FZN Cuisine Solutions

Cuisine Solutions, Inc. (AMEX: FZN), a leading premium, fully-cooked, frozen food manufacturer, today announced results for its fiscal year and fourth quarter ended June 28, 2008. For the fourth quarter of fiscal year 2008 our net sales were $21,016,000, up 10.7% over prior fiscal year fourth quarter of $18,979,000. Growth in fourth quarter sales was largely driven by increases of 23.1% in On Board Services and 23.7% in Military sales compared to the same period in fiscal 2007. New product sales were up 13.1% and Europe saw growth of 22.4%. Net income for the fourth quarter of fiscal year 2008 increased $445,000 to $222,000 compared to fourth quarter of fiscal year 2007 income of ($223,000) due primarily to a 2007 tax adjustment of $810,000. Net income per share basic and diluted increased from ($0.01) per share in the fourth quarter of fiscal 2007 to $0.01 per share in the fourth quarter of fiscal 2008. �Our sales in each of these five channels are very small compared to the overall market, and we continue to be poised for growth in all five channels, and our goal remains the same -- to be the leader in premium, fully-cooked frozen food ,� remarked Cuisine Solutions� CEO and President, Stanislas Vilgrain. For the fiscal year 2008 we reported an increase in net sales of 8.9% from $80,331,000 to $87,479,000, compared to 2007. Four of our five sales channels showed positive growth for the fiscal year. The largest growth was in the National Restaurant Chain and On Board Services channels growing 47.9% and 27.1%, respectively, compared to fiscal year 2007. Net income for fiscal year 2008 decreased to $44,000 from a restated $8,725,000 in fiscal year 2007 due primarily to the release in fiscal year 2007 of a valuation allowance for a net benefit of $5,249,000 as well as higher raw material costs and personnel reduction costs at our French facilities. Net income per share diluted declined from $0.48 per share in fiscal 2007 to $0.01 per share in fiscal 2008. �Innovative, non-comparable products produced in the sous-vide method continues to draw attention to our company,� stated Vilgrain. �We believe every one of our customers recognizes that the quality, consistency and safety we provide with our product line is unmatched by any other manufacturer.� � (unaudited) � � � � � � Fourth Quarter Ended Full Year Ended By Geographic Region June 28, 2008 � June 30, 2007 � % change � June 28, 2008 � June 30, 2007 � % change USA Sales $13,323,000 $12,912,000 3.2 % $57,255,000 $55,866,000 2.5 % Europe Sales 7,366,000 6,017,000 22.4 % 29,535,000 24,150,000 22.3 % Rest of World Sales 327,000 � 50,000 554.0 % 689,000 � 315,000 118.7 % Net Sales $21,016,000 � $18,979,000 10.7 % $87,479,000 � $80,331,000 8.9 % � June 28, 2008 � June 30, 2007 � % change � June 28, 2008 � June 30, 2007 � % change Existing products $16,064,000 $14,599,000 10.0 % $69,002,000 $63,603,000 8.5 % New products 4,952,000 � 4,380,000 13.1 % 18,477,000 � 16,728,000 10.5 % Net Sales $21,016,000 � $18,979,000 10.7 % $87,479,000 � $80,331,000 8.9 % � By Channel June 28, 2008 � June 30, 2007 � % change � June 28, 2008 � June 30, 2007 � % change On Board Services $6,529,000 $5,304,000 23.1 % $24,637,000 $19,385,000 27.1 % Food Service 3,678,000 3,497,000 5.2 % 14,621,000 13,693,000 6.8 % Retail 3,964,000 4,173,000 -5.0 % 21,665,000 23,766,000 -8.8 % Military 4,983,000 4,027,000 23.7 % 17,864,000 17,612,000 1.4 % National Restaurant Chains 1,862,000 � 1,978,000 -5.9 % 8,692,000 � 5,875,000 47.9 % Net Sales $21,016,000 � $18,979,000 10.7 % $87,479,000 � $80,331,000 8.9 % � � CUISINE SOLUTIONS, INC. CONSOLIDATED BALANCE SHEETS As of June 28, 2008 � June 30, 2007 ASSETS Current assets Cash and cash equivalents $ 1,016,000 $ 546,000 Trade accounts receivable, net 8,264,000 5,864,000 Inventory, net 11,322,000 15,081,000 Prepaid expenses 482,000 521,000 Accounts receivable, related party 0 57,000 Deferred tax assets 801,000 680,000 Other current assets � 458,000 � 638,000 TOTAL CURRENT ASSETS 22,343,000 23,387,000 � Investments, non-current 375,000 375,000 Fixed assets, net 14,012,000 12,520,000 Restricted cash 130,000 66,000 Deferred tax assets, net 5,002,000 4,884,000 Other assets � 86,000 � 83,000 TOTAL ASSETS $ 41,948,000 $ 41,315,000 � LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 6,357,000 $ 6,999,000 Accrued payroll and related liabilities 2,389,000 2,486,000 Line-of-credit 1,049,000 1,811,000 Current portion of long-term debt � 906,000 � 777,000 TOTAL CURRENT LIABILITIES 10,701,000 12,073,000 � Long-term debt, less current portion 5,689,000 5,523,000 Asset retirement obligation 601,000 499,000 Deferred rent � 170,000 � 100,000 TOTAL LIABILITIES 17,161,000 18,195,000 � Commitments and Contingencies - - � Stockholders' equity Common stock - $.01 par value, 20,000,000 shares authorized, 16,623,191 and 16,439,191 shares issued and outstanding at June 30, 2007 and June 24, 2006, respectively 174,000 166,000 Class B Stock - $.01 par value, none and 175,000 shares authorized at June 28, 2008 and June 30, 2007, respectively. None issued. - - Additional paid-in capital 28,946,000 28,248,000 Accumulated deficit (6,358,000) (6,402,000) Accumulated other comprehensive income Cumulative translation adjustment 2,025,000 1,108,000 TOTAL STOCKHOLDERS' EQUITY � 24,787,000 � 23,120,000 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 41,948,000 $ 41,315,000 � � � � � CUISINE SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF INCOME � Fourth Quarter Ended Year Ended June 28, 2008 June 30, 2007 June 28, 2008 June 30, 2007 � Net sales $ 21,016,000 $ 18,979,000 $ 87,479,000 $ 80,331,000 Cost of goods sold � 16,256,000 � 14,762,000 � 69,417,000 � 62,116,000 Gross margin 4,760,000 4,217,000 18,062,000 18,215,000 � Research and development 248,000 262,000 1,067,000 909,000 Selling and marketing 1,897,000 1,621,000 8,197,000 7,688,000 General and administrative � 2,180,000 � 1,680,000 � 8,601,000 � 6,051,000 Income before non operating expense and income taxes 435,000 654,000 197,000 3,567,000 Total non-operating expense � (42,000) � (68,000) � (189,000) � (208,000) Income before income taxes 393,000 586,000 8,000 3,359,000 Provision for income tax (expense) benefit � (171,000) � (810,000) � 36,000 � 5,249,000 Income (loss) from continuing operations 222,000 (224,000) 44,000 8,608,000 � Net income from discontinued operations � - � 1,000 � - � 117,000 Net income (loss) $ 222,000 $ (223,000) $ 44,000 $ 8,725,000 Per common share data Basic earnings: Income (loss) from continuing operations $ 0.01 $ (0.01) $ - $ 0.52 Income from discontinued operations � - � - � - � 0.01 Net income (loss) $ 0.01 $ (0.01) $ - $ 0.53 Diluted earnings: Income (loss) from continuing operations $ 0.01 $ (0.01) $ - $ 0.47 Income from discontinued operations � - � - � - � 0.01 Net income (loss) $ 0.01 $ (0.01) $ - $ 0.48 � Weighted average shares outstanding-basic 17,247,709 16,554,574 16,893,953 16,477,272 Common stock equivalents � 788,740 � � - � � 1,022,942 � � 1,851,379 Weighted average shares outstanding-diluted � 18,036,449 � � 16,554,574 � � 17,916,895 � � 18,328,651 � This news release contains forward looking statements within the meaning of Section�27A of the Securities Act of 1933, as amended and Section�21E of the Securities Exchange Act of 1934, as amended. Achievement of projected or implied future results, including, without limitation, is subject to numerous risks and uncertainties�including, without limitation, the risks and uncertainties discussed in the Company�s filings with the Securities and Exchange Commission�and the possibility of inaccurate assumptions that could cause actual results to vary materially from the results expressed or implied in this presentation. Among these risks and uncertainties are the Company�s assumptions related to the performance of certain aspects of its business upon which its future financial results may be materially reliant, including, without limitation, projected sales generated by its military, retail, onboard services, food service and national restaurant chain channels, the retention or loss of one or more significant customers, changes in product mix and corresponding changes in average unit price and production efficiencies, costs related to new facilities and other expenditures incident to plans to future growth and market, industry or regulatory changes. Material changes in any of these or other financial factors may cause actual results to differ materially from any projections made herein. In addition, except as required by law, the Company does not undertake and does not intend to update any forward-looking statement that it may make in this presentation or in any other context, from time to time.