Health Sciences Group Posts 1Q Results, Establishes NewDivision

Health Sciences Group Posts 1Q Results, Establishes NewDivision

LOS ANGELESHealth Sciences GroupInc. (NASDAQ:HESG) announced its financial results for the first quarter endedMarch 31 (1Q04).

Net sales for the first quarter decreased to $3.32 millionfrom the $4.78 million reported for the same period last year. The decrease inrevenues is primarily attributable to discontinuation of sales of low-marginproducts.

The companys net loss for 1Q04 was $1.18 million, or $0.09per share, in comparison with a net loss of $1.05 million, or $0.11 per share,for the same quarter the previous year.

The decision to discontinue sales of low-margin products isexpected to accelerate our time period to profitability, said Bill Glaser,co-chairman and president of Health Sciences Group. We expect year-endrevenues and gross margins to exceed those reported in 2003. Additionally, weexpect robust sales of our new proprietary products to place us in a position toreport profitability by the end of this year.

The company also announced that it had formed Nutragenica, anew division to market and distribute its proprietary products.