Numico Writing Off More Than $310 Million

Numico Writing Off More Than $310 Million

ZOETERMEER,TheNetherlands--In preliminary reports for fiscal 2001, Royal Numico N.V. reported that even though it had a 14-percent increase in overall sales, it would have to write off approximately $350 million in goodwill and brands for Rexall Sundown due to a downturn in the herb and vitamin market. In preliminary figures released Jan. 21, Numico reported sales of $3.8 billion for fiscal 2001, compared to $3.3 billion earned in 2000.

Rexall, a wholly owned, indirect subsidiary that Numico acquired in June 2000, had been one of the jewels in the company's crown of herb and supplement companies. As of mid-2000, the Dutch giant held a 26.2 percent share of the supplement market. According toNumico, Rexall did not perform well due to the slowdown in the market for vitamins and herbs in the United States, especially after the Sept. 11 events. Consequently, the company is being restructured under the newly appointed chief executive officer (CEO), RalphDenisco. Presently, Numico (www.numico.com) plans a write-off of goodwill and brands forRexall, a move that is currently under discussion with auditors. (The goodwill write-off is a non-cash charge that will reduce non-cash amortization expense; it will also adversely affect the company's bottom line.) The company expects the figure will be somewhere between US$310 million and $352 million.

In other business areas, Numico experienced incremental increases. In the United States, the company's retail stores--General Nutrition Centers (GNC)--performed well, experiencing a 2 percent increase in total sales, coming in at $1.4 billion in 2001. In weight loss and sports nutrition, the category grew monumentally to 30 percent. And even though the vitamin and herb category was down across all of Numico's businesses, multivitamins continued to show positive growth.