Spectrum Organic Benefits from Bad Fats

Spectrum Organic Benefits from Bad Fats

PETALUMA, Calif.SpectrumOrganic Products Inc. (OTCBB:SPOP) reported March 1 that for its fiscal year(FY03), ended Dec. 31, sales rose thanks to increased public awareness of goodversus bad fats.

Sales were up, coming in at $45.7 million from $40.6 million,while gross margin hovered around 26 percent of sales. Operating expenses roseto $10.3 million from $9.0 million, and net income rose to $2.7 million, or $.06earned per share, from $1.1 million, or $.02 earned per share.

The companys higher sales were mainly due to the mass mediasfocus on the dangers of hydrogenated oils with respect to obesity andcardiovascular disease. As a result, the division seeing the largest increasedrevenues was Spectrum Ingredients, which experienced a sales increase of 31percent over the year prior. The companys Spectrum Naturals line ofpackaged culinary oils, dressings and butter substitutes had a 19-percent salesgrowth, and sales of the companys essential fatty acid supplements, SpectrumEssentials, increased 15 percent.

On the positive side, the year featured double-digit salesgrowth in each of our three major product lines and record net income, saidNeil G. Blomquist, president and chief executive officer. On the negativeside ... we suffered some gross margin erosion as a result of higher rawmaterial costs due to organic commodity prices and the weak dollar, especiallyversus the euro.