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Executive Summary

Strong demand for naproxen and naproxen sodium in the U.S. helped boost Syntex' FY 1985 pharmaceutical sales 18% to $445 mil., the company announced in a Sept. 5 press release. For the year ended July 31, sales for the non-steroidal anti-inflammatory agents increased 24% to $287.2 mil., thus accounting for roughly 65% of the firm's domestic pharmaceutical business. Fourth quarter results for the Palo Alto, California-based company were particularly strong, as net earnings jumped 65% to $43.5 mil., compared with $26.3 mil. in the fourth quarter a year ago. Volume was up a more modest 10% at $255.8 mil. "Earnings per share, net income and sales in the fourth quarter of fiscal 1985 were higher than in any other quarter in the history of Syntex," Chairman and CEO Albert Bowers, PhD, said. "An exceptionally strong performance in our pharmaceuticals business and improvements in our diagnostics operations contributed to the record results." Syntex reported that its diagnostics business operated at a profit during the quarter, compared with a pretax operating loss of approximately $12 mil., which included inventory writedowns of approximately $8 mil. in the fourth quarter of 1984. For the year, net income increased 11% on a sales gain of 4%. Net income was $150 mil., up from $134.6 mil. in FY 1984, while sales were $948.5 mil., compared to last year's volume of $916.5 mil. The company noted that R&D spending in fiscal 1985 increased 9% to $127.7 mil., representing a rate of investment in research that is 13.5% of sales. Reid-Provident's 74.6%0 sales jump during the fourth quarter reflected the inclusion of sales figures for Rowell Labs, the acquisition of which was completed on June 4, the Atlanta-based mfr. announced on Aug. 27. For the three months ended June 30, the company reported unaudited sales of $5.7 mil., up from $3.3 mil. a year ago. "The increase in sales attributable to the (Rowell) acquisition was significant," the firm commented, "however, the related effect on earnings was offset by costs related to the merger." Net earnings were $271,000 for the quarter, a 15.8% increase over 1984. For the fiscal year, sales were $16.6 mil. compared to $13.4 mil. the previous year. While corporate net income of $1.4 mil. was more than 50% higher than last year's $918,000, the figure included an extraordinary gain of $436,000 net of income tax, resulting from the settlement of an insurance claim. Referring to the modest 4.4% yearly earnings gain exclusive of the extraordinary income item, Reid-Provident explained: "A significant factor which contributed to the relatively flat earnings from operations was increased costs of manufacturing due to disruption related to the fire at the Atlanta manufacturing plant in April 1984." The company noted that construction of a replacement facility began in early June. Chart omitted.

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