UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 9, 2005
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Aceto Corporation
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(Exact name of registrant as specified in its charter)
New York
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(State or Other Jurisdiction of Incorporation)
000-4217 11-1720520
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(Commission File Number) (IRS Employer Identification Number)
One Hollow Lane, Suite 201, Lake Success, New York 11042
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(Address of Principal Executive Offices)
(516) 627-6000
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Indicate by check mark if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
____ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
____ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14-12)
____ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17CFR 240.14d-2(b))
____ Pre-commencement communications pursuant to Rule 13-e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On November 9, 2005, Aceto Corporation, a New York corporation (the
"Registrant"), issued the attached press release that included financial
information for its first quarter of fiscal 2005. A copy of the press release is
attached as Exhibit 99.1 to this Report on Form 8-K. The information contained
in the press release is being furnished to the Commission and shall not be
deemed incorporated by reference into any of the Registrant's registration
statements or other filings with the Commission.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
Exhibit 99.1 Press Release issued by Aceto Corporation dated November 9, 2005
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
ACETO CORPORATION
(Registrant)
Dated: November 9, 2005 By: /s/ Leonard S. Schwartz
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Leonard S. Schwartz
Chairman, CEO and President
EXHIBIT INDEX
Exhibit No. Exhibits.
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99.1 Press Release issued by Aceto Corporation dated November 9, 2005
[LOGO] ACETO Exhibit 99.1
FOR IMMEDIATE RELEASE
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ACETO CORPORATION ANNOUNCES FIRST QUARTER FINANCIAL RESULTS
LAKE SUCCESS, NY - November 9, 2005 - Aceto Corporation (NASDAQ:ACET), a global
distributor of chemically-derived pharmaceuticals, biopharmaceuticals, specialty
chemicals and agrochemicals, today announced results of operations for its first
quarter ended September 30, 2005.
Net sales for the first quarter were $75.0 million, compared to $80.4 million in
the first quarter of fiscal year 2005. This decline reflects the previously
disclosed decrease in sales of two active pharmaceutical ingredients (APIs) due
to intense competition. Sales of those two products in the first quarter of
fiscal year 2006 were $1.7 million, compared with $11.8 million in the first
quarter of fiscal year 2005, a decrease of $10.1 million. The gross profit
margin on net sales was essentially unchanged over the two periods. Net income
was $2.0 million, or $0.08 per diluted share, in the first quarter of fiscal
2006, versus $3.4 million, or $0.14 per diluted share, in the same quarter last
year. The decline in net income is largely attributable to the decrease in sales
of the two APIs. (Prior year per share amounts have been adjusted for a 3-for-2
stock split, effected in the form of a dividend, paid January 10, 2005.)
Aceto also announces that it has reached a tentative legal settlement of a
patent claim brought against it that required Aceto to take a charge of $0.5
million in the quarter. This charge reduced first quarter earnings per share by
$0.02 per diluted share and was not anticipated when the Company issued earnings
guidance of at least $0.07 per diluted share for the quarter.
Aceto closed the first quarter in a strong financial position, highlighted by
working capital of $97.6 million, no long-term debt, and shareholders' equity of
$109.8 million at September 30, 2005.
Leonard S. Schwartz, Chairman, CEO, and President of Aceto, stated, "Apart from
the decrease in sales of the two APIs, our business performed well during the
first quarter. Without those two products, our sales grew 7% due primarily to
the introduction of new Health Sciences products, steady growth in our Chemicals
& Colorants segment and strength in our Agrochemicals segment."
Mr. Schwartz added, "We continue to focus on our initiatives in human and
veterinary biopharmaceuticals. Although the FDA no longer plans to issue
guidance before the end of 2005 regarding how approval of human generic
biopharmaceuticals will be handled, we
firmly believe this market will emerge, and we continue to seek to develop
products and markets in this area. With regard to veterinary biopharmaceuticals,
the USDA is currently reviewing our applications to market a range of vaccines
for companion animals. We hope to commence commercial sales towards the end of
fiscal year 2006, subject to our receiving approvals on a timely basis."
Mr. Schwartz concluded, "In terms of financial guidance, we expect to earn a
minimum of $0.05 per diluted share in the second quarter of fiscal year 2006.
The second quarter results will again reflect reduced sales of the two APIs
mentioned above, which contributed $6.6 million in sales in the second quarter
of fiscal year 2005. The second quarter guidance also includes a $0.01 per
diluted share charge for exiting the facility previously occupied by the
Institutional Sanitary Supplies segment. We remain optimistic about the
long-term strategic direction and prospects of Aceto."
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, November 9, 2005.
Interested parties may participate in the call by dialing 888-787-0577
(706-679-3204 for international callers). Please call in 10 minutes before the
call is scheduled to begin. The conference call will also be broadcast live over
the Internet via the Investor Relations section (CONFERENCE CALLS) of Aceto's
website. To listen to the live call please go to the website at least 15 minutes
before the call to register, download and install any necessary audio software.
The conference call will be archived on Aceto's website, and a recorded phone
replay of the call will be available from 12:00 noon ET on Wednesday, November
9, 2005, until 5:00 p.m. ET on Thursday, November 10, 2005. Dial 800-642-1687
(706-645-9291 for international callers) and enter the code 9665856 for the
phone replay.
ABOUT ACETO
Aceto Corporation, which was incorporated in 1947, is a global leader in the
distribution and marketing of biopharmaceuticals, chemically-derived
pharmaceuticals, specialty chemicals and agrochemicals used principally as raw
materials in the agricultural, color, pharmaceutical, surface coating/ink and
general chemical consuming industries. With offices in ten countries, Aceto
distributes over 1,000 chemicals in these and other fields. 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. These 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 "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,
statements regarding emergence of a market for human generic biopharmaceuticals,
approval of applications for, and sales of, veterinary vaccines, a tentative
settlement of the patent claim, results for the second quarter of fiscal year
2006, and prospects for long-term growth. All forward-looking statements in this
press release are made as of the date of this press release, and Aceto 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 at WWW.SEC.GOV.
CONTACT: -OR- INVESTOR RELATIONS COUNSEL:
Aceto Corporation The Equity Group Inc.
Leonard S. Schwartz, Chairman/CEO/President Lauren Barbera
Douglas Roth, CFO (212) 836-9610,
LBARBERA@EQUITYNY.COM
(516) 627-6000 WWW.THEEQUITYGROUP.COM
WWW.ACETO.COM
ACETO CORP.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED
SEPTEMBER 30,
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2005 2004
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Net sales $ 74,993 $ 80,449
Cost of sales 62,490 66,934
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Gross profit 12,503 13,515
Gross profit % 16.7% 16.8%
Selling, general and
administrative expenses 10,362 9,430
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Operating income 2,141 4,085
Other income, net of
interest expense 759 528
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Income from continuing operations before income taxes 2,900 4,613
Provision for income taxes 899 1,245
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Income from continuing operations 2,001 3,368
(Loss) income from discontinued operations, net of income taxes (27) 7
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Net income $ 1,974 $ 3,375
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Basic income per common share (a):
Income from continuing operations $ 0.08 $ 0.14
(Loss) income from discontinued operations $ - $ -
Net income $ 0.08 $ 0.14
Diluted income per common share (a):
Income from continuing operations $ 0.08 $ 0.14
(Loss) income from discontinued operations $ - $ -
Net income $ 0.08 $ 0.14
Weighted average shares outstanding (a):
Basic 24,287 24,127
Diluted 24,634 24,657
(a) The number of shares outstanding and the per-share information for
September 30, 2004 have been adjusted for a 3-for-2 stock split, effected
in the form of a dividend, paid January 10, 2005.
ACETO CORPORATION
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
September 30, 2005
(unaudited) June 30, 2005
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ASSETS
Current Assets:
Cash in banks $ 22,312 $ 19,950
Investments 5,064 5,068
Receivables:
Trade, less allowance for doubtful
accounts: Sept, $429; June $ 427 50,965 49,636
Other 1,266 1,421
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52,231 51,057
Inventory 50,972 51,722
Prepaid expenses and other current assets 1,576 821
Assets held for sale - 242
Deferred income tax benefit, net 2,799 2,780
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Total current assets 134,954 131,640
Long-term notes receivable 607 624
Property and equipment, net 5,479 5,543
Goodwill 1,720 1,720
Intangible assets,net 3,159 3,153
Deferred income tax benefit, net 2,623 3,626
Other assets 2,730 2,722
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Total Assets $ 151,272 $ 149,028
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Drafts and acceptances payable $ 2,879 $ 2,462
Short term bank loans - 126
Accounts payable 24,307 24,783
Note payable - related party 500 500
Accrued expenses 9,704 9,474
Liabilities related to assets held for sale - 46
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Total current liabilities 37,390 37,391
Long-term liabilites 3,951 3,811
Minority interest 178 171
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Total liabilities 41,519 41,373
Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value:
(40,000 shares authorized; 25,644
shares issued; 24,296 and 24,282 shares
outstanding at Sept 30, 2005 and
June 30, 2005, respectively) 256 256
Capital in excess of par value 56,840 56,903
Retained earnings 64,838 62,864
Treasury stock, at cost:
(1,348 and 1,362 shares at Sept.
30, 2005 and June 30, 2005, respectively) (13,368) (13,505)
Accumulated other comprehensive income 1,187 1,137
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Total shareholders' equity 109,753 107,655
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Total liabilities and shareholders' equity $ 151,272 $ 149,028
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