Balance Bar Company Reports Second-Quarter Operating Results Exceed Expectations.

CARPINTERIA, Calif.--(BUSINESS WIRE)--July 20, 1999--

Balance Bar Company (Nasdaq: BBAR) reported operating results for the second quarter and six months ended June 30, 1999 that exceeded expectations.

The Company's sales increased 28% to $26.3 million in the second quarter of 1999 from $20.6 million in the second quarter of 1998. Several customers ran special sales promotions in the second quarter of 1999 and 1998 and approximately $500,000 and $1.7 million, respectively, of sales resulted from these sales promotions. Excluding the special sales promotions, sales increased 37% in the second quarter of 1999.

The Company launched four flavors of nutritional shakes under the Total Balance(TM) brand in March 1999. In the second quarter of 1999, the Company incurred slotting costs to place Total Balance in stores and began several marketing initiatives to generate consumer awareness and trial. The sales and operating losses from the new product line were in line with management expectations. The Company also produced four new television commercials and, in May 1999, the Company began a major new television campaign. Despite the planned investment spend on the Total Balance launch and the planned higher level of advertising expenses in the second quarter of 1999, strong sales performance and cost controls caused operating results to exceed expectations. Net income for the second quarter of 1999 was $915,000, or $0.07 per diluted share, compared to $1.2 million or $0.10 per diluted share for the same period in 1998.

For the six months ended June 30, 1999, sales increased 24% to $47.1 million from $38.0 million in the six months ended June 30, 1998. Approximately $1.2 million and $4.5 million of sales in the six months ended June 30, 1999 and 1998, respectively, were sales to customers that were running special sales promotions. Net income for the six months ended June 30, 1999 was $1.9 million, or $0.15 per diluted share, compared to $2.5 million or $0.21 per diluted share for the same period in 1998.

Sales to customers other than natural foods distributors and retailers were 63% of second quarter 1999 sales compared to 48% in the second quarter of 1998. Sales to the Company's six largest customers were 66% of second quarter 1999 sales compared to 63% in the second quarter of 1998. Sales to customers in the United States were 99% of second quarter 1999 and 1998 sales. Sales of the Balance Bar product line were 92% of second quarter 1999 sales compared to 97% in the second quarter of 1998.

Jim Wolfe, Balance Bar Company Chief Executive Officer and President, stated "We are quite pleased with the record sales of our Balance+(TM) line of nutraceutically-enhanced Balance Bars and retailer reception to Total Balance in the second quarter. Balance+ sales represented 15% of second quarter 1999 sales. We launched Total Balance to the Western one-third of the U.S. in March and to the remaining U.S. in June 1999. Total Balance now enjoys significant distribution in natural foods stores and the roll out to grocery stores is on track. We also launched a new line of nutrition bars under the Balance Outdoor(TM) brand in late June 1999. Early retailer interest in Balance Outdoor is strong."

Balance Bar Company develops and markets branded nutritional food and beverage products. Its current product lines consist of the Balance Bar (Balance(R), Balance+ and Balance Outdoor), 40-30-30 Balance(TM) powdered drink mix and Total Balance ready-to-drink nutritional beverages.

This press release contains forward-looking statements made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. A number of risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements. These risks include risks associated with developing and selling new products (such as creating consumer trial and obtaining consumer acceptance of the products), anticipating changes in dietary trends, avoiding adverse publicity, maintaining sales to significant customers and other risk factors. For a more detailed description of the risk factors facing the Company, please refer to the Company's 1998 Annual Report on Form 10-K. -0-

                          Balance Bar Company
                           Income Statements
               (amounts in 000s, except per share data)
                              (unaudited)

                           Three Months Ended     Six Months Ended
                               June 30,                June 30,
                            1999       1998        1999      1998

Sales                     $26,288    $20,556     $47,125   $38,013
Cost of sales              13,537     10,491      24,304    19,505
 Gross profit              12,751     10,065      22,821    18,508
Expenses:
 Advertising                4,537      2,564       6,858     4,194
 Selling and marketing      5,224      4,067      10,008     7,589
 General and
  administrative            1,539      1,358       2,956     2,415
 Interest (income)
  expense                    (100)        40        (179)       98
 Total expenses            11,200      8,029      19,643    14,296
Income before income
 taxes                      1,551      2,036       3,178     4,212
Income taxes                  636        834       1,303     1,726
 Net income               $   915    $ 1,202     $ 1,875   $ 2,486

Earnings per share:
 Basic                    $  0.08    $  0.12     $  0.16   $  0.25
 Diluted                  $  0.07    $  0.10     $  0.15   $  0.21

Weighted shares outstanding:
 Basic                     11,800     10,287      11,749     9,945
 Diluted                   12,864     12,210      12,916    11,948


                          Balance Bar Company
                       Condensed Balance Sheets
                          (amounts in 000s)

                                    June 30, 1999    December 31, 1998
                                     (unaudited)        (audited)
Current assets:
 Cash and marketable securities      $   5,427        $   7,172
 Accounts receivable, net               10,254           10,686
 Inventories                             7,239            5,002
 Prepaid and other                       2,250            2,362
 Deferred taxes                            650              624
  Total current assets                  25,820           25,846
Property and equipment, net              1,430            1,105
Investment and other assets              3,545               30
  Total assets                       $  30,795        $  26,981

Current liabilities:
  Accounts payable                   $   5,995        $   5,080
  Accrued liabilities                    2,434            1,974
  Total current liabilities              8,429            7,054
Stockholders' equity                    22,366           19,927
  Total liabilities and equity       $  30,795        $  26,981