Cuisine Solutions Retrenches;
Delists Stock, Goes Private

Cuisine Solutions, Inc., Alexandria, Virginia, which sells prepared frozen food to restaurants, airlines and the military, delisted its common stock from the NYSE-Amex Exchange Sept. 9.

The company said that the benefits of having its common stock listed and registered were outweighed by the associated annual costs. By becoming a privately-held company it will reportedly save about $800,000 a year.

The decision to delist and deregister the common stock will reduce expenses that include legal, accounting and other administrative fees, particularly compliance with the Sarbanes-Oxley Act of 2002. Given the limited public trading volume and liquidity of the stock, the company does not believe the benefits of having it listed and registered outweigh the costs.

A slowdown in the airline and restaurant industries has taken a toll on Cuisine Solutions, which reported an 18% drop in sales and a 31% decline in earnings for the second quarter – $19.5 million in net sales, down from $23.7 million for the same quarter a year ago; net income of $155,000 was down from $225,000 a year earlier.

The company has reduced staffing, primarily in the USA, as a result of the downturn in business and the effects of the current economic environment. The cuts are expected to save it $2 million a year. Sales of its prepared foods to airlines were down almost 39%, while restaurant chain sales fell nearly 50%. Foodservice and retail sales also declined, although sales to the military rose 63%.

Still, the company made a point of exhibiting at the National Restaurant Association show earlier this year. Among the products showcased were Lamb Shank and Beef Short Ribs. Its Culinary Division was created in 1987 for the purpose of developing high quality frozen products for the domestic market. Three years later a plant was opened in Alexandria to manufacture its sous-vide product line.