SOURCE: Overhill Farms, Inc.

March 15, 2007 09:30 ET

Overhill Farms Announces $7 Million Expansion Plan

LOS ANGELES, CA -- (MARKET WIRE) -- March 15, 2007 -- Overhill Farms, Inc. (AMEX: OFI) today announced a planned $7 million expansion of the manufacturing capacity of its main Vernon, California plant. Overhill Farms plans to use the new machinery and systems to meet anticipated growth and improve operating efficiency.

The expansion will include installation of new high-speed equipment on three production lines, an additional spiral freezer, additional pasta-making equipment, new packaging machines and a number of other equipment and infrastructure improvements.

James Rudis, Chairman and Chief Executive Officer, said the project will be funded by the company's current lender. The majority of the equipment is expected to be installed by April 30, 2007, with the balance of the project scheduled to be completed by the fourth quarter of fiscal 2007.

"When we designed our newest plant, which opened approximately four years ago, we included capacity for anticipated growth," Mr. Rudis said. "As we announced in January, Overhill Farms was awarded new contracts that we expect will generate significant increases in revenue and will absorb most of our available capacity. Additional opportunities we have identified for new business require us to expand our production capacity."

Mr. Rudis said the new equipment and infrastructure improvements are expected to increase Overhill Farms' production capacity to permit annual sales of approximately $250 million. In January, Mr. Rudis said the company expects to be at an annual revenue run rate of $200 million by the third quarter of fiscal 2007. Overhill Farms reported revenues of $168.3 million in fiscal 2006.

In January, Overhill Farms announced a three-year agreement to produce meals for a major national food brand which is expected to generate sales of approximately $43 million during the first year. In addition, it began production late in the second quarter of 24 new private label food items being introduced by a major grocery chain. The company also recently announced that it has been awarded contracts for private label products by two other retail customers.

Overhill Farms (AMEX: OFI), based in Vernon, California, is a value-added supplier of custom high quality frozen foods to foodservice, retail and airline customers. For more information see www.OverhillFarms.com.

This news release contains disclosures that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs and include, but are not limited to, statements regarding the company's operations and financial performance and condition and statements regarding expectations of continued or increased sales, profitability, efficiency, cash flows and growth, anticipated required and available production capacity, expected types, timing and costs of improvements, and availability of funding for planned improvements. For this purpose, statements of historical fact may be deemed to be forward-looking statements. In addition, forward-looking statements include statements in which the company uses words such as "continue," "efforts," "expect," "believe," "anticipate," "confident," "intend," "strategy," "plan," "will," "estimate," "project," "goal," "target," "prospects," "optimistic" or similar expressions. These statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the company's ability to meet its obligations under its existing financing arrangements; the ability of the equipment suppliers and installers to meet the planned installation schedule and requirements; the company's ability to successfully take advantage of new business opportunities; the impact of competitive products and pricing; market conditions and weather patterns that may affect the cost of raw materials as well as the market for the company's products; changes in the company's business environment, including actions of competitors and changes in customer preferences; the occurrence of acts of terrorism or war; changes in governmental laws and regulations, including income taxes; market and customer demand for new and existing products; and other factors as may be discussed in the company's Annual Report on Form 10-K for the year ended October 1, 2006 and other reports filed with the Securities and Exchange Commission.

Contact Information

  • Contacts:

    James Rudis
    Chairman, President and CEO
    Overhill Farms, Inc.
    323-582-9977

    Alexander Auerbach
    Auerbach & Co. Public Relations
    1-800-871-2583
    Email Contact