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Tofutti Brands Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 18, 2010 05:19PM
Tofutti Brands Inc (TOF) filed Quarterly Report for the period ended 2010-04-03.
Highlight of Business Operations:
Our gross profit increased to $1,614,000 in the period ended April 3, 2010 from $1,371,000 in the period ended March 28, 2009 due to the higher level of sales. Our gross profit percentage was 35% for the period ending April 3, 2010 compared to 33% for the period ending March 28, 2009. The improvement in our gross profit percentage was due primarily to the discontinuance of slower selling, lower margin products in 2009, therefore these products are no longer negatively impacting our 2010 sales. Freight out expense, a significant part of our cost of sales, decreased by $16,000, or 7%, to $227,000 for the thirteen weeks ended April 3, 2010 compared with $243,000 for the thirteen weeks ended March 28, 2009.
Selling expenses decreased by $61,000 to $354,000 for the current fiscal quarter compared with $415,000 for the comparable period in 2009. This decrease was partially due to a decrease in payroll expense of $33,000 and outside warehouse rental expense of $31,000. We anticipate that the current period's selling expenses will continue on the same level for the balance of 2010.
Marketing expenses increased by $48,000 to $133,000 in the fiscal 2010 period due principally to increases in newspaper advertising expense of $34,000 and promotion expense of $12,000. We anticipate that the current period's marketing expenses will continue on the same level for the balance of 2010.
Research and development costs, which consist principally of salary expenses and laboratory costs, increased by $11,000 to $141,000 for the thirteen weeks ended April 3, 2010 from $130,000 for the comparable period in 2009 due to an increase in lab costs and supplies of $15,000.
General and administrative expenses increased by $23,000 to $511,000 for the thirteen weeks ended April 3, 2010 compared with $488,000 for the comparable period in 2009 due to an increase in public relations expense of $28,000, which was partially offset by a decrease in travel and entertainment expense of $19,000. We anticipate that the current period's general and administrative expenses will continue on the same level, or increase slightly, for the balance of 2010.
As of April 3, 2010, we had approximately $1,771,000 in cash and cash equivalents and our working capital was approximately $4.4 million compared to working capital of approximately $3.8 million at January 2, 2010. Management determined not to incur the costs associated with renewing the Company's line of credit with Wachovia Bank which lapsed on April 30, 2010 after assessing the Company's financial condition, which improved substantially since the beginning of 2009 and the Company's history of never drawing on the line since 2006 when the line of credit was first obtained.
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