Tofutti Reports New Product Start-Up Costs Will Continue ToAffect Company Into 4Q02

Tofutti Reports New Product Start-Up Costs Will Continue ToAffect Company Into 4Q02

CRANFORD, N.J.--For its third quarter (3Q02), ended Sept. 28and reported Nov. 12, Tofutti Brands Inc. (AMEX:TOF) announced a lower netincome due to start-up costs for new products.

Sales for the quarter were $4.5 million, up from $4.3 million logged in thesame period last year. Gross margin went down to 30.0 percent of sales comparedto 3Q01's 32.9 percent. Operating expenses hovered at approximately the samelevel ($977,000 for 3Q02 compared to $925,000 in 3Q01), and net profit droppedto $232,000, or $.04 per share earned, compared to the same quarter last year's$316,000, or $.05 per share earned.

The company's operating results were negatively impacted during the quarterdue to new product start-up costs, including introductory allowances payable tolarge chain supermarkets, significant increases in paper and plastic packagingcosts, and higher freight and warehouse expenses. Tofutti reported that itexpects that these costs will continue to affect operating expenses for theremainder of 2002.