Exhibit 99.1
FOR IMMEDIATE RELEASE
---------------------
ACETO CORPORATION REPORTS BEST QUARTER EVER; PROJECTS
DILUTED EPS OF
$.20-.23 FOR FOURTH QUARTER VS. $.15 IN LAST YEAR'S PERIOD
THIRD QUARTER NET INCOME UP 54% FROM LAST YEAR ON A 13% SALES INCREASE
LAKE SUCCESS, NY - May 7, 2004 - Aceto Corporation (Nasdaq:ACET), a global
distributor of chemically-derived pharmaceuticals, biopharmaceuticals and
specialty chemicals, today announced quarterly results of operations for its
third quarter and nine months ended March 31, 2004.
THIRD QUARTER FINANCIAL HIGHLIGHTS - versus fiscal 2003 third quarter
o Net sales grew 13% to $79.7 million.
o Gross profit rose 29% to $15.0 million, and gross profit margin increased to
18.8% from 16.4%.
o Operating income was up 45% to $4.9 million.
o Net income increased 54% to $3.7 million or $0.23 per diluted share, from
$2.4 million or $0.16 per diluted share in the same period last year.
NINE-MONTH FINANCIAL HIGHLIGHTS - versus the first nine months of fiscal 2003
o Net sales were up 9% to $221.2 million.
o Gross profit grew 19% to $39.9 million, and gross profit margin increased to
18.0% from 16.5%.
o Operating income rose 23% to $12.7 million.
o Income, before the cumulative effect of a non-cash accounting charge of
$1.9 million in last year's period, increased 39% to $9.8 million or $0.60
per diluted share, from $7.1 million or $0.47 per diluted share in the first
nine months of fiscal 2003.
Leonard S. Schwartz, Chairman, CEO and President of Aceto, stated, "We are
extremely proud to report our best quarter ever in terms of sales, gross profit
margin, net income and EPS. We saw strength throughout the business, including
our Health Sciences, Chemicals & Colorants and Agrochemicals segments. During
the quarter we launched two active pharmaceutical ingredients (APIs), bringing
the total to three in fiscal 2004 to date, and we expect to launch at least one
more in our fourth quarter. We completed a smooth and successful integration of
Pharma Waldhof, the biopharmaceutical distributor we acquired on December 31,
2003. Importantly, upon closing, the acquisition was immediately accretive to
our earnings. Additionally, our office in Poland is up and running, facilitating
our expansion in Eastern Europe, where the EU pharmaceutical standards will be
required under law by June 2004."
Douglas Roth, CFO of Aceto, added, "We closed the quarter with an even stronger
balance sheet than last quarter, with cash of $30.8 million, working capital of
$79.8 million, no long-term debt and shareholders' equity of $97.6 million at
March 31, 2004. Our strong financial position will serve as support for our
future growth plans."
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Aceto Corporation News Release
Page 2
May 7, 2004
Mr. Schwartz further stated, "Looking forward, we plan to continue to grow our
three main business segments organically. Additionally, we have plans in place
for strategic growth in new directions in each of these business areas that are
similar to the existing businesses. More specifically, in Health Sciences we
plan to continue to launch at least four generic APIs per year, expand in
Eastern Europe, and enter the generic biopharmaceutical market as it develops.
In fact, we now know that there are certain segments of the market where the
regulatory pathways currently exist, therefore these segments will develop
faster than we originally thought. Our plans for the generic biopharmaceutical
business are well under way, and our unique business model is getting a very
positive response from our customers. We are also pursuing continued expansion
in our Agrochemicals segment through the acquisition and distribution rights of
new products, globalizing our Chemicals & Colorants segment, and adding
resources to our Chinese and Indian sourcing operations."
Mr. Schwartz concluded, "As a result of these initiatives, we are very
optimistic about Aceto's near and long-term prospects. We anticipate closing our
fiscal year with another strong quarter. We expect to achieve diluted earnings
per share of $.20-.23 in the fourth quarter, which compares to $.15 in the
fourth quarter of 2003. This would produce fiscal year 2004 diluted EPS of
$.80-.83, up 27-32% over last year (before the cumulative effect of a non-cash
accounting charge in 2003). We look forward to reporting on our continued
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 Friday, May 7, 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 Friday, May 7, 2004 until 12:00 noon ET on
Monday, May 10, 2004. Interested parties may dial 800-428-6051 (973-709-2089 for
international callers) and enter the code 352165 for the phone replay.
ABOUT ACETO
Aceto Corporation, which was incorporated in 1947, is a global leader in the
distribution and marketing of chemically-derived pharmaceuticals,
biopharmaceuticals and specialty chemicals used principally as raw materials in
the agricultural, color, pharmaceutical, surface coating/ink and general
chemical consuming industries. With offices in ten countries, Aceto Corporation
distributes over 1,000 chemicals in these and other fields.
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Aceto Corporation News Release
Page 3
May 7, 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, as well as the
earnings guidance for the Company's fourth quarter and fiscal year 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, other than
as required by law. 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, risk of entering into new
European markets, continued successful integration of acquisitions, 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
(516) 627-6000 Lauren Barbera
WWW.ACETO.COM (212) 836-9610,
LBARBERA@EQUITYNY.COM
WWW.THEEQUITYGROUP.COM
Aceto Corporation News Release
Page 4
May 7, 2004
ACETO CORP.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THIRD QUARTER ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
2004 2003 2004 2003
---------- ---------- ----------- -----------
Net sales $ 79,690 $ 70,561 $ 221,229 $ 203,216
Cost of sales 64,711 58,974 181,371 169,760
---------- ---------- ----------- -----------
Gross profit 14,979 11,587 39,858 33,456
Gross profit % 18.80% 16.42% 18.02% 16.46%
Selling, general and
administrative expenses 10,093 8,206 27,162 23,140
---------- ---------- ----------- -----------
Operating income 4,886 3,381 12,696 10,316
Other income net of
interest expense 198 149 1,018 4
---------- ---------- ----------- -----------
Income before income taxes and cumulative
effect of accounting change 5,084 3,530 13,714 10,320
Provision for income taxes 1,374 1,119 3,922 3,258
---------- ---------- ----------- -----------
Income before cumulative effect of
accounting change 3,710 2,411 9,792 7,062
Cumulative effect of accounting change (1) - - - 1,873
---------- ---------- ----------- -----------
Net income $ 3,710 $ 2,411 $ 9,792 $ 5,189
========== ========== =========== ===========
Basic income per common share (2):
Before accounting change $ 0.23 $ 0.16 $ 0.62 $ 0.48
Cumulative effect of accounting change - - - 0.13
---------- ---------- ----------- -----------
$ 0.23 $ 0.16 $ 0.62 $ 0.35
Diluted earnings per common share (2):
Income before accounting change $ 0.23 $ 0.16 $ 0.60 $ 0.47
Cumulative effect of accounting change - - - 0.12
---------- ---------- ----------- -----------
$ 0.23 $ 0.16 $ 0.60 $ 0.35
Weighted average shares outstanding (2):
Basic 15,896 14,841 15,790 14,784
Diluted 16,306 15,252 16,203 15,006
(1) Impairment loss on a business in the industrial sanitary supply segment
recognized as a cumulative effect of an accounting change in the first interim
reporting period of fiscal 2003.
(2) The number of shares outstanding and the per share information have been
adjusted for a 3-for-2 stock dividend distributed on January 2, 2004 to common
stockholders of record as of the close of business December 17, 2003.
Aceto Corporation News Release
Page 5
May 7, 2004
ACETO CORP.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
MARCH 31, 2004 JUNE 30, 2003
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(UNAUDITED)
ASSETS
Current Assets:
Cash $ 30,771 $ 20,263
Short-term investment 953 877
Trade receivables, less allowance for doubtful
accounts: 3/31/04 $847; 6/30/03 $ 939 54,558 43,841
Other 1,705 1,320
-------------- -------------
56,263 45,161
Inventory 37,763 41,696
Prepaid expenses 1,139 1,015
Income taxes receivable - 939
Deferred income tax benefit, net 301 301
-------------- -------------
Total current assets 127,190 110,252
Long-term notes receivable 770 1,017
Property, plant and equipment 6,803 6,282
Less accumulated depreciation 4,218 3,681
-------------- -------------
2,585 2,601
Goodwill 7,949 7,783
Intangible assets 3,870 412
Deferred income tax benefit 1,107 1,107
Other assets 1,542 347
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Total Assets $ 145,013 $ 123,519
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Drafts and acceptances payable $ 4,541 $ 1,315
Short term bank loans 1,299 3,286
Accounts payable 14,222 17,372
Accrued merchandise purchases 9,595 4,048
Accrued compensation 4,153 4,117
Accrued environmental remediation 1,550 1,550
Accrued income taxes 736 -
Other accrued expenses 11,325 7,262
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Total current liabilities 47,421 38,950
Shareholders' equity:
Common stock, $.01 par value per share; 176 176
Authorized:3/31/04, 40,000,000; 6/30/03, 20,000,000 shares
Issued: 3/31/04 & 6/30/03: 17,570,579 shares;
Outstanding: 3/31/04, 15,948,516; 6/30/03, 15,564,070 shares
Capital stock in excess of par 57,124 57,047
Retained earnings 54,577 46,142
Accumulated other comprehensive loss 1,803 1,040
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113,680 104,405
Less:
cost of common shares held in treasury;
3/31/04, 1,622,063; 6/30/03, 2,006,509 shares 16,088 19,836
-------------- -------------
Total shareholders' equity 97,592 84,569
Total liabilities and shareholders' equity $ 145,013 $ 123,519
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