GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Techne Corp. Reports Operating Results (10-Q)

February 08, 2010 | About:
insider

10qk

18 followers
Techne Corp. (TECH) filed Quarterly Report for the period ended 2009-12-31.

Techne Corp. has a market cap of $2.29 billion; its shares were traded at around $61.48 with a P/E ratio of 21.96 and P/S ratio of 8.68. The dividend yield of Techne Corp. stocks is 1.69%. Techne Corp. had an annual average earning growth of 18.9% over the past 10 years. GuruFocus rated Techne Corp. the business predictability rank of 5-star.TECH is in the portfolios of Bill Frels of MAIRS & POWER INC, Ron Baron of Baron Funds, Chuck Royce of ROYCE & ASSOCIATES.

Highlight of Business Operations:

Biotechnology net sales increased $2.1 million (5.2%) and decreased $20,000,

respectively, for the quarter and six months ended December 31, 2009 compared

to the same prior-year periods. The increase in the quarter was mainly as a

result of increased sales volume. North American biotechnology sales to

industrial pharmaceutical and biotechnology customers increased 5.7% during

the quarter ended December 31, 2009. Biotechnology sales to academic, Pacific

Rim distributors and China grew 4.5%, 13.0% and 21.8%, respectively, during

the second quarter of fiscal 2010 compared to the same prior-year period. A

12.8% decline in sales to industrial pharmaceutical and biotechnology

customers in the first quarter of fiscal 2010 more than offset the second

quarter sales growth. Sales to North American industrial pharmaceutical and

biotechnology customers decreased 4.7% during the six months ended December

31, 2009 as compared to the first six months of fiscal 2009. Biotechnology

sales to academic, Pacific Rim distributors and China grew 4.3%, 9.5% and

25.8%, respectively, in the first six months of fiscal 2010.



R&D Europe net sales increased $1.5 million (8.6%) and $388,000 (1.1%) for

the quarter and six months ended December 31, 2009, respectively, from the

comparable prior-year periods. R&D Europe's net sales decreased 6.6% and 2.8%

for the quarter and six months ended December 31, 2009 when measured at

currency rates in effect in the comparable prior-year periods. The decreased

net sales for the periods was mainly the result of lower sales to

pharmaceutical customers. Approximately 75% of R&D Europe sales are in non-

British pound sterling currencies (mainly Euro) which had a favorable impact

on consolidated net sales of approximately $1.6 million and $2.7 million,

respectively, for the quarter and six months ended December 31, 2009 as a

result of the change in exchange rates used to convert sales in other

currencies to British pounds sterling. In addition, consolidated net sales

were impacted favorably by $1.0 million and unfavorably by $1.3 million for

the quarter and six months ended December 31, 2009, respectively, as a result

of the change in exchange rates used to convert British pound sterling to

U.S. dollars.



QUARTER ENDED SIX MONTHS ENDED

- -

12/31/09 12/31/08 12/31/09 12/31/08

- - - -

Biotechnology 80.0% 77.2% 80.5% 79.2%

R&D Europe 53.9% 52.1% 53.7% 55.3%

Hematology 47.0% 43.5% 48.7% 43.9%

Consolidated gross margin 79.7% 78.3% 80.1% 79.8%



Consolidated gross margins, as a percentage of consolidated net sales,

increased from 78.3% and 79.8% for the quarter and six months ended December

31, 2008 to 79.7% and 80.1% for the quarter and six months ended December 31,

2009. The increases were primarily the result of improved margins in the

Biotechnology and Hematology Divisions due to incremental profit on increased

sales volumes.



Income taxes for both the quarter and six months ended December 31, 2009 were

provided at rates of 32.6% of consolidated earnings before income taxes, as

compared to 30.8% and 32.3% for the same prior-year periods. The U.S credit

for research and development expired at the end of calendar 2007 and was not

renewed until the quarter ended December 31, 2008, resulting in a lower

effective tax rate for the quarter ended December 31, 2008. Foreign income

taxes have been provided at rates that approximate the tax rates in the

countries in which R&D Europe and R&D China operate. The Company expects its

fiscal 2010 effective income tax rate to range from approximately 32.0% to

33.0%.



The Company operates internationally, and thus is subject to potentially

adverse movements in foreign currency rate changes. Approximately 30% of

consolidated net sales are made in foreign currencies including 16% in euro,

7% in British pound sterling, 3% in Chinese yuan and the remaining 4% in

other European currencies. As a result, the Company is exposed to market risk

mainly from foreign exchange rate fluctuations of the euro, British pound

sterling and the Chinese yuan as compared to the U.S. dollar as the financial

position and operating results of the Company's foreign operations are

translated into U.S. dollars for consolidation.



Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.0/5 (1 vote)

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