First quarter 2003 earnings.
Matrixx Initiatives, Inc. Reports Strong First Quarter 2003 Results 76% Increase in Sales for Q1; Third Consecutive Quarter of Profitability
PR NEWSWIRE - April 29, 2003 18:20
PHOENIX, Apr 29, 2003 /PRNewswire-FirstCall via COMTEX/ -- Matrixx Initiatives, Inc. (Nasdaq: MTXX), developer and distributor of the expanded line of Zicam(R) products, today announced net earnings for the first quarter ended March 31, 2003. Net sales increased 76 percent to $8.9 million during 2003 compared to $5.06 million for the previous year. Due to increased investment in advertising that continued throughout the first quarter, net income was $117,000 compared to net income of $929,000 for the first quarter of 2002. Earnings per share (EPS) on a continuing operations basis were $0.01, reflecting the company's third consecutive profitable quarter.
"The significant topline increase underscores the value of higher sales as a true measure of year-over-year growth," said Carl J. Johnson, president and chief executive officer of Matrixx. "Last year we showed an increase in earnings per share (EPS) which reflected our decision to adjust our advertising strategy and reduce expenditures in the first quarter to conserve resources for the 2002-2003 cold season. This year, we have continued to invest aggressively in marketing support to drive sales, yet still maintained our commitment to profitability."
These results reflect:
-- The company's ongoing commitment to promote new products and strengthen the Zicam franchise, including aggressive investment in advertising/marketing support to drive sales. There was limited advertising during the first quarter of last year.
-- The addition of five new products in 2002, which significantly contributed to the top-line growth for this quarter and continue to provide opportunities for tremendous growth with additional distribution.
-- Growing consumer demand for Zicam nasal products, with 7.1 points growth in market share, for a total of 12.1 share(1). The nasal product segment increased 4.3% in dollars, driven by Zicam. Without Zicam, segment sales would have actually fallen 3%.
"In 2003, we are committed to maintaining growth of the Zicam brand and expect a 30 percent increase in revenue while working to provide shareholders with increased value on a year-over-year basis by growing earnings at an even faster rate than last year," Mr. Johnson continued. "Currently, our products are highly seasonal and quarterly results are greatly impacted by our commitment to promote our products and strengthen the Zicam franchise. In Q2, we expect to expand our strong commitment to research and development in 2003 to drive corporate growth and annual profitability in 2004 and beyond."
Consolidated Financial Results
According to William Hemelt, executive vice president and chief financial officer, the first quarter results also reflect the significant momentum achieved throughout the 2002/2003 cold season. "While investors should expect variability in our quarterly earnings results as the Company invests in new products utilizing our proprietary technologies, the first quarter results, reviewed in combination with the record results for the fourth quarter of 2002, validate the new product strategy as a means of achieving consistent overall growth."
First Quarter 2003 Consolidated Financial Results
($000s) 2003 2002 2002
1st Qtr 1st Qtr 4th Qtr
Net sales $8,901 $5,067 $11,576
Cost of sales 2,649 1,247 3,312
Gross profit 6,252 3,820 8,264
Operating exp 5,692 2,881 7,920
R&D expense 311 26 21
Income operations 249 913 323
Total other (49) (69) (32)
EBT 200 844 291
Income tax 83 (85) (3,386)(1)
Net income $117 $929 $3,677
Net income/share $0.01 $0.10 $0.39(2)
Shares out (mil) 9.4 9.4 9.4
(1) Recognition of deferred tax asset of $3,398,000 reduced income tax expense in the 4th Qtr and for the year.
(2) EPS of $0.03 for the 4th Qtr after excluding recording of deferred tax assets.
Selected Balance Sheet Information ($000s)
3/31/2003 12/31/2002
Cash and mkt securities $12,222 $12,010
Total assets $44,627 $47,185
Total debt $5,339 $5,254
Shareholders' equity $35,197 $35,155
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