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DEFA14A
ACETO CORP filed this Form DEFA14A on 10/20/2017
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Some brief comments on our business segments: within our Human Health segment, Rising Pharmaceuticals, our finished dosage form generic drug business, is the cornerstone of ACETO’s growth strategy. At the fiscal year end we had 129 Rx products within 398 SKU’s. This is an increase of 98.5% Rx products compared to Fiscal 2016. The pipeline of products filed and or approved pending launch, which is a barometer of internal future growth, stood at 62 at fiscal year-end. This is in addition to the 71 products in varying stages of development. Contrasting this with last fiscal year’s pipeline, this is an increase of 29.1%. We are still seeking opportunities to acquire late stage assets that come about through industry consolidations or strategic divestitures.

 

In our Pharmaceutical Ingredients business segment, we anticipated that our product development effort would result in sufficient new business to provide overall growth to the segment. New business did contribute 22% of revenue and 20.5 % of gross profit. However, the loss of business offset these gains and the business segment was flat on a year-to-year basis.

 

Our Performance Chemicals business segment continued to show gross profit improvement, increasing on a fiscal year-to-year basis by almost 3% to $37.2 million. On a margin basis, gross margin improved from 21.3% to 22.5% for the year. While revenue did decrease by 2%, the gross profit for this non-manufacturing distribution business is at industry leading performance levels. Going forward, we will strive to maintain our favorable margins but with more focus on top-line growth. Our primary source of product originates from China and, due to our office and staff in Shanghai, we have been able to maintain and improve margins as regulatory and environmental regulations within the country have created pricing pressures and, in some cases, forced closure of non-compliant facilities within the country.

 

FISCAL 2017 FINANCIAL REVIEW

 

We again achieved record full-year results for net sales. Our net sales were $638 million, a 14.3% increase from the $558.5 million reported for fiscal 2016. Gross profit was $140.8 million compared to $142.8 million in fiscal 2016, a decrease of 1.4%. Gross margin for fiscal 2017 was 22.1% compared to 25.6% in the prior year. Net income decreased by 67.3% to $11.4 million from $34.8 million reported in fiscal 2016. GAAP earnings per diluted share was $0.35 for fiscal 2017 compared to $1.18 per share in fiscal 2016, a 70.3% decrease.

 

 

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