Umami Sustainable Seafood Inc. Announces First Quarter Fiscal 2012 Results

SAN DIEGO, November 18, 2011 /PRNewswire/ --

Umami Sustainable Seafood Inc. (OTCBB:UMAM) ("Umami" or the "Company"), a holding company of fish farms supplying sashimi-grade Northern Bluefin Tuna to the global market, announces operating results for the three months ended September 30, 2011.

Sales were $14.4 million for the three months ended September 30, 2011.  There were no sales in the three months ended September 30, 2010.  The increase is primarily due to sales related to the Baja operations, and management's decision to meet current liquidity needs by harvesting some of the Company's stock earlier in the yearly cycle.

Gross profit for the three months ended September 30, 2011 was $6.4 million, or 44% of sales, compared to $0 for the corresponding period in 2010.  Included in our cost of goods sold for the quarter is a $1.3 million fair value adjustment related to the Baja acquisition.  Excluding this adjustment to cost of goods sold, Umami's gross margin for the three months ended September 30, 2011 would have been approximately 53%.

Net loss attributable to Umami stockholders for the three months ended September 30, 2011 was $0.7 million, as compared to a net loss of $1.5 million for the same period in 2010.  Estimated non-GAAP net income attributable to Umami shareholders using estimated catch and farming costs was $0.6 for the three months ended September 30, 2011.

Combined inventory (livestock) at September 30, 2011 was 4,358 metric tons, compared to 2,027 metric tons at September 30, 2010.  The increase during this quarter was attributable to organic growth of livestock and the acquisition of the Baja operations.  The net increase in biomass for the quarter ending September 30, 2011 was 1,583 metric tons, representing a 416% increase over the 307 metric tons of increased biomass in the quarter ending September 30, 2010.

In announcing these results, Oli Steindorsson, Chairman and CEO of Umami, commented:  "The Company concluded its first quarter with marked strengthening of our financial position as result of our ongoing improvements in operations and our deliberate decision to begin our harvest during the first quarter of the reporting year.  We wanted to use the cash from those sales to even out our cash flow for the year and to fund our operations moving forward instead of taking on any additional debt.  We also reported a dramatic increase in our biomass at all of our facilities for the three months ending in September of this year as compared to the same quarter in 2010.  We are working very hard to build out and improve the capacity of operations at all of our facilities in anticipation of the strong sales growth we expect to see for the remainder of the fiscal year and into the future."

We present non-GAAP gross profit measures and non-GAAP net income attributable to Umami shareholders in the following tables. Management believes these non-GAAP measures help indicate our performance before the fair value purchase price adjustments to the Baja inventory that are considered by management to be representative of our on- going operating results.  Once the adjustments related to the fair value of the Baja inventory due to the purchase price adjustment have been fully recognized in cost of sales in the future, these non-GAAP adjustments to cost of sales, and the resulting non-GAAP measures, will no longer be applicable. 

    The following non-GAAP table is a summary of our costs and margins 
    showing our gross margin and the effect of the purchase price adjustment 
    for the three months ended September 30, 2011 ($000):
 
    Net Revenue                                                      $14,432
    Cost of Goods Sold                                               $(8,067)
 
    Gross Profit                                                      $6,365
 
    Gross Profit %                                                        44%
 
    Add back: Estimated Cost of Goods Sold in excess of catch 
    and farming costs                                                 $1,301
 
    Estimated non-GAAP gross profit based on catch and farming 
    costs                                                             $7,666
 
    Estimated non-GAAP gross profit % based on catch and farming costs    53%
 
    The following table is a summary of non-GAAP net income attributable 
    to Umami shareholders adjusted for the effect the purchase price 
    adjustment had on the net income attributable to Umami shareholders 
    for the three months ended September 30, 2011 ($000):
 
    Net loss attributable to Umami Shareholders                        $(747)
    Plus estimated cost of goods sold in excess of catch and 
    farming costs                                                     $1,301
 
    Estimated non-GAAP net income attributable to Umami shareholders using
    estimated catch and farming costs                                   $554

About Umami Sustainable Seafood Inc.

The Company owns and operates Kali Tuna, which is an established Croatian based aquaculture operation raising Northern Bluefin Tuna in the Croatian part of the Adriatic Sea and, as of November 30, 2010, Baja Aqua Farms, which is an established Mexico based aquaculture operation raising Northern Bluefin Tuna in the Pacific. The Company intends to become the leader in aquaculture for northern Bluefin tuna by acquisition and internal growth. The growth of the Company will be founded on the sustainable management of resources and economically sound practices, seeking opportunities resulting from market consolidation and scientific progress in the industry. We also intend to continue our research into closed cycle farming technology for Bluefin tuna which has produced encouraging results. For more information, please visit http://www.umamiseafood.com.

Notice Regarding Forward Looking Statements

This press release contains projections and forward-looking statements, as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release, which are not purely historical, are forward-looking statements and can include, without limitation, statements based on current expectations involving a number of risks and uncertainties and which are not guarantees of future performance of the Company. There are numerous risks and uncertainties that could cause actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information, including (i) adverse market conditions; (ii) any adverse occurrence with respect to the farmed seafood industry generally or the businesses of Kali Tuna and Baja specifically; and (iii) changes in the regulatory environment. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Although the Company believes that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance those beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors set forth in the Company's Annual Report on Form 10-K filed on November 14, 2011, and other reports filed or to be filed from time-to-time with the Securities and Exchange Commission.

SOURCE Umami Sustainable Seafood Inc.