Vital Living Revenue Reports Second Quarter Results

PHOENIX, Aug 04, 2005 /PRNewswire-FirstCall via COMTEX/ -- Vital Living, Inc. (VTLV) announced today that revenue during the second quarter ended June 30, 2005 climbed 71% to $1,509,000 from $883,000 during the same period last year. The company's net loss in the 2005 second quarter was $429,000, or $0.00 per basic and diluted share, versus a net loss in the 2004 second quarter of $16,181,000, or $0.24 per basic and diluted share, which includes an intangible asset impairment charge of $13,338,000.

Gregg A. Linn, chief financial officer of Vital Living, said, "The substantial improvement in our second quarter results was attributable to Vital Living's successful restructuring plan initiated in 2004 as well as increased demand in the company's proprietary nutraceutical products. We believe our significantly enhanced financial position from only one year ago demonstrates our strategic focus to eliminate non-core assets and to focus on our core competency while continuing quarterly sales growth.

"Clearly, Vital Living has reached a critical turning point. We have streamlined our distributors in support of dispensing practitioner channels and continue to receive strong marketplace acceptance for our leading Greens First(TM) product, our 'super food' drink formula. Additionally, we recently launched our latest product offering, Red Alert(TM), effectively strengthening our opportunities for long-term growth. We look forward to further improvement in our financial performance as we increase penetration of our expanding product portfolio and drive toward profitability."

Additional second quarter of 2005 highlights compared to the same period last year include:

- Gross profit from continuing operations climbed 67% to $827,000 from
- Net loss before discontinued operations declined to $429,000 versus from

During the six months ended June 30, 2005, revenue increased 52% to $2,770,000 from $1,827,000 in the same period last year. Net loss from continuing operations during the 2005 six-month period was $1,150,000 versus $18,816,000, including an intangible asset impairment charge of $13,338,000, in the same period last year, an improvement of 94%.

Linn continued, "Our ability to successfully consolidate operations and strategically market our proprietary, clinically proven nutraceutical products led to an impressive 97% reduction in net loss. In the 2005 second quarter, Vital Living also reported Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA), which excludes the effects of the re-pricing of the variable rate warrants, of $275,000 compared to a loss of $1,322,000 in the same period last year. This positive milestone was achieved for the second consecutive quarter through sequential revenue growth and stable gross margin percentages. For the six months ended June 30, 2005, Adjusted EBITDA less the effects of variable award warrants totaled $325,000 versus a loss of $3,395,000 in the same period a year ago.

"In addition to these trends, we recently reached an exclusive licensing agreement with SkyePharma, which provides Vital Living entry into the pharmaceutical business. We are excited by the opportunity to partner with an industry leader and develop new therapeutics for the treatment of pain relief, prostate cancer, and more. We believe management has established a strong platform for future growth following our latest corporate developments and the completion of a successful turnaround as demonstrated by our second quarter results," Linn concluded.

About Vital Living, Inc.

Headquartered in Phoenix, Vital Living develops or licenses nutraceuticals and markets them for distribution through physicians, medical groups, chiropractic offices and retail outlets. Vital Living develops and tests its nutraceuticals in collaboration with leading medical experts in the nutraceuticals field and has designed them to be incorporated by physicians into a standard physician-patient program in which patients supplement doctor-prescribed pharmaceuticals with its nutraceuticals.

Vital Living is developing unique, safe and naturally derived nutritional products, utilizing advanced drug-delivery technologies, including the Geomatrix(TM) technology through its affiliation with SkyePharma PLC. The Geomatrix(TM) technology has been provided exclusively for Vital Living's pharmaceutical development in China, and the development of nutraceuticals on a global basis. For more information on the company, please visit

Except for any historical information, the matters discussed in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this press release include improved net cash flow, and the success of the Company's cost-cutting efforts, corporate restructuring initiative, the Company's positioning for future growth, the strength of the Company's products, the ability of the Company's management, and the Company's future performance. These forward-looking statements involve risks and uncertainties, including activities, events or developments that the company expects, believes or anticipates will or may occur in the future. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including the ability of the Company to manage the development of the three pharmaceutical products, regulatory approval of the pharmaceutical products, and the ultimate success of the products. Such statements are subject to a number of assumptions, risks and uncertainties which are set forth under "risk factors" in our Form 10-KSB for the year ended December 31, 2004. Readers are cautioned that such statements are not guarantees of future performance and those actual results or developments may differ materially from those set forth in the forward-looking statements. The company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information or otherwise.

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