Hi-Tech Pharmacal Co., Inc. reported second fiscal quarter (ending Oct. 31) data today, which showed notable growth from the previous year.
HITK’s net sales were up 63%, to $40.9M, from last year for the three-month period, and up 64% for the quarter, excluding the Midlothian Laboratories data, which showed a $1.6M decrease due to discontinuation of cough and cold remedies that failed to obtain approval.
Obtained in February of this year, ECR Pharmaceuticals, with its line of branded products, accounted for $4.6M of sales.
HITK’s OTC-branded products are marketed by the Health Care Products Division, which saw a 9% jump, to $3.6M, for the three month period over last year’s figures, largely due to continued strength of the Diabetic Tussin® and Multibetic® products.
Cost of sales for the three month period was up $5.4M, while decreasing as a percentage of sales by 7%, down to 45% of net sales, showing improved efficiency in HITK’s cost-to-earnings structure. Sales of higher margin products in its OTC line, and those via ECR Pharmaceuticals, played a key role in streamlining profitability.
R&D costs were ramped up to facilitate external projects, and thus were up $300K for the three-month period over last year’s total of $1.8M.
Selling, general and administrative costs were up $2.7M from the 2008 figure of $7.5M for the quarter, due largely to the amortization of intangibles associated with the ECR Pharmaceuticals acquisition and a $1.7M royalty to a legal partner for the Dorzolamide with Timolol ophthalmic solution.
HITK’s net income was up a promising $6.3M for the quarter, from $1.1M the previous year; diluted earnings per share rose to $0.60, up $0.51.
President and CEO of HITK David Seltzer commented on the continued success of Dorzolamide, with Timolol ophthalmic solution and the core generic liquid line, saying, “As expected, these products strengthened the Company’s financial position and allowed us to continuously invest in the business to assure future growth.”
Seltzer asserted the strong growth evinced by this report, emphasizing the ECR acquisition and the recent “in-licensing of Zolpimist®, which we believe will be a very successful product for ECR in the coming fiscal year”.
With 15 products currently in line for FDA approval and ready to strike pay dirt in the $600M brand and generic market, and 20 products under development that will have access to a $2B brand market which includes oral solutions, sterile ophthalmic products, suspensions and solid dosage forms, HITK is well arrayed to push the envelope even further in coming quarters.
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