Aceto Announces Fiscal 2010 First Quarter Results of Operations

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LAKE SUCCESS, N.Y., Nov 6, 2009 (GlobeNewswire via COMTEX) -- ACET | Quote | Chart | News | PowerRating -- Aceto Corporation (Nasdaq:ACET), a global leader in the sourcing, quality assurance, regulatory support, marketing and distribution of chemically derived pharmaceuticals, nutraceuticals, specialty chemicals and crop protection products, today announced results of operations for its fiscal 2010 first quarter ended September 30, 2009.

Net sales for the fiscal 2010 first quarter were $70.6 million, a decrease of 24.8% from $93.8 million reported in the year ago quarter. Gross profit decreased 37.6% to $11.8 million in the 2010 fiscal quarter compared to $18.9 million in the 2009 quarter. SG&A expenses decreased 16.8% to $10.1 million in the 2010 quarter compared to $12.2 million in the year ago comparable quarter. Net income decreased 78% to $1.0 million, or $0.04 per diluted share, compared to $4.6 million or $0.18 per diluted share in the 2009 quarter.

Albert Eilender, Non-Executive Chairman of Aceto stated, "This past year, as well as the first quarter of the current fiscal year, have been difficult periods for the Company, largely due to the fact that the global economy has contracted beyond what was anticipated a short 12 months ago. Clearly, we are not satisfied with the operating results we have reported for the first quarter of fiscal 2010. Be assured that even though we are confident that in time the general economy will noticeably improve, we are reevaluating how we allocate our efforts and financial resources as well as the steps we can take now to manage Aceto through this period."

Commenting on the Company's first quarter performance, Vincent Miata, President of Aceto stated, "During the fiscal first quarter, the global economic conditions which we have seen for the past 12-18 months continued to negatively impact our results. The decreased sales affected us across almost all of our global operations, in part due to the fact our customers are more closely managing their inventory to coincide with their own reduced demand. During the quarter sales in our Health Sciences segment declined 30.5 % from the comparable quarter. This was primarily due to a decrease in reorders of existing products and overall competitive market pressures including a general push by governments to lower health care costs both in the U.S. and overseas. In our Chemicals & Colorants business segment, sales declined 17.5% on the same comparison basis largely due to the overall economic condition of both the automotive and housing markets. Sales in our Crop Protection segment remained relatively unchanged at $3.4 million for the quarter."

Updating the current status of Aceto's various business initiatives, Mr. Miata commented, "Regarding our animal vaccine project, we have completed all of the testing requirements of the USDA and we are now in the process of compiling the data for submission to the agency. With respect to our initiative to enter the Japanese pharmaceutical market, we continue to move forward, albeit slowly. We have progressed from the trial orders we had initially received to larger, commercial orders and we continue to view this as a good, long-term, business opportunity for Aceto. Our effort to sell finished dosage form generic drugs has proven to be more challenging, than we had originally anticipated. We still believe that it will prove to be a viable long-term business opportunity for Aceto and are working diligently to evaluate and enhance our pipeline of products."

"In our Crop Protection business, we have entered the Glyphosate market for the 2010 growing season. In addition, we also have other crop protection products where we plan to pursue EPA registrations. Generally speaking, the U.S. market for generic crop protection products continues to grow and Aceto is positioned to leverage our core business competencies, sourcing, regulatory support, and marketing, to capitalize on this trend."

Mr. Miata concluded, "As we move forward, we believe the strength of our balance sheet puts us in a position to take advantage of business opportunities that may present themselves in the future. As the economy begins to show subtle signs that the worst may be behind us, we remain optimistic about the future prospects for Aceto."

CONFERENCE CALL

Albert Eilender, Vincent Miata and Douglas Roth will conduct a conference call at 10:00 a.m. ET on Friday, November 6, 2009. Interested parties may participate in the call by dialing 800-447-0521 (847-413-3238 for international callers) -- please call in 10 minutes before the call is scheduled to begin, and ask for the Aceto call (conference ID # 25645160). The conference call will also be webcast live via the Investor Relations section of the Company's website, www.aceto.com. To listen to the live call please go to the website at least 15 minutes early to register, download and install any necessary audio software. The conference call will be archived on the Company's website, and a recorded phone replay will also be available from 1:00 p.m. ET on Friday, November 6, 2009 until 5:00 p.m. ET on Monday, November 9, 2009. Dial 888-843-8996 (630-652-3044 for international callers) and enter the code 25645160 for the phone replay.

ABOUT ACETO

Aceto Corporation, incorporated in 1947, is a global leader in the sourcing, quality assurance, regulatory support, marketing and distribution of chemically derived pharmaceuticals, nutraceuticals, specialty chemicals and crop protection products. With a physical presence in ten countries, Aceto distributes over 1,000 chemicals and pharmaceuticals used principally as raw materials in the pharmaceutical, crop protection, surface coating/ink and general chemical consuming industries. Aceto's global operations, including a staff of 26 in Shanghai and 14 in India are unique in the industry and enable its worldwide sourcing and regulatory capabilities. (ACET-F)

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections of management. Aceto intends for these forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," or variations of such words are intended to identify such forward-looking statements. The forward-looking statements contained in this press release include, but are not limited to, statements regarding the improvement of the general economy, the future progress of our business initiatives, viability of finished dosage form generic drugs as a long term business opportunity, our ability to capitalize on the generic crop protection market growth and our ability to use our financial strength to take advantage of future business opportunities All forward-looking statements in this press release are made as of the date of this press release, and Aceto assumes no obligation to update these forward-looking statements whether as a result of new information, future events or otherwise, other than as required by law. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by any forward-looking statements. These uncertainties include, but are not limited to, the risk factors discussed in the Business and Management's Discussion and Analysis sections in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Copies of these filings are available at www.sec.gov.

                        Aceto Corporation
                Consolidated Statements of Income
            (in thousands, except per share amounts)

                                                       (unaudited)
                                                    Three Months Ended
                                                       September 30,
                                                      2009      2008
                                                    --------  --------
 Net sales                                          $ 70,609  $ 93,839
 Cost of sales                                        58,793    74,902
                                                    --------  --------
 Gross profit                                         11,816    18,937
 Gross profit %                                        16.73%    20.18%

 Selling, general and
  administrative expenses                             10,140    12,185
                                                    ------------------
 Operating income                                      1,676     6,752

 Other (expense) income, net of interest expense         (43)      360
                                                    --------  --------

 Income before income taxes                            1,633     7,112
 Provision for income taxes                              630     2,561
                                                    --------  --------
 Net income                                         $  1,003  $  4,551
                                                    ========  ========

 Net income per common share                        $   0.04  $   0.19

 Diluted net income per common share                $   0.04  $   0.18

 Weighted average shares outstanding:
  Basic                                               24,592    24,369
  Diluted                                             25,022    24,864

                    Aceto Corporation
                Consolidated Balance Sheet
          (in thousands, except per-share amounts)

                                          Sept 30, 2009  June 30, 2009
                                           (unaudited)
                                          -------------  -------------
 Assets
 Current Assets:
  Cash and cash equivalents               $      50,732  $      57,761
  Investments                                       590            541
  Trade receivables: less allowances for
   doubtful accounts: Sept 30, 2009
   $1,036; and June 30, 2009 $976                49,591         46,996
  Other receivables                              11,318          9,361
  Inventory                                      54,333         54,402
  Prepaid expenses and other current
   assets                                         1,430          1,006
  Deferred income tax asset, net                  1,601          1,579
                                          -------------  -------------

   Total current assets                         169,595        171,646


 Long-term notes receivable                       1,000          1,000
 Property and equipment, net                      4,184          4,249
 Property held for sale                           3,752          3,752
 Goodwill                                         1,901          1,861
 Intangible assets, net                          11,273         11,518
 Deferred income tax asset, net                   2,300          2,366
 Other assets                                     9,313          9,072
                                          -------------  -------------

 Total Assets                             $     203,318  $     205,464
                                          =============  =============

 Liabilities and Shareholders' Equity

 Current liabilities:
  Accounts payable                        $      22,630  $      25,126
  Accrued expenses                               18,871         20,739
  Deferred income tax liability                   1,072          1,072
                                          -------------  -------------
   Total current liabilities                     42,573         46,937

 Long-term liabilities                            8,096          9,017
 Environmental remediation liability              7,451          7,451
 Deferred income tax liability                      452            491
                                          -------------  -------------
   Total liabilities                             58,572         63,896

 Commitments and contingencies

 Shareholders' equity:
  Common stock, $.01 par value:
   (40,000 shares authorized; 25,644
   shares issued; 24,779 and 24,771
   shares outstanding at Sept 30, 2009
   and June 30, 2009, respectively)                 256            256
  Capital in excess of par value                 57,041         56,767
  Retained earnings                              86,454         85,450
  Treasury stock, at cost:
   (865 and 873 shares at Sept 30, 2009
   and June 30 2009, respectively)               (8,355)        (8,430)
  Accumulated other comprehensive income          9,350          7,525
                                          -------------  -------------
   Total shareholders' equity                   144,746        141,568
                                          -------------  -------------
 Total liabilities and shareholders'
  equity                                  $     203,318  $     205,464
                                          =============  =============

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Aceto Corporation

CONTACT:  Aceto Corporation
Theodore Ayvas, Director of Corporate Communications &
Investor Relations
(516) 627-6000
www.aceto.com

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