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SEC Filings

8-K
ACETO CORP filed this Form 8-K on 11/03/2017
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First Quarter Financial Review

 

Net sales for the first quarter of fiscal 2018 were $185.3 million, an increase of 44.7% from $128.0 million reported in the first quarter of fiscal 2017. Total Company gross profit was $40.0 million, an increase of 29.7%, compared to $30.8 million in the first quarter of fiscal 2017. Gross margin for the first quarter was 21.6% compared to 24.1% in the prior year period.

 

Human Health segment sales were $106.0 million, an increase of 121.4%, compared to $47.9 million for the first quarter of fiscal 2017. The revenue increase primarily reflects the addition of $55.1 million from the acquisition of certain products and related assets of Citron and Lucid. Gross profit for the Human Health segment was $24.6 million, an increase of 73.5%, compared to $14.2 million for the first quarter of fiscal 2017, reflecting the addition of certain products and related assets of Citron and Lucid. Gross margin for the first quarter was 23.2%, compared to 29.7% in the prior year period. The decrease in gross margin was due to the addition of relatively lower gross margin from the Citron and Lucid products and to the decline of gross profit for certain legacy Rising products.

 

Pharmaceutical Ingredients segment sales were $36.6 million, a decrease of 9.9%, compared to $40.6 million for the first quarter of fiscal 2017. The segment’s sales decrease was driven by lower sales of domestic APIs. Gross profit in the quarter was $5.8 million, a 16.0% decrease compared to $7.0 million for the first quarter of fiscal 2017. Gross margin for the first quarter was 16.0%, compared to 17.1% in the prior year period. The decrease in gross profit and margin was driven by lower sales of domestic APIs and a less favorable product mix in APIs.

 

Performance Chemicals segment sales were $42.7 million, an increase of 8.0% compared to $39.5 million for the first quarter of fiscal 2017, largely due to higher sales of agricultural and pigment intermediates in the Specialty Chemicals business. Gross profit was $9.5 million, a decrease of 1.9%, compared to $9.7 million for the first quarter of fiscal 2017. Gross margin was 22.3% for the first quarter, compared to 24.5% in the prior year period. The decrease in gross profit and margin was primarily due to lower sales of certain agricultural protection products and a less favorable product mix of specialty chemical products.

 

Total selling, general and administrative expenses were $31.1 million compared to $21.0 million in the same period last year, a 48.2% increase, with $5.4 million of the increase attributable to amortization expense associated with the purchase of intangible assets related to the Citron and Lucid product purchase. Also included in selling, general and administrative expenses for the first quarter of 2018 were $4.1 million of one-time costs associated with the departure of the company’s former CEO. Research and Development expenses in the first quarter totaled $1.6 million compared to $1.1 million in the prior year period. The majority of R&D expenses are milestone based and fluctuate quarterly.

 

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