For the third quarter of fiscal 2008, the company previously reported net revenues of $62.4 million and net income of $3.2 million ($0.20 per basic and diluted share).

Compared to the second quarter of fiscal year 2009, when net revenues were $51.6 million and net income was $1.8 million ($0.11 per basic and diluted share), the third quarter reflected a 44% increase in net income (approximately $0.05 per share) on a 5.6% increase in revenues.

James Rudis, Chairman and Chief Executive Officer of Overhill Farms, said, "Due to the negative economic climate, many of our customers have experienced reduced sales and competitive pressure on prices. While the economy has clearly affected Overhill Farms' revenues and will continue to do so in the near-term, we have been able to record strong profits by controlling costs and improving productivity wherever possible."

Mr. Rudis added, "Equally important, we have developed additional business from new and existing accounts, and intend to continue to do so. Our performance, in both efficiency and new sales, supports our belief that the outlook for our company remains positive, particularly in fiscal 2010 if, as we expect, economic conditions begin to improve."

Mr. Rudis said the latest quarterly results, which reflect current economic conditions, contrast to an exceptionally strong quarter a year ago, and were also influenced by previously announced reductions in volume from one retail customer and by softness in sales to the supermarket and airline industries.

Reflecting the company's positive outlook, Mr. Rudis said that during the third quarter, Overhill Farms made a $5 million voluntary loan prepayment to its principal lender, Guggenheim Corporate Funding, LLC.

After the scheduled and voluntary debt payments and outlays of more than $1 million for other assets, Mr. Rudis noted, the company had cash on hand of $7.8 million, compared to $4.7 million a year earlier. This, along with the company's entire $7.5 million line of credit, is available to meet liquidity and growth needs. Mr. Rudis said the company plans to continue to make voluntary debt reductions as cash flow permits.

Gross profit as a percentage of net revenues increased slightly to 13.6% for the quarter ended June 28, 2009 from 13.5% for the third quarter of fiscal 2008. Mr. Rudis attributed the increase to improved commodity prices and lower freight charges, offset in part by lower absorption of overhead costs due to lower sales volume.

By customer category, the company's net revenues from retail customers for the third quarter of fiscal 2009 decreased by $10.3 million, or 21.3%, to $38.0 million from the $48.3 million reported a year earlier. This decrease was largely due to the decision by one of the company's retail customers, H.J. Heinz Company, to self-manufacture a greater share of its volume requirements. The remainder of the decrease in retail net revenues was the result of lower sales to key customers due to the economic downturn.

Foodservice net revenues increased by $4.8 million, or 52.7%, to $13.9 million for the third quarter of fiscal of 2009, from $9.1 million a year earlier. The increase was attributable to sales to a new customer and increased volume for an existing customer, as previously announced. The company expects to see increased foodservice revenues as it manufactures full quarters of anticipated volume from new and existing customers. The anticipated increased revenues are expected to partially offset the decreased revenue from H.J. Heinz Company noted above.

Airline net revenues decreased by $2.4 million, or 48.0%, to $2.6 million for the most recent quarter, from $5.0 million a year earlier, due largely to the current economic downturn and the resulting decline in air travel.

For the nine months ended June 28, 2009, the company reported net income of $6.9 million or $0.44 per basic share and $0.43 per diluted share, compared to $7.9 million or $0.50 per basic and diluted share a year earlier.