PETALUMA, Calif., May 10, 2004 (BUSINESS WIRE) -- Spectrum Organic Products, Inc. (SPOP) reported that net sales for the three months ended March 31, 2004 reached a new quarterly record for the company of $12,733,100 compared to net sales of $10,308,600 for the same period of the prior year, a growth rate of 24 percent (1). The improved sales performance was primarily attributable to increased consumer awareness of the importance of healthy oils to overall health and nutrition. Additionally, many food manufacturers continued their push to eliminate partially hydrogenated oils (trans fats) from their products which drove the company's industrial sales to record levels.
Spectrum reported a net loss for the quarter of $109,000 versus net income of $635,600 for the first quarter of 2003, which was primarily attributable to margin pressure on the company's consumer branded product lines as a result of increased raw material costs for certain key organic raw materials such as olive oil, canola oil and flaxseed. Also contributing to the operating loss in 2004 was increased spending behind several new sales and marketing initiatives during the first quarter. In particular, there was heavy spending to launch Spectrum's new advertising campaign, as well as a new company identity and packaging revisions, a completely redesigned website and an increased presence at industry trade shows.
Management believes that earnings before interest, taxes, depreciation and amortization (EBITDA)(2) is an important measure of its financial performance. For the three months ending March 31, 2004, Spectrum reported EBITDA of $40,600 versus EBITDA of $847,500 for the first quarter of 2003. The decrease in 2004 was primarily attributable to the gross margin pressure and the increased spending behind the sales and marketing initiatives.
"Our first quarter sales were an all-time record, with significant growth delivered in all three of the company's business segments," said Neil G. Blomquist, Spectrum CEO. "Additionally, we launched our new 'I am Spectrum' advertising campaign and a new public relations program. The organic foods industry continues to feature double-digit growth. As category leaders in culinary oils and essential fatty acid nutritional supplements, Spectrum remains in an enviable position for future sales growth."
Spectrum Organic Products, Inc. is a leading manufacturer and marketer of natural and organic culinary oils, vinegar, condiments and butter substitutes under the Spectrum Naturals(R) brand and essential fatty acid nutritional supplements under the Spectrum Essentials(R) brand. The company also produces and sells a wide range of industrial oils, vinegar and nutritional ingredients to other manufacturers through its Spectrum Ingredients Division. All of the company's products feature healthy oils that are free from hydrogenation and genetically modified organisms.
"Safe Harbor" statements under the Private Securities Act of 1995: The statements contained in this release, which are not historical facts, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by the forward-looking statements. These risks and uncertainties are described in the company's Securities and Exchange Commission filings under the symbol "SPOP."