Eskimo Pie Corporation reported that net income for the quarter ended March 31, 2000 improved by over 200% as compared to the same period in 1999. During the first quarter of 2000, net income was $705,000 or $0.20 per share as compared with $232,000 or $.07 per share in 1999. Exclusive of special charges in 1999 and 2000, net income in the first quarter of 2000 would have been $831,000 or $.24 per share, a 93% improvement over the first quarter results in 1999 of $430,000 or $.12 per share.
The 2000 results include expenses of approximately $200,000 related to the Company’s continuing pursuit of a possible sale of the Company in whole or in parts. 1999 results include restructuring charges of $314,000 consisting of severance costs of $104,000 associated with the discontinuance of certain non-core and unprofitable manufacturing operations in the Company’s Packaging division and expenses of $210,000 incurred in connection with the Company’s consideration of strategic alternatives.
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Sales in the first quarter of 2000 increased by 2% over 1999, to $16.4 million. Sales of Eskimo Pie branded products increased by 5% and Weight Watcher’s and Nabisco sales each increased by over 50%. All divisions showed sales improvement over the previous year, with the exception of the Packaging Division, whose sales decrease was due to the discontinuance of non-profitable business during the first quarter of 1999. Gross margin for the quarter increased by 280 basis points, from 42.4% in 1999 to 45.2% in 2000. This improvement was due primarily to improved product mix, with increased sales in the National Brands division as well as savings from the discontinuance of the non-profitable business in the Packaging division.
David B. Kewer, the Company’s President and Chief Executive Officer stated that “The first quarter results reflect the Company’s continued focus on the growth of the Company’s core assets and tight management of inventories and overhead expenditures. Net income in the first quarter of the year has not been this positive since the first quarter of 1996. We are continuing to experience the benefits of the turnaround initiatives that the Company has implemented over the last couple of years.”
In September 1999, the Company announced that its Board of Directors had authorized management to actively pursue all strategic alternatives to maximize shareholder value, including a sale of the Company as a whole or one or more sales of the Company’s strategic assets. As of the date of this release, this process is continuing.
Eskimo Pie Corporation, headquartered in Richmond, Virginia, created the frozen novelty industry in 1921 with the invention of the Eskimo Pie ice cream bar. Today, the Company markets a broad range of frozen novelties, ice cream and sorbet products under the Eskimo Pie, Real Fruit, Welch’s, Weight Watchers Smart Ones, SnackWell’s and OREO brand names. These nationally branded products are generally manufactured by a select group of licensed dairies who purchase the necessary flavors ingredients and packaging directly from the Company. Eskimo Pie Foodservice is a leading supplier of premium soft serve ice cream, frozen yogurt, custard and smoothies to the foodservice industry. The Company also sells a full line of quality flavors and ingredients for use in private label dairy products in addition to the brands it licenses.
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