OTC:TOFB
TOFUTTI BRANDS INC
A specialized consumer goods manufacturer with $10.1M in 2023 revenue and a strategic focus on premium branded food products and merchandise in North America.
Key Metrics
Investment Thesis
Bull Case
Despite recent losses, the company maintains a positive shareholders' equity of $3.8M and has generated substantial gross profit of $2.8M, suggesting underlying product demand remains robust. The presence of non-cash adjustments totaling $1.1M indicates potential accounting conservative measures or asset revaluations that could improve future earnings quality. If revenue growth can be arrested and margin expansion achieved through R&D investments of $166,000, the stock could see significant upside.
Bear Case
The business faces severe liquidity constraints with a net cash decline of $235,000 and a substantial retained earnings deficit of $3.4M that threatens solvency. Revenue has declined for two consecutive years while operating expenses have ballooned to $3.0M, eroding profitability and leaving no room for error in market conditions. The negative operating profit of -$238,000 signals deep structural inefficiencies that may require major capital injection or strategic pivots.
About TOFUTTI BRANDS INC
TOFUTTI BRANDS INC operates as a diversified consumer goods manufacturer and retailer serving North American markets with a focus on premium food products and branded merchandise. The company generates revenue primarily through direct-to-consumer sales, wholesale distribution, and retail partnerships while investing in research and development to maintain product relevance. With total assets of $4.6 million and recent annual revenue of $10.1 million, the firm maintains a lean operational structure despite facing current financial headwinds.
Analysis
Management Discussion
The company reported a net loss of $366,000 in 2023 alongside revenue contraction to $10.1 million, indicating challenges in scaling operations or maintaining pricing power. Cash flow from operations turned negative at -$225,000 while accounts receivable decreased significantly by $447,000, suggesting either aggressive credit terms or collection issues. The reduction in current liabilities and cash burn highlights the need for improved cost management to stabilize the balance sheet.
Industry Overview
The consumer goods manufacturing sector is highly competitive with low barriers to entry but high customer loyalty requirements. Companies must continuously innovate and manage supply chain costs to maintain market share against established rivals. Margins are typically tight, making operational efficiency and brand differentiation critical for long-term survival.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 |
|---|---|---|
| Revenue | $12.8M | $10.1M |
| Cost of Revenue | $10.5M | $7.3M |
| Gross Profit | $2.3M | $2.8M |
| Operating Expenses | $3.3M | $3.0M |
| Operating Income | $-916.0K | $-238.0K |
| R&D | $143.0K | $166.0K |
| G&A | $1.4M | $1.4M |
| Stock-Based Comp | $56.0K | $60.0K |
| Other OpEx | $1.7M | $1.5M |
| Non-Operating Income | $163.0K | $-2.0K |
| Interest Expense | $2.0K | $2.0K |
| Pre-Tax Income | $-753.0K | $-240.0K |
| Income Tax | $-228.0K | $126.0K |
| Continuing Ops | $-525.0K | $-366.0K |
| Discontinued Ops | $0 | $0 |
| Net Income | $-525.0K | $-366.0K |
| Minority Interest | $0 | $0 |
| Net to Common | $-525.0K | $-366.0K |
| Metric | 2022 | 2023 |
|---|---|---|
| Current Assets | $4.9M | $4.2M |
| Accounts Receivable | $1.3M | $828.0K |
| Inventory | $2.5M | $2.5M |
| Prepaid Expenses | $80.0K | $93.0K |
| Other Current Assets | $1.1M | $837.0K |
| Long-Term Assets | $597.0K | $382.0K |
| Operating Leases | $158.0K | $81.0K |
| Other LT Assets | $439.0K | $301.0K |
| Total Assets | $5.5M | $4.6M |
| Current Liabilities | $1.3M | $793.0K |
| Accounts Payable | $684.0K | $237.0K |
| Current Leases | $74.0K | $74.0K |
| Other Current Liab | $-18.0K | $-59.0K |
| Long-Term Liabilities | $124.0K | $30.0K |
| LT Operating Leases | $85.0K | $7.0K |
| Other LT Liab | $39.0K | $23.0K |
| Total Liabilities | $1.4M | $823.0K |
| Shareholders' Equity | $4.1M | $3.8M |
| Paid-In Capital | $263.0K | $323.0K |
| Retained Earnings | $3.8M | $3.4M |
| Total L&E | $5.5M | $4.6M |
| Metric | 2022 | 2023 |
|---|---|---|
| Net Income (CFO) | $-525.0K | $-366.0K |
| Non-Cash Adjustments | $-1.5M | $1.1M |
| Working Capital Changes | $1.4M | $-924.0K |
| Cash from Operations | $-616.0K | $-225.0K |
| Cash from Investing | $0 | $0 |
| Cash from Financing | $-10.0K | $-10.0K |
| FX Effect | $0 | $0 |
| Net Change in Cash | $-626.0K | $-235.0K |
| Beginning Cash | $1.7M | $1.1M |
| Ending Cash | $1.1M | $837.0K |
Frequently Asked Questions
How does TOFUTTI BRANDS INC make money?
Core product manufacturing of premium food items, wholesale distribution network serving regional retailers, direct-to-consumer e-commerce sales channels, and proprietary retail partnerships.
What are the main risks for TOFB?
Significant operating losses impacting cash reserves with net income of -$366,000, declining revenue trend from $12.8M in 2022 to $10.1M in 2023, high accounts receivable relative to cash flow increasing bad debt exposure, and limited liquidity with a retained earnings deficit of $3.4M.
What is TOFB's competitive advantage?
Strong brand equity in the premium food sector allowing for higher gross margins, a flexible supply chain capable of managing inventory levels effectively, and a diversified revenue stream reducing reliance on single sales channels.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.