Overhill Farms gets deal with big chain |
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Thu, 25 Jan 2007 21:00
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WASHINGTON (AFX) - Shares of frozen foods maker Overhill Farms Inc. jumped Thursday on word of a deal with a major food brand that may be worth $43 million in first-year sales.Shares of Vernon, Calif.-based Overhill Farms was up 82 cents to $3.81 in afternoon trading on the American Stock Exchange.A company spokeswoman said a confidentiality agreement with the national food brand prevented her from disclosing the name of the new customer. But the three-year contract could generate as much as $43 million in first-year sales.'With this new agreement, and other new business and customer initiatives, Overhill Farms is on track to reach an annual revenue run rate of over $200 million by the third quarter of this fiscal year,' Chairman and Chief Executive James Rudis said in a statement.Also, Overhill Farms said it anticipates losing $10 million in sales to the Panda Restaurant Group, an existing customer that is planning to shift $20 million in food production volume from Overhill Farms to a rival. Overhill Farms said it was 'informed that the transition of production to the new vendor has not proceeded as anticipated.'Overhill Farms, which provides frozen foods and meals for grocery chains, restaurants and airlines, also said it will begin making 24 new packaged foods in February for an existing West Coast grocery chain under that chain's private label. The company said it is the largest launch in the number of products for a single customer.Additionally, Overhill Farms also received contracts from two new customers for private-label food products, but the spokeswoman declined to name them or quantify their value.Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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