Aceto Corp. (ACET)
F2Q09 (Qtr End 12/31/08) Earnings Call
February 06, 2009, 10:00 am ET
Ted Ayvas - Director, IR and Corporate Communications
Doug Roth - VP and CFO
Vince Miata - President
Len Schwartz - Chairman and CEO
Daniel Rizzo - Sidoti & Company
Eugene Fox - Cardinal Capital Management
David Jordan - Axiom Capital Management
Kevin McCanine - Main Line Capital
Eugene Fox - Cardinal Capital Management
Previous Statements by ACET
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This conference call 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 conference call include but are not limited to statements regarding the company's strategic initiatives, including selling of finished dosage from generic drugs, providing vaccines for companion animals, selling into the Japanese pharmaceutical market, selling Halosulfuron in the 2009 growing season and statements regarding the prospects for long-term growth.
All forward-looking statements are made as of the date of this conference call and Aceto assumes no obligation to update them other than as required by law. Risks that could cause actual results to differ materially from those set forth or implied by any forward-looking statements can be found in Aceto's filings with the Securities and Exchange Commission which are available at www.sec.gov.
I will now turn the call over to Mr. Ted Ayvas, Director of Investor Relations and Corporate Communications, Mr. Ayvas you may begin.
Thank you good morning and welcome to Aceto Corporation's fiscal 2009 second quarter conference call and audio webcast. With me today is Leonard Schwartz, our Chairman and CEO, Vincent Miata our President, Douglas Roth our Chief Financial Officer and Hank Gracin of Lehman & Ellen our outside Securities Counsel.
During this call Doug will give you an overview of the company's results for the fiscal second quarter ended December 31, 2008. Vince will discuss the performance of our business segment and Len will provide an update on our strategic initiatives for growth. Following that we will open the call up for questions.
Now I’d like to turn the call over to Doug Roth. Doug?
Thank you and good morning, everyone. The sales for the quarter decreased 4% to $74 million, compared to $77 million in the comparable 2008 quarter. Gross profit decreased 6% to $12 million from $13 million in the year ago quarter. Operating income also decreased by 24% to $1.3 million from $1.7 million in the fiscal 2008 quarter.
Net income increased 20% to $1.1 million, compared to $900,000 in the 2008 comparable quarter. Earnings per diluted share were $0.04 in this fiscal second quarter, which are flat from the $0.04 per diluted share that we reported in the fiscal 2008 second quarter.
Now I'd like to turn the call over to Vince Miata to discuss the performance of our three business segments.
Thanks, Doug, and good morning to everyone. Looking at our business segments, sales in our Health Sciences segment declined 2% in the 2008 comparable quarter, largely the result of the decline in sales of pharmaceutical intermediate.
Sales in our Chemicals & Colorants business segment declined 6%, compared to the 2008 comparable quarter, largely the result of declines in the sales of pigment intermediates, aroma chemicals and international sales. These declines were partially offset by an increase in sales into the surface coatings industry.
Sales in our Crop Protection segment decreased 5% from the 2008 comparable quarter, largely the result of decreased sales of our sprout inhibitor products, which is largely dependent on the size of the potato crop harvest.
I would now like to turn the call over to Len Schwartz to provide you an update on our strategic initiatives for growth.
Thanks Vince, and good morning everyone. Before I update you on our strategic initiatives growth, I would like to take a minute to discussing action that we are taking to better deal with the current global economic conditions.
As you can see our second quarter results were impacted by the very difficult economic environment that we have been operating which has affected almost all the chemical producing and consuming industries.
In the latter part of 2008, it became evident to us that the economic environment in which we are operating was only going to get more challenging, the whole world did that not only us.
Since we have been committed to enhancing the sustainable growth of Aceto, we made a conscious decision to try and better understand the future dynamics of the various markets and business segments that Aceto participates in.
In order to do this, we made a decision to go back in time and study some history to get a better understanding as to how successful companies operated during the Great Depression.
We found that successful companies during that period of time had similar characteristics; well, little or no debt, strong positive cash flows, maintained strong brands, supported their brands by advertising, and provided the best value to the customer in the most cost-effective manner.