03.01.11
CCA Industries reported a net loss of $697,500 in the fourth quarter of 2010. Revenues declined nearly 20% to $10.1 million. On the year, the company reported a net loss of more than $1.6 million, compared to a net income of more than $3.4 million in 2009. Sales for 2010 fell nearly 12% to $50.8 million.
Company executives said that earnings were significantly impacted by two events in fiscal 2010, the first of which was the settlement of a class action litigation in California related to the company's advertising of its dietary Mega-T supplements. As a result of the settlement, the company recorded an expense of $2,235,465 during fiscal 2010.
In addition to the dietary supplement litigation, the company faced a serious stability problem with some of its Plus White oral care whitening products that occurred during production, which caused the company to issue a voluntary recall of the affected products. The stability problem did not cause any safety issues, but resulted in the product losing its efficacy. The company incurred expenses of approximately $359,000 related to the voluntary product recall, and an undetermined loss of sales.
Finally, the company experienced a slowdown in sales for the fourth quarter of 2010 due to retailers reducing the amount of their in-store inventory, as well as the residual effects of the dietary supplement litigation. As a result of the lower sales, the company had a loss in the fourth quarter of 2010. Retail orders have improved in the first quarter of 2011.
Finally, the company experienced a slowdown in sales for the fourth quarter of 2010 due to retailers reducing the amount of their in-store inventory, as well as the residual effects of the dietary supplement litigation. As a result of the lower sales, the company had a loss in the fourth quarter of 2010. Retail orders have improved in the first quarter of 2011.
"Last year was a difficult year, as it has been for many companies operating in this economic climate. Management has worked hard to control costs and to reduce overhead. So far, in fiscal 2011, overhead has been reduced by over $2 million. We exceeded our sales budget for the first quarter of 2011 and anticipate that we will have an operating profit for the quarter. Our sales have been bolstered by a surge in CCA's core brands Mega-T, Plus White and Bikini Zone, and we are looking forward to a very successful year," stated Dunnan Edell, chief executive officer.