UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to_______
Commission File Number 0-21884
REXALL SUNDOWN, INC.
--------------------
(Exact Name of Registrant as Specified in its Charter)
FLORIDA 59-1688986
------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
851 Broken Sound Parkway, NW, Boca Raton, Florida 33487
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (561) 241-9400
Indicate by check mark whether Registrant has (1) filed all reports to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. [X] Yes __No
As of April 13, 1998, the number of shares outstanding of the Registrant's
Common Stock was 71,363,162.
REXALL SUNDOWN, INC.
TABLE OF CONTENTS
Page No.
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Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets as of February 28, 1998 and August
31, 1997 ........................................................... 3
Consolidated Statements of Operations for the
Three and Six Months Ended February 28, 1998 and 1997 .............. 4
Consolidated Statements of Cash Flows for the Six Months Ended
February 28, 1998 and 1997 ......................................... 5
Notes to Consolidated Financial Statements ......................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................ 9
Part II. Other Information .................................................. 13
Signatures............................................................................ 15
-2-
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
REXALL SUNDOWN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
February 28, 1998 August 31, 1997
-------------------- --------------------
ASSETS
Current assets:
Cash and cash equivalents $ 64,027 $ 81,943
Marketable securities 27,650 24,829
Trade accounts receivable, net 48,058 28,494
Inventory 73,136 42,739
Prepaid expenses and other current assets 9,190 7,221
Net current assets of discontinued operations 4,076 4,076
-------------------- ---------------
Total current assets 226,137 189,302
Property, plant and equipment, net 49,946 34,372
Other assets 13,680 12,620
-------------------- --------------------
Total assets $ 289,763 $ 236,294
==================== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 28,901 $ 14,509
Accrued expenses and other current liabilities 22,714 21,158
Current portion of long-term debt - 3,476
-------------------- --------------------
Total current liabilities 51,615 39,143
Other liabilities 480 449
-------------------- --------------------
Total liabilities 52,095 39,592
-------------------- --------------------
Shareholders' equity:
Preferred stock, $.01 par value; authorized 5,000,000
shares, no shares outstanding - -
Common stock, $.01 par value; authorized 200,000,000 shares,
shares issued: 71,321,925 and 70,144,634, respectively 713 702
Capital in excess of par value 137,351 124,002
Retained earnings 100,182 72,488
Cumulative translation adjustment (578) (490)
-------------------- --------------------
Total shareholders' equity 237,668 196,702
-------------------- --------------------
Total liabilities and shareholders' equity $ 289,763 $ 236,294
==================== ====================
See accompanying notes
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REXALL SUNDOWN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
February 28, February 28,
----------------------------------- -------------------------------------
1998 1997 1998 1997
----------------- --------------- --------------- -------------------
Net sales $ 115,489 $ 64,948 $ 226,209 $ 127,026
Cost of sales 48,159 25,690 92,354 49,801
----------------- --------------- --------------- -------------------
Gross profit 67,330 39,258 133,855 77,225
Selling, general and administrative 44,939 26,736 89,568 53,353
expenses ----------------- --------------- --------------- -------------------
Operating income 22,391 12,522 44,287 23,872
Other income (expense):
Interest income 1,056 1,390 2,270 1,971
Other income (11) 31 22 31
Interest expense (84) (74) (216) (120)
----------------- --------------- --------------- -------------------
Income before income tax provision 23,352 13,869 46,363 25,754
Income tax provision 8,384 4,936 16,190 9,190
----------------- --------------- --------------- -------------------
Net income $ 14,968 $ 8,933 $ 30,173 $ 16,564
================= =============== =============== ===================
Pro forma net income $ 14,688 $ 8,780 $ 29,231 $ 16,255
================= =============== =============== ===================
Net income per common share:
Basic $ 0.21 $ 0.13 $ 0.43 $ 0.25
================= =============== =============== ===================
Diluted $ 0.20 $ 0.13 $ 0.41 $ 0.24
================= =============== =============== ===================
Pro forma net income per common share:
Basic $ 0.21 $ 0.13 $ 0.41 $ 0.24
================= =============== =============== ===================
Diluted $ 0.20 $ 0.12 $ 0.40 $ 0.23
================= =============== =============== ===================
Weighted average common shares
outstanding:
Basic 71,046,098 69,349,742 70,738,237 67,330,742
================= =============== =============== ===================
Diluted 73,887,728 71,626,444 73,341,881 69,677,638
================= =============== =============== ===================
See accompanying notes
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REXALL SUNDOWN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six Months Ended
February 28,
----------------------------------------------
1998 1997
------------------ ------------------
Cash flows provided by (used in) operating activities:
Net income $ 30,173 $ 16,564
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,291 1,754
Amortization 863 804
Deferred income taxes (744) 88
Foreign exchange translation adjustment (88) (300)
Compensatory stock options issued 588 -
Adjustment to conform fiscal years (2,479) -
Changes in assets and liabilities:
Trade accounts receivable (19,564) (6,108)
Inventory (30,397) 143
Prepaid expenses and other current assets (1,969) (1,721)
Other assets (1,130) (1,978)
Accounts payable 14,392 5,334
Accrued expenses and other current liabilities 8,960 2,255
Other liabilities 31 (152)
Discontinued operations - non cash charges
and changes in assets and liabilities - (62)
------------------ ------------------
Net cash provided by operating activities 927 16,621
------------------ ------------------
Cash flows provided by (used in) investing activities:
Acquisition of property, plant and equipment (17,865) (3,496)
Purchase of marketable securities (34,465) (58,145)
Proceeds from sale of marketable securities 31,644 5,988
Other - 190
------------------ ------------------
Net cash used in investing activities (20,686) (55,463)
------------------ ------------------
Cash flows provided by (used in) financing activities:
Net proceeds from offering - 62,287
Proceeds from bank line of credit - 403
Principal payments on long-term debt (3,476) (144)
S Corporation distributions to members - (347)
Exercise of options to purchase common stock 5,319 1,812
------------------ ------------------
Net cash provided by financing activities 1,843 64,011
------------------ ------------------
Net increase (decrease) in cash and cash equivalents (17,916) 25,169
Cash and cash equivalents at beginning of period 81,943 13,450
------------------ ------------------
Cash and cash equivalents at end of period $ 64,027 $ 38,619
================== ==================
See accompanying notes
-5-
REXALL SUNDOWN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
1. Basis of Presentation and Other Matters
The accompanying unaudited consolidated financial statements,
which are for interim periods, do not include all disclosures provided
in the annual consolidated financial statements of Rexall Sundown, Inc.
(the "Company"). These unaudited consolidated financial statements
should be read in conjunction with the consolidated financial
statements and the footnotes thereto contained in the Company's Annual
Report on Form 10-K for the year ended August 31, 1997, as filed with
the Securities and Exchange Commission.
In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (which are of
a normal recurring nature) necessary for a fair presentation of the
financial statements. The results of operations for the interim periods
are not necessarily indicative of the results to be expected for the
full year.
2. Pro Forma Net Income Per Diluted Common Share
Pro forma net income per diluted common share is calculated by
dividing pro forma net income, net income after giving effect to the
pro forma tax adjustment for the Richardson Labs, Inc. ("Richardson")
acquisition (See Note 8.), by weighted average shares outstanding,
giving effect to common stock equivalents (common stock options). Pro
forma net income per share of common stock is presented in the
accompanying consolidated statements of income on an adjusted basis,
which gives retroactive effect to a two-for-one stock split paid in the
form of a stock dividend on October 23, 1997 to shareholders of record
on October 7, 1997. All references to the number of shares of common
stock, except shares authorized, and to per share data in the
consolidated financial statements have been adjusted to reflect the
stock split on a retroactive basis.
3. Recent Accounting Standards
During the second quarter of fiscal 1998, the Company adopted
SFAS No. 128, "Earnings Per Share." SFAS No. 128 establishes new
standards for computing and presenting earnings per share ("EPS"). This
statement replaces the presentation of primary and fully diluted EPS
and requires a dual presentation of basic and diluted EPS. Basic EPS is
computed using the weighted average number of common shares. Diluted
EPS is computed using the weighted average number of common shares and
potentially dilutive common shares outstanding during the period.
Potentially dilutive common shares consist of common stock options.
Earnings per share amounts for all periods have been restated to
conform to the requirements of SFAS No. 128.
-6-
REXALL SUNDOWN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
(Dollars in thousands)
(Unaudited)
3. Recent Accounting Standards, continued
SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information" establishes standards for the way that public
companies report selected information about operating segments in
annual financial statements and requires that those companies report
selected information about segments in interim financial reports issued
to shareholders. It also establishes standards for related disclosures
about products and services, geographic areas and major customers. SFAS
No. 131 is effective for the Company's financial statements for the
year ending August 31, 1999. Although management has not completed its
assessment of SFAS No. 131, it is contemplated that the pronouncement
will require certain segregated financial disclosures related to the
Company's channels of distribution.
4. Inventory
The components of inventory as of February 28, 1998 and August
31, 1997 are as follows:
February 28, 1998 August 31, 1997
----------------- ---------------
Raw materials, bulk tablets
and capsules $ 33,835 $ 22,275
Work in process 8,544 2,807
Finished products 30,757 17,657
-------- --------
$ 73,136 $ 42,739
======== ========
5. Sales to a Major Customer
The Company had sales to a national retailer which represented
approximately 29% and 19% of net sales for the three months ended
February 28, 1998 and 1997, respectively, and 29% and 16% of net sales
for the six months ended February 28, 1998 and 1997, respectively.
6. Contingencies
The Company believes that it is not presently a party to any
litigation, the outcome of which would have a material adverse impact
on the Company.
-7-
REXALL SUNDOWN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
(Dollars in thousands)
(Unaudited)
7. Supplemental Disclosure of Non-Cash Financing Activities
The Company recognized a reduction of income taxes payable and
a corresponding increase in additional paid-in capital related to the
exercise of stock options of $3,986 and $1,328 for the three months
ended February 28, 1998 and 1997, respectively, and $7,453 and $2,309
for the six months ended February 28, 1998 and 1997, respectively.
8. Business Combination
On January 29, 1998, the Company exchanged 2,884,616 shares of
the Company's common stock for all of the common stock of Richardson.
Richardson develops, markets and sells diet and weight management
nutritional supplements. The transaction was accounted for as a pooling
of interests and, accordingly, the Company's historical financial
statements have been restated to include the financial position and
results of operations of Richardson for all prior periods presented.
Richardson was an S corporation for federal income tax
purposes and, accordingly, did not pay U.S. Federal income taxes.
Richardson will be included in the Company's U.S. federal income tax
return effective January 29, 1998. Richardson's fiscal year end has
been changed to conform to the Company's fiscal year end.
Net sales and pro forma net income (including a pro forma
adjustment for income taxes related to the Subchapter S status of
Richardson) of the separate companies are as follows:
Rexall
Sundown Richardson Combined
------- ---------- --------
Six months ended February 28, 1997
Net sales $114,604 $12,422 $127,026
Pro forma net income 15,793 462 16,255
Six months ended February 28, 1998
Net sales $209,122 $17,087 $226,209
Pro forma net income 28,318 913 29,231
In connection with the merger, approximately $2.5 million of
merger costs and expenses were incurred in the second quarter of fiscal
1998, of which approximately $1.2 million and $1.3 million was charged
to Richardson and the Company, respectively.
-8-
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
Rexall Sundown, Inc. (the "Company") develops, manufactures, markets
and sells vitamins, nutritional supplements and consumer health products. The
Company distributes its products using three channels of distribution: sales to
retailers; direct sales through distributors; and mail order.
Revenue from the sale of the Company's products is recognized at the
time products are shipped to customers. Net sales are net of all discounts,
allowances, returns and credits. Initial costs associated with acquiring sales
agreements with certain retail customers are amortized over the expected term of
the relevant agreement and the amortization of such costs is recorded as a
reduction in net sales.
Gross margins are impacted by changes in the relative sales mix among
the Company's channels of distribution. In particular, gross margin is
positively impacted if sales of the Company's direct sales subsidiary, Rexall
Showcase International, Inc. ("Rexall Showcase"), increase as a percentage of
net sales because such products command a higher gross margin. In a related
manner, selling, general and administrative expenses as a percentage of net
sales are typically higher if sales of Rexall Showcase increase as a percentage
of net sales because of the commissions paid to Rexall Showcase's independent
distributors. Conversely, if Rexall Showcase's sales as a percentage of net
sales decrease, gross margins will decrease as a percentage of net sales and
selling, general and administrative expenses will decrease as a percentage of
net sales. Historically, operating margins from sales to retailers and mail
order have been higher than operating margins from the Rexall Showcase division.
Results of Operations
Three Months Ended February 28, 1998 Compared to Three Months Ended February
28, 1997
Net sales for the three months ended February 28, 1998 were $115.5
million, an increase of $50.5 million or 77.8% over the comparable period in
fiscal 1997. Of the $50.5 million increase, sales to retailers accounted for
$37.0 million, an increase of 95.3% over the comparable period in fiscal 1997.
The increase in sales to retailers was primarily attributable to increased sales
and distribution to the Company's existing customer base business, new product
introductions and new account distribution. Net sales of Rexall Showcase
increased by $12.9 million, an increase of 60.8% over the comparable period in
fiscal 1997. Net sales of the Company's mail order division, SDV, increased by
$580,000 or 12% over the comparable period in fiscal 1997. The increase in net
sales in each division was associated with increased unit sales as pricing has
remained essentially flat.
Gross profit for the three months ended February 28, 1998 was $67.3
million, an increase of $28.1 million or 71.5% over the comparable period in
fiscal 1997. As a percentage of net sales, gross profit decreased from 60.4% for
the three months ended February 28, 1997 to 58.3% for the three months ended
February 28, 1998. The decrease in gross margin was related principally to the
decreased net sales of Rexall Showcase as a percentage of the Company's net
sales and also due to increased costs associated with the start-up of the
Company's new packaging facility which commenced operations in December 1997.
-9-
Selling, general and administrative expenses for the three months ended
February 28, 1998 were $44.9 million, an increase of $18.2 million or 68.1% over
the comparable period in fiscal 1997. As a percentage of net sales, such
expenses decreased to 38.9% for the three months ended February 28, 1998 from
41.2% for the comparable period in fiscal 1997, primarily as a result of
increased net sales and the relatively fixed nature of such expenses, except for
the commission expense of Rexall Showcase, which is variable and comprises the
majority of Rexall Showcase's selling, general and administrative expenses. Such
commission expense increased by $6.0 million over the comparable period in
fiscal 1997. The Company also had approximately $1.7 million in additional
expenses related to national television advertising over the comparable period
in fiscal 1997 and approximately $2.5 million in pooling of interest expenses
related to the acquisition of Richardson for which there was no corresponding
expense in the same period last year.
Interest income for the three months ended February 28, 1998 was $1.1
million, as compared to $1.4 million for the comparable period in fiscal 1997.
Income before income tax provision was $23.4 million for the three
months ended February 28, 1998, an increase of $9.5 million or 68.4% over the
comparable period in fiscal 1997. As a percentage of net sales, income before
income tax provision decreased from 21.4% for the three months ended February
28, 1997 to 20.2% for the comparable period in fiscal 1998. Pro forma net income
was $14.7 million for the current fiscal quarter, an increase of $5.9 million or
67.3% from the prior year's comparable quarter, due to the reasons described
above.
Six Months Ended February 28, 1998 Compared to Six Months Ended
February 28, 1997
Net sales for the six months ended February 28, 1998 were $226.2
million, an increase of $99.2 million or 78.1% over the comparable period in
fiscal 1997. Of the $99.2 million increase, sales to retailers accounted for
$71.3 million, an increase of 95.3% over the comparable period in fiscal 1997.
The increase in sales to retailers was primarily attributable to increased sales
and distribution to the Company's existing customer base business, new product
introductions and new account distribution. Net sales of the Company's direct
sales subsidiary, Rexall Showcase, increased by $27.0 million, an increase of
62.1% over the comparable period in fiscal 1997. Net sales of the Company's mail
order division, SDV, increased by $901,000 or 10.3% over the comparable period
in fiscal 1997. The increase in net sales in each division was associated with
increased unit sales as pricing has remained essentially flat.
Gross profit for the six months ended February 28, 1998 was $133.9
million, an increase of $56.6 million or 73.3% over the comparable period in
fiscal 1997. As a percentage of net sales, gross profit decreased from 60.8% for
the six months ended February 28, 1997 to 59.2% for the six months ended
February 28, 1998. The decrease in gross margin was related principally to the
decreased net sales of Rexall Showcase as a percentage of the Company's net
sales and also due to increased costs related to start-up costs associated with
the Company's new packaging facility which commenced operations in December
1997.
Selling, general and administrative expenses for the six months ended
February 28, 1998 were $89.6 million, an increase of $36.2 million or 67.9% over
the comparable period in fiscal 1997. As a percentage of net sales, such
expenses decreased from 42.0% for the six months ended February 28, 1997 to
39.6% for the comparable period in fiscal 1998, primarily as a result of
increased net sales and
-10-
the relatively fixed nature of such expenses except for the commission expense
of Rexall Showcase, which is variable and comprises the majority of Rexall
Showcase's selling, general and administrative expenses. Such commission expense
increased by $13.7 million over the comparable period in fiscal 1997.
Additionally, the Company had approximately $5.0 million in incremental expenses
related to national television advertising over the comparable period in fiscal
1997 and approximately $2.5 million in pooling of interest expenses related to
the Richardson acquisition for which there was no corresponding expense in the
same period last year.
Interest income for the six months ended February 28, 1998 was $2.3
million, as compared to $2.0 million for the comparable period in fiscal 1997.
Income before income tax provision was $46.4 million for the six months
ended February 28, 1998, an increase of $20.6 million or 80.0% over the
comparable period in fiscal 1997. As a percentage of net sales, income before
income tax provision increased from 20.3% for the six months ended February 28,
1997 to 20.5% for the comparable period in fiscal 1998. Pro forma net income was
$29.2 million for the first six months of the current fiscal year, an increase
of $13.0 million or 79.8% from the first six months of the prior fiscal year due
to the reasons described above.
Seasonality
The Company believes that its business is not subject to significant
seasonality based on historical trends, with the exception of Rexall Showcase,
which typically experiences lower revenues in the second and fourth fiscal
quarters due to winter and summer holiday seasons, respectively.
Liquidity and Capital Resources
The Company had working capital of $174.5 million as of February 28,
1998, compared to $150.2 million as of August 31, 1997. This increase was
principally the result of increased trade accounts receivable due to higher
sales in the six months of fiscal 1998 and higher inventory levels to support
the Company's anticipated future sales growth.
Net cash provided by operating activities for the six months ended
February 28, 1998 was $927,000 compared to $16.3 million for the comparable
period in fiscal 1997. Net cash provided by operating activities decreased
primarily due to increased accounts receivable and inventory, partially offset
by increases in net income, accounts payable and accrued expenses, all of which
were necessary to support increased sales in the first half of fiscal 1998 and
anticipated future growth. Net cash used in investing activities was $20.7
million for the six months ended February 28, 1998 compared to $55.4 million for
the comparable period in fiscal 1997. Net cash used in investing activities
decreased primarily due to decreased marketable securities purchased in the
first half of fiscal 1998, partially offset by increased capital expenditures of
$14.4 million. Net cash provided by financing activities was $1.8 million for
the six months ended February 28, 1998 compared to $64 million for the
comparable period in fiscal 1997 reflecting $62.3 million of net proceeds
received from the public offering in the first quarter of fiscal 1997.
-11-
The Company believes that its existing cash balances, internally
generated funds from operations and its available bank line of credit will
provide the liquidity necessary to satisfy the Company's working capital needs,
including the purchase and maintenance of inventory, the financing of the
Company's accounts receivable, as well as the financing of anticipated capital
expenditures and acquisitions.
Year 2000
The Company has reviewed its critical information systems for Year 2000
compliance and has initiated plans to remedy any deficiencies in a timely
manner. As a result of the review and action plan, the Company believes the cost
of such remedial corrective actions are not material to the Company's financial
position, results of operations or cashflows.
Recent Accounting Standards
SFAS No. 131 establishes standards for the way that public companies
report selected information about operating segments in annual financial
statements and requires that those companies report selected information about
segments in interim financial reports issued to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. SFAS No. 131 is effective for the
Company's financial statements for the year ended August 31, 1999. Although
management has not completed its assessment of SFAS No. 131, it is contemplated
that the pronouncement will require certain segregated financial disclosures
related to the Company's channels of distribution.
Inflation
Inflation has not had a significant impact on the Company in the past
three years nor is it expected to have a significant impact in the foreseeable
future.
Forward Looking Statements
This report contains certain "forward-looking statements" within the
meaning of Section 21E of the Securities Act of 1934, which represent the
Company's expectations or beliefs. For this purpose, any statements contained in
this report that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the generality of the foregoing,
words such as "may," "will," "expect," "believe," "anticipate," "intend,"
"could," "estimate" or "continue" or the negative or other variations thereof or
comparable terminology are intended to identify forward-looking statements.
These statements by their nature involve substantial risks and uncertainties,
certain of which are beyond the Company's control, and actual results may differ
materially depending on a variety of important factors described in the
Company's filings with the Securities and Exchange Commission.
-12-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
On January 29, 1998, the Company consummated a merger with
Richardson whereby the Company issued 2,884,616 shares of common stock, par
value $.01 per share, of the Company to Richardson's stockholders in exchange
for all of the outstanding shares of common stock of Richardson. The transaction
was not a public offering of securities and, accordingly, is exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
The Company's Annual Meeting of Shareholders was held on February 4,
1998. The holders of 67,891,911 shares of common stock were entitled to vote at
the Annual Meeting and there were present, in person or by proxy, holders of
67,269,069 shares of common stock (99.1% of the shares entitled to vote).
The following individuals were elected as Directors of the Company to
serve until the 1999 Annual Meeting by the following votes (the numbers in
parentheses represent the percent of the shares of Common Stock voted at the
Annual Meeting):
FOR WITHHELD AUTHORITY
---------------------------------------------------
Carl DeSantis 67,114,884 (99.8%) 154,185 (.2%)
Christian Nast 67,118,868 (99.8%) 150,201 (.2%)
Dean DeSantis 67,113,178 (99.8%) 155,891 (.2%)
Damon DeSantis 67,113,178 (99.8%) 155,891 (.2%)
Nickolas Palin 67,113,188 (99.8%) 155,881 (.2%)
Stanley Leedy 67,118,868 (99.8%) 150,201 (.2%)
Raymond Monteleone 67,119,278 (99.8%) 149,791 (.2%)
Melvin T. Stith 67,119,248 (99.8%) 149,821 (.2%)
The proposal to increase the number of authorized shares of the
Company's Common Stock from 100,000,000 to 200,000,000 shares by amending the
Company's Articles of Incorporation was approved as follows: 66,674,124 (99.1%)
shares were cast for the proposal; 505,898 (.8%) shares were cast against the
proposal; and 89,047 (.1%) shares abstained.
The proposal to amend the Company's Amended and Restated 1993 Stock
Incentive Plan was approved as follows: 41,779,071 (62.1%) shares were cast for
the proposal; 18,138,590 (27.0%) shares were cast against the proposal; 161,821
(.2%) shares abstained; and 7,189,587 (10.7%) were broker non-votes.
-13-
The proposal to ratify the appointment of Coopers & Lybrand LLP as the
Company's independent accountants for the fiscal year ending August 31, 1998 was
approved as follows: 67,132,337 (99.8%) shares were cast for the proposal;
36,160 (.1%) shares were cast against the proposal; and 90,572 (.1%) shares
abstained.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.1 Employment Agreement dated January 29, 1998
by and between the Company and John Priddy.
27 Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K.
A report on Form 8-K was filed on February 11, 1998 to
report the merger of Richardson with the Company.
-14-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REXALL SUNDOWN, INC.
Date: April 13, 1998
By: /s/ Carl DeSantis
------------------------------------------
Carl DeSantis, Chairman of the Board
Date: April 13, 1998
By: /s/ Geary Cotton
------------------------------------------
Geary Cotton, Chief Financial Officer,
Treasurer and Chief Accounting Officer
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