EX-99.1 2 ex99_1.txt PRESS RELEASE Exhibit 99.1 May 16, 2006 Tofutti Press Release Company Contact: Steve Kass Chief Financial Officer (908) 272-2400 (908) 272-9492 (Fax) TOFUTTI ANNOUNCES FIRST QUARTER RESULTS Cranford, New Jersey -- May 16, 2006 -- TOFUTTI BRANDS INC. (AMEX Symbol: TOF) today announced its results for the thirteen week period ended April 1, 2006. Net sales for the thirteen weeks ended April 1, 2006 increased 8% to $4.6 million compared with net sales of $4.2 million for the thirteen weeks ended April 2, 2005. For the thirteen weeks ended April 1, 2006, the Company reported a slight increase in operating income to $132,000 as compared with operating income of $130,000 for the comparable 2005 period. The Company's operating results continued to be negatively impacted during the thirteen week period ended April 1, 2006 as a result of new product start-up costs, including costs incurred at new co-packaging locations, increased marketing expenses and higher packaging and freight charges. The Company expects that during the remainder of 2006 its operating expenses will continue to be affected by these same factors. Net income for the thirteen weeks ended April 1, 2006 decreased slightly to $71,000 ($0.01 per share) compared to $76,000 ($0.01 per share) for the thirteen week period ended April 2, 2005. Mr. David Mintz, Chairman and Chief Executive Officer of the Company stated, "Our results reflect the increasing demand for our TOFUTTI brand soy-based, dairy-free frozen desserts and food products and positive initial market reaction for our new products. We are continuing our efforts to improve our operating results and look forward to improved margins and increased market penetration during the approaching summer months." TOFUTTI BRANDS INC. is principally involved in the development, production and marketing of TOFUTTI brand soy-based, dairy-free frozen desserts, soy-based dairy free cheese products and other soy-based, dairy-free food products. TOFUTTI products are sold in grocery stores, supermarkets, health and convenience stores throughout the United States and in approximately twenty-five other countries. 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 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-KSB. TOFUTTI BRANDS INC. ------------------- Condensed Statements of Operations ---------------------------------- (in thousands, except per share figures) Thirteen Thirteen weeks weeks ended ended 4/1/06 4/2/05 ------ ------ Net sales ........................................ $4,588 $4,240 Cost of sales .................................... 3,393 3,027 ------ ------ Gross profit ..................................... 1,195 1,213 Operating expenses ............................... 1,063 1,083 ------ ------ Operating income ................................. 132 130 Interest income .................................. -- 1 ------ ------ Income before income taxes ....................... 132 131 Income taxes ..................................... 61 55 ------ ------ Net income ....................................... $ 71 $ 76 ====== ====== Net income per common share: Basic ................................... $ 0.01 $ 0.01 ====== ====== Diluted ................................. $ 0.01 $ 0.01 ====== ====== Weighted average common shares outstanding: Basic ................................... 5,446 5,637 ====== ====== Diluted ................................. 6,013 6,223 ====== ====== TOFUTTI BRANDS INC. Condensed Balance Sheets (in thousands)
April 1, 2006 December 31, 2005 ------------- ----------------- (Unaudited) Assets Current assets: Cash and equivalents $ 306 $1,256 Accounts receivable, net of allowance for doubtful accounts of $308 and $291, respectively 1,999 2,643 Inventories 2,224 2,045 Prepaid expenses 43 51 Deferred income taxes 577 577 --- --- Total current assets 5,149 6,572 Fixed assets (net of accumulated depreciation of $16 and $14, respectively) 32 34 Other assets 16 16 -- --- $5,197 $6,622 ====== ====== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $783 $1,442 Accrued expenses 125 479 Accrued officers' compensation 500 500 Income taxes payable 369 478 --- --- Total current liabilities 1,777 2,899 ----- ----- Commitments and contingencies Stockholders' equity: Preferred stock -- -- Common stock 54 55 Additional paid-in capital -- -- Retained earnings 3,366 3,668 ----- ----- Total stockholders' equity 3,420 3,723 ----- ----- Total liabilities and stockholders' equity $5,197 $6,622 ====== ======