US dairy-free products supplier Tofutti Brands has reported a half-year loss after a fall in the sales of frozen lines hit the business in the second quarter.

Chairman and CEO David Mintz said a "weakness" in sales of frozen food led to "disappointing" results for Tofutti in the second quarter.

Tofutti booked a loss of US$84,000 for the 26 weeks to 28 June. That was down on the US$88,000 it filed in the first half of 2013 but gross profits fell over US$700,000 on the back of lower sales, dragged down by a drop in second-quarter revenue.

The company's net sales declined 4.5% in the first half to US$7.4m. Tofutti saw net sales in the second quarter slump 17.9% to US$3.5m.

Tofutti said an increase in its promotional spending also affected its gross profits in the quarter.

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Tofutti Announces Second Quarter And Six Month Results

CRANFORD, N.J., Aug. 12, 2014 /PRNewswire/ -- TOFUTTI BRANDS INC. (NYSE MKT Symbol: TOF) today announced its results for the thirteen and twenty-six week periods ended June 28, 2014.

Tofutti Brands reported net sales for the thirteen weeks ended of $3,498,000, a decrease of $764,000, or 18%, compared to net sales of $4,262,000 for the thirteen weeks ended June 29, 2013. The decrease was mainly the result of a decrease in frozen food product sales, primarily frozen desserts, with a smaller decrease in the company's nondairy cheese product line. In the 2014 period the company increased promotional and allowance activity by over $100,000, which negatively affected reported sales. Net sales for the twenty-six week period ended June 28, 2014 were $7,355,000, a decrease of $346,000, or 4%, compared to net sales of $7,701,000 for the twenty-six week period ended June 29, 2013. The decrease in sales was primarily from the decrease in sales in the second quarter, which offset the increase in sales in the first quarter.

The company's gross profit and gross profit percentage for the thirteen week period ending June 28, 2014 were approximately $961,000 and 27%, respectively, compared to $1,489,000 and 35%, respectively, for the period ending June 29, 2013. The company's gross profit and gross profit percentage for the twenty-six week period ending June 28, 2014 were $2,251,000 and 31%, respectively, compared to $2,493,000 and 32%, respectively, for the period ending June 29, 2013. The decrease in the company's gross profit percentage was due primarily to the decrease in sales and a substantial increase in the company's promotional allowance programs in the thirteen weeks ended June 28, 2014.

For the thirteen week period ended June 28, 2014, the company reported a loss of $190,000, or $0.02 per share, compared to income of $181,000, or $0.04 per share, for the thirteen week period ended June 29, 2013.

The company reported a loss of $78,000 before an income tax expense of $6,000 for the twenty-six week period ended June 28, 2014 compared to a loss of $82,000 before an income tax expense of $6,000 for the twenty-six week period ended June 29, 2013. The company's net loss for the twenty-six weeks ended June 28, 2014 was $84,000, or $0.02 per share, compared to a net loss of $88,000, or $0.02 per share, for the twenty-six weeks ended June 29, 2013.

As of June 28, 2014, the company had approximately $171,000 in cash and cash equivalents and its working capital was approximately $2.6 million, compared with approximately $214,000 in cash and cash equivalents and working capital of $2.7 million at December 28, 2013.

Mr. David Mintz, Chairman and Chief Executive Officer of the company stated, "Our disappointing results for the second quarter of 2014 primarily reflect a weakness in frozen food product sales. We are focused on expanding the market for our frozen food products and non-dairy cheese products. Our introduction of new products and price increases instituted in the first and second quarters of the year should improve our gross margins during the remainder of the year."

About Tofutti Brands Inc.

Founded in 1981, Tofutti Brands Inc. develops and distributes a complete line of dairy-free products. The Company sells more than 80 milk-free foods including frozen desserts, cheese products and prepared frozen dishes throughout the United States and in more than 30 countries. Tofutti Brands Inc. is a proven innovator in the food industry and has developed a full line of delicious and healthy dairy-free foods. Available throughout the United States and in more than 30 countries, Tofutti Brands answers the call of millions of people who are allergic or intolerant to dairy, diabetic, kosher or vegan, as well as those who wish to have a healthier low-fat diet. Tofutti's product line includes dairy-free ice cream pints, Tofutti Cutie(R) sandwiches and novelty bars. Tofutti also has a growing array of prepared foods including Pizza Pizzaz(R), Mintz's Blintzes(R), and a Cheese Ravioli line, all made with Tofutti's milk-free cheeses such as Better Than Cream Cheese(R), Sour Supreme(R) and Veggie Cheese Slices. For more information, visit www.tofutti.com.

Original source: Tofutti Brands