SAN DIEGO, May 17, 2011 /PRNewswire-FirstCall/ -- Umami
Sustainable Seafood Inc. (OTCBB:UMAM) ("Umami" or the "Company"), a
holding company of fish farms supplying sashimi-grade Northern
Bluefin Tuna to the global market, announces operating results for
the three and nine months ended March 31,
2011.
Sales were $42.3 million for the
three months ended March 31, 2011, an
increase of $22.0 million, or 108%,
over the three months ended March 31,
2010. The increase is primarily due to the consolidation of
the Baja operations for the entire
quarter in the current three months. Sales were $56.7 million for the nine months ended
March 31, 2011 compared with
$25.2 million for the three months
ended March 31, 2010. The increase is
primarily due to the consolidation of the Baja operations since December 1, 2010.
Gross profit for the three months ended March 31, 2011 was $10.0
million, or 24%, of sales. Included in the cost of sales for
Baja is a $7.8 million (18% of total 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 cost. We expect the value of the future inventory that
is caught and grown at the Baja
operation to be more in line with its historical cost and,
accordingly, we would expect our cost of sales as a percentage of
revenue to be approximately 60% once we have sold the inventory
that was acquired.
Gross profit for the nine months ended March 31, 2011 was $13.2
million, or 23% of sales. For the nine months ended
March 31, 2011, cost of sales was
$43.5 million. Included in the cost
of sales for Baja is a
$10.3 million (18% of total 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 cost. We expect the value of the future inventory that
is caught and grown at the Baja
operation to be more in line with its historical cost and,
accordingly, we would expect our cost of sales as a percentage of
revenue to be approximately 60% once we have sold the inventory
that was acquired.
Based on our expectation of future sales prices and costs we
would expect our gross margins to be 40% or better in the future
once all remaining acquired inventory has been sold.
Net income attributable to Umami stockholders for the three
months ended March 31, 2011 was
$2.8 million and for the nine months
ended March 31, 2011 was $2.7 million. Estimated non-GAAP net income
attributable to Umami shareholders using estimated catch and
farming costs and eliminating gain on bargain purchase on business
combination was $9.6 million for the
three months ended March 31, 2011 and
for the nine months ended March 31,
2011 was $10.2 million.
Combined inventory (livestock) at March
31, 2011 was 3,000 metric tons, compared to 1,200 metric
tons at March 31, 2010, which equals
a 150% increase which is attributable to organic growth of
livestock and the acquisition of Baja.
In announcing these results, Oli Steindorsson, Chairman and CEO
of Umami, commented: "The completion of the Baja acquisition on November 30, 2010 more than doubled the size of
our farming operations, gave us geographic diversity and added
three unique farming locations to our operations. We are also
pleased to be able to show our shareholders enhanced profitability
reflecting on both strong demand for our products and the proof of
our concept of long term farming of Bluefin Tuna. Last but not
least, the growth on our livestock sets the tone for strong sales
growth in next 2 years."
We present 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 our
performance before the fair value purchase price adjustments to the
Baja inventory that are considered
by management to be representative of our on-going operating
results. 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.
The following table is a summary of our costs and
margins showing our gross margin and the effect
of the purchase price adjustment:
3 Months 9 Months
ended ended
March March
31, 2011 31, 2011
Net Revenue $42,338 $56,712
Cost of Goods Sold (32,383) (43,539)
Gross Profit $9,955 $13,173
Gross Profit % 24% 23%
Add back: Estimated Cost of Goods Sold in excess
of catch and farming costs 7,751 10,311
Estimated gross profit based on catch and farming
costs $17,706 $23,484
Estimated gross profit % based on catch and
farming costs 42% 41%
The following table is a summary of our net
income attributable to Umami shareholders and the
effect the purchase price adjustment and the
bargain purchase on business combination had on
the net income attributable to Umami
shareholders:
3 Months 9 Months
ended ended
March March
31, 2011 31, 2011
Net income attributable to Umami Shareholders $2,808 $2,717
Plus estimated cost of goods sold in excess of
catch and farming costs 7,751 10,311
Eliminate Bargain purchase on business
combination (930) (2,781)
Pro-forma estimate of net income attributable to
Umami shareholders using estimated catch and
farming costs and eliminating gain on bargain
purchase on business combination $9,629 10,247
About Umami Sustainable Seafood Inc.
The Company owns and operates Kali Tuna, which is an established
Croatian based aquaculture operation raising Northern Bluefin Tuna
in the Croatian part of the Adriatic Sea and, as of November 30, 2010, Baja Aqua Farms, which is an
established Mexico based
aquaculture operation raising Northern Bluefin Tuna in the Pacific.
The Company intends to become the leader in aquaculture for
northern bluefin tuna by acquisition and internal growth. The
growth of the Company will be founded on the sustainable management
of resources and economically sound practices, seeking
opportunities resulting from market consolidation and scientific
progress in the industry. We also intend to continue our research
into closed cycle farming technology for Bluefin tuna which has
produced encouraging results. For more information, please visit
http://www.umamiseafood.com.
Notice Regarding Forward Looking Statements
This press release contains projections and forward-looking
statements, as that term is defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Statements in this
press release, which are not purely historical, are forward-looking
statements and can include, without limitation, statements based on
current expectations involving a number of risks and uncertainties
and which are not guarantees of future performance of the Company.
There are numerous risks and uncertainties that could cause actual
results and the Company's plans and objectives to differ materially
from those expressed in the forward-looking information, including
(i) adverse market conditions; (ii) any adverse occurrence with
respect to the farmed seafood industry generally or the businesses
of Kali Tuna and Baja
specifically; and (iii) changes in the regulatory environment.
Actual results and future events could differ materially from those
anticipated in such information. These and all subsequent written
and oral forward-looking information are based on estimates and
opinions of management on the dates they are made and are expressly
qualified in their entirety by this notice. Although the Company
believes that the beliefs, plans, expectations and intentions
contained in this press release are reasonable, there can be no
assurance those beliefs, plans, expectations or intentions will
prove to be accurate. Investors should consult all of the
information set forth herein and should also refer to the risk
factors set forth in the Company's Annual Report on Form 10-K filed
on October 22, 2010, and other
reports filed or to be filed from time-to-time with the Securities
and Exchange Commission.
Contacts:
Umami Sustainable Seafood Inc.
Oli Steindorsson
Chairman and CEO
+1(619)544-9177
The Investor Relations Group
+1(212)825-3210
Investor Relations:
James Carbonara or Adam Holdsworth
Public Relations:
Laura Colontrelle or Enrique Briz
SOURCE Umami Sustainable Seafood Inc.