Leiner Health Products Reports Third Quarter 2007 Results.- Sales Increase 9.3% from Q3 Fiscal 2006; Net Income Rises to $8.9 Million - CARSON Carson, city (1990 pop. 83,995), Los Angeles co., S Calif., an industrial and residential suburb of Los Angeles; inc. 1968. Oil refining is the major industry; fabricated metals, paper, and other products are manufactured. The California State Univ. Dominguez Hills is there. , Calif. -- Leiner Health Products Leiner Health Products is a company based in Carson, California, and is one of America's largest manufacturers of vitamins, minerals, herbal nutritional supplements, and generic medications. Inc. today announced its financial results for the third quarter ended December December: see month. 30, 2006. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter were $198.1 million compared to $181.2 million for the same period in fiscal 2006, a 9.3% increase. Net US sales increased $18.3 million or 11.0% in the third quarter of fiscal 2007 compared to the same period in fiscal 2006, while net Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. sales decreased by $1.5 million or 10.2% in the same periods. The net US sales increase resulted from growth in consumer demand for Leiner products in certain key targeted categories, such as multivitamins and heart health, as well as growth in the Company's contract manufacturing segment. Leiner reported net income of $8.9 million for the quarter, compared to net income of $1.5 million for the same period in fiscal 2006. Gross margin improved in the third quarter of fiscal 2007 to 25.9% versus 23.1% in the third quarter of fiscal 2006 primarily due to continued stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders of certain raw material costs and improved fixed cost absorption from higher plant utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be . For the first nine months of fiscal 2007, net sales totaled $560.0 million compared to $495.8 million in the first nine months of fiscal 2006, a 13% increase. Net sales in the nine months of fiscal year 2007 included an additional week versus the same period in the prior year. In addition, fiscal 2006 sales were impacted by the establishment of return reserves related to certain branded products and inventory reductions carried out by the Company's biggest customers. For the first nine months of fiscal 2007, Leiner realized net income of $16.9 million, compared to a net loss of $4.1 million in the first nine months of fiscal 2006. Credit Agreement EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the quarter was $26.7 million, compared to $22.6 million for the same period in fiscal 2006. For the first nine months of fiscal 2007, Credit Agreement EBITDA was $70.9 million, compared to $54.0 million during the first nine months of fiscal 2006. Leiner was in compliance with all of its financial covenants as of December 31, 2006. Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. Kaminski, Chief Executive Officer, commented, "We are pleased with the strong sales and improved margins that we experienced this past quarter. We are grateful to our customers, vendors and employee partners for their support and commitment to continuing to understand consumer preferences for high quality, low cost self care products." Conference Call Information The Company will hold a conference call to discuss its third-quarter results on Thursday Thursday: see week. , February February: see month. 8, 2007, at 11:00 a.m. Eastern Time. The public is invited to attend. The dial-in number for the conference call is 706-634-0167. The call is also being webcast, and can be accessed through the "Investor Information" section of the company's website, www.leiner.com. For those who cannot listen to the live broadcast, a telephone replay of the call will be available from February 8, 2007, at 2:00 p.m. Eastern Time through February 15, 2007, and can be accessed by dialing 706-645-9291, conference ID #5699132. An archived webcast will also be available on Leiner's website. Additional information regarding Leiner's fiscal 2007 will be contained in the Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. , which will be posted on the company's website, www.leiner.com, by 5:00 p.m. PT, February 13, 2007. Alternatively, the Quarterly Report on Form 10-Q will also be available through the SEC's website, www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . Use of Non-GAAP Financial Measures In our earnings release and conference call we may use or discuss non-GAAP financial measures as defined by SEC Regulation G. We use Credit Agreement EBITDA to measure our performance. Credit Agreement EBITDA is a non-GAAP measure that should not be considered as an alternative to income from operations or net income (loss) as a measure of operating results or cash flows as a measure of liquidity. Credit Agreement EBITDA is the basis for the calculation of significant financial covenants in the Company's credit facility, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , which requires Leiner to meet specified Consolidated Indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. to Credit Agreement EBITDA Leverage Ratio and a Credit Agreement EBITDA to Consolidated Interest Expense Ratio as such terms are defined in the Credit Agreement Amendment. Management believes that availability of Credit Agreement EBITDA will assist investors in evaluating Leiner's financial performance and our performance relative to credit agreement covenants. See the "Calculation of Credit Agreement EBITDA" in this release for a reconciliation of Credit Agreement EBITDA to net income (loss) computed under U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). About Leiner Health Founded in 1973, Leiner Health Products, headquartered in Carson, Calif., is America's leading manufacturer of store brand vitamins Vitamins Definition Vitamins are organic components in food that are needed in very small amounts for growth and for maintaining good health. The vitamins include vitamin D, vitamin E, vitamin A, and vitamin K, or the fat-soluble vitamins, and folate , minerals, and nutritional supplements Nutritional Supplements Definition Nutritional supplements include vitamins, minerals, herbs, meal supplements, sports nutrition products, natural food supplements, and other related products used to boost the nutritional content of the diet. and its second largest supplier of over-the-counter pharmaceuticals in the food, drug, mass merchant and warehouse club (FDMC FDMC Francis Douglas Memorial College (New Plymouth, New Zealand) FDMC Faculdade de Direito Milton Campos (Portugese, Brazilian law school) FDMC Fiscal Director of the Marine Corps ) retail market, as measured by retail sales. Leiner provides nearly 50 FDMC retailers with over 3,000 products to help its customers create and market high quality store brands at low prices. It also is the largest supplier of vitamins, minerals and nutritional supplements to the US military. Leiner markets its own brand of vitamins under YourLife[R] and sells over-the-counter pharmaceuticals under the Pharmacist's Formula[R] name. In 2006, Leiner distributed more than 31 billion doses that help offer consumers high quality, affordable choices to improve their health and wellness. Forward-looking Statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains "forward-looking statements" that are subject to risks and uncertainties. These statements often include words such as "may," "will," "could," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms or similar expressions. These statements are only predictions. In addition to risks and uncertainties noted in this press release, there are risks and uncertainties that could cause the company's actual operating results to differ materially from those anticipated by some of the statements made. Such risks and uncertainties include: (i) slow or negative growth in the vitamin, mineral, supplement or over-the-counter pharmaceutical industry; (ii) adverse publicity regarding the consumption of vitamins, minerals, supplements or over-the-counter pharmaceuticals; (iii) increased competition; (iv) increased costs; (v) increases in the cost of borrowings and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. unavailability un·a·vail·a·ble adj. Not available, accessible, or at hand. un  a·vail of additional
debt or equity capital; (vi) changes in general worldwide economic and
political conditions in the markets in which the company may compete
from time to time; (vii) the inability of the company to gain and/or
hold market share of its customers; (viii) exposure to and expenses of
defending and resolving product liability claims and other litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute.When a person begins a civil lawsuit, the person enters into a process called litigation. ; (ix) the ability of the company to successfully implement its business strategy; (x) the inability of the company to manage its operations efficiently; (xi) consumer acceptance of the company's products; (xii) introduction of new federal, state, local or foreign legislation or regulation or adverse determinations by regulators; (xiii) the mix of the company's products and the profit margins thereon there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that ; and (xiv) the availability and pricing of raw materials. The company expressly disclaims any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. [TABLE OMITTED] [TABLE OMITTED] Reconciliation of Non-GAAP Financial Measures to Comparable U.S. GAAP Measures (Unaudited) The following table reconciles Credit Agreement EBITDA, the non-GAAP financial measure used in this release, to the comparable GAAP measure for the respective periods:
[TABLE OMITTED]
(1) Represents the establishment of a reserve for anticipated customer
returns and the reduction of the carrying value of inventory
related to certain branded products in the first quarter of fiscal
2006. This charge resulted in a reduction to gross profit in the
condensed consolidated statement of operations and in operating
activities in the condensed consolidated statement of cash flows
at December 24, 2005.
(2) Represents internal expenses incurred in connection with the
agreement to purchase substantially all of the OTC assets of PFI.
These expenses are included in the general and administrative
expenses in the condensed consolidated statement of operations and
in operating activities in the condensed consolidated statement of
cash flows.
(3) Represents severance and other related costs incurred in
connection with the elimination of approximately 86 positions in
the third quarter of fiscal 2006. These expenses were included as
a separate item in the condensed statement of operations and in
operating activities in the condensed consolidated statement of
cash flows.
(4) Represents the value of inventory purchased solely in connection
with the PFI acquisition for prices above our manufacturing cost.
This charge resulted in a reduction to gross profit in the
condensed consolidated statement of operations and in operating
activities in the condensed consolidated statement of cash flows
for the three and nine month periods ended December 24, 2005.
(5) Represents expenses incurred in connection with operating
facilities that prior to the PFI acquisition were operated by the
PFI business and to provide adequate inventory and to ensure
continuous supplies to customers of PFI business. This charge
resulted in a reduction to gross profit in the condensed
consolidated statement of operations and in operating activities
in the condensed consolidated statement of cash flows for the
three and nine month periods ended December 24, 2005.
(6) Represents add back of expense incurred in connection with the
joint care customer in-stock investments, inventory reduction
impact and other expenses as stipulated in the Credit Agreement
Amendment. These expenses resulted in a reduction to gross profit
in the condensed consolidated statement of operations for the nine
months ended December 24, 2005.
(7) Management fees are included in other operating expenses in the
condensed consolidated statement of operations and in operating
activities in the condensed consolidated statement of cash flows.
(8) Credit Agreement EBITDA is calculated in accordance with the
definitions contained in our Credit Agreement Amendment described
earlier in this release.
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