LONG BEACH, Calif. and LONGMONT, Colo., Nov. 14, 2002 (PRIMEZONE) -- Hauser, Inc. (OTCBB:HAUS) today reported financial results for its fiscal 2003 second quarter and six months ended September 30, 2002, reflecting a second consecutive quarter of operating profitability. During the 2003 fiscal second quarter, the company sold its Shuster Laboratories division. Accordingly, the financial information presented in this news release reports the sale of that division as discontinued operations for all periods presented.
For the fiscal 2003 second quarter, total revenues were $13.8 million compared with $11.1 million in the corresponding year-earlier quarter. Income from operations was $896,000, contrasted to a loss from operations of $504,000 in the same quarter a year ago. Income from continuing operations before income tax expense and discontinued operations totaled $399,000, contrasted to a loss a year ago of $864,000. After reflecting a tax accounting treatment related to the sale of Shuster Laboratories and a loss from discontinued operations, net loss totaled $271,000, or $0.04 per share, reduced from net loss of $911,000, or $0.16 per share, in the second quarter last year.
For the first sixth months of fiscal 2003, total revenues were $27.2 million compared with $24.1 million in the corresponding year-earlier period. Income from operations was $1.1 million contrasted to a loss from operations of $1.0 million in the same period a year ago. Income from continuing operations before income tax expense and discontinued operations improved to $13,000, from a loss of $1.7 million in the year ago period. After reflecting a tax accounting treatment related to the sale of Shuster Laboratories and a loss from discontinued operations, net loss was $154,000, or $0.03 per share, compared with net loss of $1.5 million, or $0.28 per share, in the first six months of last year
"During the 2003 fiscal second quarter, we sold our Shuster Laboratories division for approximately $7.7 million and used the proceeds to pay down a substantial portion of our debt, which will significantly lower future interest expense," said Kenneth Cleveland, president and chief executive officer.
On October 31, 2002, the company entered into an agreement with Wells Fargo Bank to further amend its Amended Credit Facility by extending its due date to November 30, 2002 and reducing its credit line to $9.0 million from $10.0 million. The company is engaged in discussions, which could result in the company obtaining funds to pay the outstanding loans to Wells Fargo when due, and permit the company to obtain a new line of credit to finance operations. There can be no assurances that the requisite funds will be obtained. If alternative financing is not available to enable the company to repay Wells Fargo by November 30, 2002, the terms of the alternative financing are not acceptable to the company, or if Wells Fargo does not extend the outstanding loans, the company's ability to continue as a going concern would be in question.
Hauser, headquartered in Long Beach, California and Longmont, Colorado, is a leading supplier of herbal extracts and nutritional supplements. Hauser also provides chemical engineering services and contract research and development. Hauser's products and services are principally marketed to the pharmaceutical, dietary supplement and food ingredient businesses. Hauser's business units include: Botanicals International, ZetaPharm and Hauser Contract Research Organization.
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. The forward-looking statements included herein and elsewhere are based on current expectations that involve judgments which 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 BALANCE SHEETS
(In thousands)
Sept. 30, March 31,
ASSETS 2002 2002
-------- --------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 451 $ 549
Accounts receivable, less
allowance for doubtful accounts:
September 30, 2002, $464;
March 31, 2002, $824 8,574 7,620
Inventory, at lower of cost or market 7,307 7,513
Prepaid expenses and other 1,119 732
Current assets of business held for sale -- 2,266
-------- --------
Total current assets 17,451 18,680
-------- --------
PROPERTY AND EQUIPMENT:
Land and buildings 6,197 6,160
Laboratory and processing equipment 9,862 9,736
Furniture and fixtures 1,996 1,672
-------- --------
Total property and equipment 18,055 17,568
Accumulated depreciation and
amortization (10,133) (9,669)
-------- --------
Net property and equipment 7,922 7,899
-------- --------
OTHER ASSETS:
Deposits and other 111 845
Non-current assets of business
held for sale -- 4,638
-------- --------
TOTAL ASSETS $ 25,484 $ 32,062
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,023 $ 3,185
Current portion of long-term debt 8,993 16,455
Note payable to related party 2,882 2,823
Accrued salaries and benefits 1,124 1,377
Customer deposits 238 461
Accrued exit costs 78 251
Amount due to related party 4,267 3,043
Other current liabilities 1,757 2,498
Liabilities of business held for sale -- 789
-------- --------
Total current liabilities 24,362 30,882
-------- --------
LONG-TERM DEBT -- --
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value;
20,000,000 shares authorized;
shares issued and outstanding;
September 30, 2002 6,260,173;
March 31, 2002, 5,871,493 6 6
Additional paid-in capital 95,235 95,139
Warrants 1,133 1,133
Accumulated deficit (95,252) (95,098)
-------- --------
1,122 1,180
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 25,484 $ 32,062
======== ========
See notes to consolidated financial statements.
HAUSER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share amounts)
(Unaudited)
Three months ended Six months ended
September 30, September 30,
2002 2001 2002 2001
--------- --------- --------- ---------
REVENUES:
Dietary supplements $ 10,089 $ 7,595 $ 18,994 $ 17,006
Pharmaceutical and
functional food
ingredients 1,803 1,321 4,261 2,927
Technical services 1,893 2,167 3,911 4,125
--------- --------- --------- ---------
Total revenues 13,785 11,083 27,166 24,058
--------- --------- --------- ---------
COST OF REVENUES:
Dietary supplements 7,785 5,918 15,033 13,462
Pharmaceutical and
functional food
ingredients 1,548 1,100 3,654 2,431
Technical services 1,548 1,790 2,964 3,474
--------- --------- --------- ---------
Total cost of
revenues 10,881 8,808 21,651 19,367
--------- --------- --------- ---------
GROSS PROFIT 2,904 2,275 5,515 4,691
--------- --------- --------- ---------
OPERATING EXPENSES:
New product
development 431 609 900 1,280
Sales and marketing 592 570 1,203 1,166
General and
administrative 985 1,600 2,296 3,264
--------- --------- --------- ---------
Total operating
expenses 2,008 2,779 4,399 5,710
--------- --------- --------- ---------
INCOME (LOSS) FROM
OPERATIONS 896 (504) 1,116 (1,019)
INTEREST EXPENSE (497) (360) (1,103) (726)
--------- --------- --------- ---------
INCOME (LOSS) FROM
CONTINUING
OPERATIONS
BEFORE INCOME TAX
(EXPENSE) BENEFIT
AND DISCONTINUED
OPERATIONS 399 (864) 13 (1,745)
INCOME TAX BENEFIT
(EXPENSE) (268) (19) (67) 86
--------- --------- --------- ---------
INCOME (LOSS) FROM
CONTINUING
OPERATIONS
AND BEFORE
DISCONTINUED
OPERATIONS 131 (883) (54) (1,659)
DISCONTINUED
OPERATIONS:
Income (loss) from
operations of
discontinued
Shuster component
(including loss
on disposal of
$905) (670) (47) (167) 216
Income tax benefit
(expense) 268 19 67 (86)
--------- --------- --------- ---------
INCOME (LOSS) ON
DISCONTINUED
OPERATION (402) (28) (100) 130
--------- --------- --------- ---------
NET LOSS $ (271) $ (911) $ (154) $ (1,529)
========= ========= ========= =========
INCOME (LOSS) PER
SHARE BASIC AND DILUTED
Continuing
operations $ 0.02 $ (0.15) $ (0.01) $ (0.30)
Discontinued
operations (0.06) (0.01) (0.02) 0.02
--------- --------- --------- ---------
Net income (loss) $ (0.04) $ (0.16) $ (0.03) $ (0.28)
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 6,218,805 5,701,778 6,113,787 5,455,036
========= ========= ========= =========