Aceto Corp. Reports Operating Results (10-Q)
Aceto Corp has a market cap of $233.5 million; its shares were traded at around $9.17 with a P/E ratio of 24.2 and P/S ratio of 0.6. The dividend yield of Aceto Corp stocks is 2.1%. Aceto Corp had an annual average earning growth of 5.8% over the past 10 years.Mutual Fund and Other Gurus that owns ACET: John Buckingham of Al Frank Asset Management, Inc., Chuck Royce of Royce& Associates.
Highlight of Business Operations:We are reporting net sales of $173,343 for the six months ended December 31, 2010, which represents a 22.5% increase from the $141,519 reported in the comparable prior period. Gross profit for the six months ended December 31, 2010 was $26,410 and our gross margin was 15.2% as compared to gross profit of $22,596 and gross margin of 16.0% in the comparable prior period. Our selling, general and administrative costs (SG&A) for the six months ended December 31, 2010 declined 13.8%, when compared to $24,380 we reported in the prior period. Our net income increased to $1,628, or $0.06 per diluted share, compared to a net loss of ($1,498), or ($0.06) per diluted share in the prior period.
Our financial position as of December 31, 2010 remains strong, as we had cash and cash equivalents and short-term investments of $25,251, working capital of $106,651, long-term bank loans of $44,550 and shareholders equity of $152,279.
Net sales for the Health Sciences segment increased $6,624 or 7.9% to $90,100 for the six months ended December 31, 2010, when compared to the prior period. Overall, the domestic Health Sciences group had an increase of $3,272, when compared to the prior period, which represents increases in both our domestic generics product group of $1,884 and our domestic pharmaceutical intermediates of $1,785. The increase in our domestic generics product group is due to reorders of several existing products. The increase in domestic pharmaceutical intermediates primarily relates to the increase in finished dosage form products. In addition, the Health Sciences segment saw an increase in sales from our international operations of $3,352 over the prior period, particularly in Europe.
Net sales for the Specialty Chemicals segment were $69,200 for the six months ended December 31, 2010, an increase of $17,829 from net sales of $51,371 for the prior period. Our chemical business consists of a variety of products, customers and consuming markets, most of which is affected by current economic conditions. As previously mentioned, the index for consumer durables, which impacts the Specialty Chemicals segment, expanded at an annual rate of 8.8%. Sales of our chemicals used in surface coatings increased $6,140 from the prior period, as well as sales of agricultural, dye, pigment and miscellaneous intermediates which together increased $3,812. In addition sales of our polymer additives increased $1,346 from the prior period. These three increases represent increased demand in sectors that are affected by general economic conditions. In March 2010, we acquired certain assets of Andrews Paper & Chemical, Co., Inc., a supplier of diazos and couplers to the paper, film, and electronics industries. In the first six months of fiscal 2011, we experienced sales of these products of $1,004, where there was no comparable amount in the prior period. In addition, we experienced an increase in sales of specialty chemicals from our international operations of $3,769.
SG&A decreased $3,356 or13.8%, to $21,024 for the six months ended December 31, 2010 compared to $24,380 for the prior period. As a percentage of sales, SG&A decreased to 12.1% for the six months ended December 31, 2010 versus 17.2% for the prior period. The primary reason for the decrease in SG&A is due to approximately $2,587 of one-time costs associated with the separation of our former Chairman of the Board of Directors and CEO, which were recorded in the six months ended December 31, 2009, as well as an overall decline in personnel related costs, resulting from the rationalization project we undertook in fiscal 2010. These decreases in SG&A are offset in part by $1,060 of transaction costs related to the Rising acquisition.
For the six months ended December 31, 2010, operating income was $5,386 compared to a loss of ($1,784) in the prior period, an increase of $7,070. This increase was due to the overall increase in gross profit of $3,814 and the decline in SG&A of $3,356 from the comparable prior period.
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