TOFUTTI BRANDS INC

Current report

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of these standards will have on it financial statements.

Current report

Our gross profit increased significantly to $589,000 for the thirteen weeks ended March 29, 2025 from $474,000 for the thirteen weeks ended March 30, 2024, due principally to significant price increases we implemented at the end of 2024. Our gross profit percentage was 37% for the thirteen weeks ending March 29, 2025 compared to 21% for the thirteen weeks ending March 30, 2024. There was significant ingredient and packaging cost increases that took place in the first quarter of 2024 that were not present in the first quarter of 2025.

Current report

Selling expenses increased by $3,000, or 1%, to $217,000 for the thirteen weeks ended March 29, 2025 from $214,000 for the thirteen weeks ended March 30, 2024. Increases in meetings and convention expense of $12,000 and bad debt expense of $8,000 was partially offset by decrease in payroll expense of $6,000 and travel expense of $8,000. We anticipate that our selling expense will continue at the same level, or lower, for the balance of 2025.

Current report

Marketing expenses decreased by $13,000, or 10%, to $121,000 for the thirteen weeks ended March 29, 2025 from $134,000 for the thirteen weeks ended March 30, 2024. The decrease was primarily due to decreases in advertising expense of $28,000, which was partially offset by increases in promotion expenses of $7,000, and artwork and plate expense of $10,000. We anticipate that our marketing promotion expenses will continue at the same level for the balance of 2025.

Current report

Product development costs, increased by $2,000, or 5%, to $44,000 for the thirteen weeks ended March 29, 2025 from $42,000 for the thirteen weeks ended March 30, 2024 due to a $15,000 increase in professional fees and outside services expense of $5,000. We anticipate our product development costs for the balance of the year will continue at a slightly higher level as compared to the 2024 period due to higher professional fees and outside services expense.

Current report

General and administrative expenses decreased by $14,000, or 4%, to $368,000 for the thirteen weeks ended March 29, 2025 from $382,000 for the thirteen weeks ended March 30, 2024, primarily due to a decrease in stock option expense of $14,000 due to all outstanding options becoming fully vested by end of 2024, real and personal property tax of $5,000, waste removal of $5,000, and payroll expense of $5,000.We anticipate our general and administrative expense will continue at a lower level compared to the 2024.

Previous report

Our gross profit was $485,000 for the thirteen weeks ended September 28, 2024 and $786,000 for the thirteen weeks ended September 30, 2023. Our gross profit percentage decreased to 24% for the thirteen weeks ending September 28, 2024 compared to 31% for the thirteen weeks ending September 30, 2023. Our gross profit and gross profit percentage were negatively impacted by the decrease in frozen dessert product sales, and was due to a decrease in sales of our vegan cheese products and frozen dessert pints and increased promotional activity to combat the increased competition in the vegan cheese market. We anticipate that our gross profit and gross profit percentage will remain lower than in 2023 for the remainder of 2024.

Previous report

Selling and warehouse expenses decreased slightly by $3,000, or 1%, to $207,000 for the thirteen weeks ended September 28, 2024 from $210,000 for the thirteen weeks ended September 30, 2023. The decrease was due to decreases in commission expense of $10,000, meetings and convention expense of $11,000, and sample shipping expenses of $3,000 which were partially offset by an increase in outside warehouse rental expenses of $5,000, an increase in payroll expense of $5,000, and an increase in travel, entertainment, and auto expense of $10,000. The decrease in commission expense is due to the decrease in sales for the thirteen-weeks ended September 28, 2024 compared with the thirteen-weeks ended September 30, 2023.

Previous report

Marketing expenses decreased by $20,000, or 19%, to $83,000 for the thirteen weeks ended September 28, 2024 from $103,000 for the thirteen weeks ended September 30, 2023. The decrease was primarily due to decreases in artwork and plates expense of $3,000 and advertising expense of $18,000. We anticipate that our marketing expenses for the balance of this year will be comparable to the corresponding periods in fiscal 2023.

Previous report

Product development costs were $28,000 for both the thirteen week periods ended September 28, 2024 and September 30, 2023. We anticipate our product development costs for the remainder of 2024 will continue at a lower level than the corresponding 2023 period as we have reduced our research and development work.

Previous report

General and administrative expenses increased by $41,000, or 12%, to $374,000 for the thirteen weeks ended September 28, 2024 from $333,000 for the thirteen weeks ended September 30, 2023, primarily due to increases in payroll expense of $8,000, office supply expense of $11,000, security and fire alarm expense of $9,000, and building rental expense of $19,000, equipment rental expense of $4,000 and general insurance expense of $6,000, which were partially offset by a decrease in IT expense of $10,000 and professional and outside services expense of $10,000. Building rent, security and fire alarm, and office expenses increased due to additional expenses associated with the move to our new facility. These are one-time expenses that will be offset by future savings in operational expenses.

Previous report

Thirty Nine Weeks Ended September 28, 2024 Compared with Thirty Nine Weeks Ended September 30, 2023

Previous report

Net sales for the thirty-nine weeks ended September 28, 2024 decreased by $1,243,000, or 16%, to $6,481,000, from net sales of $7,724,000 for the thirty-nine weeks ended September 30, 2023. Sales of our vegan cheese products decreased to $5,383,000 in the thirty-nine weeks ended September 28, 2024 from $6,492,000 for the thirty-nine weeks ended September 30, 2023. Sales of our frozen dessert products decreased to $1,098,000 for the thirty-nine weeks ended September 28, 2024 from $1,232,000 for the thirty-nine weeks ended September 30, 2023. The significant reduction in sales for the current thirty-nine week period was primarily due to the decrease in our vegan cheese sales caused by increased competition in the vegan cheese category and a decline in our export cheese business.

Previous report

Our gross profit decreased to $1,621,000 for the thirty-nine weeks ended September 28, 2024 from $2,059,000 for the thirty-nine weeks ended September 30, 2023, while our gross profit percentage was 25% for the thirty-nine weeks ending September 28, 2024 compared to 27% for the thirty-nine weeks ending September 30, 2023. The decrease in our gross profit and gross profit percentage was due to the reduction in sales.

Previous report

Freight expense, a significant part of our cost of sales, decreased by $98,000, or 16%, to $513,000 for the thirty-nine weeks ended September 28, 2024 compared with $611,000 for the thirty-nine weeks September 30, 2023 due to the reduction in sales. Freight expense was 8% of sales for the thirty-nine weeks ended September 28, 2024 and for the thirty-nine weeks ended September 30, 2023.

Previous report

Selling and warehouse expenses decreased by $131,000, or 16%, to $671,000 for the thirty-nine weeks ended September 28, 2024 from $802,000 for the thirty-nine weeks ended September 30, 2023. The decrease was primarily attributable to decreases in meetings and convention expense of $55,000, commission expense of $86,000, bad debt expense of $15,000, and sample shipping expenses of $26,000, which were partially offset by an increase in outside warehouse rental expenses of $25,000, payroll expenses of $15,000, and travel, entertainment, and auto expenses of $11,000. The decrease in commission expense is due to the decrease in sales and a reduction to the commission rate we pay to our brokers from 5% to 4% for the thirty-nine weeks ended September 28, 2024 compared with the thirty-nine weeks ended September 30, 2023.

Previous report

Marketing expenses increased slightly by $10,000, or 3%, to $297,000 for the thirty-nine weeks ended September 28, 2024 from $287,000 for the thirty-nine weeks ended September 30, 2023. The increase was primarily due to increases in promotions expense of $36,000, point of sale material expense of $16,000 and artwork and plate expense of $5,000, which were partially offset by decreases in advertising expense of $11,000, and public relations expense of $5,000.

Previous report

Product development costs were $92,000 for the thirty-nine weeks ended September 28, 2024 and $111,000 for the thirty-nine weeks ended September 30, 2023. The decrease was due primarily to a decrease in professional fees and outside services expenses of $11,000 and lab costs and supplies expense of $8,000.

Previous report

General and administrative expenses increased by 8%, or $79,000, to $1,097,000 for the thirty-nine weeks ended September 28, 2024 from $1,018,000 for the thirty-nine weeks ended September 30, 2023. This increase was primarily due to increases in payroll expense of $28,000, security and fire alarm expense of $9,000, office supply expense of $19,000, equipment repairs expense of $5,000, telephone expense of $5,000, building rental expense of $27,000, and general insurance expense of $12,000, which were partially offset by decreases in public relations expense of $19,000, IT expense of $9,000, and stock option expense of $7,000. Our increase in payroll expense was due primarily to an increase in group insurance expense.

Previous report

Income tax expense was $5,000 for the thirty-nine weeks ended September 28, 2024 and $148,000 for the thirty-nine weeks ended September 30, 2023.