Techne Corporation Releases Unaudited Second Quarter Results for Fiscal Year 2008
Net earnings as a percentage of net sales improved to 38.9% for thesix months ended December 30, 2007 from 36.5% in the first six months of lastyear. The improvement in net earnings was mainly due to increased consolidatednet sales. The favorable impact on consolidated net earnings of the change inexchange rates used to convert R&D Europe results from British pounds to U.S.dollars was $339,000 ($.01 per diluted share) for the quarter and $742,000($.02 per diluted share) for the six months ended December 31, 2007.
Consolidated net sales for the quarter and six months ended December 31,2007 were $62.1 million and $120.1 million, respectively. This was an increaseof 18.4% and 14.6% from the quarter and six months ended December 31, 2006,respectively. Consolidated net sales were favorably affected by the strengthof the British pound as compared to the U.S. dollar. Excluding the effect ofchanges in foreign currency exchange rates, consolidated net sales increased16.5% and 12.6% for the quarter ended and six months ended December 31, 2007,respectively, from the comparable prior year periods.
Biotechnology net sales, which include sales by R&D Systems' BiotechnologyDivision, R&D Systems China and BiosPacific, were $39.1 million and$78.0 million, for the quarter and six months ended December 31, 2007,increases of 17.1% and 12.5%, respectively. This improvement was primarilythe result of increased volume and the timing of shipments to diagnosticcustomers. The timing of diagnostic customer sales is not predictable andthese sales increases are not necessarily indicative of future sales.Excluding the increased sales to diagnostic customers, Biotechnology net salesincreased 12.9% and 12.3% for the quarter ended and six months ended December31, 2007, respectively, from the comparable prior year periods.
R&D Europe's net sales for the quarter and six months ended December 31,2007 were $19.0 million and $34.5 million, increases of 24.7% and 22.3%,respectively, from the same prior-year periods. In British pounds, R&DEurope's net sales increased 18.5% and 14.8% for the quarter and six monthsended December 31, 2007. Hematology net sales for the quarter and six monthsended December 31, 2007 were $4.0 million and $7.6 million, increases of 3.8%and 4.1%, respectively, compared to the quarter and six months ended December31, 2006.
Tom Oland, President and Chief Executive Officer of Techne Corporation,said, "Second quarter sales exceeded our expectations in all segments of ourbusiness and in nearly all product lines and geographical territories.However, given the exceptionally strong sales growth rate in this quarter anddue to the Easter holiday falling in March 2008, we caution our shareholdersnot to expect a similar sales growth rate in our third fiscal quarter."
Mr. Oland added, "Our business is doing well. We continue to release newproducts and build for our future. For fiscal 2008, given current trends forour specific products, we continue to target revenue growth in the range of 8%to 11%."
Consolidated gross margins were 79.5% and 79.3% for the quarter and sixmonths ended December 31, 2007 respectively, compared to 79.6% and 79.1% forthe quarter and six months ended December 31, 2006. Biotechnology grossmargins decreased to 79.4% and 79.8% for the quarter and six months endedDecember 31, 2007 from 80.8% and 80.2% for the sa
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