Inventure Foods Reports Second Quarter 2014 Results Revenues Increased 33.9% to $71.9 Million; Earnings per Diluted Share $0.12 PHOENIX, July 31, 2014 (GLOBE NEWSWIRE) -- Inventure Foods, Inc. (Nasdaq:SNAK) ("Inventure Foods"), a leading specialty food marketer and manufacturer, today reported financial results for the second quarter and six months ended June 28, 2014. Second Quarter 2014 Highlights oNet revenues increased 33.9% to $71.9 million. oEBITDA* increased 79.7% to $6.4 million. oDiluted earnings per share were $0.12. Year-to-Date Fiscal 2014 Highlights oNet revenues increased 36.3% to $139.4 million. oEBITDA* increased 72.8% to $11.5 million. oDiluted earnings per share were $0.20. "We reported very strong second quarter EBITDA growth of 79.7% fueled by a strong net revenue increase of 33.9%," said Terry McDaniel, Chief Executive Officer of Inventure Foods. "Our healthy/natural line increased 57.5%, and now represents over 80% of our business. Our overall success this quarter was driven by 79.1% growth of our Boulder Canyon brand, 13.9% growth in frozen berries and the addition of our newly acquired Fresh Frozen Foods business. During the second quarter, we generated a 170 basis point improvement in gross margin, largely driven by a 470 basis point improvement in our snack segment. The continued strong execution of our 2014 strategic initiatives allowed us to deliver another strong quarter of double digit earnings growth." (All comparisons above are to the second quarter and first six months of 2013) ________________________ *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 term EBITDA to the most comparable GAAP financial measures. Second Quarter Fiscal 2014 Net revenues increased 33.9% to $71.9 million, compared to $53.7 million in the prior year period. The increase in net revenues was due to a 57.5% increase in the healthy/natural product portfolio, partially offset by the Company's decision to discontinue approximately $1.5 million in lower margin sales. Gross profit as a percent of net revenues increased 170 basis points to 18.7%, compared to 17.0% in the prior year. This increase is due to a 470 basis point improvement in the Company's snack segment as a result of improved product and channel mix with stronger emphasis on higher margin branded products. Selling, general and administrative expenses increased $2.1 million, or 31.0%, to $9.0 million, compared to $6.9 million in the prior year period. As a percentage of net revenues, selling, general and administration expenses decreased 20 basis points to 12.6%, compared to 12.8% in the prior year period. The Company continued to leverage the fixed cost portion of SG&A expenses. Net income was $2.5 million, or $0.12 diluted earnings per share for the second quarter of 2014, compared to $1.4 million, or $0.07 diluted earnings per share for the second quarter of 2013. Year to Date Fiscal 2014 Consolidated net revenues for the six months ended June 28, 2014 increased 36.3% to $139.4 million, compared to $102.2 million in the prior year period. Gross profit increased 39.3% to $25.0 million, compared to $18.0 million in the prior-year period. This was primarily driven by margin enhancements within the Company's snack segment. Net income increased 65.2% to $4.1 million, compared to net income of $2.5 million in the prior year. Fully diluted earnings per share for the first six months of 2014 were $0.20, versus $0.13 during the same period in 2013.Consolidated EBITDA increased 72.8% to $11.5 million, or 8.3% of net revenues. 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, cereal and extruded product for sale primarily to snack food distributors and retailers. Frozen Segment: Net revenues during the second quarter increased 58.1% to $44.1 million, compared to $27.9 million in the prior year period. Gross profit increased $2.7 million, or 59.7%, to $7.1 million, compared to $4.4 million in the prior year period. As a percentage of net revenues, gross profit increased 20 basis points to 16.1%. Net revenues for the first six months increased 60.9% to $87.8 million, compared to $54.6 million in the prior year period. Gross profit increased $5.5 million, or 59.1% to $14.9 million, compared to $9.4 million in the prior year period. Snack Segment: Net revenues during the second quarter increased 7.6% to $27.7 million, compared to $25.8 million in the prior year period.Gross profit increased $1.7 million, or 35.6%, to $6.4 million, compared to $4.7 million in the prior year period. As a percentage of net revenues, gross profit increased 470 basis points to 22.9%. Net revenues for the first six months increased 8.2% to $51.6 million, compared to $47.7 million in the prior year period. Gross profit increased $1.5 million, or 17.6%, to $10.1 million, compared to $8.6 million in the prior year period. Mr. McDaniel concluded, "Our team successfully executed on our ongoing initiative to generate healthy EBITDA growth through a focus on strong sales growth, enhancing margins and leveraging the capabilities of our acquired businesses.Going forward, we remain focused on the successful execution of our strategic initiatives to further strengthen our brand portfolios, expand our margin profile and increase profitability long-term. We fully expect the momentum we have built in the first half to continue for the balance of the year." Conference Call The Company will hold an investor conference call today, Thursday, July 31, 2014, at 11:00 a.m. Eastern time. 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™, Fresh Frozen™ 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 ability to improve business profitability to support our future growth, execute our ongoing initiative to generate healthy EBITDA growth through a focus on strong sales growth, enhancing margins and leveraging the capabilities of our acquired businesses, expand our distribution and further explore new product categories, execute our strategic initiatives to further strengthen our brand portfolios, expand our margin profile and increase profitability long-term. 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 Six Months Ended June 28, June 29, June 28, June 29, 2014 2013 2014 2013 Net revenues $71,852 $53,677 $139,361 $102,214 Cost of revenues 58,396 44,541 114,342 84,253 Gross profit 13,456 9,136 25,019 17,961 Selling, general & administrative 9,024 6,889 17,422 13,846 expenses Operating income 4,432 2,247 7,597 4,115 Interest expense, net 584 171 1,254 391 Income before income taxes 3,848 2,076 6,343 3,724 Income tax provision 1,376 669 2,274 1,261 Net income $2,472 $1,407 $4,069 $2,463 Earnings per common share: Basic $0.13 $0.07 $0.21 $0.13 Diluted $0.12 $0.07 $0.20 $0.13 Weighted average number of common shares: Basic 19,468 19,307 19,453 19,257 Diluted 19,960 19,702 19,942 19,698 INVENTURE FOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) June 28, December 28, 2014 2013 (unaudited) Assets Current assets: Cash and cash equivalents $878 $910 Accounts receivable, net allowance 21,814 23,618 Inventories 49,755 43,086 Deferred income tax asset 740 755 Other current assets 2,299 1,223 Total current assets 75,486 69,592 Property and equipment, net 55,953 50,140 Goodwill 23,064 23,064 Trademarks and other intangibles, net 25,022 25,624 Other assets 1,638 1,671 Total assets $181,163 $170,091 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $20,404 $19,380 Accrued liabilities 11,207 10,121 Current portion of long-term debt 6,128 6,110 Total current liabilities 37,739 35,611 Long-term debt, less current portion 58,808 61,865 Line of credit 13,425 3,223 Deferred income tax liability 4,203 4,188 Interest rate swaps 449 526 Other liabilities 2,300 5,525 Total liabilities 116,924 110,938 Shareholders' equity: Common stock 199 198 Additional paid-in capital 31,929 30,960 Accumulated other comprehensive loss (198) (244) Retained earnings 32,780 28,710 64,710 59,624 Less: treasury stock (471) (471) Total shareholders' equity 64,239 59,153 Total liabilities and shareholders' equity $181,163 $170,091 INVENTURE FOODS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL STATEMENTS RECONCILIATION (in thousands) (unaudited) Quarter Ended Six Months Ended June 28, June 29, June 28, June 29, 2014 2013 2014 2013 Reconciliation – EBITDA ^(1): Reported net income $2,472 $1,407 $4,069 $2,463 Add back: Interest, net 584 171 1,254 391 Add back: Income tax 1,376 669 2,274 1,261 provision Add back: Depreciation 1,705 1,332 3,321 2,545 Add back: Amortization 301 3 602 5 of intangible assets EBITDA $6,438 $3,582 $11,520 $6,665 ^(1) This press release includes the financial measure "EBITDA".This measurement is deemed a "non-GAAP financial measure" under the rules of the SEC, including Regulation G.This non-GAAP financial measure may be determined or calculated differently by other companies.EBITDA is presented as a supplemental performance measure and is not intended as an alternative to net income or any other measure calculated in accordance with generally accepted accounting principles. CONTACT: John Mills/Katie Turner, ICR (646) 277-1200 Inventure Foods logo
Inventure Foods Reports Second Quarter 2014 Results
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