Aceto second quarter net sales increase 20.8% to $85.7 million

Feb 4 2011

Aceto Corporation (Nasdaq:ACET), a global leader in the sourcing, quality assurance, regulatory support, marketing and distribution of pharmaceuticals, nutraceuticals, specialty chemicals and crop protection products, today announced results of operations for its fiscal 2011 second quarter ended December 31, 2010.

Net sales for the fiscal 2011 second quarter were $85.7 Million, an increase of 20.8% from $70.9 Million in the year ago quarter. Gross profit increased 21.7% to $13.1 Million in the 2011 fiscal quarter compared to $10.8 Million in the 2010 quarter. SG&A expenses decreased 19.8% to $11.4 Million in the 2011 fiscal quarter compared to $14.2 Million in the year ago comparable quarter. Both the fiscal 2010 and 2011 quarters were negatively impacted by several one-time charges. Prior year's fiscal 2010 second quarter results reflected three one-time, pre-tax, charges totaling $4.7 Million. The current second quarter, was impacted by two one-time charges relating to the December 31, 2010 acquisition of assets of Rising Pharmaceuticals, Inc. that were discussed on the January 6^th conference call following the close of the transaction. The first charge of $2.6 Million was an additional tax expense resulting from the repatriation of approximately $15 Million of cash from overseas. The second charge of $1.1 Million represents the transaction costs associated with the acquisition. As a result, we ended the fiscal 2011 second quarter with a net loss of $1.2 Million, or ($0.05) per diluted share compared to a net loss of $2.5 Million or ($0.10) per diluted share in the 2010 quarter. Adjusting for these 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, compared to $0.6 Million, or $0.03 per diluted share in the 2010 quarter.

We should also note that the Rising acquisition is reflected on the attached balance sheet as of the closing date. Rising operations had no impact upon the Income Statement in the quarter.

Net sales for the six months ended December 31, 2010 were $173.3 Million, a 22.5% increase from $141.5 Million for the fiscal 2010 comparable period. Gross profit for the first half of fiscal 2011 was $26.4 Million, an increase of 16.9% from $22.6 Million in the first half of fiscal 2010. For the first half of fiscal 2011, we reported net income of $1.6 Million, or $0.06 per diluted share, compared to a net loss of $1.5 Million, or ($0.06) per diluted share in the first half of fiscal 2010. Again, adjusting for the one-time charges that negatively impacted both periods, we would have reported $4.9 Million, or $0.19 per share for the fiscal 2011 half year compared to $1.6 Million, or $0.07 per share for the 2010 comparable period.

Commenting on the results, Albert Eilender, Chairman and CEO of Aceto stated, "Notwithstanding the one time charges we incurred as a result of the Rising acquisition, we are pleased that the year to year improvement in our operating results has continued. All three of our business segments showed sales growth during the quarter. During the quarter, sales in our Health Sciences segment increased 3.8% from the 2010 comparable quarter, largely the result of increased sales from our international operations, particularly Germany for API's and nutraceutical products. Sales in our Specialty Chemicals segment increased 37.5% compared to the 2010 comparable quarter, largely the result of increased sales of chemicals used in surface coatings as well as increased sales of agricultural, dye, pigment and miscellaneous intermediates. Sales in our Crop Protection segment increased 132.5% from the 2010 comparable quarter as a result of increased sales among a number of our products in this segment."

Commenting on the Rising Pharmaceuticals transaction, Mr. Eilender stated, "We are delighted to have completed the transaction and look forward to the synergistic business opportunities in the finished dosage form area that we believe will prove to be a key building block in the future growth of Aceto."

SOURCE Aceto Corporation