Natrol Reports First Quarter Earnings
15/May/2003
Natrol, Inc. (NASDAQ: NTOL - news) today announced financial results for the quarter ended March 31, 2003.
CHATSWORTH, Calif. - (BUSINESS WIRE) -- May 15, 2003 - Natrol, Inc. (NASDAQ: NTOL - news) today announced financial results for the quarter ended March 31, 2003.
The Company recorded a net loss of $124,000 or $(0.01) per share for the quarter ended March 31, 2003 as compared to net income before cumulative effect of change in accounting principle of $121,000 or $0.01 per share in the quarter ended March 31, 2002. During the first quarter of 2002, the Company implemented Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" which resulted in a one-time expense of $6.8 million net of income tax benefits of $4.1 million.
Revenue increased 9.3%, or $1.6 million, to $19.1 million for the three months ended March 31,2003 from $17.5million for the three months ended March 31, 2002.
"The absolute bottom line does not tell the entire story," said Elliott Balbert, Natrol's Chairman and Chief Executive Office when making the earnings announcement. "On a segment basis, Natrol invested in the launch of Annasa, our multi-level marketing business. This investment reduced overall operating earnings by $509,000 and consolidated net income by $312,000 after accounting for tax benefits caused by the loss. Another positive sign for our business is a reduction in the amount of returns received. During the first quarter of 2003, returns as a percentage of gross sales were 3.7% as compared to 14.5% in the first quarter of 2002. From a macro-level, while we are not yet able to point ahead to desired rates of profitability, we are seeing positive indicators that we hope will result in stable and improving financial performance."
The statements made in this press release which are not historical facts including statements regarding expectations for future growth of revenue and profits and trends concerning net sales, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. As a result of a number of factors, including the factors described above that Natrol may not currently foresee, Natrol's actual results could differ materially from those set forth in the forward-looking statements. Certain factors that might cause Natrol's actual results to differ materially from those set forth in the forward-looking statements include adverse trends in the dietary supplements industry, intense competition, adverse effects of unfavorable publicity regarding particular products or the Companyâs industry generally, the Company's dependence on the introduction of successful new products, the Company's ability to gain market share and shelf space in each of its distribution channels, the Company experiencing high rates of product returns, and adverse government regulation, as well as those factors set forth under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2002 and in the Company's other filings with Securities and Exchange Commission.
Contact:
Natrol Inc., Chatsworth
Dennis Jolicoeur, (818) 739-6000
Natrol, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share and per share data)
(unaudited)
March 31
2003
Assets
Current assets:
Cash and cash equivalents $8,865
Accounts receivable, net of allowances
of $464 and $409 at March 31, 2003 and
December 31, 2002, respectively 8,419
Inventory 8,545
Income taxes receivable 79
Deferred income taxes 665
Prepaid expenses and other current assets 1,433
______
Total current assets 28,006
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Property and equipment:
Building and improvements 15,607
Machinery and equipment 5,067
Furniture and office equipment 3,072
______
23,746
Accumulated depreciation and amortization (6,240)
______
17,506
Deferred income taxes 3,853
Goodwill, net of accumulated amortization
and impairment charge of $37,381 at
March 31, 2003 and December 31, 2002, respectively 4,026
Other assets 43
______
Total assets $53,434
======
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $5,743
Accrued expenses 2,518
Accrued payroll and related liabilities 628
Income taxes payable -
Current portion of long-term debt 267
______
Total current liabilities 9,156
______
Long-term debt, less current portion 7,736
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
Outstanding shares-13,798,720 and 13,788,720 at
March 31,2003 and December 31, 2002, respectively 138
Additional paid?in capital 62,020
Accumulated deficit (22,735)
______
39,423
Shares held in treasury, at cost-921,900
shares at March 31, 2003 and December 31, 2002 (2,881)
______
Total stockholders' equity 36,542
______
Total liabilities and stockholders' equity $53,434
Natrol, Inc. and SubsidiariesContact:
Consolidated Statements of Operations
(In thousands, except share and per share data)
Quarter March 31,
Ended 2002
2003
(unaudited)
(as restated)
Net sales $19,167 $17,539
Cost of goods sold 10,904 10,960
______ ______
Gross profit 8,263 6,579
______ ______
Selling and marketing expenses 5,319 3,886
General and administrative expenses 2,997 2,344
______ ______
Total operating expenses 8,316 6,230
______ ______
Operating income (loss) (53) 349
Interest income 10 19
Interest expense (162) (170)
______ ______
Income (loss) before income tax provision
(benefit) and cumulative effect of accounting
change (205) 198
Income tax provision (benefit) (81) 77
______ ______
Income (loss) before cumulative effect of change
in accounting principle (124) 121
Cumulative effect of change in accounting
principle, net of income tax benefit of $4,139 (6,819)
Net loss $(124) $(6,698)
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Income (loss) per share:
Income (loss) per share before cumulative effect
of change in accounting principle $(0.01) $0.01
Income (loss) per share attributable to
cumulative effect of change in accounting
principle - (0.53)
Loss per share $(0.01) $(0.52)
======= =======
Weighted-average shares outstanding--basic
and diluted 12,870,598 12,833,913
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Natrol Inc., Chatsworth
Dennis Jolicoeur, (818) 739-6000