Overhill Farms Reports Increases in Revenues to $194.4 Million,

Overhill Farms Reports Increases in Revenues to $194.4 Million, and
Net Income to $3.1 Million, for Fiscal 2012 
LOS ANGELES, CA -- (Marketwire) -- 12/18/12 --  Overhill Farms, Inc.
(NYSE MKT: OFI) today reported net revenues of $194.4 million for the
fiscal year ended September 30, 2012, an increase of $25.2 million or
14.9% from net revenues of $169.2 million for the fiscal year ended
October 2, 2011.  
Net income for fiscal 2012 was $3.1 million or $0.20 per basic and
$0.19 per diluted common share, more than double the net income of
$1.4 million or $0.09 per basic and diluted common share of the prior
fiscal year. 
The Company also reduced the outstanding balance of its credit
facility by $4.0 million during fiscal 2012. 
James Rudis, the Company's Chairman, President and Chief Executive
Officer, said, "We are pleased to report substantial increases in
both revenues and net income despite an economic climate that
continues to be challenging for us and for our customers." 
"We continue to see the positive effects of our Boston Market frozen
food license. We are pleased to report that the Kroger supermarket
chain, with 2,425 stores in 31 states, will begin carrying our Boston
Market brand frozen foods, with initial shipments scheduled for
February of 2013," Mr. Rudis added. 
As previously announced, after receiving several substantive
proposals regarding potential transactions, the Company engaged the
investment banking firm of Piper Jaffray & Co. to assist it in
evaluating these and other alternatives. Mr. Rudis said that Piper
Jaffray has presented proposals to the Company, which are currently
being evaluated by management and the Board of Directors. 
The increase in net revenues for fiscal 2012 was primarily due to
higher sales volumes from the Company's portion of Boston Market
brand products and from a major food service account. 
Retail net revenues for fiscal 2012 increased by $12.5 million, or
11.1%, to $125.4 million from $112.9 million for the prior fiscal
year. The increase in retail net revenues was largely due to an
increase in sales of Boston Market products (sold to various third
party customers) of $25.7 million. This increase was partially offset
by decreases in net revenues to Jenny Craig, Inc. of $11.0 million
and $2.2 million to oth
er retail accounts. 
Foodservice and airline net revenues for fiscal 2012 increased by
$12.5 million, or 22.2%, to $68.9 million from $56.4 million for
fiscal 2011, due primarily to a $14.2 million increase in sales to
Panda Restaurant Group Inc, partially offset by a $2.0 million
decrease in airline net revenues. As a result of the decreased
significance to the Company of airline revenues, the airline category
will be included in the foodservice net revenue category going
forward. 
For fiscal 2012, the foodservice category as a percentage of net
revenues increased to 35.4% from 33.3% for fiscal 2011. The Company
continues to increase its sales efforts in this category, and
believes foodservice represents a significant opportunity in fiscal
2013 and beyond. 
Gross profit for fiscal 2012 increased by $4.0 million, or 30.8%, to
$17.0 million from $13.0 million for fiscal 2011. Gross margin
increased to 8.8% for fiscal 2012 from 7.7% for fiscal 2011.  
The increase in gross profit dollars and margin was driven largely by
more favorable overhead absorption as a result of higher volume
production runs to fulfill increased sales volumes, along with some
easing of commodity prices. 
Freight and storage expenses were $3.8 million higher, due
predominantly to increased shipments for Boston Market products and
higher fuel surcharges. The Company anticipates increased freight and
storage expenses as sales volumes for Boston Market increase and if
fuel prices remain at their current levels or increase.  
For the fourth quarter of fiscal 2012, the Company reported net
revenues of $46.3 million, compared to $44.3 million for the fourth
quarter of fiscal 2011. The Company reported net income of $322,447
or $0.02 per basic and diluted common share for the fourth quarter of
fiscal 2012, compared to a net loss for the fourth quarter of fiscal
2011 of ($1.4 million), or ($0.09) per basic and diluted common
share. 
Conference Call
 Overhill Farms will host a conference call on
December 18, 2012, at 10:00 a.m. PST (1:00 p.m. EST). Shareholders
and investment professionals can participate by dialing 877-407-9210.
A webcast of accompanying slides is at
http://tinyurl.com/overhill2012. 
About Overhill Farms
 Overhill Farms, Inc. (www.OverhillFarms.com) is
a value-added supplier of custom high quality prepared frozen foods
for branded retail, private label foodservice and airline customers.
Its product 
line includes entrees, plated meals, bulk-packed meal
components, pastas, soups, sauces, poultry, meat and fish
specialties, as well as organic and vegetarian offerings. The
Company's capabilities give its customers a one-stop solution for new
product development, precise replication of existing recipes, product
manufacturing and packaging. Its customers include prominent
nationally recognized names such as Jenny Craig, Inc., Safeway Inc.,
Panda Restaurant Group, Inc., Pinnacle Foods Group LLC and American
Airlines, Inc. The Company also sell frozen foods under the Boston
Market brand, under an exclusive license from Boston Market
Corporation. 
This news release contains disclosures that are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current expectations or beliefs and include, but are not limited to,
statements about the Company's operations and financial performance
and condition and statements regarding expectations of continued or
increased sales volumes and revenues, margins, profitability,
production efficiencies and expansions, anticipated freight and
storage costs, cash flows and growth, anticipated amounts and timing
of growth in the Company's customer base and business in the
foodservice and retail market sectors, revenue growth from new
customers, expectations concerning the Company's Boston Market line,
contemplated or potential acquisitions or similar transactions and
general economic pressures. For this purpose, statements of
historical fact may be deemed to be forward-looking statements.
Forward-looking statements include statements which are predictive in
nature, which depend upon or refer to future events or conditions, or
which include words such as "continue," "efforts," "expects,"
"anticipates," "intends," "plans," "believes," "estimates,"
"projects," "forecasts," "strategy," "will," "potential," "may,"
"goal," "target," "prospects," "optimistic," "confident," "likely,"
"probable," "hope," "should," "growth," "opportunities" or similar
expressions. In addition, any statements concerning future financial
performance (including future revenues, earnings or growth rates),
on-going business strategies or prospects, and possible future
company actions, which may be provided by management, are also
forward-looking statements. The Company cautions that these
statements by their nature involve risks and uncertainties, and
actual results may differ materially depending on a variety of
important factors, including, among others: the Company's and other
parties' ability to satisfy conditions precedent to proposed
transactions, including, without limitation, obtaining any applicable
regulatory and stockholder approvals; the impact of competitive
products and pricing; fulfillment by suppliers of existing raw
material contracts; market conditions that may affect the costs
and/or availability of raw materials and the Company's ability to
obtain favorable long-term purchase commitments for raw materials,
and of fuels, energy, logistics and labor as well as the market for
the Company's products, including customers' ability to pay and
consumer demand; changes in business environment, including actions
of competitors and changes in customer preferences, as well as
disruptions to customers' businesses; certifications obtained by
competitors; seasonality in the retail category; loss of key
customers due to competitive environment or production being moved
in-house by customers; natural disasters that can impact, among other
things, costs of fuel and raw materials; the occurrence of acts of
terrorism, such as the events of September 11, 2001, or acts of war;
changes in governmental laws and regulations; change in control due
to takeover or other significant changes in ownership; financial
viability and resulting effect on revenues and collectability of
accounts receivable of customers during deep recessionary periods;
ability to obtain additional financing as and when needed, and rising
costs of credit that may be associated with new borrowings; voluntary
or government-mandated food recalls; and other factors as may be
discussed in the Company's Annual Report on Form 10-K for the year
ended September 30, 2012, and other reports filed with the Securities
and Exchange Commission. 


 
                                                                            
                            OVERHILL FARMS, INC.                            
                      CONDENSED SUMMARY OF OPERATIONS                       
                                                                            
                                                 For the Fiscal Year Ended  
                                               ---------------------------- 
                                               September 30,    October 2,  
                                                    2012           2011     
                                               -------------  ------------- 
                                                                            
Net revenues                                     194,389,370  $ 169,218,474 
Cost of sales                                                               
                                                 177,342,289    156,264,764 
                                               -------------  ------------- 
Gross profit                                      17,047,081     12,953,710 
Selling, general and administrative expenses      11,894,203     10,352,586 
                                               -------------  ------------- 
Operating income           
                        5,152,878      2,601,124 
Total interest expense                                                      
                                                    (312,176)      (334,570)
                                               -------------  ------------- 
Income before income taxes                         4,840,702      2,266,554 
Income tax provision                               1,725,737        825,046 
                                               -------------  ------------- 
Net income                                     $   3,114,965  $   1,441,508 
                                               =============  ============= 
                                                                            
Net income per share - basic                   $        0.20  $        0.09 
                                               =============  ============= 
Net income per share - diluted                 $        0.19  $        0.09 
                                               =============  ============= 
                                                                            
Shares used in computing net income per share:                              
Weighted average shares outstanding - basic       15,831,596     15,823,271 
Weighted average shares outstanding - diluted     15,994,853     16,051,058 
                                                                            
                                                                            
                            OVERHILL FARMS, INC.                            
                      CONDENSED SUMMARY OF OPERATIONS                       
                                                                            
                                                For the Three Months Ended  
                                               ---------------------------- 
                                               September 30,    October 2,  
                                                    2012           2011     
                                               -------------  ------------- 
                                                                            
Net revenues                                   $  46,312,998  $  44,250,708 
Cost of sales                                     42,768,499     42,772,064 
                                               -------------  ------------- 
Gross profit                                       3,544,499      1,478,644 
Selling, general and administrative expenses                                
                                                   3,069,443      3,518,519 
                                               -------------  ------------- 
Operating income (loss)                              475,056     (2,039,875)
Total interest expense                               (56,617)       (83,694)
                                               -------------  ------------- 
Income (loss) before income taxes                    418,439     (2,123,569)
Income tax provision (benefit)                        95,992       (766,117)
                                               -------------  ------------- 
Net income (loss)                              $     322,447  $  (1,357,452)
                                               =============  ============= 
                                                                            
Net income (loss) per share - basic            $        0.02  $       (0.09)
                                               =============  ============= 
Net income (loss) per share - diluted          $        0.02  $       (0.09)
                                               =============  ============= 
                                                                            
Shares used in computing net income (loss) per                              
 share:                                                                     
Weighted average shares outstanding - basic       15,841,493     15,823,271 
Weighted average shares outstanding - diluted     15,917,927     15,823,271 

  
Contacts: 
James Rudis
Chairman, President and CEO
Overhill Farms, Inc.
323-582-9977 
Alexander Auerbach
Auerbach & Co. Public Relations
1-800-871-2583
auerbach@aapr.com 
 
 
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