Naturade, Inc., Ends 2001 with 9% Net Sales Increase, Expands Mass Market Business, Secures $2.5 Million Investment to Bolster Working Capital
IRVINE, Calif.--(BUSINESS WIRE)--April 3, 2002--Naturade, Inc. (OTCBB:NRDC), a leading marketer of soy protein products for heart health, reported year-end results for 2001 that reflected continuing sales growth driven by increases in its Naturade Total Soy(TM) brand and an infusion of capital earmarked to help maintain the Company's #1 share in supermarket, drug store and mass merchandiser accounts.
Highlights for the year 2001 include the following:
1. Net sales of $17.1 million were up 9.4% over 2000. This included a
31.8% increase in mass market repeat purchases (turn business),
especially on the Naturade Total Soy brand. The 31.8% calculation
excludes growth due to added distribution and due to a channel
shift in which certain mass customers switched to direct purchases
from Naturade rather than purchasing from health food
distributors.
2. Naturade maintained its strong health food sales base in protein
powders and aloe vera products while expanding its mass market
business. Health food stores represented 49.1% of 2001 Naturade
volume and core health food net sales were up 1.2% compared to
2000. This gain was calculated after factoring out the channel
shift from health food distributors to direct mass accounts and
sales lost because of the Company's decision to discontinue lower
volume products.
3. A net loss of $2.7 million ($0.36/share) reflected a commitment to
invest in new mass market distribution and in the growth potential
of soy protein which was generated by late 1999 FDA approval of a
health claim that "25 grams of soy protein daily, in a diet low in
saturated fat and cholesterol, may reduce the risk of heart
disease." This compares to a $2.1 million ($0.30/share) net loss
in 2000.
4. Naturade retained its #1 position in supermarket, drug store and
mass merchandiser outlets with a 37.7% share of natural soy
protein powders as measured by IRI (Information Resources, Inc.)
for the 52 weeks ending December 2, 2001. Naturade continued to
outsell other established competitors and also held its ground
versus new product introductions from major companies, including
Rexall Sundown, Twin Labs and EAS, none of which achieved as much
as a 5% market share.
5. Significant volume increases from major retailers such as Kroger,
Safeway, Albertsons, K-mart and Whole Foods reflected deeper
on-shelf distribution of the Naturade Total Soy brand, including
new products launched in late 2000, such as Naturade Total Soy
Calcium 1000(TM) powder and ready-to-drink shakes.
6. In simultaneous transactions closed on January 2, 2002, Naturade
sold Series B Convertible Preferred Stock and Warrants to Westgate
Equity Partners, L.P. (Westgate) of St. Louis for $2.5 million,
converted its $5.3 million of debt to Health Holdings &
Botanicals, LLC (HHB) to common stock, cancelled its Series A
Convertible Preferred Stock held by HHB and amended its existing
Credit and Security Agreement with Wells Fargo Business Credit
(Wells). The amended Wells agreement extended the relationship
through December 31, 2003, increased the credit line to $4.5
million, waived existing defaults and increased the interest rate.
"The recapitalization resulting from these transactions is not reflected in the final 2001 balance sheet because the closing occurred on January 2nd, but will significantly improve Naturade's financial ratios beginning in the first quarter of 2002," says Naturade CEO Bill Stewart. "The net proceeds will be used for working capital, including the financing of continued expansion of the Naturade Total Soy brand.
"Repeat business from major retailers such as Sam's Club, Fred Meyer and Costco demonstrates that our business model is working," Stewart continues. "We're anxious to move to the next level by creating new strategic alliances with other companies, capitalizing on the resources of our new investment partners," Stewart concludes. |
