0000842023-12-000003.txt : 20120131 0000842023-12-000003.hdr.sgml : 20120131 20120131091117 ACCESSION NUMBER: 0000842023-12-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20120131 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120131 DATE AS OF CHANGE: 20120131 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: 12557549 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): January 31, 2012 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 January 31, 2012, describing the results of operations for the quarter and six months ended December 31, 2011 and its financial condition as of December 31, 2011, is attached hereto as Exhibit 99.1. Segment information for Techne Corporation for the quarter and six months ended December 31, 2011 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 Janaury 31, 2012. 99.2 Segment information for the quarter and six months ended December 31, 2011. 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: January 31, 2012 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 January 31, 2012. 99.2 Segment information for Techne Corporation for the quarter and six months ended December 31, 2011. EX-99.1 2 release13112.txt PRESS RELEASE DATED JANUARY 31, 2012 TECHNE CORPORATION RELEASES UNAUDITED SECOND QUARTER AND SIX MONTH FISCAL YEAR 2012 RESULTS Minneapolis/January 31, 2012/ Techne Corporation's (NASDAQ:TECH) financial results for the second quarter and six months ended December 31, 2011 include the following highlights: Second quarter earnings were $25.8 million or $0.70 per diluted share. Adjusted earnings for the quarter grew 5.1%, to $28.0 million or $0.76 per diluted share after adjustment for intangible asset amortization and costs recognized upon the sale of inventory that was written-up to fair value as part of the acquisitions of Boston Biochem, Inc. and Tocris Holdings Limited completed in the quarter ended June 30, 2011. Earnings for the six-month period ended December 31, 2011 were $53.3 million or $1.44 per diluted share. Adjusted earnings for the six-month period ended December 31, 2011 grew 9.1%, to $58.0 million or $1.56 per diluted share after adjustment for intangible asset amortization and costs recognized upon the sale of inventory that was written-up to fair value as part of acquisitions completed in the quarter ended June 30, 2011. Net sales as reported grew 10.3% to $74.7 million for the quarter ended December 31, 2011. Organic sales grew 1.8% in the quarter. Organic sales exclude sales from acquisitions and the changes in foreign currency rates. Net sales as reported grew 12.2% to $152 million for the six months ended December 31, 2011. Organic sales grew 2.5% in the six-month period. A weaker U.S. dollar as compared to foreign currencies improved sales by $238,000 and $2.1 million in the quarter and six-month period ended December 31, 2011, respectively, from the comparable prior-year periods. The Biotechnology segment includes sales made through R&D Systems' Biotechnology Division, R&D Systems Europe, Tocris, R&D Systems China, BiosPacific and Boston Biochem. Biotechnology segment net sales were $69.8 million for the quarter ended December 31, 2011, an increase of 10.7% from $63.1 million for the quarter ended December 31, 2010. Biotechnology net sales were $142 million for the six-month period ended December 31, 2011, an increase of 12.7% from $126 million for the six-month period ended December 31, 2010. Biotechnology sales growth was 1.5% and 2.2% for the quarter and six month period ended December 31, 2011, respectively, if the sales from the acquisitions and foreign currency benefit are excluded. Customer sales growth for the Biotechnology segment from the same prior-year periods include: Period Ended December 31, 2011 ------------------------------ Quarter Six Months ------------- ------------- R&D Systems Biotechnology Division: Industrial, pharmaceutical and Biotechnology 4.6% 7.0% Academic (4.1%) (3.3%) Pacific Rim distributors 11.2% 5.8% R&D Europe: Reported 1.0% 5.9% Organic (0.8%) (0.8%) R&D China: Reported 48.5% 36.7% Organic 32.8% 23.8% Hematology net sales for the quarter and six month period ended December 31, 2011 were $4.9 million and $10.1 million, increases of 4.9% and 6.5%, respectively, from the comparable prior-year periods. The gross margin percentage declined to 73.9% in the quarter ended December 31, 2011 from 77.4% in the comparable prior year quarter and to 74.6% in the six-month period ended December 31, 2011 from 77.4% in the comparable prior- year period, due costs recognized upon the sale of inventory that was written-up to fair value as part of the acquisitions and amortization of intangible assets. Gross margins were 77.3% and 77.6% for the quarters ended December 31, 2011 and 2010, respectively, and 78.5% and 77.6% for the six- month period ended December 31, 2011 and 2010, respectively, if such costs were excluded in all periods. Selling, general and administrative expenses for the quarter and six-month period ended December 31, 2011 increased $2.2 million and $5.4 million from the quarter and six-month period ended December 31, 2010. The acquired businesses added $1.7 million and $3.3 million of selling, general and administrative expenses, excluding intangible asset amortization, in the quarter and six-month period ended December 31, 2011, respectively. Intangible amortization increased $458,000 and $918,000 in the quarter and six-month period ended December 31, 2011, respectively, from the same prior- year periods. The increase in selling, general and administrative expense for the six-month period ended December 31, 2011 was also impacted by increased profit sharing expense of $832,000 from the comparable prior-year period. Other non-operating expenses for the quarter and six-month period ended December 31, 2011 included foreign exchange transaction losses of $104,000 and $629,000, respectively, compared to foreign exchange transaction losses of $87,000 and foreign exchange transaction gains of $418,000 for the quarter and six-month period ended December 31, 2010, respectively. The effective tax rate for the quarter and six-month period ended December 31, 2011 was 31.8% and 31.9% as compared to 29.6% and 31.0% for the same prior-year periods. The U.S. research and development credit was renewed in late calendar 2010, reducing the effective tax rate in the quarter and six months ended December 31, 2010. Effective tax rates for fiscal 2012 are expected to be 31% to 33%. Techne repurchased 113,167 and 263,027 shares of its common stock curing the quarter and six months ended December 31, 2011, respectively, for approximately $7.5 million and $18.2 million. Approximately $32.4 million remains available at December 31, 2011 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 Securities Litigation Reform Act. Such statements, including the expected effective tax rate, 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 integration of the acquired companies, 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 section titled "Risk Factors" in 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. Use of Adjusted Financial Measures: The adjusted financial measures used in this press release quantify the impact the following events had on reported net sales, gross margin percentages, selling, general and administrative expenses, net earnings and earnings per share for the quarter and six-month period ended December 31, 2011 as compared to the reported amounts for the same periods ended December 31, 2010: - fluctuations in exchange rates used to convert transactions in foreign currencies (primarily the Euro, British pound sterling and Chinese yuan) to U.S. dollars, and - the acquisitions of Boston Biochem on April 1, 2011 and Tocris on April 28, 2011, including the impact of amortizing intangible assets and the recognition of costs upon the sale of inventory written-up to fair value. These adjusted financial measures are not prepared in accordance with generally accepted accounting principles (GAAP) and may be different from adjusted financial measures used by other companies. Adjusted financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. We view these adjusted financial measures to be helpful in assessing the Company's ongoing operating results. In addition, these adjusted financial measures facilitate our internal comparisons to historical operating results and comparisons to competitors' operating results. We include these adjusted financial measures in our earnings announcement because we believe they are useful to investors in allowing for greater transparency related to supplemental information we use in our financial and operational analysis. Investors are encouraged to review the reconciliations of adjusted financial measures used in this press release to their most directly comparable GAAP financial measures as provided with the financial statements attached to this press release * * * * * * * * * * * * 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 four subsidiaries: BiosPacific, Inc. (BiosPacific), located in Emeryville, California, Boston Biochem, Inc., located in Cambridge, Massachusetts, R&D Systems China Co. Ltd., (R&D China), located in Shanghai, China and Tocris Cookson Inc., located in Saint Louis, Missouri. BiosPacific is a worldwide supplier of biologics to manufacturers of in vitro diagnostic systems and immunodiagnostic kits. Boston Biochem is a leading developer and manufacturer of ubiquitin-related research products. R&D China and R&D Europe distribute biotechnology products. R&D Europe has two subsidiaries: Tocris Holdings Ltd (Tocris) of Bristol, England and R&D Systems GmbH, a German sales operation. Tocris is a leading supplier of reagents for non-clinical life science research. 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 ------------------ ------------------- 12/31/11 12/31/10 12/31/11 12/31/10 -------- -------- -------- -------- Net sales $ 74,662 $ 67,708 $152,258 $135,653 Cost of sales 19,492 15,327 38,701 30,677 -------- -------- -------- -------- Gross margin 55,170 52,381 113,557 104,976 Operating expenses: Selling, general and administrative 10,651 8,427 21,424 16,040 Research and development 6,837 6,603 13,504 13,222 -------- -------- -------- -------- Total operating expenses 17,488 15,030 34,928 29,262 -------- -------- -------- -------- Operating income 37,682 37,351 78,629 75,714 Other income (expense): Interest income 798 1,020 1,526 1,867 Other non-operating expense, net (607) (698) (1,782) (955) -------- -------- -------- -------- Total other (expense) income 191 322 (256) 912 -------- -------- -------- -------- Earnings before income taxes 37,873 37,673 78,373 76,626 Income taxes 12,060 11,139 25,039 23,719 -------- -------- -------- -------- Net earnings $ 25,813 $ 26,534 $ 53,334 $ 52,907 ======== ======== ======== ======== Earnings per share: Basic $ 0.70 $ 0.72 $ 1.44 $ 1.43 Diluted $ 0.70 $ 0.71 $ 1.44 $ 1.42 Weighted average common shares outstanding: Basic 36,966 37,093 37,030 37,066 Diluted 37,028 37,156 37,099 37,131 TECHNE CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) 12/31/11 6/30/11 -------- -------- ASSETS Cash and equivalents $ 80,994 $ 77,613 Short-term available-for-sale investments 56,758 63,200 Trade accounts receivable 32,351 35,914 Other receivables 2,194 1,946 Inventory 40,978 44,906 Other current assets 13,941 6,838 -------- -------- Current assets 227,216 230,417 -------- -------- Available-for-sale investments 148,114 131,988 Property and equipment, net 94,604 95,398 Goodwill and intangible assets, net 133,919 138,915 Other non-current assets 20,395 20,952 -------- -------- Total assets $624,248 $617,670 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $ 14,123 $ 18,188 Deferred taxes 12,619 13,360 Stockholders' equity 597,506 586,122 -------- -------- Total liabilities and stockholders' equity $624,248 $617,670 ======== ======== TECHNE CORPORATION RECONCILIATION of ORGANIC SALES (In thousands) (Unaudited) QUARTER ENDED SIX MONTHS ENDED ------------------ ------------------- 12/31/11 12/31/10 12/31/11 12/31/10 -------- -------- -------- -------- Net sales $ 74,662 $ 67,708 $152,258 $135,653 Organic sales adjustments: Acquisitions (5,515) 0 (11,055) 0 Impact of foreign currency fluctuations (238) 0 (2,116) 0 -------- -------- -------- -------- Organic sales $ 68,909 $ 67,708 $139,087 $135,653 ======== ======== ======== ======== TECHNE CORPORATION RECONCILIATION of NET EARNINGS and EARNINGS per SHARE (In thousands, except per share data) (Unaudited) QUARTER ENDED SIX MONTHS ENDED ------------------ ------------------- 12/31/11 12/31/10 12/31/11 12/31/10 -------- -------- -------- -------- Net earnings $ 25,813 $ 26,534 $ 53,334 $ 52,907 Identified adjustments: Costs recognized upon sale of acquired inventory 1,767 0 3,915 0 Amortization of intangibles 1,268 171 2,553 341 -------- -------- -------- -------- 3,035 171 6,468 341 Tax impact of adjustments (858) (63) (1,826) (126) -------- -------- -------- -------- 2,177 108 4,642 215 -------- -------- -------- -------- Net earnings - Adjusted for identified items $ 27,990 $ 26,642 $ 57,976 $ 53,122 ======== ======== ======== ======== Earnings per share - Diluted - Adjusted $ 0.76 $ 0.72 $ 1.56 $ 1.43 TECHNE CORPORATION RECONCILIATION of GROSS MARGIN PERCENTAGES (Unaudited) QUARTER ENDED SIX MONTHS ENDED ------------------ ------------------- 12/31/11 12/31/10 12/31/11 12/31/10 -------- -------- -------- -------- Gross margin percentage 73.9% 77.4% 74.6% 77.4% Identified adjustments: Costs recognized upon sale of acquired inventory 2.4% 0.0% 2.6% 0.0% Amortization of intangibles 1.0% 0.2% 1.0% 0.2% -------- -------- -------- -------- Gross margin percentage - Adjusted 77.3% 77.6% 78.2% 77.6% ======== ======== ======== ======== TECHNE CORPORATION RECONCILIATION of SELLING, GENERAL and ADMINISTRATIVE EXPENSES (In thousands) (Unaudited) QUARTER ENDED SIX MONTHS ENDED ------------------ ------------------- 12/31/11 12/31/10 12/31/11 12/31/10 -------- -------- -------- -------- Selling, general and administrative expenses $ 10,651 $ 8,427 $ 21,424 $ 16,040 Identified selling, general and administrative expense adjustments: Acquired companies' expense, excluding intangible amortization (1,720) 0 (3,282) 0 Amortization of intangibles (519) (61) (1,040) ( 122) -------- -------- -------- -------- Selling, general and administrative expenses - Adjusted $ 8,412 $ 8,366 $ 17,102 $ 15,918 ======== ======== ======== ======== TECHNE CORPORATION RECONCILIATION of INTANGIBLE AMORTIZATION (In thousands) (Unaudited) QUARTER ENDED SIX MONTHS ENDED ------------------ ------------------- 12/31/11 12/31/10 12/31/11 12/31/10 -------- -------- -------- -------- Amortization of intangible assets was included in: Cost of goods sold $ 749 $ 110 $ 1,513 $ 219 Selling, general and administrative expenses 519 61 1,040 122 -------- -------- -------- -------- Total amortization of intangible assets $ 1,268 $ 171 $ 2,553 $ 341 ======== ======== ======== ======== EX-99.2 3 segment1211.txt SEGMENT RESULTS SEGMENT INFORMATION TECHNE CORPORATION AND SUBISIDARIES (in thousands of $'s, except per share data) Increase (Decrease) Fiscal 2012 From Fiscal 2011 ------------------------------- ---------------------- First Second YTD Percent First Second YTD ------ ------ ------- ------- ------ ------ ------ Sales 77,596 74,662 152,258 100% 9,651 6,954 16,605 Cost of sales 19,209 19,492 38,701 25% 3,859 4,165 8,024 ------ ------ ------- ------- ------ ------ ------ Gross margin 58,387 55,170 113,557 75% 5,792 2,789 8,581 Gross margin percentage 75.2% 73.9% 74.6% SG&A expense 10,773 10,651 21,424 14% 3,160 2,224 5,384 R&D expense 6,667 6,837 13,504 9% 48 234 282 Interest income (728) (798) (1,526) (1%) 119 222 341 Other non-operating ex., net 1,175 607 1,782 1% 918 (91) 827 ------ ------ ------- ------- ------ ------ ------ 17,887 17,297 35,184 23% 4,245 2,589 6,834 ------ ------ ------- ------- ------ ------ ------ Earnings before income taxes 40,500 37,873 78,373 52% 1,547 200 1,747 Income taxes 12,979 12,060 25,039 17% 399 921 1,320 ------ ------ ------- ------- ------ ------ ------ 27,521 25,813 53,334 35% 1,148 (721) 427 ====== ====== ======= ======= ====== ====== ====== Diluted earnings per share 0.74 0.70 1.44 Weighted average diluted shares outstanding 37,170 37,028 37,099 BIOTECHNOLOGY (1) (in thousands of $'s) Increase (Decrease) Fiscal 2012 From Fiscal 2011 ------------------------------- ---------------------- First Second YTD Percent First Second YTD ------ ------ ------- ------- ------ ------ ------ Sales 72,303 69,808 142,111 100% 9,262 6,728 15,990 Cost of sales 16,465 16,887 33,352 23% 3,624 4,267 7,891 ------ ------ ------- ------- ------ ------ ------ Gross margin 55,838 52,921 108,759 77% 5,638 2,461 8,099 Gross margin percentage 77.2% 75.8% 76.5% SG&A expense 9,470 9,003 18,473 13% 2,984 2,144 5,128 R&D expense 6,469 6,624 13,093 9% 48 245 293 Interest income (609) (689) (1,298) (1%) 53 129 182 Exchange loss/gain 524 105 629 1% 1,029 18 1,047 ------ ------ ------- ------- ------ ------ ------ 15,854 15,043 30,897 22% 4,114 2,536 6,650 ------ ------ ------- ------- ------ ------ ------ Pretax result 39,984 37,878 77,862 55% 1,524 (75) 1,449 ====== ====== ======= ======= ====== ====== ====== (1) Includes R&D Systems' Biotechnology Division, R&D Systems Europe, BiosPacific, R&D China, Boston Biochem and Tocris. HEMATOLOGY (in thousands of $'s) Increase (Decrease) Fiscal 2012 From Fiscal 2011 ------------------------------- ---------------------- First Second YTD Percent First Second YTD ------ ------ ------- ------- ------ ------ ------ Sales 5,293 4,854 10,147 100% 389 226 615 Cost of sales 2,744 2,605 5,349 53% 235 (102) 133 ------ ------ ------- ------- ------ ------ ------ Gross margin 2,549 2,249 4,798 47% 154 328 482 Gross margin percentage 48.2% 46.3% 47.3% SG&A expense 480 400 880 9% 152 64 216 R&D expense 198 213 411 4% -- (11) (11) Interest income (47) (45) (92) (1%) 6 21 27 ------ ------ ------- ------- ------ ------ ------ 631 568 1,199 12% 158 74 232 ------ ------ ------- ------- ------ ------ ------ Pretax result 1,918 1,681 3,599 35% (4) 254 250 ====== ====== ======= ======= ====== ====== ====== CORPORATE AND OTHER (2) (in thousands of $'s) Increase (Decrease) Fiscal 2012 From Fiscal 2011 ----------------------- ---------------------- First Second YTD First Second YTD ------ ------ ------- ------ ------ ------ Interest income 72 64 136 (60) (72) (132) Rental income 134 198 332 11 60 71 ------ ------ ------- ------ ------ ------ 206 262 468 (49) (12) (61) SG&A expense 823 1,248 2,071 24 16 40 Other-Building expenses 587 482 1,069 31 (49) (18) Other-Equity Investment losses 198 218 416 (131) 0 (131) ------ ------ ------- ------ ------ ------ 1,608 1,948 3,556 (76) (33) (109) ------ ------ ------- ------ ------ ------ Pretax result (1,402) (1,686) (3,088) 27 21 48 ====== ====== ======= ====== ====== ====== (2) Unallocated corporate expenses and Techne's share of losses by Hemerus Medical, LLC and Nephromics, LLC.