TurboChef Technologies (NASDAQ:OVEN) improved its results, yet still lost an oven-load of money. It is also dealing with an SEC investigation that will cause restatements of past financials. The combination is not very mouthwatering.

The company lost $0.22 a share for the quarter, wider than the $0.17 loss a year earlier. TurboChef tried to explain away some of its losses, but it doesn't resonate with me. Out of this year's total, $3.2 million, or $0.11, was attributed to (hopefully one-time) costs associated with the ongoing SEC investigation. The company also spent $2.2 million, or $0.08 a share, on marketing for its new residential oven products. Certainly, some of its marketing expenses were related to a one-time consumer launch media event, the industry's largest trade show, and trade advertising commitments. But the company itself admits this caused marketing expenditures to come in only slightly above budget. New-product spending is a normal cost of doing business, and likely will remain high for the near future.

The SEC investigation is an informal inquiry into TurboChef's stock option grants from Jan, 1, 1997, to the present. The company announced in June that preliminary findings indicated some prior financial statements would need to be restated to record material charges for stock-based compensation, including financial results for 2006. This will delay its 10-Q filing until last year's 10-K is filed (expected this month). Still, how can a company be judged until the restatements are done, and investors are able to analyze the details in these reports?

The commercial segment, which has seen some success, more than doubled revenue from last year, but it was still only $23 million. While it has tried to diversify its revenue base, its top three customers still account for 66% of the top line. Obviously, a slowdown or cancellation of orders from any would be devastating. TurboChef faces heavy competition from leader Middleby (NASDAQ:MIDD). United Technologies (NYSE:UTX) is also a formidable competitor. Given this, it would seem an inauspicious time to launch a new product aimed at a different market. I would advise investors to look elsewhere, as this company may take a while to heat up.

Related Foolishness:

Middleby is a Motley Fool Hidden Gems recommendation.

Fool contributor Larry Rothman is happy to receive feedback, and promises to read it when not being wrestled by his three children. He doesn't have any positions in the companies mentioned.