• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Hi-Tech Pharmacal Reports a 27% Sales Increase and a 60% EPS Increase for the Quarter Ended July 31, 2005

Posted on: Thursday, 8 September 2005, 09:00 CDT

Hi-Tech Pharmacal Co., Inc. (NASDAQ: HITK) today reported results for the Company's fiscal first quarter ended July 31, 2005.

Net sales for the three months ended July 31, 2005 were $15,427,000 an increase of $3,287,000 or 27% as compared to the net sales of $12,140,000 for the three months ended July 31, 2004.

Net sales for generic pharmaceutical products for the three months ended July 31, 2005 were $13,939,000, an increase of $3,569,000, or 34%, compared to the sales of $10,370,000 for the fiscal 2004 respective period. The increase was primarily due to strong sales of newer generic prescription products launched in the last year partially offset by declines of in-line products.

Net sales for the Health Care Products division, which markets the Company's branded products, were $1,235,000, a decrease of $215,000 or 15%, compared to $1,450,000 reported for the same period last year. The change was primarily caused by decreased sales of DiabetiDerm(R) and DiabetiSweet(R) products.

For the three months ending July 31, 2005, sales of Naprelan(R) were approximately $253,000, a decrease of $67,000 compared to $320,000 for the same period last year.

Cost of sales increased to $7,210,000, or 47% of net sales, for the three months ended July 31, 2005 from $5,925,000, or 49% of net sales, for the three months ended July 31, 2004. The decrease as a percentage of sales is due to strong sales of recently introduced high margin generic products.

Research and product development costs for the three months ended July 31, 2005 decreased to $637,000, or 4% of net sales compared to $1,088,000 or 9% of net sales for the same period ended July 31, 2004 due to the completion, in the prior year, of clinical trials associated with fluticasone propionate, a generic version of GlaxoSmithKline's Flonase(R) for which the Company submitted an ANDA in February 2005.

Selling, general and administrative expense increased to $5,607,000, or 36% of net sales, from $3,827,000, or 32% of net sales, for the three months ended July 31, 2005 and 2004 respectively. This was primarily the result of increased legal expenses, commission expenses and freight costs.

Net income for the three months ended July 31, 2005 and 2004 was $1,406,000 and $869,000, respectively, an increase of $537,000, or 62%. Fully diluted earnings per share increased to $.16 per share for the three months ended July 31, 2005 from $.10 for the three months ended July 31, 2004.

David Seltzer, President and CEO, commented on the quarter: "We are pleased with our financial results for the first quarter. Our generic business, led by our cough and cold line drove this strong increase. Additionally, we launched Urealac 50% Cream a generic version of Bradley's Keralac(TM) Cream (50% Urea). We believe that our growing portfolio of liquid and topical generic products will drive our Company's growth in the future. We also expect strong performance from the line of our branded products that has been enhanced by the recent acquisition of Zostrix(R)."

Hi-Tech currently has eleven products awaiting approval at the FDA. These products target brand sales of over $1.6 billion. In addition to these products awaiting approval at the FDA, Hi-Tech has fifteen products in active development targeting brand sales of over $2.0 billion, including sterile ophthalmic products, oral solutions and suspensions and nasal sprays.

The Company's management reiterates its belief that net sales will grow between 15% and 20% for Fiscal Year 2006. The Company's ability to meet the forecast depends on such factors as the timing of new product launches, competition, legal proceedings and other market conditions.

Hi-Tech is a specialty pharmaceutical company developing, manufacturing and marketing branded and generic prescription and OTC products for the general healthcare industry. 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.

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, the outcome of the SEC staff's investigation and any conclusions reached by the staff which are adverse to the Company, its officers or directors, 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.

Three Months Ended ------------------ 7/31/2005 7/31/2004 ----------- ----------- Net sales $15,427,000 $12,140,000 Cost of goods sold 7,210,000 5,925,000 ----------- ----------- Gross profit 8,217,000 6,215,000 Selling, general and administrative expenses 5,607,000 3,827,000 Research and product development costs 637,000 1,088,000 Interest expense 5,000 7,000 Interest (income) and other (264,000) (93,000) ----------- ----------- Total 5,985,000 4,829,000 ----------- ----------- Income before income taxes 2,232,000 1,386,000 Provision for income taxes 826,000 517,000 ----------- ----------- Net income $ 1,406,000 $ 869,000 =========== =========== Basic net earnings per common share $ 0.18 $ 0.11 =========== =========== Diluted net earnings per common share $ 0.16 $ 0.10 =========== =========== Weighted average common shares outstanding- basic 7,808,000 8,082,000 Effect of potential common shares 1,004,000 899,000 ----------- ----------- Weighted average common shares outstanding - diluted 8,812,000 8,981,000 =========== ===========

Source: Business Wire

More News in this Category