Overhill Farms Inc (OFI, Financial) filed Quarterly Report for the period ended 2011-04-03.
Overhill Farms Inc. has a market cap of $98.2 million; its shares were traded at around $6.2101 with a P/E ratio of 16 and P/S ratio of 0.5. Overhill Farms Inc. had an annual average earning growth of 16.5% over the past 10 years.
Operating income for the first six months of fiscal year 2011 was $5.2 million (6.1% of net revenues), compared to $9.5 million (8.9% of net revenues) for the first six months of fiscal year 2010, due primarily to lower net revenues and lower gross profits. SG&A expenses as a percentage of net revenues were 5.0% for the first six months of both fiscal years 2011 and 2010. SG&A expense for the first six months of fiscal year 2011 decreased by $939,000 as compared to the first six months of fiscal year 2010, driven by a $421,000 reduction in legal fees, due partly to a one-time insurance reimbursement of $125,000 and partly to our resolution of certain litigation matters as described in Part II, Item 1 of this report and prior filings with the Commission, and a $596,000 decrease in brokerage expense, due primarily from the change in recording of brokerage expense for Safeway Inc. of $424,000. We expect SG&A to remain relatively steady as we continue to contest all remaining claims and grievances as described in Part II, Item 1 of this report. Net income for the first six months of fiscal year 2011 was $3.1 million (3.6% of net revenues) compared to $5.4 million (5.1% of net revenues) for the first six months of fiscal year 2010, due to lower gross profits partially offset by lower amortization expense and lower interest expense as a result of lower rates and pay-downs under our credit facility.
Retail net revenues decreased $7.2 million (21.3%) to $26.6 million for the second quarter of fiscal year 2011 from $33.8 million for the second quarter of fiscal year 2010. The decrease in net revenues was primarily due to reduced sales to Safeway Inc., H. J. Heinz Company, and Jenny Craig, Inc. of $3.8 million, $3.2 million and $1.2 million, respectively. As previously disclosed, H. J. Heinz Company had informed us that it intended to move all of its remaining volume to self-manufacture beginning after their contract expired at the end of calendar year 2009. The decreases in Safeway Inc. and Jenny Craig, Inc. are due to the slow economic recovery, their inventory management plans and increased price promotions by national brands, which seem to be abating. These decreases were partially offset by increases of $909,000 to other existing customers.
Selling, General and Administrative Expenses. SG&A expenses decreased $652,000 (24.1%) to $2.0 million (4.9% of net revenues) for the second quarter of fiscal year 2011 from $2.7 million (5.3% of net revenues) for the second quarter of fiscal year 2010. The decrease in SG&A expense was due to a $353,000 reduction in legal fees, due partly to a one-time insurance reimbursement of $125,000 and partly to our resolution of certain litigation matters as described in Part II, Item 1 of this report and prior filings with the Commission, and to a $303,000 decrease in brokerage expense, stemming primarily from the change in recording of brokerage expenses for Safeway Inc. ($221,000). During the latter part of the third quarter of fiscal year 2010, Safeway Inc. changed its in-store sales and marketing model thereby eliminating its previous brokerage arrangement. As a result, we are no longer paying brokerage to an independent third party but now pay Safeway Inc. and record these costs as a reduction to net revenues rather than as SG&A expense, as was done in the second quarter of fiscal year 2010.
Selling, General and Administrative Expenses. SG&A expenses decreased $939,000 (17.7%) to $4.3 million (5.0% of net revenues) for the first six months of fiscal year 2011 from $5.3 million (5.0% of net revenues) for the first six months of fiscal year 2010. SG&A expenses were driven by a $421,000 reduction in legal fees, due partly to a one-time insurance reimbursement of $125,000 and partly to our resolution of certain litigation matters as described in Part II, Item 1 of this report and prior filings with the Commission, and a $569,000 decrease in brokerage expense, due primarily from the change in recording of brokerage expense for Safeway Inc. ($424,000). During the latter part of the third quarter of fiscal year 2010, Safeway Inc. changed its distribution model and began handling its distribution itself. As a result, we are no longer paying brokerage to an independent third party but now paying Safeway Inc. as reduction to net revenues rather than as an SG&A expense. We expect SG&A expense to remain at the current level as we continue to contest all claims and grievances as described in Part II, item 1 of this report.
During the first six months of fiscal years 2011 and 2010, our operating activities provided cash of $5.1 million and $10.2 million, respectively. Cash generated from operations before working capital changes for the first six months of fiscal year 2011 was $5.1 million. Cash used in changes in working capital was $53,000 during the first six months of fiscal year 2011 and resulted from cash used to increase inventory by $2.0 million, in anticipation of increased customer orders, as well as a decrease in accrued liabilities of $123,000. This was partially offset by decreases in accounts receivable and prepaid expenses and other assets of $1.6 million and $109,000, respectively, as well as an increase in accounts payable of $354,000. As of April 3, 2011, we had working capital of $23.5 million compared to working capital of $24.4 million at fiscal year end 2010. The decrease in working capital was due primarily to a decrease in accounts receivable. We anticipate increasing our working capital on an on-going basis, starting in the third quarter of fiscal year 2011, as we prepare for the launch of the Boston Market products. We were able to fund our operations in the first six months of fiscal year 2011 internally while decreasing our external debt.
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Overhill Farms Inc. has a market cap of $98.2 million; its shares were traded at around $6.2101 with a P/E ratio of 16 and P/S ratio of 0.5. Overhill Farms Inc. had an annual average earning growth of 16.5% over the past 10 years.
Highlight of Business Operations:
Operating income for the second quarter of fiscal year 2011 was $2.5 million (6.2% of net revenues), compared to $4.1 million (8.1% of net revenues) for the second quarter of fiscal year 2010, due primarily to lower net revenues and gross profit as noted above. SG&A expenses as a percentage of net revenues decreased to 4.9% for the second quarter of fiscal year 2011, compared to 5.3% for the second quarter of fiscal year 2010 due primarily to reduced legal and brokerage expenses. SG&A expense decreased $652,000 to $2.0 million for the second quarter of fiscal year 2011, compared to $2.7 million for the second quarter of fiscal year 2010, due predominately to a reclassification of Safeway Inc. brokerage expense ($221,000), which is now recorded as a reduction of net revenues, as well as a $353,000 reduction in legal fees due partly to a one-time insurance reimbursement of $125,000 and partly to our resolution of certain litigation matters as described in Part II, Item 1 of this report and prior filings with the Commission. Net income for the second quarter of fiscal year 2011 was $1.5 million (3.7% of net revenues), compared to $2.4 million (4.8% of net revenues) for the second quarter of fiscal year 2010, due to lower gross profit partially offset by decreases in amortization and interest expense as a result of lower interest rates and pay-downs under our credit facility.Operating income for the first six months of fiscal year 2011 was $5.2 million (6.1% of net revenues), compared to $9.5 million (8.9% of net revenues) for the first six months of fiscal year 2010, due primarily to lower net revenues and lower gross profits. SG&A expenses as a percentage of net revenues were 5.0% for the first six months of both fiscal years 2011 and 2010. SG&A expense for the first six months of fiscal year 2011 decreased by $939,000 as compared to the first six months of fiscal year 2010, driven by a $421,000 reduction in legal fees, due partly to a one-time insurance reimbursement of $125,000 and partly to our resolution of certain litigation matters as described in Part II, Item 1 of this report and prior filings with the Commission, and a $596,000 decrease in brokerage expense, due primarily from the change in recording of brokerage expense for Safeway Inc. of $424,000. We expect SG&A to remain relatively steady as we continue to contest all remaining claims and grievances as described in Part II, Item 1 of this report. Net income for the first six months of fiscal year 2011 was $3.1 million (3.6% of net revenues) compared to $5.4 million (5.1% of net revenues) for the first six months of fiscal year 2010, due to lower gross profits partially offset by lower amortization expense and lower interest expense as a result of lower rates and pay-downs under our credit facility.
Retail net revenues decreased $7.2 million (21.3%) to $26.6 million for the second quarter of fiscal year 2011 from $33.8 million for the second quarter of fiscal year 2010. The decrease in net revenues was primarily due to reduced sales to Safeway Inc., H. J. Heinz Company, and Jenny Craig, Inc. of $3.8 million, $3.2 million and $1.2 million, respectively. As previously disclosed, H. J. Heinz Company had informed us that it intended to move all of its remaining volume to self-manufacture beginning after their contract expired at the end of calendar year 2009. The decreases in Safeway Inc. and Jenny Craig, Inc. are due to the slow economic recovery, their inventory management plans and increased price promotions by national brands, which seem to be abating. These decreases were partially offset by increases of $909,000 to other existing customers.
Selling, General and Administrative Expenses. SG&A expenses decreased $652,000 (24.1%) to $2.0 million (4.9% of net revenues) for the second quarter of fiscal year 2011 from $2.7 million (5.3% of net revenues) for the second quarter of fiscal year 2010. The decrease in SG&A expense was due to a $353,000 reduction in legal fees, due partly to a one-time insurance reimbursement of $125,000 and partly to our resolution of certain litigation matters as described in Part II, Item 1 of this report and prior filings with the Commission, and to a $303,000 decrease in brokerage expense, stemming primarily from the change in recording of brokerage expenses for Safeway Inc. ($221,000). During the latter part of the third quarter of fiscal year 2010, Safeway Inc. changed its in-store sales and marketing model thereby eliminating its previous brokerage arrangement. As a result, we are no longer paying brokerage to an independent third party but now pay Safeway Inc. and record these costs as a reduction to net revenues rather than as SG&A expense, as was done in the second quarter of fiscal year 2010.
Selling, General and Administrative Expenses. SG&A expenses decreased $939,000 (17.7%) to $4.3 million (5.0% of net revenues) for the first six months of fiscal year 2011 from $5.3 million (5.0% of net revenues) for the first six months of fiscal year 2010. SG&A expenses were driven by a $421,000 reduction in legal fees, due partly to a one-time insurance reimbursement of $125,000 and partly to our resolution of certain litigation matters as described in Part II, Item 1 of this report and prior filings with the Commission, and a $569,000 decrease in brokerage expense, due primarily from the change in recording of brokerage expense for Safeway Inc. ($424,000). During the latter part of the third quarter of fiscal year 2010, Safeway Inc. changed its distribution model and began handling its distribution itself. As a result, we are no longer paying brokerage to an independent third party but now paying Safeway Inc. as reduction to net revenues rather than as an SG&A expense. We expect SG&A expense to remain at the current level as we continue to contest all claims and grievances as described in Part II, item 1 of this report.
During the first six months of fiscal years 2011 and 2010, our operating activities provided cash of $5.1 million and $10.2 million, respectively. Cash generated from operations before working capital changes for the first six months of fiscal year 2011 was $5.1 million. Cash used in changes in working capital was $53,000 during the first six months of fiscal year 2011 and resulted from cash used to increase inventory by $2.0 million, in anticipation of increased customer orders, as well as a decrease in accrued liabilities of $123,000. This was partially offset by decreases in accounts receivable and prepaid expenses and other assets of $1.6 million and $109,000, respectively, as well as an increase in accounts payable of $354,000. As of April 3, 2011, we had working capital of $23.5 million compared to working capital of $24.4 million at fiscal year end 2010. The decrease in working capital was due primarily to a decrease in accounts receivable. We anticipate increasing our working capital on an on-going basis, starting in the third quarter of fiscal year 2011, as we prepare for the launch of the Boston Market products. We were able to fund our operations in the first six months of fiscal year 2011 internally while decreasing our external debt.
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