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PHARMACONTROL's PRIVATE LABEL SALES IN FISCAL THIRD QUARTER GROW 46%

This article was originally published in The Tan Sheet

Executive Summary

PHARMACONTROL's PRIVATE LABEL SALES IN FISCAL THIRD QUARTER GROW 46% to $ 12.2 mil. in the three months ended March 31, the Englewood Cliffs, N.J.-based firm announced on May 17. Pharmacontrol, the parent company of Private Formulations, Inc., said the sales increase "resulted from the addition of a number of new drug chains and mass merchandisers to the company's customer base in the private label sector." Pharmacontrol appears to be on track for its first profitable year since its founding in 1981 as an R&D company primarily focused on developing and marketing soluble aspirin. Pharmacontrol reported third quarter net income of $ 408,000 compared to a loss of $ 127,000 in the same period last year. Through nine months of fiscal 1992, Pharmacontrol sales are ahead 42.7% to $ 32.8 mil., generating net income over $ 1.2 mil. "Active merchandising programs and the addition of new products resulting from the company's active R&D program have further increased sales to existing customers," the company reported. In the third quarter, Pharmacontrol added, "increasing contract manufacturing of branded products on an exclusive basis for major pharmaceutical companies has made a significant contribution to the growing revenues." The company said that its R&D program "is geared toward developing and gaining approval of products which are anticipated to be converted from prescription drug status to OTC drug status, as was the case with ibuprofen." Private Formulations currently manufactures and distributes "more than 80 different types of generic OTC solid dosage pharmaceutical products," Pharmacontrol noted. According to a November 1992 prospectus, approximately 35% of FY 1992 revenues of $ 30.4 mil. were from ibuprofen private label products. Acetaminophen products accounted for about 22% of FY 1992 revenues. About 30% of the company's business has been to Revco in fiscal years 1991 and 1992, while business to Walgreens represented nearly 20% of sales in those years. ICC Industries, an affiliate of Pharmacontrol, accounted for about 10% of the company's total revenues in fiscal 1992. Other major customers include Rite Aid, Albertson's, AARP and Reliable Drug, the company reported in the prospectus. Separately, the company announced that New York City-based ICC has exercised options covering 4 mil. shares of Pharmacontrol stock under a 1991 agreement that gave ICC the opportunity to acquire a controlling stake in Pharmacontrol in return for financial support of the struggling company. ICC acquired the shares by relieving certain debt owed by Pharmacontrol. Following the exercise of options, ICC owns a 63% equity position in Pharmacontrol based on its 15 mil. share stake. In addition, ICC has an option to acquire nearly 3 mil. additional shares. ICC is a privately held manufacturer and marketer of chemical, plastic and pharmaceutical products with 1992 sales of approximately $ 600 mil., Pharmacontrol said. Chart omitted.
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