EXHIBIT 99.1
CONTACTS:
Thomas W. Freeze, Sr. VP and CFO Philip Bourdillon/Eugene Heller
Poore Brothers, Inc. Silverman Heller Associates
623-932-6203 310-208-2550
POORE BROTHERS REPORTS RECORD SECOND-QUARTER RESULTS
-- RECORD REVENUE AND NET INCOME DRIVEN BY T.G.I. FRIDAY'S(R) BRAND
AND INITIAL SHIPMENTS OF CRUNCH TOONS(TM) BRAND--
GOODYEAR, ARIZ. - JULY 24, 2003 - POORE BROTHERS, INC. (NASDAQ: SNAK) today
reported record financial results for the second quarter ended June 28, 2003.
For the second quarter of 2003, net revenue reached a record $18.6 million, an
increase of 21% compared to second-quarter 2002 net revenue of $15.4 million.
The Company's revenue increase was driven by strong growth of T.G.I. Friday's(R)
brand salted snacks in the convenience store channel, and by approximately $2
million of initial shipments of Crunch Toons(TM) brand snacks. Overall, T.G.I.
Friday's(R) brand salted snacks revenue was 15% higher than in the second
quarter of 2002, accounting for approximately 57% of the Company's net revenue
in the quarter. Revenue from the Company's potato chip brands and distributed
products rose modestly.
Net income for the second quarter of 2003 more than tripled -- to a record $2.0
million, or $0.12 per basic and $0.11 per diluted share, compared to net income
of $0.6 million, or $0.04 per basic and diluted share, in the comparable quarter
of 2002. Net income included $1.9 million of pre-tax income from a previously
announced insurance claim settlement, partially offset by a $1.0 million pre-tax
impairment write-down of idle packaging equipment. Excluding these two unusual
items, net income would have risen 120% to $1.4 million, or $0.08 per basic and
diluted share.
Gross profit increased 17% to $3.7 million, or 20% of net revenue, despite being
negatively impacted by the $1.0 million idle packaging equipment write-down.
This compares to $3.2 million, or 21% of net revenue, in the same quarter of
2002. The increase in gross profit was attributable to higher revenue, improved
manufacturing efficiencies (in part due to new high-speed packaging equipment),
and lower overall trade promotion spending. Since the comprehensive consumer and
trade promotion programs for the Crunch Toons(TM) brand launch are not scheduled
until the second half of the year, the initial shipments of the brand in June
had a significantly favorable impact on profitability. Excluding the packaging
equipment write-down, gross profit would have increased 49% to $4.7 million, or
25% of net revenue.
Operating costs were flat at $2.4 million, declining from 15.4% to 13.1% of net
revenue. Net interest expense decreased in the second quarter of 2003 by over
50% from the comparable period in 2002 due to lower long-term debt borrowings
and investment income. Pre-tax income rose 372% to $3.1 million, or 17% of net
revenue, compared to $0.7 million, or 4% of net revenue, in the same quarter of
2002. Excluding the unusual items, pre-tax income increased 236% to $2.2
million, or 12% of net revenue. The Company's income tax rate in 2003 of
approximately 38% reflects both federal and state income taxes, whereas the 4%
rate in 2002 did not include any federal income taxes.
For the six months ended June 28, 2003, net revenue increased 14% to a record
$33.8 million, compared with revenue of $29.6 million in the first half of the
previous year. Net income for the six months ended June 28, 2003 increased 123%
to $2.3 million, or $0.13 per basic and diluted share, compared with net income
of $1.0 million, or $0.06 per basic and diluted share, in the prior-year period.
Increased net revenue and net income for the six-month period were the result of
the same factors affecting the second quarter results.
Mr. Eric J. Kufel, president and chief executive officer, stated, "We are very
pleased with our stronger-than-expected and record-setting second-quarter
financial performance. Several large introductory promotional orders permitted
us to commence shipments of our Crunch Toons(TM) brand in June to several large
national retailers, including Wal-Mart, Sam's Club and Target. We continue to
receive favorable feedback from consumers and retailers regarding the brand's
remarkable three-dimensional resolution snacks, featuring Looney Tunes(TM)
characters, and interactive packaging that appeals to kids. We are excited about
commencing shipments in the third quarter to a number of national and large
regional grocery retailers, including Safeway, Albertsons, Publix, Winn Dixie
and others. We are also pleased with our launch progress in other channels such
as vending and convenience store."
"The comprehensive introductory trade promotional program investments that we
previously announced will begin in the third quarter and will continue with the
majority of the consumer programs coming in the fourth quarter, including the
Company's first-ever national television advertising to generate consumer trial
and build equity in the company-owned Crunch Toons(TM) brand name," commented
Mr. Thomas W. Freeze, senior vice president and chief financial officer. "These
investments will negatively impact our financial results in the short-term;
however, we believe that these strategic investments are critical to helping us
build a portfolio of innovative national niche snack food brands capable of
sustaining long-term revenue and profit growth in 2004 and beyond."
"Until our consumer and trade promotion programs are implemented and we can
assess the impact of those programs on consumer demand, we are adjusting our
guidance for fiscal 2003 only to reflect the positive impact of the insurance
claim settlement, less the impairment write-down of idled packaging equipment.
That said, our 2003 goals are to deliver between $10 million and $15 million in
revenue growth and to achieve between $0.6 million and $1.1 million in net
income for the year, or $0.03-$0.06 per diluted share."
ABOUT POORE BROTHERS, INC.
With facilities in Indiana and Arizona, Poore Brothers is a marketer and
manufacturer of INTENSELY DIFFERENT(TM) salted snack foods under a variety of
owned or licensed brand names, including CRUNCH TOONS(TM), T.G.I. FRIDAY'S(R),
TATO SKINS(R), POORE BROTHERS(R), BOB'S TEXAS STYLE(R), and BOULDER POTATO
COMPANY(R). Further information is available at http://www.poorebrothers.com.
STATEMENTS CONTAINED IN THIS PRESS RELEASE THAT ARE NOT HISTORICAL FACTS ARE
"FORWARD LOOKING" STATEMENTS AS THAT TERM IS DEFINED IN THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. 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, THE POTENTIAL NEED FOR ADDITIONAL FINANCING, ACQUISITION-RELATED
RISKS, SIGNIFICANT COMPETITION, CUSTOMER ACCEPTANCE OF EXISTING AND FUTURE
PRODUCTS, DEPENDENCE UPON MAJOR CUSTOMERS, DEPENDENCE UPON EXISTING AND FUTURE
LICENSE AGREEMENTS, GENERAL RISKS RELATED TO THE FOOD PRODUCTS INDUSTRY, AND
SUCH OTHER FACTORS AS ARE DESCRIBED IN THE COMPANY'S FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION.
LOONEY TUNES, characters, names and all related indicia are trademarks of
and (C) Warner Bros.
(s03)
POORE BROTHERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
QUARTER ENDED SIX MONTHS ENDED
---------------------------- ----------------------------
JUNE 28, JUNE 29, JUNE 28, JUNE 29,
2003 2002 2003 2002
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net revenue $ 18,580,943 $ 15,358,319 $ 33,798,626 $ 29,635,839
Cost of revenue 13,845,782 12,170,534 26,032,385 23,931,222
Write-down of equipment 1,010,720 -- 1,010,720 --
------------ ------------ ------------ ------------
Gross profit 3,724,441 3,187,785 6,755,521 5,704,617
Selling, general & administrative expenses 2,430,224 2,369,170 4,903,670 4,334,094
------------ ------------ ------------ ------------
Operating income 1,294,217 818,615 1,851,851 1,370,523
Insurance claim settlement, net 1,918,785 -- 1,918,785 11,341
Interest expense, net (64,401) (151,407) (136,029) (316,632)
------------ ------------ ------------ ------------
Income before income tax provision 3,148,601 667,208 3,634,607 1,065,232
Income tax provision (1,178,000) (27,000) (1,361,000) (45,000)
------------ ------------ ------------ ------------
Net income $ 1,970,601 $ 640,208 $ 2,273,607 $ 1,020,232
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Earnings per common share:
Basic $ 0.12 $ 0.04 $ 0.13 $ 0.06
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Diluted $ 0.11 $ 0.04 $ 0.13 $ 0.06
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Weighted average number of common shares:
Basic 16,984,728 15,833,473 16,857,685 15,763,714
============ ============ ============ ============
Diluted 18,343,696 18,079,446 18,042,137 17,843,698
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POORE BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 28, DEC. 28,
2003 2002
------------ ------------
(unaudited)
Current assets $ 13,872,319 $ 8,808,726
Property and equipment, net 12,123,272 13,009,948
Other assets, net 9,921,237 9,937,952
------------ ------------
Total assets $ 35,916,828 $ 31,756,626
============ ============
Current liabilities $ 8,472,298 $ 6,848,755
Long-term debt 3,636,326 4,105,118
Deferred tax liability 195,443 80,512
------------ ------------
Total liabilities 12,304,067 11,034,385
Shareholders' equity 23,612,761 20,722,241
------------ ------------
Total liabilities and shareholders' equity $ 35,916,828 $ 31,756,626
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