SOURCE: Medical Nutrition USA, Inc.

Medical Nutrition USA, Inc.

September 10, 2009 08:59 ET

Medical Nutrition USA, Inc. Reports 24% Sales Increase in Second Quarter

Strong Performance Led by Branded Products

ENGLEWOOD, NJ--(Marketwire - September 10, 2009) - Medical Nutrition USA, Inc. (NASDAQ: MDNU) today announced financial results for the three- and six-months ended July 31, 2009.

Second Quarter Fiscal 2010 vs. 2009

--  Branded product sales increased 23% to $3,799,600 from $3,099,500;
--  Total sales increased 24% percent to $4,124,100 from $3,326,900 on
    higher branded and non-branded product sales;
--  Gross profit increased to $2,170,800 or 53% of sales, from $1,764,000
    or 53% of sales;
--  Selling, General and Administrative expenses decreased to $1,990,400
    or 48% of sales, compared to $2,061,800 or 62% of sales;
--  Net cash provided by operating activities was $382,400 compared to
    $44,600 in the same quarter a year ago. The increase is primarily due to
    increased sales performance in the quarter;
--  Net income was $125,000 or $0.01 per share compared to a net loss of
    $183,700 or $(0.01) per share; and
--  Cash position remained strong with approximately $9.9 million in cash
    and short term investments and no debt.
    

Six months ended July 31 Fiscal 2010 vs. 2009

--  Branded product sales increased 15% to $6,912,000 from the $5,991,600;
--  Total sales increased 14% to $7,551,800 from $6,636,500, on higher
    branded product sales offset by slightly lower private label sales;
--  Gross profit increased to $3,989,000, or 53% of sales from $3,533,400
    or 53% of sales;
--  Selling, General & Administrative expenses decreased to $3,996,200 or
    53% of sales compared to $4,050,700 or 61% of sales;
--  Net cash provided by operating activities was $366,400 compared to
    $503,700. The decrease is primarily due to an approximately $200,000
    federal tax refund received in the six 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,
    offset by increased sales performance; and
--  Net loss was $18,900 or $(0.00) per share compared to a net loss of
    $305,100 or $(0.02) per share.
    

"Our solid performance for the quarter reflects increased usage across all branded product lines as the result of increased product line breadth and greater penetration of the nursing home, hospital and dialysis clinic markets. Our business continues to benefit from excellent support from clinicians and the growing body of evidence attesting to the efficacy of our products," said Chairman and Chief Executive Officer Frank A. Newman.

"Our investments in research leading to the development of independent clinical data continue to be an important driver of our growth in both revenue and market share. This, in addition to our new product development and the performance of our product line relative to competing products, sets us apart," Mr. Newman said. "As before, we expect these ongoing efforts to continue to result in the introduction of a significant new product every 10 - 12 months."

Earlier this week Medical Nutrition USA announced the introduction of a new formulation of an existing product, Fiber-Stat® with Prune Juice Concentrate. The new additive, Prune Juice Concentrate, is rich in antioxidants and promotes natural bowel regulation. That, combined with Fiber-Stat's 15 grams of soluble fiber and prebiotic fructo-oliosaccarides (FOS) offers a triple-action formula that is not only unique but highly effective in the treatment of constipation and low fiber intake in elderly and frail patients.

Conference call

Management will host a webcast and conference call at 11:00 a.m. EDT today to discuss these results, recent activities, corporate news and Company strategy. A live webcast of the conference call can be accessed through the company's web site at: http://ir.medicalnutritionusa.com/events.cfm. The live conference call dial-in number is: 866-379-6256 (United States and Canada) with the ID: 28155612.

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 Saturday, Sept. 12.

About Medical Nutrition USA, Inc.

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 news 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 and Form 10-Q for the quarter ended April 30, 2009 filed on June 12, 2009.


                         MEDICAL NUTRITION USA, INC.

                          CONDENSED BALANCE SHEETS


                                                 July 31,     January 31,
                                              -------------  -------------
                                                  2009           2009
                                              -------------  -------------
                                                (unaudited)
ASSETS

Current Assets:
  Cash and cash equivalents                   $   9,945,500  $   9,654,300
  Accounts receivable, net of allowance of
   $46,200 and $65,600, respectively              1,419,800      1,377,400
  Inventories                                       627,200        510,600
  Deferred income taxes                             372,700        406,500
  Prepaid income taxes                                9,400          8,300
  Other current assets                               96,200        191,900
                                              -------------  -------------
    Total current assets                         12,470,800     12,149,000

Fixed Assets, net of accumulated depreciation
 and amortization of $406,900 and $345,400,
 respectively                                       313,700        318,800

Other Assets:
  Deferred income taxes                             913,700        969,000
  Security deposits                                  15,300         15,300
  Investment in Organics Corporation of
   America                                          125,000        125,000
  Intangible assets, net of amortization            260,700        276,800
                                              -------------  -------------

                                              $  14,099,200  $  13,853,900
                                              =============  =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable                            $     806,000  $     530,700
  Accrued expenses                                  640,600        967,600
  Accrued rebates                                    54,300         73,700
                                              -------------  -------------
   Total current liabilities                      1,500,900      1,572,000
                                              -------------  -------------

Stockholders' Equity:
  Preferred stock $0.001 par value, 5,000,000
   shares authorized; no shares issued and
   outstanding as of July 31, 2009 and
   January 31, 2009                                      --             --
  Common stock, $0.001 par value; 20,000,000
   shares authorized; 14,200,682 and
   14,128,614 shares issued as of July 31,
   2009 and January 31, 2009, respectively           14,200         14,100
  Additional paid-in-capital                     25,404,300     25,067,600
  Accumulated deficit                           (12,516,800)   (12,497,900)
  Less treasury stock, at cost, 100,148 and
   98,080 shares, respectively                     (303,400)      (301,900)
                                              -------------  -------------
  Total stockholders' equity                     12,598,300     12,281,900
                                              -------------  -------------
                                              $  14,099,200  $  13,853,900




                           MEDICAL NUTRITION USA, INC.

                       CONDENSED STATEMENTS OF OPERATIONS


                        SIX MONTHS ENDED           THREE MONTHS ENDED
                             JULY 31,                    JULY 31,
                   --------------------------  --------------------------
                       2009          2008          2009          2008
                   ------------  ------------  ------------  ------------
                    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Sales              $  7,551,800  $  6,636,500  $  4,124,100  $  3,326,900
Cost of sales         3,562,800     3,103,100     1,953,300     1,562,900
                   ------------  ------------  ------------  ------------
Gross profit          3,989,000     3,533,400     2,170,800     1,764,000

Selling, general
 and administrative
 expenses             3,818,400     3,999,200     1,959,700     2,061,800

Research and
 development            177,800        51,500        30,700            --
                   ------------  ------------  ------------  ------------
Operating (loss)
 income                  (7,200)     (517,300)      180,400      (297,800)
                   ------------  ------------  ------------  ------------

Interest income          78,000       121,800        40,500        52,900
                   ------------  ------------  ------------  ------------

(Loss) income
  before income
  taxes                  70,800      (395,500)      222,900      (244,900)

Income tax
 (benefit) expense       89,700       (90,400)       95,900       (61,200)
                   ------------  ------------  ------------  ------------
Net (loss)
 income            $    (18,900) $   (305,100) $    125,000  $   (183,700)
                   ------------  ------------  ------------  ------------

(Loss) earnings
 per common share:
Basic              $      (0.00) $      (0.02) $       0.01  $      (0.01)
                   ------------  ------------  ------------  ------------

Diluted            $      (0.00) $      (0.02) $       0.01  $      (0.01)
                   ------------  ------------  ------------  ------------

Weighted average
 common shares
 outstanding
Basic                14,162,926    13,931,496    14,194,052    13,889,399
                   ------------  ------------  ------------  ------------

Diluted              14,162,926    13,931,496    14,264,427    13,889,399
                   ------------  ------------  ------------  ------------

Contact Information

  • Contacts:

    Medical Nutrition USA, Inc.
    Frank J. Kimmerling
    Vice President/CFO
    800.221.0308
    Email Contact

    Investor Relations
    Adam Friedman
    212.981.2529 x18
    Email Contact