SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999, or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________to___________
__________________
Commission file number 0-17272
__________________
TECHNE CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1427402
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
614 MCKINLEY PLACE N.E. (612) 379-8854
MINNEAPOLIS, MN 55413 (Registrant's telephone number,
(Address of principal including area code)
executive offices) (Zip Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes (X) No ( )
At May 3, 1999, 20,201,423 shares of the Company's Common Stock (par value
$.01) were outstanding.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
TECHNE CORPORATION & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
3/31/99 6/30/98
------------ -----------
ASSETS
Cash and cash equivalents $ 11,258,651 $27,372,345
Short-term investments 14,495,879 15,321,935
Accounts receivable (net) 13,643,737 10,001,937
Inventories 7,189,577 3,810,600
Deferred income taxes 1,787,000 1,583,000
Other current assets 619,822 431,187
------------ -----------
Total current assets 48,994,666 58,521,004
Deferred income taxes 2,767,000 1,798,000
Fixed assets (net) 13,469,818 11,687,300
Intangible assets (net) 47,959,411 293,854
Real estate deposit (Note D) 6,249,018 -
Other assets 1,010,800 618,723
------------ -----------
TOTAL ASSETS $120,450,713 $72,918,881
============ ===========
LIABILITIES & EQUITY
Trade accounts payable $ 2,642,008 $ 2,203,130
Salary and related accruals 2,124,459 2,005,428
Other payables 5,695,961 1,039,334
Income taxes payable 1,907,060 2,185,122
------------ -----------
Total current liabilities 12,369,488 7,433,014
Deferred rent 1,886,400 1,655,100
Royalty payable 12,459,000 -
Common stock, par value $.01 per
share; authorized 50,000,000;
issued and outstanding
20,196,055 and 19,049,983,
respectively 201,961 190,500
Additional paid-in capital 34,357,540 13,714,445
Retained earnings 58,928,276 49,446,319
Accumulated foreign currency
Translation adjustments 248,048 479,503
------------ -----------
Total stockholders' equity 93,735,825 63,830,767
------------ -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $120,450,713 $72,918,881
============ ===========
See notes to unaudited Consolidated Financial Statements.
TECHNE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
QUARTER ENDED NINE MONTHS ENDED
------------------------ ------------------------
3/31/99 3/31/98 3/31/99 3/31/98
----------- ----------- ----------- -----------
Sales $23,789,055 $17,698,472 $66,588,506 $48,708,472
Cost of sales 7,169,105 5,490,966 20,012,235 14,922,728
----------- ----------- ----------- -----------
Gross margin 16,619,950 12,207,506 46,576,271 33,785,744
Operating expenses
(income):
Selling, general and
administrative 4,268,228 3,748,958 13,167,506 11,602,557
Research and development 3,004,721 2,725,251 8,698,832 7,706,757
Amortization expense 2,394,662 9,662 7,183,986 61,796
Interest income (227,664) (314,023) (670,747) (844,390)
----------- ----------- ----------- -----------
9,439,947 6,169,848 28,379,577 18,526,720
----------- ----------- ----------- -----------
Earnings before
income taxes 7,180,003 6,037,658 18,196,694 15,259,024
Income taxes 2,643,000 2,015,000 6,548,000 4,846,000
----------- ----------- ----------- -----------
NET EARNINGS $ 4,537,003 $ 4,022,658 $11,648,694 $10,413,024
=========== =========== =========== ===========
BASIC EARNINGS PER SHARE $ 0.23 $ 0.21 $ 0.58 $ 0.55
DILUTED EARNINGS PER SHARE $ 0.22 $ 0.20 $ 0.56 $ 0.53
See notes to unaudited Consolidated Financial Statements.
TECHNE CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
NINE MONTHS ENDED
-------------------------
3/31/99 3/31/98
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $11,648,694 $10,413,024
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 8,830,039 1,699,813
Deferred income taxes (1,200,000) (181,000)
Deferred rent 231,300 534,600
Tax benefit from exercise of options 413,000 127,000
Other 402,271 205,900
Change in current assets and current
liabilities, net of acquisition:
(Increase) decrease in:
Accounts receivable (3,780,606) (1,152,283)
Inventories 2,295,976 192,467
Other current assets (43,544) (7,503)
Increase (decrease) in:
Trade account/other payables (1,373,875) 1,131,345
Salary and related accruals 123,255 225,532
Income taxes payable (244,582) 392,725
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 17,301,928 13,581,620
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition (Note B) (24,989,543) -
Purchase of short-term investments (11,637,214) (20,145,831)
Proceeds from sale of short-term investments 12,463,270 11,968,197
Additions to fixed assets (3,121,109) (2,443,887)
Real estate deposit (Note D) (4,088,188) -
Proceeds from sale of fixed assets - 246,503
Increase in other long term assetS (900,000) (150,000)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (32,272,784) (10,525,018)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 989,672 653,488
Repurchase of common stock (2,075,683) (280,000)
----------- -----------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (1,086,011) 373,488
EFFECT OF EXCHANGE RATE CHANGES ON CASH (56,827) 111,134
----------- -----------
NET CHANGE IN CASH AND EQUIVALENTS (16,113,694) 3,541,224
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 27,372,345 8,598,367
----------- -----------
CASH AND EQUIVALENTS AT END OF PERIOD $11,258,651 $12,139,591
=========== ===========
See notes to unaudited Consolidated Financial Statements.
TECHNE CORPORATION & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. BASIS OF PRESENTATION:
The unaudited Consolidated Financial Statements have been prepared in accordance
with generally accepted accounting principles and with instructions to Form 10-Q
and Article 10 of Regulation S-X. The accompanying unaudited Consolidated
Financial Statements reflect all adjustments which are, in the opinion of
management, necessary to a fair presentation of the results for the interim
periods presented. All such adjustments are of a normal recurring nature.
A summary of significant accounting policies followed by the Company is detailed
in the Annual Report to Shareholders for Fiscal 1998. The Company follows these
policies in preparation of the interim Financial Statements. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. It is suggested that the Consolidated Financial
Statements be read in conjunction with the Company's Consolidated Financial
Statements and Notes thereto for the fiscal year ended June 30, 1998 included in
the Company's Annual Report to Shareholders for Fiscal 1998.
Certain Consolidated Balance Sheet captions appearing in this interim report are
as follows:
3/31/99 6/30/98
----------- -----------
ACCOUNTS RECEIVABLE
Accounts receivable $13,909,737 $10,270,937
Less reserve for bad debts 266,000 269,000
----------- -----------
NET ACCOUNTS RECEIVABLE $13,643,737 $10,001,937
=========== ===========
INVENTORIES
Raw materials $ 2,070,248 $ 2,125,365
Supplies 141,033 145,539
Finished goods 4,978,296 1,539,696
----------- -----------
TOTAL INVENTORIES $ 7,189,577 $ 3,810,600
=========== ===========
FIXED ASSETS
Laboratory equipment $11,108,313 $ 9,944,951
Office equipment 3,107,723 2,923,110
Leasehold improvements 11,938,979 10,243,142
----------- -----------
26,155,015 23,111,203
Less accumulated depreciation
and amortization 12,685,197 11,423,903
----------- -----------
NET FIXED ASSETS $13,469,818 $11,687,300
=========== ===========
INTANGIBLE ASSETS
Customer list $18,010,000 $ 1,010,000
Technology licensing agreements 500,000 500,000
Goodwill 39,075,090 1,225,547
----------- -----------
57,585,090 2,735,547
Less accumulated amortization 9,625,679 2,441,693
----------- -----------
NET INTANGIBLE ASSETS $47,959,411 $ 293,854
=========== ===========
Effective July 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income," which requires disclosures
of comprehensive income and its components in the Company's financial
statements. The Company's total comprehensive income for the quarters ended
March 31, 1999 and 1998 were $4,333,849 and $4,104,732, respectively. The
Company's total comprehensive income for the nine months ended March 31, 1999
and 1998 were $11,417,239 and $10,484,592, respectively. The Company's
comprehensive income consists of net income, unrealized holding gains and losses
on securities and foreign currency translation adjustments.
On June 30, 1999, the Company will adopt Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information," which requires the disclosure of financial and descriptive
information about the reportable operating segments of the Company.
B. ACQUISITION:
On July 1, 1998, the Company, through its Research and Diagnostics Systems, Inc.
subsidiary, acquired the research products business of Genzyme Corporation.
Assets acquired were as follows:
Inventories $ 5,660,000
Equipment 320,000
Customer list 17,000,000
-----------
$22,980,000
===========
The purchase price paid and payable for the acquisition is as follows: $24.76
million cash, 987,206 shares of Techne common stock valued at $17 million and
$18.84 million of royalties (present value of an estimated $23.7 million payable
over five years) on the Company's biotechnology sales. The excess of the
consideration (including acquisition costs) over the fair market value of the
assets acquired has been recorded as goodwill and is being amortized on a
straight-line basis over six years. The customer list is being amortized on a
declining basis over an estimated economic life of five years.
Pro forma financial information for the quarter and nine months ended March 31,
1998, presented as if the acquisition had occurred on July 1, 1997, are as
follows (in 000's except earnings per share data):
QUARTER ENDED NINE MONTHS ENDED
------------- -----------------
3/31/98 3/31/98
------- -------
Sales $21,526 $59,608
Net earnings 1,572 3,357
Basic earnings per share .08 .17
Diluted earnings per share .08 .16
C. EARNINGS PER SHARE:
Shares used in the earnings per share computations are as follows:
QUARTER ENDED NINE MONTHS ENDED
---------------------- ----------------------
3/31/99 3/31/98 3/31/99 3/31/98
---------- ---------- ---------- ----------
Weighted average common shares
outstanding-basic 20,124,535 19,005,562 20,096,055 18,923,525
Dilutive effect of stock
options and warrants 667,536 637,260 530,168 668,917
---------- ---------- ---------- ----------
Average common shares
outstanding--diluted 20,792,071 19,642,822 20,626,223 19,592,442
========== ========== ========== ==========
D. REAL ESTATE ACQUISITION:
On January 22, 1999, the Company entered into agreements to acquire real estate
which its wholly-owned subsidiary, R&D Systems, currently occupies in
Minneapolis, Minnesota. The purchase price of the properties is approximately
$28 million. Cash of $4 million and 100,000 shares of Common Stock valued at
$2.16 million were placed in escrow during the third quarter of fiscal 1999 in
anticipation of the expected closing in July, 1999. The remainder of the
purchase price is expected to be obtained through mortgage financing.
In addition to agreements to purchase the currently occupied properties, the
Company has acquired options on property adjacent to its R&D Systems' facility
to provide future expansion space for the Company.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations Quarter and Nine Months Ended March 31, 1999
vs. Quarter and Nine Months Ended March 31, 1998
Techne Corporation (Techne) has two operating subsidiaries: Research and
Diagnostic Systems, Inc. (R&D Systems) located in Minneapolis, Minnesota and R&D
Systems Europe Ltd. (R&D Europe) located in Abingdon, England. R&D Systems has
two divisions: Biotechnology and Hematology. The Biotechnology Division
manufactures purified cytokines (proteins), antibodies and assay kits, which are
sold primarily to biomedical researchers and clinical research laboratories.
The Hematology Division develops and manufactures whole blood hematology
controls and calibrators which are sold to hospital and clinical laboratories to
check the performance of their hematology instruments to assure the accuracy of
hematology test results. R&D Europe sells R&D Systems' biotechnology products
in Europe, both directly and through a sales subsidiary in Germany. The Company
has a foreign sales corporation, Techne Export Inc.
From November 1997 through March 1999, Techne purchased a total of $4 million of
preferred stock of ChemoCentryx, Inc. (CCX), representing approximately 44% of
issued and outstanding voting shares. In addition, Techne is obligated to
purchase up to an additional $1 million of preferred stock in fiscal 2000 upon
CCX's achievement of certain milestones. After purchase of the additional
preferred shares, Techne will own approximately 49% of the issued and
outstanding voting shares (assuming no investment by other parties). Techne has
consolidated CCX into its financial statements due to the limited amount of cash
consideration provided by the holders of the common shares of CCX. CCX is a new
technology and drug development company working in the area of chemokines.
Chemokines are cytokines which regulate the trafficking patterns of leukocytes,
the effector cells of the human immune system. In conjunction with the equity
investment and joint research efforts, Techne obtains exclusive worldwide
research and diagnostic marketing rights to chemokine proteins, antibodies and
receptors discovered or developed by CCX or R&D Systems.
Net Sales
Net sales for the quarter ended March 31, 1999 were $23,789,055, an increase of
$6,090,583 (34%) from the quarter ended March 31, 1998. Sales for the nine
months ended March 31, 1999 increased $17,880,034 (37%) from $48,708,472 to
$66,588,506. R&D Systems sales increased $4,788,711 (37%) and $13,521,150 (38%)
for the quarter and nine months ended March 31, 1999, respectively. R&D Europe
sales increased $1,301,872 (27%) and $4,358,884 (33%) for the quarter and nine
months ended March 31, 1999, respectively.
The increase in sales for the quarter and nine months was due, in part, to the
acquisition of Genzyme Corporation's research products business on July 1, 1998.
In addition, the increase in consolidated sales for the quarter and nine months
was due to increased sales of R&D Systems' cytokines, antibodies and
immunoassay kits to both R&D Systems customers and to former Genzyme customers
as they are converted from Genzyme products to R&D Systems products.
Gross Margins
Gross margins, as a percentage of sales, increased slightly from the prior year.
Margins for the third quarter of fiscal 1999 were 69.9% compared to 69.0% for
the same quarter in fiscal 1998. Margins for the nine months ended March 31,
1999 were 70.0% compared to 69.4% for the same period in fiscal 1998.
R&D Europe gross margins increased from 41.3% to 47.8% for the quarter and from
46.1% to 46.8% for the nine months ended March 31, 1999. Hematology Division
gross margins increased from 44.4% to 45.7% for the quarter and from 45.1% to
46.3% for the nine months ended March 31, 1999 as a result of changes in product
mix and increased volumes. Biotechnology Division gross margins decreased from
72.5% to 70.2% for the quarter and from 72.2% to 70.7% for the nine months ended
March 31, 1999. The decrease in Biotechnology Division gross margins for the
quarter and nine months was a result of lower gross profit levels on the
inventory acquired from Genzyme and the write-off of obsolete Genzyme packaging
and kit components due to a more rapid conversion of customers to R&D Systems
labeled product than anticipated.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $519,270 (14%) from the
third quarter of fiscal 1998 to the third quarter of fiscal 1999. These
expenses also increased $1,564,949 (13%) for the first nine months of fiscal
1999. The majority of the increase for the quarter and nine months was due to
additional sales personnel added in the U.S. and Europe as a result of the
Genzyme acquisition and additional advertising and promotion activities.
Research and Development Expenses
Research and development expenses increased $279,470 (10%) and $992,075 (13%)
for the quarter and nine months ended March 31, 1999. The increase related to
products currently under development, many of which have been or will be
released in fiscal 1999 and fiscal 2000. Products currently under development
include both biotechnology and hematology products.
Amortization Expense
Amortization expense increased for the quarter and nine months ended March 31,
1999 as a result of the customer list and goodwill associated with the Genzyme
acquisition.
Net Earnings
Earnings before income taxes increased $1,142,345 from $6,037,658 in the third
quarter of fiscal 1998 to $7,180,003 in the third quarter of fiscal 1999.
Earnings before taxes for the nine months increased $2,937,670 from $15,259,024
to $18,196,694. The increase in earnings before income taxes was due mainly to
an increase in Biotechnology Division earnings of $707,987 and $2,430,073,
an increase in R&D Europe earnings of $451,449 and $818,129, and an increase
in Hematology Division earnings of $188,618 and $393,668 for the quarter and
nine months ended March 31, 1999. These increases were offset by increased
net losses of CCX of $139,548 and $751,886 for the quarter and nine months
ended March 31, 1999.
Income taxes for the quarter and nine months ended March 31, 1999 were provided
at a rate of approximately 37% and 36% of consolidated pretax earnings compared
to 33% and 32% for the prior year. The increase in the tax rate is mainly due
to the net loss by CCX in the third quarter and first nine months of fiscal 1999
for which no tax benefit has been provided. U.S. federal taxes have been
reduced by the credit for research and development expenditures and the benefit
of the foreign sales corporation. Foreign income taxes have been provided at
rates which approximate the tax rates in the United Kingdom and Germany.
Liquidity and Capital Resources
At March 31, 1999, cash and cash equivalents and short-term investments were
$25,754,530 compared to $42,694,280 at June 30, 1998. The decrease from June
30, 1998 was due to the cash outlay for the Genzyme acquisition. The Company
believes it can meet its future cash, working capital and capital addition
requirements (excluding real estate to be acquired in July, 1999) through
currently available funds, cash generated from operations and maturities of
short-term investments. The Company has an unsecured line of credit of
$750,000. The interest rate on the line of credit is at prime. There were no
borrowings on the line in the prior or current fiscal years.
Cash Flows From Operating Activities
The Company generated cash of $17,301,928 from operating activities in the first
nine months of fiscal 1999 compared to $13,581,620 for the first nine months of
fiscal 1998. The increase was mainly the result of increased net earnings
adjusted for noncash expenses partially offset by decreased trade accounts and
other payables.
Cash Flows From Investing Activities
On July 1, 1998 the Company acquired the research products business of Genzyme
Corporation for $24.76 million cash, $17 million common stock and royalties on
the Company's biotechnology sales for five years. Cash and cash equivalents at
June 30, 1998 and maturities of short-term investments were used to finance the
cash portion of the acquisition.
During the nine months ended March 31, 1999 short-term investments decreased by
$826,056. During the nine months ended March 31, 1998, the Company increased
short-term investments by $8,177,634. The Company's investment policy is to
place excess cash in short-term tax-exempt bonds. The objective of this policy
is to obtain the highest possible return with the lowest risk, while keeping
the funds accessible.
Capital additions were $3,121,109 for the first nine months of fiscal 1999,
compared to $2,443,887 for the first nine months of fiscal 1998. Included in
the fiscal 1999 and 1998 additions were $1,703,000 and $1,180,110 for leasehold
improvements related to remodeling of facilities by R&D Systems. The remaining
additions in fiscal 1999 and 1998 were for laboratory and computer equipment.
Total expenditures for capital additions and leasehold improvements planned for
the remainder of fiscal 1999 are expected to cost approximately $3.0 million and
are expected to be financed through currently available funds and cash
generated from operating activities.
During the third quarter of fiscal 1999, the Company placed $4 million in escrow
as a deposit on real estate it plans to acquire in July 1999.
Cash Flows From Financing Activities
Cash of $989,672 and $653,488 was received during the nine months ended March
31, 1999 and 1998, respectively, for the exercise of options for 181,870 and
73,791 shares of common stock. During the first nine months of fiscal 1999 and
1998, options for 20,000 and 55,835 shares of common stock were exercised by the
surrender of 4,404 and 20,624 shares of the Company's common stock with fair
market values of $92,424 and $360,194, respectively.
During the first nine months of fiscal 1999 and 1998, the Company purchased and
retired 138,600 and 20,000 shares, respectively, of Company common stock at
market values of $2,075,683 and $280,000. The Board of Directors has authorized
the Company, subject to market conditions and share price, to purchase and
retire up to $10 million of its common stock. Through May 3, 1999, 575,600
shares have been purchased at a market value of $6,887,847.
The Company has never paid cash dividends and has no plans to do so in fiscal
1999.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
At March 31, 1999, the Company had an investment portfolio of fixed income
securities, excluding those classified as cash and cash equivalents, of
$14,495,879. These securities, like all fixed income instruments, are subject
to interest rate risk and will decline in value if market interest rates
increase. However, the Company has the ability to hold its fixed income
investments until maturity and therefore the Company does not expect to
recognize an adverse impact in income or cash flows.
The Company operates internationally, and thus is subject to potentially adverse
movements in foreign currency rate changes. The Company does not enter into
foreign exchange forward contracts to reduce its exposure to foreign
currency rate changes on intercompany foreign currency denominated balance
sheet positions. Historically, the effect of movements in the exchange rates
has been immaterial to the consolidated operating results of the Company.
Y2K AND EURO CURRENCY ISSUES
The Company must take steps to ensure that it is not adversely affected by Y2K
software failures which may arise in software applications where two-year digits
are used to define the applicable year. The Company is conducting a review of
all of its computer systems (information technology as well as embedded systems)
to identify those areas that could be affected by Y2K noncompliance. The Company
plans to complete the process of upgrading those systems which may not be Y2K
compliant by mid 1999 and does not believe the cost of any such upgrades will be
material. The Company is in the process of developing contingency plans should
systems fail. The Company has also communicated with many of its suppliers and
service providers regarding compliance with Y2K requirements. As a result of
such inquiries, no significant deficiencies have been identified. The Company
will continue to monitor these third parties for Y2K compliance.
There can be no assurance, however, that there will not be a delay in, or
increased costs associated with, upgrading the Company's computer systems, which
could have a material adverse effect on the operations and financial position of
the Company. In addition, there can be no assurances that the Company's
customers and suppliers will not be adversely affected by their own Y2K issues,
which may indirectly adversely affect the Company.
The Company has implemented new accounting and operational software at its
European subsidiary, which accommodated the conversion on January 1, 1999 to a
common currency, the "Euro," by members of the European Union. The software is
also Y2K compliant.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
No change
ITEM 2 - CHANGES IN SECURITIES
Effective February 26, 1999, the Company issued to Hillcrest Development, a
Minnesota Limited Partnership, 100,000 shares of Common Stock in connection
with the acquisition of real estate. The number of shares issued was based on
$21.6083 per share, being the average market value of the Company's Common
Stock during the 15 trading days prior to February 26, 1999. The issuance
of such securities was deemed to be exempt from registration under the
Securities Act of 1933 by virtue of Section 4(2) thereof. Hillcrest
represented its intention to acquire the stock for investment purposes only
and not with a view to the distribution thereof; in addition, a restrictive
securities legend has been placed on the stock certificate representing the
shares.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 - SUBMISSION OF MATTERS TO VOTE OF SHAREHOLDERS
None
ITEM 5 - OTHER INFORMATION
Forward Looking Information and Cautionary Statements: Statements in this
filing, and elsewhere, which look forward in time involve risks and
uncertainties which may affect the actual results of operations. The
following important factors, among others, have affected and, in the future,
could affect the Company's actual results: the level of success in converting
customers and distributors of Genzyme Corporation's research product business
to the Company and selling the Company's broader range of products to the
former Genzyme customers and distributors, the introduction and acceptance of
new biotechnology and hematology products, the levels and particular
directions of research into cytokines by the Company's customers, the impact
of the growing number of producers of cytokine research products and related
price competition, the retention of hematology OEM and proficiency survey
business, the Company's expansion of marketing efforts in Europe, and the
costs and results of research and product development efforts of the Company
and of companies in which the Company has invested or with which it has formed
strategic relationships.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
See exhibit index immediately following signature page.
B. REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter ended March 31,
1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TECHNE CORPORATION
(Company)
Date: May 14, 1999 /s/ Thomas E. Oland
-------------------------------
Thomas E. Oland
President, Chief Executive and
Financial Officer
EXHIBIT INDEX
TO
FORM 10-Q
TECHNE CORPORATION
Exhibit # Description
- ---------- ------------------
10.1 Extension, dated March 31, 1999, to Employment
Agreement with Thomas C. Detwiler, Ph.D.
10.2 Extension, dated March 31, 1999, to Employment
Agreement with Monica Tsang, Ph.D.
10.3 Extension, dated March 31, 1999, to Employment
Agreement with Marcel Veronneau.
10.4 Second Amendment, dated February 2, 1999, to Purchase
Agreement dated January 22, 1999 between R&D Systems, Inc.
and Hillcrest Development relating to the purchase of
property at 614 and 640 McKinley Place NE and 2201 Kennedy
Street in Minneapolis, Minnesota
10.5 Third Amendment, dated April 3, 1999, to Purchase
Agreement dated January 22, 1999 between R&D Systems, Inc.
and Hilllcrest Development.
10.6 Phase I Option Agreement, dated February 10, 1999, between
R&D Systems, Inc. and Hillcrest Development and form of
Purchase Agreement relating to the purchase of property at
2101 Kennedy Street in Minneapolis, Minnesota.
10.7 First Amendment, dated April 10, 1999, to Phase I Option
Agreement dated February 10, 1999.
10.8 Phase II Option Agreement, dated February 10, 1999,
between R&D Systems, Inc. and Hillcrest Development and
form of Purchase Agreement relating to the purchase of
property at 2001 Kennedy Street in Minneapolis, Minnesota.
27 Financial Data Schedule