Posting quarterly results on June 26, Tofutti Brands reported a net sales decrease of 8% to $3,226,000 for the thirteen weeks that ended on March 28, 2020, relative to the same period in 2019. Gross profit, however, increased slightly to $996,000 and net income more than doubled to $50,000.
The Cranford, New Jersey, USA-headquartered company’s soy-based, dairy-free product line, which is primarily distributed through retail channels, includes ice cream substitutes, novelties, other frozen desserts, vegan cheese, pizza, and blintzes made with milk-free cheese.
Tofutti logged a slight dip in sales during the early weeks of government-imposed restrictions to mitigate the spread of Covid-19, as shipments to restaurants and small food shops declined. Sales of vegan cheese products decreased to $2,814,000 in the quarter from $2,978,000 during the same period in 2019. Receipts for frozen dessert and frozen food products decreased from $523,000 to $412,000.
To date, the effects of the novel coronavirus (SARS-CoV-2) health emergency have not materially affected operations. All co-packing facilities are currently operating normally and the pandemic has not constrained production requirements. Tofutti continues to be able to schedule trucks for delivery and a large majority of its customers are still operating and ordering products as before.
Most administrative work is being performed remotely. A small crew maintains the office for those functions that cannot be handled by phone or online. The company expects that any potential decline in sales receipts will be offset in whole or in part by a similar decline in sales and marketing expenses due to social distancing restrictions and other current rules and regulations that preclude face-to-face sales meeting, attendance at trade shows and the initiation of in-store promotions.
On May 4 Tofutti was granted a $165,000 loan pursuant to the federal government’s Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (CARES), which was enacted on March 27. The term of the loan is four years, with monthly payments due the first day of each month, beginning seven months from the date of initial disbursement. Interest accrues at 1% per year, and a portion of the loan may be forgiven based on payments for payroll, rent and utilities during the period subsequent to obtaining the loan.
“We are gratified to be able to continue to run our business effectively during the Covid-19 crisis, while safeguarding our staff. We are continuing to meet market demand for our products during this period of uncertainty with the assistance of co-packers who continued to operate through the entire period. We look forward to emerging from this perilous period as a stronger and more profitable company,” said Chairman and CEO David Mintz.