BOCA RATON, Fla., March 19 /PRNewswire/ -- Rexall Sundown, Inc.
(Nasdaq: RXSD) today announced record sales and earnings for the three months
ended February 28, 1998.
Net sales for the second quarter rose 78% to $115.5 million from
$64.9 million for the same period in fiscal 1997. Pro forma net income for
the three months just ended increased 67% to $14.7 million from $8.8 million
in last year's second quarter. Pro forma net income reflects a pro forma tax
provision for Richardson Labs, Inc. ("Richardson") for periods prior to the
acquisition of Richardson as Richardson was an S Corporation and was not
subject to corporate income taxes. Pro forma diluted earnings per share for
the second quarter were $0.20 compared to $0.12 in the second quarter last
year. Results for the second quarter of fiscal 1998 include expenses related
to the Richardson acquisition of approximately $2.5 million.
Chris Nast, the Company's Chief Executive Officer, stated, "Sales growth
momentum remains strong in each of our divisions and resulted in another
outstanding record quarter. Sales to Retailers rose 95% compared to the same
period last year, and Rexall Showcase International, the Company's Direct
Sales division, posted a strong sales gain of 61% compared to the prior year's
quarter.
"Osteo Bi-Flex(TM) remains the third best selling nutritional supplement
in the country. In addition, we continue to see exceptional demand for the
entire line of Sundown(R) herbals which is presently the number one selling
herbal line in the total U.S. food, drug and mass markets," Mr. Nast said.
Operating income for the second quarter of fiscal 1998 was $22.4 million,
or 19.4% of sales, compared to operating income of $12.5 million, or 19.3% of
sales, recorded in last year's second quarter. Acquisition related expenses
of the Richardson transaction reduced operating income as a percentage of
sales in the second quarter of fiscal 1998 by 2.2 percentage points.
Results for the quarter ended February 28, 1998 reflect a full three month
contribution from Richardson, which was acquired by Rexall Sundown at the end
of January 1998 in a transaction structured as a pooling of interests. In
addition, the Company's results for all prior periods have been restated to
include Richardson's results. Mr. Nast said, "As we continue to integrate
Richardson's operations and more fully begin to realize synergies, we expect
Richardson's contribution to overall profitability to increase."
For the six months ended February 28, 1998, net sales increased 78% to
$226.2 million from $127.0 million in the first six months of the previous
year. Pro forma net income for the period rose 80% to $29.2 million from
$16.3 million in the first half of fiscal 1997. Pro forma diluted earnings
per share for the most recent six month period were $0.40 compared to $0.23 in
the same period a year ago.
Nast also announced the retirement of Dean DeSantis, the Company's Chief
Operating Officer. "Throughout his career with the Company, Dean has
demonstrated a keen understanding of the business and has been a key
contributor to the overall success the Company now enjoys. Operational
efficiencies have never been stronger and productivity is at its highest
level. Our future capacity requirements have also been enhanced with the
recent start of operations at our new packaging facility, which more than
doubled our tablet manufacturing and packaging operations. Since solidifying
his plans to leave the Company to pursue other interests, Dean has been
focused on providing a smooth and orderly transition of his responsibilities
and has strengthened operational areas with key management appointments," Nast
said. Nast also noted that until a successor is named, he will assume the
responsibilities of Chief Operating Officer. Dean DeSantis will continue to
serve as a Director of the Company and will be available to assist and advise
the Company on an on-going basis.
Carl DeSantis, Chairman of the Board, said, "The Company continues to have
strong momentum and is clearly executing its strategic plan. In this last
quarter we have completed the Richardson acquisition, and we continue to
actively pursue other acquisitions as part of our ongoing business plan. With
continued 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 continue our leadership role in the industry."
Rexall Sundown, Inc. develops, manufactures and distributes vitamins,
nutritional supplements and other consumer health products. Visit the Rexall
Sundown website at http://www.rexallsundown.com.
Forward-looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to certain risks and
uncertainties detailed 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 %
February 28, Increase
1998 1997 (Decrease)
Net sales $115,489 $64,948 77.8%
Cost of sales 48,159 25,690 87.5%
Gross profit 67,330 39,258 71.5%
Selling, general and
administrative
expenses 44,939 26,736 68.1%
Operating income 22,391 12,522 78.8%
Other income, net 961 1,347 (28.7%)
Income before income
tax provision 23,352 13,869 68.4%
Income tax provision 8,384 4,936 69.9%
Net income $14,968 $8,933 67.6%
Pro forma net income $14,688 $8,780 67.3%
Pro forma income per
common share:
Basic $0.21 $0.13
Diluted $0.20 $0.12
Weighted average common
shares outstanding:
Basic 71,046 69,350
Diluted 73,888 71,626
Six Months Ended %
February 28, Increase
1998 1997 (Decrease)
Net sales $226,209 $127,026 78.1%
Cost of sales 92,354 49,801 85.4%
Gross profit 133,855 77,225 73.3%
Selling, general and
administrative
expenses 89,568 53,353 67.9%
Operating income 44,287 23,872 85.5%
Other income, net 2,076 1,882 10.3%
Income before income
tax provision 46,363 25,754 80.0%
Income tax provision 16,190 9,190 76.2%
Net income $30,173 $16,564 82.2%
Pro forma net income $29,231 $16,255 79.8%
Pro forma income per
common share:
Basic $0.41 $0.24
Diluted $0.40 $0.23
Weighted average common
shares outstanding:
Basic 70,738 67,330
Diluted 73,342 69,678
REXALL SUNDOWN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
February 28, August 31,
1998 1997
ASSETS
Current assets:
Cash and marketable securities $91,677 $106,771
Trade accounts receivable, net 48,058 28,494
Inventory 73,136 42,739
Other current assets 13,135 11,166
Total current assets 226,006 189,170
Property, plant and equipment, net 49,946 34,373
Other assets 13,680 12,620
Total assets $289,632 $236,163
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $51,615 $39,028
Long-term debt and other liabilities 480 449
Shareholders' equity 237,537 196,686
Total liabilities and
shareholders' equity $289,632 $236,163
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 Karen Griffiths, General
Information, of Lynn Sawyer-Landau, Analyst Information,
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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