OLD TAPPAN, NJ -- (Marketwire) -- 11/23/10 -- In the news release, "New Leaf Brands Announces 2010 Third Quarter Results and Operations Update," issued Monday, November 22, 2010 by New Leaf Brands, Inc. (OTCBB: NLEF), we are advised by the company that the fourth paragraph after the bulleted list should read "a net loss of approximately $5.2 million or $(0.28) per share" rather than "a net loss of approximately $4.9 million or $(0.26) per share" as originally issued. Additionally, in the seventh paragraph after the bullets, "$7.8 million" should read "$7.7 million" and "$(1.21) per share based on 10.46 million shares outstanding" should read "$(1.24) per share based on 10.5 million shares outstanding." Complete corrected text follows.
New Leaf Brands Announces 2010 Third Quarter Results and Operations Update
OLD TAPPAN, NJ - (November 22, 2010) - New Leaf Brands, Inc. (OTCBB: NLEF)
New Leaf Brands, Inc. (OTCBB: NLEF) ("Company"), a provider of great tasting, all natural, healthy beverages, announced the Company's financial results for the three and nine months ending September 30, 2010 and provides an operations update.
2010 Business and Product Updates
- As of today, New Leaf is available in 37 states, through more than 130 distributors compared to approximately 25 states and 65 distributors during the same period in 2009.
- Duane Reade, a leading drug retailer in Metro NY with approximately 200 retail locations, has authorized New Leaf brands and will begin placing New Leaf in their stores in Q4.
- Expanded horizontal distribution in NYC as Food Emporium and D'agastinos have authorized New Leaf Lemonades in addition to our Iced Teas.
- Key growth markets tapped for development are New York, California, Texas and Florida.
- Expansion in west region of the United States continues with the additions of Albertsons (248), Gelsons (18), Whole Foods (11) Bristol Farms (13), and Jons (15) as new retail chains added for distribution during the quarter.
- This week authorized in 42 G & M convenience stores in Southern California, which are scheduled to launch Q4.
- Receiving strong interest from convenience and supermarket chain stores nationally for our products, especially our new line of lemonades introduced earlier this year.
- Slated 4 new and exciting flavors of lemonades to be introduced in the first quarter of 2011.
2010 Marketing Updates
- NY Giants Pro Bowl Wide Receiver, Steve Smith, endorses New Leaf Brands' lemonades and Iced Teas.
- New Leaf sponsored 85 person team participates in the 2010 MS Bike Tour in New York City, sampling and building brand awareness amongst the 6000 riders and volunteers and raising more than $29,000 for MS.
- Began aggressive consumer sampling program participating at national and local events such as the The Metropolitan Cooking & Entertaining Show in Washington, DC where over 10,000 consumers were able to sample New Leaf. Rachel Ray, Paula Deen and Bobby Flay were featured at this event. Other recent events attended were the G2E in Las Vegas and Culture Shock at Columbia University in NYC.
Eric Skae, New Leaf President and Chief Executive Officer, stated, "We are pleased with our results for the third quarter and nine month periods of 2010. Although we were challenged with capital, we managed to continue to increase our case sales, distribution, chain store placement/approval and market awareness in all our key markets. The New Leaf Brand is now available in 37 states. In addition to recent chain store authorizations and initial interest we are receiving from supermarkets and chain stores throughout the US, our prospects have never looked better for propelling our future growth."
Mr. Skae continued, "In an effort to maintain our growth momentum while reducing our operating expenses, we implemented a shift in our strategy focusing on a greater level of horizontal development in key growth markets and controlled geographic expansion in markets that have high potential for growth. During the third quarter of 2010 we made a strategic decision to reallocate our resources to create a more efficient sales effort while streamlining our business. We implemented these changes to our sales and marketing effort during the quarter and intend to continue through the fourth quarter this year. Our focus on horizontal growth will allow us to build relationships with larger retailers such as supermarkets and chain stores which we expect to yield higher revenues with lower expenses. We also expect this shift to contribute to stabilizing our shipping costs as we grow while delivering more product SKUs in the same geographic areas we currently serve. Our overall strategic direction remains in building a world-class beverage company around our New Leaf Brand of ready-to-drink teas, lemonades and other functional beverages we are currently developing. We believe our focus on building our chain store distribution network while maintaining operating efficiencies will yield even higher revenue and gross profit margin as we enter the New Year."
Financial Highlights for the Third Quarter Ended September 30, 2010:
Net Revenue from continuing operations for the quarter ending September 30, 2010 totaled $1.05 million, a 2.5% increase compared to $1.03 million for the same period last year. The limited growth in revenues for the quarter was a result of the company's shift in its selling and marketing focus to chain stores and national accounts. Cost of sales for the three months ending September 30, 2010 decreased to $647,459, compared to $738,902 for the same period in 2009. Gross profit increased to $404,088 for the third quarter of 2010 compared to $286,318 for the same period last year of 2009 yielding an improved gross profit margin of 38.4% versus 27.9% respectively. Gross profit margin increased due to the recovery of credits from a former bottle manufacture, greater operating efficiencies and the reduction in the price on raw materials.
Net loss from continued operations for the period ended September 30, 2010 totaled $1.6 million or $(0.02) per share based on 74.4 million shares outstanding compared to a net loss of approximately $5.2 million or $(0.28) per share based on 18.7 million shares outstanding.
Financial Highlights for the Nine Months Ended September 30, 2010:
Net Revenue from continuing operations for the Nine months ending September 30, 2010 totaled $3.7 million, a 25.9% increase compared to $2.9 million for the same period ending September 30, 2009. Revenue increased as a result of expanded distribution, an increase in the number of retailers offering our products and an increase in marketing programs. New Leaf's first nine months 2010 case volume increased 25% to 423,069 from 338,475 for the first nine months in 2009.
Cost of sales for the Nine months ending September 30, 2010 increased to $2.4 million, a 4.8% increase compared to $2.3 million for the same period in 2009. Gross profit increased to $1.2 million for the first nine months of 2010 compared to $611,085 for the same period of 2009 yielding an improved gross profit margin of 34.2% versus 21% respectively. Gross profit margin increased due partially to the credit recovery from a former bottler, greater operating efficiencies and the reduction in the price on raw materials. Management sees continued improvement in gross margins for the remainder of 2010 and throughout 2011 as sales volumes continue to increase.
Net loss from continued operations for the nine month period ended September 30, 2010 totaled $7.7 million or $(0.12) per share based on 65.7 million shares outstanding compared to a net loss of approximately $12.6 million or $(1.24) per share based on 10.5 million shares outstanding.
"As we close the fourth quarter and enter the New Year, I am confident we have reached a positive inflection point and are well positioned to accelerate our distribution and sales. With over 20,000 retail accounts in our target pipeline our team believes we can double our distribution network next year. As an up-and-coming beverage company, fighting for shelf space and establishing distribution, we are constantly challenged to overcome obstacles that require creative solutions and resourceful thinking. New Leaf has met many challenges to date and our team has overcome them all. I have found that the best strategy is to be well prepared and react quickly when opportunity presents itself. Because we are an independent beverage company, not owned by a larger corporation, we have the latitude we need to compete effectively. Our goal is to have New Leaf products available wherever consumers ask for them and they will, because It Just Tastes Better," further commented Eric Skae.
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.
New Leaf Brands, Inc.
201.784.2400 x 15
New Leaf Brands, Inc.
201.784.2400 x 11
Alan Sheinwald/Mark McPartland
Alliance Advisors, LLC