Exhibit 99.1
April 14, 2008
Tofutti Press Release
Company Contact: Steve Kass
Chief Financial Officer
(908) 272-2400
(908) 272-9492 (Fax)
TOFUTTI ANNOUNCES 2007 RESULTS
Cranford, New Jersey -- April 14, 2008 -- TOFUTTI BRANDS INC. (AMEX
Symbol: TOF) issued its results for the fifty-two week period ended December 29,
2007 today.
Net sales for the fifty-two weeks ended December 29, 2007 (fiscal 2007)
were $19,150,000, a decrease of $315,000, or 2%, from net sales for the
fifty-two weeks ended December 30, 2006 (fiscal 2006).
The company's efforts to grow its sales in 2007 were negatively
impacted by three factors. Tofutti lost a significant amount of business in the
second and third quarters of 2007 when the ice cream plant that formerly
produced its frozen dessert products shut down unexpectedly at the end of April
2007. The shut down caused inventory shortages of the company's frozen dessert
novelties until a new production source was obtained. The company fully
restocked its inventory by the middle of the fourth quarter, and the company
experienced a growth in fourth quarter revenues compared to the fourth quarter
of fiscal 2006. Also impacting sales was the discontinued purchase of one item
that generated $400,000 in sales in 2006 by a major customer. Although the sales
loss was sizeable, the impact to profitability was not significant since it was
not a highly profitable item. Additionally, in view of the new frozen dessert
production arrangements, the company discontinued a number of slower moving
items whose continued production involved maintaining excess inventory in
relationship to the sales level that these items generated.
The company's gross profit in fiscal 2007 decreased by $58,000, or 1%,
due primarily to the decrease in sales while its gross profit percentage
remained constant at 29% for fiscal 2007 and fiscal 2006. The gross profit
percentage continues to be adversely affected by increased freight expenses due
to the high continued high cost of petroleum, and the company expects ingredient
costs for certain key items and packaging costs to continue at their current
high levels. The company initiated a series of price increases that will become
effective in the first and second quarters of 2008, which it believes will help
it maintain, or improve, its current gross profit percentage.
For fiscal 2007, the company reported a decrease in income before
income taxes of $330,000 to $799,000 from $1,129,000 in fiscal 2006. Net income
for fiscal 2007 decreased to $465,000 ($0.08 per share) compared to $617,000
($0.11 per share) for fiscal 2006.
"Our efforts to grow our sales in fiscal 2007 were frustrated by the
closure of our key producer of our frozen dessert products. As a result of a lot
of effort, we were able to identify a new producer and to move our production to
the new site relatively quickly. As a result of these efforts, we were able to
increase sales in the fourth quarter and are now at full production. We are once
again concentrating on increasing the sales of our flagship products. We believe
that our business plan of concentrating on our core business of non-dairy frozen
desserts and soy-cheese products will drive the growth in our sales and
operating income," said David Mintz, the Company's Chairman and CEO. "We are
optimistic that our business plan will result in improved sales and operating
income in fiscal 2008."
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.
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Statements of Operations
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(in thousands, except per share figures)
Fifty-two weeks Fifty-two weeks
ended 12/29/07 ended 12/30/06
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Net sales................................ $19,150 $19,465
Cost of sales............................ 13,628 13,885
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Gross profit............................. 5,522 5,580
Operating expenses....................... 4,723 4,451
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Income before income taxes .............. 799 1,129
Income taxes............................. 334 512
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Net income .............................. $465 $617
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Weighted average number of shares
outstanding:
Basic........................... 5,620 5,432
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Diluted......................... 5,884 5,992
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Net income per share:
Basic........................... $0.08 $0.11
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Diluted......................... $0.08 $0.10
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TOFUTTI BRANDS INC.
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Balance Sheets
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(in thousands, except per share figures)
December 29, December 30,
2007 2006
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Assets
Current assets:
Cash and cash equivalents $1,499 $289
Accounts receivable, net of allowance for doubtful
accounts of $430 and $368, respectively 1,991 2,084
Inventories 1,552 2,992
Prepaid expenses 46 2
Refundable income taxes 770
Deferred income taxes 298 558
--- ---
Total current assets 6,156 5,925
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Fixed assets (net of accumulated amortization of
$24 and $19) 24 29
Other assets 16 16
-- --
$6,199 $5,970
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 633 $ 711
Accrued expenses 566 277
Accrued officers' compensation 500 500
Income taxes payable -- 472
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Total current liabilities 1,699 1,960
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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 5,653,467 shares at December 29, 2007
and 5,443,467 shares at December 30, 2006 57 54
Additional paid-in capital 225 56
Retained earnings 4,215 3,900
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Total stockholders' equity 4,497 4,010
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Total liabilities and stockholders' equity $6,196 $5,970
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