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MENLEY & JAMES SECOND QUARTER 1993 RESULTS

    HORSHAM, Pa., Aug. 5 /PRNewswire/ -- Menley & James, Inc. (NASDAQ: MENJ) today reported that for the second quarter ended June 30, 1993, net sales were $6.1 million compared to $6.7 million in 1992. Including the non-recurring effect of a $1.6 million (pretax) expense for the settlement of litigation, the company had a net loss for the period of $813,000, or $0.13 per share, compared to net income of $519,000, or $0.08 per share, in the second quarter of 1992.
    For the first six months of 1993 and 1992, revenues for each year were $12.3 million.  The company had a loss for the six-month period ended June 30, 1993, before the cumulative effect of a change in accounting for income taxes, of $850,000, or $0.14 per share.  After taking into consideration the accounting change which represented the benefit of recording $1.9 million in deferred tax assets arising from the adoption of Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes," the company had net income of $1.1 million, or $0.17 per share.  For the same period in 1992, the company had income before extraordinary item of $892,000, or $0.15 per share, and net income, after the extraordinary item, of $302,000, or $0.06 per share.
    Commenting on the company's performance, Larry White, President and Chief Executive Officer, said, "Our results for the second quarter were below expectations as solid gains in our key brands did not offset declines in our secondary brands.  Garfield(R) children's multivitamins continue to gain market share.  In less than a year since the product was introduced, we have captured a market share of approximately 8 percent.  Sales of HOLD(R) were up strongly in the quarter, reflecting the effectiveness of new marketing programs.  Sales of Serutan(R), benefiting from strong new distribution gains as a result of the doctor sampling program, were also up significantly.  These gains, however, did not cover reduced volume in the company's other brands.
    "We will continue to aggressively pursue our marketing activities in the second half of the year, but anticipate that full year sales results will be below our earlier expectations.  Among the factors contributing to these lower expectations are: our recognition that the total market for children's multivitamins is smaller than had been estimated by earlier independent market research and increased levels of sales erosion in the company's secondary brands."
    Menley & James produces and markets a diversified portfolio of 33 over-the-counter (OTC) pharmaceutical and toiletry products sold in drug stores, supermarkets and mass merchandisers throughout the United States.
                           MENLEY & JAMES
                     Selected Consolidated Data
         (Unaudited, in thousands, except per share amounts)
    Periods ended            Three Months                Six Months
     June 30,              1992         1993          1992        1993
    Net sales          $  6,699     $  6,068      $ 12,328     $ 12,311
    Cost of goods sold    2,758        2,623         4,814        5,090
    Gross profit          3,941        3,445         7,514        7,221
    Selling, general and
     administrative
     expenses             2,718        2,480         5,151        5,671
    Depreciation and
     amortization           394          458           783          914
    Income from operations  829          507         1,580          636
    Lawsuit Settlement       --        1,600            --        1,600
    Interest expense        265          192           643          391
    Income (loss) before
     income taxes           564       (1,285)          937       (1,355)
    Provision (benefit) for
     income taxes            45         (472)           45         (505)
    Income (loss) before
     extraordinary item and
     cumulative effect of
     change in accounting for
     income taxes           519         (813)          892         (850)
    Extraordinary item,
     net of tax              --           --          (590)          --
    Cumulative effect as of
     Jan. 1, 1993 of change
     in method of accounting
     for income taxes        --           --            --        1,900
    Net income (loss)
     applicable to common
     shares            $    519     $   (813)     $    302     $  1,050
    Income (loss) applicable
     to common shares before
     extraordinary item
     and cumulative effect
     of change in accounting
     for income taxes,
     supplemental      $    519     $   (813)     $    980 (A) $   (850)
    Net income (loss)
     applicable to
     common shares,
     supplemental      $    519     $   (813)     $    390 (A) $  1,050
    Per share of common stock:
    Income (loss) before
     extraordinary item
     and cumulative
     effect of change
     in accounting for
     income taxes,
     supplemental      $   0.08     $  (0.13)     $   0.15 (A) $  (0.14)
    Extraordinary item,
     net of tax              --           --         (0.09)          --
    Cumulative effect
     of accounting change    --           --            --         0.31
    Net income (loss),
     supplemental      $   0.08     $  (0.13)     $   0.06 (A) $   0.17
    Weighted average
     number of common
     shares outstanding,
     supplemental         6,216        6,148         6,238 (A)    6,148
    (A) Adjusted to reflect the sale of 2,300,000 shares of Common Stock by the company and the application of the net proceeds therefrom.
    -0-             08/05/93
    CONTACT:  Larry White, president and chief executive officer, of Menley & James, 215-441-6500, or Fred Spar of Kekst and Company, 212-593-2655, for Menley & James
    (MENJ) CO:  MENLEY & JAMES, INC. IN:  MTC SU:  ERN ST:  PA


-- NY099 -- X433 08/05/93
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Date:Aug 5, 1993
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