The company is estimating sales of about €42.5m for last year, up from €29m in 2004 when it made a loss of €5m. It had a turnover of more than €60m in 2002, but has since undergone a painful restructuring process that saw the closure of its manufacturing plant in Donegal and production shifted to China after a disastrous American expansion.
BMR recently completed a fundraising round during which it secured €4.5m, with most of that coming from fresh investment by Patricia Smith, the company’s chief executive, and its chairman, Tom Kirwan. ICC Venture Capital also gave BMR a €13m cash injection in 2003, then a record for the former state venture capital firm.
In documents recently filed at the Companies Office, BMR’s auditors noted the return to profitability in 2005, but said that the company’s continued existence as a going concern was down to the support of its creditors. BMR’s balance sheet at the end of 2004 showed its liabilities were €14m more than total assets.
“The only thing that has kept the doors open has been the patience of our creditors,” said Smith. “We’re not out of the woods yet, and I don’t want to overstate the turnaround because we are still in talks with our creditors, but we are happy with last year’s results.”
Smith is attributing the company’s improved performance in 2005 to strong sales of Slendertone, which is promoted by Sky TV presenter Kirsty Gallacher. In Japan, it has signed a €20m distribution deal with Oak Lawn Marketing.
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It also has a distribution agreement with US firm Compex Technologies, which is aggressively marketing the Slendertone Flex toner in the American market.
BMR originally signed over the European distribution rights for Slendertone to Compex in a 2003 deal, but bought them back last year in a bid to reduce stock value writedowns.
“We are planning significant growth in the European market in 2006,” said Smith. BMR is currently planning a Europe-wide rollout of its Slendertone Active range, which promises improved fitness levels and a firmer tummy in four weeks, and is also looking at developing a new range of medical devices through its Neurotech division, which it plans to beef up in 2006.
Smith says that sales of the company’s medical devices were €16.2m, or 38% of total turnover, last year.
She does not expect further job losses at its Irish operations. “The outsourcing to the Far East was not popular, but we pretty much finished our restructuring in the third quarter of last year,” she said.
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BMR’s woes began after a planned assault on America in 2002 was stymied by what it said was a $300m (€247m) flood of “dubious” illegal imitators onto the US market, prompting a flurry of legal actions by the company and a crackdown by the American Food and Drug Administration (FDA) and the Federal Trade Commission.
After the FDA’s investigation into muscle-toning products, nervous retailers in the America refused to carry even bona-fide products such as Slendertone, which then had to shelve a multi-million-dollar marketing campaign.
The accounts also reveal that the company is being sued for $560,000 (€461,000) by “the acquirer of the operating assets of certain liabilities of its USA subsidiary, BMR Neurotech Inc”. The legal action concerns indemnities given to the purchasers.