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Uncle B's Bakery Inc.: Record First Quarter Net Income up 78.4% on Record Sales of $6.4 Million, up 58.1%

ELLSWORTH, Iowa, Nov. 22 /PRNewswire/ -- William T. Rose, Jr., chairman and chief executive officer of Uncle B's Bakery, Inc. (Nasdaq: UNCB), today announced results for the company's first fiscal quarter ended October 31, 1996.

For the most recent three-month period the company reported record net income of $267,994 or $0.08 per share (up 78.4 percent) on record net sales of $6.4 million (up 58.1 percent) compared to net income of $150,202 or $0.04 per share, before the cumulative effect of an accounting change, on net sales of $4.0 million for the first quarter of fiscal 1996.

Rose attributed 13.9 percent of the net sales increase in the first quarter to Uncle B's branded product sales, while the bake-off product introduced in the fourth quarter of last year accounted for 86.1 percent of the increase. He indicated that gross profit for the most recent three-month period increased to $2.4 million, or 38.3 percent of net sales, versus the comparable quarter's gross profit of $2.0 million or 50.2 percent. Excluding the favorable impact of an economic development incentive on gross profit for the prior year's first quarter, gross profit for the most recent quarter increased 39.8 percent.

Rose said that inefficiencies related to the plant expansion and new product manufacturing were reduced significantly in the most recent quarter. He also indicated that the company has achieved lower relative general and administrative costs, and that overall plant efficiencies continue to improve. "As we near the completion of our plant expansion, I am confident we have made a series of excellent strategic decisions that will enable Uncle B's to build upon its success in this quarter, and that the company is well positioned to expand its product and customer base," he said.

Sales of the company's higher-margin branded products represented 69.3 percent of net sales, while the company's bake-off product amounted to 31.7 percent of revenue during the most recent quarter. "Uncle B's bake-off product has been well received and is expected to result in additional sales growth opportunities in the foodservice distribution channel," said Rose.

Uncle B's Bakery, Inc. produces and markets fresh-tasting, never-frozen bagels under "Uncle B's" and "Millspring" brand labels. Currently, Uncle B's Bagels are available in the refrigerated dairy cases of over 11,000 supermarkets in 43 states. The company also produces a bake-off bagel for national foodservice distribution.
 Three months ended
 10/31/96 10/31/95
 Net sales $6,381,279 $4,034,981
 Gross profit 2,445,460 2,024,109
 Income from operations 393,386 279,108

Income before cumulative
 effect of accounting change 267,994 150,202

Cumulative effect to July 31, 1995
 of accounting change --- (1,406,050)
 Net income (loss) $267,994 $ (1,255,848)

Earnings per share:

Income before cumulative
 effect of accounting change(1) $0.08 $0.04

Cumulative effect of accounting
 change(1) --- (0.40)
 Net income (loss) 0.08 (0.35)

Weighted average common shares

and common equivalent shares
 outstanding 3,545,147 3,545,147

(1) Effective August 1, 1995, the company changed its method of accounting for new account allowances (fees paid to customers to obtain retail shelf or warehouse space) from the capitalization method (with amortization over 12 - 36 months) to expensing the costs as incurred. This change resulted in a cumulative effective adjustment of $1,406,050 (no income tax effect), which is included in the net loss for the quarter ended October 31, 1995.

SOURCE Uncle B's Bakery Inc.
 -0- 11/22/96

/CONTACT: Wm. Howard McClennan, Jr., Chief Financial Officer of Uncle B's Bakery, Inc., 515-836-4000; or Madeleine Franco or Eric Simonsen, of Jordan Richard Assoc., 801-595-8611/


CO: Uncle B's Bakery Inc. ST: Iowa IN: FOD SU: ERN

JC-SS -- LAF018 -- 5676 11/22/96 08:30 EST
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Publication:PR Newswire
Date:Nov 22, 1996
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