-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KeoUTsOY15t2efti5RvaxX1XblD8/W5CTh+YQW8SI6It6EypP18JWOX30ukqWcYA LKILmw9UIeWTel2FvwfiGg== 0000842023-06-000046.txt : 20061027 0000842023-06-000046.hdr.sgml : 20061027 20061027100633 ACCESSION NUMBER: 0000842023-06-000046 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20061025 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061027 DATE AS OF CHANGE: 20061027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TECHNE CORP /MN/ CENTRAL INDEX KEY: 0000842023 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 411427402 STATE OF INCORPORATION: MN FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-17272 FILM NUMBER: 061167462 BUSINESS ADDRESS: STREET 1: 614 MCKINLEY PL N E CITY: MINNEAPOLIS STATE: MN ZIP: 55413 BUSINESS PHONE: 6123798854 MAIL ADDRESS: STREET 1: 614 MCKINLEY PLACE NE CITY: MINNEAPOLIS STATE: MN ZIP: 55413 8-K 1 k8q1.txt 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): October 25, 2006 TECHNE CORPORATION (Exact Name of Registrant as Specified in Charter) Minnesota 0-17272 41-1427402 (State or Other Jurisdiction (Commission I.R.S. Employer of Incorporation) File Number) Identification No.) 614 Mckinley Place NE Minneapolis, MN 55413 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (612) 379-8854 Not Applicable (Former Name or Former Address, if changed since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions: / / Written communications pursuant to Rule 425 under the Securities Act 17 CFR 230.425) / / Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) / / Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) / / Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition A copy of the press release issued by Techne Corporation on October 25, 2006, describing the results of operations for the quarter ended September 30, 2006 and its financial condition as of September 30, 2006, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter ended September 30, 2006 which has been included on Techne Corporation's website (www.techne-corp.com), is attached hereto as Exhibit 99.2. The information in this Form 8-K and the Exhibits attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing. Item 9.01 Financial Statements and Exhibits (d) Exhibits 99.1 Press Release dated October 25, 2006. 99.2 Segment information for the quarter ended September 30, 2006. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: October 25, 2006 TECHNE CORPORATION By: /s/ Thomas E. Oland --------------------------- Name: Thomas E. Oland Title: President and Chief Executive Officer EXHIBIT INDEX Exhibit No. Description ----------- ----------- 99.1 Press release of Techne Corporation dated October 25, 2006. 99.2 Segment information for Techne Corporation for the quarter ended September 30, 2006. EX-99.1 2 press1006.txt PRESS RELEASE DATED 10/25/2006 TECHNE CORPORATION RELEASES UNAUDITED FIRST QUARTER RESULTS FOR FISCAL YEAR 2007 Minneapolis/October 25, 2006/--Techne Corporation's (NASDAQ: TECH) consolidated net earnings for the quarter ended September 30, 2006 increased 15.5% to $19.6 million and its earnings per diluted share increased 16.3% to $0.50 compared with $17.0 million and $.43 per diluted share for the quarter ended September 30, 2005. The improvement in results was mainly due to increased consolidated net sales and improved gross margin percentages. Consolidated net sales for the quarter ended September 30, 2006 were $52.4 million, an increase of 9.7% from the quarter ended September 30, 2005. Biotechnology net sales for the quarter ended September 30, 2006 were $35.9 million, an increase of 11.2% from the quarter ended September 30, 2005. Approximately $700,000 of the increase in biotechnology net sales for the quarter was the result of price increases. R&D Europe's net sales for the quarter ended September 30, 2006 were $12.9 million, an increase of 8.9% from the first quarter of the prior year. In British pound sterling, R&D Europe's net sales increased 2.7% from the same quarter of the prior year. Hematology net sales for the quarter ended September 30, 2006 were $3.5 million, a decrease of 0.9% as compared to the quarter ended September 30, 2005. Consolidated gross margins were 78.5% for the quarter ended September 30, 2006 compared to 76.7% for the quarter ended September 30, 2005. Biotechnology gross margins were 79.6% for the quarter ended September 30, 2006 compared to 77.5% for the quarter ended September 30, 2005, mainly as a result of changes in product mix. Biotechnology gross margins were also affected by purchase accounting related to inventory on hand at the acquisition date of Fortron and BiosPacific in fiscal 2006. Included in cost of sales for the quarters ended September 30, 2006 and 2005 were $291,000 and $575,000, respectively, related to inventory purchase accounting. Consolidated net earnings and diluted earnings per share for the quarter ended September 30, 2006 were impacted slightly by the change in exchange rates from the quarter ended September 30, 2006, used to convert R&D Europe results from British pound sterling to U.S. dollars. The change in exchange rates increased consolidated net earnings approximately $206,000 for the quarter ended September 30, 2006. In September 2006, the Company invested $7.2 million for an 18% equity interest in Nephromics, LLC. Nephromics has licensed technology related to the diagnosis of preeclampsia and has sub-licensed the technology to several major diagnostic companies for the development of diagnostic assays. The Company is currently considering paying off its $13.1 million mortgage debt during the quarter ended December 31, 2006. The interest rate on the mortgage is at a floating rate, which is currently at 7.8%. Interest expense for the quarter ended September 30, 2006 was $268,000. The mortgage note has a 5% prepayment penalty. The Company estimates that prepayment of the mortgage would result in a reduction in diluted earnings per share of approximately $.01 in the quarter of payment. Forward Looking Statements: This earnings release contains forward-looking statements within the meaning of the Private Litigation Reform Act. These statements, including the possibility of prepaying the mortgage and the associated financial impact, 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, Fortron Bio Science, Inc. (Fortron), located in Minneapolis, and BiosPacific, Inc. (BiosPacific), located in Emeryville, California. Fortron develops and manufactures antibodies and BiosPacific is a worldwide supplier of biologics to manufacturers of in vitro diagnostic systems and immunodiagnostic kits. R&D Europe is a distributor of 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 ----------------- 9/30/06 9/30/05 ------- ------- Net sales $52,351 $47,709 Cost of sales 11,237 11,096 ------- ------- Gross margin 41,114 36,613 Operating expenses: Selling, general and administrative 7,067 6,454 Research and development 4,855 4,717 Amortization of intangible assets 403 492 ------- ------- Total operating expenses 12,325 11,663 ------- ------- Operating income 28,789 24,950 Other expense (income): Interest expense 268 223 Interest income (1,676) (974) Other non-operating expense (income), net 485 211 ------- ------- Total other expense (income) (923) (540) ------- ------- Earnings before income taxes 29,712 25,490 Income taxes 10,081 8,489 ------- ------- Net earnings $19,631 $17,001 ======= ======= Earnings per share: Basic $ 0.50 $ 0.44 Diluted $ 0.50 $ 0.43 Weighted average common shares outstanding: Basic 39,379 38,754 Diluted 39,469 39,669 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 9/30/06 6/30/06 --------- --------- ASSETS Cash and equivalents $ 97,827 $ 89,634 Short-term available-for-sale investments 22,704 19,212 Trade accounts receivable 24,466 23,769 Other receivables 1,218 1,309 Inventory 8,982 9,024 Other current assets 7,286 6,874 --------- --------- Current assets 162,483 149,822 Available-for-sale investments 76,596 77,660 Property and equipment, net 89,418 88,772 Goodwill and intangible assets, net 31,618 32,021 Other non-current assets 29,090 22,237 --------- --------- Total assets $ 389,205 $ 370,512 ========= ========= LIABILITIES Current liabilities $ 15,606 $ 17,966 Long-term debt 11,902 12,198 Stockholders' equity 361,697 340,348 --------- --------- Total liabilities and equity $ 389,205 $ 370,512 ========= ========= EX-99.2 3 seg906.txt SEGMENT RESULTS SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data) Increase (Decrease) Fiscal 2007 From Fiscal 2006 --------------------- --------------------- First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 52,351 100% 4,642 Cost of sales 11,237 21% 141 ------- -------- ------- Gross margin 41,114 79% 4,501 Gross margin percentage 78.5% SG&A expense 7,067 13% 613 R&D expense 4,855 9% 138 Amortization expense 403 1% (89) Interest expense 268 1% 45 Interest income (1,676) (3%) (702) Other non-operating ex., net 485 1% 274 ------- -------- ------- 11,402 22% 279 ------- -------- ------- Earnings before income taxes 29,712 57% 4,222 Income taxes 10,081 20% 1,592 ------- -------- ------- 19,631 37% 2,630 ======= ======== ======= Diluted earnings per share .50 Weighted average diluted shares outstanding 39,469 BIOTECHNOLOGY (1) (in thousands of $'s) Increase (Decrease) Fiscal 2007 From Fiscal 2006 --------------------- --------------------- First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 41,621 100% 4,022 Intersegment sales (5,699) (400) ------- -------- ------- 35,922 3,622 Cost of sales 8,482 20% 12 Intersegment sales (5,524) (201) ------- -------- ------- 2,958 (189) Gross margin 32,964 80% 3,811 Gross margin percentage 79.6% SG&A expense 4,013 10% 374 R&D expense 4,675 11% 143 Amortization expense 403 1% (89) Interest, net (595) (1%) (327) ------- -------- ------- 8,496 21% 101 ------- -------- ------- Pretax result 24,468 59% 3,710 ======= ======== ======= (1) Includes R&D Systems' Biotechnology Division, Fortron Bio Science, Inc., and BiosPacific, Inc. R&D SYSTEMS EUROPE (in thousands of British pound sterling) Increase (Decrease) Fiscal 2007 From Fiscal 2006 --------------------- --------------------- First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 6,870 100% 180 Cost of sales 3,285 48% (7) ------- -------- ------- Gross margin 3,585 52% 187 Gross margin percentage 52.2% SG&A expense 1,074 16% 70 Interest income (410) (6%) (84) Exchange loss/(gain) 78 1% 63 ------- -------- ------- 742 11% 49 ------- -------- ------- Pretax result 2,843 41% 138 ======= ======== ======= R&D SYSTEMS EUROPE (in thousands of $'s) Increase (Decrease) Fiscal 2007 From Fiscal 2006 --------------------- --------------------- First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 12,927 100% 1,052 Cost of sales 6,181 48% 337 ------- -------- ------- Gross margin 6,746 52% 715 Gross margin percentage 52.2% SG&A expense 2,020 16% 238 Interest income (771) (6%) (192) Exchange loss 147 1% 119 ------- -------- ------- 1,396 11% 165 ------- -------- ------- Pretax result 5,350 41% 550 ======= ======== ======= HEMATOLOGY (in thousands of $'s) Increase (Decrease) Fiscal 2007 From Fiscal 2006 --------------------- --------------------- First Percent First Quarter Of Sales Quarter ------- -------- ------- Sales 3,502 100% (32) Cost of sales 2,098 60% (7) ------- -------- ------- Gross margin 1,404 40% (25) Gross margin percentage 40.1% SG&A expense 398 11% 14 R&D expense 180 5% (5) Interest, net (81) (2%) (44) ------- -------- ------- 497 14% (35) ------- -------- ------- Pretax result 907 26% 10 ======= ======== ======= CORPORATE AND OTHER (2) (in thousands of $'s) Increase (Decrease) Fiscal 2007 From Fiscal 2006 --------------------- --------------------- First First Quarter Quarter ------- ------- Interest income 229 139 Rental income 299 (43) ------- ------- 528 96 SG&A expense 636 (13) Interest expense 268 45 Other-Building expenses 510 67 Other-Hemerus losses 127 45 ------- ------- 1,541 144 ------- ------- Pretax result (1,013) (48) ======= ======= (2) Unallocated corporate expenses and Techne's share of losses by Hemerus Medical, LLC. -----END PRIVACY-ENHANCED MESSAGE-----