Source: LOHAS Weekly Newsletter
Published: Sunday, October 01, 2000

October 26, 2000

SYTE Withdraws Bid for MTHR, Companies Bicker in Press-release Scuffle; MTHR Posts 3Q00 Results

Internet holding company SiteStar Corp. (SYTE) in a press release dated Oct. 20 announced the withdrawal of its $17.4 million offer to acquire all outstanding shares of MotherNature.com (MTHR). According to SiteStar, MTHR refused to enter into discussions with the company after it announced its acquisition intentions in August.

Subsequently, MotherNature on Oct. 23 issued a press release charging that SiteStar failed to commence a former tender offer and was unwilling to execute a customary nondisclosure agreement that would allow the companies to hold confidential discussions. Five hours later, SiteStar released a final statement accusing MTHR’s management of ""trying to rewrite history by circulating misleading press releases."" MotherNature has not further commented on the matter.

Separately, MTHR posted a 3Q00 net loss of $6.7 million or $.44/share vs. a 3Q99 net loss of $18.8 million or $1.93/share pro forma. Net sales for 3Q00 were $3 million vs. 3Q99 net sales of $1.6 million.

FDA Ban Could Spell Losses for CHTT

One day after an FDA panel announced that phenylpropanolamine (PPA--an ingredient found in cold remedies and weight-loss supplements--is linked to a higher risk of strokes in people aged 18 to 49, Chattem Inc. (CHTT) on Oct. 20 warned that a ban on PPA could have a significant impact on its bottom line. According to CHTT, Detatrim in FY01 is expected to add about $8 million (in earnings before interest and taxes) or $.40 or $.50/share. Potential losses cannot be determined until a final decision is made on the ban, CHTT said. The company’s shares fell $1.50 to $5.25, but closed on Oct. 25 at $6.12/share.

DSCM Cuts Workforce, Announces 3Q00 Loss

In an effort to decrease operating costs by more than $50 million for 2001, Drugstore.com (DSCM) on Oct. 20 said it will cut its workforce by 10 percent or about 60 people. Separately, DSCM posted a 3Q00 net loss of $45.7 million or $.80/share vs. a 3Q99 net loss of $41.9 million or $1.33/share. DSCM had 3Q00 revenues of $26.5 million vs. 3Q99 revenues of $12.2 million. U.S. Bancorp Piper Jaffray on Oct. 24 said DSCM’s 3Q00 results were ""slightly better than expected"" and maintained its Buy rating on the company.

IVCO Receives $30.5 Million Credit Facility

Supplements manufacturer and distributor IVC Industries (IVCO) on Oct. 24 announced that it has completed arrangements with First Union National Bank subsidiary Congress Financial Corp. for a $30.5 million credit facility, effective Oct. 16. Terms of the deal were not disclosed. According to IVCO CFO Thomas Bocchino, the new facility, which replaces similar arrangements with other financial institutions, increases the company’s borrowing availability and eliminates restrictions associated with its previous facility. Bocchino says the money will enhance the company’s ability to ""meet current obligations and finance future projects.""

Financial News: PSTA, PRGO Post Net Gains; CYAN Posts Net Loss; OPTS Downgraded; More

Monterey Pasta Co. (PSTA) posted a 3Q00 net income of $1.8 million or $.13/diluted share vs. a 3Q99 net income of $1 million or $.08/share.

Perrigo Co. (PRGO) posted a 1Q01 net income of $10.5 million or $.14/share vs. a 1Q00 net income of $10 million or $.14/share.

Cyanotech (CYAN) reported a 2Q01 net loss of $40,000 or $0.0/share vs. a 2Q00 net loss of $609,000 or $.05/share. CYAN had net sales of $2.4 million, up 58 percent from 2Q00 net sales of $1.5 million.

Opta Food Ingredients (OPTS) reported a 3Q00 net income of $217,000 or $.02/share vs. a 3Q99 net income of $316,000 or $.03/share. Additionally, Adams, Harkness & Hill on Oct. 20 downgraded OPTS from Accumulate to Market Perform.

Nu Skin Enterprises (NUS) posted a 3Q00 net income of $15 million or $.18/share vs. a 3Q99 net income of $21.1 million or $.24/share.

Briefly:

Twinlab (TWLB) and Reader’s Digest Association (RDA) on Oct. 24 said they plan to jointly market vitamins, minerals and supplements in the U.S. The terms of the partnership were not disclosed. The parties say they will launch their marketing plan this spring.

Whole Foods Market (WFMI) has chosen downtown Toronto’s upscale Hazelton Lanes shopping district as its first Canadian location. The natural foods store will occupy a 45,000-sq.-ft., two-level space in the landmark Avenue Road-Yorkville building.

Omni Nutraceuticals (ZONE) on Oct. 20 said its financial advisor, Rabobank Intl., has begun contacting parties that are potentially interested in exploring strategic alternatives for the company. Possibilities include recapitalizing the company, mergers or acquisitions.

Healthnet Intl. (HLNT) has secured $1 million in financing from what it calls ""a group of sophisticated investors."" Under the terms of the private placement, the investor group purchased 1 million shares of common stock for $1/share. Additionally, SmallCaps Online LLC initiated coverage on HLNT with a Buy rating.

A coalition of environmental groups, including Greenpeace and Sierra Club, have threatened to sue EPA for failing to assess the impact genetically modified (GM) corn and cotton varieties could have on threatened and endangered butterflies before approving them for use.

Shaman Pharmaceuticals (SHPH) on Oct. 25 announced that it has retained California-based investment bank Roth Capital to help it identify ways to create greater value for the company and its shareholders.

Palm Beach, Fla.-based Florida Crystals received the American Taste Award for Excellence from the San Francisco-based American Tasting Institute.