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West Pharmaceutical Services Annual Report (Amendment), Year Ended Dec 31, 1994

Filing Date
Filed October 20, 1995
Period End
December 31, 1994
Security
WST
In the record · 2016–202610-K1110-Q338-K118

WST filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 118 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jan ’17Jan ’17
  2. Material agreement8-K · Apr ’19Apr ’19
  3. Leadership change8-K · Aug ’21Aug ’21
  4. Leadership change8-K · Sep ’25Sep ’25

01—Abstract

Summary

Summary of the 10-K/A filed October 20, 1995. Cited figures are marked; the original filing is the authoritative source.

The West Company, Incorporated filed this 10-K on October 20, 1995 for fiscal 1994.

The company operates in one industry segment, designing and manufacturing elastomer, metal, glass and plastic stoppers, closures, containers and medical device components for the health care and consumer products markets. Net sales were $365.1 milliona in 1994, up from $348.7 million in 1993, and net income was $27.3 million, or $1.70 per share, compared with $23.5 million, or $1.48 per share, in 1993. Gross margin improved to 31.8%, and management described the financial position as strong, with year-end working capital of $50.4 million and total debt of $57.8 million.

The filing highlights several growth and risk items. Becton Dickinson and Company accounted for about 11%b of 1994 consolidated net sales. The company completed several acquisitions in 1994, including Senetics, Inc., a 51% interest in Schubert Seals A/S, and the remaining minority interests in five European subsidiaries.

In a subsequent event, the company agreed on March 24, 1995 to acquire Paco Pharmaceutical Services, Inc. for $12.25c per share in cash, a purchase price of approximately $54 million. Management expects 1995 capital project cash requirements of about $44 million and environmental cleanup requirements not exceeding $1 million. The company also noted exposure to foreign exchange and raw material supply risks, including reliance on imported natural rubber from Sri Lanka and Malaysia and sole-source suppliers for certain older formulations.

02—Key points

Key Highlights

  1. Net sales rose to $365.1 million in 1994 from $348.7 million in 1993, and net income reached $27.3 million, or $1.70 per share.
  2. Gross margin improved to 31.8% in 1994, with gross profit of $116.1 million, an increase the filing attributes partly to Total Quality Management and Manufacturing Resource Planning initiatives.
  3. Becton Dickinson and Company accounted for approximately 11% of 1994 consolidated net sales, and the company expects to remain a major B-D supplier.
  4. The 1994 acquisitions included Senetics, Inc. ($3 million purchase price), a 51% interest in Schubert Seals A/S for $4.8 million, and the remaining minority interests in five European subsidiaries for DM 45,000 thousand.
  5. Subsequent event: a definitive merger agreement signed March 24, 1995 to acquire Paco Pharmaceutical Services, Inc. at $12.25 per share in cash, an purchase price of approximately $54 million.
  6. Year-end 1994 total debt was $57.8 million, up from $32.3 million in 1993, and total debt as a percentage of total invested capital was 20.1%.
  7. Cash from operations was $49.8 million in 1994, and planned 1995 capital projects are estimated at $44 million.

03—Questions

Frequently Asked Questions

  1. How did The West Company perform financially in 1994?

    Net sales increased to $365.1 million from $348.7 million, and net income rose to $27.3 million, or $1.70 per share, from $23.5 million, or $1.48 per share, in 1993. The 1994 effective tax rate was 31.8%, which the filing says was unusually low due in part to a one-time net refund of foreign taxes.

  2. Who are the company's major customers and how concentrated is revenue?

    Becton Dickinson and Company accounted for approximately 11% of 1994 consolidated net sales. The next ten largest customers, excluding B-D, accounted for approximately 28% of 1994 consolidated net sales, with no single one exceeding 6%.

  3. What is the Paco Pharmaceutical Services transaction?

    On March 24, 1995, the company announced a definitive merger agreement to acquire all of Paco's common stock at $12.25 per share in cash, for a purchase price of 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.

  4. What are the main supply and currency risks the company disclosed?

    The company reported that about 25% of its rubber is natural rubber, substantially all imported from Sri Lanka and Malaysia, and that supply could be affected by political stability and weather. It also depends on petroleum-derived synthetic elastomers and plastics and on sole sources for certain older formulations. Its financial results are affected by exchange rate fluctuations, which it partly hedges with forward exchange contracts.

  5. What are the company's cash requirements and financial flexibility for 1995?

    Cash requirements for capital projects in 1995 are estimated at $44 million, and environmental cleanup payments are not expected to exceed $1 million. Management expects the company's cash, available credit facilities of $30 million short-term and DM 35 million long-term, and current capitalization to provide sufficient flexibility to meet future cash flow requirements, and expects proceeds of $3.1 million from stock option exercises in 1995.

04—Continue

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