<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission file number 0-21003
TWINLAB CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 11-3317986
(State of incorporation) (I.R.S. Employer Identification No.)
150 Motor Parkway, Suite 210, Hauppauge, NY 11788
(Address of principal executive office) (zip code)
(516) 467-3140
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required 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.
YES X NO
------- -------
At April 30, 1998, the registrant had 31,551,049 shares of common
stock outstanding.
1
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TWINLAB CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1997
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 7,449 $ 4,029
Accounts receivable, net of allowance for bad
debts of $406 41,606 44,059
Inventories 47,734 37,254
Deferred tax assets 1,196 1,615
Prepaid expenses and other current assets 1,617 1,288
--------- ---------
Total current assets 99,602 88,245
Property, plant and equipment, net 14,050 13,958
Deferred tax assets 47,740 48,777
Other assets 22,384 20,344
--------- ---------
Total $ 183,776 $ 171,324
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 9,954 $ 13,993
Accounts payable 20,034 16,534
Accrued expenses and other current liabilities 15,182 10,208
--------- ---------
Total current liabilities 45,170 40,735
Long-term debt, less current portion 100,241 100,245
--------- ---------
Total liabilities 145,411 140,980
Commitments and contingencies
Shareholders' equity:
Preferred stock, $.01 par value; 2,000,000
shares authorized; none issued -- --
Common stock, $1.00 par value; 75,000,000
shares authorized; 27,321,900 shares
outstanding as of March 31, 1998 and
27,320,100 shares outstanding as of
December 31, 1997 27,322 27,320
Additional paid-in capital 147,035 147,003
Accumulated deficit (135,992) (143,979)
--------- ---------
Total shareholders' equity 38,365 30,344
--------- ---------
Total $ 183,776 $ 171,324
========= =========
</TABLE>
2
<PAGE> 3
TWINLAB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 1997
-------- --------
(UNAUDITED)
<S> <C> <C>
NET SALES $ 73,451 $ 51,169
COST OF SALES 37,232 29,183
-------- --------
GROSS PROFIT 36,219 21,986
OPERATING EXPENSES 20,039 9,688
-------- --------
INCOME FROM OPERATIONS 16,180 12,298
OTHER (EXPENSE) INCOME:
Interest income 98 44
Interest expense (3,103) (3,044)
Other (81) 6
-------- --------
(3,086) (2,994)
-------- --------
INCOME BEFORE PROVISION FOR INCOME TAXES 13,094 9,304
PROVISION FOR INCOME TAXES 5,107 3,637
-------- --------
NET INCOME $ 7,987 $ 5,667
======== ========
BASIC NET INCOME PER SHARE $ 0.29 $ 0.21
======== ========
DILUTED NET INCOME PER SHARE $ 0.29 $ 0.21
======== ========
WEIGHTED AVERAGE COMMON SHARES USED IN
COMPUTING BASIC INCOME PER SHARE 27,321 27,000
======== ========
WEIGHTED AVERAGE COMMON SHARES USED IN
COMPUTING DILUTED INCOME PER SHARE 27,373 27,016
======== ========
</TABLE>
3
<PAGE> 4
TWINLAB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 1997
-------- -------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,987 $ 5,667
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 713 466
Bad debt expense -- 200
Deferred income taxes 1,456 1,308
Changes in operating assets and liabilities:
Accounts receivable 2,453 (2,778)
Inventories (10,480) (5,669)
Prepaid expenses and other current assets (329) (221)
Accounts payable 3,500 4,322
Accrued expenses and other current liabilities 4,986 1,476
-------- -------
Net cash provided by operating activities 10,286 4,771
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (402) (2,292)
(Increase) decrease in other assets (2,444) 614
-------- -------
Net cash used in investing activities (2,846) (1,678)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 22 --
Payments of debt (4,004) (5,007)
Principal payments of capital lease obligations (38) (36)
-------- -------
Net cash used in financing activities (4,020) (5,043)
-------- -------
Net increase (decrease) in cash and cash equivalents 3,420 (1,950)
Cash and cash equivalents at beginning of period 4,029 3,794
-------- -------
Cash and cash equivalents at end of period $ 7,449 $ 1,844
======== =======
Supplemental disclosures of cash flow information:
Cash paid during the periods for:
Interest $ 370 $ 270
======== =======
Income taxes $ 1,544 $ 1,314
======== =======
</TABLE>
4
<PAGE> 5
TWINLAB CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(ALL AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1. In the opinion of management, the accompanying unaudited consolidated
financial statements include all necessary adjustments (consisting of
normal recurring accruals) and present fairly the financial position of
Twinlab Corporation and subsidiaries as of March 31, 1998 and the
results of its operations and cash flows for the three months ended
March 31, 1998 and 1997 in conformity with generally accepted
accounting principles for interim financial information applied on a
consistent basis. The results of operations for the three months ended
March 31, 1998 are not necessarily indicative of the results to be
expected for the full year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. These financial statements
should be read in conjunction with the audited consolidated financial
statements and notes thereto included in Twinlab Corporation's December
31, 1997 Annual Report to Stockholders on Form 10-K as filed with the
Securities and Exchange Commission.
2. CONDENSED AND SUMMARIZED FINANCIAL INFORMATION
The Company's amended revolving credit facility and restrictive
covenants contained in the indenture governing the senior subordinated
notes restrict the payment of dividends and the making of loans,
advances, or other distributions to Twinlab Corporation ("Twinlab") by
any of its subsidiaries except in certain limited circumstances. The
condensed financial information of Twinlab, on a stand-alone basis, is
as follows:
<TABLE>
<CAPTION>
CONDENSED BALANCE SHEETS MARCH 31, 1998 DECEMBER 31, 1997
- ------------------------ -------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash $ 171 $ 169
Investment in subsidiaries 38,194 30,175
--------- ---------
$ 38,365 $ 30,344
========= =========
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value
2,000,000 shares authorized; none issued
Common stock, $1.00 par value, $ -- $ --
75,000,000 shares authorized;27,321,900
outstanding as of March 31, 1998 and
27,320,100 outstanding as of
December 31, 1997 27,322 27,320
Additional paid-in capital 147,035 147,003
Accumulated deficit (135,992) (143,979)
--------- ---------
$ 38,365 $ 30,344
========= =========
</TABLE>
5
<PAGE> 6
<TABLE>
<CAPTION>
CONDENSED STATEMENTS OF INCOME THREE MONTHS ENDED MARCH 31,
1998 1997
------ --------
(UNAUDITED)
<S> <C> <C>
Equity interest in net income of subsidiaries $8,012 $5,766
Interest income 2 1
------ ------
Income before provision for income taxes $8,014 $5,767
Provision for income taxes 27 100
------ ------
Net income $7,987 $5,667
====== ======
</TABLE>
<TABLE>
<CAPTION>
CONDENSED STATEMENTS OF CASH FLOW THREE MONTHS ENDED MARCH 31,
1998 1997 .
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES: (UNAUDITED)
<S> <C> <C>
Net income $ 7,987 $ 5,667
CASH FLOWS USED IN INVESTING ACTIVITIES:
Equity investments in subsidiaries (8,007) (5,666)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 22
------- -------
Net increase in cash $ 2 $ 1
Cash at beginning of period 169 162
------- -------
Cash at end of period $ 171 $ 163
======= =======
</TABLE>
Twin Laboratories Inc. ("Twin") is a direct wholly-owned subsidiary of
Twinlab. Advanced Research Press, Inc. ("ARP") and Changes
International of Fort Walton Beach, Inc. ("Changes International") are
indirect wholly-owned subsidiaries of Twinlab. Twinlab, ARP and
Changes are guarantees of the senior subordinated notes of Twin.
The assets, results of operations and shareholders' equity of Twin
comprise substantially all of the assets, results of operations and
shareholders' equity of Twinlab on a consolidated basis. Twinlab has no
separate operations and has no significant assets other than Twinlab's
investment in Twin and, through Twin, in ARP and Changes International.
Twin has no direct or indirect subsidiaries other than ARP and Changes
International; and Twin has no other stockholder than Twinlab.
Accordingly, the Company has determined that separate financial
statements of Twin, ARP and Changes International would not be material
to investors and, therefore, are not included herein.
Summarized financial information of Twin is as follows:
<TABLE>
<CAPTION>
AS OF MARCH 31, 1998 AS OF DECEMBER 31, 1997
-------------------- -----------------------
(UNAUDITED)
<S> <C> <C>
Current assets $ 99,431 $ 88,077
Noncurrent assets 84,174 83,079
Current liabilities 49,265 44,825
Noncurrent liabilities 100,241 100,245
Shareholder's equity 34,099 26,086
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 1997
---------- ---------
(UNAUDITED)
<S> <C> <C>
Net sales $ 73,451 $ 51,169
Gross profit 36,219 21,986
Net income 8,012 5,766
</TABLE>
Summarized financial information of ARP is as follows:
<TABLE>
<CAPTION>
AS OF MARCH 31,1998 AS OF DECEMBER 31,1997
------------------- ----------------------
(UNAUDITED)
<S> <C> <C>
Current assets $ 1,625 $ 1,399
Noncurrent assets 191 193
Current liabilities 664 568
Noncurrent liabilities -- --
Shareholder's equity 1,152 1,024
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1998 1997
-------- -----
(UNAUDITED)
<S> <C> <C>
Net sales $ 1,343 $ 1,591
Gross profit 345 406
Net income 129 146
</TABLE>
Summarized financial information of Changes International is as
follows:
<TABLE>
<CAPTION>
AS OF MARCH 31,1998
-------------------
(UNAUDITED)
<S> <C>
Current assets $ 5,746
Noncurrent assets 12,891
Current liabilities 3,335
Noncurrent liabilities --
Shareholder's equity 15,302
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,1998
--------------------------------
(UNAUDITED)
<S> <C>
Net sales $12,566
Gross profit 10,250
Net income 960
</TABLE>
3. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31,1997
-------------- ----------------
(UNAUDITED)
<S> <C> <C>
Raw materials $25,116 $16,340
Work in process 9,550 7,393
Finished goods 13,068 13,521
------- -------
Total $47,734 $37,254
======= =======
</TABLE>
7
<PAGE> 8
4. NET INCOME PER SHARE
In 1997, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 128, "Earnings Per Share" and restated net
income per common share for all periods presented. Basic net income per
common share was calculated based upon the weighted average number of
common shares outstanding during the respective periods. Diluted net
income per common share was calculated based upon the weighted average
number of common shares outstanding and included the equivalent shares
for dilutive options outstanding during the respective periods.
The weighted average common shares outstanding for the computation of
basic net income per common share for the three months ended March 31,
1998 and 1997 were 27,321,000 and 27,000,000, respectively.
Additionally 52,000 and 16,000 of equivalent common shares were
included for the three months ended March 31, 1998 and 1997,
respectively, for the diluted calculation.
5. RECENT ACCOUNTING PRONOUNCEMENTS
The Company adopted SFAS No. 130, "Reporting Comprehensive Income" in
1998. For the three months ended March 31, 1998 and 1997 there are no
items of other comprehensive income as defined in the pronouncement.
6. SUBSEQUENT EVENTS
In April 1998, the Company completed a second public offering of 9.2
million shares of its common stock priced at $36.50 per share. Of the
total shares offered, 4.2 million shares were sold by the Company. The
net proceeds to the Company from the offering were approximately $147.4
million. Of the net proceeds to the Company, approximately $56.5
million was used to pay the purchase price for the Bronson acquisition
(discussed below), including related fees and expenses; approximately
$40.1 million will be used to redeem $35.0 million of the Company's
senior subordinated notes at a redemption price of 109-1/2 percent,
plus accrued and unpaid interest; and approximately $5.6 million was
used to reduce outstanding borrowings under the Company's revolving
credit facility, including accrued and unpaid interest. The remaining
net proceeds to the Company of approximately $45.2 million will be used
for working capital and other general corporate purposes. The Company
is currently considering the possibility of making an offer to purchase
for cash all Notes not otherwise purchased in the Redemption or
purchasing Notes in the open market.
On April 30, 1998 the Company acquired substantially all of the assets
and assumed certain liabilities of the Bronson Division of Jones
Medical Industries, Inc. Bronson's audited net sales and operating
income for the fiscal year ended December 31, 1997 were approximately
$32.1 million and $9.5 million, respectively. For the three months
ended March 31, 1998, Bronson's unaudited net sales and operating
income were approximately $7.7 million and $1.9 million, respectively.
The purchase price was $55 million in cash (excluding related fees and
expenses), subject to certain adjustments.
8
<PAGE> 9
TWINLAB CORPORATION AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The following discussion and analysis should be read in conjunction with the
response to Part I, Item 1 of this report.
The Company operates in one business segment, the manufacture and marketing of
brand name nutritional supplements. Within this segment, the Company operates in
three primary business areas: the Twinlab division, the herbal products
division, and the network marketing division. Products sold under the Twinlab
division name include vitamins, minerals, amino acids, fish and marine oils,
sports nutrition products and special formulas. The herbal products division
includes a full line of herbal supplements and phytonutrients marketed by the
Nature's Herbs division and a full line of herb teas marketed by the Alvita Tea
division. The Company's network marketing activities are conducted through
Changes International, which was acquired in November 1997. In addition, the
Company's publishing activities are conducted through its subsidiary, Advanced
Research Press, Inc.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO
THREE MONTHS ENDED MARCH 31, 1997
NET SALES. Net sales for the three months ended March 31, 1998 were $73.5
million, an increase of $22.3 million, or 43.5%, as compared to net sales of
$51.2 million for the three months ended March 31, 1997. The 43.5% increase was
attributable to increases in gross sales, which were due to the Company's
increased sales volume. During the first quarter of 1998 the Company received a
substantial increase in orders for its herbal supplement products, particularly
from a mass market retailer. The increase was due to strong demand at the retail
level and to the fact that that the Company's number of SKU's in this category
more than doubled during the first quarter. As a result, the Company's
production and sales mix changed in the first quarter of 1998 versus the first
quarter of 1997, as herbal supplements represented a greater portion of the
Company's total net sales. Net sales of Twinlab products were $33.9 million, a
decrease of $7.7 million, or 18.5%, as compared to $41.6 million for the three
months ended March 31, 1997. This decrease in net sales of Twinlab products was
primarily due to the production and sales mix change discussed above. Herbal
products contributed $25.8 million, an increase of $17.6 million, or 214.8%,
from the $8.2 million in sales for the three months ended March 31, 1997. The
herbal category continued to benefit from the factors discussed above and the
strong demand for St. John's Wort, Gingko, Saw Palmetto and Echinacea.
Publishing contributed $1.2 million as compared to $1.4 million for the three
months ended March 31, 1997. The network marketing line, which was acquired in
the fourth quarter of the calendar year 1997, contributed $12.6 million in net
sales during the three months ended March 31, 1998.
GROSS PROFIT. Gross profit for the three months ended March 31, 1998 was $36.2
million, which represented an increase of $14.2 million, or 64.7%, as compared
to $22.0 million for the three months ended March 31, 1998. Gross profit margin
was 49.3% for the three months ended March 31, 1998 as compared to 43.0% for the
three months ended March 31, 1997. The overall increase in gross profit dollars
was attributable to the Company's higher sales volume for the three months ended
March 31, 1998. The increase in gross profit margin for the three months ended
March 31, 1998 as compared to the three months ended March 31, 1997 was
primarily due to higher gross profit margins of the network marketing business.
9
<PAGE> 10
TWINLAB CORPORATION AND SUBSIDIARIES
OPERATING EXPENSES. Operating expenses were $20.0 million for the three months
ended March 31, 1998, representing an increase of $10.4 million, or 106.8%, as
compared to $9.7 million for the three months ended March 31, 1998. As a percent
of net sales, operating expenses increased from 18.9% for the three months ended
March 31, 1997 to 27.3% for the three months ended March 31, 1998 The increase
in operating expenses was primarily attributable to increased selling and
marketing expenses, primarily commissions, and to a lesser extent to general
administrative expenses associated with the network marketing operations.
INCOME FROM OPERATIONS. Income from operations was $16.2 million for the three
months ended March 31, 1998, representing an increase of $3.9 million, or 31.6%,
as compared to $12.3 million for the three months ended March 31, 1997. Income
from operations margin decreased to 22.0% of net sales for the three months
ended March 31, 1998, as compared to 24.0% of net sales for the three months
ended March 31, 1997. The increase in income from operations was primarily due
to the Company's higher sales volume together with higher gross margins. The
decrease in income from operations margins was due to higher operating expenses
for the three months ended March 31, 1998, due primarily to increased selling
and marketing costs, and commission expenses associated with the network
marketing operations.
OTHER EXPENSE. Other expense was $3.1 million for the three months ended March
31, 1998, as compared to $3.0 million for the three months ended March 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended March 31, 1998, cash provided by operating activities
was $10.3 million, as compared to $4.8 million for the three months ended March
31, 1997. Cash used in financing activities was $4.0 million for the three
months ended March 31, 1998, and $5.0 million for the three months ended March
31, 1997 and in both periods primarily represented the repayment of outstanding
indebtedness.
Capital expenditures were $0.4 million and $2.3 million for the three months
ended March 31, 1998 and 1997, respectively. Capital expenditures were primarily
for the purchase or production equipment to expand capacity or improve
manufacturing efficiency. Capital expenditures are expected to be approximately
$17.0 million during the calendar year 1998, $13.3 million of which will be used
for the expansion of the Utah facility and the remainder for the purchase of
manufacturing equipment. The Company estimates that its historical level of
maintenance capital expenditures has been approximately $0.5 million per fiscal
year. The Company recently entered into a lease for approximately 21,000 square
feet of office space in Hauppauge, New York to house its executive and
administrative personnel. Management believes that it will be able to lease,
purchase, or construct additional facilities to the extent necessary to meet the
Company's future expansion requirements.
10
<PAGE> 11
TWINLAB CORPORATION AND SUBSIDIARIES
Twinlab has no operations of its own and accordingly has no independent means of
generating revenue. As a holding company, Twinlab's internal sources of funds to
meet its cash needs, including payment of expenses, are dividends and other
permitted payments from its direct and indirect subsidiaries. The indenture,
dated as of May 7, 1996, as amended, among Twinlab, Twin Laboratories Inc., ARP,
Changes International and State Street Bank and Trust Company, as trustee,
relating to the senior subordinated notes and the amended revolving credit
facility impose upon the Company certain financial and operating covenants,
including, among others, requirements that the Company maintain certain
financial ratios and satisfy certain financial tests, limitations on capital
expenditures and restrictions on the ability of the Company to incur debt, pay
dividends or take certain other corporate actions.
In April 1998, the Company completed a second public offering of 9.2 million
shares of its common stock priced at $36.50 per share. Of the total shares
offered, 4.2 million shares were sold by the Company. The net proceeds to the
Company from the offering are estimated at approximately $147.4 million. Of the
net proceeds to the Company, approximately $56.5 million was used to pay the
purchase price for the Bronson acquisition (discussed below), including related
fees and expenses; approximately $40.1 million will be used to redeem $35.0
million of the Company's senior subordinated notes at a redemption price of
109-1/2 percent, plus accrued and unpaid interest; and approximately $5.6
million were used to reduce outstanding borrowings under the Company's
revolving credit facility, including accrued and unpaid interest. The remaining
net proceeds to the Company of approximately $45.2 million will be used for
working capital and other general corporate purposes. The Company is currently
considering an offer to purchase for cash all Notes not otherwise purchased in
the Redemption or purchasing Notes in the open market.
On April 30, 1998 the Company acquired substantially all of the assets and
assumed certain liabilities of the Bronson Division of Jones Medical Industries,
Inc. Bronson's audited net sales and operating income for the fiscal year ended
December 31, 1997 were approximately $32.1million and $9.5 million,
respectively. For the three months ended March 31, 1998 Bronson's unaudited net
sales and operating income were approximately $7.7 million and $1.9 million
respectively. The purchase price was $55 million in cash (excluding related fees
and expenses), subject to certain adjustments.
Management believes that the Company has adequate capital resources and
liquidity to meet its borrowing obligations, fund all required capital
expenditures and actively pursue its business strategy for the next 18 to 24
months. The Company's capital resources and liquidity are expected to be
provided by the Company's cash flow from operations, borrowings under its
amended revolving credit facility and approximately $45.2 million of proceeds
from its second public offering. As of April 30, 1998, approximately $50 million
of borrowings were available under the amended revolving credit facility for
working capital requirements and general corporate purposes.
One of the Company's business strategies is to actively pursue acquisition
opportunities, including product line acquisitions, that complement or extend
existing products, expand its distribution channels or are compatible with its
business philosophy and strategic goals. Future acquisitions could be financed
by internally generated funds, bank borrowings, public offerings or private
placements of equity or debt securities, or a combination of the foregoing. Up
to $35 million of borrowings under the amended revolving credit facility,
subject to certain conditions and reductions, will be available to fund future
acquisitions. There can be no assurance that the Company will be able to make
acquisitions on terms favorable to the Company or that funds to finance an
acquisition will be available or permitted under the Company's financing
instruments.
11
<PAGE> 12
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
Information contained or incorporated by reference in this periodic report on
Form 10-Q and in other SEC filings by the Company contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 which can be identified by the use of forward-looking terminology such
as "believes," "expects," "may," "will," "should" or "anticipates" or the
negative thereof of other variations thereon or comparable terminology, or by
discussions of strategy. No assurance can be given that future results covered
by the forward-looking statements will be achieved, and other factors could also
cause actual results to vary materially from the future results covered in such
forward-looking statements.
12
<PAGE> 13
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no matters submitted to a vote of security holders during the
quarter ended March 31, 1998.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS:
27 Financial Data Schedule.
(b) REPORTS ON FORM 8-K:
A report on Form 8-K was filed on May 12, 1998, reporting the
Bronson Acquisition.
13
<PAGE> 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.
TWINLAB CORPORATION
BY: /s/ Ross Blechman
-----------------------------------------------
Ross Blechman
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
DATED: May 15, 1998 BY: /s/ John McCusker
-----------------------------------------------
John McCusker
CHIEF FINANCIAL OFFICER,
(PRINCIPAL FINANCIAL OFFICER)
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 7,449
<SECURITIES> 0
<RECEIVABLES> 42,012
<ALLOWANCES> 406
<INVENTORY> 47,734
<CURRENT-ASSETS> 99,602
<PP&E> 22,811
<DEPRECIATION> 8,761
<TOTAL-ASSETS> 183,776
<CURRENT-LIABILITIES> 45,170
<BONDS> 0
0
0
<COMMON> 27,322
<OTHER-SE> 11,043
<TOTAL-LIABILITY-AND-EQUITY> 183,776
<SALES> 73,451
<TOTAL-REVENUES> 73,451
<CGS> 37,232
<TOTAL-COSTS> 37,232
<OTHER-EXPENSES> 20,039
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,103
<INCOME-PRETAX> 13,094
<INCOME-TAX> 5,107
<INCOME-CONTINUING> 7,987
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,987
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
