NutraCea - Financial Results 5-07

Financial Results 5-07

05/15/2007

NutraCea Announces First Quarter Financial Results

PHOENIX, May 15, 2007/PRNewswire-FirstCall/ ——NutraCea (OTC Bulletin Board: NTRZ), a leader in stabilized rice bran nutrient research and technology, announced today its financial results for the first quarter period ended March 31, 2007.

Consolidated revenues for the quarter were approximately $2.0 million, a decrease of $1.8 million, or 47% from the same period one year ago. The shortfall in revenues was primarily attributable to $2.6 million of purchase orders for product that we produced for three new customers, for which we did not recognize revenues for reasons including the timing of the acceptance of delivery by the customers and product labels not being completed by the third party co-packer. We anticipate that this revenue will be recognized in the second quarter.

Gross margin in the first quarter was $884,000, or 44%, compared to $1,682,000, or 45% during the first quarter of last year.

For the three months ended March 31, 2007, the Company's net loss was $247,000, or $0.00 per share, compared to a net loss of $233,000, or $0.00 per share, in the same period last year.

The balance sheet continues to remain strong with $61.8 million in cash and no debt.

Brad Edson, NutraCea President and CEO, said, "Despite the revenue shortfall, which should be viewed as a timing issue, we expect the second quarter to reflect the benefits of having our first plant in Louisiana operational, which will also supply the Dillon plant for more value added production capacity. The first quarter timing issue was unfortunate, although not indicative of any shortage of demand for our product. In fact, we are seeing tremendous demand for our products from the large food companies and others that eagerly await the availability of supply of stabilized rice bran from our future plants to satisfy the burgeoning demand."

"Operationally we are on schedule for our production expansion. Our first Louisiana-based plant has been operating at full capacity since April 2007. The second Dillon expansion is near completion, the Arbuckle rice facility is currently scheduled for installation of our proprietary stabilization equipment and should be

ready for operation by the summer. Our second Louisiana-based plant is under construction and will be ready for commissioning later this year. On the international front, we continue to conduct high-level discussions with various potential partners and believe the Company is in a strong financial position to advance these discussions into definitive agreements some time this year," added Mr. Leo Gingras, COO of NutraCea.

NutraCea and Subsidiaries Consolidated Condensed Statements Of Operations (Unaudited)
Quarters ended	March 31, 2007	March 31, 2006
Revenues
Net product sales	$1,987,000	$3,773,000
Royalty	10,000	9,000
Total revenue	1,997,000	3,782,000

Cost of goods sold	1,113,000	2,100,000

Gross Margin	884,000	1,682,000

Research and development expenses	121,000	98,000
Selling, general and administrative expenses	2,313,000	1,535,000
Professional fees	459,000	308,000
Total operating expenses	2,893,000	1,941,000

Loss from operations	(2,009,000)	(259,000)

Other income (expense)
Interest and other income	512,000	26,000
Gain on settlement	1,250,000	-

Net loss	$(247,000)	$(233,000)

Basic and diluted earnings per share:
Basic loss per share	$(0.00)	$(0.00)
Fully diluted loss per share	$(0.00)	$(0.00)
Weighted average basic number of shares outstanding	111,959,000	67,119,000
Weighted average fully diluted number of shares outstanding	111,959,000	67,119,000

NutraCea and Subsidiaries Consolidated Condensed Balance Sheets (Unaudited)
	March 31, 2007	December 31, 2006
ASSETS
Current assets:
Cash and cash equivalents	$61,769,000	$14,867,000
Marketable securities	368,000	368,000
Trade accounts receivable, net	3,214,000	7,093,000
Inventories	1,343,000	796,000
Notes receivable, net of discount, current portion	4,928,000	1,694,000
Deposits and other current assets	2,061,000	1,383,000
Total current assets	73,683,000	26,201,000
Notes receivable, net of current portion	648,000	682,000
Property and equipment, net	11,139,000	8,961,000
Patents, trademarks, and other intangible assets, net	5,021,000	5,097,000
Goodwill	32,314,000	32,314,000
Total assets	$122,805,000	$73,255,000
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$1,399,000	$2,778,000
Deferred revenue	34,000	103,000
Total current liabilities	1,433,000	2,881,000

Commitments and contingencies:
Convertible, series B preferred stock, no par value, $1,000 stated value 20,000,000 shares authorized, 0 and 470 shares issued and outstanding	-	439,000
Convertible, series C preferred stock, no par value, $1,000 stated value 25,000 shares authorized, 2 and 5,468 shares issued and outstanding	2,000	5,051,000
Shareholders' equity:
Common stock, no par value 200,000,000 shares authorized, 134,817,754 and 103,792,827 shares issued and outstanding in 2007 and 2006, respectively	170,844,000	114,111,000
Accumulated deficit	(49,552,000)	(49,305,000)
Accumulated other comprehensive income, unrealized gain on marketable securities	78,000	78,000
Total shareholders' equity	121,370,000	64,884,000
Total liabilities and shareholders'
Equity	$122,805,000	$73,255,000

About NutraCea

NutraCea is a leader in stabilized rice bran nutrient research and dietary supplement development. Through its wholly owned subsidiary, RiceX, the Company manufactures and distributes products and food ingredients made from rice bran through its proprietary technology and processes. NutraCea has developed intellectual properties to create a range of proprietary product formulations, delivery systems and whole food nutrition products. The Company’s proprietary technology enables the creation of food and nutrition products from rice bran, normally an underutilized by-product of standard rice processing. In addition to its whole foods products, NutraCea develops families of health-promoting "nutraceuticals," including natural arthritis relief and cholesterol-lowering products. More information can be found in the Company's filings with the SEC and at its Web site http://www.NutraCea.com.

Forward-Looking Statements

This release contains forward-looking statements, including, but not limited to, statements regarding the successful implementation of the strategic growth plan, and the transition of Chief Financial Officers, which statements are subject to market and other risks. These statements are made based upon current expectations and actual results may differ from those projected, due to a number of risks and uncertainties. The Company does not undertake to update forward-looking statements in this news release to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking information. Assumptions and other information that could cause results to differ from those set forth in the forward-looking information can be found in the Company's filings with the Securities and Exchange Commission, including the Company's most recent periodic report.