SOURCE: Medical Nutrition USA, Inc.

Medical Nutrition USA, Inc.

June 09, 2009 08:33 ET

Medical Nutrition USA, Inc. Reports 10% Increase in Branded Product Unit Sales for the Quarter

ENGLEWOOD, NJ--(Marketwire - June 9, 2009) - Medical Nutrition USA, Inc. (NASDAQ: MDNU) today announced financial results for the first fiscal quarter ended April 30, 2009.

First Quarter Fiscal 2010 vs. 2009

--  Branded product revenue increased 8% to $3,112,400 from $2,892,500 on
    a 10% increase in unit sales offset by lower pricing during the first month
    of the quarter;
--  Total sales increased nearly 4% percent to $3,427,700 from $3,309,600
    on higher branded product sales offset by a decrease in private label sales
    and lower pricing during the first month of the quarter;
--  Gross profit increased to $1,817,400 or 53% of sales, from $1,769,400
    or 53% of sales;
--  Selling, general and administrative expenses decreased to $1,857,900
    or 54% of sales, compared to $1,937,400 or 59% of sales;
--  Net cash used in operating activities was $16,100 compared to $459,100
    provided by operating activities in the same quarter a year ago. The
    decrease is primarily due to an approximately $200,000 federal tax refund
    received in the three months ended April 30, 2008, and an increase of
    approximately $144,000 in bonus payments made during the period related to
    performance during the fiscal year ended January 31, 2009;
--  Net loss was $143,900 or $(0.01) per share compared to a net loss of
    $121,400 or $(0.01) per share; and
--  Strong cash position with approximately $9.6 million in cash and short
    term investments and no debt.
    

"The quarter finished strongly despite getting off to a slow start because of strong distributor buying in January in anticipation of a price increase," Medical Nutrition USA, Inc.'s Chairman and Chief Executive Officer Frank A. Newman, said. "By April we were back on trend with branded unit sales growth of 14% for the month versus 10% for the quarter, which included record sales of Pro-Stat® AWC.

"Consistent with our practice of developing a new product every 10 - 12 months, in Q1 we launched Pro-Stat® AWC with Citrulline, an enhanced formulation for long-term care residents with advanced wounds, such as pressure ulcers. Citrulline helps sustain the body's production of nitric oxide, which is essential for effective wound healing. This important enhancement to Pro-Stat® AWC reflects our continuing dedication to developing significant and highly effective new products on a timely basis.

"Evidence as to the effectiveness of Pro-Stat® continues to mount. The June issue of the Journal of The American Dietetic Association (JADA) reports an important new clinical trial on the effects of Pro-Stat® in maintaining nitrogen balance and lean body mass in older women. The growing bulwark of clinical data attesting to the benefits of Pro-Stat is a valuable resource for clinicians and an important competitive advantage.

"We expect total revenue for fiscal 2010 to increase by approximately 16 - 18% as a result of strong branded product sales offset by lower private label sales. Second quarter sales are expected to grow by approximately 14 - 16% compared to the second quarter of the prior year.

"With $9.6 million cash on hand, strong cash flow and no debt we remain well positioned to grow our business organically and also through acquisitions, should suitable opportunities arise. We look forward to continuing our strong performance throughout the remainder of fiscal 2010."

Conference call

Management will host a conference call on Tuesday, June 9 at 11:00 a.m. EDT to discuss these results, recent activities, corporate news and strategy. A live webcast of the conference call can be accessed through the company's web site at: www.mdnu.com. The live conference call dial-in number is: 866-379-6256 (United States and Canada) with the ID: 10467555. An archive of the webcast can be accessed through the same link above; and an audio-only replay of the call will be available following the conference call by dialing 800-642-1687 or 706-645-9291 and providing the same ID shown above. The audio-only replay will be available through Thursday, June 11.

About Medical Nutrition USA

Medical Nutrition USA 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® and UTI-Stat™, as well as private label products. Additional information is available at www.mdnu.com.

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-K for the year ended January 31, 2009 as filed with the Securities and Exchange Commission on April 24, 2009.

                       MEDICAL NUTRITION USA, INC.

                        CONDENSED BALANCE SHEETS


                                             April 30,       January 31,
                                          ---------------  ---------------
                                                2009             2009
                                          ---------------  ---------------
                                            (unaudited)
ASSETS

Current Assets:
  Cash and cash equivalents               $     9,599,100  $     9,654,300
  Accounts receivable, net of allowance
   of $62,000 and $65,600, respectively         1,191,600        1,377,400
  Inventories                                     529,100          510,600
  Deferred income taxes                           405,600          406,500
  Prepaid income taxes                              9,500            8,300
  Other current assets                            184,900          191,900
                                          ---------------  ---------------
    Total current assets                       11,919,800       12,149,000

Fixed Assets, net of accumulated
 depreciation and amortization of
 $374,500 and $345,400, respectively              313,400          318,800

Other Assets:
  Deferred income taxes                           976,600          969,000
  Security deposits                                15,300           15,300
  Investment in Organics Corporation of
   America                                        125,000          125,000
  Intangible assets, net of amortization          274,100          276,800
                                          ---------------  ---------------

                                          $    13,624,200  $    13,853,900

                                          ---------------  ---------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable                        $       708,200  $       530,700
  Accrued expenses                                573,000          967,600
  Accrued rebates                                  54,300           73,700
                                          ---------------  ---------------
   Total current liabilities                    1,335,500        1,572,000
                                          ---------------  ---------------

Stockholders' Equity:
  Preferred stock $0.001 par value,
   5,000,000 shares authorized; no shares
   outstanding as of April 30, 2009 and
   January 31, 2009                                    --               --
  Common stock, $0.001 par value;
   20,000,000 shares authorized;
   14,190,682 and 14,128,614 shares
   issued, respectively                            14,200           14,100
  Additional paid-in-capital                   25,219,700       25,067,600

  Accumulated deficit                         (12,641,800)     (12,497,900)
  Less treasury stock, at cost, 99,345
   and 98,080 shares, respectively               (303,400)        (301,900)

                                          ---------------  ---------------
  Total stockholders' equity                   12,288,700       12,281,900
                                          ---------------  ---------------
                                          $    13,624,200  $    13,853,900
                                          ---------------  ---------------




                           MEDICAL NUTRITION USA, INC.

                       CONDENSED STATEMENTS OF OPERATIONS


                                                   THREE MONTHS ENDED
                                                         APRIL 30,
                                               ---------------------------
                                                    2009           2008
                                               --------------  -----------
                                                 (unaudited)   (unaudited)

Sales                                          $    3,427,700  $ 3,309,600
Cost of sales                                       1,610,300    1,540,200

                                               --------------  -----------
Gross profit                                        1,817,400    1,769,400
                                               --------------  -----------

Selling, general and administrative expenses        1,857,900    1,937,400

Research and development                              147,100       51,500

                                               --------------  -----------
Operating loss                                       (187,600)    (219,500)

Interest income                                        37,600       68,900

                                               --------------  -----------

Loss before income tax benefit                       (150,000)    (150,600)

Income tax benefit                                     (6,100)     (29,200)

                                               --------------  -----------
Net loss                                       $     (143,900) $  (121,400)

                                               --------------  -----------

Loss per common share:
Basic                                          $        (0.01) $     (0.01)

                                               --------------  -----------

Diluted                                        $        (0.01) $     (0.01)

                                               --------------  -----------

Weighted average common shares outstanding
Basic                                              14,130,752   13,974,529

                                               --------------  -----------

Diluted                                            14,130,752   13,974,529
                                               --------------  -----------

Contact Information

  • Contacts:

    Medical Nutrition USA, Inc.
    Frank J. Kimmerling
    Vice President/Finance
    Chief Financial Officer
    800-221-0308
    Email Contact

    Adam Friedman Associates LLC
    Adam Friedman
    212-981-2529 x18
    Email Contact