Salinas, CA – March 23, 2006 – Monterey Gourmet Foods (NASDAQ: PSTA) today announced the first phase of a manufacturing restructuring program designed to reduce the Company’s cost structure, increase efficiencies and improve profitability. The program is projected to result in operating cost savings of nearly $1 million per year effective midyear 2006.
The restructuring program has multiple elements that will contribute to a much more streamlined and efficient operation,” stated Jim Williams, President/CEO of Monterey Gourmet Foods. “Key elements of this program include consolidating production of our two Salinas, CA plants into the primary Moffett Street plant, and transferring packaged sauce production to our CIBO Naturals plant in Seattle, WA.As a result of this consolidation, the Company will discontinue its lease of the 40,000 sq. ft production area in the Abbott Street facility. Our distribution center will remain at that site.”
Williams further stated, “The cost associated with this restructuring will be approximately $400,000; $300,000 will be capital expense and $100,000 will be operating expense in the first and second quarters of 2006. Consequently, we will see no negative effect from this program in 2006.”
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 by product including without limitation statements including such terms as “reduce”, “increase”, “improve”, “contribute”, projected”. 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 associated with the plant restructuring program, (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 2004, its Quarterly Reports on Form 10-Q for the quarters ended March 27, 2005, June 30, 2005, September 30, 2005, and its Reports of Material Event on Forms 8-K filed January 18, 2005, February 14, 2005, March 28, 2005, April, 2005, May 10, 2005, June 17, 22 and 28, 2005, August 2, 2005, November 14, 2005 and January 18 and 23, 2006, and its Proxy Statement filed June 13, 2005. 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 9,700 retail and club stores throughout the United States and selected regions of Canada, the Caribbean, Latin America, and Asia Pacific.
