Hauser Reports Fiscal 2002 Second Quarter Financial Results


LONG BEACH, Calif and BOULDER, Colo., Nov. 26, 2001 (PRIMEZONE) -- Hauser, Inc. (OTCBB:HAUS) today reported its financial results for the fiscal 2002 second quarter ended September 30, 2001.

For the fiscal 2002 second quarter, net loss narrowed to $911,000, or $0.16 per share, from a net loss in the corresponding quarter a year ago of $3.1 million, or $0.63 per share. Loss from operations improved to $538,000, compared with loss from operations of $2.4 million in the same quarter a year ago. Total revenues were $13.4 million, compared with total revenues of $17.4 million in the corresponding year-earlier quarter.

For the first half of fiscal 2002, Hauser recorded a net loss of $1.5 million, or $0.28 per share, improved from a net loss in the year-earlier first half of $5.0 million, or $1.03 per share. The current first half loss from operations totaled $716,000, compared with a year ago when the first half loss from operations equaled $4.4 million. Total revenues for the first six months of fiscal 2002 were $29.2 million, compared with $39.1 million a year ago.

Kenneth Cleveland, president and chief executive officer, said, "Our results reflect the progress we continue to make as we seek ways to operate more efficiently. Costs in sales, marketing, and general and administrative have been significantly reduced, not only quarter-over-quarter but also sequentially."

Hauser also announced that it is in the process of negotiating a renewal of the credit line with its bank. The credit facility expired on September 30, 2001, and the bank is continuing to make funds available to the company.

As part of its program to better focus Hauser's resources and improve its financial and operating structure, the company has previously announced its intention to sell Hauser Contract Research, Hauser Laboratories and Shuster Laboratories.

Cleveland said, "We are pleased with the progress we are making toward divestiture of our non-core business units, which will permit us to pay down debt and better deploy our resources on those operations that hold the greatest potential for Hauser's future success."

Additionally, the company announced that Dean P. Stull and Volker Wypyszyk, both senior executive vice presidents and board members, have resigned.

Hauser, a Customer Connected(sm) company headquartered in Long Beach, California and Boulder, Colorado, is a leading supplier of herbal extracts and nutritional supplements. The company also provides interdisciplinary laboratory testing services, chemical engineering services, and contract research and development. The company's products and services are principally marketed to the pharmaceutical, dietary supplement and food ingredient businesses. Hauser's business units include: Botanicals International Extracts, Hauser Laboratories, Shuster Laboratories, and ZetaPharm.

Certain oral and written statements of management of the Company included in this Press Release and elsewhere may contain forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are intended to be covered by the safe harbors created thereby. These statements include the plans and objectives of management for future operations. There can be no assurance that the company will renew the credit facility or on terms acceptable to the company. The forward-looking statements included herein and elsewhere are based on current expectations that involve judgments that are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved.


 HAUSER, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS-Unaudited
 --------------------------------------------------------------------
                      Three months ended        Six months ended 
                        September 30,             September 30,
                   ------------------------  ------------------------
                      2001         2000         2001         2000
                   -----------  -----------  -----------  -----------
 REVENUES:
  Dietary
   supplements     $ 7,595,000  $10,117,000  $17,006,000  $22,771,000
  Pharmaceutical
   and Functional
   Ingredients       1,321,000    3,551,000    2,927,000    8,372,000
  Technical
   services          4,531,000    3,703,000    9,264,000    7,968,000
                   -----------  -----------  -----------  -----------
   Total revenues   13,447,000   17,371,000   29,197,000   39,111,000
                   -----------  -----------  -----------  -----------

 COST OF REVENUES:
  Dietary
   supplements       5,910,000    9,280,000   13,310,000   21,061,000
  Pharmaceutical
   and Functional
   Ingredients       1,100,000    2,797,000    2,431,000    7,182,000
  Technical
   services          3,663,000    3,402,000    7,240,000    6,748,000
                   -----------  -----------  -----------  -----------
   Total cost
    of revenues     10,673,000   15,479,000   22,981,000   34,991,000
                   -----------  -----------  -----------  -----------

 GROSS PROFIT        2,774,000    1,892,000    6,216,000    4,120,000
                   -----------  -----------  -----------  -----------
 OPERATING
 EXPENSES:
  Research and
   development         609,000      776,000    1,280,000    1,309,000
  Sales and
   marketing           722,000    1,241,000    1,483,000    2,089,000
  General and
   administrative    1,981,000    2,300,000    4,169,000    5,129,000
                   -----------  -----------  -----------  -----------
   Total operating
    expenses         3,312,000    4,317,000    6,932,000    8,527,000
                   -----------  -----------  -----------  -----------
 LOSS FROM
  OPERATIONS          (538,000)  (2,425,000)    (716,000)  (4,407,000)
                   -----------  -----------  -----------  -----------
 OTHER INCOME
  (EXPENSE):
   Interest and
    other income         4,000       11,000        9,000       28,000
   Interest expense   (377,000)    (631,000)    (822,000)  (1,219,000)
  Net gain from
   sale of assets         --        (29,000)        --        601,000
                   -----------  -----------  -----------  -----------
   Total other
   (expense) income   (373,000)    (649,000)    (813,000)    (590,000)
                   -----------  -----------  -----------  -----------

 LOSS BEFORE
  INCOME TAX          (911,000)  (3,074,000)  (1,529,000)  (4,997,000)

 INCOME TAX
  EXPENSE (BENEFIT)       --           --           --           --

                   -----------  -----------  -----------  -----------
 NET LOSS          $  (911,000) $(3,074,000) $(1,529,000) $(4,997,000)
                   ===========  ===========  ===========  ===========
 LOSS PER SHARE
  BASIC AND
  DILUTED:         $     (0.16) $     (0.63) $     (0.28) $     (1.03)
                   ===========  ===========  ===========  ===========
 WEIGHTED AVERAGE
 SHARES OUTSTANDING
  BASIC AND DILUTED  5,701,778    4,874,606    5,455,036    4,855,366
                   ===========  ===========  ===========  ===========

 HAUSER, INC.
 CONSOLIDATED BALANCE SHEETS-Unaudited
 -------------------------------------

                                        September 30,    March 31,
                                            2001            2001
                                        ------------    ------------
 ASSETS

 CURRENT ASSETS:
  Cash and cash equivalents             $    539,000    $    616,000
  Accounts receivable, less
   allowance for doubtful
   accounts:
    September 30, 2001, $830,000;
    March 31, 2001, $877,000              10,914,000      12,272,000
  Inventory, at cost or market             9,887,000       9,802,000
  Prepaid expenses and other               1,149,000         928,000
                                        ------------    ------------
   Total current assets                   22,489,000      23,618,000
                                        ------------    ------------
 PROPERTY AND EQUIPMENT:
  Land and buildings                       8,985,000       8,967,000
  Laboratory and processing
   equipment                              17,184,000      17,402,000
  Furniture and fixtures                   4,324,000       3,588,000
                                        ------------    ------------
  Total property and equipment            30,493,000      29,957,000
  Accumulated depreciation
   and amortization                      (18,224,000)    (17,258,000)
                                        ------------    ------------
  Net property and equipment              12,269,000      12,699,000
                                        ------------    ------------
 OTHER ASSETS:
  Goodwill, less accumulated
   amortization:
    September 30, 2001 $1,384,000;
    March 31, 2000, $1,273,000               837,000         948,000
  Deposits and other                         565,000         574,000
                                        ------------    ------------
                                        $ 36,160,000    $ 37,839,000
                                        ============    ============

 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES:
  Accounts payable                      $  2,959,000    $  2,833,000
  Current portion of
   long-term debt                         18,692,000      18,790,000
  Accrued salaries and benefits              982,000       1,300,000
  Deposits                                   556,000         643,000
  Accrued exit costs                         299,000         508,000
  Other current liabilities                5,710,000       5,814,000
                                        ------------    ------------
   Total current liabilities              29,198,000      29,888,000
                                        ------------    ------------
 LONG-TERM DEBT                                 --            36,000
                                        ------------    ------------
 NOTE PAYABLE TO RELATED PARTY             2,764,000       2,705,000
                                        ------------    ------------
 STOCKHOLDERS' EQUITY:
  Common stock, $.001 par value;
   50,000,000 shares authorized;
   shares issued and outstanding:
    September 30, 2001, 5,712,262;
    March 31, 2001, 5,072,742                  6,000           5,000
  Additional paid-in capital              95,060,000      94,544,000
  Warrants                                   354,000         354,000
  Accumulated deficit                    (91,222,000)    (89,693,000)
                                        ------------    ------------
                                           4,198,000       5,210,000
                                        ------------    ------------
                                        $ 36,160,000    $ 37,839,000
                                        ============    ============


            

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