Published:
Monterey Gourmet Foods Announces First Quarter Results With Sales Increasing 27% Compared to First Quarter 2005 and a Return to Profitability
Monterey Gourmet Foods (NASDAQ: PSTA) today
announced first quarter sales of $22.5 million compared to $17.7 million
for the first quarter 2005, or a 27% increase. The Company also reported
operating profits of $404,000 compared to $102,000 in the first quarter
2005. Net income was $100,000, or $.01 per share, compared to $17,000, or
$.00 per share in the first quarter 2005.
Mr. Jim Williams, President/CEO of Monterey Gourmet Foods, explained, "We
are pleased to report another strong quarter of sales growth. Importantly,
sales of core Monterey brands increased 21% due to sales growth in both
club and retail supermarket channels. Monterey's branded sales in the club
channel were up 39%, and branded sales in the retail channel were up 14%.
We also saw double-digit organic growth at Emerald Valley Organics and CIBO
Naturals."
Commenting further on financial results, Mr. Williams stated, "Our return
to profitability in the first quarter was the result of higher sales and a
2.2% improvement in overall gross margins to 30.2%. In addition, there were
some positive effects from our 2006 profit improvement program which is
expected to be fully in place by July."
In closing, Mr. Williams commented, "Today our Company has a lot of
positive momentum. Our new products are succeeding in the market; our
acquisitions collectively are contributing positively to results; gross
margins are improving due to higher sales and cost-reduction initiatives;
and we have a strong, motivated management team. We are optimistic that we
will see continued profit improvement in future quarters."
As previously announced, the Monterey Gourmet Foods 2006 Shareholder
Meeting is scheduled for May 19, 2006, 10am at the Embassy Suites Hotel,
Seaside, CA.
This press release contains forward-looking statements concerning the
effect of Monterey Gourmet Foods' corporate acquisitions and product
innovations on projected sales for future periods including without
limitation statements including such terms as "is expected to be fully in
place," "positive momentum," "are succeeding," "are contributing
positively," "are improving," "are optimistic," "continued profit
improvement" and words of similar import. These forward-looking statements
are based on currently available competitive, financial and economic data
and management's views and assumptions regarding future events. Such
forward-looking statements are inherently uncertain, and investors must
recognize that actual results may differ from those expressed or implied in
the forward-looking statements. Consequently, the Company wishes to
caution readers not to place undue reliance on any forward-looking
statements. Among the factors that could cause Monterey Gourmet Foods'
actual results to differ from such forward-looking statements are the
following: (i) the process associated with the integrations of Sonoma Foods
and Casual Gourmet operations, processes, and products, (ii) a significant
reduction of sales to two major customers currently comprising a majority
of total revenues, (iii) the retention of newly acquired customers
including achieving volume projections for these new customers, (iv) the
Company's ability to achieve improved production efficiencies in connection
with the introduction of its new items, (v) the timely and cost-effective
introduction of new products in the coming months, (vi) retention of key
personnel and retention of key management, (vii) the risks inherent in food
production, (viii) intense competition in the market in which the Company
competes and (ix) Monterey Gourmet Foods' ability to source competitively
priced raw materials to achieve historical operating margins. In addition,
the Company's results may also be affected by general factors, such as
economic conditions, political developments, interest and inflation rates,
accounting standards, taxes, and laws and regulations in markets where the
Company competes.
The Company has provided additional information regarding risks associated
with the business in the Company's Annual Report on Form 10-K for fiscal
2005, and its Proxy Statement filed April 21, 2006. The Company undertakes
no obligation to update or revise publicly, any forward-looking statements
whether as a result of new information, future events or otherwise.
Monterey Gourmet Foods manufactures USDA inspected, fresh gourmet
refrigerated food products at its integrated 143,000 square foot corporate
headquarters, distribution, and manufacturing facilities in Salinas,
(Monterey County) California, its organic food production facility in
Eugene, Oregon and its newly acquired facility in Seattle, Washington.
Monterey Gourmet Foods has national distribution of its products in over
10,000 retail and club stores throughout the United States and selected
regions of Canada, the Caribbean, Latin America, and Asia Pacific.
MONTEREY GOURMET FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(000's $ except earnings per share numbers and share totals)
Three Months Ended
----------------------
March 31, March 27,
2006 2005
---------- ----------
Net revenues $ 22,478 $ 17,663
Cost of sales 15,684 12,715
---------- ----------
Gross profit 6,794 4,948
Selling, general and administrative expenses 6,390 4,846
---------- ----------
Operating income 404 102
Other income, net 1 5
Interest expense, net (200) (79)
---------- ----------
Income before provision for income tax expense 205 28
Provision for income tax expense (105) (11)
---------- ----------
Net income $ 100 $ 17
========== ==========
Basic income per share $ 0.01 $ 0.00
Diluted income per share $ 0.01 $ 0.00
Primary shares outstanding 14,782,501 14,394,016
Diluted shares outstanding 14,999,257 14,516,283
MONTEREY GOURMET FOODS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
March 31, December
2006 31, 2005
--------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 472 $ 330
Accounts receivable, net 7,887 9,342
Inventories 7,128 6,949
Deferred tax assets 925 1,030
Prepaid expenses and other 722 866
--------- ---------
Total current assets 17,134 18,517
Property and equipment, net 14,280 14,324
Deferred tax assets 6,172 6,172
Deposit and other 160 148
Intangible assets, net 10,832 11,088
Goodwill 13,144 11,956
--------- ---------
Total assets $ 61,722 $ 62,205
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft $ - $ 1,507
Line of credit 2,994 3,000
Accounts payable 4,336 4,171
Accrued liabilities 2,268 2,299
Current portion of long-term debt 2,379 2,521
--------- ---------
Total current liabilities 11,977 13,498
Long-term debt 6,231 6,626
Deferred tax liability 2,812 2,812
Minority interest 159 159
Stockholders' equity:
Preferred stock, $.001 par value, 1,000,000 shares
authorized, none outstanding - -
Common stock, $.001 par value, 50,000,000 shares
authorized, 14,844,171 and 14,514,038 issued and
outstanding 14 14
Additional paid-in capital 46,867 45,534
Accumulated deficit (6,338) (6,438)
--------- ---------
Total stockholders' equity 40,543 39,110
--------- ---------
Total liabilities and stockholders' equity $ 61,722 $ 62,205
========= =========
MONTEREY GOURMET FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
--------------------
March 31, March 27,
2006 2005
--------- ---------
Cash flows from operating activities:
Net income $ 100 $ 17
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income taxes 105 (2)
Depreciation and amortization 753 713
Provisions for allowances for bad debts,
returns, adjustments and spoils (1,332) (1,198)
Provisions for inventory allowances (139) (125)
Stock option expense 67 -
Changes in assets and liabilities:
Accounts receivable 2,787 2,573
Inventories (40) 53
Prepaid expenses 144 186
Deposits and other (12) (51)
Accounts payable 165 679
Accrued liabilities (31) (1,097)
--------- ---------
Net cash provided by operating
activities 2,567 1,748
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment (434) (192)
Acquisition of businesses net of cash
and minority interest (2) (5,654)
--------- ---------
Net cash used in investing activities (436) (5,846)
--------- ---------
Cash flows from financing activities:
Proceeds from bank borrowing - 5,000
Bank overdraft (1,507) -
Repayment of line of credit (6) -
Repayment of bank borrowing (549) (207)
Repayment of capital lease obligations (7) -
Proceeds from issuance of common stock 80 13
--------- ---------
Net cash (used in) provided by financing
activities (1,989) 4,806
--------- ---------
Net increase in cash and cash equivalents 142 708
Cash and cash equivalents, beginning of period 330 569
--------- ---------
Cash and cash equivalents, end of period $ 472 $ 1,277
========= =========
Cash payments: March 31, March 27,
2006 2005
--------- ---------
Interest $ 207 $ 71
Income Taxes $ 6 $ 13
Non-cash investing and financing activities:
Issuance of stock for acquisition of
business $ 1,186 $ -
Capital lease obligations $ 19 $ -
Distributed by Market Wire
Copyright © 2008, MarketWire
Copyright © 2008, NewsBlaze,
Daily NewsTags: ,Food and Beverage:Food, ,NASDAQ01,NASDAQ01,CA,SALINAS, CA
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