TOFUTTI ANNOUNCES RESULTS FOR THIRTEEN AND THIRTY-NINE WEEKS ENDED OCTOBER 2, 2021

Rhea-AI Summary

TOFUTTI BRANDS INC. (OTCQB: TOFB) reported its financial results for the thirteen and thirty-nine weeks ended October 2, 2021. Net sales for the thirteen-week period rose to $3,356,000, driven by increases in vegan cheese and frozen desserts. However, gross profit declined to $818,000, impacted by rising ingredient costs and freight expenses attributed to COVID-19. For the thirty-nine weeks, net sales decreased to $9,533,000, with a net income of $228,000. The company ended the period with $3,009,000 in cash and strong working capital of $4,886,000.

Positive

• Thirteen-week net sales increased to $3,356,000 from $3,152,000 in the previous year.
• Sales of vegan cheese increased by $161,000 to $2,816,000.
• Cash position improved to $3,009,000 compared to $1,459,000 at the beginning of the year.
• Strong working capital of $4,886,000 supports future operational stability.

Negative

• Gross profit decreased to $818,000 from $1,033,000, reflecting supply chain issues.
• Gross profit percentage fell to 24% from 33% due to increased costs.
• Net income declined to $228,000 compared to $410,000 for the same period last year.
• Sales decreased by $88,000 over the thirty-nine-week period, primarily from frozen dessert sales declines.

Cranford, New Jersey, Nov. 16, 2021 (GLOBE NEWSWIRE) -- TOFUTTI BRANDS INC. (OTCQB Symbol: TOFB) issued its results for the thirteen and thirty-nine weeks ended October 2, 2021 today.

Tofutti Brands reported net sales for the thirteen weeks ended October 2, 2021 of $3,356,000 compared to net sales of $3,152,000 for the thirteen weeks ended September 26, 2020. The increase is mainly attributable to increases in sales in our vegan cheese categories and frozen desserts. Sales of vegan cheese products increased by $161,000 to $2,816,000 in the 2021 period from $2,655,000 in the 2020 period. Frozen dessert sales increased by $43,000 to $540,000 in the thirteen weeks ended October 2, 2021 from $497,000 for the thirteen weeks ended September 26, 2020.

The Company’s gross profit decreased to $818,000 for the thirteen weeks ended October 2, 2021 from $1,033,000 for the thirteen weeks ended September 26, 2020, and its gross profit percentage decreased to 24% for the thirteen weeks ending October 2, 2021 compared to 33% for the thirteen weeks ending September 26, 2020. Sudden cost increases due to COVID-related supply chain issues for ingredients used in the production of our products and continued higher freight expenses have negatively impacted our gross profit. We anticipate these ingredient cost increases and higher freight expenses will continue for the balance of the year and at least into the first half of 2022.

The Company had net income of $120,000, or $0.02 per share (basic and diluted), for the thirteen weeks ended October 2, 2021, compared to net income of $220,000, or $0.04 per share (basic and diluted), for the thirteen weeks ended September 26, 2020.

Net sales for the thirty-nine week period ended October 2, 2021 were $9,533,000 compared to net sales of $9,621,000 for the thirty-nine week period ended September 26, 2020, a decrease of $88,000. Sales of vegan cheese products increased slightly to $8,033,000 in the 2021 period from $8,016,000 in the 2020 period. Sales of our frozen dessert and frozen food products decreased to $1,500,000 for the thirty-nine weeks ended October 2, 2021 from $1,605,000 for the thirty-nine weeks ended September 26, 2020. The decrease in our sales for the 2021 thirty-nine-week period was mostly due to the decrease in frozen dessert sales resulting from the discontinuance of two specialty items in the 2021 period due to their declining sales.

The Company’s gross profit for the thirty-nine week period ending October 2, 2021 was $2,577,000 compared to $3,044,000 for the thirty-nine week period ending September 26, 2020. The Company’s gross profit percentage decreased to 27% for the thirty-nine weeks ending October 2, 2021 compared to 32% for the thirty-nine weeks ending September 26, 2020.

The Company had net income of $228,000, or $0.04 per share (basic and diluted), for the thirty-nine weeks ended October 2, 2021 compared to net income of $410,000, or $0.08 per share (basic and diluted), for the thirty-nine weeks ended September 26, 2020.

As of October 2, 2021, the Company had approximately $3,009,000 in cash and our working capital was approximately $4,886,000, compared with approximately $1,459,000 in cash and working capital of $4,639,000 at January 2, 2021. The increase in cash during the first thirty-nine weeks of 2021 was due to the $1,500,000 provided by operating activities and 50,000 provided by investing activities, which benefitted from improved accounts receivable collection, and increased further due to reduced inventory and income taxes payable and an increase in accounts payable and accrued expenses.

Mr. Steven Kass, Chief Executive and Financial Officer of the Company stated, “We are pleased with our continued success in generating cash from operations which has resulted in our strong cash and working capital position at October 2, 2021. We believe that the production difficulties that impacted our revenues earlier in 2021 have been resolved and that we are poised to achieve improved revenues during the remainder of this year,” concluded Mr. Kass.        

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 35 milk-free foods including cheese products, frozen desserts and prepared frozen dishes. 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 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 bars. Tofutti also sells a prepared food entrée, Mintz's Blintzes^®, made with Tofutti's milk-free cheeses such as Better Than Cream Cheese^® and Sour Supreme^®. For more information, visit www.tofutti.com.

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.

Unaudited Condensed Statements of Income
(in thousands, except per share figures)

		Thirteen				Thirteen				Thirty-Nine				Thirty-Nine
		weeks ended				weeks ended				weeks ended				weeks ended
		October 2, 2021				September 26, 2020				October 2, 2021				September 26, 2020
Net sales		$	3,356			$	3,152			$	9,533			$	9,621
Cost of sales			2,538				2,119				6,956				6,577
Gross profit			818				1,033				2,577				3,044
Operating expenses:
Selling and warehouse			282				283				909				881
Marketing			38				38				173				210
Research and development			24				50				99				194
General and administrative			331				411				1,097				1,229
			675				782				2,278				2,514
Income before interest expense and income taxes			143				251				299				530
Interest expense			7				6				19				19
Income before income tax			136				245				280				511
Income tax expense			16				25				52				101
Net income		$	120			$	220			$	228			$	410
Weighted average common shares outstanding
Basic			5,154				5,154				5,154				5,154
Diluted			5,436				5,436				5,154				5,436
Earnings per common share:
Basic		$	0.02			$	0.04			$	0.04			$	0.08
Diluted		$	0.02			$	0.04			$	0.04			$	0.08

TOFUTTI BRANDS INC.
Unaudited Condensed Balance Sheets
(in thousands, except share and per share figures)

		October 2,				January 2,
		2021				2021
Assets
Current assets:
Cash		$	3,009			$	1,459
Accounts receivable, net of allowance for doubtful accounts and sales promotions of $322 and $457, respectively			1,413				2,078
Inventories			1,686				1,997
Prepaid expenses and other current assets			66				88
Total current assets			6,174				5,622
Equipment, net			41				135
Operating lease right-of-use assets			142				224
Deferred tax assets			96				83
Other assets			23				19
Total assets		$	6,476			$	6,083
Liabilities and Stockholders’ Equity
Current liabilities:
SBA loan payable		$	165			$	112
Income taxes payable			2				117
Accounts payable			770				219
Accrued expenses			351				535
Total current liabilities			1,288				983
Convertible note payable-long term-related party			500				500
SBA loan payable, net of current portion			-				53
Operating lease liabilities			36				123
Total liabilities			1,824				1,659
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, issued and outstanding 5,153,706 shares			52				52
Additional paid in capital			207				207
Retained earnings			4,393				4,165
Total stockholders’ equity			4,652				4,424
Total liabilities and stockholders’ equity		$	6,476			$	6,083

FAQ

What were TOFUTTI's net sales for the thirteen weeks ended October 2, 2021?

TOFUTTI's net sales for the thirteen weeks ended October 2, 2021 were $3,356,000.

How much did TOFUTTI's gross profit decrease for the thirteen weeks ended October 2, 2021?

TOFUTTI's gross profit decreased to $818,000 for the thirteen weeks ended October 2, 2021, down from $1,033,000.

What is TOFUTTI's cash position as of October 2, 2021?

As of October 2, 2021, TOFUTTI had approximately $3,009,000 in cash.

Did TOFUTTI experience a decline in net income for the thirty-nine weeks ended October 2, 2021?

Yes, TOFUTTI's net income declined to $228,000 for the thirty-nine weeks ended October 2, 2021, compared to $410,000 for the same period last year.

What factors negatively impacted TOFUTTI's gross profit in the recent report?

TOFUTTI's gross profit was negatively impacted by rising ingredient costs and freight expenses due to COVID-related supply chain issues.