EXHIBIT 99.1
ADVANCED NUTRACEUTICALS, INC. ANNOUNCES SECOND QUARTER RESULTS AND
OTHER CORPORATE DEVELOPMENTS
Denver, Colorado, May 19, 2004 - Advanced Nutraceuticals, Inc. (OTCBB: ANII),
announced today results for the second quarter and the six months ended March
31, 2004. These are the first reported results of the Company's operations
following the divestiture of its unprofitable subsidiary, ANI Pharmaceuticals,
Inc. ("ANIP"), during March 2004. The operations of ANIP are now accounted for
as a discontinued operation in the Company's financial statements. The
successful operations and results of the Company's subsidiary, Bactolac
Pharmaceutical, Inc. ("Bactolac"), have been overshadowed in past years due to
losses from ANIP.
Net sales from continuing operations for the six months ended March 31, 2004
were $8.4 million compared to $6.2 million for the comparable prior year period,
a 35% increase. The Company reported net income from continuing operations of
$2.7 million, or $.54 per common share, compared with net income of $855,000, or
$.17 per common share for the 2003 period. The 2004 period included the effect
of a recorded $1.3 million deferred income tax benefit.
Net sales from continuing operations for the three months ended March 31, 2004
were $4.3 million compared to $3.1 million for the three months ended March 31,
2003, a 37% increase. The Company reported net income from continuing operations
of $2.1 million, or $.42 per common share for the quarter compared to net income
of $401,000, or $.08 per common share, for the third quarter of 2003. The 2004
period included the effect of a recorded $1.3 million deferred income tax
benefit.
Net loss from discontinued operations for the six months ended March 31, 2004
was $1.5 million, or $.30 per common share, compared with a net loss of
$807,000, or $.16 per common share for the 2003 period. Net loss from
discontinued operations for the three months ended March 31, 2004 was $1.1
million, or $.22 per common share, compared with a net loss of $571,000, or $.11
per common share for the second quarter of 2003. Both the six-month and
three-month periods ended March 31, 2004, include the effect of a recorded
$697,000 deferred tax benefit. The Company used the entire net cash proceeds
from the ANIP sale to reduce the Company's secured debt by approximately $3.0
million.
In May of 2004 Bactolac entered into a new lease for an additional 29,000 square
feet of space to expand its operations as well as commence production of liquid
vitamin products.
Dr. Reddy, founder and president of Bactolac, and largest shareholder of the
Company, was quoted as saying, "I am pleased with the progress that has recently
been accomplished and am optimistic about the growth potential for Bactolac."
Condensed Consolidated Statements of Operations
Three Months Ended Six Months Ended
(In thousands except per share data) March 31, March 31,
2004 2003 2004 2003
---- ---- ---- ----
Net sales $ 4,320 $ 3,149 $ 8,395 $ 6,230
Gross profit 1,520 1,153 2,849 2,372
General and administrative expenses 647 685 1,348 1,413
------- ------- ------- -------
Operating income 873 468 1,501 959
Other expenses, net (60) (68) (84) (103)
------- ------- ------- -------
Income from continuing
operations before taxes 813 401 1,417 855
Income tax benefit 1,303 -- 1,303 --
------- ------- ------- -------
Income from continuing operations 2,116 401 2,720 855
Loss from discontinued operations,
net of income tax benefit (1,128) (571) (1,533) (808)
------- ------- ------- -------
Net income (loss) $ 987 $ (170) $ 1,186 $ 47
======= ======= ======= =======
Basic income (loss) per share
Continuing operations $ .42 $ .08 $ .54 $ .17
Discontinued operations (.22) (.11) (.30) (.16)
------- ------- ------- -------
$ .20 $ (.03) $ .24 $ .01
======= ======= ======= =======
Diluted income (loss) per share
Continuing operations $ .42 $ .08 $ .54 $ .17
Discontinued operations (.23) (.11) (.30) (.16)
------- ------- ------- -------
$ .19 $ (.03) $ .24 $ .01
======= ======= ======= =======
Weighted average shares outstanding:
Basic 4,993 4,993 4,993 4,993
======= ======= ======= =======
Diluted 5,070 4,993 5,036 5,156
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Condensed Consolidated Balance Sheet
(In thousands)
------------
March 31,
2004
---------
ASSETS
Current assets: $ 6,368
Property and equipment, net 1,161
Other assets 8,965
-------
Total assets $16,494
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 1,640
Long term liabilities 1,586
Stockholders' equity 13,268
-------
Total liabilities and stockholders' equity $16,494
=======
For additional information contact:
Jeff McGonegal (303) 475-3786 (Email: jmcgonegal@anii.cc) or
Gregory Pusey (303) 722-4008 (Email: gpusey@anii.cc)
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This press release includes "forward looking statements" as defined by the
Securities and Exchange Commission (the "SEC"). All statements, other than
statements of historical fact, included in the press release that address
activities, events or developments that the Company believes or anticipates will
or may occur in the future are forward-looking statements. These statements are
based on certain assumptions made based on experience, expected future
developments and other factors ANII believes are appropriate in the
circumstances. Such statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of ANII. Investors are
cautioned that any such statements are not guarantees of future performance.
Actual results or developments may differ materially from those projected in the
forward-looking statements as a result of many factors, including adverse
changes in market conditions, fluctuations in sales volumes and problems in
collecting receivables. Furthermore, ANII does not intend (and is not obligated)
to update publicly any forward-looking statements. The contents of this release
should be considered in conjunction with the warnings and cautionary statements
contained in the Company's recent filings with the SEC.