Techne Corporation's (NASDAQ: TECH) consolidated pretax net earnings for the quarter ended March 31, 2011 increased 9.5% to $45.4 million compared with $41.4 million for the quarter ended March 31, 2010, mainly as a result of increased sales and foreign exchange transaction gains, partially offset by increased selling, general and administrative expenses. For the nine months ended March 31, 2011, Techne's consolidated pretax net earnings increased 3.5% to $122.0 million compared with $117.8 million per share for the nine months ended March 31, 2010, primarily as a result of increased sales and foreign exchange transaction gains.
Techne's consolidated net earnings for the quarter ended March 31, 2011 decreased 4.1% to $31.1 million or $0.84 per diluted share compared with $32.4 million or $0.87 per diluted share for the quarter ended March 31, 2010. For the nine months ended March 31, 2011, Techne's consolidated net earnings increased 0.1% to $84.0 million or $2.26 per diluted share compared to $83.9 million or $2.25 per diluted share for the nine months ended March 31, 2010. The March 31, 2010 quarter and nine month results included a $4.7 million tax benefit, equating to $.12 per share, from a foreign exchange tax loss on Techne's repatriation of 50 million pound sterling from R&D Systems Europe to its U.S. based parent.
Consolidated net sales for the quarter and nine months ended March 31, 2011 were $76.3 million and $211.9 million, increases of 8.5% and 4.7%, respectively, from the quarter and nine months ended March 31, 2010. Consolidated net sales for the quarter were positively affected by a weaker U.S. dollar as compared to foreign currencies for the quarter ended March 31, 2010. Consolidated net sales for the nine months were negatively affected by a stronger U.S. dollar as compared to foreign currencies for the nine months ended March 31, 2010. Excluding the effect of changes in foreign currency exchange rates, consolidated net sales increased 7.8% and 5.7% for the quarter and nine months ended March 31, 2011, respectively, from the comparable prior-year periods.
Biotechnology net sales, which include sales by R&D Systems' Biotechnology Division, R&D Systems China and BiosPacific, were $49.9 million for the quarter ended March 31, 2011, an increase of 8.1% from $46.2 million for the quarter ended March 31, 2010. North American biotechnology sales to industrial pharmaceutical and biotechnology customers increased 9.9% during the third quarter of fiscal 2011 as compared to the third quarter of fiscal 2010. Biotechnology sales to academic customers, sales to Pacific Rim distributors and sales in China grew 6.4%, 3.3% and 46.0%, respectively, in the third quarter of fiscal 2011 as compared to the third quarter of fiscal 2010. Biotechnology sales for the nine months ended March 31, 2011, were $141.0 million, an increase of 6.3% from $132.6 million for the nine months ended March 31, 2010. North American biotechnology sales to industrial pharmaceutical and biotechnology customers increased 5.7% during the nine months ended March 31, 2011 as compared to the first nine months of fiscal 2010. Biotechnology sales to academic customers, to Pacific Rim distributors, and sales in China grew 7.7%, 2.4% and 25.3%, respectively, in the first nine months of fiscal 2011.
R&D Europe's net sales for the quarter and nine months ended March 31, 2011 were $21.2 million and $56.2 million, increases of 10.5% and 0.8%, respectively, from the same prior-year periods. R&D Europe's net sales increased 8.4% and 4.4% for the quarter and nine months ended March 31, 2011 when measured at currency rates in effect in the comparable prior-year period. Hematology net sales for the quarter and nine months ended March 31, 2011 were $5.2 million and $14.7 million, increases of 4.3% and 5.4% from the comparable prior-year periods.
Selling, general and administrative expenses for the quarter and nine months ended March 31, 2011 increased $1.6 million (20.4%) and $439,000 (1.8%) from the quarter and nine months ended March 31, 2010. The increase in selling, general and administrative expense for the quarter and nine months resulted primarily from increased profit sharing expense of $704,000 and $418,000, respectively.
Foreign exchange transaction gains for the quarter and nine months ended March 31, 2011 were $249,000 and $667,000, respectively, compared to foreign exchange transaction losses of $372,000 and $329,000 for the quarter and nine months ended March 31, 2010, respectively.
The effective tax rate for the quarter and nine months ended March 31, 2011 was 31.6% and 31.2% as compared to 21.8% and 28.8% for the same prior-year periods. The effective rates for the prior year periods were abnormally low due to the tax benefit received following repatriation of funds from the U.K. to the U.S. Excluding this benefit, the effective tax rates for the quarter and nine months ended March 31, 2010 would have been 33.1% and 32.8% for the quarter and nine months ended March 31, 2010, respectively, The improvement in the effective tax rate in fiscal 2011 was the result of renewal of the U.S. research and development credit and an increase in the deduction for qualified production activities.
Under separate press releases, the Company has announced two acquisitions subsequent to March 31, 2011. On April 1, 2011, the Company, through its R&D Systems and R&D Europe subsidiaries, acquired the assets of Boston Biochem, Inc., a Massachusetts based company, and Boston Biochem Limited, a U.K. based company. Boston Biochem, Inc. is a leading developer and manufacturer of innovative ubiquitin-related research products and Boston Biochem Limited was its Euorpean distributor. The two companies had combined product sales of approximately $2.5 million in calendar 2010. The combined Boston Biochem assets were acquired for approximately $8.0 million cash.
On April 28, 2011, the Company, through its R&D Systems and R&D Europe subsidiaries, acquired 100% ownership of Tocris Holdings Limited and Subsidiaries (Tocris). Tocris is a U.K based holding company with a development and manufacturing subsidiary located in Bristol, U.K. and a distribution subsidiary located in Missouri. Tocris is a leading supplier of reagents for non-clinical life science research. Tocris has a strong track record of profitable, cash generative growth with calendar 2010 revenues of approximately 11.7 million pounds Sterling ($18.2 million). Tocris was acquired for 75 million pounds Sterling (approximately $124 million) in cash.
SOURCE Techne Corporation
Techne Corporation's consolidated net earnings up 17.2% for quarter ended March 31, 2010