Opta Food Ingredients, Inc. (Nasdaq:OPTS), a leading developer and manufacturer of proprietary food ingredients, today reported that revenue for the third quarter ended September 30, 2000 increased 22 percent to $6.5 million compared with $5.4 million for the comparable 1999 quarter. Net income for the quarter amounted to $217,000, or $.02 per share, compared with $316,000, or $.03 per share, for the same period last year.
For the nine months ended September 30, 2000, revenue rose 42 percent to $19.8 million compared with $13.9 million for the same period in 1999. A majority of the revenue increase was attributable to the company’s Stabilized Products and Canadian Harvest acquisitions completed June 30, 1999 and December 31, 1999, respectively. Excluding previously announced non-recurring charges recorded in the first quarters of 2000 and 1999, net income for the first nine months of 2000 amounted to $543,000, or $.05 per share, compared with a net loss of $8,000, or break even on a per share basis, for the first nine months of 1999. Including the non-recurring charges, Opta reported a net loss of $107,000, or $.01 per share, for the nine months ended September 30, 2000 compared with a net loss of $358,000, or $.03 per share, for the same period last year.
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According to Arthur J. McEvily, president and chief executive officer, revenue for the quarter was lower than anticipated due to customer delays in launching new products and sales to some customers at lower levels than planned for by the company. Opta’s overall gross margin as a percentage of sales was 31 percent for the quarter, compared with 37 percent for the same period last year. McEvily said margins were affected by a change in sales mix with the addition of Canadian Harvest in Opta’s overall results as well as the impact of reduced demand in 2000 by a major customer for a higher margin fiber product.
“We are clearly not satisfied with this quarter’s results,” McEvily said. “There is no one major factor we can point to — rather it was a combination of customer delays and orders falling short of internal forecasts. We know our business will always be impacted — positively and negatively — by variables such as changes in the timing of customer product launches. Our strategy in addressing this situation is to continue developing a broad and diversified pipeline of sales opportunities that will enable us to drive sales growth despite delays in timing or fluctuations in demand by any particular customer. We are very encouraged by the number of customer opportunities currently in our pipeline.”
A primary management focus during the quarter was strengthening the sales and marketing group. “We now have a full complement of sales professionals on board and have augmented our marketing capabilities. Recent additions include salespeople with strong industry experience and well-established customer relationships,” McEvily said. Also, on September 11, 2000, Opta announced the signing of an exclusive international distribution agreement with Nutrinova Nutrition Specialties & Food Ingredients GmbH, headquartered in Frankfurt, Germany for oat fiber, bran and EverFresh® products. “We are extremely pleased with Nutrinova’s strong commitment to the growth of our international sales in 2001 including the resources it is devoting to driving the program forward,” he added.
Opta 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 200 food companies, including 10 of the 15 largest U.S. consumer packaged food companies and three of the world’s largest quick service restaurant chains.
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By GlobalDataNote: 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 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.
Opta Food Ingredients, Inc.
Statement of Operations
(in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
Product revenue $ 6,539 $ 5,368 $ 19,811 $ 13,939
Cost and expenses:
Cost of revenue 4,535 3,357 13,696 9,110
Selling, general
and administrative 1,143 1,144 4,072 3,245
Research and development 776 816 2,265 2,435
Restructuring costs -- -- 300 350
6,454 5,317 20,333 15,140
Income (loss)
from operations 85 51 (522) (1,201)
Other income (expense):
Interest income 177 316 527 996
Interest expense (62) (64) (183) (195)
Other income, net 17 13 71 42
Net income (loss) $ 217 $ 316 ($ 107) ($ 358)
Basic net income (loss)
per share $ 0.02 $ 0.03 ($ 0.01) ($ 0.03)
Diluted net income (loss)
per share $ 0.02 $ 0.03 ($ 0.01) ($ 0.03)
Weighted average shares
outstanding - basic 10,752 10,975 10,811 11,042
Weighted average shares
outstanding - diluted 10,784 11,004 10,811 11,042
