BOCA RATON, Fla., Dec. 15 /PRNewswire/ -- Rexall Sundown, Inc.
(Nasdaq: RXSD) today announced results for its first quarter ended November
30, 1999.
Net sales for the first quarter were $142.1 million, reflecting an
increase of 16% over the $122.1 million reported in the first quarter of
fiscal 1999. Net income was $11.7 million for the three months just ended,
essentially even with the $11.8 million reported in last year's first quarter.
Earnings per share for the first quarter of $0.18 increased 11% from $0.16 in
the first quarter of last year, reflecting the positive impact from our share
repurchase program.
In making the announcement, Damon DeSantis, the Company's President and
Chief Executive Officer, stated, "Both revenue and earnings per share posted
double digit gains over fiscal 1999 and the gain in revenues primarily
reflected the success of our initiatives to introduce meaningful new products
while expanding our distribution across additional segments within the
nutrition industry." Sales to retailers rose 28% and sales of Rexall Showcase
International, the Company's direct sales division, decreased 2% during the
quarter.
The significant increase in sales to retailers was driven by the
introduction of Metab-O-Lite, a unique diet and energy supplement. DeSantis
added, "Our ability to quickly identify and capitalize on opportunities and
consumer trends in the marketplace coupled with our product development and
marketing strength was once again demonstrated as Metab-O-Lite quickly became
the #1 selling product at retail in the diet tablet category, with a 23
percent share of the market."
Sales of Rexall Showcase were lower than expected in its U.S. business
primarily reflecting softness in the overall domestic direct selling industry.
DeSantis said, "We have numerous efforts underway, led by a significant
expansion of our use of the Internet as part of a broad strategic plan to
strengthen our domestic and international sales both in the near and long
term." These and other initiatives will be introduced to the distributor
force at the Rexall Showcase February corporate conference to be held in
Washington D.C.
Operating profit increased 5% to $18.3 million, from $17.4 million last
year, reflecting the favorable impact of higher retail sales. As a percent of
sales, operating margins declined to 12.8% as additional fixed costs
associated with the recent expansion of the Rexall Showcase business into
Japan and Taiwan were not absorbed in the current period. DeSantis said, "We
expect that our fixed expenses will come in line as sales attain targeted
levels."
The Company's initiatives to accelerate its growth rates and expand its
brand portfolio include the planned introduction of a line of Pokemon(TM)
children's vitamins and expansion into functional food bars under the Metab-O-
Lite and Ultra Chroma Slim(R) brands. This strategy is being further
augmented with an aggressive move towards e-commerce for the Rexall Showcase
division.
"We are also extremely excited about our recent announcement of the
planned acquisition of MET-Rx Nutrition, Inc., a recognized leader in the
sports nutrition and bar categories. The acquisition of MET-Rx will help
complement our strategy to diversify into new delivery forms, new categories
and strengthen our distribution in the health and natural food channel. MET-
Rx's business philosophy of developing leading edge, science-based products
with strong brand name recognition is consistent with that of Rexall Sundown."
In conclusion DeSantis stated, "We are optimistic with regard to the
outlook for both the industry and our company for the balance of this fiscal
year and beyond. The numerous initiatives we have underway all support our
strategy to diversify into new categories and delivery forms, expand and
strengthen our channels of distribution and further increase brand awareness
with the consumer."
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 and 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 represent 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 the Company's direct sales division,
Rexall Showcase International, 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 %
November 30, Increase
1999 1998 (Decrease)
Net sales $142,098 $122,064 16.4%
Cost of sales 62,465 53,168 17.5%
Gross profit 79,633 68,896 15.6%
Selling, general and
administrative expenses 61,383 51,450 19.3%
Operating income 18,250 17,446 4.6%
Other income, net 488 1,271 (61.6%)
Income before income
tax provision 18,738 18,717 0.1%
Income tax provision 7,045 6,963 1.2%
Net income $11,693 $11,754 (0.5%)
Income per common share:
Basic $0.18 $0.16
Diluted $0.18 $0.16
Weighted average common
shares outstanding:
Basic 64,434 71,321
Diluted 65,123 72,591
REXALL SUNDOWN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
November 30, August 31,
1999 1999
ASSETS
Current assets:
Cash and marketable securities $18,568 $2,124
Trade accounts receivable, net 64,563 71,332
Inventory 113,668 114,861
Other current assets 24,340 23,469
Total current assets 221,139 211,786
Property, plant and equipment, net 68,769 69,274
Other assets 15,376 14,291
Total assets $305,284 $295,351
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $29,079 $24,381
Accrued expenses and other
current liabilities 32,954 24,280
Short-term debt - 15,000
Current liabilities 62,033 63,661
Other liabilities 568 722
Shareholders' equity 242,683 230,968
Total liabilities and
shareholders' equity $305,284 $295,351
SOURCE Rexall Sundown, Inc.
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Related links:
http://www.rexallshowcase.com
CONTACT:
Investors, Donna Conners, or Press, Carol
Walters, 561-241-9400, both of Rexall Sundown; or General
Information, Karen Griffiths, or Analyst Information, Vanessa
Schwartz, 212-661-8030, both of The Financial Relations
Board-BSMG
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