PARAMUS, N.J. — Higher interest, depreciation, amortization and stock-based compensation expense contributed to a loss at Smart Balance, Inc. in the third quarter. For the quarter ended Sept. 30, the company sustained a loss of $3,725,000, which compared with income of $1,143,000, equal to 2c per share on the common stock, during the same quarter of the previous year. Sales for the quarter were $101,334,000, up 41% from $71,660,000 during the same quarter of the previous year.

“Beginning with our third-quarter report we established two business segments — Natural and Smart Balance,” said Stephen Hughes, chairman and chief executive officer. “Overall, our results were in-line with our expectations. In the quarter, our Natural segment, which includes the Udi's, Glutino and Earth Balance brands, represented more than half of our total net sales and reported strong organic net sales increases of 42%, consistent with our consumption growth of 44.5% across these brands. While our Smart Balance segment, which includes spreads, milk and grocery, reported a net sales decline, we managed to increase brand profit margin for this segment. Excluding the expenses related to the launch of our Smart Balance Spreadable Butter, Smart Balance delivered slightly higher profitability as compared to last year.”

The Udi’s acquisition closed on July 2.

“We are well on our way to integrating Udi’s with our other Natural brands — Glutino & Earth Balance,” Mr. Hughes said. “Since the acquisition on July 2, our teams have been working extraordinarily well together and have made great strides in combining our sales and marketing efforts. The growth in the gluten-free market and the potential for the combination of Udi’s and Glutino is a very powerful proposition in our efforts to make gluten-free products more available on retail shelves. Since adding these brands to our portfolio, retailers have accepted an incremental 400 Udi’s and Glutino items and it is clear that they are highly motivated to address the needs of gluten-free consumers.”

For the nine months ended Sept. 30, net income declined 94% to $462,000, or 1c per share, which compared with income of $8,015,000, or 14c per share, during the same period of the previous year. Sales for the nine months were $256,614,000, up 35% from $190,403,000.