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.
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%.
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.
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.
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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