Weekly News Update

December 14, 2000

Monterey Pasta Buys Nate’s Polenta

Monterey Pasta Co. (PSTA) on Dec. 11 announced the acquisition of Nate’s polenta business from San Francisco-based Elena’s Food Specialties for a consideration of $450,000 in cash, plus an inventory valued at $13,000. Elena’s shareholders also could receive an earn-out based on future sales and calculated during the first year of combined operations. Nate’s will continue to be manufactured in Elena’s facility under a copack agreement, the company said.

According to Monterey Pasta, Nate’s polenta business gives the company increased national distribution with about 700 retail outlets that include significant private-label business. ""Adding Nate’s polenta business represents another example of the company’s key strategy of diversifying with gourmet refrigerated food products,"" said PSTA President and CEO Lance Hewitt in a statement.

nSpired Acquires Cool Fruits

San Leadro, Calif.-based nSpired Natural Foods in late November acquired Fort Meyers, Fla.-based Cool Fruits in a stock purchase. Terms of the deal were not disclosed. Former Cool Fruits owner Richard Worth has joined nSpired to lead the company’s marketing and business development activities, which include brand development, package design and strategic planning. Worth is responsible for introducing Frookies, the first nationally distributed brand of cookies sweetened with fruit juice rather than refined sugars.

Chattem to Take $18 Million to $20 Million Charge in 4Q00

Chattem Inc. (CHTT) on Dec. 11 announced expected 4Q00 charges of between $18 million and $20 million in 4Q00. According to Reuters news service, the charges include the returns of $5.6 million and inventory reductions of $2.8 million from its appetite suppressant Dexatrim, which CHTT stopped shipping in November due to a U.S. regulatory warning that the drug could increase the risk of stroke. The charges also include a loss of $2.6 million related to the September sale of its Ban deodorant line, which it sold for $160 million in cash; returns and inventory reductions in its Sunsource brands; an increased allowance for and write-off of ""bad debts;"" and deductions for inventory obsolescence and returns, totaling $7 million to $9 million.

Separately, Chattem also said it has commenced a tender offer and consent solicitation for $75.3 million of its outstanding $275 million senior subordinated notes due 2008, and $7.9 million of its outstanding $29.1 million senior subordinated notes due 2004.

More Financial & Stock News:

Zila Inc. (ZILA) posted a 1Q01 net loss $163,000 or $.00/share vs. a 1Q00 net loss of $51,000 or $.00/share. Zila had 1Q01 revenues of $18.8 million vs. 1Q00 revenues of $17.9 million.

Martek Biosciences Corp. (MATK) reported a 4Q00 net loss of $4.1 million or $.23/share vs. a 4Q99 net loss of $3.98 million or $.24/share. The company’s total revenues in 4Q00 were $3.1 million vs. 4Q99 total revenues of $1.8 million. For FY00, MATK reported a net loss of $15.7 million or $.91/share vs. a FY99 net loss of $14.8 million or $.95/share.

Taglich Brothers on Dec. 11 initiated coverage on Lifeway Foods (LWAY) with a Speculative Buy rating and a 12-month price target of $8.50/share.

Lehman Brothers on Dec. 12 reiterated its1-Buy rating on Whole Foods Market (WFMI) and raised its price target from $60 to $67.

Briefly:

According to United Natural Foods (UNFI), longtime UNFI Director and President Richard Youngman has retired to pursue other interests. Following the company’s annual meeting, UNFI on Dec. 8 announced that Steve Townsend has been appointed to replace Youngman as director and president.

Just days after The Daily Camera in Boulder, Colo., reported Wild Oats Markets’ (OATS) intention to close a suburban Denver store on Dec. 9, an employee at the location confirmed that the store will remain open through the end of December. According to The Daily Camera, OATS President Jim Lee wouldn’t comment on the future of the store’s employees but did say that he hoped customers would shop at the OATS-owned Alfalfa’s located roughly a mile from the closing store.

The American Herbal Products Association (AHPA) on Dec. 12 launched a national consumer print ad campaign entitled ""Another Healthy Herb."" The ads are scheduled to appear in a variety of health and nutrition magazines throughout the year. The campaign features an online component that will provide comprehensive information on herbs, AHPA says.

A University of Colorado, Boulder, study found that 64 percent of people surveyed prefer recycled toilet paper vs. virgin toilet paper. Those in favor of recycled TP said they like it because it was stronger, thicker and more durable.

The National Institutes of Health’s (NIH) National Center for Complementary and Alternative Medicine (NCCAM) and National Institute of Arthritis and Musculoskeletal and Skin Diseases (NIAMS) announced the commencement of a large-scale, three-phase study to measure the effects of glucosamine and chondroitin on osteoarthritis. The study will be funded by NCCAM with $14 million appropriated by Congress and is expected to take a little more than four years to complete.

According to Supermarket News, Oakland, Calif.-based Dreyer’s Ice Cream has signed a long-term distribution agreement with Burlington, Vt.-based Ben & Jerry’s Homemade. Under the terms of the deal, Dreyer’s will distribute Ben & Jerry’s in all of its U.S. company-operated markets.

Markham, Ont.-based Canadian Health Food Association (CHFA) on Dec. 7 announced the death of its board of directors chair, Brock Elliott. Elliott had served on CHFA’s board since 1993 and was the recipient of this year’s Retailer-of-the-Year award. Memorial services were held Dec. 12 in Antigonish, Nova Scotia. For information on making a donation in Elliott’s memory, contact CHFA at admin@chfa.ca.