Meatless Competition Affects Gardenburger 1Q03

Meatless Competition Affects Gardenburger 1Q03

PORTLAND, Ore.--Gardenburger Inc. (OTCBB:GBUR)reported Feb. 3 that for its first quarter (1Q03), ended Dec. 31, sales weredown due to increased market competition in the meatless patty arena.

For the quarter, sales dipped to $9.0 million from $10.8 millionand gross margin declined (37.4 percent in 1Q03 from 38.6 percent of salesposted in 1Q02). Operating expenses rose to $4.6 million from $3.8 million, andnet loss grew to $2.3 million, or $.40 per share lost, from $58,000, or $.13 pershare lost.

The company was disappointed with its 1Q03 sales. "We saw asoftening in our food service sales, which we are currently addressing,"said Scott Wallace, chairman of the board, president and chief executiveofficer. "We continue to see pressure in the competitive veggie burgersegment of the grocery channel." To compensate for these losses, thecompany plans to launch two products in the spring: Barbecued Chicken andMeatless Meatloaf. In the meantime, sales of its Herb Crusted Cutlet and CrispyNugget products are going well.

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