West Pharmaceutical Services, Inc. Announces First Quarter Results
LIONVILLE, Pa., April 19 /PRNewswire/ -- West Pharmaceutical Services, Inc. (NYSE: WST) today announced results for the first quarter ended March 31, 2000.
Sales for the first quarter were $107.7 million compared to the $114.2 million reported in the first quarter of 1999. At constant exchange rates, first quarter sales decreased 2% compared with the same quarter last year. Net income was $5.1 million, or $0.35 per share, compared with net income of $9.5 million, or $0.63 per share, in the same period of 1999. As expected, the Contract Services segment experienced lower sales volumes and a negative operating margin. Sales of the Device Product Development segment, the Company's largest segment, increased 3% at constant exchange rates, but margins for this segment were negatively impacted by sales mix and costs associated with new projects. Foreign exchange negatively impacted earnings by $0.04 per share. Therefore, compared with 1999's first quarter, consolidated gross margins and operating profit were lower. Average common shares outstanding in the first quarter of 2000 were 14.5 million, compared with 15.1 million for 1999's first quarter. The reduction in average common shares outstanding for the quarter is due to the Company's stock buyback program announced in March 1999 under which 727,500 shares have been purchased.
William G. Little, Chairman and Chief Executive Officer, commented, "The performance of our Contract Services segment is largely responsible for the significant reduction in our financial results. However, I am encouraged by increased order rates and expect this business to resume making positive contributions in the second half of the year. Growth in sales of the Device Product Development segment continued, with impacts from foreign exchange and product mix having a somewhat negative effect on sales and margins."
Mr. Little concluded, "I am extremely encouraged by the recent interest in our drug delivery technology, and we anticipate at least one product license agreement for nasal delivery of a pain management compound in the second quarter. Although the Company's first quarter results, as anticipated, were significantly below results reported in 1999, we believe earnings for 2000 will exceed last year's performance."
West Pharmaceutical Services applies value-added technologies to the process of bringing new drug therapies and healthcare products to global markets. West's technologies include the design and manufacture of packaging components for pharmaceutical, healthcare and consumer products; research and development of drug delivery systems; contract laboratory services; clinical services; and other services that support the manufacturing, filling and packaging of pharmaceutical and healthcare products. For more information, visit the West Pharmaceutical Services website at http://www.westpharma.com.
Statements concerning forecasted results, financial or otherwise, which are contained in the above material, constitute "forward-looking statements" that involve risks and uncertainties. The Company's actual results may differ materially from those expressed in any forward-looking statement and are dependent on a number of factors including but not limited to, sales demand, timing of customers' projects, competitive pressures, the strength or weakness of the U.S. dollar, inflation, the cost of raw materials, successful continuance of cost-improvement programs and statutory tax rates.
WEST PHARMACEUTICAL SERVICES, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data)
Quarter Ended March 31, 2000 March 31, 1999 Net sales $ 107,700 100 % $114,200 100 % Cost of goods and services sold 79,500 74 79,800 70 Gross profit 28,200 26 34,400 30 Selling, general and administrative expenses 17,400 16 17,000 15 Other expense, net 400 -- -- -- Operating profit 10,400 10 17,400 15 Interest expense 3,000 3 2,000 2 Income before income taxes and minority interests 7,400 7 15,400 13 Provision for income taxes 2,700 3 5,900 5 Minority interests 100 -- 100 -- Income from consolidated operations 4,600 4 % 9,400 8 % Equity in net income of affiliated companies 500 100 Net income $ 5,100 $9,500 Net income per share: Basic $0.35 $0.63 Assuming dilution $0.35 $0.63 Average common shares outstanding 14,546 15,082 Average shares assuming dilution 14,562 15,133
SOURCE West Pharmaceutical Services, Inc.
CONTACT: Stephen M. Heumann, Vice President and Treasurer of West Pharmaceutical Services, 610-594-3346; Investor Relations: Ephraim Bernstein, Dory Lombardo, or Press: Stacey Nield, all of Morgen-Walke Associates, 212-850-5600, for West Pharmaceutical Services/