BOCA RATON, Fla., June 14 /PRNewswire/ -- Rexall Sundown, Inc.
(Nasdaq: RXSD) announced today results for its fiscal third quarter ended
May 31, 1999.
Net sales of $171.2 million increased 13% over the $151.0 million reported
in the third quarter of fiscal 1998. Net income of $18.5 million for the
three months just ended decreased $0.9 million, or 5%, compared to last year's
third quarter. Third quarter diluted earnings per share of $0.28 were 8%
above the $0.26 reported in 1998 reflecting the positive impact of the
Company's share repurchase program.
In making the announcement, Damon DeSantis, the Company's President and
Chief Executive Officer, stated, "Our ability to introduce new and innovative
products and increase distribution enabled the Company to achieve a
double-digit revenue increase during a time when the overall industry was
growing at single digits." Sales to retailers increased 20%, led by $35
million in sales of Cellasene(TM), the Company's new product which helps
eliminate cellulite. Sales of Rexall Showcase International, the Company's
direct sales division, increased minimally during the quarter. "With the
successful opening of Rexall Showcase Japan at the end of May now behind us,
we have numerous initiatives underway to grow the U.S. business which was
affected by the dedication of our domestic leaders to open Japan," said
Mr. DeSantis.
"Operating profits were essentially even with the third quarter of 1998 as
the contribution from higher sales levels was offset by a nearly four-fold
increase in consumer advertising which was necessary to provide the proper
long-term support for our nationally branded products," said DeSantis. The
Company spent over $18 million for advertising in the third quarter, up from
$4 million last year, to support the major launches of Cellasene and the
Twist 'N Learn(TM) herbal line, as well as increasing the level of support for
its leading national brand Osteo Bi-Flex(R).
DeSantis continued, "To ensure our long-term success as the industry
leader, we continue to make the right fundamental investments in the business
which encompass brand support, new product research and development, global
expansion and increasing manufacturing capabilities." Market share for the
Company's flagship brand, Sundown(R), reached a record level of 13.6%, an
increase of 2.1 points over last year, as measured by scan data for the food,
drug and mass class of trade for the 13-week period ended May 23, 1999. The
Company's Sundown brand of herbals and vitamins continue to be the number one
brand in food, drug and mass, Osteo Bi-Flex is the number two nationally
branded supplement and Cellasene is the third best-selling nutritional item.
The Company also completed the repurchase of an additional 1.3 million shares
for $24 million, bringing the total to 8.2 million shares for $124 million
since the inception of the share repurchase program.
For the nine months just ended, net sales of $436.7 million increased 16%
over the $377.2 million reported in 1998. Net income of $46.5 million for the
same nine-month period declined $2.2 million, or 4%, compared to last year's
pro forma results. Diluted earnings per share of $0.67 were up slightly over
the $0.66 reported in 1998.
Mr. DeSantis added, "While consumer consumption of Cellasene continues to
climb week to week, the Company believes its sales for Cellasene will be down
sequentially as a result of the significant pipeline distribution which
occurred in the third quarter. Accordingly, we expect the Company's revenue
may decline, sequentially, in the fourth quarter."
"Looking toward our fiscal year 2000, we envision that the successful
execution of our long-term strategy will enable us to continue to grow at a
rate which exceeds the growth of the overall industry," added Mr. DeSantis.
Key trend indicators for the industry have led the Company to believe that the
overall nutritional industry, in the near term, will grow in the single digits
and therefore the Company expects that its growth rates will be in the mid
teens, further expanding upon its leadership position. Additionally, having
reached significant distribution levels and the number one position in the
category, the Company's model going forward will incorporate a substantial
investment against the consumer to continue to solidify its brands for the
long-term.
In conclusion Mr. DeSantis added, "We believe strongly in the long-term
growth prospects for the nutritional industry and our Company and that the
aging demographics and desire to feel young and stay healthy will continue to
fuel the dynamics of the industry well into the future."
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
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended % Nine Months Ended %
May 31, Increase May 31, Increase
1999 1998 (Decrease) 1999 1998 (Decrease)
Net sales $171, 211 $150,979 13.4% $436,656 $377,188 15.8%
Cost of sales 72,421 65,197 11.1% 189,138 157,551 20.0%
Gross profit 98,790 85,782 15.2% 247,518 219,637 12.7%
Selling,
general and
administrative
expenses 69,549 55,920 24.4% 175,806 145,488 20.8%
Operating
income 29,241 29,862 (2.1%) 71,712 74,149 (3.3%)
Other income,
net 237 1,109 (78.6%) 2,337 3,185 (26.6%)
Income before
income tax
provision 29,478 30,971 (4.8%) 74,049 77,334 (4.2%)
Income tax
provision 10,984 11,591 (5.2%) 27,589 27,781 (0.7%)
Net income $18,494 $19,380 (4.6%) $46,460 $49,553 (6.2%)
Pro forma
net income(A)$18,494 $19,380 (4.6%) $46,460 $48,611 (4.4%)
Pro forma income per common share:
Basic $0.29 $0.27 $0.68 $0.69
Diluted $0.28 $0.26 $0.67 $0.66
Weighted average common shares outstanding:
Basic 64,813 71,372 68,157 70,950
Diluted 66,709 74,180 69,613 73,621
(A) Pro forma net income reflects a pro forma tax provision for Richardson
Labs, Inc. for periods prior to the January 1998 business combination
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)
May 31, August 31,
1999 1998
ASSETS
Current assets:
Cash and marketable securities $6,669 $119,394
Trade accounts receivable, net 82,166 60,805
Inventory 117,118 77,727
Other current assets 15,501 11,630
Total current assets 221,454 269,556
Property, plant and equipment, net 68,263 56,697
Other assets 15,271 13,105
Total assets $304,988 $339,358
LIABILITIES AND SHAREHOLDERS'EQUITY
Current liabilities:
Accounts payable $44,080 $21,653
Accrued expenses and other current liabilities 29,297 27,260
Short-term debt 15,000 --
Total current liabilities 88,377 48,913
Other liabilities 240 384
Shareholders' equity 216,371 290,061
Total liabilities and shareholders' equity $304,988 $339,358
SOURCE Rexall Sundown, Inc.
 back to top
Related links:
http://www.rexallsundown.com
CONTACT:
Investors, Donna Conners, Director Financial
Reporting, Press, Carol Walters, Manager Corporate
Communications, of Rexall Sundown, Inc., 561-241-9400; Karen
Griffith or Lynn Sawyer-Landau, of the Financial Relations Board,
212-661-8030
|
