ENGLEWOOD, N.J., Dec. 12 /PRNewswire-FirstCall/ -- Medical
Nutrition USA, Inc., (OTC:MDNU) (BULLETIN BOARD: MDNU) today
announced financial results for the quarter and nine months ended
October 31, 2006. Review of Operating Results Sales for the quarter
increased approximately 41% to $2,734,700 as compared to $1,937,300
for the quarter ended October 31, 2005. The increase in sales
resulted primarily from sales of branded products, which increased
52% to $2,239,100 from $1,473,000 in the comparable quarter of the
prior year. Branded product sales consisted primarily of the
Pro-Stat(R) line of hydrolyzed, liquid, modular protein. Sales for
the nine months ended October 31, 2006 increased approximately 41%
to $7,630,700 as compared to $5,410,400 for the nine months ended
October 31, 2005. The increase in sales resulted primarily from
sales of branded products, which increased 57% to $6,161,300 from
$3,915,900 in the comparable nine months ended October 31, 2005 of
the prior year. Branded product sales consist primarily of the
Pro-Stat(R) line of hydrolyzed, liquid, modular protein. Gross
profit for the quarter increased to $1,416,600 or 51.8% of sales as
compared to $991,000 or 51.2% of sales for the comparable quarter
of the prior year. The increase in gross profit was primarily
attributable to increased sales of branded products. Gross profit
for the nine months ended October 31, 2006 increased to $4,027,700
or 52.8% of sales as compared to $2,798,400 or 51.7% of sales for
the comparable nine months ended October 31, 2005 of the prior
year. The increase in gross profit was primarily attributable to
increased sales of branded products Selling, general and
administrative expenses for the quarter increased by $371,000 to
$1,218,200, or 44.5% of sales, from $847,200, or 43.7% of sales for
the three months ended October 31, 2005. The increase was primarily
attributable to an increase in sales and marketing costs of
$130,500, research and development costs of $140,900 and an
increase of $175,200 in non-cash, stock-based compensation,
resulting from the Company's adoption of SFAS 123(R) on February 1,
2006. No share-based compensation cost was recorded in the
comparable quarter of the prior year. Selling, general and
administrative expenses for the nine months ended October 31, 2006
increased by $1,201,700 to $3,676,000, or 48.2% of sales, from
$2,474,300, or 45.7% of sales for the nine months ended October 31,
2005. The increase was primarily attributable to an increase in
sales and marketing of $299,000 and an increase of $530,700 in
non-cash, stock-based compensation, resulting from the Company's
adoption of SFAS 123(R) on February 1, 2006. No share-based
compensation cost was recorded in the comparable period of the
prior year. Operating income for the quarter, before non-cash
charges for stock-based compensation, was $373,600 as compared to
$143,800 for the three months ended October 31, 2005. Operating
income for the nine months ended October 31, 2006, before non- cash
charges for stock-based compensation, was $882,400 as compared to
$324,100 for the nine months ended October 31, 2005. Interest
expense for the quarter was $80,800, and interest income was
$83,100 as compared to $179,500 and $15,900, respectively, for the
comparable quarter of the prior year. The decrease in interest
expense of $98,700 resulted primarily from a decrease in non-cash
amortization of debt discount associated with the Company's 2003
convertible promissory notes. Interest expense for the nine months
ended October 31, 2006 was $2,737,900, and interest income was
$182,400 as compared to $332,300 and $41,800, respectively, for the
comparable nine months ended October 31st of the prior year. The
increase in interest expense of $2,405,600 resulted primarily from
an increase in non-cash amortization of debt discount associated
with the Company's 2003 convertible promissory notes. Net income
for the quarter was $196,400 or $0.01 per share compared to a net
loss for the comparable prior year quarter of ($25,900) or ($0.01)
per share. Excluding non-cash charges for stock-based compensation
and amortization of debt discount, net income for the quarter would
have been $452,400 or $0.03 per share. Net loss for the nine months
was ($2,231,400) or ($0.23) per share compared to net income for
the comparable nine months ended October 31, 2005 of the prior year
of $26,100 or $0.01 per share. Excluding non-cash charges for
stock-based compensation and amortization of debt discount, net
income for the nine months ended October 31, 2006 would have been
$943,900 or $0.10 per share. All but $250,000 aggregate principal
amount of the Company's outstanding convertible promissory notes
had been converted into common stock as of October 31, 2006. Future
non-cash charges to interest expense for amortization of the debt
discount associated with the remaining notes, which mature on
December 4, 2006, are estimated to be $124,700 for the quarter
ending January 31, 2007. At October 31, 2006, the Company had cash
and short-term investments-Treasury Bills-on hand of $7,229,200.
"We are very pleased with another quarter of record sales of our
branded products. Sales continue to benefit from the results of a
clinical trial published in the March issue of the journal Advances
in Skin and Wound Care, which reported 96% greater healing of
pressure ulcers among nursing home residents receiving Pro-Stat(R).
Our recent introductions of Pro-Stat(R) Advanced Wound Care formula
and Fiber-Stat(R), have also contributed to sales. We expect that
the appointment of David Shapiro as Vice President, Sales, which we
announced last week, will further strengthen our sales effort,"
said Frank A. Newman, Chairman and Chief Executive Officer. Medical
Nutrition USA, Inc. (http://www.mdnu.com/) 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(R) and Fiber-Stat(R), as
well as private label products. There will be a live conference
call with its management team to discuss the Company's results for
its third quarter fiscal 2007 on Wednesday, December 13, 2006, at
11:30 AM EST. The dial-in-number is (877) 407-0778 (within the US
and Canada) and (201) 689-8565 (International). 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-KSB for the year ended January
31, 2006 as filed with the Securities and Exchange Commission on
April 24, 2006 and Form 10-QSB for the second quarter of fiscal
year 2007, filed on September 13, 2006. MEDICAL NUTRITION USA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS NINE MONTHS ENDED THREE
MONTHS ENDED OCTOBER 31, OCTOBER 31, 2006 2005 2006 2005
(Unaudited) (Unaudited) (Unaudited) (Unaudited) Sales $ 7,630,700
$5,410,400 $2,734,700 $1,937,300 Cost of sales 3,603,000 2,612,000
1,318,100 946,300 Gross profit 4,027,700 2,798,400 1,416,600
991,000 Selling, general and administrative expenses 3,676,000
2,474,300 1,218,200 847,200 Operating income 351,700 324,100
198,400 143,800 Other income (expense): Interest income 182,400
41,800 83,100 15,900 Interest expense (2,737,900) (332,300)
(80,800) (179,500) Total other income (expense) (2,555,500)
(290,500) 2,300 (163,600) (Loss) income before income taxes
(2,203,800) 33,600 200,700 (19,800) Income tax expense (27,600)
(7,500) (4,300) (6,100) Net (loss) income $(2,231,400) $ 26,100 $
196,400 $ (25,900) Earnings per share: Basic $ (0.23) $ 0.01 $ 0.01
$ (0.01) Diluted $ (0.23) $ 0.01 $ 0.01 $ (0.01) Weighted average
shares outstanding: Basic 9,796,907 2,914,224 13,485,395 2,932,701
Diluted 9,796,907 2,914,224 15,325,198 2,932,701 DATASOURCE:
Medical Nutrition USA, Inc. CONTACT: Alan Levy, Vice
President/Finance, Chief Financial Officer of Medical Nutrition
USA, Inc., 1-800-221-0308, ; or Investor Relations: Andrew
Barwicki, +1-516-662-9461, , for Medical Nutrition USA, Inc. Web
site: http://www.mdnu.com/
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