Monterey Gourmet Foods continues to record year over year improvements
SALINAS, CA (November 8, 2007) -- Monterey Gourmet Foods (NASDAQ: PSTA) today announced third quarter operating profit of $413,000 compared to an operating loss of ($3,955,000) for the third quarter of 2006. The Company also reported net income of $279,000 or $.02 per share compared to a net loss of ($3,872,000) or ($.22) per share in the third quarter 2006—a net improvement of $4,151,000. The Company also reported net revenues of $24.5 million compared to $22.1 million for the third quarter 2006 -– an 11% improvement.
Eric Eddings, President/CEO of Monterey Gourmet Foods, explained, “We are pleased to report continued improvement in revenues, profits, and working capital. When compared to the third quarter 2006, our third quarter 2007 revenues increased by $2.4 million; our income before taxes grew by $4.4 million; and our net income grew by $4.2 million. Our third quarter 2006 net loss was impacted by $3.2 million intangible asset impairment charge. In addition, our working capital increased by $1.3 million to $14.7 million. Key brands contributing to our revenue growth were, Monterey Pasta and Casual Gourmet branded products, which were up 45 percent and 49 percent respectively in net revenues.”
Commenting further, Mr. Eddings noted that “Selling, General and Administrative expenses as a percent of net revenues for the third quarter 2007 were 25.3 percent compared to 32.5 percent for the third quarter 2006, which continues to reflect 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 and our ability to accomplish pre-established goals. Our new products are doing well in the market place as reflected by the fact that 10% of our year to date revenues have been generated by new products. Our aggressive launch of organic and made with organic pastas continues to exceed our internal and external expectations, including criteria established by some of our largest customers. In addition the re-launch of our retail pasta packaging, which includes enhancements to our graphics and brand identity as well as a significant reduction in packaging material, has been met with great enthusiasm by our trade partners. This also demonstrates our ability to quickly execute on key branding and cost savings initiatives. We are also very excited about the new item introductions of our Casual Gourmet Chicken Meatballs and our Emerald Valley Kitchen Edamame Spreads. Both of these new categories are being presented by our national sales teams and will make significant contributions to the respective brands future growth.
In conclusion, Eddings emphasized that “while we still have challenges ahead, we have overcome many challenges, which we believe create significant momentum for the future benefit of our shareholders.”
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 “create significant momentum.” 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, May 11, 2007 and August 13, 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.
