Vita FD Products (AMEX:VSF)
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Vita Foods Reports Q4 Sales of $13.5 Million, 7-Cents Per-Share Earnings
Full-Year Sales of $50.9 Million, 28-Cents Per-Share Earnings
CHICAGO, Feb. 20 /PRNewswire-FirstCall/ -- For the fourth quarter ended
December 31, 2003, Vita Food Products, Inc. today announced consolidated net
income of $276,000, or $0.07 per share, compared to net income of $802,000 or
$0.21 per share in the fourth quarter of 2002. The Vita seafood segment, which
is engaged in the processing and sale of herring products and cured and smoked
salmon products as well as complementary specialty food products, contributed
net income of $366,000 compared to $849,000 in 2002. The reduction in net
income for the Vita seafood segment primarily arose from Vita seafood's largest
customer discontinuing sales of a Vita salmon product and an increased cost of
raw materials. The Company's other business segment, Vita Specialty Foods,
which is engaged in the processing and sale of salad dressings, marinara sauces,
cooking sauces, honey and other specialty food products, partially offset Vita
seafood's net income with a loss of $90,000 in the fourth quarter of 2003.
Created in November 2002, Vita Specialty Foods includes the consolidated results
of two former entities, Virginia Honey Company, Inc. ("Virginia Honey") and The
Halifax Group, Inc. ("Halifax"). In the fourth quarter of 2002, Vita Specialty
Foods partially offset Vita seafood's net income with a loss of $47,000.
Consolidated net sales for the fourth quarter of 2003were $13.5 million,
compared with $14.7 million in the fourth quarter of 2002. Vita seafood's net
sales for the fourth quarter of 2003 were $8.9 million compared to $9.6 million
from the prior year quarter, representing an 8% decrease. The decrease was
largely due to Vita's largest customer discontinuing sales of a Vita salmon
product. Vita Specialty Foods net sales for the fourth quarter were $4.6
million compared to $5.1 million from the prior year quarter, representing a 9%
decrease. The decrease was a result of lower honey sales and increased sales
deductions.
Gross margin for the quarter decreased to 28.3% from 31.6% in the prior year
quarter.
"At Vita Specialty Foods, we successfully added processing capability before the
end of the year to our plant in Martinsburg, West Virginia. This added
capability has allowed us to produce a variety of new products and in larger
volumes. This was an important step in the integration of the Halifax
operations that were closed down in the third quarter. We expect significant
positive results from Vita Specialty Foods in 2004," said Steve Rubin, the
Company's chairman and chief executive officer. "However, we are clearly not
satisfied with the results from the Vita seafood operations. The loss of a
significant product placement late in the third quarter did not allow the
Company sufficient time to replace that business in the fourth quarter."
Full-Year Results
For the twelve months ended December 31, 2003, the Company had consolidated net
income of $1,048,000 or $0.28 per share, compared to $1,446,000, or $0.39 per
share for 2002, a 28% decline, or $0.11 per share. The Vita seafood segment
experienced an 85% decrease in net income with $148,000 compared to $983,000 in
2002. Vita Specialty Foods contributed net income of $900,000 for the year. In
2002, Virginia Honey operated alone for ten months before being merged with
Halifax to form Vita Specialty Foods during the last two months of the year.
The combined results contributed a net income of $463,000.
Consolidated net sales for the year increased 19% to $50.9 million from $42.9
million in 2002. Vita seafood's net sales declined 3% to $27.2 million in 2003
from $28.1 million in 2002. Vita Specialty Foods net sales for the year were
$23.7 million. For 2002, Virginia Honey and The Halifax Group combined, as
explained above, for net sales of $14.8 million.
Vita seafood is a U.S. leader in the herring and retail packaged salmon markets,
and is engaged in several other food segments, including cream cheese, cocktail
sauce, tartar 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.
Vita Specialty Foods, the Company's wholly owned subsidiary, combines the
products of former entities The Virginia Honey Company and The Halifax Group,
Inc. Virginia Honey was a manufacturer and distributor of honey, salad
dressings, including its' award-winning Vidalia(R) Onion Vinegarette salad
dressing, cooking sauces, jams & jellies, and gift baskets. Halifax was a
manufacturer and distributor of licensed brand-named products including the
world-renowned Jim Beam(R) brand of steak sauce, barbeque sauce, marinade and
related products and The Drambuie(R) Gourmet Collection. Halifax also
manufactures and distributes the Artie Bucco(TM) line of products based on the
popular HBO(R) series The Sopranos(R), the award-winning Scorned Woman(R)
gourmet food line, the Oak Hill Farms(R) line of salad dressings and various
gourmet products and branded gift items.
This release contains forward-looking statements about the Company's future
growth, profitability, introduction of new products, 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.
Condensed Consolidated Statement of Operations
(in thousands, except per share data)
(unaudited)
Three Months Twelve Months
Ended Ended
------- --------- ------ --------
Dec 31, Dec 31, Dec 31, Dec 31,
------- --------- ------ ---------
2003 2002 Change 2003 2002 Change
------- --------- ------ ------- -------- -----
Net sales $13,467 $14,718 (8%) $50,930 $42,863 19%
Cost of goods sold 9,658 10,072 (4%) 35,100 29,531 19%
------- --------- ------- -------- -----
Gross margin 3,809 4,646 (18%) 15,830 13,332 19%
Selling and administrative
expenses
Selling, marketing &
distribution 2,213 2,030 9% 8,738 6,484 35%
Administrative 949 1,194 (21%) 4,590 3,933 17%
------- -------- ------- -------
Total 3,162 3,224 (2%) 13,328 10,417 28%
------- -------- ------- -------
Operating profit 647 1,422 (55%) 2,502 2,915 (14%)
Interest expense 186 181 3% 752 602 25%
------- -------- ------ -------
Income before income taxes 461 1,241 (63%) 1,750 2,313 (24%)
Income tax expense 185 439 (58%) 702 867 (19%)
------- -------- ------ -------
Net income $276 $802 (66%) $1,048 $1,446 (28%)
====== ====== ======= =======
Earnings per common share:
Basic $0.07 $0.21 (67%) $0.28 $0.39 (28%)
====== ====== ======= =======
Diluted $0.07 $0.21 (67%) $0.27 $0.38 (29%)
====== ====== ======= =======
Weighted average shares
outstanding:
Basic 3,810 3,771 3,789 3,750
Diluted 3,994 3,864 3,926 3,854
DATASOURCE: Vita Food Products, Inc.
CONTACT: Clifford Bolen, Chief Financial Officer, of Vita Food Products,
+1-312-738-4500