Boulder Brands Announces 2013 First Quarter Results

Boulder Brands Announces 2013 First Quarter Results

BOULDER, Colo., May 2, 2013 (GLOBE NEWSWIRE) -- Boulder Brands, Inc.
(Nasdaq:BDBD) today announced its financial results for the first quarter
ended March 31, 2013.

Boulder Brands, Inc. Logo

For the first quarter of 2013 compared to the equivalent period of 2012:

  *Net sales increased 34.5% to $106.7 million, GAAP operating income
    increased 64.3% to $12.7 million, and adjusted EBITDA increased 62.0% to
    $18.3 million.
  *Organic net sales increased 9.5% and organic adjusted EBITDA increased
    34.2% (in each case on a pro forma basis assuming that the Company had
    owned Udi's during the first quarter of 2012). Organic net sales,
    excluding discontinued items, increased 12.2%.
  *GAAP diluted earnings per share were $0.06 in the first quarter of 2013,
    compared to $0.06 per share in the first quarter of 2012.
  *Diluted earnings per share, excluding certain items, were $0.07 in the
    first quarter of 2013, compared to $0.06 in the first quarter of 2012.
    Earnings per share were impacted by higher interest, depreciation,
    amortization and stock-based compensation expense, when compared to last
    year.
  *The Company raised its outlook for 2013.For 2013, the Company now expects
    net sales, EBITDA and adjusted EBITDA to be in the high-end of its
    previously announced forecasted range of $450 million to $460 million in
    net sales, $64 million to $69 million of EBITDA, and $72 million to $77
    million of adjusted EBITDA. 

Commenting on the results, Chairman and Chief Executive Officer Stephen Hughes
stated, "We started the year off strong and continued to execute on our core
strategies. In the first quarter, our Natural segment, which includes the
Udi's, Glutino and Earth Balance brands, represented 56.5% of our total net
sales and reported a strong organic net sales increase of 42.6% and organic
brand profit growth of 73.8%, in each case compared to the first quarter of
2012.The Natural segment continued to benefit from distribution gains with
our gluten-free brands and continued strength in the gluten-free category,
resulting in 49.5% organic net sales growth for our gluten free brands in the
first quarter.Since acquiring Udi's, total company organic adjusted EBITDA
growth has averaged approximately 35% over the past three quarters."

Commenting about the Smart Balance segment, Mr. Hughes said, "While the
decline in our Smart Balance segment slightly offset growth in our Natural
Segment, part of the Smart Balance decline was based on our strategic plan to
improve profitability. We are exiting certain categories that are not
strategic, such as Bestlife spreads and Smart Balance Butter Blends, and are
rationalizing categories that are not profitable, such as milk. The result is
an improvement in overall profitability. This quarter, we improved our brand
profit margin for the Smart Balance segment. While we manage this segment for
profit, we are also making prudent and strategic investments in our spreads
business, including our space-saver packaging initiative. We are encouraged
by the early response from retailers to our space-saver packing initiative and
expect to gain points of distribution with our spreads products in 2013. We
expect these recently implemented strategies to result in a more stable and
profitable Smart Balance portfolio."

2013 First Quarter Results

Total Company net sales in the first quarter of 2013 increased 34.5% to $106.7
million, compared to net sales of $79.3 million in the first quarter of
2012.This performance reflected the impact from the acquisition of Udi's,
which closed on July 2, 2012, and strong growth from Glutino and Earth
Balance.Organic net sales, which assume the Company owned Udi's for the
entire first quarter of 2012, increased 9.5% in the first quarter of 2013
compared to the first quarter of 2012.

The chart below reconciles net sales to organic sales for the first quarters
of 2013 and 2012, by segment:

Reconciliation of Net Sales to Organic Net Sales – First Quarter
$ in Millions                                                   2013   2012
                                                                     
Natural Segment                                                       
Reported Net Sales                                             $60.3  $24.1
Udi's Pre-Ownership                                            --   18.1
Organic Natural Segment Net Sales                               60.3   42.2
                                                                     
Smart Balance Segment                                                 
Reported Net Sales                                             46.4   55.2
Discontinued items*                                            0.2    2.5
Smart Balance Net Sales – Excluding Discontinued Items*         46.2   52.7
                                                                     
Total Company Reported Net Sales                                106.7  79.3
Total Company Organic Net Sales                                 $106.7 $97.4
Total Company Organic Net Sales – Excluding Discontinued Items* $106.5 $94.9
                                                                     
*Discontinued items include Bestlife Spreads and Smart Balance Butter Blends

The chart below highlights net sales, gross profit, gross margin, and brand
profit (calculated as gross profit less marketing, selling and royalty expense
(income)) for the first quarters of 2013 and 2012, by the Company's Natural
and Smart Balance segments.In addition, it reconciles organic brand profit to
reported brand profit:

Segment Results – First Quarter
                                                 
$ in Millions                    2013   Margin 2012  Margin
Net Sales:                                        
Natural                         $60.3        $24.1 
Smart Balance                   46.4         55.2  
                                $106.7       $79.3 
Gross Profit                                     
Natural                         $24.3  40.3%  $9.3  38.5%
Smart Balance                   21.3   45.9%  25.8  46.8%
                                $45.6  42.7%  $35.1 44.2%
Brand Profit                                      
Natural                         $17.2  28.6%  $5.8  24.2%
Smart Balance                   13.6   29.2%  15.8  28.6%
                                $30.8  28.9%  $21.6 27.2%
Udi's pre-ownership brand profit             4.1   22.4%
Organic Brand Profit             $30.8  28.9%  $25.7 26.3%

Net sales for the Company's Natural segment (Udi's, Glutino and Earth Balance
brands) increased 149.6% to $60.3 million in the first quarter of 2013
compared to $24.1 million in the first quarter of 2012.Organic net sales for
the Natural segment increased 42.6% in the quarter.The Company's gluten-free
brands – Udi's and Glutino – reported organic net sales growth of 62.4% and
34.2%, respectively, in the quarter, which was driven by an acceleration in
distribution gains and continued strength in the gluten-free category
growth. The Company's Earth Balance portfolio registered a net sales gain of
17.9% in the first quarter of 2013 compared to the first quarter of 2012.

Net sales for the Company's Smart Balance segment declined 15.8% to $46.4
million in the first quarter of 2013 compared to $55.2 million in the first
quarter of 2012.This segment was negatively impacted by the winding down of
Bestlife® spreads and Smart Balance® Butter Blends, as the Company
repositioned its focus on premium spreads and spreadable butter within the
spreads category. Excluding the impact of these discontinued items, sales
for the Smart Balance segment declined 12.2% in the first quarter of 2013
compared to the same period in 2012. Despite the difficult environment for
spreads, the Company's premium spreads and spreadable butter products
outperformed the competition and gained share in its category.Net sales of
the Company's Smart Balance® Spreads and Spreadable Butter businesses, when
combined, declined 6.2% in the first quarter of 2013.The positive impact from
the introduction of Smart Balance® Spreadable Butter was offset by lower
volume in the Company's core spreads business.

Net sales of the Company's Smart Balance grocery products decreased 21.9% in
the first quarter of 2013 compared to the first quarter of 2012, primarily due
to lower sales in the peanut butter and oil businesses. This decrease was
mainly attributable to pricing and promotion activities from competitors.

Net sales of Smart Balance® milk decreased 20.2% in the first quarter of
2013.This decrease was mainly attributable to the difficult comparison to
last year's quarter, which included a strong promotional calendar and
incremental distribution gains.In addition, the decline was due to the
Company's strategy to improve profitability in milk by scaling back less
profitable accounts.

Gross profit in the first quarter of 2013 increased 29.9% to $45.6 million, or
42.7% of net sales; compared to $35.1 million, or 44.2% of net sales in the
first quarter of 2012.Although gross margin increased in the Natural segment
due to manufacturing efficiencies and synergies, overall gross margin was
impacted by the negative mix impact from the Natural segment.Gross margin for
the Smart Balance segment was negatively impacted by higher promotion expenses
in the spreads category.

Brand Profit for the Company's Natural segment increased to $17.2 million in
the first quarter of 2013 from $5.8 million in last year's quarter.The
significant increase is related to the Udi's acquisition, as it contributed
approximately $9.1 million to brand profit, as well as the growth from Glutino
and Earth Balance.Organic brand profit for the Natural segment increased
73.8% from last year's quarter.

Brand Profit for the Company's Smart Balance segment decreased to $13.6
million in the first quarter of 2013 from $15.8 million in the previous year's
quarter primarily due to higher promotion expenses in Smart Balance. Smart
Balance segment brand profit declined, whereas, brand profit margin increased
60 basis points compared to last year.

The table below provides a reconciliation of GAAP operating income to adjusted
EBITDA, a non-GAAP measure.

Reconciliation of Operating Income to Adjusted EBITDA – First Quarter
$ in Millions                                                 2013  2012
Operating income                                              $12.7 $7.8
Add back certain items affecting operating income:                 
Restructuring, acquisition and integration-related costs     0.2   (0.1)
Non-GAAP operating income                                     12.9  7.7
Add back non-cash and other items affecting operating income:      
Depreciation and amortization                                4.4   2.6
Stock-based compensation expense                             1.8   1.5
Subtotal                                                      19.1  11.8
Less other expense, net                                       0.8   0.5
Adjusted EBITDA                                               $18.3 $11.3
                                                                  
Udi's pre-ownership Adjusted EBITDA                           N/A   $2.3
                                                                  
Organic Adjusted EBITDA                                       $18.3 $13.6

GAAP operating income increased to $12.7 million in the first quarter of 2013
compared to $7.8 million in the first quarter of 2012.Excluding
restructuring, acquisition and integration related costs, non-GAAP operating
income increased to $12.9 million in the first quarter of 2013 compared to
non-GAAP operating income of $7.7 million in the first quarter of 2012.The
charges impacting operating income in the first quarter of 2013 include
restructuring, acquisition and integration-related costs of $0.2 million.
Included in the first quarter of 2012 was a one-time benefit related to the
adjustment of a restructuring charge of $0.1 million.First quarter 2013
operating income was impacted by higher depreciation, amortization and stock
compensation of approximately $2.1 million when compared to last year's
quarter.

Other expenses in the first quarter of 2013 and 2012 of $0.8 million and $0.5
million, respectively, reflect costs associated with commodity hedging
activities and currency changes in the Company's Canadian subsidiary.Adjusted
EBITDA increased 62.0% to $18.3 million in the first quarter of 2013 compared
to $11.3 million in the prior year's quarter. Organic adjusted EBITDA
increased 34.2% in the first quarter of 2013 compared to the first quarter of
2012.

The table below provides a reconciliation of GAAP Net Income and GAAP Diluted
EPS to non-GAAP Net Income and non-GAAP Diluted EPS.

Reconciliation of Certain Items Affecting NetIncome and EarningsPer Share
(EPS) – First Quarter
                                                  
                                Net Income ($Mil) DilutedEPS ($ Per Share)
                                2013     2012      2013         2012
Reported GAAP                    $4.0     $3.7      $0.06        $0.06
Add back certain items:                                       
Restructuring, acquisition &    0.1      (0.1)     0.00         (0.00)
integration costs
Forfeiture of certain stock     0.2      (0.1)     0.01         (0.00)
options
                                                             
Total certain items              0.3      (0.2)     0.01         (0.00)
                                                             
Excluding certain items          $4.3     $3.5      $0.07        $0.06
(Non-GAAP)

Excluding the items noted above, and adjusting for the forfeiture of certain
stock options impact after tax (which results in a normalized tax rate of
approximately 41%), net income in the first quarter of 2013 was $4.3 million,
or $0.07 per share, compared with net income of $3.5 million, or $0.06 per
share, in the first quarter of 2012.In the first quarter of 2013, GAAP net
income was impacted by higher interest, depreciation, amortization and
stock-based compensation expense of approximately $3.2 million, or $0.05 per
share, when compared to the first quarter of 2012.

2013 Outlook

The Company raised its outlook for 2013.For 2013, the Company now expects net
sales, EBITDA and adjusted EBITDA to be in the high-end of its previously
announced forecasted range of $450 million to $460 million for net sales, $64
million to $69 million for EBITDA and $72 million to $77 million for adjusted
EBITDA.

Davies Bakery Acquisition

Boulder Brands has acquired Davies Bakery, a UK-based gluten-free bakery and
bread manufacturer, from Frank Roberts & Sons for approximately £2.5
million.The Davies Bakery subsidiary of Frank Roberts & Sons manufactures and
sells gluten-free bread and baked goods in the UK for its own brand,
Yes!YouCan, and co-packages for private label customers.Davies reported £1.3
million in net sales in its 2012 fiscal year, ended August 31, 2012.Boulder
Brands expects to utilize Davies' retail relationships, its state of the art
manufacturing facility, and expertise in the UK market, to launch Udi's bakery
& grocery items in the UK in 2013.

Forward-looking Statements

Statements made in this press release that are not historical facts, including
statements about the Company's plans, strategies, beliefs, and expectations,
including the Company's outlook for 2013, are forward-looking and subject to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995.These statements may include use of the words "expect," "anticipate,"
"plan," "intend," "project," "may," "believe" and similar
expressions.Forward-looking statements speak only as of the date they are
made, and, except for the Company's ongoing obligations under the U.S. federal
securities laws, the Company undertakes no obligation to publicly update any
forward-looking statement, whether to reflect actual results of operations,
changes in financial condition, changes in general economic or business
conditions, changes in estimates, expectations or assumptions, or
circumstances or events arising after the issuance of this press
release.Actual results may differ materially from such forward-looking
statements for a number of reasons, including the Company's ability to:
maintain and grow those revenues derived from our Smart Balance® buttery
spread products from which we generate a substantial portion of our revenues;
maintain margins during periods of commodity cost fluctuations; introduce and
expand distribution of our new products; meet marketing and infrastructure
needs; respond to changes in consumer demand; respond to adverse publicity
affecting the Company or the industry in which we operate; maintain our
performance during difficult economic conditions; comply with regulatory
requirements; maintain existing relationships with and secure new customers;
continue to rely on third party distributors, manufacturers and suppliers;
successfully integrate and operate the Glutino and Udi's businesses (and other
companies we may acquire) and realize the expected benefits of the Glutino
and Udi's acquisitions (and other acquisitions we may consummate); operate
outside of the U.S.; successfully maintain relationships with the co-packers
for our Glutino® and Gluten-Free Pantry® products; grow net sales in a
competitive environment and with increasingly price sensitive consumers; and
maintain volume in light of price increases stemming from rises in commodity
costs; respond to potential changes in future tax rates; handle unexpected
costs, charges, liabilities, or expenses resulting from the company's recent
and potential future acquisitions; potential adverse reactions or changes in
business relationships resulting from acquisitions; as well as other risks and
uncertainties set forth in the Company's filings with the SEC.

Non-GAAP Financial Measures

The Company reports its financial results in accordance with accounting
principles generally accepted in the United States ("GAAP").

The Company uses the terms "organic net sales," "brand profit," "organic brand
profit," "net income and diluted earnings per share (EPS) excluding certain
items," "EBITDA" and "Adjusted EBITDA" as non-GAAP measures.The Company
believes that these measures help to explain its profitability and performance
in a manner which assists potential investors and securities analysts who
evaluate our Company.Brand profit is defined as gross profit less marketing,
selling and royalty expense (income).EBITDA is defined as net income before
net interest expense, income taxes, depreciation and amortization.Adjusted
EBITDA represents EBITDA as adjusted for stock-based compensation, purchase
accounting adjustments, restructuring, acquisition and integration-related
costs and certain other items. Measures identified as "organic" are
calculated assuming that we had owned Udi's during the first quarter of
2012.The Company believes that the exclusion of both non-cash and certain
items, helps to provide a reflection of the operating profitability of the
Company and complements the Company's planning and forecasting models used in
providing investors and securities analysts with important supplemental
information regarding the Company's underlying profitability and operating
performance.However, non-GAAP financial measures should be viewed in addition
to, and not as an alternative for, the Company's results prepared in
accordance with GAAP.In addition, the non-GAAP measures the Company uses may
differ from non-GAAP measures used by other companies.The GAAP measures most
directly comparable to (i) net income excluding certain items, (ii) diluted
earnings per share, excluding certain items, (iii) EBITDA and (iv) Adjusted
EBITDA, are (i)) net income, (ii) diluted earnings per share, (iii) operating
income and (iv) operating income. We have included in this press release
reconciliations of organic net sales to net sales, adjusted EBITDA to GAAP
operating income, organic brand profit to brand profit, net income excluding
certain items to GAAP net income and diluted EPS excluding certain items to
GAAP EPS. Because of the forward-looking nature of the Company's forecasted
EBITDA and adjusted EBITDA, specific quantifications of the amounts that would
be required to reconcile these measures to our forecasted GAAP operating
income are not available. The Company believes that there is a degree of
volatility with respect to certain of the Company's GAAP measures, primarily
related its income tax reporting and certain adjustments made to arrive at the
relevant non-GAAP measures, which preclude the Company from providing accurate
forecasted GAAP to non-GAAP reconciliations. Based on the above, the Company
believes that providing estimates of the amounts that would be required to
reconcile the range of the non-GAAP EBITDA and adjusted EBITDA to forecasted
GAAP operating income would imply a degree of precision that would be
confusing or misleading to investors for the reasons identified above.

About Boulder Brands, Inc. Boulder Brands, Inc. (Nasdaq:BDBD) is committed to
providing superior tasting, solution-driven products. The company's health
and wellness platform consists of brands that target specific consumer needs:
Glutino and Udi's for gluten-free diets; Earth Balance for plant-based diets;
Smart Balance for heart healthier diets; and Bestlife for weight management.
For more information about Boulder Brands, Inc., please visit
www.boulderbrands.com.


BOULDER BRANDS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
                                                     March31,   December31,
                                                     2013        2012
                                                     (unaudited)
Assets                                                           
Current assets:                                                  
Cash                                                  $7,580    $11,509
Accounts receivable, net of allowance of: $867 (2013) 33,056      30,323
and $656 (2012)
Accounts receivable - other                           2,052       3,277
Inventories, net                                      30,019      25,292
Prepaid taxes                                         681         3,206
Prepaid expenses and other assets                     4,566       1,776
Deferred tax asset                                    6,181       6,201
Total current assets                                  84,135      81,584
Property and equipment, net                           34,738      31,195
Other assets:                                                    
Goodwill                                              321,937     322,191
Intangible assets, net                                231,143     233,691
Deferred costs, net                                   11,319      11,545
Other assets                                          1,845       1,748
Total other assets                                    566,244     569,175
Total assets                                          $685,117  $681,954
Liabilities and Stockholders' Equity                             
Current liabilities:                                             
Accounts payable and accrued expenses                 $55,419   $60,592
Income taxes payable                                  110         110
Current portion of long-term debt                     24          25
Total current liabilities                             55,553      60,727
Long-term debt                                        237,282     232,890
Deferred tax liability                                48,774      48,867
Contract payable                                      1,375       2,750
Other liabilities                                     1,277       1,232
Total liabilities                                     344,261     346,466
Commitment and contingencies                                     
Stockholders' equity:                                            
Common stock, $.0001 par value, 250,000,000 shares
authorized; 63,194,926 and 63,194,629 issued in 2013  6           6
and 2012, respectively and 59,504,263 and 59,503,966
outstanding in 2013 and 2012, respectively
Additional paid in capital                            550,320     548,470
Accumulated deficit                                   (192,803)   (196,764)
Accumulated other comprehensive loss, net of tax      (1,072)     (629)
Treasury stock, at cost (3,690,663 shares)            (15,595)    (15,595)
Total stockholders' equity                            340,856     335,488
Total liabilities and stockholders' equity            $685,117  $681,954


BOULDER BRANDS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(In thousands, except share and per share data)
                                                                  
                                                                  
                                                        Three Months Ended
                                                        March 31,
                                                        2013       2012
Net sales                                                $106,653 $79,291
Cost of goods sold                                       61,079     44,211
Gross profit                                             45,574     35,080
                                                                  
Operating expenses:                                                
Marketing                                                7,076      6,805
Selling                                                  8,235      6,803
General and administrative                               17,320     13,854
Restructuring, acquisition and integration-related costs 203        (138)
Total operating expenses                                 32,834     27,324
Operating income                                         12,740     7,756
                                                                  
Other income (expense):                                            
Interest expense                                         (4,771)    (1,160)
Other expense, net                                       (844)      (458)
Total other (expense)                                    (5,615)    (1,618)
Income before income taxes                               7,125      6,138
Provision for income taxes                               3,164      2,435
Net income                                               $3,961   $3,703
                                                                  
Earnings per share:                                                
Basic                                                    $0.07    $0.06
Diluted                                                  $0.06    $0.06
                                                                  
Weighted average shares outstanding:                               
Basic                                                    59,503,989 58,940,044
Diluted                                                  62,176,150 59,179,648
                                                                  
Net income                                               $3,961   $3,703
Other comprehensive income (loss), net of tax:                     
Foreign currency translation adjustment                  (443)      453
Other comprehensive (loss) income                        (443)      453
Comprehensive income                                     $3,518   $4,156

CONTACT: Carole Buyers, CFA
         Senior Vice President Investor Relations &
         Business Development
         Boulder Brands, Inc.
         cbuyers@boulderbrands.com
         303-652-0521x152
 
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