TECHNE CORPORATION RELEASES UNAUDITED FOURTH QUARTER
RESULTS FOR FISCAL YEAR 2009
Minneapolis/August 4, 2009/-- Techne Corporation's (NASDAQ: TECH)
consolidated net earnings for the quarter ended June 30, 2009
decreased 6.9% to $25.4 million or $.68 per diluted share compared
with $27.3 million or $.70 per diluted share for the quarter ended
June 30, 2008. For the fiscal year ended June 30, 2009, Techne's
consolidated net earnings increased 1.6% to $105.2 million or $2.78
per diluted share compared with $103.6 million or $2.64 per diluted
share for the fiscal year ended June 30, 2008. Net earnings as a
percentage of net sales were 39.9% for the fiscal year ended June 30,
2009 as compared to 40.2% in fiscal 2008.
Foreign currency fluctuations and general economic conditions
continued to have a negative impact on consolidated net sales and
earnings in the quarter ended June 30, 2009. The change in exchange
rates used to convert foreign currencies (primarily British pound
sterling and euros) to U.S. dollars reduced net earnings by $1.1
million ($.03 per diluted share) for the quarter and $4.5 million
($.12 per diluted share) for fiscal year 2009, as compared to the same
periods in fiscal 2008.
Consolidated net sales for the quarter and fiscal year ended June 30,
2009 were $64.9 million and $264.0 million, respectively. This was a
4.2% decrease and a 2.5% increase from the quarter and fiscal year
ended June 30, 2008, respectively. Consolidated net sales were
negatively affected by the strength of the U.S. dollar as compared to
foreign currencies. Excluding the effect of changes in foreign
currency exchange rates, consolidated net sales decreased 0.9% for the
quarter ended June 30, 2009 and increased 5.9% for the fiscal year
ended June 30, 2009, 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 $42.3
million for the quarter ended June 30, 2009, a decrease of 0.6% from
the quarter ended June 30, 2008. Biotechnology sales were $173.9
million for the fiscal year ended June 30, 2009, an increase of 5.0%
over the same period last year. North American biotechnology sales to
industrial pharmaceutical and biotechnology customers declined
approximately 2% during the fourth quarter of fiscal 2009. The
Company attributes the lower fourth quarter sales growth rate to
continued customer caution in a time of economic uncertainty.
R&D Europe's net sales for the quarter and fiscal year ended June 30,
2009 were $18.0 million and $72.5 million, decreases of 14.3% and
4.2%, respectively, from the same prior-year periods. R&D Europe's
net sales decreased 3.6% for the quarter ended June 30, 2009 and
increased 7.2% for the fiscal year ended June 30, 2009 when measured
at currency rates in effect in the comparable prior periods. R&D
Europe's net sales for the quarter ended June 30, 2009 were affected
by the timing of the Easter holiday in Europe, which occurred in the
third quarter of fiscal 2008.
Hematology net sales for the quarter and fiscal year ended June 30,
2009 were $4.6 million and $17.5 million, increases of 8.9% and 9.2%,
respectively, compared to the quarter and fiscal year ended June 30,
2008.
Consolidated gross margins were 77.4% and 79.0% for the quarter and
fiscal year ended June 30, 2009, respectively, compared to 79.5% for
both the quarter and fiscal year ended June 30, 2008, respectively.
The decreases in gross margins in the quarter and fiscal year ended
June 30, 2009 were primarily caused by lower gross margins in Europe
resulting from comparatively unfavorable exchange rates. Consolidated
gross margins for the quarter ended June 30, 2009 also decreased from
the quarter ended March 31, 2009 as a result of a change in sales mix
from higher margin Biotechnology Division sales to lower margin
Hematology Division and R&D Europe sales.
Selling, general and administrative expenses for the quarter and
fiscal year ended June 30, 2009 decreased $1.4 million (15.9%) and
$3.6 million (9.7%), respectively from the quarter and fiscal year
ended June 30, 2008. The decrease in selling, general and
administrative expenses from the comparable prior-year periods were
the result of the following (in thousands):
Quarter Fiscal Year
------- -----------
Reduction in profit sharing expense $(1,816) $(3,759)
Change in exchange rates to convert
foreign expenses to U.S. dollars (486) (2,024)
Legal expenses 587 786
Stock option expense 111 (249)
Other, including annual wage, salary
and benefits increases 178 1,695
------- -------
$(1,426) $(3,551)
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Research and development expenses increased $187,000 (3.2%) and $1.2
million (5.2%), respectively, for the quarter and fiscal year ended
June 30, 2009 from the comparable prior-year periods.
Interest income decreased $1.7 million and $4.6 million for the
quarter and fiscal year ended June 30, 2009, respectively, from the
comparable prior-year periods, primarily as a result of lower rates of
return on cash and available-for-sale investments and, to a lesser
extent, to lower cash and available-for-sale investment balances.
The effective tax rates for the quarter and fiscal year ended June 30,
2009 were 32.2% and 32.3%, respectively, as compared to effective tax
rates of 32.7% for both of the same prior-year periods.
In November 2007, the Company's Board of Directors authorized the
repurchase and retirement of up to $150 million of the Company's
common stock. In April 2009, an additional $60 million was authorized
for repurchase and retirement of common stock. The Company repurchased
approximately 33,000 shares of its common stock during the fourth
quarter of fiscal 2009 for approximately $1.8 million. Approximately
$67.5 million remains available for the repurchase of shares under
these authorizations.
Forward Looking Statements:
This earnings release contains forward-looking statements within the
meaning of the Private Litigation Reform Act. These statements 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, 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 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 FISCAL YEAR ENDED
---------------- ------------------
6/30/09 6/30/08 6/30/09 6/30/08
------- ------- -------- --------
Net sales $64,890 $67,769 $263,956 $257,420
Cost of sales 14,656 13,888 55,488 52,889
------- ------- -------- --------
Gross margin 50,234 53,881 208,468 204,531
Operating expenses:
Selling, general and
administrative 7,560 8,986 33,164 36,715
Research and development 5,999 5,812 23,564 22,394
Amortization of
intangible assets 240 282 960 1,135
------- ------- -------- --------
Total operating expenses 13,799 15,080 57,688 60,244
------- ------- -------- --------
Operating income 36,435 38,801 150,780 144,287
Other income (expense):
Interest income 1,038 2,783 7,634 12,188
Other non-operating
expense, net (49) (1,079) (3,051) (2,644)
------- ------- -------- --------
Total other income 989 1,704 4,583 9,544
------- ------- -------- --------
Earnings before income taxes 37,424 40,505 155,363 153,831
Income taxes 12,038 13,248 50,121 50,273
------- ------- -------- --------
Net earnings $25,386 $27,257 $105,242 $103,558
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Earnings per share:
Basic $ 0.68 $ 0.70 $ 2.78 $ 2.65
Diluted $ 0.68 $ 0.70 $ 2.78 $ 2.64
Weighted average common
shares outstanding:
Basic 37,248 38,665 37,802 39,139
Diluted 37,332 38,788 37,900 39,247
TECHNE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
6/30/09 6/30/08
-------- --------
ASSETS
Cash and equivalents $160,940 $166,992
Short-term available-for-sale investments 41,947 39,353
Trade accounts receivable 29,516 31,747
Other receivables 1,637 1,585
Inventory 11,269 9,515
Other current assets 10,158 9,241
-------- --------
Current assets 255,467 258,433
-------- --------
Available-for-sale investments 61,863 87,384
Property and equipment, net 100,133 101,722
Goodwill and intangible assets, net 28,072 29,032
Other non-current assets 26,470 30,798
-------- --------
Total assets $472,005 $507,369
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LIABILITIES
Current liabilities $ 15,523 $ 20,239
Stockholders' equity 456,482 487,13
-------- --------
Total liabilities and equity $472,005 $507,369
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