For the first quarter ended March 31, 2001, Vita Food Products, Inc. (AMEX: VSF) yesterday announced net income of $59,000, or $0.02 per share, compared with a net income of $44,000 or $0.01 per share in the first quarter of 2000, an increase of $15,000 or $0.01 per share. The increase in quarterly earnings was due primarily to lower operating expenses.
Net sales for the first quarter were $6.2 million, compared with $6.2 million in the first quarter of 2000. Sales of salmon products increased 7% and sales of herring products decreased 6% in the quarter.
Gross margin for the quarter decreased to 27.2% from 27.3% in the prior year. Furthermore, the operating expense margin decreased to 24.5% from 25.3% in 2000. The lower operating expense margin was due primarily to lower marketing expenses partially offset by higher distribution expenses. The resulting operating profit improvement was $48,000 or 39%.
“We have concentrated our efforts on cost controls and efficiency improvements and, although our sales remained relatively flat, our operating profit improved 39% from the prior year quarter,” said Stephen Rubin, President of Vita Food Products, Inc. “We will continue to strive for further improvement and also look to make some exciting introductions to our product line this year. In addition, our agreement in principle to acquire Virginia Honey is generating a great deal of momentum. Virginia Honey’s quality products coupled with our extensive broker network should provide the opportunities to expand Virginia Honey’s sales foreseen by both companies when we reached our agreement.”
On May 7, 2001 the company announced that it had entered into an agreement in principle with Virginia Honey Company, Inc. and Terry Hess, the sole shareholder of Virginia Honey, to purchase all of the equity of Virginia Honey. Virginia Honey is a manufacturer and distributor of exceptional honey, salad dressings, including its award winning Vidalia onion vinaigrette salad dressing, sauces, jams & jellies, and gift baskets. The expansion of Virginia Honey in 1998 provided a 24,000 square foot packaging operation as well as new state-of-the art filling equipment and a 40,000 square foot manufacturing plant. Pursuant to the agreement with Vita, Mr. Hess will enter into an employment agreement with Virginia Honey.
This release contains forward-looking statements about the Company’s future growth, profitability and competitive position. Any such statements are subject to risks and uncertainties, including changes in economic and market conditions, industry competition, raw material prices, the success of new product introductions, management of growth and other risks noted in the Company’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s analysis only as of the date hereof.
Vita Food Products, Inc. is the U.S. leader in the herring and retail packaged salmon markets, and is engaged in several other food segments, including cream cheese, cocktail sauce and horseradish. More than 95% of Vita’s sales are in kosher foods. Vita’s common stock is currently traded on the American Stock Exchange and Chicago Stock Exchange under the ticker symbol VSF.
Statements of Operations Vita Food Products, Inc.
For the three months ended
Net Sales $6,219,753 $6,218,402
Cost of Goods Sold 4,527,035 4,519,859
Gross Margin 1,692,718 1,698,543
Selling and Administrative Expenses
Selling, Marketing & Distribution 1,003,619 1,056,070
Administrative 517,611 519,479
Total 1,521,230 1,575,549
Operating Profit 171,488 122,994
Other (Income) Expense
Interest 112,872 101,107
Income Before Income Tax Expense (benefit) 58,616 21,887
Income Tax Expense (Benefit) 0 (22,000)
Net Income $58,616 $43,887
Basic Earnings Per Share $0.02 $0.01
Weighted Average Common Shares Outstanding 3,724,546 3,712,471
Diluted Earnings Per Share $0.02 $0.01
Weighted Average Common Shares Outstanding 3,732,727 3,733,320