NBTY shrugs off market downturn
of the year, an impressive performance in a market which has been
in decline over the last six months.
The much-reported downturn in sales of nutritional supplements in the US market which has impacted the results of numerous companies over the last six months seems not to have affected one such company, NBTY.
The company has reported a 24 per cent rise in net sales to $252 million (€253m) for the third quarter of the year, while net profits for the same period rose 53 per cent to $20 million.
The company stressed that these results did not include the $15 million it received in settlement of a price fixing lawsuit in which it was a plaintiff. Including this payment, reported net income increased by 122 per cent to $30 million.
For the nine months ended 30 June 2002: net sales were $719 million, an increase of 21 per cent on the same period last year. Net income increased 68 per cent to $54 million. During the nine month period, the company received a total of $21 million as settlement payments in the price fixing litigation, and including these payments, reported net income increased by 108 per cent to $66 million.
Sales for the Nature's Bounty wholesale operation were $80 million in the third quarter compared with $53 million in the previous like quarter, an increase of 52 per cent. The increase reflects greater sales of core products and strong sales response to new product introductions and promotions. The company said that greater consumer awareness and acceptance of natural alternatives including flaxseed oil, fish oils and soy-based products had also contributed to increased sales.
The group's Vitamin World subsidiary (540 stores across the US) increased sales by 13 per cent from year-on-year with same store sales increasing 11 per cent. While this operation is still not yet profitable, it continues to be cash flow positive, the company said. Holland & Barrett, the UK health food retail business, saw its sales increase 12 per cent with same store sales increasing 10 per cent. There are currently 465 Holland & Barrett outlets in the UK and Ireland.
Third quarter revenues from Puritan's Pride (NBTY's direct response/e-commerce operations) increased 16 per cent after being negative in the second quarter of 2002. The number of products available via catalogues and the website continued to increase, and the company claims to be the leader in this sector.
Commenting on the results, NBTY chairman and CEO, Scott Rudolph, said: "We are pleased to report a record quarter for operations with all divisions generating substantial sales increases. Our wholesale business again contributed substantially to the overall rise in revenues. These results reaffirm NBTY's position as the dominant force in the nutritional supplement industry. NBTY significantly reduced its debt level while strengthening the company's financial position. We are confident that NBTY will continue to capitalise on market opportunities. We remain optimistic about the long term outlook for the company."
