Vaughan Foods, Inc. Reports Second Quarter Operating Results
by Benzinga Staff
August 5, 2010 4:15 PM | 7 min read | Make a Comment
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MOORE, Okla., Aug. 5, 2010 (GLOBE NEWSWIRE) -- Vaughan Foods, Inc. FOOD, a regional leader in fresh-cut vegetables and fruit products, and a broad line of refrigerated prepared salads, sauces, soups, and side-dishes, today announced its operating results for the 2nd quarter ended June 30, 2010.
Vaughan recorded net income of $260,000, or $0.03 per share during the second quarter of 2010, continuing the profitable trend started in the first quarter, and exceeding the net income of $18,000 in the comparable quarter of 2009. Gross profit increased to 10.5 percent in the 2nd quarter from 9.6 percent in the year earlier quarter. The improved results are primarily attributable to efficiencies in production labor costs and continuing controls over selling, general and administrative expense, as management continues its focus on improvements in its manufacturing processes.
Net income for the six months ended June 30, 2010 was $377,000 or $0.05 per share compared to a net loss of $248,000 or $0.05 per share in the same period of 2009 -- a year-over-year turnaround of $0.6 million. Gross profit increased to 11.5 percent in the year-to-date period of 2010 compared to 9.2 percent in the same period of 2009. The improved results of the first six months of 2010 are attributable to several factors, including efficiencies in production labor, benefits of the Company's Enterprise Resource Planning ("ERP") system, continued stability in commodity raw material costs, and further stabilization of the Company's work force.
Earnings before interest, taxes, depreciation and amortization ("EBITDA") improved to $2.3 million in the six months ended June 30, 2010 compared with $1.0 million in the period of 2009. The Company generated $0.6 million in cash from operating activities, decreased short-term borrowings on its revolving line of credit by $0.5 million, and paid off long-term debt of $0.4 million.
"Our second quarter earnings are the highest since Vaughan became a public company in 2007, and mark our second consecutive quarter of profitability," said Herb Grimes, Chairman and CEO. "The performance reflects the many improvements that our management team has made.
"Despite the seasonality, economic and other external factors that can cause our results to be uneven over any short-term range, we continue to be encouraged as our quality and diverse product lines develop customer loyalty and build solid new growth opportunities as well. Our second quarter is seasonally our strongest. We have just scratched the surface of our unique and compelling business model, and remain committed to and excited about the future of Vaughan Foods."
Investor Conference Call
Vaughan management will host an investor conference call on Friday, August 6, 2010 at 10:00 a.m. ET to discuss these results.
Interested parties should call (877) 312-5516 (domestic) or (253) 237-1139 (international) at least 5 minutes before the scheduled start time (no passcode required). You may also access this call via the Internet at:
For those who are unavailable to listen to the live broadcast, a replay will be available through August 27, 2010 and can be accessed by dialing (800) 642-1687 (domestic), and (706) 645-9291 (international). The conference ID is 90738266.
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.
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 Forms 10-K and 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, December 31,
2010 2009
Assets
Current assets:
Cash and cash equivalents $ -- $ --
Cash receipts subject to account control
agreement 971 523
Accounts receivable, net of allowance for
credit losses of $56,375 at June 30, 2010
and $106,375 at December 31, 2009 6,696 5,312
Inventories 2,817 3,055
Prepaid expenses and other assets 249 211
Deferred tax assets 271 265
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Total current assets 11,004 9,366
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Restricted assets:
Cash 528 528
Investments 757 541
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Total restricted assets 1,285 1,069
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Property and equipment, net 15,318 15,797
Other assets:
Loan origination fees, net of amortization 331 422
Intangible assets 61 77
Deferred tax assets, noncurrent 2,369 2,656
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Total assets $ 30,368 $ 29,387
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 8,397 $ 8,432
Disbursements in transit 749 1,270
Line of credit 1,872 2,322
Note payable to former owners of
Allison's Gourmet Kitchens, LP 881 876
Accrued liabilities 1,662 1,393
Current portion of long-term debt 1,482 1,138
Current portion of capital lease obligation 12 94
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Total current liabilities 15,055 15,525
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Long term liabilities:
Long-term debt, net of current portion 6,285 6,944
Deferred gain on sale of assets 26 43
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Total long-term liabilities 6,311 6,987
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Total stockholders' equity 9,002 6,875
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Total liabilities and stockholders'
equity $ 30,368 $ 29,387
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Vaughan Foods, Inc.
Consolidated Statements of Operations
(dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2010 2009 2010 2009
Net sales $ 26,226 $ 27,466 $ 47,921 $ 49,785
Cost of sales 23,477 24,826 42,410 45,189
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Gross profit 2,749 2,640 5,511 4,596
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Selling,
general and
administrative 2,127 2,329 4,397 4,483
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Operating
income 622 311 1,114 113
Interest
expense (207) (289) (477) (516)
Other income,
net 11 10 21 6
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Income (loss)
before income
taxes 426 32 658 (397)
Income tax
expense
(benefit) 166 14 281 (149)
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Net income
(loss) $ 260 $ 18 $ 377 $ (248)
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Weighted
average
shares
outstanding
Basic 9,380,577 4,623,077 7,961,212 4,623,077
Weighted
average
shares
outstanding
Diluted 9,384,660 4,759,932 7,962,165 4,623,077
Net income
(loss) per
share
Basic $ 0.03 $ 0.00 $ 0.05 $ (0.05)
Net income
(loss) per
share diluted $ 0.03 $ 0.00 $ 0.05 $ (0.05)
=====================================================================
Vaughan Foods, Inc.
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2010 and 2009
(dollars in thousands)
2010 2009
---- ----
Cash flows from operating activities:
Net (loss) $ 377 $ (248)
Adjustments to reconcile net (loss) to
net cash provided by operating
activities:
Depreciation and amortization 1,339 963
Provision for credit losses (50) (9)
(Gain) loss on sale of asset (21) (6)
Stock based compensation expense 45 44
Deferred income taxes 281 (149)
Changes in operating assets and
liabilities:
Accounts receivable (1,333) (1,819)
Inventories 238 (780)
Prepaid expenses and other assets (39) (117)
Accounts payable (34) 1,720
Disbursements in transit (521) 1,110
Accrued liabilities 269 428
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Net cash provided by operating
activities 551 1,137
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Cash flows from investing activities:
Purchases of property and equipment (713) (311)
Proceeds from sale of assets 20 5
Investments in Restricted assets (216) (706)
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Net cash (used in) investing
activities (909) (1,012)
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Cash flows from financing activities:
Payments of loan origination fees (58) (204)
Proceeds from stock issue 1,706 --
Proceeds from line of credit -- 2,931
Repayments of line of credit (450) (1,000)
Cash receipts subject to account control
agreement (448) (1,459)
Proceeds from notes issued to former owners
of Allison's Gourmet Kitchens, LP 5 --
Repayment of long-term debt and capital
leases (397) (393)
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Net cash provided by (used in)
financing activities 358 (125)
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Net increase (decrease) in cash and cash
equivalents -- --
Cash and cash equivalents at beginning of
period -- --
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Cash and cash equivalents at end of period $ -- $ --
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CONTACT: Cameron Associates
Investor Contact:
Paul Henning
212-554-5462
Paul@cameronassoc.com
