BOCA RATON, Fla., Dec. 16 /PRNewswire/ -- Rexall Sundown, Inc.
(Nasdaq: RXSD) announced today results for its fiscal first quarter ended
November 30, 1998.
Net sales for the first quarter were $123.6 million, reflecting an
increase of 12% over the $110.7 million reported in the first quarter of 1998.
Net income of $11.8 million for the three months just ended declined
$2.8 million, or 19%, compared to last year's pro forma first quarter.
Diluted earnings per share for the first quarter were $0.16 compared to $0.20
reported in the first quarter last year, reflecting a 20% decline.
In making the announcement, Damon DeSantis, the Company's President,
stated, "As previously indicated in the Company's November 5th press release,
due to slower industry growth, which precipitated many retailers to re-align
their inventory positions and order patterns, the Company's net sales growth
was expected to slow." These lower sales levels, coupled with increased
infrastructure investment to meet future growth expectations, adversely
impacted the Company's margins in the first quarter. "The industry and the
Company experienced unparalleled growth last year. Now, we find ourselves,
along with the industry, in what we believe to be a temporary slow down.
However, one thing is clear; our resolution and commitment to strengthening
our competitiveness and making the right decisions for the long term are
stronger today than they have ever been," Mr. DeSantis added.
In the most recent quarter, Rexall Showcase sales increased 15%, while
sales to retail customers increased 11% compared to the first quarter of 1998.
Mr. DeSantis said, "Our fundamentals are very much intact as we experienced
continued growth in Rexall Showcase and further expanded our global reach with
the opening of our Taiwan operation." The Company's Sundown(R) brand of both
herbals and vitamins continued to be the number one brand in food, drug and
mass and Osteo Bi-Flex(TM) remained the number two supplement in the country.
For the 13 week period ended October 25, 1998, the Company's market share in
the food, drug and mass channel increased to 12.6%, up 3.6 points from the
comparable period in the prior year. Sequentially, the Company's current
market share was up 0.4 points from the prior 13 week period ended
July 28, 1998.
The Company also reported that it had repurchased approximately
3.5 million shares of its previously announced $100 million share repurchase
program, representing approximately 5% of the Company's outstanding stock.
Chris Nast, the Company's Chief Executive Officer said, "We believe the stock
is a very attractive investment and the repurchase program provides immediate
accretion and value to our shareholders." The Company believes it is well
positioned for future success and it remains confident in the long-term
fundamentals of the nutritional industry. "Our actions and strategy
continuously demonstrate the mindset of the industry leader, with
determination to stay focused on creating value for our customers, our
consumers and shareholders," Mr. Nast 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, 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
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended %
November 30, Increase
1998 1997 (Decrease)
Net sales $123,550 $110,720 11.6%
Cost of sales 53,168 44,195 20.3%
Gross profit 70,382 66,525 5.8%
Selling, general and
administrative expenses 52,936 44,629 18.6%
Operating income 17,446 21,896 (20.3%)
Other income, net 1,271 1,115 14.0%
Income before income tax
provision 18,717 23,011 (18.7%)
Income tax provision 6,963 7,806 (10.8%)
Net income $11,754 $15,205 (22.7%)
Pro forma net income (a) $11,754 14,543 (19.2%)
Pro forma income per common share:
Basic $0.16 $0.21
Diluted $0.16 $0.20
Weighted average common shares
outstanding:
Basic 71,321 70,430
Diluted 72,591 72,796
(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)
(Unaudited)
November 30, August 31,
1998 1998
ASSETS
Current assets:
Cash and marketable securities $76,299 $119,394
Trade accounts receivable, net 51,030 60,805
Inventory 85,836 77,727
Other current assets 12,517 11,630
Total current assets 225,682 269,556
Property, plant and equipment, net 60,064 56,697
Other assets 15,405 13,105
Total assets $301,151 $339,358
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 49,800 $48,913
Other liabilities 384 384
Shareholders' equity 250,967 290,061
Total liabilities and shareholders' equity $301,151 $339,358
SOURCE Rexall Sundown, Inc.
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Related links:
http://www.rexallshowcase.com
CONTACT:
Geary Cotton, Chief Financial Officer, or
Carol Walters, Manager Corporate Communications, both of Rexall
Sundown, Inc., 561-241-9400; or Karen Griffiths or Lynn
Sawyer-Landau, both of The Financial Relations Board,
212-661-8030
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