Hi-Tech Pharmacal Reports Q4 and Full Year 2012

• Posted by Danny
• on July 10th, 2012

The small-cap druggy misses EPS estimates, but beats on the top line as it reports record sales.

This morning Hi-Tech Pharmacal ($HITK) released Q4 numbers that came in 5 cents shy of the Street’s target of 78c. We had them pegged at 81c on Estimize….way off. But on the bright side, revenues set a record for the quarter (beating estimates handily), and full year earnings were impressive as the company topped $200 million in sales for the first time ever.

Here’s the breakdown:

Q4 (YoY):

• Net sales +7.0%
• Net income -21%
• SG&A +37%
• R&D +45%

Division breakdown:

• Generic sales +10%
• Branded OTC sales +59% (big increase due in part to an acquisition)
• Branded Rx sales -44% (big decrease due in part to termination of Lodrane line)

Full year 2012 (YoY):

• Net sales +21%
• Net income +17%
• SG&A +22%
• R&D +31%

Division breakdown:

• Generic sales +26%
• Branded OTC sales +24%
• Branded Rx sales -24%

So while the Q4 numbers left a bit to be desired on the EPS front, the full year report looks very healthy. Hi-Tech appears to be stepping up their advertising and research efforts, hoping this will payoff down the road as new products are brought to market and recent acquisitions realized.

Fluticasone nasal spray remains their bread and butter as it accounted for about 43% of overall sales in 2012. This is a double-edged sword though – while sales remain strong for the spray, increased competition by other companies making the same Rx could dampen revenues down the road. HITK is surely aware of this as the CEO had this to say:

“We are very pleased with the results reported for our fourth quarter and year ended April 30, 2012. We surpassed $200 million in sales for the first time as we reported record sales for both the fourth quarter and year end. Our generic business continues to be a very strong and growing business for us, as sales of Fluticasone nasal spray continue to increase despite a new competitor entering the market this past fiscal year….Results at ECR were down compared to the last fiscal year, primarily due to the discontinuation of the Lodrane line of antihistamines and one of the mildest winters in more than 20 years, which lead to weak demand for cough and cold products. Given Hi-Tech’s strong results and strong balance sheet, we remain very optimistic about the growth of the Company in the future.”

 

 

Ranked 10th in the BeanScreen this month, we’ve owned HITK for a year now at a cost basis of about $29. We sold some off last December and picked it back up a couple months ago.

 

sources: Hi-Tech Pharmacal Reports Sales of $61.3 million and Diluted EPS of $0.73 for the Fourth Quarter 2012 Ended April 30, 2012 – BusinessWire

 

 

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