NutraCea: announces results for Q3 and first nine months 2007

Phoenix / AZ. (nc) NutraCea, a world leader in stabilized rice bran (SRB) nutrient research and technology, announced its financial results for the third quarter and nine months ended September 30, 2007.

The Company reported consolidated net revenues of 1,5 million USD for the third quarter of 2007 compared to net revenues of 4,9 million USD for third quarter 2006, a decrease of 3,4 million USD. Gross product sales were reported at three million USD, excluding a product sales return of 1,5 million USD. The decrease is comprised of a 1,54 million USD increase in product sales, offset by a 4,4 million USD decrease in infomercial sales, including a 1,5 million USD sales return and a decrease of 490’000 USD in royalty revenues.

Net loss for the quarter was 4,8 million USD, or 0,03 USD per share, compared to net income of 641’000 USD, or 0,01 USD per share for third quarter 2006.

Gross margins in the quarter ended September 30, 2007 were 115’000 USD, or eight percent, compared to 2’411’000 USD, or 49 percent, during the same period last year. Gross margins on the various product lines vary widely and the gross margins are impacted from period to period by sales mix and utilization of production capacity. The 2’526’000 USD decrease for the three months ended September 30, 2007 is comprised of the 803’000 USD decline corresponding to the decline in sales in the third quarter of 2007, a 1’284’000 USD decline associated with the return of product noted above, and a 490’000 USD decline in royalty and licensing fees.

Nine Month Results

Consolidated net revenues for the first nine months of 2007 were 16,5 million USD, compared to net revenues of 12,9 million USD for the first nine months of 2006, a 3,6 million USD increase. The revenue increase resulted from an 8,2 million USD increase in product sales, or 186 percent increase, offset by a decrease of 9,0 million USD in infomercial sales and a 1,5 million USD sales return in the third quarter, and a 4,5 million USD increase in royalty and licensing revenue.

The Company recorded a net loss of 3,0 million USD, or 0,20 USD per share for the nine months ended September 30, 2007, compared to net income of 807’000 USD, or 0,01 USD per share for the same period last year.

Gross margins in the nine months ended September 30, 2007 were 9’902’000 USD, or 47 percent, compared to 5’396’000 USD, or 44 percent, during the same period last year. Gross margins on our various product lines vary widely and the gross margins are impacted from period to period by sales mix and utilization of production capacity. The 3’976’000 USD increase for the nine months ended September 30, 2007 is comprised of the 755’000 USD increase corresponding to the sales growth in the nine months ended September 30, 2007, offset by the 1’284’000 USD decline associated with the return of product and a 4’504’000 USD increase in royalty and licensing fees.

_{About: NutraCea is a leader in stabilized rice bran nutrient research and dietary supplement development. Through its wholly owned subsidiary RiceX, the company manufacturers as well as distributes products and food ingredients made from Rice Bran through its proprietary technology and processes. The Company has developed intellectual properties to create a range of proprietary product formulations, delivery systems and whole food nutrition products. NutraCea´s proprietary technology enables the creation of food and nutrition products from rice bran, normally a wasted by-product of standard rice processing. In addition to its whole foods products, NutraCea develops families of health- promoting «nutraceuticals», including natural arthritic relief and cholesterol-lowering products.}