BOCA RATON, Fla., March 16 /PRNewswire/ -- Rexall Sundown, Inc.
(Nasdaq: RXSD) announced today results for its fiscal second quarter ended
February 28, 1999.
Net sales for the second quarter of $141.9 million increased 23% over the
$115.5 million reported in the second quarter of fiscal 1998. Net income of
$16.2 million for the three months just ended increased $1.5 million, or 10%,
compared to last year's pro forma second quarter. Second quarter diluted
earnings per share of $0.23 were 15% above the $0.20 reported in 1998.
In making the announcement, Damon DeSantis, the Company's President and
Chief Executive Officer, stated, "Both revenue and net income posted double
digit gains over 1998 reflecting our continued success of introducing
meaningful new products and initiatives coupled with the continued expansion
of our retail distribution and our global direct selling distributor network."
Sales to retailers increased 28% and sales of Rexall Showcase International,
the Company's direct sales division, increased 21% compared to the prior
year's second quarter. "As our sales tracked more closely to our growth
expectations, our second quarter operating margin of 17.6% expanded 3.5 points
sequentially, reflecting the operating leverage we have as our revenues
expand," DeSantis added.
The Company's Sundown(R) brand of herbals and vitamins is the number one
brand in food, drug and mass and Osteo Bi-Flex(R) continues to be the second
best-selling supplement in the country. DeSantis continued, "Throughout the
second quarter, our retail partners experienced accelerated consumer take-away
of our products which leads us to believe that excess retail inventory levels,
which affected us during the first half of fiscal 1999, are now behind us."
In keeping with its strategy of introducing proprietary, science-based
products and innovations, the Company introduced Cellasene(TM) and the
exclusive Twist N' Learn(TM) herbal line in February. The Company has
exclusive distribution rights in the U.S. and in select countries abroad for
Cellasene, a clinically studied product that can help eliminate cellulite.
"We remain extremely optimistic with regard to the outlook for the balance of
our fiscal year as these and other planned initiatives allow us to expand upon
our leadership position in the nutrition industry," said DeSantis.
For the six months just ended, net sales of $265.4 million increased
17% over the $226.2 million reported in 1998. Net income of $28.0 million for
the same six-month period declined $1.3 million, or 4%, compared to last
year's pro forma results. Diluted earnings per share of $0.39 were 3% below
the $0.40 reported in 1998.
The Company also reported that it had completed its initial $100 million
share repurchase program under which 6.9 million shares, or approximately
10%, of its outstanding stock were purchased. The Company's Board of
Directors today authorized a new share repurchase program which will allow the
Company to buy up to an additional $100 million of its common stock. Under
the terms of the program, which has no expiration date, the Company expects to
buy stock from time to time in the open market or in privately negotiated
transactions, depending on market conditions and other factors. The Company
believes it is well positioned for future success and it remains confident in
the long-term growth outlook for the nutritional industry.
Rexall Sundown, Inc., develops, manufactures and distributes vitamins,
nutritional supplements and other consumer health products in the United
States and internationally. Visit the Company's websites at
http://www.rexallsundown.com or http://www.rexallshowcase.com.
This press release may contain "forward-looking statements" as such term
is defined in the Private Securities Litigation Reform Act of 1995 or by the
Securities and Exchange Commission in its rules, regulations and releases,
which represents the Company's interpretation or beliefs. These
forward-looking statements, by their nature, involve substantial risks and
uncertainties, certain of which may be beyond the Company's control and actual
results may differ materially depending on a variety of important factors
including uncertainties related to acquisitions, government regulation,
managing and maintaining growth, the effect of adverse publicity, litigation,
reliance on independent distributors of Rexall Showcase, competition and other
factors described in the Company's filings with the Securities and Exchange
Commission.
REXALL SUNDOWN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended %
February 28, Increase
1999 1998 (Decrease)
Net sales $141,895 $115,489 22.9%
Cost of sales 63,549 48,159 32.0%
Gross profit 78,346 67,330 16.4%
Selling, general and
administrative expenses 53,321 44,939 18.7%
Operating income 25,025 22,391 11.8%
Other income, net 829 961 (13.7%)
Income before income tax
provision 25,854 23,352 10.7%
Income tax provision 9,642 8,384 15.0%
Net income $16,212 $14,968 8.3%
Pro forma net income (a) $16,212 $14,688 10.4%
Pro forma income per common
share:
Basic $.24 $.21
Diluted $.23 $.20
Weighted average common
shares outstanding:
Basic 68,377 71,046
Diluted 69,578 73,888
Six Months Ended %
February 28, Increase
1999 1998 (Decrease)
Net sales $265,445 $226,209 17.3%
Cost of sales 116,717 92,354 26.4%
Gross profit 148,728 133,855 11.1%
Selling, general and
administrative expenses 106,257 89,568 18.6%
Operating income 42,471 44,287 (4.1%)
Other income, net 2,100 2,076 1.2%
Income before income
tax provision 44,571 46,363 (3.9%)
Income tax provision 16,605 16,190 2.6%
Net income $27,966 $30,173 (7.3%)
Pro forma net income (a) $27,966 $29,231 (4.3%)
Pro forma income per
common share:
Basic $.40 $.41
Diluted $.39 $.40
Weighted average common
shares outstanding:
Basic 69,857 70,738
Diluted 71,092 73,342
(a) Pro forma net income reflects a pro forma tax provision for
Richardson Labs, Inc. for periods prior to the January 1998
acquisition as Richardson was an S Corporation and not subject to
corporate income taxes.
REXALL SUNDOWN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
February 28, August 31,
1999 1998
ASSETS
Current assets:
Cash and marketable securities $38,260 $119,394
Trade accounts receivable, net 73,949 60,805
Inventory 72,878 77,727
Other current assets 13,647 11,630
Total current assets 198,734 269,556
Property, plant and equipment, net 64,156 56,697
Other assets 14,572 13,105
Total assets $277,462 $339,358
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $56,939 $48,913
Other liabilities 340 384
Shareholders' equity 220,183 290,061
Total liabilities and shareholders' equity $277,462 $339,358
SOURCE Rexall Sundown, Inc.
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Related links:
http://www.rexallshowcase.com
CONTACT:
Investors, Donna Conners, Director Financial
Reporting, or Press, Carol Walters, Manager Corporate
Communications, of Rexall Sundown, 561-241-9400, or General
information, Karen Griffiths, or Analyst Information, Lynn
Sawyer-Landau of The Financial Relations Board, 212-661-8030
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