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Schiff Nutrition International, Inc. Announces Fiscal 2007 Second Quarter Results

Posted on: Thursday, 11 January 2007, 09:01 CST

Schiff Nutrition International, Inc. (NYSE:WNI), today announced results for the fiscal 2007 second quarter and six months ended November 30, 2006.

Schiff Nutrition's net sales were $38.8 million for the second quarter, compared to $35.5 million for the same period in fiscal 2006. For its fiscal 2007 second quarter, Schiff Nutrition reported net income of $2.2 million, or $0.08 per diluted share, as compared to $1.5 million, or $0.06 per diluted share, for the fiscal 2006 second quarter.

Schiff Nutrition's net sales were $84.5 million for the six months ended November 30, 2006, compared to $83.5 million for the same period in fiscal 2006. For the first six months of fiscal 2007, Schiff Nutrition reported net income of $5.5 million, or $0.20 per diluted share, compared to $6.5 million, or $0.24 per diluted share, for the same period a year ago. Fiscal 2006 six month results were favorably impacted by the recognition of approximately $2.3 million reimbursement of import related costs, the recognition of approximately $1.6 million of non-taxable foreign currency related gain, and an overall effective tax rate of approximately 11 percent.

Bruce Wood, president and chief executive officer, stated, "We were encouraged by the 9.5 percent net sales increase in the second quarter versus the prior year period. Our overall branded sales recorded a 2.2 percent increase in the period, including a 10.5 percent increase in our flagship Move Free® brand, and our private label net revenues increased 42 percent. At the same time, we experienced strong growth in our gross margin, operating earnings, and earnings per share versus the prior year quarter."

Wood added, "We continue to foresee very intense competitive conditions in the joint care category. We remain committed to very competitive levels of marketing support behind our Move Free Advanced initiative. We are confident in the long-term prospects for Move Free and our other Schiff® branded business, and we are continuing our efforts on organic and acquisition growth initiatives."

Conference Call Information

Schiff Nutrition International will hold a conference call today, January 11 at 11:00 a.m. ET. The U.S. domestic access number is 866-203-3436. International participants should dial 617-213-8849. Please call in approximately ten minutes in advance. The conference call will be broadcast live over the Internet at http://www.schiffnutrition.com/press.asp. A replay of the call will be available by dialing 888-286-8010 for domestic callers and 617-801-6888 for international callers; enter access code 85570434. The telephone replay will be available through January 16, 2007.

About Schiff Nutrition

Schiff Nutrition International, Inc. develops, manufactures, markets and distributes branded and private label vitamins, nutritional supplements and nutrition bars in the United States and throughout the world. To learn more about Schiff, please visit the web site www.schiffnutrition.com.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on management's beliefs and assumptions, current expectations, estimates, and projections. These statements are subject to risks and uncertainties, certain of which are beyond the company's ability to control or predict, and, therefore, actual results may differ materially. Schiff Nutrition disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

Important factors that may cause these forward-looking statements to be false include, but are not limited to: the level of customer and consumer acceptance of Move Free Advanced, the inability to successfully implement marketing and spending programs behind our Move Free brand and other new branded products, the impact of raw material pricing, availability and quality (particularly relating to joint care products and ingredients from suppliers outside the United States), the mix between branded and private label products, the ability to grow and/or maintain branded and private label sales, the inability to achieve cost savings and operational efficiencies, the inability to increase operating margins and increase revenues, dependence on individual products, dependence on individual customers, the impact of competitive products and pricing (including private label), market and industry conditions (including pricing, demand for products and level of trade inventories), the impact of clinical studies regarding nutritional supplements, particularly relating to the joint care category, the success of product development, the inability to obtain customer acceptance of new product introductions, changes in laws and regulations, litigation and government regulatory action in the United States and internationally, the inability or increased cost to obtain product liability and general insurance, the uncertainty of market acceptance of new products, adverse publicity regarding the consumption of nutritional supplements, the inability to find strategic acquisitions or the inability to successfully consummate or integrate an acquisition, changes in accounting standards, and other factors indicated from time to time in the company's SEC reports, copies of which are available upon request from the company's investor relations department or may be obtained at the SEC's web site (www.sec.gov). These risks and uncertainties should be carefully considered before making an investment decision with respect to shares of our common stock.

SCHIFF NUTRITION INTERNATIONAL, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

(unaudited)

Three Months EndedNovember 30,

Six Months EndedNovember 30,

2006 

2005 

2006 

2005 

Net sales

$

38,817 

$

35,456 

$

84,469 

$

83,473 

Cost of goods sold

22,640 

24,246 

51,176 

59,554 

Gross profit

16,177 

11,210 

33,293 

23,919 

Operating expenses:

Selling and marketing

8,790 

6,060 

17,079 

12,076 

Other operating expenses

4,741 

3,761 

9,236 

6,677 

Total operating expenses

13,531 

9,821 

26,315 

18,753 

Income from operations

2,646 

1,389 

6,978 

5,166 

Other income, net

728 

305 

1,413 

2,254 

Income from continuing operations before income taxes

3,374 

1,694 

8,391 

7,420 

Income taxes

1,125 

89 

2,879 

823 

Income from continuing operations

2,249 

1,605 

5,512 

6,597 

Loss from discontinued operations, net of tax

-- 

(70)

-- 

(127)

Net income

$

2,249 

$

1,535 

$

5,512 

$

6,470 

Weighted average common sharesoutstanding -- diluted

27,330 

26,866 

27,322 

26,820 

Net income per share -- diluted:

Income from continuing operations

$

0.08 

$

0.06 

$

0.20 

$

0.25 

Loss from discontinued operations

-- 

-- 

-- 

(0.01)

Net income

$

0.08 

$

0.06 

$

0.20 

$

0.24 

SCHIFF NUTRITION INTERNATIONAL, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(IN THOUSANDS)

November 30,

May 31,

2006 

2006 

(unaudited)

Cash and cash equivalents

$

25,044 

$

24,899 

Available-for-sale securities

41,507 

40,120 

Receivables, net

19,552 

20,431 

Inventories

29,423 

23,515 

Other current assets

4,966 

4,863 

Total current assets

120,492 

113,828 

Property and equipment, net

14,294 

13,287 

Other assets, net

4,581 

4,500 

Total assets

$

139,367 

$

131,615 

Total current liabilities

$

23,997 

$

23,312 

Deferred taxes

13 

796 

Stockholders' equity

115,357 

107,507 

Total liabilities & stockholders' equity

$

139,367 

$

131,615 

Source: Business Wire

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