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REXALL SUNDOWN FY 1993 SALES ADVANCE 25.5% TO $ 93.1 MIL.

This article was originally published in The Tan Sheet

Executive Summary

REXALL SUNDOWN FY 1993 SALES ADVANCE 25.5% TO $ 93.1 MIL. while pro forma net income more than doubled (up 145%) to $ 7.1 mil., the Fort Lauderdale, Fla.-based vitamin and OTC marketer said Oct. 27. In the company's fourth quarter ended Aug. 31, pro forma net income jumped 395% to $ 2.8 mil., boosted by a 29% sales gain to $ 26.1 mil. and a favorable comparison with the fourth quarter 1992 when Rexall took a one-time charge as a result of the Phar-Mor bankruptcy filing. "The fourth-quarter and full-year results reflect solid sales gains across all channels of distribution -- sales to retailers, mail order and direct sales," Rexall Sundown Chairman and CEO Carl DeSantis said. Profit margins "continued to trend up in all business segments," he added, specifically citing the company's independent distribution business, Rexall Showcase, which "achieved profitability for the first time earlier this year." "Looking forward into 1994," DeSantis said, "we expect to see a continuation of the strength in our core business segments." However, he cautioned: "Over the short term, we expect some of those gains to be partially offset by some strategic moves we have recently initiated," including Rexall's recent acquisition of Pennex Products ("The Tan Sheet" Aug. 16, p. 19). DeSantis reiterated that the company does "not expect Pennex to achieve profitability until some time toward the end of 1994." He also predicted that there will be "some additional costs" associated with the start-up of the company's vitamin manufacturing plant in Boca Raton. Rexall is predicting that the vitamin plant will be up and running during the third quarter of fiscal 1994, which would be next spring. Reporting third-quarter 1993 financials, Herbalife announced that retail sales were ahead 49% to $ 171.2 mil. The company, which distributes its products through a network of independent distributors, noted that not sales grew 48.5% in the third quarter to $ 90.3 mil. For the nine months, Herbalife retail sales jumped 79% to $ 508.6 mil. while net sales kept pace, advancing 78% to $ 268.2 mil. Net income for the third quarter doubled to $ 11 mil. while nine-month net earnings were ahead over 120% to $ 31.2 mil. Herbalife reported that during the third quarter, "retail sales throughout Europe, North America and the Asia/Pacific Rim continued to be strong, with Europe accounting for the largest percentage of total retail sales at 51%." The North American market, which contributed 46% of total retail sales in the quarter, "continues to benefit from the broad acceptance of the company's Thermojetics products," Herbalife declared. Thermojetics is an herbal tablet-based weight control system that has been marketed in the U.S. since May 1992. Chart omitted.

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