YOCREAM International Reports Third Quarter Results
PORTLAND, Ore., Sept. 14, 2004 /PRNewswire-FirstCall/ -- YOCREAM International, Inc. (Nasdaq: YOCM), a manufacturer and wholesaler of frozen desserts and smoothies, today reported the financial results for the third quarter and nine months ended July 31, 2004. YOCREAM third quarter sales were $5,907,000, compared with $6,636,000 in the third quarter of 2003. For the nine months ended July 31, 2004 and 2003 sales were $14,213,000 and $15,500,000, respectively. Douglas Caudell, CFO explained that sales levels in the current periods were effected by three events that took place in the prior year. "These include the Company's lead customer switching from the Company's premixed coffee latte freeze to a competitor's coffee concentrate product, a regional chain of specialty restaurants suspending purchases of a proprietary gourmet ice cream, and a copacking customer acquiring its own production facility. Were it not for the loss of this business, the Company would have reported an increase in sales of 5.2% from its other products." The Company reported the following events that management expects will contribute to its historic growth trends: -- Since being awarded a 36-month Committed Agreement in October to supply Dannon(R) YoCream(R) Frozen Yogurt to members of Premier Inc., the Company has opened twenty-five new national points of distribution to facilitate Premier sales. The Company anticipates securing the business of additional members as well as building volume at the points of distribution. Premier, Inc. is a leading healthcare alliance. -- Since completing the aseptic processing system in October 2003, the Company has converted the smoothie products provided to its lead customer from frozen and fresh to an aseptically packaged shelf stable product that is more convenient and cost effective for the customer. The Company has also reformulated its coffee latte' product into an aseptically packaged coffee concentrate. This enabled the Company to reacquire a portion of the coffee concentrate business from its lead customer. -- By the first quarter of fiscal 2005, the Company plans to introduce its own shelf stable YoCaffe'(R) Latte' Coffee Concentrate to the general marketplace. -- The smoothie product line has recently been extended to include a shelf stable bag-in-the box product, packaged on the Company's new aseptic packaging line. In the fourth quarter of 2004, the Company will introduce Fruitquake(R) aseptic, shelf stable, dispenser smoothies. This smoothie line extension meets the needs of operators that have limited refrigeration or, as in military, geographic locations without refrigeration. The smoothie "mobile meal" solution is targeted at students and military personnel. -- A concentrated fruit smoothie line has also been developed for customers desiring to mix the product with water at their dispensing locations. This line extension is being selectively introduced to key accounts for test market and is scheduled for release in the second quarter of 2005." -- In the spring of 2004, the Company introduced the first two flavors of its Dannon(R) YoCream(R) Low-Carb Premium Soft Serve Frozen Yogurt line. Management believes that this is the only nationally branded low-carb soft serve that includes live active yogurt cultures to promote a healthy digestive system. As the low carbohydrate product trend takes shape, the Company sees the opportunity for growth in the "healthier options" category and will position its product as no-sugar-added to appeal to a broader consumer base. Matt Hanna, Director of Administration announced, "The Company is in the process of developing new proprietary products at the request of significant customers that offer high volume opportunities for the next fiscal year. This is consistent with the Company's plan to promote its copacking capabilities, and the flexibility of its manufacturing facilities." The Company's manufacturing plant has three distinct packaging operations, including a line that fills half-gallon gable top containers for soft serve mixes or liquid products, a second line for packaging hard packed frozen desserts, and an aseptic packaging line completed in October of 2003. Net income for the third quarter was approximately $189,000, or $0.08 per share compared with $336,000, or $0.15 per share for the same period last year. Net income for the nine months was approximately $349,000, or $0.15 per share compared with $485,000, or $0.21 per share for the same period last year. "Earnings were impacted by several factors, Caudell stated, including the level of sales, increases in costs associated with the conversion of sales from a fresh smoothie to an aseptic shelf-stable product, and by increases in certain key ingredient costs." Caudell continued, "The Company is in a strong financial position, with the cash and unused borrowing capacity to both withstand economic downturns and finance the continued expansion in its business." 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 Nine Months Ended July 31, July 31, 2004 2003 2004 2003 Sales $5,906,991$6,635,915 $14,212,727 $15,500,197 Cost of goods sold 4,439,177 4,649,178 10,423,754 11,155,046 Gross profit 1,467,814 1,986,737 3,788,973 4,345,151 Selling, general and administrative expenses 1,177,716 1,284,075 3,201,480 3,388,294 Income from operations 290,098 702,662 587,493 956,857 Other expense Other income 13,000 -- 13,000 -- Interest expense, net (20,247) (8,701) (62,423) (24,316) Unusual expenses -- (157,163) -- (157,163) Income before income taxes 282,851 536,798 538,070 775,378 Income tax provision 93,500 200,800 189,000 290,000 Net income $ 189,351 $ 335,998 $ 349,070 $ 485,378 Earnings per common share - basic $0.08 $0.15 $0.15 $0.22 Earnings per common share - diluted $0.08 $0.15 $0.15 $0.21 Shares used in basic earnings per share 2,277,956 2,257,511 2,277,956 2,253,334 Shares used in diluted earnings per share 2,285,028 2,269,478 2,298,169 2,278,350 YOCREAM INTERNATIONAL, INC BALANCE SHEETS July 31, October 31, 2004 2003 (unaudited) ASSETS Current assets Cash and cash equivalents $2,621,687 $2,644,436 Trade accounts receivable 1,224,433 934,259 Inventories 2,076,440 1,846,989 Other current assets 268,130 247,012 Income taxes receivable 303,447 378,269 Deferred tax asset 186,037 74,250 Total current assets 6,680,174 6,125,215 Fixed assets, net 6,368,153 6,241,922 Intangible and other long-term assets, net 432,451 499,970 $13,480,778 $12,867,107 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 384,000 $ 336,333 Accounts payable 1,064,426 1,144,045 Other accrued liabilities 84,632 140,146 Total current liabilities 1,533,058 1,620,254 Long-term debt, less current portion 2,392,293 2,279,667 Deferred tax liability 1,019,700 795,451 Other liabilities 41,018 25,826 Total liabilities 4,986,069 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 3,761,428 3,412,358 Total shareholders' equity 8,494,709 8,145,639 $13,480,778 $12,867,107SOURCE YOCREAM International, Inc.
Web Site: http://www.yocream.com
For more information, contact Terry Lusetti, YoCream Investor Relations, 503-256-3754