For the quarter, net sales increased to $4,073,000 from (€3,136,000)$4,041,000 for the same quarter last year. Gross margin, as a percentage of sales, decreased 1.9 per cent to 36.7 per cent for the current quarter of 2004 compared to the third quarter of 2003. The company said that this was due to higher manufacturing operating costs principally in packaging materials, operating supplies, insurance and outside contract services.
TTF, which is also a major player to the food industry, reported a net loss of $390,000 for the third quarter, compared to a loss of $170,000 for the corresponding quarter in 2003. This was largely down to an aggressive approach to support its planned growth by hiring senior level sales and research and development personnel, as well as expanding its sales and marketing activities abroad, particularly with its newly formed Brazilian joint venture. As a result, operating costs for the quarter increased to $1,854,000 for the quarter from $1,686,000 in last year's third quarter.
Although the results were undoubtedly disappointing, the company said that the benefits of the expanded sales and marketing efforts are expected to contribute to revenues during 2005, the company added.
For the nine-month period, net sales increased to $13,005,000 from $12,122,000 for the first nine months of 2003 due principally to higher volumes of existing flavor and fragrances sales and new product launches. Gross margin, as a percentage of sales, decreased 1.0 per cent to 39.9 per cent for the nine months compared to the first nine months of 2003. Total operating expenses, as part of the expanded and enhanced sales and marketing focus, increased to $5,376,000 from $4,940,000 for the first nine months last year. The company reported a net loss of $345,000 for the nine-month period as compared to a net loss of $143,000 for the 2003 comparable period.
Philip Rosner, company CEO TFF said, "The Company initiated its comprehensive business expansion programme at the beginning of 2004 with an investment in our business which should yield benefits during fiscal 2005, particularly from our newly formed Brazilian joint venture. While in the short term, this strategic programme will cause increases in our operating costs without the immediate benefit of an incremental growth in revenues, we believe we will complete this endeavor a stronger Company, better positioned for consistent fundamentally sound performance."
"Our previous announcements related to the Brazilian joint venture and our recent expanded business relationship with The Hain Celestial Group, coupled with our planned retooling of our manufacturing operations which should improve our gross margins, are all positive steps in the company's overall strategy to increase sales and return it to consistent profitability on a going forward basis."