-----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, P8vvtp9LwevZDPIzuudnQFETguT3bNplXIQHGhhTms3xGs1BgK/jdz7L2Q/I85AA 7mMJlFVGjAznImQApDrZuQ== 0000842023-08-000003.txt : 20080129 0000842023-08-000003.hdr.sgml : 20080129 20080129090954 ACCESSION NUMBER: 0000842023-08-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080129 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080129 DATE AS OF CHANGE: 20080129 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: 08556083 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): January 29, 2008 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 29, 2008, describing the results of operations for the quarter and six months ended December 31, 2007 and its financial condition as of December 31, 2007, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter and six months ended December 31, 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 January 29, 2008. 99.2 Segment information for the quarter and six months ended December 31, 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: January 29, 2008 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 29, 2008. 99.2 Segment information for Techne Corporation for the quarter and six months ended December 31, 2007. EX-99.1 2 release108.txt EARNINGS RELEASE DATED JANUARY 29, 2008 TECHNE CORPORATION RELEASES UNAUDITED SECOND QUARTER RESULTS FOR FISCAL YEAR 2008 Minneapolis/January 29, 2008/--Techne Corporation's (NASDAQ: TECH) consolidated net earnings for the quarter ended December 31, 2007 increased 26.7% to $23.6 million or $.60 per diluted share compared with $18.7 million or $.47 per diluted share for the quarter ended December 31, 2006. For the six months ended December 31, 2007, Techne's consolidated net earnings increased 22.0% to $46.7 million or $1.18 per diluted share compared with $38.3 million or $0.97 per diluted share for the six months ended December 31, 2006. Net earnings as a percentage of net sales improved to 38.9% for the six months ended December 30, 2007 from 36.5% in the first six months of last year. The improvement in net earnings was mainly due to increased consolidated net sales. The favorable 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 $339,000 ($.01 per diluted share) for the quarter and $742,000 ($.02 per diluted share) for the six months ended December 31, 2007. Consolidated net sales for the quarter and six months ended December 31, 2007 were $62.1 million and $120.1 million, respectively. This was an increase of 18.4% and 14.6% from the quarter and six months ended December 31, 2006, respectively. Consolidated net sales 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 16.5% and 12.6% for the quarter ended and six months ended December 31, 2007, respectively, from the comparable prior year periods. Biotechnology net sales, which include sales by R&D Systems' Biotechnology Division, R&D Systems China and BiosPacific, were $39.1 million and $78.0 million, for the quarter and six months ended December 31, 2007, increases of 17.1% and 12.5%, respectively. This improvement was primarily the result of increased volume and the timing of shipments to diagnostic customers. The timing of diagnostic customer sales is not predictable and these sales increases are not necessarily indicative of future sales. Excluding the increased sales to diagnostic customers, Biotechnology net sales increased 12.9% and 12.3% for the quarter ended and six months ended December 31, 2007, respectively, from the comparable prior year periods. R&D Europe's net sales for the quarter and six months ended December 31, 2007 were $19.0 million and $34.5 million, increases of 24.7% and 22.3%, respectively, from the same prior-year periods. In British pounds, R&D Europe's net sales increased 18.5% and 14.8% for the quarter and six months ended December 31, 2007. Hematology net sales for the quarter and six months ended December 31, 2007 were $4.0 million and $7.6 million, increases of 3.8% and 4.1%, respectively, compared to the quarter and six months ended December 31, 2006. Tom Oland, President and Chief Executive Officer of Techne Corporation, said "Second quarter sales exceeded our expectations in all segments of our business and in nearly all product lines and geographical territories. However, given the exceptionally strong sales growth rate in this quarter and due to the Easter holiday falling in March 2008, we caution our shareholders not to expect a similar sales growth rate in our third fiscal quarter." Mr. Oland added, "Our business is doing well. We continue to release new products and build for our future. For fiscal 2008, given current trends for our specific products, we continue to target revenue growth in the range of 8% to 11%." Consolidated gross margins were 79.5% and 79.3% for the quarter and six months ended December 31, 2007 respectively, compared to 79.6% and 79.1% for the quarter and six months ended December 31, 2006. Biotechnology gross margins decreased to 79.4% and 79.8% for the quarter and six months ended December 31, 2007 from 80.8% and 80.2% for the same prior-year periods mainly as a result of higher volume sales to diagnostic customers. The decrease in Biotechnology gross margins was partially offset by higher margins in Europe due to favorable exchange rates and changes in sales mix as a result of higher sales growth in the Biotechnology Division as compared to the sales growth in the lower margin Hematology Division. Selling, general and administrative expenses for the quarter and six months ended December 31, 2007 increased $1.8 million (20.6%) and $2.8 million (17.9%), respectively. These increases primarily resulted because of wage and salary increases and the hiring of additional marketing and administrative personnel to support the Company's sales growth. The second quarter increase also resulted from increased professional fees of $340,000, increased stock option expense of $352,000, additional profit sharing of $331,000, R&D China selling, general and administrative expenses of $144,000, and the change in foreign currency exchange rates used to convert British pounds to U.S. dollars of $116,000. Second quarter selling, general and administrative expenses increased approximately $2.5 million from the first quarter of fiscal 2008 due primarily because of costs associated with production and printing of the annual catalogs and the annual granting of stock options to the Company's Board of Directors (approximately $1.2 million). Selling, general and administrative expenses for the six months ended December 31, 2007 also increased because of increased professional fees of $386,000, increased stock option expense of $357,000, additional profit sharing of $536,000, R&D China selling, general and administrative expenses of $244,000 and the change in foreign currency exchange rates used to convert British pounds to U.S. dollars of $283,000. 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. The effective tax rate was 33.6% for the quarter and six months ended December 31, 2007 as compared to 33.9% for the quarter and six months ended December 31, 2006. Without significant business developments, the Company expects its fiscal 2008 effective income tax rate to range from approximately 33.5% to 34.5%. The Company repurchased approximately 321,000 shares of its common stock during the second quarter of fiscal 2008 for approximately $20.6 million. 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 growth rates and 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 two 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 SIX MONTHS ENDED ------------------ ------------------ 12/31/07 12/31/06 12/31/07 12/31/06 -------- -------- -------- -------- Net sales $ 62,142 $ 52,509 $120,129 $104,860 Cost of sales 12,751 10,714 24,855 21,951 -------- -------- -------- -------- Gross margin 49,391 41,795 95,274 82,909 -------- -------- -------- -------- Operating expenses: Selling, general and administrative 10,645 8,830 18,735 15,897 Research and development 5,562 5,044 10,743 9,899 Amortization of intangible assets 282 404 570 807 -------- -------- -------- -------- Total operating expenses 16,489 14,278 30,048 26,603 -------- -------- -------- -------- Operating income 32,902 27,517 65,226 56,306 Other expense (income): Interest expense -- 815 -- 1,083 Interest income (3,252) (1,956) (6,250) (3,632) Other non-operating expense, net 573 428 1,142 913 -------- -------- -------- -------- Total other income (2,679) (713) (5,108) (1,636) -------- -------- -------- -------- Earnings before income taxes 35,581 28,230 70,334 57,942 Income taxes 11,942 9,567 23,623 19,648 -------- -------- -------- -------- Net earnings $ 23,639 $ 18,663 $ 46,711 $ 38,294 ======== ======== ======== ======== Earnings per share: Basic $ 0.60 $ 0.47 $ 1.18 $ 0.97 Diluted $ 0.60 $ 0.47 $ 1.18 $ 0.97 Weighted average common shares outstanding: Basic 39,395 39,387 39,442 39,383 Diluted 39,497 39,511 39,542 39,483 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 12/31/07 6/30/07 -------- -------- ASSETS Cash and equivalents $148,657 $135,485 Short-term available-for-sale investments 40,139 29,289 Trade accounts receivable 29,273 29,559 Other receivables 1,465 1,407 Inventory 9,409 8,757 Other current assets 8,974 8,341 -------- -------- Current assets 237,917 212,838 -------- -------- Available-for-sale investments 95,663 91,433 Property and equipment, net 94,478 91,535 Goodwill and intangible assets, net 29,597 30,167 Other non-current assets 30,558 28,871 -------- -------- Total assets $488,213 $454,844 ======== ======== LIABILITIES Current liabilities $ 19,858 $ 17,193 Stockholders' equity 468,355 437,651 -------- -------- Total liabilities and equity $488,213 $454,844 ======== ======== EX-99.2 3 seg1208.txt SEGMENT RESULTS SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data) Increase (Decrease) Fiscal 2008 From Fiscal 2007 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 57,987 62,142 120,129 100% 5,636 9,633 15,269 Cost of sales 12,104 12,751 24,855 21% 867 2,037 2,904 ------- ------- ------- -------- ------- ------- ------- Gross margin 45,883 49,391 95,274 79% 4,769 7,596 12,365 Gross margin percentage 79.1% 79.5% 79.3% SG&A expense 8,090 10,645 18,735 15% 1,023 1,815 2,838 R&D expense 5,181 5,562 10,743 9% 326 518 844 Amortization expense 288 282 570 -- (115) (122) (237) Interest expense 0 0 0 -- (268) (815) (1,083) Interest income (2,998) (3,252) (6,250) (5%) (1,322) (1,296) (2,618) Other non-operating expense, net 569 573 1,142 1% 84 145 229 ------- ------- ------- -------- ------- ------- ------- 11,130 13,810 24,940 20% (272) 245 (27) ------- ------- ------- -------- ------- ------- ------- Earnings before income taxes 34,753 35,581 70,334 59% 5,041 7,351 12,392 Income taxes 11,681 11,942 23,623 20% 1,600 2,375 3,975 ------- ------- ------- -------- ------- ------- ------- 23,072 23,639 46,711 39% 3,441 4,976 8,417 ======= ======= ======= ======== ======= ======= ======= Diluted earnings per share .58 .60 1.18 Weighted average diluted shares outstanding 39,587 39,497 39,542 BIOTECHNOLOGY (1) (in thousands of $'s) Increase (Decrease) Fiscal 2008 From Fiscal 2007 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 45,328 46,576 91,904 100% 3,707 6,503 10,210 Intersegment sales (6,447) (7,433)(13,880 (748) (786) (1,534) ------- ------- ------- ------- ------- ------- 38,881 39,143 78,024 2,959 5,717 8,676 Cost of sales 8,997 9,612 18,609 20% 515 1,929 2,444 Intersegment sales (6,174) (7,430)(13,604) (650) (995) (1,645) ------- ------- ------- ------- ------- ------- 2,823 2,182 5,005 (135) 934 799 ------- ------- ------- -------- ------- ------- ------- Gross margin 36,058 36,961 73,019 80% 3,094 4,783 7,877 Gross margin percentage 80.2% 79.4% 79.8% SG&A expense 4,624 5,534 10,158 11% 611 870 1,481 R&D expense 5,002 5,368 10,370 11% 327 514 841 Amortization expense 288 282 570 1% (115) (122) (237) Interest, net (1,257) (1,309) (2,566) (3%) (662) (587) (1,249) Exchange loss/(gain) 34 12 46 -- 34 12 46 ------- ------- ------- -------- ------- ------- ------- 8,691 9,887 18,578 20% 195 687 882 ------- ------- ------- -------- ------- ------- ------- Pretax result 27,367 27,074 54,441 60% 2,899 4,096 6,995 ======= ======= ======= ======== ======= ======= ======= (1) Includes R&D Systems' Biotechnology Division, BiosPacific, Inc. and R&D China R&D SYSTEMS EUROPE (in thousands of British pounds) Increase (Decrease) Fiscal 2008 From Fiscal 2007 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 7,605 9,301 16,906 100% 735 1,450 2,185 Cost of sales 3,455 4,053 7,508 44% 170 287 457 ------- ------- ------- -------- ------- ------- ------- Gross margin 4,150 5,248 9,398 56% 565 1,163 1,728 Gross margin percentage 54.6% 56.4% 55.6% SG&A expense 1,114 1,276 2,390 14% 40 40 80 Interest income (683) (773) (1,456) (8%) (273) (293) (566) Exchange loss/(gain) (96) (81) (177) (1%) (174) (17) (191) ------- ------- ------- -------- ------- ------- ------- 335 422 757 5% (407) (270) (677) ------- ------- ------- -------- ------- ------- ------- Pretax result 3,815 4,826 8,641 51% 972 1,433 2,405 ======= ======= ======= ======== ======= ======= ======= R&D SYSTEMS EUROPE (in thousands of $'s) Increase (Decrease) Fiscal 2008 From Fiscal 2007 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 15,449 19,027 34,476 100% 2,522 3,770 6,292 Cost of sales 7,020 8,293 15,313 44% 839 974 1,813 ------- ------- ------- -------- ------- ------- ------- Gross margin 8,429 10,734 19,163 56% 1,683 2,796 4,479 Gross margin percentage 54.6% 56.4% 55.6% SG&A expense 2,262 2,599 4,861 14% 242 194 436 Interest income (1,387) (1,576) (2,963) (9%) (616) (643) (1,259) Exchange loss (198) (165) (363) (1%) (345) (39) (384) ------- ------- ------- -------- ------- ------- ------- 677 858 1,535 5% (719) (488) (1,207) ------- ------- ------- -------- ------- ------- ------- Pretax result 7,752 9,876 17,628 51% 2,402 3,284 5,686 ======= ======= ======= ======== ======= ======= ======= HEMATOLOGY (in thousands of $'s) Increase (Decrease) Fiscal 2008 From Fiscal 2007 -------------------------------- ----------------------- First Second Percent First Second Quarter Quarter YTD Of Sales Quarter Quarter YTD ------- ------- ------- -------- ------- ------- ------- Sales 3,657 3,972 7,629 100% 155 146 301 Cost of sales 2,261 2,276 4,537 59% 163 129 292 ------- ------- ------- -------- ------- ------- ------- Gross margin 1,396 1,696 3,092 41% (8) 17 9 Gross margin percentage 38.2% 42.7% 40.5% SG&A expense 467 487 954 13% 69 48 117 R&D expense 179 194 373 5% (1) 4 3 Interest, net (120) (125) (245) (3%) (39) (30) (69) ------- ------- ------- -------- ------- ------- ------- 526 556 1,082 15% 29 22 51 ------- ------- ------- -------- ------- ------- ------- Pretax result 870 1,140 2,010 26% (37) (5) (42) ======= ======= ======= ======== ======= ======= ======= CORPORATE AND OTHER (2) (in thousands of $'s) Increase (Decrease) Fiscal 2008 From Fiscal 2007 ----------------------- ----------------------- First Second First Second Quarter Quarter YTD Quarter Quarter YTD ------- ------- ------- ------- ------- ------- Interest income 234 242 476 5 36 41 Rental income 67 111 178 (232) (130) (362) ------- ------- ------- ------- ------- ------- 301 353 654 (227) (94) (321) SG&A expense 737 2,025 2,762 101 703 804 Interest expense -- -- -- (268) (815) (1,083) Other-Building expenses 544 600 1,144 34 51 85 Other-Hemerus losses 131 113 244 4 (10) (6) Other-Nephromics losses 125 124 249 125 1 126 ------- ------- ------- ------- ------- ------- 1,537 2,862 4,399 (4) (70) (74) ------- ------- ------- ------- ------- ------- Pretax result (1,236) (2,509) (3,745) (223) (24) (247) ======= ======= ======= ======= ======= ======= (2) Unallocated corporate expenses and Techne's share of losses by Hemerus Medical, LLC and Nephromics, LLC. -----END PRIVACY-ENHANCED MESSAGE-----