 |
 |
Page 15 |
 | |
Fiscal Year Ended November 3, 2006 (53 weeks) Compared to Fiscal Year Ended October 28, 2005 (52 weeks) Net Sales - Consolidated Sales in fiscal 2006 increased $3,419 (2.6%) when compared to the prior year. After considering the additional week in 2006, a 53 week year, sales were essentially flat compared to the prior year. Sales in the Company’s frozen food segment increased $3,638 (7.7%), as a result of increased average unit selling prices and higher unit volume primarily due to the introduction of a successful new product. Promotional spending as a percentage of sales increased to 8.4% compared to 8.0% in the prior year partially offsetting the sales increase in the frozen food division. Sales in the Company’s refrigerated and snack food products segment decreased $219 (0.3%) primarily as result of lower unit sales volume. Higher unit selling prices helped mitigate the decrease. Gross Margin - Consolidated The gross margin increased to 36.6% compared to the prior year at 34.7%. This improvement resulted from higher unit selling prices and lower commodity costs. Meat ingredient costs declined significantly in the fiscal year helping to increase the gross margin. Flour commodities increased significantly in 2006 partially offsetting the meat commodity cost declines. When combining all divisions, net-selling prices increased approximately 5.4% on a unit volume decline of approximately 2.6 % compared to the prior fiscal year. Selling, General and Administrative - Consolidated Selling, general and administrative expenses increased $464 (1.1%) when compared to the prior year. After considering the additional week in 2006, a 53 week year, average weekly expenses were slightly lower as compared to the prior year. Within this category costs for fuel, vehicle repairs, consulting and travel expenses outpaced sales growth. Offsetting these increases were higher interest income on investments and lower pension, advertising and telephone expenses. Gain on Sale of Equity Securities The Company sold 5,028 shares of stock received as a result of the bankruptcy of a significant customer on February 22, 2006. This transaction resulted in a pre-tax gain of $106. Income Taxes The effective income tax rate was 17.2% and (58.2)% in fiscal years 2006 and 2005, respectively. In fiscal year 2006, the effective income tax rate differed from the applicable mixed statutory rate of approximately 38.0% primarily due to the Company’s current year claim for research and development tax credits related to prior year activities. In fiscal year 2005, the effective income tax rate differed from the applicable mixed statutory rate of approximately 38.0% primarily due to a reduction in recorded income tax reserves. Fiscal Year Ended October 28, 2005 Compared to Fiscal Year Ended October 29, 2004 Net Sales – Consolidated Sales in fiscal 2005 decreased $7,020 (5.1%) when compared to the prior year. Sales in the Company’s frozen food segment increased 6.6%, as a result of increased average unit selling prices offset by slightly lower unit volume. Promotional spending as a percentage of sales decreased to 8.0% compared to 8.6% in the prior year contributing to the sales increase in the frozen food division. Sales in the Company’s refrigerated and snack food products segment decreased 10.1% primarily as result of lower unit sales volume. Gross Margin - Consolidated The gross margin increased to 34.7% compared the prior year at 34.5%. Continued high meat ingredient costs were offset by higher unit selling prices resulting in a consistent gross margin percentage. When combining all divisions, net selling prices increased approximately 4.8% on a unit volume decline of approximately 12.7 % compared to the prior fiscal year. |
|
|