Aceto Corp. (ACET, Financial) filed Quarterly Report for the period ended 2010-03-31.
Aceto Corp. has a market cap of $148.5 million; its shares were traded at around $5.87 with a P/E ratio of 53.4 and P/S ratio of 0.5. The dividend yield of Aceto Corp. stocks is 3.4%. Aceto Corp. had an annual average earning growth of 5.7% over the past 10 years.ACET is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Net sales for the Health Sciences segment decreased by $8,550 for the nine months ended March 31, 2010, to $135,313, which represents a 5.9% decrease from net sales of $143,863 for the prior period. This decrease is predominantly due to decreased sales from our foreign operations of $10,141, specifically our Asian and The Netherlands operations, due primarily to weak demand from certain customers. The decrease in Health Sciences sales is partially offset by $1,689 increase in domestic nutraceutical products, which represent raw materials used in the production of nutritional supplements, due to increased penetration of existing products across the entire customer base, as well as new customers. In addition, growth in vitamin sales is attributed to increased sales efforts.
Net sales for the Specialty Chemicals segment were $87,438 for the nine months ended March 31, 2010, a decrease of $3,798 or 4.2% from net sales of $91,236 for the prior period. Our Specialty Chemicals business is diverse in terms of products, customers and consuming markets, including the automotive and housing markets, and is directly impacted by market conditions in the economy. The decrease in sales from this segment is attributable to a decline in sales of $1,181 in chemicals used in aroma products, $1,050 in chemicals used to produce surface coatings, $1,049 in products used in the treatment of metal and $3,381 of agricultural, dye, pigment and other intermediates. In addition, the prior period also included a rise in prices in the chemical industry related to increased demand for chemical products in China, as a direct result of the supplier interruption in China due to the summer Olympics in August 2008. Aceto was able to carry more stock in anticipation of the closing of certain factories in China due to the Olympics. Leading up to the Olympics, our customers were willing to pay increased prices to ensure that they had enough raw materials to finish calendar year 2008 and continued to pay those purchase commitments which were at higher prices. Once the Olympics were over and the purchase commitments ended, both demand and sales prices dropped. These decreases are offset, in part, by a rise of $1,393 in sales of chemicals used in the food, beverage and cosmetics industry due to a resurgence of a product utilized in sunscreen and an increase in sales of specialty chemicals from our foreign operations of $952.
Gross profit decreased to $38,448 (16.0% of net sales) for the nine months ended March 31, 2010, as compared to $43,937 (17.7% of net sales) for the prior period. In December 2009, we completed a review of our inventory by product line and recorded an $859 non-cash inventory write-down to its estimated net realizable value, included in cost of sales, relating to certain Health Sciences and Specialty Chemicals inventories.
SG&A increased $1,369 or 4.1%, to $34,443 for the nine months ended March 31, 2010 compared to $33,074 for the prior period. As a percentage of sales, SG&A increased to 14.3% for the nine months ended March 31, 2010 versus 13.3% for the prior period. The primary reason for the increase in SG&A is due to approximately $2,587 of one-time costs associated with the separation of the Company s former Chairman of the Board of Directors and CEO, which were recorded in the second quarter of fiscal 2010. In addition, the Company completed an SG&A rationalization review and has recorded charges of approximately $1,215 during the nine months ended March 31, 2010 for personnel related costs in conjunction with our cost reduction efforts. The increase in SG&A is partially offset by a decline of $1,623 in personnel related costs due to decreased accrued bonus expense as a result of decreased profitability, decrease in fringe benefits and a decline in stock-based compensation expense. SG&A also decreased due to a $505 drop in sales and marketing expenses, which is directly related to the decline in sales for the first nine months of fiscal 2010 and a $312 decrease in bad debt expense due to additional reserves recorded in the prior period, where there was no comparable amount in the current period. In addition, in the prior period, we had $153 in research and development expenses (R&D) with no comparable amount in the nine months ended March 31, 2010 due to the abandonment in fiscal 2009 of R&D related to two finished dosage form generic pharmaceutical products that were to be distributed in Europe.
For the nine months ended March 31, 2010, operating income was $4,005 compared to income of $10,863 in the prior period, a decrease in operating income of $6,858 or 63.1%. This decrease was due to the overall decrease in gross profit of $5,489 and increase in SG&A of $1,369 from the comparable prior period.
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Aceto Corp. has a market cap of $148.5 million; its shares were traded at around $5.87 with a P/E ratio of 53.4 and P/S ratio of 0.5. The dividend yield of Aceto Corp. stocks is 3.4%. Aceto Corp. had an annual average earning growth of 5.7% over the past 10 years.ACET is in the portfolios of John Buckingham of Al Frank Asset Management, Inc., Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
We are reporting net sales of $240,866 for the nine months ended March 31, 2010, which represents a 2.8% decrease from the $247,854 reported in the comparable prior period. Gross profit for the nine months ended March 31, 2010 was $38,448 and our gross margin was 16.0% as compared to gross profit of $43,937 and gross margin of 17.7% in the comparable prior period. Our selling, general and administrative costs (SG&A) for the nine months ended March 31, 2010 increased 4.1%, when compared to $33,074 we reported in the prior period. We had a net income of $2,343 or $0.09 per diluted share, compared to net income of $7,578, or $0.30 per diluted share in the prior period. The primary reason for the decline in income is due to approximately $2,587 of one-time costs associated with the separation of our former Chairman of the Board of Directors and CEO, which were recorded in the nine months ended March 31, 2010. In addition, the Company completed an SG&A rationalization review and review of its inventory by product line and has recorded one-time charges of approximately $2,074 in the second quarter of fiscal 2010.Net sales for the Health Sciences segment decreased by $8,550 for the nine months ended March 31, 2010, to $135,313, which represents a 5.9% decrease from net sales of $143,863 for the prior period. This decrease is predominantly due to decreased sales from our foreign operations of $10,141, specifically our Asian and The Netherlands operations, due primarily to weak demand from certain customers. The decrease in Health Sciences sales is partially offset by $1,689 increase in domestic nutraceutical products, which represent raw materials used in the production of nutritional supplements, due to increased penetration of existing products across the entire customer base, as well as new customers. In addition, growth in vitamin sales is attributed to increased sales efforts.
Net sales for the Specialty Chemicals segment were $87,438 for the nine months ended March 31, 2010, a decrease of $3,798 or 4.2% from net sales of $91,236 for the prior period. Our Specialty Chemicals business is diverse in terms of products, customers and consuming markets, including the automotive and housing markets, and is directly impacted by market conditions in the economy. The decrease in sales from this segment is attributable to a decline in sales of $1,181 in chemicals used in aroma products, $1,050 in chemicals used to produce surface coatings, $1,049 in products used in the treatment of metal and $3,381 of agricultural, dye, pigment and other intermediates. In addition, the prior period also included a rise in prices in the chemical industry related to increased demand for chemical products in China, as a direct result of the supplier interruption in China due to the summer Olympics in August 2008. Aceto was able to carry more stock in anticipation of the closing of certain factories in China due to the Olympics. Leading up to the Olympics, our customers were willing to pay increased prices to ensure that they had enough raw materials to finish calendar year 2008 and continued to pay those purchase commitments which were at higher prices. Once the Olympics were over and the purchase commitments ended, both demand and sales prices dropped. These decreases are offset, in part, by a rise of $1,393 in sales of chemicals used in the food, beverage and cosmetics industry due to a resurgence of a product utilized in sunscreen and an increase in sales of specialty chemicals from our foreign operations of $952.
Gross profit decreased to $38,448 (16.0% of net sales) for the nine months ended March 31, 2010, as compared to $43,937 (17.7% of net sales) for the prior period. In December 2009, we completed a review of our inventory by product line and recorded an $859 non-cash inventory write-down to its estimated net realizable value, included in cost of sales, relating to certain Health Sciences and Specialty Chemicals inventories.
SG&A increased $1,369 or 4.1%, to $34,443 for the nine months ended March 31, 2010 compared to $33,074 for the prior period. As a percentage of sales, SG&A increased to 14.3% for the nine months ended March 31, 2010 versus 13.3% for the prior period. The primary reason for the increase in SG&A is due to approximately $2,587 of one-time costs associated with the separation of the Company s former Chairman of the Board of Directors and CEO, which were recorded in the second quarter of fiscal 2010. In addition, the Company completed an SG&A rationalization review and has recorded charges of approximately $1,215 during the nine months ended March 31, 2010 for personnel related costs in conjunction with our cost reduction efforts. The increase in SG&A is partially offset by a decline of $1,623 in personnel related costs due to decreased accrued bonus expense as a result of decreased profitability, decrease in fringe benefits and a decline in stock-based compensation expense. SG&A also decreased due to a $505 drop in sales and marketing expenses, which is directly related to the decline in sales for the first nine months of fiscal 2010 and a $312 decrease in bad debt expense due to additional reserves recorded in the prior period, where there was no comparable amount in the current period. In addition, in the prior period, we had $153 in research and development expenses (R&D) with no comparable amount in the nine months ended March 31, 2010 due to the abandonment in fiscal 2009 of R&D related to two finished dosage form generic pharmaceutical products that were to be distributed in Europe.
For the nine months ended March 31, 2010, operating income was $4,005 compared to income of $10,863 in the prior period, a decrease in operating income of $6,858 or 63.1%. This decrease was due to the overall decrease in gross profit of $5,489 and increase in SG&A of $1,369 from the comparable prior period.
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