EXHIBIT 99.1
ADVANCED NUTRACEUTICALS, INC. ANNOUNCES THIRD QUARTER RESULTS AND RECORD SALES.
Denver, Colorado, August 13, 2004 - Advanced Nutraceuticals, Inc. (OTCBB: ANII),
announced today results for the third quarter and the nine months ended June 30,
2004. These are the second quarterly reported results of the Company's
operations following the divestiture of its unprofitable subsidiary, ANI
Pharmaceuticals, Inc. ("ANIP"), during the second quarter of 2004, and the
Company's strong financial results trend continued. The operations of ANIP are
now accounted for as a discontinued operation in the Company's financial
statements. The successful operations and earnings of the Company's only
remaining operating subsidiary, Bactolac Pharmaceutical, Inc. ("Bactolac"), were
overshadowed in past years due to losses from ANIP.
Record net sales from continuing operations for the nine months ended June 30,
2004 were $13.2 million compared to $9.4 million for the comparable prior year
period, a 40% year-to-date increase. The Company reported net income from
continuing operations of $3.0 million, or $.61 per common share ($.55 diluted),
compared with net income of $1.3 million, or $.27 per common share for the 2003
period ($.27 diluted). The 2004 period included the net effect of a recorded
$1.1 million deferred income tax benefit.
Record net sales from continuing operations for the three months ended June 30,
2004 were $4.8 million compared to $3.2 million for the three months ended June
30, 2003, a 50% increase. The Company reported net income from continuing
operations of $328,000, or $.07 per common share ($.05 diluted) for the quarter,
compared to net income of $494,000, or $.0.10 per common share ($.10 diluted),
for the third quarter of 2003. The 2004 period included the effect of a recorded
$175,000 million deferred income tax expense while the 2003 period had no tax
expense.
Net loss from discontinued operations for the nine months ended June 30, 2004
was $1.4 million, or $.29 per common share ($.26 diluted), compared with a net
loss of $1.4 million, or $.28 per common share ($.28 diluted) for the 2003
period. Net income from discontinued operations for the three months ended June
30, 2004 was $98,000, or $.02 per common share ($.02 diluted), compared with a
net loss of $569,000, or $.12 per common share ($.12 diluted) for the third
quarter of 2003. The nine-month period ended June 31, 2004 includes 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.
Bactolac's recently leased additional 29,000 square feet of space is currently
being built out and equipped to expand its production capability as well as
commence production of liquid vitamin products. We expect the expansion to be
fully operational in October 2004.
Dr. Reddy, founder and president of Bactolac, and largest shareholder of the
Company, was quoted as saying, "Bactolac continues to see record sales levels
and I believe that the expansion space soon to come on line will support our
continued growth opportunities. The Company's positive financial results are
dramatically enhancing our financial position by reducing debt."
Condensed Consolidated Statements of Operations
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Three Months Ended Nine Months Ended
(In thousands except per share data) June 30, June 30,
2004 2003 2004 2003
---- ---- ---- ----
Net sales $ 4,798 $ 3,206 $13,193 $ 9,435
Gross profit 1,343 1,184 4,192 3,556
General and administrative expenses 755 618 2,103 2,032
------- ------- ------- -------
Operating income 588 566 2,089 1,524
Other expenses, net (85) (72) (169) (175)
------- ------- ------- -------
Income from continuing
operations before taxes 503 494 1,920 1,349
Income tax (expense) benefit (175) -- 1,128 --
------- ------- ------- -------
Income from continuing operations 328 494 3,048 1,349
Income (loss) from discontinued operations,
net of income tax benefit 98 (569) (1,436) (1,377)
------- ------- ------- -------
Net income (loss) $ 426 $ (75) $ 1,612 $ (28)
======= ======= ======= =======
Basic income (loss) per share
Continuing operations $ .07 $ .10 $ .61 $ .27
Discontinued operations .02 (.12) (.29) (.28)
------- ------- ------- -------
$ .09 $ (.02) $ .32 $ (.01)
======= ======= ======= =======
Diluted income (loss) per share
Continuing operations $ .05 $ .10 $ .55 $ .27
Discontinued operations .02 (.12) (.26) (.28)
------- ------- ------- -------
$ .07 $ (.02) $ .29 $ (.01)
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Weighted average shares outstanding:
Basic 5,031 4,993 5,006 4,993
======= ======= ======= =======
Diluted 6,073 4,993 5,580 4,993
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Condensed Consolidated Balance Sheet
(In thousands)
--------------
June 30,
2004
---------
ASSETS
Current assets $ 6,942
Property and equipment, net 1,106
Other assets 8,819
-------
Total assets $16,867
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 1,339
Long term liabilities 1,799
Stockholders' equity 13,729
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Total liabilities and stockholders' equity $16,867
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For additional information contact:
Jeff McGonegal (303) 475-3786 (Email: jmcgonegal@anii.cc) or
Gregory Pusey (303) 722-4008 (Email: gpusey@anii.cc)
________________________________________________________________________________
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.