For the second quarter ended June 30, 2000, Vita Food Products, Inc. (AMEX: VSF) today announced a net loss of $110,000, or $0.03 per share, compared with a net loss of $143,000 or $0.04 per share in the second quarter of 1999, a decrease in net loss of $33,000 or $0.01 per share. This is the Company’s eighth consecutive quarter of earnings improvement. The 13% increase was primarily due to increased penetration in various geographic markets and higher sales to warehouse club customers. The second quarter loss is typical of Vita’s seasonal pattern, which earns most of its income during the fourth quarter, due to traditionally strong sales in advance of Christmas and New Year’s Eve.
Net sales for the second quarter were $4.76 million, compared with $4.20 million in the second quarter of 1999. Sales of herring products increased 29% and sales of Salmon products increased 3% in the quarter. Salmon product sales were bolstered by the continued acceptance of the Company’s newer marinated salmon product.
Gross margin for the quarter decreased to 26.5% from 29.1% in the prior year. Higher costs of herring, salmon and other materials and labor, without a corresponding increase in prices to customers, have resulted in lower margins, despite lower overhead costs per unit from the higher volumes produced. Offsetting the lower gross margins is a lower operating expense margin, which decreased to 28.0% from 32.7% in 1999. The lower operating expense margin was due to relatively lower sales costs and fixed administrative expenses that did not increase with the 13% increase in sales. The resulting operating profit improvement was $89,000 or $0.02 per share.
“I am pleased to report our second straight quarter of double-digit sales increases,” said Stephen Rubin, President of Vita Food Products, Inc. “Recent acceptance of our newer marinated salmon products is encouraging and hopefully will add to the substantial growth we have experienced this year.”
For the six months ended June 30, 2000, Vita had a net loss of $67,000, or $0.02 per share, compared with a net loss of $185,000 or $0.05 per share in the second quarter of 1999. The smaller net loss was primarily due to 15% higher sales and continued improvement in controlling operating expenses, offset to some extent by lower gross margins. The lower gross margins have resulted from the Company not passing along production cost increases to its customers.
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 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 three months ended for six months ended
June 30, June 30,
2000 1999 2000 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net Sales $4,757,217 $4,200,431 $10,975,620 $9,580,681
Cost of Goods Sold 3,496,719 2,978,803 8,016,578 6,902,666
Gross Margin 1,260,498 1,221,628 2,959,042 2,678,015
& Distribution 900,711 900,474 1,956,781 1,831,974
Administrative 433,147 473,416 952,626 983,121
Total 1,333,858 1,373,890 2,909,407 2,815,095
Operating Profit (Loss) (73,360) (152,262) 49,635 (137,080)
Interest 89,026 74,082 190,133 156,967
Loss before Income
Tax benefit (162,386) (226,344) (140,498) (294,047)
Income Tax Benefit (51,984) (83,747) (73,984) (108,797)
Net Loss ($110,402) ($142,597) ($66,514) ($185,250)
Basic and Diluted
Loss Per Share ($0.03) ($0.04) ($0.02) ($0.05)
Outstanding 3,712,471 3,704,724 3,712,471 3,704,724