SOURCE: Medical Nutrition USA, Inc.

June 11, 2007 16:30 ET

Medical Nutrition USA Branded Product Sales Increase 39%

ENGLEWOOD, NJ--(Marketwire - June 11, 2007) - Medical Nutrition USA, Inc. (NASDAQ: MDNU) today announced financial results for the fiscal quarter ended April 30, 2007.

Review of Operating Results

Sales for the fiscal quarter ended April 30, 2007 increased 30% to $2,831,200 as compared with $2,177,100 for the prior year fiscal quarter. The increase in sales for the quarter resulted primarily from sales of branded products, which increased 39% to $2,469,200. Branded product sales consist primarily of the Company's line of Pro-Stat® hydrolyzed, liquid, modular protein.

Gross profit for the current fiscal quarter increased approximately 31% to $1,542,100 or 54% of sales as compared to $1,177,800, or 54% of sales for the prior fiscal year. 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 fiscal quarter increased by $256,500 to $1,408,400, or 50% of sales, from $1,151,900, or 53% of sales, as compared to the prior year fiscal quarter. The fiscal quarter increase was primarily attributable to an increase in sales and marketing costs of $164,200 and in costs relating to the Company's listing on the NASDAQ Capital Market.

Operating income for the fiscal quarter increased to $133,700 as compared to $25,900 in the prior fiscal quarter.

The Company had no interest expense for the current fiscal quarter as compared to $1,232,800 in the prior year fiscal quarter. 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.

The Company recorded a tax provision of $174,500 for the quarter including $23,800 in state and franchise taxes and $150,700 in federal income tax, based on taxable income of $376,900 at a 40% effective rate. For tax purposes, the Company's income is calculated prior to GAAP charges for stock-based compensation, which is not tax deductible. The Company has a deferred tax asset of $1,563,000 as of April 30, 2007 resulting from previous net operating losses, which, with certain limitations, will be applied against income taxes due.

Net income for the fiscal quarter was $53,700 or $0.00 per share, compared to a net loss for the fiscal year quarter ended April 30, 2006 of ($1,196,400) or ($0.22) per share.

"We are pleased to report another quarter of strong growth in sales and profitability. We expect that the second quarter introduction of Pro-Stat® Profile™ coupled with continuing expansion in the number of facilities using Pro-Stat® and Fiber-Stat™ will result in continued growth. Our entire team continues to perform very well," said Frank A. Newman, Chairman and Chief Executive Officer.

The Company will host a conference call to discuss these results on Tuesday, June 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 # 244130 to access the replay, which will be available until June 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.

                        MEDICAL NUTRITION USA, INC.

                  CONSOLIDATED STATEMENTS OF OPERATIONS

                                                   THREE MONTHS ENDED
                                                        APRIL 30,
                                              ----------------------------
                                                  2007            2006
                                              -------------   ------------
                                               (Unaudited)    (Unaudited)

Sales                                         $   2,831,200   $  2,177,100
Cost of sales                                     1,289,100        999,300

                                              -------------   ------------
Gross profit                                      1,542,100      1,177,800
                                              -------------   ------------

Selling, general and administrative expenses      1,408,400      1,151,900

                                              -------------   ------------
Operating income                                    133,700         25,900
                                              -------------   ------------

Other income (expense):
    Interest income                                  94,500         32,300
    Interest expense                                      -     (1,232,800)

                                              -------------   ------------
Total other income (expense)                         94,500     (1,200,500)
                                              -------------   ------------

Income (loss) before income taxes                   228,200     (1,174,600)

Income tax expense                                  174,500         21,800

                                              -------------   ------------
Net income (loss)                             $      53,700   $ (1,196,400)
                                              -------------   ------------

Earnings (loss) per common share:
Basic                                         $        0.00   $      (0.22)
                                              =============   ============

Diluted                                       $        0.00   $      (0.22)
                                              =============   ============

Weighted average common shares outstanding
Basic                                            14,059,179      5,470,987
                                              =============   ============

Diluted                                          15,469,317      5,470,987
                                              =============   ============



                        MEDICAL NUTRITION USA, INC.
                        CONSOLIDATED BALANCE SHEETS


                                                April 30,      January 31,
                                              ----------------------------
                                                  2007            2007
                                              ------------    ------------
ASSETS                                        (unaudited)
Current Assets:
     Cash and cash equivalents                $  4,374,300    $  8,103,300
     Short term investments - U.S. treasury
      bills and commercial paper                 4,147,000               -
     Accounts receivable, net of allowance of
      $36,600 and $44,200 at April 30, 2007
      and January 31, 2007, respectively           853,100       1,050,300
     Inventories                                   613,700         496,200
     Deferred income taxes                         250,500         250,500
     Other current assets                           95,000          57,800
                                              ------------    ------------
       Total current assets                     10,333,600       9,958,100

Fixed Assets, net of accumulated depreciation
 and amortization of $202,100 and $189,200,
 respectively                                      164,300         162,700

Other Assets:
     Deferred income taxes                       1,312,500       1,442,100
     Security deposits                              15,300          15,300
     Investment in Organics Corporation of
      America                                      125,000         125,000
     Intangible assets, net of amortization        235,900         240,700
                                              ------------    ------------

                                              $ 12,186,600    $ 11,943,900
                                              ============    ============
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts payable                         $    557,400    $    653,200
     Accrued expenses                              328,200         276,600
     Accrued rebates                                73,900          94,000
                                              ------------    ------------
       Total current liabilities                   959,500       1,023,800
                                              ------------    ------------

Stockholders' Equity:
     Preferred stock $0.001 par value,
      5,000,000 shares authorized;
      no shares outstanding at April
      30, 2007 and January 31, 2007                      -               -
     Common stock, $0.001 par value;
      20,000,000 shares authorized;
      14,068,145 and 14,050,145 issued
      at April 30, 2007 and
      January 31, 2007, respectively                14,000          14,000
     Additional paid-in-capital                 24,137,700      23,884,400
     Accumulated deficit                       (12,821,200)    (12,874,900)
                                              ------------    ------------
                                                11,330,500      11,023,500
     Less: treasury stock, at cost; 22,851
      shares as of April 30, 2007
      and January 31, 2007                        (103,400)       (103,400)
                                              ------------    ------------
     Total stockholders' equity                 11,227,100      10,920,100
                                              ------------    ------------
                                              $ 12,186,600    $ 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