Bio-Techne (TECH) 10-K risk factor changes: FY2012 vs FY2011

The Company faces significant competition across all of its product [removed: line] [added: lines] and in each market in which it operates.

The Company manufactures the majority of the products it sells at its [removed: Minneapolis] [added: Minneapolis, Minnesota] facility.

Approximately 30% of the Company’s sales are made through its foreign subsidiaries, which [removed: make] [added: transact] their sales in foreign currencies.

The Company’s business is subject to governmental laws and [removed: regulation.][added: regulations.]

From time to time, new tax legislation may be [removed: implemented,] [added: implemented] which could adversely affect current or future tax filings or negatively impact the Company’s effective tax rate and thus increase future tax payments.

The Company has investments in marketable [removed: debt] securities that are classified and accounted for as available-for-sale.

These securities include U.S. government and agency securities, foreign government and agency securities, corporate debt [added: and equity] securities and certificates of deposit.

The Company may incur losses as a result of its investments in [added: ChemoCentryx, Inc. and] other companies, the success of which is largely out of the Company’s control.

The Company faces risk resulting from the economic instability in the Eurozone countries.

Sales to Europe made up approximately 29% of the Company’s net sales in fiscal 2012.

As a result of several Eurozone countries facing fiscal crises and uncertainty about the continued viability of the Euro as a single currency, the Company’s European sales may be adversely affected by reduced spending on health care and research by Eurozone governments and general economic instability in the region.

Such reduced sales would adversely affect the Company’s revenues, financial condition and results of operations.

##### [Table of Contents](#toc)

The Company has an approximate 18.0% equity investment in ChemoCentryx, Inc. (CCXI) that is valued at $94.7 million on the Company’s June 30, 2012 Balance Sheet.

CCXI is a biopharmaceutical company focused on discovering, developing and commercializing orally-administered therapeutics to treat autoimmune diseases, inflammatory diseases and cancers.

The development of new drugs is a highly risky undertaking.

CCXI is dependent on a limited number of products, must achieve favorable clinical trial results, obtain regulatory and marketing approval for these products and is reliant on a strategic alliance with GlaxoSmithKline.

CCXI has also incurred significant losses and has yet to achieve profitability.

The ownership of CCXI shares is very concentrated, the share price is highly volatile and there is limited trading of the shares.

These factors make it possible that the Company could experience future dilution or a substantial decline in the $65.2 million unrealized gain it has on its CCXI investment and/or its $29.5 million investment in CCXI.

Development stage companies of the type the Company has invested in are dependent on their ability to raise additional funds to continue research and development efforts and on receiving patent protection and/or FDA clearance to market their products.

The Company uses the equity method of accounting for certain of these investments and records a percentage of the losses of these companies as losses of the Company.

The Company may not have control of the expense levels of such companies and their losses may be greater than those anticipated by the Company.

Additionally, if funding were unavailable or inadequate to fund operations of these companies or if patent protection or FDA clearance were not received by them, the Company may determine that its investment in one or more of these unconsolidated companies is “other than temporarily” impaired, and the Company could write off all or a portion of its investment.

The principal forward-looking statements in this report include: the Company’s expectations regarding product releases, governmental license renewals, future [added: income] tax rates, [added: medical device excise tax,] capital expenditures, [added: the performance of the Company’s investments,] future dividend declarations, [added: the construction and lease of certain facilities,] adequacy of owned and leased property for future operations, and sufficiency of capital resources to meet the Company’s foreseeable future cash and working capital requirements.

These activities are conducted domestically through its wholly-owned subsidiaries, Research and Diagnostic Systems, Inc. (R&D Systems), Boston Biochem, Inc. (Boston [removed: Biochem), Tocris Cookson, Inc. (Tocris US),] [added: Biochem)] and BiosPacific, Inc. (BiosPacific).

The Company’s European biotechnology operations are conducted through its wholly-owned U.K. subsidiaries, R&D Systems Europe Ltd. (R&D Europe) and Tocris Holdings Limited [removed: (Tocris UK).][added: (Tocris).]

The Company has two reportable segments based on the nature of its [removed: products.][added: products (biotechnology and hematology).]

Consolidated net sales for fiscal 2011 included $4.7 million [removed: of revenues] [added: net sales] from companies acquired during fiscal 2011.

Consolidated net sales [removed: and consolidated net earnings] in fiscal 2011 were affected by changes in exchange rates from the prior year used to convert consolidated net sales [removed: and consolidated net earnings] in foreign currencies into U.S. dollars and the impact of repatriation of prior-year earnings in fiscal 2010.

Consolidated net sales [added: increased 8.5%] and consolidated net earnings [removed: increased 1.9% and 4.3%, respectively,] [added: were flat] for fiscal [removed: 2010] [added: 2012] as compared to fiscal [removed: 2009.][added: 2011.]

Consolidated [added: organic] net [removed: sales] [added: sales, excluding the impact of the acquisitions] and [removed: consolidated net earnings in fiscal 2010 were slightly affected by changes in exchange rates] [added: the effect of the change] from the prior year [added: in exchange rates] used to convert [removed: consolidated net] sales [removed: and consolidated net earnings] in foreign currencies [added: (primarily British pound sterling, euros and Chinese yuan)] into U.S. [removed: dollars.][added: dollars, were as follows (in thousands):]

Net sales [added: by reportable segment were as follows] (in thousands):

| | | [removed: _2011_] [added: _2012_] | | | | [removed: _2010_] [added: _2011_] | | | | [removed: _2009_] [added: _2010_] | | |

| Biotechnology | | $ | [removed: 270,287] [added: 293,274] | | | $ | [removed: 250,653] [added: 270,287] | | | $ | [removed: 246,454] [added: 250,653] | |

| Hematology | | | [removed: 19,675] [added: 21,286] | | | | [removed: 18,394] [added: 19,675] | | | | [removed: 17,502] [added: 18,394] | |

| | | $ | [removed: 289,962] [added: 314,560] | | | $ | [removed: 269,047] [added: 289,962] | | | $ | [removed: 263,956] [added: 269,047] | |

Biotechnology segment net sales increased [added: $23.0 million (8.5%) and] $19.6 million [removed: (7.8%)] [added: (7.8%), respectively,] in fiscal [added: 2012 and fiscal] 2011 from [added: each of the prior] fiscal [removed: 2010.][added: years.]

Included in [removed: biotechnology] [added: fiscal 2012 and 2011] net sales were [removed: $4.7] [added: $2.7] million [removed: of sales by Boston Biochem] and [removed: Tocris, which were acquired by the Company during fiscal 2011, and] $2.5 [removed: million] [added: million, respectively,] of sales of new protein based biotechnology products which had their first sale in [added: each of the] fiscal [removed: 2011.][added: years.]

Hematology segment net sales [removed: in fiscal 2011] increased [added: $1.6 million (8.2%) and] $1.3 million [removed: (7.0%) mainly due to] [added: (7.0%), respectively, in fiscal 2012 and 2011 from each of the prior fiscal years, primarily as a result of] increased sales volume.

[removed: Gross] [added: Segment gross] margins, as a percentage of net sales, were as follows:

| Biotechnology | | | [removed: 79.8] [added: 76.9] | % | | | [removed: 81.9] [added: 79.8] | % | | | [removed: 81.2] [added: 81.9] | % |

| Hematology | | | [removed: 47.0] [added: 48.6] | % | | | [removed: 47.7] [added: 47.0] | % | | | [removed: 45.9] [added: 47.7] | % |

| Consolidated | | | [removed: 77.6] [added: 75.0] | % | | | [removed: 79.6] [added: 77.6] | % | | | [removed: 78.8] [added: 79.6] | % |

[removed: The consolidated] [added: Consolidated] gross [removed: margin] [added: margins] for fiscal [added: 2012 and] 2011 [removed: was] [added: were] negatively impacted [removed: 0.7%] as a result of purchase accounting related to inventory and intangible assets [removed: from] [added: acquired during] the [removed: Boston Biochem and Tocris acquisitions.][added: fourth quarter of fiscal 2011.]

Under purchase accounting, inventory [removed: acquired] is valued at fair [removed: market] value less expected selling and marketing costs, resulting in reduced margins in future periods as the inventory is sold.

[removed: At the acquisition dates, the] [added: The increase in] value of [added: the] acquired inventory [added: remaining at June 30, 2012] was [removed: increased $25.7] [added: $15.2] million.

Selling, general and administrative expenses increased [added: $5.8 million (16.1%) and] $3.2 million (9.8%) [removed: and decreased $989,000 (3.0%)] in fiscal [removed: 2011] [added: 2012] and [removed: 2010,] [added: 2011,] respectively.

[removed: Selling,] [added: Consolidated selling,] general and administrative expenses were [removed: as follows] [added: composed of the following] (in thousands):

| Biotechnology | | $ | [removed: 30,058] [added: 36,453] | | | $ | [removed: 27,511] [added: 30,058] | | | $ | [removed: 27,527] [added: 27,511] | |

| Hematology | | | [removed: 1,451] [added: 1,697] | | | | [removed: 1,393] [added: 1,451] | | | | [removed: 1,463] [added: 1,393] | |

| Unallocated corporate expenses | | | [removed: 4,388] [added: 3,533] | | | | [removed: 3,796] [added: 4,388] | | | | [removed: 4,699] [added: 3,796] | |

| | | $ | [removed: 35,897] [added: 41,683] | | | $ | [removed: 32,700] [added: 35,897] | | | $ | [removed: 33,689] [added: 32,700] | |

| | | [removed: _Increase/(Decrease)_] [added: _Increase/ (Decrease)_] | | | | | | |

| | | [added: _2012_ | | | |] _2011_ | | | | _2010_ | | |

| Professional and other acquisition related costs | | $ | [removed: 1,735] [added: (1,735] | [added: )] | | $ | [removed: 0] [added: 1,735] | |

| [removed: Acquired company] [added: Increase due to acquired companies] selling, general and administrative expenses | | | [removed: 945] [added: 3,256] | | | | [removed: 0] [added: 945] | |

| Non-acquisition related legal fees | | | [removed: (555] [added: (117] | ) | | | [removed: (690] [added: (555] | ) |

| Profit sharing and bonus expense | | | [removed: 806] [added: 40] | | | | [removed: (403] [added: 806] | [removed: )] |

| Stock-based compensation expense | | | [removed: 3] [added: 503] | | | | [removed: (343] [added: 3] | [removed: )] |

| Customer relationships and trade names amortization | | | [removed: 50] [added: 1,502] | | | | [removed: 0] [added: 50] | |

| Other, including annual wage, salary and benefit increases | | | [removed: 213] [added: 2,337] | | | | [removed: 447] [added: 213] | |

The decrease in non-acquisition related legal fees in fiscal [removed: 2011] [added: 2012] and [removed: 2010] [added: 2011] was primarily from lower costs associated with ongoing patent interference and infringement litigation.

The increase in [removed: fiscal] 2011 [removed: and decrease in fiscal 2010 in] profit sharing and bonus expense reflect the change in financial results from [removed: each of the respective prior years.][added: fiscal 2010.]

USE OF ADJUSTED FINANCIAL MEASURES:

The adjusted financial measures used in this Annual Report on Form 10-K quantify the impact the following events had on reported net sales, gross margin percentages and net earnings for fiscal 2012 as compared to fiscal 2011 and 2010:

| | \- | | fluctuations in exchange rates used to convert transactions in foreign currencies (primarily the Euro, British pound sterling and Chinese yuan) to U.S. dollars; |

| --- | --- | --- | --- |

| | \- | | the acquisitions of Boston Biochem, Inc. on April 1, 2011 and Tocris Holdings Limited on April 28, 2011, including the recognition of costs upon the sale of inventory written-up to fair value; |

| --- | --- | --- | --- |

| | \- | | professional fees and other costs incurred as part of the acquisitions of Boston Biochem, Inc. and Tocris Holdings Limited; |

| --- | --- | --- | --- |

| --- | --- | --- | --- |

| | \- | | impairment losses related to the Company’s investments in unconsolidated entities; |

| --- | --- | --- | --- |

| | \- | | the reversal of valuation allowances on deferred tax assets related to the excess tax basis in the Company’s unconsolidated entities; and |

| --- | --- | --- | --- |

| | \- | | the tax benefit from repatriation of funds from R&D Europe. |

| --- | --- | --- | --- |

These adjusted financial measures are not prepared in accordance with generally accepted accounting principles (GAAP) and may be different from adjusted financial measures used by other companies.

Adjusted financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

The Company views these adjusted financial measures to be helpful in assessing the Company’s ongoing operating results.

In addition, these adjusted financial measures facilitate our internal comparisons to historical operating results and comparisons to competitors’ operating results.

These adjusted financial measures are included in this Annual Report on Form 10-K because the Company believes they are useful to investors in allowing for greater transparency related to supplemental information used in the Company’s financial and operational analysis.

Investors are encouraged to review the reconciliations of adjusted financial measures used in this Annual Report on Form 10-K to their most directly comparable GAAP financial measures.

Consolidated net sales in fiscal 2012 were impacted by the acquisitions of Boston Biochem and Tocris during the fourth quarter of fiscal 2011.

Included in fiscal 2012 and 2011 consolidated net sales were $19.4 million and $4.7 million of acquisition-related net sales that were not comparable to the prior fiscal year.

Consolidated net earnings for fiscal 2012 included $7.6 million of costs recognized upon the sale of inventory that was written-up to fair value at the time of the acquisitions and $5.1 million amortization of intangible assets compared to $1.8 million and $1.5 million, respectively, in fiscal 2011.

Consolidated net earnings in fiscal 2012 also included impairment losses of $3.3 million recorded on two of the Company’s investments in unconsolidated entities and a $3.0 million tax benefit from the reversal of deferred tax valuation allowances.

| Consolidated net sales | | $ | 314,560 | | | $ | 289,962 | | | $ | 269,047 | |

| Organic sales adjustments: | | | | | | | | | | | | |

| Acquisitions | | | (19,385 | ) | | | (4,683 | ) | | | 0 | |

| Impact of foreign currency fluctuations | | | 27 | | | | (466 | ) | | | (888 | ) |

| Consolidated organic net sales | | $ | 295,202 | | | $ | 284,813 | | | $ | 268,159 | |

| Organic sales growth | | | 1.8 | % | | | 5.9 | % | | | 1.6 | % |

Biotechnology segment organic net sales increased $3.6 million (1.3%) and $14.5 million (5.8%), respectively, in fiscal 2012 and 2011, primarily as a result of increased sales volume.

Biotechnology segment organic sales growth from the same prior-year periods was as follows:

| | | _Year Ended June 30,_ | | | | | | |

| | | _2012_ | | | | _2011_ | | |

| U.S. industrial, pharmaceutical and biotechnology | | | 3.2 | % | | | 4.8 | % |

| U.S. academic | | | (5.1 | %) | | | 6.4 | % |

| Europe | | | (1.5 | %) | | | 4.1 | % |

| China | | | 21.6 | % | | | 22.6 | % |

| Pacific Rim | | | 7.0 | % | | | 4.1 | % |

On April 1, 2011, the Company acquired for approximately $7.9 million cash, the assets of Boston Biochem, Inc., a leading developer and manufacturer of innovative ubiquitin-related research products.

These products provide biomedical researchers the tools that facilitate and accelerate basic research and drug discovery efforts.

Boston Biochem was founded in 1997 and currently has over 800 ubiquitin-related products.

The Ubiquitin Proteasome Pathway is the principal system for protein degradation and signaling in eukaryotic cells.

Ubiquitination also affects proteasome-independent events such as protein localization, activity and function.

These pathways are central to the regulation of almost all cellular processes.

Ubiquitin and related pathways are associated with the regulation of numerous disease states including multiple cancers, diabetes, Parkinson’s, Alzheimer’s, cystic fibrosis, Angelman’s syndrome, Liddle syndrome and Wilson’s disease.

On April 28, 2011, the Company acquired for £75.0 million cash (approximately $124 million), 100% ownership of Tocris Holdings Limited and subsidiaries (Tocris), a leading supplier of reagents for non-clinical life science research.

Pursuant to the purchase agreement, £7.5 million of the purchase price paid to Tocris’ shareholders is being held in escrow for 18 months to secure warranty and indemnity obligations of the shareholders.

Tocris’ products are used in both in-vitro and in-vivo experiments, to understand biological processes and diseases.

The business is focused on making biologically active neuro- and bio-chemicals which are used by researchers to elucidate biological processes and pathways.

The products are used in life-science research activities and as part of the initial drug discovery process.

Tocris is a Bristol, U.K. based company with origins deriving from Tocris Neuramin and Cookson Chemical, which were founded in 1982 and 1985, respectively.

Tocris currently offers over 2,900 chemical, peptide and antibody products.

The principal end users are non-clinical laboratory based researchers, working in areas such as neuroscience, cardiovascular disease, endocrinology and cellular processes.

Originally a supplier of small molecules, Tocris has successfully pursued a strategy of extending its product range into related market segments such as signal transduction.

The products sold by Tocris are used in various research

fields including cancer, cardiovascular disease, endocrinology, immunology, metabolic diseases, neurological diseases, pain and inflammation, and respiratory diseases.

From a cellular process perspective, Tocris products are used to study angiogenesis, apoptosis, cell cycle, cell metabolism, cellular skeleton and motor proteins, extracellular matrix, adhesion molecules, signal transduction and stem cells.

Tocris reagents are also used from a pharmacological perspective to study ion channels, 7-TM receptors, nuclear receptors, enzyme-linked receptors, transporter molecules and enzymes.

As a result of the above acquisitions, the Company has changed the presentation of its segment disclosure from three reporting segments (biotechnology, R&D Europe and hematology) to two reporting segments (biotechnology and hematology).

Corresponding items of segment information have been revised for prior periods to conform to the current year presentation.

The favorable impact in fiscal 2011 on consolidated net sales and consolidated net earnings of the change from the prior year in exchange rates was $466,000 and $258,000, respectively.

Consolidated net earnings for fiscal 2010 included a $4.7 million tax benefit as a result of a foreign currency exchange tax loss on the repatriation of prior-year earnings from R&D Europe to the U.S.

The favorable impact in fiscal 2010 on consolidated net sales and consolidated net earnings of the change from the prior year in exchange rates was $888,000 and $68,000, respectively.

Consolidated net sales for fiscal 2011 were $290.0 million, an increase of $20.9 million (7.8%) from fiscal 2010.

Consolidated net sales for fiscal 2011 included $4.7 million of revenue from companies acquired during fiscal 2011 and were favorably affected by the change from the prior year in exchange rates used to convert sales in foreign currencies into U.S. dollars.

Excluding the acquisitions and the effect of changes in foreign currency exchange rates, consolidated net sales increased 5.9% in fiscal 2011 from fiscal 2010.

The majority of the biotechnology net sales increase, exclusive of acquisitions, was from

increased sales volume.

Biotechnology net sales to U.S. industrial pharmaceutical and biotechnology customers, biotechnology’s largest customer group, increased 4.8% in fiscal 2011 compared to the prior fiscal year.

Biotechnology net sales to U.S. academic customers and Pacific Rim distributors increased 6.4% and 4.1%, respectively, in fiscal 2011 from fiscal 2010.

Biotechnology sales by R&D China and R&D Europe increased 26.0% (22.6% in constant currency) and 4.4% (4.1% in constant currency) in fiscal 2011 from fiscal 2010, respectively.

Consolidated net sales for fiscal 2010 were $269.0 million, an increase of $5.1 million (1.9%) from fiscal 2009.

Consolidated net sales were favorably affected by the change from the prior year in exchange rates used to convert sales in foreign currencies into U.S. dollars.

Excluding the effect of changes in foreign currency exchange rates, consolidated net sales increased 1.6% in fiscal 2010 from fiscal 2009.

Biotechnology segment net sales in fiscal 2010 increased $4.2 million (1.7%) from fiscal 2009.

The majority of the biotechnology net sales increase was from increased sales volume.

Included in consolidated net sales in fiscal 2010 were $2.8 million of sales of new protein based biotechnology products, which had their first sale in fiscal 2010.

Biotechnology net sales to U.S. academic customers, Pacific Rim distributors and sales by R&D China increased 4.0%, 10.5% and 21.8%, respectively, in fiscal 2010 from fiscal 2009.

At the end of fiscal [removed: 2011,] [added: 2012,] the Company had a portfolio of fixed income [added: debt] securities, excluding those classified as cash and cash equivalents, of [removed: $195] [added: $202] million (see Note C to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K).

As the Company’s fixed income securities are classified as available-for-sale, no gains or losses are recognized by the Company in its Consolidated Statement of Earnings [added: and Comprehensive Income] due to changes in interest rates unless such securities are sold prior to maturity.

The Company operates internationally, and thus is subject to potentially adverse movements in foreign currency [added: exchange] rates.

| | | [removed: _2011_] [added: _2012_] | | | | [removed: _2010_] [added: _2011_] | | | | [removed: _2009_] [added: _2010_] | | |

| High | | $ | [removed: 1.67] [added: 1.64] | | | $ | 1.67 | | | $ | [removed: 1.98] [added: 1.67] | |

| Low | | | [removed: 1.53] [added: 1.54] | | | | [removed: 1.45] [added: 1.53] | | | | [removed: 1.43] [added: 1.45] | |

| Average | | | 1.59 | | | | [removed: 1.58] [added: 1.59] | | | | [removed: 1.60] [added: 1.58] | |

| High | | $ | [removed: 1.48] [added: 1.44] | | | $ | [removed: 1.50] [added: 1.48] | | | $ | [removed: 1.56] [added: 1.50] | |

| Low | | | [removed: 1.27] [added: 1.24] | | | | [removed: 1.22] [added: 1.27] | | | | [removed: 1.27] [added: 1.22] | |

| Average | | | [removed: 1.37] [added: 1.34] | | | | [removed: 1.38] [added: 1.37] | | | | [removed: 1.37] [added: 1.38] | |

| High | | $ | [removed: .155] [added: .159] | | | $ | [removed: .148] [added: .155] | | | $ | [removed: .147] [added: .148] | |

| Low | | | [removed: .148] [added: .155] | | | | [removed: .146] [added: .148] | | | | .146 | |

| Average | | | [removed: .151] [added: .158] | | | | [removed: .146] [added: .151] | | | | .146 | |

At June 30, [removed: 2011,] [added: 2012,] the Company had the following trade receivable and intercompany payables denominated in one currency but receivable or payable in another currency (in thousands):

| | | [removed: _Denominated Currency_] [added: _Denominated_ _Currency_] | | | | _U. [removed: S. Dollar] [added: S._ _Dollar] Equivalent_ | | |

| Other European currencies | | £ | [removed: 921] [added: 918] | | | $ | [removed: 1,478] [added: 1,442] | |

| U.S. dollars | | yuan | [removed: 4,934] [added: 4,972] | | | $ | [removed: 763] [added: 783] | |

Foreign currency transaction gains and losses are included in “Other non-operating expense, net” in the Consolidated Statement of [removed: Earnings.][added: Earnings and Comprehensive Income.]

The effect of translating net assets of foreign subsidiaries into U.S. dollars are recorded on the Consolidated Balance Sheet as part of “Accumulated other comprehensive [removed: (loss) income.”][added: income (loss).”]

The effects of a hypothetical simultaneous 10% appreciation in the U.S. dollar from June 30, [removed: 2011] [added: 2012] levels against the euro, British pound sterling and Chinese yuan are as follows (in thousands):

| Decrease in translation of [removed: 2011] [added: 2012] earnings into U.S. dollars | | $ | [removed: 2,463] [added: 2,375] | |

| Decrease in translation of net assets of foreign subsidiaries | | | [removed: 12,736] [added: 14,732] | |

| Additional transaction losses | | | [removed: 119] [added: 484] | |

| Euros | | £ | 966 | | | $ | 1,518 | |

| | | | | | | | | |

| Euros | | £ | 163 | | | $ | 255 | |

| U.S. dollars | | £ | 2,584 | | | $ | 4,059 | |

| British pound sterling | | yuan | 152 | | | | 24 | |

| Euros | | £ | 1,593 | | | $ | 2,557 | |

| Euros | | £ | 284 | | | $ | 456 | |

| U.S. dollars | | £ | 266 | | | $ | 426 | |

These activities are conducted domestically through its wholly-owned subsidiaries, Research and Diagnostic Systems, Inc. (R&D Systems), Boston Biochem, Inc. (Boston Biochem), [removed: Tocris Cookson, Inc. (Tocris US),] and BiosPacific, Inc. (BiosPacific).

The Company’s European biotechnology operations are conducted through its wholly-owned U.K. subsidiaries, R&D Systems Europe Ltd. (R&D Europe) and Tocris Holdings Limited [removed: (Tocris UK).][added: (Tocris).]

In fiscal [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009,] [added: 2010,] net sales from the Company’s biotechnology segment were 93% of consolidated net sales in each year.

The Company’s hematology segment net sales were 7% of consolidated net sales for each of fiscal [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009.][added: 2010.]

They act as [removed: signals] [added: signaling agents] by interacting with specific receptors on the affected cells and trigger events that can lead to significant changes in a cell, tissue or [removed: organism.][added: organ.]

Another example of [removed: cytokine] [added: the beneficial] action [added: of cytokines] is [removed: the] [added: their] key role played in [removed: stimulating] [added: attracting] cells [removed: surrounding a wound] [added: at the site of injury, inducing them] to grow and [removed: divide, to attract migratory cells to the injury site] [added: divide] and [removed: mediate] [added: initiate] the healing process.

The Company also [removed: has] [added: produces and markets] enzymes and intracellular [removed: cell] signaling [removed: reagents in its product portfolio.][added: reagents.]

Protein quantification is an integral component of basic research and as a valuable indicator of the effects of new [added: therapeutic] compounds [removed: as candidates] in the pharmaceutical drug discovery and development process.

Tocris products are [removed: chemically-based] small compounds, sold in highly purified forms [removed: and] [added: typically] with agonistic or antagonistic properties in a variety of biological processes.

The combined chemical and biological reagents portfolio of the two companies provide new tools which [added: customers] can [removed: be used] [added: use] in solving the complexity of important biological pathways and glean knowledge which may lead to a fuller understanding of biological processes and ultimately [added: to] the development of novel strategies to address different pathologies.

The Company currently manufactures and sells [removed: over 20,000] [added: approximately 22,000] biotechnology products.

The Company has received Food and Drug Administration (FDA) marketing clearance for its erythropoietin (EPO), transferrin receptor (TfR) and Beta2-microglobulin [added: (ß2M)] immunoassays for use as _in vitro_ diagnostic devices.

Intracellular [removed: Cell] Signaling Products.

This diverse product line provides reagents to elucidate [removed: cell] signal transduction pathways within cells.

Products include antibodies, phospho-specific antibodies, antibody arrays, active caspases, kinases, [removed: and] phosphatases, and [removed: ELISA] [added: enzyme-linked immunosorbant assay (ELISA)] assays to measure the activity of apoptotic and signaling molecules.

[removed: Controls] [added: Control] and [removed: calibrators] [added: calibrator products can be utilized to] ensure that [removed: these] [added: hematology] instruments are performing accurately and reliably.

Doctors use this [removed: rapid] test in disease screening and diagnosis.

In fiscal [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009,] [added: 2010,] OEM agreements accounted for [removed: $8.7] [added: $9.7] million, [removed: $8.0] [added: $8.7] million and [removed: $7.6] [added: $8.0] million, respectively, or 3% of total consolidated net sales in each fiscal year.

The Company sells [added: its hematology products] directly to customers in the United States and through distributors in the rest of the world.

In fiscal [removed: 2011,] [added: 2012,] the Company introduced [removed: 1,646] [added: 1,800] new biotechnology products.

All of these products will be for research [removed: purposes] [added: use] only and therefore do not require FDA clearance.

The Company also developed several new hematology control products in fiscal [removed: 2011] [added: 2012] and is continuously working on product improvements and enhancements.

| | | [removed: _2011_] [added: _2012_] | | | | [removed: _2010_] [added: _2011_] | | | | [removed: _2009_] [added: _2010_] | | |

| Biotechnology | | $ | [removed: 25,176] [added: 27,112] | | | $ | [removed: 24,331] [added: 25,176] | | | $ | [removed: 22,792] [added: 24,331] | |

| Hematology | | | [removed: 809] [added: 800] | | | | [removed: 790] [added: 809] | | | | [removed: 772] [added: 790] | |

| | | $ | [removed: 25,985] [added: 27,912] | | | $ | [removed: 25,121] [added: 25,985] | | | $ | [removed: 23,564] [added: 25,121] | |

| Percent of net sales | | | [removed: 9.0] [added: 8.9] | % | | | [removed: 9.3] [added: 9.0] | % | | | [removed: 8.9] [added: 9.3] | % |

[removed: CCX] [added: CCXI] is a technology and drug development company working in the area of chemokines.

The [removed: Company has evaluated the cost versus equity method of accounting for its] [added: Company’s] investment in [removed: CCX and] [added: CCXI is included in “Short-term available-for-sale investments” at June 30, 2012 at fair value of $94.7 million as the Company has] determined that it does not have the ability to exercise significant influence over the operating and financial policies of [removed: CCX and therefore, accounts for its investment on a cost basis.][added: CCXI.]

The Company’s net investment in [removed: CCX] [added: Hemerus was $551,000 and $773,000] at [removed: both] June 30, [removed: 2011] [added: 2012] and [removed: 2010 was $14.3 million.][added: 2011, respectively.]

The Company has [removed: an 8.3%] [added: a 6.9%] ownership percentage in Hemerus Medical, LLC (Hemerus).

Hemerus owns two patents, has several patent applications pending and has received FDA clearance to market its products in the U.S. [removed: In parallel with this investment, R&D Systems entered into] [added: The Company accounts for its investment in Hemerus under the equity method of accounting as Hemerus is] a [removed: Joint Research Agreement with Hemerus.][added: limited liability company.]

The Company’s net investment in [removed: Hemerus] [added: Nephromics] was [removed: $773,000] [added: $505,000] and [removed: $1.2] [added: $3.7] million at June 30, [removed: 2011] [added: 2012] and [removed: 2010,] [added: 2011,] respectively.

In fiscal [removed: 2010] [added: 2012] and fiscal [removed: 2009,] [added: 2010,] the Company received distributions of [removed: $50,000] [added: $463,000] and [removed: $1.3 million,] [added: $50,000,] respectively, from Nephromics.

The Company’s net investment in ACTGen was $925,000 [removed: and $1.1 million] at June 30, [removed: 2011 and 2010, respectively.][added: 2011.]

Three of the Company’s immunoassay kits, EPO, TfR and [removed: Beta2-microglobulin,] [added: ß2M,] have FDA clearance to be sold for clinical diagnostic use.

Thus, the Company is subject to regulation and inspection by the Minnesota Department of Health and has been granted a license through August [removed: 2012.][added: 2013.]

Some of Tocris’ products are considered controlled substances and require government permits to stock such products and to ship them to [removed: end users.][added: end-users.]

Human blood is purchased from commercial blood [removed: banks] [added: banks,] while porcine and bovine blood is purchased from nearby meat processing plants.

Many of the starting components used in the chemical synthesis are widely available [removed: common] products and no single source of raw reagents poses a supply risk to this business.

The Company has two reportable segments based on the nature of its products (biotechnology and hematology).

For example, cytokines can induce cells to acquire more specialized functions and features.

Unregulated cytokine production and action can have non-beneficial effects and lead to various pathologies.

The Company has an approximate 18.0% equity investment in ChemoCentryx, Inc. (CCXI).

At June 30, 2011, the Company had a $14.3 million investment in the preferred stock of CCXI and accounted for the investment on a cost basis.

The investment was included in “Investments in unconsolidated entities” at June 30, 2011.

In September 2011, the Company entered into a $10.0 million loan agreement with CCXI.

The loan agreement contained a number of conversion features contingent upon CCXI obtaining future debt or equity financing.

The agreement also included a $5.0 million commitment by the Company to participate in a private placement in the event of a successful public offering of CCXI shares.

On February 8, 2012, CCXI completed its initial public offering (IPO) at $10 per share.

Upon the close of the IPO, the Company’s investment in CCXI’s preferred shares and the loan, plus accrued interest, converted into CCXI common stock.

The Company invested an additional $5.0 million in the private placement, as discussed above, and received ten year warrants to purchase 150,000 shares of CCXI common stock at $20 per share.

During fiscal 2012, Hemerus entered into an agreement to sell substantially all of its assets.

The Company has determined that it is more-likely-than-not that it will recover its remaining investment in Hemerus.

During fiscal 2012, Nephromics signed an agreement to sell substantially all of its assets.

As a result of the agreement, the Company determined that a portion of its investment in Nephromics was other-than-temporarily impaired and wrote off $2.4 million of this investment.

During fiscal 2012, the Company determined that, based on ACTGen financial results for calendar 2011 and its operational and funding status, the Company’s investment in ACTGen was other-than-temporarily impaired and wrote off its remaining investment of $854,000.

Beginning January 1, 2013, the Company will be subject to the medical device excise tax which was included as part of the Affordable Care Act.

The tax applies to the sale of medical devices by a manufacturer, producer or importer of the device and is 2.3% of the sale price.

The tax will apply to the Company’s _in vitro_ diagnostic products, including its hematology products and biotechnology clinical diagnostic immunoassay kits.

The Company estimates it will pay approximately $250,000 for the medical device excise tax in fiscal 2013.

| U.S.: | | | | | | | | |

| R&D Systems | | | 646 | | | | 33 | |

| R&D Europe | | | 57 | | | | 20 | |

| China & Hong Kong: | | | | | | | | |

| | | | 783 | | | | 64 | |

| | | _2012_ | | | | _2011_ | | | | _2010_ | | |

| Other Asia | | | 25,988 | | | | 24,715 | | | | 22,372 | |

| Rest of world | | | 14,742 | | | | 13,415 | | | | 13,250 | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | _2012_ | | | | _2011_ | | | | _2010_ | | |

| | | | | | | | | | | |

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On April 1, 2011, the Company acquired for approximately $7.9 million cash, the assets of Boston Biochem, Inc., a leading developer and manufacturer of innovative ubiquitin-related research products.

These products provide biomedical researchers the tools that facilitate and accelerate basic research and drug discovery efforts.

Boston Biochem was founded in 1997 and currently has over 800 ubiquitin-related products.

The Ubiquitin Proteasome Pathway is the principal system for protein degradation and signaling in eukaryotic cells.

Ubiquitination also affects proteasome-independent events such as protein localization, activity and function.

These pathways are central to the regulation of almost all cellular processes.

Ubiquitin and related pathways are associated with the regulation of numerous disease states including multiple cancers, diabetes, Parkinson’s, Alzheimer’s, cystic fibrosis, Angelman’s syndrome, Liddle syndrome and Wilson’s disease.

On April 28, 2011, the Company acquired for £75.0 million cash (approximately $124 million), 100% ownership of Tocris Holdings Limited and subsidiaries (Tocris), a leading supplier of reagents for non-clinical life science research.

Pursuant to the purchase agreement, £7.5 million of the purchase price paid to Tocris’ shareholders is being held in escrow for 18 months to secure warranty and indemnity obligations of the shareholders.

Tocris’ products are used in both in-vitro and in-vivo experiments, to understand biological processes and diseases.

The business is focused on making biologically active chemicals which are used by researchers to elucidate biological processes and pathways.

The products are used in life-science research activities and as part of the initial drug discovery process.

Tocris is a Bristol, U.K. based company with origins deriving from Tocris Neuramin and Cookson Chemical, which were founded in 1982 and 1985, respectively.

Tocris currently offers over 2,900 chemical, peptide and antibody products.

The principal end users are non-clinical laboratory based researchers, working in areas such as neuroscience, cardiovascular disease, endocrinology and cellular processes.

Originally a supplier of small molecules, Tocris has successfully pursued a strategy of extending its product range into related market segments such as signal transduction.

The products sold by Tocris are used in various research fields including cancer, cardiovascular disease, endocrinology, immunology, metabolic diseases, neurological diseases, pain and inflammation, and respiratory diseases.

From a cellular process perspective, Tocris products are used to study angiogenesis, apoptosis, cell cycle, cell metabolism, cellular skeleton and motor proteins, extracellular matrix, adhesion molecules, signal transduction and stem cells.

Tocris reagents are also used from a pharmacological perspective to study ion channels, 7-TM receptors, nuclear receptors, enzyme-linked receptors, transporter molecules and enzymes.

##### [Table of Contents](#toc)

As a result of the above acquisitions, the Company has changed the presentation of its segment disclosure from three reporting segments (biotechnology, R&D Europe and hematology) to two reporting segments (biotechnology and hematology).

Corresponding items of segment information have been revised for prior periods to conform to the current year presentation.

For example, cytokines can signal a cell to acquire the features necessary for it to take on a more specialized task.

Blood is composed of plasma, the fluid portion of blood, and blood cells, which are suspended in the plasma.

There are three basic types of blood cells: red cells, white cells and platelets.

Hemoglobin in red cells transports oxygen from the lungs throughout the body.

White cells are part of the body’s immune system.

Platelets serve as a “plug” to stem blood flow at the site of an injury by initiating a complex series of biochemical reactions that lead to the formation of a clot.

These fundamental blood components (red cells, white cells and platelets) differ widely in size and concentration.

As noted above, hematology controls are used in automated and semi-automated cell counting analyzers to make sure these instruments are counting blood cells in patient samples accurately.

More than one billion of these tests are done world-wide every year, the great majority with cell counting instruments.

In most laboratories, the CBC consists of the white cell count, the red cell count, the hemoglobin reading, and the hematocrit reading (the percent of red cells in a volume of whole blood after it has been centrifuged).

Also included in a CBC test is the differential, which numbers and classifies the different types of white blood cells.

These and other characteristics or “parameters” of a blood sample can be measured by automated or semi-automated cell counters.

The number of parameters measurable in a blood control product depends on the type and sophistication of the instrument for which the control is designed.

Hematology Products

Whole Blood CBC Controls/Calibrators.

The Company currently produces controls and calibrators for the following major brands of analyzers: Abbott Diagnostics, Beckman Coulter, Siemens Healthcare Diagnostics, HORIBA Medical and Sysmex.

Linearity and Reportable Range Controls.

These products provide a means of assessing the linearity of hematology analyzers for white blood cells, red blood cells, platelets and reticulocytes (immature red blood cells).

[removed: Such cancellation may moot an earlier jury decision] [added: Days earlier,] on October 28, 2009, at the conclusion of trial in the Nebraska Court, [added: a jury decided] that the Company did not meet its burden of demonstrating by clear and convincing evidence that the Streck patents were invalid.

The jury also found that a reasonable license royalty rate was 12.5%, and that R&D Systems did not willfully infringe, resulting in a judgment in favor of Streck in the amount of approximately $170,000 including [removed: court related] [added: court-related] costs.

The Nebraska Court entered an injunction prohibiting the making and selling of the products that are the subject of the [removed: lawsuit, but stayed a portion of the injunction to allow the Company to sell inventory on-hand through December 20, 2010.][added: lawsuit.]

##### [Table of Contents](#toc)

On October 20, 2011, the Federal Circuit issued an opinion upholding the District Court’s interference-related finding of priority in favor of Streck, and on January 10, 2012, the Federal Circuit affirmed the District Court’s infringement finding and permanent injunction.

The Company filed a Petition for Writ of Certiorari to the United States Supreme Court, seeking to reverse or vacate the Federal Circuit affirmances.

The Petition was not granted, and in June 2012, the Company paid $170,000 in full satisfaction of the judgment and court-related costs.

The judgment, if upheld by the Federal Circuit Court of Appeals, will constitute cancellation of all claims of the five Streck patents involving the addition of reticulocytes to hematology controls.

If the Company’s appeal is successful, after cancellation of the Streck patents, the Company may be issued a patent covering integrated hematology controls containing reticulocytes.

The Company does not believe the resolution of the above proceedings will have a material impact on the Company’s Consolidated Financial Statements.

For the fiscal year ended June 30, [removed: 2011][added: 2012]

| (State [removed: of Incorporation)] [added: of Incorporation)] | | (IRS [removed: Employer Identification] [added: Employer Identification] No.) |

Securities registered pursuant to Section 12(g) of the [removed: Act: None][added: Act:]

| Non-accelerated filer | | ¨ | | [removed: Smaller] [added: Small] reporting company | | ¨ |

The aggregate market value of the Common Stock held by non-affiliates of the Registrant, based upon the closing sale price on December 31, [removed: 2010] [added: 2011] as reported on The Nasdaq Stock Market [removed: ($65.67] [added: ($68.26] per share) was approximately [removed: $1.9] [added: $2.0] billion.

Shares of $0.01 par value Common Stock outstanding at August 24, [removed: 2011: 37,081,617.][added: 2012: 36,828,834]

Portions of the Company’s Proxy Statement for its [removed: 2011] [added: 2012] Annual Meeting of Shareholders are incorporated by reference into Part III.

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| [removed: PART I] [added: [PART I](#tx357001_1)] | | | | | | | [added: | |]

| [added: | |] Item 1. | | [removed: [Business](#tx208359_1)] [added: [Business](#tx357001_2)] | | | 1 | |

| [added: | |] Item 1A. | | [Risk [removed: Factors](#tx208359_2)] [added: Factors](#tx357001_3)] | | | [removed: 10] [added: 8] | |

| [added: | |] Item 1B. | | [Unresolved Staff [removed: Comments](#tx208359_3)] [added: Comments](#tx357001_4)] | | | [removed: 12] [added: 11] | |

| [added: | |] Item 2. | | [removed: [Properties](#tx208359_4)] [added: [Properties](#tx357001_5)] | | | 12 | |

| [added: | |] Item 3. | | [Legal [removed: Proceedings](#tx208359_5)] [added: Proceedings](#tx357001_6)] | | | [removed: 13] [added: 12] | |

| [removed: PART II] [added: [PART II](#tx357001_8)] | | | | | | | [added: | |]

| [added: | |] Item 5. | | [Market for the Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity [removed: Securities](#tx208359_7)] [added: Securities](#tx357001_9)] | | | 13 | |

| [added: | |] Item 6. | | [Selected Financial [removed: Data](#tx208359_8)] [added: Data](#tx357001_10)] | | | 15 | |

| [added: | |] Item 7. | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#tx208359_9)] [added: Operations](#tx357001_11)] | | | 16 | |

| [added: | |] Item 7A. | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#tx208359_10)] [added: Risk](#tx357001_12)] | | | [removed: 25] [added: 26] | |

| [added: | |] Item 8. | | [Financial Statements and Supplementary [removed: Data](#tx208359_11)] [added: Data](#tx357001_13)] | | | [removed: 27] [added: 28] | |

| [added: | |] Item 9. | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#tx208359_12)] [added: Disclosure](#tx357001_14)] | | | [removed: 46] [added: 47] | |

| [added: | |] Item 9A. | | [Controls and [removed: Procedures](#tx208359_13)] [added: Procedures](#tx357001_15)] | | | [removed: 46] [added: 47] | |

| [added: | |] Item 9B. | | [Other [removed: Information](#tx208359_14)] [added: Information](#tx357001_16)] | | | [removed: 46] [added: 47] | |

| [removed: PART III] [added: [PART III](#tx357001_17)] | | | | | | | [added: | |]

| [added: | |] Item 10. | | [Directors, Executive Officers and Corporate [removed: Governance](#tx208359_15)] [added: Governance](#tx357001_18)] | | | [removed: 46] [added: 47] | |

| [added: | |] Item 11. | | [Executive [removed: Compensation](#tx208359_16)] [added: Compensation](#tx357001_19)] | | | [removed: 47] [added: 48] | |

| [added: | |] Item 12. | | [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder [removed: Matters](#tx208359_17)] [added: Matters](#tx357001_20)] | | | [removed: 47] [added: 48] | |

| [added: | |] Item 13. | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#tx208359_18)] [added: Independence](#tx357001_21)] | | | [removed: 47] [added: 48] | |

| [added: | |] Item 14. | | [Principal Accounting Fees and [removed: Services](#tx208359_19)] [added: Services](#tx357001_22)] | | | [removed: 47] [added: 48] | |

| [removed: PART IV] [added: [PART IV](#tx357001_23)] | | | | | | | [added: | |]

| [added: | |] Item 15. | | [Exhibits, Financial Statement [removed: Schedules](#tx208359_20)] [added: Schedules](#tx357001_24)] | | | [removed: 48] [added: 49] | |

10-K 1 d357001d10k.htm FORM 10-K

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| | | Item 4. | | [Mine Safety Disclosures](#tx357001_7) | | | 13 | |

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| [SIGNATURES](#tx357001_25) | | | | | | | 50 | |

10-K 1 d10k.htm FORM 10-K

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| Item 4. | | [(Removed and Reserved)](#tx208359_6) | | | 13 | |

| [SIGNATURES](#tx208359_21) | | | | | 49 | |

##### [Table of Contents](#toc)

Rental income from the above properties was [removed: $549,000, $413,000] [added: $693,000, $549,000] and [removed: $481,000] [added: $413,000] in fiscal [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009,] [added: 2010,] respectively.

| R&D China | | Shanghai, China | | Office/warehouse | | | [removed: 5,600] [added: 7,000] | |

| Tocris | | Bristol, United Kingdom | | [removed: Office/manufacturing] [added: Office/manufacturing/] lab/warehouse | | | 11,000 | |

The Company has recently begun renovation of the second property and plans to lease approximately 40% of the 179,000 square foot building as office space and use the remainder for manufacturing and shipping operations.

The Company plans to build a new facility for its Tocris operations in Bristol, UK.

Purchase of the land and construction of the 23,000 square foot facility is expected to begin in fiscal 2013 and be completed in fiscal 2014.

A portion of the second property is currently leased to third parties and the Company plans to continue to lease out the building until the space is needed for its own operations.

| Tocris | | Ellisville, Missouri | | Office/warehouse | | | 3,700 | |

##### [Table of Contents](#toc)

Not applicable.

| | | _Fiscal [removed: 2011] [added: 2012] Price_ | | | | | | | | _Fiscal [removed: 2010] [added: 2011] Price_ | | | | | | |

| 1st Quarter | | $ | [removed: 63.44] [added: 86.43] | | | $ | [removed: 55.63] [added: 66.34] | | | $ | [removed: 65.54] [added: 63.44] | | | $ | [removed: 58.91] [added: 55.63] | |

| 2nd Quarter | | | [removed: 68.12] [added: 73.55] | | | | [removed: 58.60] [added: 62.04] | | | | [removed: 69.95] [added: 68.12] | | | | [removed: 62.12] [added: 58.60] | |

| 3rd Quarter | | | [removed: 73.96] [added: 72.20] | | | | [removed: 65.33] [added: 65.25] | | | | [removed: 69.74] [added: 73.96] | | | | [removed: 60.00] [added: 65.33] | |

| 4th Quarter | | | [removed: 83.82] [added: 74.79] | | | | [removed: 71.54] [added: 63.08] | | | | [removed: 67.65] [added: 83.82] | | | | [removed: 57.10] [added: 71.54] | |

As of August [removed: 24, 2011,] [added: 23, 2012,] there were over [removed: 28,000] [added: 25,000] beneficial shareholders of the Company’s common stock and over [removed: 190] [added: 180] shareholders of record.

The Company paid quarterly cash dividends totaling [added: $41.0 million,] $39.7 million and $38.4 million in fiscal [added: 2012,] 2011 and 2010, respectively.

Its Board of Directors periodically considers the payment of cash [removed: dividends.][added: dividends, and there is no guarantee that the Company will pay cash dividends in the future.]

The comparison assumes $100 was invested on the last trading day before July 1, [removed: 2006] [added: 2007] in the Company’s common stock and in each of the foregoing indices and assumes reinvestment of dividends.

[removed: ][added: ]

The following table sets forth the repurchases of Company common stock for the quarter ended June 30, [removed: 2011.][added: 2012.]

| _Period_ | | _Total Number [removed: of_ _Shares] [added: of Shares] Purchased_ | | | | [removed: _Average_ _Price Paid_ _Per] [added: _Average Price Paid Per] Share_ | | | | _Total Number [removed: of_ _Shares Purchased_ _as] [added: of Shares Purchased as] Part of [removed: Publicly_ _Announced Plans_ _or] [added: Publicly Announced Plans or] Programs_ | | | | [removed: _Maximum_ _Approximate Dollar_ _Value] [added: _Maximum Approximate Dollar Value] of Shares [removed: that_ _May] [added: that May] Yet Be [removed: Purchased_ _Under] [added: Purchased Under] the Plans [removed: or_ _Programs_] [added: or Programs_] | | |

| 4/1/12 – 4/30/12 | | | 31,781 | | | $ | 66.76 | | | | 31,781 | | | $ | 27.2 million | |

| 5/1/12 – 5/31/12 | | | 2,862 | | | $ | 67.79 | | | | 2,862 | | | $ | 27.0 million | |

| 6/1/12 – 6/30/12 | | | 0 | | | | 0 | | | | 0 | | | $ | 27.0 million | |

| 4/1/11 - 4/30/11 | | | 0 | | | | 0 | | | | 0 | | | $ | 50.6 million | |

| 5/1/11 - 5/31/11 | | | 0 | | | | 0 | | | | 0 | | | $ | 50.6 million | |

| 6/1/11 - 6/30/11 | | | 0 | | | | 0 | | | | 0 | | | $ | 50.6 million | |

[removed: _(dollars] [added: (dollars] in thousands, except per share [removed: data)_][added: data)]

| _Income and Share Data:_ | | [added: _2012_ | | | |] _2011 (1)_ | | | | _2010_ | | | | _2009_ | | | | _2008_ | | | [removed: | _2007_ | | |]

| Net sales | | $ | [removed: 289,962] [added: 314,560] | | | $ | [removed: 269,047] [added: 289,962] | | | $ | [removed: 263,956] [added: 269,047] | | | $ | [removed: 257,420] [added: 263,956] | | | $ | [removed: 223,482] [added: 257,420] | |

| Gross [removed: margin(2)(3)] [added: margin(2)] | | | [removed: 77.6] [added: 75.0] | % | | | [removed: 79.6] [added: 77.6] | % | | | [removed: 78.8] [added: 79.6] | % | | | [removed: 79.3] [added: 78.8] | % | | | [removed: 78.9] [added: 79.3] | % |

| Selling, general and administrative [removed: expenses(2)(3)] [added: expenses(2)] | | | [removed: 12.4] [added: 13.3] | % | | | [removed: 12.2] [added: 12.4] | % | | | [removed: 12.8] [added: 12.2] | % | | | [removed: 14.5] [added: 12.8] | % | | | [removed: 14.4] [added: 14.5] | % |

| Research and development [removed: expenses(2)(3)] [added: expenses(2)] | | | [removed: 9.0] [added: 8.9] | % | | | [removed: 9.3] [added: 9.0] | % | | | [removed: 8.9] [added: 9.3] | % | | | [removed: 8.7] [added: 8.9] | % | | | [removed: 9.0] [added: 8.7] | % |

| Operating income(2) | | | [removed: 56.2] [added: 52.8] | % | | | [removed: 58.1] [added: 56.2] | % | | | [removed: 57.1] [added: 58.1] | % | | | [removed: 56.1] [added: 57.1] | % | | | [removed: 55.6] [added: 56.1] | % |

| Earnings before income taxes(2) | | | [removed: 56.9] [added: 51.6] | % | | | [removed: 58.1] [added: 56.9] | % | | | [removed: 58.9] [added: 58.1] | % | | | [removed: 59.8] [added: 58.9] | % | | | [removed: 57.7] [added: 59.8] | % |

| Net earnings(2) | | | [removed: 38.7] [added: 35.7] | % | | | [removed: 40.8] [added: 38.7] | % | | | [removed: 39.9] [added: 40.8] | % | | | [removed: 40.2] [added: 39.9] | % | | | [removed: 38.1] [added: 40.2] | % |

| Net earnings | | $ | [removed: 112,302] [added: 112,331] | | | $ | [removed: 109,776] [added: 112,302] | | | $ | [removed: 105,242] [added: 109,776] | | | $ | [removed: 103,558] [added: 105,242] | | | $ | [removed: 85,111] [added: 103,558] | |

| Diluted earnings per share | | $ | [removed: 3.02] [added: 3.04] | | | $ | [removed: 2.94] [added: 3.02] | | | $ | [removed: 2.78] [added: 2.94] | | | $ | [removed: 2.64] [added: 2.78] | | | $ | [removed: 2.15] [added: 2.64] | |

| Average common and common equivalent shares — diluted (in thousands) | | | [removed: 37,172] [added: 37,006] | | | | [removed: 37,347] [added: 37,172] | | | | [removed: 37,900] [added: 37,347] | | | | [removed: 39,247] [added: 37,900] | | | | [removed: 39,513] [added: 39,247] | |

| High | | $ | [removed: 83.37] [added: 85.13] | | | $ | [removed: 69.65] [added: 83.37] | | | $ | [removed: 81.90] [added: 69.65] | | | $ | [removed: 79.73] [added: 81.90] | | | $ | [removed: 61.87] [added: 79.73] | |

| Low | | $ | [removed: 56.14] [added: 62.37] | | | $ | [removed: 57.10] [added: 56.14] | | | $ | [removed: 45.64] [added: 57.10] | | | $ | [removed: 56.20] [added: 45.64] | | | $ | [removed: 45.63] [added: 56.20] | |

| _Balance Sheet Data as of June 30:_ | | [removed: _2011_] [added: _2012_] | | | | [removed: _2010_] [added: _2011_] | | | | [removed: _2009_] [added: _2010_] | | | | [removed: _2008_] [added: _2009_] | | | | [removed: _2007_] [added: _2008_] | | |

| Cash, cash equivalents and short-term available-for-sale investments | | $ | [removed: 140,813] [added: 268,986] | | | $ | [removed: 138,811] [added: 140,813] | | | $ | [removed: 202,887] [added: 138,811] | | | $ | [removed: 206,345] [added: 202,887] | | | $ | [removed: 164,774] [added: 206,345] | |

| Receivables | | | [removed: 37,860] [added: 37,741] | | | | [removed: 34,137] [added: 37,860] | | | | [removed: 31,153] [added: 34,137] | | | | [removed: 33,332] [added: 31,153] | | | | [removed: 30,966] [added: 33,332] | |

| Inventories | | | [removed: 44,906] [added: 38,277] | | | | [removed: 13,737] [added: 44,906] | | | | [removed: 11,269] [added: 13,737] | | | | [removed: 9,515] [added: 11,269] | | | | [removed: 8,757] [added: 9,515] | |

| Working capital | | | [removed: 212,229] [added: 310,757] | | | | [removed: 184,016] [added: 212,229] | | | | [removed: 239,944] [added: 184,016] | | | | [removed: 238,194] [added: 239,944] | | | | [removed: 195,645] [added: 238,194] | |

| Total assets | | | [removed: 617,670] [added: 719,324] | | | | [removed: 518,816] [added: 617,670] | | | | [removed: 472,005] [added: 518,816] | | | | [removed: 507,369] [added: 472,005] | | | | [removed: 454,844] [added: 507,369] | |

| _Cash Flow Data:_ | | [removed: _2011_] [added: _2012_] | | | | [removed: _2010_] [added: _2011_] | | | | [removed: _2009_] [added: _2010_] | | | | [removed: _2008_] [added: _2009_] | | | | [removed: _2007_] [added: _2008_] | | |

| Net cash provided by operating activities | | $ | [removed: 127,194] [added: 126,746] | | | $ | [removed: 111,260] [added: 127,194] | | | $ | [removed: 111,321] [added: 111,260] | | | $ | [removed: 115,317] [added: 111,321] | | | $ | [removed: 90,503] [added: 115,317] | |

| Capital expenditures | | | [removed: 3,630] [added: 6,017] | | | | [removed: 4,644] [added: 3,630] | | | | [removed: 6,556] [added: 4,644] | | | | [removed: 16,365] [added: 6,556] | | | | [removed: 8,076] [added: 16,365] | |

| Cash dividends paid per common [removed: share(4)] [added: share(3)] | | | [removed: 1.07] [added: 1.11] | | | | [removed: 1.03] [added: 1.07] | | | | [removed: 0.75] [added: 1.03] | | | | [removed: 0.00] [added: 0.75] | | | | 0.00 | |

| _Financial Ratios:_ | | [removed: _2011_] [added: _2012_] | | | | [removed: _2010_] [added: _2011_] | | | | [removed: _2009_] [added: _2010_] | | | | [removed: _2008_] [added: _2009_] | | | | [removed: _2007_] [added: _2008_] | | |

| Return on average equity | | | [removed: 20.6] [added: 17.8] | % | | | [removed: 22.9] [added: 20.6] | % | | | [removed: 22.3] [added: 22.9] | % | | | [removed: 22.4] [added: 22.3] | % | | | [removed: 21.9] [added: 22.4] | % |

| Return on average assets | | | [removed: 19.8] [added: 16.8] | % | | | [removed: 22.2] [added: 19.8] | % | | | [removed: 21.5] [added: 22.2] | % | | | 21.5 | % | | | [removed: 20.6] [added: 21.5] | % |

| Current ratio | | | [removed: 12.7] [added: 9.7] | | | | [removed: 11.8] [added: 12.7] | | | | [removed: 16.5] [added: 11.8] | | | | [removed: 12.8] [added: 16.5] | | | | [removed: 12.4] [added: 12.8] | |

| Price to earnings [removed: ratio(5)] [added: ratio(4)] | | | [removed: 28] [added: 24] | | | | [removed: 20] [added: 28] | | | | [removed: 23] [added: 20] | | | | [removed: 29] [added: 23] | | | | [removed: 27] [added: 29] | |

| _Employee Data as of June 30:_ | | [removed: _2011_] [added: _2012_] | | | | [removed: _2010_] [added: _2011_] | | | | [removed: _2009_] [added: _2010_] | | | | [removed: _2008_] [added: _2009_] | | | | [removed: _2007_] [added: _2008_] | | |

| Full-time employees | | | [removed: 763] [added: 783] | | | | [removed: 684] [added: 763] | | | | [removed: 687] [added: 684] | | | | [removed: 666] [added: 687] | | | | [removed: 628] [added: 666] | |

| [removed: (4)] [added: (3)] | The Company’s Board of Directors periodically considers the payment of cash dividends. |

| [removed: (5)] [added: (4)] | Common share price at end of fiscal year (June 30) divided by the diluted earnings per share for the respective fiscal year. |

| --- | --- |

| (3) | Fiscal 2007 through 2010 include reclassification of amortization expense as discussed in Note A of the Consolidated Financial Statements. |

CONSOLIDATED STATEMENTS OF [removed: EARNINGS][added: EARNINGS AND COMPREHENSIVE INCOME]

[removed: _TECHNE Corporation] [added: _Corporation] and Subsidiaries_

| | | [removed: _2011_] [added: _2012_] | | | | [removed: _2010_] [added: _2011_] | | | | [removed: _2009_] [added: _2010_] | | |

| Net sales | | $ | [removed: 289,962] [added: 314,560] | | | $ | [removed: 269,047] [added: 289,962] | | | $ | [removed: 263,956] [added: 269,047] | |

| Cost of sales | | | [removed: 65,025] [added: 78,756] | | | | [removed: 54,898] [added: 65,025] | | | | [removed: 55,923] [added: 54,898] | |

| Gross margin | | | [removed: 224,937] [added: 235,804] | | | | [removed: 214,149] [added: 224,937] | | | | [removed: 208,033] [added: 214,149] | |

| Selling, general and administrative | | | [removed: 35,897] [added: 41,683] | | | | [removed: 32,700] [added: 35,897] | | | | [removed: 33,689] [added: 32,700] | |

| Research and development | | | [removed: 25,985] [added: 27,912] | | | | [removed: 25,121] [added: 25,985] | | | | [removed: 23,564] [added: 25,121] | |

| Total operating expenses | | | [removed: 61,882] [added: 69,595] | | | | [removed: 57,821] [added: 61,882] | | | | [removed: 57,253] [added: 57,821] | |

| Operating income | | | [removed: 163,055] [added: 166,209] | | | | [removed: 156,328] [added: 163,055] | | | | [removed: 150,780] [added: 156,328] | |

| Interest income | | | [removed: 3,752] [added: 2,639] | | | | [removed: 4,375] [added: 3,752] | | | | [removed: 7,634] [added: 4,375] | |

| Other non-operating expense, net | | | [removed: (1,826] [added: (3,399] | ) | | | [removed: (4,257] [added: (1,826] | ) | | | [removed: (3,051] [added: (4,257] | ) |

| Total other [added: (expense)] income | | | [removed: 1,926] [added: (4,014] | [added: )] | | | [removed: 118] [added: 1,926] | | | | [removed: 4,583] [added: 118] | |

| Earnings before income taxes | | | [removed: 164,981] [added: 162,195] | | | | [removed: 156,446] [added: 164,981] | | | | [removed: 155,363] [added: 156,446] | |

| Income taxes | | | [removed: 52,679] [added: 49,864] | | | | [removed: 46,670] [added: 52,679] | | | | [removed: 50,121] [added: 46,670] | |

| Net earnings | | [removed: $] | [removed: 112,302] [added: 112,331] | | | [removed: $] | [removed: 109,776] [added: 112,302] | | | [removed: $] | [removed: 105,242] [added: 109,776] | |

| Basic | | $ | [removed: 3.03] [added: 3.04] | | | $ | [removed: 2.95] [added: 3.03] | | | $ | [removed: 2.78] [added: 2.95] | |

| Diluted | | $ | [removed: 3.02] [added: 3.04] | | | $ | [removed: 2.94] [added: 3.02] | | | $ | [removed: 2.78] [added: 2.94] | |

| Cash dividends per common share: | | $ | [removed: 1.07] [added: 1.11] | | | $ | [removed: 1.03] [added: 1.07] | | | $ | [removed: 0.75] [added: 1.03] | |

| Basic | | | [removed: 37,098] [added: 36,939] | | | | [removed: 37,255] [added: 37,098] | | | | [removed: 37,802] [added: 37,255] | |

| Diluted | | | [removed: 37,172] [added: 37,006] | | | | [removed: 37,347] [added: 37,172] | | | | [removed: 37,900] [added: 37,347] | |

| | | [added: _2012_ | | | |] _2011_ | | | | _2010_ | | |

| Cash and cash equivalents | | $ | [removed: 77,613] [added: 116,675] | | | $ | [removed: 94,139] [added: 77,613] | |

| Short-term available-for-sale investments | | | [removed: 63,200] [added: 152,311] | | | | [removed: 44,672] [added: 63,200] | |

| Trade accounts receivable, less allowance for doubtful accounts of [removed: $448] [added: $455] and [removed: $347,] [added: $448,] respectively | | | [removed: 35,914] [added: 35,668] | | | | [removed: 30,850] [added: 35,914] | |

| Other receivables | | | [removed: 1,946] [added: 2,073] | | | | [removed: 1,532] [added: 1,946] | |

| Inventories | | | [removed: 44,906] [added: 38,277] | | | | [removed: 13,737] [added: 44,906] | |

| Deferred income taxes | | | [removed: 5,797] [added: 0] | | | | [removed: 13,379] [added: 5,797] | |

| Prepaid expenses | | | [removed: 1,041] [added: 1,503] | | | | [removed: 976] [added: 1,041] | |

| Total current assets | | | [removed: 230,417] [added: 346,507] | | | | [removed: 201,040] [added: 230,417] | |

| Available-for-sale investments | | | [removed: 131,988] [added: 143,966] | | | | [removed: 171,171] [added: 131,988] | |

| Property and equipment, net | | | [removed: 95,398] [added: 93,788] | | | | [removed: 97,400] [added: 95,398] | |

| [removed: Goodwill] [added: Consolidated goodwill] | | [added: $] | [added: 85,682 | | | $ |] 86,633 | | | [added: $] | 25,068 | |

| [removed: Intangible] [added: Consolidated intangible] assets, net | | [added: $] | [added: 46,476 | | | $ |] 52,282 | | | [added: $] | 2,044 | |

| Investments in unconsolidated entities | | | [removed: 19,633] [added: 1,056] | | | | [removed: 20,559] [added: 19,633] | |

| Deferred income taxes | | | [removed: 0] [added: 14,234] | | | | [removed: 1,011] [added: 0] | |

| Other assets | | | [removed: 1,319] [added: 1,849] | | | | [removed: 523] [added: 1,319] | |

| [added: Consolidated assets] | | $ | [added: 719,324 | | | $ |] 617,670 | | | $ | 518,816 | |

| Trade accounts payable | | $ | [removed: 5,207] [added: 6,291] | | | $ | [removed: 5,232] [added: 5,207] | |

| Salaries, wages and related accruals | | | [removed: 4,784] [added: 4,699] | | | | [removed: 3,781] [added: 4,784] | |

| Impairment losses on investments | | | (3,254 | ) | | | 0 | | | | 0 | |

| Other comprehensive income (loss) | | | 38,066 | | | | 4,943 | | | | (13,757 | ) |

| | | _2012_ | | | | _2011_ | | |

| | | $ | 719,324 | | | $ | 617,670 | |

| Accrued expenses | | | 7,275 | | | | 2,688 | |

| | | $ | 719,324 | | | $ | 617,670 | |

| Other comprehensive loss | | | | | | | | | | | | | | | | | | | (13,757 | ) | | | (13,757 | ) |

| Net earnings | | | | | | | | | | | | | | | 112,331 | | | | | | | | 112,331 | |

| Repurchase of common stock | | | (344 | ) | | | (3 | ) | | | | | | | (23,595 | ) | | | | | | | (23,598 | ) |

| Balances at June 30, 2012 | | | 36,826 | | | $ | 368 | | | $ | 131,851 | | | $ | 520,448 | | | $ | 21,775 | | | $ | 674,442 | |

| Impairment losses on investments | | | 3,254 | | | | 0 | | | | 0 | |

Available-for-sale investments are recorded based on trade-date.

The Company utilizes valuation techniques for determining fair market value which maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.

The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market.

When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

In September 2011, the FASB issued ASU No. 2011-08 _Intangibles – Goodwill and Other_ under an amendment to Topic 350_,_ which permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test.

If an entity concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not be required to perform the two-step impairment test for that reporting unit.

The Company adopted ASU No. 2011-08 for its fiscal year 2012 annual impairment test.

The Company completed its annual impairment testing of goodwill and concluded that no impairment existed as of June 30, 2012.

In July 2012, the FASB issued ASU No. 2012-02 _Intangibles – Goodwill and Other_ under an amendment to Topic 350_,_ which permits an entity to make a qualitative assessment of whether it is more likely than not that an indefinite-lived intangible assets is impaired as a basis for determining whether it is necessary to perform a quantitative impairment test.

An entity will have an option not to calculate annually the fair value of an indefinite-lived intangible asset if the entity determines that it is not more likely than not that that the asset is impaired.

The update is effective for the Company for annual and interim impairment tests for fiscal 2014.

Early adoption is permitted.

The Company adopted ASU No. 2012-02 in the fourth quarter of fiscal 2012.

The Company adopted ASU No. 2011-05 in the fourth quarter of fiscal 2012.

The adoption did not have a material impact on the Company’s consolidated financial statements.

| | | _2012_ | | | | | | | | _2011_ | | | | | | |

| Equity securities | | | 29,472 | | | | 94,664 | | | | 0 | | | | 0 | |

| | | $ | 229,967 | | | $ | 296,277 | | | $ | 194,171 | | | $ | 195,188 | |

At June 30, 2012 and 2011, all of the Company’s available-for-sale investments were valued using Level 1 inputs.

The Company’s investment in equity securities consists of investments in the common stock and warrants of ChemoCentryx, Inc. (CCXI).

At June 30, 2011, the Company had a $14.3 million investment in the preferred stock of CCXI and accounted for the investment on a cost basis.

The investment was included in “Investments in unconsolidated entities” at June 30, 2011.

In September 2011, the Company entered into a $10.0 million loan agreement with CCXI.

The loan was carried at fair value (Level 3 input) while outstanding.

The loan agreement contained a number of conversion features contingent upon CCXI obtaining future debt or equity financing.

The agreement also included a $5.0 million commitment by the Company to participate in a private placement in the event of a successful public offering of CCXI shares.

On February 8, 2012, CCXI completed its initial public offering (IPO) at $10 per share.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Income taxes receivable | | | 0 | | | | 1,755 | |

| | | | | | | | | | | | | | | | | | | | | | | | | |

| Balances at June 30, 2008 | | | 38,643 | | | $ | 386 | | | $ | 115,408 | | | $ | 359,208 | | | $ | 12,128 | | | $ | 487,130 | |

| Net earnings | | | | | | | | | | | | | | | 105,242 | | | | | | | | 105,242 | |

| Comprehensive income | | | | | | | | | | | | | | | | | | | | | | | 85,637 | |

| Surrender and retirement of stock to exercise options | | | (0 | ) | | | (0 | ) | | | (22 | ) | | | | | | | | | | | (22 | ) |

| Repurchase of common stock | | | (1,420 | ) | | | (14 | ) | | | | | | | (90,615 | ) | | | | | | | (90,629 | ) |

| Foreign currency translation adjustments | | | | | | | | | | | | | | | | | | | 5,028 | | | | 5,028 | |

| Comprehensive income | | | | | | | | | | | | | | | | | | | | | | | 117,245 | |

| Trade, other accounts payable and accrued expenses | | | (591 | ) | | | (74 | ) | | | 1,394 | |

The increase from fiscal 2010 was the result of goodwill related to acquisitions in fiscal 2011 which are described in Note B.

The Company’s annual assessment included comparison of the carrying amount of each reporting unit, including goodwill, to the fair value of the reporting unit.

The Company completed its annual impairment testing of goodwill and concluded that no impairment existed as of June 30, 2011, as the fair values of the Company’s reporting units substantially exceeded their carrying values, with the exception of the Tocris and Boston Biochem reporting units which were acquired in the fourth quarter of fiscal 2011.

The carrying values of Tocris and Boston Biochem approximate fair values at June 30, 2011.

The Company reviews the carrying amount of intangible and other long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

Recoverability of asset groups subject to impairment analysis requires the Company to make assumptions and judgments regarding the fair value of these asset groups.

Asset groups are considered to be impaired if their carrying amount exceeds the groups’ ability to continue to generate income from operations and positive cash flow in future periods.

If asset groups are considered impaired, the amount by which the carrying amount exceeds its fair value would be expensed as an impairment loss.

In June 2009, the FASB issued Statement of Financial Accounting Standard No. 167, now codified in ASC Topic 810, _Consolidation._ This statement amends the consolidation guidance applicable to variable interest entities and was effective for the Company beginning July 1, 2010.

_Reclassifications:_ Certain reclassifications have been made to prior years’ Consolidated Financial Statements to conform to the current year presentation.

These reclassifications had no impact on net earnings or shareholders’ equity as previously reported.

The Company reclassified prior years’ amortization expense as appropriate based upon the nature of the related intangible asset to cost of sales or selling, general and administrative expense.

The aggregate purchase price of these acquisitions was allocated to the assets acquired and liabilities assumed based on their preliminarily estimated fair values at the date of acquisition.

The preliminary estimate of the excess of purchase price over the fair value of net tangible assets acquired was allocated to identifiable intangible assets and goodwill.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as a result of the fiscal 2011 acquisitions (in thousands):

| | | _Boston Biochem_ | | | | _Tocris_ | | |

| Current assets | | $ | 1,738 | | | $ | 33,837 | |

| Intangible assets | | | 4,300 | | | | 48,425 | |

| Goodwill | | | 1,500 | | | | 61,365 | |

| Equipment | | | 484 | | | | 1,233 | |

| Total assets acquired | | | 8,022 | | | | 144,860 | |

| Current liabilities | | | 134 | | | | 1,800 | |

| Deferred income taxes | | | 0 | | | | 19,182 | |

| Net assets acquired | | $ | 7,888 | | | $ | 123,878 | |

| Cash paid, net of cash acquired | | $ | 7,888 | | | $ | 123,878 | |

Tangible assets acquired, net of liabilities assumed, were stated at fair value at the date of acquisition based on management’s assessment.

The purchase price allocated to developed technology, trade names and customer relationships was based on management’s forecasted cash inflows and outflows and using a relief-from-royalty and a multi-period excess earnings method to calculate the fair value of assets purchased with consideration to other factors including an independent valuation of management’s assumptions.

The developed technology is being amortized with the expense reflected in cost of goods sold in the Consolidated Statement of Earnings.

As of June 30, [removed: 2011,] [added: 2012,] management, under the supervision of the chief executive officer and chief financial officer, assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control — Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on the assessment, management determined that the Company maintained effective internal control over financial reporting as of June 30, [removed: 2011.][added: 2012.]

Other than “Executive Officers of the Registrant” which is set forth at the end of Item 1 in Part I of this report, the information required by Item 10 is incorporated herein by reference to the sections entitled “Election of Directors,” “Corporate Governance” and “Compliance With Section 16(a) of the Exchange Act” in the Company’s Proxy Statement for its [removed: 2011] [added: 2012] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

The information required by Item 11 is incorporated herein by reference to the section entitled “Corporate Governance” and “Executive Compensation Discussion and Analysis” in the Company’s Proxy Statement for its [removed: 2011] [added: 2012] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

Information about the Company’s equity compensation plans at June 30, [removed: 2011] [added: 2012] is as follows:

| Equity compensation plans approved by Shareholders (1) | | | [removed: 499,000] [added: 575,000] | | | $ | [removed: 64.15] [added: 65.78] | | | | [removed: 2.8] [added: 2.7] million | |

The remaining information required by Item 12 is incorporated by reference to the sections entitled “Principal Shareholders” and “Management Shareholdings” in the Company’s Proxy Statement for its [removed: 2011] [added: 2012] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

The information required by Item 13 is incorporated by reference to the sections entitled “Corporate Governance” in the Company’s Proxy Statement for its [removed: 2011] [added: 2012] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

The information required by Item 14 is incorporated herein by reference to the section entitled “Audit Matters” in the Company’s Proxy Statement for its [removed: 2011] [added: 2012] Annual Meeting of Shareholders which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the close of the fiscal year for which this report is filed.

Consolidated Statements of Earnings [added: and Comprehensive Income] for the Years Ended June 30, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009][added: 2010]

Consolidated Balance Sheets as of June 30, [removed: 2011] [added: 2012] and [removed: 2010][added: 2011]

Consolidated Statements of Shareholders’ Equity [removed: and Comprehensive Income (Loss)] for the Years Ended June 30, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009][added: 2010]

Consolidated Statements of Cash Flows for the Years Ended June 30, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009][added: 2010]

Notes to Consolidated Financial Statements for the Years Ended June 30, [removed: 2011, 2010] [added: 2012, 2011] and [removed: 2009][added: 2010]

| | | [removed: | | | |] TECHNE CORPORATION | [removed: | |]

| Date: August 29, [removed: 2011 | | | |] [added: 2012] | | /s/ [removed: THOMAS] [added: Thomas] E. [removed: OLAND | |] [added: Oland] |

| | | [removed: | | | |] By: [removed: | | Thomas] [added: Thomas] E. [removed: Oland] [added: Oland] |

| | | [removed: | | | |] Its: [removed: | | President] [added: President] |

| Date | | Signature and Title | [removed: | |]

| August 29, [removed: 2011 | |] [added: 2012] | | /s/ [removed: THOMAS] [added: Thomas] E. [removed: OLAND] [added: Oland] |

| | | [removed: | | Thomas] [added: Thomas] E. [removed: Oland] [added: Oland] |

| | | [removed: | | Chairman] [added: Chairman] of the Board, President, [removed: Chief Executive Officer and Director (principal executive officer)] |

| August 29, [removed: 2011 | |] [added: 2012] | | /s/ [removed: ROGER] [added: Roger] C. [removed: LUCAS, PH.D.] [added: Lucas, Ph.D.] |

| | | [removed: | | Dr.] [added: Dr.] Roger C. [removed: Lucas] [added: Lucas] |

| | | [removed: | | Vice] [added: Vice] Chairman and [removed: Director] [added: Director] |

| August 29, [removed: 2011 | |] [added: 2012] | | /s/ [removed: HOWARD] [added: Howard] V. [removed: O’CONNELL] [added: O’Connell] |

| | | [removed: | | Howard] [added: Howard] V. O’Connell, [removed: Director] [added: Director] |

| August 29, [removed: 2011 | |] [added: 2012] | | /s/ [removed: RANDOLPH] [added: Randolph] C. [removed: STEER, PH.D.,] [added: Steer, Ph.D.,] M.D. |

| | | [removed: | | Dr.] [added: Dr.] Randolph C. Steer, [removed: Director] [added: Director] |