Hauser Reports Year-End Results


BOULDER, Colo., July 17, 2001 (PRIMEZONE) -- Hauser, Inc. (OTCBB:HAUS) yesterday reported results for the year ended March 31, 2001.

For the year there was a net loss of $33.3 million, including non-cash charges totaling $22.2 million reflecting the write down of substantially all goodwill, certain fixed assets and inventory. The net loss per share for the 2001 fiscal year was $6.75, compared with a net loss of $28.4 million, or $6.47 per share for the 11 months ended March 31, 2000.

Total revenues for fiscal 2001 were $66.7 million compared to $81.2 million during the 11 months of fiscal 2000. The reduction in revenue was a result of a worldwide over supply of dietary supplement products, which resulted in reduced sales due to customer inventory levels. The revenue decline also resulted from a decision by a principal supplier to sell excipient products directly rather than distribute them through Hauser.

Kenneth Cleveland, president and chief executive officer, said, "Hauser's fiscal 2001 year was marked by the continued effort to reduce costs, restructure operations and return the company to profitability. We believe our restructuring efforts and cost reductions will improve our operating efficiencies and allow us to continue to be a leading supplier of natural product extracts and nutritional supplements to food, health care, and pharmaceutical markets in the U.S."

Cleveland added: "Looking to the future, we are concentrating on developing proprietary, clinically supported natural extract products. Our emphasis will be on the development of those products that differentiate Hauser from its competitors and extend our company's legacy of discovery and innovation."

Hauser, a Customer Connected(SM) company headquartered in 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 news 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 STATEMENTS OF OPERATIONS
 ---------------------------------------------------------------------
                                       Twelve Months   Eleven Months 
                                           Ended           Ended
                                       March 31, 2001  March 31, 2000
                                        ------------    ------------
 REVENUES:

  Natural products                      $ 21,380,902    $ 28,329,424
  Fine chemicals                          28,415,694      28,695,223
  Technical services                      16,246,044      15,442,139
  Pharmaceuticals                            670,970       8,694,819
                                        ------------    ------------
   Total revenues                         66,713,610      81,161,605
                                        ------------    ------------

 COST OF REVENUES:

  Natural products                        20,844,964      26,013,125
  Fine chemicals                          24,521,058      24,139,555
  Technical services                      14,097,545      13,017,485
  Pharmaceuticals                               --         8,497,212
  Write-down of inventory                  4,498,407       6,675,856
                                        ------------    ------------
   Total cost of revenues                 63,961,974      78,343,233
                                        ------------    ------------
 GROSS PROFIT (LOSS)                       2,751,636       2,818,372
                                        ------------    ------------
 OPERATING EXPENSES:

  Research and development                 2,586,002         800,462
  Sales and marketing                      3,620,483       4,611,631
  General and administrative              11,393,691      11,104,083
  Write-off of assets and
   facility closure costs                 17,844,197       9,255,900
                                        ------------    ------------
    Total operating expenses              35,444,373      25,772,076

                                        ------------    ------------
 LOSS FROM OPERATIONS                    (32,692,737)    (22,953,704)
                                        ------------    ------------
 OTHER INCOME (EXPENSE):

  Interest and other income                  391,583          88,371
  Interest expense                        (2,296,053)     (1,879,465)
  Gain from sale of land held
   for investment                          1,430,396            --
                                        ------------    ------------
      Total other (expense) income          (474,074)     (1,791,094)
                                        ------------    ------------

 LOSS BEFORE INCOME TAX                  (33,166,811)    (24,744,798)

 INCOME TAX EXPENSE                           93,862       3,630,057
                                        ------------    ------------
 NET LOSS                               $(33,260,673)   $(28,374,855)
                                        ============    ============
 LOSS PER SHARE BASIC AND DILUTED       $      (6.75)   $      (6.47)
                                        ============    ============
 WEIGHTED AVERAGE SHARES OUTSTANDING
   BASIC AND DILUTED                       4,929,473       4,388,221
                                        ============    ============

 HAUSER, INC.
 CONSOLIDATED BALANCE SHEETS
 ---------------------------------------------------------------------
                                           March 31,      March 31,
                                             2001            2000
                                         ------------    ------------
 ASSETS

 CURRENT ASSETS:

  Cash and cash equivalents              $    616,242    $  1,272,875
  Accounts receivable, less allowance
   for doubtful accounts:
   2001, $876,849; 2000, $976,101          12,269,932      17,052,701
  Inventory, at lower of cost or market     9,802,166      22,631,914
  Prepaid expenses and other                  928,231         611,897
                                         ------------    ------------
      Total current assets                 23,616,571      41,569,387
                                         ------------    ------------
 PROPERTY AND EQUIPMENT:

  Land and buildings                        8,967,678       8,753,733
  Laboratory and processing equipment      17,401,764      25,879,426
  Furniture and fixtures                    3,587,807       4,289,140
                                         ------------    ------------
   Total property and equipment            29,957,249      38,922,299
  Accumulated depreciation and
   amortization                           (17,257,953)    (23,237,393)
                                         ------------    ------------
   Net property and equipment              12,699,296      15,684,906
                                         ------------    ------------
 OTHER ASSETS:

  Goodwill, less accumulated amortization:
   2001, $1,273,013; 2000, $1,742,698         947,967      18,556,242
  Deposits and other                          575,583         249,106
                                         ------------    ------------
                                         $ 37,839,417    $ 76,059,641
                                         ============    ============
 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES:

  Accounts payable                       $  2,833,036    $  4,067,144
  Current portion of long-term debt        18,790,034      26,377,638
  Accrued salaries and benefits             1,300,117       2,391,576
  Customer deposits                           642,839         916,870
  Accrued exit costs                          508,444       1,987,214
  Amount due to related party               2,988,160         847,157
  Other current liabilities                 2,825,444       1,227,668
                                         ------------    ------------
   Total current liabilities               29,888,074      37,815,267
                                         ------------    ------------

 LONG-TERM DEBT                                36,335         418,832
 NOTE PAYABLE TO RELATED PARTY              2,704,803            --

 COMMITMENTS AND CONTINGENCIES

 STOCKHOLDERS' EQUITY:

  Common stock, $.001 par value;
   20,000,000 shares authorized;
   shares issued and outstanding:
   2001, 5,072,742; 2000, 4,811,585             5,073           4,812
  Additional paid-in capital               94,543,588      94,252,750
  Warrants                                    354,237            --
  Accumulated deficit                     (89,692,693)    (56,432,020)
                                         ------------    ------------
                                            5,210,205      37,825,542
                                         ------------    ------------
                                         $ 37,839,417    $ 76,059,641
                                         ============    ============


            

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