Armanino Foods of Distinction, Inc., Reports Net Sales and Earnings for the First Quarter

HAYWARD, Calif.--()--Armanino Foods of Distinction, Inc. (OTC Pink: AMNF) reported a decrease in its net sales and net income before and after taxes for the first quarter ending March 31, 2020.

Net sales for the first quarter ending March 31, 2020 were $9,760,846, compared to $9,769,191 for the first quarter of 2019, a decrease of 0.1%. Income before taxes for the first quarter of 2020 was $1,381,886, compared to $1,890,243 for the comparable quarter a year ago, a decrease of 27%. Net income for this period decreased to $1,105,508 (or $0.0345 per share), from $1,436,496 (or $0.0448 per share) for the previous year, a decrease of 23%.

Tim Anderson, President and CEO of Armanino Foods said, “While this is our 67th quarter in a row of profitability, year over year net sales and profits were down this quarter. Looking at our results from a gross rather than net sales perspective, our total first quarter gross sales were up 2% over the prior year. This was primarily driven by momentum from prior periods in our US domestic markets which began to dramatically weaken towards the end of this quarter as a result of the impact from the COVID-19 pandemic. If not for the COVID-19 impact sales would have been stronger this period. Our experience is directionally consistent with food service industry sales data collected by Technomics, a reputable data analysis firm, which recently projected that the entire food service industry will see a 31% to 48% drop in March sales from February once all the data is collected. First quarter gross sales in our US markets grew by approximately $700,000, or by 7%, over the prior year. This was offset by lower first quarter gross sales in our Asian markets which declined by approximately $340,000, or by -21% over the prior year. While higher year over year promotional expenses also contributed to lower net sales and profits this quarter, promotional expenditures did continue to trend downward from the prior two quarters. Lastly, higher cost of sales resulting from the effects of product mix this quarter also contributed to lower profits over the prior year.”

Anderson continued, “Due to the world wide impact from the COVID-19 outbreak, we anticipate that in Q2, for the first time in the past 67 quarters, we will report a quarterly net loss. The majority of our sales are driven by customers who provide products to institutions which serve food away from home. This segment has been significantly impacted by the pandemic as shelter in place orders were instituted across the US, and in many parts of our markets in Asia. On the other hand, second quarter sales to date from our customers in the meal kit and retail markets have increased significantly. Many of our meal kit and retail customers have indicated their intentions to buy more of our products in the near future. We expect sales in this market segment to partially offset the expected decline in sales in our food away from home market. New machinery we acquired about a year ago will help us to fulfill these orders in an efficient and profitable manner. Currently, we do not expect any disruption in our supply chain for raw materials and packaging. We are exploring new revenue streams with additional marketing efforts to augment our current efforts in the coming months.”

Anderson concluded, “We are fortunate to have a strong balance sheet especially in this environment. Currently our cash balances are healthy, and we have relatively low levels of debt. After conducting stress test analyses under various extreme business scenarios, we are confident that we have enough cash to fund our operations beyond this year. In order to protect the strength of our working capital we immediately implemented cost-cutting measures across the board as soon as the pandemic started. These included significant reductions in our labor and production costs in anticipation of a period of decreased orders for our products from the food away from home market. We are continuously running stress test analyses and closely monitoring our cash, inventory, and receivable balances and are prepared to manage them accordingly as the situation might dictate. In addition, we are looking to fortify our working capital by applying for funding from the US government’s stimulus Payroll Protection Program under the CARES Act. To utilize the excess capacity we currently have, we are exploring the possibility of temporarily repurposing our production capabilities to manufacture non-food related products which are currently in high demand but in low supply.”

Armanino Foods of Distinction, Inc. is an international food company that manufactures and markets frozen Italian specialty food items such as pestos, Bolognese, Alfredo sauce and filled pastas to the foodservice, retail, and industrial markets. In addition to a classic Basil Pesto Armanino offers other flavors such as Cilantro, Dried Tomato & Garlic, Roasted Red Bell Pepper, Southwest Chipotle, Artichoke, Roasted Garlic, Creamy Garlic, Harissa, Romesco, Chimichurri, and Light Basil Pesto. Armanino’s Organic line includes classic Basil Pesto. Frozen pastas, sauces and meatballs are also offered by Armanino Foods.

Armanino Foods of Distinction, Inc.

Results for the Quarter Ended 3/31/20 (Unaudited)

 

 

 

2020

 

2019

Net Sales

 

$9,760,846

 

$9,769,191

Income Before Taxes

 

$1,381,886

 

$1,890,243

Net Income

 

$1,105,508

 

$1,436,496

Basic/Diluted Income Per Common Share

 

$0.0345

 

$0.0448

Basic/Diluted Weighted Average Common Shares Outstanding

 

32,065,645

 

32,065,645

This press release contains forward-looking statements within the meaning of U.S. securities laws, including statements regarding the Company’s goals and growth prospects. These forward looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected, including general economic conditions, fluctuations in customer demand, competitive factors such as pricing pressures on existing products, and the timing and market acceptance of new product introductions, the Company’s ability to achieve manufacturing efficiencies necessary for profitable sales at current pricing, and the risk factors listed from time-to-time in the Company’s annual and quarterly reports. The Company assumes no obligation to update the information included in this press release.

The best source of information on the company is the OTC Markets website http://www.otcmarkets.com/stock/amnf/company-info, or the Company website http://www.armaninofoods.com

Contacts

Edgar Estonina
COO/CFO
510-441-9300
amnf@armaninofoods.com

Contacts

Edgar Estonina
COO/CFO
510-441-9300
amnf@armaninofoods.com