Meat Industry INSIGHTS Newsletter

981004 Fresh Foods Exceeds Revenue and Earnings Expectations

October 12, 1998

Claremont, NC - Fresh Foods, Inc., reported earnings of $.23 a share, before non-recurring charges due to acquisition and integration, on significantly higher operating revenues for the quarter ended Sept. 5, 1998.

Operating revenues for the second quarter of Fresh Foods' fiscal 1999 rose to $77,843,355 compared to $39,768,803 for the quarter ended Aug. 15, 1997. Operating income for the second quarter, before non-recurring expenses, approximately doubled compared to the second quarter of the previous fiscal year, rising to $6,307,555 versus $2,460,553.

The primary factors contributing to the higher operating revenues and operating income in fiscal 1999 compared to fiscal 1998 were the acquisition of the core business of Pierre Foods effective June 9, 1998, and the conversion of several company-owned restaurants to the Sagebrush Steakhouse and Saloon restaurant concept.

Net income for the second quarter of the fiscal year, before non-recurring expenses, was $1,372,897 compared to net income of $1,354,462 in the corresponding quarter of the previous fiscal year. After non-recurring expenses due to acquisition and integration charges, Fresh Foods' had a quarterly net loss of $358,756.

Earnings per share on a fully diluted basis were $.23 a share before non- recurring expenses, matching earnings per share for the second quarter of the previous fiscal year. After non-recurring expenses, Fresh Foods had a six cents per share loss for the quarter.

"In general, our consolidated financial results were in line with management's expectations as we continue to move forward with our plan for successfully integrating Pierre Foods and Sagebrush with Fresh Foods," said David R. Clark, Fresh Foods president and chief operating officer. "We were pleased that results for our Sagebrush concept were in line with projections during a very difficult time for the restaurant industry in general," Clark continued. "It also was very exciting that Pierre exceeded quarterly revenue expectations by approximately $5 million and topped operating profit expectations by about $655,000."

Through the first two quarters of fiscal 1999, Fresh Foods reported that revenue increased approximately $36.8 million and that operating income before non-recurring expenses grew about $3.2 million, compared to the prior year's results for the intial two quarters, which ended Aug. 15, 1997.

Fresh Foods, Inc. is the parent company of several wholly owned subsidiary companies, including: Pierre Foods, LLC, which comprise Pierre Foods plants in Cincinnati, Ohio and Claremont, N.C.; Claremont Restaurant Group, LLC, which is responsible for all restaurant activities; and Mom 'n' Pop's Country Ham, LLC, which is one of the nation's largest country ham producers.

Fresh Foods is a fully integrated producer and marketer of full cooked, value-added food products. In addition to its food processing business, the company owns and operates 65 restaurants and franchises an additional 37 units.

The company's food products included numerous fully cooked meat products as well as packaged microwaveable sandwiches for the foodservice, vending, convenience store, and other home meal replacement markets. Fresh Foods sells its high-quality, value-added products through various distribution channels under the Pierre, Fast Choice, and Mom 'n' Pop's brand names, which are widely recognized in the food industry. It also sells a variety of sandwiches under several national restaurant brands.

Fresh Foods through its Claremont Restaurant Group subsidiary, owns and operates 46 Sagebrush Steakhouse & Saloon restaurants. In addition, the company owns and operates 13 Western Steer and five Prime Sirloin locations and one Bennett's restaurant. All franchised locations operate under the Western Steer, Prime Sirloin, and Bennett's concepts.

This Article Compliments of...

Iotron Technology Inc.

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