Monday February 26, 4:22 pm Eastern Time
Press Release
biz.yahoo.com
SOURCE: Gum Tech International Inc.
Gum Tech International Reports Fourth Quarter 2000 Results; Zicam(TM) Cold Remedy Sales to Consumers Increase
PHOENIX, Feb. 26 /PRNewswire/ -- Gum Tech International Inc., (Nasdaq: GUMM - news) announced today that Zicam(TM) Cold Remedy sales to consumers in the first half of the 2000-2001 cold season increased 40 percent over last year's comparable period. The Company's net sales for the quarter were $5.0 million, down from the prior year's level due to the sizeable introductory shipments to retailers of Zicam(TM) Cold Remedy in late 1999 when distribution channels were initially being filled. For the year-ended December 31, 2000, the Company reported net sales of $13.3 million, versus $15.5 million in 1999.
``Given the substantially less severe cold season in the fourth quarter of 2000 than last year, the increase in consumer sales demonstrates significant improvement in Zicam's(TM) brand awareness. Our research indicates that, for the four-week period ended December 24, 2000, Zicam(TM) Cold Remedy moved up to among the top 20 selling products (per UPC) in the entire cough, cold, allergy and zinc category. Research also indicates that Zicam(TM) Cold Remedy has become the number one selling product in the alternative upper respiratory category for the same time period,'' said William Hemelt, Gum Tech's Chief Financial Officer.
``We anticipate that sales of Zicam(TM) Cold Remedy will continue to be strong throughout the second half of the 2000-2001 cold season. In fact, Company sales of Zicam(TM) Cold Remedy in the current quarter have already exceeded last year's first quarter sales. The current cold season had a slow build-up in the fourth quarter but is projected to continue at a relatively high level through the end of March. We believe our advertising campaign created substantial brand awareness that is driving sales and, in addition, our public relations efforts were successful in obtaining television and newspaper coverage of Zicam(TM) Cold Remedy across the country. We believe these factors will translate into higher sales of Zicam(TM) products, both to retailers and to the Company.''
The Company also noted increasing sales of Zicam(TM) Allergy Relief. ``It is clear that our marketing campaign to establish the Zicam(TM) brand name is having a beneficial impact on sales of Zicam(TM) Allergy Relief. We have managed to build a strong base for this product even during the off-season and plan to capitalize on this momentum going into the peak allergy seasons in the second and third quarters of 2001,'' said Mr. Hemelt.
Mr. Gary Kehoe, Gum Tech's President and Chief Operating Officer, added, ``We are extremely pleased by our progress in establishing the Zicam(TM) brand name. To have achieved this level of consumer support midway through our second season is remarkable.''
Regarding the Company's gum operations Mr. Kehoe added, ``We continue to be optimistic regarding the long term value of our research and development efforts in the gum industry. We are working with several new customers regarding research and development and/or contract manufacturing possibilities. The Swedish Match joint venture is moving forward with its efforts in the non-tobacco nicotine market. Also, we are continuing work relating to the Procter & Gamble research and development agreement that was announced in the fourth quarter.''
Gum Tech reported a net loss to shareholders of $2.3 million for the fourth quarter of 2000, or $0.26 per share. The decline in earnings from the same period last year principally reflects the impact of introductory shipments of Zicam(TM) Cold Remedy to retailers in 1999 and higher advertising expenses in fourth quarter 2000 associated with an aggressive campaign to promote brand awareness. These expenses were incurred primarily in the fourth quarter in order to promote the Zicam(TM) brand prior to the peak of the cold season. Advertising expenses for the first quarter of 2001 are projected to be slightly less than the comparable period last year. Mr. Hemelt noted that this advertising program was funded primarily through capital infusions by Gum Tech and Gel Tech's new 40% partner, Zensano, Inc., which enabled Gel Tech to avoid incurring significant new debt. Partially offsetting these impacts was income resulting from a $1.625 million payment from Procter & Gamble in connection with on going research and development work. |
