Natrol Reports 2002 Earnings
31/Mar/2003
Natrol, Inc. (NASDAQ: NTOL) today announced its results for the fourth quarter and year ended December 31, 2002.
CHATSWORTH, Calif.--(BUSINESS WIRE )--March 31, 2003 - Natrol, Inc. (NASDAQ: NTOL) today announced its results for the fourth quarter and year ended December 31, 2002.
For the year ended December 31, 2002, the Company reported operating income of $1.8 million and net income, before the cumulative effect of accounting changes of $693,000 or $0.05 per share. During 2002, the Company adopted Statement of Financial Accounting Standard ("SFAS") No. 142, "Goodwill and Other Intangible Assets." In adopting SFAS No. 142, the Company wrote off $11.0 million of its goodwill from prior acquisitions which, net of tax, caused the Company to incur a $6.8 million charge to earnings. The result of this cumulative effect of the accounting change is a net loss of $6.1 million or ($0.48) per share for the year ended December 31, 2002.
Sales for the year ended December 31, 2002 amounted to $70.3 million versus $71.8 million of sales for the prior year. In 2001, the Company reported an operating loss of $19.0 million. However, $20 million of this operating loss was due to an impairment charge relative to goodwill recorded as a result of the Company's acquisition of Prolab Nutrition, Inc. in 1998. Before this impairment charge, operating earnings would have been $1.0 million. The net loss for the year ended December 31, 2002 amounted to $20.3 million or ($1.59) per share.
For the quarter ended December 31, 2002, the Company recorded net revenue of $17.0 million, a 29% increase over last quarter of 2001 when the Company recorded net revenue of $13.1 million. Net income for the quarter ended December 31, 2002 amounted to $913,000 or $0.07 per share versus a loss of $23.0 million or ($1.79) per share in 2001.
"Natrol has always taken a conservative posture in its accounting practices," said Elliot Balbert, Natrol's Chairman and Chief Executive Officer, when making the announcement. "As business people, we believe that our prior acquisitions continue to be valuable. However, accounting practices have changed and those changes dictate that in today's marketplace, the goodwill on our books should be cut substantially. The charge to earnings was a non-cash event. For the year, we are pleased to announce positive operating earnings. Moreover, our operating earnings come after Natrol invested and expensed $1.1 million to prepare for its full 2003 launch of Annasa, our new multi-level marketing company."
"During 2002, our cash balance increased $4.6 million. We finished the year with in excess of $10 million on our books. Earning, before depreciation and amortization ($1.4 million), interest and taxes ("EBITDA") amounted to $3.2 million. Without the Annasa investment, EBITDA would have been $4.3 million. Our balance sheet remains strong. Net tangible assets amount to more than $2.50 per share at year-end. We feel that the strength of the final quarter of 2002 which showed a 29% increase in net revenue relative to the last quarter of 2001 to be a positive note. Our industry remains difficult, but we believe we have the resources to meet the challenges ahead and improve revenue and earnings as we move forward."
Contact:
Natrol Inc., Chatsworth
Dennis Jolicoeur, (818)739-6000
NATROL, INC.and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
December 31,
2002 2001
__________ _________
Assets
Current assets:
Cash and cash equivalents $10,077 $5,485
Accounts receivable, net of allowances
of $409 and $363 at December 31, 2002
and 2001, respectively 6,790 6,787
Inventory 8,669 9,743
Income taxes receivable 117 1,408
Deferred income taxes 665 1,324
Prepaid expenses and other current assets 1,452 1,826
__________ _________
Total current assets 27,770 26,573
Property and equipment:
Building and improvements 15,607 15,625
Machinery and equipment 5,067 5,708
Furniture and office equipment 3,003 2,019
__________ _________
23,677 23,352
Accumulated depreciation and amortization (5,867) (5,606)
__________ _________
17,810 17,746
Deferred income taxes, noncurrent 3,853
Goodwill, net of accumulated amortization and
impairment charge of $36,781 and $26,423
at December 31, 2002 and 2001, respectively 4,026 18,984
Other assets 39 54
__________ _________
Total assets $53,498 $59,357
========== =========
December 31,
2002 2001
__________ _________
Liabilities and stockholders' equity
Current liabilities:
Accounts payable 4,395 3,373
Accrued expenses 3,358 4,240
Accrued payroll and related liabilities 692 493
Income taxes payable 323 --
Current portion of long-term debt 301 277
__________ _________
Total current liabilities 9,069 8,383
Deferred income taxes, noncurrent 251
Long-term debt, less current portion 7,778 8,083
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value of $0.01 per share:
Authorized shares -- 2,000,000
Issued and outstanding shares -- none -- --
Common stock, par value of $0.01 per share:
Authorized shares -- 50,000,000
Issued and outstanding shares -- 13,787
and 13,712 at December 31, 2002
and 2001, respectively 138 137
Additional paid-in capital 62,005 61,869
Accumulated deficit (22,611) (16,485)
__________ _________
39,532 45,521
Shares held in treasury, at cost -- 921,900
shares at September 30, 2002 and December 31,
2001 (2,881) (2,881)
__________ _________
Total stockholders' equity 36,651 42,640
__________ _________
Total liabilities and stockholders' equity $53,498 $59,357
========== =========
NATROL, INC.Contact:
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
Three months ended Year ended
December 31, December 31,
2002 2001 2002 2001
_______ _______ ________ ________
Net sales $16,928 $13,130 $70,331 $71,821
Cost of goods sold 8,987 9,307 41,727 42,989
_______ _______ ________ ________
Gross profit 7,941 3,823 28,604 28,832
Selling and marketing
expenses 4,662 6,135 17,420 18,103
General and
administrative expenses 1,584 1,545 9,407 9,746
Reduction in Goodwill 20,000 20,000
_______ _______ ________ ________
Total operating expenses 6,246 27,680 26,827 47,849
_______ _______ ________ ________
Operating income (loss) 1,695 (23,857) 1,777 (19,017)
_______ _______ ________ ________
Interest income 18 23 87 149
Interest expense (221) (251) (731) (885)
_______ _______ ________ ________
Income (loss) before
income tax (benefit) and
cumulative effect of
accounting change 1,492 (24,085) 1,133 (19,753)
Income tax provision (benefit) 579 (1,120) 440 587
_______ _______ ________ ________
Income (loss) before
cumulative erffect of
accounting change $913 $(22,965) $693 $(20,340)
Cumulative effect of
accounting change net
of income tax
benefit of $4,139 (6,819)
Net Income (loss) $913 $(22,965) $(6,126) $(20,340)
======== ======== ======== =========
Basic and dilutive earnings
(loss) per share before
cumulative effect of change
in accounting principle $ 0.07 $(1.79) $0.05 $(1.59)
Earnings (loss) per share,
basic and dilutive after
cumualtive effect of change
in accounting principle $ 0.07 $(1.79) $(.48) $(1.59)
Weighted average shares
outstanding basic and
dilutive 12,866 12,784 2,852 12,783
Natrol Inc., Chatsworth
Dennis Jolicoeur, (818) 739-6000