0000842023-12-000013.txt : 20120501 0000842023-12-000013.hdr.sgml : 20120501 20120501090446 ACCESSION NUMBER: 0000842023-12-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20120501 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120501 DATE AS OF CHANGE: 20120501 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: 12798047 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): May 1, 2012 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 May 1, 2012, describing the results of operations for the quarter and nine months ended March 31, 2012 and its financial condition as of March 31, 2012, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter and nine months ended March 31, 2012 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 May 1, 2012. 99.2 Segment information for the quarter and nine months ended March 31, 2012. 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: May 1, 2012 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 May 1, 2012. 99.2 Segment information for Techne Corporation for the quarter and nine months ended March 31, 2012. EX-99.1 2 release5012012.txt PRESS RELEASE DATED MAY 1, 2012 TECHNE CORPORATION RELEASES UNAUDITED THIRD QUARTER AND NINE MONTH FISCAL YEAR 2012 RESULTS Minneapolis/May 1, 2012/ Techne Corporation's (NASDAQ:TECH) financial results for the third quarter and nine months ended March 31, 2012 include the following highlights: Third quarter earnings were $31.8 million or $0.86 per diluted share. Adjusted earnings for the quarter were $33.1 million or $0.90 per diluted share, an increase of 5.9% from the same prior-year period. Adjusted earnings and earnings per share exclude intangible asset amortization and costs recognized upon the sale of inventory that was written-up to fair value as part of the acquisitions of Boston Biochem, Inc. and Tocris Holdings Limited completed in the quarter ended June 30, 2011. Adjusted earnings and earnings per diluted share also exclude the impact of impairment charges on certain equity investments and the reversal of deferred tax asset valuation allowances. Earnings for the nine-month period ended March 31, 2012 were $85.1 million or $2.30 per diluted share. Adjusted earnings for the nine- month period ended March 31, 2012 were $91.1 million or $2.46 per diluted share, an increase of 7.9% from the same prior-year period. Net sales as reported grew 9.6% to $83.6 million for the quarter ended March 31, 2012. Organic sales grew 1.8% in the quarter compared to the same prior-year period. Organic sales exclude sales from acquisitions and the changes in foreign currency rates. Net sales as reported grew 11.3% to $236 million for the nine months ended March 31, 2012. Organic sales grew 2.3% in the nine-month period compared to the same prior-year period. A stronger U.S. dollar as compared to foreign currencies reduced sales by $587,000 in the quarter ended March 31, 2012 from the comparable prior-year quarter. A weaker U.S. dollar as compared to foreign currencies improved sales by $1.5 million in the nine-month period ended March 31, 2012 from the comparable prior-year period. The Biotechnology segment includes sales made through R&D Systems' Biotechnology Division, R&D Systems Europe, Tocris, R&D Systems China, BiosPacific and Boston Biochem. Biotechnology segment net sales were $78.2 million for the quarter ended March 31, 2012, an increase of 9.9% from $71.1 million for the quarter ended March 31, 2011. Biotechnology net sales were $220 million for the nine-month period ended March 31, 2012, an increase of 11.7% from $197 million for the nine-month period ended March 31, 2011. Biotechnology sales growth was 1.5% and 2.0% for the quarter and nine month periods ended March 31, 2012, respectively, if sales from the acquisitions and foreign currency effect are excluded. Organic sales growth for the Biotechnology segment from the same prior-year periods were: Period Ended March 31, 2012 --------------------------- Quarter Nine Months ----------- ----------- U.S. industrial, pharmaceutical and biotechnology 5.6% 5.7% U.S. academic (5.4%) (4.9%) Europe (0.4%) (0.6%) China 19.9% 22.4% Pacific Rim 7.8% 6.5% Hematology net sales for the quarter and nine-month period ended March 31, 2012 were $5.4 million and $15.6 million, increases of 5.6% and 6.2%, respectively, from the comparable prior-year periods. The gross margin percentage declined to 75.8% in the quarter ended March 31, 2012 from 79.1% in the comparable prior-year quarter and to 75.0% in the nine-month period ended March 31, 2012 from 78.0% in the comparable prior- year period, due to costs recognized upon the sale of inventory that was written-up to fair value as part of the acquisitions and the amortization of intangible assets. Gross margins were 79.0% and 79.2% for the quarters ended March 31, 2012 and 2011, respectively, and 78.5% and 78.2% for the nine-month periods ended March 31, 2012 and 2011, respectively, if such costs were excluded in all periods. Selling, general and administrative expenses for the quarter and nine-month period ended March 31, 2012 increased $604,000 and $6.0 million, respectively, from the quarter and nine-month periods ended March 31, 2011. The acquired businesses added $795,000 and $3.2 million of selling, general and administrative expenses, excluding intangible asset amortization, in the quarter and nine-month periods ended March 31, 2012, respectively. Intangible amortization included in selling, general and administrative expenses increased $456,000 and $1.4 million in the quarter and nine-month period ended March 31, 2012, respectively, from the same prior-year periods. Selling, general and administrative expense for the quarter and nine-month period ended March 31, 2011 included $211,000 of professional fees related to the acquisitions. Other expense for the quarter and nine-month period ended March 31, 2012 included $3.3 million of impairment losses on investments in unconsolidated entities. These losses were the result of Nephromics, LLC signing an agreement to sell substantially all of its assets and ACTGen, Inc. suffering substantial operating losses and encountering funding difficulties. Other non-operating expenses include foreign exchange transaction gains of $164,000 and losses of $465,000, respectively, for the quarter and nine-month period ended March 31, 2012, compared to foreign exchange transaction gains of $249,000 and $667,000 for the quarter and nine-month period ended March 31, 2011, respectively. The effective tax rate for the quarter and nine-month period ended March 31, 2012 was 26.5% and 30.0%, respectively, as compared to 31.6% and 31.2% for the same prior-year periods. Income taxes for the quarter and nine-month period ended March 31, 2012 were positively impacted by $3.0 million due to the reversal of a valuation allowance on deferred tax assets related to the excess tax basis in the Company's investments in unconsolidated entities. The tax rate for the remainder of fiscal 2012 is expected to be 31% to 33%. In September 2011, the Company entered into a $10.0 million loan agreement with ChemoCentryx, Inc. (CCXI). The loan agreement contained a number of conversion features contingent upon CCXI obtaining future debt or equity financing. The agreement also included a $5.0 million commitment by the Company to participate in a private placement in the event of a successful public offering of CCXI shares. With CCXI's completion of its initial public offering during the quarter ended March 31, 2012, the loan plus accrued interest was converted to common shares and the Company purchased the additional $5 million of common equity as required by its previous commitment. At March 31, 2012, the Company's investment in CCXI was included in short-term available-for-sale investments at its fair market value of $66.5 million. The Company's unrealized gain of $37.0 million, net of deferred tax liability of $13.2 million, was included in accumulated other comprehensive income at March 31, 2012. The Company's investment in CCXI was $14.3 million at June 30, 2011 and was included in other non-current assets. The Company repurchased 45,983 and 309,010 shares of its common stock during the quarter and nine months ended March 31, 2012, respectively, for approximately $3.1 million and $21.3 million. Approximately $29.3 million remains available at March 31, 2012 for the repurchase and retirement of shares under the currently open authorization. Forward Looking Statements: Our press releases may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements, including the expected effective tax rate, 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 acquired companies, 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, general economic conditions, 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 section titled "Risk Factors" in 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 our press releases due to new information or future events. Investors are cautioned not to place undue emphasis on these statements. Use of Adjusted Financial Measures: The adjusted financial measures used in this press release quantify the impact the following events had on reported net sales, gross margin percentages, selling, general and administrative expenses, net earnings and earnings per share for the quarter and nine-month period ended March 31, 2012 as compared to the reported amounts for the same periods ended March 31, 2011: - fluctuations in exchange rates used to convert transactions in foreign currencies (primarily the Euro, British pound sterling and Chinese yuan) to U.S. dollars; - the acquisitions of Boston Biochem on April 1, 2011 and Tocris on April 28, 2011, including the impact of amortizing intangible assets and the recognition of costs upon the sale of inventory written-up to fair value; - impairment losses related to the Company's investments in unconsolidated entities; and - the reversal of valuation allowances on deferred tax assets related to the excess tax basis in the Company's unconsolidated entities. These adjusted financial measures are not prepared in accordance with generally accepted accounting principles (GAAP) and may be different from adjusted financial measures used by other companies. Adjusted financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. We view these adjusted financial measures to be helpful in assessing the Company's ongoing operating results. In addition, these adjusted financial measures facilitate our internal comparisons to historical operating results and comparisons to competitors' operating results. We include these adjusted financial measures in our earnings announcement because we believe they are useful to investors in allowing for greater transparency related to supplemental information we use in our financial and operational analysis. Investors are encouraged to review the reconciliations of adjusted financial measures used in this press release to their most directly comparable GAAP financial measures as provided with the financial statements attached to this press release. * * * * * * * * * * * * 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 three operating subsidiaries: BiosPacific, Inc. (BiosPacific), located in Emeryville, California, Boston Biochem, Inc., located in Cambridge, Massachusetts 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. Boston Biochem is a leading developer and manufacturer of ubiquitin-related research products. R&D China and R&D Europe distribute biotechnology products. R&D Europe has two subsidiaries: Tocris Holdings Ltd (Tocris) of Bristol, England and R&D Systems GmbH, a German sales operation. Tocris is a leading supplier of reagents for non-clinical life science research. 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 ---------------- ------------------ 3/31/12 3/31/11 3/31/12 3/31/11 ------- ------- -------- -------- Net sales $83,621 $76,271 $235,879 $211,924 Cost of sales 20,238 15,941 58,939 46,618 ------- ------- -------- -------- Gross margin 63,383 60,330 176,940 165,306 Operating expenses: Selling, general and administrative 9,899 9,295 31,323 25,335 Research and development 7,122 6,297 20,626 19,519 ------- ------- -------- -------- Total operating expenses 17,021 15,592 51,949 44,854 ------- ------- -------- -------- Operating income 46,362 44,738 124,991 120,452 Other income (expense): Interest income 470 1,067 1,996 2,934 Impairment losses on investments in unconsolidated entities (3,254) 0 (3,254) 0 Other non-operating expense, net (373) (421) (2,155) (1,376) ------- ------- -------- -------- Total other (expense) income (3,157) 646 (3,413) 1,558 ------- ------- -------- -------- Earnings before income taxes 43,205 45,384 121,578 122,010 Income taxes 11,449 14,320 36,488 38,039 ------- ------- -------- -------- Net earnings $31,756 $31,064 $ 85,090 $ 83,971 ======= ======= ======== ======== Earnings per share: Basic $ 0.86 $ 0.84 $ 2.30 $ 2.26 Diluted $ 0.86 $ 0.84 $ 2.30 $ 2.26 Weighted average common shares outstanding: Basic 36,864 37,119 36,975 37,084 Diluted 36,930 37,194 37,043 37,153 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 3/31/12 6/30/11 -------- -------- ASSETS Cash and equivalents $ 95,280 $ 77,613 Short-term available-for-sale investments 124,325 63,200 Trade accounts receivable 39,114 35,914 Inventory 40,497 44,906 Other current assets 7,056 8,784 -------- -------- Current assets 306,272 230,417 -------- -------- Available-for-sale investments 145,129 131,988 Property and equipment, net 94,614 95,398 Goodwill and intangible assets, net 134,876 138,915 Other non-current assets 3,143 20,952 -------- -------- Total assets $684,034 $617,670 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued expenses $ 14,620 $ 12,679 Payable for pending available-for-sale investment purchases 7,360 0 Income taxes - deferred and current 8,741 5,509 -------- -------- Current liabilities 30,721 18,188 -------- -------- Deferred taxes 8,816 13,360 Stockholders' equity 644,497 586,122 -------- -------- Total liabilities and stockholders' equity $684,034 $617,670 ======== ======== TECHNE CORPORATION RECONCILIATION of ORGANIC SALES (In thousands) (Unaudited) QUARTER ENDED NINE MONTHS ENDED ---------------- ------------------ 3/31/12 3/31/11 3/31/12 3/31/11 ------- ------- -------- -------- Net sales $83,621 $76,271 $235,879 $211,924 Organic sales adjustments: Acquisitions (6,600) 0 (17,655) 0 Impact of foreign currency fluctuations 587 0 (1,529) 0 ------- ------- -------- -------- Organic sales $77,608 $76,271 $216,695 $211,924 ======= ======= ======== ======== Organic sales growth 1.8% 2.3% TECHNE CORPORATION RECONCILIATION of NET EARNINGS and EARNINGS per SHARE (In thousands, except per share data) (Unaudited) QUARTER ENDED NINE MONTHS ENDED ---------------- ------------------ 3/31/12 3/31/11 3/31/12 3/31/11 ------- ------- -------- -------- Net earnings $31,756 $31,064 $ 85,090 $ 83,971 Identified adjustments: Costs recognized upon sale of acquired inventory 1,955 0 5,870 0 Amortization of intangibles 1,268 170 3,821 511 Acquisition related professional fees 0 211 0 211 Impairment losses on investments 3,254 0 3,254 0 Tax impact of above adjustments (2,069) (137) (3,883) (263) Tax impact of reversal of valuation allowance (3,016) 0 (3,016) 0 ------- ------- -------- -------- 1,392 244 6,046 459 ------- ------- -------- -------- Net earnings - adjusted for identified items $33,148 $31,308 $ 91,136 $ 84,430 ======= ======= ======== ======== Adjusted growth 5.9% 7.9% Earnings per share - Diluted - adjusted $ 0.90 $ 0.84 $ 2.46 $ 2.27 TECHNE CORPORATION RECONCILIATION of GROSS MARGIN PERCENTAGES (Unaudited) QUARTER ENDED NINE MONTHS ENDED ---------------- ------------------ 3/31/12 3/31/11 3/31/12 3/31/11 ------- ------- -------- -------- Gross margin percentage 75.8% 79.1% 75.0% 78.0% Identified adjustments: Costs recognized upon sale of acquired inventory 2.3% 0.0% 2.5% 0.0% Amortization of intangibles 0.9% 0.1% 1.0% 0.2% ------- ------- -------- -------- Gross margin percentage - adjusted 79.0% 79.2% 78.5% 78.2% ======= ======= ======== ======== TECHNE CORPORATION RECONCILIATION of SELLING, GENERAL and ADMINISTRATIVE EXPENSES (In thousands) (Unaudited) QUARTER ENDED NINE MONTHS ENDED ---------------- ------------------ 3/31/12 3/31/11 3/31/12 3/31/11 ------- ------- -------- -------- Selling, general and administrative expenses $ 9,899 $ 9,295 $ 31,323 $ 25,335 Identified selling, general and administrative expense adjustments: Acquired companies' expense, excluding intangible amortization (795) 0 (3,160) 0 Amortization of intangibles (518) (62) (1,558) (185) Acquisition related professional fees 0 (211) 0 (211) ------- ------- -------- -------- Selling, general and administrative expenses - adjusted $ 8,586 $ 9,022 $ 26,605 $ 24,939 ======= ======= ======== ======== TECHNE CORPORATION RECONCILIATION of INTANGIBLE AMORTIZATION (In thousands) (Unaudited) QUARTER ENDED NINE MONTHS ENDED ---------------- ------------------ 3/31/12 3/31/11 3/31/12 3/31/11 ------- ------- -------- -------- Amortization of intangible assets included in: Cost of goods sold $ 750 $ 108 $ 2,263 $ 326 Selling, general and administrative expenses 518 62 1,558 185 ------- ------- -------- -------- Total amortization of intangible assets $ 1,268 $ 170 $ 3,821 $ 511 ======= ======= ======== ======== EX-99.2 3 seg312.txt SEGMENT RESULTS SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data) Increase (Decrease) Fiscal 2012 From Fiscal 2011 ---------------------------------- ------------------------- First Second Third % of First Second Third Qtr Qtr Qtr YTD Sales Qtr Qtr Qtr YTD ------ ------ ------ ------- ----- ----- ------ ----- ------ Sales 77,596 74,662 83,621 235,879 100% 9,651 6,954 7,350 23,955 Cost of sales 19,209 19,492 20,238 58,939 25% 3,859 4,165 4,297 12,321 ------ ------ ------ ------- ----- ----- ------ ----- ------ Gross margin 58,387 55,170 63,383 176,940 75% 5,792 2,789 3,053 11,634 Gross margin percentage 75.2% 73.9% 75.8% 75.0% SG&A expense 10,773 10,651 9,899 31,323 13% 3,160 2,224 604 5,988 R&D expense 6,667 6,837 7,122 20,626 9% 48 234 825 1,107 Interest income (728) (798) (470) (1,996) (1%) 119 222 597 938 Impairment loss 0 0 3,254 3,254 1% 0 0 3,254 3,254 Other non- operating ex., net 1,175 607 373 2,155 1% 918 (91) (48) 779 ------ ------ ------ ------- ----- ----- ------ ----- ------ 17,887 17,297 20,178 55,362 23% 4,245 2,589 5,232 12,066 ------ ------ ------ ------- ----- ----- ------ ----- ------ Earnings before income taxes 40,500 37,873 43,205 121,578 52% 1,547 200(2,179) (432) Income taxes 12,979 12,060 11,449 36,488 16% 399 921(2,871)(1,551) ------ ------ ------ ------- ----- ----- ------ ----- ------ 27,521 25,813 31,756 85,090 36% 1,148 (721) 692 1,119 ====== ====== ====== ======= ===== ===== ====== ===== ====== Diluted earnings per share 0.74 0.70 0.86 2.30 Weighted average diluted shares outstanding 37,170 37,028 36,930 37,043 BIOTECHNOLOGY (1) (in thousands of $'s) Increase (Decrease) Fiscal 2012 From Fiscal 2011 ---------------------------------- ------------------------- First Second Third % of First Second Third Qtr Qtr Qtr YTD Sales Qtr Qtr Qtr YTD ------ ------ ------ ------- ----- ----- ------ ----- ------ Sales 72,303 69,808 78,180 220,291 100% 9,262 6,728 7,060 23,050 Cost of sales 16,465 16,887 17,444 50,796 23% 3,624 4,267 4,145 12,036 ------ ------ ------ ------- ----- ----- ------ ----- ------ Gross margin 55,838 52,921 60,736 169,495 77% 5,638 2,461 2,915 11,014 Gross margin percentage 77.2% 75.8% 77.7% 76.9% SG&A expense 9,470 9,003 8,921 27,394 12% 2,984 2,144 995 6,123 R&D expense 6,469 6,624 6,924 20,017 9% 48 245 820 1,113 Interest income (609) (689) (387) (1,685) (1%) 53 129 484 666 Exchange loss/ gain 524 105 (164) 465 0% 1,029 18 85 1,132 ------ ------ ------ ------- ----- ----- ------ ----- ------ 15,854 15,043 15,294 46,191 21% 4,114 2,536 2,384 9,034 ------ ------ ------ ------- ----- ----- ------ ----- ------ Pretax result 39,984 37,878 45,442 123,304 56% 1,524 (75) 531 1,980 ====== ====== ====== ======= ===== ===== ====== ===== ====== (1) Includes R&D Systems' Biotechnology Division, R&D Systems Europe, BiosPacific, R&D China, Boston Biochem and Tocris. HEMATOLOGY (in thousands of $'s) Increase (Decrease) Fiscal 2012 From Fiscal 2011 ---------------------------------- ------------------------- First Second Third % of First Second Third Qtr Qtr Qtr YTD Sales Qtr Qtr Qtr YTD ------ ------ ------ ------- ----- ----- ------ ----- ------ Sales 5,293 4,854 5,441 15,588 100% 389 226 290 905 Cost of sales 2,744 2,605 2,794 8,143 52% 235 (102) 152 285 ------ ------ ------ ------- ----- ----- ------ ----- ------ Gross margin 2,549 2,249 2,647 7,445 48% 154 328 138 620 Gross margin percentage 48.2% 46.3% 48.7% 47.8% SG&A expense 480 400 435 1,315 9% 152 64 (3) 213 R&D expense 198 213 198 609 4% -- (11) 5 (6) Interest income (47) (45) (23) (115) (1%) 6 21 46 73 ------ ------ ------ ------- ----- ----- ------ ----- ------ 631 568 610 1,809 12% 158 74 48 280 ------ ------ ------ ------- ----- ----- ------ ----- ------ Pretax result 1,918 1,681 2,037 5,636 36% (4) 254 90 340 ====== ====== ====== ======= ===== ===== ====== ===== ====== CORPORATE AND OTHER (2) (in thousands of $'s) Increase (Decrease) Fiscal 2012 From Fiscal 2011 ---------------------------- --------------------------- First Second Third First Second Third Qtr Qtr Qtr YTD Qtr Qtr Qtr YTD ------ ------ ------ ------- ----- ------ ----- ------ Interest income 72 64 60 196 (60) (72) (67) (199) Rental income 134 198 150 482 11 60 36 107 ------ ------ ------ ------- ----- ------ ----- ------ 206 262 210 678 (49) (12) (31) (92) SG&A expense 823 1,248 543 2,614 24 16 (388) (348) Other-Building expenses 587 482 545 1,614 31 (49) (41) (59) Other-Impairment losses 0 0 3,254 3,254 0 0 3,254 3,254 Other-Equity Investment losses 198 218 142 558 (131) 0 (56) (187) ------ ------ ------ ------- ----- ------ ----- ------ 1,608 1,948 4,484 8,040 (76) (33) 2,769 2,660 ------ ------ ------ ------- ----- ------ ----- ------ Pretax result (1,402)(1,686)(4,274) (7,362) 27 21 (2,800) (2,752) ====== ====== ====== ======= ===== ====== ===== ====== (2) Unallocated corporate expenses and Techne's share of losses related to investment in unconsolidated entities.