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Weider's second quarter is strong, but will it last?

12-Jan-2005

Weider Nutrition International is still looking lithe, with strong results for the fiscal 2005 second quarter thanks to good sales of its flagship brand and a new addition to its joint care portfolio.

Net sales were up $6.2 million for the second quarter of 2005, compared to the same period last year. Net income leapt to $3.5 million ($0.13 per share) from $2.7 million ($0.10 per share) in the second quarter of 2004.

The increase has been attributed to a good performance from its Schiff-branded Move Free products and August's launch of Lubriflex3 , a triple action formula with antioxidant Uniflex to protect cartilage and joints, HA for lubricating and cushioning, and glucosamine, which is claimed to help maintain healthy joint function.

The company claimed the benefits of Lubriflex3 could be felt by joint discomfort sufferers in a matter of days, making it faster acting than glucosamine-only supplements.

Weider's second quarter results mean that for the six-months ended November 30, 2004 net sales were $136.7 million, compared to $124.4 million for the same period in fiscal 2004. Net income grew significantly from $4.9 million ($0.18 per share) a year ago to $7.2 million (or $0.27 per share).

However in spite of the company's strong performance, president and ceo Bruce Wood was candidly cautious about the rest of the fiscal.

"Although our year-to-date profit trend is strong, we anticipate escalating raw material costs, significant marketing support of the Lubriflex3 launch, and continuing difficult economic conditions in Germany, may negatively impact operating margins in the second half of the fiscal year," he said.

"Nevertheless, we plan to continue to invest in branded growth initiatives and explore branded acquisition opportunities that complement our existing portfolio. We remain optimistic about the potential for long-term growth within our industry."

In December Weider announced that it had reformulated its Move Free products , to include a 1500 milligrams glucosamine/1200 milligrams chondroitin blend of hyaluronic acid (HA) to support joint cartilage and maintain healthy joint function.

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