NutraCea Announces 2007 Third Quarter and Nine Month Financial Results

PHOENIX, Nov 14, 2007 /PRNewswire-FirstCall via COMTEX/ -- NutraCea (NTRZ) a world leader in stabilized rice bran (SRB) nutrient research and technology announced today financial results for the third quarter and nine months ended September 30, 2007.

The Company reported consolidated net revenues of $1.5 million for the third quarter of 2007 compared to net revenues of $4.9 million for third quarter 2006, a decrease of $3.4 million. Gross product sales were reported at $3 million, excluding a product sales return of $1.5 million. The decrease is comprised of a $1.54 million increase in product sales, offset by a $4.4 million decrease in infomercial sales, including a $1.5 million sales return and a decrease of $490,000 in royalty revenues.

Net loss for the quarter was $(4.8) million, or $(0.03) per share, compared to net income of $641,000, or $0.01 per share for third quarter 2006.

Gross margins in the quarter ended September 30, 2007 were ($115,000), or (8%), compared to $2,411,000, or 49%, during the same period last year. Gross margins on our various product lines vary widely and the gross margins are impacted from period to period by sales mix and utilization of production capacity. The $2,526,000 decrease for the three months ended September 30, 2007 is comprised of the $803,000 decline corresponding to the decline in sales in the third quarter of 2007, a $1,284,000 decline associated with the return of product noted above, and a $490,000 decline in royalty and licensing fees.

Nine Month Results
Consolidated net revenues for the first nine months of 2007 were $16.5 million, compared to net revenues of $12.9 million for the first nine months of 2006, a $3.6 million increase. The revenue increase resulted from an $8.2 million increase in product sales, or 186% increase, offset by a decrease of $9.0 million in infomercial sales and a $1.5 million sales return in the third quarter, and a $4.5 million increase in royalty and licensing revenue.

The Company recorded a net loss of $3.0 million, or $(0.2) per share for the nine months ended September 30, 2007, compared to net income of $807,000, or $0.01 per share for the same period last year.

Gross margins in the nine months ended September 30, 2007 were $9,902,000, or 47%, compared to $5,396,000, or 44%, during the same period last year. Gross margins on our various product lines vary widely and the gross margins are impacted from period to period by sales mix and utilization of production capacity. The $3,976,000 increase for the nine months ended September 30, 2007 is comprised of the $755,000 increase corresponding to the sales growth in the nine months ended September 30, 2007, offset by the $1,284,000 decline associated with the return of product and a $4,504,000 increase in royalty and licensing fees.

About NutraCea
NutraCea is a leader in stabilized rice bran nutrient research and dietary supplement development. Through its wholly owned subsidiary RiceX, the company manufacturers as well as distributes products and food ingredients made from Rice Bran through its proprietary technology and processes. The Company has developed intellectual properties to create a range of proprietary product formulations, delivery systems and whole food nutrition products. NutraCea's proprietary technology enables the creation of food and nutrition products from rice bran, normally a wasted by-product of standard rice processing. In addition to its whole foods products, NutraCea develops families of health- promoting "nutraceuticals," including natural arthritic relief and cholesterol-lowering products. More information can be found in the company's filings with the SEC and you can visit the NutraCea web site http://www.NutraCea.com.

Forward Looking Statements
In our conference call today, we may make forward-looking statements, including, but not limited to, statements regarding our future production capacity, revenue growth, international expansion, supply of raw rice bran, fluctuations in revenue and completion of facilities and transactions. Each of these statements are subject to market risks. These statements are made based upon current expectations and actual results may differ from those projected due to a number of risks and uncertainties. The Company does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Assumptions and other information that could cause results to differ from those set forth in the forward-looking information can be found in the Company's filings with the Securities and Exchange Commission, including the company's most recent periodic report.

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