US food company Monterey Pasta has reported a net loss for the second quarter, as pasta sales were dented by the popularity of low carbohydrate diets.
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The reported a net loss of US$0.54m, or 4 cents per share, for the quarter to 27 June compared to net income of $0.49m, or 3 cents per share, in the year-ago period. Net revenues slid to $15.0m from $15.3m a year earlier.
CEO Jim Williams said second-quarter earnings had been affected increased raw material costs (especially dairy, eggs and protein items), higher workers’ compensation costs, lower utilisation of plant and equipment in the company’s Salinas facility due to lower pasta sales, and legal fees.
“While the second quarter results fell short of what we hoped for, we are encouraged by the steady progress we are making on key initiatives, especially new products,” Williams said.
“Products not being sold a year ago accounted for over $5m in sales for the quarter. These included CIBO Naturals products, our CarbSmart brand of low-carb products, low-carb Grilled Wrap Sandwiches, and our “quick-prep” refrigerated entrees. Additionally, we have been successful in reducing operating costs and saw significant savings in several areas compared to our first quarter costs,” he added.
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By GlobalData“With the positive momentum from new product sales, we have high expectations that we could return to profitability in the third quarter. Of course, continued high raw materials or other exceptional costs would affect our profitability,” Williams warned.
