Del Labs’ 2Q Earnings Down Due to Operations Transfer

Del Laboratories, Inc., Uniondale, NY, reported net sales rose 5.1% to $102.9 million, in the second quarter ended June 30. Net earnings for the quarter fell to $3.7 million from $4.9 million in 2003 due to higher production costs and start-up problems from the transfer of manufacturing operations from Farmingdale, NY, to Rocky Point, NC.

Net sales for the first six months of 2004 were $186.0 million, down 2.8%. Net earnings for the first six months were $4.4 million, compared to $9.2 million in 2003.

“We continue to make steady improvement in our production processes and anticipate that we will be back to our pre-relocation manufacturing efficiency levels before the end of the third quarter,” commented Dan K. Wassong, Del Lab’s chairman, president and chief executive officer. “In our cosmetic business, Sally Hansen remains the No. 1 brand in the mass market nail care category with a 26.5% share of market for the second quarter, as reported by ACNielsen.”

Del Labs also signed a definitive merger agreement to be acquired by DLI Holding Corp. for $465 million. DLI Holding Corp. will be owned by affiliates of Kelso and Company with members of Del’s current management. An affiliate of Church & Dwight Co., Inc. will own non-voting preferred stock.

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