IRVINE, Calif., May 25, 2004 (BUSINESS WIRE) -- Naturade Inc. (NRDC) , a leading marketer of heart health and weight management products under the brand names Naturade Total Soy(R) and Diet Lean(TM), today reported net sales for first quarter 2004 of $3,552,624, down 8.1% from first quarter 2003. Net loss for the quarter of $468,467 increased by $275,809 over first quarter 2003 reflecting the lower sales and a decline in gross margin to 45.3% in first quarter 2004 from 46.2% in the first quarter of 2003 as a result of an increased mix of private label to branded products in the quarter.
"The first quarter sales setback was disappointing," said Naturade CEO Bill Stewart. "Our mass market channel sales were affected by the impact of a labor strike in food stores where the company's sales decreased 13.4% in first quarter 2004 over the same period in 2003. In addition, the company had increased volume in a mass market account in the first quarter of 2003 that did not recur in 2004 because the customer consolidated its entire meal replacement category to make room for low carb products. In response, we have made adjustments to keep spending under control. We remain confident that initiatives already in place regarding new products and product development will positively impact both sales and profit."
Stewart added, "In March, Naturade extended its new Diet Lean(TM) brand from one carbohydrate blocker SKU to a complete line of six weight loss products that offer safe, natural alternatives to Ephedra. We believe Diet Lean(TM) is positioned to capitalize on the hottest trend in retailing, low carbohydrate dieting.
"Simultaneously, the company has teamed up with SportPharma to launch a line of sports nutrition powders. The SportPharma(R) line includes four basic products that target the estimated 60 million 'fitness-active' consumers who shop in both mass market and health food stores."
"The volume from our SportPharma(R) and Diet Lean(TM) lines could have a meaningful impact on second half sales results. Diet Lean(TM) is supported by partnerships with major ingredient brands such as Tonalin(R) and Phase 2(R) to attack the weight-loss market. Both ingredient suppliers are actively supporting their brands through national consumer campaigns. In addition, the SportPharma(R) line opens up a new business category, Sports Nutrition, and its customer base for the company."
With headquarters in Irvine, Naturade provides healthy solutions for weight loss consistent with its commitment - since 1926 - to improve the health and well-being of consumers with innovative, natural products. Its premier brand, Naturade Total Soy(R), is a complete line of meal replacement products for weight loss and cholesterol reduction, which is sold at major supermarket and club, health food, drug and mass merchandise stores throughout the United States and Canada. Well known for over 50 years of leadership in soy protein, Naturade also markets a complete line of protein boosters for low carbohydrate dieters, a new line of safe, natural weight loss products under the Diet Lean(TM) brand and a line of SportPharma(R) sports nutrition products for fitness-active consumers. Naturade's other brands include Calcium Shake(TM), Naturade Total Soy Menopause Relief(TM), Power Shake(R) and Aloe Vera 80(R). For more information, visit www.naturade.com
ALL STATEMENTS IN THIS PRESS RELEASE THAT ARE NOT STATEMENTS OF HISTORICAL FACT ARE FORWARD-LOOKING STATEMENTS, INCLUDING ANY PROJECTIONS OF EARNINGS, REVENUE, OR OTHER FINANCIAL ITEMS, ANY STATEMENTS OF THE PLANS, STRATEGIES, AND OBJECTIVES OF MANAGEMENT FOR FUTURE OPERATIONS, MARKETING OR SALES, ANY STATEMENTS CONCERNING PROPOSED NEW PRODUCTS, SERVICES OR DEVELOPMENTS, ANY STATEMENTS REGARDING FUTURE ECONOMIC CONDITIONS OR PERFORMANCE, STATEMENTS OF BELIEF AND ANY STATEMENTS OF ASSUMPTIONS UNDERLYING ANY OF THE FOREGOING. THESE STATEMENTS ARE BASED ON EXPECTATIONS AND ASSUMPTIONS AS OF THE DATE OF THIS PRESS RELEASE AND ARE SUBJECT TO NUMEROUS RISKS AND UNCERTAINTIES, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS. THE RISKS AND UNCERTAINTIES INCLUDE THE FOLLOWING: THE FACT THAT OUR ACCOUNTANTS HAVE EXPRESSED DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN, OUR EXPECTATION OF FURTHER LOSSES, OUR NEED FOR ADDITIONAL FINANCING AND ACCESS TO BORROWING, CHANGING CONSUMER PREFERENCES FOR DIET AND NUTRITIONAL PRODUCTS, OUR DEPENDENCE ON KEY CUSTOMERS, OUR DEPENDENCE ON THIRD-PARTY MANUFACTURERS, GOVERNMENT REGULATIONS THAT COULD AFFECT OUR PRODUCTS, OUR ABILITY TO IDENTIFY SUITABLE STRATEGIC PARTNERS, COMPETITION, OUR DEPENDENCE ON KEY PERSONNEL, LABELING OR PROMOTION RISKS ASSOCIATED WITH THE MASS MARKET, THE EFFECT OF CLOSELY CONTROLLED STOCK, THE PACE OF TECHNOLOGICAL CHANGE, POSSIBLE INTERRUPTIONS IN OUR BUSINESS RESULTING FROM THE U.S. GOVERNMENT'S RESPONSE TO TERRORISM, VARIABILITY OF QUARTERLY RESULTS, PRODUCT LIABILITY EXPOSURE, REDUCED SALES IN THE DIETARY SUPPLEMENT INDUSTRY, THE EFFECT OF ADVERSE PUBLICITY, OUR ABILITY TO PROTECT OUR INTELLECTUAL PROPERTY, THE RATE OF CONSUMER ACCEPTANCE OF NEW PRODUCT INTRODUCTIONS, STOCK PRICE VOLATILITY, AND OTHER RISK FACTORS THAT MAY BE DETAILED FROM TIME TO TIME IN THE COMPANY'S DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. NATURADE DOES NOT UNDERTAKE ANY OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS FOR ACTUAL RESULTS AND FUTURE EVENTS, AND DOES NOT INTEND TO DO SO.