ACETO Reports Fiscal 2013 First Quarter Results

Thu Nov 8, 2012 5:00pm EST

* Reuters is not responsible for the content in this press release.

FISCAL 2013 FIRST QUARTER HIGHLIGHTS (Comparisons to FY 2012 Q1):

  • Net sales increased 10.3% to $111.7 million, from $101.3 million
  • Gross profit increased 16.1% to $21.5 million, from $18.5 million
  • Net income increased 34.9% to $4.8 million, from adjusted net income of $3.6 million
  • EPS increased 38.5% to $0.18, from adjusted EPS of $0.13

PORT WASHINGTON, N.Y., Nov. 8, 2012 (GLOBE NEWSWIRE) -- ACETO Corporation (Nasdaq:ACET), a global leader in the marketing, sale and distribution of products for Human Health, Pharmaceutical Ingredients and Performance Chemicals, announced today results of operations for its fiscal 2013 first quarter ended September 30, 2012.

Albert Eilender, Chairman and CEO of ACETO, stated, "We are very pleased with our results for the first quarter of fiscal 2013. Total company sales were up 10.3%. Our Human Health segment continues to show strength with a sales increase of 16.1%, largely driven by new generic product launches in our Rising Pharmaceuticals subsidiary. Performance Chemicals also showed a significant increase, as strong demand for agricultural products led a 23.4% revenue increase in the quarter. Some of these sales can be attributed to earlier than anticipated orders. Sales in Pharmaceutical Ingredients declined by 4.0% due to lower sales of pharmaceutical intermediates."

"Our gross margin expanded by almost 100 basis points during the quarter, due primarily to a more favorable product mix in Human Health and Performance Chemicals. Combined with operating margin leverage, this resulted in a 38.5% increase in earnings per share after adjusting for one-time charges in the first quarter of fiscal 2012. We remain confident in our ability to continue to drive corporate profitability, although sales growth in Performance Chemicals is directly tied to the global economic environment. With a strong balance sheet, we continue to be very well positioned to invest in our internal growth initiatives, and to continue to pursue strategic acquisitions," concluded Mr. Eilender.

FINANCIAL REVIEW

Net sales for the fiscal 2013 first quarter ended September 30, 2012 were $111.7 million, a 10.3% increase from $101.3 million for the fiscal 2012 first quarter. Gross profit for the fiscal 2013 first quarter was $21.5 million, an increase of 16.1% from $18.5 million in the fiscal 2012 first quarter.

For the fiscal 2013 first quarter, ACETO reported net income of $4.8 million, or $0.18 per diluted share, compared to $3.0 million, or $0.11 per diluted share, in the prior year period. Net income in the fiscal 2013 first quarter increased by 58.9% and earnings per share increased by 63.6%. Excluding separation charges in the fiscal 2012 first quarter, adjusted net income in the fiscal 2012 first quarter was $3.6 million, or $0.13 per diluted share. Based on this adjustment, net income in the fiscal 2013 first quarter increased by 34.9% and EPS increased by 38.5%.

CONFERENCE CALL

Albert Eilender, Salvatore Guccione, Ronald Gold and Douglas Roth will conduct a conference call at 9:00 a.m. ET on November 9, 2012 to discuss the operating results for the fiscal 2013 first quarter. Interested parties may participate in the call by dialing 800-447-0521 (847-413-3238 for international callers) – please call in 10 minutes before the call is scheduled to begin, and ask for the ACETO call (conference ID # 33625313). The conference call will also be webcast live via the Investor Relations section of our website, 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 November 9, 2012 until 5:00 p.m. ET on Monday November 12, 2012. Dial 888-843-7419 (630-652-3042 for international callers) and enter the code 33625313 for the phone replay.

ABOUT ACETO

ACETO Corporation, incorporated in 1947, is a global leader in the marketing, sale and distribution of products for Human Health (finished dosage form generics and nutraceutical products), Pharmaceutical Ingredients (pharmaceutical intermediates and active pharmaceutical ingredients) and Performance Chemicals (specialty chemicals and agricultural protection products). With business operations in nine 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 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.

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 a projection 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, 2012 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
 Consolidated Statements of Income
(in thousands, except per share amounts)
     
  (unaudited)
  Three Months Ended
  September 30,
  2012 2011
Net sales  $ 111,748  $ 101,317
Cost of sales  90,243  82,798
Gross profit  21,505  18,519
Gross profit % 19.24% 18.28%
     
Selling, general and  administrative expenses  13,892  13,569
Operating income   7,613  4,950
     
Other income (expense), net of interest expense  9  (211)
     
Income before income taxes  7,622  4,739
Income tax provision   2,802  1,706
Net income   $ 4,820  $ 3,033
     
Net income per common share  $ 0.18  $ 0.11
     
Diluted net income per common share  $ 0.18  $ 0.11
     
Weighted average shares outstanding:    
 Basic  26,805  26,476
 Diluted  27,229  26,635
 
ACETO Corporation and Subsidiaries
Consolidated Balance Sheets
(in thousands, except per-share amounts)
     
  September 30, 2012 June 30, 2012
  (unaudited)  
     
Assets    
Current Assets:    
 Cash and cash equivalents  $ 24,343  $ 24,862
 Investments  581  1,518
 Trade receivables: less allowances for doubtful accounts: Sept 30, 2012 $867; and June 30, 2012 $887  76,795  74,744
 Other receivables  2,390  2,979
 Inventory  85,700  84,687
 Prepaid expenses and other current assets  2,795  2,231
 Deferred income tax asset, net  998  948
     
 Total current assets  193,602  191,969
     
Property and equipment, net   11,755  11,705
Property held for sale  3,752  3,752
Goodwill  33,515  33,495
Intangible assets, net  43,830  45,251
Deferred income tax asset, net  4,741  4,719
Other assets  8,849  8,389
     
Total Assets  $ 300,044  $ 299,280
     
Liabilities and Shareholders' Equity    
     
Current liabilities:    
 Current portion of long-term debt  $ 6,964  $ 6,713
 Accounts payable  37,988  42,007
 Accrued expenses  21,948  24,921
 Total current liabilities  66,900  73,641
     
Long-term debt  41,253  39,052
Long-term liabilities  12,988  12,943
Environmental remediation liability  5,259  5,633
Deferred income tax liability  17  8
 Total liabilities  126,417  131,277
     
Commitments and contingencies    
     
Shareholders' equity:    
 Common stock, $.01 par value:    
 (40,000 shares authorized; 27,163 and 26,937 shares issued and outstanding at Sept 30, 2012 and June 30, 2012, respectively)  272  269
 Capital in excess of par value  65,322  64,071
 Retained earnings  105,677  102,344
 Accumulated other comprehensive income  2,356  1,319
 Total shareholders' equity  173,627  168,003
     
Total liabilities and shareholders' equity  $ 300,044  $ 299,280
 
ACETO Corporation
Diluted Net Income Per Common Share Excluding Charges (Non-GAAP Reconciliation)
(in thousands, except per share amounts)
         
  (unaudited) Three Months Ended September 30, 2012 (unaudited) Diluted Net Income Per Common Share Three Months Ended September 30, 2012 (unaudited) Three Months Ended September 30, 2011 (unaudited) Diluted Net Income Per Common Share Three Months Ended September 30, 2011
         
Net income, as reported $4,820  $ 0.18 $3,033  $ 0.11
         
Adjustments:        
 Separation charges  --   --   884  0.03
         
Adjusted income excluding charges  4,820 0.18  3,917 0.14
Adjustments to provision (benefit) for income taxes  --   --   345  0.01
         
Adjusted net income (Non-GAAP)  $ 4,820  $ 0.18  $ 3,572  $ 0.13
         
Diluted weighted average shares outstanding 27,229 27,229 26,635 26,635

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: Investor Relations Contact:
         Amy Glynn
         The Ruth Group
         (646) 536-7023
         aglynn@theruthgroup.com