TOFUTTI ANNOUNCES RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022

Rhea-AI Summary

Tofutti Brands Inc. (OTCQX: TOFB) reported net sales of $12,827,000 for the fiscal year ending December 31, 2022, reflecting a 2% increase from the previous year. Sales in frozen desserts and foods rose slightly to $1,876,000, while vegan cheese product sales increased to $10,951,000. However, gross profit dropped to $2,342,000, down $1,000,000 from the prior year, resulting in a gross profit margin of 18% compared to 27% previously. The company faced significant cost increases primarily due to supply chain issues and high petroleum prices, leading to a net loss of $525,000, or $0.10 per share. Tofutti anticipates improved results in 2023 as price increases take effect.

Positive

• Net sales increased by $237,000 or 2% to $12,827,000.
• Slight sales growth in frozen dessert and vegan cheese product lines.

Negative

• Gross profit decreased by $1,000,000 to $2,342,000.
• Gross profit margin fell to 18% from 27%.
• Net loss of $525,000 compared to a net income of $143,000 the previous year.

Cranford, New Jersey, March 31, 2023 (GLOBE NEWSWIRE) -- TOFUTTI BRANDS INC. (OTCQX Symbol: TOFB) issued its results for the fiscal year ended December 31, 2022 today.

Tofutti Brands reported net sales of $12,827,000, a slight increase of $237,000 or 2%, from net sales of $12,590,000 for the fiscal year ended January 1, 2022 due to the price increases implemented by the Company in the fourth quarter of 2022. Sales of our frozen dessert and frozen food product lines increased slightly to $1,876,000 in the fiscal year ended December 31, 2022 from $1,829,000 in fiscal 2021. Sales of vegan cheese products also increased slightly to $10,951,000 in the fiscal year ended December 31, 2022 from $10,761,000 in the fiscal year ended January 1, 2022.

Our gross profit for the year ended December 31, 2022 decreased by $1,000,000 to $2,342,000 from $3,342,000 for the fiscal year ended January 1, 2022 and our gross profit percentage for the fiscal year ended December 31, 2022 was 18% compared to 27% for the fiscal year ended January 1, 2022. The decrease in both our gross profit and gross profit percentage was primarily caused by the substantial increases in the costs for certain ingredients, especially palm oil, gums and flavorings and the substantial increase in freight out expense. These substantial cost increases were due primarily to the lingering supply chain issues caused by the Covid-19 pandemic and the record high cost of petroleum. The high cost of petroleum directly impacted the costs of certain ingredients and packaging such as the plastic packaging we use for our spreadable cheese products.

We had a net loss of $525,000, or a $0.10 loss per share (basic and diluted), for the year ended December 31, 2022 compared to net income of $143,000, or $0.03 (basic and diluted) per share, for the fiscal year ended January 1, 2022.

At December 31, 2022, we had approximately $1,072,000 in cash, and our working capital was $3,625,000 as compared to $1,698,000 and $4,326,000 at January 1, 2022. The decrease in cash is primarily due to the use of funds to purchase inventories during the period, due to management’s decision to purchase ingredients in advance of production needs to ensure an adequate supply and to prevent future production disruptions.

Mr. Steven Kass, Chief Executive and Financial Officer of the Company stated, “We look forward to improved results in 2023 as the price increases we have implemented take full effect and expect that our cash position will also improve.”

About Tofutti Brands Inc.

Founded in 1981, Tofutti Brands Inc. develops and distributes a complete line of plant-based products. The Company sells more than twenty-five (25) dairy-free foods including cheese products and frozen desserts. Tofutti Brands Inc. is a proven innovator in the food industry and has developed a full line of delicious and healthy dairy-free foods. Available throughout the United States and in more than fifteen (15) countries, Tofutti Brands answers the call of millions of people who are allergic or intolerant to dairy or wish to maintain a kosher or vegan diet. Tofutti’s product line includes plant-based ice cream pints, cones, Tofutti Cutie^® sandwiches and novelty

Forward-Looking Statements

Some of the statements in this press release concerning the Company’s future prospects are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results may vary significantly based upon a number of factors including, but not limited to the impact of COVID-19 on the economy and our operations, business conditions both domestic and international, competition, changes in product mix or distribution channels, resource constraints encountered in promoting and developing new products and other risk factors detailed in the Company’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K.

Company Contact:	Steve Kass
	Chief Executive/Financial Officer
	(908) 272-2400
	(908) 272-9492 (Fax)

TOFUTTI BRANDS INC.
STATEMENTS OF OPERATIONS
(In thousands, except for per share data)

		Fiscal year ended December 31, 2022				Fiscal year ended January 1, 2022
Net sales		$	12,827			$	12,590
Cost of sales			10,485				9,248
Gross profit			2,342				3,342
Operating expenses:
Selling and warehousing			1,147				1,206
Marketing			564				281
Product development costs			143				124
General and administrative			1,404				1,489
Total operating expenses			3,258				3,100
Income (loss) from operations			(916	)			242
SBA loan forgiveness			165				-
Income (loss) before interest expense and income taxes			(751	)			242
Interest expense			2				25
Income (loss) before provision for income taxes			(753	)			217
(Benefit from) provision for income taxes			(228	)			74
Net income (loss)		$	(525	)		$	143
Weighted average common shares outstanding:
Basic			5,154				5,154
Diluted			5,154				5,154
Net income (loss) per common share:
Basic		$	(0.10	)		$	0.03
Diluted		$	(0.10	)		$	0.03

TOFUTTI BRANDS INC.
BALANCE SHEETS
(In thousands, except for share and per share data)

		December 31, 2022				January 1, 2022
Assets
Current assets:
Cash		$	1,072			$	1,698
Accounts receivable, net of allowance for doubtful accounts and sales promotions of $495 and $435, respectively			1,305				1,336
Inventories			2,463				1,874
Prepaid expenses and other current assets			80				98
Total current assets			4,920				5,006
Operating lease right-of-use assets			158				203
Finance lease right-of-use asset			53				-
Deferred tax assets			367				112
Other assets			19				21
Total assets		$	5,517			$	5,342
Liabilities and Stockholders’ Equity
Current liabilities:
SBA loan payable		$	-			$	165
Income taxes payable			41				46
Accounts payable			684				122
Accrued expenses			555				347
Financing lease liability, current portion			15				-
Total current liabilities			1,295				680
Operating lease liabilities, net of current portion			85				95
Finance lease liability, net of current portion			39				-
Total liabilities			1,419				775
Stockholders’ equity:
Preferred stock – par value $.01 per share; authorized 100,000 shares, none issued and outstanding			-				-
Common stock – par value $.01 per share; authorized 15,000,000 shares, 5,153,706 shares issued and outstanding			52				52
Additional paid-in capital			263				207
Retained earnings			3,783				4,308
Total stockholders’ equity			4,098				4,567
Total liabilities and stockholders’ equity		$	5,517			$	5,342

 

FAQ

What were the earnings results for Tofutti Brands for the fiscal year 2022?

Tofutti Brands reported net sales of $12,827,000 for the fiscal year 2022, with a net loss of $525,000.

How did Tofutti's gross profit change in 2022?

Gross profit decreased to $2,342,000 in 2022, down $1,000,000 from the previous year.

What is Tofutti Brands' stock symbol?

Tofutti Brands trades under the stock symbol TOFB.

What factors impacted Tofutti Brands' financial performance in 2022?

The company faced significant cost increases due to supply chain issues and high petroleum prices.

What is Tofutti's outlook for 2023?

Tofutti anticipates improved results in 2023 as price increases take full effect.