Baywood Reports Results for Third Quarter and Nine Months Ended September 30, 2003

SCOTTSDALE, Ariz., Nov 14, 2003 /PRNewswire-FirstCall via Comtex/ -- Baywood International, Inc. (the "Company") (OTC Bulletin Board: BYWD), a nutraceutical company specializing in the development, marketing and distribution of its own proprietary brands, today reported unaudited financial results for the three and nine months ended September 30, 2003.

Third quarter 2003 revenues rose 27.1% to $1,190,509 from $936,488 in the comparable quarter of last year. Revenues for the nine months ended September 30, 2003 decreased 10.5% to $2,420,076 from $2,704,253 compared to the same period last year. The decrease for the nine-month period is due to the decrease in sales volume in the first six months of 2003 to the Company's distributors in Canada and in Hong Kong to HKTPCO, the Company's sole marketer and distributor for all of Asia. The Company attributes these decreases to the economic impact in the first half of 2003 resulting from reduced consumer spending at the retail level, thereby decreasing demand at the wholesale level, in addition to the impact of SARS in Hong Kong. As the Company previously stated, sales were expected to recover in the second half of 2003 as the economy in North America slowly rebounds, the impact of SARS in Hong Kong lessens and the introduction of new formulations begin to gain recognition in the marketplace. These factors contributed to the increase in sales for the three months ended September 30, 2003. In addition, the Company is continuing to broaden its customer base through the introduction of other new products under its Baywood PURECHOICE(R), Baywood SOLUTIONS(R) and Complete La Femme(R) lines into retail channels.

The Company's gross profit margin for the three and nine months ended September 30, 2003 was 40.3% and 46%, respectively, compared to 41.9% and 45.2%, respectively, for the same periods last year. The decrease of 0.8% in gross profit margin for the nine-month period ending September 30, 2003 is primarily due to the higher mix of sales in the three months ended September 30, 2003 into the international market, particularly to HKTPCO in Hong Kong, where margins are typically lower.

The Company swung into net income of $74,804, or less than $.01 per share, for the three-month period ended September 30, 2003, compared to a net loss of $(88,917), or less than $(.01), for the same period last year. For the nine months ended September 30, 2003, the Company's net loss was $(100,340), or less than $(.01) per share, compared to a net loss of $(80,491), or less than $(.01) per share, for the same period last year. The Company experienced approximately a decrease of $83,000 in fixed marketing and selling expenses including advertising, samples, promotional materials and public relations. The decreases in marketing and selling expenses were complemented by a decrease in general and administrative expenses during the nine-month period ended September 30, 2003 including legal costs and certain corporate expenditures resulting from further cost-cutting measures implemented throughout the Company. These factors, coupled with the increase in sales for the quarter, contributed to the Company's net income for the three-month period ended September 30, 2003.

Neil Reithinger, Baywood Chairman, President & C.E.O., commented, "This has been a challenging year, and we are pleased with our results for this third quarter. While it is essential that we fulfill the growth potential of our products into the marketplace to retailers and consumers, it is also particularly important for us to continue to streamline our operations so that we can achieve and maintain a scalable and profitable business. As we navigate our way through this difficult economic environment, we have made great progress in becoming more efficient so that we can channel resources into more promotional activities for 2004. This future promotional support is the important next step for Baywood to not only drive consumers into the stores to purchase our products, but also support our retailers who have committed to stocking our products."

About Baywood:

Baywood International, Inc. is a nutraceutical company specializing in the development, marketing and distribution of its own proprietary brands under the names Baywood PURECHOICE(R), Baywood SOLUTIONS(R) and Complete La Femme(R). The Company's products are distributed through independent and chain health food stores, pharmacies, grocery stores, and other direct-to-consumer channels both internationally and domestically. Contact Baywood International, Inc. at 1-888-350-0799 or for more information visit www.bywd.com .

This press release may contain forward-looking statements, made in reliance upon Section 21D of the Exchange Act of 1934, which involve known and unknown risks, uncertainties or other factors that could cause actual results to differ materially from the results, performance, or expectations implied by these forward-looking statements. The Issuer's expectations among other things are dependent upon general economic conditions, continued demand for its products, the availability of raw materials, retention of its key management and operating personnel, as well as other uncontrollable or unknown factors which are more fully disclosed in the Company's Form 10-KSB's and 10-QSB's on file with the United States Securities and Exchange Commission.

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