Nutrition 21 Revenues Up 43%

12/02/08 Nutritional bioscience company Nutrition 21, Inc. has reported a 43% increase in total revenues to $13.0 million compared to $9.1 million in the comparable quarter a year ago. For the quarter, the Company's operating loss of $2.8 million represents a $1.6 million improvement over the year-ago period. Financial results for the quarter were impacted by a $2.4 million increase in advertising and promotion to support the launch of new products and a $0.7 million increase in net interest expense. Net loss for the quarter was $3.8 million, or $(0.06) per fully diluted share, compared to the net loss of $4.7 million, or $(0.08) per fully diluted share in the second quarter of fiscal year 2007.

Total revenues for the six months ended December 31, 2007 increased 83% to $25.2 million compared to $13.8 million in the same period a year ago. The Company's six-month operating loss was $6.5 million which is a $1.5 million improvement over the prior year. Net loss for the six months ended December 31, 2007 was $7.9 million, or $(0.13) per fully diluted share, compared to $8.8 million, or $(0.16) per fully diluted share, in the comparable period a year ago.

Paul Intlekofer, president and chief executive officer of Nutrition 21, Inc., said, "We are pleased with the progress that was achieved during the quarter in terms of growing revenues strongly while meaningfully reducing our operating loss. Going forward, we look to make consistent progress on top-line revenues, while we place continued emphasis on achieving profitability in an optimal timeframe."

"We are particularly pleased that during the quarter our Core4Life Advanced Memory Formula product is the fastest growing product in its segment at one of the nation's leading drugstore chains. In January we increased our distribution of Advanced Memory Formula by an additional 6,500 retail store locations, bringing the total number of retail stores locations to 20,500. As the median age of the U.S. population continues to increase, our focus group studies with middle-aged participants indicate that there is a strong desire to maintain the highest level of cognitive function and memory. Our Core4Life Advanced Memory Formula is aimed directly at this large and growing market and has been effective in clinical studies.

"Additionally, our new Diabetes Essentials brand continues to grow as awareness of the product line and its benefits begin to take hold. We are also working to develop an additional distribution channel for this product line in order to embed these products within the diabetes community nationwide. We believe that the Diabetes Essentials suite of products offers those suffering with diabetes a unique and pleasant approach to managing their nutritional requirements and improving the quality of their lives on an on-going basis."

Mr. Intlekofer concluded, "We continue to be pleased with the retail acceptance of the Iceland Health products. We also look forward to having our Iceland Health Joint Relief and Iceland Health Omega-3 products featured in displays and/or end-caps at a major national drugstore retailer in the month of March and at another large national drugstore retail chain in the month of April. In January, we increased our distribution channel for Iceland Health Joint Relief products by an additional 7,000 retail store locations, bringing to 23,000 stores offering the product. As focus group studies indicate, maintaining healthy and functional joints is a major concern, particularly within the "Baby Boom" generation, in order to remain as active and independent as possible for as long as possible. As clinical studies indicate, our Iceland Health Joint Relief product delivers the benefits that this active group is looking for. We are dedicated to developing this large and growing market in the years to come."