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Techne Corp. Reports Operating Results (10-Q)

May 07, 2010 | About:
10qk

10qk

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Techne Corp. (TECH) filed Quarterly Report for the period ended 2010-03-31.

Techne Corp. has a market cap of $2.31 billion; its shares were traded at around $62.03 with a P/E ratio of 22.2 and P/S ratio of 8.9. The dividend yield of Techne Corp. stocks is 1.6%. Techne Corp. had an annual average earning growth of 15.7% 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, Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Consolidated net sales and consolidated net earnings increased 3.6% and

17.2%, respectively, for the quarter ended March 31, 2010 compared to the

quarter ended March 31, 2009. Consolidated net sales and consolidated net

earnings increased 1.6% and 5.0% for the nine months ended March 31, 2010

compared to the nine months ended March 31, 2009, respectively. Consolidated

net earnings for the quarter and nine months ended March 31, 2010 included a

$4.7 million tax benefit as a result of a foreign exchange loss for tax

purposes on the repatriation of prior-year earnings from R&D Europe to the

U.S. Without the tax benefit, consolidated net earnings would have increased

0.3% for the quarter ended March 31, 2010 and decreased 0.8% for the nine

months ended March 31, 2010.



Biotechnology net sales increased $1.0 million (2.3%) and $1.0 million

(0.8%), respectively, for the quarter and nine months ended March 31, 2010

compared to the same prior-year periods. The increase in the quarter was

mainly the result of increased sales volume. North American biotechnology

sales to industrial pharmaceutical and biotechnology customers increased 2.0%

during the quarter ended March 31, 2010. Biotechnology sales to its academic

customers and Pacific Rim distributors and sales in China grew 3.5%, 12.6%

and 10.3%, respectively, during the third quarter of fiscal 2010 compared to

the same prior-year period. Sales to North American industrial

pharmaceutical and biotechnology customers decreased 2.5% during the nine

months ended March 31, 2010 as compared to the first nine months of the prior

fiscal year. Biotechnology sales to its academic customers and Pacific Rim

distributors and sales in China grew 4.0%, 10.6% and 20.7%, respectively, in

the first nine months of fiscal 2010.



R&D Europe net sales increased $868,000 (4.7%) and $1.3 million (2.3%) for

the quarter and nine months ended March 31, 2010, respectively, from the

comparable prior-year periods. R&D Europe's net sales decreased 1.9% and 2.5%

for the quarter and nine months ended March 31, 2010, respectively, when

measured at currency rates in effect in the comparable prior-year periods.

The decrease in net sales for both 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 euros) which had an

unfavorable impact on consolidated net sales of approximately $263,000 for

the quarter ended March 31, 2010 and a favorable impact on net sales of $2.4

million for the nine months ended March 31, 2010 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

$1.5 million and $155,000 for the quarter and nine months ended March 31,

2010, respectively, as a result of the change in exchange rates used to

convert British pound sterling to U.S. dollars.



QUARTER ENDED NINE MONTHS ENDED

- -

3/31/10 3/31/09 3/31/10 3/31/09

- - - -

Biotechnology 79.4% 79.4% 80.1% 79.3%

R&D Europe 52.7% 48.6% 53.3% 53.0%

Hematology 49.3% 47.6% 48.9% 45.1%

Consolidated gross margin 79.5% 78.9% 79.9% 79.5%



Income taxes for the quarter and nine months ended March 31, 2010 were

provided at rates of 21.8% and 28.8% of consolidated earnings before income

taxes, respectively, as compared to 32.3% both of the same prior-year

periods. Included in income taxes during the quarter and nine months ended

March 31, 2010, was a $4.7 million tax benefit from a foreign exchange loss

for tax purposes related to the repatriation of earnings from R&D Europe to

the U.S. Excluding this tax benefit, the effective tax rates for the quarter

and nine months ended March 31, 2010 would have been 33.1% and 32.8%,

respectively. 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 fourth quarter 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 euros,

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

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