Measured Approach

Data as of

: 11/20/2009

Industry: Biotechnology & Drugs

Current Data

Current Price $67.12 PEG 1.4Market Cap ($M) 2499.98 EPS TTM ($) $2.76Shares Outstanding (M) 37.2450 P/E TTM 24.3Institutional Holdings % 78.6 EPS Estimated 2010 ($) $2.97Insider Holdings % 6.8 P/Estimated EPS 22.6Beta 0.70

MA Value ($) $89.72

Latest Quarter Reported 09/30/2009 Dividend Yield % 1.5

Techne Corporation (TECH) is a mid-cap biotechnology company that offers a goodrisk/reward profile. It is engaged in the development and manufacture of biotechnologyproducts and hematology calibrators and controls. The company appears to be richlypriced as compared to its competitors. However, we think this is a hidden gem.The company's strengths include a strong financial position with no long-term debt andcash in excess of current liabilities, expanding profit margins and outstanding return onequity.

Quick Facts

The results are in for the first quarter and Techne reported a decline in net earnings of 6.4% to $26.8 million ($0.72 per diluted share). In the prior year quarter, the companyreported net income of $28.6 million or $0.74 per diluted share. Consolidated net salesfor the quarter were $66.5 million, a 4.0% decrease from $69.32 million in the year-agoquarter. Four analysts estimated revenues of $66.70 million for the quarter.TECH announced that its Board of Directors has decided to pay a dividend of $0.26 pershare for the

quarter ended September 30, 2009. The quarterly dividend will be payableNovember 23, 2009 to all common shareholders of record on November 9, 2009. Futurecash dividends will be considered by the Board of Directors on a quarterly basis.Fr

om the company’s

FY2009 10K:

“TECHNE’s sales and earnings again reached record levels in

fiscal 2009, despite difficultworld economic conditions. Regardless of the economic environment, our long-terminvestment in the people, equipment and facilities that generate new productdevelopment continues to be the primary driver of our business, as it has for manyyears.Here are some of the highlights of our fiscal 2009 performance:

• Net earnings were $105.2

million or $2.78 per diluted share, an EPS increase of 5.3%,as compared with net earnings of $103.6 million, or $2.64 per diluted share in fiscal2008. Foreign currency fluctuations negatively affected net earnings by $4.5 million (12cents per share), resulting from strength in the U.S. dollar vs. the euro and British poundsterling. Net earnings were also affected by lower investment yields that reducedinterest income by $4.6 million (9 cents per share after tax).

• Net sales increased 2.5% to $264.0 million, compared with sales of $257.4 million, in

Fiscal 2008. Organic revenue growth, net of foreign currency exchange rate changes,was5.9% vs. 12.3% last year.

• Gross margins for fiscal 2009 were 79.0%, down from 79.5% last year, primarily due to

currency impacts; operating margin was 57.1%, up from 56.1%; and return on sales was39.9%, down from 40.2% due to the severe decline in interest income.

• Return on average invested capital (ROIC) was 22.3% in fiscal 2009, generating more

than 11% of economic value for our shareholders, when compared with TEC

HNE’s cost

of capital of approximately 11%.

• Return on average equity was also 22.3% (the same as ROIC since we have no debt)

and return on average assets was 21.5% for the year.

• Net cash provided by operations was $111.3 million and we returned $118.8

millionto shareholders during the year; $28.2 million in dividends and $90.6 million throughpurchases of 1.4 million shares of our common stock at an average purchase price of $63.82 per share. We closed the year with $264.8 million in cash and available-for-saleinvestments.

• We introduced 1,419 new products during fiscal 2009, bringing our product total to

nearly 14,000 products. Revenues from these new products amounted to $3.4 million intheir first year, representing greater than expected first year sales.Our Biotechnology segment, which represented 65.9% of TECHNE revenues in fiscal2009, grew 5.0% for the year vs. 13.0% in fiscal 2008, reflecting the pronouncedslowdown in the world economy. In that regard, key customer segment revenue growthrates were: Bio/Pharmaceutical 4.7%, International Distributors 6.2% and the Academicmarket 3.9%.

R&D Systems Europe (R&D Europe), which represented 27.5% of TECHNE’s

US dollar revenues in fiscal 2009, declined 4.2% during the year, as the result of currency translations, primarily the euro and the British pound sterling, both of whichweakened significantly versus the US dollar in fiscal 2009. Organically, excludingcurrency effects, R&D Europe grew 7.2% for the year, compared with 12.2% in fiscal2008. Thus far, biotechnology research in both European academic institutions andbio/pharmaceutical companies has been less severely impacted by the world recessionthan comparable institutions in the United States.

”

ANALYSIS OF THE BALANCE SHEET

The schedule below shows the year-end balance sheets for the years between June 30,2005 and June 30, 2009 and for the twelve month period ending September 30, 2009.Accounts receivable

and inventory comprise approximately 16 percent of the business’s

current assets. Cash and short-term investments comprise approximately 81 percent of current assets. The amount of current assets has been steadily increasing throughoutthe period shown.

Fixed assets (net property, plant and equipment) include all of the company’s

production machinery and equipment. As of September 30, 2009, they made up

approximately 48 percent of the company’s non

-current assets. Other non-currentassets include long-term investments (36 percent of non-current assets) andgoodwill/intangibles (14 percent of non-current assets.)

Overall, the business’s total assets have increased approximately 65 percent during the

period June 30, 2005 to September 30, 2009. The increase in total assets has been dueprimarily to increases in cash and short-term investments.Current liabilities are comprised about equally of accounts payable and other currentliabilities. Total current liabilities are $16.0 million, as of September 30, 2009.

As the business’s earnings steadily increased, so did its equity. The company nearl

ydoubled its booked equity during the period presented below.

Balance Sheet

(Amounts in Millions)

Assets

TTM09/30/09FYE06/30/09FYE06/30/08FYE06/30/07FYE06/30/06FYE06/30/05Cash 174.80 160.90 167.00 135.50 89.60 80.30ST Investments 52.50 41.90 39.40 29.30 19.20 16.80Accounts Receivable 31.70 31.20 33.30 31.00 25.10 23.70Inventory 12.50 11.30 9.50 8.80 9.00 7.80Other Current Assets 10.40 10.20 9.20 8.30 6.90 6.40Total Current Assets 281.90 255.50 258.40 212.80 149.80 135.00Net Property, Plant & Equip. 98.80 100.10 101.70 91.50 88.80 89.00LT Investments 74.40 84.00 112.10 115.60 94.90 50.00Goodwill/Intangibles 27.80 28.10 29.00 30.20 32.00 14.10Other LT Assets 4.10 4.40 6.00 4.70 5.00 7.10

Total Assets 487.00 472.00 507.40 454.80 370.50 295.30Liabilities

Accounts Payable 8.00 7.50 6.10 6.90 5.50 4.10Short Term Debt 0.00 0.00 0.00 0.00 1.20 1.20Other Current Liabilities 8.10 8.10 14.10 10.30 11.30 8.70Total Current Liabilities 16.00 15.50 20.20 17.20 18.00 14.00LT Debt 0.00 0.00 0.00 0.00 12.20 13.40Other LT Liabilities 0.00 0.00 0.00 0.00 0.00 0.00

Total Liabilities