Message #9 From:
NewsBot Date: November 9, 2005 02:00:00 AM
ACET News Aceto Corporation Announces First Quarter Financial Results
LAKE SUCCESS, N.Y.--(BUSINESS WIRE)--Nov. 9, 2005--Aceto Corporation (NASDAQ:ACET), a global distributor of chemically-derived pharmaceuticals, biopharmaceuticals, specialty chemicals and agrochemicals, today announced results of operations for its first quarter ended September 30, 2005.
Net sales for the first quarter were $75.0 million, compared to $80.4 million in the first quarter of fiscal year 2005. This decline reflects the previously disclosed decrease in sales of two active pharmaceutical ingredients (APIs) due to intense competition. Sales of those two products in the first quarter of fiscal year 2006 were $1.7 million, compared with $11.8 million in the first quarter of fiscal year 2005, a decrease of $10.1 million. The gross profit margin on net sales was essentially unchanged over the two periods. Net income was $2.0 million, or $0.08 per diluted share, in the first quarter of fiscal 2006, versus $3.4 million, or $0.14 per diluted share, in the same quarter last year. The decline in net income is largely attributable to the decrease in sales of the two APIs. (Prior year per share amounts have been adjusted for a 3-for-2 stock split, effected in the form of a dividend, paid January 10, 2005.)
Aceto also announces that it has reached a tentative legal settlement of a patent claim brought against it that required Aceto to take a charge of $0.5 million in the quarter. This charge reduced first quarter earnings per share by $0.02 per diluted share and was not anticipated when the Company issued earnings guidance of at least $0.07 per diluted share for the quarter.
Aceto closed the first quarter in a strong financial position, highlighted by working capital of $97.6 million, no long-term debt, and shareholders' equity of $109.8 million at September 30, 2005.
Leonard S. Schwartz, Chairman, CEO, and President of Aceto, stated, "Apart from the decrease in sales of the two APIs, our business performed well during the first quarter. Without those two products, our sales grew 7% due primarily to the introduction of new Health Sciences products, steady growth in our Chemicals & Colorants segment and strength in our Agrochemicals segment."
Mr. Schwartz added, "We continue to focus on our initiatives in human and veterinary biopharmaceuticals. Although the FDA no longer plans to issue guidance before the end of 2005 regarding how approval of human generic biopharmaceuticals will be handled, we firmly believe this market will emerge, and we continue to seek to develop products and markets in this area. With regard to veterinary biopharmaceuticals, the USDA is currently reviewing our applications to market a range of vaccines for companion animals. We hope to commence commercial sales towards the end of fiscal year 2006, subject to our receiving approvals on a timely basis."
Mr. Schwartz concluded, "In terms of financial guidance, we expect to earn a minimum of $0.05 per diluted share in the second quarter of fiscal year 2006. The second quarter results will again reflect reduced sales of the two APIs mentioned above, which contributed $6.6 million in sales in the second quarter of fiscal year 2005. The second quarter guidance also includes a $0.01 per diluted share charge for exiting the facility previously occupied by the Institutional Sanitary Supplies segment. We remain optimistic about the long-term strategic direction and prospects of Aceto."
CONFERENCE CALL
Leonard S. Schwartz, Chairman, CEO, and President, and Douglas Roth, CFO, will conduct a conference call at 10:00 a.m. ET on Wednesday, November 9, 2005. Interested parties may participate in the call by dialing 888-787-0577 (706-679-3204 for international callers). Please call in 10 minutes before the call is scheduled to begin. The conference call will also be broadcast live over the Internet via the Investor Relations section (Conference Calls) of Aceto's website. To listen to the live call please go to the website at least 15 minutes before the call to register, download and install any necessary audio software. The conference call will be archived on Aceto's website, and a recorded phone replay of the call will be available from 12:00 noon ET on Wednesday, November 9, 2005, until 5:00 p.m. ET on Thursday, November 10, 2005. Dial 800-642-1687 (706-645-9291 for international callers) and enter the code 9665856 for the phone replay.
ABOUT ACETO
Aceto Corporation, which was incorporated in 1947, is a global leader in the distribution and marketing of biopharmaceuticals, chemically-derived pharmaceuticals, specialty chemicals and agrochemicals used principally as raw materials in the agricultural, color, pharmaceutical, surface coating/ink and general chemical consuming industries. With offices in ten countries, Aceto distributes over 1,000 chemicals in these and other fields.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections of management. Aceto intends for these forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," or variations of such words are intended to identify such forward-looking statements. The forward-looking statements contained in this press release include, but are not limited to, statements regarding emergence of a market for human generic biopharmaceuticals, approval of applications for, and sales of, veterinary vaccines, results for the second quarter of fiscal year 2006, and prospects for long-term growth. All forward-looking statements in this press release are made as of the date of this press release, and Aceto assumes no obligation to update these forward-looking statements whether as a result of new information, future events or otherwise, other than as required by law. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by any forward-looking statements. These uncertainties include, but are not limited to, the mix of products sold and the profit margins thereon, order cancellation or a reduction in orders from customers, competitive product offerings and pricing actions, the availability and pricing of key raw materials, dependence on key members of management, risk of entering into new European markets, continued successful integration of acquisitions, economic and political conditions in the United States and abroad, as well as other risks detailed in the Company's SEC reports, including the Company's Form 10-K and other filings. Copies of these filings are available at www.sec.gov.
Aceto Corp.
Consolidated Statements of Income
(in thousands, except per-share amounts)
(unaudited)
Three months
ended
September 30,
2005 2004
-------- --------
Net sales $74,993 $80,449
Cost of sales 62,490 66,934
-------- --------
Gross profit 12,503 13,515
Gross profit % 16.7% 16.8%
Selling, general and
administrative expenses 10,362 9,430
-------- --------
Operating income 2,141 4,085
Other income, net of
interest expense 759 528
-------- --------
Income from continuing operations before income taxes 2,900 4,613
Provision for income taxes 899 1,245
-------- --------
Income from continuing operations 2,001 3,368
(Loss) income from discontinued operations, net of
income taxes (27) 7
-------- --------
Net income $1,974 $3,375
======== ========
Basic income per common share (a):
Income from continuing operations $0.08 $0.14
(Loss) income from discontinued operations $ - $ -
Net income $0.08 $0.14
Diluted income per common share (a):
Income from continuing operations $0.08 $0.14
(Loss) income from discontinued operations $ - $ -
Net income $0.08 $0.14
Weighted average shares outstanding (a):
Basic 24,287 24,127
Diluted 24,634 24,657
(a) The number of shares outstanding and the per-share information
for September 30, 2004 have been adjusted for a 3-for-2 stock
split, effected in the form of a dividend, paid January 10,
2005.
Aceto Corporation
Consolidated Balance Sheet
(in thousands, except per share amounts)
September
30, 2005 June 30,
(unaudited) 2005
----------- ---------
Assets
Current Assets:
Cash in banks $22,312 $19,950
Investments 5,064 5,068
Receivables:
Trade, less allowance for doubtful
accounts: Sept, $429; June $ 427 50,965 49,636
Other 1,266 1,421
----------- ---------
52,231 51,057
Inventory 50,972 51,722
Prepaid expenses and other current assets 1,576 821
Assets held for sale - 242
Deferred income tax benefit, net 2,799 2,780
----------- ---------
Total current assets 134,954 131,640
Long-term notes receivable 607 624
Property and equipment, net 5,479 5,543
Goodwill 1,720 1,720
Intangible assets,net 3,159 3,153
Deferred income tax benefit, net 2,623 3,626
Other assets 2,730 2,722
----------- ---------
Total Assets $151,272 $149,028
=========== =========
Liabilities and Shareholders' Equity
Current liabilities:
Drafts and acceptances payable $2,879 $2,462
Short term bank loans - 126
Accounts payable 24,307 24,783
Note payable - related party 500 500
Accrued expenses 9,704 9,474
Liabilities related to assets held for sale - 46
----------- ---------
Total current liabilities 37,390 37,391
Long-term liabilites 3,951 3,811
Minority interest 178 171
----------- ---------
Total liabilities 41,519 41,373
Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value:
(40,000 shares authorized; 25,644 shares issued;
24,296 and 24,282 shares outstanding at
Sept 30, 2005 and June 30, 2005,
respectively) 256 256
Capital in excess of par value 56,840 56,903
Retained earnings 64,838 62,864
Treasury stock, at cost:
(1,348 and 1,362 shares at Sept.
30, 2005 and June 30, 2005,
respectively) (13,368) (13,505)
Accumulated other comprehensive income 1,187 1,137
----------- ---------
Total shareholders' equity 109,753 107,655
----------- ---------
Total liabilities and shareholders' equity $151,272 $149,028
=========== =========
