Fiscal Year Record Revenue Exceeds $530 Million
BOCA RATON, Fla., Oct. 7 /PRNewswire/ -- Rexall Sundown, Inc.
(Nasdaq: RXSD) announced today record results for the fourth quarter and
fiscal year ended August 31, 1998.
Net sales for the fourth quarter were $153.6 million, reflecting a 73%
increase over $88.6 million reported in the same period of the prior year.
Net income of $20.6 million for the three months just ended increased
$9.2 million, or 81%, compared to last year's pro forma fourth quarter.
Diluted earnings per share for the fourth quarter were $0.28 compared to $0.16
in the fourth quarter last year reflecting a 75% increase.
In making the announcement, Chris Nast, the Company's Chief Executive
Officer, stated, "We once again achieved outstanding revenue and net income
growth." Sales to retailers rose 99% and sales of Rexall Showcase
International, the Company's Direct Sales division, increased 42% compared to
the prior year's quarter. "More impressive is the fact that our fourth
quarter operating margins of 20.6 percent increased approximately 1.9 points,
compared to the fourth quarter of 1997, during a period where we more than
doubled our investment in advertising and product development," Mr. Nast
added.
For the fiscal year ended August 31, 1998, net sales increased 83% to
$530.7 million from $290.6 million the previous year. Mr. Nast said, "We
continue to achieve a substantially higher sales growth rate compared to the
overall nutritional industry reflecting our continued success at gaining new
distribution, broadening distribution within our existing accounts, expanding
our direct sales distributor base and introducing innovative new science-based
products." The Company's Osteo Bi-Flex(TM) brand has become the second
best-selling national brand supplement in the country and the Sundown(R)
vitamin and Sundown(R) herbal lines remain the number one selling brands in
both units and dollars in the total U.S. food, drug and mass markets.
Pro forma net income for the year ended August 31, 1998 rose 86% to
$69.2 million from $37.2 million in 1997. Diluted earnings per share for the
1998 fiscal year were $0.94, reflecting an increase of 77%, compared to $0.53
in 1997.
Carl DeSantis, Chairman of the Board, said, "1998 was a year of dramatic
sales and income growth for the Company supported by record performance
throughout the organization." The Company invested over $30 million in 1998,
upgrading its infrastructure through the installation of new manufacturing and
packaging equipment, a new enterprise-wide computer system and new
administrative facilities. "These investments coupled with the recently
authorized share repurchase program reflects our continued confidence in the
Company, its future growth potential and our positive outlook regarding the
long-term fundamentals of the vitamin and nutritional supplement industry.
Our employees and distributors, led by an experienced and expanded management
team, continue to exhibit an outstanding passion and an entrepreneurial spirit
that will help us not only maintain, but broaden, our leadership position in
the industry," Mr. DeSantis added.
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, 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)
Three Months Ended % Twelve Months Ended %
August 31, Increase August 31, Increase
(Unaudited)
1998 1997(Decrease) 1998 1997(Decrease)
Net sales $153,553 $88,579 73.4% $530,741 $290,623 82.6%
Cost of sales 65,680 35,389 85.6% 223,231 113,675 96.4%
Gross profit 87,873 53,190 65.2% 307,510 176,948 73.8%
Selling, general
and administrative
expenses 56,167 36,653 53.2% 201,655 122,941 64.0%
Operating income 31,706 16,537 91.7% 105,855 54,007 96.0%
Other income, net 1,214 1,197 1.4% 4,399 4,055 8.5%
Income before income
tax provision 32,920 17,734 85.6% 110,254 58,062 89.9%
Income tax
provision 12,297 5,540 122.0% 40,078 19,592 104.6%
Net income $20,623 $12,194 69.1% $70,176 $38,470 82.4%
Pro forma net
income (A) $20,623 $11,382 81.2% $69,234 $37,176 86.2%
Pro forma income
per common share:
Basic $0.29 $0.16 $0.97 $0.54
Diluted $0.28 $0.16 $0.94 $0.53
Weighted average
common shares
outstanding:
Basic 71,934 69,987 71,196 68,572
Diluted 74,229 72,257 73,773 70,792
(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)
August 31, August 31,
1998 1997
ASSETS
Current assets:
Cash and marketable securities $119,394 $106,772
Trade accounts receivable, net 60,805 28,494
Inventory 77,727 42,739
Other current assets 11,630 11,297
Total current assets 269,556 189,302
Property, plant and equipment, net 56,697 34,372
Other assets 13,105 12,620
Total assets $339,358 $236,294
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities $48,913 $39,143
Other liabilities 384 449
Shareholders' equity 290,061 196,702
Total liabilities and shareholders' equity $339,358 $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, 561-241-9400; or Karen Griffiths, General
Information, or Lynn Sawyer-Landau, Analyst Information,
212-661-8030, both of The Financial Relations Board
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