Playtex Products posts losses against restructuring charges
hurt by charges and lost sales from smaller brands that it has sold
on as part of its plans to restructure.
The manufacturer of brands such as Banana Boat sunscreen, Wet Wipes and a variety of skin care products recorded a loss of $12 million, versus a profit of $37.5 million in the corresponding quarter ending in December 2004.
Emphasizing the impact of the charges, the company pointed out that excluding these items the loss came in at $92,000. Likewise an estimated $2.4 million loss was made on the sale of certain brand assets and $8.8 million went on taxation expenses.
Meanwhile net sales fell by 5 per cent to reach $133.5 million, from $140.9 million a year ago - a figure that reflected the loss of sales from the brands that have been sold on.
However, excluding sales from divested brands, quarterly sales rose by 3 per cent, on the back of increased sales from skin care products, particularly sunscreen and wipes.
In November the company sold Baby Magic lotion, Mr. Bubble Bath and Ogilive home perm kiks to Cenuco for $57 million.
The sale of the brand forms part of a long-term restructuring strategy which aims to streamline the company's operations and concentrate on its more profitable and popular brands.
In July last year the company announced that it was moving to a consolidated North American structure and restructuring its Canadian operations. It also announced a restructuring of its US Banana Boat Sun Care Direct Sales Delivery organization sales force.
The move affected the company's tampon packaging facility in Arnprior, Ontario, Canada, as well as the US team responsible for the direct sales of its Banana Boat sun care products.
The Arnprior facility underwent a phased shut down, with a targeted completion date of first quarter 2006. The shut down means that logistics will continue to be operated out of the company's Mississauga, Ontario facility but all product supply will be furnished through the appropriate US operation.
Production at Arnprior together with the company's Dover, Delaware operations, is being outsourced to Malaysia, something the company had previously announced in February.
The company also announced that the US Banana Boat direct sales force would be strategically aligned to focus on the its core markets.
Playtex Products is in the midst of significant restructuring in an effort to help boost flagging profits. The move is part of aims to cut cost by $12 to $14 million this year and by $22 to $24 million in 2006.
In 2006 the company is targeting sales of $760 million and gross earnings of $180 million.
