SOURCE: Medical Nutrition USA, Inc.

September 11, 2007 16:30 ET

Medical Nutrition USA Branded Product Sales Increase 31%

ENGLEWOOD, NJ--(Marketwire - September 11, 2007) - Medical Nutrition USA, Inc. (NASDAQ: MDNU) today announced financial results for the quarter and six months ended July 31, 2007.

Review of Operating Results

Sales for the quarter ended July 31, 2007 increased 23% to $3,353,300 as compared to $2,718,900 for the quarter ended July 31, 2006. The increase in sales for the quarter resulted primarily from sales of branded products, which increased 31% to $2,816,800. Branded product sales consist primarily of the Company's Pro-Stat® line of hydrolyzed, liquid, modular proteins and Fiber-Stat™ liquid fiber supplement.

Sales for the six months ended July 31, 2007 increased approximately 26% to $6,184,500 as compared to $4,896,000 for the six months ended July 31, 2006. The increase in sales for the six months resulted primarily from sales of branded products, which increased 35% to $5,286,000.

Gross profit for the quarter increased approximately 25% to $1,790,400 or 53% of sales as compared to $1,433,300, or 53% of sales for the quarter of the prior fiscal year. For the six months ended July 31, 2007, gross profit increased approximately 28% to $3,332,500 or 54% of sales as compared to $2,611,100 or 53% of sales for the six months ended July 31, 2006. The increase in gross profit for the quarter was primarily attributable to increased sales of branded products.

Selling, general and administrative expenses (SG&A) for the quarter increased by $307,300 to $1,532,900, or 46% of sales, from $1,225,600, or 45% of sales, as compared to the comparable quarter in the prior year. SG&A for the six months ended July 31, 2007 increased by $542,000 to $2,941,300, or 48% of sales, from $2,399,300, or 49% of sales for the six months ended July 31, 2006. The increase was primarily attributable to increased sales and marketing expenses resulting from expansion of the Company's sales force.

The Company had no interest expense during the quarter and six months of the current fiscal year as compared to $1,424,300 for the prior year quarter and $2,657,100 for the prior year six months ended July 31, 2006. The decrease was primarily a result of the completion of the amortization of debt discount related to the Company's 2003 convertible promissory notes and warrants, all of which had been converted into common stock as of January 31, 2007.

Net income for the quarter was $160,500 or $0.01 per share, compared to a net loss of $(1,231,400) or $(0.12) per share for the quarter ended July 31, 2006. Net Income for the six months ended July 31, 2007 was $214,200 or $0.02 per share, compared to a net loss for the six months ended July 31, 2006 of ($2,427,800) or $(0.30) per share.

"We are pleased to report continuing robust growth in sales and profitability," said Frank A. Newman, Chairman and Chief Executive Officer. "We expect branded product sales to increase 30-40% in the third quarter as a result of broadening demand for our products, the ongoing roll-out of Pro-Stat Profile™ and the efforts of our expanded sales team."

The Company will host a conference call to discuss these results on Wednesday, September 12th at 11:00 A.M. EDT. To participate, please call 877-407-0778 (US and Canada) and 201-689-8565 (International). Replays will be available shortly after the call at 877-660-6853 (US and Canada) and 201-612-7415 (International). Enter Account # 286 and Conference ID # 253591 to access the replay, which will be available until September 19, 2007.

About Medical Nutrition USA Inc.

Medical Nutrition USA Inc. develops and distributes products for the nutritionally at risk who are under medical supervision. Its products are used primarily in long-term care facilities, hospitals, dialysis clinics and bariatric clinics. The Company's product lines include Pro-Stat®, Fiber-Stat®, as well as private label products.

This press release contains forward-looking statements that are subject to certain risks and uncertainties. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed. Risks and uncertainties that could cause or contribute to such material difference include, but are not limited to, general economic conditions, changes in customer demand, changes in trends in the nursing home, renal care, health food and bariatric surgery markets, changes in competitive pricing for products, and the impact of our competitors' new product introductions. Our future financial condition and results of operations, as well as any forward-looking statements are subject to change and inherent risk and uncertainties. Other important factors that may cause actual results to differ materially from those expressed in forward-looking statements is contained in the Medical Nutrition USA, Inc. Annual Report on Form 10-KSB for the year ended January 31, 2007 as filed with the Securities and Exchange Commission on May 16, 2007 and Form 10QSB for the quarter ended April 30, 2007 as filed on June 14, 2007.

                        MEDICAL NUTRITION USA, INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS



                         SIX MONTHS ENDED           THREE MONTHS ENDED
                             JULY 31,                    JULY 31,
                    --------------------------- ---------------------------
                        2007          2006          2007          2006
                    ------------- ------------  ------------- ------------
                    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Sales               $   6,184,500 $  4,896,000  $   3,353,300 $  2,718,900
Cost of sales           2,852,000    2,284,900      1,562,900    1,285,600

                    ------------- ------------  ------------- ------------
Gross profit            3,332,500    2,611,100      1,790,400    1,433,300

Selling, general
 and administrative
 expenses               2,941,300    2,399,300      1,532,900    1,225,600

Research and
 development               91,400       58,400         91,400       58,400

                    ------------- ------------  ------------- ------------
Operating income          299,800      153,400        166,100      149,300
                    ------------- ------------  ------------- ------------

Other income
 (expense):
    Interest income       199,300       99,300        104,800       67,000
    Interest
     expense                    -   (2,657,100)             -   (1,424,300)

                    ------------- ------------  ------------- ------------
Total other income
 (expense)                199,300   (2,557,800)       104,800   (1,357,300)
                    ------------- ------------  ------------- ------------

Income (loss)
 before income
 taxes                    499,100   (2,404,400)       270,900   (1,208,000)

Income tax expense        284,900       23,400        110,400       23,400

                    ------------- ------------  ------------- ------------
Net income (loss)   $     214,200 $ (2,427,800) $     160,500 $ (1,231,400)
                    ------------- ------------  ------------- ------------

Earnings (loss) per
 common share:
Basic               $        0.02 $      (0.30) $        0.01 $      (0.12)
                    ============= ============  ============= ============

Diluted             $        0.01 $      (0.30) $        0.01 $      (0.12)
                    ============= ============  ============= ============

Weighted average
 common shares
 outstanding
Basic                  14,084,092    8,034,692     14,108,193   10,514,798
                    ============= ============  ============= ============

Diluted                15,616,442    8,034,692     15,764,791   10,514,798
                    ============= ============  ============= ============



                        MEDICAL NUTRITION USA, INC.

                        CONSOLIDATED BALANCE SHEETS

                                                    JULY        JANUARY
                                                  31, 2007      31, 2007
                                                ------------  ------------
ASSETS                                          (Unaudited)

Current Assets:
       Cash and cash equivalents                $    713,300  $  8,103,300
       Short-term investments                      8,224,000             -
       Accounts receivable, net of
        allowance of $42,200 and
       $44,200 at July 31, 2007 and January
        31, 2007, respectively                       999,100     1,050,300
       Inventory                                     525,400       496,200
       Deferred income taxes                         760,900       250,500
       Prepaid income taxes                          220,000             -
       Other current assets                          187,100        57,800
                                                ------------  ------------
         Total current assets                     11,629,800     9,958,100

Fixed Assets, net of accumulated depreciation
 of $216,000 and $189,200, respectively              174,300       162,700

Other assets:
      Deferred income taxes                          677,400     1,442,100
      Security deposits                               15,300        15,300
      Investment in Organics Corporation
       of America                                    125,000       125,000
      Intangible assets, net of
       amortization                                  233,500       240,700
                                                ------------  ------------

                                                $ 12,855,300  $ 11,943,900
                                                ============  ============
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
       Accounts payable                         $    554,500  $    653,200

       Accrued expenses                              427,600       276,600
       Accrued rebates                                72,100        94,000
                                                ------------  ------------
        Total current liabilities                  1,054,200     1,023,800
                                                ------------  ------------

Stockholders' Equity:
       Preferred stock $.001 par value,
        5,000,000 shares authorized,
          no shares outstanding at July 31,
           2007 and January 31, 2007
       Common stock, $0.001 par value;
        20,000,000 shares                                  -             -
        authorized; 14,162,011 shares
        issued at July 31, 2007
        and 14,050,145 shares issued at
        January 31, 2007, respectively                14,200        14,000
       Additional paid-in-capital                 24,551,000    23,884,400
       Accumulated deficit                       (12,660,700)  (12,874,900)
                                                ------------  ------------
                                                  11,904,500    11,023,500
      Less: treasury stock, at cost; 22,851
       shares as of July 31, 2007
          and January 31, 2007                      (103,400)     (103,400)
                                                ------------  ------------
      Total stockholders' equity                  11,801,100    10,920,100
                                                ------------  ------------
                                                $ 12,855,300  $ 11,943,900
                                                ============  ============



Contact Information

  • Contacts:
    Medical Nutrition USA, Inc.
    Alan Levy
    Vice President/Finance
    Chief Financial Officer
    800.221.0308
    Email Contact

    Investor Relations
    Andrew Barwicki
    516.662.9461
    Email Contact