OKLAHOMA CITY, OK, Apr 02, 2007 (MARKET WIRE via COMTEX) -- AMS Health Sciences, Inc. (AMM) today announced efforts from a far-reaching, nine-step strategic plan implemented in 2006 have helped to generate a 7.3% increase in net sales for the fourth quarter of 2006 over the same period in 2005. In addition, gross profit for the fiscal year 2006 improved to $3.2 million even though sales were $3 million less from fiscal year 2005.
"In the summer of 2006, the management of AMS Health Sciences embarked on an ambitious plan to return the Company to greater operating efficiency and profitability," said AMS President and Chief Executive Officer, Dr. Jerry Grizzle. "Our focus on operations, plus our increased investment in more sophisticated marketing, branding and packaging -- as evident through our new Saba(TM) division and sabaforlife.com website -- has generated tremendous enthusiasm among our associates. It took hard decisions, as well as a strong commitment from our employees, but we are showing steady and deliberate progress on all lines of our financial statements."
Sales for the fourth quarter of 2006 were $2.6 million, an increase of $176,836, or 7.3%, over the same period in 2005. Gross profit for the quarter was $620,927 compared to $614,172 in 2005, an increase of 1.1%, due to year end inventory adjustments. In addition, loss from ongoing operations before interest and taxes improved by 8.1% over the same period in 2005.
Some of the noteworthy, positive performance trends for the fourth quarter included:
-- Employee costs declined 56% over the same period in 2005;
-- Travel expense declined 77%;
-- Vehicle expense declined 43%;
-- Building expense declined 50%; and
-- Bad debt expense declined 100%.
Dr. Grizzle said while sales for 2006 were $9.7 million -- a decrease of $2.9 million over 2005 -- gross profit increased to $3.2 million, an improvement of $129,395, or 4.2%. Net loss for 2006 was $2.2 million, or $0.28 per common diluted share, on 8.0 million shares outstanding, compared to net loss of $3.8 million, or $0.52 per common diluted share, on 7.3 million shares outstanding in the year 2005. Included in the total net loss, was a loss of $812,272 for the Heartland Cup subsidiary, as compared to a loss of $611,807 for the year 2005. According to Dr. Grizzle, the Company leased Heartland Cup in November 2006 to a foam products manufacturer, and as a result, will show little financial impact from the subsidiary on a go-forward basis.
Cash and cash equivalents at December 31, 2006 totaled $1.1 million, compared to $396,936 at December 31, 2005. Shareholders' equity at December 31, 2006 was $2.1 million. While the Company reported a loss for the year, there are several positive trends to note:
-- Gross profit increased 4.2% on a sales decrease of 23.2%;
-- Cost of goods sold as a percentage of net sales improved 8.7% over
-- Operating loss posted a 68.0% improvement over fiscal 2005; and
-- Net loss, including discontinued operations, improved 41.2% over 2005.
Positive trends related to distribution and administrative expenses compared to 2005 include:
-- Employee costs improved 55.6%;
-- Travel expense decreased 58.3%;
-- Vehicle expense improved 72.2%;
-- Building expense decreased 77.8%; and
-- Bad debt expense improved 100%.
In addition to the above, there were approximately $500,000 of administrative expenses that were one-time charges, and will not recur in 2007.
The positive trends continue as the Company recorded an increase in new associates of 402 in January 2007, or 124% increase from January 2006, while monthly auto-shipments increased by 1,160, or 15% from January 2006. In February 2007, new associates grew by 298, or 75% over February 2006, while monthly auto-shipments increased by 1,148 or 14.9%, over February 2006.
"I believe these trends, along with the successful launch of the new Saba(TM) division in February 2007, have AMS Health Sciences poised to make 2007 one of the best years in our Company's history," said Dr. Grizzle.
AMS Health Sciences, Inc. sells more than 60 natural nutritional supplements, weight management products, and natural skincare products through independent distributors across the U.S. and Canada. More information about the Company is available at http://www.amsonline.com. For more information on its new Saba(TM) division, visit www.sabaforlife.com.
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that represent the Company's current expectations and beliefs, including, among other things: (i) expectations regarding the positive impact of certain strategic initiatives to contain costs and increase sales; and (ii) the Company's plans regarding the rollout of its new Saba product line. The forward-looking statements and related assumptions involve risks and uncertainties that could cause actual results and outcomes to differ materially from any forward-looking statements of views expressed herein. These risks and uncertainties include, but are not limited to: (a) material decreases in active associates, or the Company's failure to execute its strategic initiatives; (b) regulatory risks associated with the Company's nutritional supplements, which could adversely affect the Company if regulatory scrutiny dampens enthusiasm or the ability of the Company or its associates to effectively market its products; (c) any failure of current or planned initiatives or products, including, among others, the introduction of the Saba line of nutritional supplements to generate interest among associates and customers and generate sponsoring and selling activities on a sustained basis; (d) any inability of the Company to obtain necessary product registrations for its nutritional and personal care products in a timely manner; (e) adverse publicity related to the Company's business, products or industry; and (f) continued competitive pressures in the Company's markets. The Company's financial performance and the forward-looking statements contained herein are further qualified by a detailed discussion of associated risks set forth in the documents filed by the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-KSB. The forward-looking statements set forth the Company's beliefs as of the date of this release, and the Company assumes no duty to update the forward-looking statements contained in this release to reflect any change.