Exhibit 99.1
Inventure Foods Reports First Quarter 2014 Financial Results
First Quarter Revenues Increased 39.1% to $67.5 Million
First Quarter EBITDA Increased 64.8% to $5.1 Million
PHOENIX, May 1, 2014 (GLOBE NEWSWIRE) — Inventure Foods, Inc. (NASDAQ: SNAK) (“Inventure Foods”), a leading specialty food marketer and manufacturer, today reported financial results for the first quarter ended March 29, 2014.
First Quarter 2014 Highlights
· Net revenues increased 39.1% to $67.5 million.
· EBITDA* increased 64.8% to $5.1 million.
· Diluted earnings per share were $0.08.
“We are pleased to report a solid start to fiscal year 2014 with robust net revenues and EBITDA growth,” said Terry McDaniel, Chief Executive Officer of Inventure Foods. “We believe that the progress we have made in product innovation when combined with our strategic acquisitions better position us to capitalize on our growth opportunities across various categories. Looking ahead our team remains committed to delivering improved financial results and we expect that fiscal 2014 will be another strong year for Inventure Foods.”
(All comparisons above are to the first quarter 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.
First Quarter Fiscal 2014
Net revenues increased 39.1% to $67.5 million, compared to $48.5 million in the prior year period. The increase in net revenues was due to a 55.1% increase in the healthy/natural product portfolio. Gross profit as a percent of net revenues decreased 110 basis points to 17.1% compared to 18.2% in the prior year. This decline is due to a decrease in gross margin in the snack segment related to weaker product sales mix, including a reduction in sales of certain more profitable licensed products and increased manufacturing of co-packed products.
Selling, general and administrative expenses increased $1.4 million or 20.7% to $8.4 million, compared to $7.0 million in the prior year period. As a percentage of net revenues, selling, general and administration expenses decreased 190 basis points to 12.4%, compared to 14.3% in the prior year period. The company continues to leverage the fixed cost portion of SG&A expenses as revenues expand.
Net income was $1.6 million, or $0.08 diluted earnings per share for the first quarter of 2014 compared to $1.1 million, or $0.05 diluted earnings per share for the first quarter of 2013.
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 first quarter increased 63.9% to $43.7 million, compared to $26.6 million in the prior year period. Gross profit increased $2.9 million, or 58.5% to $7.8 million, compared to $4.9 million in the prior year period.
Snack Segment: Net revenues during the first quarter increased 8.9% to $23.9 million, compared to $21.9 million in the prior year period. Gross profit decreased $0.2 million, or 4.1% to $3.7 million, compared to $3.9 million in the prior year period.
Mr. McDaniel concluded, “Our frozen and snack segments continue to experience an increase in revenues fueled by positive consumer response to our expanded healthy/natural and indulgent product offerings. We expect these product line expansions to help further improve our operating margin as we realize additional accretion from the Fresh Frozen Foods acquisition over the course of fiscal 2014.”
Conference Call
The Company will hold an investor conference call today, Thursday, May 1, 2014, at 4:30 p.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 CompanyTM, Fresh FrozenTM and Bob’s Texas Style®. For further information about Inventure Foods, please visit www.inventurefoods.com.
Contact
John Mills/Katie Turner, ICR (646) 277-1200
Note Regarding Forward-looking Statements
This press release contains forward-looking statements, including, but not limited to, our expectations regarding delivering improved financial results and operating margin 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 stockholders, 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 |
| ||||
|
| March 29, |
| March 30, |
| ||
Net revenues |
| $ | 67,509 |
| $ | 48,537 |
|
Cost of revenues |
| 55,946 |
| 39,712 |
| ||
Gross profit |
| 11,563 |
| 8,825 |
| ||
Operating expenses: |
|
|
|
|
| ||
Selling, general & administrative expenses |
| 8,398 |
| 6,957 |
| ||
Operating income |
| 3,165 |
| 1,868 |
| ||
Non-operating expense: |
|
|
|
|
| ||
Interest expense, net |
| 670 |
| 220 |
| ||
Income before income taxes |
| 2,495 |
| 1,648 |
| ||
Income tax provision |
| 898 |
| 592 |
| ||
Net income |
| $ | 1,597 |
| $ | 1,056 |
|
|
|
|
|
|
| ||
Earnings per common share: |
|
|
|
|
| ||
Basic |
| $ | 0.08 |
| $ | 0.05 |
|
Diluted |
| $ | 0.08 |
| $ | 0.05 |
|
Weighted average number of common shares: |
|
|
|
|
| ||
Basic |
| 19,437 |
| 19,206 |
| ||
Diluted |
| 19,924 |
| 19,694 |
| ||
INVENTURE FOODS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
|
| March 29, |
| December 28, |
| ||
Assets |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 677 |
| $ | 910 |
|
Accounts receivable, net |
| 22,528 |
| 23,618 |
| ||
Inventories |
| 41,877 |
| 43,086 |
| ||
Deferred income tax asset |
| 746 |
| 755 |
| ||
Other current assets |
| 1,652 |
| 1,223 |
| ||
Total current assets |
| 67,480 |
| 69,592 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
| 53,933 |
| 50,140 |
| ||
Goodwill |
| 23,064 |
| 23,064 |
| ||
Trademarks and other intangibles, net |
| 25,323 |
| 25,624 |
| ||
Other assets |
| 1,556 |
| 1,671 |
| ||
Total assets |
| $ | 171,356 |
| $ | 170,091 |
|
|
|
|
|
|
| ||
Liabilities and Stockholders’ Equity |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable |
| $ | 21,790 |
| $ | 19,380 |
|
Accrued liabilities |
| 11,513 |
| 10,121 |
| ||
Current portion of long-term debt |
| 6,112 |
| 6,110 |
| ||
Total current liabilities |
| 39,415 |
| 35,611 |
| ||
|
|
|
|
|
| ||
Long-term debt, less current portion |
| 60,332 |
| 61,865 |
| ||
Line of credit |
| 3,621 |
| 3,223 |
| ||
Deferred income tax liability |
| 4,197 |
| 4,188 |
| ||
Interest rate swaps |
| 479 |
| 526 |
| ||
Other liabilities |
| 2,274 |
| 5,525 |
| ||
Total liabilities |
| 110,318 |
| 110,938 |
| ||
|
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Common stock |
| 198 |
| 198 |
| ||
Additional paid-in capital |
| 31,220 |
| 30,960 |
| ||
Accumulated other comprehensive loss |
| (216 | ) | (244 | ) | ||
Retained earnings |
| 30,307 |
| 28,710 |
| ||
|
| 61,509 |
| 59,624 |
| ||
|
|
|
|
|
| ||
Less: treasury stock |
| (471 | ) | (471 | ) | ||
Total stockholders’ equity |
| 61,038 |
| 59,153 |
| ||
Total liabilities and stockholders’ equity |
| $ | 171,356 |
| $ | 170,091 |
|
INVENTURE FOODS, INC. AND SUBSIDIARIES
RECONCILIATION OF EBITDA
(in thousands)
(unaudited)
|
| Quarter Ended |
| ||||
|
| March 29, |
| March 30, |
| ||
Reconciliation – EBITDA (1): |
|
|
|
|
| ||
Reported net income |
| $ | 1,597 |
| $ | 1,056 |
|
Add back: Interest, net |
| 670 |
| 220 |
| ||
Add back: Income tax provision |
| 898 |
| 592 |
| ||
Add back: Depreciation |
| 1,616 |
| 1,213 |
| ||
Add back: Amortization of intangible assets |
| 301 |
| 2 |
| ||
EBITDA(1) |
| $ | 5,082 |
| $ | 3,083 |
|
(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.