-----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, LzntXqjt5FWQmVBXIAFXUgVVcGTW/+nOeVnfu/Edr+LugatwEzDMCCS0KHqINS8o Xa56X6MQ0EwRDUkbz2NWSQ== 0000842023-11-000003.txt : 20110201 0000842023-11-000003.hdr.sgml : 20110201 20110201091511 ACCESSION NUMBER: 0000842023-11-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20110201 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110201 DATE AS OF CHANGE: 20110201 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: 11561537 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 k8q.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): February 1, 2011 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 February 1, 2011, describing the results of operations for the quarter and six months ended December 31, 2010 and its financial condition as of December 31, 2010, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter and six months ended December 31, 2010 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 February 1, 2011. 99.2 Segment information for the quarter and six months ended December 31, 2010. 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: February 1, 2011 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 February 1, 2011. 99.2 Segment information for Techne Corporation for the quarter and six months ended December 31, 2010. EX-99.1 2 release211.txt PRESS RELEASE DATED FEBRUARY 1, 2011 TECHNE CORPORATION RELEASES UNAUDITED SECOND QUARTER RESULTS FOR FISCAL YEAR 2011 Minneapolis/February 1, 2011/ Techne Corporation's (NASDAQ: TECH) consolidated net earnings for the quarter ended December 31, 2010 increased 7.3% to $26.5 million or $0.71 per diluted share compared with $24.7 million or $0.66 per diluted share for the quarter ended December 31, 2009. The increase in consolidated net earnings for the quarter resulted from an increase in sales and a decrease in income taxes due to the renewal of the U.S. research and development credit. The $898,000 benefit ($0.02 per share) from the renewal of the research and development credit includes $659,000 that relates to the previous three calendar quarters. For the six months ended December 31, 2010, Techne's consolidated net earnings increased 2.8% to $52.9 million or $1.42 per share compared with $51.5 million or $1.38 per share for the six months ended December 31, 2009. Consolidated net sales for the quarter and six months ended December 31, 2010 were $67.7 million and $135.7 million, increases of 3.3% and 2.7%, respectively, from the quarter and six months ended December 31, 2009. Consolidated net sales for the quarter and six months were negatively affected by a stronger U.S. dollar as compared to foreign currencies for the quarter and six months ended December 31, 2009. Excluding the effect of changes in foreign currency exchange rates, consolidated net sales increased 5.1% and 4.5% for the quarter and six months ended December 31, 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 $44.4 million for the quarter ended December 31, 2010, an increase of 4.8% from $42.4 million for the quarter ended December 31, 2009. North American biotechnology sales to industrial pharmaceutical and biotechnology customers increased 3.9% during the second quarter of fiscal 2011 as compared to the second quarter of fiscal 2010. Biotechnology sales to academic customers and sales in China grew 6.7% and 19.2%, respectively, while sales to Pacific Rim distributors declined 4.5%, in the second quarter of fiscal 2011 as compared to the second quarter of fiscal 2010. Biotechnology sales for the six months ended December 31, 2010, were $91.1 million, an increase of 5.4% from $86.4 million for the six months ended December 31, 2009. North American biotechnology sales to industrial pharmaceutical and biotechnology customers increased 3.5% during the six months ended December 31, 2010 as compared to the first six months of fiscal 2010. Biotechnology sales to academic customers, to Pacific Rim distributors, and sales in China grew 8.4%, 1.8% and 16.4%, respectively, in the first six months of fiscal 2011. R&D Europe's net sales for the quarter and six months ended December 31, 2010 were $18.6 million and $35.0 million, decreasing 0.7% and 4.3%, respectively, from the same prior-year periods. R&D Europe's net sales increased 5.5% and 2.2% for the quarter and six months ended December 31, 2010 when measured at currency rates in effect in the comparable prior-year period. Hematology net sales for the quarter and six months ended December 31, 2010 were $4.6 million and $9.5 million, increases of 7.0% and 6.0% from the comparable prior-year periods. Consolidated gross margin for the quarter ended December 31, 2010 increased $298,000, but decreased $631,000 for the six months ended December 31, 2010 from the same prior-year periods. Biotechnology gross margin increased $973,000 and $1.8 million for the quarter and six months ended December 31, 2010 as a result of increased net sales partially offset by a decrease in gross margin percentage. R&D Europe gross margin decreased $564,000 and $2.3 million for the quarter and six months ended December 31, 2010 as compared to the same prior-year periods. Approximately $1.2 million and $2.4 million of the decrease in R&D Europe gross margins, respectively, was the result of changes in exchange rates used to translate sales in foreign currencies into U.S. dollars. Approximately 15.0% and 6.4% of consolidated net sales for the six months ended December 31, 2010 were made in euro and British pound sterling, respectively. The average euro exchange rate declined 8.8% and 8.3% against the U.S. dollar for the quarter and six months ended December 31, 2010 (euro:$1.34 and euro:$1.33) compared to the same prior-year periods (euro:$1.47 and euro:$1.45). The average British pound sterling exchange rate declined 3.7% and 4.3% against the U.S. dollar for the quarter and six months ended December 31, 2010 (British pound:$1.57 and British pound:$1.56) compared to the same prior-year periods (British pound:$1.63 and British pound:$1.63). Excluding the effect of the exchange rate on sales, gross margins for R&D Europe increased $605,000 and $62,000 for the quarter and six months ended December 31, 2010. The consolidated gross margin, as a percentage of net sales, was 77.5% for both the quarter and six months ended December 31, 2010, compared to 79.7% and 80.1% for the quarter and six months ended December 31, 2009, respectively. R&D Europe gross margin percentages for the quarter and six months ended December 31, 2010 were 51.2% and 49.4% compared to 53.9% and 53.7%. The decrease was a result of the effect of exchange rate changes on net sales as discussed above. Biotechnology gross margin percentages were 77.8% and 78.1% for the quarter and six months ended December 31, 2010 compared to 80.0% and 80.5% for the quarter and six months ended December 31, 2009. The decrease in the Biotechnology gross margin percentage was mainly the result of changes in product mix and $220,000 additional royalty expense and royalty initiation fees related to new licensing agreements in the first quarter of fiscal 2011. Royalty initiation fees in the second quarter of fiscal 2011 were not material. Selling, general and administrative expenses for the quarter and six months ended December 31, 2010 decreased $642,000 (7.1%) and $1.1 million (6.6%) from the quarter and six months ended December 31, 2009. The decrease in selling, general and administrative expense for the quarter and six months resulted primarily from decreased legal expenses, lower printing costs due to the timing of the printing of the annual Biotechnology catalog and the effect of the change in exchange rates used to convert foreign expenses to U.S. dollars. Research and development expenses for the quarter and six months ended December 31, 2010 increased $212,000 (3.3%) and $677,000 (5.4%) from the quarter and six months ended December 31, 2009. The increase in research and development expenses is mainly due to increases in personnel and supply costs associated with the continuous development and release of new high-quality biotechnology products. The effective tax rate for the quarter and six months ended December 31, 2010 was 29.6% and 31.0% as compared to 32.6% for both of the same prior-year periods. The improvement in the effective tax rate in fiscal 2011 was the result of renewal of the U.S. research and development credit discussed above and an increase in the deduction for qualified production activities. 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 ------------------ ------------------ 12/31/10 12/31/09 12/31/10 12/31/09 -------- -------- -------- -------- Net sales $67,708 $65,521 $135,653 $132,055 Cost of sales 15,218 13,329 30,459 26,230 -------- -------- -------- -------- Gross margin 52,490 52,192 105,194 105,825 -------- -------- -------- -------- Operating expenses: Selling, general and administrative 8,365 9,007 15,917 17,045 Research and development 6,603 6,391 13,222 12,545 Amortization of intangible assets 171 240 341 480 -------- -------- -------- -------- Total operating expenses 15,139 15,638 29,480 30,070 -------- -------- -------- -------- Operating income 37,351 36,554 75,714 75,755 Other income (expense): Interest income 1,020 1,156 1,867 2,324 Other non-operating expense, net (698) (1,011) (955) (1,673) -------- -------- -------- -------- Total other (expense) income 322 145 912 651 -------- -------- -------- -------- Earnings before income taxes 37,673 36,699 76,626 76,406 Income taxes 11,139 11,978 23,719 24,913 -------- -------- -------- -------- Net earnings $26,534 $24,721 $ 52,907 $ 51,493 ======== ======== ======== ======== Earnings per share: Basic $ 0.72 $ 0.66 $ 1.43 $ 1.38 Diluted $ 0.71 $ 0.66 $ 1.42 $ 1.38 Weighted average common shares outstanding: Basic 37,093 37,252 37,066 37,248 Diluted 37,156 37,353 37,131 37,346 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 12/31/10 6/30/10 -------- -------- ASSETS Cash and equivalents $135,875 $ 94,139 Short-term available-for-sale investments 58,987 44,672 Trade accounts receivable 28,228 30,850 Other receivables 1,986 1,532 Inventory 13,736 13,737 Other current assets 14,748 16,110 -------- -------- Current assets 253,560 201,040 -------- -------- Available-for-sale investments 158,666 171,171 Property and equipment, net 95,096 97,400 Goodwill and intangible assets, net 26,771 27,112 Other non-current assets 21,515 22,093 -------- -------- Total assets $555,608 $518,816 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 13,672 $ 17,024 Stockholders' equity 541,936 501,792 -------- -------- Total liabilities and stockholders' equity $555,608 $518,816 ======== ======== EX-99.2 3 seg12-10.txt SEGMENT RESULTS SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data) Increase (Decrease) Fiscal 2011 From Fiscal 2010 --------------------------------- --------------------- First Second Percent First Second Qtr. Qtr. YTD Of Sales Qtr. Qtr. YTD ------ ------ ------- --------- ------ ------ ------ Sales 67,945 67,708 135,653 100% 1,411 2,187 3,598 Cost of sales 15,241 15,218 30,459 22% 2,340 1,889 4,229 ------ ------ ------- --------- ------ ------ ------ Gross margin 52,704 52,490 105,194 78% (929) 298 (631) Gross margin percentage 77.6% 77.5% 77.5% SG&A expense 7,552 8,365 15,917 12% (486) (642)(1,128) R&D expense 6,619 6,603 13,222 10% 465 212 677 Amortization expense 170 171 341 -- (70) (69) (139) Interest income (847) (1,020) (1,867) (1%) 321 136 457 Other non-operating ex., net 257 698 955 1% (405) (313) (718) ------ ------ ------- -------- ------ ------ ------ 13,751 14,817 28,568 22% (175) (676) (851) ------ ------ ------- -------- ------ ------ ------ Earnings before income taxes 38,953 37,673 76,626 56% (754) 974 220 Income taxes 12,580 11,139 23,719 17% (355) (839)(1,194) ------ ------ ------- -------- ------ ------ ------ 26,373 26,534 52,907 39% (399) 1,813 1,414 ====== ====== ======= ======== ====== ====== ====== Diluted earnings per share 0.71 0.71 Weighted average diluted shares outstanding 37,107 37,156 BIOTECHNOLOGY (1) (in thousands of $'s) Increase (Decrease) Fiscal 2011 From Fiscal 2010 --------------------------------- --------------------- First Second Percent First Second Qtr. Qtr. YTD Of Sales Qtr. Qtr. YTD ------ ------ ------- --------- ------ ------ ------ Sales 54,141 52,652 106,793 100% 2,445 1,949 4,394 Intersegment sales (7,491) (8,217) (15,708) 177 65 242 ------ ------ ------- ------ ------ ------ 46,650 44,435 91,085 2,622 2,014 4,636 Cost of sales 11,689 11,665 23,354 22% 1,804 1,539 3,343 Intersegment sales (7,578) (8,251) (15,829) 20 (498) (478) ------ ------ ------- -------- ------ ------ ------ 4,111 3,414 7,525 1,824 1,041 2,865 Gross margin 42,539 41,021 83,560 78% 798 973 1,771 Gross margin percentage 78.4% 77.8% 78.1% SG&A expense 4,583 4,780 9,363 9% (151) (276) (427) R&D expense 6,421 6,379 12,800 12% 465 189 654 Amortization expense 170 171 341 -- (70) (69) (139) Interest income (581) (715) (1,296) (1%) 190 57 247 Exchange loss/gain (8) (10) (18) -- (10) (11) (21) ------ ------ ------- -------- ------ ------ ------ 10,585 10,605 21,190 20% 424 (110) 314 ------ ------ ------- -------- ------ ------ ------ Pretax result 31,954 30,416 62,370 58% 374 1,083 1,457 ====== ====== ======= ======== ====== ====== ====== (1) Includes R&D Systems' Biotechnology Division, BiosPacific, Inc. and R&D China R&D SYSTEMS EUROPE (in thousands of Br. pounds) Increase (Decrease) Fiscal 2011 From Fiscal 2010 --------------------------------- --------------------- First Second Percent First Second Qtr. Qtr. YTD Of Sales Qtr. Qtr. YTD ------ ------ ------- --------- ------ ------ ------ Sales 10,571 11,767 22,338 100% (310) 305 (5) Cost of sales 5,561 5,742 11,303 51% 500 454 954 ------ ------ ------- --------- ------ ------ ------ Gross margin 5,010 6,025 11,035 49% (810) (149) (959) Gross margin percentage 47.4% 51.2% 49.4% SG&A expense 1,188 1,274 2,462 11% (3) (44) (47) Interest income (52) (65) (117) (1%) 35 14 49 Exchange loss/(gain) (323) 58 (265) (1%) (234) (3) (237) ------ ------ ------- --------- ------ ------ ------ 813 1,267 2,080 9% (202) (33) (235) ------ ------ ------- --------- ------ ------ ------ Pretax result 4,197 4,758 8,955 40% (608) (116) (724) ====== ====== ======= ========= ====== ====== ====== R&D SYSTEMS EUROPE (in thousands of $'s) Increase (Decrease) Fiscal 2011 From Fiscal 2010 --------------------------------- --------------------- First Second Percent First Second Qtr. Qtr. YTD Of Sales Qtr. Qtr. YTD ------ ------ ------- --------- ------ ------ ------ Sales 16,391 18,645 35,036 100% (1,447) (130)(1,577) Cost of sales 8,621 9,097 17,718 51% 326 433 759 ------ ------ ------- --------- ------ ------ ------ Gross margin 7,770 9,548 17,318 49% (1,773) (563)(2,336) Gross margin percentage 47.4% 51.2% 49.4% SG&A expense 1,842 2,017 3,859 11% (110) (142) (252) Interest income (81) (103) (184) (1%) 62 25 87 Exchange loss/(gain) (497) 97 (400) (1%) (352) (2) (354) ------ ------ ------- --------- ------ ------ ------ 1,264 2,011 3,275 9% (400) (119) (519) ------ ------ ------- --------- ------ ------ ------ Pretax result 6,506 7,537 14,043 40% (1,373) (444)(1,817) ====== ====== ======= ========= ====== ====== ====== HEMATOLOGY (in thousands of $'s) Increase (Decrease) Fiscal 2011 From Fiscal 2010 --------------------------------- --------------------- First Second Percent First Second Qtr. Qtr. YTD Of Sales Qtr. Qtr. YTD ------ ------ ------- --------- ------ ------ ------ Sales 4,904 4,628 9,532 100% 236 303 539 Cost of sales 2,509 2,707 5,216 55% 190 415 605 ------ ------ ------- --------- ------ ------ ------ Gross margin 2,395 1,921 4,316 45% 46 (112) (66) Gross margin percentage 48.8% 41.5% 45.3% SG&A expense 328 336 664 7% (42) (30) (72) R&D expense 198 224 422 4% -- 23 23 Interest income (53) (66) (119) (1%) 19 6 25 ------ ------ ------- --------- ------ ------ ------ 473 494 967 10% (23) (1) (24) ------ ------ ------- --------- ------ ------ ------ Pretax result 1,922 1,427 3,349 35% 69 (111) (42) ====== ====== ======= ========= ====== ====== ====== CORPORATE AND OTHER (2) (in thousands of $'s) Increase (Decrease) Fiscal 2011 From Fiscal 2010 ----------------------- --------------------- First Second First Second Qtr. Qtr. YTD Qtr. Qtr. YTD ------ ------ ------- ------ ------ ------ Interest income 132 136 268 (50) (48) (98) Rental income 123 138 261 42 23 65 ------ ------ ------- ------ ------ ------ 255 274 529 (8) (25) (33) SG&A expense 799 1,232 2,031 (183) (194) (377) Other-Building expenses 556 531 1,087 8 1 9 Other-Equity Investment losses 329 218 547 (9) (278) (287) ------ ------ ------- ------ ------ ------ 1,684 1,981 3,665 (184) (471) (655) ------ ------ ------- ------ ------ ------ Pretax result (1,429) (1,707) (3,136) 176 446 622 ====== ====== ======= ====== ====== ====== (2) Unallocated corporate expenses and Techne's share of losses by Hemerus Medical, LLC and Nephromics, LLC. -----END PRIVACY-ENHANCED MESSAGE-----