AMRI swings to a profit as it slogs through a turnaround

AMRI, rebuilding its business after a string of slow quarters, posted a profit for the first time in 12 months as it looks to hit its stride as a growing contract drug developer.

The Albany, NY, company reported $2.3 million in net income for the second quarter, falling short of the $3.7 million it made in the same period last year but reversing four straight quarters of losses. AMRI ($AMRI) pulled in $89.5 million in revenue on the period, a 31% increase driven by roughly 10-fold growth in its manufacturing business that offset mostly flat sales in drug discovery and active ingredient production.

The company's big gains in manufacturing are tied largely to the $211 million the company spent on a trio of acquisitions over the past year, bolstering its capabilities in the field. And AMRI is relying on its checkbook to keep up the momentum, last month signing a deal to pay $174 million in cash in stock for Spanish drug manufacturer Gadea Pharmaceutical, a company expected to bring in up to $90 million in revenue this year.

AMRI is still running the numbers on its latest deal and won't announce its updated 2015 forecast until September, the company said, but management is optimistic the contractor is back on a path to consistent profitability.

"We are very pleased to present another strong financial quarter, with all our divisions achieving excellent results," CEO William Marth said in a statement. "Notably, recent acquisitions, combined with the cost reduction initiatives and efficiency efforts we've made to date, are contributing to continued strong contract margin performance."

AMRI remains in the midst of a transition, through which it's nixing its dependence on royalty revenue and pivoting away from drug discovery, focusing instead on large-scale manufacturing. The company has been steadily buying up assets and dumping unwanted capacity on its way.

- read the results (PDF)

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