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Techne Corporation Releases Unaudited Fourth Quarter Results for Fiscal Year 2009
Date:8/4/2009

MINNEAPOLIS, Aug. 4 /PRNewswire-FirstCall/ -- Techne Corporation's (Nasdaq: TECH) consolidated net earnings for the quarter ended June 30, 2009 decreased 6.9% to $25.4 million or $.68 per diluted share compared with $27.3 million or $.70 per diluted share for the quarter ended June 30, 2008. For the fiscal year ended June 30, 2009, Techne's consolidated net earnings increased 1.6% to $105.2 million or $2.78 per diluted share compared with $103.6 million or $2.64 per diluted share for the fiscal year ended June 30, 2008. Net earnings as a percentage of net sales were 39.9% for the fiscal year ended June 30, 2009 as compared to 40.2% in fiscal 2008.

Foreign currency fluctuations and general economic conditions continued to have a negative impact on consolidated net sales and earnings in the quarter ended June 30, 2009. The change in exchange rates used to convert foreign currencies (primarily British pound sterling and euros) to U.S. dollars reduced net earnings by $1.1 million ($.03 per diluted share) for the quarter and $4.5 million ($.12 per diluted share) for fiscal year 2009, as compared to the same periods in fiscal 2008.

Consolidated net sales for the quarter and fiscal year ended June 30, 2009 were $64.9 million and $264.0 million, respectively. This was a 4.2% decrease and a 2.5% increase from the quarter and fiscal year ended June 30, 2008, respectively. Consolidated net sales were negatively affected by the strength of the U.S. dollar as compared to foreign currencies. Excluding the effect of changes in foreign currency exchange rates, consolidated net sales decreased 0.9% for the quarter ended June 30, 2009 and increased 5.9% for the fiscal year ended June 30, 2009, 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 $42.3 million for the quarter ended June 30, 2009, a decrease of 0.6% from the quarter ended June 30, 2008. Biotechnology sales were $173.9 million for the fiscal year ended June 30, 2009, an increase of 5.0% over the same period last year. North American biotechnology sales to industrial pharmaceutical and biotechnology customers declined approximately 2% during the fourth quarter of fiscal 2009. The Company attributes the lower fourth quarter sales growth rate to continued customer caution in a time of economic uncertainty.

R&D Europe's net sales for the quarter and fiscal year ended June 30, 2009 were $18.0 million and $72.5 million, decreases of 14.3% and 4.2%, respectively, from the same prior-year periods. R&D Europe's net sales decreased 3.6% for the quarter ended June 30, 2009 and increased 7.2% for the fiscal year ended June 30, 2009 when measured at currency rates in effect in the comparable prior periods. R&D Europe's net sales for the quarter ended June 30, 2009 were affected by the timing of the Easter holiday in Europe, which occurred in the third quarter of fiscal 2008.

Hematology net sales for the quarter and fiscal year ended June 30, 2009 were $4.6 million and $17.5 million, increases of 8.9% and 9.2%, respectively, compared to the quarter and fiscal year ended June 30, 2008.

Consolidated gross margins were 77.4% and 79.0% for the quarter and fiscal year ended June 30, 2009, respectively, compared to 79.5% for both the quarter and fiscal year ended June 30, 2008, respectively. The decreases in gross margins in the quarter and fiscal year ended June 30, 2009 were primarily caused by lower gross margins in Europe resulting from comparatively unfavorable exchange rates. Consolidated gross margins for the quarter ended June 30, 2009 also decreased from the quarter ended March 31, 2009 as a result of a change in sales mix from higher margin Biotechnology Division sales to lower margin Hematology Division and R&D Europe sales.

Selling, general and administrative expenses for the quarter and fiscal year ended June 30, 2009 decreased $1.4 million (15.9%) and $3.6 million (9.7%), respectively from the quarter and fiscal year ended June 30, 2008. The decrease in selling, general and administrative expenses from the comparable prior-year periods were the result of the following (in thousands):

                                                       Quarter  Fiscal Year
    Reduction in profit sharing expense                $(1,816)     $(3,759)
    Change in exchange rates to convert foreign
     expenses to U.S. dollars                             (486)      (2,024)
    Legal expenses                                         587          786
    Stock option expense                                   111         (249)
    Other, including annual wage, salary and benefits
     increases                                             178        1,695
                                                           ---        -----
                                                       $(1,426)     $(3,551)
                                                      ========     ========

Research and development expenses increased $187,000 (3.2%) and $1.2 million (5.2%), respectively, for the quarter and fiscal year ended June 30, 2009 from the comparable prior-year periods.

Interest income decreased $1.7 million and $4.6 million for the quarter and fiscal year ended June 30, 2009, respectively, from the comparable prior-year periods, primarily as a result of lower rates of return on cash and available-for-sale investments and, to a lesser extent, to lower cash and available-for-sale investment balances.

The effective tax rates for the quarter and fiscal year ended June 30, 2009 were 32.2% and 32.3%, respectively, as compared to effective tax rates of 32.7% for both of the same prior-year periods.

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. In April 2009, an additional $60 million was authorized for repurchase and retirement of common stock. The Company repurchased approximately 33,000 shares of its common stock during the fourth quarter of fiscal 2009 for approximately $1.8 million. Approximately $67.5 million remains available for the repurchase of shares under these authorizations.

Forward Looking Statements:

This earnings release contains forward-looking statements within the meaning of the Private Litigation Reform Act. These 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 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.

                               TECHNE CORPORATION
                      CONSOLIDATED STATEMENTS OF EARNINGS
                     (In thousands, except per share data)
                                  (Unaudited)

                                       QUARTER ENDED     FISCAL YEAR ENDED
                                    6/30/09    6/30/08   6/30/09    6/30/08
                                    -------    -------   -------    -------
    Net sales                       $64,890    $67,769  $263,956   $257,420
    Cost of sales                    14,656     13,888    55,488     52,889
                                     ------     ------    ------     ------
    Gross margin                     50,234     53,881   208,468    204,531
                                     ------     ------   -------    -------
    Operating expenses:
       Selling, general and
        administrative                7,560      8,986    33,164     36,715
       Research and development       5,999      5,812    23,564     22,394
       Amortization of intangible
        assets                          240        282       960      1,135
                                        ---        ---       ---      -----
          Total operating expenses   13,799     15,080    57,688     60,244
                                     ------     ------    ------     ------
    Operating income                 36,435     38,801   150,780    144,287
    Other income (expense):
       Interest income                1,038      2,783     7,634     12,188
       Other non-operating expense,
        net                             (49)    (1,079)   (3,051)    (2,644)
                                       ----    -------   -------    -------
           Total other income           989      1,704     4,583      9,544
                                        ---      -----     -----      -----
    Earnings before income taxes     37,424     40,505   155,363    153,831
    Income taxes                     12,038     13,248    50,121     50,273
                                     ------     ------    ------     ------
    Net earnings                    $25,386    $27,257  $105,242   $103,558
                                    =======    =======  ========   ========
    Earnings per share:
     Basic                            $0.68      $0.70     $2.78      $2.65
     Diluted                          $0.68      $0.70     $2.78      $2.64
    Weighted average common
     shares outstanding:
      Basic                          37,248     38,665    37,802     39,139
      Diluted                        37,332     38,788    37,900     39,247

                        TECHNE CORPORATION
                   CONSOLIDATED BALANCE SHEETS
                          (In thousands)
                           (Unaudited)

    ASSETS                                     6/30/09  6/30/08
    ------                                     -------  -------
    Cash and equivalents                      $160,940 $166,992
    Short-term available-for-sale investments   41,947   39,353
    Trade accounts receivable                   29,516   31,747
    Other receivables                            1,637    1,585
    Inventory                                   11,269    9,515
    Other current assets                        10,158    9,241
                                                ------    -----
      Current assets                           255,467  258,433
                                               -------  -------
    Available-for-sale investments              61,863   87,384
    Property and equipment, net                100,133  101,722
    Goodwill and intangible assets, net         28,072   29,032
    Other non-current assets                    26,470   30,798
                                                ------   ------
      Total assets                            $472,005 $507,369
                                              ======== ========
    LIABILITIES
    -----------
    Current liabilities                        $15,523  $20,239
    Stockholders' equity                       456,482  487,130
                                               -------  -------
      Total liabilities and equity            $472,005 $507,369
                                              ======== ========


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