Hi-Tech Pharmacal Co., Inc. (NASDAQ: HITK) today reported results for the Company’s fiscal third quarter ended January 31, 2013.
Net sales for the three months ended January 31, 2013 were $64,331,000, an increase of $8,706,000 or 16% compared to the net sales of $55,625,000, for the three months ended January 31, 2012.
Net sales for generic pharmaceuticals for the three months ended January 31, 2013 were $54,148,000, an increase of $6,607,000 or 14%, compared to sales of $47,541,000 for the respective prior fiscal period. Sales of Fluticasone Propionate increased to $23,000,000 from $21,800,000 in the comparable quarter as the Company sold more units at a lower average price. The Company also benefited from sales of new products such as Nystatin oral suspension, Lidocaine 5%, Levetiracetam oral solution and Paregoric, launched in February, March, May and August 2012, respectively.ECR Pharmaceuticals contributed $5,079,000 to sales in the current period, an increase of $732,000 or 17%, compared to sales of $4,347,000 for the respective fiscal 2012 period. The increase was primarily due to higher sales of Tussicaps ®. Net sales for the Health Care Products division, which markets the Company’s OTC branded products, were $5,104,000, an increase of $1,367,000 or 37%, compared to $3,737,000 reported for the same period last year. The increase was due to higher sales across all product lines. Most notably, sales of Diabetic Tussin ® saw a significant increase over the same quarter in the prior year. New product Sinus Buster ®, acquired March 2012, also contributed to the increase. Sales in all three divisions were impacted by the strong cough, cold and flu season experienced during the quarter ended January 31, 2013. The Hi-Tech generic division saw increases in hydrocodone/homatropine, HCP had strong increases in Diabetic Tussin ® and ECR had a large increase in sales of Tussicaps ®. Cost of goods sold increased to $31,452,000 or 49% of net sales, for the three months ended January 31, 2013 from $24,889,000, or 45% of net sales, for the three months ended January 31, 2012. The increase in cost of goods sold as a percentage of net sales is primarily due to pricing declines for Fluticasone Propionate nasal spray. The Company anticipates that pricing declines will continue, but the cost to manufacture Fluticasone Propionate nasal spray will decline in the fourth quarter of the fiscal year due to lower input costs. Higher margins at the ECR subsidiary partially offset this trend.