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 ST. PAUL, Minn., Dec. 30 /PRNewswire/ -- Sparta Foods, Inc., today announced sales for the year ended Sept. 30, 1993, of $8,212,399, an increase of 9.1 percent over sales of $7,528,146 for the year ended Sept. 30, 1992.
 The net loss for the year was $123,521, or 4 cents per share, versus net income of $70,402, or 3 cents per share last year. Per share calculations reflect a 1-for-3 reverse stock split effective Nov. 15, 1993.
 The company said that expenses relating to the expansion of its service organization and the completion of its major business- development and acquisition strategy reduced gross profit and operating income in the year and in the fourth quarter.
 Nicholas G. Grammas, chairman and chief executive officer of Sparta Foods, said, "In 1989 we began an aggressive program of acquisitions and development of our business infrastructure to achieve our objective of becoming the leading full-line Mexican food manufacturer in the upper Midwest. This program is now essentially complete.
 "Many of our efforts were completed during 1993, and our acquisition of International Food Products, Inc. became effective on Oct. 1, 1993."
 International Food Products, Inc. (IFP), a Lakeville, Minn. manufacturer of tortillas and tortilla chips has marketed its products at retail under the LaCampana Paradiso(R) and Mexitos(R) brand names.
 "In anticipation of the successful completion of the IFP acquisition, we consolidated production facilities, added to our management team and increased our distribution capacity. These steps, and the start-up of a major production line for press flour tortillas and the expansion of our private label burrito program, all added to current-period expense. We view these strategic and preparatory expenses, as well as the direct expense of the IFP acquisition, to be key investments in our future growth and profitability," Grammas said.
 "We have completed the transitional period to position Sparta Foods for the future, and have accomplished the necessary steps to make us the leading full-service Mexican food manufacturer in the upper Midwest."
 On a pro-forma basis, stated to reflect the IFP acquisition as though it had been effective for the full year ended Sept. 30, 1993, annual sales were $10,651,000, and the company's net loss for the year was $357,795, or 12 cents per share. The company said that the majority of its pro forma net loss was attributable to non-recurring cash and non-cash charges relating directly to the IFP acquisition. On a pro forma basis, the non-recurring charges were $435,000, before taxes.
 Grammas said, "With the IFP acquisition now complete, and with its operations now fully integrated into Sparta Foods, we can focus on building our business through our existing broad line of Mexican food products, and offer food distributors a one-stop Mexican-food product source.
 "Including the additional volume from the IFP acquisition, our first quarter sales are running substantially ahead of last year, and despite the additional expenses from the acquisition that will be accrued in the first quarter, we expect to show a bottom-line improvement over last year."
 The company said results from its first fiscal quarter, ending Dec. 31, 1993, will be reported in February 1994.
 Sparta Foods is a manufacturer and distributor of food products in the rapidly growing Mexican-style food service and retail grocery business. The company manufactures and distributes tortillas, tortilla chips, burritos, Mexican-style salsa and other sauces to retail food stores and food service establishments, through its wholly owned subsidiaries, La Canasta of Minnesota, Inc., and Cruz Mexican Foods, Inc.
 Sparta Foods, Inc. is headquartered in St. Paul, and its common stock is traded over-the-counter in Minneapolis-St. Paul, with the symbol SRTA.
 Condensed Consolidated Statements of Operations
 Three months ended Nine months ended
 9/30/93 9/30/92 9/30/93 9/30/92
 Net sales $2,053,468 $2,084,435 $8,212,399 $7,528,146
 Cost of sales 1,633,513 1,636,470 6,440,734 5,791,567
 Gross profit 419,955 447,965 1,771,665 1,736,579
 Selling, general
 and administrative
 expenses 490,533 456,857 1,805,626 1,518,854
 Operating income
 (loss) (70,578) (8,892) (33,961) 217,725
 Other income (expense)
 Interest income 21,453 2,464 28,199 10,401
 Interest expense (36,742) (26,756) (144,759) (112,224)
 Total other income
 (expense) (15,289) (24,292) (116,560) (101,823)
 Income (loss) before
 income taxes (85,867) (33,184) (150,521) 115,902
 Provision (benefit) for
 income taxes (39,100) -- (27,000) 45,500
 Net income (loss) $(46,767) $(33,184) $(123,521) $70,402
 Net income (loss) per
 common share (a) ($0.02) ($0.01) ($0.04) $0.03
 Weighted average number
 of common shares
 outstanding (a) 2,919,111 2,785,667 2,892,747 2,723,224
 (a) Per share amounts and shares outstanding have been adjusted to
 reflect a 1-for-3 reverse stock split effective Nov. 15, 1993.
 -0- 12/30/93
 /CONTACT: Doug Ewing of Swenson/Falker Associates, 612-371-0000, for Sparta Foods; or Nicholas G. Grammas, CEO of Sparta Foods, 612-646-1888/

CO: Sparta Foods, Inc.; International Food Products, Inc. ST: Minnesota IN: FOD SU: ERN

CP-AL -- MN005 -- 8083 12/30/93 14:03 EST
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Publication:PR Newswire
Date:Dec 30, 1993

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