September 5, 2008

Aceto Announces Record Yearly and Quarterly Results; Q4 2008 Net Income Up 89.7 Percent on 20.1 Percent Increase in Sales Vs 2007

LAKE SUCCESS, N.Y., Sept. 5, 2008 (GLOBE NEWSWIRE) -- Aceto Corporation (Nasdaq:ACET), a global leader in the sourcing, quality assurance, regulatory support, marketing and distribution of chemically derived pharmaceuticals, biopharmaceuticals, specialty chemicals and crop protection products, today announced results of operations for its fourth quarter and fiscal year ended June 30, 2008.

Net sales for the fourth quarter were $104.7 million, an increase of 20.1% from $87.2 million in the year ago quarter. This represents the second consecutive quarter of record quarterly sales. Gross profit increased 46.8% to $24.2 million in the 2008 fiscal quarter compared to $16.5 million in the 2007 quarter. SG&A expenses increased 16.8% to $12.5 million from $10.7 million. Net income increased 89.7% to $8.0 million, or $0.32 per diluted share, up from $4.2 million or $0.17 per diluted share in the 2007 quarter.

Net sales for the year ended June 30, 2008 were $359.6 million, a 14.7% increase from $313.5 million for fiscal 2007. Gross profit for fiscal 2008 was $67.3 million, an increase of 23.5% from $54.5 million. Net income was $13.5 million, or $0.54 per diluted share for fiscal 2008, compared to $10.2 million, or $0.41 per diluted share in fiscal 2007.

Leonard S. Schwartz, Chairman, CEO, and President of Aceto stated, "We are extremely pleased with the record operating results that we have achieved. For the second consecutive fiscal year, net sales and gross profit both reached record levels. Looking at the fiscal fourth quarter, we reported record levels of net sales, gross profit, net income and earnings per share. Operating income in the fourth quarter of 2008 increased 104.3%, driven by the 20.1% increase in net sales, leading to the 89.7% increase in net income and the $0.32 per diluted share which far surpassed both the $0.17 for the fiscal 2007 quarter and the $0.21 guidance that we provided with our third quarter results."

Commenting on Aceto's various business segments, Mr. Schwartz continued, "During the quarter, all of our businesses performed well, particularly Health Sciences and Crop Protection, as evidenced by the across the board increase in sales. Our Health Sciences segment grew 34.9% from the 2007 comparable quarter as a result of increased sales from both our foreign and domestic operations. The Health Sciences segment was especially profitable for Aceto, generating approximately 71% of our fiscal 2008 fourth quarter gross profit. The sales increase can be attributed to increased volume of business for existing products, some of which were more profitable than others. Sales in our Chemicals & Colorants business segment showed only a very modest increase. Sales in our Crop Protection segment increased 19.5% from the 2007 comparable quarter, largely the result of increased sales of a herbicide that is primarily used on peanuts and an increase in sales of our sprout inhibitor products, which are utilized on potato crops."

Updating the status of Aceto's current Strategic Initiatives, Mr. Schwartz commented:

    * Companion animal vaccines -- The animal challenge retesting has    been completed and the results, which confirm the results of the    first set of tests that the vaccine is efficacious, have been    submitted to the USDA. In addition, we have submitted the protocol    for the field safety test to the USDA for their review which we    believe is the final major step in the approval process. Please be    reminded that this is a regulatory review and while we are doing    everything that we can to expedite the process, there can be no    assurance given as to when the approval process will be 100%    completed.  * Entering the Japanese pharmaceutical market -- We are pleased to    announce that we have received our second order for a    pharmaceutical intermediate from a Japanese pharmaceutical    manufacturer. Japan is a difficult market to enter with high    barriers to entry, particularly in the very conservative    pharmaceutical industry there. As such, we are particularly    encouraged by our early successes and are enhancing our resources    there to continue to move forward into the market and particularly,    to pursue business opportunities for the large number of sample    requests that we have received.  * Finished dosage form generic drugs -- Our slow movement here has    been caused by the need to comply with Medicare, Medicaid and    private insurance reimbursements to enable us to succeed in our    business model of sourcing products directly from offshore generic    pharmaceutical companies and sell directly to the large retail    pharmacies, rather than selling to other generic companies or    distributors. We have now created an in-house capability to do this    and are expecting this issue to be resolved soon. At such time, we    expect to go to market with three products.  * Globalization of our nutraceutical business -- I am pleased to say    that the globalization of our nutraceutical business has been    accomplished with the establishment of our pan European sales    organization and the integration of our Singapore operation. We are    now moving forward quickly to secure as much business as possible. 

Mr. Schwartz added, "As we look to expand Aceto's global markets and grow our core businesses, we look to move into marketplaces which appear to be attractive for our business model. One such opportunity is Vietnam where we have been granted a license to sell medicines, medical devices and active pharmaceutical ingredients to the pharmaceutical industry. We currently have two sales representatives in Vietnam and are in the process of forming a representative office there. In fiscal 2008, we had sales of almost $8 million in Vietnam and as we move forward, we will commit the necessary resources to grow our business in this vibrant marketplace."

Mr. Schwartz concluded, "We ended the fourth quarter of fiscal 2008 with working capital of $128.8 million, no long-term bank debt and shareholders' equity of $140.4 million. This level of working capital provides us with the financial strength to capitalize on the sourcing opportunities in highly volatile markets (China and India) and at the same time continue to move our strategic initiatives and other activities forward along with our newly created R&D work.

"Since the globalization of Aceto in 1996, which since its founding in 1947 had been a manufacturers representative business with virtually all sales in the U.S., the Company has developed into a globally integrated, highly technically capable independent distributor. This globalization consisted of establishment of our office in Shanghai, acquisitions of a U.S. distribution company from Witco, the Schweizerhall U.S. distribution business, the 2001 acquisition of Schweizerhall Pharma with business locations in Germany, France, Holland, Singapore, India and Hong Kong, the 2004 acquisition of Pharma Waldhof from Roche, and most recently, the creation of our Indian headquarters and the establishment of Aceto Japan. During this time period, the Company created a highly efficient and capable global technical/ regulatory and sourcing organization second to none, while continuing to develop and enhance the entrepreneurial culture among its 225 employees. As such, we remain optimistic about the Company's long-term business prospects, with our core businesses serving as a solid foundation for future growth and not forgetting that we need to continue to focus on strong cost controls."


Leonard S. Schwartz, Chairman, CEO, and President, and Douglas Roth, CFO, will conduct a conference call at 10:00 a.m. ET on Friday, September 5, 2008. 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, and ask for the Aceto call (conference ID # 59494379). The conference call will also be webcast live via the Investor Relations section of the Company's website, To listen to the live call please go to the website at least 15 minutes early to register, download and install any necessary audio software. The conference call will be archived on the Company's website, and a recorded phone replay will also be available from 1:00 p.m. ET on Friday, September 5, 2008 until 5:00 p.m. ET on Monday, September 8, 2008. Dial 800-642-1687 (706-645-9291 for international callers) and enter the code 59494379for the phone replay.


Aceto Corporation, incorporated in 1947, is a global leader in the sourcing, quality assurance, regulatory support, marketing and distribution of chemically derived pharmaceuticals, biopharmaceuticals, specialty chemicals and crop protection products. With a physical presence in ten countries, Aceto distributes over 1,000 chemicals and pharmaceuticals used principally as raw materials in the pharmaceutical, crop protection, surface coating/ink and general chemical consuming industries. Aceto's global operations, including a staff of 26 in Shanghai and 14 in India are unique in the industry and enable its worldwide sourcing and regulatory capabilities. (ACET-F)

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 the Company's strategic initiatives, including selling finished dosage form generic drugs, providing vaccines for companion animals, entering into the Japanese pharmaceutical market, the globalization of our nutraceutical business, committing the necessary resources to grow the Company's business in Vietnam, capitalizing on the sourcing opportunities in highly volatile markets (China and India) 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

                              Aceto Corporation                    Consolidated Statements of Income                (in thousands, except per share amounts)                                 (unaudited)                           Three Months Ended      Twelve Months Ended                                 June 30,                June 30,                             2008      2007          2008      2007                          ---------  ---------    ---------  ---------  Net sales               $ 104,703  $  87,183    $ 359,591  $ 313,473  Cost of sales              80,483     70,689      292,286    258,980                          ---------  ---------    ---------  ---------  Gross profit               24,220     16,494       67,305     54,493  Gross profit %              23.13%     18.92%       18.72%     17.38%   Selling, general and   administrative expenses   12,498     10,696       45,422     39,418  Research and development   expenses                    (126)        --          506         11                          --------------------    --------------------  Operating income           11,848      5,798       21,377     15,064   Other income, net of   interest expense             279         76          812        359                          ---------  ---------    ---------  ---------   Income before income   taxes                     12,127      5,874       22,189     15,423  Provision for income   taxes                      4,150      1,668        8,716      5,211                          ---------  ---------    ---------  ---------  Net income              $   7,977  $   4,206    $  13,473  $  10,212                          =========  =========    =========  =========   Net income per common   share                  $    0.33  $    0.17    $    0.55  $    0.42   Diluted net income per   common share           $    0.32  $    0.17    $    0.54  $    0.41   Weighted average shares   outstanding:    Basic                    24,356     24,326       24,346     24,305    Diluted                  24,788     24,793       24,800     24,711 
                  Aceto Corporation           Consolidated Balance Sheet    (in thousands, except per-share amounts)                            June 30,   June 30,                              2008       2007                                                   ---------  ---------   Assets  Current Assets:                Cash and cash     equivalents           $  46,515  $  32,320   Investments                  548      3,036   Trade receivables: less     allowances for doubtful    accounts: June 30, 2008     $477; and June 30, 2007     $491                     68,220     58,206   Other receivables          4,819      3,123   Inventory                 71,109     60,679   Prepaid expenses and     other current assets        817      1,128   Deferred income tax     asset, net                1,756      2,541                          ---------  ---------       Total current assets  193,784    161,033    Long-term notes    receivable                   347        449  Property and equipment,    net                        4,307      4,406  Property held for sale      6,978      5,268  Goodwill                    1,987      1,820  Intangible assets, net      5,421      5,817  Deferred income tax    asset, net                 4,098      5,958  Other assets                5,321      3,727                          ---------  ---------   Total Assets            $ 222,243  $ 188,478                          =========  =========   Liabilities and    Shareholders' Equity   Current liabilities:   Accounts payable       $  43,480  $  32,539   Short term bank loans         --         25   Note payable - related     party                       500        500   Accrued expenses          19,948     14,154   Deferred income tax     liability                 1,070        885                          ---------  ---------      Total current        liabilities           64,998     48,103   Long-term liabilities       7,034      6,684  Environmental remediation    liability                  7,578      5,816  Deferred income tax    liability                  1,751      2,746  Minority interest             473        302                          ---------  ---------      Total liabilities      81,834     63,651   Commitments and    contingencies   Shareholders' equity:        Common stock, $.01 par     value:    (40,000 shares     authorized; 25,644     shares issued; 24,446     and 24,330 shares     outstanding at June 30,     2008 and June 30, 2007,     respectively)               256        256   Capital in excess of     par value                56,832     56,854   Retained earnings         81,778     74,419   Treasury stock, at cost:    (1,198 and 1,314 shares     at June 30, 2008 and    June 30 2007,     respectively)           (11,571)   (12,693)   Accumulated other     comprehensive income     13,114      5,991                          ---------  ---------      Total shareholders'        equity               140,409    124,827                          ---------  ---------   Total liabilities and    shareholders' equity   $ 222,243  $ 188,478                          =========  ========= 

This news release was distributed by GlobeNewswire,

 CONTACT: Aceto Corporation          Theodore Ayvas, Director of Corporate Communications &           Investor Relations          (516) 627-6000