Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from the line of Daniel Rizzo with Sidoti & Company.
Daniel Rizzo - Sidoti & Company
I think you indicated and may be you already talked about this, but consumer or customers are lowering the inventories or lowered the inventories in the second quarter. Is that continuing right now?
Joseph Papa
Yeah. Yes, Dan the answer to that is in the over-the-counter area, customers our customers, retailers have lowered their inventory and we do see that as we sit here today. The profit number is approximately 8% reduction in inventory in the retailers versus the same time period one year ago.
Daniel Rizzo - Sidoti & Company
Okay. And then again may be you talked about this but, you said that there was additional cost related to capacity constraints which you had to outsource some production capacities. Is that right?
Joseph Papa
That is correct.
Daniel Rizzo - Sidoti & Company
Did you.... what products were that for?
Joseph Papa
It was we as I mentioned in the script. We experienced tremendous growth in our vitamin and nutritional supplement business,
Daniel Rizzo - Sidoti & Company
Right.
Joseph Papa
As a result of the growth because of some of the issues that occurred in a competitor, we took on demand that was significantly beyond our past vitamin nutritional supplement business. As a result of that, we needed some help with areas that are within the critical path of manufacturing those products, when we took on that help and obviously we had to pay for that.
Now while that certainly is something that affects the near term, we did feel that strategically it is in best interest of our shareholders to take on that incremental investment which is what I will call today knowing that the long-term gains in market share and the profitability from those products is wanted and that's why we feel it was the right thing for us to do at this time.
Daniel Rizzo - Sidoti & Company
Okay. But that's still occurring to you still, I mean there you still add capacity in those products correct?
Joseph Papa
No, we actually because of some great activities by our team, we've been able to transition out of the external manufacturing into our facility at here, we have a facility in South Carolina as well as a facility that we recently acquired called JB Laboratories, the combination of the efforts in our South Carolina facility as well as JB Laboratories allowed us to take on the incremental demand required and allowed us to now... we're going forward from January, we no longer are seeking additional external support. There maybe a couple of products still coming in from past orders but no additional products will go forward as a requirement for external manufacturing help.
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