YoCream International First Quarter Sales Increased 23% and Income From Operations...

YoCream International First Quarter Sales Increased 23% and Income From
Operations Increased 256%

PORTLAND, Ore., March 13 /PRNewswire-FirstCall/ -- YoCream International,
Inc. (Pink Sheets: YOCM), a manufacturer and wholesaler of frozen desserts and
beverages, today reported the financial results for the first quarter ended
January 31, 2008. To view the full results, please visit
www.yocream.com.
(Logo: here)
Sales for the three months ended January 31, 2008 increased 23.3% to
$5,136,000, and represented the seventh consecutive quarter of double digit
growth. The breakdown of sales by category was as follows:

% % Dollar %
Category 2008 Total 2007 Total Change Change

Frozen
Desserts $3,511,000 68.4% $2,558,000 61.4% $953,000 37.3%

Frozen
Beverages 1,531,000 29.8% 1,401,000 33.6% 131,000 9.4%

Co-packing 94,000 1.8% 208,000 5.0% (114,000) (54.8%)

Total $5,136,000 100.0% $4,167,000 100.0% $969,000 23.3%

The 37.3% increase in frozen dessert sales in the first quarter of 2008
primarily came from the Company's core frozen yogurt products. Strong sales of
YoCream's flagship traditional sweeter-profile frozen yogurt have been
complemented by increased demand for its creamy, sweet and tangy Original
Tart(TM) frozen yogurt that was reintroduced in the second quarter of 2007.
The Company completed development of a second tart frozen yogurt branded
EuroTart(TM) during the first quarter of 2008. "This product has a lighter,
frostier texture than Original Tart(TM) and a flavor profile more closely
resembling the powdered products that are popular in certain markets," stated
Suzanne Gardner, Director of Marketing. "We sampled EuroTart(TM) through one
of our large customers and received very positive feedback and suggestions for
a slight modification to the flavor. These changes were made and we anticipate
incremental tart frozen yogurt sales this summer from YoCream EuroTart(TM)."
The heightened public awareness of probiotics and the related benefits of
yogurt continue to drive interest in cultured dairy products and desserts. In
February, the International Dairy Foods Association (IDFA) opened its Ice
Cream Technology Conference with the session, Frozen Yogurt: the "It" Dessert
of 2008! John Hanna, YoCream CEO, spoke about frozen yogurt manufacturing
practices and the importance of a standard of identity for frozen yogurt to
include high live and active culture counts. YoCream's frozen yogurt products
are manufactured with a proprietary process that maintains high probiotic
culture counts, distinguishing them from a number of competitive brands. The
National Yogurt Association (NYA) has approved YoCream products to carry the
Live and Active Culture (LAC) seal. Dan Kim, CEO of Red Mango, addressed the
IDFA conference on consumer demand for frozen yogurt. YoCream is the exclusive
manufacturer for Red Mango's proprietary natural yogurt formula in the U.S.
"In the first quarter of 2008, we began sales of a nonfat frozen yogurt
smoothie base that we developed for a major fast food restaurant chain,"
stated Tyler Bargas, Director of Sales. "The nationwide roll out of this
product is expected to begin in the second quarter of this fiscal year."
The 9.4% increase in the frozen beverage category in the first quarter of
2008 primarily related to sales of Jolly Rancher(R) Frozen Beverage to major
chains and convenience stores throughout the nation. New frozen beverage
flavors were developed and introduced for the 2008 summer season including
Twizzers(TM) Strawberry, Bubble Yum(TM) Cotton Candy and Jolly Rancher(TM)
Cinnamon Fire. In the first quarter of 2008, a new Jolly Rancher(TM) Tropical
Tremor(TM) Fruit Punch flavor was completed. "We expect sales of these
products as well as Jarritos(TM) frozen beverages to seasonally intensify in
the months ahead," noted Bargas.
Co-packing sales were higher in the first quarter of 2007 because the
Company was producing a yogurt and fruit smoothie retail product for a major
food products company. Sales of this product were discontinued later in 2007.
The Company is presently producing a coffee product for a California-based
coffee company selling to the convenience store market and is considering
other co-packing opportunities on a selective basis.
Gross profit for the first quarter of 2008 increased 15.1% to $2,019,000.
As a percentage of sales, gross profit margins for the quarter were 39.3%
compared to 42.1% in 2007. Over the past twelve months gross profit margins
have been impacted by an increase in ingredient costs, mainly dairy products.
As a result, management implemented a price increase in December 2007 and
expects margins to stabilize in subsequent quarters.
Income from operations for the first quarter of 2008 increased 256% to
$285,000 from $80,000 for the same period in 2007. As a percentage of sales,
income from operations in 2008 increased to 5.5% compared with 1.9% in 2007.
The increase was due to the increase in sales and the reduction in operating
costs and expenses as a percent of sales. The Company expects the positive
sales trend to continue as a result of the increased demand for soft serve
frozen yogurt, rollout of the Company's recently acquired business with a
major fast food restaurant chain, new product introductions and continued
intense sales activity.
Net income increased for the first quarter of 2008 to $100,000 or $.04 per
share, compared with $1,000 for the same period in 2007. The increase was
primarily due to the increase in income from operations. Management was
pleased with the first quarter results and expects a strong year. The first
quarter comes during the winter, and is the Company's slowest quarter.
Earnings before interest, taxes, and depreciation (EBITDA) for the first
quarter of fiscal 2008 increased 97.3% to $516,000, compared with $262,000 for
the same period in 2007.
YoCream International, Inc., with headquarters and a dairy and
manufacturing facility in Portland, OR, is a pioneer and leading producer of
frozen yogurt, desserts and beverages. Founded in 1977, YoCream produces,
markets and sells its signature frozen yogurt, tart frozen yogurt, ice cream
and frozen custard mixes under the YoCream brand. YoCream's frozen beverage
product lines include Fruitquake Frozen Drinks and Smoothies for blender, bar
drinks and lemonades or ice teas as well as Jolly Rancher(TM), Bubble Yum(TM),
Twizzlers(TM), and Jarritos(TM) Frozen Beverages for frozen carbonated and
uncarbonated machine dispensing. The Company also co-packs similar products
for other companies. Due to the nature of these products, sales are subject to
seasonal fluctuations, with the summer months normally being the busiest
season. The introduction and roll out of new products has tended to level the
seasonal fluctuations.
This release may contain certain forward-looking statements, which are
based on management's current expectations. Factors that could cause future
results to vary materially from these expectations include, but are not
limited to, change in distribution abilities, level of customer acceptance of
new products, change in co-packing relationships and strategic alliances and
other economic, competitive, governmental, and regulatory factors affecting
the Company's operations, pricing, products and service.
SOURCE YoCream International, Inc.

Terry Lusetti, Investor Relations of YoCream International, Inc.,
+1-503-256-3754