Free 7-day Trial
All Articles and Columns »

Techne Corp. Reports Operating Results (10-Q)

February 09, 2011 | About:
10qk

10qk

18 followers
Techne Corp. (TECH) filed Quarterly Report for the period ended 2010-12-31.

Techne Corp. has a market cap of $2.54 billion; its shares were traded at around $68.66 with a P/E ratio of 23.3 and P/S ratio of 9.4. The dividend yield of Techne Corp. stocks is 1.6%. Techne Corp. had an annual average earning growth of 14.9% over the past 10 years. GuruFocus rated Techne Corp. the business predictability rank of 5-star.Hedge Fund Gurus that owns TECH: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns TECH: Bill Frels of Mairs & Power Inc. , Ron Baron of Baron Funds, Chuck Royce of Royce& Associates, Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC.
This is the annual revenues and earnings per share of TECH over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of TECH.


Highlight of Business Operations:

Consolidated net sales and consolidated net earnings increased 3.3% and 7.3%, respectively, for the quarter ended December 31, 2010 compared to the quarter ended December 31, 2009. Consolidated net sales and consolidated net earnings both increased 2.7% for the six months ended December 31, 2010 compared to the six months ended December 31, 2009. Consolidated net sales and net earnings were negatively affected by changes in exchange rates from the prior year used to convert consolidated net sales and consolidated net earnings in foreign currencies into U.S. dollars. The unfavorable impact on consolidated net sales of the change from the prior year in exchange rates used to convert sales in foreign currencies (primarily British pounds sterling and euros) into U.S. dollars was $1.2 million and $2.4 million for the quarter and six months ended December 31, 2010, respectively. The unfavorable impact on consolidated net earnings of the change from the prior year in exchange rates used to convert foreign currency financial statements to U.S. dollars was $302,000 and $643,000 for the quarter and six months ended December 31, 2010, respectively. In the first six months of fiscal 2011, the Company generated cash of $60.1 million from operating activities, paid cash dividends of $19.6 million, and paid $1.9 million for the repurchase of stock. At December 31, 2010 the Company had cash, cash equivalents and available-for-sale investments of $354 million compared to $310 million at June 30, 2010.

Consolidated net sales for the quarter and six months ended December 31, 2010 were $67.7 million and $135.7 million, respectively, increases of $2.2 million (3.3%) and $3.6 million (2.7%) from the quarter and six months ended December 31, 2009. Excluding the effect of changes in foreign currency exchange rates, consolidated net sales increased 5.1% and 4.5% for the quarter and six months ended December 31, 2010, respectively, from the comparable prior-year periods. Included in consolidated net sales for the quarter and six months ended December 31, 2010 was $460,000 and $674,000 of sales of new biotechnology products which had their first sale in fiscal 2011.

R&D Europe net sales decreased $130,000 (0.7%) and $1.6 million (4.3%) for the quarter and six months ended December 31, 2010, respectively, from the comparable prior-year periods. R&D Europe net sales increased 5.5% and 2.2% for the quarter and six months ended December 31, 2010 when measured at currency rates in effect in the comparable prior-year period. Approximately 75% of R&D Europe sales are in non-British pound sterling currencies (mainly euros). The change in exchange rates used to convert sales in such other currencies to British pounds sterling had an unfavorable impact on consolidated net sales of approximately $531,000 and $816,000 for the quarter and six months ended December 31, 2010, respectively. In addition, consolidated net sales were impacted unfavorably by $638,000 and $1.6 million for the quarter and six months ended December 31, 2010, respectively, as a result of the change in exchange rates used to convert British pound sterling to U.S. dollars.

Consolidated gross margin for the quarter ended December 31, 2010 increased $298,000, but decreased $631,000 for the six months ended December 31, 2010 from the same prior-year periods. Biotechnology gross margin increased $973,000 and $1.8 million for the quarter and six months ended December 31, 2010 as a result of increased net sales partially offset by a decrease in gross margin percentage. R&D Europe gross margin decreased $564,000 and $2.3 million for the quarter and six months ended December 31, 2010 as compared to the same prior-year periods. Approximately $1.2 million and $2.4 million of the decrease in R&D Europe gross margins, respectively, was the result of changes in exchange rates used to translate sales in foreign currencies into U.S. dollars. Approximately 15.0% and 6.4% of consolidated net sales for the six months ended December 31, 2010 were made in euro and British pound sterling, respectively. The average euro exchange rate declined 8.8% and 8.3% against the U.S. dollar for the quarter and six months ended December 31, 2010 (€:$1.34 and €:$1.33) compared to the same prior-year periods (€:$1.47 and €:$1.45). The average British pound sterling exchange rate declined 3.7% and 4.3% against the U.S. dollar for the quarter and six months ended December 31, 2010 (£:$1.57 and £:$1.56) compared to the same prior-year periods (£:$1.63 and £:$1.63). Excluding the effect of the exchange rate on sales, gross margins for R&D Europe increased $605,000 and $62,000 for the quarter and six months ended December 31, 2010.

Selling, general and administrative expenses for the quarter and six months ended December 31, 2010 decreased $642,000 (7.1%) and $1.1 million (6.6%) from the same prior-year periods. The decrease in selling, general and administrative expense for the quarter ended December 31, 2010 resulted primarily from decreased legal expense of $153,000, lower printing costs of approximately $390,000 due to the printing of the annual Biotechnology catalog in the third quarter of fiscal 2011 compared to the second quarter in fiscal 2010, and the effect of the change in the exchange rate used to convert R&D Europe expenses from British pounds and euros into U.S. dollars of $116,000. The decrease in selling, general and administrative expense for the six months ended December 31, 2010 resulted from decreased legal expense of $260,000, lower profit sharing expense of $286,000 lower catalog printing costs of $390,000, and the effect of the change in the exchange rate used to convert R&D Europe expenses from British pounds and euros into U.S. dollars of $250,000.

Capital expenditures for fixed assets for the first six months of fiscal 2011 and 2010 were $1.8 million and $2.2 million, respectively. Included in capital expenditures for the first six months of fiscal 2010 was $960,000 related to remodeling of laboratory space at the Company’s Minneapolis facility. The remaining capital additions were mainly for laboratory and computer equipment. Capital expenditures in the remainder of fiscal 2011 are expected to be approximately $3.7 million and are expected to be financed through currently available funds and cash generated from operating activities.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 1.4/5 (5 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide