Ted Ayvas – Director, Corporate Communications & IR Doug Roth – CFO Len Schwartz – Chairman, President & CEO

Daniel Rizzo – Sidoti & Company David Jordan – Axiom Capital Management Eugene Fox – Cardinal Capital Management John Roberts [ph] Las Badri [ph]

Thank you. Good morning, and welcome to Aceto Corporation's fiscal 2009 First Quarter Conference Call and Audio Webcast.

With me today are Leonard Schwartz, our Chairman, President and CEO; Douglas Roth, our Chief Financial Officer; and Hank Gracin of Lehman & Eileen, our outside securities counsel. During this call, Doug will give an overview of the company's financial results for the fiscal first quarter ended September 30, 2008.

Len will discuss the performance of our business segments and provide an update on our strategic initiatives for growth. Following that we will open the call for questions.

Now I’d like to turn the call over to Doug Roth. Doug?

Thank you, Ted. And good morning, everyone.

We are very happy with the operating results that we have reported this morning. Quarterly sales increased 18% to $94 million compared to $80 million in the comparable 2008 quarter.

Gross profit increased 30% to $19 million from $15 million in the year ago quarter. Operating income increased 87% to $7 million from $4 million in last year's first quarter.

This resulted in our net income increasing 250% to $5 million compared to $1 million in 2008 comparable quarter. Earnings per share were $0.18 in the fiscal first quarter surpassing the $0.05 per diluted share that we reported in the first fiscal quarter of 2008.

Before I turn the call over to Len, I just want to take a minute to look at our cash position and to discuss our repatriation plan and the corresponding tax charge that we took in the first quarter. As of September 30th we're reporting cash, cash equivalents and short-term investments of $43 million and not all that money is available to use in the U.S.

because it's sitting in our foreign subs. As we discussed during our last earnings call, we expect our cash requirements to be approximately $12 million in our Crop Protection segment over the next 12 months to 18 months to pay for capital investments, namely data compensation and task force membership to support our entry into four new products.

We plan to repatriate $13 million from our foreign subsidiaries and we have recorded a tax charge accordingly of $250,000 in the first quarter results to cover the anticipated taxes associated with the repatriation. We anticipate actually putting everything in place and repatriating the cash in our fiscal third quarter.

So that's – we hope to have it all done before March 30, 2009. Now I’d like to turn the call back over to Len.

Thanks, Doug. Good morning, everyone.

In the first quarter – looking at our business segments, in the first quarter sales in the Health Sciences segment were 21% largely the result of increased sales from our foreign operation, particularly our European operations and increasing sales in our nutritional products and an increase in sales in our domestic generic products group. The increase in sales in our domestic generic products can be attributed to increased volume of business for existing products.

Chemicals and Colorants sales grew 19% compared to the 2008 comparable quarter primarily due to increased domestic sales of pigment, dye and miscellaneous intermediates as well as an increase in sales from our foreign operations. Unfortunately, sales in our Crop Protection segment decreased 23% from the 2008 comp quarter largely the result of decreased sales of our sprout inhibitor products, which are used on potato crops.

These are post-harvest sprout inhibitors, not pre-harvest. I'd now like to provide you with an update of our current and strategic initiatives.

As you know we have three initiatives. The first one is to provide vaccines for companion animals.

It's moving forward. During the first quarter we are very pleased to have received a letter from the USDA stating they have accepted the results of our challenge study and that our vaccine was at least as good as other currently available products.

In addition, the USDA approved the protocol for the field safety test and issued Aceto a permit to import the necessary quantities of the vaccine to begin the testing. This vaccine has been imported, distributed to veterinarians who will be administering the vaccine.

We believe that this is the final major step in the approval process, however, please do not forget that this is a regulatory deal and while we are doing everything we can to expedite the process there can be no assurance given as to when the approval process will be 100% competed. I’d like to add that the United States government, the FDA, the USA and Law agencies are extremely cautious about the import of biological products into the United States, and we believe that just receiving a permit to import even the trial quantities is a very, very significant step forward.

As it relates to the Japanese market, we have received our third order from a pharmaceutical intermediate for a Japanese pharmaceutical manufacturer. We're encouraged by our success.

We continue to enhance our resources there and it's going to take awhile, but there is a large number of business opportunities which is recognized by the large number of sample requests that we're receiving. With respect to our initiative to distribute finished dosage form generic drugs under the Aceto brand, we are getting very close to having our Medicare, Medicaid and private insurance reimbursement issues resolved, and we are continuing our efforts in this area to enhance our pipeline of products with finished dosage forms, finished dosage forms generic drug.

One of our peoples in India now along with our Indian people continuing to look for new products to sell and we believe will be successful. It's taken a long time, but it's that the nature of the business.

(inaudible) creating a new pharmaceutical company, which is in effect setting up the finished dosage for a company is not an easy task. We ended the first quarter of '09 with working capital of $131 million, no long-term bank debt and shareholders equity of $141 million.

We are in excellent financial condition with our no long-term bank debt. I don't know if we have any bank debt at the moment, even short term, and we intend to leverage our financial position to enhance our business, short, medium, and long term.

We believe this level of working capital provides us with the financial strength to continue to move our strategic initiatives forward as well as to take market opportunities to enhance our business to grow our business, particularly, giving us the ability to take purchase positions at advantageous prices in the highly volatile markets of our two principle supply markets, principally, China and India. These markets are very volatile.

We have the cash to take positions. The suppliers that know we have the cash in dealing with us that will be paid, and in fact, some of our small competitors both in the U.S.

and Europe just can't even buy goods now because they can't get credit to do so. Our financial position is being used to enhance our business.

Obviously, we remain very optimistic about the company's long term prospects. Our core businesses are doing well, at least two or three of them, although the Crop Protection business we have four products in the pipeline.

And again we're not forgetting the need to continue to focus on strong cost controls as well as maintain our very, very strong cash position. Ladies and gentlemen, that's my written presentation and I'll be happy to take your questions now.

Hi, guys.

Hi, Dan.

You did very well with the Chemicals and Colorant business for the quarter. I was just wondering if you're seeing that fall off now given the current economic conditions in the United States.

Well, actually not. It's – the driver of the Chemicals and Colorants business is largely, it has been the introducing – introduction of new products.

It's all China, it's virtually all China. It's been added to our capabilities because a lot of the Chinese manufacturers are not in good shape and they are concerned about who they are selling to, they know Aceto very well, they are very comfortable selling to Aceto, and basically that's it.

Even though overall consumption maybe down, it certainly down everywhere, certainly in automotive, housing, appliance and what not. If we have a small percentage of the market we can grab more market share for the existing products and we can introduce new products because very candidly there is nobody else other than Aceto introducing new specialty chemical products from China right now, and it's been this way for a couple of years, so even though the markets maybe down we are achieving more market share for our existing products and have the capability to launch new products on a more regular basis now.

Okay. I don't know – I know you touched on this before because you can provide a little color on the four new products you're talking about in the Crop Protection?

Have we talked about what they are? No.

I don't think so. We haven't disclosed them.

Without disclosing that can you just tell me what – why you support end markets in terms of the crop you're looking at?

Well, really – how can we answer this, later, can we call – can we make a release about this later? I don't want to mislead anybody.

Okay. Can we come back to that?

There are so many different market segments that we're in. I don't want to mislead you, so we're going to – Ted is going to talk to our Mike Feinman who runs that Crop Protection business and we'll come back to it later, is that okay?

That's fine.

Okay.

And finally, it's just something I know is in your balance sheet, your investments, the investments volume were up to approximately $11 million, I was just wondering what you are investing in?

That's – Dan it's just time deposits that are over 90 days, otherwise we were taking advantage of the LIBOR market in Germany and in Netherlands, it was almost 4.9% or 5% once it got to 120 days, that's all it is. The cash equivalent is 90 days or less, investments is just time deposits with a longer term than 90 days.

Okay. Thanks, guys.

You're welcome. Next?

Good morning gentlemen. I think you responded to the question about the impact of the economic debacle in the world, but you said some interesting things here, the API on existing products, the existing products mainly from the fourth quarter to the first quarter?

And could you comment on new products and when they'll start to hit so we can get a sense that the API business is continuing to grow. And you said the Japanese third order, can you give us an idea of what each order could generate in revenues?

And in terms of the repatriation of funds, how much your funds are in China? And if you repatriated all the funds, how much would that cost you?

Why – let me answer the last one first because that's an easy one. We have very little money in China.

Just enough to buy some Chinese –

Or anywhere in the world, they didn't necessarily mean China.

Okay. Somewhere – if you take a look at our cash and cash equivalents and that is let's say $43 million, approximately $24 million of it is offshore.

Okay. And of course 215,000 ton repatriate $10 million?

Yes, but after that there is steep incline in terms of the U.S. taxes we're paying, so, what we did is we took a look at – the first $13 million that we bring in, it was tax – it's called the high taxed profits overseas.

If we were to go and bring in an additional $5 million the tax consequences would leap significantly here. It would be therefore more economical for us to borrow as opposed to repatriate.

So it's – that's the sort of model that you look at.

If you did it in another year, would the same tax apply as to the first $10 million in the first year?

Probably not.

Okay. So what is the increased tax hit on the balance of the $14 million that you could potentially –

I haven't even done that model. All I can tell you is the next million is like 10% or 12%.

Okay.

Okay. So therefore as I said it's more economic to borrow the money as opposed to repatriate it.

And we don't need it here in the U.S. per se because this $13 million will satisfy the “capital requirements” that we need to enter into the Ag markets so there is no real need, why, why take the tax charge of – and I'm earning more money overseas because the LIBOR over there is right now much better than over here so we look at it three dimensionally.

Okay. And if you pay your bills here from there does that repatriation tax hits?

Let's get to the other points. I got the picture.

How about the API existing products?

Let me look at the globe little bit on this issue of repatriation. We're repatriating this money because we need to make capital investments.

If we didn't need to make capital investments here we would not repatriate the money. It's likely and maybe we'll talk more about acquisition, it's likely that if we make any further acquisitions they'll be in Europe anyway and the money's there, or outside the U.S., not only in Europe, okay?

Okay.

So we do what we have to when we have to do it. We're in good shape in every case.

I'm sure you do. I know that, but could you talk about the – you said that the – in the quarter the existing products grew how much from the prior quarter and when do you have a lot more products?

Because I know that you've always had a tremendous amount of products in the pipe. When do they start to hit so we could get another level of expansion?

Could you compare the fourth quarter to the first quarter?

On a regular basis we said that the increase domestically in our domestic API business was because we had a good order pattern for existing products, but that doesn't mean we haven't launched any new products. Understand where we went.

You know very well, you do personally, that we did really well in 2002, 3 and 4 and went down because we had blockbusters. The products we have, we have domestically something approaching 100 products in the pipeline, but they're not blockbusters, all small products.

We're adding products on a regular basis and in Europe, too. So you can't – it's not by looking at blockbusters, and we're going to do this in two quarters and we're going to have a big jump in sales.

It's continuing more, it's continuing business growth, and along with that, what that does it makes us more important to the customers because we have a much broader breadth of products for the customers.

I know, but you used to say, you used to give out how many products you'd introduced per quarter and we don't know – we no longer know how many products you introduced, but even if they're small you could be Nellie Fox. I just want to know how many base hits you have.

I don't care about how many home runs, I just want to follow the base hits.

My guess is my understanding is we're probably getting two or three new products per quarter now.

On a base of what?

On a base of 100 products. We have about 100 new products we're working here.

And they're all cumulative. They're not, you get it and goes away.

We're not losing any products these days. Three years ago we got (inaudible) very simply because we lost two big products globally.

We're not losing any products. This is like building a brick wall, on top of the other.

It's not concrete blocks that are bigger than bricks, it's bricks.

Could you comment on the – third question I had was that I'm sure everybody is interested in this. The Japanese business, what level of business its doing now, and what each product could mean over the long term?

We believe Japan is a very slow, steady market. The economic situation in the world at the present time is making the Japanese more cost conscious which plays into our hands.

Even though they won't sacrifice quality, they'll consider a lower cost supplier. The three orders we got in Japan were all initial orders, also could be called trial orders from Japanese pharmaceutical manufacturers.

They were all under $50,000, two of them were well under $50,000.

What could they mean –

You can't say what they could mean. You could look at the Japanese market for pharmaceutical intermediates of $4 billion, and we believe that over a period of time we can build a business of tens of millions of dollars, exactly what we did in the U.S.

starting about five years ago, mid-level pharmaceuticals intermediates.

Okay. So just so we can understand, the three products that you give trial orders for, if they became – if they evolved to regular business orders rather than trial orders in a year or two what could each of those products generate revenues to you?

Is that a fair question?

One, okay. One product, one product I know could be something on the order of a $0.5 million a year.

Okay.

Okay? And those are the kinds of, I now understand your question.

What we're looking at is these are all key intermediates for Japanese pharmaceutical manufacturers. They would not be interested in a product spending two minutes doing any research, quality control and qualifying a new source if their products were less than $100,000.

No, no, I understand that. So is the potential three years, four years down the road to deliver 50 products to them that could be between $0.5 million and a $1 million each in terms?

I mean I can't even imagine –

50 products is too much, but there is a potential in two years, two years, three years to be doing well in excess of $10 million a year business, exactly what we did in the United States.

For how many products?

We don't know. It could be 10, it could be 15, it could be 20.

Okay, so –

Hard to quantify, but we are getting – the most important thing is that we are getting acceptance. That's the critical issue.

And is anybody doing what you're doing?

Nobody is doing, which is quite surprising to me. Nobody has –

So why in two years or three years could it be $10 million or $15 million if you're the primary source of low cost supply to a market that's not penetrated I would think your business opportunity could be $50 million or $100 million if you had a good partner over there?

The definition of short-term in Japan is five years. It takes time.

It takes time.

You overlooked the analogy I mean.

(inaudible), please. I'm being conservative.

I don't want to be too optimistic. We consider this a huge opportunity.

We built up in the U.S. We moved in this business in the U.S.

with the Mercks and the Pfizers of the world, and we're doing something approaching $25 million in the U.S. We started this five years ago.

We expect the same thing to happen to Japan. Japan, we expect more positive results because we have no competition.

There's simply nobody doing what we're doing. 95% of the pharmaceutical industry is using Japan by Japanese pharmaceutical manufacturers are manufactured in Japan.

And what price competitive edge do you have there? That's my last question.

It's a dream. It's a dream.

I mean in no cases we have price edge are anywhere from 30% to 40% lower than the Japanese manufacturers.

Okay. Thank you very much.

You're welcome.

Hi, Len.

Hi, Gene.

Can you talk about – It looks like you used a little bit of cash in the quarter. Can you talk about where it went specifically?

Yes. When the balance sheet comes out, Gene, you'll see that we had – our cash did decreased, but that has a lot to do with the fall of the euro compared to the U.S.

dollar from June, right? At June, the balance sheet – and don't quote me, but the balance sheet closing rate at June was somewhere in the neighborhood of 158, and at September 30, it's like 147 or something.

So just by the very fact that the U.S. dollar vis-à-vis the euro got stronger, the cash went down.

You'll also see that in our equity section when we convert our European operations to the U.S. dollar.

But when you take a look at the balance sheet, you'll see that our inventory is just a few million dollars less than it was in June, but our payables came down significantly, so we believe the cash position even though we have a headwind now with the euro, okay? Because right now, as you know, the euro is a little bit short of 130, alright?

So that's going to hurt us a little bit, but we should pick up some cash from our reduction in inventory.

I believe this is normal in our business. This is sort of roundabout but a normal way.

No. I just want to understand.

So it's basically a translation of cash that you held in other currencies to US dollars.

Correct. And a payment – proportionally more – more payments in accounts payable, and our inventory didn't come down as much.

Okay. Len, just if you don't mind repeating, can you explain the $12 million?

Just repeat – remind me and other people how this new business model, how camp business model is going to work?

Okay. Let me talk about it.

We have six products in our pipeline, in our Crop Protection pipeline. Two of them we filed for – I'll come back to that – two of them we intend to file for.

The EPA under Fifth Rule regulates agricultural chemicals, economic poison, whether it's ant killer or it's a crop protection product, or a post-harvest product like our CIPC, it's regulated. To get an EPA label, which is a license to sell, you have to supply data that the EPA requires.

On products that are existing you have an option of not supplying the data but citing CIT ING somebody else's data. That's how it's done.

You cite somebody else's data and when you put your application in for the label which is the license you either say you're going to submit the data by a certain time or cite somebody else's data. You check the box.

When you check the box you then have to pay compensation to the people that have the existing label. It's called a cite all; you're citing all their data.

Now a lot of the data on some of the products we're working on is all the data, there's a 15-year exclusionary rule just like a patent. If the data is more than 15 years, you don't have to pay.

So the money that we intend to expend will be compensation for the data. Now this compensation is generally negotiating between you and the player or players in the marketplace.

For example, if there are five players in existing, or five registrants, if you will, and you will be number six, you may have to pay one-sixth. If there is two, you may have to pay 50%.

But the way this works is you cite the data and then a year later you start negotiating and if you are in part of the component of the negotiation is that if you only achieve a 20% market share which is Aceto is not going to be the predominant player in any of these markets, you pay less than half. So that money is based on data compensation.

Okay now, is that clear? And also task force, there's also task forces for other issues relating to it, for example, contact with human beings and spray applications and things like that.

If you have a product that's part of task force you got to pay to the task force some money, but generally their task force are very broad, cover a task force what's called, one is called the spray drift pass, I'm sorry – spray drift, how the spray drifts, how it affects humans, there's like lots of products so that's not the biggest portion of the money. The big portion of the money is paying compensation to the label holders, if you will.

Is that clear? Hello?

Okay.

Okay, let me answer. Can I come back to again Rizzo's questions, please.

Dan? Okay, Dan's not there.

Dan, you asked about the four products. The four products, two of which we filed and two of which we intend to file within the next couple months I would assume.

Product A marketplace is four-fold, rice, corn, vegetables and sugar cane. Product two is cotton.

Product three is potatoes. Product four is vegetables and nuts.

Plus we have two more products we're working on, which are more of a longer term; they're going to be filed in the 12-month to 18-month time frame. Okay.

Next question?

Leonard, I just wanted to ask you, maybe I missed it because I had to pick up another phone, but could you tell me why the potatoes were down 23%? Did anybody ask that?

It's the market for potatoes.

Excuse me?

It's the mark – the harvest for potatoes. This is a post-harvest –

I know, but why were revenues down 23%?

Because less potatoes were harvested, or maybe they went to market sooner, or maybe when you export potatoes or they go long distance they lose more product; just product mix, just the way the product was used.

I mean I would think that someone ate your lunch.

No, no, no –

Because I don't think, I mean I don't follow the potato futures, but I can't imagine there is 23% less potatoes.

No, I didn't say 23% less potatoes, but maybe the potatoes were used quicker. Maybe it was a less harvest.

Maybe – it depends upon how long they have to store the potatoes, how far they have to ship them. It's more than just the potato market.

So this had nothing to do with the American Vanguard product at all?

No, not at all; completely different business.

So are you afraid of the fluctuations in your future agricultural products that you witnessed in the quarter in potatoes?

No, because this is normal. It's up 20%, down 20%.

This is the normal for this business.

Okay.

Next question.

Sorry about that, Len, I got disconnected –

Okay.

– I'm sorry you answered the question, but I'll go back, I'll listen to what you said. Any incremental color that you can give us in terms of the animal vaccine?

Obviously, I read what you put there. What – we're in the middle of our safety trial now?

We've begun the field safety trial. We have distributed product of that variance, and we have a number that varies in three different locations.

This is all a protocol, a very rigorous protocol that's been accepted by the USDA. We've begun – we've begun the field safety trial.

They have to vaccinate a certain number of dogs in different locations and a certain number of veterinarians. Again, this is not efficacy.

They've accepted the efficacy and in fact they felt our product is, they gave us some indications that our product may be even better than the domestically produced products, right, but this is field safety. Looking for arrhythmia, swelling, that kind of stuff, and generally these products, you have no problems with these tests at all.

The efficacy test was the main test.

How long should we expect this test to take, Len?

This test we believe we have to do all – it's based on the number of dogs that are available. Some of the testing – puppy gets three injections.

So some of the dogs will require one, some will require – because they use puppies, mid-age dogs and older dogs, because every dog gets vaccinated every year, or should be vaccinated every year. But we believe that the requisite number of vaccines administered will be within six months.

Then we have to compile, analyze the data and submit to the USDA for their review.

Okay, so it will take at least six months from the start of the trial to conclude it, and then an uncertain amount of time for the FDA to actually decide what they want to do with the data?

Well, actually, the USDA not the FDA. Sorry.

Excuse me, I apologize.

You don't have to apologize. Big shareholders don't have to apologize.

Anyway, but this is not nearly as complicated data as the efficacy data. The efficacy study took three months to four months of analytical and statistical.

This is the veterinarians have to simply report whether (inaudible) reactions. Very simple.

So we don't believe it's going to be nearly as long, but it's gotten, again, we don't know when it's going to happen. It's going to take some time, but we believe the pot of gold is there at the end of the rainbow, and we're getting there.

Okay.

Let me go back. The fact that they allowed us to import the vaccine was a critical step.

The U.S. government is paranoid about importing any biological products into this country.

Without 100% plus certainty that the products are safe.

Len, your marketing plan, once you get approval, has there been any changes in your thoughts as to how you're going to market the vaccine?

No, but we're actually doing a leading. You recall the isoflurane, which is the inhalable anesthetic used for humans and veterinary.

We're focused on the veterinary. We've actually entered that market and what we call big scale.

We bought a whole bunch of products from our supplier and we're actually going out to veterinarians now selling isoflurane and also to few distributors. That's our strategy, is to get Aceto known by the veterinarians so when we have the vaccine we will be able to come in and walk in the door.

And this is all in a New York metropolitan area, if you will, where there's lots of dogs around here.

I think you'd said, Len, earlier on that you basically didn't envision you had any problems selling as much as you could produce. I presume that you don't feel any differently today?

This is a market opportunity I've never seen, the quality I’ve never seen before. There is four suppliers in the marketplace down from five.

It's without doubt an oligopoly, the veterinarians don't even see a representative of the manufacturers, they don't even give them the right time a day, and just good selling will deliver the business now. Aceto has more strengths in good selling.

We're the 25th largest company in Long Island, we're a New York company, all those people are not around there and we intend to build a brand.

Last question, Len. Any incremental update?

You wrote that you thought you were very close to final approval in Medicare, Medicaid. I presume this is for your final form generic.

Anything that you can add to what you wrote?

We have every reason to believe that we will have the final approval on February 1st. Again, this is not a regulatory approval; this is still in that documentation.

We're already there but they only allow submissions for approvals four times a year, November, February, May and I guess September or whatever. At which point we believe we'll be able to enter the business and start selling directly.

I think you had indicated you have a number of products in the pipeline and you demand – they're basically people are waiting for you to be approved.

They're not holding their breath waiting, but we have every reason to believe that we will be able to sell two of the top three big box retails pharmacies. Plus two of the second tier.

Thanks so much.

You're welcome.

Morning, guys.

Hi, John.

I think Asulam is used on sugar cane?

Asulam, yes. Asulam is used on sugar cane, it's not – I mentioned sugar cane before but the product we're talking about the sugar cane is another product.

But for Asulam, Monsano just acquired I think the largest sugar cane seed producer. I don't know do they intend to bring round up resistance into sugar cane, what would that do to Asulam?

Asulam is an insecticide – it's a herbicide.

Okay and it's they brought an insecticide –

It's not going to affect anything.

Okay. It's a niche product that –

It's a niche product used on sugar cane since the beginning of time. It's a small market in the United States, Russia is a good market, but I can't imagine, I just can't imagine.

Secondly, the strength in the chemical and colorants business domestically, I think at least recently that was magazine related, I think you said last call maybe? Or maybe was that at your meeting?

What I said was that one of the reasons that business continues to grow is because of the organic pigments. As you know we entered the organic pigment business about three years ago, we moved upstream from intermediates.

Magazines – 50% of the organic pigments are used in printings for magazines because the magazines are color magazines and that business continues to go.

Do you think the election kind of caused the kind of surge here that will come off in the short-term?

We are so far removed from that, I mean it's just, our organic pigment business is just moving on at a steady pace – steady slow growth, that's where we are.

I thought the strategic intentness division was to grow the international side faster, there seems like it's just the domestic side growing too fast that international can't keep up?

No, we are moving international in colors and chemicals in Europe too, absolutely, and also in South Asia to our Singapore office.

In the quarter just reported domestic – you cited domestic as the source of the strength?

The source, but not the only source. That was the strength.

And then lastly has the new administration coming in said anything about their position on generic biologicals?

Not that I know of, maybe you know more than me, but there is a whole push on generic drugs. My opinion is, I don't want to be political, but I believe with the new administration there's going to be a strong push to reduce healthcare costs and that's Aceto, generic drugs, lower price intermediates, that's our core functionality, so (inaudible) the lowest price market places and executing by good quality assurance and regulatory support.

(inaudible)

Thank you.

Thanks, John.

I just wondered if you, Len, in the oligopolis [ph] that control the pet vaccines, okay, are you working with an independent company that has got a direct detail sales force into the veterinarians?

No, we are doing that ourselves.

Is there one available that doesn't represent the oligopolis?

The four companies in the business have their own sales force, but they sell primarily through distributors, to our knowledge other than in some rare cases we – they do not sell directly to veterinarians, right. We are building our own organic sales force, we have one person who is out selling the iso 4 to the veterinarians, we have a couple of distributors who we are working with and we are going to build a local sales force that works for Aceto, Aceto people.

Why would you want to do that as opposed to hire someone who is already there nationally?

Because we don't have the capacity to sell nationally, we don't want to compete with the big guys nationally because we can't. These people have the capability to create severe market disruptions.

We are looking for a significant share of the New York metropolitan area which is defined as a 50 mile radius from where you're sitting right now.

And what's the level of revenues that within the 50 mile radius that exist and what – ?

My guess is it's somewhere in the $100 million range.

And you're looking for a significant market share of that?

We are looking to sell, but understand that we are going to be a very small player, we are talking about Merck, Pfizer, Schering-Plough, and DSM-Wyatt, alright, Wyatt, Merck, Pfizer, Schering-Plough. We cannot go head-to-head with these people.

Aceto's never been able to go head-to-head with Dow, DuPont, Union Cabot [ph]. We have to fit in our place, and if we try to achieve significant market share in the New York market as our first approach that'll be fine.

Okay. You don't want to define significant, do you?

Ultimately it'll be double-digits millions. How's that?

Double-digit millions?

Double-digit starts with 10.

I'm sure. I just wanted to hear you say it.

Okay. Thank you.

Yes, guys, just a general question. Historically, Aceto's first quarter has been maybe it's weakest.

That's not always true, but there's a pattern there; and the fourth quarter usually its strongest, and I know you're not going to give us guidance, but is your expectation is that that pattern would hold this year? Thank you.

Let me tell you that I can't really comment on that. We just don't know.

All I can tell you is that the company is in severe, the company, not the company, God forbid. The country, the world is in a severe economic crisis, okay?

So we don't know where the world is going, but what we're trying to do is structure Aceto to make sure that we know where Aceto is going, and even if we are not happy to go back under any circumstances irrespective of what happened at the rest of the world, and I made some notes about Aceto's plans in this economic climate, so please, got to digress. Some of this I've written already, so I understand you can tell the difference when I'm reading or talking at lip.

What we've done is we've done some research about companies during the Great Depression, successful companies during the Great Depression, 1929 to 1939 of course, right? These companies had positive and strong cash flows, they had none or limited debt, they maintained strong brands, Kellogg, Proctor & Gamble, Chevrolet, Camels.

They supported these brands by advertising, and yet through all this they provided best value to the customers at the lowest price. They consistently look for innovative ways to promote business.

For example, McCormick Spices, which is now a very successful large company, was not such a large company in the 1940s. They were a very small company.

What they did was they figured out, they realized of course that people would use cheaper foods. They developed spices and flavors so people could get good taste out of the cheaper food.

That propelled them to greatness. And lastly, they were not afraid to make capital investments if the business warranted.

I'm not talking about McCormick, I'm talking about companies that knew what they were doing during the Depression. P&G developed soap operas and soap opera is a name coined by P&G during the Depression.

The research that we've done is continuing so, to carry on, we developed what we call Aceto strategic plan for operating in a highly recessionary economic environment. Whether you call a depression or a recession, it doesn't matter.

It's highly recessionary. Our strategy is to maintain strong cash flow by controlling purchasing, strengthening inventory management which I think you'll see coming up, we're working on that very aggressively, credit policies and carefully balanced SG&A expenditures so expenditures so as to not inhibit long-term growth.

We're not cutting SG&A just to cut SG&A to make short-term numbers look better. We're going to be careful about this but we have to maintain long-term growth.

We're going to continue our careful enhancement of our sourcing and regulatory capabilities so as to continually provide our customers with most competitive pricing combined with quality assurance and regulatory support. As I said before, we are already utilizing our cash position to take advantage of price volatility in China and India, our major sourcing markets.

We will continue to provide the highest level of customer service, that's mothered in apple pie, of course, we will always do that, but we're really pressing that harder because we believe our competitors won't be able to do that. We will increase our activity to find investment opportunities.

We believe opportunities will come along. And the major new thing that we're going to do is we're going to create and manage a global Aceto brand.

We're working on that now and our brand will be an industrial brand, principally industrial brand, other than pet vaccines and some finished dosage forms, but we intend to create an Aceto brand so that both our customers and suppliers know that they have a high level of reliability and confidence in dealing with Aceto. And that's how we intend to continue our growth irrespective of the economic situation in the world.

Sorry for all that, gentlemen.

No, thank you for the answer. Thank you.

It's very interesting.

I just wanted to tell you you're doing great, Leonard.

Thank you.

You're my hero, you're my chemical hero. But you're doing great and I appreciate everything you said today and the latest – the last remark you said I thought was terrific.

I just wanted to say, thanks.

Thank you.

Well, thank you very much. You can be sure on behalf of the board, management, and all our people at Aceto we will not give up, and we'll continue on irrespective of what happens in the world.

Thank you very much.