SOURCE: Nutrition 21, Inc.

ingredients,Nutrition 21, Chromax, probiomega, NXXI, investment banker, BDO Capital Advisors, patent

February 11, 2011 08:05 ET

Nutrition 21 Announces Financial Results for 2nd Quarter Fiscal Year 2011

PURCHASE, NY--(Marketwire - February 11, 2011) - Nutrition 21, Inc. (OTCBB: NXXI), the developer and marketer of clinically substantiated nutritional ingredients for dietary supplements, foods and beverages, and animal nutrition, today announced financial results for the second fiscal quarter ended December 31, 2010.

The Company reported total revenues of $1.9 million for the second quarter ended December 31, 2010, compared to $2.1 million in the corresponding quarter a year ago. Net loss from continuing operations for the second quarter this year was $0.5 million, or ($0.0) per diluted common share, compared to a net loss from continuing operations of $0.7 million, or $(0.01) per diluted common share, in the corresponding quarter a year ago.

For the six months ended December 31, 2010, the Company reported total revenues from continuing operations of $3.5 million compared to $4.4 million in the comparable period a year ago. Net loss from continuing operations for the six months ended December 31, 2010 was $1.4 million compared to $1.3 million in the comparable period a year ago.

Reduced product sales compared to the comparable period a year ago were partially offset by termination fees paid to the Company in connection with termination of certain licensing agreements.

Net loss from discontinued operations for the quarter ended December 31, 2010 was $91 thousand or $( 0.00) per diluted common share, compared to net loss of $1.5 million or $0.01 per diluted common share in the comparable period a year ago. For the six months ended December 31, 2010 the company reported a net loss from discontinued operations of $71 thousand compared to $1.5 million in the comparable period a year ago.

Michael Zeher, president and chief executive officer, said, "We are pleased to report that our operating income, since the divestiture of the Branded Products Group in the second quarter of 2009, continues to be positive. Looking forward, we continue to be optimistic, but cautious, as we will need to satisfy a requirement to redeem our Series J Preferred Stock in September 2011 for approximately $17.8 million. As reported earlier, a special committee of the Board of Directors has retained BDO Capital Advisors, LLC as its investment banker to consider approaches to meet this requirement. Possible alternatives include, among other things, negotiation of an extension with the holders of the Preferred Stock, a going private sale or other transaction, and a refinancing of the business."

About Nutrition 21

Nutrition 21, Inc., headquartered in Purchase, NY, is a nutritional bioscience company and holds over 30 issued and pending patents associated with chromium picolinate as well as combinations of chromium compounds with other dietary supplement ingredients. Its ingredients are sold to leading dietary supplement, and functional food and beverage manufacturers. For more information please visit http://www.nutrition21.com.

Safe Harbor Provision

This press release may contain certain forward-looking statements. The words "believe," "expect," "anticipate" and other similar expressions generally identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are based largely on the company's current expectations and are subject to a number of risks and uncertainties, including without limitation: the effect of the expiration of patents; regulatory issues; uncertainty in the outcomes of clinical trials; changes in external market factors; changes in the company's business or growth strategy or an inability to execute its strategy due to changes in its industry or the economy generally; the emergence of new or growing competitors; various other competitive factors; and other risks and uncertainties indicated from time to time in the company's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended June 30, 2010. Actual results could differ materially from the results referred to in the forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the results referred to in the forward-looking statements contained in this press release will in fact occur. Additionally, the company makes no commitment to disclose any revisions to forward-looking statements, or any facts, events or circumstances after the date hereof that may bear upon forward-looking statements.

                           NUTRITION 21, INC.
                      CONSOLIDATED BALANCE SHEETS
                         (Dollars in thousands)

                                                December 31,    June 30,
                                                    2010          2009
                                                ------------  ------------
                                                (unaudited)     (Note 1)
ASSETS
Current assets:
  Cash and cash equivalents                     $      1,260  $        935
  Accounts receivable, net                             1,142         1,495
  Other receivables, net                                 419           224
  Inventories, net                                       122           173
  Other current assets                                   162           104
Property and equipment, net                               62            57
Patents, trademarks and other intangibles, net           493           588
Other assets                                             232           386
                                                ------------  ------------
TOTAL ASSETS                                    $      3,892  $      3,962
                                                ============  ============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Accounts payable                                $        692  $        719
Accrued expenses                                       1,006         1,321
8% Series J convertible preferred stock
 subject to mandatory redemption                      16,088        15,068
                                                ------------  ------------

    Total liabilities                                 17,786        17,108
                                                ------------  ------------
Stockholders' Deficit                                (13,894)      (13,146)
                                                ------------  ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT     $      3,892  $      3,962
                                                ============  ============






                            NUTRITION 21, INC.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except share and per share data)
                                (unaudited)



                                    Three Months Ended   Six Months Ended
                                       December 31,        December 31,

                                      2010      2009      2010      2009
                                    --------  --------  --------  --------

Net sales                           $  1,484  $  1,978  $  3,038  $  4,194
Other revenues                           383        82       450       176
                                    --------  --------  --------  --------

Total Revenues                         1,867     2,060     3,488     4,370
                                    --------  --------  --------  --------

Costs and Expenses

Cost of Revenues                         414       541       932     1,191

General and Administrative               765       883     1,431     1,862

Advertising and Promotion                135       185       363       351

Research and Development                  80       103       181       182

Depreciation and Amortization             42        59       126       164
                                    --------  --------  --------  --------

Total Costs and Expenses               1,436     1,771     3,033     3,750
                                    --------  --------  --------  --------

Operating Income                         431       289       455       620

Interest expense, net                   (954)     (939)   (1,896)   (1,938)
                                    --------  --------  --------  --------

Loss from Continuing Operations         (523)     (650)   (1,441)   (1,318)

Loss from Discontinued Operations,
 net                                     (91)   (1,529)      (71)   (1,504)
                                    --------  --------  --------  --------

Net Loss                            $   (614) $ (2,179) $ (1,512) $ (2,822)
                                    ========  ========  ========  ========

Basic and diluted loss per common
 share                              $  (0.00) $  (0.03) $  (0.01) $  (0.03)
                                    ========  ========  ========  ========

Weighted average number of common
 shares - basic and diluted          140,523    75,023   136,658    74,389
                                    ========  ========  ========  ========



Contact Information

  • CONTACT:
    Nutrition 21, Inc.
    Alan Kirschbaum
    914-701-4500