TECHNE CORPORATION RELEASES UNAUDITED SECOND QUARTER
RESULTS FOR FISCAL YEAR 2010
Minneapolis/February 2, 2010/-- Techne Corporation's (NASDAQ: TECH)
consolidated net earnings for the quarter ended December 31, 2009 increased
4.6% to $24.7 million or $.66 per diluted share compared with $23.6 million
or $.62 per diluted share for the quarter ended December 31, 2008. The
increase in net earnings for the quarter was due to increased Biotechnology
sales, improved gross margins and lower selling, general and administrative
expenses partially offset by decreased interest income. Also affecting net
earnings for the quarter were foreign currency fluctuations. The change in
exchange rates used to convert foreign currencies (primarily British pound
sterling and euros) to U.S. dollars increased net earnings by $572,000 ($.01
per diluted share) for the quarter ended December 31, 2009 as compared to the
same prior-year period. For the six months ended December 31, 2009, Techne's
consolidated net earnings decreased 1.4% to $51.5 million or $1.38 per
diluted share compared with $52.2 million or $1.36 per diluted shares for the
six months ended December 31, 2008. The decrease in consolidated net
earnings for the six months was the result of lower interest income offset by
slightly improved gross margins and lower selling, general and administrative
expenses.
Consolidated net sales for the quarter and six months ended December 31, 2009
were $65.5 million and $132.1 million, increases of 5.9% and 0.7%,
respectively, from the quarter and six months ended December 31, 2008.
Consolidated net sales were positively 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 increased 1.6% and
decreased 0.4% for the quarter and six months ended December 31, 2009,
respectively, 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 $42.4 million for the
quarter ended December 31, 2009, an increase of 5.2% from $40.3 million for
the quarter ended December 31, 2008. North American biotechnology sales to
industrial pharmaceutical and biotechnology customers increased 5.7% during
the second quarter of fiscal 2010 as compared to the second quarter of fiscal
2009. Biotechnology sales to academic, Pacific Rim distributors and China
grew 4.5%, 13.0% and 21.8%, respectively, in the second quarter of fiscal
2010. Biotechnology net sales for the six months ended December 31, 2009 of
$86.4 million were comparable to $86.5 million for the six months ended
December 31, 2008. North American biotechnology sales to industrial
pharmaceutical and biotechnology customers decreased 4.7% during the six
months ended December 31, 2009 as compared to the first six months of fiscal
2009. Biotechnology sales to academic, Pacific Rim distributors and China
grew 4.3%, 9.5% and 25.8%, respectively, in the first six months of fiscal
2010.
R&D Europe's net sales for the quarter and six months ended December 31, 2009
were $18.8 million and $36.6 million, increases of 8.6% and 1.1%,
respectively, from the same prior-year periods. R&D Europe's net sales
decreased 6.6% and 2.8% for the quarter and six months ended December 31,
2009 when measured at currency rates in effect in the comparable prior-year
periods. The decreased net sales for the periods was mainly the result of
lower sales to pharmaceutical customers.
Hematology net sales for the quarter and six months ended December 31, 2009
were $4.3 million and $9.0 million, increases of 1.5% and 5.7%, respectively,
compared to the quarter and six months ended December 31, 2008.
Consolidated gross margins were 79.7% and 80.1% for the quarter and six
months ended December 31, 2009, respectively, compared to 78.3% and 79.8% for
the quarter and six months ended December 31, 2008. The increased gross
margins in fiscal 2010 are mainly the result of improved margins in the
Biotechnology and Hematology Divisions due to incremental profit on increased
sales volumes.
Selling, general and administrative expenses for the quarter and six months
ended December 31, 2009 decreased $696,000 (7.2%) and $1.5 million (8.1%),
respectively, from the quarter and six months ended December 31, 2008. The
decrease in selling, general and administrative expense for the quarter ended
December 31, 2009 from the comparable prior-year period resulted mainly from
lower stock compensation expense of $361,000. The decrease in selling,
general and administrative expenses for the six months ended December 31,
2009 from the comparable prior-year period was due to lower stock
compensation expense of $361,000 and lower profit sharing expense of
$725,000.
Research and development expenses for the quarter and six months ended
December 31, 2009 increased $545,000 (9.3%) and $789,000 (6.7%),
respectively, from the quarter and six months ended December 31, 2008. The
increase in research and development expenses is the result of continuous
development and release of new high-quality biotechnology products upon which
the Company's future sales revenue growth is dependent.
Interest income decreased $1.0 million and $2.8 million for the quarter and
six months ended December 31, 2009 from the comparable prior-years period
primarily as a result of lower rates of return on cash and available-for-sale
investments.
The effective tax rates for both the quarter and six months ended December
31, 2009 were 32.6% compared to 30.8% and 32.3% for the quarter and six
months ended December 31, 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 lower effective tax rate for the
quarter ended December 31, 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 SIX MONTHS ENDED
------------------ ------------------
12/31/09 12/31/08 12/31/09 12/31/08
-------- -------- -------- --------
Net sales $65,521 $61,876 $132,055 $131,200
Cost of sales 13,329 13,430 26,230 26,516
-------- -------- -------- --------
Gross margin 52,192 48,446 105,825 104,684
-------- -------- -------- --------
Operating expenses:
Selling, general and
administrative 9,007 9,703 17,045 18,543
Research and development 6,391 5,846 12,545 11,756
Amortization of intangible assets 240 240 480 480
-------- -------- -------- --------
Total operating expenses 15,638 15,789 30,070 30,779
-------- -------- -------- --------
Operating income 36,554 32,657 75,755 73,905
Other income (expense):
Interest income 1,156 2,205 2,324 5,092
Other non-operating expense, net (1,011) (712) (1,673) (1,899)
-------- -------- -------- --------
Total other income 145 1,493 651 3,193
-------- -------- -------- --------
Earnings before income taxes 36,699 34,150 76,406 77,098
Income taxes 11,978 10,528 24,913 24,883
-------- -------- -------- --------
Net earnings $24,721 $23,622 $51,493 $52,215
======== ======== ======== ========
Earnings per share:
Basic $ 0.66 $ 0.62 $ 1.38 $ 1.36
Diluted $ 0.66 $ 0.62 $ 1.38 $ 1.36
Weighted average common
shares outstanding:
Basic 37,252 37,894 37,248 38,259
Diluted 37,353 37,992 37,346 38,370
TECHNE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
12/31/09 6/30/09
-------- --------
ASSETS
Cash and equivalents $195,551 $160,940
Short-term available-for-sale investments 53,928 41,947
Trade accounts receivable 26,159 29,516
Other receivables 1,642 1,637
Inventory 12,988 11,269
Other current assets 10,691 10,158
-------- --------
Current assets 300,959 255,467
-------- --------
Available-for-sale investments 49,183 61,863
Property and equipment, net 98,910 100,133
Goodwill and intangible assets, net 27,592 28,072
Other non-current assets 25,589 26,470
-------- --------
Total assets $502,233 $472,005
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 13,687 $ 15,523
Stockholders' equity 488,546 456,482
-------- --------
Total liabilities and stockholders' equity $502,233 $472,005
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