TOFB 8-K
Tofutti Brands Inc (TOFB)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On March 31, 2023, the Registrant reported its results of operations for the fiscal year ended December 31, 2022. A copy of the press release issued by the Registrant in this connection is furnished herewith as Exhibit 99.1.
The information in this Item in this Current Report on Form 8-K and Exhibit 99.1 attached hereto are being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
| Exhibit 99.1 | Press Release dated March 31, 2023 | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: March 31, 2023 | TOFUTTI BRANDS INC. | |
| (Registrant) | ||
| By: | /s/ Steven Kass | |
| Steven Kass | ||
| Chief Executive and Financial Officer | ||
Exhibit 99.1
March 31, 2023
Tofutti Press Release
| Company Contact: | Steve Kass |
| Chief Executive/Financial Officer | |
| (908) 272-2400 | |
| (908) 272-9492 (Fax) |
TOFUTTI ANNOUNCES RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022
Cranford, New Jersey — March 31, 2023 — TOFUTTI BRANDS INC. (OTCQX Symbol: TOFB) issued its results for the fiscal year ended December 31, 2022 today.
Tofutti Brands reported net sales of $12,827,000, a slight increase of $237,000 or 2%, from net sales of $12,590,000 for the fiscal year ended January 1, 2022 due to the price increases implemented by the Company in the fourth quarter of 2022. Sales of our frozen dessert and frozen food product lines increased slightly to $1,876,000 in the fiscal year ended December 31, 2022 from $1,829,000 in fiscal 2021. Sales of vegan cheese products also increased slightly to $10,951,000 in the fiscal year ended December 31, 2022 from $10,761,000 in the fiscal year ended January 1, 2022.
Our gross profit for the year ended December 31, 2022 decreased by $1,000,000 to $2,342,000 from $3,342,000 for the fiscal year ended January 1, 2022 and our gross profit percentage for the fiscal year ended December 31, 2022 was 18% compared to 27% for the fiscal year ended January 1, 2022. The decrease in both our gross profit and gross profit percentage was primarily caused by the substantial increases in the costs for certain ingredients, especially palm oil, gums and flavorings and the substantial increase in freight out expense. These substantial cost increases were due primarily to the lingering supply chain issues caused by the Covid-19 pandemic and the record high cost of petroleum. The high cost of petroleum directly impacted the costs of certain ingredients and packaging such as the plastic packaging we use for our spreadable cheese products.
We had a net loss of $525,000, or a $0.10 loss per share (basic and diluted), for the year ended December 31, 2022 compared to net income of $143,000, or $0.03 (basic and diluted) per share, for the fiscal year ended January 1, 2022.
At December 31, 2022, we had approximately $1,072,000 in cash, and our working capital was $3,625,000 as compared to $1,698,000 and $4,326,000 at January 1, 2022. The decrease in cash is primarily due to the use of funds to purchase inventories during the period, due to management’s decision to purchase ingredients in advance of production needs to ensure an adequate supply and to prevent future production disruptions.
Mr. Steven Kass, Chief Executive and Financial Officer of the Company stated, “We look forward to improved results in 2023 as the price increases we have implemented take full effect and expect that our cash position will also improve.”
About Tofutti Brands Inc.
Founded in 1981, Tofutti Brands Inc. develops and distributes a complete line of plant-based products. The Company sells more than twenty-five (25) dairy-free foods including cheese products and frozen desserts. Tofutti Brands Inc. is a proven innovator in the food industry and has developed a full line of delicious and healthy dairy-free foods. Available throughout the United States and in more than fifteen (15) countries, Tofutti Brands answers the call of millions of people who are allergic or intolerant to dairy or wish to maintain a kosher or vegan diet. Tofutti’s product line includes plant-based ice cream pints, cones, Tofutti Cutie® sandwiches and novelty
Forward-Looking Statements
Some of the statements in this press release concerning the Company’s future prospects are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Actual results may vary significantly based upon a number of factors including, but not limited to the impact of COVID-19 on the economy and our operations, business conditions both domestic and international, competition, changes in product mix or distribution channels, resource constraints encountered in promoting and developing new products and other risk factors detailed in the Company’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K.
TOFUTTI BRANDS INC.
STATEMENTS OF OPERATIONS
(In thousands, except for per share data)
Fiscal year ended December 31, 2022 | Fiscal year ended January 1, 2022 | |||||||
| Net sales | $ | 12,827 | $ | 12,590 | ||||
| Cost of sales | 10,485 | 9,248 | ||||||
| Gross profit | 2,342 | 3,342 | ||||||
| Operating expenses: | ||||||||
| Selling and warehousing | 1,147 | 1,206 | ||||||
| Marketing | 564 | 281 | ||||||
| Product development costs | 143 | 124 | ||||||
| General and administrative | 1,404 | 1,489 | ||||||
| Total operating expenses | 3,258 | 3,100 | ||||||
| Income (loss) from operations | (916 | ) | 242 | |||||
| SBA loan forgiveness | 165 | - | ||||||
| Income (loss) before interest expense and income taxes | (751 | ) | 242 | |||||
| Interest expense | 2 | 25 | ||||||
| Income (loss) before provision for income taxes | (753 | ) | 217 | |||||
| (Benefit from) provision for income taxes | (228 | ) | 74 | |||||
| Net income (loss) | $ | (525 | ) | $ | 143 | |||
| Weighted average common shares outstanding: | ||||||||
| Basic | 5,154 | 5,154 | ||||||
| Diluted | 5,154 | 5,154 | ||||||
| Net income (loss) per common share: | ||||||||
| Basic | $ | (0.10 | ) | $ | 0.03 | |||
| Diluted | $ | (0.10 | ) | $ | 0.03 | |||
TOFUTTI BRANDS INC.
BALANCE SHEETS
(In thousands, except for share and per share data)
| December 31, 2022 | January 1, 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 1,072 | $ | 1,698 | ||||
| Accounts receivable, net of allowance for doubtful accounts and sales promotions of $495 and $435, respectively | 1,305 | 1,336 | ||||||
| Inventories | 2,463 | 1,874 | ||||||
| Prepaid expenses and other current assets | 80 | 98 | ||||||
| Total current assets | 4,920 | 5,006 | ||||||
| Operating lease right-of-use assets | 158 | 203 | ||||||
| Finance lease right-of-use asset | 53 | - | ||||||
| Deferred tax assets | 367 | 112 | ||||||
| Other assets | 19 | 21 | ||||||
| Total assets | $ | 5,517 | $ | 5,342 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| SBA loan payable | $ | - | $ | 165 | ||||
| Income taxes payable | 41 | 46 | ||||||
| Accounts payable | 684 | 122 | ||||||
| Accrued expenses | 555 | 347 | ||||||
| Financing lease liability, current portion | 15 | - | ||||||
| Total current liabilities | 1,295 | 680 | ||||||
| Operating lease liabilities, net of current portion | 85 | 95 | ||||||
| Finance lease liability, net of current portion | 39 | - | ||||||
| Total liabilities | 1,419 | 775 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock – par value $.01 per share; authorized 100,000 shares, none issued and outstanding | - | - | ||||||
| Common stock – par value $.01 per share; authorized 15,000,000 shares, 5,153,706 shares issued and outstanding | 52 | 52 | ||||||
| Additional paid-in capital | 263 | 207 | ||||||
| Retained earnings | 3,783 | 4,308 | ||||||
| Total stockholders’ equity | 4,098 | 4,567 | ||||||
| Total liabilities and stockholders’ equity | $ | 5,517 | $ | 5,342 | ||||