- Quarterly Sales Increase 5% compared to fourth quarter 2003
- E.P.S. expected to be in the range of $.01 loss to $.02 loss
SALINAS, CA (January 4, 2005) -- Monterey Gourmet Foods (NASDAQ: PSTA) today announced that its fourth quarter sales are expected to increase approximately 5% over the same quarter in 2003. Earnings are expected to range from a $.01 to $.02 per share loss. Complete financial results are scheduled to be released February 10, 2005.
Mr. Jim Williams, President/CEO of Monterey Gourmet Foods, explained, “We are pleased that sales for the quarter increased, compared to the same quarter one year ago. This was due to our continued progress in diversifying our company. Sales of prepared entrees and grilled wraps represented 15% of sales for the quarter. Sales from our “All Natural and Organic” lines represented 30% of our sales.”
Commenting on the fourth quarter loss, Mr. Williams stated, “Our shortfall versus anticipated profitability resulted largely from an unexpected decline in sales volume to our second largest customer. This decline was driven by this customer’s downward adjustment in item counts storewide, resulting in some lost placements for Monterey Gourmet Foods, as well as a slow down in new item authorizations. We do have two new items approved for testing in selected areas with this customer starting early in the first quarter, 2005.Sales to our largest customer continued to improve during the quarter due to the success of new items. December 2004 sales to this customer were slightly higher than December sales of the prior year.”
Mr. Williams continued, “Lower sales volume from our main Salinas, California plant continues to aggravate our ability to absorb the plant’s fixed overhead which impacts our gross margin. Additionally, unusually high raw material costs continue to reduce margins compared to historical levels.”
Mr. Williams concluded with, “We appreciate our shareholders’ continued support as we work intensively to build Monterey Gourmet Foods into a stronger, more diversified company.”
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 “are expected”, “are scheduled”, and “approximately.” 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 CIBO Naturals’ 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 in connection with the introduction of its new packaging and new items, (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) the Company’s 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 2003, and its Reports of Material Event on Forms 8-K filed February 5, 2004, February 10, 2004, April 12, 2004, May 3, 2004, November 8, 2004 and its Proxy Statement filed June 21, 2004. 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 Pasta 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.
