SOURCE: Medical Nutrition USA, Inc.

Medical Nutrition USA, Inc.

April 21, 2009 08:08 ET

Medical Nutrition USA, Inc. Reports 32% Increase in Branded Products Unit Sales for Quarter

ENGLEWOOD, NJ--(Marketwire - April 21, 2009) - Medical Nutrition USA, Inc. (NASDAQ: MDNU) today announced financial results for the fourth fiscal quarter and the fiscal year ended January 31, 2009.

Fourth Quarter Fiscal 2009 vs. 2008

--  Branded product revenue increased 15% to $3,395,000 from $2,946,900 on
    a 32% increase in unit sales offset by price reductions;
--  Total sales increased 15.2% to $3,684,000 from $3,196,300 on higher
    branded product sales and private label sales.
--  Gross profit increased to $1,928,000, or 52% of sales, from $1,678,466
    or 53% of sales;
--  Selling, general and administrative expenses increased to $2,023,000
    or 54.9% of sales, compared to $1,303,000, or 40.7% of sales primarily due
    to our previously announced increased investment in expansion of our sales
    force, new product introductions and preparation for our planned retail
    product introductions.
--  Net cash provided by operating activities was $222,000 compared to
    $664,000;
--  Net loss was ($136,000) or $(.01) per share compared to net income of
    $435,000 or $.03 per share; and
--  Strong cash position with over $9.7 million in cash and short term
    investments and no debt.
    

Year ended January 31 - Fiscal 2009 vs. 2008

--  Branded product revenue increased 13% to $12,438,000 from $10,978,900
    on a 29% increase in unit sales offset by price reductions;
--  Total sales increased 7% to $13,747,200 from $12,800,600 on higher
    branded product sales offset by lower private label sales ($1,309,214
    compared to $1,821,700);
--  Gross profit increased to $7,273,000, or 53% of sales, from
    $6,805,700, or 53% of sales.
--  Selling, general and administrative expenses increased to $7,973,200
    or 58% of sales, compared to $5,871,700, or 46% of sales;
--  Net cash provided by operating activities was $1,217,900 compared to
    $1,972,800; and
--  Net loss was ($492,100) or ($.04) per share compared to net income of
    $869,100 or $.06 per share.
    

"Our strong performance for the quarter and the year is the result of our focus on expanding our customer base and building market share," Medical Nutrition USA, Inc.'s Chairman and Chief Executive Officer, Frank A. Newman, said. "Despite an increased level of competition, branded product unit sales increased 32 percent in the fourth quarter, and 29 percent for the year.

"The steps taken in fiscal 2009 included increasing our sales force and instituting more aggressive pricing, resulting not only in improved utilization among current users, but also the addition of new nursing homes and hospitals to our user community, including nationally recognized teaching hospitals.

"Consistent with our practice of developing a new product every 10-12 months, the Company introduced UTI-Stat™, for urinary-tract infections, in the second quarter. Urinary tract infections are a chronic problem in nursing homes and hospitals. UTI-Stat™ has received strong and growing acceptance since its introduction and we expect it to make a material contribution to future sales.

"We expect the June publication of two important new clinical trials on Pro-Stat™ to further strengthen the recognition of Pro-Stat's efficacy and contribute to increased sales. This growing bulwark of clinical data is an important competitive advantage and a valuable resource for clinicians.

"We continue to make progress toward the retail introduction of select products. However, the recession has caused many retailers to become less receptive to increasing inventories to accommodate new products. As a result, we do not expect to see material results from retail sales until very late in this year or early next year.

"Not including any benefit from retail sales, we expect total revenue for fiscal 2010 to increase by approximately 16-18% as a result of a strong branded product sales offset by flat private label sales. We expect first quarter sales to be below that trend as a result of distributor loading in January in anticipation of price increases.

"With $9.7 million cash on hand, strong cash flow and no debt we are well positioned to grow our business organically and also through acquisitions, should suitable opportunities arise. We look forward to continuing our strong performance in the coming year."

Conference call

Management will host a conference call on Tuesday, April 21 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: 95195127. In addition, 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, April 23.

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, 2008 as filed with the Securities and Exchange Commission on April 29, 2008 and Form 10-Q for the quarter ended October 31, 2008 filed on December 15, 2008.


                         MEDICAL NUTRITION USA, INC.

                              BALANCE SHEETS

                                                        January 31,
                                                --------------------------

                                                    2009           2008
                                                -----------    -----------
ASSETS

Current Assets:
  Cash and cash equivalents                     $ 9,654,300    $ 5,208,000
  Short-term investments                                  -      4,336,800
  Accounts receivable, net of allowance of
   $65,600 and $45,000, respectively              1,377,400      1,054,500
  Inventories                                       510,600        401,800
  Deferred income taxes                             406,500        877,700
  Prepaid income taxes                                8,300        232,000
  Other current assets                              191,900        179,800
                                                -----------    -----------

   Total current assets                          12,149,000     12,290,600

Fixed assets, net of accumulated depreciation
 and amortization of $345,400 and $248,500,
 respectively                                       318,800        199,000

Other assets:
  Deferred income taxes                             969,000        480,000
  Security deposits                                  15,300         15,300
  Investment in Organics Corporation of
   America                                          125,000        125,000
  Intangible assets, net of amortization            276,800        252,700
                                                -----------    -----------

                                                $13,853,900    $13,362,600
                                                ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable                              $   530,700    $   364,800
  Accrued expenses                                  967,600        466,000
  Accrued rebates                                    73,700         61,700
                                                -----------    -----------

   Total current liabilities                      1,572,000        892,500
                                                -----------    -----------

Stockholders' Equity:
  Preferred stock $0.001 par value, 5,000,000
   shares authorized; no shares issued and
   outstanding at January 31, 2009 and 2008              --             --
  Common stock, $0.001 par value; 20,000,000
   shares authorized, 14,128,614 shares issued
   as of January 31, 2009 and 14,045,483 shares
   issued as of January 31, 2008                     14,100         14,000
  Additional paid-in-capital                     25,067,600     24,687,900
  Accumulated deficit                           (12,497,900)   (12,005,800)
                                                -----------    -----------

                                                 12,583,800     12,696,100
  Less: treasury stock, at cost; 98,080 and
   52,562 shares, respectively                     (301,900)      (226,000)
                                                -----------    -----------

  Total stockholders' equity                     12,281,900     12,470,100
                                                -----------    -----------

                                                $13,853,900    $13,362,600
                                                ===========    ===========




                         MEDICAL NUTRITION USA, INC.

                          STATEMENTS OF OPERATIONS


                                                        Years Ended
                                                        January 31,
                                                --------------------------

                                                    2009           2008
                                                -----------    -----------

Sales                                           $13,747,200    $12,800,600
Cost of sales                                     6,474,200      5,994,900

                                                -----------    -----------
Gross profit                                      7,273,000      6,805,700
                                                -----------    -----------

Selling, general and administrative expenses      7,921,700      5,763,700

Research and development expenses                    51,500        108,000

                                                -----------    -----------
Operating (loss) income                            (700,200)       934,000
                                                -----------    -----------
Interest income                                     237,800        416,000
                                                -----------    -----------

(Loss) income before income tax expense            (462,400)     1,350,000

Income tax expense                                   29,700        480,900
                                                -----------    -----------

Net (loss) income                               $  (492,100)   $   869,100
                                                ===========    ===========

(Loss) earnings per common share:

Basic                                           $     (0.04)   $      0.06
                                                ===========    ===========

Diluted                                         $     (0.04)   $      0.06
                                                ===========    ===========

Weighted average common shares outstanding:

Basic                                            13,893,787     14,128,601
                                                ===========    ===========

Diluted                                          13,893,787     15,553,755
                                                ===========    ===========

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