Natrol Heads Toward Profitability

CHATSWORTH, Calif.—Despite a slight decrease in net sales, Natrol Inc. (NASDAQ:NTOL) reported a return to profitability for its first quarter ended March 31. While gross shipments of both Natrol® and Laci Le Beau® brands increased 5.4 percent to $15.4 million, overall sales were negatively impacted by lower sales contributions from the Prolab® brand and contract manufacturing of about $1.0 million. However, gross profit rose 10 percent to $6.9 million, resulting in a margin of 40.7 percent, compared to a 35.5-percent margin in the same period last year. Earnings settled at a positive $72,000 or $0.01 per share, up from $0.59 million or $0.04 per share lost a year ago; current earnings benefited from a $0.23 million contribution from the sale of a company building.

“The first quarter was a positive first step toward a return to operating profitability,” said Wayne Bos, president and chief executive officer (CEO).“We continue to make strides toward establishing a base of predictable revenues from our core branded product portfolio, which will serve as a platform for future growth. We are taking steps to pare overhead; general and administrative expenses were reduced approximately 13.4 percent in the first quarter compared to the prior year. Even as we look to grow, we continue to seek out cost efficiencies.”

“As we go into the next two fiscal quarters,” observed Elliott Balbert, founder and executive chairman of Natrol (www.natrol.com), “the full effect of our restructuring strategies should begin to take effect. During the past few months, we hired a new president and CEO, a new chief operating officer, and a new vice president of marketing. Moreover, we recently added two new board members with outstanding credentials. Our new leadership is not only bringing fresh energy into the business, but importantly, strategies, skills and insights into that will take us to the next level.”