TECH, OTOH, misses by two pennies:
>>MINNEAPOLIS, Jan. 28 /PRNewswire-FirstCall/ -- Techne Corporation's (Nasdaq: TECH - News; the Company) consolidated net sales for the quarter and six months ended December 31, 2002 were $33,300,214 and $67,848,450, respectively. This was an increase of $2,163,303 or 7% and $6,868,873 or 11% from the second quarter and first six months of last year. R&D Systems' Biotechnology Division net sales for the quarter and six months increased $735,054 (4%) and $3,856,766 (10%). R&D Europe's net sales for the quarter and six months increased $1,264,877 (17%) and $2,724,548 (19%). In British pounds, R&D Europe's net sales increased 7% and 10% for the quarter and six months, respectively. R&D Systems' Hematology Division net sales for the quarter and six months increased $163,372 (4%) and $287,559 (4%).
The slowing of the Company's sales growth as compared to prior-year periods from a 16% growth rate in the first quarter of the current fiscal year to 7% in the current quarter was primarily due to the unexpected reduction in R&D Systems' Biotechnology Division sales growth. Biotechnology Division's sales for the second quarter of fiscal 2003 increased 4% from last year compared to a 16% increase in the first quarter of fiscal 2003. The decline in sales growth occurred across all major product lines and customer segments and can be attributed mainly to economic factors and the timing of the Christmas and New Year holidays, which fell in the middle of the work week. Competitive factors are not believed to have had an impact on the second quarter decline in sales growth.
Thomas E. Oland, President and CEO stated: "The second quarter of last year was a strong quarter as we rebounded from the events of September 11. The second quarter of this year was also negatively impacted by the timing of the holidays. Nonetheless, the slowing of the sales growth rate was swift and unexpected. We are being very careful with our capital investments and mindful of expenses while we focus on product development and growth."
For the three months ended December 31, 2002, Techne's consolidated net earnings increased 17% to $9,881,293 or 23 cents per share (diluted), compared with $8,434,635 or 20 cents per share (diluted) in the second quarter of last year. For the six months ended December 31, 2002, Techne's consolidated net earnings increased 21% to $20,326,207 or 48 cents per share (diluted), compared with $16,859,416 or 40 cents per share in the first six months of last year. The improvement in earnings was the result of increased sales and lower intangible amortization partially offset by higher research expenses, lower interest income and an increase in the effective income tax rate.
On July 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets". Goodwill amortization of $1,567,500 and $3,135,000 was expensed in the second quarter and first six months of last year, respectively, but is no longer amortized under SFAS No. 142. The after tax effect of the goodwill expense in the second quarter and first six months of fiscal 2002 was $.02 and $.04 per diluted share, respectively.
Research and development expenses for the quarter and six months ended December 31, 2002 increased $669,967 (16%) and $1,513,330 (18%), respectively, of which $276,681 and $844,839 was due to increased losses by ChemoCentryx, Inc. (CCX) and Discovery Genomics, Inc. (DGI), development stage companies in which Techne has invested. Losses by CCX and DGI for the quarter and six months ended December 31, 2002 were $658,831 and $1,356,474 ($.02 and $.03 per diluted share), respectively, compared to $382,150 and $511,635 ($.01 and $.01 per diluted share), respectively, in the second quarter and first six months of fiscal 2002. Interest income decreased $209,304 and $381,589 from the second quarter and first six months of the prior year due to lower yields on short-term investments. The effective income tax rate increased for the quarter and six months as a result of increased losses by CCX and DGI for which there are no tax benefits, decreased tax exempt interest income and changes in state income tax regulations.
During the first six months of fiscal 2003, Techne purchased and retired 247,500 shares of common stock at a market value of $5,864,890. From the start of the Company's repurchase program in May 1995, 1,618,700 shares have been purchased at a market value of $16,528,387. The Board of Directors has authorized, subject to market conditions and share price, the purchase and retirement of up to $40 million of common stock.
Statements in this earnings release and elsewhere which look forward in time involve risks and uncertainties which 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 into cytokines by the Company's customers, the impact of the growing number of producers of cytokine 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.
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 and R&D Europe is a distributor of biotechnology products.
Techne Corporation
12/31/02
(Unaudited)
Quarter Ended Six Months Ended
12/31/02 12/31/01 12/31/02 12/31/01
Net sales $33,300,214 $31,136,911 $67,848,450 $60,979,577
Cost of sales 8,370,754 8,028,285 17,061,009 15,576,227
Gross margin 24,929,460 23,108,626 50,787,441 45,403,350
Operating expenses:
Selling, general
and administrative 4,773,790 4,833,875 9,773,113 9,369,792
Research and
development 4,979,240 4,309,273 9,812,337 8,299,007
Amortization of
intangible assets 484,812 2,137,311 969,625 4,274,623
Interest expense 296,535 334,819 619,225 673,524
Interest income (703,983) (913,287) (1,494,423) (1,876,012)
Other non-operating
expense 110,773 -- 212,357 --
9,941,167 10,701,991 19,892,234 20,740,934
Earnings before
income taxes 14,988,293 12,406,635 30,895,207 24,662,416
Income taxes 5,107,000 3,972,000 10,569,000 7,803,000
Net earnings $9,881,293 $8,434,635 $20,326,207 $16,859,416
Earnings per share:
Basic $0.24 $0.20 $0.49 $0.41
Diluted $0.23 $0.20 $0.48 $0.40
Weighted average common
shares outstanding:
Basic 41,444,808 41,486,607 41,403,906 41,461,183
Diluted 42,315,579 42,540,904 42,300,344 42,536,336
12/31/02 6/30/02
ASSETS
Cash and equivalents $28,821,496 $26,392,480
Short-term investments 78,911,716 70,671,341
Other current assets 28,571,687 32,013,928
Property and equipment (net) 80,955,464 70,312,602
Intangible assets (net) 17,927,375 18,897,000
Other non-current assets 18,145,995 19,959,608
Total assets $253,333,733 $238,246,959
LIABILITIES
Current liabilities $11,911,752 $14,629,524
Long-term debt 16,197,862 17,100,652
Stockholders' equity 225,224,119 206,516,783
Total liabilities and equity $253,333,733 $238,246,959<<
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Cheers, Tuck |
