West Pharmaceutical Services, Inc. Comments on Second Quarter and 2000 Year - Announces Management Changes and Other Corporate Developments
LIONVILLE, Pa., June 21 /PRNewswire/ -- West Pharmaceutical Services, Inc. (NYSE: WST) today reported that earnings for the second quarter ending June 30, 2000 and for the year are expected to be sharply lower than previously anticipated.
The Company stated that the previously disclosed soft business conditions for its contract manufacturing and packaging unit are now expected to extend through the fourth quarter. The Company also reported that this unit continues to experience reduced demand, further project cancellations and lower-than-anticipated market acceptance for customers' products.
The Company also reported that it is transitioning its plastic manufacturing plant in Lewes, England to a facility focused on producing medical devices and multi-component consumer products. The transition is expected to be completed by year-end. During this period, the plant will be under-utilized.
The Company has begun reducing its labor force to reflect these current business conditions and will report severance costs of approximately $1.5 million in the second quarter.
The Company's core device product development segment is growing in line with the industry as a whole, driven in large part by an increasing demand for clean-room products. The Company's Board of Directors recently approved significant capital investment in European manufacturing facilities to meet this demand.
In the area of drug delivery, the Company announced that it is in late-stage negotiations with a major partner to develop multiple products based on its proprietary drug delivery technology. Definitive agreements are expected to be completed early in the third quarter.
Based on the preliminary data available, the Company now expects its second-quarter earnings to be approximately $0.35 per share compared with second-quarter 1999 earnings-per-share of $0.70. Earnings for the full year are expected to be in the range of $1.80 to $2.00 per share versus the $2.59 per share reported in 1999.
William G. Little, Chairman and Chief Executive Officer, commented, "The performance of our core device product development segment globally is meeting expectations and we are making major investments to meet the increasing demand for clean-room products. In addition, we are pleased with the progress of our drug delivery efforts. It is therefore disappointing that our contract manufacturing and packaging business continues to have a negative effect on our overall prospects for the year. We are taking appropriate steps to reduce manufacturing costs."
The Company also announced the appointment of Steven A. Ellers as Executive Vice President and Herbert L. Hugill as Division President, Sales and Contract Services. Anna Mae Papso, the Company's Vice President and Corporate Controller, has been promoted to Vice President, Finance. Ms. Papso and Mr. Ellers will report directly to Mr. Little, the CEO, while Mr. Hugill will report to Mr. Ellers. In addition, Linda R. Altemus has been promoted to Chief Information Officer, reporting to Mr. Little.
In his new role, Mr. Ellers will have worldwide responsibility for the Company's Device Product Development and Contract Services segments. Mr. Hugill will be responsible for the Company's worldwide sales for these segments. Ms. Papso will assume Mr. Ellers' duties as chief financial officer.
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. SOURCE West Pharmaceutical Services, Inc.
CONTACT: Stephen M. Heumann, Vice President and Treasurer of West Pharmaceutical Services, Inc., 610-594-3346; Investors - Robert P. Jones or Dory Lombardo, Press - Stacey Nield, all of Morgen-Walke Associates, 212-850-5600, for West Pharmaceutical Services, Inc./