Matrixx reports loss, rise in oral Zicam product sales

Facing consumer lawsuits and scrutiny by the U.S. Food and Drug Administration, Matrixx Initiatives Inc. posted a loss of $13.9 million for the nine months ended Dec. 31, compared with $10.7 million during the same period in 2008.

Money stopped rolling in shortly after the FDA told the Phoenix company to pull its Zicam nasal gel products off retail shelves in June 2009 because of complaints that consumers were losing their sense of smell after using the cold product.

The company hired the Phoenix office of Chicago-based advertising agency Cramer-Krasselt to create a branded advertising campaign for other Zicam cough and cold products not affected by the FDA mandate. Advertising Age reported that the contract was valued at about $30 million.

In a prepared statement, Bill Hemelt, president and CEO of Matrixx, said the Zicam Cold Remedy oral delivery products are gaining market share.

For the 12 weeks ended Dec. 27, retail unit sales of Zicam Cold Remedy oral delivery products increased 16 percent, while the total cough/cold category increased 5 percent compared to the previous year.

Hemelt attributes the gains to increased in-store promotion and advertising. Plus, he said, many Zicam nasal gel customers are turning to the company’s oral delivery products.

Net income for the three months ended Dec. 31 weren’t as bloody as the nine-month period. Matrixx reported $3.8 million in net income on $28.5 million in net sales for its third fiscal quarter of 2010, compared with $3.1 million in net income on $38.7 million in net sales during the same period a year earlier.

The company’s $61 million in net sales for the nine months ended Dec. 31, compare with $80.8 million for the same period a year ago.

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