Cuisine Solutions has reported a net loss of $1.8 million for Q3 2002, due to a drop in US sales. The company has lowered costs by making redundancies and instituting salary cuts across the board.
Cuisine Solutions also recognized $385,000 of losses in equity from its investment in Brazil, as well as an amortization of $40,000 for website development after the launch of its FiveLeaf brand in February.
Q3 revenue fell 17.7% to $7.65 million from $9.30 million a year earlier. The drop was largely in its core areas of On Board Services and Foodservice, caused by reduced travel and a related drop in demand from airlines, hotels and casinos. Business travel is usually a major source of income for Cuisine Solutions, via sales to airlines and the hotel banquet industries.
Sales in the US fell by more than a fifth. Gross margins were hit as a result of the lower production and its resulting higher fixed cost absorption and distribution costs per unit. Sales in the company’s second biggest market, France, fell by 18%.
Now facing an urgent need to diversify its business, the company is planning to continue product line expansion into the retail market. The FiveLeaf line of prepared entrees, accompaniments and desserts has been launched nationwide, and are now available by phone, catalog and the website. Ultimately, they will be available in retail stores, beginning with the US sites operated by Omaha Steaks.