Snacks margins boosted Inventure profits

Snacks margins boosted Inventure profits

US snack and frozen food maker Inventure Foods today (31 July) reported higher half-year sales and profits.

Inventure saw its net income leap 65.2% to US$4.1m in the six months to 28 June. Its operating profit growth was even stronger, up 84.2% at US$7.6m. Profits were helped by higher margins from Inventure's snacks business as it put more emphasis on higher-margin products.

Net revenues increased 36.3% to $139.4m, the company, which makes Boulder Canyon Natural Foods and TGI Friday's snacks, said.

Shares in Inventure were up 5.71% at US$12.04 at 13:38 EDT.

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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

  • Net revenues increased 33.9% to $71.9 million.
  • EBITDA* increased 79.7% to $6.4 million.
  • Diluted earnings per share were $0.12.

Year-to-Date Fiscal 2014 Highlights

  • Net revenues increased 36.3% to $139.4 million.
  • EBITDA* increased 72.8% to $11.5 million.
  • Diluted 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)

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*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."

Original source: Inventure Foods