8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 6, 2014

Aceto Corporation

(Exact Name of Registrant as Specified in its Charter)

New York

(State or Other Jurisdiction of Incorporation)

000-04217	11-1720520
(Commission File Number)	(IRS Employer Identification Number)

4 Tri Harbor Court, Port Washington, New York, 11050

(Address of Principal Executive Offices)

(516) 627-6000

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

£	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
£	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR 240.14d-2(b))
£	Pre-commencement communications pursuant to Rule 13-e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02    Results of Operations and Financial Condition.

On February 6, 2014, Aceto Corporation, a New York corporation (the “Registrant”), issued the attached press release that included financial information for its second quarter ended December 31, 2013. A copy of the press release is attached as Exhibit 99.1 to this Report on Form 8-K. The information in this Report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press Release issued by Aceto Corporation dated February 6, 2014

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

ACETO CORPORATION

(Registrant)

Dated: February 7, 2014	By: /s/ Salvatore Guccione
	Salvatore Guccione
	President and CEO

EXHIBIT INDEX

Exhibit No.	Exhibits.
99.1	Press Release issued by Aceto Corporation dated February 6, 2014

EX-99.1

Exhibit 99.1

	ACETO Corporation 4 Tri Harbor Court Port Washington, New York 11050
“Sourcing and Supplying Quality Products Worldwide”	NEWS RELEASE

FOR IMMEDIATE RELEASE

ACETO Reports Second Quarter Fiscal 2014 Financial Results

EPS Increases 41% Year-Over-Year to $0.24

PORT WASHINGTON, N.Y., February 6, 2014 -- ACETO Corporation (Nasdaq:ACET), a global leader in the marketing, sale and distribution of products for Human Health, Pharmaceutical Ingredients and Performance Chemicals, announced today financial results for the second quarter of fiscal 2014 ended December 31, 2013.

Second Quarter Fiscal 2014 versus Second Quarter Fiscal 2013

●     Net sales of $116.5 million versus $114.0 million, a 2.2% increase

●     Gross profit of $27.0 million versus $20.7 million, a 30.3% increase

●     Operating income of $10.7 million versus $6.6 million, a 62.5% increase

●     Net income of $6.8 million versus $4.5 million, a 49.7% increase

●     EPS of $0.24 versus $0.17, a 41.2% increase

Management Commentary

“Our second quarter results reflect another strong performance by the Rising Pharmaceutical division of our Human Health segment and the continued shift of ACETO’s business to higher margin finished dosage form generic products, selectively away from certain high volume, low margin business,” said Sal Guccione, Chief Executive Officer of ACETO. “During fiscal 2013, Rising launched nine new generic products which contributed to the Human Health segment’s 33.4% sales increase for the quarter compared to the year ago quarter. In addition, our nutraceutical business, the other component of our Human Health segment, posted a strong quarter with sales and gross profit increasing on the strength of new product introductions, new customers and royalty income on a proprietary product. As a result, the Human Health segment accounted for 34% of ACETO’s net sales, up sharply from 26% last year, which drove an expansion of our gross margin from 18.2% to 23.2%.”

Mr. Guccione continued, “ACETO delivered a strong overall performance in the first half of fiscal 2014, which included sizeable reorders of a high-margin active pharmaceutical ingredient (API). As we have indicated in the past, ACETO’s business could fluctuate on a quarterly basis, reflecting varying timing and sizes of orders. This year is no exception, as we are presently not expecting any sales of the high margin API during the remainder of this fiscal year.  Looking ahead, we expect to launch 4 new generic drugs in the fourth quarter of fiscal 2014 and an additional 9 in fiscal 2015 for a total of 13 new generic drugs over the next 18 months.  To support these and future product launches, we plan to increase spending on research and development projects to approximately $4.5 million for the current fiscal year versus $2.8 million spent in fiscal 2013. Our balance sheet remains strong, with $42.0 million of cash and low long-term debt, giving ACETO the financial flexibility to continue investing in new growth opportunities,” concluded Mr. Guccione.

1

Financial Review

Net sales for the second quarter of fiscal 2014 ended December 31, 2013 were $116.5 million, an increase of 2.2% from $114.0 million reported in the second quarter of fiscal 2013. Total company gross profit increased to $27.0 million in the second quarter of fiscal 2014, or 30.3%, compared to $20.7 million in the second quarter of fiscal 2013. Selling, general and administration expenses were $15.1 million in the second quarter of fiscal 2014 compared to $13.9 million in the same period last year, an 8% increase. Research and development expenses totaled $1.2 million compared to $0.2 million in the prior year period. Operating income totaled $10.7 million compared to $6.6 million in the second quarter last year, a 62.5% increase. Net income for the three months ended December 31, 2013 increased 49.7% to $6.8 million, or $0.24 per share, compared to net income of $4.5 million, or $0.17 per share, for the comparable quarter of fiscal 2013.

Human Health segment sales increased to $39.8 million, or 33.4%, primarily driven by an increase in sales at Rising resulting from the launch of nine new generic products during fiscal 2013. In addition, nutritional product sales benefited from increased demand from existing customers. Gross profit for the segment was $13.0 million, an increase of 46.3% compared to the second quarter of fiscal 2013.

Pharmaceutical Ingredients segment sales were $37.5 million, a decrease of 5.8% compared to the second quarter of fiscal 2013, mainly due to a decline in sales in European operations. However gross profit increased by 42.1%, to $7.8 million, driven primarily by increased volume of reorders of a certain high-margin API.

The Performance Chemicals segment reported an 11.5% decline in sales primarily due to lower sales of a low-margin broad-spectrum herbicide, as well as lower domestic sales of pigments and other intermediates. Gross profit in the Performance Chemicals segment was down by 2.3% to $6.2 million compared to last year.  However, the segment benefited from an improved product mix, resulting in gross margin improvement of 150 basis points to 15.8% versus last year’s quarter.

Net sales for the six month period ended December 31, 2013 were $245.8 million, an 8.9% increase from the $225.7 million reported for the six month period ended December 31, 2012. Gross profit for the first half of fiscal 2014 was $60.7 million, an increase of 43.8% compared to gross profit of $42.2 million in the prior year period. Research and development expenses totaled $1.7 million compared to $1.1 million in the prior year period. Operating income totaled $28.2 million compared to $14.2 million in the second quarter last year, a 98.0% increase. For the six month period ended December 31, 2013, ACETO reported net income of $18.1 million, or $0.64 per diluted share, compared to $9.3 million, or $0.34 per diluted share, in the prior year six month period, representing increases of 93.8% and 88.2% respectively.

2

Conference Call

Management will host a conference call to discuss the operating and financial results at 9:00am ET on Friday, February 7, 2014.  To participate in the conference call, please dial (800) 446-1671 approximately 10 minutes prior to the call. Please reference conference ID # 36518688.

A live webcast of the conference call will be available in the Investor Relations section of the Company’s website, www.aceto.com.  Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software.

A telephone replay of the conference call will be available from 11:30 a.m. ET on Friday, February 7, 2014 until 11:59 p.m. ET on Friday, February 14, 2014 and may be accessed by calling (888) 843-7419 and reference conference ID # 36518688.  An archived replay of the conference call will also be available in the investor relations section of the Company’s website.

ABOUT ACETO

ACETO Corporation, incorporated in 1947, is a global leader in the marketing, sale and distribution of products for Human Health (finished dosage form generics and nutraceutical products), Pharmaceutical Ingredients (pharmaceutical intermediates and active pharmaceutical ingredients) and Performance Chemicals (specialty chemicals and agricultural protection products). With business operations in nine countries, ACETO distributes over 1,100 chemical compounds used principally as finished products or raw materials in the pharmaceutical, nutraceutical, agricultural, coatings and industrial chemical industries. ACETO’s global operations, including a staff of 25 in China and 12 in India, are distinctive in the industry and enable its worldwide sourcing and regulatory capabilities.

FORWARD LOOKING STATEMENTS

This news release contains forward-looking statements as that term is defined in the federal securities laws.  The events described in forward-looking statements contained in this news release may not occur.  Generally, these statements relate to our business plans or strategies, projected or anticipated benefits or other consequences of ACETO’s plans or strategies, financing plans, projected or anticipated benefits from acquisitions that ACETO may make, or a projection involving anticipated revenues, earnings or other aspects of ACETO’s operating results or financial position, and the outcome of any contingencies.  Any such forward-looking statements are based on current expectations, estimates and projections of management. ACETO intends for these forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements. Words such as “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions are intended to identify forward-looking statements.  The forward-looking statements contained in this press release include, but are not limited to, statements regarding the Company’s strategic initiatives including selling finished dosage form generic drugs, and statements regarding the prospects for long-term growth.   ACETO cautions you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond ACETO’s control, which may influence the accuracy of the statements and the projections upon which the statements are based.  Factors that could cause actual results to differ materially from those set forth or implied by any forward-looking statement include, but are not limited to, risks and uncertainties discussed in ACETO’s reports filed with the Securities and Exchange Commission, including, but not limited to, ACETO’s Annual Report or Form 10-K for the fiscal year ended June 30, 2013 and other filings. Copies of these filings are available at www.sec.gov. 

3

Any one or more of these uncertainties, risks and other influences could materially affect ACETO’s results of operations and whether forward-looking statements made by ACETO ultimately prove to be accurate. In addition, periodic high-margin product sales may have a positive material financial impact in a given quarter that may be non-recurring in future quarters, thereby rendering one quarter’s performance not useful as a predictor of future quarters’ results.  ACETO’s actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements.  ACETO undertakes no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

Investor Relations Contact:

LHA

Jody Burfening

jburfening@lhai.com

(212) 838-3777

(Financial Tables Follow)

4

Aceto Corporation and Subsidiaries

Consolidated Balance Sheets

(in thousands, except per-share amounts)

	December 31, 2013		June 30, 2013
	(unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	41,967	$	33,231
Investments		1,693		2,144
Trade receivables: less allowances for doubtful accounts: Dec 31, 2013 $1,285; and June 30, 2013 $1,294		87,966		90,108
Other receivables		5,663		5,283
Inventory		94,651		83,849
Prepaid expenses and other current assets		3,043		2,984
Deferred income tax asset, net		885		701
Total current assets		235,868		218,300
Property and equipment, net		11,443		11,410
Property held for sale		4,058		4,058
Goodwill		33,804		33,526
Intangible assets, net		38,894		40,831
Deferred income tax asset, net		8,106		8,055
Other assets		7,589		7,250
Total Assets	$	339,762	$	323,430
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	8,197	$	11,714
Accounts payable		40,066		39,222
Accrued expenses		41,710		38,971
Total current liabilities		89,973		89,907
Long-term debt		16,256		20,355
Long-term liabilities		11,183		13,413
Environmental remediation liability		4,319		5,109
Deferred income tax liability		9		6
Total liabilities		121,740		128,790
Commitments and contingencies
Shareholders’ equity:
Common stock, $.01 par value:
(40,000 shares authorized; 28,367 and 27,831 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively)		284		278
Capital in excess of par value		78,304		72,845
Retained earnings		133,304		118,615
Accumulated other comprehensive income		6,130		2,902
Total shareholders’ equity		218,022		194,640
Total liabilities and shareholders’ equity	$	339,762	$	323,430

5

Aceto Corporation and Subsidiaries

 Consolidated Statements of Income

(in thousands, except per share amounts)

	(unaudited)						(unaudited)
	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2013			2012			2013			2012
Net sales	$	116,508		$	113,956		$	245,769		$	225,704
Cost of sales		89,524			93,248			185,051			183,491
Gross profit		26,984			20,708			60,718			42,213
Gross profit %		23.16	%		18.17	%		24.71	%		18.70	%
Selling, general and administrative expenses		15,067			13,945			30,831			26,932
Research and development expenses		1,174			151			1,728			1,056
Operating income		10,743			6,612			28,159			14,225
Other (expense) income, net of interest expense		(13	)		486			145			495
Income before income taxes		10,730			7,098			28,304			14,720
Income tax provision		3,975			2,585			10,214			5,387
Net income	$	6,755		$	4,513		$	18,090		$	9,333
Net income per common share	$	0.24		$	0.17		$	0.65		$	0.35
Diluted net income per common share	$	0.24		$	0.17		$	0.64		$	0.34
Weighted average shares outstanding:
Basic		27,873			26,959			27,790			26,882
Diluted		28,467			27,316			28,404			27,272

6