Investment, Returns Mark Nutrition 21 2007 Results

PURCHASE, N.Y.— Nutrition21 (NASDAQ:NXXI) released its delayed fourth quarter (4Q) and fiscal year 2007 results over a month after announcing preliminary results on Aug. 13, saying it needed the additional time to complete a $17.75 million financing, as well as to meet year-end financial and Sarbanes-Oxley audit requirements.

While 4Q revenues rose to $12.0 million from $2.5 million sold a year ago, net loss for the quarter dropped to $8.2 million, or $0.13 loss per diluted share, from $3.7 million or $0.9 loss per diluted share lost a year ago. For the fiscal year, total revenues reached $42.1 million, up from $10.7 million last year; but, net loss was $19.1 million or $0.33 loss per diluted share, worse than a net loss of $10.3 million or $0.26 loss per diluted share posted for 2006.

According to management, revenues in the fourth quarter were negatively impacted by a $1.8 million return of Selenomax® by a national retailer that had made a one-time $2.6 million purchase in the third quarter. However, in August 2007, Nutrition 21 entered into an agreement to sell the returned inventory to a third party for $1.7 million in barter credits it expects to use in fiscal 2008. Further, the net loss for the year includes a one-time net charge of $1.4 million in the fourth quarter, due to the Selenomax returns and a $0.7 million noncash impairment charge for intangibles.

The company (www.Nutrition21.com) attributed the net loss for the quarter and the year to its investment and commitment made to transition from a research and development-focused company primarily selling chromium picolinate as an ingredient, to a sales and marketing-driven company selling branded consumer products targeting the growing age and weight-related health needs, including diabetes, cardiovascular health, obesity, joint health, cognitive function and mental health.

“We now have a diverse portfolio of best-in-class products, extensive marketing capabilities, strong relationships with our retail distributors and an experienced staff,” said Paul Intlekofer, Nutrition 21’s president and CEO. “Excluding the one-time sale and return of Selenomax, we have grown revenues in each of the last four quarters. The investments we made during this past year and the recent $17.75 million financing will enable us to continue to build our brands and to position us to be able to generate sustainable growth over the next few years.”

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