"I do not really understand that. Buying before a price increase should increase sales, not decrease them."
They announced the increase during Q4/2012 so stock-up buying moved Q1 sales into Q4/12.
Since their products have a limited shelf life , customers cannot stock up that much. That's why Q2 showing OK sales.
There is seasonality. This is discussed in detail in the Connecticut Comments piece which somebody already referenced. Also discussed there is the fact that the buying ahead of the price increase would have occurred in Q4, not Q1, explaining the slight revenue decline in Q1
This company is looking terrific in all respects. The reduction in commodity prices should be an additional help to the numbers later this year. Based on the Q1 results, and understanding the seasonality, the chance of a special dividend this year has increased IMHO. I happen to think that the chance of a buyout has also increased, though nobody should buy the stock for that reason alone. Fortunately, the fundamentals more than justify purchase at current levels. I added another 10K shares after seeing the results.
I just read an analysis of the Armanino report on Connecticut Comments web site. It includes a whole analysis of the seasonality and says that the first quarter is normally lower than the rest. They have a new target of $1.60 which I like.