Umami reports third quarter results. Fishing season starts.

Umami reports third quarter results. Fishing season starts.

Ian Gilson CFA

On May 17, 2012 Umami (UMAM) reported its results for the third fiscal quarter of 2012. The numbers were well ahead of our estimates with revenue of $25.6 million and net income for Umami stockholders of $7.0 million or $0.11 per diluted share excluding non-operating charges. Gross margins were in line with the second quarter and above year ago levels. Some of the numbers reported for the first quarter have been adjusted and we have incorporated these in our data.

Sales to Japan continue to be the major part of revenue and demand for quality tuna exceeds the available supply. Average price per kilogram was close to the second quarter as it was in the first, and well above year ago levels. Third quarter selling prices increased again and was $29.15/kg as compared to $19.60 last year and $25.16 in the second quarter.

The biomass inventory was at its lowest level since the acquisition of the Baja operations. However, the tuna fishing season has just started and this will add to inventory.

The company has $17 million in cash, much of it in Croatia, and has, in the past, purchased tuna. Above is the historical data and our estimates of changes in biomass for the fourth quarter of fiscal 2012 and for each quarter of fiscal 2013.

At the current time we estimate that fiscal year-end inventory will be at approximately the same level as at the end of the third quarter.