EL SEGUNDO, Calif. and LONGMONT, Colo., Feb 14, 2003 (PRIMEZONE) -- Hauser, Inc. (OTCBB:HAUS) today reported its financial results for the fiscal 2003 third quarter ended December 31, 2002.
For the fiscal 2003 third quarter, total revenues were $12.0 million compared with $11.3 million in the corresponding year-earlier quarter. Net loss decreased to $1.2 million, or $0.18 per share, from a net loss of $2.3 million, or $0.41 per share, in the corresponding quarter a year ago. Loss from operations was $693,000, compared with a loss from operations of $2.2 million in the same quarter a year ago.
For the first nine months of fiscal 2003, total revenues were $39.2 million compared with $35.4 million in same period of the prior year. Net loss narrowed to $1.3 million, or $0.21 per share, from a net loss of $3.9 million, or $0.70 per share, in the corresponding period a year earlier. Income from operations was $423,000, compared with a loss from operations of $3.2 million in the first nine months of fiscal 2002.
"We have substantially reduced costs, increased manufacturing efficiencies, consolidated operations, restructured administrative activities and reduced operating assets," said Kenneth Cleveland, president and chief executive officer. "These actions, however, have not been sufficient to allow Hauser to remain in compliance with the terms of its amended credit agreement with Wells Fargo Bank."
Wells Fargo has advised the company that certain events of default had occurred, including a payment default, and that it will not waive these events of default. Hauser has been unable to secure alternative financing that would permit it to satisfy its obligations to Wells Fargo. If Wells Fargo is not willing to defer collection of the past due amounts, the company may be forced to seek bankruptcy protection.
Hauser has established a special committee of independent directors to consider and evaluate a number of alternatives, which would permit the company to satisfy its cash needs and its obligations to its creditors. It is likely that any alternative will require Hauser to file a voluntary petition under Chapter 11 of the Bankruptcy Code.
Hauser, headquartered in El Segundo, 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 STATEMENTS OF OPERATIONS
(In thousands, except share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
2002 2001 2002 2001
--------- --------- --------- ---------
REVENUES:
Dietary supplements $ 9,264 $ 7,373 $ 28,258 $ 24,379
Pharmaceutical and
functional food
ingredients 1,326 1,574 5,587 4,501
Technical services 1,452 2,394 5,363 6,519
--------- --------- --------- ---------
Total revenues 12,042 11,341 39,208 35,399
COST OF REVENUES:
Dietary supplements 7,283 5,264 22,316 18,726
Pharmaceutical and
functional food
ingredients 1,148 1,315 4,802 3,746
Technical services 1,226 1,567 4,190 5,041
--------- --------- --------- ---------
Total cost of revenues 9,657 8,146 31,308 27,513
GROSS PROFIT 2,385 3,195 7,900 7,886
OPERATING EXPENSES:
New product development 556 658 1,456 1,938
Sales and marketing 905 828 2,108 1,994
General and
administrative 1,617 1,946 3,913 5,210
Restructuring charge -- 1,957 -- 1,957
--------- --------- --------- ---------
Total operating
expenses 3,078 5,389 7,477 11,099
--------- --------- --------- ---------
INCOME (LOSS) FROM
OPERATIONS (693) (2,194) 423 (3,213)
OTHER INCOME (EXPENSE):
Interest expense (334) (232) (1,437) (958)
--------- --------- --------- ---------
INCOME (LOSS) FROM
CONTINUING OPERATIONS
AND BEFORE (1,027) (2,426) (1,014) (4,171)
INCOME (LOSS) FROM
OPERATIONS OF (127) 79 (294) 295
--------- --------- --------- ---------
NET LOSS $ (1,154) $ (2,347) $ (1,308) $ (3,876)
========= ========= ========= =========
INCOME (LOSS) PER
SHARE BASIC
AND DILUTED
Continuing operations $ (0.16) $ (0.42) $ (0.16) $ (0.75)
Discontinued operations (0.02) 0.01 (0.05) 0.05
--------- --------- --------- ---------
Net loss $ (0.18) $ (0.41) $ (0.21) $ (0.70)
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES OUTSTANDING 6,472,932 5,769,808 6,233,937 5,560,341
========= ========= ========= =========
HAUSER, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, March 31,
2002 2002
----------- ---------
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ -- $ 549
Accounts receivable, less
allowance for doubtful accounts:
December 31, 2002, $478;
March 31, 2002, $824 8,011 7,620
Inventory, at lower of
cost or market 8,197 7,513
Prepaid expenses and other 995 732
Current assets of business
held for sale -- 2,266
------- -------
Total current assets 17,203 18,680
PROPERTY AND EQUIPMENT:
Land and buildings 4,292 6,160
Laboratory and processing
equipment 9,745 9,736
Furniture and fixtures 1,870 1,672
------- -------
15,907 17,568
Accumulated depreciation
and amortization (9,537) (9,669)
------- -------
Net property and equipment 6,370 7,899
------- -------
OTHER ASSETS:
Deposits and other 555 845
Non-current assets of
business held for sale -- 4,638
------- -------
TOTAL ASSETS $24,128 $32,062
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 7,108 $ 3,185
Book cash overdraft
(outstanding checks) 141 --
Current portion of
long-term debt 8,706 16,455
Note payable to
related party 2,911 2,823
Accrued salaries
and benefits 901 1,377
Customer deposits 84 461
Accrued exit costs -- 251
Amount due to related party 2,175 3,043
Other current liabilities 2,198 2,498
Liabilities of business
held for sale -- 789
------- -------
Total current liabilities 24,224 30,882
------- -------
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.001 par value;
20,000,000 shares authorized; 6 6
Additional paid-in capital 95,171 95,139
Warrants 1,133 1,133
Accumulated deficit (96,406) (95,098)
-------- --------
(96) 1,180
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 24,128 $ 32,062
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