Yesterday, Overhill Farms released news regarding its third quarter financials. The company reported net revenues of $50.4 million, an increase of $10.7 million, or 27%, from the same quarter last year. Its net income was $698,125, or $0.04 per basic and diluted share, compared to a net loss of $331,971, or $0.02 per basic and diluted share, in 2011.
The company attributed the increase in net revenues to sales of Boston Market products and increased foodservice sales, partially offset by decreased sales to one of the Company’s retail customers and decreased sales in the airline sector.
James Rudis, Overhill’s Chairman, President and CEO, remarked, “We are pleased by the strong improvement in revenues, which reflect the contribution of the Boston Market line of frozen foods. We have added several new grocery retailers for the Boston Market product line, and we have expanded distribution of Boston Market meals to additional stores of retailers that were already carrying the line, most notably Walmart. We are confident that there is significant potential for further growth and for improvement in the profitability of the Boston Market line.”
Mr. Rudis noted that the sales gains for the Boston Market line were achieved at a time when the frozen meal market has contracted. “We have already taken a number of cost-control measures, and are planning to implement additional steps that we anticipate will have a positive impact on the profitability of the Boston Market line,” he said. “We will roll out a significant cost reduction plan beginning in our fourth fiscal quarter and continuing into our first fiscal quarter of fiscal 2013. We believe this will have a positive impact in fiscal 2013.”
Overhill also reported that its gross profit more than doubled to $4.1 million, and that its gross margin was 8.1%. The improvement in gross profit, both in dollars and as a percentage of revenues, was due to increased production efficiencies and yields as a result of higher volume production runs. Mr. Rudis said the company expects to achieve increased sales in the foodservice category during the rest of 2012 as a result of increased sales to a major existing customer and new customer initiatives.
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