Exhibit 99.1
March 31, 2006
Tofutti Press Release
Company Contact: Steve Kass
Chief Financial Officer
(908) 272-2400
(908) 272-9492 (Fax)
TOFUTTI ANNOUNCES 2005 RESULTS
Cranford, New Jersey -- March 31, 2006 -- TOFUTTI BRANDS INC. (AMEX
Symbol: TOF) issued its results for the fifty-two week period ended December 31,
2005 today. The Company's fiscal year is usually the fifty-two week period which
ends on the last Saturday in December. The 2004 fiscal year was a fifty-three
week period which ended on January 1, 2005.
Net sales for the fifty-two weeks ended December 31, 2005 (fiscal 2005)
were $18,613,000, a decrease of $575,000, or 3%, from the sales level realized
for the fifty-three weeks ended January 1, 2005 (fiscal 2004).
The decline in sales during fiscal 2005 was caused by several factors.
Sales to the Company's major customers fluctuate widely from period to period
and there is no way to accurately predict that their sales pattern from one year
will be repeated in the corresponding period of the next fiscal year. During the
third quarter and some of the fourth quarter of fiscal 2005, sales were
negatively impacted due to the loss of business in Florida and the southeastern
United States as a result of problems caused by the severe weather those areas
experienced and attendant infrastructure and transportation problems. In
addition to the weather issues, the Company experienced instances where it was
temporarily out of stock of certain items when transferring its frozen dessert
production to new facilities. The process of transferring to new facilities also
had a negative effect on 2005 sales.
The Company's gross profit in fiscal 2005 decreased by $376,000, or 7%,
due primarily to the decline in sales, an increase in freight costs and the
write off of approximately $200,000 in obsolete inventory. The Company's gross
profit percentage decreased slightly to 27% in fiscal 2005 from 28% in fiscal
2004. The gross profit percentage was adversely affected by increasing freight
expenses, start-up manufacturing costs associated with our new products and new
manufacturing facilities and the increased cost of allowances associated with
the introduction of new products. In order to improve the gross profit
percentage, the Company has initiated a series of price increases that will be
completed by the end of the second quarter of 2006.
For fiscal 2005, the Company reported a decrease in operating income to
$607,000 from $1,046,000 in fiscal 2004. The Company's operating results
continued to be negatively impacted by the increase in costs of goods sold, the
costs of the relocation of our frozen dessert manufacturing facilities and the
decline in sales.
Net income for fiscal 2005 decreased 42% to $352,000 ($0.06 per share)
compared to $607,000 ($0.11 per share) for fiscal
2004.
"Our results in fiscal 2005 were negatively impacted in great measure
by factors that were not in our control. We believe that these negative factors
are now behind us and that our business plan of concentrating on our core
business of non-dairy frozen desserts and soy-cheese products is succeeding,"
said David Mintz, the Company's Chairman and CEO. "We look forward to continuing
our strong fourth quarter results into 2006 and we expect to reverse the decline
in sales in our frozen dessert and food product lines and in most customer
categories in 2006."
TOFUTTI BRANDS INC. is principally involved in the development,
production and marketing of TOFUTTI brand soy-based, dairy-free frozen desserts
, soy-based dairy free cheese products and other soy-based, dairy-free food
products. TOFUTTI products are sold in grocery stores, supermarkets, health and
convenience stores throughout the United States and in approximately twenty-five
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.
Statements of Operations
(in thousands, except per share figures)
Fifty-two Fifty-three
weeks ended weeks ended
12/31/05 01/01/05
-------- --------
Net sales.......................................... $18,613 $19,188
Cost of sales...................................... 13,633 13,832
------ ------
Gross profit....................................... 4,980 5,356
Operating expenses................................. 4,373 4,310
----- -----
Operating income................................... 607 1,046
Interest income.................................... 9 5
--- -----
Income before income taxes ........................ 616 1,051
Income taxes....................................... 264 444
---- ----
Net income ........................................ $352 $607
==== ====
Weighted average number of shares outstanding:
Basic..................................... 5,604 5,685
===== =====
Diluted................................... 6,185 6,263
===== =====
Net income per share:
Basic..................................... $0.06 $0.11
===== =====
Diluted................................... $0.06 $0.10
===== =====
TOFUTTI BRANDS INC.
Balance Sheets
(in thousands, except per share figures)
December 31, January 1,
2005 2005
------------ ----------
Assets
Current assets:
Cash and equivalents $1,256 $2,199
Accounts receivable, net of allowance for doubtful
accounts of $291 and $219, respectively 2,643 1,614
Inventories 2,045 792
Prepaid expenses 51 14
Deferred income taxes 577 593
----- -----
Total current assets 6,572 5,212
----- -----
Fixed assets (net of accumulated amortization of
$14 and $10) 34 38
Other assets 16 16
------ ------
$6,622 $5,266
====== ======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,442 $270
Accrued expenses 479 421
Accrued officers' compensation 500 500
Income taxes payable 478 403
----- -----
Total current liabilities 2,899 1,594
----- -----
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 5,542,267 shares at December 31,
2005 and 5,636,867 shares at January 1, 2005 556 56
Additional paid-in capital -- 162
Retained earnings 3,668 3,454
----- -----
Total stockholders' equity 3,723 3,672
----- -----
Total liabilities and stockholders' equity $6,622 $5,266
====== ======