LOS ANGELES, CA -- (Marketwire) -- 08/10/11 -- Overhill Farms, Inc. (NYSE Amex: OFI) announced today that it has entered into a sales, distribution, and co-manufacturing agreement with Bellisio Foods, Inc., in conjunction with the national launch by Overhill Farms of the Boston Market frozen food line.
Under direction of Overhill Farms, Bellisio will provide sales management services for the Boston Market line. These will include customer sales, promotion management, broker management, customer invoicing and customer administration. Bellisio, based in Minneapolis, Minnesota, and with production facilities in Jackson, Ohio, will also manufacture approximately 50% of the Boston Market products.
In discussing the agreement with Bellisio, James Rudis, Chairman, President and Chief Executive Officer of Overhill Farms, said, "We have known Bellisio for several years as an efficient, well-managed food company with which we do not directly compete. When Overhill Farms acquired the license to the Boston Market retail food line, we saw an opportunity for our companies to work together. Bellisio has an experienced sales and marketing organization with longstanding relationships with virtually all major retailers, mass merchandisers, club stores, convenience stores and the military. They also efficiently distribute products to these major retailers and other outlets, which include all Boston Market customers. Utilizing these capabilities enables Overhill Farms to implement a smooth and cost-effective transition from the previous supplier of Boston Market frozen meals."
Mr. Rudis noted that, with the assistance of Bellisio's sales team, the Company has been able to retain virtually all of the retailer accounts that had previously carried the Boston Market product.
Mr. Rudis said that the Bellisio agreement should result in lower costs to manufacture and distribute the Boston Market Products. The Boston Market products can be combined with Bellisio products in full-truck shipments to the Boston Market customer base, which presently is heavily represented in the Eastern and Midwestern portions of the country. The agreement also enables Overhill Farms to avoid the cost and time needed to develop an equivalent sales and distribution system internally, he noted.
All Boston Market products, including those manufactured by Overhill Farms, will be warehoused and distributed by Bellisio through their facilities centrally located in Jackson, Ohio. Overhill Farms will be responsible for overall product quality, and for development of new items for the Boston Market line.
The agreement calls for manufacturing, sales, warehousing and distribution to be provided by Bellisio at fixed costs, with Bellisio to receive a pre-determined portion of profits resulting from these sales. The term of the agreement is 24 months.
"We carefully reviewed the cost-effectiveness of this collaborative arrangement with Bellisio compared to Overhill Farms proceeding on a stand-alone basis," Mr. Rudis said. "Under this arrangement, the overall profitability of the Boston Market line should be significantly improved, which is in the best interests of the Company, our customers and our shareholders."
Mr. Rudis said Overhill Farms and Bellisio Foods will explore similar potential opportunities that can be to the companies' mutual advantage.
About Overhill Farms
Overhill Farms, Inc. (www.OverhillFarms.com) is a leading value-added supplier of custom high quality prepared frozen foods for branded retail, private label, foodservice and airline customers. Its product line includes entrées, plated meals, bulk-packed meal components, pastas, soups, sauces, poultry, meat and fish specialties, as well as organic and vegetarian offerings. The Company's capabilities give its customers a one-stop solution for new product development, precise replication of existing recipes, product manufacturing and packaging. Its customers include prominent nationally recognized names such as Jenny Craig, Inc., Safeway Inc., Panda Restaurant Group, Inc., Pinnacle Foods Group LLC and American Airlines, Inc.
About Bellisio Foods
Bellisio Foods (www.BellisioFoods.com), headquartered in Minneapolis, Minnesota, has production facilities in Lakeview, Minnesota and Jackson, Ohio. The privately-held company is the third-largest producer of frozen entrees in the United States. Its brands include Michelina's, Authentico, Zap'ems Gourmet, Anytime Snackers, Joy of Cooking Foods and others, and it serves the foodservice industry through the Arden Culinary line.
About Boston Market
Boston Market Corporation (www.BostonMarket.com), headquartered in Golden, Colorado, has been giving time back to busy families and individuals for more than 25 years. In 486 locations from coast to coast it offers fresh, home-style meals with taste, convenience and value, including its fresh chicken prepared in signature rotisserie ovens and its extensive selection of high-quality side dishes. Boston Market at-home frozen meals are produced by Overhill Farms under an exclusive license from Boston Market Corporation.
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 about the Company's operations and financial performance and condition and statements regarding expectations of continued or increased sales volumes and revenues, margins, profitability, production efficiencies and expansions, brokerage and freight expense savings, cash flows and growth, anticipated amounts and timing of growth in the Company's customer base and business in the foodservice and retail market sectors, revenue growth from new customers, expectations concerning our Boston Market line, retention of existing Boston Market customers, the ability to the Company and Bellisio to effectively co-manufacture the Boston Market line, Bellisio's ability to sell and distribute the Boston Market line, contemplated or potential acquisitions or similar transactions and general economic pressures. For this purpose, statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as "continue," "efforts," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "strategy," "will," "goal," "target," "prospects," "optimistic," "confident," "likely," "probable," "hope," "should," "growth," "opportunities" or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), on-going business strategies or prospects, and possible future company actions, which may be provided by management, are also forward-looking statements. We caution that 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 and other parties' ability to satisfy conditions precedent to proposed acquisitions or similar transactions, including, without limitation, obtaining any applicable regulatory and stockholder approvals, the impact of competitive products and pricing; fulfillment by suppliers of existing raw material contracts; market conditions that may affect the costs and/or availability of raw materials and the Company's ability to obtain favorable long-term purchase commitments for raw materials, and of fuels, energy, logistics and labor as well as the market for the Company's products, including customers' ability to pay and consumer demand; changes in business environment, including actions of competitors and changes in customer preferences, as well as disruptions to customers' businesses; certifications obtained by competitors; seasonality in the retail category; loss of key customers due to competitive environment or production being moved in-house by customers; natural disasters that can impact, among other things, costs of fuel and raw materials; the occurrence of acts of terrorism, such as the events of September 11, 2001, or acts of war; changes in governmental laws and regulations; change in control due to takeover or other significant changes in ownership; financial viability and resulting effect on revenues and collectability of accounts receivable of customers during deep recessionary periods; ability to obtain additional financing as and when needed, and rising costs of credit that may be associated with new borrowings; voluntary or government-mandated food recalls; and other factors as may be discussed in the Company's Annual Report on Form 10-K for the year ended September 26, 2010, Quarterly Report on Form 10-Q for the quarter ended April 3, 2011, and other reports filed with the Securities and Exchange Commission.