-----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, E866WtO+VjbTOdYVdNtLUxSbs28oosGy6ATkIZ+2/dg/IPqhF5iQTbdFD0LLklJY Hh/OdY6+B97f2wSIEbMFkg== 0000842023-08-000010.txt : 20080429 0000842023-08-000010.hdr.sgml : 20080429 20080429092922 ACCESSION NUMBER: 0000842023-08-000010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080429 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080429 DATE AS OF CHANGE: 20080429 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: 08783247 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): April 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 April 29, 2008, describing the results of operations for the quarter and nine months ended March 31, 2008 and its financial condition as of March 31, 2008, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter and nine months ended March 31, 2008 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 April 29, 2008. 99.2 Segment information for the quarter and nine months ended March 31, 2008. 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: April 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 March 31, 2008. 99.2 Segment information for Techne Corporation for the quarter and nine months ended March 31, 2008. EX-99.1 2 release42908.txt PRESS RELEASE DATED 4/29/08 TECHNE CORPORATION RELEASES UNAUDITED THIRD QUARTER RESULTS FOR FISCAL YEAR 2008 Minneapolis/April 29, 2008/--Techne Corporation's (NASDAQ: TECH) consolidated net earnings for the quarter ended March 31, 2008 increased 23.8% to $29.6 million or $.76 per diluted share compared with $23.9 million or $.60 per diluted share for the quarter ended March 31, 2007. For the nine months ended March 31, 2008, Techne's consolidated net earnings increased 22.7% to $76.3 million or $1.94 per diluted share compared with $62.2 million or $1.57 per diluted share for the nine months ended March 31, 2007. Net earnings as a percentage of net sales improved to 40.2% for the nine months ended March 31, 2008 from 37.7% in the first nine 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 foreign currencies (primarily British pound sterling and Euros) to U.S. dollars was $251,000 ($.006 per diluted share) for the quarter and $1.0 million ($.026 per diluted share) for the nine months ended March 31, 2008. Consolidated net sales for the quarter and nine months ended March 31, 2008 were $69.5 million and $189.7 million, respectively. This was an increase of 15.5% and 14.9% from the quarter and nine months ended March 31, 2007, respectively. Consolidated net sales were favorably affected by the strength of foreign currencies as compared to the U.S. dollar. Excluding the effect of changes in foreign currency exchange rates, consolidated net sales increased 12.6% and 12.4% for the quarter ended and nine months ended March 31, 2008, 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 $45.1 million and $123.1 million, for the quarter and nine months ended March 31, 2008, increases of 15.2% and 13.5%, respectively. This improvement was primarily the result of increased volume, including 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 13.2% and 12.6% for the quarter ended and nine months ended March 31, 2008, respectively, from the comparable prior year periods. R&D Europe's net sales for the quarter and nine months ended March 31, 2008 were $20.2 million and $54.7 million, increases of 16.2% and 20.0%, respectively, from the same prior-year periods. R&D Europe's net sales increased 6.0% and 10.9% for the quarter and nine months ended March 31, 2008 when measured at currency rates in effect in the comparable prior periods. Hematology net sales for the quarter and nine months ended March 31, 2008 were $4.2 million and $11.8 million, increases of 14.8% and 7.7%, respectively, compared to the quarter and nine months ended March 31, 2007. The timing of shipments to OEM customers positively impacted Hematology sales results during the quarter ended March 31, 2008. Tom Oland, President and Chief Executive Officer of Techne Corporation, said "Sales exceeded our expectations in all segments of our business and in nearly all product lines and geographical territories for the second straight quarter. The Easter holiday had much less impact on sales than we anticipated and we benefited from a large one-time $1.1 million sale to a diagnostic customer." Mr. Oland added, "While improvement in recent market demand has allowed the Company to capitalize on its expanding product line and commitment to quality, we continue to believe that, given current market conditions, our long-term sales growth will be in a targeted range of 8% to 10%, excluding the effect of changes in exchange rates." Consolidated gross margins were 79.7% and 79.4% for the quarter and nine months ended March 31, 2008, respectively, compared to 80.0% and 79.4% for the quarter and nine months ended March 31, 2007, respectively. Biotechnology gross margins decreased to 79.8% for both the quarter and nine months ended March 31, 2008 from 80.4% and 80.3% 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 nine months ended March 31, 2008 increased $1.8 million (24.4%) and $4.6 million (19.9%), respectively. These increases include wage and salary increases and the hiring of additional marketing and administrative personnel to support the Company's sales growth. The third quarter increase also resulted from increased legal fees of $559,000, additional profit sharing of $620,000, increased bad debt expense of $124,000, R&D China selling, and general and administrative expenses of $149,000. Selling, general and administrative expenses for the nine months ended March 31, 2008 also increased because of additional profit sharing of $1.2 million, increased legal fees of $930,000, R&D China selling, general and administrative expenses of $392,000, the change in foreign currency exchange rates used to convert British pounds to U.S. dollars of $310,000, increased stock option expense of $196,000, and increased bad debt expense of $124,000. The effective tax rates for the quarter and nine months ended March 31, 2008 were 31.2% and 32.7%, respectively, as compared to effective tax rates of 35.2% and 34.4%, respectively, from the same prior-year periods. Third quarter rates in both fiscal years were impacted by changes in state apportionment estimates. Without significant business developments, the Company expects its fiscal 2008 effective income tax rate to range from approximately 33.0% to 34.0%. The Company repurchased approximately 437,000 shares of its common stock during the third quarter of fiscal 2008 for approximately $28.7 million. During fiscal 2008 and through March 31, 2008, the Company has repurchased approximately 758,000 shares of its common stock for approximately $49.3 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 NINE MONTHS ENDED ---------------- ------------------ 3/31/08 3/31/07 3/31/08 3/31/07 ------- ------- -------- -------- Net sales $69,522 $60,197 $189,651 $165,057 Cost of sales 14,146 12,019 39,001 33,970 ------- ------- -------- -------- Gross margin 55,376 48,178 150,650 131,087 ------- ------- -------- -------- Operating expenses: Selling, general and administrative 8,994 7,229 27,729 23,126 Research and development 5,839 5,169 16,582 15,068 Amortization of intangible assets 283 403 853 1,210 ------- ------- -------- -------- Total operating expenses 15,116 12,801 45,164 39,404 ------- ------- -------- -------- Operating income 40,260 35,377 105,486 91,683 ------- ------- -------- -------- Other expense (income): Interest expense -- -- -- 1,083 Interest income (3,155) (2,237) (9,405) (5,869) Other non-operating expense, net 423 767 1,565 1,680 ------- ------- -------- -------- Total other income (2,732) (1,470) (7,840) (3,106) ------- ------- -------- -------- Earnings before income taxes 42,992 36,847 113,326 94,789 Income taxes 13,402 12,954 37,025 32,602 ------- ------- -------- -------- Net earnings $29,590 $23,893 $ 76,301 $ 62,187 ======= ======= ======== ======== Earnings per share: Basic $ 0.76 $ 0.61 $ 1.94 $ 1.58 Diluted $ 0.76 $ 0.60 $ 1.94 $ 1.57 Weighted average common shares outstanding: Basic 39,000 39,414 39,296 39,393 Diluted 39,108 39,543 39,396 39,498 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 3/31/08 6/30/07 -------- -------- ASSETS: Cash and equivalents $162,849 $135,485 Short-term available-for-sale investments 42,947 29,289 Trade accounts receivable 32,798 29,559 Other receivables 1,407 1,407 Inventory 10,003 8,757 Other current assets 9,357 8,341 -------- -------- Current assets 259,361 212,838 -------- -------- Available-for-sale investments 75,097 91,433 Property and equipment, net 94,069 91,535 Goodwill and intangible assets, net 29,314 30,167 Other non-current assets 30,269 28,871 -------- -------- Total assets $488,110 $454,844 ======== ======== LIABILITIES Current liabilities $ 20,162 $ 17,193 Stockholders' equity 467,948 437,651 -------- -------- Total liabilities and equity $488,110 $454,844 ======== ======== EX-99.2 3 seg308.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 Third Percent First Second Third Qtr Qtr Qtr YTD Of Sales Qtr Qtr Qtr YTD ------ ------ ------ ------- -------- ------ ------ ------ ------ Sales 57,987 62,142 69,522 189,651 100% 5,636 9,633 9,325 24,594 Cost of sales 12,104 12,751 14,146 39,001 21% 867 2,037 2,127 5,031 ------ ------ ------ ------- -------- ------ ------ ------ ------ Gross margin 45,883 49,391 55,376 150,650 79% 4,769 7,596 7,198 19,563 Gross margin percentage 79.1% 79.5% 79.7% 79.4% SG&A expense 8,090 10,645 8,994 27,729 15% 1,023 1,815 1,765 4,603 R&D expense 5,181 5,562 5,839 16,582 9% 326 518 670 1,514 Amortization expense 288 282 283 853 - (115) (122) (120) (357) Interest expense 0 0 0 0 - (268) (815) 0 (1,083) Interest income (2,998) (3,252) (3,155) (9,405) (5%) (1,322) (1,296) (918) (3,536) Other non-operating expense, net 569 573 423 1,565 - 84 145 (344) (115) ------ ------ ------ ------- -------- ------ ------ ------ ------ 11,130 13,810 12,384 37,324 19% (272) 245 1,053 1,026 ------ ------ ------ ------- -------- ------ ------ ------ ------ Earnings before income taxes 34,753 35,581 42,992 113,326 60% 5,041 7,351 6,145 18,537 Income taxes 11,681 11,942 13,402 37,025 20% 1,600 2,375 448 4,423 ------ ------ ------ ------- -------- ------ ------ ------ ------ 23,072 23,639 29,590 76,301 40% 3,441 4,976 5,697 14,114 ====== ====== ====== ======= ======== ====== ====== ====== ====== Diluted earnings per share .58 .60 .76 1.94 Weighted average diluted shares outstanding 39,587 39,497 39,108 39,396
BIOTECHNOLOGY (1) (in thousands of $'s)
Increase (Decrease) Fiscal 2008 From Fiscal 2007 ---------------------------------------- ------------------------------ First Second Third Percent First Second Third Qtr Qtr Qtr YTD Of Sales Qtr Qtr Qtr YTD ------ ------ ------ ------- -------- ------ ------ ------ ------ Sales 45,328 46,576 52,912 144,816 100% 3,707 6,503 6,710 16,920 Intersegment sales (6,447) (7,433) (7,822) (21,702) (748) (786) (750) (2,284) ------ ------ ------ ------- ------ ------ ------ ------ 38,881 39,143 45,090 123,114 2,959 5,717 5,960 14,636 Cost of sales 8,997 9,612 10,709 29,318 20% 515 1,929 1,668 4,112 Intersegment sales (6,174) (7,430) (7,755) (21,359) (650) (995) (608) (2,253) ------ ------ ------ ------- ------ ------ ------ ------ 2,823 2,182 2,954 7,959 (135) 934 1,060 1,859 Gross margin 36,058 36,961 42,136 115,155 80% 3,094 4,783 4,900 12,777 Gross margin percentage 80.2% 79.4% 79.8% 79.8% SG&A expense 4,624 5,534 5,257 15,415 11% 611 870 1,091 2,572 R&D expense 5,002 5,368 5,640 16,010 11% 327 514 669 1,510 Amortization expense 288 282 283 853 1% (115) (122) (120) (357) Interest, net (1,257) (1,309) (1,285) (3,851) (3%) (662) (587) (444) (1,693) Exchange loss/(gain) 34 12 (5) 41 -- 34 12 (5) 41 ------ ------ ------ ------- -------- ------ ------ ------ ------ 8,691 9,887 9,890 28,468 20% 195 687 1,191 2,073 ------ ------ ------ ------- -------- ------ ------ ------ ------ Pretax result 27,367 27,074 32,246 86,687 60% 2,899 4,096 3,709 10,704 ====== ====== ====== ======= ======== ====== ====== ====== ======
(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 Third Percent First Second Third Qtr Qtr Qtr YTD Of Sales Qtr Qtr Qtr YTD ------ ------ ------ ------- -------- ------ ------ ------ ------ Sales 7,605 9,301 10,180 27,086 100% 735 1,450 1,326 3,511 Cost of sales 3,455 4,053 4,392 11,900 44% 170 287 301 758 ------ ------ ------ ------- -------- ------ ------ ------ ------ Gross margin 4,150 5,248 5,788 15,186 56% 565 1,163 1,025 2,753 Gross margin percentage 54.6% 56.4% 56.9% 56.1% SG&A expense 1,114 1,276 1,163 3,553 13% 40 40 88 168 Interest income (683) (773) (762) (2,218) (8%) (273) (293) (220) (786) Exchange loss/(gain) (96) (81) (230) (407) (2%) (174) (17) (252) (443) ------ ------ ------ ------- -------- ------ ------ ------ ------ 335 422 171 928 3% (407) (270) (384) (1,061) ------ ------ ------ ------- -------- ------ ------ ------ ------ Pretax result 3,815 4,826 5,617 14,258 53% 972 1,433 1,409 3,814 ====== ====== ====== ======= ======== ====== ====== ====== ======
R&D SYSTEMS EUROPE (in thousands of $'s)
Increase (Decrease) Fiscal 2008 From Fiscal 2007 ---------------------------------------- ------------------------------ First Second Third Percent First Second Third Qtr Qtr Qtr YTD Of Sales Qtr Qtr Qtr YTD ------ ------ ------ ------- -------- ------ ------ ------ ------ Sales 15,449 19,027 20,226 54,702 100% 2,522 3,770 2,823 9,115 Cost of sales 7,020 8,293 8,726 24,039 44% 839 974 686 2,499 ------ ------ ------ ------- -------- ------ ------ ------ ------ Gross margin 8,429 10,734 11,500 30,663 56% 1,683 2,796 2,137 6,616 Gross margin percentage 54.6% 56.4% 56.9% 56.1% SG&A expense 2,262 2,599 2,311 7,172 13% 242 194 199 635 Interest income (1,387) (1,576) (1,514) (4,477) (8%) (616) (643) (447) (1,706) Exchange loss/gain) (198) (165) (457) (820) (2%) (345) (39) (499) (883) ------ ------ ------ ------- -------- ------ ------ ------ ------ 677 858 340 1,875 3% (719) (488) (747) (1,954) ------ ------ ------ ------- -------- ------ ------ ------ ------ Pretax result 7,752 9,876 11,160 28,788 53% 2,402 3,284 2,884 8,570 ====== ====== ====== ======= ======== ====== ====== ====== ======
HEMATOLOGY (in thousands of $'s)
Increase (Decrease) Fiscal 2008 From Fiscal 2007 ---------------------------------------- ------------------------------ First Second Third Percent First Second Third Qtr Qtr Qtr YTD Of Sales Qtr Qtr Qtr YTD ------ ------ ------ ------- -------- ------ ------ ------ ------ Sales 3,657 3,972 4,206 11,835 100% 155 146 542 843 Cost of sales 2,261 2,276 2,466 7,003 59% 163 129 381 673 ------ ------ ------ ------- -------- ------ ------ ------ ------ Gross margin 1,396 1,696 1,740 4,832 41% (8) 17 161 170 Gross margin percentage 38.2% 42.7% 41.4% 40.8% SG&A expense 467 487 489 1,443 12% 69 48 58 175 R&D expense 179 194 199 572 5% (1) 4 1 4 Interest, net (120) (125) (123) (368) (3%) (39) (30) (12) (81) ------ ------ ------ ------- -------- ------ ------ ------ ------ 526 556 565 1,647 14% 29 22 47 98 ------ ------ ------ ------- -------- ------ ------ ------ ------ Pretax result 870 1,140 1,175 3,185 27% (37) (5) 114 72 ====== ====== ====== ======= ======== ====== ====== ====== ======
CORPORATE AND OTHER (2) (in thousands of $'s)
Increase (Decrease) Fiscal 2008 From Fiscal 2007 ------------------------------- ------------------------------ First Second Third First Second Third Qtr Qtr Qtr YTD Qtr Qtr Qtr YTD ------ ------ ------ ------- ------ ------ ------ ------ Interest income 234 242 233 709 5 36 15 56 Rental income 67 111 91 269 (232) (130) 36 (326) ------ ------ ------ ------- ------ ------ ------ ------ 301 353 324 978 (227) (94) 51 (270) SG&A expense 737 2,025 937 3,699 101 703 417 1,221 Interest expense -- -- -- -- (268) (815) -- (1,083) Other-Building expenses 544 600 633 1,777 34 51 114 199 Other-Equity Investment losses 256 237 343 836 129 (9) 82 202 ------ ------ ------ ------- ------ ------ ------ ------ 1,537 2,862 1,913 6,312 (4) (70) 613 539 ------ ------ ------ ------- ------ ------ ------ ------ Pretax result (1,236) (2,509) (1,589) (5,334) (223) (24) (562) (809) ====== ====== ====== ======= ====== ====== ====== ======
(2) Unallocated corporate expenses and Techne's share of losses by Hemerus Medical, LLC and Nephromics, LLC. -----END PRIVACY-ENHANCED MESSAGE-----