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U.S. Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

For the quarterly period ended January 31, 2004

OR

For the transition period from              to             

Commission file number 0-20424

Hi-Tech Pharmacal Co., Inc.

(Exact name of registrant as specified in its charter)

369 Bayview Avenue, Amityville, New York 11701

(Address of principal executive offices)

631 789-8228

(Registrant’s telephone number)

Not applicable

(Former name, former address and former

fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act).    Yes  ¨    No  x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act subsequent to the distribution of securities under a plan confirmed by a court.    Yes  ¨    No  ¨

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

Common Stock, $.01 Par Value—8,078,501 shares outstanding as of March 14, 2004.

INDEX

HI-TECH PHARMACAL CO., INC.

2

PART I. ITEM 1

HI-TECH PHARMACAL CO., INC.

CONDENSED BALANCE SHEETS

See notes to condensed financial statements

3

HI-TECH PHARMACAL CO., INC.

CONDENSED STATEMENTS OF OPERATIONS (unaudited)

See notes to condensed financial statements

4

HI-TECH PHARMACAL CO., INC.

CONDENSED STATEMENTS OF CASH FLOWS (unaudited)

See notes to condensed financial statements

5

HI-TECH PHARMACAL CO., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2004

BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The preparation of the Company’s financial statements in conformity with generally accepted accounting principles necessarily requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expense during the reporting periods. Actual results could differ from these estimates and assumptions. Operating results for the three and nine month periods ended January 31, 2004 are not necessarily indicative of the results that may be expected for the year ending April 30, 2004. For further information, refer to the financial statements and footnotes thereto for the year ended April 30, 2003 on Form 10-K.

REVENUE RECOGNITION

Revenue is recognized for product sales upon shipment to the customer and when estimates of discounts, rebates, promotional adjustments, price adjustments, returns, chargebacks, and other potential adjustments are reasonably determinable, collection is reasonably assured and the Company has no further performance obligations. These estimates are presented in the financial statements as reductions to net revenues and accounts receivable.

Net sales for generic pharmaceutical products, which include some private label contract manufacturing, for the three months ended January 31, 2004 and January 31, 2003 were $15.4 million and $13.4 million, respectively. The Company’s Health Care Products division, which markets the Company’s branded products, for the three months ended January 31, 2004 and January 31, 2003 had net sales of $2.6 million and $2.5 million, respectively.

CUSTOMER DEPOSITS AND CONTRACT RESEARCH INCOME

Contract research income is recognized as work is completed and as billable costs are incurred. In certain cases, contract research income is based on attainment of designated milestones. Advance payments may be received to fund certain development costs.

NET EARNINGS PER SHARE

Net income per common share is computed based on the weighted average number of common shares outstanding for basic earnings per share and on the weighted average number of common shares and share equivalents (stock options) outstanding for diluted earnings per share.

WORKING CAPITAL REVOLVING LOAN

The Company has a three year $8,000,000 revolving credit facility dated January 23, 2002. The revolving credit facility bears interest at a rate selected by the Company equal to the Prime Rate or LIBOR plus 1.50%. Loans are collateralized by inventory, accounts receivable and other assets. The agreement contains covenants with respect to working capital, net worth and certain ratios, as well as other covenants and prohibits the payment of cash dividends. For the nine months ended January 31, 2004 there were no borrowings under the credit facility.

6

HI-TECH PHARMACAL CO., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

January 31, 2004

INVENTORIES

The components of inventory consist of the following:

FIXED ASSETS

The components of net plant and equipment consist of the following:

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

The components of accounts payable and accrued expenses consist of the following:

Common Stock

On July 17, 2003 the Company entered into a definitive agreement with certain accredited investors with respect to the private placement of 860,000 shares of its common stock at a purchase price of $29.21 per share, for net proceeds of approximately $23.8 million. The net proceeds will be used mainly for the funding of future acquisitions, research and development and for general corporate purposes.

7

HI-TECH PHARMACAL CO., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

January 31, 2004

Stock-based compensation:

Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation”, encourages the use of the fair value based method of accounting for stock-based employee compensation. Alternatively, SFAS No. 123 allows entities to continue to apply the intrinsic value method prescribed by Accounting Principles Board (“APB”) Opinion 25, “Accounting for Stock Issued to Employees”, and related interpretations and provide pro forma disclosures of net income and earnings per share, as if the fair value based method of accounting had been applied to employee awards. The Company has elected to continue to follow the intrinsic value method in accounting for its stock-based employee compensation arrangements as defined by APB Opinion 25 and provide the disclosures required by SFAS No. 123 and SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure”, which was released in December 2002 as an amendment of SFAS No. 123. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions to stock-based employee compensation.

CONTINGENCIES AND OTHER MATTERS

The Company’s products and facilities are subject to regulation by a number of Federal and State governmental agencies. The Food & Drug Administration (“FDA”), in particular, maintains oversight of the formulation, manufacture, distribution, packaging and labeling of all of the Company’s products.

During the quarter ended January 31, 2004 the Company’s significant customers were Walgreens, which accounted for approximately 17% of sales, McKesson, which accounted for 16% of sales and CVS, which accounted for approximately 10% of sales. At January 31, 2004, receivables from these customers were approximately 54% of the total trade receivable balance.

The Company has a three year $8,000,000 revolving credit facility dated January 23, 2002. The revolving credit facility bears interest at a rate elected by the Company equal to the Prime Rate or the LIBOR Rate plus 1.50%. Loans are collateralized by inventory, accounts receivable and other assets. The agreement contains covenants with respect to working capital, net worth and certain ratios, as well as other covenants and prohibits the payment of cash dividends. For the nine months ended January 31, 2004 there were no borrowings under the credit facility.

The Company has a net investment of approximately $180,000 in a joint venture which markets and develops nutritional supplements. Mr. Reuben Seltzer, a director of the Company, has an interest in the joint venture. Mr. Reuben Seltzer is the son of Mr. Bernard Seltzer, Chairman of the Board of the Company.

On December 18, 2003, Daiichi Pharmaceutical Co., Ltd. filed a complaint against the Company in the United States District Court for the District of New Jersey alleging infringement of its patent for a drug known as Levofloxacin, which it has sublicensed exclusively to Santen Inc. for use in certain ophthalmic pharmaceutical preparations. The plaintiff seeks a permanent injunction against the Company from engaging in the marketing within the United States of Levoflaxacin Opthalmic Solution, described in the Company’s new drug application with the United States Food and Drug Administration. On February 17, 2004, the Company filed an Answer and Counterclaim to the Complaint denying infringement of any valid claim in the patent suit, seeking a judicial declaration that the patent is invalid and not infringed. The Company believes it has meritorious defenses to the allegations in the Complaint. The Company intends to defend against the claims asserted against it.

8

HI-TECH PHARMACAL CO., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

January 31, 2004

On or about November 24, 2003 MedPointe Healthcare, Inc. (“MedPointe”) filed a Verified Complaint and Application for Order to Show Cause with Temporary Restraints against the Company in the United States District Court for the District of New Jersey, Trenton vicinage. The suit alleges willful infringement by the Company of MedPointe’s patent No. 6,417,206 as a result of the Company’s offering to sell its Tannate 12-D S product, as a generic equivalent to MedPointe’s Tussi-12^®D S. On December 1, 2003 the Court entered Temporary Restraints against the Company pending the return date of the Order to Show Cause. On March 1, 2004 the Court issued a preliminary injunction enjoining the Company from marketing its Tannate 12-D S product. The Company will therefore not commence shipment of the Tannate 12-D S product until a final decision of the Court on the patent infringement claim has been reached. The Company intends to appeal this ruling. It is impossible to predict with certainty the outcome of this dispute.

On or about November 15, 2002 an action was commenced against the Company; Albertson’s Inc.; American Drug Stores, Inc.; Osco Drug, Inc.; Walgreen Co; American Procurement and Logistics Company in the Circuit Court of Cook County, Illinois. The complaint alleges that the defendants sold and supplied Brometane, and certain other product which allegedly caused plaintiffs to suffer severe and permanent injuries. This action against the Company was dismissed with prejudice and without costs on February 23, 2004.

On or about October 28, 2002 an action was commenced in the United States District Court for the Northern District of Texas, Dallas Division, against the Company; Wyeth; Wyeth Consumer Healthcare; Bayer Corporation; Bayer A.G.; Novartis Consumer Health, Inc.; Novartis Pharmaceuticals Corporation; Schering-Plough Corporation; The Delaco Company and Chattem, Inc. The complaint alleges claims for permanent and debilitating injuries as a result of exposure to phenylpropanolamine (hereinafter referred to “PPA”) through ingestion of PPA-containing products designed, formulated, marketed, manufactured, distributed, and /or sold by the Company and the other defendants. One plaintiff, Roger Grantham, claims he ingested a PPA-containing product manufactured by the Company. Mr. Grantham is a plaintiff in the Amanda Carrisalez case, which was originally filed in the United States District Court for the Northern District of Texas and was then transferred to the Multidistrict Litigation in Seattle. The plaintiffs, individually, seek compensatory damages in the amount of $15 million for actual damages, plus punitive damages. The Company has filed an answer to this action and believes it has meritorious defenses. The Company’s defense costs are being covered under its product liability policy which has a $5 million limit for defense and liability (“Product Liability Policy”). The last date of sale of the limited number of products containing PPA by the Company was December, 2000.

In March 2001, the Center for Environmental Health (“CEH”) filed a lawsuit against several defendants alleging violations of California’s Proposition 65 and Unfair Trade Practices Act for failure to provide clear and reasonable warnings regarding the carcinogenicity and reproductive toxicity of lead and the reproductive toxicity of cadmium to the users of FDA-approved anti-diarrheal medicines. In February 2004, the Company received a settlement proposal from the plaintiffs offering to settle the matter against the Company. The Company has accepted this settlement offer in principle. The Company believes that its liability in this matter will not exceed approximately $75,000.

The Company believes that the effect of these litigation matters will not be material to the financial position or operations of the Company.

9

HI-TECH PHARMACAL CO., INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

January 31, 2004

With the exception of the historical information contained in this Form 10-Q, the matters described herein may include “forward-looking statements” within the meaning of the Private Securities Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to materially differ from those projected or implied. These risks include, but are not limited to, regulatory matters, the ability of the Company to grow internally or by acquisition, and to integrate acquired businesses, changing industry and competitive conditions, and other risks outside the Company’s control referred to in its registration statement and periodic reports filed with the Securities and Exchange Commission. The Company disclaims any obligation to update any forward-looking statements.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JANUARY 31, 2004 COMPARED TO THREE MONTHS ENDED JANUARY 31, 2003

Net sales for the three months ended January 31, 2004 were $18,035,000, an increase of $2,122,000 or 13% as compared to the net sales for the three months ended January 31, 2003 of $15,913,000. Net sales for generic pharmaceutical products, which include some private label contract manufacturing, for the three months ended January 31, 2004 were $15,450,000, an increase of $2,022,000, or 15%, compared to the fiscal 2003 respective period sales of $13,428,000. The increase was primarily due to increased sales of Promethazine products as well as the continued success of the Company’s Urea products, offset partially by lower sales of the Company’s Tannate based products.

The Health Care Products division, which markets the Company’s branded products, for the three months ended January 31, 2004 and 2003 had net sales of $2,585,000 and $2,485,000, respectively, an increase of $100,000 or 4%.

During the quarter ended January 31, 2004 the Company’s significant customers were Walgreens, which accounted for approximately 17% of sales, McKesson, which accounted for 16% of sales and CVS, which accounted for approximately 10% of sales. At January 31, 2004, receivables from these customers were approximately 54% of the total trade receivable balance.

Cost of sales, as a percentage of net sales, decreased from 52% or $8,250,000 for the three months ended January 31, 2003 to 47% or $8,407,000 for the three months ended January 31, 2004. The percentage decrease resulted from an increase in the average unit selling prices and product mix. If one or more other generic pharmaceutical manufacturers significantly reduce their prices in an effort to gain market share, the Company’s profitability could be adversely affected.

Research and product development costs for the three months ended January 31, 2004 increased to $998,000, or 6% of net sales compared to $555,000 or 4% of net sales for the same period ended January 31, 2003. Contract research income increased to $56,000 in the fiscal 2004 period from $0 in the fiscal 2003 period. The Company currently has 7 products under review at the FDA and 20 products in active development.

Selling, general and administrative expenses increased to $5,331,000, 30% as a percentage of net sales, from $4,114,000, 26% of net sales for the three months ended January 31, 2004 and 2003, respectively. This was primarily the result of increased freight costs due to smaller, more frequent shipments to meet customer demand during extreme winter conditions, legal fees associated with the MedPointe litigation and consulting fees.

Net income for the three months ended January 31, 2004 and 2003 was $2,149,000 and $1,911,000, respectively, an increase of $238,000, or 12%. The overall increase is due to the increase in sales of new products including Urea 40% Cream and Lotion, increases in average unit selling prices and the other factors noted above.

10

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JANUARY 31, 2004 COMPARED TO NINE MONTHS ENDED JANUARY 31, 2003

Net sales for the nine months ended January 31, 2004 were $42,952,000, an increase of $6,445,000 or 18% as compared to net sales for the nine months ended January 31, 2003 of $36,507,000. Net sales of generic pharmaceutical products, which include some private label contract manufacturing, for the nine months ended January 31, 2004 was $37,821,000, an increase of $7,020,000, or 23%, compared to the nine months ended January 31, 2003 sales of $30,801,000. The increase is primarily due to the introduction of a new product, Urea 40% Cream and Lotion, in the second quarter of fiscal 2004 which accounted for net sales of approximately $5,100,000 along with increased distribution of our core generic products.

The Health Care Products division, which markets the Company’s branded products, had net sales of $5,131,000 and $5,706,000 for the nine months ended January 31, 2004 and 2003 respectively, a decrease of $575,000 or 10%. This decrease is primarily the result of exported Health Care products which were improperly returned to the domestic market during the first half of the fiscal year. The Company has taken the necessary steps to minimize the impact of this diversion and believes that its consequences are limited.

During the nine months ended January 31, 2004 the Company’s significant customers were Walgreens, which accounted for approximately 15% of sales, McKesson, which accounted for 11% of sales and Cardinal, which accounted for approximately 10% of sales. At January 31, 2004, receivables from these customers were approximately 45% of the total trade receivable balance.

Cost of sales, as a percentage of net sales, decreased from 50% or $18,152,000 for the nine months ended January 31, 2003 to 46% or $19,970,000 for the nine months ended January 31, 2004. This resulted from an increase in average unit selling prices and changes in product mix. If one or more other generic pharmaceutical manufacturers significantly reduce their prices in an effort to gain market share, the Company’s profitability could be adversely affected.

Research and product development costs for the six months ended January 31, 2004 increased to $2,414,000 or 6% of net sales compared to $1,470,000 or 4% of net sales for the same period ended January 31, 2003. Contract research income increased to $479,000 in the fiscal 2004 period compared to $122,000 in the fiscal 2003 respective period. The Company currently has 7 products under review at the FDA and 20 projects in active development.

Selling, general and administrative expenses which, as a percentage of net sales increased to 29%, or $12,448,000 from $10,020,000, or 27% of net sales, for the nine months ended January 31, 2004 and 2003, respectively. This was primarily the result of increased freight costs due to smaller, more frequent shipments to meet customer demand during extreme winter conditions, legal fees associated with the MedPointe litigation and commission expenses associated with the introduction of new products.

Net income for the nine months ended January 31, 2004 and 2003 was $5,504,000 and $4,458,000, respectively, an increase of $1,048,000, or 24%. The overall increase is due to the introduction of new products, an increase in the average unit selling prices and the other factors noted above.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s operations are financed principally by cash flow from operations. During the January 31, 2004 period, working capital increased to $53,391,000 from $24,085,000 at April 30, 2003, an increase of $29,306,000, which was primarily due to the sale of 860,000 shares of the Company’s common stock in a private placement on July 17, 2003 resulting in net proceeds of approximately $23,800,000. Accounts receivable increased to $15,514,000 compared to $5,609,000 at April 30, 2003, an increase of $9,905,000, due to greater sales in the current quarter of $18,035,000 compared to $10,939,000 in the fourth quarter of fiscal 2003. In addition, the Company implemented new EDI procedures resulting in delays in customer payments. A significant amount of such balances were collected subsequent to the end of the quarter. During the nine months ended January 31, 2004 the Company invested

$1,425,000 in fixed assets. The Company has started an expansion of a warehouse facility which is expected to cost approximately $700,000. Construction, equipment and other commitments are approximately $2,100,000 at January 31, 2004.

On July 17, 2003 the Company entered into a definitive agreement with certain accredited investors with respect to the private placement of 860,000 shares of its common stock at a purchase price of $29.21 per share, for net proceeds of approximately $23.8 million. The net proceeds will be used mainly for the funding of future acquisitions, research and development and for general corporate purposes.

The Company has a three year $8,000,000 revolving credit facility dated January 23, 2002. The revolving credit facility bears interest at a rate selected by the Company equal to the Prime Rate or the LIBOR Rate plus 1.50%. Loans are collateralized by inventory, accounts receivable and other assets. The agreement contains covenants with respect to working capital, net worth and certain ratios, as well as other covenants and prohibits the payment of cash dividends. For the nine months ended January 31, 2004, there were no borrowings under the credit facility.

The Company’s products and facilities are subject to regulation by a number of Federal and State governmental agencies. The Food & Drug Administration maintains oversight of the formulation, manufacture, distribution, packaging and labeling of all of the Company’s products. The Company believes it is substantially in compliance with such governmental regulations.

The Company has a net investment of approximately $180,000 in a joint venture which markets and develops nutritional supplements. Mr. Reuben Seltzer, a director of the Company, has an interest in the joint venture. Mr. Reuben Seltzer is the son of Mr. Bernard Seltzer, Chairman of the Board of the Company.

11

SEASONALITY

Historically, the months of September through March account for a greater portion of the Company’s sales than the other months of the fiscal year. Accordingly, period-to-period comparisons within the same fiscal year are not necessarily meaningful and should not be relied on as indicative of future results.

CRITICAL ACCOUNTING POLICIES

In preparing financial statements in conformity with generally accepted accounting principles in the United States of America, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses for the reporting period covered thereby. Actual results could differ from those estimates. Our estimates for sales returns and allowances, the useful lives of property and equipment and the realization of deferred tax assets represent a significant portion of the estimates made by management.

Revenue is recognized for product sales upon shipment to the customer and when estimates of discounts, rebates, promotional adjustments, price adjustments, returns, chargebacks, and other potential adjustments are reasonably determinable, collection is reasonably assured and the Company has no further performance obligations. These estimates are presented in the financial statements as reductions to net revenues and accounts receivable. Contract research income is recognized as work is completed and billable costs are incurred. In certain cases, contract research income is based on attainment of designated milestones.

Returns – Consistent with industry practice, the Company maintains a return policy that allows its customers to return product within a specified period prior to expiration. The Company’s estimate for returns is based upon its historical experience with actual returns. While such experience has allowed for reasonable estimations in the past, history may not always be an accurate indicator of future returns. The Company continually monitors its estimates for returns and makes adjustments when it believes that actual product returns may differ from the established accruals.

Chargebacks – The Company markets products directly to wholesalers, distributors, retail pharmacy chains, mail order pharmacies and group purchasing organizations. The Company also markets products indirectly to independent pharmacies, managed care organizations, hospitals, nursing homes and pharmacy benefit management companies, collectively referred to as “indirect customers.” The Company enters into agreements with its indirect customers and enters into agreements with its wholesalers to establish contract pricing for certain products. Indirect customers then independently select a wholesaler from which to actually purchase the products at these contracted prices. The Company will provide credit to the wholesaler for any difference between the contracted price and the wholesaler’s invoice price. Such credit is called a chargeback. The estimate for chargebacks is based on expected and historical sell-through levels by its wholesaler customers to contracted customers. The Company continually monitors its provision for chargebacks and makes adjustments when it believes that actual chargebacks may differ from established estimates.

Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures within 90 days of the filing date of this quarterly report, and, based on their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

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PART II. OTHER INFORMATION

On December 18, 2003, Daiichi Pharmaceutical Co., Ltd. filed a complaint against the Company in the United States District Court for the District of New Jersey alleging infringement of its patent for a drug known as Levofloxacin, which it has sublicensed exclusively to Santen Inc. for use in certain ophthalmic pharmaceutical preparations. The plaintiff seeks a permanent injunction against the Company from engaging in the marketing within the United States of Levoflaxacin Opthalmic Solution, described in the Company’s new drug application with the United States Food and Drug Administration. On February 17, 2004, the Company filed an Answer and Counterclaim to the Complaint denying infringement of any valid claim in the patent suit, seeking a judicial declaration that the patent is invalid and not infringed. The Company believes it has meritorious defenses to the allegations in the Complaint. The Company intends to defend against the claims asserted against it.

On or about November 24, 2003 MedPointe Healthcare, Inc. (“MedPointe”) filed a Verified Complaint and Application for Order to Show Cause with Temporary Restraints against the Company in the United States District Court for the District of New Jersey, Trenton vicinage. The suit alleges willful infringement by the Company of MedPointe’s patent No. 6,417,206 as a result of the Company’s offering to sell its Tannate 12-D S product, as a generic equivalent to MedPointe’s Tussi-12^®D S. On December 1, 2003 the Court entered Temporary Restraints against the Company pending the return date of the Order to Show Cause. On March 1, 2004 the Court issued a preliminary injunction enjoining the Company from marketing its Tannate 12-D S product. The Company will therefore not commence shipment of the Tannate 12-D S product until a final decision of the Court on the patent infringement claim has been reached. The Company intends to appeal this ruling. It is impossible to predict with certainty the outcome of this dispute.

On or about November 15, 2002 an action was commenced against the Company and Albertson’s Inc., American Drug Stores, Inc., Osco Drug, Inc., Walgreen Co., American Procurement and Logistics Company in the Circuit Court of Cook County, Illinois. The complaint alleges that the defendants sold and supplied Brometane, and certain other products which allegedly caused plaintiffs to suffer severe and permanent injuries. This action against the Company was dismissed with prejudice and without costs on February 23, 2004.

On or about October 28, 2002 an action was commenced in the United States District Court for the Northern District of Texas, Dallas Division, against the Company, Wyeth, Wyeth Consumer Healthcare, Bayer Corporation, Bayer A.G., Novartis Consumer Health, Inc., Novartis Pharmaceuticals Corporation, Schering-Plough Corporation, The Delaco Company and Chattem, Inc. The complaint alleges claims for permanent and debilitating injuries as a result of exposure to phenylpropanolamine (hereinafter referred to as “PPA”) through ingestion of PPA-containing products designed, formulated, marketed, manufactured, distributed, and/or sold by the Company and the other defendants. One plaintiff, Roger Grantham, claims he ingested a PPA-containing product manufactured by the Company. Mr. Grantham is a plaintiff in the Amanda Carrisalez case, which was originally filed in the United States District Court for the Northern District of Texas and was then transferred to the Multidistrict Litigation in Seattle. The plaintiffs, individually, seek compensatory damages in the amount of $15 million for actual damages, plus punitive damages. The Company filed an answer to this action and believes it has meritorious defenses. The Company’s defense costs, after its deductible, are being covered under its product liability policy which has a $5 million limit for defense costs and liability (“Product Liability Policy”). The last date of sale of the limited number of products containing PPA by the Company was December 2000.

In March 2001, the Center for Environmental Health (“CEH”) filed a lawsuit against several defendants alleging violations of California’s Proposition 65 and Unfair Trade Practices Act for failure to provide clear and reasonable warnings regarding the carcinogenicity and reproductive toxicity of lead and the reproductive toxicity of cadmium to the users of FDA-approved anti-diarrheal medicines. In February 2004, the Company received a settlement proposal from the plaintiffs offering to settle the matter against the Company. The Company has accepted this settlement offer in principle. The Company believes that its liability in this matter will not exceed approximately $75,000.

From time to time, the Company becomes involved in various legal matters in addition to the above described matters that the Company considers to be in the ordinary course of business. While the Company is not presently able to determine the potential liability, if any, related to such matters, the Company believes none of such matters, individually or in the aggregate, will have a material adverse effect on its financial position.

13

None

None

None

None

Report on Form 8-K dated December 11, 2003 regarding earnings for the quarter ended October 31, 2003.

14

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,

The registrant has duly caused this report to be signed on its behalf

by the undersigned thereunto duly authorized.

HI-TECH PHARMACAL CO., INC.

(Registrant)

Date: March 15, 2004

Date: March 15, 2004

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