Health and Nutrition Systems Suffers High Operating Costs

Health and Nutrition Systems Suffers High Operating Costs

WEST PALM BEACH, Fla.--Health and Nutrition Systems International Inc. (OTCBB:HNNS) reported revenue growth but also an earnings decline for its firstquarter ended March 31. Revenues climbed 10 percent to $1.51 million from $1.37million sold a year ago. However, net income fell to $.04 million or $.01 pershare from $.25 million or $.07 per share earned in the comparable quarter lastyear.

The declined net income was attributed to higher co-op, slotting fees, salespromotions and advertising expenditures during the quarter. The increasedrevenues was attributed to higher sales in Walgreens, Rite Aid, Target and CVS,which partially offset declined sales in GNC. In fact, chain stores accountedfor 92 percent of total sales. The company's newest product acquisition,Acutrim, produced mixed results, as it helped boost total revenues but is lowermargin and costs more to sell.