01—Abstract
Summary
Summary of the 10-K filed March 30, 1995. Cited figures are marked; the original filing is the authoritative source.
The West Company, Incorporated (now West Pharmaceutical Services, Inc.) reported net sales of $365.1 milliona for 1994, up from $348.7 million in 1993, with net income of $27.3 million, or $1.70 per share, compared with $23.5 million, or $1.48 per share, in 1993.
Gross profit rose to $116.1 millionb, and the gross margin improved to 31.8% from 30.0%. The company operates in one industry segment, making elastomer, metal, glass and plastic stoppers, closures, containers and medical device components for the health care and consumer products markets. Health care represented over 85% of revenues.
Becton Dickinson and Company accounted for approximately 11% of consolidated net sales. The balance sheet expanded during 1994 mainly through acquisitions. Total assets rose to $397.4 millionc from $309.2 million, and total debt increased to $57.8 million from $32.3 million.
Cash of $27.2 milliond was on hand at year-end, and working capital was $50.4 million. Cash from operations totaled $49.8 million, against $27.1 million of capital expenditures and $7.2 million of dividends ($.45 per share). Shareholders' equity reached $227.3 million, and return on shareholders' equity was 13.2%.
A subsequent event disclosed in the filing is a definitive merger agreement announced March 24, 1995, under which the company will acquire PACO Pharmaceutical Services, Inc. for $12.25 per share in cash, a purchase price of approximately $54 million funded from cash and existing bank facilities. The filing also notes an environmental cleanup matter in Wayne, New Jersey, for which the company has initiated legal action to compel a property owner to provide a use restriction.
02—Key points
Key Highlights
- Net sales of $365.1 million in 1994, up from $348.7 million in 1993, an increase the filing describes as 5%
- Net income of $27.3 million, or $1.70 per share, versus $23.5 million, or $1.48 per share, in 1993
- Consolidated gross margin improved to 31.8% in 1994 from 30.0% in 1993
- Health care market accounted for over 85% of revenues; Becton Dickinson and Company represented approximately 11% of consolidated net sales
- Acquisitions in 1994 included Senetics, Inc. and a 51% interest in Schubert Seals A/S, which added $8.4 million to 1994 sales
- Total debt rose to $57.8 million from $32.3 million, while cash increased to $27.2 million at year-end 1994
- Pending acquisition of PACO Pharmaceutical Services, Inc. at $12.25 per share in cash, an approximately $54 million purchase price
03—Questions
Frequently Asked Questions
How did the company's profitability change in 1994?
Net income rose to $27.3 million, or $1.70 per share, from $23.5 million, or $1.48 per share, in 1993. Gross profit grew to $116.1 million, and the filing attributes part of the margin improvement to higher sales volume and productivity initiatives such as Total Quality Management and Manufacturing Resource Planning systems. The 1994 effective tax rate was 31.8%, which the filing says reflects a one-time net refund of foreign taxes.
How concentrated is the company's customer base?
Becton Dickinson and Company accounted for approximately 11% of consolidated net sales in the last fiscal year. The next ten largest customers, excluding B-D, accounted for approximately 28% of 1994 consolidated net sales, and no one of them exceeded 6%.
What is the PACO Pharmaceutical Services transaction?
On March 24, 1995, the company entered into a definitive merger agreement to acquire all of PACO's common stock at $12.25 per share in cash. The purchase price is approximately $54 million, funded from cash balances and existing bank facilities. PACO provides contract packaging and contract manufacturing services for pharmaceutical and personal health care companies. The filing shows PACO's net sales of $68.0 million for its fiscal year ended March 31, 1994.
How did the balance sheet and cash flow change during 1994?
Total assets increased to $397.4 million from $309.2 million, and total debt increased to $57.8 million from $32.3 million. Operating cash flow was $49.8 million, and capital expenditures were $27.1 million. The company also paid $13.9 million in cash for 1994 acquisitions and paid $7.2 million in dividends. Management stated that available cash and credit facilities provide sufficient flexibility to meet future cash flow requirements.
04—Continue