Fourth Quarter Revenues Increased 35.2%
to $58.9 Million Full Year Revenues Increased
16.4% to $215.6 Million
Inventure Foods, Inc. (Nasdaq:SNAK) ("Inventure Foods"), a leading
specialty food marketer and manufacturer, today reported financial
results for the fourth quarter and fiscal year ended December 28,
2013.
Fourth Quarter 2013 Highlights
- Net revenues increased 35.2% to $58.9 million.
- Adjusted EBITDA* increased 46.4% to $5.8 million.
- Diluted earnings per share was $0.10, or $0.14* adjusted for
transaction related expenses.
Fiscal Year 2013 Highlights
- Net revenues increased 16.4% to $215.6 million.
- Adjusted EBITDA* increased 12.2% to $18.0 million.
- Diluted earnings per share was $0.33, or $0.38* adjusted for
transaction related expenses.
"We are pleased to report strong net revenues for fiscal 2013,
the highest in the Company's history, and remain confident that we
will continue our earnings improvement in fiscal 2014," said Terry
McDaniel, Chief Executive Officer of Inventure Foods. "Our team
remains focused on our strategic vision to strengthen our core
brand portfolios as we continue to expand our healthy / natural
product portfolios. We believe the acquisitions we completed in
2013 will better position us to capitalize on our growth
opportunities in the expanding better-for-you and snack food
categories and enable us to generate long-term sustainable growth
for our shareholders."
(All comparisons above are to the fourth quarter and fiscal year
2012)
| |
|
| *Please see the tabular
reconciliation of financial measures prepared in accordance with
United States generally accepted accounting principles ("GAAP") to
non-GAAP financial measures included at the end of this press
release for the definition and information concerning certain items
affecting comparability and reconciliations of the non-GAAP terms
adjusted diluted earnings per share, EBITDA and adjusted EBITDA to
the most comparable GAAP financial measures. This news release
includes the financial measures "EBITDA" and "adjusted EBITDA",
"adjusted net income" and "adjusted diluted earnings per Share."
These measurements are deemed "non-GAAP financial measures"
under rules of the SEC, including Regulation G. This non-GAAP
financial information may be determined or calculated differently
by other companies. |
Fourth Quarter Fiscal 2013
Net revenues increased 35.2% to $58.9 million, compared to $43.5
million in the prior year period. The increase in net revenues was
due to a 55.8% increase in the healthy / natural product portfolio.
Gross profit as a percent of net revenues decreased 190 basis
points to 18.5% compared to 20.4% in the prior year. This decline
is due to a decrease in gross margin in the snack segment related
to increased manufacturing of co-packed products during the period,
as well as a reduction in sales of certain licensed products.
Selling, general and administrative expenses increased $1.7
million or 27.1% to $7.8 million, compared to $6.1 million in the
prior year period. As a percentage of net revenues, selling,
general and administration expenses decreased 90 basis points to
13.2%, compared to 14.1% in the prior year period. The increase in
selling, general and administrative expenses is due to
approximately $1.1 million in transaction related expenses and
increased commissions on higher revenue.
Net income was $2.0 million, or $0.10 diluted earnings per share
for the fourth quarter of 2013 compared to $2.4 million, or $0.12
diluted earnings per share for the fourth quarter of 2012. Fourth
quarter 2013 net income includes $0.8 million in transaction
related expenses, net of tax, primarily attributable to the
acquisition of Fresh Frozen Foods in November 2013. The comparable
prior year period includes a gain of $0.7 million, net of tax,
related to the sale of the DSD business. Adjusted fourth quarter
diluted earnings per share* was $0.14 in the current year, compared
to $0.08 in the prior period.
Adjusted EBITDA* increased 46.4% to $5.8 million, or 9.8% of net
revenues, compared to $3.9 million, or 9.1% of net revenues in the
prior year period.
Fiscal 2013
Net revenues increased $30.4 million, or 16.4% to $215.6
million, compared to $185.2 in the prior year. Gross profit as a
percent of net revenues decreased 190 basis points to 18.0%,
compared to 19.9% in 2012. This decline is due to a decrease in
gross margin in the snack segment related to increased
manufacturing of co-packed products during the period as well as a
reduction in sales of certain licensed products. Healthy / natural
products experienced revenue growth of 27.2% and represented 67.1%
of net revenues, compared to 61.4% the prior year.
Selling, general and administrative expenses increased $2.5
million or 9.7% to $28.0 million compared to $25.5 million in the
prior year. As a percentage of net revenues, selling, general and
administration expenses decreased 80 basis points to 13.0%,
compared to 13.8% in the prior year. Selling, general and
administrative expenses include approximately $1.4 million in
transaction related expenses.
Net income was $6.6 million, or $0.33 diluted earnings per
share, in fiscal 2013, compared to $7.4 million, or $0.38
diluted earnings per share in the prior year. Net income in fiscal
2013 includes $0.9 million in transaction related expenses, net of
tax, due to the acquisitions of Willamette Valley Fruit Company and
Fresh Frozen Foods. The prior year includes a gain of $0.7 million,
net of tax, related to the sale of the DSD business. Adjusted
diluted earnings per share* was $0.38 in fiscal 2013, compared to
$0.34 in the prior year.
Adjusted EBITDA* increased 12.2% to $18.0 million, or 8.3% of
net revenues, compared to $16.0 million, or 8.7% of net revenues in
the prior year period.
Segment Review
The Company has two reportable segments: frozen and snack. The
frozen product segment includes frozen fruits, vegetables and
beverages, for sale primarily to groceries, club stores and mass
merchandisers. The Snack segment includes manufactured potato
chips, kettle chips, potato crisps, potato skins, pellet snacks,
sheeted dough products and extruded product for sale primarily to
snack food distributors and retailers.
Frozen Segment: Net revenues during the fourth
quarter increased 59.4% to $35.1 million, compared to $22.0 million
in the prior year period. Gross profit increased $3.0 million, or
73.0% to $7.1 million, compared to $4.1 million in the prior year
period.
Net revenues for fiscal 2013 increased 29.0% to $117.1 million,
compared to $90.8 million in the prior year. Gross profit
increased $5.2 million, or 29.9% to $22.7 million, compared to
$17.5 million in the prior year.
Snack Segment: Net revenues during the fourth
quarter increased 10.4% to $23.8 million, compared to $21.5 million
in the prior year period. Gross profit decreased $1.0 million, or
21.3% to $3.8 million, compared to $4.8 the prior year period.
Net revenues for fiscal 2013 increased 4.3% to $98.5 million,
compared to $94.4 million in fiscal 2012. Gross profit decreased
$3.2 million, or 16.7% to $16.1, million compared to $19.4 million
in the prior year.
Mr. McDaniel concluded, "We are pleased with the continued
growth of our frozen and snack segments. These results
illustrate the success of our strategic initiatives as we strive to
become a leading healthy/natural foods company and work to improve
the performance of our indulgent product portfolio. We believe
Inventure Foods is better positioned than ever before with the
right team, products and financial flexibility to report another
record performance in 2014 and to capitalize on the tremendous
growth opportunities ahead of us."
Conference Call
The Company will hold an investor conference call today at 11
a.m. Eastern time. The conference call is scheduled to begin at
11:00 a.m. ET on Thursday, February 27, 2014. To participate on the
live call listeners in North America may dial (877) 853-7702 and
international listeners may dial (408) 940-3848. In addition, the
call will be broadcast live over the Internet hosted at the
"Investor Relations" section of the Company's website at
www.inventurefoods.com and will be archived online for one
year.
About Inventure Foods
With manufacturing facilities in Arizona, Indiana, Washington,
Oregon and Georgia, Inventure Foods, Inc. (SNAK) is a marketer and
manufacturer of specialty food brands in better-for-you and
indulgent categories under a variety of Company owned and licensed
brand names, including Boulder Canyon Natural Foods®, Jamba®,
Seattle's Best Coffee®, Rader Farms®, T.G.I. Friday's®, Nathan's
Famous®, Vidalia Brands®, Poore Brothers®, Tato Skins®, Willamette
Valley Fruit CompanyTM, Fresh FrozenTM and Bob's Texas Style®. For
further information about Inventure Foods, please visit
www.inventurefoods.com.
Note Regarding Forward-looking Statements
This press release contains forward-looking statements,
including, but not limited to, our expectations regarding continued
earnings improvement in fiscal 2014, the ability to strengthen our
core brand portfolios and expand our health/natural product
portfolios, the ability to capitalize on our growth opportunities
in the better-for-you and snack food categories and to generate
long-term sustainable growth for shareholders, and the ability to
achieve a record performance in 2014 and capitalize on our growth
opportunities. Because such statements include risks and
uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors
that may cause actual results to differ from the forward-looking
statements contained in this press release and that may affect the
Company's prospects in general include, but are not limited to,
general economic conditions, increases in cost or availability of
ingredients, packaging, energy and employees, price competition and
industry consolidation, ability to execute strategic initiatives,
product recalls or safety concerns, disruptions of supply chain or
information technology systems, customer acceptance of new products
and changes in consumer preferences, food industry and regulatory
factors, interest rate risks, dependence upon major customers,
dependence upon existing and future license agreements, the
possibility that we will need additional financing due to future
operating losses or in order to implement the Company's business
strategy, acquisition and divestiture-related risks, the volatility
of the market price of the Company's common stock, and such other
factors as are described from time to time in the Company's filings
with the Securities and Exchange Commission. All
forward−looking statements are based on information available to
the Company as of the date of this news release, and the Company
assumes no obligation to update such statements.
| INVENTURE FOODS, INC.
AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED
STATEMENTS OF INCOME |
| (in thousands, except
per share data) |
|
(unaudited) |
| |
| |
Quarter
Ended |
Year
Ended |
| |
December 28,
2013 |
December 29,
2012 |
December 28,
2013 |
December 29,
2012 |
| Net revenues |
$ 58,852 |
$ 43,542 |
$ 215,580 |
$ 185,179 |
| Cost of revenues |
47,983 |
34,670 |
176,694 |
148,287 |
| Gross profit |
10,869 |
8,872 |
38,886 |
36,892 |
| Operating expenses: |
|
|
|
|
| Selling, general & administrative
expenses |
7,795 |
6,133 |
28,036 |
25,548 |
| Operating income |
3,074 |
2,739 |
10,850 |
11,344 |
| Non-operating (income) expense: |
|
|
|
|
| Gain on sale of DSD business |
-- |
(1,101) |
-- |
(1,101) |
| Interest expense, net |
231 |
151 |
872 |
764 |
| Income before income taxes |
2,843 |
3,689 |
9,978 |
11,681 |
| Income tax provision |
836 |
1,325 |
3,360 |
4,232 |
| Net income |
$ 2,007 |
$ 2,364 |
$ 6,618 |
$ 7,449 |
| |
|
|
|
|
| Earnings per common share: |
|
|
|
|
| Basic |
$ 0.10 |
$ 0.12 |
$ 0.34 |
$ 0.40 |
| Diluted |
$ 0.10 |
$ 0.12 |
$ 0.33 |
$ 0.38 |
| Weighted average number of common
shares: |
|
|
|
|
| Basic |
19,454 |
19,075 |
19,360 |
18,821 |
| Diluted |
19,916 |
19,684 |
19,789 |
19,574 |
| |
| |
| INVENTURE FOODS, INC.
AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED
BALANCE SHEETS |
| (in
thousands) |
|
(unaudited) |
| |
| |
December 28,
2013 |
December 29,
2012 |
| Assets |
|
|
| Current assets: |
|
|
| Cash and cash equivalents |
$ 910 |
$ 419 |
| Accounts receivable, net allowance |
23,618 |
17,547 |
| Inventories |
43,086 |
27,071 |
| Deferred income tax asset |
755 |
1,030 |
| Other current assets |
1,223 |
1,323 |
| Total current assets |
69,592 |
47,390 |
| |
|
|
| Property and equipment, net |
50,140 |
34,051 |
| Goodwill |
23,064 |
11,616 |
| Trademarks and other intangibles, net |
25,624 |
2,010 |
| Other assets |
1,671 |
827 |
| Total assets |
$ 170,091 |
$ 95,894 |
| |
|
|
| Liabilities and Shareholders'
Equity |
|
|
| Current liabilities: |
|
|
| Accounts payable |
$ 19,380 |
$ 12,178 |
| Accrued liabilities |
10,121 |
8,415 |
| Current portion of long-term debt |
6,110 |
1,646 |
| Total current liabilities |
35,611 |
22,239 |
| |
|
|
| Long-term debt, less current portion |
61,865 |
6,897 |
| Line of credit |
3,223 |
10,117 |
| Deferred income tax liability |
4,188 |
3,968 |
| Interest rate swaps |
526 |
766 |
| Other liabilities |
5,525 |
808 |
| Total liabilities |
110,938 |
44,795 |
| |
|
|
| Shareholders' equity: |
|
|
| Common stock |
198 |
196 |
| Additional paid-in capital |
30,960 |
29,660 |
| Accumulated other comprehensive loss |
(244) |
(378) |
| Retained earnings |
28,710 |
22,092 |
| |
59,624 |
51,570 |
| |
|
|
| Less: treasury stock |
(471) |
(471) |
| Total shareholders' equity |
59,153 |
51,099 |
| Total liabilities and shareholders'
equity |
$ 170,091 |
$ 95,894 |
| |
| |
| INVENTURE FOODS, INC.
AND SUBSIDIARIES |
| RECONCILIATION OF
EBITDA AND ADJUSTED EBITDA |
| (in
thousands) |
|
(unaudited) |
| |
| |
Quarter Ended |
Year
Ended |
| |
December 28,
2013 |
December 29,
2012 |
December 28,
2013 |
December 29,
2012 |
| Reconciliation – EBITDA (1): |
|
|
|
|
| Reported net income |
$ 2,007 |
$ 2,364 |
$ 6,618 |
$ 7,449 |
| Add back: Interest, net |
231 |
151 |
872 |
764 |
| Add back: Income tax provision |
836 |
1,325 |
3,360 |
4,232 |
| Add back: Depreciation |
1,407 |
1,204 |
5,430 |
4,678 |
| Add back: Amortization of intangible
assets |
200 |
2 |
288 |
23 |
| EBITDA(1) |
$ 4,681 |
$ 5,046 |
$ 16,568 |
$ 17,146 |
| Adjustments: |
|
|
|
|
| Gain on sale of DSD business |
-- |
(1,101) |
-- |
(1,101) |
| Acquisition-related transaction
costs |
1,093 |
-- |
1,427 |
-- |
| Adjusted EBITDA(1) |
$ 5,774 |
$ 3,945 |
$ 17,995 |
$ 16,045 |
| |
| |
| INVENTURE FOODS, INC.
AND SUBSIDIARIES |
| ITEMS AFFECTING
COMPARABILITY – RECONCILIATION OF ADJUSTED INFORMATION TO GAAP
INFORMATION |
| (in
thousands) |
|
(unaudited) |
| |
| |
Quarter Ended |
Year
Ended |
| |
December 28,
2013 |
December 29,
2012 |
December 28,
2013 |
December 29,
2012 |
| Reported net income |
$ 2,007 |
$ 2,364 |
$ 6,618 |
$ 7,449 |
| Gain on sale of DSD business, net of tax |
-- |
(706) |
-- |
(702) |
| Acquisition-related transaction costs, net of
tax |
772 |
-- |
946 |
-- |
| Adjusted net income(2) |
$ 2,779 |
$ 1,658 |
$ 7,564 |
$ 6,747 |
| Adjusted diluted earnings per
share(2) |
$ 0.14 |
$ 0.08 |
$ 0.38 |
$ 0.34 |
| |
| (1) EBITDA is defined as net income, net
of taxes, interest expense, income taxes, depreciation and
amortization. We further adjust EBITDA to exclude the gain on the
sale of our DSD business and adjust for acquisition-related
transaction costs, which include outside fees and expenses, and to
ignore the effect of what we consider transactions or events not
related to our core business to arrive at adjusted EBITDA. The GAAP
financial measure that is most directly comparable to EBITDA is net
cash provided by operating activities. We present adjusted EBITDA
because we believe it provides useful information regarding our
ability to meet our future debt payment requirements, capital
expenditures and working capital requirements and it provides an
overall evaluation of our financial condition. We include adjusted
EBITDA in this earnings announcement to provide transparency to
investors and to assist investors in comparing our performance
across reporting periods on a consistent basis by excluding items
that we do not believe are indicative of our core operating
performance. Adjusted EBITDA has certain inherent limitations
as an analytical tool and should not be used in isolation or as a
substitute for net income, cash flows, or other consolidated income
or cash flow data prepared in accordance with GAAP or as a measure
of our profitability or our liquidity. Further, EBITDA may not be
comparable to similarly titled measures used by other
companies. |
| |
| (2) Adjusted net income and adjusted
diluted earnings per share permit a comparative assessment of our
SG&A expenses, net income and diluted earnings per share by
excluding certain one-time expenses, and merger and restructuring
expenses to make a more meaningful comparison of our operating
performance. |
CONTACT: John Mills/Katie Turner, ICR (646) 277-1200
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