PORTLAND, Ore., Aug. 11 /PRNewswire-FirstCall/ -- Gardenburger, Inc. (BULLETIN BOARD: GBUR) today reported financial results for the Company's third quarter of fiscal 2003. Net revenues were $15.0 million for the quarter ended June 30, 2003, compared to $17.1 million for the quarter ended June 30, 2002. The third quarter net loss available for common shareholders was $856,000, or $0.10 per share. Net income available for common shareholders for the third quarter of fiscal 2002 was $221,000, or $0.02 per share, and included income of $108,000 from a legal settlement.
"Sales were adversely affected by an unusually wet Spring as we entered the grilling season," said Scott Wallace, Chairman of the Board, President and Chief Executive Officer of Gardenburger, Inc. "Additionally, several major customers reduced inventory levels as they sought to reduce their warehousing costs in a slow economy. We are, however, encouraged by the response to our two newest meatless products, BBQ Chik'n and Meatless Meatloaf."
Third Quarter Results
For the third quarter of fiscal year 2003, Gardenburger posted a gross margin of 44 percent, compared to 45 percent during the comparative quarter last year. The reduced gross margin is attributable to a change in the mix of products sold as Gardenburger continues to launch new meatless alternative products.
Selling and marketing expense for the third quarter of fiscal 2003 was $3.8 million, compared to $4.0 million for the third quarter of fiscal year 2002. In fiscal 2002 Gardenburger marketed its products through magazine advertising as well as consumer coupons and retail store trade advertisements. In fiscal 2003 the company eliminated the magazine advertising program and increased its consumer coupon and trade ad campaign. The change in marketing program and related timing resulted in the lower selling and marketing expense for the third quarter of fiscal 2003. General and administrative costs for the quarter were $1.2 million compared to $1.0 million for the third quarter of fiscal 2002. The third quarter fiscal 2003 increase resulted from costs attributable to development of a long-term business strategy.
Founded in 1985 by GardenChef Paul Wenner(TM), Gardenburger, Inc. is an innovator in meatless, low-fat food products. The Company distributes its flagship Gardenburger(R) veggie patty to more than 30,000 food service outlets throughout the United States and Canada. Retail customers include more than 24,000 grocery, natural food and club stores. Based in Portland, Ore., the Company currently employs approximately 175 people.
Statements in this press release about future events or performance are forward-looking statements that are necessarily subject to risk and uncertainty. The Company's actual results could be quite different. Important factors that could affect results include the Company's dependence on product acceptance, the Company's ability to execute its distribution plan, effectiveness of the Company's sales and marketing efforts, and intense competition in the veggie burger and other meat alternatives industry, which the Company believes will continue. Other important factors that could affect results are set forth in the Company's Annual Report on Form 10-K for the year ended September 30, 2002 and the Company's 2002 Annual Report to shareholders. Although forward-looking statements help provide complete information about the Company, investors should keep in mind that forward-looking statements are inherently less reliable than historical information.