MINNEAPOLIS, Aug. 5 /PRNewswire-FirstCall/ -- Techne Corporation's (Nasdaq: TECH) consolidated net earnings for the quarter ended June 30, 2008 increased 18.9% to $27.3 million or $.70 per diluted share compared with $22.9 million or $.58 per diluted share for the quarter ended June 30, 2007. For the fiscal year ended June 30, 2008, Techne's consolidated net earnings increased 21.7% to $103.6 million or $2.64 per diluted share compared with $85.1 million or $2.15 per diluted share for the fiscal year ended June 30, 2007.
Net earnings as a percentage of net sales improved to 40.2% for the fiscal year ended June 30, 2008 from 38.1% in the fiscal year ended June 30, 2007. The improvement in net earnings was mainly due to increased consolidated net sales. The favorable 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 $296,000 ($.008 per diluted share) for the quarter and $1.3 million ($.034 per diluted share) for the fiscal year ended June 30, 2008.
Consolidated net sales for the quarter and fiscal year ended June 30, 2008 were $67.8 million and $257.4 million, respectively. This was an increase of 16.0% and 15.2% from the quarter and fiscal year ended June 30, 2007, respectively. 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 12.1% and 12.3% for the quarter and fiscal year ended June 30, 2008, 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 $42.5 million and $165.7 million for the quarter and fiscal year ended June 30, 2008, increases of 11.6% and 13.0%, respectively, from the quarter and fiscal year ended June 30, 2007. This improvement was primarily the result of increased volume, including shipments to diagnostic customers. Increased sales to diagnostic customers positively effected Biotechnology net sales in the second and third quarters of fiscal 2008. The timing of diagnostic customer sales is not predictable and these sales increases are not necessarily indicative of future sales. Excluding sales to diagnostic customers, Biotechnology net sales increased 12.4% for the fiscal year ended June 30, 2008 from the comparable prior year period.
R&D Europe's net sales for the quarter and fiscal year ended June 30, 2008 were $21.0 million and $75.7 million, increases of 30.0% and 22.6%, respectively, from the same prior-year periods. R&D Europe's net sales increased 16.0% and 12.2% for the quarter and fiscal year ended June 30, 2008 when measured at currency rates in effect in the comparable prior periods.
Hematology net sales for the quarter and fiscal year ended June 30, 2008 were $4.2 million and $16.0 million, increases of 1.9% and 6.1%, respectively, compared to the quarter and fiscal year ended June 30, 2007. The increase for the fiscal year was mainly due to increased volume sales to several OEM customers during the third quarter of the fiscal year.
Consolidated gross margins were 79.5% for both the quarter and fiscal year ended June 30, 2008, compared to 78.3% and 79.1% for the quarter and fiscal year ended June 30, 2007, respectively. The gross margin improvement resulted from higher gross margins in Europe due to favorable exchange rates and changes in sales mix as a result of higher sales growth in the Biotechnology Division as compared to the sales growth in the lower margin Hematology Division. This improvement was partially offset by lower gross margins generated from high volume sales to diagnostic customers, particularly in the second and third quarters of the fiscal year.
Selling, general and administrative expenses for the quarter and fiscal year ended June 30, 2008 increased $1.1 million (14.6%) and $5.7 million (18.6%), respectively, from the same prior year periods. These increases include wage and salary increases and the hiring of additional marketing and administrative personnel to support the Company's sales growth. Selling, general and administrative expenses for the quarter ended June 30, 2008 also increased from the same prior year period due to increased profit sharing and bonuses of $841,000. Selling, general and administrative expenses for the fiscal year ended June 30, 2008 also increased because of additional profit sharing and bonuses of $2.0 million, increased legal fees of $837,000, R&D China selling, general and administrative expenses of $552,000, and the change in foreign currency exchange rates used to convert British pounds to U.S. dollars of $311,000.
The effective tax rates for both the quarter and fiscal year ended June 30, 2008 were 32.7% as compared to effective tax rates of 32.9% and 34.0% for the quarter and fiscal year ended June 30, 2007, respectively. Fiscal year 2008 rates were positively impacted by changes in state apportionment estimates. Without significant business developments, the Company expects its fiscal 2009 effective income tax rate to range from approximately 33.0% to 34.0%.
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 140,000 shares of its common stock during the fourth quarter of fiscal 2008 for approximately $9.4 million. During fiscal 2008, the Company repurchased approximately 899,000 shares of its common stock for approximately $58.7 million.
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 and 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.
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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)
QUARTER ENDED FISCAL YEAR ENDED
6/30/08 6/30/07 6/30/08 6/30/07
Net sales $67,769 $58,425 $257,420 $223,482
Cost of sales 13,888 12,697 52,889 46,667
Gross margin 53,881 45,728 204,531 176,815
and administrative 8,986 7,839 36,715 30,965
development 5,812 5,014 22,394 20,082
intangible assets 282 404 1,135 1,614
expenses 15,080 13,257 60,244 52,661
Operating income 38,801 32,471 144,287 124,154
Other expense (income):
Interest expense -- -- -- 1,083
Interest income (2,783) (2,565) (12,188) (8,434)
expense, net 1,079 894 2,644 2,574
Total other income (1,704) (1,671) (9,544) (4,777)
Earnings before income
taxes 40,505 34,142 153,831 128,931
Income taxes 13,248 11,218 50,273 43,820
Net earnings $27,257 $22,924 $103,558 $85,111
Earnings per share:
Basic $0.70 $0.58 $2.65 $2.16
Diluted $0.70 $0.58 $2.64 $2.15
Weighted average common
Basic 38,665 39,444 39,139 39,406
Diluted 38,788 39,555 39,247 39,513
CONSOLIDATED BALANCE SHEETS
ASSETS 6/30/08 6/30/07
Cash and equivalents $166,992 $135,485
Short-term available-for-sale investments 39,353 29,289
Trade accounts receivable 31,747 29,559
Other receivables 1,585 1,407
Inventory 9,515 8,757
Other current assets 9,241 8,341
Current assets 258,433 212,838
Available-for-sale investments 87,384 91,433
Property and equipment, net 101,722 91,535
Goodwill and intangible assets, net 29,032 30,167
Other non-current assets 30,798 28,871
Total assets $507,369 $454,844
Current liabilities $20,239 $17,193
Stockholders' equity 487,130 437,651
Total liabilities and equity $507,369 $454,844
|SOURCE Techne Corporation|
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