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For the quarter the Company reported total revenues of $8.6 million compared to $10.8 million in the comparable quarter last year. Net loss for the quarter was $0.4 million, or $(0.01) per fully diluted share, compared to a net loss in the comparable quarter last year of $8.2 million, or $(0.13) per fully diluted share. The reduction in net loss is largely due to a decrease in operating expenses as the Company continues to calibrate its spending to achieve the most effective mix of marketing spend and economic efficiencies.
For the nine-month period ended March 31, 2009, total revenues were $34.2 million compared to $36.0 million in the comparable nine-month period of fiscal year 2008. Net loss for the nine-month period was $88,000, or $0.00 per fully diluted share, compared to a net loss in the comparable period last year of $16.0 million, or $(0.26) per fully diluted share. The reduction in the net loss was a direct result of lower operating expenses.
Michael A. Zeher, president and chief executive officer of Nutrition 21, commented, "While revenues were lower than the comparable quarter last year, primarily due to the turbulent economic conditions, our bottom-line results continue to show dramatic improvement. General and administrative expenses were reduced by more than 50 percent; advertising and promotion expenses were 42 percent of revenues compared to 79 percent of revenues in last year's third quarter - this resulted in our fourth consecutive quarter of positive EBITDA and our third consecutive quarter of EBITDA in excess of $1.0 million. We believe that we are building considerable leverage and sustainability into our operating model and expect revenues to increase in the future.
"We are very pleased with the levels of distribution and off-the-shelf sales that our Iceland Health branded products continue to achieve. For the 12-week period that correlates to the March fiscal quarter, consumer purchases of Iceland Health products at retail increased 29 percent over the same period last year. This is more than triple the growth of the overall vitamin-mineral-supplement category. Despite significant economic headwinds, we are demonstrating that our combination of strong branding, safe and efficacious products, and effective marketing support are driving strong results.
Mr. Zeher concluded, "Also during the quarter we redeemed 100 percent of the outstanding Series I preferred stock. This obligation was met on a timely basis due to operating on a more cost-efficient basis and our improved cash flow. Looking forward into the coming quarters, there are a number of potential revenue-building activities which we believe will have a positive impact for many years to come. We look forward to these opportunities with confident anticipation."
Conference Call
The Company has scheduled a conference call to review the results on Tuesday, May 12, 2009 at 10:00AM ET.
Participants can dial (866) 562-9910 or (706) 679-5064 to access the conference call, or can listen via a live Internet web cast, which can be found at http://www.nutrition21.com. A replay of the call will be available by visiting http://www.nutrition21.com for 30 days or by calling (800) 642-1687 or (706) 645-9291, access code 94814802, through May 15, 2009.
About Nutrition 21
Nutrition 21, Inc. (NASDAQ: NXXI - News), headquartered in Purchase, NY, is a nutritional bioscience company and the maker of chromium picolinate-based and omega-3 fish oil-based supplements with health benefits substantiated by clinical research. Nutrition 21 holds more than 30 patents for nutrition products and uses. Nutrition 21's portfolio of health and wellness products include: Iceland Health Chromax, Iceland Health Advanced Memory Formula(TM), Iceland Health Omega-3 Fish Oil, Iceland Health Joint Relief, and Diabetes Essentials(R). The company also manufactures private label supplements and ingredients for third parties. Nutrition 21 distributes its products nationally through more than 30,000 major food, drug and super center stores throughout the United States and internationally. For more information please visit http://www.nutrition21.com.
Safe Harbor Provision
This press release may contain certain forward-looking statements. The words "believe," "expect," "anticipate" and other similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are based largely on the Company's current expectations and are subject to a number of risks and uncertainties, including without limitation: the effect of the expiration of patents; regulatory issues; uncertainty in the outcomes of clinical trials; changes in external market factors; changes in the Company's business or growth strategy or an inability to execute its strategy due to changes in its industry or the economy generally; the emergence of new or growing competitors; various other competitive factors; and other risks and uncertainties indicated from time to time in the Company's filings with the Securities and Exchange Commission, including its Form 10-K/A for the year ended June 30, 2008. Actual results could differ materially from the results referred to in the forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the results referred to in the forward-looking statements contained in this press release will in fact occur. Additionally, the Company makes no commitment to disclose any revisions to forward-looking statements, or any facts, events or circumstances after the date hereof that may bear upon forward-looking statements.
Financial Tables on Following Pages
NUTRITION 21, INC.
Consolidated Balance Sheets
(in thousands)
(unaudited)
March 31, June 30,
2009 2008
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $2,694 $4,817
Accounts receivable, net 3,763 2,922
Other receivables 576 286
Inventories, net 3,097 1,014
Prepaid expenses and other current assets 772 1,483
------ ------
Total current assets 10,902 10,522
Property and equipment, net 53 69
Patents, trademarks and other
intangibles, net 850 1,540
Goodwill 15,607 15,395
Other intangibles with indefinite lives 5,379 5,379
Other assets 1,711 2,981
Investments in auction rate securities -- 3,740
------- -------
TOTAL ASSETS $34,502 $39,626
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings $----- $3,000
Current portion of long-term debt 2,470 --
Accounts payable 3,507 4,221
Accrued expenses 2,138 2,575
Deferred income 578 1,228
6% Series I convertible preferred stock
subject to mandatory redemption -- 3,270
------ ------
Total current liabilities 8,693 14,294
Long-term debt 1,735 4,185
Deferred income taxes 2,152 2,152
8% Series J convertible preferred stock
subject to mandatory redemption 12,792 11,594
------ ------
Total liabilities 25,372 32,225
------ ------
Stockholders' Equity 9,130 7,401
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $34,502 $39,626
NUTRITION 21, INC.
Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
Three Months Nine Months
Ended Ended
March 31, March 31,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $8,509 $10,891 $33,915 $35,457
Other revenues 114 (71) 242 569
--- ---- --- ---
TOTAL REVENUES 8,623 10,820 34,157 36,026
----- ------ ------ ------
COSTS AND EXPENSES
Cost of revenues 2,891 6,064 13,164 14,194
Advertising and promotion
expenses 3,643 8,568 13,811 28,139
General and
administrative expenses 982 2,358 2,742 4,767
Research and development
expenses 93 330 266 844
Depreciation and
amortization 264 604 910 1,708
----- ------ ------ -------
TOTAL COSTS AND EXPENSES 7,874 17,924 30,893 49,652
------- -------- ------- --------
OPERATING PROFIT (LOSS) 749 (7,104) 3,264 (13,626)
Interest income 8 95 86 241
Interest expense (1,161) (1,159) (3,438) (2,649)
------- -------- ------- -------
LOSS BEFORE INCOME TAXES (404) (8,168) (88) (16,034)
Income taxes -- 7 -- 11
------ ------- ------- -------
NET LOSS $(404) $(8,175) $(88) $(16,045)
------ -------- ----- ---------
Basic and diluted loss
per common share ($0.01) $(0.13) ($0.00) $(0.26)
======= ======= ======= =======
Weighted average number
of common shares -
basic and diluted 67,746,755 62,176,195 65,738,852 61,796,508
========== ========== ========== ==========
Contacts:
Nutrition 21, Inc. Lytham Partners, LLC
Alan Kirschbaum Joe Diaz, Robert Blum, Joe Dorame
914-701-4500 (602) 889-9700
SOURCE Nutrition 21, Inc.
http://www.nutrition21.com
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