Sales & Earnings In Brief

Prestige OTCs up, personal care down: The drug and personal care product marketer and distributor reports a 5.6 percent increase to $47.6 million in net revenues for its OTC segment during its fiscal 2008 third quarter, although total company net revenues were flat and total net income dropped 4.8 percent to $8 million. Diluted earnings per share for the October-December period fell from 17 cents to 16 cents. A busy cold and flu season drove Prestige Brands' OTC growth with its Chloraseptic and Little Remedies brands, as well as the Allergen Block line of preventive drug-free gels launched in 2008 (1"The Tan Sheet" Nov. 10, 2008, p. 15). Declines in Murine and Clear Eyes eye care brands partially offset other OTC gains, but Chairman and CEO Mark Pettie says a new "eight hours of soothing relief" claim for Clear Eyes will help drive growth. Total revenues for the Irvington, N.Y.-based firm's personal care business fell 10.2 percent from the year-ago period, because of what Pettie called "anticipated declines" in sales of Denorex dandruff shampoo. Sales of wart removers Compound W and Wartner also fell, Prestige reports. Pettie calls Prestige's free cash flow a "bright spot," but says the firm is unlikely to meet its 2 percent to 4 percent anticipated long-term growth rate in 2009

Prestige OTCs up, personal care down: The drug and personal care product marketer and distributor reports a 5.6 percent increase to $47.6 million in net revenues for its OTC segment during its fiscal 2008 third quarter, although total company net revenues were flat and total net income dropped 4.8 percent to $8 million. Diluted earnings per share for the October-December period fell from 17 cents to 16 cents. A busy cold and flu season drove Prestige Brands' OTC growth with its Chloraseptic and Little Remedies brands, as well as the Allergen Block line of preventive drug-free gels launched in 2008 (¹ (Also see "Sales & Earnings In Brief" - Pink Sheet, 10 Nov, 2008.), p. 15). Declines in Murine and Clear Eyes eye care brands partially offset other OTC gains, but Chairman and CEO Mark Pettie says a new "eight hours of soothing relief" claim for Clear Eyes will help drive growth. Total revenues for the Irvington, N.Y.-based firm's personal care business fell 10.2 percent from the year-ago period, because of what Pettie called "anticipated declines" in sales of Denorex dandruff shampoo. Sales of wart removers Compound W and Wartner also fell, Prestige reports. Pettie calls Prestige's free cash flow a "bright spot," but says the firm is unlikely to meet its 2 percent to 4 percent anticipated long-term growth rate in 2009.

Drugstore.com paints it black: The online retailer achieved quarterly profitability under generally accepted accounting principles for the first time since going public in July 1999, driven largely by its core business of OTC consumer staples. Drugstore.com reports Feb. 4 its net income was $289,000 from net sales of $93.9 million in its fiscal 2008 fourth quarter. The firm's year-ago fourth quarter was initially announced as GAAP-profitable, but a $2.5 million sales tax charge in New Jersey later knocked down that period's earnings to a loss of $2.3 million. Drugstore.com's OTC net sales grew 6 percent for the October-December period to $69.8 million and 11.3 percent for the full year to $260.8 million. CEO Dawn Lepore says in a same-day earnings call that despite strong January sales growth, the Bellevue, Wash.-based firm is scaling back planned capital expenditures and freezing hiring in response to the economic recession. However, the company continues work with Medco Health Solutions on an integrated online OTC portal set to launch by mid-2009 (² (Also see "Medco Enhances Members’ OTC Care In Drugstore.com Alliance" - Pink Sheet, 8 Dec, 2008.), p. 4).

S-P consumer segment slides: Schering-Plough Consumer Health net sales fell 13.8 percent to $219 million in the fourth quarter, and grew just 0.8 percent to $1.28 billion for fiscal 2008, the pharmaceutical firm says Feb. 3. In a same-day earnings call, Bob Bertolini, chief financial officer for the Kenilworth, N.J.-based firm, attributes the consumer decline mainly to the 41.5 percent drop-off in OTC Claritin sales in the quarter, due to private label competition, decreased inventory at some retailers and the timing of 2007 shipments. On the positive side for the October-December period, Bertolini points to a 66.7 percent increase in quarterly MiraLAX sales, to $30 million, helping the laxative become a market leader. Additionally, Schering-Plough anticipates "launching more than a dozen new products in 2009," he says, including the January introduction of Claritin Liqui-Gels (³ (Also see "New Products In Brief" - Pink Sheet, 19 Jan, 2009.), p. 18). Overall company net sales grew 16.8 percent for the quarter to $4.3 billion and 45.8 percent for the year to $18.5 billion. Quarterly net income was $480 million, or diluted earnings of 27 cents per share, after a net loss in the year-ago quarter of $3.3 billion, related to the acquisition of Organon BioSciences (⁴ (Also see "MiraLAX Launch, Claritin Drive Schering-Plough Consumer Sales" - Pink Sheet, 18 Feb, 2008.), p. 4).

Nutrition 21 slashes advertising: Purchase, N.Y.-based Nutrition 21 earns a narrow profit of $102,000 in its fiscal 2009 second quarter. The nutritional supplement developer and marketer Feb. 5 attributes its second consecutive profitable quarter largely to reduced operating expenses, especially in advertising and promotion. Nutrition 21's advertising and promotion costs for the October-December period were $4.8 million, a 50.5 percent decrease from the same quarter in fiscal 2008, when the firm took a $3.8 million net loss. Overall second-quarter revenues were essentially flat at $12.9 million, compared to $13 million in fiscal 2008. President and CEO Michael A. Zeher said the company will "launch new products that deliver science-based innovation to our customers," such as the recently introduced Iceland Health Appetite Control Formula. Zeher became CEO in July 2008 (⁵ (Also see "People In Brief" - Pink Sheet, 28 Jul, 2008.), p. 17).

Currency changes lower USANA revenue: Despite record net sales of $111 million in its fiscal 2008 fourth quarter, the marketer of nutrition and weight-loss supplement products says it estimates a $9 million loss in revenue due to "dramatic changes in currencies." The Salt Lake City-based company says Jan. 22 it witnessed its sixth consecutive year of record sales in fiscal 2008, with approximately $429 million in net sales. Earnings per share for the year are estimated at $1.72 and for the October-December period at 16 cents, both figures including one-time adjustments. USANA CEO Dave Wentz says "the fundamental drivers of our business continue to gain traction," especially through operations launched in the Philippines.