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Techne Fiscal Q4 Earnings Beat Estimates; Shares Gain - Analyst Blog

Techne Corp. ( TECH ) posted a 7.3% rise in adjusted earnings per share to 88 cents for the fourth quarter fiscal 2014 (ended Jun 30, 2014) from 82 cents in the year-ago quarter. With this, the company surpassed the Zacks Consensus Estimate of 85 cents.

Following the earnings release, shares of TECH rose 0.2% to close at $94.35 in the last reported session.

However, net earnings fell 5.6% to $26.8 million from $28.4 million a year ago while on a per share basis, it declined 6.5% to 72 cents from 77 cents in the fourth quarter of fiscal 2013.

Techne Corporation - Earnings Surprise | FindTheBest

Revenue Details

Fiscal fourth quarter revenues spiked 16.4% to $92.5 million from $79.5 million in the same period of fiscal 2013 and almost in line with the Zacks Consensus Estimate of $92 million.

Revenues from the company's Biotechnology segment improved 4.1% to $76.7 million while organic growth for the segment was 1% during the quarter. The Clinical Controls segment reported revenues of $15.8 million, reflecting an impressive increase of 177.2%, primarily due to the Bionostics acquisition. Organic growth for this segment was 8%.

Margins

TECH reported a 7.6% rise in gross profit to $63.6 million from $59.1 million in the year-ago quarter. However, gross margin contracted 570 basis points (bps) to 68.7% from 74.4% a year ago.

Adjusted gross margin declined 320 bps to 73.4% primarily due to a change in the product mix from the higher margin Biotechnology segment sales to Clinical Controls segment sales as a result of the Bionostics acquisition.

Operating earnings declined 2.4% to $38.8 million from $39.8 million a year ago while operating margin contracted 810 bps to 42.0% from 50.1% in the comparable fiscal 2013 quarter.

Fiscal 2014 Results

For fiscal 2014, TECH posted adjusted earnings per share of $3.39, up 5.9% from $3.20 per share in fiscal 2013. Net earnings for the fiscal year went down 1.4% to $110.9 million from $112.6 million in fiscal 2013.

Adjusted earnings per share exclude intangible asset amortization, costs recognized upon the sale of inventory that was written-up to fair value as part of acquisition and professional fees related to acquisition activity in fiscal 2014, and the impact of certain tax events.

Revenues for the fiscal year stood at $357.8 million, up 15.2% from $310.6 million in fiscal 2013.

Financial Position

TECH exited the fiscal year with cash and cash equivalents of $318.6 million, up a significant 94.5% from $163.8 million as of Jun 30, 2013. Notes payable (including current portion) stood at $12.9 million at the end of fiscal 2014 versus none in fiscal 2013.

In fiscal 2014, cash flow from operating activities increased 10.7% to $136.8 million from $123.6 million in fiscal 2013. Capital expenditure declined 38.7% to $13.8 million from $22.5 million incurred last year.

Zacks Rank

Currently, TECH carries a Zacks Rank #2 (Buy). Other well-placed stocks in the medical instruments industry include Alphatec Holdings, Inc. ( ATEC ), RTI Surgical Inc. ( RTIX ) and Bacterin International Holdings, Inc. ( BONE ). While Alphatec Holdings and RTI Surgical sport a Zacks Rank #1 (Strong Buy), Bacterin International Holdings carries the same rank as TECH.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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