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Brakke Consulting’s
Animal Health News & Notes for August 9, 2002
Copyright © Brakke Consulting, Inc.
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COMPANY EARNINGS RELEASES
> Doane Pet Care Company reported results for its second quarter and six months ended June 29, 2002. The Company reported net income of $5.2 million for its second quarter ended June 29, 2002 on net sales of $204.3 million, compared to a net loss of $6.2 million on net sales of $217.3 million for the second quarter ended June 30, 2001. The Company also reported net income of $13.7 million for the six months ended June 29, 2002 on net sales of $424.4 million, compared to a net loss of $14.9 million on net sales of $468.0 million for the 2001 six months ended June 30, 2001. (PRNewswire)
> Central Garden & Pet Company announced financial results for the fiscal third quarter and nine months ended June 29, 2002. Net income for the fiscal third quarter increased to $18.4 million from $7.7 million in the comparable 2001 period. Net sales for the 2002 quarter were $335.6 million compared to $341.8 million in the year-ago period. The improved earnings were driven primarily by a continuing shift to higher margin proprietary garden and pet brands, significant cost reductions in both the Garden Products and Pet Products segments, the elimination of goodwill amortization and increased other income. (Business Wire)
> Church & Dwight reported sales for the second quarter, excluding Armkel and other affiliates, increased 12.6% to $258.5 million from $229.6 million last year. This increase is primarily due to the Arrid antiperspirant and Lambert Kay pet care product lines acquired from Carter-Wallace late in 2001. Consumer products sales increased 14.2% to $212 million, and specialty products sales rose 5.6% to $46.5 million. Excluding acquisitions, as well as some minor divestitures and the export operation that is being reorganized, consumer products sales increased 4%, with higher laundry and deodorizer sales, partially offset by lower personal care. (Business Wire)
> The Clorox Company reported results for the second quarter of 2002. Excluding divestitures, the specialty products segment volume rose 4% and sales jumped 7% for the quarter. Volume growth was driven by record shipments of several products, and strong gains in shipments of Hidden Valley dressing and dip mixes and Fresh Step and Scoop Away cat litters. (Business Wire)
> Nutreco reported results for the first half of 2002 were a net profit of Euro 4.7 million ($4.6 million), a decrease of 86% compared with the first half of 2001. During the first six months of 2002 net sales of Euro 1,835 million ($1,820 million) increased by 2% compared with the first six months of 2001. This increase was mainly due to the positive effect of acquisitions in 2001. (Wattnet Meatnews)
> OurPet’s Company released results for its second quarter, ended June 30, 2002. Quarterly revenues of $1.0 million were flat, compared to year-earlier period revenue. Net income was a loss of $155,690, versus a loss of $77,554 in the second quarter of 2001. For the first half of 2002, revenues of $2.0 million declined 12.4% versus the year-earlier first half. Net income for the first half of 2002 was a loss of $273,684, versus a net loss of $153,796 in the first half of 2001. (Business Wire)
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COMPANY NEWS RELEASES
> The FDA amended the animal drug regulations to reflect approval of a supplemental abbreviated new animal drug application (ANADA) filed by Pliva d.d. of Croatia. The approval covers a filing for the use of Geomycin 200 (oxytetracycline) Injection for the treatment of various bacterial diseases in cattle and swine. It is approved for use in lactating dairy cattle. (Feedstuffs)
> Steven Garner, DVM and Safari Animal Care Centers announced the development of a veterinary software program called VetPlan, a combination of computer software and hardware. The VetPlan system captures pet history and medical findings and communicates the results and recommendations to clients quickly and easily, creating personalized written veterinary care plans for every pet. VetPlan will become available to veterinarians in the United States this fall. (company press release)
> JAPAN Dainippon Pharmaceuticals and Tanabe Seiyaku have jointly announced that Dainippon will purchase Tanabe’s animal health business on November 1, 2002. Dainippon Animal Science Division sales for the year ending March 31, 2002 were 24.6 billion yen ($205 million) contributed by mainly companion animal health products. Tanabe Animal Health Division sales were 2.6 billion yen ($22 million) contributed by mainly food-producing animal and aquaculture businesses. Financial terms were not disclosed. (Company press release)
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ANIMAL HEALTH NEWS
> FRANCE France has found its first cases of farms with traces of the hormone MPA in the feed. The health authorities have been carrying out tests on farms since the feed contaminated with the hormone was found on farms in the Netherlands. Two farms, a sheep farm in the Haute-Vienne region and a cattle farm in the Allier region, have been found to be contaminated. The authorities are now testing to see if the livestock has been infected by the contaminated feed, but it is unlikely to know fully until the animals have been sent for slaughter. (Wattnet Meatnews)
> US A new unit within the USDA’s Animal and Plant Health Inspection Service has been created to focus on USDA’s key role in regulating and facilitating biotechnology. The new department, named the Biotechnology Regulatory Services, will have 25 staff members and an approximately $4 million budget. Previously, APHIS’ biotechnology programs were divided between APHIS’ Plant Protection and Quarantine and Veterinary Services programs. APHIS’ new biotechnology unit will enable the department to take a more comprehensive approach to regulating genetically modified organisms. (Meating Place)
> US Agricultural Research Service scientists have filed a patent application on a cloned gene that promises to treat or prevent bacterial infections that cause mastitis in dairy cows. The gene produces a protein that is naturally present in cows’ milk and blood plasma, but in amounts too small to have any therapeutic effect. The recombinant protein, named CD14, binds to and neutralizes toxins made by bacteria that cause mastitis. Scientists now are conducting tests to support the new hypothesis that cows genetically engineered to produce higher-than-normal amounts of CD14 could enjoy CD14’s protection from infection as well. (AnimalNet)
> US A proposal to make caging pregnant pigs unconstitutional in Florida qualified for the November ballot after what was thought to be the nation’s first such petition drive, initiated by Floridians for Humane Farms. The amendment would phase out the use of 2-foot by 7-foot metal cages to confine sows during pregnancy, as well as tight tethers. No state currently bans the technique. Florida is 30th in the nation in hog production, far behind leaders like Iowa, North Carolina and Minnesota, and only a few swine producers in the state are known to confine pregnant pigs in crates. (AP)
> US Five years into a 15-year study at the University of Wyoming, research has shown cattle do not naturally catch chronic wasting disease, a brain-wasting malady akin to BSE that infects deer and elk. So far science does not indicate chronic wasting will spread to humans. Cattle were inoculated in the mouth or placed near infected animals, a scenario that would replicate nature. Even though 3 cattle inoculated directly in the brain did develop evidence of chronic wasting, cattle exposed via more natural routes of exposure have shown no evidence of CWD. (AnimalNet – Reuters)
> A recognized reformer of the financial planning industry is now is launching a crusade to change the vaccination practices of veterinarians, and once again is receiving national attention. James Schwartz is calling upon veterinarians to change their vaccination practices and to provide pet guardians with the opportunity for “informed consent” by briefing guardians about the possible dangers and questionable benefits of annual vaccination shots. The now-retired financial planner has established the Next To Kin Foundation to promote education and research into issues such as over-vaccination and the legal standing of companion animals. (PRNewswire)
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BRAKKE CONSULTING VIEWPOINT
One gets the feeling in reading this week’s newsletter that most of the industry is waiting for school to start and for the moderation of some very warm temperatures. Having just completed a two week visit to the Midwest, I can confirm that it is hot and dry. When the conditions are combined with very low cattle prices, it’s not a pretty picture for fall 2002 large animal product sales.
However, some distribution firms seem to have business models that are meeting with a great deal of success in 2002. I visited clients that have reported sales growth in excess of 15%, and one client just finished their year with a 25% increase over 2001. Congratulation to these companies!
Have a great weekend.
[Ron Brakke]
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