COLD-EEZE Maker Sells Struggling Wellness Unit

March 21, 2008

1 Min Read
COLD-EEZE Maker Sells Struggling Wellness Unit

DOYLESTOWN, Pa.—The Quigley Corp. (NASDAQ: QGLY), maker of COLD-EEZE brand products, sold its direct selling health and wellness unit Darius International Inc., which markets health and wellness products through its wholly owned subsidiary, InnerLight Inc., to InnerLight Holdings. Under terms of the purchase agreement, InnerLight Holdings will purchase Darius stock for $1 million, without guarantees, warranties or indemnities.

Darius is a direct selling organization that constituted Quigley's health and wellness segment, which it formed in 2000 to introduce new products to the market through a network of independent distributor representatives. Kevin P. Brogan, the current president of Darius, is also the major shareholder in Innerlight Holdings.

Over the past year, the wholly owned Darius subsidiaries have suffered declining net sales, and profits have turned to losses. According to Quigley, this downturn in performance reflects the continued reduction in the number of active independent distributor representatives, as well as the effects of ongoing litigation with the sponsor of its product line.

The unaudited net book value of Darius at Dec. 31, 2007 and 2006 was about $124,000 and $2.4 million, respectively. Darius' net sales for 2007 and 2006 were roughly

$11.2 million and $15.3 million, respectively, with net losses for 2007 and

2006 of $600,000 and $1.2 million, respectively.

Thus, Quigley ( saw its ownership of this health and wellness segment, which is separate from its COLD-EEZE line, as no longer beneficial, as losses began to drain the research and development budget of its pharmaceutical segment. In selling this Darius unit, the company hopes to streamline its operations, focusing on continuing operations in over-the-counter (OTC) product marketing and pharmaceutical research.

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