PHOENIX Matrixx Initiatives Thursday morning released financial results for its fiscal 2008 third quarter and nine months ended Dec. 31.
And while the company recorded a net loss for the quarter of $635,000 and a 13.5 percent decline in net sales to $68 million, the period falls before the cold and flu illness rates began picking up in January.
“Our year-to-date results reflect the extreme weakness in the cold season through December,” commented Carl Johnson, Matrixx president and chief executive officer. “The incidence of colds and flu in the general population during the quarter … was the lowest since Zicam was introduced in 1999,” Johnson said, adding that the low incidence of illness was compounded by the fact that many retailers carried less inventory of cough and cold products going into this season than in seasons past. “This year our factory orders were nearly equal to retail unit consumption for the quarter ended Dec. 31,” he noted. “This change in factory orders more closely mirroring retail consumption leads us to believe factory orders will follow consumption more closely during our fourth quarter ending March 31.”
And that means a projected uptick in sales—Matrixx has projected fiscal 2008 net sales to be as much as 5 percent above the $97.6 million recorded last year.
“For the 12 weeks ended Dec. 30, category retail sales of cough and cold products decreased approximately 5 percent, compared to the prior year; and, during the same period, Zicam sales decreased 7 percent compared to the prior year,” Johnson said.
Matrixx also announced their transition from brokerage representation, courtesy of the Emerson Group, to an in-house sales force. “We believe our new sales force will help us achieve new product acceptance at retail, increase distribution and lower overall sales expense in the future,” Johnson said, adding that Matrixx has signed at least one national retailer in launching its Xcid antacid, which is expected to hit shelves by the end of March. A launch into the gastrointestinal space, if successful, will help to diversify Matrixx’ portfolio from its heavy reliance on the cough-cold season.