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MORNINGSTAR GROUP REPORTS THIRD-QUARTER 1993 RESULTS

 DALLAS, Nov. 5 /PRNewswire/ -- The Morningstar Group Inc. (NASDAQ: MSTR) today reported third-quarter net income of $600,000 or $0.04 per common share, the company's fifth consecutive profitable quarter since its initial public offering in April 1992. As previously indicated, net income was down more than 50 percent from the prior year level when the company reported a profit of $1.5 million, or $.10 per common share.
 For the quarter ended Sept. 30, 1993, Morningstar's net sales were $98.7 million, up 16.1 percent from net sales from remaining operations of $85.0 million in 1992's third quarter, and up 13.5 percent from net sales, including those of divested operations, of $87.0 million for that quarter. For the first nine months of 1993, Morningstar's net sales were $290.4 million, up 12.3 percent from net sales from remaining operations of $258.5 million in the first nine months of 1992, and down 8.6 percent from last year's total net sales, including those from divested operations, of $317.7 million.
 Operating income for the third quarter of 1993 was $2.6 million, down 18.1 percent from the third quarter of 1992, while operating income for the first nine months of 1993 was $12.6 million, up 2.3 percent for the comparable 1992 period.
 James A. Bach, Morningstar's president and chief executive officer, said "As we indicated in a press release on Oct. 22, our third-quarter performance was adversely affected by accelerating competitive pressures in several of our product lines and, in addition, by nearly $500,000 of one-time, pre-tax transitioning expenses related to our Favorite Foods acquisition. In spite of the near-term margin pressures and as we also indicated on Oct. 22, we continue to aggressively pursue opportunities to grow our business."
 Morningstar is a nationally prominent manufacturer, distributor and marketer of refrigerated food products. Its established branded products include: International Delight(R), a gourmet-flavored coffee creamer; Second Nature(R), a refrigerated no-cholesterol egg substitute; Naturally Yours(R), a nofat, real dairy sour cream, and in the western two-thirds of the United States, Lactaid(R), a lactose-reduced milk produced under license from McNeil Consumer Products Company, a subsidiary of Johnson & Johnson. Morningstar also specializes in providing private label refrigerated products to grocery warehouses and diary companies and operates Velda Farms, a regional dairy in Florida.
 A controlling interest in Morningstar is held by an investor group led by Hicks, Muse & Co. Incorporated, a private investment firm with offices in Dallas and New York.
 THE MORNINGSTAR GROUP INC.
 (Dollars in millions except share data)
 Periods ended Sept. 30 Three Months Nine Months
 1992 1993 1992 1993
 Sales:
 Remaining operations $ 85.0 $ 98.7 $ 258.5 $ 290.4
 Total sales 87.0 98.7 317.7 290.4
 Operating income $ 3.2 $ 2.6 $ 12.4 $ 12.6
 Interest expense 1.6 1.6 7.8 4.7
 Non-operating expense(income) -- (.1) 14.7 (.3)
 Taxes -- .5 -- 3.0
 Net income (loss) before
 extraordinary items 1.6 .6 (10.1) 5.2
 Extraordinary items (.1) -- (5.7) (.2)
 Net income (loss) (1.5) .6 (15.8) 5.0
 Less: Dividends on
 preferred stock -- -- .9 --
 Net income (loss) to common
 shareholders $ 1.5 $ .6 $ (16.7) $ 5.0
 Average shares
 outstanding (000s) 14,953 15,009 11,418 15,038
 Earnings (loss) per common share:
 Before extraordinary items $ .11 $ .04 $ (.97) $ .34
 Extraordinary losses $ (.01) $ -- $ (.50) $ (.01)
 Net earnings (loss) per common
 share $ .10 $ .04 $ (1.47) $ .33
 -0- 11/5/93
 /CONTACT: Tracy L. Noll, CFO of The Morningstar Group Inc., 214-360-4777, or Roy Winnick of Kekst and Company, 212-593-2655/
 (MSTR)


CO: The Morningstar Group, Inc. ST: Texas IN: FOD SU: ERN

TM -- NY072 -- 1416 11/05/93 17:41 EST
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Publication:PR Newswire
Date:Nov 5, 1993
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