West Pharmaceutical Services Announces Improved First Quarter Results

Apr 19, 2001, 01:00 ET from West Pharmaceutical Services, Inc.

    LIONVILLE, Pa., April 19 /PRNewswire/ -- West Pharmaceutical Services,
 Inc. (NYSE:   WST) today announced improved results for the first quarter ended
 March 31, 2001.
     Net income for the first quarter was $5.4 million, or $0.38 per share,
 compared with net income of $5.1 million, or $0.35 per share, in the same
 period of 2000.  This was an 8% increase in earnings per share.  Sales for the
 first quarter were $116.2 million, a 7% increase (10% at constant exchange
 rates) over the $108.7 million reported in the first quarter of 2000.  Sales
 of the Device Product Development segment were 2% higher (6% at constant
 exchange rates), largely due to increased demand for pre-filled injection and
 parenteral component products.  In addition, increased activity in contract
 manufacturing and packaging services resulted in a 31% increase in sales of
 the Contract Services segment.  Revenues also improved in the Drug Delivery
 segment.
     Gross margins for the first quarter increased to 26.4% from 25.9% in the
 same period of 2000.  Operating margin improved to 10.1% from 9.6%, assisted
 by a near breakeven performance in the Contract Services segment, compared
 with that segment's significant operating loss in the first quarter of 2000.
 Margins in the Device Product Development segment were lower, in spite of
 stronger sales, due to higher raw material costs and, in Europe, higher labor
 costs.  Losses in the Drug Delivery segment narrowed.
     William G. Little, Chairman and Chief Executive Officer, commented, "I am
 pleased to report that there was a marked improvement in sales and earnings
 when compared with the fourth quarter of 2000, and a positive comparison to
 results posted in the first quarter of 2000.  Many of the market issues that
 had negatively impacted our contract manufacturing and packaging business
 diminished during the first quarter of 2001.  Demand in the international
 portion of our Device Product
     Development segment was strong.  Company-wide efforts aimed to increase
 efficiency, to enhance the manufacturing infrastructure and to refocus our
 global sales efforts are beginning to show some results.  Given the
 information that is currently available, we would expect to see year-over-year
 improvement in earnings in the second quarter of 2001.  Finally, let me say
 that we are continuing our review of strategic alternatives with the
 assistance of our financial advisor, UBS Warburg.  Although I cannot comment
 on the substance of this review, I believe we have made progress and look
 forward to announcing the results."
 
     West Pharmaceutical Services applies value-added technologies to the
 process of bringing new drug therapies and healthcare products to global
 markets.  West's technologies include the design and manufacture of packaging
 components for pharmaceutical, healthcare and consumer products; research and
 development of drug delivery systems; contract laboratory services; clinical
 services; and other services that support the manufacturing, filling, and
 packaging of pharmaceutical and healthcare products.  For more information,
 visit the West Pharmaceutical Services website at http://www.westpharma.com.
 
     Certain statements contained in this Press Release that are not historical
 are forward-looking statements within the meaning of the Private Securities
 Litigation Reform Act of 1995.  The words "estimate," "expect," "intend,"
 "believe" and similar expressions are intended to identify forward-looking
 statements.  These forward-looking statements involve known and unknown risks
 and uncertainties.  Many factors could cause the actual results, performance
 or achievements of the Company to be materially different from any future
 results, performance or achievements that may be expressed or implied by such
 forward-looking statements, including but not limited to (1) sales demand,
 (2) the timing and success of customers' projects, (3) competitive pressures,
 (4) the strength or weakness of the U.S. dollars, (5) inflation and (6) the
 cost of raw materials.  The Company does not intend to update these
 forward-looking statements.
     For additional information regarding these and other risks and
 uncertainties associated with the Company's business, reference is made to the
 Company's reports filed from time to time with the Securities and Exchange
 Commission.
 
                       West Pharmaceutical Services, Inc.
                       Consolidated Statements of Income
                     (in thousands, except per share data)
 
                                                      Quarter Ended
                                            March 31, 2001      March 31, 2000
 
     Net sales                             $116,200   100%     $108,700    100%
 
     Cost of goods and services sold         85,500    74        80,500     74
     Gross profit                            30,700    26        28,200     26
     Selling, general and
      administrative expenses                19,300    17        17,400     16
 
     Other (income) expense, net               (300)   (1)          400     --
     Operating profit                        11,700    10        10,400     10
 
     Interest expense                         3,700     3         3,000      3
     Income before income
      taxes and minority interests            8,000     7         7,400      7
     Provision for income taxes               2,900     3         2,700      3
 
     Minority interests                          --    --           100     --
     Income from consolidated operations      5,100     4%        4,600      4%
 
     Equity in net income
      of affiliated companies                   300                 500
     Net income                              $5,400              $5,100
 
     Net income per share:
       Basic                                  $0.38               $0.35
       Assuming dilution                      $0.38               $0.35
     Average common shares outstanding       14,320              14,546
     Average shares assuming dilution        14,323              14,562
 
 
                       West Pharmaceutical Services, Inc.
                         Operating Segment Information
                                 (in thousands)
 
                                            Three Months Ended March 31,
                                              2001                2000
     Net Sales:
     Device product development             $95,300             $93,100
     Contract services                       20,100              15,300
     Drug delivery research and development     800                 400
     Corporate and unallocated items             --                (100)
     Consolidated Total                    $116,200            $108,700
 
                                            Three Months Ended March 31,
                                              2001                2000
     Operating Profit (Loss):
     Device product development             $18,700             $19,800
     Contract services                         (400)             (3,600)
     Drug delivery research and development  (1,800)             (2,300)
     Corporate and unallocated items         (4,800)             (3,500)
     Consolidated Total                     $11,700             $10,400
 
 
 

SOURCE West Pharmaceutical Services, Inc.
    LIONVILLE, Pa., April 19 /PRNewswire/ -- West Pharmaceutical Services,
 Inc. (NYSE:   WST) today announced improved results for the first quarter ended
 March 31, 2001.
     Net income for the first quarter was $5.4 million, or $0.38 per share,
 compared with net income of $5.1 million, or $0.35 per share, in the same
 period of 2000.  This was an 8% increase in earnings per share.  Sales for the
 first quarter were $116.2 million, a 7% increase (10% at constant exchange
 rates) over the $108.7 million reported in the first quarter of 2000.  Sales
 of the Device Product Development segment were 2% higher (6% at constant
 exchange rates), largely due to increased demand for pre-filled injection and
 parenteral component products.  In addition, increased activity in contract
 manufacturing and packaging services resulted in a 31% increase in sales of
 the Contract Services segment.  Revenues also improved in the Drug Delivery
 segment.
     Gross margins for the first quarter increased to 26.4% from 25.9% in the
 same period of 2000.  Operating margin improved to 10.1% from 9.6%, assisted
 by a near breakeven performance in the Contract Services segment, compared
 with that segment's significant operating loss in the first quarter of 2000.
 Margins in the Device Product Development segment were lower, in spite of
 stronger sales, due to higher raw material costs and, in Europe, higher labor
 costs.  Losses in the Drug Delivery segment narrowed.
     William G. Little, Chairman and Chief Executive Officer, commented, "I am
 pleased to report that there was a marked improvement in sales and earnings
 when compared with the fourth quarter of 2000, and a positive comparison to
 results posted in the first quarter of 2000.  Many of the market issues that
 had negatively impacted our contract manufacturing and packaging business
 diminished during the first quarter of 2001.  Demand in the international
 portion of our Device Product
     Development segment was strong.  Company-wide efforts aimed to increase
 efficiency, to enhance the manufacturing infrastructure and to refocus our
 global sales efforts are beginning to show some results.  Given the
 information that is currently available, we would expect to see year-over-year
 improvement in earnings in the second quarter of 2001.  Finally, let me say
 that we are continuing our review of strategic alternatives with the
 assistance of our financial advisor, UBS Warburg.  Although I cannot comment
 on the substance of this review, I believe we have made progress and look
 forward to announcing the results."
 
     West Pharmaceutical Services applies value-added technologies to the
 process of bringing new drug therapies and healthcare products to global
 markets.  West's technologies include the design and manufacture of packaging
 components for pharmaceutical, healthcare and consumer products; research and
 development of drug delivery systems; contract laboratory services; clinical
 services; and other services that support the manufacturing, filling, and
 packaging of pharmaceutical and healthcare products.  For more information,
 visit the West Pharmaceutical Services website at http://www.westpharma.com.
 
     Certain statements contained in this Press Release that are not historical
 are forward-looking statements within the meaning of the Private Securities
 Litigation Reform Act of 1995.  The words "estimate," "expect," "intend,"
 "believe" and similar expressions are intended to identify forward-looking
 statements.  These forward-looking statements involve known and unknown risks
 and uncertainties.  Many factors could cause the actual results, performance
 or achievements of the Company to be materially different from any future
 results, performance or achievements that may be expressed or implied by such
 forward-looking statements, including but not limited to (1) sales demand,
 (2) the timing and success of customers' projects, (3) competitive pressures,
 (4) the strength or weakness of the U.S. dollars, (5) inflation and (6) the
 cost of raw materials.  The Company does not intend to update these
 forward-looking statements.
     For additional information regarding these and other risks and
 uncertainties associated with the Company's business, reference is made to the
 Company's reports filed from time to time with the Securities and Exchange
 Commission.
 
                       West Pharmaceutical Services, Inc.
                       Consolidated Statements of Income
                     (in thousands, except per share data)
 
                                                      Quarter Ended
                                            March 31, 2001      March 31, 2000
 
     Net sales                             $116,200   100%     $108,700    100%
 
     Cost of goods and services sold         85,500    74        80,500     74
     Gross profit                            30,700    26        28,200     26
     Selling, general and
      administrative expenses                19,300    17        17,400     16
 
     Other (income) expense, net               (300)   (1)          400     --
     Operating profit                        11,700    10        10,400     10
 
     Interest expense                         3,700     3         3,000      3
     Income before income
      taxes and minority interests            8,000     7         7,400      7
     Provision for income taxes               2,900     3         2,700      3
 
     Minority interests                          --    --           100     --
     Income from consolidated operations      5,100     4%        4,600      4%
 
     Equity in net income
      of affiliated companies                   300                 500
     Net income                              $5,400              $5,100
 
     Net income per share:
       Basic                                  $0.38               $0.35
       Assuming dilution                      $0.38               $0.35
     Average common shares outstanding       14,320              14,546
     Average shares assuming dilution        14,323              14,562
 
 
                       West Pharmaceutical Services, Inc.
                         Operating Segment Information
                                 (in thousands)
 
                                            Three Months Ended March 31,
                                              2001                2000
     Net Sales:
     Device product development             $95,300             $93,100
     Contract services                       20,100              15,300
     Drug delivery research and development     800                 400
     Corporate and unallocated items             --                (100)
     Consolidated Total                    $116,200            $108,700
 
                                            Three Months Ended March 31,
                                              2001                2000
     Operating Profit (Loss):
     Device product development             $18,700             $19,800
     Contract services                         (400)             (3,600)
     Drug delivery research and development  (1,800)             (2,300)
     Corporate and unallocated items         (4,800)             (3,500)
     Consolidated Total                     $11,700             $10,400
 
 
 SOURCE  West Pharmaceutical Services, Inc.