Revenue More Than Doubles to $57.0 Million in FY 2011 Compared with FY 2010 Due Primarily to the Baja Acquisition Completed in November 2010
Dallas, Texas (November 15, 2011) – StockGuru Shines its Spotlight on Umami Sustainable Seafood Inc. (OTCBB: UMAM) (, a holding company of fish farms supplying sashimi-grade Northern Bluefin Tuna to the global market. Yesterday the Company announced operating results for the fiscal year ended June 30, 2011. It closed on November 14, 2011, at $2.30, trading in a fifty-two week range of $3.50 – 0.60.
Financial highlights include the following:
- Fiscal 2011 full-year revenues increased 125% to $57.0 million from $25.3 million in fiscal 2010
- Gross profit margin was 24%
Oli Steindorsson, Chairman and CEO of Umami, commented: “This year’s performance was marked by solid growth in our inventory, sales and revenues as a result of improvements in our operations as well as the acquisition of the Baja operations during the year. We spent a great deal of time during the year focusing on building a strong management team, improving our overall operational processes and assimilating the Baja operations into Umami. We are happy to report that our hard work is starting to pay off. Our gross profit margins for 2011 were 24%, when counting the effect of the purchase price adjustment according to GAAP standards, and 41% using non-GAAP accounting measures. A comparison of sales and inventory for 2011 and 2010 shows that we are growing at a pace that exceeds the expectations we had at this time last year. We also believe that the applicable GAAP accounting will have a positive effect on our future bottom line when we will no longer be carrying the one-time costs associated with the Baja acquisition in our inventory costs. We are now more confident than ever that we have set the stage for continued success moving forward, and that we will carry this new momentum into fiscal 2012.”
Fiscal 2011 Financial Results
For fiscal 2011, revenues increased 125% to $57.0 million from $25.3 million in fiscal 2010. The increase is primarily due to the Company’s acquisition of the Baja operations on November 30, 2010. The Baja operations had $28.2 million in sales for the period from December 1, 2010 to June 30, 2011. Umami also had higher total sales at Kali Tuna with year-over-year increase in farmed tuna sales of 66%. The Company had no sales from purchased tuna in the year ended June 30, 2011 compared with $7.9 million in the prior year.
For the year ended June 30, 2011, costs of sales were $43.2 million compared to $20.1 million for the year ended June 30, 2010. The increase of $23.1 million is due to costs associated with the Baja sales discussed above totaling $25.8 million, higher cost of sales at Kali related to the higher volume of sales of farmed tuna year-over-year resulting in a net increase of $3.3 million, partially offset by no cost of sales of purchased tuna in the year ended June 30, 2011. Included in the cost of sales for Baja is a $9.8 million (35% of total Baja sales) fair value adjustment representing the increase in the carrying value of Baja inventory to reflect the valuation of the inventory purchased in the Baja acquisition over its historical fishing and farming costs. Umami expects the cost of the future inventory that is caught and grown at the Baja operation to be more in line with its historical cost and, accordingly, it would expect the cost of sales as a percentage of revenue to be approximately 60% once it has sold the inventory that was acquired. As of June 30, 2011, $2.9 million of fair value adjustment remains on Umami’s balance sheet. This cost will be recognized as a cost of sales over the next 12 months.
Gross profit for the year ended June 30, 2011 was $13.8 million, or 24% of sales, compared to $5.3 million, or 21%, for the corresponding period in 2010. Gross profit increased as result of improved business conditions for the Company’s products in Japan. Additionally, since most of Umami’s sales are in Japanese yen, the appreciation of the yen against the dollar has improved the gross margin. Based on the Company’s current expectation of future sales prices and costs, it expects gross margins to be 40% or better in the future once all remaining acquired inventory has been sold.
Umami presents non-GAAP gross profit measures and non-GAAP net income attributable to Umami shareholders in the following tables. Management believes these non-GAAP measures help indicate performance before the fair value purchase price adjustments to the Baja inventory. Once the adjustments related to the fair value of the Baja inventory due to the purchase price adjustment have been fully recognized in cost of sales in the future, these non-GAAP adjustments to cost of sales and the resulting non-GAAP measures will no longer be applicable.
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