Advertising Costs Still Contributing to VLI Losses

April 11, 1985

VLI Corp. Wednesday reported sharply higher losses for the first quarter and noted that advertising and promotion costs for its contraceptive sponge continue to take a big bite out of its rising sales.

For the three months ended March 31, the Irvine-based pharmaceutical company posted a loss of $359,625 compared to a profit of $305,027 a year earlier. Sales were a record-breaking $4.9 million, a 32% increase over the $3.7 recorded a year earlier.

Although the latest results are behind those of a year ago, VLI said its first-quarter performance represented an improvement over that of the final quarter of 1985 when the company lost $3.2 million on sales of $3.8 million.

"We are pleased with the significant improvement in the containment of our costs as well as the tremendous increase in sales," Robert A. Elliott, VLI president, said in a prepared statement.

Elliott attributed the increased sales to the company's heavy advertising and promotion spending over the last nine months. Since last summer, when its campaign to promote the "Today" contraceptive sponge began, VLI has spent about $5 million on advertising.

Earnings Flat for Sterling Despite Rising Revenues

Sterling Cos. reported a sharp rise in revenue, but almost flat earnings in 1984, the first year for which the privately held company has made its financial figures public.

The Irvine-based company that owns a home-building firm, a savings and loan and an automobile dealership, earned $1.47 million in 1984, compared to $1.53 million the year before. Revenues more than tripled to $44.5 million from $13.3 million.

Jim Hilbert, Sterling's chief financial officer, said the jump in revenues was triggered by the company's acquisition of a Rolls-Royce and BMW dealership in Newport Beach in January of last year, followed the next month by the founding of Sterling Savings & Loan Assn. in Irvine.

He said Sterling's earnings were suppressed by added start-up costs associated with the new businesses. Sterling declined to release quarterly information about its revenues and earnings.

Enrollment Dip Hurts National Education Corp.

National Education Corp., a vocational training school operator, said that earnings for the first three months of 1985 dropped 40% below earnings for the same period a year ago. The company had earlier predicted the drop, which saw profits tumble to $1.45 million from $2.43 million.

Revenues for the quarter, however, rose 6% to $43.7 million, up from $41.3 in the year-ago quarter. Donald Bright, president of the Newport Beach company, credited the revenue gain to record first-quarter performance by the company's training, publishing and services group.

Bright said the earnings decline was caused by a drop in enrollment at company schools during the last half of 1984. Enrollments recently have begun to pick up, he said.

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