PHOENIX, Feb. 15, 2007 (PRIME NEWSWIRE) -- The Inventure Group, Inc. (Nasdaq:SNAK) today reported financial results for the fourth quarter and fiscal year ended December 30, 2006.
Net revenues for the fourth quarter of 2006 were $16.1 million, down 5% compared to $17.0 million in the fourth quarter of 2005. Net income for the fourth quarter of 2006 was $0.2 million, or $0.01 per basic and diluted share, compared to a net loss of $(1.1) million, or $(0.05) per basic and diluted share in the fourth quarter of 2005.
The fourth quarter net revenue decline was primarily attributable to significantly reduced promotional spending compared to the year-ago period. This same factor contributed to a 33% increase in fourth quarter gross profit and a $1.2 million improvement in net income versus the year-ago period. The increase in net income was also positively affected by severance charges, inventory write-offs, and expenses from the write-off of deferred acquisition costs that were incurred in 2005.
Net revenues for fiscal 2006 were $69.8 million, down 7% compared to $75.3 million in fiscal 2005. Net income for fiscal 2006 was $1.1 million, or $0.06 per basic and diluted share, an increase of 290% compared to net income of $0.3 million, or $0.01 per basic and diluted share in fiscal 2005.
The Company noted that fiscal 2005 results included an extra week of revenue as its fiscal calendar produces a fifty three week year every four years and the extra week occurred in third quarter 2005. Normalizing revenue to account for the additional week and the elimination of Cinnabon sales, the Company delivered a slight net revenue decrease for the year primarily due to significantly decreasing its promotional spending, attributable to greatly increased promotional spending efficiencies.
The same factors that contributed to increased net income in the fourth quarter applied to the fiscal year as promotional spending efficiencies and reduced selling, general and administrative expenses produced increased net income.
Mr. Eric J. Kufel, President and Chief Executive Officer, commented, "We are very pleased with the Company's progress in fiscal 2006. We reversed negative earnings trends, strengthened the culture, management team and key operating processes within the company and strategically positioned the Inventure Group to return to its historical path of long-term revenue and net income growth."
The Company reported that it is test marketing several new products, including new T.G.I. Friday's(r) brand products such as pizza chips and a new version of Quesadilla snack chips, new Boulder Canyon Natural Foods(r) products including Spinach and Artichoke flavor chips and new Poore Brothers(r) brand products including 40% reduced fat kettle cooked potato chips. The Company continues to conduct product development work on all brands and is contemplating several new licensing opportunities. The Company has added contract manufacturing customers to leverage its excess capacity and expects to grow its contract manufacturing base in 2007 due to several new initiatives now underway.
"In closing, we believe we have significantly strengthened the Company's operating capabilities and we plan to realize the benefits of those efforts in 2007 and beyond by focusing on revenue and profit growth through expanding distribution on our existing brands, increasing our pipeline of new products and acquisition opportunities, continuing to improve our key processes and systems, leveraging our manufacturing capacity and building upon our Intensely Different culture," concluded Mr. Kufel.
About The Inventure Group, Inc.
With facilities in Indiana and Arizona, The Inventure Group is a marketer and manufacturer of Intensely Different snack foods under a variety of owned or licensed brand names, including T.G.I. Friday's(r), Tato Skins(r), Poore Brothers(r), Bob's Texas Style(r), and Boulder Canyon Natural Foods. For further information about The Inventure Group or this release, please contact Steve Weinberger, Chief Financial Officer, at (623) 932-6200, or log on to http://www.poorebrothers.com.
The Inventure Group, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3283
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 new 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.
THE INVENTURE GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Quarter Ended Fiscal Year Ended
--------------------------- ---------------------------
Dec. 30, Dec. 31, Dec. 30, Dec. 31,
2006 2005 2006 2005
------------- ------------- ------------- -------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net revenues $ 16,149,877 $ 17,016,160 $ 69,818,930 $ 75,332,541
Cost of
revenues 13,339,336 14,907,081 56,563,445 61,435,762
(Gain) on sale
of equipment/
Brand
discontinuance
costs -- -- -- (194,359)
------------- ------------- ------------- -------------
Gross profit 2,810,541 2,109,079 13,255,485 14,091,138
Selling, general
& administrative
expenses 2,585,895 3,762,808 11,639,518 13,638,684
------------- ------------- ------------- -------------
Operating
income (loss) 224,646 (1,653,729) 1,615,967 452,454
Interest income
(expense), net 83,472 (45,454) 260,425 49,274
------------- ------------- ------------- -------------
Income (loss)
before income
taxes 308,118 (1,699,183) 1,876,392 501,728
Income tax benefit
(provision) (155,299) 632,764 (782,999) (221,244)
------------- ------------- ------------- -------------
Net income
(loss) $ 152,819 $ (1,066,419) $ 1,093,393 $ 280,484
============= ============= ============= =============
Earnings (loss)
per common share:
Basic $ 0.01 $ (0.05) $ 0.06 $ 0.01
============= ============= ============= =============
Diluted $ 0.01 $ (0.05) $ 0.06 $ 0.01
============= ============= ============= =============
Weighted
average number
of common shares:
Basic 19,287,400 20,053,509 19,275,578 19,763,992
============= ============= ============= =============
Diluted 19,413,160 20,053,509 19,393,345 19,946,941
============= ============= ============= =============
THE INVENTURE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Dec. 30, Dec. 31,
2006 2005
-------------- --------------
(unaudited) (unaudited)
Current assets $ 20,038,930 $ 21,411,795
Property and equipment, net 12,534,444 10,109,654
Other assets, net 10,238,890 10,282,120
-------------- --------------
Total assets $ 42,812,264 $ 41,803,569
============== ==============
Current liabilities $ 6,626,269 $ 7,522,523
Long-term debt 3,973,461 1,681,432
Other long-term liabilities 2,291,542 2,356,757
-------------- --------------
Total liabilities 12,891,272 11,560,712
Shareholders' equity 29,920,992 30,242,857
-------------- --------------
Total liabilities and shareholders'
equity $ 42,812,264 $ 41,803,569
============== ==============
THE INVENTURE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Year Ended
-----------------------------
Dec. 30, Dec. 31,
2006 2005
-------------- --------------
(unaudited) (unaudited)
Net cash flows from operating activities $ 2,466,979 $ 487,266
Net cash flows from investing activities (1,292,191) (281,999)
Net cash flows from financing activities (2,198,773) (185,512)
-------------- --------------
Net increase in cash (1,023,985) 19,755
Cash and cash equivalents at beginning
of period 9,695,245 9,675,490
-------------- --------------
Cash and cash equivalents at end
of period $ 8,671,260 $ 9,695,245
============== ==============