Sales Increase 101% and Net Income Advances 103%
BOCA RATON, Fla., June 17 /PRNewswire/ -- Rexall Sundown, Inc.
(Nasdaq: RXSD) today announced record results for the three months ended May
31, 1998.
Net sales for the third quarter rose 101% to $151.0 million from
$75.0 million for the same period in fiscal 1997. Pro forma net income of
$19.4 million for the three months just ended increased $9.8 million or 103%
compared to last year's third quarter. Diluted earnings per share for the
third quarter were $0.26 compared to $0.13 in the third quarter last year.
In making the announcement, Chris Nast, the Company's Chief Executive
Officer, stated, "We are very proud to have achieved this dramatic level of
sales and net income growth. Sales to retailers rose 156% compared to the
same period last year, and Rexall Showcase International, the Company's direct
sales division, continued its success, posting a strong sales gain of 45%
compared to the prior year's quarter. More impressive is the fact that our
third quarter operating margin of 19.8% increased 1.7 points, compared to the
third quarter of fiscal 1997, despite the increase in our investment in
advertising, research and product development and manufacturing capacity."
For the nine months ended May 31, 1998, net sales increased 87% to
$377.2 million from $202.0 million in the previous year. "The Company's year
over year sales growth continues to significantly outpace that of the overall
industry and reflects the leadership we are bringing throughout the entire
category. Our products continue to be well received by consumers and our
distribution continues to expand," Mr. Nast said.
The Sundown(R) Vitamin and Herbal product lines remain the number one
selling brands in the total U.S. food, drug and mass markets and the Company's
Osteo Bi-Flex(TM) product remains the third best-selling nutritional
supplement in the country. The Company continues to expand its sales to
existing retail customers while adding new customers. Also contributing to
the Company's record results was the Rexall Showcase International division
which launched new products such as the ProPortion(TM) Bar, expanded its
Aestival(TM) personal care product line and continued to increase its
distributor base.
Pro forma net income for the nine months ended May 31, 1998 rose 89% to
$48.6 million from $25.8 million in last year's period. Diluted earnings per
share for the most recent nine month period were $0.66 compared to $0.37 in
the same period a year ago.
Carl DeSantis, Chairman of the Board, said, "The continuation of record
levels of sales and earnings reflects all the investments and efforts that the
Company and its employees are making to ensure our continued leadership in the
vitamin and nutritional supplement industry." DeSantis also noted that during
the quarter the Company expanded its stock option program beyond the
management level to include all employees. Mr. DeSantis added, "We are
pleased to add this benefit which will ensure that the interests of our
employees, management, distributors and shareholders are harmoniously aligned.
With positive trends in the vitamin and nutritional supplement industry along
with our continued focus on science-based and proprietary products, we are
well positioned to sustain our leadership role into the future," Mr. DeSantis
said.
Rexall Sundown, Inc., develops, manufactures and distributes vitamins,
nutritional supplements and other consumer health products in the United
States and internationally. Visit the Rexall Sundown web site at
http://www.rexallsundown.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, 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
1998 1997 1998 1997
Net sales $150,979 $75,018 101.3% $377,188 $202,044 86.7%
Cost of sales 65,197 28,485 128.9% 157,551 78,286 101.3%
Gross profit 85,782 46,533 84.3% 219,637 123,758 77.5%
Selling, general
and administrative
expenses 55,920 32,935 69.8% 145,488 86,288 68.6%
Operating income 29,862 13,598 119.6% 74,149 37,470 97.9%
Other income, net 1,109 976 13.6% 3,185 2,858 11.4%
Income before
income tax
provision 30,971 14,574 112.5% 77,334 40,328 91.8%
Income tax
provision 11,591 4,862 138.4% 27,781 14,052 97.7%
Net income $19,380 $9,712 99.5% $49,553 $26,276 88.6%
Pro forma net
income $19,380 9,539 103.2% $48,611 $25,794 88.5%
Pro forma income
per common share:
Basic $0.27 $0.14 $0.69 $0.38
Diluted $0.26 $0.13 $0.66 $0.37
Weighted average
common shares
outstanding:
Basic 71,372 69,638 70,950 67,330
Diluted 74,180 71,558 73,621 69,678
(1) 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)
May 31, August 31,
1998 1997
ASSETS
Current assets:
Cash and marketable securities $99,591 $106,772
Trade accounts receivable, net 45,548 28,494
Inventory 74,923 42,739
Other current assets 12,723 11,297
Total current assets 232,785 189,302
Property, plant and equipment, net 53,253 34,372
Other assets 12,230 12,620
Total assets $298,268 $236,294
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $39,317 $39,143
Long-term debt and other liabilities 554 449
Shareholders' equity 258,397 196,702
Total liabilities and shareholders' equity $298,268 $236,294
SOURCE Rexall Sundown, Inc.
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Related links:
http://www.rexallsundown.com
CONTACT:
Geary Cotton, Chief Financial Officer of
Rexall Sundown, Inc., 561-241-9400; or General Information, Karen
Griffiths, or Analyst Information, Lynn Sawyer-Landau,
212-661-8030, both of The Financial Relations Board
NOTE TO EDITORS: To receive additional information on Rexall
Sundown, Inc., via fax, at no charge, dial 1-800-PRO-INFO and
enter code RXSD.
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