PETALUMA, Calif., May 06, 2005 (BUSINESS WIRE) -- Spectrum Organic Products, Inc. (SPOP) reported that net sales for the three months ended March 31, 2005 reached a new quarterly record for the company of $13,243,000 compared to net sales of $12,733,100 for the same period of the prior year, a growth rate of 4 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 from their products, which drove the company's industrial sales higher.
Spectrum reported net income for the quarter of $29,800 versus a net loss of $109,000 for the first quarter of 2004, which was primarily attributable to improved margins in the company's Spectrum Essentials(R) brand of nutritional supplements as a result of lower costs for organic flaxseed. Also contributing to the improved profitability in 2005 was increased sales of private label products largely due to a new relationship with a major specialty retailer. Partially offsetting those favorable trends were higher costs for certain key raw materials, such as olive oil and canola oil, in the Company's Spectrum Naturals(R) brand of culinary products.
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, 2005 Spectrum reported EBITDA of $341,000 versus EBITDA of $40,600 for the first quarter of 2004. The increase in 2005 was primarily attributable to increased gross profit in the Spectrum Essentials(R) and private label product lines.
"Our first quarter sales were an all-time record, with moderate growth delivered in all three of the company's business segments," said Neil G. Blomquist, Spectrum CEO. "We also managed to deliver a small profit for the quarter, despite heavy sales and marketing expenses associated with the Expo-West trade show held in March and the shutdown of our Iowa manufacturing facility for equipment upgrades during March."
Spectrum Organic Products, Inc. is a leading 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.OB".