TOFUTTI BRANDS INC - Quarter Report: 2014 September (Form 10-Q)

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x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 27, 2014

o	Transition report pursuant to Section 13 or 15(d) of the Exchange Act for the transition period from [           ] to [              ]

 

 

Delaware	13-3094658
(State of Incorporation)	(I.R.S. Employer Identification No.)

 

 

 

 

 

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if smaller reporting company)	Smaller reporting company x

 

 

 

 

 

 

(in thousands, except share and per share figures)

 

		September 27, 2014				December 28, 2013*
Assets
Current assets:
Cash and cash equivalents		$	64			$	214
Accounts receivable, net of allowance for doubtful         accounts and sales promotions of $329 and $277,         respectively			2,270				1,954
Inventories, net of reserve of $150 and $150, respectively			1,906				1,844
Prepaid expenses			45				40
Deferred costs			197				138
Total current assets			4,482				4,190
Fixed assets			29				--
Other assets			16				16
		$	4,527			$	4,206
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of notes payable		$	6			$	--
Accounts payable			1,477				877
Accrued expenses			339				459
Deferred revenue			213				153
Total current liabilities			2,035				1,489
Notes payable, less current maturities			23				--
Commitments and contingencies			--				--
Stockholders’ equity:
Preferred stock - par value $.01 per share;
authorized 100,000 shares, none issued			--				--
Common stock - par value $.01 per share;          authorized 15,000,000 shares, issued and          outstanding 5,153,706 shares at September 27, 2014,          and 5,153,706 shares at December 28, 2013			52				52
Additional paid-in capital			--				--
Retained earnings			2,417				2,665
Total stockholders’ equity			2,469				2,717
Total liabilities and stockholders’ equity		$	4,527			$	4,206

 

 

 

		Thirteen weeks ended September 27, 2014				Thirteen weeks ended September 28, 2013				Thirty-nine weeks ended September 27, 2014				Thirty-nine weeks ended September 28, 2013
Net sales		$	3,292			$	3,442			$	10,647			$	11,143
Cost of sales			2,451				2,405				7,555				7,613
Gross profit			841				1,037				3,092				3,530
Operating expenses:
Selling and warehouse			306				404				1,117				1,351
Marketing			128				161				402				485
Research and development			152				130				488				450
General and administrative			419				450				1,327				1,434
			1,005				1,145				3,334				3,720
Loss before income taxes			(164	)			(108	)			(242	)			(190	)
Income tax expense			--				41				6				46
Net loss		$	(164	)		$	(149	)		$	(248	)		$	(236	)
Weighted average common shares outstanding:
Basic and diluted			5,154				5,154				5,154				5,154
Net  loss per common share:
Basic and diluted		$	(0.03	)		$	(0.03	)		$	(0.05	)		$	(0.05	)

 

 

 

		Thirty-nine weeks ended September 27, 2014				Thirty-nine weeks ended September 28, 2013
Cash (used in) operating activities, net		$	(150	)		$	(174	)
Cash (used in) financing activities, net			--				--
Net (decrease) in cash and cash equivalents			(150	)			(174	)
Cash and cash equivalents at beginning of period			214				471
Cash and cash equivalents at end of period		$	64			$	297
Supplemental cash flow information:
Income taxes paid		$	6			$	6
Non-cash transactions:
Financing of vehicle through note payable		$	29			$	--

 

 

 

 

 

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

 

 

Fixed Asset.  Fixed assets consist of a company automobile used for advertising and trade show purposes.  Amortization is provided by charges to income using the straight-line method over the useful life of five years. 

 

 

 

 

Net sales for the thirteen weeks ended September 27, 2014 were $3,292,000, a decrease of $150,000, or 4%, from net sales of $3,442,000 for the thirteen weeks ended September 28, 2013.  The decrease in sales was primarily the result of a decrease in  frozen food product sales, primarily frozen desserts, with a smaller decrease in our nondairy cheese product line.  In addition, in the 2014 period we increased promotional and allowance activity by over $100,000, which negatively affected reported sales.  We expect that our sales promotion programs activity will continue at present or increased levels into 2015.

 

 

Selling expenses decreased by $98,000, or 24%, to $306,000 for the thirteen weeks ended September 27, 2014 compared to $404,000 for the thirteen weeks ended September 28, 2013.  This decrease was due principally to decreases in outside warehouse rental expense of $50,000, bad debt expense of $29,000, and commission expense of $24,000, which decreases were partially offset by an increase in travel, entertainment and auto expense of $12,000. We anticipate that the current period’s selling expenses will continue on the same level for the balance of 2014.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

		Thirty-nine Weeks  ended September 27, 2014				Thirty-nine Weeks ended September 28, 2013
Net cash used in operating activities		$	(150,000	)		$	(174,000	)
Net cash used in financing activities			--				--
Net decrease in cash and cash equivalents		$	(150,000	)		$	(174,000	)

 

 

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

Disclosure Controls and Internal Controls. As provided in Rule 13a-14 of the General Rules and Regulations under the Securities and Exchange Act of 1934, as amended, Disclosure Controls are defined as meaning controls and procedures that are designed with the objective of insuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, designed and reported within the time periods specified by the SEC’s rules and forms. Disclosure Controls include, within the definition under the Exchange Act, and without limitation, controls and procedures to insure that information required to be disclosed by us in our reports is accumulated and communicated to our management, including our chief executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure. Internal Controls are procedures which are designed with the objective of providing reasonable assurance that (1) our transactions are properly authorized; (2) our assets are safeguarded against unauthorized or improper use; and (3) our transactions are properly recorded and reported, all to permit the preparation of our financial statements in conformity with generally accepted accounting principles.

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a lack of sufficient resources and an insufficient level of monitoring and oversight, which may restrict our ability to gather, analyze and report information relative to the financial statements and income tax assertions in a timely manner.

 

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The limited size of the accounting department makes it impracticable to achieve an optimum separation of duties.

 

 

 

*

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

 

Pursuant to the requirements of Section 13 or 15(d) 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.