TECHNE CORPORATION RELEASES UNAUDITED THIRD QUARTER
RESULTS FOR FISCAL YEAR 2003
Minneapolis/May 1, 2003/--For the three months ended March 31, 2003, Techne
Corporation's consolidated net earnings increased 17% to $12,393,538 or 30
cents per share (diluted), compared with $10,573,912 or 25 cents per share
(diluted) in the third quarter of last year. For the nine months ended March
31, 2003, Techne's consolidated net earnings increased 19% to $32,719,745 or
78 cents per share (diluted), compared with $27,433,328 or 65 cents per share
in the first nine months of last year. The improvement in earnings was the
result of increased sales and lower intangible amortization partially offset
by an increase in the effective income tax rate and increased losses by
companies in which Techne has invested.
Consolidated net sales for the quarter and nine months ended March 31, 2003
were a record $37,736,518 and $105,584,968, respectively. This was an
increase of $3,451,242 or 10% and $10,320,115 or 11% from the third quarter
and first nine months of last year. R&D Europe's net sales for the quarter
and nine months increased $2,145,555 (27%) and $4,870,103 (22%). In British
pounds, R&D Europe's net sales increased 13% and 11% for the quarter and nine
months, respectively. R&D Systems' Biotechnology Division net sales for the
quarter and nine months increased $940,215 (4%) and $4,796,981 (8%) and R&D
Systems' Hematology Division net sales for the quarter and nine months
increased $365,472 (10%) and $653,031 (6%).
On July 1, 2002, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets". Goodwill
amortization of $1,567,500 and $4,702,500 was expensed in the third quarter
and first nine months of last year, respectively, but is no longer amortized
under SFAS No. 142. The after tax effect of the goodwill expense in the
third quarter and first nine months of fiscal 2002 was $.02 and $.07 per
diluted share, respectively.
Research and development expenses for the quarter and nine months ended March
31, 2003 increased $843,123 (19%) and $2,356,453 (18%), respectively.
Approximately half of the increase in each period was due to increased losses
by ChemoCentryx, Inc. (CCX) and Discovery Genomics, Inc. (DGI), development
stage companies in which Techne has invested. The portion of the losses by
these two companies included in Techne results for the quarter and nine
months ended March 31, 2003 were $923,238 and $2,279,712 ($.02 and $.05 per
diluted share), respectively, compared to $529,433 and $1,041,068 ($.01 and
$.02 per diluted share), respectively, in the third quarter and first nine
months of fiscal 2002. The effective income tax rate increased for the
quarter and nine months as a result of increased losses by CCX and DGI for
which there are no tax benefits, decreased tax exempt interest income and
changes in state income tax regulations.
During the first nine months of fiscal 2003, Techne purchased and retired
926,500 shares of common stock at a market value of $20,481,567. From the
start of the Company's repurchase program in May 1995, the Board of Directors
has authorized, subject to market conditions and share price, the purchase
and retirement of up to a total of $40 million of common stock. Through
April 30, 2003, 2,397,700 shares have been purchased at a market value of
$33,176,069.
Statements in this earnings release and elsewhere which look forward in time
involve risks and uncertainties which 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.
* * * * * * * * * * * * * *
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 and R&D Europe is a distributor of
biotechnology products.
Contact: Kathy Backes, Controller (612) 379-8854
TECHNE CORPORATION
3/31/03
(UNAUDITED)
QUARTER ENDED NINE MONTHS ENDED
------------------------ -------------------------
3/31/03 3/31/02 3/31/03 3/31/02
----------- ----------- ------------ ------------
Net sales $37,736,518 $34,285,276 $105,584,968 $ 95,264,853
Cost of sales 8,756,163 8,392,165 25,817,172 23,968,392
----------- ----------- ------------ ------------
Gross margin 28,980,355 25,893,111 79,767,796 71,296,461
Operating expenses:
Selling, general
and administrative 4,705,923 4,469,162 14,557,695 13,913,188
Research and
development 5,285,180 4,442,057 15,097,517 12,741,064
Amortization of
intangible assets 484,813 2,137,312 1,454,438 6,411,935
Interest expense 178,274 323,719 797,499 997,243
Interest income (732,060) (886,595) (2,226,483) (2,762,607)
Other non-operating
expense/(income) (59,313) 57,544 74,385 (16,690)
----------- ----------- ------------ ------------
9,862,817 10,543,199 29,755,051 31,284,133
----------- ----------- ------------ ------------
Earnings before
income taxes 19,117,538 15,349,912 50,012,745 40,012,328
Income taxes 6,724,000 4,776,000 17,293,000 12,579,000
----------- ----------- ------------ ------------
Net earnings $12,393,538 $10,573,912 $ 32,719,745 $ 27,433,328
=========== =========== ============ ============
Earnings per share:
Basic $ 0.30 $ 0.25 $ 0.79 $ 0.66
Diluted $ 0.30 $ 0.25 $ 0.78 $ 0.65
Weighted average
common shares
outstanding:
Basic 41,296,620 41,544,110 41,369,059 41,488,383
Diluted 41,990,671 42,524,992 42,198,103 42,531,964
3/31/03 6/30/02
------------ ------------
ASSETS
Cash and equivalents $ 26,836,002 $ 26,392,480
Short-term investments 76,775,269 70,671,341
Receivables 20,944,172 19,413,618
Inventory 6,558,346 6,077,035
Other current assets 5,366,314 6,523,275
Property and equipment (net) 81,543,402 70,312,602
Intangible assets (net) 17,442,562 18,897,000
Other non-current assets 16,739,190 19,959,608
------------ ------------
Total assets $252,205,257 $238,246,959
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LIABILITIES
Current liabilities $ 13,425,839 $ 14,629,524
Long-term debt 16,163,560 17,100,652
Stockholders' equity 222,615,858 206,516,783
------------ ------------
Total liabilities and equity $252,205,257 $238,246,959
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