OLD TAPPAN, NJ -- (Marketwire) -- 05/18/10 -- New Leaf Brands, Inc. (OTCBB: NLEF) --
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 first quarter ending March 31, 2010.
Eric Skae, New Leaf President and CEO, stated, "We are pleased with our first quarter revenue increase over the previous year and even more excited by the future prospects of our healthy beverage product line. With the warm summer months quickly approaching we expect to experience acceleration in sales for all of our great tasting healthy beverages, including our newly launched lemonades. The strong working relationships we continue to maintain with our distributors have been a key factor in our growth and success we have enjoyed in a relatively short amount of time. Our previously announced distribution expansion with Manhattan Beer is nearly complete and at the end of this June our products will be offered in over 4,000 establishments in the New York Metro area. We expect to have similar success in the Western region of the U.S. with our presence now in L.A. providing a solid platform to expand in this area. We believe the demand for our healthy and great tasting beverages will continue to strengthen in these key markets and others such as Arizona where New Leaf is now being sold in 100% of the state. We have remained focused on increasing our revenue and distribution network while maintaining operating efficiencies as confirmed by our increase in gross profit margin by 17 percentage points, or more than doubling since last year. As our sales volumes continue to increase, our profit margin should follow."
Mr. Skae continued, "With the recent launch of our new line of lemonades made with 6%-10% real fruit juice and sweetened with 100% organic cane sugar, we now have 18 unique great tasting healthy beverages. The first production run of our lemonades sold out in 14 days and we have nearly tripled new production orders to meet current demand. As of April 2010, New Leaf beverages are sold in 35 states, through more than 120 distributors and in over 12,000 retail outlets. We sold 113,119 cases in the first quarter of 2010, up over 37% from 82,196 cases in the first quarter of 2009. In April 2010, we sold 79,890 cases, a 114% increase over our April 2009 sales of 37,360 cases. 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
Financial Highlights for the First Quarter Ended March 31, 2010
Net Revenue from continuing operations for the quarter ending March 31, 2010 totaled $954,549, a 36 % increase compared to $701,789 for the quarter ending March 31, 2009. Revenue increased as a result of expanded distribution and an increase in marketing programs. New Leaf's first quarter 2010 case volume increased 37% to 113,119 from 82,196 for the first quarter in 2009.
Cost of sales for the three months ending March 31, 2010 increased to $679,699, an 8% increase compared to $626,579 for the same period in 2009. Gross profit increased to $274,850 for the first quarter of 2010 compared to $75,210 for the first quarter of 2009 producing an improved gross profit margin of 28% versus 11% respectively. Gross profit margin increased due to greater operating efficiencies realized as production volumes increase and the reduction in the price on raw materials. Management sees continued improvement in gross margins throughout 2010 as sales volumes continue to increase.
Operating expenses for the period ended March 31, 2010 and 2009 were $2.98 million and $1.26 million, respectively. The increase in operating expense for 2010 is primarily due an increase in Marketing expense to $1.1 million from $630,442 in 2009 and Option and Stock Compensation expense of $1.1 million compared to $20,607 during 2009. General and Administrative expenses increased for the period ending March 31, 2010 to $489,220 compared to $428,573 for the same period in 2009.
Net loss for the period ended March 31, 2010 totaled $2.7 million or $(0.04) per share based on 63.8 million shares outstanding compared to a net loss of approximately $2.0 million or $(0.24) per share based on 8.4 million shares outstanding.
About New Leaf Brands, Inc.:
Founded by Eric Skae in 2004 in Orangeburg, New York, New Leaf Brands (OTCBB: NLEF) was born out of the vision to provide consumers with a healthy and great tasting beverage. New Leaf Brands are available in 12 unique tea flavors sweetened with 100% organic cane sugar, 4 lemonades made with 6%-10% real fruit juice and sweetened with 100% organic cane sugar and 2 diet iced teas sweetened with Splenda.
In the US, the refreshing beverages can be found in over 12,000 outlets including restaurants, delis, health food stores, pizzerias and other retail establishments. For more information, please visit http://www.newleafbrands.com/ or follow New Leaf on Twitter @DrinkNewLeaf and become a fan on Facebook (http://www.facebook.com/pages/New-Leaf-Tea/142029534279?ref=ts).
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.