TECHNE CORPORATION RELEASES UNAUDITED FOURTH QUARTER
RESULTS FOR FISCAL YEAR 2010
Minneapolis/August 3, 2010/-- Techne Corporation's (NASDAQ: TECH)
consolidated net earnings for the quarter ended June 30, 2010 increased 2.0%
to $25.9 million or $.69 per diluted share compared with $25.4 million or
$.68 per diluted share for the quarter ended June 30, 2009. Net operating
income increased 6.8% to $38.9 million, or 58.3% of net sales, for the
quarter ended June 30, 2010 as compared to net operating income of $36.4
million, or 56.1% of net sales, for the quarter ended June 30, 2009. The
increase in net operating income for the quarter was primarily due to
increased sales and improved gross margins as a result of changes in sales
mix. The increased sales and improved gross margins for the quarter were
partially offset by foreign exchange transaction losses. For the quarter
ended June 30, 2010, foreign exchange transaction losses were $631,000
compared to foreign exchange transaction gains of $685,000 for the quarter
ended June 30, 2009, resulting in a $.03 earnings per share impact between
the quarters ended June 30 2010 and 2009.
For fiscal 2010, Techne's consolidated net earnings increased 4.3% to $110
million or $2.94 per diluted share compared with $105 million or $2.78 per
diluted share for fiscal 2009. Net operating income increased 3.7% to $156.3
million, or 58.1% of net sales, for fiscal 2010 as compared to net operating
income of $150.8 million, or 57.1% of net sales, for fiscal 2009. The
increase in net operating income for the fiscal year was primarily due to
increased sales and improved gross margins as a result of changes in sales
mix. The increased sales and improved gross margins for the fiscal year were
partially offset by lower interest income of $3.3 million, or $.07 per share,
and greater foreign exchange transaction losses of $926,000, or $.02 per
share. Income taxes for fiscal 2010 included a $4.7 million tax benefit in
the third quarter of fiscal 2010. The tax benefit, equating to $.12 per
share, resulted from a foreign currency exchange tax loss on the repatriation
of 50 million British pound sterling from R&D Europe to the U.S. Techne
previously paid U.S. income taxes on the foreign earnings that were included
in the repatriated funds.
Consolidated net sales for the quarter and fiscal year ended June 30, 2010
were $66.7 million and $269.0 million, respectively. This was a 2.8% and 1.9%
increase from the quarter and fiscal year ended June 30, 2009, respectively.
Consolidated net sales for the quarter ended June 30, 2010 were negatively
affected by a stronger U.S. dollar as compared foreign currencies (primarily
British pound sterling and euro) for the quarter ended June 30, 2009.
Excluding the effect of changes in foreign currency exchange rates,
consolidated net sales increased 5.4% and 1.6% for the quarter and fiscal
year ended June 30, 2010, 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 $45.3 million for the
quarter ended June 30, 2010, an increase of 7.0% from $42.3 million for the
quarter ended June 30, 2009. North American biotechnology sales to
industrial pharmaceutical and biotechnology customers increased 11.7% during
the fourth quarter of fiscal 2010 as compared to the fourth quarter of fiscal
2009. Biotechnology sales to academic customers, Pacific Rim distributors
and sales in China grew 4.3%, 10.0% and 24.8%, respectively, in the fourth
quarter of fiscal 2010 as compared to the fourth quarter of fiscal 2009.
Biotechnology sales were $178 million for fiscal 2010, an increase of 2.3%
over the same period last year. North American biotechnology sales to
industrial pharmaceutical and biotechnology customers increased 0.9% during
fiscal 2010 as compared to fiscal 2009. Biotechnology sales to academic
customers, Pacific Rim distributors and sales in China grew 4.0%, 10.5% and
21.8%, respectively, in fiscal 2010 as compared to fiscal 2009.
R&D Europe's net sales for the quarter and fiscal year ended June 30, 2010
were $17.0 million and $72.8 million, respectively, a decrease of 5.7% and an
increase of 0.3% from the same prior-year periods. R&D Europe's net sales
increased 3.8% and decreased 0.9%, respectively, for the quarter and fiscal
year ended June 30, 2010 when measured at currency rates in effect in the
comparable prior periods.
Hematology net sales for the quarter and fiscal year ended June 30, 2010 were
$4.5 million and $18.4 million, a decrease of 2.2% and an increase of 5.1%,
respectively, from comparable prior-year periods.
Consolidated gross margins were 79.3% and 79.8% for the quarter and fiscal
year ended June 30, 2010, respectively, compared to 77.4% and 79.0% for the
quarter and fiscal year ended June 30, 2009, respectively. The increased
gross margins in fiscal 2010 are mainly the result of improved margins in the
biotechnology segment due to incremental profit on increased sales volumes.
Selling, general and administrative expenses for the quarter and fiscal year
ended June 30, 2010 decreased $96,000 (1.3%) and $989,000 (3.0%),
respectively from the quarter and fiscal year ended June 30, 2009. The
decrease in selling, general and administrative expense for the quarter ended
June 30, 2010 resulted primarily from decreased legal expenses of $506,000,
partially offset by annual wage, salary and benefit increases. The decrease
in selling, general and administrative expenses for fiscal 2010 was primarily
due to lower stock compensation ($343,000), profit sharing ($403,000) and
legal ($690,000) expenses, partially offset by annual wage, salary and
benefit increases.
Research and development expenses for the quarter and fiscal year ended June
30, 2010 increased $252,000 (4.2%) and $1.6 million (6.6%), respectively,
from the quarter and fiscal year ended June 30, 2009. 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 $26,000 and $3.3 million for the quarter and fiscal
year ended June 30, 2010, respectively, from the comparable prior-year
periods, primarily as a result of lower rates of return on cash and
available-for-sale investments, offset in part by higher cash and available-
for-sale investment balances.
The effective tax rates for the quarter and fiscal year ended June 30, 2010
were 32.9% and 29.8%, respectively, as compared to 32.2% and 32.3% for the
same prior-year periods. The effective tax rate for fiscal 2010 was
abnormally low due to the tax benefit received following repatriation of
funds from the U.K. to the U.S. in the third quarter of fiscal 2010.
Excluding this benefit, the effective tax rate for fiscal 2010 would have
been 32.8%.
The Company repurchased 260,693 and 283,555 shares of its common stock during
the quarter and fiscal year ended June 30, 2010, respectively, for
approximately $15.5 million and $16.9 million. Approximately $50.6 million
remains available for the repurchase and retirement of shares under the
currently open authorization.
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 FISCAL YEAR ENDED
---------------- ------------------
6/30/10 6/30/09 6/30/10 6/30/09
------- ------- -------- --------
Net sales $66,714 $64,890 $269,047 $263,956
Cost of sales 13,834 14,656 54,463 55,488
------- ------- -------- --------
Gross margin 52,880 50,234 214,584 208,468
------- ------- -------- --------
Operating expenses:
Selling, general and administrative 7,464 7,560 32,175 33,164
Research and development 6,251 5,999 25,121 23,564
Amortization of intangible assets 240 240 960 960
------- ------- -------- --------
Total operating expenses 13,955 13,799 58,256 57,688
------- ------- -------- --------
Operating income 38,925 36,435 156,328 150,780
Other income (expense):
Interest income 1,011 1,038 4,375 7,634
Other non-operating expense, net (1,335) (49) (4,257) (3,051)
------- ------- -------- --------
Total other (expense) income (324) 989 118 4,583
------- ------- -------- --------
Earnings before income taxes 38,601 37,424 156,446 155,363
Income taxes 12,706 12,038 46,670 50,121
------- ------- -------- --------
Net earnings $25,895 $25,386 $109,776 $105,242
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Earnings per share:
Basic $ 0.70 $ 0.68 $ 2.95 $ 2.78
Diluted $ 0.69 $ 0.68 $ 2.94 $ 2.78
Weighted average common
shares outstanding:
Basic 37,233 37,248 37,255 37,802
Diluted 37,314 37,332 37,347 37,900
TECHNE CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
6/30/10 6/30/09
-------- --------
ASSETS
Cash and equivalents $ 98,925 $160,940
Short-term available-for-sale investments 39,886 41,947
Trade accounts receivable 30,850 29,516
Other receivables 1,532 1,637
Inventory 13,737 11,269
Other current assets 16,110 10,158
-------- --------
Current assets 201,040 255,467
Available-for-sale investments 171,171 61,863
Property and equipment, net 97,400 100,133
Goodwill and intangible assets, net 27,112 28,072
Other non-current assets 22,093 26,470
-------- --------
Total assets $518,816 $472,005
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 17,024 $ 15,523
Stockholders' equity 501,792 456,482
-------- --------
Total liabilities and stockholders' equity $518,816 $472,005
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