West Pharmaceutical Services Inc. (WST, Financial) filed Quarterly Report for the period ended 2009-09-30.
West Pharmaceutical Services applies technologies to the process of bringing new drug therapies and healthcare products. West's technologies include the design and manufacture of packaging components for pharmaceutical healthcare and consumer products; research and development of drug delivery systems; contract manufacturing and packaging services; clinical services; and contract laboratory services and other services that support the manufacturing filling and packaging of pharmaceutical healthcare and consumer products. West Pharmaceutical Services Inc. has a market cap of $1.23 billion; its shares were traded at around $37.51 with a P/E ratio of 19.4 and P/S ratio of 1.2. The dividend yield of West Pharmaceutical Services Inc. stocks is 1.7%. West Pharmaceutical Services Inc. had an annual average earning growth of 5.9% over the past 10 years.
Net income per diluted share for the first nine months of 2009 was $1.53 including a combined benefit of $0.08 per diluted share from the Brazil tax amnesty gain ($0.04) and discrete income tax benefits ($0.06), partially offset by restructuring and related charges ($0.02). The effects of foreign currency translation reduced year-to-date 2009 net income per diluted share by $0.14. Net income per diluted share for the first nine months of 2008 was $1.98 including a net benefit of $0.15 per diluted share from the gain on contract settlement proceeds ($0.11) and discrete income tax benefits ($0.09), partially offset by restructuring and related charges ($0.05). Excluding the impact of foreign currency and discrete items, year-to-date 2009 net income per diluted share fell below the prior year amount by $0.24 due to higher pension and other selling, general and administrative costs and a reduction in gross profit on lower sales and reduced product throughput.
In November 2009, we initiated restructuring plans for certain business operations and support functions in both of our reporting segments. The Pharmaceutical Systems plan involves exiting certain specialized laboratory services offerings due to a change in market demand, reducing support personnel primarily associated with information technology applications and discontinuing other non-core initiatives and associated assets. The costs are estimated to be between $6.0 million and $7.0 million, which consist of approximately $2.0 million in cash expenditures, related to severance benefits and $4.0 million to $5.0 million in asset impairment charges primarily related to laboratory equipment and certain plant assets. The Tech Group plan is intended to better align our available production capacity with expected levels of contract manufacturing activity by consolidating manufacturing operations and support functions. The costs of the Tech Group plan are estimated to be between $2.0 million and $3.0 million, which consist of $1.0 million to $2.0 million in cash expenditures for severance and asset relocation costs and approximately $1.0 million in asset impairment charges. In the aggregate, we expect to incur costs of approximately $7.0 million in the fourth quarter of 2009, with the balance in 2010 as the associated costs are incurred. The combined plans are expected to generate savings of approximately $6.0 million in 2010, increasing to approximately $8.0 million annually following completion including approximately $1.0 million in reduced depreciation expense.
Third quarter 2009 consolidated gross profit increased $5.7 million over the same quarter in 2008. Excluding an unfavorable foreign exchange impact of $1.8 million, gross profit increased by $7.5 million as a result of higher gross margins contributed by Pharmaceutical Systems. For the nine-month period ended September 30, 2009, consolidated gross profit was $13.3 million below that reported in the same period of 2008, the majority of which ($12.9 million) related to the impact of foreign currency translation. The year-to-date consolidated gross margin percentage remained substantially unchanged at 28.8% compared to the first nine months of 2008.
Third quarter and year-to-date 2009 consolidated SG&A expenses were $2.8 million and $9.8 million, respectively, above those recorded in the same periods of 2008. Excluding favorable effects from foreign currency translation of $1.0 million and $5.7 million for the third quarter and year-to-date period, respectively, SG&A expenses were $3.8 million and $15.5 million higher than in the respective prior-year periods.
In Pharmaceutical Systems, excluding the favorable impact from foreign currency translation, 2009 SG&A expenses increased by $1.0 million and $7.5 million, respectively, over the prior-year third quarter and first nine months. Compensation costs were $0.5 million and $2.6 million above those incurred in the 2008 third quarter and first nine months, respectively, due to increased staffing of information technology and other necessary technical and manufacturing support functions and from the impact of annual salary increases. Depreciation expense, primarily associated with our 2008 information systems implementation, accounted for $0.5 million and $1.5 million, respectively, of the third quarter and year-to-date increase. For the nine months ended September 30, 2009, severance and related benefit costs increas
Read the The complete ReportWST is in the portfolios of Private Capital of Private Capital Management.
West Pharmaceutical Services applies technologies to the process of bringing new drug therapies and healthcare products. West's technologies include the design and manufacture of packaging components for pharmaceutical healthcare and consumer products; research and development of drug delivery systems; contract manufacturing and packaging services; clinical services; and contract laboratory services and other services that support the manufacturing filling and packaging of pharmaceutical healthcare and consumer products. West Pharmaceutical Services Inc. has a market cap of $1.23 billion; its shares were traded at around $37.51 with a P/E ratio of 19.4 and P/S ratio of 1.2. The dividend yield of West Pharmaceutical Services Inc. stocks is 1.7%. West Pharmaceutical Services Inc. had an annual average earning growth of 5.9% over the past 10 years.
Highlight of Business Operations:
Third quarter 2009 net income per diluted share was $0.50, which included a net gain resulting from our participation in a tax amnesty program in Brazil ($0.04) and discrete income tax benefits ($0.01). See Note 3, Restructuring and Other Items, for a discussion of the Brazil tax amnesty benefit. The adverse effects of foreign currency translation reduced net income per diluted share by $0.01 during the third quarter. Same quarter 2008 net income per diluted share was $0.40, including a net benefit of $0.03 per diluted share relating to discrete income tax benefits ($0.06) partially offset by contract settlement costs ($0.03). Excluding the impact of foreign exchange and these discrete items in both years, net income per diluted share in 2009 surpassed 2008 levels by $0.09 as a result of improved gross margins on higher Pharmaceutical Systems sales.Net income per diluted share for the first nine months of 2009 was $1.53 including a combined benefit of $0.08 per diluted share from the Brazil tax amnesty gain ($0.04) and discrete income tax benefits ($0.06), partially offset by restructuring and related charges ($0.02). The effects of foreign currency translation reduced year-to-date 2009 net income per diluted share by $0.14. Net income per diluted share for the first nine months of 2008 was $1.98 including a net benefit of $0.15 per diluted share from the gain on contract settlement proceeds ($0.11) and discrete income tax benefits ($0.09), partially offset by restructuring and related charges ($0.05). Excluding the impact of foreign currency and discrete items, year-to-date 2009 net income per diluted share fell below the prior year amount by $0.24 due to higher pension and other selling, general and administrative costs and a reduction in gross profit on lower sales and reduced product throughput.
In November 2009, we initiated restructuring plans for certain business operations and support functions in both of our reporting segments. The Pharmaceutical Systems plan involves exiting certain specialized laboratory services offerings due to a change in market demand, reducing support personnel primarily associated with information technology applications and discontinuing other non-core initiatives and associated assets. The costs are estimated to be between $6.0 million and $7.0 million, which consist of approximately $2.0 million in cash expenditures, related to severance benefits and $4.0 million to $5.0 million in asset impairment charges primarily related to laboratory equipment and certain plant assets. The Tech Group plan is intended to better align our available production capacity with expected levels of contract manufacturing activity by consolidating manufacturing operations and support functions. The costs of the Tech Group plan are estimated to be between $2.0 million and $3.0 million, which consist of $1.0 million to $2.0 million in cash expenditures for severance and asset relocation costs and approximately $1.0 million in asset impairment charges. In the aggregate, we expect to incur costs of approximately $7.0 million in the fourth quarter of 2009, with the balance in 2010 as the associated costs are incurred. The combined plans are expected to generate savings of approximately $6.0 million in 2010, increasing to approximately $8.0 million annually following completion including approximately $1.0 million in reduced depreciation expense.
Third quarter 2009 consolidated gross profit increased $5.7 million over the same quarter in 2008. Excluding an unfavorable foreign exchange impact of $1.8 million, gross profit increased by $7.5 million as a result of higher gross margins contributed by Pharmaceutical Systems. For the nine-month period ended September 30, 2009, consolidated gross profit was $13.3 million below that reported in the same period of 2008, the majority of which ($12.9 million) related to the impact of foreign currency translation. The year-to-date consolidated gross margin percentage remained substantially unchanged at 28.8% compared to the first nine months of 2008.
Third quarter and year-to-date 2009 consolidated SG&A expenses were $2.8 million and $9.8 million, respectively, above those recorded in the same periods of 2008. Excluding favorable effects from foreign currency translation of $1.0 million and $5.7 million for the third quarter and year-to-date period, respectively, SG&A expenses were $3.8 million and $15.5 million higher than in the respective prior-year periods.
In Pharmaceutical Systems, excluding the favorable impact from foreign currency translation, 2009 SG&A expenses increased by $1.0 million and $7.5 million, respectively, over the prior-year third quarter and first nine months. Compensation costs were $0.5 million and $2.6 million above those incurred in the 2008 third quarter and first nine months, respectively, due to increased staffing of information technology and other necessary technical and manufacturing support functions and from the impact of annual salary increases. Depreciation expense, primarily associated with our 2008 information systems implementation, accounted for $0.5 million and $1.5 million, respectively, of the third quarter and year-to-date increase. For the nine months ended September 30, 2009, severance and related benefit costs increas
Read the The complete ReportWST is in the portfolios of Private Capital of Private Capital Management.
