TECHNE CORPORATION RELEASES UNAUDITED FIRST QUARTER
RESULTS FOR FISCAL YEAR 2008
Minneapolis/October 24, 2007/--Techne Corporation's (NASDAQ: TECH)
consolidated net earnings for the quarter ended September 30, 2007
increased 17.5% to $23.1 million or $.58 per diluted share compared with
$19.6 million or $.50 per diluted share for the quarter ended September
30, 2006. Net earnings as a percentage of net sales improved from 37.5%
in the first quarter of last year to 39.8% for the quarter ended
September 30, 2007. 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 $403,000 ($.01 per
diluted share) for the quarter ended September 30, 2007.
Consolidated net sales for the quarter ended September 30, 2007 were
$58.0 million, an increase of 10.8% from the same prior-year quarter.
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 8.6% for the quarter ended September 30, 2007 from the quarter
ended September 30, 2006.
Biotechnology net sales, which include sales by R&D Systems'
Biotechnology Division, R&D Systems China and BiosPacific, for the
quarter ended September 30, 2007 were $38.9 million, an increase of 8.2%
from the same prior-year quarter. R&D Europe's net sales for the quarter
were $15.4 million, an increase of 19.5% from the same prior-year
quarter. In British pound sterling, R&D Europe's net sales increased
10.7% for the quarter. Hematology net sales for the quarter were $3.7
million, an increase of 4.4%.
Gross margins were 79.1% and 78.5% in the first quarters of fiscal 2008
and 2007, respectively. The increase in gross margins was due to 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 ended
September 30, 2007 increased $1.0 million (14.5%). The increase resulted
from the change in foreign currency exchange rates used to convert
British pounds to U.S. dollars ($170,000), increased profit sharing of
$205,000 and R&D China selling, general and administrative expenses of
$99,000. The remainder of the increase was due mainly to annual wage
and salary increases.
The effective tax rate was 33.6% for the quarter ended September 30,
2007 as compared to 33.9% for the quarter ended September 30, 2006.
Without significant business developments, the Company expects its
fiscal 2008 effective income tax rate to range from approximately 33.5%
to 34.5%.
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 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
----------------
9/30/07 9/30/06
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Net sales $57,987 $52,351
Cost of sales 12,104 11,237
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Gross margin 45,883 41,114
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Operating expenses:
Selling, general and administrative 8,090 7,067
Research and development 5,181 4,855
Amortization of intangible assets 288 403
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Total operating expenses 13,559 12,325
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Operating income 32,324 28,789
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Other expense (income):
Interest expense -- 268
Interest income (2,998) (1,676)
Other non-operating expense, net 569 485
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Total other income (2,429) (923)
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Earnings before income taxes 34,753 29,712
Income taxes 11,681 10,081
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Net earnings $23,072 $19,631
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Earnings per share:
Basic $ 0.58 $ 0.50
Diluted $ 0.58 $ 0.50
Weighted average common shares outstanding:
Basic 39,489 39,379
Diluted 39,587 39,469
TECHNE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
9/30/07 6/30/07
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ASSETS
Cash and equivalents $144,745 $135,485
Short-term available-for-sale investments 36,249 29,289
Trade accounts receivable 30,673 29,559
Other receivables 1,362 1,407
Inventory 9,281 8,757
Other current assets 8,899 8,341
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Current assets 231,209 212,838
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Available-for-sale investments 97,851 91,433
Property and equipment, net 93,385 91,535
Goodwill and intangible assets, net 29,879 30,167
Other non-current assets 28,732 28,871
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Total assets $481,056 $454,844
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LIABILITIES
Current liabilities $ 14,800 $ 17,193
Stockholders' equity 466,256 437,651
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Total liabilities and equity $481,056 $454,844
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