Matrixx Initiatives, Inc.

Matrixx Initiatives, Inc. (MTXX - Snapshot Report) is fresh off the heels of another strong quarter, reporting results that easily eclipsed analyst estimates. The company has more than doubled its cash holdings in the last year and has no debt.

Company Description

Matrixx Initiatives, Inc., through its subsidiaries develops and manufactures over-the-counter healthcare products. The company's products include nasal sprays, cold medicines and vitamin products. Matrixx was founded in 1991 and has a market cap of $169 million.

Industry Trend

The healthcare sector has been able to weather the economic storm much better than many other industries, supported by less elastic demand for goods and services. This dynamic was evident when Matrixx reported great second-quarter results on Oct 22.

Second-Quarter Results

Revenue was up 18% to $33.6 million. Net income totaled $8.2 million, a 29% increase from last year. This produced earnings of 86 cents per share, ahead of analyst estimates by 12 cents.

It was the third time in the last three quarters that Matrixx has surprised and beat analyst estimates.

Financial Statistics

The company's gross margin increased to 69% from 66% in the same quarter last year.

With the credit market remaining tight, Matrixx helped its cause by improving the quality of its balance sheet, building its cash reserves to $19.7 million, up from $9.8 million last year. Matrixx also noted that it is in the very favorable position of having no debt.

Analyst Estimates

Analyst estimates have continued to tick higher, with the current-year estimate advancing to $1.35 per share from $1.24.

The next-year estimate is pegged at $1.55 per share, a 15% earnings growth projection.

The Chart

Shares of MTXX have been rallying since late October, surging from $15 to a recent high above $18. Take a look at the chart below.