Nutrition 21 profits plunge amid company reshuffle

By Shane Starling

- Last updated on GMT

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Nutrition 21, the New York-based dietary supplements manufacturer
and ingredients supplier, has turned in a near-400 percent increase
in losses as it restructures and rebrands its range and settles

The company's predominantly chromium-based range of supplements includes Iceland Health, Chromax, Advanced Memory Formula and Diabetes Essentials, but it said its restructuring would mean all products would soon come under the Iceland Health moniker. Net losses swelled from $2.2m to $8.2m for the quarter ended March 31 compared to the same period for the previous year. Revenues dropped from $15.8m to $10.8m over the same year, although the company noted the 2007 figure was boosted by the $2.6m one-off sale of Selenomax High Selenium Yeast. A further $3.2m in outstanding expenses included a provision for inventory obsolescence, a provision for possible settlements of outstanding litigations, and costs associated with the resignation of the former CEO. Rebranding strategies ​ The company said it was not discouraged by the results so heavily influenced by its restructuring program begun 18 months ago, and expected to break even in the June quarter. "The company has invested heavily in developing its formulas, its patent positions and its consumer business - both in the retail and direct response business units,"​ said director Peter Mann. "All of this accomplishment has come at a significant cost. We are now ready to begin reaping the fruits of that investment. We're pleased with the progress already made after only six weeks and are optimistic that future financial results will show an immediate and significant improvement." ​ Nutrition 21 co-chief executive officer Gerard Butler added: "Over the course of the next six months, we intend to re-brand all of our existing products in the food, mass and drug channels under the Iceland Health name. Iceland Health has developed a strong franchise with consumers over the years, and this represents a significant opportunity for our existing products to benefit from Iceland Health's reputation for quality and consumer loyalty."​ He said the Iceland Health branding exercise would streamline marketing spend as it focused on "direct and retail channels".​ Additional products would be added to the brand via direct selling channels that may then graduate to retail channels if they prove successful enough. "We believe this strategy will generate greater efficiencies from the marketing dollars that we spend, enabling us to successfully create brand identity in a cost-effective manner,"​ said co-chief executive officer, Michael Fink. The company was keen to expand its ingredient portfolio beyond its flagship Chromax chromium picolinate product. "We expect to market our ingredients portfolio on a wider scale and attract more brand name products that can be enhanced by the addition of a Nutrition 21 ingredient,"​ Butler said. Chromium is poorly absorbed by the human body but is known to play an important role in the metabolism of carbohydrate, fat and protein. Research indicates chromium picolinate is better absorbed than other forms of the mineral.

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