Nutrition 21, Inc., the developer and marketer of nutritional supplements under the Iceland Health(R), Chromax(R) and Diabetes Essentials(R) brands that help consumers manage blood sugar levels, improve cardiovascular health, enhance memory and reduce chronic joint pain, today announced financial results for the fourth quarter and the full fiscal year ended June 30, 2009.
For the quarter ended June 30, 2009 the company reported total revenues of $5.4 million compared to $11.0 million in the comparable quarter last year. Net loss for the quarter was $20.7 million, or ($0.31) per fully diluted share, compared to a net loss of $0.9 million, or $(0.01) per fully diluted share in the comparable quarter last year. The net loss for the quarter ended June 30, 2009 includes a $17.5 million non-cash impairment charge relating to goodwill and intangible assets that have indefinite lives.
For the year ended June 30, 2009, total revenues were $39.6 million compared to $47.1 million in the year ended June 30, 2008. Net loss for the year ended June 30, 2009, which includes the $17.5 million non-cash impairment charge mentioned above, was $20.8 million, or ($0.31) per fully diluted share, compared to a net loss in the prior year of $16.9 million, or ($0.27) per fully diluted share.
For the year ended June 30, 2009, the company had an operating profit of $0.2 million before the $17.5 million non-cash impairment charge mentioned above, a $13.6 million improvement over an operating loss of $13.4 million for the year ended June 30, 2008. EBITDA (a non-GAAP measure defined as net earnings before interest, taxes, depreciation and amortization) before the $17.5 million non-cash impairment charge, was $1.3 million for the year ended June 30, 2009, a $12.5 million improvement over negative EBITDA of $11.2 million in the prior year. The primary reasons for this improvement are more target-specific advertising and reduced general and administrative expenses.
The adverse financial results primarily reflect the severe economic downturn and caused the company to breach a financial covenant with its senior lender. The lender waived this breach upon agreement by the company to repay by November 15, 2009 all amounts borrowed from the lender. The company is also negotiating to restructure $2.5 million principal amount of notes plus interest that are past due and are secured by the company's Iceland Health trademark.
The company has signed a non-binding letter of intent for the sale of its retail and direct response businesses to a privately owned company and will announce the terms of the proposed sale if the transaction proceeds and when there is a binding agreement. The company will continue to refocus its main efforts on its profitable ingredients business.
The bid price for the company's common stock has been less than $1 for more than 30 consecutive days and, as a result, Nasdaq Staff notified the company on December 26, 2007 that it does not comply with Listing Rule 5550(a)(2). On October 9, 2009, Nasdaq Staff further notified the company that the period to regain compliance with the Rule expired October 7, 2009, and that unless the company appeals the Staff's determination, trading in the common stock will be suspended on October 20, 2009 and the common stock will be delisted. The company does not plan an appeal and expects that its common stock will be quoted on the OTC Bulletin Board.
About Nutrition 21
Nutrition 21, Inc. (NASDAQ: NXXI - News), headquartered in Purchase, NY, is a nutritional bioscience company and the maker of chromium picolinate-based and omega-3 fish oil-based supplements with health benefits substantiated by clinical research. Nutrition 21 holds more than 30 patents for nutrition products and uses. Nutrition 21's portfolio of health and wellness products include: Iceland Health Chromax, Iceland Health Advanced Memory Formula(TM), Iceland Health Omega-3 Fish Oil, Iceland Health Joint Relief, and Diabetes Essentials. The company also manufactures private label supplements and ingredients for third parties. Nutrition 21 distributes its products nationally through more than 30,000 major food, drug and super center stores throughout the United States and internationally. For more information please visit http://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 Form 10-K for the year ended June 30, 2009. 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.