Monterey Pasta Company yesterday reported net income for the quarter ended 30 December, 2001 of US$1,272,000, or US$0.09 per share, on net revenues of US$15,547,000 based on 13.7 million primary and 14.4 million diluted shares outstanding. This compares with a net income of US$1,910,000 for the quarter (fourteen weeks) ended 31 December, 2000 which resulted in earnings of US$0.14 per share, based on 13.3 million primary and 14.1 million diluted shares outstanding. The 2001 net income results are stated at full taxation for book reporting purposes, while the 2000 numbers reflect a small tax benefit, due to the deferral of taxes resulting from the company’s net operating loss carryforwards. Applying a level of taxation to the 2000 net income, consistent with the 2001 rate, results in a proforma 2000 net income of US$1,055,000 or US$.08 per share. Therefore, after adjusting for consistent taxation, the fourth quarter 2001 net income of US$.09 per diluted share represents an increase of US$.01 per share compared with the fourth quarter 2000. The fourth quarter 2001 results also included a year-to-date increase in estimated income tax of US$70,000, and a non-cash charge of US$155,000 related to performance-based stock options.
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For the twelve months ended 30 December, 2001, the company reported net revenues of US$59,220,000, yielding net income of US$4,429,000 and earnings of US$0.33 per share on 13.5 million primary shares outstanding, and US$0.31 per share on 14.3 million diluted shares outstanding.
This compares with net revenues for the twelve months (53 weeks) ended 31 December 31, 2000, of US$47,962,000, with net income of US$6,141,000, or earnings of US$0.46 per share on 13.2 million primary and US$.44 per share on 13.8 million diluted shares outstanding. Applying a level of taxation to the 2000 net income, consistent with the 2001 rate, results in a proforma year-to-date 2000 net income of US$3,627,000 or US$.26 per diluted share. Therefore, after adjusting for consistent taxation, the year-to-date 2001 net income of US$.31 per diluted share represents a 19% increase over the proforma 2000 results.
Commenting on the results, Lance Hewitt, chief executive officer and president, said, “We are delighted to report our fifth consecutive profitable year. More important, after many challenges throughout the year, 2001 ended on a very positive note with fourth quarter gross profit at 41%, easily the highest for the year, and the highest in twelve quarters. The 23% annual increase in sales year over year with one less week in 2001 once again demonstrates the excellent demand for the Company’s innovative products. In fact, adjusting fourth quarter and annual sales for like periods reflects a 26% annual sales increase, and a 23% increase for the fourth quarter when compared with year 2000. Much of this growth is testimony to continued success with our new product offerings, which we will count on in 2002 to continue our strong growth trend.”
Steve Brinkman, Chief Financial Officer, commented, “We are pleased with the fourth quarter improvement in gross profit percent. We have addressed the production issues with borsellini and calzones, natural gas prices are currently below year 2000 average levels, we have reduced electrical usage to partially offset the rate increases, and the price of dairy ingredients has moderated to levels consistent with those budgeted for 2001.”
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By GlobalDataBrinkman continued, “Our balance sheet is stronger than ever with over US$7m in our cash account, zero bank debt and excellent financial ratios, including a current ratio of 5.1 to 1. After sales, general, and administrative expenses are adjusted to remove US$323m in one-time non-cash expenses associated with performance-based options, these expenses decreased as a percent of sales for the fifth straight year, to 25.6% in 2001, from 25.8% in 2000. This decline occurred in spite of an increased commitment to sales and marketing expenses to support the Company’s growth.”
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