Tough Herbal Extracts Market Hurts Hauser 3Q

Tough Herbal Extracts Market Hurts Hauser 3Q

BOULDER, Colo.--Hauser (OTC BB:HAUS) reported depressed revenues and earnings for its fiscal 2001 third quarter ended Dec. 31, citing a continued stiffening in the market for herbal extracts.

For the quarter, net sales plummeted to $13.1 million from $23.0 million sold in the comparable quarter a year ago, and gross margin sank to negative 13.5 percent from a 15.7-percent gross gain achieved in the same period the year prior. Operating expenses rose by more than 11 percent of sales, and net loss widened to $5.2 million or $1.05 per share from $1.6 million or $.31 per share lost in the same quarter last year.

"The decrease in revenue is the result of the worldwide oversupply of herbal extracts for dietary supplements, which has resulted in depressed prices for herbal extracts," said Kenneth Cleveland, chief executive officer. "In addition, the decrease in revenue reflects the company's discontinuance of the sale of paclitaxel and the decision by a principal excipient supplier to sell its products directly rather than distribute through Hauser." He further noted that pricing pressures have not eased during the last quarter and will continue to impact herbal extract suppliers. "Our third quarter loss reflects this pricing pressure and an inventory write-down of $3.1 million to reflect the lower market value of the inventory," he said.