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| 8-K - HI TECH PHARMACAL CO INC | v205073_8k.htm |
Exhibit
99.1
Hi-Tech
Pharmacal Reports Sales of $44.9 Million and EPS of $0.76 for the Second Fiscal
Quarter Ended October 31, 2010
AMITYVILLE, N.Y. - December 9,
2010 - Hi-Tech Pharmacal Co., Inc. (NASDAQ: HITK) today reported
results for the quarter ended October 31, 2010.
For the
three months ended October 31, 2010, the Company reported net sales of $44.9
million, an increase of 10% from $40.9 million for the same period last
year.
During
the quarter ended October 31, 2010, net sales of generic pharmaceutical
products, which include contract manufacturing were $36.8 million, an increase
of 13% compared to $32.7 million for the same fiscal 2010 period. Sales of
Fluticasone Propionate nasal spray increased to $17.3 million from $2.5 million
in the comparable period due to strong unit sales at higher prices. Sales of
Dorzolamide with Timolol ophthalmic solution and Dorzolamide ophthalmic solution
totaled $8.1 million, up from $7.5 million in the October 31, 2009 period as the
Company sold more units but at lower average prices. Generic sales
include $0.2 million of sales for the Midlothian division for the period ended
October 31, 2010 compared to $0.7 million for the period ended October 31,
2009.
ECR
Pharmaceuticals contributed $4.7 million to sales in the current period, an
increase of 4%, compared to sales of $4.6 million for the respective fiscal 2010
period. The increase was primarily due to sales of the Lodrane® line of
antihistamines, which were partially offset by lower sales of the Dexpak® line of
corticosteroids.
Sales of
the Health Care Products division, which markets the Company’s OTC branded
products, decreased 7% to $3.4 million from $3.6 million for the three months
ended October 31, 2010. The decrease was largely due to lower sales of products
in the diabetic product line which were partially offset by sales of the
Mag-Ox® line of
magnesium supplements acquired in March 2010.
For the
three months ended October 31, 2010, cost of sales increased to $19.9 million
from $18.5 million, but decreased as a percentage of sales to 44% of net sales,
from 45% of net sales, for the three months ended October 31,
2009. Increased sales of Fluticasone Propionate nasal spray at higher
average prices led to the decrease in cost of sales as a percentage of sales as
did sales of the Mag-Ox® line of
Magnesium supplements. Significant pricing declines for Dorzolamide with Timolol
ophthalmic solution and Dorzolamide ophthalmic solution partially offset this
trend.
Research
and product development costs for the period ended October 31, 2010 increased to
$2.5 million from $2.1 million for the three month period ended October 31, 2009
due to increased internal expenses in the generic division and expenditures at
the ECR Pharmaceuticals subsidiary.
For the
three month period ended October 31, 2010, selling, general and administrative
expense was $9.1 million, a decrease of $1.1 million from $10.2 million for the
period ended October 31, 2009. The decrease in selling, general and
administrative expense was primarily due to absence of the royalty payment on
profits of Dorzolamide with Timolol ophthalmic solution.
5
Royalty
income increased to $1.2 million for the three months ended October 31, 2010
from $0.6 million in the comparable period on higher royalties for products
divested by the Company’s Midlothian division.
Net
income for the three month period was $10.0 million as compared to $7.4 million
in the prior period. This resulted in diluted earnings per share of $0.76
compared to $0.60 per share in the prior year.
David
Seltzer, President and CEO, commented on the results: “We are pleased with a
record quarter in terms of both sales and net income. Our business showed
growth, led by robust performance of our generic pharmaceuticals.
Increased profitability has enabled the Company to stay focused on the
aggressive development program for liquid and sterile products where we
see multiple opportunities for growth. We are also pleased with the
performance of our branded prescription and OTC divisions and continue to look
for near and long term acquisition and licensing opportunities to grow both
businesses.”
Conference call
Information
The
Company will hold a conference call today, December 9th, to
discuss its financial results at 10 a.m. Eastern Time.
To access
the conference call, dial toll free 866-788-0547, or 857-350-1685 for
international callers, five minutes before the conference. The passcode of the
conference call is 52439230.
A replay
of the conference call will be available after 1:00 p.m. on December 9, 2010,
for one week by calling toll free 888-286-8010, or 617-801-6888 for
international callers. The passcode for the replay is 78221522.
Other
Information
Hi-Tech
currently has 15 products awaiting approval at the FDA, targeting brand and
generic sales of over $1.0 billion. In addition, Hi-Tech has 20 products in
active development targeting brand sales of over $2 billion, including sterile
ophthalmic products, oral solutions and suspensions and nasal
sprays.
Hi-Tech
is a specialty pharmaceutical company developing, manufacturing and marketing
generic and branded prescription and OTC products. The Company
specializes in difficult to manufacture liquid and semi-solid dosage forms and
produces a range of sterile ophthalmic, otic and inhalation
products. The Company’s Health Care Products Division is a leading
developer and marketer of branded prescription and OTC products for the diabetes
marketplace. Hi-Tech’s ECR Pharmaceuticals subsidiary markets branded
prescription products.
Forward-looking
statements (statements which are not historical facts) in this Press Release are
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are not promises or guarantees
and investors are cautioned that all forward-looking statements involve risks
and uncertainties, including but not limited to the impact of competitive
products and pricing, product demand and market acceptance, new product
development, the regulatory environment, including without limitation, reliance
on key strategic alliances, availability of raw materials, fluctuations in
operating results and other results and other risks detailed from time to time
in the Company's filings with the Securities and Exchange Commission. These
statements are based on management's current expectations and are naturally
subject to uncertainty and changes in circumstances. We caution you not to place
undue reliance upon any such forward looking statements which speak only as of
the date made. Hi-Tech is under no obligation to, and expressly disclaims any
such obligation to, update or alter its forward-looking statements, whether as a
result of new information, future events or otherwise.
Contact
Information: Hi-Tech Pharmacal Co., Inc.
William
Peters, CFO
(631)
789-8228
6
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Six
Months
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Three
Months
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10/31/10
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10/31/09
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10/31/10
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10/31/09
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Net
sales
|
$ | 85,290,000 | $ | 84,352,000 | $ | 44,890,000 | $ | 40,875,000 | ||||||||
|
Cost
of goods sold
|
37,094,000 | 35,404,000 | 19,891,000 | 18,477,000 | ||||||||||||
|
Gross
profit
|
48,196,000 | 48,948,000 | 24,999,000 | 22,398,000 | ||||||||||||
|
Selling,
general, administrative expenses
|
18,604,000 | 22,862,000 | 9,093,000 | 10,163,000 | ||||||||||||
|
Research
& product development costs
|
4,465,000 | 3,466,000 | 2,485,000 | 2,081,000 | ||||||||||||
|
Royalty
(Income)
|
(2,221,000 | ) | (943,000 | ) | (1,177,000 | ) | (556,000 | ) | ||||||||
|
Contract
research (income)
|
(617,000 | ) | (313,000 | ) | (429,000 | ) | (313,000 | ) | ||||||||
|
Interest
expense
|
22,000 | 15,000 | 12,000 | 7,000 | ||||||||||||
|
Interest
(income) and other
|
(316,000 | ) | (1,285,000 | ) | (181,000 | ) | (276,000 | ) | ||||||||
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Total
|
$ | 19,937,000 | $ | 23,802,000 | $ | 9,803,000 | $ | 11,106,000 | ||||||||
|
Income
before income taxes
|
28,259,000 | 25,146,000 | 15,196,000 | 11,292,000 | ||||||||||||
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Provision
for income taxes
|
9,608,000 | 9,074,000 | 5,220,000 | 3,894,000 | ||||||||||||
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Net income
|
$ | 18,651,000 | $ | 16,072,000 | $ | 9,976,000 | $ | 7,398,000 | ||||||||
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Basic
net earnings per common share
|
$ | 1.48 | $ | 1.40 | $ | 0.79 | $ | 0.63 | ||||||||
|
Diluted
net earnings per common share
|
$ | 1.43 | $ | 1.33 | $ | 0.76 | $ | 0.60 | ||||||||
|
Weighted
average shares outstanding:
|
||||||||||||||||
|
Basic
|
12,577,000 | 11,509,000 | 12,585,000 | 11,673,000 | ||||||||||||
|
Effect
of potential common shares
|
477,000 | 543,000 | 459,000 | 589,000 | ||||||||||||
|
Diluted
|
13,054,000 | 12,052,000 | 13,044,000 | 12,262,000 | ||||||||||||
7