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TheStreet Open House

American Pacific's CEO Discusses F3Q12 Results - Earnings Call Transcript

Stocks in this article: APFC

Because of this outlook we are increasing guidance for our continuing operations, we are providing guidance of $36 million in EBITDA in fiscal 2012, a 26% increase over 2011 based on continuing operations for both years. Dana will discuss guidance in more detail later in this conference call.

Let us now discuss each of the business segments beginning with our fine chemical segment. The fine chemical team exceeded our expectations for the third quarter, client utilization and throughput has improved resulting in improved profit margins. Also our cost reduction initiative especially in the area of solvent recycling has contributed to the bottom-line performance.

The increase in plant utilization is been driven by our major core products, our two large simulated moving bed or SMB units are being fully utilized. You may be called and reported last quarter that we entered into a new 5 year agreement for the central nervous system product that utilizes our large SMB units.

Despite this product now been off pattern, our customer continues to retain significant market share with AMPAC buying chemicals being the primary supplier of the active pharmaceutical ingredient. Our anti-viral products are also driving the increase in plant utilization as well as achieving targeted throughput. Our development product pipeline continues to bear fruit enabling us to bring new products to the market. We have successfully completed the validation of two new cancer drugs and are currently producing them at commercial scale, both of use novel mechanisms to treat different types of cancer.

In addition, we anticipate bringing a third new product to market. We are currently validating the process for the production of our first controlled substance. This is a major accomplishment that will lead to continue new opportunities for our fine chemical segment. This area of controlled substances has significant barriers to entry and we are pleased to have been able to penetrate those barriers and be one of the few U.S. producers of pharmaceutical chemicals in this arena.

Read the rest of this transcript for free on seekingalpha.com

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