HAUPPAUGE, N.Y.--(BUSINESS WIRE)--July 30, 2002--Twinlab Corporation (NASDAQ: TWLB) today announced its results for the quarter and six months ended June 30, 2002.
The Company incurred a net loss of $(3.6) million or $(0.13) per share for the second quarter of 2002, versus a net loss of $(7.1) million or $(0.25) per share for the second quarter of last year. The net loss for the quarter ended June 30, 2002 includes a net benefit of approximately $0.5 million relating to proceeds received from a litigation settlement offset by the recording of reserves for litigation matters and related costs. Second quarter net sales were $42.7 million compared to $49.0 million in the comparable quarter last year.
For the six months ended June 30, 2002, the Company reported net income of $0.1 million, versus a net loss of $(23.0) million or $(0.80) per share for the first six months of 2001. Net sales for the six months ended June 30, 2002 were $90.9 million compared to $101.7 million in the comparable period last year. Net income for the six months ended June 30, 2002 includes a federal income tax benefit of $6.9 million representing a refund received by the Company in addition to the net litigation benefit discussed above. The net loss for the six months ended June 30, 2001 included the loss on disposal of Changes International of $8.7 million.
Ross Blechman, Twinlab's Chairman, President and Chief Executive Officer stated, "We continue to experience unfavorable sales comparisons to prior year comparable periods primarily as a result of lower sales to one major customer. However, completed cost reductions, while still not fully reflected in our results, have contributed to continuing positive cash flow from operations and we were able to repay $17 million of outstanding debt during the quarter. We expect additional annualized cost reductions in excess of $6 million, commencing in the first quarter of 2003, as a result of the consolidation of our manufacturing and distribution facilities announced last week."
Mr. Blechman added, "Although we have a great deal of work ahead of us to complete the facility consolidation, we believe our cost cutting and business rationalization decisions are substantially behind us. We are now refocusing on driving revenues through targeted marketing activities, strategic investments in product development and an expansion of our sales force."
Twinlab Corporation, headquartered in Hauppauge, N.Y., is a leading manufacturer and marketer of high quality, science-based, nutritional supplements, including a complete line of vitamins, minerals, nutraceuticals, herbs and sports nutrition products.
Except for historical information contained herein, 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 include but are not limited to: (i) the impact of competitive products; (ii) changes in law and regulations; (iii) adequacy and availability of insurance coverage; (iv) limitations on future financing; (v) increases in the cost of borrowings and unavailability of debt or equity capital; (vi) the effect of adverse publicity regarding nutritional supplements; (vii) uncertainties relating to acquisitions; (viii) the inability of the Company to gain and/or hold market share; (ix) exposure to and expense of resolving and defending product liability claims and other litigation; (x) consumer acceptance of the Company's products; (xi) managing and maintaining growth; (xii) customer demands; (xiii) the inability to integrate and consolidate its manufacturing and distribution facilities and achieve cost savings and operational efficiencies; (xiv) dependence on individual products; (xv) dependence on individual customers, (xvi) market and industry conditions including pricing, demand for products, levels of trade inventories and raw materials availability, (xvii) the success of product development and new product introductions into the marketplace; (xviii) lack of available product liability insurance for ephedra-containing products; (xix) slow or negative growth in the nutritional supplement industry; (xx) the departure of key members of management; (xxi) the absence of clinical trials for many of the Company's products; (xxii) the ability of the Company to efficiently manufacture its products; as well as other risks and uncertainties that are described from time to time in the Company's filings with the Securities and Exchange Commission, copies of which are available upon request from the Company's investor relations department.
Additional Twinlab information is available on the World Wide Web at: http://www.twinlab.com