SALINAS, CA (February 16, 2007) -- Monterey Gourmet Foods (NASDAQ: PSTA) today announced a fourth quarter sales increase of 13% to $26,648,000 compared to $23,658,000 for the fourth quarter 2005. The Company also reported net income of $516,000 or $.03 per share for the fourth quarter ended December 31, 2006. This compares to the net loss of $697,000 or $.05 per share for the fourth quarter ended December 31, 2005 - a $1.2 million improvement.
For the calendar year ended December 31, 2006, the Company reported net revenues of $94,297,000, resulting in a net loss of $3,110,000 or $0.19 per share on 16.1 million weighted average shares outstanding. This compares with net revenues for the twelve months ended December 31, 2005, of $85,248,000, with a net loss of $537,000, or $0.04 per share on 14.5 million weighted average shares outstanding.
Eric Eddings, President/CEO of Monterey Gourmet Foods, explained, "We are encouraged with the fourth quarter increase in sales, margins and income compared to the previous year, especially because it is a broad increase across all of our brands. Our revenues increased 13%, our gross profit improved by 23% and our net income improved by $1,213,000."
Commenting further on the year end results, Mr. Eddings stated, "Our revenues increased 11% to $94,297,000 and our gross profit increased 18% to $27,439,000. Because of reduced revenue in the third quarter of 2006 from our investment in Casual Gourmet Foods, we impaired this investment by $3,160,000 which created an operating loss of $2,462,000 for the 2006 calendar year compared to an operating loss of $358,000 for the calendar year 2005. However, as indicated in our statement of cash flows, we generated $7.0 million in cash from operating activities during 2006."
Mr. Eddings addressed the outlook for 2007 with these comments: "With the completion of our plant consolidation project, the realignment of our resources, and the expansion of the responsibilities of key individuals from our various subsidiaries across all of our brands, we begin 2007 as one company, with one sales force, and a unified vision for marketing our multiple brands. The fourth quarter results are very encouraging and provide us with push towards even stronger momentum as we go forward."
In conclusion, Eddings emphasized, "While we still have challenges ahead, we believe our recent achievements validate our strategy and provide us with the roadmap for future success. We wish to invite all interested parties to listen to our conference call later today where we will further discuss recent developments and future initiatives."
MORE ABOUT MONTEREY GOURMET FOODS (PSTA)
Monterey Gourmet Foods manufactures USDA inspected, fresh gourmet refrigerated food products at its integrated 133,000 square foot corporate headquarters, distribution, and manufacturing facilities in Salinas, (Monterey County) California, Seattle, Washington, and Eugene, Oregon. 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. For more information about Monterey Gourmet Foods, visit
www.MontereyGourmetFoods.com.
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 "we are encouraged," very encouraging," "provide us with a push," "very excited," "validate our strategy" and "roadmap for future success." 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 all the Company’s brands, plants and sales force, (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, (v) the timely and cost-effective introduction of new products in the coming months, (vi) the utilization of the recently-completed plant expansion and the increased fixed costs associated with increased plant capacity, (vii) retention of key personnel and retention of key management, (viii) the risks inherent in food production, (ix) intense competition in the market in which the Company competes and (x) 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, its Proxy Statement filed April 21, 2006, Forms 10-Q filed for our quarters ended March 31, 2006, June 30, 2006, and September 30, 2006 and Forms 8-K filed on January 23, February 23, March 9, April 25, June 13, June 28, September 11, September 21, October 5 and November 8, 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.
