PARK CITY, Utah, Feb. 14 /PRNewswire-FirstCall/ -- Nutraceutical International Corporation (Nasdaq: NUTR) today reported results for the fiscal 2002 first quarter ended December 31, 2001.
Revenue for the first quarter was $24.5 million compared to $25.3 million for the same quarter of fiscal 2001. For the first quarter, net income before change in accounting principle was $2.5 million compared to $1.3 million for the same quarter of fiscal 2001. First quarter diluted earnings per share before change in accounting principle were $0.22 compared to $0.12 per share in the same quarter of fiscal 2001. EBITDA (earnings before net interest expense, taxes, depreciation and amortization) for the first quarter was $5.4 million compared to $4.5 million for the same quarter of fiscal 2001.
Nutraceutical adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets ("SFAS 142"), effective October 1, 2001. In accordance with SFAS 142, the Company determined that it had a non-cash goodwill impairment equal to its goodwill carrying amount of $51.8 million. This goodwill impairment resulted from the Company's fair value assessment using a market approach based on Nasdaq quoted market prices. The Company treated this non-cash goodwill impairment as a cumulative effect of change in accounting principle, which resulted in a non-cash charge of $35.3 million, net of tax benefit of $16.5 million, on the Company's condensed consolidated statement of operations for the three months ended December 31, 2001. Les Brown, senior vice president and chief financial officer, commented, "We believe that the required 2002 adoption of the new accounting standard, SFAS 142, will improve financial comparisons between Nutraceutical and other companies that do not have reported goodwill on their balance sheets and amortization associated with business acquisitions that were accounted for as purchase transactions rather than pooling-of-interests transactions."
Bill Gay, chairman and chief executive officer, commented, "The decline in net sales during the first quarter reflects both the continued slowdown in sales in the nutritional supplement industry as well as the effects of September 11. As stated previously, we believe that the industry slowdown may continue through calendar 2002. Our management team continues to focus on strategic marketing and sales initiatives and lean manufacturing practices. We are pleased about the fundamental strength of our balance sheet and our earnings and cash flow performance during the first quarter. Management continues to believe that the Company's core business strategy should be to serve the 'Healthy Foods Channel,' where customers seek product innovation, quality and knowledge."
Nutraceutical is one of the nation's largest manufacturers and marketers of quality branded nutritional supplements sold to health and natural food stores. The Company sells its branded products under the brand names Solaray(R), KAL(R), NaturalMax(R), VegLife(R), Premier One(R), Solar Green(R), Natural Sport(R), ActiPet(R), Action Labs(R) and Thompson(R) to health and natural food stores in the United States, and to distributors and stores worldwide. Under the name Woodland Publishing(TM), the Company publishes, prints and markets a line of books and booklets to, among others, book distributors, national retail bookstores and health and natural food stores. The Company manufactures and/or distributes one of the broadest branded product lines in the industry with over 2,500 stock keeping units (SKUs), including over 400 SKUs exclusively sold internationally. The Company believes that as a result of its emphasis on innovation, quality, loyalty, education and customer service, the Company's brands are widely recognized in health and natural food stores and among their customers. In addition to its branded products, the Company manufactures bulk materials for use in its own products and for sale to other manufacturers and marketers in the nutritional supplement industry under the trade names Monarch Nutritional Laboratories(TM) and Great Basin Botanicals(TM).
The statements contained in this release, including those regarding the Company's business strategy, cost improvements, industry performance and the impact of these activities on the Company's future success, and all other statements that are not purely historical, are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Many of the factors that will determine the Company's financial results are beyond the ability of the Company to control or predict. These factors include, among other things, changing domestic and international market and political conditions, product competition, the nature of product development, adverse publicity regarding the consumption of nutritional supplements, changes in laws and regulations, adequacy and availability of insurance coverage, availability of raw materials, dependence on distributors and customers, litigation, limitations on future financings, increased costs, the Company's ability to manufacture its products efficiently, sales and earnings volatility, acts of war and terrorist activities, and the uncertainties relating to acquisitions. Actual events or the Company's actual results could differ materially from those indicated in the forward-looking statements contained in this press release. All such forward-looking statements are based upon information available to the Company as of the date hereof, and the Company disclaims any intention or obligation to update any forward-looking statements contained herein. For further details and a discussion of these risks and uncertainties, see the Company's SEC filings, which are updated from time to time, copies of which are available upon request from the Company at 435-655-6106.