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."
This release contains, within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, forward-looking statements that are based on management's beliefs and assumptions, current expectations, estimates and projections. Many of the factors that will determine the Company's financial results are beyond the ability of the Company to control or predict. These statements are subject to risks and uncertainties and therefore actual results may differ materially. The Company disclaims any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise. Important factors and risks that may affect future results are described in the Company's filings with the Securities and Exchange Commission.