Vita Foods Reports Q3 Sales of $11.4 Million, 7-Cent Per-Share Net Loss
12 November 2005 - 9:23AM
PR Newswire (US)
CHICAGO, Nov. 11 /PRNewswire-FirstCall/ -- For the third quarter
ended September 30, 2005, Vita Food Products, Inc. (AMEX:VSF) today
announced a consolidated net loss of $(257,000) or $(0.07) per
share, compared to net loss of $(276,000) or $(0.07) per share in
the third quarter of 2004. The Vita seafood segment, which is
primarily engaged in the processing and sale of herring products
and cured and smoked salmon products, experienced a net loss of
$(320,000) compared to net loss of $(248,000) in 2004. This
increased loss for the Vita seafood segment primarily arose as
result of both decreased sales volume coupled with higher expenses
especially for freight and interest. The Company's other business
segment, Vita Specialty Foods ("VSF"), which is engaged in the
processing and sale of salad dressings, marinara sauces, cooking
sauces, honey and other specialty food products, partially offset
Vita seafood's net loss with net income of $63,000 in the third
quarter of 2005 compared to net loss of $(28,000) in the third
quarter of 2004. This improvement for VSF was primarily
attributable to a lower level of sales deductions in the current
year quarter, whereas the sales deductions were abnormally high
during the third quarter of 2004. Consolidated net sales for the
third quarter of 2005 were $11.4 million, compared with $11.6
million in the third quarter of 2004. Vita seafood's net sales for
the third quarter of 2005 were $5.8 million compared to $6.3
million from the prior year quarter, representing a 7.9% decrease.
However, the decrease was due to reduced sales of a lower margin
resale line of salmon products. VSF's net sales for the third
quarter were $5.6 million compared to $5.3 million for the prior
year quarter, representing a 5.7% increase. The increase was
primarily a result of lower sales deductions especially promotional
allowances. However, primarily as a result of these lower sales
deductions and the sales mix away from the lower margin resale
products, consolidated gross margin for the quarter increased to
28.3% from 26.4% in the prior year quarter. "We are pleased to
report our continued improvement in the specialty foods segment.
Our net income increased $165,000 year over year for the nine
months just ended. However, the seafood division continues to
struggle with consistent improvement. We are behind our
expectations in this segment and we will continue to confront the
causes as quickly as we can," said Steve Rubin, the Company's
chairman and chief executive officer. "We believe the Vita seafood
segment will show profitability in the fourth quarter, despite its
struggles, due to historically strong seasonal sales, while the
specialty foods segment will continue to show improvement in
earnings." Nine-Month Results For the nine months ended September
30, 2005, the Company had a consolidated net loss of $(463,000) or
$(0.12) per share, compared to a net loss of $(655,000), or $(0.17)
per share for the same period in 2004, an improvement of $192,000
or $0.05 per share. The Vita seafood segment had a net loss of
$(891,000) compared to a net loss of $(917,000) in 2004, an
improvement of $26,000 or 2.8%. VSF's net income was $428,000
compared to $263,000 in 2004, an improvement of $165,000 or 62.7%.
Consolidated net sales for the nine months were $32.7 million,
compared with $34.8 million for the nine months ended September 30,
2004, representing a decrease of $2.1 million or 6.0%. Vita
seafood's net sales were $16.6 million for the nine months,
compared with $17.3 million for the same period in 2004,
representing a decrease of $0.7 million or 4% for the nine-month
period, largely a reflection of a decrease in the herring product
line sales volume. VSF's net sales were $16.1 million for the nine
months, compared with $17.5 million for the same period in 2004,
representing a decrease of $1.4 million or 8.0%. The largest
contributing factor to this decrease was the reduction in sales of
lower margin honey products, which were down $1.1 million or 22%.
The impact of the Company's loss on earnings before income taxes,
depreciation and amortization for the twelve months ended September
30, 2005 resulted in non-compliance with one of the Company's debt
covenants at that date. However, the Company received a permanent
waiver from its lender relating to such non-compliance. The
Company's lender also has approved a new amendment to the Loan and
Security Agreement that changes the Company's debt covenants and
other provisions. The Company believes that the new debt covenants
will be attainable. Vita seafood is a U.S. leader in the herring
and retail packaged salmon markets, and is engaged in several other
food segments, including cream cheese, cocktail sauce, tartar sauce
and horseradish. The Company markets and sells these items under
the Vita(R), Elf(R) and Grand Isle(R) brands. More than 95% of
Vita's sales are in kosher foods. Vita's common stock is currently
traded on the American Stock Exchange and Chicago Stock Exchange
under the ticker symbol VSF. Vita Specialty Foods Inc., the
Company's wholly owned subsidiary, combines the products of former
entities The Virginia Honey Company and The Halifax Group, Inc.
Virginia Honey was a manufacturer and distributor of honey, salad
dressings, including its' award-winning Virginia Brand Vidalia(R)
Onion Vinegarette salad dressing, cooking sauces, jams &
jellies, and gift baskets. Halifax was a manufacturer and
distributor of licensed brand-named products including the
world-renowned Jim Beam(R) brand of steak sauce, barbeque sauce,
marinades, salsas and The Drambuie(R), Kahlua(R), and
Courvoisier(R) Gourmet Collections. Halifax also marketed,
manufactured and distributed the Artie Bucco(TM) line of products
based on the popular HBO(R) series The Sopranos(R), the
award-winning Scorned Woman(R) gourmet food line, the Oak Hill
Farms(R) line of salad dressings and various gourmet products and
branded gift items. This release contains forward-looking
statements about the Company's future growth, profitability and
competitive position. Any such statements are subject to risks and
uncertainties, including changes in economic and market conditions,
industry competition, raw material prices, the success of new
product introductions, management of growth and other risks noted
in the Company's filings with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on
forward-looking statements, which reflect management's analysis
only as of the date hereof. - - TABLES FOLLOW - - VITA FOOD
PRODUCTS, INC. Condensed Consolidated Statements of Operations (in
thousands, except per share data) (unaudited) Three Months Nine
Months Ended Ended Sept 30, Sept 30, Sept 30, Sept 30, 2005 2004
Change 2005 2004 Change Net sales $11,418 $11,575 (1%) $32,670
$34,845 (6%) Cost of goods sold 8,191 8,515 (4%) 22,566 24,840 (9%)
Gross margin 3,227 3,060 5% 10,104 10,005 1% Selling and
administrative expenses Selling, marketing & distribution 2,350
2,387 (2%) 6,813 7,300 (7%) Administrative 1,014 941 8% 3,322 3,247
2% Total 3,364 3,328 1% 10,135 10,547 (4%) Operating loss (137)
(268) 49% (31) (542) 94% Interest expense 292 192 52% 741 549 35%
Loss before income taxes (429) (460) 7% (772) (1,091) 29% Income
tax benefit (172) (184) (7%) (309) (436) (29%) Net loss $(257)
$(276) 7% $(463) $(655) 29% Loss per common share: Basic $(0.07)
$(0.07) 0% $(0.12) $(0.17) 29% Diluted $(0.07) $(0.07) 0% $(0.12)
$(0.17) 29% Weighted average shares outstanding: Basic 3,866 3,847
3,861 3,838 Diluted 3,866 3,847 3,861 3,838 DATASOURCE: Vita Food
Products, Inc. CONTACT: Clifford Bolen, Chief Operating Officer,
Chief Financial Officer, of Vita Food Products, Inc.,
+1-312-738-4500,
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