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West Announces Third Quarter 2009 Results
Date:11/3/2009

erly improvement in material costs in 2009 because the benefit of lower market prices for petroleum products through the first half of the year was delayed until the current quarter under the terms of West's purchase agreements for certain materials. Those improvements were partially offset by $2.5 million of higher depreciation costs and $1.2 million of increased labor costs.

Pharmaceutical Systems SG&A costs were substantially unchanged in the third quarter compared to the 2008 period, and as a result were lower as a percentage of the higher sales. Currency translation reduced reported costs of foreign operations by $1.0 million, with those lower reported costs offset by increases in compensation and depreciation expenses. Research spending was $0.4 million higher than in the prior-year quarter. Adjusted operating profit increased 29.4% to $29.9 million, an increase of $6.8 million, net of $0.5 million of adverse currency translation effects.

Tech Group Segment

Tech Group segment sales were $62.9 million in the third quarter, down from $68.3 million in the prior-year period. Foreign currency translation reduced reported revenue by $1.0 million and contractually mandated price reductions, associated with lower plastic resin costs, accounted for $1.6 million in lower revenue. Excluding those items, revenues were $2.8 million lower, on mixed, but generally lower, demand from customers for their custom-manufactured products. Launch-quantity orders from customers introducing new products contributed substantial revenue in the quarter but were more than offset by the lower demand for more mature products and by product withdrawals that have occurred since the 2008 period. Tooling and development revenues were $1.5 million lower than in the prior year.

Acquisitions and dispositions affect comparisons to the prior-year quarter. Third quarter results include for the first time the operations acquired from Pl
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SOURCE West Pharmaceutical Services, Inc.
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