Exhibit 99.2
November 12, 2004
Tofutti Press Release (Corrected)
Company Contact: Steve Kass
Chief Financial Officer
(908) 272-2400
(908) 272-9492 (Fax)
TOFUTTI ANNOUNCES THIRD QUARTER RESULTS
Cranford, New Jersey -- November 12, 2004 -- TOFUTTI BRANDS INC. (AMEX
Symbol: TOF) today announced its results for the thirteen and thirty-nine week
periods ended September 25, 2004.
Net sales for the thirteen week period ended September 25, 2004 at
approximately $4.7 million decreased $230,000 from the sales recorded for the
thirteen weeks ended September 27, 2003. Net sales for the thirty-nine week
period ended September 25, 2004 decreased 5% to $13.9 million compared with net
sales of $14.6 million for the thirty-nine week period ended September 27, 2003.
Gross profit for the thirteen weeks ended September 25, 2004 increased by
$60,000 to $1,527,000, resulting in a gross profit percentage of 32% compared to
30% in the 2003 period. The reduction in sales for the thirteen and thirty-nine
week periods was principally related to the loss of business in Florida and the
southeastern United States in August and September arising from problems caused
by the severe weather that those areas experienced and attendant transportation
problems. To a lesser extent, the reduction in sales reflects the Company's
discontinuance of certain unprofitable products and product lines starting at
the end 2003 and that it no longer has the benefit of their sales. For the
thirteen and thirty-nine week periods ended September 25, 2004, the Company
reported operating income of $347,000 and $911,000, respectively, as compared
with operating income of $269,000 and $1,175,000 for the thirteen and
thirty-nine week periods in 2003. The Company's operating results in 2004 were
negatively impacted as a result of rising raw material costs, increased costs of
manufacturing, new product start-up costs, including costs incurred at new
co-packaging locations, and higher packaging and freight charges. The Company
expects that during the remainder of 2004 its operating expenses will continue
to be affected by these same factors, but recently completed sales price
increases have begun to help mitigate the effect of these higher operating
costs.
The Company recorded net income of $187,000 ($0.03 per share) for the
thirteen weeks ended September 25, 2004 compared to $158,000 ($0.03 per share)
for the thirteen weeks ended September 27, 2003. Net income for the thirty-nine
weeks ended September 25, 2004 was $523,000 ($0.09 per share) compared to
$692,000 ($0.12 per share) for the thirty-nine weeks ended September 27, 2003.
Although the Company has utilized over $4.5 million since September 2000
in connection with its stock repurchase program and in the retirement of
dilutive options, it had working capital of $3.5 million and cash and cash
equivalents of over $2.1 million at September 25, 2004.
Mr. David Mintz, Chairman and Chief Executive Officer of the Company
stated, "We are disappointed with the decreased level of sales in the third
quarter, but considering the difficulties encountered in one of our largest
markets, Florida and the southeastern United States, during August and
September, it's not surprising. We believe that sales and deliveries will return
to normal for the remainder of the year. Our recently completed price increases
have contributed to an improvement in our gross profit margins during the third
quarter and we look forward to continued improvement during the fourth quarter.
We continue to see market acceptance of both our current and new products and
believe that the upward trend of our sales will resume during the remainder of
the year.
TOFUTTI BRANDS INC. is principally involved in the development,
production and marketing of TOFUTTI brand soy-based, dairy-free
frozen desserts and soy-based, dairy-free food products which contain no
butterfat or cholesterol. TOFUTTI products are sold in grocery stores,
supermarkets, health and convenience stores throughout the United States and in
seventeen other countries.
Some of the statements in this press release concerning the Company's
future prospects are forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those in
the forward-looking statements. Actual results may vary significantly based upon
a number of factors including, but not limited to business conditions both
domestic and international, competition, changes in product mix or distribution
channels, resource constraints encountered in promoting and developing new
products and other risk factors detailed in the Company's filings with the
Securities and Exchange Commission, including its annual report on Form 10-KSB.
TOFUTTI BRANDS INC.
Condensed Statements of Operations
(in thousands, except per share figures)
Thirteen Thirteen Thirty-nine Thirty-nine
weeks ended weeks ended weeks ended weeks ended
9/25/04 9/27/03 9/25/04 9/27/03
------- ------- ------- -------
Net sales........................ $4,730 $4,960 $13,871 $14,555
Cost of sales.................... 3,203 3,493 9,486 9,844
----- ----- ----- -----
Gross profit..................... 1,527 1,467 4,385 4,711
Operating expenses............... 1,180 1,198 3,474 3,536
----- ----- ----- -----
Operating income................. 347 269 911 1,175
Interest income.................. -- 1 4 6
--- --- --- ----
Income before income tax......... 347 270 915 1,181
Income taxes..................... 160 112 392 489
--- ---- --- ---
Net income ...................... $187 $158 $523 $692
==== ==== ==== ====
Net income per share:
Basic.................... $0.03 $0.03 $0.09 $0.12
===== ===== ===== =====
Diluted.................. $0.03 $0.02 $0.08 $0.10
===== ===== ===== =====
Weighted average number of
shares outstanding:
Basic.................... 5,637 5,714 5,700 5,757
===== ===== ===== =====
Diluted.................. 6,204 6,761 6,281 6,753
===== ===== ===== =====
TOFUTTI BRANDS INC.
Condensed Balance Sheets
(in thousands)
September 25, December 27,
2004 2003
(Unaudited) (Audited)
----------- ---------
Assets
Current assets:
Cash and equivalents $2,163 $2,557
Accounts receivable (net of allowance
for doubtful accounts of $201 and $149, respectively) 1,566 1,508
Inventories 580 774
Prepaid expenses 18 --
Prepaid income taxes 88 55
Deferred income taxes 258 220
---- ---
Total current assets 4,673 5,114
Fixed assets(net of accumulated amortization
of $8 and $5, respectively 40 43
Other assets 16 16
-- --
Total assets 4,729 $5,173
===== ======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $1,036 $471
Accrued officers' compensation -- 500
Income taxes payable 105 105
--- ---
Total current liabilities 1,141 1,076
----- -----
Commitments and contingency -- --
Stockholders' equity:
Preferred stock - par value $.01 per share;
authorized 100,000 shares, none issued -- --
Common stock- par value $.01 per share;
authorized 15,000,000 shares, issued and
outstanding 5,636,867 at September 25, 2004
and 5,709,867 shares at December 27, 2003 56 57
Additional paid-in capital 162 1,193
Accumulated earnings 3,370 2,847
----- -----
Total stockholders' equity 3,588 4,097
===== =====
Total liabilities and stockholders' equity $4,729 $5,173
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