Loser that cannot ever make $! How does GUMM lose more money? A: Sell more product, LOL
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Matrixx Initiatives, Inc. Reports Second Quarter 2003 Results
2003-07-23 16:38 (New York)
With 74% Topline Growth for Year to Date
PHOENIX, July 23 /PRNewswire-FirstCall/ -- Matrixx Initiatives, Inc.
(Nasdaq: MTXX), developer and distributor of the expanded line of Zicam(R)
products, today announced net sales of $3.1 million for the second quarter of
2003, an increase of more than 69% over the same period in 2002. Sales for
the first six months of the year increased to $11.9 million, or 74% above
total sales for the first half of 2002. Despite a substantial increase in
research and development programs, the company reported that it had cut its
net loss for the second quarter by more than half, from $(0.09) in 2002 to
$(0.04) in 2003. Second quarter results are generally the company's weakest
due to the seasonality of its current products.
"This quarter represents the completion of our first full year of
operations as Matrixx Initiatives, Inc., and we are extremely pleased by the
continued growth in our sales and bottom line improvement," said Carl J.
Johnson, president and chief executive officer of Matrixx. Mr. Johnson
credited the strong revenue growth to:
-- Positive consumer response to the new products introduced in 2002
combined with the continued growth of the original Zicam Cold Remedy;
and
-- The effectiveness of the 2002-2003 Zicam advertising campaign. The
campaign marked the first full-season of sustained marketing in the
brand's history which, based on consumer response, proved effective in
motivating consumers by emphasizing Zicam's unique benefits.
Mr. Johnson said that on the basis of the strong performance to date, the
company remained confident that it would meet its previous guidance of 30%
topline growth for 2003. "Based on current sales momentum," said Mr. Johnson,
"and the strong sell-in of our three new products scheduled for the upcoming
2003-2004 cold season, we expect our revenues for the full year of 2003 will
increase at least 30% above the 2002 sales of $23.5 million."
Mr. Johnson also noted the following:
-- Six of the company's top 15 retail customers, including two major drug
store chains, are expected to carry all 10 Zicam brand products in the
upcoming 2003-2004 cold season.
-- The number of Zicam products in distribution is expected to increase
74% for the upcoming cold season among Matrixx's top 15 customers,
which represent more than 80% of the company's year-to-date unit
sales. The increases in distribution among these customers mean that,
on a weighted average basis, 6.1 Zicam products are expected to be in
distribution in the company's top 15 retail customers, versus 3.5
products last year.
-- Reports from the field indicate that the Zicam brand is expected to
receive higher levels of promotional and display support in the
upcoming cold season.
"Additionally, subject to a number of assumptions, we believe that our
bottom line growth will continue to grow at an even faster pace. Despite a
net loss recorded to date of $(0.03) per share for the six months ended
June 30, 2003, we expect to be much more profitable in the remainder of the
year," said Mr. Johnson.
Consolidated Financial Results
According to William Hemelt, executive vice president and chief financial
officer, the substantial increase in research and development expenses in the
second quarter reflects the company's intent to commit approximately 6% of net
sales to R&D activities. "While there was significant impact on earnings from
these expenses, they include amounts spent on our products to be sold in the
third quarter of 2003, plus additional research into products, both within and
outside of the cough/cold arena, that we anticipate introducing in 2004 and
2005," said Mr. Hemelt. He also noted that the company had further improved
its balance sheet through the planned reduction of its outstanding debt by
$2.7 million.
Mr. Hemelt cautioned that the earnings for the quarter do not reflect
accumulated charges of approximately $500,000 that remain in dispute with its
current swab supplier.
Second Quarter 2003 Consolidated Financial Results
($000s) 2003 2002 2003 2002
2nd Qtr 2nd Qtr YTD YTD
Net sales $3,096 $1,826 $11,997 $6,893
Cost of sales 973 525 3,621 1,772
Gross profit 2,123 1,301 8,376 5,121
Operating expenses 2,172 2,218 7,864 5,099
Research and development 596 96 907 122
Income from operations (645) (1,013) (395) (100)
Total other income (expense) (29) 142 (78) 73
Net income before tax (674) (871) (473) (27)
Income tax expense (benefit) (271) 0 (187) (85)
Net income from continuing
operations $(403) $(871) $(286) $58
Net income per share $(0.04) $(0.09) $(0.03) $0.01
Average shares outstanding (mil) 9.4 9.4 9.4 9.4
Selected Balance Sheet Information
($000s)
June 30, December 31, June 30,
2003 2002 2002
Cash and Marketable Securities $8,755 $12,010 $13,278
Total assets $40,002 $47,185 $32,693
Total debt $2,677 $5,254 $7,763
Shareholders' equity $34,754 $35,155 $24,418
About Matrixx Initiatives, Inc.
Matrixx Initiatives, Inc. is engaged in the development, manufacture and
marketing of innovative drug delivery systems for over-the-counter (OTC)
pharmaceuticals. Zicam, LLC, its wholly-owned subsidiary, produces, markets
and sells Zicam(R) Cold Remedy nasal gel, a patented, homeopathic remedy that
has been clinically proven to significantly reduce the duration and severity
of the common cold. In studies published in the October 2000 issue of ENT --
Ear, Nose and Throat Journal, and separately in the January 2003 issue of QJM:
An International Journal of Medicine, the Zicam Cold Remedy product was shown
to reduce significantly the duration of the common cold. The company also
manufactures and markets a full line of Zicam brand pharmaceuticals, including
Zicam Allergy Relief nasal gel, a homeopathic remedy designed to provide
relief to allergy sufferers; Zicam Cold Remedy Swabs; Zicam Kids Size Cold
Remedy Swabs; Zicam Extreme Congestion Relief; Zicam Sinus Relief; and Zicam
Nasal Moisturizer. For more information regarding Matrixx products, go to
www.zicam.com . To find out more about Matrixx Initiatives, Inc.
(Nasdaq: MTXX), visit our website at www.matrixxinc.com . For additional
information, contact William Hemelt, chief financial officer, 602-387-5353,
whemelt@matrixxinc.com, or Lynn Romero, investor relations, at 602-387-5353,
lromero@matrixxinc.com. Matrixx is located at 2375 East Camelback Road,
Suite 500, Phoenix, Arizona 85016.
Matrixx Initiatives, Inc. Forward Looking Statement Disclaimer:
This news release contains forward looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including statements
regarding the company's expectation of at least a 30 percent increase in
revenue in 2003 over the previous year and its expectation of being much more
profitable in the remainder of the year; the company's expectation that six of
its top 15 retail customers will carry all 10 Zicam products, the company's
expectation that the number of its products in distribution to its top 15
customers will increase 74% from 3.5 products per customer to 6.1 products per
customer; the company's expectation of receiving higher levels of sales
support in the upcoming cold season; and the company's intention to commit
approximately 6% of net sales to research and development activities.
These forward looking statements are based on the company's expectations
and are subject to a number of risks and uncertainties, many of which cannot
be predicted or quantified and are beyond the company's control. Future
events and actual results could differ materially from those set forth in,
contemplated by, or underlying the forward looking statements. Factors that
could cause actual results to differ materially from the company's
expectations include the possibility that future sales of Zicam products will
not be as strong as expected, the possibility that supply issues may impact
future sales of Zicam products, the possibility that the introduction of the
company's new products will be delayed or that consumer acceptance of the new
products will be less than anticipated, the possibility that the company's
products may face unanticipated competition, the possibility that expenses may
exceed budgeted amounts, the possibility that the company's research and
development program will not be as successful as planned in producing
desirable and profitable products or that such product development may be
delayed for the 2004-2005 season, the possibility that the company's
litigation will not be as successful as expected; and the possibility that the
company's corporate growth strategy will not be successfully implemented or
well received by the market. Other factors that could cause actual results to
differ materially from the company's expectations are described in the
company's Annual Report on Form 10-K filed pursuant to the Securities Exchange
Act of 1934.
SOURCE Matrixx Initiatives, Inc.
-0- 07/23/2003
/CONTACT: William Hemelt, Chief Financial Officer, +1-602-387-5353,
whemelt@matrixxinc.com, or Lynn Romero, Investor Relations, +1-602-387-5353,
lromero@matrixxinc.com, both of Matrixx Initiatives, Inc./
/Web site: zicam.com /
/Web site: matrixxinc.com /
(MTXX)
CO: Matrixx Initiatives, Inc.; Zicam, LLC
ST: Arizona
IN: HEA MTC BIO
SU: ERN
-0- Jul/23/2003 20:38 GMT |
