TECHNE CORPORATION RELEASES UNAUDITED FIRST QUARTER
RESULTS FOR FISCAL YEAR 2010
Minneapolis/October 28, 2009/-- Techne Corporation's (NASDAQ: TECH)
consolidated net earnings for the quarter ended September 30, 2009 decreased
6.4% to $26.8 million or $.72 per diluted share compared with $28.6 million
or $.74 per diluted share for the quarter ended September 30, 2008. The
decline in net earnings was mainly due to foreign currency fluctuations,
decreased consolidated net sales and lower interest income. Foreign currency
fluctuations and general economic conditions continued to have a negative
impact on consolidated net sales and earnings in the quarter ended September
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 $566,000 ($.01 per diluted share) for the quarter ended September
30, 2009 as compared to the same prior-year period.
Consolidated net sales for the quarter ended September 30, 2009 were $66.5
million, a 4.0% decrease from the quarter ended September 30, 2008.
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 2.2% for
the quarter ended September 30 from the comparable prior-year period.
Biotechnology net sales, which include sales by R&D Systems' Biotechnology
Division, R&D Systems China and BiosPacific, were $44.0 million for the
quarter ended September 30, 2009, a decrease of 4.6% from the quarter ended
September 30, 2008. The Company attributes the lower sales growth rate to
continued customer caution in a time of economic uncertainty and the
exceptionally strong growth rate of 18.7% in the first quarter of fiscal 2009
as compared to the same quarter in fiscal 2008. North American biotechnology
sales to industrial pharmaceutical and biotechnology customers declined
approximately 12.8% during the first quarter of fiscal 2010 as compared to
the first quarter of fiscal 2009. Biotechnology sales to North American
academic customers and Pacific Rim distributors each grew about 3.9% in the
first quarter of fiscal 2010. Biotechnology sales in China grew 30.1% during
the first quarter of fiscal 2010 compared to the same prior-year period.
R&D Europe's net sales for the quarter ended September 30, 2009 were $17.8
million, a decrease of 5.8% from the same prior-year period. R&D Europe's
net sales increased 0.8% for the quarter ended September 30, 2009 when
measured at currency rates in effect in the comparable prior period.
Hematology net sales for the quarter ended September 30, 2009 were $4.7
million, an increase of 9.9% compared to the quarter ended September 30,
2008.
Consolidated gross margins were 80.6% for the quarter ended September 30,
2009 compared to 81.1% for the quarter ended September 30, 2008. The decrease
in gross margin percent in the quarter was primarily caused by lower gross
margins in Europe resulting from comparatively unfavorable exchange rates.
The consolidated gross margin percent for the quarter ended September 30,
2009 increased from the quarter ended June 30, 2009 gross margin percentage
of 77.4% as a result of higher gross margins in Europe resulting from
comparatively favorable exchange rates and an improvement in Hematology gross
margins due to higher sales volume.
Selling, general and administrative expenses for the quarter ended September
30, 2009 decreased $802,000 (9.1%) from the quarter ended September 30, 2009.
The decrease in selling, general and administrative expenses from the
comparable prior-year period was the result of lower profit sharing expense
of $635,000 and the effect of the change in exchange rates used to convert
foreign expenses to U.S. dollars of $198,000.
Interest income decreased $1.7 million for the quarter ended September 30,
2009 from the comparable prior-year period primarily as a result of lower
rates of return on cash and available-for-sale investments.
The effective tax rate for the quarter ended September 30, 2009 was 32.6%
compared to 33.4% for the quarter ended September 30, 2008. The U.S. credit
for research and development expired at the end of calendar 2007 and was not
renewed until the quarter ended December 31, 2008, resulting in a higher
effective tax rate for the quarter ended September 30, 2008.
Forward Looking Statements:
Our press releases may contain forward-looking statements within the meaning
of the Private Litigation Reform Act. Such 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 our press releases 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
-----------------
9/30/09 9/30/08
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Net sales $66,534 $69,324
Cost of sales 12,901 13,086
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Gross margin 53,633 56,238
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Operating expenses:
Selling, general and administrative 8,038 8,840
Research and development 6,154 5,910
Amortization of intangible assets 240 240
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Total operating expenses 14,432 14,990
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Operating income 39,201 41,248
Other income (expense):
Interest income 1,168 2,887
Other non-operating expense, net (662) (1,187)
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Total other income 506 1,700
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Earnings before income taxes 39,707 42,948
Income taxes 12,935 14,355
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Net earnings $26,772 $28,593
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Earnings per share:
Basic $ 0.72 $ 0.74
Diluted $ 0.72 $ 0.74
Weighted average common shares outstanding:
Basic 37,245 38,624
Diluted 37,339 38,747
TECHNE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
9/30/09 6/30/09
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ASSETS
Cash and equivalents $174,757 $160,940
Short-term available-for-sale investments 52,518 41,947
Trade accounts receivable 30,334 29,516
Other receivables 1,391 1,637
Inventory 12,468 11,269
Other current assets 10,416 10,158
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Current assets 281,884 255,467
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Available-for-sale investments 52,612 61,863
Property and equipment, net 98,806 100,133
Goodwill and intangible assets, net 27,832 28,072
Other non-current assets 25,912 26,470
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Total assets $487,046 $472,005
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 16,040 $ 15,523
Stockholders' equity 471,006 456,482
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Total liabilities and stockholders' equity $487,046 $472,005
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