Smart Balance, the US maker of “heart healthy” foods, posted an increase in first-quarter net profit today (8 May) boosted by operating income gains and lower interest.

For the period ended 31 March, net income reached US$1.1m compared to a loss of $1.2m for the first quarter of 2008 reflecting lower interest and other expenses and the gain on derivatives liability related to an interest rate swap, partially offset by higher provisions for income taxes.

Operating income for the period increased $1.2m, or 60%, to $3.2m for the quarter. A $5.5m increase in gross margin was partially offset by a $4.2m increase in operating expenses.

Net sales for the first quarter jumped 23.3% to $62.6m from $50.8m for the comparable period of 2008. The increase was primarily due to a combination of higher prices and increased case shipments, partially offset by higher coupon redemption expenses.

“I am pleased with both our revenue growth and our earnings per share,” said Stephen Hughes, Smart Balance chairman and CEO. “Despite the challenging economic environment, consumers are embracing our premium priced value proposition as evidenced by our continued share growth. Reaching the number two market share position in our core category is an important milestone on the road to building Smart Balance into a billion dollar brand.”

The company said it expects “continued volume growth” led by “increased distribution” and new products in spreads, peanut butter, cooking oil and popcorn, as well as expansion of its milk products for the remainder of 2009.