NutraCea: announces Q1/2008 financial results

Phoenix / AZ. (nc) NutraCea, a world leader in stabilized rice bran (SRB), nutrient research and technology, announced financial results for its first quarter ended March 31, 2008. Consolidated net revenues rose 155 percent to 5,1 million USD for the first quarter of 2008, compared to consolidated net revenues of 2,0 million USD for the first quarter of 2007. The 3,1 million USD increase was primarily due to a 860’000 USD increase in sales of products produced in the United States, an increase of 17’000 USD in royalty revenues and 2,2 million USD in sales from the Company´s Irgovel subsidiary in Brazil for the period February 19, 2008, through March 31, 2008.

The Company reported a net loss of 6,8 million USD, or 0,05 USD per share, compared to a net loss of 247’000 USD, or 0,00 USD per share for first quarter 2007. The loss was primarily due to a 4,5 million USD increase in operating expenses and a net decrease in Other Income and Expenses (net) of 1,4 million USD.

Sales, General and Administrative (SG+A) expenses were 5,2 million USD, compared to SG+A of 2.3 million USD for the first quarter of 2007. This increase was primarily due to expanded investment in personnel, infrastructure and sales and marketing activities to meet anticipated future demands. In the quarter we wrote down 390’000 in connection with a doubtful note receivable. The Company´s professional fees were 2,0 million USD compared to 459,000 USD for the same quarter last year. These expenses were primarily due to consulting and legal fees of approximately 621,000 USD in connection with marketing and business development, SOX 404 activities, the acquisition of Irgovel and our investment in PT Panganmas Inti Nusantara, an Indonesian Company (PIN), made through our Medan LLC subsidiary. We also incurred a 750,000 USD broker fee which included the estimated value of an option to be issued related to our investment PIN. Of the 5,2 million USD in SG+A during the quarter, approximately 1,5 million USD were non-cash charges.

Brad Edson, president and CEO of NutraCea: «The revenues that we reported for our first quarter were significantly higher year-over-year and slightly lower than we anticipated over Q4 of 2007 as we purposely began to build inventory for product roll outs for new and existing customers that are expected to occur late in our third quarter and build into our fourth quarter. Currently, on a cost basis, we have approximately 2,8 million USD in domestic inventory, which is a large number for us but necessary in order for the Company to have sufficient quantities of supply to be able to meet anticipated sales demands later this year. We will continue to build our inventory from current levels and are in fact adding further temporary warehousing space to accommodate our inventory needs. When our expected new sales come in during the second half of the year, our inventory will decrease significantly».