TOFUTTI Announces Third Quarter and Nine Month Results

Tue Nov 15, 2011 4:30pm EST

* Reuters is not responsible for the content in this press release.

TOFUTTI Announces Third Quarter and Nine Month Results

PR Newswire

CRANFORD, N.J., Nov. 15, 2011 /PRNewswire/ -- TOFUTTI BRANDS INC. (NYSEAMEX Symbol: TOF) today announced its results for the thirteen and thirty-nine week periods ended October 1, 2011.

The Company reported net sales for the thirteen weeks ended October 1, 2011 of approximately $3.6 million compared with net sales of $4.4 million for the thirteen weeks ended October 2, 2010.  Net sales for the thirty-nine week period ended October 1, 2011 decreased to approximately $12.1 million from approximately $13.5 million for the thirty-nine week period ended October 2, 2010.  The reduction in sales in both the 2011 thirteen and thirty-nine week periods was primarily due to the determination of Trader Joe's, our largest customer, to cease selling branded goods.  During the third quarter of 2011, sales to Trader Joe's declined to $2,000 from $656,000 in the second quarter of 2011 and $764,000 in the third quarter of 2010.  During the thirty-nine weeks ended October 1, 2011, sales to Trader Joe's declined to $1,420,000 compared to $2,655,000 for the thirty-nine weeks ended October 2, 2010.  Our frozen dessert sales were also negatively impacted because of a significant decrease in sales in all frozen dessert categories.  Management believes this is an industry-wide trend, which may be due to the continuing economic recession.  

For the thirteen week period ended October 1, 2011, the Company reported income before income taxes of $70,000 compared to income before income taxes of $337,000 for the thirteen week period ended October 2, 2010.  The Company reported income before income taxes of $99,000 for the thirty-nine week period ended October 1, 2011 compared to income before income taxes of $740,000 for the thirty-nine week period ended October 2, 2010.

The Company recorded net income of $34,000 ($0.01 per share on a basic and diluted basis) for the thirteen weeks ended October 1, 2011 compared to net income of $212,000 ($0.04 per share on a basic and diluted basis) for the thirteen weeks ended October 2, 2010.  Net income for the thirty-nine weeks ended October 1, 2011 was $52,000 ($0.01 per share on a basic and diluted basis) compared to $445,000 ($0.09 per share on a basic and diluted basis) for the thirty-nine weeks ended October 2, 2010.

As of October 1, 2011, the Company had cash and cash equivalents of approximately $1.6 million and working capital of approximately $4.5 million compared to cash and cash equivalents of approximately $2.5 million and working capital of approximately $4.4 million at January 1, 2011.

Mr. David Mintz, Chairman and Chief Executive Officer of the Company stated, "During the third quarter of this year, we suffered a setback in our plans to increase sales as our largest customer, Trader Joe's, decided to cease selling branded goods and stopped placing orders for certain of our products. We believe that we will recover a significant portion of these sales over times as our loyal customers switch to other retail outlets to purchase these products.  We look forward to improvements in our operating income during the upcoming months as product price increases are phased in and new product are stocked by grocers."

TOFUTTI BRANDS INC. is principally involved in the development, production and marketing of TOFUTTI brand soy-based, dairy-free frozen desserts, soy-based dairy free cheese products and other soy-based, dairy-free food products.  TOFUTTI products are sold in grocery stores, supermarkets, health and convenience stores throughout the United States and in approximately twenty-five other countries.

Some of the statements in this press release concerning the Company's future prospects are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.  Actual results may vary significantly based upon a number of factors including, but not limited to business conditions both domestic and international, competition, changes in product mix or distribution channels, resource constraints encountered in promoting and developing new products and other risk factors detailed in the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K.  

TOFUTTI BRANDS INC.

Condensed Statements of Operations

(in thousands, except per share figures)



Thirteen

weeks ended

October 1, 2011

Thirteen

weeks ended

October 2, 2010

Thirty-nine

weeks ended

October 1, 2011

Thirty-nine

weeks ended

October 2, 2010






Net sales

$3,617

$4,378

$12,072

$13,474

Cost of sales

2,496

2,909

8,636

9,221

Gross profit

1,121

1,469

3,436

4,253

Operating expenses

1,051

1,132

3,337

3,513

Income before income taxes

70

337

99

740

Income tax expense

36

125

47

295

Net income

$ 34

$212

$ 52

$445

Weighted average common

shares outstanding:





Basic and diluted

5,177

5,177

5,177

5,177

Net  income per common share:





Basic and diluted

$0.01

$0.04

$0.01

$0.09




TOFUTTI BRANDS INC.

Condensed Balance Sheets

(in thousands, except share figures)



October 1,
2011

January 1
2011*


(unaudited)


Assets



Current assets:



    Cash and cash equivalents

$1,624

$2,528

    Accounts receivable, net of allowance for doubtful
       accounts and sales promotions of $365 and $320,
       respectively

1,979

1,338

    Inventories

1,375

1,697

    Prepaid expenses

162

16

    Refundable income taxes

91

--

    Deferred income taxes

204

186

               Total current assets

5,435

5,765




Fixed assets, net of accumulated amortization of
       $42 and $38

6

10

Other assets

16

16


$5,457

$5,791




Liabilities and Stockholders' Equity



Current liabilities:



    Accounts payable

$359

$260

    Accrued expenses

350

585

    Accrued officers' compensation

250

500

                 Total current liabilities

959

1,345







Stockholders' equity:



    Preferred stock - par value $.01 per share;

        authorized 100,000 shares, none issued

--

--

    Common stock - par value $.01 per share;

        authorized 15,000,000 shares, issued and
        outstanding 5,176,678 shares at October 1, 2011
        and 5,176,678 shares at January 1, 2011

52

52

Additional paid-in capital

7

7

    Retained earnings

4,439

4,387

                Total stockholders' equity

4,498

4,446

                Total liabilities and stockholders' equity

$5,457

$5,791


*  Derived from audited financial information




SOURCE TOFUTTI BRANDS INC.

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