MINNEAPOLIS, Oct. 22 /PRNewswire-FirstCall/ -- Techne Corporation's (Nasdaq: TECH) consolidated net earnings for the quarter ended September 30, 2008 increased 23.9% to $28.6 million or $.74 per diluted share compared with $23.1 million or $.58 per diluted share for the quarter ended September 30, 2007. Net earnings as a percentage of net sales improved from 39.8% in the first quarter of last year to 41.2% for the quarter ended September 30, 2008. The improvement in net earnings was mainly due to increased consolidated net sales. The unfavorable impact on consolidated net earnings of the change in exchange rates used to convert foreign currencies (primarily British pound sterling and Euros) to U.S. dollars was $310,000 ($.01 per diluted share) for the quarter ended September 30, 2008.
Consolidated net sales for the quarter ended September 30, 2008 were $69.3 million, an increase of 19.6% from the same prior-year quarter. Consolidated net sales were favorably affected by the strength of foreign currencies as compared to the U.S. dollar. Excluding the effect of changes in foreign currency exchange rates, consolidated net sales increased 18.4% for the quarter ended September 30, 2008 from the quarter ended September 30, 2007. The quarter ended September 30, 2008 included one more selling day than the comparable prior-year quarter.
Biotechnology net sales, which include sales by R&D Systems' Biotechnology Division, R&D Systems China and BiosPacific, for the quarter ended September 30, 2008, were $46.1 million, an increase of 18.7% from the same prior-year quarter. R&D Europe's net sales for the quarter were $18.9 million, an increase of 22.6% from the same prior-year quarter. R&D Europe's net sales increased 18.4% for the quarter when measured at currency rates in effect in the comparable prior periods. Hematology net sales for the quarter were $4.2 million, an increase of 16.1%. The timing of shipments to OEM customers positively impacted Hematology sales results during the quarter ended September 30, 2008 and will likely reduce the Hematology sales growth rate in the quarter ending December 31, 2008 as compared to the comparable prior-year quarter.
Consolidated gross margins were 81.1% and 79.1% in the first quarters of fiscal 2009 and 2008, respectively. The increase in gross margins was due to higher sales volume on relatively fixed costs and higher margins in Europe due to favorable exchange rates.
Selling, general and administrative expenses decreased to 12.8% of consolidated net sales for the quarter ended September 30, 2008 from 14.0% for the quarter ended September 30, 2007. Selling, general and administrative expenses for the quarter ended September 30, 2008 increased $750,000 (9.3%) from the same prior-year period due mainly to annual wage and salary increases and increased legal costs of $276,000. Research and development expenses increased $729,000 (14.1%) for the quarter ended September 30, 2008 mainly as a result of increased personnel costs.
The consolidated effective tax rate was 33.4% and 33.6% for the quarters ended September 30, 2008 and 2007, respectively. As a result of the recent renewal of the U.S. research and development credit, income tax expense in the second quarter of fiscal 2008 will include a credit for the January to June 2008 period in addition to a credit for the current-year six month period. Including the increased research and development credit and without other significant business developments, the Company expects its fiscal 2009 effective income tax rate to range from approximately 32.5% to 33.5%.
In November 2007, the Company's Board of Directors authorized the repurchase and retirement of up to $150 million of the Company's common stock. The Company repurchased approximately 214,000 shares of its common stock during the first quarter of fiscal 2009 for approximately $15.6 million. Subsequent to September 30, 2008, the Company has repurchased an additional 335,000 shares for approximately $22.7 million. In total, the Company has repurchased approximately 1.3 million shares of its common stock for approximately $90.8 million under this authorization.
Forward Looking Statements:
This earnings release contains forward-looking statements within the meaning of the Private Litigation Reform Act. These statements, including the Company's expectations as to Hematology sales and consolidated income tax rates, 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, 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.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
Net sales $69,324 $57,987
Cost of sales 13,086 12,104
Gross margin 56,238 45,883
Selling, general and administrative 8,840 8,090
Research and development 5,910 5,181
Amortization of intangible assets 240 288
Total operating expenses 14,990 13,559
Operating income 41,248 32,324
Other income (expense):
Interest income 2,887 2,998
Other non-operating expense, net (1,187) (569)
Total other income 1,700 2,429
Earnings before income taxes 42,948 34,753
Income taxes 14,355 11,681
Net earnings $28,593 $23,072
Earnings per share:
Basic $0.74 $0.58
Diluted $0.74 $0.58
Weighted average common shares outstanding:
Basic 38,624 39,489
Diluted 38,747 39,587
CONSOLIDATED BALANCE SHEETS
ASSETS 9/30/08 6/30/08
Cash and equivalents $162,071 $166,992
Short-term available-for-sale investments 34,108 39,353
Trade accounts receivable 32,296 31,747
Other receivables 1,672 1,585
Inventory 9,699 9,515
Other current assets 9,542 9,241
Current assets 249,388 258,433
Available-for-sale investments 101,270 87,384
Property and equipment, net 100,100 101,722
Goodwill and intangible assets, net 28,792 29,032
Other non-current assets 28,118 30,798
Total assets $507,668 $507,369
Current liabilities $19,258 $20,239
Stockholders' equity 488,410 487,130
Total liabilities and equity $507,668 $507,369
|SOURCE Techne Corporation|
Copyright©2008 PR Newswire.
All rights reserved