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Tofutti Brands Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 16, 2010 05:26PM
Tofutti Brands Inc (TOF) filed Quarterly Report for the period ended 2010-10-02.
Highlight of Business Operations:
Marketing expenses decreased by $36,000 to $100,000 for the thirteen weeks ended October 2, 2010 compared with $136,000 for the thirteen weeks ended September 26, 2009 due principally to a $28,000 decrease in newspaper advertising expense and a $22,000 decrease in promotion expense, which were partially offset by a $10,000 increase in public relations expense.
Research and development costs, which consist principally of salary expenses and laboratory costs, decreased slightly to $148,000 for the thirteen weeks ended October 2, 2010 compared to $152,000 for the thirteen weeks ended September 26, 2009. This decrease was primarily due to a decrease in lab costs and supplies of $15,000, which was partially offset by increases of $6,000 in payroll expense and $5,000 of professional fees and outside services expense.
Our gross profit in the period ended October 2, 2010 decreased by $72,000, or 2%, to $4,253,000 due to the lower sales in the 2010 period. Our gross profit percentage increased to 32% for the thirty-nine week period ended October 2, 2010 compared to 31% for the thirty-nine week period ended September 26, 2009. This improvement in gross profit percentage was due to a reduction in freight out expense and an improvement in the mix of products sold. During the 2010 period sales of less profitable frozen dessert products, which had been part of the product mix sold in the 2009 period, were discontinued. Freight out expense, part of our cost of sales, decreased by $32,000, or 4%, to $722,000 for the thirty-nine weeks ended October 2, 2010 compared with $754,000 for the thirty-nine weeks ended September 26, 2009. The decrease in freight out expense was a result of our arranging shipments in a more cost-effective manner by shipping our frozen dessert novelties from our plant in Indiana to the West Coast rather than shipping them from our third-party Pennsylvania warehouse.
Selling and warehouse expenses decreased by 6% to $1,163,000 for the thirty-nine week period ended October 2, 2010 compared with $1,235,000 for the comparable period in 2009. This decrease is due primarily to decreases in commission expense of $9,000, outside warehouse rental of $31,000 and payroll expense of $55,000. These decreases were partially offset by an increase in auto expense of $26,000.
Marketing expenses increased by $75,000 to $403,000 in the thirty-nine week period ended October 2, 2010 from $328,000 in the thirty-nine weeks ended September 26, 2009 due principally to a $39,000 increase in advertising expense and a $33,000 increase in promotion expense.
General and administrative expenses decreased to $1,517,000 for the thirty-nine week period ended October 2, 2010 compared with $1,579,000 for the thirty-nine week period ended September 26, 2009 due primarily to decreases in payroll expense of $30,000, travel and entertainment expense of $36,000 and outside fees and professional fee expense of $18,000, which were offset by increases in auto expense of $12,000 and data processing expense of $7,000.
Stocks Discussed: TOF,