Exhibit 99.1
FOR IMMEDIATE RELEASE
---------------------
ACETO CORPORATION REPORTS SECOND QUARTER RESULTS WITH
BEST EVER QUARTERLY GROSS PROFIT MARGIN
LAKE SUCCESS, NY - February 11, 2004 - Aceto Corporation (Nasdaq:ACET), a global
distributor of pharmaceutical and specialty chemicals, today announced quarterly
results of operations for its second quarter and six months ended December 31,
2003. The operating results do not reflect the Company's acquisition of Pharma
Waldhof, which was consummated on December 31, 2003.
SECOND QUARTER FINANCIAL HIGHLIGHTS - versus fiscal 2003 second quarter
o Net sales grew 7% to $69.2 million.
o Gross profit rose 18% to $12.9 million.
o Net income increased 27% to $3.0 million or $0.19 per diluted share, from
$2.3 million or $0.16 per diluted share in the same period last year. The
weighted average number of diluted shares outstanding rose 7% due to an
increased number of stock options exercised during the past year and
because more unexercised stock options were included in the calculation as
a result of the Company's higher stock price.
SIX-MONTH FINANCIAL HIGHLIGHTS - versus the first six months of fiscal 2003
o Net sales were up 7% to $141.5 million.
o Gross profit grew 14% to $25.3 million.
o Income, before the cumulative effect of a non-cash accounting charge of
$1.9 million in last year's period, increased 31% to $6.1 million or $0.38
per diluted share, from $4.7 million or $0.31 per diluted share in the
first six months of fiscal 2003. For the reasons set forth above, the
weighted average number of diluted shares outstanding increased 8.5%.
Leonard S. Schwartz, Chairman, CEO and President of Aceto, stated, "We are
pleased with the results for the second quarter and first half of fiscal 2004,
during which our three main business segments - Health Sciences, Chemicals and
Colorants, and Agrochemicals - all performed well. Our gross profit margin rose
from 17.0% in the second quarter of last year to 18.7% in the current period,
representing our best-ever quarterly gross profit margin. We are especially
encouraged because these results were achieved despite no new product launches
in our Health Sciences segment in the quarter. We do, however, expect to launch
at least three Active Pharmaceutical Ingredients (APIs) during the second half
of the year."
Douglas Roth, CFO of Aceto, added, "In the second quarter, SG&A expenses
increased, as expected, from $7.7 million to $9.3 million primarily due to
higher professional fees related to internal control documentation and
assessment as mandated by the Sarbanes-Oxley legislation, and non-recurring
legal fees connected with a fully successful lawsuit in China and our joint
venture with Nufarm. Additionally, SG&A was negatively impacted by currency
translation from Euros to US dollars which was more than offset by the
favorable currency translation for sales and gross profit."
Mr. Roth continued, "Our financial position remains strong. As of December 31,
2003, we had cash of $31.9 million, working capital of $77.3 million, no
long-term debt and shareholders' equity of $93.2 million."
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Aceto Corporation News Release Page 2
February 11, 2004
Mr. Schwartz further stated, "We recently completed the acquisition of Pharma
Waldhof from Roche and are extremely enthusiastic about the addition of this
biopharmaceutical distribution company to our business. Not only do we believe
the transaction will be immediately accretive to earnings, but it serves as the
cornerstone of Aceto's entry into the biopharmaceutical market and positions us
on the cutting edge of the generic biopharmaceutical market as it develops.
Another emerging market in which we are excited to be participating is Eastern
Europe, which, prior to entry into the EU, is mostly unregulated in terms of
pharmaceuticals. We opened an office in Poland in early January to facilitate
the supply of EU-approved APIs to pharmaceutical manufacturers in countries
joining the EU, such as Poland, where the EU pharmaceutical standards will be
required under the law by June of this year."
Mr. Schwartz concluded, "As a result of these recent developments and the
strength of our ongoing business, we are optimistic about Aceto's near and
long-term prospects. Current initiatives for continued growth include launching
products from our pipeline of over 50 APIs, establishing another business
location in Eastern Europe, and pursuing additional agrochemical partnerships
and product acquisitions. We are seeing more and more agrochemical opportunities
due to the consolidation of large companies and the disintermediation of the
traditional supply channels. With regard to financial guidance for the third
quarter of fiscal 2004, we anticipate achieving earnings of $0.19 - $0.22 per
diluted share, which compares to $0.16 in the third quarter of last year. We
look forward to updating you with our progress."
CONFERENCE CALL
Leonard S. Schwartz, Chairman, CEO, and President, and Douglas Roth, CFO, will
conduct a conference call at 10:00 a.m. ET on Wednesday, February 11, 2004.
Interested parties may participate in the call by dialing 800-915-4836
(973-317-5319 for international callers) - please call in 10 minutes before the
call is scheduled to begin, and ask for the Aceto call. The conference call will
also be broadcast live over the Internet via the Investor Relations section
(CONFERENCE CALLS) of the Company's website. 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. If you are unable to listen live, the conference
call will be archived on the Company's website. A recorded phone replay of the
call will also be available from 12:00 noon ET on Wednesday, February 11, 2004
until 12:00 noon ET on Thursday, February 12, 2004. Interested parties may dial
800-428-6051 (973-709-2089 for international callers) and enter the code 335745
for the phone replay.
ABOUT ACETO
Aceto Corporation, which was incorporated in 1947, is a global leader in the
distribution and marketing of pharmaceutical and specialty chemicals used
principally in the agricultural, color, pharmaceutical, surface coating/ink and
general chemical industries. With offices in ten countries, Aceto Corporation
distributes over 1,000 chemicals in these and other fields. For more
information, please view our web slide show presentation.
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Aceto Corporation News Release Page 3
February 11, 2004
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements are
based on current expectations, estimates and projections made by management. The
Company intends for the forward-looking statements to be covered by the
safe-harbor provisions for forward-looking statements. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates,"
or variations of such words are intended to identify such forward-looking
statements. The forward looking statements contained in this press release
include, but are not limited to, expected new product launches during the second
half of fiscal 2004, as well as the earnings guidance for the Company's third
quarter of fiscal 2004. All forward-looking statements in this press release are
made as of the date hereof, and the Company assumes no obligation to update
these forward-looking statements whether as a result of new information, future
events or otherwise. The forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
set forth or implied by any forward-looking statements. These uncertainties
include, but are not limited to, the mix of products sold and the profit margins
thereon, order cancellation or a reduction in orders from customers, competitive
product offerings and pricing actions, the availability and pricing of key raw
materials, dependence on key members of management, economic and political
conditions in the United States and abroad, as well as other risks detailed in
the Company's SEC reports, including the Company's Form 10-K and other filings.
Copies of these filings are available through the SEC's electronic data
gathering analysis and retrieval system (EDGAR) at WWW.SEC.GOV.
CONTACT: -OR- INVESTOR RELATIONS COUNSEL:
Aceto Corporation The Equity Group Inc.
Leonard S. Schwartz, Chairman/CEO Loren G. Mortman
Douglas Roth, CFO (212) 836-9604,
LMortman@equityny.com
- --------------------- Lauren Barbera
(516) 627-6000 (212) 836-9610,
www.aceto.com
- ------------- www.theequitygroup.com
LBarbera@equityny.com ----------------------
- ---------------------
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Aceto Corporation News Release Page 4
February 11, 2004
ACETO CORP.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXPECT PER SHARE AMOUNTS)
(UNAUDITED)
SECOND QUARTER ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2003 2002 2003 2002
---------- ---------- ----------- ----------
Net Sales $ 69,202 $ 64,633 $141,539 $132,655
Cost of Sales 56,258 53,627 116,271 110,404
---------- ---------- ----------- ----------
Gross Profit 12,944 11,006 25,268 22,251
Gross Profit % 18.70% 17.03% 17.85% 16.77%
Selling, General and
Administrative Expenses 9,331 7,655 17,458 15,316
---------- ---------- ----------- ----------
Operating Profit 3,613 3,351 7,810 6,935
Other Income (Expense) Net of
Interest Expense 463 49 820 (145)
---------- ---------- ----------- ----------
Income before Income Taxes and Cumulative
Effect of Accounting Change 4,076 3,400 8,630 6,790
Provision for Income Taxes 1,113 1,072 2,548 2,139
Income Before Cumulative Effect of
Accounting Change 2,963 2,328 6,082 4,651
Cumulative effect of accounting change
net of income taxes (1) - - - 1,873
---------- ---------- ----------- ----------
Net Income $ 2,963 $ 2,328 $ 6,082 $ 2,778
========== ========== =========== ==========
Basic earnings per common share (2):
Before accounting change $ 0.19 $ 0.16 $ 0.39 $ 0.32
Cumulative effect of accounting change $ - $ - $ - $ 0.13
---------- ---------- ----------- ----------
$ 0.19 $ 0.16 $ 0.39 $ 0.19
Diluted earnings per common share (2):
Before accounting change $ 0.19 $ 0.16 $ 0.38 $ 0.31
Cumulative effect of accounting change $ - $ - $ - $ 0.12
---------- ---------- ----------- ----------
$ 0.19 $ 0.16 $ 0.38 $ 0.19
Weighted average shares outstanding
Basic 15,648 14,756 15,711 14,729
Diluted 16,002 14,931 16,125 14,856
(1) Impairment loss on a business in the industrial sanitary supply segment was
recognized as a cumulative effect of an accounting change in the first interim
of fiscal 2003.
(2) Retroactively adjusted to reflect a 3-for-2 stock dividend, accounted for as
a stock split, distributed on January 2, 2003 to common stockholders of record
as of the close of business December 17, 2003.
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Aceto Corporation News Release Page 5
February 11, 2004
ACETO CORP.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, 2003 JUNE 30, 2003
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(UNAUDITED)
ASSETS
Current Assets:
Cash $ 31,927 $ 20,263
Short-term investment 994 877
Trade receivables, less allowance for doubtful
accounts: 12/31/03 $724; 6/30/03 $ 939 47,375 43,841
Other 1,945 1,320
----------------- ---------------
49,320 45,161
Inventory 41,083 41,696
Prepaid expenses 1,257 1,015
Income taxes receivable - 939
Deferred income tax benefit, net 301 301
Total current assets 124,882 110,252
Long-term notes receivable 795 1,017
Property, plant and equipment 6,717 6,282
Less accumulated depreciation 4,077 3,681
----------------- ---------------
2,640 2,601
Goodwill 10,766 7,783
Deferred income tax benefit 1,107 1,107
Other assets 637 759
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Total Assets $ 140,827 $ 123,519
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Drafts and acceptances payable $ 1,712 $ 1,315
Short term bank loans 1,130 3,286
Accounts payable 21,458 17,372
Accrued merchandise purchases 6,973 4,048
Accrued compensation 3,900 4,117
Accrued environmental remediation 1,550 1,550
Accrued income taxes 1,333 -
Other accrued expenses 9,566 7,262
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Total current liabilities 47,622 38,950
Shareholders' equity:
Common stock, $.01 par value per share; 176 176
Authorized: 12/31/03, 40,000,000; 6/30/03, 20,000,000 shares
Issued: 12/31/03 & 6/30/03: 17,570,579 shares;
Outstanding: 12/31/03, 15,851,736; 6/30/03, 15,564,070 shares
Capital stock in excess of par 57,278 57,047
Retained earnings 50,867 46,142
Accumulated other comprehensive loss 1,932 1,040
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110,252 104,405
Less:
cost of common shares held in treasury;
12/31/03, 1,718,843; 6/30/03, 2,006,509 shares 17,048 19,836
----------------- ---------------
Total shareholders' equity 93,205 84,569
Total liabilities and shareholders' equity $ 140,827 $ 123,519
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