Exhibit 99.1
April 8, 2005
Tofutti Press Release
Company Contact: Steve Kass
Chief Financial Officer
(908) 272-2400
(908) 272-9492 (Fax)
TOFUTTI ANNOUNCES 2004 RESULTS
Cranford, New Jersey -- April 8, 2005 -- TOFUTTI BRANDS INC. (AMEX
Symbol: TOF) issued its results for the fifty-three week period ended January 1,
2005 today. The Company's fiscal year is usually the fifty-two week period which
ends on the last Saturday in December. The 2003 fiscal year was a fifty-two week
period which ended on December 27, 2003.
The Company posted record net sales of approximately $5.3 million in
the 14 week fourth quarter of fiscal 2004 compared to net sales of approximately
$4.5 million in the 13 week period in fiscal 2003. Net sales for the fifty-three
weeks ended January 1, 2005 (fiscal 2004) were $19,188,000, an increase of
$174,000, or 1%, from the sales level realized for the fifty-two weeks ended
December 27, 2003 (fiscal 2003). Based on recent sales trends, we expect
continued sales increases in our frozen dessert and food product lines and in
most customer categories.
As a result of the strong fourth quarter sales, the Company was able to
report increased sales in fiscal 2004 despite reductions in sales in the first
and third quarters of fiscal 2004 as compared to fiscal 2003. In the first
quarter of fiscal 2004, our shipping schedule was adversely affected due to the
loss of shipping days when the extended New Year's holiday was celebrated by our
trucking companies and because we discontinued certain unprofitable products and
product lines starting at the end 2003 and no longer had the benefit of their
sales in fiscal 2004. In the third quarter of fiscal 2004, our sales were
adversely affected due to the loss of business in
Florida and the southeastern United States in August and September as a result
of problems caused by the severe weather those areas experienced and attendant
transportation problems.
The Company's gross profit in fiscal 2004 increased by $214,000, or 3%,
due primarily to the slight sales increase and improved product mix, while its
gross profit percentage increased slightly to 34% in fiscal 2004 as compared to
33% in fiscal 2003. The Company's gross profit percentage continued to be
adversely affected by start-up manufacturing costs associated with the
introduction of new products and the increased cost of allowances associated
with those new products.
For fiscal 2004, the Company reported a decrease in operating income to
$1,046,000 from $1,131,000 in fiscal 2003. In fiscal 2004 the Company's
operating results continued to be negatively impacted as a result of new product
start-up costs, including costs incurred at new co-packaging locations,
increased marketing expenses and higher packaging and freight charges.
Net income for fiscal 2004 increased 57% to $607,000 ($0.11 per share)
compared to $386,000 ($0.07 per share) for fiscal 2003. Net income in 2004
increased principally as a result of lower provision for income tax. Income
taxes for fiscal 2004 were $444,000 compared to $760,000 in 2003. The higher
effective rate in fiscal 2003 was due to an adjustment in the deferred tax asset
account as a result of a revaluation of taxable reserves and allowances
according to current IRS rules and regulations. We believe that our effective
tax rate will continue to approximate our historical tax rate of 40-42% during
fiscal 2005.
The Company's working capital decreased to $3,618,000 at January 1,
2005 from $4,038,000 at December 27, 2003 reflecting the use of $1.5 million for
the purchase of stock options and for the repurchase of 258,000 shares of common
stock in 2004.
"Although we did not achieve our goals in fiscal 2004, we ended the
year on a high note, as we achieved record revenues in the fourth quarter," said
David Mintz, the Company's Chairman and CEO. "Our new product pipeline continued
to provide Tofutti Brands with new and exciting products. The improved results
in the fourth quarter confirms that our business plan
of concentrating on our core business of non-dairy frozen desserts and
soy-cheese products is succeeding."
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 that 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.
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Statements of Operations
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(in thousands, except per share figures)
Fifty-three Fifty-two
weeks ended weeks ended
01/01/05 12/27/03
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Net sales.................................. $19,188 $19,014
Cost of sales.............................. 12,660 12,700
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Gross profit............................... 6,528 6,314
Operating expenses......................... 5,482 5,183
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Operating income........................... 1,046 1,131
Interest income............................ 5 15
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Income before income taxes ................ 1,051 1,146
Income taxes............................... 444 760
--- ---
Net income ................................ $607 $386
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Net income per share:
Basic............................. $0.11 $0.07
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Diluted........................... $0.10 $0.06
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Weighted average number of
shares outstanding:
Basic............................. 5,685 5,744
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Diluted........................... 6,263 6,556
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TOFUTTI BRANDS INC.
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Balance Sheets
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(in thousands, except per share figures)
January 1, December 27,
2005 2003
---------- ------------
Assets
Current assets:
Cash and equivalents $2,199 $2,557
Accounts receivable, net of allowance for doubtful
accounts of $219 and $149, respectively 1,614 1,508
Inventories 792 774
Prepaid expenses 14 --
Prepaid income taxes -- 55
Deferred income taxes 593 220
--- ---
Total current assets 5,212 5,114
Fixed assets (net of accumulated amortization of
$10 and $5) 38 43
Other assets 16 16
-- --
$5,266 $5,173
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $691 $471
Accrued officers' compensation 500 500
Income taxes payable 403 105
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Total current liabilities 1,594 1,076
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Commitment and Contingencies
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 shares at January 1, 2005,
and 5,709,867 shares at December 27, 2003 56 57
Additional paid-in capital 162 1,193
Retained earnings 3,454 2,847
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Total stockholders' equity 3,672 4,097
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Total liabilities and stockholders' equity $5,266 $5,173
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