First quarter earnings ease for Overhill Farms
Feb. 9, 2012
by Meat&Poultry Staff
LOS ANGELES – Net income for Overhill Farms, Inc. was $1.1 million, or 7 cents per share on revenues of $47.5 million for the first quarter ended Jan. 1, 2012, down from 1.6 million, or 10 cents per share from the comparable year-ago period.
"The company performed well during the most recent fiscal quarter, with significant improvements in sales, profitability and gross margins as compared to the third and fourth quarters of fiscal year 2011," said James Rudis, chairman, president and chief executive officer. "We anticipate improved sales to most of our long-term retail and food service customers, and favorable results from our intense focus on improving our gross profit margins."
The company reported gross profit decreased to $4.7 million, a reduction of $285,000, or 5.7 percent, from the $5.0 million for the same period in 2011, due to higher costs for commodities, freight and storage. Gross profit as a percentage of net revenues was 9.9 percent compared to 11.2 percent for the comparable year-ago period.
Net revenues in the Retail segment for the first fiscal quarter of 2012 increased by $3.1 million, or 10.5 percent, to $32.6 million, up from the $29.5 million in 2011 largely due to sales of Boston Market branded products. Foodservice segment net revenues declined by $145,000, or 1.1 percent, to $13.0 million from $13.2 million a year ago.
"The Boston Market line is now profitable, with initial marketing investments and start-up costs largely behind us," Rudis added. "We continue to focus on improving that profitability through a number of product and manufacturing improvements, as well by returning promotion activity to normalized levels.
"We are preparing to launch a second product line for one of our major retail accounts, and one of our largest foodservice customers has committed a significant amount of additional business to us. We are also in the test market phase for a new product for a major restaurant chain — an opportunity that developed out of our relationship with Simplot," he added.
Ongoing initiatives aimed at cutting costs in the airline industry caused net revenues in the Airline segment to ease by $238,000, or 11.3 percent, to $1.9 million for the first quarter, down from $2.1 million for the first quarter of fiscal year 2011.