Monterey Gourmet posts profitable quarter
May 06, 2009
by Bakingbusiness Staff
SALINAS, CALIF. — A strategy of managing costs, reducing inventory and focusing on core business translated into a profitable quarter for Monterey Gourmet Foods, the Salinas-based company’s first since the fourth quarter of fiscal 2007. Net income in the first quarter ended March 31 totaled $747,000, equal to 4c per share on the common stock. This compared with a loss of $1,531,000 in the same period a year ago.
Revenue for the quarter was $20,975,000, down 12% from $23,956,000 during the same quarter of the previous year.
"The consumer shifting from eating out at restaurants to more frequently eating at home benefits us as we provide fresh packaged product for discerning at-home cooks," said Eric C. Eddings, president and chief executive officer, during a May 6 conference call with securities analysts. "People are spending less on food, period. While this could be a worrisome trend for other food companies in general, we feel we are well positioned to benefit from this movement and capture additional market share."
One reason for this optimism is the company’s pursuit of private label opportunities, Mr. Eddings said.
"We have some exciting developments in the private label channel," he said. "For example, this week we began shipping a new nationally distributed private label item from our Salinas plant to one of our largest customers. In our branded categories, our CIBO Naturals brand performed well during the quarter, led by the success of our Starbucks sandwich spread program."
Mr. Eddings said the company’s faith in pasta and filled pasta as a core competency with significant opportunities for the future is evident in its recent launch of Pasta Duets, a new product developed using restaurant-inspired concepts that includes both a pasta and a sauce in a box.
"Some would say, well, isn’t that a kit that’s been done before?" Mr. Eddings said. "Well, what’s interesting about what we’re doing is we are bringing up some very unique, different flavor profiles into the mix that will allow us to really marry up things that you might not necessarily do at home that would be very unique and very decadent for a restaurant meal solution."