HealthRite rejects unsolicited offer for its retail and catalog business.

HEALTHRITE REJECTS OFFER FOR ITS RETAIL AND CATALOG BUSINESS from an undisclosed bidder, the firm announced Sept. 19. HealthRite Chair-man and CEO Warren Haber reported that the company "emphatically rejected" the unsolicited proposal to buy its VS retail and catalog operations.

HealthRite, formerly known as Vitamin Specialties, operates 18 retail stores in the Philadelphia area. The company also manufactures and sells Montana Naturals Big Sky, Pure Energy and Vitamin Specialties vitamins and dietary supplements. In addition, the company's Jason Pharmaceuticals subsidiary, acquired on Jan. 3 ("The Tan Sheet" Oct. 17, 1994, p. 15), manufactures and sells Medifast weight management and medical nutrition products through physicians and clinics. HealthRite said it changed its name in July "to reflect more accurately the range of activities and objectives of the company."

Haber said he was "particularly pleased" with the retail stores' performance in the last few weeks. HealthRite has nearly finished putting point-of-purchase equipment in the stores and expanding merchandise programs. The company's store expansion program, begun in 1994 with the addition of seven new stores, will resume in 1996, the firm said.

HealthRite second-quarter sales were $4.2 mil., up 77.8% from $2.3 mil. a year ago. In the first half, sales increased 73.7% to $8.2 mil. from $4.7 mil. Excluding $2.8 mil. in sales from Jason Pharmaceuticals, HealthRite sales rose 15%.

HealthRite posted net income of $157,000 in the three-month period ended June 30, compared to a $59,000 loss in the prior-year quarter. Net income in the first half reached $357,000, up significantly from $31,000 in net income reported in the first six months of 1994. The 1994 figures reflect expenses from the 1994 merger of Montana Naturals ("The Tan Sheet" May 2, 1994, p. 5) and discontinued operations.

Improved gross margins and a lower tax rate associated with a tax loss carryforward contributed to the increase in first-half 1995 net income, the firm said. However, partially offsetting the rise were increased expenses, primarily in the Vitamin Specialties division from the relocation of its administrative, bottling, warehousing and catalog operations to Jason's Owings Mills, Md. facility in May and June. Also affecting earnings were the seven newly opened stores, which are not yet generating profits, the firm said.