Whitewing Losses Still Outrun Expectations

Whitewing Losses Still Outrun Expectations

MISSION HILLS, Calif.--The financial losses at Whitewing Labs Inc. (OTC BB:WWLI) keeppiling up, as the company's net margin increased by almost ten points as a percentage ofsales for its first quarter ended March 31. On the top line, revenues more than doubled to$.5 million, compared to $.2 million sold in the same period a year ago. However, grossmargin slipped four points and operating expenses nudged up three points as a percentageof sales, compared to the same quarter last year. As a result, net loss widened by tenpoints to $.11 million or $.04 per share from $.03 million or $.01 per share lost in theequivalent 1999 quarter.

Whitewing, a growing natural supplement business, reported that, in its quest to growthe company, it has focused on growth of its customer base over short-term profits. Itexplained that major product development and advertising investments were expected toproduce short-term losses, and it admitted that recent losses have been greater thanexpected. While it has expanded its customer base to 199,000 during the recently endedquarter, steadily increased competition has affected the market share for its Prostsafebrand supplement product, which accounts for more than half of the company's net sales. Inits quarterly report, management concluded that Prostsafe "will continue tocontribute a substantial but continually decreasing percentage of total revenues insubsequent periods."