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Inventure Foods Reports Fourth Quarter and Fiscal Year 2013 Financial Results

Inventure Foods Reports Fourth Quarter and Fiscal Year 2013 Financial Results

           Fourth Quarter Revenues Increased 35.2% to $58.9 Million

             Full Year Revenues Increased 16.4% to $215.6 Million

PHOENIX, Feb. 27, 2014 (GLOBE NEWSWIRE) -- 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

  oNet revenues increased 35.2% to $58.9 million.
  oAdjusted EBITDA* increased 46.4% to $5.8 million.
  oDiluted 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 Company^TM, Fresh Frozen^TM 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, December 29, December 28, December 29,
                       2013       2012       2013       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         7,795       6,133       28,036      25,548
expenses
Operating income       3,074        2,739        10,850       11,344
Non-operating (income)                                        
expense:
Gain on sale of DSD    --           (1,101)      --           (1,101)
business
Interest expense, net  231         151         872         764
Income before income   2,843        3,689        9,978        11,681
taxes
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, December 29,
                                           2013       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 December December December
                                      28,      29,      28,      29,
                                       2013     2012     2013     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   200     2       288     23
assets
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    December    December   December
                            28,          29,         28,        29,
                             2013       2012        2013       2012
Reported net income          $2,007      $2,364      $6,618     $7,449
Gain on sale of DSD          --         (706)      --        (702)
business, net of tax
Acquisition-related
transaction costs, net of    772        --         946       --
tax
Adjusted net income^(2)      $2,779     $1,658     $7,564    $6,747
Adjusted diluted earnings    $0.14      $0.08      $0.38     $0.34
per share^(2)


(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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