DALLAS, Feb. 22, 2001 (PRIMEZONE) -- Fresh America Corp. (Nasdaq:FRES), a major North American fresh produce distribution company, today announced that it reduced debt by $23 million during 2000, a 41% reduction, and that its strategy of leveraging its national distribution network and expanding value-added products and services is strongly supported by industry trends in both retail and foodservice distribution and is setting the stage for growth and improved returns. The company also announced the election of two outside directors.
Mr. Colon Washburn, Fresh America's Chairman and Chief Executive Officer, said "During 2000 the company reduced its debt by over $23 million, improved operating performance of ongoing operations and emerges from 2000 with a stable platform for future growth. Although the company expects to report a loss for the fourth quarter and the year, the expenses related to the closing of certain operations as well as other expenses that are not expected to carry forward into future periods tend to mask the progress that has been made this year. Both the industry and Fresh America have gone through a tough couple of years but we are encouraged by the emerging opportunities that align so well with our company's strengths. We want to thank our suppliers and customers for their support over the last year as Fresh America has worked to reposition itself and address its balance sheet by reducing debt and improving cash flow."
Continuing, Mr. Washburn said, "Over the past year we have taken steps to leverage areas of proven excellence in wholesale distribution, value-added products and services, and collaboration with suppliers and customers. In November 2000 we began providing sourcing, logistical distribution and value-added services to a large, national broadline food service cooperative. Our distribution network and services were a good fit for their participating companies and specialized needs. In March 2001 we will begin a forward distribution service in the Northeast for a national floral distributor in the retail sector. This type of service is compatible with produce distribution opportunities under consideration for the same location and will transition a Fresh America distribution center that was formerly dedicated to our Sam's business.
"The transition of the former Sam's facilities was a critical goal for us in 2000 due to their strategic locations. Of the six former Sam's facilities, four will remain in operation. Our Atlanta, Georgia facility successfully transitioned during 2000 with the addition of a tomato operation to complement existing program business; Wilkes-Barre, Pennsylvania will transition, as mentioned, with a forward distribution service in March 2001; Chicago will put in a tomato operation to service the previously mentioned food service cooperative as well as other foodservice and retail customers and Dallas has been annexed as part of an existing expanding operation. These transitioned distribution centers provide the company capacity in good markets and will be an integral part of our growth."
The company also announced that it is selling its Canadian operation to better focus on its domestic opportunities. Mr. Washburn stated, "Ontario Tree Fruits has been a successful terminal operation and importer for the company but does not fit well with our focus on value-added services and products. By leveraging the import knowledge gained through Ontario Tree Fruits, we will continue to provide our customers with imported produce through our domestic import division as well as through our operating divisions."
Continuing, Mr. Washburn stated, "Consolidation in both the food service and retail industry has dramatically increased direct sourcing of product and the corresponding de-emphasis of brokers and terminal markets. However, buying power will not totally satisfy today's customer and market place. Due to increasing competition in the food retail sector, national and selected regional retailers have started to emphasize supply chain efficiency to reduce inventory and eliminate unnecessary costs. With knowledge acquired through our experience with Sam's, the investment in and continuing development of our S.A.P. technology platform and collaborative relationships that share assets, expertise and information, we can help customers increase their supply chain efficiency. Using a uniform technology platform throughout our organization greatly enhances our ability to service multi-regional and national customers. In addition, we have expanded our concentration in tomatoes with a significant "hot-house" program. We continue to expand our supplier connections and customer base and expect to continue to achieve strong growth in this category. We are in various stages of discussion with several large retail and food service distributors concerning value-added programs and services. The discussions have validated our business model and represent significant future opportunities."
The Company also announced the appointment of Mr. Keith McKinney and Mr. Mark Gier to its Board of Directors. Mr. Washburn stated, "Mr. McKinney is an entrepreneur and private investor with extensive experience in transportation, logistics and freight forwarding. Mr. Gier currently operates a business advisory service specializing in all facets of the cold storage business, including both investment and turnaround management. Both new directors are very accomplished in the distribution industry and we look forward to their guidance as the company capitalizes on the many opportunities of today's marketplace. In addition, we have also added two of our senior executives, John Gray and Larry Martin, to our Board and look forward to their additional contributions as well."
This news release contains forward-looking statements that are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of the Company. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Important risk factors that could cause actual results to differ materially from those reflected in the Company's forward-looking statements include the expiration of the agreement with its primary customer, risks associated with new business opportunities, volatility of produce prices and quality, the availability and costs of borrowed funds and covenant requirements of its lenders, the ability to refinance its existing bank facility and raise additional capital, general economic and market conditions, competition, dependence on key personnel and seasonality, as well as the risk factors and uncertainties disclosed in the Company's filings with the Securities and Exchange Commission.