Hi-Tech Pharmacal Co., Inc. (NASDAQ: HITK) today reported results for the Company’s fiscal first quarter ended July 31, 2012.
Quarterly Results Net sales for the three months ended July 31, 2012 were $52,043,000, a decrease of $4,168,000 or 7% compared to the net sales of $56,211,000, for the three months ended July 31, 2011.
Net sales for generic pharmaceuticals for the three months ended July 31, 2012 were $45,922,000, a decrease of $3,047,000 or 6%, compared to sales of $48,969,000 for the respective prior fiscal period. The decrease was primarily due to lower sales of Fluticasone Propionate nasal spray. Sales of Fluticasone decreased to $22,000,000 from $26,200,000 in the comparable quarter as the Company sold more units at a lower average price. Sales of Dorzolamide ophthalmic products also declined with both unit and pricing decreases. These declines were partially offset by sales of new products such as Lidocaine 5% ointment, launched in March 2012.
ECR Pharmaceuticals contributed $3,095,000 to sales in the current period, a decrease of $612,000 or 17%, compared to sales of $3,707,000 for the respective fiscal 2012 period. The decrease was primarily due to the discontinuation of the Lodrane ® line of antihistamines which the Company stopped shipping August 31, 2012. Sales of discontinued Lodrane ® products totaled approximately $2,400,000 for the three months ended July 31, 2011. Increased sales of Bupap ® and Dexpak ®, in addition to sales from newly acquired brands Tussicaps ® and Orbivan ®, partially offset the decrease in sales for the current period.Net sales for the Health Care Products division, which markets the Company’s OTC branded products, were $3,026,000, a decrease of $509,000 or 14%, compared to $3,535,000 reported for the same period last year. The decrease was primarily due to consumer discounts and promotional pricing on the Nasal Ease ® brand, which were part of the launch plan in major retail chains. These declines were partially offset by sales of our new product Sinus Buster ®, acquired March 2012. Cost of goods sold increased to $26,722,000, or 51% of net sales, for the three months ended July 31, 2012 from $22,975,000, or 41% of net sales, for the three months ended July 31, 2011. The increase in cost of goods sold as a percentage of net sales is primarily due to pricing declines for Fluticasone Propionate nasal spray and Dorzolamide ophthalmic products. Additionally, consumer discounts lowered margins in the HCP division.