FOR IMMEDIATE RELEASE
SALINAS, CA (August 9, 2007) -- Monterey Gourmet Foods (NASDAQ: PSTA) today announced second quarter operating profit of $734,000—exceeding the operating performance of all prior quarters dating back to March 2003. The company also reported net income of $464,000 or $.03 per share compared to $146,000 or $.01 per share in the second quarter 2006—a 218 percent increase. The Company also reported net revenues of $24.5 million compared to $23.1 million for the second quarter 2006.
Eric Eddings, President/CEO of Monterey Gourmet Foods, explained, “We are pleased to report our best quarterly operating results in more than four years. For the quarter, our revenues increased by $1.4 million; our income before taxes grew by $569,000 or 276 percent; our net income grew by $318,000 and our cash increased by $1.4 million. Key brands contributing to our revenue growth were CIBO Naturals, Monterey Pasta’s refrigerated pasta and Casual Gourmet branded products, which were up 21 percent, 15 percent, and 26 percent respectively in net revenues.
“Selling, General and Administrative expenses as a percent of net revenues for the second quarter 2007 were 24.5 percent compared to 28.5 percent for the second quarter 2006, which reflects our cost savings initiatives that we implemented starting in September of last year. We continue to make process improvements throughout our business and keep our product lines fresh as we introduce new items within our culinary expertise.”
Mr. Eddings also stated that “We continue to work toward meeting our goals regarding our talent improvement, our innovation and our ability to complete our objectives. We are excited about our new product innovations and our new product category launches which continue to be a major priority for our organization. With the launch of several new items including Tuscan Bean Spreads, Edamame Spreads and Organic Cut and Filled Pastas, we believe we are better positioned for higher and more profitable sales growth in the future.”
In conclusion, Eddings emphasized that “while we still have challenges ahead, our Company has significant momentum; our management team is working closely together for the benefit of our shareholders; and our continued improvement in profits validate our strategy which will lead us to future successes.”
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), Calif.; Seattle, Wash.; and Eugene, Ore. Monterey Gourmet Foods has national distribution of its products in more than 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 unannounced results of operations for the most recent quarter and sales for future periods including without limitation such phrases and terms as “we believe we are better positioned for higher and more profitable sales growth in the future,” “we feel our Company has a lot of forward momentum,” and “we believe …that our continued improvements in profits validate our strategy and will lead us to 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 2006, its Proxy Statement for its June 22, 2007 Annual meeting of Shareholders, and Forms 8-K filed on February 21, 2007, April 27, 2007, and May 11, 2007. 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.
