West Pharmaceutical Services, Inc. Announces Second Quarter And Six Month Results
LIONVILLE, Pa., July 20 /PRNewswire/ -- West Pharmaceutical Services, Inc. (NYSE: WST) today announced results for the second quarter and six months ended June 30, 2000.
Net sales for the second quarter were $112.7 million compared to the $124.4 million reported in the second quarter of 1999. At constant exchange rates, sales for the second quarter 2000 were 5.9% lower. Sales in the Company's Device Product Development segment, which represent approximately 85% of total sales, declined 1.9%, at constant exchange rates, compared with the same period last year. This decline reflects the impact of inventory reductions of the Company's products by certain of its customers, compared with a broad-based increase in demand in the second quarter of 1999. The Company's Contract Services segment experienced lower sales volume due to continued soft business conditions in its Contract Manufacturing and Packaging unit.
Net income for the second quarter was $5.0 million, or $0.35 per share, including pretax severance costs of $1.5 million, as compared with net income of $10.4 million, or $0.70 per share, in the second quarter of 1999. The reduced results reflect lower domestic demand for higher value pharmaceutical and medical device packaging components, lower utilization of the Company's plastics facility in the United Kingdom, and continued low volume in the Contract Services segment. In addition, the adverse impact of the strong U.S. dollar reduced reported results from international operations and increased the cost of their dollar-based raw materials. This was offset somewhat by reduced selling, general and administrative expenses due to higher pension income, lower incentive compensation and the effects of the strong U.S. dollar.
In the second quarter, the Company had an average of 14.5 million common shares outstanding compared to an average of 14.9 million in the same period last year. The Company repurchased 162,000 shares during the second quarter 2000 under its share repurchase program. Since the inception of its one million share repurchase program in March 1999, the Company has acquired 889,500 shares at a cost of approximately $28.0 million.
For the six-month period ending June 30, 2000, net sales were $220.4 million compared with the $238.6 million reported in the same period last year. At constant exchange rates, first half 2000 sales were 4.1% lower. Net income for the six-month period was $10.1 million, or $0.70 per share, compared to $19.9 million, or $1.33 per share, reported in the same period of 1999.
William G. Little, Chairman and Chief Executive Officer, commented, "Our results are consistent with the announcement we made on June 21. While we are disappointed with this performance, we continue to take the steps we believe necessary to mitigate current conditions and to return us to normal growth rates. At the same time, we are making significant capital investments to meet our customers' needs and to expand our services. In addition, we remain encouraged by our drug delivery capabilities in multiple product areas that should contribute to an eventual shift in our revenue mix. In that light and as previously announced, we expect to complete a drug delivery licensing agreement with a substantial organization during the third quarter. We look forward to reporting on the continued progress of these and other development projects.
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 Six Months Ended June 30,2000 June 30,1999 June 30, 2000 June 30,1999 NET SALES $112,700 100% $124,400 100% $220,400 100% $238,600 100% Cost of 84,500 75 84,600 68 164,000 74 164,400 69 goods and services sold GROSS 28,200 25 39,800 32 56,400 26 74,200 31 PROFIT Selling, 17,000 15 19,700 16 34,400 16 36,700 15 general and administrative expenses Other - - 300 - 400 - 300 - expense, net Operating 11,200 10 19,800 16 21,600 10 37,200 16 Profit Interest 3,400 3 2,800 2 6,400 3 4,800 2 expense Income 7,800 7 17,000 14 15,200 7 32,400 14 before income taxes and minority interests Provision 3,000 3 6,600 5 5,700 3 12,500 5 for income taxes Minority 100 - - - 200 - 100 - interests Income 4,700 4% 10,400 8% 9,300 4% 19,800 8% from consolidated operations Equity in 300 - 800 100 net income of affiliated companies Net Income $5,000 $10,400 $10,100 $19,900 Net income per share: Basic $0.35 $0.70 $0.70 $1.33 Assuming $0.35 $0.69 $0.70 $1.32 dilution Average common 14,463 14,945 14,487 15,017 shares outstanding Average 14,465 15,043 14,495 15,113
dilution SOURCE West Pharmaceutical Services, Inc.
CONTACT: Stephen M. Heumann, Vice President and Treasurer of West Pharmaceutical Services, Inc., 610-594-3346; Investor Relations - Robert P. Jones, Dory Lombardo, or Press - Stacey Nield of Morgen-Walke Associates, 212-850-5600, for West Pharmaceutical Services, Inc./