West Pharmaceutical Services, Inc. (WST)

Q2 2010 Earnings Call

August 3, 2010 09:00 am ET


John Woolford - Westwicke Partners

Don Morel, Chairman and CEO

Bill Federici - CFO

Mike Anderson - Vice President and Treasurer


Dave Windley - Jefferies & Company

Derek DeBruin - UBS

Arnie Ursaner - CJS Securities



Welcome to the West Pharmaceutical Services Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions) Today's conference is being recorded. If you have any objection, you may disconnect at this time.

Now, I will like to turn today's meeting over to John Woolford from Westwicke Partners. Sir, you may begin.

John Woolford

Good morning, everyone and welcome to West's second quarter 2010 results conference call. We issued our financial results this morning and the release has been posted in the investor section on the company's website located at www.westpharma.com. If you have not received a copy of this announcement, please call Westwicke Partners at 443-213-0500 and a copy will be sent to you immediately.

There is also posted on the company's website, a slide presentation that management will refer to in their remarks today. The presentation is in PDF format and you may need to download appropriate software in order to view the presentation. A link to a free download of that software is provided at the website.

Before we begin, I remind you that statements being made by management may contain forward-looking statements within the meaning of US Federal Securities Law and that are based on management's beliefs and assumptions, current expectations, estimates and forecasts. Statements that are not historical facts, including statements that are preceded by, followed by, or that include, words such as estimate, expect, intend, believe, plan, anticipate and other words and terms of similar meaning are forward-looking statements. West's estimated or anticipated future results, product performance or other non-historical facts are forward-looking and reflect our current perspective on existing trends and information.

Many of the factors that will determine the company’s future results are beyond the ability of the company to control or predict. These statements are subject to known or unknown risks or uncertainties, and therefore, actual results could differ materially from past results and those expressed or implied in any forward-looking statement. You should bear this in mind as you consider forward-looking statements. For a non-exclusive list of those factors, which could cause actual results to differ from expectations, please refer today's press release.

Investors are also advised to consult any further disclosures the company makes on related subjects in the company's 10-K, 10-Q and 8-K reports. The company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise.

In addition, during today's call management may make reference to non-GAAP financial measures, including adjusted operating profits and adjusted diluted EPS. These measures have no standardized meaning prescribed by US GAAP and therefore, they may not be comparable to and should not be viewed as a substitute for US GAAP operating income and diluted EPS. Reconciliations of the non-GAAP financial measures to the most comparable financial results prepared in conformity to GAAP are provided in materials accompanying this morning's earnings release.

Again, this call is being recorded on behalf of West and is copyrighted material. It cannot be rerecorded or rebroadcast without the company's expressed permission. Your participation in this call implies your consent to our taping.

At this time, I would like to turn the call over to Dr. Don Morel, Chairman and CEO.

Don Morel

Thanks you very much, John, and good morning everyone. Welcome to West second quarter conference call. Joining me for the call today are Bill Federici, West's Chief Financial Officer; and Mike Anderson, our Treasurer and primary Investor Relations contact.

Please note that we are using a PowerPoint slide deck that could aid in our discussion this morning. We hope this slide to help you follow our commentary and we will call out the slide number we are referring to during the course of our remarks. For those who are unable to view the slides during the call, the information they contain is covered in both the release and our remarks.

In keeping with our usual agenda, I will begin with an overview of our second quarter results, give an update on several ongoing development programs and summarize our outlook for the remainder of the year. Bill will then discuss our financials in greater detail.

There are three points to capture, where we are at six months end of the year. First, on a positive note, we had a very good first half. Sales growth was a little ahead of our expectations and demand continues to be strong in both operating segments.

Second, the steep rise in the dollar versus the euro during the second quarter and non-recurring H1N1 sales in the second half of the year, when they comparison to 2009 difficult, and finally we are beginning to see tangible results from our investments in our key new product development programs notably the CZ 1 mL syringe and Confidose Auto-injector System. I will provide a little more detail on this program in just a moment.

Turning to our second quarter results on Slide number three, West reported revenues of $281.8 million for the quarter representing growth of 8% versus the second quarter of 2009, excluding the effects of currency and contributions from acquisitions; revenue growth was approximately 8.3% on a consolidated basis.

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