assets, net 30,167 32,021 Other non-current assets 28,871 22,237 -------- -------- Total assets $454,844 $370,512 ======== ======== LIABILITIES Current liabilities $ 17,193 $ 17,966 Long-term debt -- 12,198 Stockholders' equity 437,651 340,348 -------- -------- Total liabilities and equity $454,844 $370,512 ======== ======== EX-99.2 3 segment607.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 Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 52,351 52,509 60,197 58,425 223,482 100% 4,642 4,480 5,384 6,359 20,865 Cost of sales 11,237 10,714 12,019 12,697 46,667 21% 141 19 (86) 875 949 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Gross margin 41,114 41,795 48,178 45,728 176,815 79% 4,501 4,461 5,470 5,484 19,916 Gross margin percentage 78.5% 79.6% 80.0% 78.3% 79.1% SG&A expense 7,067 8,830 7,229 7,839 30,965 14% 613 850 328 1,570 3,361 R&D expense 4,855 5,044 5,169 5,014 20,082 9% 138 470 408 241 1,257 Amortization expense 403 404 403 404 1,614 1% (89) (88) (89) (87) (353) Interest expense 268 815 0 0 1,083 0% 45 577 (245) (258) 119 Interest income (1,676) (1,956) (2,237) (2,565) (8,434) (4%) (702) (826) (1,155) (1,043)(3,726) Other non-opera- ting ex., net 485 428 767 894 2,574 1% 274 147 538 531 1,490 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ 11,402 13,565 11,331 11,586 47,884 21% 279 1,130 (215) 954 2,148 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Earnings before income taxes 29,712 28,230 36,847 34,142 128,931 58% 4,222 3,331 5,685 4,530 17,768 Income taxes 10,081 9,567 12,954 11,218 43,820 20% 1,592 1,182 2,139 1,095 6,008 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ 19,631 18,663 23,893 22,924 85,111 38% 2,630 2,149 3,546 3,435 11,760 ======= ======= ======= ======= ======= ======== ======= ======= ======= ======= ====== Diluted earnings per share .50 .47 .60 .58 2.15 Weighted average diluted shares outstanding 39,469 39,511 39,543 39,555 39,513
BIOTECHNOLOGY (1) (in thousands of $'s)
Increase (Decrease) Fiscal 2007 From Fiscal 2006 ------------------------------------------------ -------------------------------------- First Second Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 41,621 40,073 46,202 44,788 172,684 100% 4,022 2,376 3,189 4,712 14,299 Intersegment sales (5,699) (6,647) (7,072) (6,652)(26,070) (400) (92) (676) (941)(2,109) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ 35,922 33,426 39,130 38,136 146,614 3,622 2,284 2,513 3,771 12,190 Cost of sales 8,482 7,683 9,041 9,577 34,783 20% 12 (464) (84) 980 444 Intersegment sales (5,524) (6,435) (7,147) (6,679)(25,785) (201) (295) (669) (922)(2,087) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ 2,958 1,248 1,894 2,898 8,998 (189) (759) (753) 58 (1,643) Gross margin 32,964 32,178 37,236 35,238 137,616 80% 3,811 3,043 3,266 3,713 13,833 Gross margin percentage 79.6% 80.8% 80.4% 78.6% 79.9% SG&A expense 4,013 4,664 4,166 4,617 17,460 10% 374 470 (33) 1,207 2,018 R&D expense 4,675 4,854 4,971 4,833 19,333 11% 143 450 378 248 1,219 Amortization expense 403 404 403 404 1,614 2% (89) (88) (89) (87) (353) Interest, net (595) (722) (841) (1,031) (3,189) (2%) (327) (349) (556) (530)(1,762) ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ 8,496 9,200 8,699 8,823 35,218 21% 101 483 (300) 838 1,122 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Pretax result 24,468 22,978 28,537 26,415 102,398 59% 3,710 2,560 3,566 2,875 12,711 ======= ======= ======= ======= ======= ======== ======= ======= ======= ======= ======
(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 Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 6,870 7,851 8,854 8,154 31,729 100% 180 322 598 876 1,976 Cost of sales 3,285 3,766 4,091 3,797 14,939 47% (7) 1 (100) 167 61 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Gross margin 3,585 4,085 4,763 4,357 16,790 53% 187 321 698 709 1,915 Gross margin percentage 52.2% 52.0% 53.8% 53.4% 52.9% SG&A expense 1,074 1,236 1,075 1,113 4,498 14% 70 51 5 (2) 124 Interest income (410) (480) (542) (595) (2,027) (6%) (84) (151) (200) (226) (661) Exchange loss /(gain) 78 (64) 22 6 42 -- 63 (90) 71 15 59 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ 742 692 555 524 2,513 8% 49 (190) (124) (213) (478) ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Pretax result 2,843 3,393 4,208 3,833 14,277 45% 138 511 822 922 2,393 ======= ======= ======= ======= ======= ======== ======= ======= ======= ======= ======
R&D SYSTEMS EUROPE (in thousands of $'s)
Increase (Decrease) Fiscal 2007 From Fiscal 2006 ------------------------------------------------ -------------------------------------- First Second Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 12,927 15,257 17,403 16,179 61,766 100% 1,052 2,151 2,907 2,702 8,812 Cost of sales 6,181 7,319 8,040 7,541 29,081 47% 337 765 682 818 2,602 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Gross margin 6,746 7,938 9,363 8,638 32,685 53% 715 1,386 2,225 1,884 6,210 Gross margin percentage 52.2% 52.0% 53.8% 53.4% 52.9% SG&A expense 2,020 2,405 2,112 2,219 8,756 14% 238 346 233 155 972 Interest income (771) (933) (1,067) (1,174) (3,945) (6%) (192) (361) (467) (494)(1,514) Exchange loss /(gain) 147 (126) 42 19 82 -- 119 (172) 129 36 112 ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ 1,396 1,346 1,087 1,064 4,893 8% 165 (187) (105) (303) (430) ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Pretax result 5,350 6,592 8,276 7,574 27,792 45% 550 1,573 2,330 2,187 6,640 ======= ======= ======= ======= ======= ======== ======= ======= ======= ======= ======
HEMATOLOGY (in thousands of $'s)
Increase (Decrease) Fiscal 2007 From Fiscal 2006 ------------------------------------------------ -------------------------------------- First Second Third Fourth Percent First Second Third Fourth Quarter Quarter Quarter Quarter YTD Of Sales Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Sales 3,502 3,826 3,664 4,110 15,102 100% (32) 45 (36) (114) (137) Cost of sales 2,098 2,147 2,085 2,258 8,588 57% (7) 13 (15) (1) (10) ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Gross margin 1,404 1,679 1,579 1,852 6,514 43% (25) 32 (21) (113) (127) Gross margin percentage 40.1% 43.9% 43.1% 45.1% 43.1% SG&A expense 398 439 431 422 1,690 11% 14 15 (10) 46 65 R&D expense 180 190 198 181 749 5% (5) 20 30 (7) 38 Interest, net (81) (95) (111) (136) (423) (3%) (44) (45) (71) (62) (222) ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ 497 534 518 467 2,016 13% (35) (10) (51) (23) (119) ------- ------- ------- ------- ------- -------- ------- ------- ------- ------- ------ Pretax result 907 1,145 1,061 1,385 4,498 30% 10 42 30 (90) (8) ======= ======= ======= ======= ======= ======== ======= ======= ======= ======= ======
CORPORATE AND OTHER (2) (in thousands of $'s)
Increase (Decrease) Fiscal 2007 From Fiscal 2006 --------------------------------------- -------------------------------------- First Second Third Fourth First Second Third Fourth Quarter Quarter Quarter Quarter YTD Quarter Quarter Quarter Quarter YTD ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ Interest income 229 206 218 224 877 139 71 61 (43) 228 Rental income 299 241 55 91 686 (43) (96) (232) (229) (600) ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ 528 447 273 315 1,563 96 (25) (171) (272) (372) SG&A expense 636 1,322 520 581 3,059 (13) 19 138 162 306 Interest expense 268 815 0 0 1,083 45 577 (245) (258) 119 Other-Building expenses 510 549 519 634 2,212 67 59 (1) 105 230 Other-Hemerus losses 127 123 119 169 538 45 41 36 (2) 120 Other-Nephromics losses -- 123 142 163 428 -- 123 142 163 428 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ 1,541 2,932 1,300 1,547 7,320 144 819 70 170 1,203 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------ Pretax result (1,013) (2,485) (1,027) (1,232) (5,757) (48) (844) (241) (442)(1,575) ======= ======= ======= ======= ======= ======= ======= ======= ======= ======
(2) Unallocated corporate expenses and Techne's share of losses by Hemerus Medical, LLC and Nephromics, LLC. -----END PRIVACY-ENHANCED MESSAGE-----