Hi-Tech Pharmacal Q1 Profit Declines, Adj. Earnings Meet Estimates - Update

(RTTNews) - Hi-Tech Pharmacal Co., Inc. (HITK), which has agreed to be acquired by Akorn, Inc. (AKRX) in a $640 million cash deal, reported Monday a decline in first-quarter profit, reflecting lower revenues and higher costs and expenses. Adjusted earnings met analysts' expectations, while revenues missed view.

It was on August 27, that Hi-Tech Pharmacal entered into a definitive agreement under which generic pharmaceutical company Akorn will acquire the firm for $640 million in cash or $43.50 per share. The closing of the deal is anticipated in the first quarter of 2014.

Hi-Tech is a specialty pharmaceutical company that develops, manufactures and markets generic and branded prescription and over-the-counter products.

In the first quarter, the company's net income declined to $4.55 million or $0.33 per share, from $6 million or $0.44 per share in the prior year.

On an adjusted basis, earnings for the recent quarter totaled $0.44 per share, while the company posted $0.53 per share last year.

On average, four analysts polled by Thomson Reuters expected earnings per share of $0.44 for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter were $50.50 million, down 3 percent from $52.04 million in the preceding year. Analysts estimated revenues of $57.78 million for the quarter.

Net sales from generic pharmaceutical products fell 5 percent, hurt mainly by a decrease in sales of Fluticasone Propionate nasal spray. Meanwhile, sales from Health Care Products division, which markets the company's branded OTC products, climbed 15 percent from a year earlier.

Sales from ECR Pharmaceuticals, which markets the firm's branded prescription products, were up 13 percent from a year ago.

Total costs and expenses advanced to $18.54 million from $16.34 million a year earlier.

HITK is currently trading at $43.15, up 0.23 percent on the Nasdaq.