Ten-Fold Net Loss Punctuates Dismal 2000 for Twinlab

Ten-Fold Net Loss Punctuates Dismal 2000 for Twinlab

HAUPPAUGE,N.Y.--Twinlab Corp. (NASDAQ:TWLB) suffered a difficult year 2000, as results for its fourth quarter and fiscal year ended Dec. 31 showed steep declines, especially to the bottom line. Net sales for the quarter were off $22.6 million or 26 percent from 4Q99 sales, and gross margin slumped to 18 percent from 43 percent achieved a year ago. Operating expenses climbed 12 percent of sales, and net loss worsened to $42.4 million or $1.48 per share from $11.5 million or $.38 per share lost in the same quarter the year prior.
For the year, sales fell 11 percent, or $35.2 million, to $280.4 million, while gross margin declined 13 percent, compared to fiscal 1999. Operating expenses rose five percent of sales, as the company levied a non-cash $26 million charge to the year as an adjustment to deferred tax assets, wrote down $16 million due to inventory issues at its Utah facility, and penciled in $2.3 million of bad debt relating to the bankruptcy of one of its distributors. In the end, net loss
for 2000 plummeted further to $51.9 million or $1.81 per share from $5.2 million or $.16 per share lost in 1999.
Along with the financial results, Twinlab reported a new credit facility agreement with CIT Group/Business Credit Inc., which will provide TWLB with a $60 million revolving line of credit, an increase of $10 million from its previous credit arrangement. The facility agreement is supported by a $15 million guaranty provided by TWLB senior management.
"Fiscal 2000 was very difficult for Twinlab, as it was for many others in our industry," said RossBlechman, president and chief executive officer. "We have undertaken an aggressive review of the company's infrastructure and taken strong actions and initiatives designed to improve the firm's structure, processes and systems."
In the week following the release of fiscal results, Twinlab announced changes to its retail management team. Bob Weinstein resigned from the company for personal reasons, leaving his post as vice president and general sales manager of the health & natural food stores sector. JaySmyre, vice president and general sales manager of food, drug and mass, will move into theopen position, leaving his post to Michael Wainwright. Both promoted executives joined the company in 1998.