Opta Food Ingredients, Inc. (Nasdaq:OPTS), a leading developer and manufacturer of proprietary food ingredients, yesterday reported record revenue of $7.0 million for the second quarter ended June 30, 2001 compared with $6.9 million for the second quarter of 2000. The company recorded a net loss for the quarter of $312,000, or $.03 per share, compared with net income of $239,000, or $.02 per share, for the same period in 2000.
For the six months ended June 30, 2001, revenue was flat at $13.3 million as compared with the first half of 2000. The net loss for the first six months of 2001 was $811,000, or $.08 per share, compared with a net loss of $324,000, or $.03 per share, for the first six months of 2000. Results for the first six months of 2000 included non-recurring charges of $650,000, or $.06 per share, for personnel costs and consolidation of the company’s starch-based and stabilizer blend operations.
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Arthur J. McEvily, president and chief executive officer, said that revenue for the quarter was ahead of the same period last year due to increased demand for the company’s products by a major quick service restaurant as well as higher sales to two other major customers during the quarter. Profitability continues to be impacted by a reduction in gross margin to 23 percent of revenue for the quarter compared with 30 percent for the same period last year. The decline in gross margin is a result of lower production levels in response to current sales as well as a focus on reducing inventory levels, McEvily said.
“Aside from delivering improved financial results, our primary goal is bringing in new business to diversify our customer base and ensure consistent revenue growth despite the inevitable disappointments in the timing of customer orders,” McEvily said. “The company looks to benefit from new leadership of its sales force with the hiring of industry veteran Doug Shreves as vice president of sales, who joined the company June 1.”
“We have a number of new business opportunities in the works that cross all product lines,” McEvily said. “We also continue to see a strong focus among food processors to reduce costs, and we are putting more sales emphasis on applications that can bring value to customers, as well as improve texture and functionality.” He cited Canadian Harvest(TM) Oat Fiber as an example of a product that delivers on this value proposition by reducing breakage and associated costs for fragile baked and fried foods such as taco shells, pretzels, ice cream cones and crackers.
McEvily added that the company’s relationship with Nutrinova Nutrition Specialties & Food Ingredients, GmbH, its international distributor for fiber-based products, is progressing well. Opta’s first order from a significant new customer, a United Kingdom-based baked goods company, was shipped subsequent to the end of the second quarter.
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By GlobalDataOpta Food Ingredients, Inc. is a leading innovator, manufacturer and marketer of proprietary food ingredients that improve the nutritional content, healthfulness, texture and taste of its customers’ food products. Opta’s food ingredients are used by more than 350 food companies, including 12 of the 20 largest U.S. consumer packaged food companies and three of the world’s largest quick service restaurant chains.
Note: This press release contains forward-looking statements based on management’s current expectations. Factors which could cause actual results to differ from such expectations are discussed in the Company’s periodic reports filed with the Securities and Exchange Commission (including Reports on Form 10-K and Form 10-Q) and include the size and timing of significant orders, as well as deferral of orders, over which the Company has no control; the extended product testing and launch cycles of the Company’s potential customers; the variation of the Company’s sales cycles from customer to customer; increased competition posed by food ingredient manufacturers; changes in pricing policies by the Company or its competitors; possible delays in securing production equipment and retrofitting production facilities and processes; the Company’s success in expanding its sales and marketing programs, its ability to successfully enter new markets and its ability to gain increased market acceptance for its existing product lines; the Company’s ability to timely develop and successfully introduce new products in its pipeline at acceptable costs; the potential for significant quarterly variations in the mix of sales among the Company’s products; the challenges of integrating the operations of acquired businesses; and general economic conditions.
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Opta Food Ingredients, Inc.
Statement of Operations
(in thousands, except per share amounts)
Three months ended Six months ended
June 30, June 30,
2001 2000 2001 2000
Product revenue $6,982 $6,908 $13,304 $13,272
Cost and expenses:
Cost of revenue 5,371 4,824 10,449 9,161
Selling, general and
administrative 1,363 1,251 2,506 2,929
Research and development 631 737 1,353 1,489
Restructuring costs – – – 300
7,365 6,812 14,308 13,879
Income (loss) from
operations (383) 96 (1,004) (607)
Other income (expense):
Interest income 116 174 261 350
Interest expense (42) (59) (93) (121)
Other income (expense), net (3) 28 25 54
Net income (loss) ($312) $239 ($811) ($324)
Basic net income (loss)
per share ($0.03) $0.02 ($0.08) ($0.03)
Diluted net income (loss)
per share ($0.03) $0.02 ($0.08) ($0.03)
Weighted average shares
outstanding – basic 10,797 10,780 10,792 10,841
Weighted average shares
outstanding – diluted 10,797 10,812 10,792 10,841
