Scott’s Liquid Gold Reports Loss

Scott’s Liquid Gold reported a net loss of approximately $2.3 million, or ($0.22) per share, on net sales of $28.6 million, for the year ended Dec. 31, 2000. These results compared with a net loss of $504,500, or ($0.05) per share, on net sales of $33.9 million, in the previous year. A net loss of $695,700, or ($0.07) per share, was recorded in the fourth quarter of 2000, versus prior-year net income of $1,469,700, or $0.15 per share. Net sales approximated $6.6 million in the quarter ended December 31, 2000, compared with net sales of approximately $8.0 million in the year earlier period.

“While we were obviously disappointed with the decline in sales and lack of profitability in the year 2000, a number of accomplishments were noteworthy and bode well for the future,” stated Mark E. Goldstein, chairman and chief executive officer of Scott’s Liquid Gold-Inc. “As our shareholders know well, Scott’s Liquid Gold has suffered from a maturing in the market for alpha hydroxy-based skin care products during the past couple of years, and from intense competition from large manufacturers of similar or alternative products. Our strategy for positioning the company for a resumption in sales growth and a return to profitability has included the introduction of a number of Oniche’ products and the pursuit of additional marketing channels, as well as the redesign of advertising campaigns for our traditional products.”

According to Mr. Goldstein, the settlement of litigation involving TriStrata Technologies, Inc. has allowed Scott’s to more effectively reconfigure its ads for the Alpha Hydrox product line for the 2001 television campaign. He added that the company’s diabetic skin care product, which was introduced last year, is performing in line with expectations and continues to gain momentum. In addition, the Alpha Radiance line of skin care products for mature women will be tested in drug store outlets in the northeastern U.S. during the first quarter of 2001, and a new topical analgesic, RubOut, will reach retailers’ shelves in the next few months.

“We are also working to develop some new marketing channels, including the television network shopping channel, for the sale of niche products,” added Mr. Goldstein.