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West Announces First Quarter 2009 Results
Date:4/30/2009

e consolidation of laboratory facilities added $0.9 million, and the ongoing upgrade of information technology systems in the U.S. added $0.5 million in depreciation. R&D costs were $0.9 million lower than in the prior year period as certain projects were completed and moved into operations.

Tech Group Segment

Tech Group segment sales were $62.3 million in the first quarter, down from $66.4 million in the prior year period. Currency translation accounted for $1.8 million of the decline. An additional $1.5 million was due to passing substantially all of the savings from lower plastic resin costs directly through to customers, which reduced revenue without impacting gross profit. Other factors contributing to the decline were the loss of consumer products revenue from business that was not transferred to other facilities from the recently sold Mexico facility, and slower sales of certain medical devices, which were higher in the prior year quarter due to a customer's temporary increase in orders in connection with a planned manufacturing transfer. Those declines were partially offset by higher contract manufacturing revenue from pen injector systems and components.

Despite lower sales, gross profit grew to $9.5 million from $8.6 million in the first quarter of 2008, and gross profit margin improved 2.3 percentage points from the same period last year, to 15.2%. Improvements were associated with a stronger product mix, including relatively higher medical device sales in Europe, better utilization of remaining facilities in the wake of restructuring efforts, and continuing improvements in efficiency and output from the Michigan production facility. Operating profit increased by $0.9 million as a result of the increased gross profit and SG&A and research costs that were substantially unchanged from the prior year period.

Corporate and Other

U.S. pension expen
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SOURCE West Pharmaceutical Services, Inc.
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