PURCHASE, N.Y.--(BUSINESS WIRE)--Feb. 13, 2003--Nutrition 21, Inc. (Nasdaq: NXXI), a leading developer and provider of nutrition products, today reported a fiscal second-quarter net loss of $2.3 million ($0.07 per diluted share) on revenues of $2.3 million, compared with a net loss of $0.4 million ($0.02 per diluted share) on revenues of $2.9 million for the same period a year ago.
For the six months ended December 31, the Company reported a net loss of $2.4 million ($0.07 per diluted share) on $5.6 million of revenues, compared with earnings of $0.9 million ($0.02 per diluted share) on revenues of $6.9 million for the comparable period a year ago. Nutrition 21 ended the quarter in a strong financial position with $5.3 million in cash and short-term investments and net working capital of $6.7 million.
Gail Montgomery, President and CEO of the Company, said, "Results for the quarter reflect the significant ongoing investments we are making to exploit our proprietary chromium opportunities for the diabetes and depression therapeutic markets and to open new channels of distribution for our 'Lite Bites' brand. Our ingredients business which showed stable revenue is also showing signs of improvement."
"We incurred significant expense to prepare for the early 2004 launch of our proprietary Diachrome(TM) and Zeramax(TM) supplement brands into diabetes and depression therapeutic markets," Montgomery added. "Studies are under way through our recently announced research partnerships with Diabetex, Inc. and Comprehensive NeuroSciences, Inc. to confirm initial findings that demonstrated measurable drug-like outcomes for these products. These partnerships permit us to confirm our findings at a greatly reduced cost relative to drug development, while still adhering to a pharmaceutical research model. They will also enable us to lower our market entry costs."
Nutrition 21's deliberate reliance on scientific research is critical to building brand differentiation and securing medical acceptance and endorsement for its therapeutic supplements, and is expected to greatly increase the Company's growth potential.
The reduction in revenues during the quarter primarily reflects a hiatus of sales of the Company's Lite Bites(R) products on QVC while the Company revamped and updated the Lite Bites product line. The first airing on QVC of the updated line is scheduled for February 27, 2003. Nutrition 21 also invested in the retail expansion of the Lite Bites business through a new distribution partnership with Leiner Health Products. Test marketing of Lite Bites in select mass market stores began earlier this month. The Company is eager to tap into the consumer retail market for weight loss products, which is much larger than the 3% of total weight loss products that are sold via television channels.
Ingredients revenue is showing improvement as a result of increasing interest in new chromium-based ingredient systems. Important findings confirming the essential role of chromium in improving insulin resistance, a condition associated with obesity, diabetes and cardiovascular disease and other overlapping health conditions, estimated to affect as many as one in four Americans, should also drive demand for the Company's proprietary ingredients.
About Nutrition 21
Nutrition 21 is a leading developer and provider of nutritional products whose health benefits are substantiated by clinical research. The market leader in nutritional chromium, Nutrition 21 currently holds 35 patents for nutrition products, 22 for chromium compounds and their uses. More information is available at 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 Registration Statement on Form S-3, the Prospectus dated April 25, 2000, its Form 10-K for the year ended June 30, 2002, and its Form 10-Q for the quarter ended September 30, 2002. 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.