**Exhibit 99.1**

 

**AT THE COMPANY**

Clifford Bolen

Senior Vice President, COO, CFO

(312) 738-4500, cbolen@vitafoodproducts.com

 

**FOR IMMEDIATE RELEASE**

**MONDAY, MARCH 27, 2006**

 

**Vita Foods Reports Fourth-Quarter2005 Results**

 

**Chicago, IL, MARCH 27, 2006 –**For the fourth quarter ended December 31, 2005,**Vita FoodProducts, Inc. (AMEX: VSF)** today announced a consolidated net lossof $426,000, or $0.11 per share, compared to a net loss of $2,062,000 or $0.54per share in the fourth quarter of 2004. The net losses for the fourth quartersof both years include certain unusual corporate level transactions. For the2005 quarter a $502,000 pre-tax charge was recognized to account for the futurecosts associated with the material reduction in the duties of a seniorexecutive officer and the December 31, 2006 termination of his employmentagreement. In addition, pre-tax costs associated with the implementation of aShareholders Rights Plan and abandoned acquisition efforts totaling $197,000were also recognized in the fourth quarter of 2005. For the 2004 quarter, a noncash goodwill impairment charge of $2,314,000 was recognized. The impairmentcharge was the result of a decline in the value of the Company’s wholly ownedsubsidiary, Vita Specialty Foods (“VSF”).

 

Absent the unusual corporate level transactions described above, theVita Seafood segment, which is engaged in the processing and sale of herring,salmon and complementary products had net income of $137,000 for the fourthquarter of 2005 compared to net income of $396,000 in the fourth quarter of 2004.This reduction is primarily the result of higher selling and administrativeexpenses. The Company’s other business segment, VSF, which is engaged in theprocessing and sale of salad dressings, marinara sauces, cooking sauces, honeyand other specialty food products, experienced a net loss of $143,000 in thefourth quarter of 2005 compared to a net loss of $145,000 in the fourth quarterof 2004.

 

Consolidated net sales for the fourth quarter of 2005 were $14.2million, compared with $13.9 million in the fourth quarter of 2004. Vita Seafood’snet sales for the fourth quarter of 2005 were $9.8 million compared to $9.6million from the prior year quarter, representing a 2% increase. VSF net salesfor the fourth quarter were $4.4 million compared to $4.3 million from theprior year quarter, also representing a 2% increase.

 

Gross margin for the fourth quarter decreased to 29.0% from 31.2% inthe prior year fourth quarter as margins for both business segments contracted asa result of higher conversion costs for both segments and higher raw materialcosts for the VSF segment.

 

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“2005 was a year full of changes for Vita,” said Steve Rubin, theCompany’s chairman and chief executive officer. “We built up our futuremanagement team, overhauled many production processes, laid out a plan tocompete more effectively and set the stage for a return to profitability in2006. In addition, the equity investment of $2.5 million that we recentlyannounced should provide the Company with the capital resources necessary totake advantage of the opportunities we have identified. We remain comfortablewith our earlier guidance of between $0.20 and $0.24 per share for 2006.”

 

**Full-Year Results**

For the twelve months ended December 31, 2005, the Company had a consolidatednet loss of $889,000 or $0.23 per share, compared to a net loss of $2,717,000,or $0.71 per share for 2004. Both losses include the unusual corporate leveltransactions described above. Absent those unusual corporate level transactions,the Vita Seafood segment had a net lossof $755,000 in 2005 compared to a net loss of $521,000 in 2004. VSF net incomewas $285,000 in 2005 compared to net income of $118,000 in 2004. The Companywas in compliance with its amended debt covenants at December 31, 2005.

 

Consolidated net sales for the year 2005 decreased 4% to $46.9 millionfrom $48.8 million in 2004. Vita Seafood’s net sales declined 2% to $26.4million in 2005 from $27.0 million in 2004. VSF’s net sales for the year 2005 declined6% to $20.5 million from $21.8 million in 2004.

 

Gross margin for the year improved to 30.4% from 29.4% in the prioryear as both business segments contributed to improved margins.

 

The Vita Seafood division is a U.S. leader in the herring and retailpackaged salmon markets, and is engaged in several other food segments,including cream cheese, cocktail sauce, tartar sauce and horseradish. TheCompany markets and sells these items under the Vita®, Elf® and GrandIsle® brands. More than 95% ofVita Seafood’s sales are in kosher foods.

 

Vita Specialty Foods, Inc., the Company’s wholly owned subsidiary,combines the products of former entities The Virginia Honey Company and TheHalifax Group, Inc. Virginia Honey was a manufacturer and distributor of honey,salad dressings, including its’ award-winning Virginia Brand Vidalia® OnionVinegarette salad dressing, cooking sauces, jams & jellies, and giftbaskets. Halifax was a manufacturer and distributor of licensed brand-namedproducts including the world-renowned Jim Beam® brand of steak sauce, barbequesauce, marinades, salsas and Kahlua®, and Courvoisier® Gourmet Collections. Halifaxalso marketed, manufactured and distributed the award-winning Scorned Woman®gourmet food line, the Oak Hill Farms® line of salad dressings and variousgourmet products and branded gift items.

 

The common stock of Vita Food Products, Inc. is currently traded on theAmerican Stock Exchange and Chicago Stock Exchange under the ticker symbol VSF.

 

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***This release contains forward-looking statements about theCompany’s future growth, profitability, customers and competitive position. Anysuch statements are subject to risks and uncertainties, including but notlimited to:***

*** ***

•                  *changes in economic and marketconditions;*

•                  *industry competition;*

•                  *raw material availability andprices;*

•                  *the success of new productintroductions;*

•                  *the potential loss of largecustomers or accounts;*

•                  *downward product price movements;*

•                  *changes in energy costs;*

•                  *integration and management ofacquired businesses;*

•                  *the seasonality of Vita’sbusiness;*

•                  *the Company’s ability to attractand retain key personnel;*

•                  *the potential impact of claimsand litigation; and*

•                  *the dietary habits and trends ofthe general public.*

 

***In light of these and other risks and uncertainties, theCompany makes no representation that any future results, performance orachievements expressed or implied in this release will be attained. The Company’sactual results may differ materially from any results expressed or implied bythe forward-looking statements.***

*** ***

**— TABLESFOLLOW —**

 

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VITA FOOD PRODUCTS, INC.

Condensed ConsolidatedStatement of Operations

(in thousands, except pershare data)

(unaudited)

** **
| ** **                             | ** ** | **Three Months** | ** ** | ** **  | ** ** | **Twelve Months** | ** ** | ** **  | ** ** |
|----------------------------------------|------------|------------------|------------|-------------|------------|-------------------|------------|-------------|------------|
| ** **                             | ** ** | **Ended**        | ** ** | ** **  | ** ** | **Ended**         | ** ** | ** **  | ** ** |
| ** **                             | ** ** | **Dec 31,**      | ** ** | **Dec 31,** | ** ** | ** **        | ** ** | **Dec 31,** | ** ** | **Dec 31,** | ** ** | ** ** | ** ** |
| ** **                             | ** ** | **2005**         | ** ** | **2004**    | ** ** | **Change**        | ** ** | **2005**    | ** ** | **2004** | ** ** | **Change** | ** ** |
| Net sales                              |       | $                | 14,186     |        | $          | 13,911            |       | 2           | %          | $ | 46,856 |   | $ | 48,756 |   | (4 | )% |
| Cost of goods sold                     |       | 10,067           |       | 9,568       |       | 5                 | %          | 32,633      |       | 34,408 |   | (5 | )% |
| Gross margin                           |       | 4,119            |       | 4,343       |       | (5                | )%         | 14,223      |       | 14,348 |   | (1 | )% |
|                                   |       |             |       |        |       |              |       |        |       |   |   |   |   |
| Selling and administrative expenses    |       |             |       |        |       |              |       |        |       |   |   |   |   |
| Selling,  marketing & distribution |       | 2,680            |       | 2,672       |       | 0                 | %          | 9,493       |       | 9,972 |   | (5 | )% |
| Administrative                         |       | 1,265            |       | 1,034       |       | 22                | %          | 4,586       |       | 4,281 |   | 7 | % |
| Employment  contract                   |       | 502              |       |        |       | N/A               |       | 502         |       |   |   | N/A |   |
| Goodwill  impairment                   |       |             |       | 2,314       |       | N/A               |       |        |       | 2,314 |   | N/A |   |
| Total                                  |       | 4,447            |       | 6,020       |       | (26               | )%         | 14,581      |       | 16,567 |   | (12 | )% |
| Operating loss                         |       | (328             | )          | (1,677      | )          | 80                | %          | (358        | )          | (2,219 | ) | 84 | % |
|                                   |       |             |       |        |       |              |       |        |       |   |   |   |   |
| Interest expense                       |       | 341              |       | 218         |       | 56                | %          | 1,083       |       | 767 |   | 41 | % |
| Loss before income taxes               |       | (669             | )          | (1,895      | )          | 65                | %          | (1,441      | )          | (2,986 | ) | 52 | % |
| Income tax expense (benefit)           |       | (243             | )          | 167         |       | (246              | )%         | (552        | )          | (269 | ) | (105 | )% |
| Net loss                               |       | $                | (426       | )           | $          | (2,062            | )          | 79          | %          | $ | (889 | ) | $ | (2,717 | ) | 67 | % |
| Loss per common share:                 |       |             |       |        |       |              |       |        |       |   |   |   |   |
| Basic                                  |       | $                | (0.11      | )           | $          | (0.54             | )          | 80          | %          | $ | (0.23 | ) | $ | (0.71 | ) | 68 | % |
| Diluted                                |       | $                | (0.11      | )           | $          | (0.54             | )          | 80          | %          | $ | (0.23 | ) | $ | (0.71 | ) | 68 | % |
| Weighted average shares outstanding:   |       |             |       |        |       |              |       |        |       |   |   |   |   |
| Basic                                  |       | 3,866            |       | 3,847       |       |              |       | 3,862       |       | 3,840 |   |   |   |
| Diluted                                |       | 3,866            |       | 3,847       |       |              |       | 3,862       |       | 3,840 |   |   |   |

 

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