Twinlab Implements Cost-Cutting Efforts

January 14, 2002

1 Min Read
Twinlab Implements Cost-Cutting Efforts

Twinlab Implements Cost-Cutting Efforts

HAUPPAUGE, N.Y.--The softness of the dietary supplement marketcombined with inventory management programs resulted in Twinlab Corp. (NASDAQ:TWLB)reporting lower sales in its third quarter (3Q01), ended Sept. 30. Net saleswere down 20 percent to $54.0 million from $67.5 million earned in the samequarter last year. Gross margin went up to 34.9 percent, a significant increasefrom the 10.9 percent reported in 3Q00. Operating expenses were considerablylower, coming in at $18.5 million, a 24.9-percent drop from 3Q00's results of$24.7 million, leading to an improvement in net loss. The company reported aloss of $1.8 million (or $.06 per share lost) for 3Q01, an improvement from a3Q00 loss of $12.3 million (or $.43 per share lost).

"Overall weakness in the nutritional supplement industry, together withcontinued inventory management programs by key distributors and customers,resulted in our decrease in sales and contributed to disappointing earningsduring the quarter," remarked Ross Blechman, chairman, president and chiefexecutive officer. "In addition, 3Q01 was negatively impacted by $1.3million in expenses associated with training and support for our new, nowoperational, ERP system." He added that the company remains stronglycommitted behind its two new product line introductions, Cholesterol Success andEnergy Fuel.

As part of its ongoing effort to reduce costs and improve operations, Twinlabannounced Nov. 13 that it had eliminated approximately 10 percent of itssalaried positions and reduced personnel costs at its manufacturing andwarehouse facilities. The company hopes these changes will save the company $3.2million in annual costs.

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