Dec 9 2009
Hi-Tech Pharmacal Co., Inc. (NASDAQ: HITK) today reported results for
the quarter ended October 31, 2009.
For the three months ended October 31, 2009, the Company reported net
sales of $40.9 million, an increase of 63% from $25.1 million for the
same period last year.
During the quarter ended October 31, 2009, net sales of Hi-Tech generic
pharmaceutical products, excluding Midlothian Laboratories, which
include liquid and sterile products were $32.0 million, an increase of
64% compared to $19.5 million for the same fiscal 2009 period. Sales of
Dorzolamide with Timolol ophthalmic solution, launched in the previous
year, totaled $7.2 million. Newly launched Hydrocortisone with Acetic
Acid, a generic version of VoSol® HC, also contributed to the
increase and offset the discontinuation of several unapproved cough and
cold products.
ECR Pharmaceuticals, acquired in February, 2009, contributed $4.6
million to sales in its line of branded products in the current period.
Sales for the Health Care Products division, which markets the Company’s
OTC branded products, increased 9% to $3.6 million from $3.3 million for
the three months ended October 31, 2009, largely due to higher sales of
Diabetic Tussin® and Multibetic®.
Net sales for Midlothian Laboratories for the three months ended October
31, 2009 were $0.7 million, a decrease of $1.6 million or 69%, compared
to net sales of $2.3 million for the three months ended October 31,
2008. The decrease was due primarily to the discontinuation of
unapproved cough and cold products.
For the three months ended October 31, 2009, cost of sales increased to
$18.5 million from $13.1 million, but decreased as a percentage of sales
to 45% of net sales, from 52% of net sales, for the three months ended
October 31, 2008. The increase in gross profit is due to increased sales
of higher margin products including Dorzolamide with Timolol ophthalmic
solution, Dorzolamide ophthalmic solution and Hydrocortisone with Acetic
Acid. Additionally, the ECR Pharmaceuticals subsidiary, included in this
quarter’s results, sells higher margin branded products.
Research and product development costs for the period ended October 31,
2009 increased to $2.1 million from $1.8 million for the three month
period ended October 31, 2008 as the Company increased expenditures on
external projects.
For the three month period ended October 31, 2009, selling, general and
administrative expense was $10.2 million, an increase of $2.7 million
from $7.5 million at October 31, 2008. This increase was primarily the
result of the ECR subsidiary and the amortization of intangibles of the
ECR acquisition. Additionally, this expense included $1.6 million in a
royalty payable to a legal partner for the Dorzolamide with Timolol
ophthalmic solution.
Net income for the three month period was $7.4 million as compared to
$1.1 million in the prior period. This resulted in diluted earnings per
share of $0.60 compared to $0.09 per share in the comparable period in
the prior year.
David Seltzer, President and CEO, commented: “We are pleased with the
continued success of Dorzolamide with Timolol ophthalmic solution and
Dorzolamide ophthalmic solution along with the core generic liquid line
which showed strong growth. As expected, these products strengthened the
Company’s financial position and allowed us to continuously invest in
the business to assure future growth. This investment includes the ECR
Pharmaceuticals business which showed strong growth this quarter and our
recent in-licensing of Zolpimist®, which we believe will be a
very successful product for ECR in the coming fiscal year.”
Hi-Tech currently has 15 products awaiting FDA approval, targeting brand
and generic sales of over $600 million. In addition, Hi-Tech has twenty
products in active development targeting brand sales of over $2 billion,
including sterile ophthalmic products, oral solutions and suspensions
and solid dosage forms.
Source:
Hi-Tech Pharmacal Co., Inc.