SOURCE: Nutrition 21, Inc.

Nutrition 21, Inc.

May 13, 2011 16:49 ET

Nutrition 21 Announces Financial Results for 3rd Quarter Fiscal Year 2011

PURCHASE, NY--(Marketwire - May 13, 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 its third fiscal quarter ended March 31, 2011.

The Company reported total revenues from continuing operations of $1.3 million for the third quarter ended March 31, 2011, compared to $1.7 million in the corresponding quarter a year ago. Net loss from continuing operations for the third quarter this year was $0.8 million, or ($0.01) per diluted common share, compared to a net loss of $0.7 million, or $(0.01) per diluted common share, in the corresponding quarter a year ago.

For the nine months ended March 31, 2011, the Company reported total revenues from continuing operations of $4.8 million compared to $6.0 million in the comparable period a year ago. Net loss from continuing operations for the nine months ended March 31, 2011 was $2.3 million compared to $1.8 million in the comparable period a year ago.

A decline in product sales in both the three and nine month periods compared to the comparable periods a year ago accounted for the lower revenues, which were partially offset for the nine month period by fees received in connection with a termination of certain licensing agreements.

There was no net loss from discontinued operations for the quarter ended March 31, 2011, compared to a net loss of $0.1 million or $0.00 per diluted common share in the comparable period a year ago. For the nine months ended March 31, 2011, the company reported a net loss from discontinued operations of $71 thousand compared to $1.9 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 fiscal year 2010, continues to be positive. While we continue to be affected by the generally soft market, particularly in the animal feed category, we are continuing to work on improving both our top and bottom lines, and in developing new opportunities for our ingredients businesses. We continue to explore alternatives to satisfy a requirement to redeem our Series J Convertible Preferred Stock in September 2011 for approximately $17.8 million. Possible alternatives include, among other things, negotiation of an extension with the preferred stock holders, a going private sale or other transaction, or 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 contains certain forward-looking statements which are intended to fall within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. The words "believe," "expect," "anticipate" and other similar expressions 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 assumptions that 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; the Company's ability to satisfy its September 2011 obligation with respect to its outstanding preferred stock; 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.

Financial Tables to follow


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



                                                       March 31,  June 30,
                                                         2011       2010
                                                      ---------  ---------
                                                     (unaudited)  (Note 1)

ASSETS
Current assets:
  Cash and cash equivalents                           $   1,294  $     935
  Accounts receivable, net                                1,378      1,495
  Other receivables, net                                     35        224
  Inventories, net                                          195        173
  Other current assets                                      113        104
Property and equipment, net                                  54         57
Patents, trademarks and other intangibles,
 net                                                        578        588
Other assets                                                154        386
                                                      ---------  ---------
TOTAL ASSETS                                          $   3,801  $   3,962
                                                      =========  =========
LIABILITIES AND STOCKHOLDERS' DEFICIT

Accounts payable                                      $     496  $     719
Accrued expenses                                          1,028      1,321
8% Series J convertible preferred stock
 subject to mandatory redemption                         16,624     15,068
                                                      ---------  ---------
    Total liabilities                                    18,148     17,108
                                                      ---------  ---------
Stockholders' Deficit                                   (14,347)   (13,146)
                                                      ---------  ---------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT           $   3,801  $   3,962
                                                      =========  =========





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



                                    Three Months Ended  Nine Months Ended
                                        March 31,           March 31,

                                      2011      2010      2011      2010
                                    --------  --------  --------  --------

Net sales                           $  1,310  $  1,602  $  4,348  $  5,796

Other revenues                            16        77       466       252
                                              --------  --------  --------

Total Revenues                         1,326     1,679     4,814     6,048
                                    --------  --------  --------  --------

Costs and Expenses

Cost of Revenues                         270       418     1,202     1,372

General and Administrative               595       709     2,026     2,571

Advertising and Promotion                210       162       573       512

Research and Development                 101       124       282       306

Depreciation and Amortization              7        63       133       227
                                    --------  --------  --------  --------

Total Costs and Expenses               1,183     1,476     4,216     4,988
                                    --------  --------  --------  --------

Operating Income                         143       203       598     1,060

Interest expense, net                   (973)     (915)   (2,869)   (2,853)
                                    --------  --------  --------  --------

Loss from Continuing Operations         (830)     (712)   (2,271)   (1,793)

Loss from Discontinued Operations,
 net                                    (--)      (124)      (71)   (1,865)
                                    --------  --------  --------  --------

Net Loss                            $   (830) $   (836) $ (2,342) $ (3,658)
                                    ========  ========  ========  ========

Basic and diluted loss per common
 share                              $  (0.01) $  (0.01) $  (0.02) $  (0.04)
                                    ========  ========  ========  ========

Weighted average number of common
 shares - basic and diluted          161,060    80,450   146,730    77,740
                                    ========  ========  ========  ========

Contact Information

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