Exhibit 99.1
August 14, 2007
Tofutti Press Release
Company Contact: Steve Kass
Chief Financial Officer
(908) 272-2400
(908) 272-9492 (Fax)
TOFUTTI ANNOUNCES SECOND QUARTER RESULTS
Cranford, New Jersey -- August 14, 2007-- TOFUTTI BRANDS INC. (AMEX
Symbol: TOF) today announced its results for the thirteen and twenty-six week
periods ended June 30, 2007.
The Company reported net sales for the thirteen week period ended June
30, 2007 of $4,796,000, a decrease of $779,000, or 14%, from the sales recorded
for the thirteen weeks ended July 1, 2006. Net sales for the twenty-six week
period ended June 30, 2007 decreased 5% to $9,642,000 compared with net sales of
$10,162,000 for the twenty-six week period ended July 1, 2006. The decline in
sales was caused by the closure of our former frozen novelty manufacturing
facility in early May prior to our relocating that production site to another
facility. This required us to postpone the shipment of certain large orders that
would have been shipped in the second quarter until the third quarter and to
allocate existing inventory of novelty products among all our customers, further
negatively impacting our sales for the period.
For the thirteen and twenty-six week periods ended June 30, 2007, the
Company reported income before income taxes of $375,000 and $600,000,
respectively, as compared with income before income taxes of $486,000 and
$617,000 for the thirteen and twenty-six week periods in 2006. 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 charges. The Company expects
that its operating expenses will continue to be affected by these same factors
during the remainder of 2007.
The Company recorded net income of $225,000 ($0.04 per share on a basic
and diluted basis) for the thirteen weeks ended June 30, 2007 compared to
$296,000 ($0.05 per share on a basic and diluted basis) for the thirteen weeks
ended July 1, 2006. Net income for the twenty-six weeks ended July 1, 2006 was
$353,000 ($0.06 per share on a basic and diluted basis) compared to $366,000
($0.07 per share on a basic basis and $0.06 per share on a diluted basis) for
the twenty-six weeks ended July 1, 2006.
As of June 30, 2007 the Company had cash and cash equivalents of
$799,000 and working capital of $4.3 million compared to cash and cash
equivalents of $289,000 and working capital of $4.0 million at December 31,
2006.
Mr. David Mintz, Chairman and Chief Executive Officer of the Company
stated, "While our revenue shortfall in the second quarter was disappointing, it
was beyond our control. We are confident that we will be able to deliver the
postponed shipments and that our third quarter results will benefit from these
delayed sales."
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.
Condensed Statements of Operations
(in thousands, except per share figures)
Thirteen weeks Thirteen weeks Twenty-six weeks Twenty-six weeks
ended ended ended ended
June 30, 2007 July 1, 2006 June 30, 2007 July 1, 2006
------------- ------------ ------------- ------------
Net sales .......................... $ 4,796 $ 5,575 $ 9,642 $10,162
Cost of sales ...................... 3,395 4,022 6,545 7,415
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Gross profit ....................... 1,401 1,553 3,097 2,747
Operating expenses ................. 1,026 1,067 2,497 2,130
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Income before income taxes ......... 375 486 600 617
Income taxes ....................... 150 190 247 251
------- ------- ------- -------
Net income ......................... $ 225 $ 296 $ 353 $ 366
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Net income per share:
Basic ..................... $ 0.04 $ 0.05 $ 0.06 $ 0.07
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Diluted ................... $ 0.04 $ 0.05 $ 0.06 $ 0.06
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Weighted average number of
shares outstanding:
Basic ..................... 5,653 5,418 5,591 5,435
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Diluted ................... 5,920 5,972 5,858 5,993
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TOFUTTI BRANDS INC.
Condensed Balance Sheets
(in thousands)
June 30, December 30,
2007 2006
---- ----
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 799 $ 289
Accounts receivable, net of allowance for doubtful
accounts of $273 and $243, respectively 2,054 2,084
Inventories 1,872 2,992
Prepaid expenses and other receivables 332 2
Deferred income taxes 558 558
------ ------
Total current assets 5,615 5,925
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Fixed assets (net of accumulated amortization of
$22 and $19) 27 29
Other assets 16 16
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$5,658 $5,970
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 617 $ 711
Accrued expenses 70 277
Accrued officers' compensation 125 500
Income taxes payable 464 472
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Total current liabilities 1,276 1,960
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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 5,653,467 shares at June 30, 2007
and 5,433,467 shares at December 30, 2006 57 54
Additional paid-in capital 222 56
Retained earnings 4,103 3,900
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Total stockholders' equity 4,382 4,010
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Total liabilities and stockholders' equity $5,658 $5,970
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