US vegetable processor Vaughan Foods narrowed its net loss during 2010 as it focused on “strengthening its fundamentals” and “formulating a solid strategy for growth”.
For the year ended 31 December, the manufacturer recorded a US$362,000 net loss compared to $500,000 in 2009.
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The company saw net sales fall from $96.5m to $93.8m, which the company attributed to the “rationalisation of unprofitable business and increased focus on the development of new products. However, gross margin improved from 9.1% in 2009 to 9.3% in 2010.
However, fourth-quarter net losses widened to $374,000 against $34,000 in the same quarter of 2009, while gross margin percentage fell to 6.3% from 9.5%. The company attributed the higher losses to higher workers compensation expense under its self-insured programme and higher diesel prices in its transport division.
Vaughan Foods said it has decided to discontinue its self-insured workers compensation programme in favour of a fully-insured programme to minimise variability in costs.
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Net sales were $22.6m during the fourth quarter against $22.7m in the same quarter of 2009.
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By GlobalDataVaughan Foods CEO and chairman Herb Grimes said yesterday (17 March) that the restrictions of certain informal customer agreements meant it was not “able to defray all fuel cost increases in a timely manner, particularly in periods of extreme price volatility, as experienced In the last few months”.
“We’ve done a very good job of developing our backhaul business to offset transportation costs. Backhaul revenues were $208,000 higher than the year earlier quarter, an increase of 73%,” he said.
He added that a number of the factors that resulted in its “disappointing fourth quarter are fixable and are being addressed” and that for the full year, it mad “solid progress in strengthening the fundamentals of our company and formulating a solid strategy for growth”.
The company lost its Nasdaq listing in early 2010 when it failed to maintain the minimum share price of US$1 for 30 consecutive days.
