YoCream International Announces Another Record Quarter: Sales Up 51.2% and Net Income Up 284%

PR Newswire

posted: 459 DAYS 6 HOURS AGO

PORTLAND, Ore., Aug. 27 /PRNewswire-FirstCall/ -- YoCream International, Inc. (Pink Sheets: YOCM), a manufacturer and wholesaler of frozen desserts and beverages, today reported the financial results for the third quarter ended July 31, 2008.

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It was a record third quarter with sales up 51.2% to $15,152,000 and net income up 284% to $1,924,000. Gross profit margins in the third quarter were 42.7% compared with 34.6% in the prior year; income from operations was $3,297,000, a 257% increase over the same period in 2007.

Sales for the nine months ended July 31, 2008 were up 42.7% to $29,631,000. Gross profit margins were 41.9% in 2008 compared with 36.9% in 2007; income from operations was $5,100,000, a 282% increase over the prior year; net income was up 369% to $2,934,000, or $1.27 per share, compared with $625,000 or $0.29 per share for the same period last year. Copacking sales were purposefully limited in order to operationally meet the significant sales growth of the Company's proprietary products. Sales by category were as follows:


                9 months       %      9 months      %        Dollar        %
     Category     2008       Total      2007      Total     Increase    Change

    Frozen
    Desserts   $21,369,000    72.1%  $11,888,000   57.2%    $9,481,000   79.7%

    Frozen
    Beverages    8,107,000    27.4%    7,800,000   37.6%       307,000    3.9%

    Co-packing     155,000     0.5%    1,083,000    5.2%      (928,000)

    Total      $29,631,000   100.0%  $20,771,000  100.0%    $8,860,000   42.7%

"It has been an outstanding year to date for us, with 9 months sales and earnings breaking through the 12 months results of previous years, and the momentum continues," observed Matt Hanna, Director of Administration. "Meeting the operational challenges of such explosive growth is a testimony to the commitment and capability of our YoCream team."

The third quarter of 2008 represents the ninth consecutive quarter of double digit sales growth for YoCream. Total YTD foodservice sales, exclusive of club and co-packing business were up approximately 105%. "We are enjoying considerable growth in major markets across the U.S.," noted Tyler Bargas, Director of Sales. "YoCream continues to nationally lead the away-from-home frozen yogurt and beverage category with a firm knowledge of the customer base and well-executed sales strategies."

New product introductions in the fourth quarter of 2008 are expected to advance sales into the 2009 selling season. "We completed a third quarter consumer taste test and will roll out 7 frozen yogurt flavors in a new YoCream Select line," noted Suzanne Gardner, Director of Marketing. "Five new frozen beverage flavors will also be introduced at the National Association of Convenience Stores (NACS) Show in Chicago on October 5, 2008. The new frozen yogurt flavors and beverages both carry national brands that compliment the high quality of YoCream products."

YoCream International, Inc., with headquarters and a dairy and manufacturing facility in Portland, OR, is a pioneer and leading producer of frozen yogurt, desserts and beverages. Founded in 1977, YoCream produces, markets and sells its signature frozen yogurt, tart frozen yogurt, ice cream and frozen custard mixes under the YoCream brand. YoCream's frozen beverage product lines include Fruitquake(TM) Frozen Drinks and Smoothies for blender, bar drinks and lemonades or ice teas as well as Jolly Rancher(TM), Bubble Yum(TM), Twizzlers(TM), and Jarritos(TM) Frozen Beverages for frozen carbonated and uncarbonated machine dispensing. The Company also co-packs similar products for other companies. YoCream's end-user customers number in the thousands and include marquee convenience stores, quality quick service restaurants, warehouse stores, prestigious eating establishments, large grocery chains, frozen yogurt shops, colleges, military and government foodservice locations, international restaurants and neighborhood stores involving over 250 specialty and full line distributors in the supply chain.

This release may contain certain forward-looking statements, which are based on management's current expectations. Factors that could cause future results to vary materially from these expectations include, but are not limited to, change in distribution abilities, level of customer acceptance of new products, change in co-packing relationships and strategic alliances and other economic, competitive, governmental, and regulatory factors affecting the Company's operations, pricing, products and service.



                         YOCREAM INTERNATIONAL, INC.
                             STATEMENTS OF INCOME
                                 (Unaudited)

                                Three Months Ended        Nine Months Ended
                                     July 31,                  July 31,
                                 2008         2007         2008         2007

    Sales                   $15,152,365  $10,021,957  $29,630,827 $20,771,007

    Cost of goods sold        8,682,087    6,549,401   17,215,339  13,116,331

      Gross profit            6,470,278    3,472,556   12,415,488   7,654,676

    Operating costs and
     expenses
      Distribution expenses   1,555,880    1,202,864   3,371,380    2,672,995
      Selling, and marketing
       expenses                 936,965      796,840   2,184,003    2,100,474
      General and
       administrative expenses  680,099      548,718   1,759,979    1,546,212

      Income from operations  3,297,334      924,134   5,100,126    1,334,995

    Other income (expenses)
      Interest income             2,088            -       3,382       14,516
      Interest expense         (123,189)    (144,127)   (393,483)    (373,803)
      Restricted stock
       compensation            (196,900)     (37,400)   (196,900)     (37,400)
      Other (net)                     -        2,000           -        2,188

      Income before income
       taxes                  2,979,333      744,607   4,513,125      940,496

    Income tax provision      1,055,000      243,600   1,579,500      315,100

      Net income             $1,924,333     $501,007  $2,933,625     $625,396

    Earnings per common
     share - basic                $0.87        $0.24       $1.34        $0.30

    Earnings per common
     share - diluted              $0.82        $0.23       $1.27        $0.29

    Shares used in basic
     earnings per share       2,214,445    2,099,341   2,187,886    2,096,948

    Shares used in diluted
     earnings per share       2,345,829    2,156,396   2,307,341    2,142,833



                          YOCREAM INTERNATIONAL, INC
                                BALANCE SHEETS
                                                  July 31,         October 31,
                                                    2008              2007
                                                 (Unaudited)
                           ASSETS
    Current assets
      Cash and cash equivalents                  $2,601,429          $70,701
      Accounts receivable, net                    3,327,791        1,562,955
      Inventories                                 3,908,603        3,748,525
      Other current assets                          539,542          388,931
      Deferred tax assets                           172,708          172,708

        Total current assets                     10,550,073        5,943,820

    Fixed assets, net                            15,228,186       15,005,641
    Intangible and other long-term assets, net      997,059        1,035,022
    Deferred tax assets                             172,800          101,100

                                                $26,948,118      $22,085,583

        LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
      Note payable - line of credit                      $-         $634,475
      Current portion of long-term debt             573,413          569,588
      Accounts payable                            2,960,737        1,616,467
      Income tax payable                          1,296,266          125,882
      Other accrued liabilities                     499,654          473,633

        Total current liabilities                 5,330,070        3,420,045

    Long-term debt, less current portion          7,824,459        7,996,013
    Deferred tax liabilities                      1,184,908        1,184,908
    Other liabilities                               114,434          100,895

        Total liabilities                        14,453,871       12,701,861

    Shareholders' equity
      Preferred stock, no par value, none issued
       or outstanding                                     -                -
      Common stock, no par value, 30,000,000
       shares authorized, 2,219,356 and 2,174,606
       issued and outstanding at July 31, 2008
       and October 31, 2007, respectively         6,521,765        6,426,965

      Unearned compensation - restricted stock   (1,838,100)      (2,035,000)
      Retained earnings                           8,087,682        5,154,057
      Accumulated other comprehensive income       (277,100)        (162,300)

        Total shareholders' equity               12,494,247        9,383,722

                                                $26,948,118      $22,085,583



                         YOCREAM INTERNATIONAL, INC.
                           STATEMENTS OF CASH FLOWS

               For the nine months ended July 31, 2008 and 2007
                                 (Unaudited)
                                                       2008            2007

    Cash flows from operating activities
      Net income                                   $2,933,625       $625,396
      Adjustments to reconcile net income to net
       cash provided by operating activities
        Depreciation and amortization                 714,386        630,263
        Deferred income taxes                               -         18,900
        Change in assets and liabilities
          Accounts receivable                      (1,764,836)      (620,589)
          Inventories                                (160,078)      (144,812)
          Other assets                               (112,648)      (170,049)
          Accounts payable                          1,344,270        114,856
          Income taxes receivable and payable       1,170,384        205,775
          Restricted stock compensation               196,900         37,400
          Other accrued liabilities                    39,560        (21,051)
            Net cash provided by operating
             activities                             4,361,563        676,089

    Cash flows from investing activities
      Expenditures for fixed assets                (1,026,931)    (3,266,637)

            Net cash used in investing
             activities                            (1,026,931)    (3,266,637)

    Cash flows from financing activities
      Proceeds from (payments on) line of credit     (634,475)       483,128
      Proceeds from long-term debt                     90,000              -
      Proceeds from development related grant          90,000              -
      Proceeds from finance lease line                      -        139,393
      Proceeds from exercise of stock options          23,150              -
      Principal payments on long-term debt           (444,229)      (319,571)
      Repurchase of common stock                      (46,250)             -
      Excess tax benefits of options and
       restricted stock                               117,900              -
            Net cash provided by (used in)
             financing activities                    (803,904)       302,950
            Net increase (decrease) in cash
             and cash equivalents                   2,530,728     (2,287,598)

    Cash and cash equivalents, beginning of period     70,701      2,386,645

    Cash and cash equivalents, end of period       $2,601,429        $99,047

SOURCE YoCream International, Inc.