YOCREAM International Reports 2004 Second Quarter Earnings
Up 21.2%PORTLAND, Ore., June 15, 2004 /PRNewswire-FirstCall/ -- YOCREAM International, Inc. (Nasdaq: YOCM), a manufacturer and wholesaler of frozen desserts and smoothies, today reported the financial results for the second quarter and six months ended April 30, 2004. YOCREAM second quarter net income increased 21.2% to $168,200, or $.07 per share from $138,700, or $.06 per share in the second quarter of 2003. For the six months ended April 30, net income increased 6.9% to $159,700, or $.07 per share from $149,400, or $.07 per share in the same period last year. "The increases were primarily due to improved gross profit margins and reduced administrative expenses," said Douglas Caudell, CFO. The Company's gross profit margin increased from 27.8% to 28.0% for the second quarter and from 26.6% to 27.9% for the six months in 2004. Caudell explained that the increase in gross margins came from the phase out of a low margin coffee latte premixed smoothie product, and from the benefits realized from the Company's cost reduction measures in the areas of packaging, logistics and production. "These increases in the gross margin were achieved even though dairy products and fuel costs escalated during the period," said Caudell. Sales for the second quarter were $4,856,000, compared to $4,995,000 in the second quarter of 2003, and sales for the six months ended April 30, 2004 were $8,306,000, compared with $8,864,000 in the same period last year. "Sales of frozen yogurt increased in 2004 due to growth in club store, military and healthcare business," said Caudell. "The overall sales decreases were primarily due to discontinuing the low margin coffee latte premixed smoothie product and the loss of one regional chain account that was purchasing our gourmet soft serve ice cream. We recently formulated a new soft serve ice cream to meet this customer's pricing concerns and remain in discussions to reinstate sales. Continued growth in sales is expected with the development of the Company's military and healthcare business, and the introduction of new products, including our low-carb frozen yogurt." At the beginning of the second quarter 2004, the Company announced that it would be introducing Dannon(R) YoCream(R) Low-Carb Premium Soft Serve Frozen Yogurt, with net carbohydrate counts ranging from 3 grams to 5 grams. Management believes that its gourmet product is the only nationally branded low-carb soft serve that includes live active yogurt cultures to promote a healthy digestive system. Sweetened with Splenda brand sucralose, this product meets the dietary guidelines for low-carb as well as diabetic consumers. The product was previewed at selected spring 2004 food shows, with sales beginning at the end of the second quarter. To meet the snack-on-the-go needs of consumers, the Company anticipates introducing low-carb single serve novelty cups in the fourth quarter of 2004. Tyler Bargas, Director of Sales and Marketing, reported that the Company is introducing a number of new products. "One is the YoCaffe(R) Latte(R) Coffee Concentrate. This is a shelf stable product that will be introduced to the general marketplace in the third quarter of 2004. Another one is a 'lite' reduced fat ice cream now being rolled out in a major Midwest chain account. Our research and development team is also developing a concentrated fruit smoothie line for those customers who want to mix a concentrate with water at their dispensing location. This line extension will be introduced by the fourth quarter of this fiscal year. We have a great arsenal to increase sales," Bargas said. Michele Hanna Emery, Director of Sales, National Accounts and Branding reported that the Company is in the process of extending its smoothie product line to include a shelf stable premixed bag-in-the box product packaged on the Company's new aseptic packaging line. "By the fourth quarter of 2004, the Company expects to introduce Fruitquake(R) aseptic, shelf stable, all natural dispenser smoothies. It will be packed in half gallon to three gallon bags with the option of auto fill equipment fitments and will meet the needs of operators that have limited refrigeration. This smoothie mobile meal solution is targeted at students and military personnel," Emery stated. YOCREAM International, Inc. makes, markets and sells frozen desserts, snacks and smoothies throughout the United States and in several foreign countries. It sells primarily to food distributors and wholesale clubs; and the Company's products are available in restaurants, convenience stores, schools, government and military installations, hospitals, corporate cafeterias and wholesale clubs. This release may contain certain forward-looking statements, which are based on management's current expectations. Factors that could cause future results to vary materially from these expectations include, but are not limited to, change in distribution abilities, level of customer acceptance of new products, change in co-packing relationships and strategic alliances and other economic, competitive, governmental, regulatory and factors affecting the company's operations, pricing, products and service. For a more complete discussion of the risks associated with forward-looking information, refer to the Risk Factors contained in the company's Form 10-K, which was filed with the Securities and Exchange Commission on January 29, 2004. YOCREAM INTERNATIONAL, INC. STATEMENTS OF INCOME Three Months Ended Six Months Ended April 30, April 30, 2004 2003 2004 2003 Sales $4,855,752 $4,995,274 $8,305,736 $8,864,282 Cost of goods sold 3,493,765 3,608,769 5,984,577 6,505,868 Gross profit 1,361,987 1,386,505 2,321,159 2,358,414 Selling, general and administrative expenses 1,072,843 1,156,248 2,023,764 2,104,218 Income from operations 289,144 230,257 297,395 254,196 Other income (expenses), net (20,358) (8,724) (42,176) (15,616) Income before income taxes 268,786 221,533 255,219 238,580 Income tax provision 100,600 82,800 95,500 89,200 Net income $168,186 $138,733 $159,719 $149,380 Earnings per common share - basic $0.07 $0.06 $0.07 $0.07 Earnings per common share - diluted $0.07 $0.06 $0.07 $0.07 Shares used in basic earnings per share 2,277,956 2,252,178 2,277,956 2,251,245 Shares used in diluted earnings per share 2,302,939 2,278,151 2,304,740 2,282,786 YOCREAM INTERNATIONAL, INC BALANCE SHEETS April 30, October 31, 2004 2003 (Unaudited) ASSETS Current assets Cash and cash equivalents $1,985,276 $2,644,436 Trade accounts receivable 1,224,846 934,259 Inventories 2,264,121 1,846,989 Other current assets 400,687 247,012 Income taxes receivable 322,485 378,269 Deferred tax asset 74,250 74,250 Total current assets 6,271,665 6,125,215 Fixed assets, net 6,319,353 6,241,922 Intangible and other long-term assets, net 458,089 499,970 $13,049,107 $12,867,107 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $384,000 $336,333 Accounts payable 946,359 1,144,045 Other accrued liabilities 102,272 140,146 Total current liabilities 1,432,631 1,620,254 Long-term debt, less current portion 2,441,191 2,279,667 Deferred tax liability 833,451 795,451 Other liabilities 36,476 25,826 Total liabilities 4,743,749 4,721,468 Shareholders' equity Common stock, no par value, 30,000,000 shares authorized, 2,277,956 shares issued and outstanding 4,733,281 4,733,281 Retained earnings 3,572,077 3,412,358 Total shareholders' equity 8,305,358 8,145,639 $13,049,107 $12,867,107SOURCE YOCREAM International, Inc.
Web Site: http://www.yocream.com
For more information, contact Terry Lusetti, YoCream Investor Relations, 503-256-3754