Smart Balance Announces 2008 First-Quart...(had a record quarter in sales growing 25...),Health

The Company continued to expand distribution with 'Plus Six', its initiative to increase average items on shelf at retail from 12 to a target of 18 by the end of June. Smart Balance has also forged a strategic agreement with Ventura Foods, Inc. to develop, market and distribute Smart Balance branded products in the foodservice channel.

"I believe the retail commitments on 'Plus Six' and Butter Blends national launch are exceptional, with key customers expanding our placements by 50% or more," said Hughes. "We expect accelerating growth in the second half of 2008 once the retail store resets are completed by July."

(1) In addition to its GAAP results, the Company has provided operating

basis results to explain year-over-year changes. The operating basis

results should not be viewed in isolation or as a substitute for GAAP

results. A reconciliation of operating basis results to GAAP results

is provided in the accompanying tables.

Change in Accounting Principles

In 2008, the Company began accruing for certain trade incentives and marketing costs as prepaid expenses to better match recognition of expense to revenue, consistent with the general practice in the consumer product goods industry. This methodology is a change from prior years. While this methodology may create timing differences between prior year's quarters on an operating basis, it has no impact on full year results. In accordance with FAS No. 154, a retrospective application of the change in accounting principle is being applied to 2007 quarterly results to improve comparability. This retroactive application is already reflected in the Company's discussion of results on an operating basis for the first quarter. The Company anticipates publishing the changes to the other quarters in the near future.

2008 First Quarter GAAP Results

The Company indicated that its repo
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