Natrol Announces 2004 Results

CHATSWORTH, Calif., Mar 15, 2005 (BUSINESS WIRE) -- Natrol, Inc. (NTOL) today announced its results for the fourth quarter and year ended December 31, 2004.

For the year ended December 31, 2004, the Company reported net income of $1.9 million or $0.13 per diluted share. This compares to income from continuing operations in 2003 of $19,000 before a loss from discontinued operations of $1.5 million. The Company's net loss for the year ended December 31, 2003 was $1.5 million or $0.11 per share.

Net sales in 2004 increased 9.1%, or $6.6 million, to $79.3 million from $72.7 million in 2003. For the three months ending December 31, 2004, net sales decreased approximately 0.7% or $116,000 to $17.3 million from $17.4 million for the three months ended December 31, 2003.

Income from continuing operations for the three months ended December 31, 2004 was $265,000 or $0.02 per diluted share as opposed to $12,000 for the three months ended December 31, 2003. The loss from discontinued operations was $414,000 for the three months ended December 31, 2003 with no loss from discontinued operations experienced in 2004. The Company's net loss for the three months ended December 31, 2003 was $402,000 or $0.03 per share.

"In 2004, we focused our energies on our core brands," noted Elliott Balbert, Natrol's President and Chairman. "Our diet category proved to be particularly strong, while sales of other core items such as Natrol Ester-C remained solid. We made progress in channels such as club stores without suffering erosion with the rest of our customer base. The gains made in these areas helped offset softness in our raw material business as well as essentially flat sales in our sports nutrition business. The consolidation of our sports nutrition business into our headquarters operation, which was announced last year, helped the Company's overall performance. Last year was our best since 1999 and as such we are pleased. Many challenges remain ahead as we work to remind consumers of our continuing mission to provide high quality products that can be trusted every day."

The statements made in this press release which are not historical facts including statements regarding expectations for future growth of revenue and profits and trends concerning net sales, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. As a result of a number of factors, the Company's actual results could differ materially from those set forth in the forward-looking statements. Certain factors that might cause Natrol's actual results to differ materially from those set forth in the forward-looking statements include adverse trends in the dietary supplements industry, intense competition, adverse effects of unfavorable publicity regarding particular products or the Company's industry generally, the Company's dependence on the introduction of successful new products, the Company's ability to gain market share and shelf space in each of its distribution channels, the Company experiencing high rates of product returns, and adverse government regulation, as well as those factors set forth under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2004 and in the Company's other filings with Securities and Exchange Commission.

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