US: Vaughan Foods narrows Q1 net loss

By: just-food.com | 8 May 2009

US salads-to-soup maker Vaughan Foods has narrowed its losses for the first quarter, helped by pricing adjustments in the previous quarter.

For the quarter ended 31 March, Vaughan recorded a net loss of US$266,000 or $0.06 per share compared to a net loss of $418,000 or $0.09 per share in the comparable quarter of 2008.

Sales totalled $22.3m, an increase of 7%, or $1.5m over the comparable quarter of 2008.

Revenue growth came from price adjustments implemented in the fourth quarter of 2008 and the first quarter of 2009 to mitigate the effects of increased raw material and transport costs.

Vaughan has also experienced higher revenues per pound of product sold due to a shift in its product mix from existing customers and due to the rationalisation of certain former low-margin customers.

Vaughan chairman and CEO Herb Grimes said: "We are finally beginning to see the effects of pricing adjustments that we made in the fourth quarter of 2008 and are encouraged by the positive trend in profitability witnessed in our first quarter.

"Our margins are much improved from the second half of last year, when unprecedented increases in commodity and transportation costs in 2008 became particularly challenging to manage, and severely impaired our earnings ability. However, we are confident that we have overcome those higher costs with price adjustments while sustaining our reputation for providing a safe, quality and affordable product to our customers."

Vaughan said the results were a good indication that it is "on track for an improving performance and stronger results" in 2009.

Sectors: Baby food, Chilled foods

Companies: Vaughan Foods