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SPARTA FOODS ANNOUNCES FIRST QUARTER SALES AND EARNINGS

 ST. PAUL, Minn., March 3 /PRNewswire/ -- Sparta Foods, Inc. today announced sales and earnings for the first quarter ended Dec. 31, 1992.
 Sales for the three months were $1,865,813, up 53 percent from $1,220,218 for the same period in 1991. The increase in sales was primarily due to the Cruz acquisition which was completed on Jan. 2, 1992. There was a net loss of $27,417 compared with net income of $2,513 for the first quarter of the prior fiscal year. The loss was due primarily to the start-up costs associated with the new press tortilla and burrito lines.
 Nicholas G. Grammas, president and chief executive officer of Sparta Foods, said, "The four-month construction period to get the plant ready as an approved McDonald's Corporation supplier affected gross margins during that period."
 Grammas continued, "Historically, the seasonality of Sparta's business has kept profits low during the first quarter of our fiscal year. Now that we are getting into our busy season, and we are producing McDonald's and other retail products in-house, Sparta's profit margins will continue to improve."
 Sparta Foods, Inc. manufactures tortillas, tortilla chips, burritos, Mexican-style salsas and other sauces for sale and distribution to retail food stores and food service establishments, through its wholly owned subsidiaries, La Canasta of Minnesota, Inc. and Cruz Mexican Foods, Inc. In addition, Sparta manufactures Mexican food products and other sauces under private label for others. Sparta's common stock is traded on the over-the-counter market in Minneapolis/St. Paul, Minn.
 SPARTA FOODS, INC.
 Consolidated Statement of Operations
 (unaudited)
 Three months ended
 December 31,
 1992 1991
 SALES $1,865,813 $1,220,218
 COST OF SALES 1,471,996 892,207
 GROSS PROFIT 393,817 328,011
 SELLING, GENERAL & ADMINISTRATIVE
 EXPENSES 402,246 306,409
 OPERATING INCOME (LOSS) (8,429) 21,602
 OTHER INCOME (EXPENSE)
 Interest income 1,491 3,256
 Interest expense (30,979) (21,345)
 -- (29,488) (18,089)
 INCOME (LOSS) BEFORE INCOME TAXES (37,917) 3,513
 PROVISION (BENEFIT) FOR INCOME TAXES (10,500) 1,000
 NET INCOME (LOSS) $(27,417) $2,513
 NET INCOME (LOSS) PER COMMON SHARE $(.00) $.00
 WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING 8,386,137 7,533,222
 -0- 3/3/93
 /CONTACT: Melissa Quinn of Padilla Speer Beardsley Inc., 612-871-8877, for Sparta Foods, Inc.; or Nicholas G. Grammas of Sparta Foods, 612-646-1888/


CO: Sparta Foods, Inc. ST: Minnesota IN: FOD SU: ERN

AL -- MN003 -- 2316 03/03/93 09:08 EST
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Publication:PR Newswire
Date:Mar 3, 1993
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