California-based dietary supplement manufacturer Natrol this week announced a net loss of $282,000 on net sales of $18 million in the third quarter to end September.
Included in the loss were expenditures of $405,000, made by the company to launch its new marketing division, Annasa. No revenue was generated by Annasa in the third quarter of 2002 and fourth quarter revenue in 2002 from Annasa is expected to be nominal, said the company. Annasa is to expand nationally in the first quarter of 2003.
Net sales decreased 11.5 per cent to $18 million for the three month-period. Operating income for the third quarter amounted to $88,000 prior to the investment in Annasa. After the investment in the marketing division, the company incurred an operating loss of $317,000 versus an operating income of $1.8 million in the third quarter of the prior year.
Net sales for the first nine months of 2002 dropped 9 per cent on last year's figures to $53.4 million.
Elliott Balbert, Natrol's chairman and CEO, said that cash flow this year had been good. "Despite having heavily invested in a state-of-the-art SAP computer system and our investment in Annasa, we finished the third quarter of 2002 with $5 million more in cash than we began the year and net borrowing has not increased. We believe our investments will reap us significant benefits in the years to come."
In the core business, the company is aiming to capitalise on growth categories such as women's products, heart health and weight loss, and has started working with customers on current product areas.
"We feel we are, in many ways, a stronger business than we were at this time last year. Our challenge is to translate that strength into visible earnings improvement," added Balbert.