Wednesday October 20, 1:01 pm ET
EL DORADO HILLS, Calif.--(BUSINESS WIRE)--Oct. 20, 2004--J.M. Dutton & Associates continues its coverage of Nutrition 21 (Nasdaq:NXXI - News) maintaining a Buy rating and its $1.70 target price. The 10-page report by J.M. Dutton senior analyst William R. Prather, R.Ph., M.D. is available at www.jmdutton.com as well as from First Call, Bloomberg, Zacks, Multex, and other leading financial portals.
On September 21, 2004, Nutrition 21 reported their financial results for the fourth quarter and fiscal year ending June 30, 2004. Revenues for the quarter of $2.8 million exceeded our estimate of $2.2 million by approximately 27%, while fiscal year 2004 revenues of $10.2 million exceeded our estimate of $9.6 million by approximately 6%. Gross margins of 81% for the quarter and 79% for the year were in line with our expectations. The reported SG&A expense of $3.3 million for the quarter was significantly higher than our estimate of $2.0 million. We believe this approximately $1 million excess over our estimate was an extraordinary expense related to a severance package for a former officer of the Company and that our SG&A estimates going forward are appropriate. Due to the uncertainty of the timing of the expected FDA approval of N21's health claims for chromium picolinate we have opted to keep our revenue and earnings per share estimates for FY2005 at $11.0 million ($0.11) respectively. We are maintaining our buy rating and 12-month price target of $1.70