ORANGEBURG, NY -- (Marketwire) -- 04/06/10 -- New Leaf Brands, Inc. (OTCBB: NLEF) ("Company"), a provider of great tasting, all natural, healthy beverages, is pleased to announce the Company's financial results for the year ending December 31, 2009.
Eric Skae, New Leaf President and CEO, stated, "Since the sale of our Lifetime business our main goal for 2009 was to position our brand for national distribution of our iced tea products in 2010. In a short period of time our rapid expansion has been very successful and as of March we are being delivered by over 100 distributors in 35 states and have recently secured distribution points in Los Angeles with Classic Distributing, Arizona with Miller Coors AZ and announced the doubling of our distribution in the New York Metro area based on our agreement with Manhattan Beer. We have enjoyed this success based on our strong management team, strong brand awareness and a great tasting product that consumers love to drink. All of our 2009 accomplishments validate the demand for our products and we expect to experience strong growth in our case volume throughout 2010 and beyond."
2009 Operational Highlights
In 2009 the Company successfully completed several business and product development milestones that will materially benefit the brand in 2010 and beyond.
- Successfully closed the asset sale of its wholly-owned subsidiary, Nutritional Specialties, Inc., to Nutra, Inc., a subsidiary of Nutraceutical International Corporation. Simultaneous with the sale, the Company used the proceeds to pay down the senior debt outstanding.
- The Company changed its name to New Leaf Brands and began trading under the stock symbol NLEF as a pure play healthy beverage company.
- Reduced total debt outstanding to $2.7 million at the end of 2009 compared to $11 million at the end of 2008.
- Simplified the capital structure by converting all preferred stock and nearly all warrants to common shares.
- Year over year case volume increased to 401,000 at the end of 2009 compared to 290,101 at the end of 2008, an increase of 38%.
Non-GAAP revenue, including 12 months of operating performance for the year ended December 31,2009, would have been $3.5 million, an increase of 40% compared to $2.5 million for the year ended December 31, 2008.
Mr. Skae continued, "We expect to continue to add distributors throughout the U.S. aggressively with the goal of having National distribution coverage before the end of 2011. The addition of new distributors and increased focus from our existing distributors has significantly improved case sales which we believe will continue to grow throughout 2010. March 2010 was a record case sales month for the company with New Leaf selling approximately 63,500 cases versus 30,940 cases in March 2009 for a 105% growth rate year over year. We believe that this significant ramp will continue during the spring and heading into the summer which are the key selling seasons for the New Leaf Brand."
2010 Business and Product Updates
- Recently, New Leaf began distribution in Los Angeles, California, a significant milestone in the Company's history. Today, New Leaf is available in two of the most prominent and largest beverage markets in the United States, California and New York.
- Manhattan Beer is in the process of doubling distribution of New Leaf in the New York Metro area into over 4,000 cold box locations. Manhattan Beer has initiated a campaign to re-shelve New Leaf with proprietary merchandising displays at the ideal consumer eye level and stocked with the Company's trademark green color glide rack at new and existing locations.
- New Leaf has officially launched the Company's new product line of lemonades in three flavors and one half-and-half flavor. These new products have been added to the Company's current product line of 14 ready-to-drink (RTD) iced teas.
- As of today, New Leaf is available in 35 states, through 100 distributors compared to 20 states and 50 distributors in 2008.
- New Leaf has added top industry and financial executives to the team including Bill Sipper, Chief Operating Officer, David Tsiang, Chief Financial Officer, and Rob Welcome, Vice President of National Accounts.
Eric Skae, New Leaf President and CEO, concluded, "We continue to rapidly build and strengthen our strong nationally recognized brand. The steps taken in 2009 allowed us to strengthen our balance sheet through the sale of our nutraceutical asset, the paying down of a significant portion of our total debt, and converting all preferred stock and nearly all outstanding warrants into common shares. In 2010 our only focus will be on marketing our beverages, including our newly launched Lemonade brand. We believe customer demand for our healthy and great tasting beverages will continue to be strong, and we are well positioned for a high level of sustained growth. As we continue to grow our sales and distribution and increase our operating efficiencies in 2010, we will continue to improve our margins significantly enhancing the value we create for our shareholders."
Financial Highlights for the Year Ending December 31, 2009
Revenue for the year ending December 31, 2009 totaled $3.5 million, an increase of $2.7 million compared to $799,000 for the year ending December 31, 2008 which was recorded from September 2008. On a non-GAAP basis revenue for all of 2008 would have been $2.47 million, an increase of 42% from the $3.5 million in 2009 revenues. New Leaf's full year case volume increased 38% from 290,101 in 2008 to 401,000 in 2009. Revenue increased year over year as a result of the acquisition of Skae Beverage International by New Leaf Brands in early September 2008.
Cost of sales increased to $2.7 million in 2009 compared to $668,000 in 2008. Gross profit increased to $756,000 in 2009 compared to $131,000 in 2008 yielding an improved gross profit margin of 22% versus 16% respectively. Gross profit margin increased due to operating efficiencies including the pricing on raw materials. Management sees continued improvement in gross margins throughout 2010.
Operating expenses for the year ended December 31, 2009 and 2008 were $6 million and $3 million, respectively. The increase in operating expense for 2009 is primarily due to marketing investment of $2.1 million compared to $882,000 during 2008. General and Administrative expenses declined year over year in 2009 to $1.2 million compared to $1.6 million in 2008 primarily due to lower professional and executive fees.
The loss from discontinued operations totaling $2.2 million for the period ended December 31, 2009 was a result of the asset purchase agreement with Nutra, Inc., a subsidiary of Nutraceutical International Corporation, to sell substantially all the rights and assets of our subsidiary, Nutritional Specialties, Inc. including the Lifetime ® and Baywood brands of products. The Asset Sale closed on October 9, 2009. The loss from discontinued operations totaled $1.9 million which included an impairment of goodwill charge of $3.3 million for the period January to October 9, 2009, the date of sale. The income from discontinued operations for the same period in 2008 totaled $982,000.
Net loss for the period ended December 31, 2009 totaled $10.9 million or $(0.40) per share based on 63.1 million shares outstanding compared to a net loss of $4.2 million or $(0.83) per share based on 8.4 million shares outstanding.
On the balance sheet, cash and cash equivalents totaled $1.5 million for the period ended December 31, 2009 compared to $98,000 for the period ended December 31, 2008. Total current assets and total assets at the end of 2009 totaled $2.5 million and $6.8 million, respectively.
Total current liabilities decreased to $5.1 million at the end of 2009 compared to $12.2 million at the end of 2008. Total liabilities also improved to $5.2 million at the end of 2009 compared to $14.9 million at the end of 2008. On a comparable basis total debt outstanding improved substantially to $2.7 million at the end of 2009 compared to $11 million at the end of 2008.
Total stockholder's equity as of December 31, 2009 totaled $1.7 million compared to the same period ended in 2008 of $1.9 million. The Company successfully converted all preferred stock outstanding and nearly all warrants outstanding which for the period ending December 31, 2009 totaled 63.1 million shares.
About New Leaf Brands, Inc.
Founded by Eric Skae in 2004 in Orangeburg, New York, New Leaf was created with the vision of providing great tasting, healthy beverages for consumers. New Leaf Tea was the company's first product and was born out of that vision and now is available to consumers in 14 unique flavors and in over 8,000 outlets including restaurants, delis, health food stores, pizzerias and other retail establishments. New Leaf Teas are sweetened with 100% organic cane sugar. For more information, please visit www.newleafbrands.com.
This press release may contain forward-looking statements, made in reliance upon Section 21D of the Exchange Act of 1934, which involve known and unknown risks, uncertainties or other factors that could cause actual results to differ materially from the results, performance, or expectations implied by these forward-looking statements. The Company's expectations, among other things, are dependent upon general economic conditions, continued demand for its products, the availability of raw materials, retention of its key management and operating personnel, its ability to operate its subsidiary companies effectively, need for and availability of additional capital as well as other uncontrollable or unknown factors which are more fully disclosed in the Company's Form 10-Ks and 10-Qs on file with the United States Securities and Exchange Commission.