When the airline industry nose-dived after the Sept. 11, 2001, terrorist attacks, food preparer Overhill Farms Inc. was hit particularly hard.
Vernon-based Overhill relied on airlines as a major buyer of its prepared meals. It supplied American, Delta and Northwest, as well as United Airlines before that carrier filed for bankruptcy protection.
As travel fell and these carriers cut expenses by reducing or eliminating meals, Overhill's airline food sales slid to $35 million in its 2002 fiscal year ended Sept. 30, from $54.7 million the previous year.
To make up for those lost sales, the company has been pushing to supply more restaurants and retailers, as well as its longtime customers, such as diet center operator Jenny Craig Inc. Overhill has had some success, but like many of the airlines, it remains financially troubled.
For the six months ended March 30, the company swung to a $2.4-million loss, from a profit of $398,343 in the same period a year earlier. Although Overhill's sales during that six-month period grew 6% to $71.6 million, the company was facing a big cash crunch and rising debts.
Over the last 12 months, Overhill's stock has fallen from a high of $3 to 81 cents Friday, down 9 cents, on the American Stock Exchange.
The company's shareholders are having their annual meeting today. They are unlikely to hear encouraging news about Overhill's airline business.
"I think we have to plan for the worst-case scenario" with the airlines, Overhill Chief Executive James Rudis said last week. "We are going to target other portions of our business for more significant growth."
In particular, Overhill is hoping to ride a wave of expansion with restaurant chain Panda Express, a customer of several years. The chain, owned by Rosemead-based Panda Restaurant Group Inc., is planning to open 108 new locations this year. Overhill marinates, chops, breads and partially cooks Panda's orange-flavored chicken dish before shipping it to the restaurants, where it is heated with sauce and vegetables.
In addition, after years of making grab-and-go meals for grocer Albertson's Inc., Overhill recently cut a deal to make private-label dinners for Safeway Inc. and also has begun selling meals under its Chicago Brothers brand to Costco Wholesale Corp. stores.
