Fiscal Year Record Revenue Exceeds $595 Million
BOCA RATON, Fla., Sept. 29 /PRNewswire/ -- Rexall Sundown, Inc.
(Nasdaq: RXSD) announced results for its fourth quarter and fiscal year ended
August 31, 1999.
Net sales for the fourth quarter were $159.0 million, a 3.6% increase
over the $153.6 million recorded in the same period of the prior year. Net
income was $13.6 million for the three months just ended, a decrease of 34%
compared to the $20.6 million in last year's fourth quarter. Diluted earnings
per share for the fourth quarter of $0.21 decreased 25% from $0.28 in the
fourth quarter of last year. The decline in earnings per share was mitigated
by the positive impact of the Company's repurchase of its shares.
In making the announcement, Damon DeSantis, the Company's President and
Chief Executive Officer, stated, "Despite difficult comparisons against 1998,
we still experienced a sales increase in the fourth quarter." Sales to
retailers rose 4% and sales of Rexall Showcase International, the Company's
direct sales division, increased slightly during the quarter.
As a result of the costs related to the Company's ongoing commitment to
consumer advertising and product development, as well as the strengthening of
its overall infrastructure and expansion of the global operations of Rexall
Showcase, the Company experienced a decline in net income for the fourth
quarter. Mr. DeSantis said, "We view our increased spending related to
branding and our ability to timely commercialize new products as long-term
investments which are necessary to maintain and enhance our leadership
position and strengthen our competitive advantage in the maturing nutritional
products industry."
For the fiscal year ended August 31, 1999, net sales increased 12.2% to
$595.7 million from $530.7 million the previous year and net income of $60.1
million declined $9.2 million, or 13.2%, from the 1998 pro forma results of
$69.2 million. The Company increased its consumer advertising by over $18
million during fiscal 1999, more than doubling the 1998 spending level. The
Company was able to expand upon its leadership position in vitamins and
herbals, achieving record market share of 12.9% in the U.S. food, drug and
mass markets for the 52-week period ended August 22, 1999, an increase of 2
share points or 18% over 1998. For the same period, the Company's growth at
retail outpaced that of all other participants in the nutritional category,
contributing 34% of the total dollar growth of the entire category. Diluted
earnings per share for the 1999 fiscal year were $0.88, a decrease of 6.4%,
compared to $0.94 in 1998.
Damon DeSantis added, "1999 was a year in which the entire nutritional
industry had to adjust from the rapid growth of 1997 and 1998. Despite a slow
down in industry growth to single digits, we were able to achieve double-digit
top-line growth while we continued to invest for the future to ensure our
long-term dominance in the nutritional industry." In total, the Company
invested over $27 million in 1999 to strengthen its infrastructure through the
installation of new manufacturing and packaging equipment, by expanding
capacity and increasing the capabilities of its laboratories, and completing
the installation of a new enterprise-wide computer system to support the
global expansion of Rexall Showcase International. "These investments,
coupled with the planned retrofit of our manufacturing facility in fiscal
2000, will conclude a three-year program to broaden our global reach and
facilitate our future growth while we continue to deliver the highest quality
products, at the best value, to meet consumer needs," said Mr. DeSantis.
In conclusion Mr. DeSantis stated, "We believe strongly in the long-term
growth prospects for the nutritional industry and our Company and that the
aging demographics and desire to achieve a better quality of life 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
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended %
August 31, Increase
1999 1998 (Decrease)
Net sales $159,008 $153,553 3.6%
Cost of sales 69,639 65,680 6.0%
Gross profit 89,369 87,873 1.7%
Selling, general and
administrative expenses 67,744 56,167 20.6%
Operating
income 21,625 31,706 (31.8%)
Other income, net 101 1,214 (91.7%)
Income before income
tax provision 21,726 32,920 (34.0%)
Income tax provision 8,124 12,297 (33.9%)
Net income $13,602 $20,623 (34.0%)
Pro forma net income (A) $13,602 $20,623 (34.0%)
Pro forma income per
common share:
Basic $ 0.21 $0.29
Diluted $ 0.21 $0.28
Weighted average common
shares outstanding:
Basic 64,407 71,934
Diluted 65,462 74,229
Twelve Months Ended %
August 31, Increase
1999 1998 (Decrease)
Net sales $595,664 $530,741 12.2%
Cost of sales 258,777 223,231 15.9%
Gross profit 336,887 307,510 9.6%
Selling, general
and administrative expenses 243,550 201,655 20.8%
Operating
income 93,337 105,855 (11.8%)
Other income, net 2,438 4,399 (44.6%)
Income before income
tax provision 95,775 110,254 (13.1%)
Income tax provision 35,713 40,078 (10.9%)
Net income $60,062 $70,176 (14.4%)
Pro forma net income(A) $60,062 $69,234 (13.2%)
Pro forma income per
common share:
Basic $0.89 $0.97
Diluted $0.88 $0.94
Weighted average common
shares outstanding:
Basic 67,212 71,196
Diluted 68,564 73,773
(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.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
August 31, August 31,
1999 1998
ASSETS
Current assets:
Cash and marketable securities $2,124 $119,394
Trade accounts receivable, net 71,332 60,805
Inventory 114,861 77,727
Other current assets 23,469 11,630
Total current assets 211,786 269,556
Property, plant and
equipment, net 69,274 56,697
Other assets 14,291 13,105
Total assets $295,351 $339,358
LIABILITIES AND SHAREHOLDERS'EQUITY
Current liabilities:
Accounts payable $24,381 $21,653
Accrued expenses and
other current liabilities 24,280 27,260
Short-term debt 15,000 --
Total current liabilities 63,661 48,913
Other liabilities 722 384
Shareholders' equity 230,968 290,061
Total liabilities and shareholders' equity $295,351 $339,358
SOURCE Rexall Sundown
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Related links:
http://www.rexallshowcase.com
CONTACT:
Investors, Donna Conners, Director of
Financial Planning, Press, Carol Walters, Manager Corporate
Communications, both of Rexall Sundown, 561-241-9400; or General,
Karen Griffiths, or Analysts, Vanessa Schwartz of the Financial
Relations Board, 212-661-8030
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