Vitamin-supplement maker NBTY swings to loss
Ronkonkoma-based NBTY Inc. reported a loss in the first three months of the year as it booked expenses for the sale or closure of several plants.
The maker, distributor and retailer of vitamins and nutritional supplements lost $10.4 million in its fiscal second quarter ended March 31, compared to earnings of $34.2 million in the same period in the prior year.
Sales rose to $757.9 million during the quarter, an increase of 0.7 percent from $753 million reported in the previous year.
One of the main factors contributing to the loss was the company's launch of a restructuring plan to consolidate and make its manufacturing, packaging and distribution facilities more efficient and profitable, chief financial officer Michael Collins said. The expected cost related to the sale and closure of seven plants in New Jersey, California and North Carolina is $30 million for the quarter, he said. NBTY anticipates saving about $35 million annually as a result of the restructuring.
About $12 million in legal settlements, which have yet to be approved by a federal court, also affected the company's earnings, Collins said. The pending settlements involve the marketing of glucosamine-based dietary supplements. The company settled without admitting any liability or wrongdoing.
Consulting expenses related to the restructuring plans played a part as well, Collins said, "as we try to get expertise to make sure we implement this plan well and we don't harm our customer service in any way."
While retail and catalog and online sales rose in the second quarter, sales in NBTY's wholesale segment underwent a "correction," Collins said, falling by $3.4 million from a year earlier, after shipments had jumped 20 percent in the three months ended in December.