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MENLEY-JAMES GARFIELD CHILDREN'S VITAMINS ACHIEVE 8% MARKETSHARE

This article was originally published in The Tan Sheet

Executive Summary

MENLEY-JAMES GARFIELD CHILDREN'S VITAMINS ACHIEVE 8% MARKETSHARE in less than a year since the fall 1992 introduction of the line, the Horsham, Penn. company noted in its sales and earnings report for the 1993 second quarter. Menley-James began shipping to mass merchandisers, including Kmart and Target, during the first quarter of 1993. The company also has announced plans to extend the Garfield line into the children's shampoo and sunscreen segments. Despite the market inroads by the Garfield line, second quarter sales declined 9.4% to $ 6.1 mil. Menley-James President and CEO Larry White stated that "results for the second quarter were below expectations as solid gains in our key brands did not offset declines in our secondary brands." In addition to Garfield's market growth, White noted that "sales of HOLD were up strongly in the quarter, reflecting the effectiveness of strong new marketing programs." The Menley-James exec reported that "sale of Serutan . . . were also up significantly," and attributed the success to "strong new distribution gains" resulting from increased physician sampling. In January, Menley-James announced a marketing agreement with Kabi Pharmacia that would increase the sales force detailing of the product tenfold. Menley-James estimated that detail calls will total approximately 50,000 by year's end. Menley-James posted a net loss for the three-month period ended June 30 of $ 813,000, including the non-recurring effect of $ 1.6 mil. pre-tax expense for the settlement of litigation, the company said. Income from operations declined 39% to $ 507,000. (See sales and earnings chart on following page.) Net earnings for the first half of 1993 were $ 1.05 mil., up 17.7%. The first half net income figure includes a one-time gain of $ 1.9 mil. from an accounting change related to deferred tax assets. Sales for the six month period were flat compared with the same period in 1992 at $ 12.3 mil. White cautioned that full-year results are now anticipated to be below the company's earlier expectations. "Among the factors contributing to these lower expectations are: our recognition that the total market for children's multivitamins is smaller than had been estimated by earlier independent market research and increased levels of sales erosion in the company's secondary brands," he said. Menley-James currently manufactures and markets 33 OTC and toiletry products, including Ornex cold medication, A.R.M. allergy medication, Femiron multivitamins, and Rose Milk skin care cream. chart omitted.
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