WILMINGTON,More than 120 people have lost jobs and a facility in New Jersey will be closed as aaiPharma continues to grapple with the aftereffects of financial investigations earlier this year.
In disclosing its quarterly earnings on Monday, aaiPharma disclosed that it had shaved 10 percent of its workforce and would shut down a New Jersey operation in August. AaiPharma took a $3.4 million restructuring charge.
Audits and other expenses tied to the review of aaiPharma’s books added another $2.9 million in expense, according to the release.
The company also said it raised an additional $10 million for its credit line — now $140 million — by agreeing to increase the interest rate 1.5 percent, extending the maturity date by one year to 2007 and adjusting “certain covenants”.
For the quarter, aaiPharma reported revenue of $51.5 million, down from $66.1 million for the same period in 2003. It reported net income of $7.2 million, or 25 cents a share, thanks in large part to the sale of two product lines for $37.5 million.
aaiPharma stock (Nasdaq: AAII) closed at $3.39 on Monday — about a tenth of its 52-week high. Through the first six months of this year aaiPharma has lost $42.354 million, or $1.48 per share.
Analysts had predicted a loss of 20 cents per share.
The tough financial news followed months of investigations into aaiPharma’s bookkeeping which triggered executive management changes and numerous lawsuits.
“We have taken additional steps on the road to recovery,” said Fred Sancilio, executive chairman and CEO of aaiPharma. Sancilio, the firm’s founder, returned to the CEO chair as part of aaiPharma’s recovery efforts. “Operationally, we have significantly reduced inventory in the channel and we have cut costs by reducing our head count by over 10 percent. We are current with our SEC regulatory filings and we are once again trading on NASDAQ under the symbol AAII. While the company is still presented with challenges, we are aggressively meeting those challenges and are headed in the right direction.”