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Aceto Announces Fiscal 2012 Second Quarter Results of Operations

FINANCIAL HIGHLIGHTS:

•   Net Sales in Fiscal 2012 2nd Quarter increased 29.2% from Fiscal 2011 2nd Quarter sales

•   Gross Profit in Fiscal 2012 2nd Quarter increased 57.3% from Fiscal 2011 comparable period

PORT WASHINGTON, N.Y., Feb. 9, 2012 (GLOBE NEWSWIRE) -- Aceto Corporation (Nasdaq:ACET), a global leader in the marketing and distribution of pharmaceutical intermediates and active ingredients, finished dosage form generics, nutraceutical products, agricultural protection products and specialty chemicals today announced results of operations for its fiscal 2012 second quarter and six months ended December 31, 2011.

Net sales for the fiscal 2012 second quarter were $110.7 Million, an increase of 29.2% from $85.7 Million reported in the fiscal 2011 second quarter. Excluding sales from Rising Pharmaceuticals, acquired in December 2010, net sales were $98.8 Million, representing an increase of 15.3%. Gross profit increased 57.3% to $20.6 Million in the 2012 fiscal quarter compared to $13.1 Million in the 2011 fiscal quarter. Excluding gross profit from Rising, the company's gross profit increased 14.7% from the fiscal 2011 first quarter. Net income was $4.6 Million, or $0.17 per diluted share for the 2012 fiscal second quarter compared to a $1.2 Million loss for the comparable quarter in fiscal 2011. The fiscal 2011 quarter was also impacted by two one-time charges relating to the December 31, 2010 acquisition of assets of Rising Pharmaceuticals, Inc. that have previously been discussed in last year's second quarter results press release. Adjusting for those one-time charges, we would have reported net income of $2.1 Million, or $0.08 per diluted share for the fiscal 2011 second quarter.

Net sales for the six months ended December 31, 2011 were $212.0 Million, a 22.3% increase from $173.3 Million for the fiscal 2011 comparable period. Gross profit for the first six months of fiscal 2012 was $39.2 Million, an increase of 48.3% from $26.4 Million in the first half of fiscal 2011. For the first half of fiscal 2012, we reported net income $7.6 Million, or $0.29 per diluted share, compared to $1.6 Million, or $0.06 per diluted share in the first half of fiscal 2011. The fiscal 2012 period was negatively impacted by a one-time charge relating to the separation of certain executive management employees. Adjusting for the one-time charges that negatively impacted both periods, we would have reported $8.2 Million, or $0.31 per share for the first six months of fiscal 2012 compared to $4.9 Million, or $0.19 per share for the 2011 comparable period.

Commenting on the results, Albert Eilender, Chairman and CEO of Aceto stated, "We are very pleased with the results we have reported today. During the quarter, we experienced sales growth across all of our business segments.  However, we have always maintained that our business is difficult to project on a quarter to quarter basis, and in this quarter, some of the overall increase in sales can be attributed to earlier than anticipated orders of products across our business segments. We look forward to discussing this in more detail during our conference call." 

"Sales in our Health Sciences segment increased 44.0% from fiscal 2011, largely the result of increased sales from our domestic Health Sciences group including the additional sales of Rising Pharmaceuticals products where we had no comparable sales in prior periods. In addition, the Health Sciences segment saw an increase in sales from our international operations, particularly in sales of nutritional products. Sales in our Specialty Chemicals segment increased 9.6% from the 2011 comparable period, largely the result of increased sales of agricultural intermediates, dye, pigment and miscellaneous products from our domestic Specialty Chemicals group. Sales in our Agricultural Protection Products segment increased 23.7% from the 2011 comparable period as a result of an increase in sales of a broad spectrum insecticide that is used on various crops. The increase was partially offset by the absence of glyphosate sales which, as we have previously stated, is not a product that we have factored into our future business plans."

CONFERENCE CALL

Albert Eilender, Ronald Gold and Douglas Roth will conduct a conference call at 9:00 a.m. ET on Friday, February 10, 2012 to discuss our operating results for the fiscal 2012 second quarter.  Interested parties may participate in the call by dialing 800-446-3782 (847-413-3235 for international callers) — please call in 10 minutes before the call is scheduled to begin, and ask for the Aceto call (conference ID # 31637574). The conference call will also be webcast live via the Investor Relations section of our website, http://www.aceto.com/. To listen to the live call please go to the website at least 15 minutes early to register, download and install any necessary audio software. The conference call will be archived on the Company's website, and a recorded phone replay will also be available from 1:00 p.m. ET on Friday February 10, 2012 until 5:00 p.m. ET on Monday February 13, 2012. Dial 888-843-7419 (630-652-3042 for international callers) and enter the code 31637574 for the phone replay.

ABOUT ACETO

Aceto Corporation, incorporated in 1947, is a global leader in the marketing and distribution of pharmaceutical intermediates and active ingredients, finished dosage form generics, nutraceutical products, agricultural protection products and specialty chemicals. With business operations in ten countries, Aceto distributes over 1,100 chemical compounds used principally as finished products or raw materials in the pharmaceutical, nutraceutical, agricultural, coatings and industrial chemical consuming industries. Aceto's global operations, including a staff of 26 in China and 12 in India are distinctive in the industry and enable its worldwide sourcing and regulatory capabilities. (ACET-F)

FORWARD LOOKING STATEMENTS

This news release contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this news release may not occur. Generally, these statements relate to our business plans or strategies, projected or anticipated benefits or other consequences of Aceto's plans or strategies, financing plans, projected or anticipated benefits from acquisitions that Aceto may make, or projections involving anticipated revenues, earnings or other aspects of Aceto's operating results or financial position, and the outcome of any contingencies. Any such 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 "may," "will," "expect," "believe," "anticipate," "project," "plan," "intend," "estimate," and "continue," and their opposites and similar expressions are intended to identify forward-looking statements.  The forward-looking statements contained in this press release include, but are not limited to, statements regarding the Company's strategic initiatives including selling finished dosage form generic drugs, and statements regarding the prospects for long-term growth.  Aceto cautions you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond Aceto's control, which may influence the accuracy of the statements and the projections upon which the statements are based.  Factors that could cause actual results to differ materially from those set forth or implied by any forward-looking statement include, but are not limited to, risks and uncertainties discussed in Aceto's reports filed with the Securities and Exchange Commission, including, but not limited to, Aceto's Annual Report or Form 10-K for the fiscal year ended June 30, 2011 and other filings. Copies of these filings are available at www.sec.gov .   

Any one or more of these uncertainties, risks and other influences could materially affect Aceto's results of operations and whether forward-looking statements made by Aceto ultimately prove to be accurate.  Aceto's actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements.  Aceto undertakes no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

Aceto Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
         
  (unaudited)
Three Months Ended
December 31,
(unaudited)
Six Months Ended
December 31,
  2011 2010 2011 2010
Net sales  $ 110,707  $ 85,683  $ 212,024  $ 173,343
Cost of sales  90,063  72,560  172,861  146,933
Gross profit  20,644  13,123  39,163  26,410
Gross profit % 18.65% 15.32% 18.47% 15.24%
         
Selling, general and administrative expenses  13,528  11,427  27,097  21,024
Operating income   7,116  1,696  12,066  5,386
         
Other income (expense), net of interest expense  48  599  (163)  1,159
         
Income before income taxes  7,164  2,295  11,903  6,545
Income tax provision   2,576  3,464  4,282  4,917
Net income (loss)  $ 4,588  $ (1,169)  $ 7,621  $ 1,628
         
Net income (loss) per common share  $ 0.17  $ (0.05)  $ 0.29  $ 0.06
         
Diluted net income (loss) per common share  $ 0.17  $ (0.05)  $ 0.29  $ 0.06
         
Weighted average shares outstanding:        
Basic  26,565  25,391  26,520  25,351
Diluted  26,737  25,391  26,686  25,554
 
Aceto Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except per-share amounts)
     
  December 31, 2011 June 30, 2011
  (unaudited)  
     
Assets    
Current Assets:    
Cash and cash equivalents  $ 28,242  $ 28,664
Investments  458  943
Trade receivables: less allowances for doubtful accounts: Dec. 31, 2011 $785; and June 30, 2011 $682  76,567  83,735
Other receivables  3,384  5,373
Inventory  78,831  77,433
Prepaid expenses and other current assets  1,790  1,720
Deferred income tax asset, net  402  747
     
Total current assets  189,674  198,615
     
Property and equipment, net   11,857  12,095
Property held for sale  3,752  3,752
Goodwill  33,522  33,625
Intangible assets, net  48,107  50,658
Deferred income tax asset, net  3,680  3,477
Other assets  10,081  9,443
     
Total Assets  $ 300,673  $ 311,665
     
Liabilities and Shareholders' Equity    
     
Current liabilities:    
Current portion of long-term debt  $ 6,197  $ 6,247
Accounts payable  38,783  44,614
Accrued expenses  28,854  32,019
Deferred income tax liability  2  306
Total current liabilities  73,836  83,186
     
Long-term debt  45,651  48,750
Long-term liabilities  13,836  12,859
Environmental remediation liability  5,754  5,998
Deferred income tax liability  25  51
Total liabilities  139,102  150,844
     
Commitments and contingencies    
     
Shareholders' equity:    
     
Common stock, $.01 par value:     
(40,000 shares authorized; 26,804 and 26,644 shares issued; 26,804 and 26,620 shares outstanding at Dec. 31, 2011 and June 30, 2011, respectively)  268  266
Capital in excess of par value  62,839  62,329
Retained earnings  95,665  90,713
Treasury stock, at cost:    
(0 and 24 shares at Dec. 31, 2011 and June 30, 2011, respectively)  --   (230)
Accumulated other comprehensive income  2,799  7,743
Total shareholders' equity  161,571  160,821
     
Total liabilities and shareholders' equity  $ 300,673  $ 311,665
   
Aceto Corporation and Subsidiaries
Diluted Net Income Per Common Share Excluding Charges (Non-GAAP Reconciliation)
(in thousands, except per share amounts)
                 
  (unaudited)
Three Months
Ended
December 31,
2011
(unaudited)
Diluted Net
Income Per
Common Share
Three Months
Ended December
31, 2011
(unaudited) Three
Months Ended
December 31,
2010
(unaudited)
Diluted Net
Income Per
Common Share
Three Months
Ended December
31, 2010
(unaudited)
Six Months
Ended
December 31,
2011
(unaudited)
Diluted Net
Income Per
Common Share
Six Months Ended
December 31,
2011
(unaudited) Six
Months Ended
December 31,
2010
(unaudited)
Diluted Net
Income Per
Common Share
Six Months
Ended December
31, 2010
                 
Net income (loss), as reported $4,588  $ 0.17 ($1,169)  $ (0.05) $7,621  $ 0.29 $1,628  $ 0.06
                 
Adjustments:                
Separation charges  --   --   --   --   884 0.03  --   -- 
Transaction costs related to Rising acquisition  --   --   1,060 0.04  --   --   1,060 0.04
                 
Adjusted income (loss) excluding charges  4,588 0.17  (109) (0.01)  8,505 0.32  2,688 0.10
Adjustments to provision (benefit) for income taxes  --  0.00  (2,225) (0.09)  345 0.01  (2,225) (0.09)
                 
Adjusted net income (Non-GAAP)  $ 4,588  $ 0.17  $ 2,116  $ 0.08  $ 8,160  $ 0.31  $ 4,913  $ 0.19
                 
                 
Diluted weighted average shares outstanding 26,737 26,737 25,619 25,619 26,686 26,686 25,554 25,554
                 
NOTE: Items identified in the above table are not in accordance with, or an alternative method for, generally accepted accounting principles (GAAP) in the United States. These items should not be reviewed in isolation or considered substitutes of the Company's financial results as reported in accordance with GAAP. Due to the nature of these items, it is important to identify these items and to review them in conjunction with the Company's financial results reported in accordance with GAAP. The exclusion of these items also allows investors to compare results of operations in the current period to prior period's results based on the Company's fundamental business performance and analyze the operating trends of the business. The exclusion of these items also allows management to evaluate performance of its business units.      
CONTACT: Theodore Ayvas
         Director of Corporate Communications & Investor Relations
         Aceto Corporation
         (516) 627-6000
         http://www.aceto.com/
Source: Aceto Corporation

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