Acquisition Costs Nip at Nutraceutical Corp. 3Q Earnings

08/27/2007

SALT LAKE CITY— Nutraceutical International Corp. (NASDAQ:NUTR) reported third quarter (3Q) sales inched up to 5 percent to $38.7 million compared to a year ago, but costs related to integrating recent acquisitions caused 3Q net income to dip to $2.9 million, or $0.25 diluted earnings per share, from $3.4 million, or $0.29 diluted earnings per share, earned in the same quarter last year. Bill Gay, chairman and CEO, noted operating cash flows and gross profit margins remained strong during 3Q. The company (www.Nutraceutical.com) also completed two acquisitions during the quarter for a total of six acquisitions during fiscal 2007. He added: “The early May acquisition of a leading wholesale distributor of our Solaray® brand in Norway strengthens our international presence, while the late June acquisition of the NaturalCare® brand of homeopathic products enhances our portfolio of brands,” Gay said. “Costs related to the acquisition, operation and integration of the businesses acquired during fiscal 2007 have impacted us, and we expect that the potential synergies of these acquired businesses will take time to realize as our integration efforts continue. We intend to focus on completing the consolidation of the acquired businesses, identify additional expansion opportunities, enhance our sales and promotional programs and manage expenses in a slow-growth and competitive environment.”

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