BOHEMIA, N.Y., Jan. 23 -- NBTY, Inc. (Nasdaq: NBTY) (http://www.NBTY.com), a leading manufacturer and marketer of nutritional supplements, today announced results for the fiscal first quarter ended December 31, 2001.
For the first quarter ended December 31, 2001, net sales increased 29% to $215 million from net sales of $167 million for the first quarter last year. Net income for the first quarter increased to $11 million, or $0.17 per diluted share compared to net income of $639 thousand, or $0.01 per diluted share for the first quarter last year.
Results for the first quarter reflect an increase in sales generated in all areas of the Company's operations, the most significant of which occurred in the Company's wholesale division.
The Company continues to maintain its financial strength. Working capital increased $8 million to approximately $139 million at December 31, 2001 compared with $131 million at September 30, 2001. Since September 30, 2001 the Company has: reduced bank debt by over $8 million; lowered total liabilities by approximately $22 million; and reduced inventories by $9 million. Overall gross profit was 53.1% for the first quarter ended December 31, 2001 compared with 55.3% for the prior like quarter reflecting increased sales for the wholesale division which traditionally has a lower gross profit. Without Global Health Sciences (acquired May 2001), gross profit would have been approximately 56%.
Sales for the Nature's Bounty wholesale operation were $66 million compared with $40 million the previous like quarter, an increase of approximately 66%. Of the $26 million increase, approximately $15 million was attributable to newly acquired businesses. The balance reflects an increase in the sales of core products and strong sales response to new product introductions and promotions. The Company's Flex-A-Min product has maintained its broad distribution since its successful advertising campaign in the first quarter of last year. The Company's newly-acquired Knox NutraJoint and Knox for Nails nutritional supplement business from Kraft Foods has broadened the product base and has given the Company entree to new wholesale accounts.
Global Health Sciences, acquired last fiscal year, has increased the Company's manufacturing capacity and was profitable for the quarter ended December 31, 2001. The Company now has manufacturing facilities in New York, New Jersey, Illinois, Colorado and California. With these five locations, the Company has a competitive advantage by being closer to its wholesale customers and thus can give better service.
While industry sales have stagnated, thereby burdening competitor companies, NBTY has increased its market share in mass market and chain drug retailers. By utilizing consumer sales information received from its Vitamin World and direct response/e-commerce operations, the Company has been able to provide its mass-market customers with tools to drive sales. The Company continues to respond to consumer preferences and monitor the market for trends and ideas, which translate into increased sales for the mass market. The Nature's Bounty brand is now recognized for its ability to generate greater sales than competing brands. The Company continues to focus its energies in gaining market share in this sector.
Vitamin World currently operates 533 stores nationwide; sales increased 14.1% from the prior like period, and same store sales increased 6.1%. While this operation is still not profitable, losses before corporate overhead allocations have been reduced by 70%. Holland & Barrett sales increased 19.8% as it continues to be a leader in the U.K. market with same store sales up 11.5%. New customers from acquired mail order and Internet companies during fiscal year 2001 contributed sales of approximately $8 million for the quarter. These operations have been fully integrated into the Company's ongoing direct response/e-commerce operations.
NBTY Chairman and Chief Executive Officer Scott Rudolph stated, "We are gratified that our focus and commitment to the wholesale business has contributed substantially to the overall rise in first quarter revenues. We continue to look for additional ways to increase our market share in this sector and to better serve our customers. The Company will strive to maintain its leadership position in the marketing of nutritional supplements and we remain optimistic for the long-term outlook for the Company." ABOUT NBTY
NBTY is a leading vertically integrated U.S. manufacturer and distributor of a broad line of high-quality, value-priced nutritional supplements in the United States and throughout the world. The Company markets more than 1,500 products under several brands, including Nature's Bounty(R), Vitamin World(R), Puritan's Pride(R), Holland & Barrett(R), Nutrition Headquarters(R), American Health(R), Nutrition Warehouse(R) and Dynamic Essentials(R).
This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business. All of these forward-looking statements, which can be identified by the use of terminology such as "subject to," "believe," "expects," "may," "will," "should," "can," or "anticipates," or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy which, although believed to be reasonable, are inherently uncertain. Factors that may affect such forward- looking statements include (i) slow or negative growth in the nutritional supplement industry; (ii) disruptions of business or negative impact on sales and earnings due to acts of war, terrorism, bio-terrorism, or civil unrest; (iii) adverse publicity regarding the consumption of nutritional supplements; (iv) inability to retain customers of companies (or mailing lists) recently acquired; (v) increased competition; (vi) increased costs; (vii) loss or retirement of key members of management; (viii) increases in the cost of borrowings and unavailability of additional debt or equity capital; (ix) unavailability of, or inability to consummate, advantageous acquisitions in the future or the inability of the Company to assimilate acquisitions into the mainstream of its business; (x) changes in general worldwide economic and political conditions in the markets in which the Company may compete from time to time; (xi) the inability of the Company to gain and /hold market share of its wholesale and retail customers; (xii) unavailability of electricity in certain geographical areas; (xiii) exposure to, expense of defending and resolving, product liability claims and other litigation; (xiv) the ability of the Company to successfully implement its business strategy; (xv) the inability of the Company to manage its retail operations efficiently; (xvi) consumer acceptance of the Company's products; (xvii) uncertainty in negotiating and consummating acquisitions which may be subject to bankruptcy court approval; (xviii) the inability of the Company to renew leases on its retail locations; (xix) inability of the Company's retail stores to attain profitability; (xx) the absence of clinical trials for many of the Company's products; (xxi) sales and earnings volatility; (xxii) the Company's ability to manufacture its products efficiently; (xxiii) the rapidly changing nature of the Internet and on-line commerce; (xxiv) fluctuations in foreign currencies, and more particularly the British Pound; (xxv) import-export controls on sales to foreign countries; (xxvi) the inability of the Company to secure favorable new sites for, and delays in opening, new retail locations; (xxvii) adverse federal, state or foreign legislation or regulation or adverse determinations by regulators; (xxviii) the mix of the Company's products and the profit margins thereon; (xxix) the availability and pricing of raw materials; (xxx) factors discussed in the Company's filings with the Securities and Exchange Commission; and (xxxi) other factors beyond the Company's control.