EXHIBIT - 99.2 CORPORATE OVERVIEW AND HIGHLIGHTS DATED NOVEMBER 2002.
ADVANCED NUTRACEUTICALS, INC.
NASDAQ SYMBOL: ANII November 2002
Corporate Overview and Highlights
Advanced Nutraceuticals, Inc. ("ANI"), a holding company with two operating
subsidiaries, Bactolac Pharmaceutical and ANI Pharmaceuticals, is focused in the
vitamin, nutraceutical and O-T-C pharmaceutical industries. Recent highlights
include:
o Bactolac, operating in the vitamin and nutraceutical segment,
continues to grow and contribute significant profitability and cash
flow with 2002 EBITDA estimated to be $2.5 million.
o ANI Pharmaceuticals, operating in the O-T-C pharmaceutical segment,
has increased revenues to a current annualized rate of over $12
million, resulting in recent breakeven performance and positive cash
flow.
o In October 2002, ANI received the regular quarterly payment of
approximately $180,000 on the $5.0 million note receivable from the
June 2001 sale of its former subsidiary NFLI.
o During September 2002, certain Board members and their affiliates
converted over $1.5 million of current notes payable into common
stock.
Capital Structure Highlights
Total shares outstanding (1) 4,992,800 (1) Includes 2,841,000 shares issued September
Closing share price 10/15/02 $ 0.90 2002 under debt conversion agreements.
Total market capitalization (2) $4,500,000 (2) Public float approximately 1,150,000
Price range - 52 week low/high $0.35-$1.24 shares.
Daily trading volume - average 30 days 2,900 Shares
Shareholders of record 1,636
Operating Highlights FYE 9/02 (Est.) FYE 9/01 (Actual)
----------------------- ------------------------
Amount Per Share Amount Per Share
-------- --------- ----------- ---------
(1) (1)
$21,700,000 $ 4.35 $17,600,000 $3.53
Total Revenues
Total Assets $25,100,000 $ 5.03 $25,700,000 $5.15
Stockholders' Equity:
Total $16,600,000 $ 3.32 $16,900,000 $3.38
Tangible $ 9,000,000 $ 1.80 $ 8,200,000 $1.64
Bactolac Pharmaceutical, Inc. www.bactolac.com
Bactolac is a contract manufacturer of vitamins and nutritional supplements that
continues to be successfully managed by its founder, Dr. Pailla M. Reddy.
Bactolac's sales have consistently grown, with sales expected to exceed
$12,300,000 for 2002, a 15% increase over 2001. To support its continued growth
and to expand its customer service capabilities Bactolac moved into a modern
37,500 square foot GMP facility located in Hauppauge, NY. Investments over the
last three years, exceeding $1,000,000, in state-of-the-art lab equipment, high
speed manufacturing equipment, tablet coating machines and flexible packaging
equipment, are now complete. These improvements have enhanced Bactolac's ability
to provide complete turnkey services from product development to final product
coating and packaging.
Bactolac creates and produces unique formulas for a variety of uses, including
weight loss, antioxidants, sports nutrition, energy products, stress relief
formulas, relaxation formulas, life extension formulas, immune enhancement,
cholesterol products, liver, heart and brain products and numerous herbal
remedies and has manufactured over 1,000 formulations. Bactolac continues to
focus on ever-increasing standards of quality products, systems and controls.
Bactolac's "In-Process Quality Control" (IPQC) ensures compliance with product
specification at all stages of the manufacturing process. Cost efficient
manufacturing, excellent service, and on time delivery are cornerstones of
Bactolac's business strategy.
ANI Pharmaceuticals, Inc. www.anipharmaceuticals.com
In August 2001, the Company organized ANI Pharmaceuticals, Inc. ("ANIP"), as a
wholly owned subsidiary of the Company, which continued the operations
previously known as ASHCO. ANIP is a contract and private label manufacturer of
OTC pharmaceutical (primarily liquid) products, operating in the Company-owned
132,000 square foot facility in Gulfport, MS. ANIP has well established and
stringent quality control procedures and standards, in accordance with GMP's as
mandated by the Food, Drug and Cosmetic Act. The company has a clean regulatory
record with a history of no objectionable observations from the FDA's last three
recurring audit examinations.
ANIP's customer base consists of distributors who re-sell the products as well
as major retail customers who have products produced with their private brand
label on the product, to compete with national brand suppliers. During January
2001, ANIP completed the final contract production for Bayer Corporation, which
had historically accounted for a substantial portion of the plant's revenue.
This resulted in plant revenues bottoming out at an annual run rate of less than
$4,000,000. Significant challenges continue at the ANIP operation but management
believes that significant progress has been made in this turnaround situation.
ANIP has recently added several customers, such as Walgreen, K-Mart and Dollar
General, and is in talks with a number of large recognized retailers. Revenues
from contract production have also increased as a result of expanded sales to
existing customers and new customers. Sales have now been rebuilt to a current
annualized run rate in excess of $12,000,000. While the majority of the increase
was not realized until the last quarter of the year ended September 2002,
management of ANIP believes that the increased level will be sustainable.
Advanced Nutraceuticals, Inc. (Parent Company) www.advancednutraceuticals.com
ANI is publicly traded on the NASDAQ Small Cap market under the symbol ANII. ANI
is a holding company with two operating subsidiaries, Bactolac and ANIP. ANI
sold another subsidiary, NFLI, in June 2001 for $3.2 million in cash and a $5.0
million prime plus one-half percent note payable by NFLI with quarterly payments
for three years and a final balloon payment in June 2004. NFLI also made a Note
to Bactolac for $650,000, which is past due. Due to NFLI's poor financial
condition, the total receivable from NFLI is currently carried at $380,000.
ANI's credit facility with its senior lender matures in November 2002, and
management of the Company believes that a new facility with a new lender should
be finalized in late 2002.
For additional information call- Gregory Pusey, President, 303-722-4008 or
Jeffrey G. McGonegal, Senior Vice President - Finance, 303-475-3786
Disclaimer on Material
This document includes "forward looking statements" as defined by the Securities
and Exchange Commission (the "SEC"). All statements, other than statements of
historical fact, 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, problems in collecting receivables, and difficulties in obtaining
quickly new debt financing with reasonable terms. Furthermore, ANII does not
intend (and is not obligated) to update publicly any forward-looking statements.
The contents of this document should also be considered in conjunction with the
warnings and cautionary statements contained in the Company's recent filings
with the SEC.