Nextera Enterprises, Inc. Announces First Quarter 2007 Results

  
    
  
  
    
      Nextera Enterprises, Inc. (OTCBB: NXRA) today reported financial results 
      for the first quarter ended March 31, 2007 included in its Quarterly 
      Report on Form 10-Q filed with the SEC.
    
    
      Net sales for the first quarter of 2007 were $2.4 million, an increase 
      of $1.3 million or 122%, from $1.1 million recorded for the first 
      quarter of 2006. Net sales for 2006 reflect the operating results of the 
      Woodridge Labs business from the March 9, 2006 acquisition date forward. 
      Woodridge Labs represents Nextera’s sole 
      operations and generates all of its revenue. The 2007 net sales include 
      a $0.2 million charge for expected returns related to the March 2007 
      voluntary recall of certain DermaFreeze365™ 
      products sold during the three months ended March 31, 2007.
    
    
      Gross profit and gross margins for the three months ended March 31, 2007 
      and 2006 were $1.3 million and 54% and $0.5 million and 51%, 
      respectively. The 2007 gross profit includes a $0.2 million charge for 
      expected returns related to the March 2007 product recall of related 
      products sold during the three months ended March 31, 2007. Included 
      within gross profit for the period ended March 31, 2006 is a $0.3 
      million charge associated with the amortization of the step up to fair 
      value in the inventory acquired from Woodridge Labs, as required by 
      related accounting literature.
    
    
      Selling, general and administrative expenses for the three months ended 
      March 31, 2007 increased to $2.0 million or, 65%, from $1.2 million 
      recorded for the same period last year. Selling, general and 
      administrative expenses for the three months ending March 31, 2006 
      reflect the operating results of the Woodridge Labs business only from 
      the March 9, 2006 acquisition to March 31, 2006. Included in the 2007 
      period expenses are approximately $0.2 million of general and 
      administrative costs associated with the former corporate headquarters 
      in Boston, Massachusetts, that are not expected to be recurring after 
      the March 2007 relocation of the corporate headquarters to the Woodridge 
      Labs facility in Panorama City, California.
    
    
      Net loss for the first quarter of 2007 was $1.3 million, or $0.03 per 
      diluted common share, compared to $0.7 million, or $0.02 per diluted 
      common share, for the first quarter of 2006. For the three months ended 
      March 31, 2007, non-cash charges were $0.4 million, or $0.01 per share. 
      Non-cash charges included $0.3 million of amortization of intangible 
      assets and depreciation and $0.1 million for stock-based compensation.
    
    
      As of March 31, 2007, Nextera had cash on-hand of $0.4 million and 
      outstanding debt under the Company’s credit 
      facility was $11.7 million.
    
    
      Joe Millin, President of Nextera Enterprises, said, “We 
      are continuing to manage through the DermaFreeze365™ 
      product recall and our retail partners have been very cooperative in 
      supporting this core brand. Additionally, we look forward to launching 
      new product lines with our retail partners in the second half of 2007.”
    
    
      About Nextera Enterprises, Inc.
    
    
      Nextera Enterprises Inc. operates through its wholly-owned subsidiary, 
      Woodridge Labs, Inc. Woodridge Labs is an independent developer and 
      marketer of branded consumer products that offer simple, effective 
      solutions to niche personal care needs. More information can be found at www.nextera.com 
      and www.woodridgelabs.com.
    
    
      Forward-Looking Statements
    
    
      This release contains forward-looking statements that involve risks and 
      uncertainties, including, but not limited to, estimates of future 
      performance. Actual results may differ materially from the results 
      predicted, and reported results should not be considered an indication 
      of future performance. Important factors that could cause actual results 
      to differ materially from those expressed or implied in the 
      forward-looking statements are detailed under “Item 
      1A.Risk Factors” and elsewhere in filings with 
      the Securities and Exchange Commission made from time to time by 
      Nextera, including, but not limited to: its Annual Report on Form 10-K 
      for the year ended December 31, 2006 filed with the Securities and 
      Exchange Commission on April 17, 2007; recent quarterly reports on Form 
      10-Q; and other current reports on Form 8-K. All forward-looking 
      statements included in this news release should be considered in the 
      context of these risk factors. Nextera undertakes no obligation to 
      release publicly any revisions to any forward-looking statements to 
      reflect events or circumstances after the date hereof or to reflect the 
      occurrence of unanticipated events. Investors and prospective investors 
      are cautioned not to place undue reliance on such forward-looking 
      statements.
    
    
      
        
          
            Nextera Enterprises, Inc.
          
          
            Condensed Consolidated Statements of Operations
          
          
            (Amounts in thousands, except share amounts)
          
          
            (Unaudited)
          
        
      
      
        
        
        
           
        
      
      
        
        
        
          Three Months Ended 

          
            March 31,
          
        
      
      
        
        
        
          2007 
        
        
        
        
          2006 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Net sales
        
        
          $ 2,434 
        
        
        
        
          $ 1,096 
        
      
      
        
          Cost of sales
        
        
          1,125 
        
        
        
        
          540 
        
      
      
        
          Gross profit
        
        
          1,309 
        
        
        
        
          556 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Selling, general and administrative expenses
        
        
          1,997 
        
        
        
        
          1,212 
        
      
      
        
          Amortization of intangible assets
        
        
          257 
        
        
        
        
          31 
        
      
      
        
          Operating loss
        
        
          (945)
        
        
        
        
          (687)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Interest income
        
        
          6 
        
        
        
        
          125 
        
      
      
        
          Interest expense
        
        
          (282)
        
        
        
        
          (74)
        
      
      
        
          Loss from continuing operations before income taxes
        
        
          (1,221)
        
        
        
        
          (636)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Provision for income taxes
        
        
          60 
        
        
        
        
          29 
        
      
      
        
          Net loss
        
        
          (1,281)
        
        
        
        
          (665)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Preferred stock dividends
        
        
          (108)
        
        
        
        
          (84)
        
      
      
        
          Net loss applicable to common stockholders
        
        
          $ (1,389)
        
        
        
        
          $ (749)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          
            Net loss per common share, basic and diluted Continuing operations
          
        
        
          $ (0.03)
        
        
        
        
          $ (0.02)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average common shares outstanding, basic and diluted
        
        
          42,337 
        
        
        
        
          35,940 
        
      
    
    
    
    
      
        
          
            Nextera Enterprises, Inc.
          
          
            Condensed Consolidated Balance Sheets
          
          
            (Amounts in thousands, except share amounts)
          
        
      
      
        
           
        
      
      
        
        
        
          March 31,

          
            2007
          
          
            (Unaudited)
          
        
        
        
        
          
            December 31,2006
          
        
      
      
        
          Assets
        
        
        
        
        
        
        
      
      
        
          Current assets:
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
          $ 434 
        
        
        
        
          $ 597 
        
      
      
        
          Inventories
        
        
          2,186 
        
        
        
        
          2,595 
        
      
      
        
          Due from supplier
        
        
          24 
        
        
        
        
          127 
        
      
      
        
          Prepaid expenses and other current assets
        
        
          1,869 
        
        
        
        
          260 
        
      
      
        
          Total current assets
        
        
          4,513 
        
        
        
        
          3,579 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Property and equipment, net
        
        
          277 
        
        
        
        
          284 
        
      
      
        
          Goodwill
        
        
          8,969 
        
        
        
        
          10,969 
        
      
      
        
          Intangible assets, net
        
        
          12,814 
        
        
        
        
          12,827 
        
      
      
        
          Other assets
        
        
          382 
        
        
        
        
          484 
        
      
      
        
          Total assets
        
        
          $ 26,955 
        
        
        
        
          $ 28,143 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities and Stockholders’ Equity
        
        
        
        
        
        
        
      
      
        
          Current liabilities:
        
        
        
        
        
        
        
      
      
        
          Accounts payable and accrued expenses
        
        
          $ 4,324 
        
        
        
        
          $ 4,364 
        
      
      
        
          Current portion of long-term debt
        
        
          250 
        
        
        
        
          – 
        
      
      
        
          Total current liabilities
        
        
          4,574 
        
        
        
        
          4,364 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Long-term debt
        
        
          11,468 
        
        
        
        
          11,718 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Deferred taxes
        
        
          296 
        
        
        
        
          236 
        
      
      
        
          Other long-term liabilities
        
        
          1,334 
        
        
        
        
          1,334 
        
      
      
        
          Total stockholders’ equity
        
        
          9,283 
        
        
        
        
          10,491 
        
      
      
        
          Total liabilities and stockholders’ equity
        
        
          $ 26,955 
        
        
        
        
          $ 28,143 
        
      
    
    
    
    
      
        
          
            Nextera Enterprises, Inc.
          
          
            Condensed Consolidated Statements of Cash Flows
          
          
            (Amounts in thousands; unaudited)
          
        
      
      
        
        
        
           
        
      
      
        
        
        
          Three Months Ended 

          
            March 31,
          
        
      
      
        
        
        
          2007 
        
        
        
        
          2006 
        
      
      
        
          Operating activities
        
        
        
        
        
        
        
      
      
        
          Net loss
        
        
          $ (1,281)
        
        
        
        
          $ (665)
        
      
      
        
          Adjustments to reconcile net loss to net cash used in operating 
          activities:
        
        
        
        
        
        
        
      
      
        
          Depreciation
        
        
          14 
        
        
        
        
          12 
        
      
      
        
          Amortization of intangible assets
        
        
          257 
        
        
        
        
          31 
        
      
      
        
          Provision for allowances and returns
        
        
          (91)
        
        
        
        
          – 
        
      
      
        
          Inventory write-down
        
        
          21 
        
        
        
        
          – 
        
      
      
        
          Deferred taxes
        
        
          60 
        
        
        
        
          – 
        
      
      
        
          Stock based compensation
        
        
          81 
        
        
        
        
          40 
        
      
      
        
          Change in operating assets and liabilities
        
        
          529 
        
        
        
        
          612 
        
      
      
        
          Net cash provided by (used in) operating activities
        
        
          (410)
        
        
        
        
          30 
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Investing activities
        
        
        
        
        
        
        
      
      
        
          Cash from acquisition escrow
        
        
          500 
        
        
        
        
          (22,951)
        
      
      
        
          Purchase of licensing agreement
        
        
          (246)
        
        
        
        
          – 
        
      
      
        
          Purchase of fixed assets
        
        
          (7)
        
        
        
        
          – 
        
      
      
        
          Net cash provided by (used in) investing activities
        
        
          247 
        
        
        
        
          (22,951)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Financing activities
        
        
        
        
        
        
        
      
      
        
          Borrowings under revolving credit facility
        
        
          – 
        
        
        
        
          3,000 
        
      
      
        
          Borrowings under term note
        
        
          – 
        
        
        
        
          10,000 
        
      
      
        
          Payment of note acquired in acquisition
        
        
          – 
        
        
        
        
          (1,000)
        
      
      
        
          Payment of debt issuance costs
        
        
          – 
        
        
        
        
          (480)
        
      
      
        
          Net cash provided by financing activities
        
        
          – 
        
        
        
        
          11,520 
        
      
      
        
        
        
           
        
        
        
        
           
        
      
      
        
          Net decrease in cash and cash equivalents
        
        
          (163)
        
        
        
        
          (11,401)
        
      
      
        
        
        
        
        
        
        
           
        
      
      
        
          Cash and cash equivalents at beginning of period
        
        
          597 
        
        
        
        
          15,043 
        
      
      
        
          Cash and cash equivalents at end of period
        
        
          $ 434 
        
        
        
        
          $ 3,642