MOORE, Okla., Aug. 6, 2009 (GLOBE NEWSWIRE) -- Vaughan Foods, Inc. (Nasdaq:FOOD ), a leader in fresh-cut vegetables and fruit products, and a broad line of refrigerated prepared salads, sauces, soups, and side-dishes, today announced that the company swung to a profit for the second quarter ended June 30, 2009, reflecting the effects of lower transportation and commodity costs, increased revenue and cost control initiatives.
Sales totaled $27.5 million in the second quarter, an increase of 12.5 percent, or $3.0 million over the comparable quarter of 2008. Sales for the six months ended June 30, 2009 totaled $49.8 million, an increase of 10.0 percent, or $4.5 million over the comparable six months ended June 30, 2008. Revenue growth was primarily attributable to price adjustments implemented in the fourth quarter of 2008 and the first quarter of 2009 and a more favorable sales product mix. The sales increases principally consisted of growth to existing customers.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") totaled $746,000 in the second quarter, and $969,000 in the year-to-date periods of 2009, respectively, compared to EBITDA losses of $215,000 and $147,000 in the second quarter and year-to-date periods of 2008, respectively. This represents a positive EBITDA swing of $961,000 and $1.1 million, for the quarter and year-to-date periods, respectively.
Net income totaled $18,000, or less than $0.01 per share in the second quarter of 2009 compared to a net loss of $546,000 or $0.12 per share in the comparable quarter of 2008. For the six months ended June 30, 2009, Vaughan recorded a net loss of $248,000 or $0.05 per share compared to a net loss of $964,000 or $0.21 per share in the comparable six month period of 2008.
Vaughan has made significant improvements over its performance in 2008 as the full effects of pricing adjustments and cost reduction initiatives have taken hold.
Gross profit amounted to $2.6 million or 9.6 percent of revenues in the second quarter of 2009, compared to $1.8 million or 7.4 percent of revenues in the second quarter of 2008. Gross profit for the six months ended June 30, 2009 totaled $4.6 million or 9.2 percent of revenues compared to $3.8 million or 8.5 percent of revenues in the comparable six month period of 2008.
Selling, general and administrative expenses decreased to $2.3 million in the second quarter of 2009 and $4.5 million in the six month period ended June 30, 2009, compared to $2.5 million and $4.9 million, respectively in the comparable periods of 2008. Sales and administrative salaries and commissions and consulting expenses were reduced as a result of integrating the functions of finance and sales between our divisions and rationalizing certain redundant positions.
Herb Grimes, Chairman and CEO of Vaughan Foods, commented, "We are pleased to report net income for the second quarter. Even though the amount is small, we are encouraged by the positive trend resulting from our margin improvement and decrease in administrative expenses. We continue to perform to our reputation for providing a safe, quality and affordable product to our customers.
"We are seeing a moderation of fuel costs and we continue to evaluate the need for price adjustments as we focus on aligning our input costs with our selling prices. Our focus to improve our margins is ongoing and will result in stronger operating results for the year of 2009 compared to 2008," concluded Mr. Grimes.
Investor Conference Call
Vaughan management will host an investor conference call on Friday, August 7, 2009 at 10:00 a.m. ET to discuss these results.
Interested parties should call 866-293-8969 (domestic) or 913-312-0644 (international) at least 5 minutes before the scheduled start time (no passcode required). You may also access this call at:
For those who are unavailable to listen to the live broadcast, a replay will be available through September 3, 2009, and can be accessed by dialing 888-203-1112 (domestic), and 719-457-0820 (international). The pass code is 9451721.
About Vaughan Foods, Inc.
Vaughan Foods is an integrated manufacturer and distributor of value-added, refrigerated foods. We are uniquely able to distribute fresh-cut produce items along with a full array of value-added refrigerated prepared foods multiple times per week. We sell to both food service and retail sectors. Our products consist of fresh-cut vegetables, fresh-cut fruits, salad kits, prepared salads, dips, spreads, soups, sauces and side dishes. Our primary manufacturing facility is in Moore, Oklahoma. Our soups and sauces are manufactured in our facility in Fort Worth, Texas.
The Vaughan Foods, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4726
Safe Harbor Statement
This press release contains forward-looking statements about the future performance of Vaughan Foods, Inc. based on Management's assumptions and beliefs in light of information currently available to it. There are a variety of factors that could cause actual and future results to differ materially from those anticipated by the statements made above. These factors are outlined in the Company's Form 10-Q and other reports filed with the Securities and Exchange Commission. Furthermore, Vaughan Foods, Inc. undertakes no obligation to update, amend or clarify forward-looking statements whether as a result of new information, future events, or otherwise.
Vaughan Foods, Inc.
Consolidated Balance Sheets
(dollars in thousands)
June 30, Dec. 31,
2009 2008
-------- --------
Assets:
Current assets:
Cash and cash equivalents $ -- $ --
Cash receipts subject to account control
agreement 1,459 --
Accounts receivable, net of allowance for
credit losses of $131,403 at June 30,
2009 and $140,870 at December 31, 2008 7,151 5,323
Inventories 4,156 3,376
Prepaid expenses and other assets 194 77
Deferred tax assets 316 310
-------- --------
Total current assets 13,276 9,086
-------- --------
Restricted assets:
Investments 1,268 562
-------- --------
Total restricted assets 1,268 562
-------- --------
Property and equipment, net 16,518 17,059
Other assets:
Loan origination fees, net of amortization 534 368
Intangible assets 93 108
Deferred tax assets, noncurrent 2,443 2,301
-------- --------
Total assets $34,132 $29,484
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 9,681 $ 7,961
Disbursements in transit 2,346 1,236
Line of credit 2,931 1,000
Note payable to former owners of
Allison's Gourmet Kitchens, LP 802 802
Accrued liabilities 2,279 1,851
Current portion of long-term debt 1,105 1,094
Current portion of capital lease obligation 186 204
-------- --------
Total current liabilities 19,330 14,148
-------- --------
Long term liabilities:
Long-term debt, net of current portion 7,647 7,950
Capital lease obligation, net of current
portion 12 95
Deferred gain on sale of assets 61 79
-------- --------
Total long-term liabilities 7,720 8,124
-------- --------
Total stockholders' equity 7,082 7,212
-------- --------
Total liabilities and stockholders'
equity $34,132 $29,484
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Vaughan Foods, Inc.
Consolidated Statements of Operations
For the three and six month periods ended June 30, 2009 and 2008
(dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2009 2008 2009 2008
------------ ------------ ------------ ------------
Net sales $ 27,466 $ 24,424 $ 49,785 $ 45,253
Cost of sales 24,826 22,618 45,189 41,408
------------ ------------ ------------ ------------
Gross profit 2,640 1,806 4,596 3,845
------------ ------------ ------------ ------------
Selling,
general and
administrative 2,329 2,490 4,483 4,904
------------ ------------ ------------ ------------
Operating
income 311 (684) 113 (1,059)
Interest
expense (289) (225) (516) (403)
Other income,
net 10 27 6 48
------------ ------------ ------------ ------------
Income (loss)
before income
taxes 32 (882) (397) (1,414)
Income tax
expense
(benefit) 14 (336) (149) (450)
------------ ------------ ------------ ------------
Net income
(loss) $ 18 $ (546) $ (248) $ (964)
============ ============ ============ ============
Weighted
average
shares
outstanding
Basic 4,623,077 4,623,077 4,623,077 4,623,077
Diluted 4,759,932 4,623,077 4,623,077 4,623,077
Net income
(loss) per
share
Basic $ 0.00 $ (0.12) $ (0.05) $ (0.21)
Diluted $ 0.00 $ (0.12) $ (0.05) $ (0.21)
============ ============ ============ ============
Vaughan Foods, Inc.
Consolidated Statements of Cash Flows
(dollars in thousands)
Six Months Ended
June 30,
-------------------
2009 2008
-------- --------
Cash flows from operating activities:
Net (loss) $ (248) $ (964)
Adjustments to reconcile net (loss) to
net cash provided by operating
activities:
Depreciation and amortization 963 882
Provision for credit losses (9) (33)
(Gain) loss on sale of asset (6) (18)
Stock option expense 44 --
Deferred income taxes (149) (450)
Changes in operating assets and
liabilities:
Accounts receivable (1,819) (821)
Inventories (780) (1,004)
Disbursements in transit 1,110 --
Prepaid expenses and other assets (117) (90)
Accounts payable 1,720 3,171
Accrued liabilities 428 (2)
-------- --------
Net cash provided by operating
activities 1,137 671
-------- --------
Cash flows from investing activities:
Purchases of property and equipment (311) (1,587)
Investments in Restricted assets (706) (46)
Proceeds from sale of assets 5 693
Deconsolidation of variable interest
entity -- (80)
-------- --------
Net cash (used in) investing
activities (1,012) (1,020)
-------- --------
Cash flows from financing activities:
Payments of loan origination fees (204) (5)
Proceeds from line of credit 2,931 --
Repayments on line of credit (1,000) --
Cash receipts subject to account control
agreement (1,459) --
Repayment of long-term debt and capital
leases (393) (403)
Repayment of notes payable to former owners
of Allison's Gourmet Kitchens, LP -- (198)
Cash paid to former owners of Wild About Food -- (45)
Repayments of short-term borrowings -- (1,000)
-------- --------
Net cash (used in) financing
activities (125) (1,651)
-------- --------
Net increase (decrease) in cash and cash
equivalents -- (2,000)
Cash and cash equivalents at beginning of
period -- 2,698
-------- --------
Cash and cash equivalents at end of period $ -- $ 698
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