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NEUTROGENA REPORTS SECOND QUARTER RESULTS

 LOS ANGELES, May 27 /PRNewswire/ -- Neutrogena Corp. (NASDAQ: NGNA) today reported sales for its second fiscal quarter ended April 30, 1993, rose 5.1 percent to $66,563,000, from $63,328,000 a year ago. Net income for the same period was $3,761,000, or $0.14 per share, compared with $4,299,000, or $0.16 per share, in the corresponding year-earlier quarter.
 For the first half of the fiscal 1993 year, Neutrogena's sales rose 7.5 percent to $136,808,000, from $127,290,000. Net income for the current six months was $9,353,000, or $0.35 per share, vs. $10,476,000, or $0.39 per share, a year ago. Fiscal 1993 first-half net income includes $1,069,000, or $.04 per share, stemming from the adoption of Statement of Financial Accounting Standards No. 109 "Accounting For Income Taxes."
 "Sales growth in the quarter reflects strong sell-in from our new product introductions, especially in the sun care area," said Lloyd E. Cotsen, Neutrogena's chairman and chief executive officer. "Domestic sales registered an 8 percent increase in the quarter over levels a year ago. As our planning had indicated, however, top line growth did not immediately translate to earnings growth. This is because we invested heavily in a concentrated television campaign in April, and because of the initial expense of introducing new products, both of which resulted in lower margins."
 Sales internationally for the second quarter were up slightly from a year ago on a foreign currency basis, but down slightly after adjusting for the strengthening U.S. dollar.
 "We are pleased that we have signed a new distributor in Spain and that Neutrogena's products are once again selling in that country," Cotsen said. "We anticipate renewed growth on the international front in the third and fourth quarters, particularly in Europe, and from the encouraging initial trade response to our recently opened Latin American region."
 Cotsen added: "We are cautious about meaningful growth for the domestic market for the third quarter on two counts. The first is continuing softness at the retail level; and, second, we have not yet seen a significant retailer response to our recent television campaign. Profit margins, however, should begin to reflect improvement as our sales mix in the second half includes fewer new product introductions, lower marketing expenditures and fewer promotions. With that and a rebound of international sales, we still expect a fourth quarter surge to carry us to favorable year-over-year comparisons."
 Neutrogena Corp., headquartered in Los Angeles, manufactures and sells high-quality, premium-priced specialty skin care and hair care products.
 NEUTROGENA CORP. AND SUBSIDIARIES
 Consolidated Statements of Income
 (Unaudited)
 (In thousands, except per share data)
 For the Three Months For the Six Months
 Ended April 30, Ended April 30,
 1993 1992 1993 1992
 Net sales $66,563(a) $63,328 $136,808(a) $127,290
 Cost of sales 17,071 14,848 35,030 29,616
 Gross profit 49,492 48,480 101,778 97,674
 Operating
 expenses:
 Marketing
 and selling 41,294 38,636 82,551 74,241
 General and
 administrative 2,921 3,460 7,164 7,668
 Income from operations 5,277 6,384 12,063 15,765
 Other income, net 702 414 983 996
 Income before income
 taxes 5,979 6,798 13,046 16,761
 Provision for income
 taxes 2,218 2,499 4,762 6,285
 Income before
 cumulative effect
 of accounting change 3,761 4,299 8,284 10,476
 Cumulative effect on
 prior years of change
 in accounting for
 income taxes --- --- 1,069 ---
 Net income $3,761 $4,299 $9,353(b) $10,476
 Per share amounts:
 Income before
 cumulative effect
 of accounting
 change $0.14 $0.16 $0.31 $0.39
 Cumulative effect of
 change in accounting
 for income taxes --- --- 0.04 ---
 Net income $0.14 $0.16 $0.35(b) $0.39
 Average number
 of shares and
 equivalent shares
 outstanding 26,548,498 26,784,704 26,655,502 26,839,754
 (a) Includes domestic unit volume decrease on existing products of $5.3 million and $1.7 million (including $0.5 million and $0.9 million from the scheduled discontinuance of two products) for the three- and six-month periods, respectively, and domestic new product sales of $8.9 million and $13.8 million for the same respective periods.
 (b) Includes $1,069,000, or $0.04 per share, of cumulative impact on prior years resulting from the implementation of Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes."
 NEUTROGENA CORP. AND SUBSIDIARIES
 Selected Consolidated Balance Sheet Information
 April 30, 1993 Oct. 31, 1992
 (Unaudited) (Audited)
 Cash and temporary investments $25,954,000 $48,494,000
 Inventory 26,489,000 27,506,000
 Working capital 54,248,000 70,624,000
 Fixed assets, net 53,722,000 49,763,000
 Long-term debt 0 0
 Shareholders' equity $116,410,000 $124,465,000
 -0- 5/27/93
 /CONTACT: Donald R. Schort of Neutrogena, 310-642-1150; or Cecilia A. Wilkinson or Roger S. Pondel of Pondel Parsons & Wilkinson, 310-207-9300, for Neutrogena/
 (NGNA)


CO: Neutrogena Corp. ST: California IN: HOU SU: ERN

BP-JL -- LA014 -- 2791 05/27/93 09:04 EDT
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Date:May 27, 1993
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