PHOENIX, April 23, 2008 (PRIME NEWSWIRE) -- The Inventure Group, Inc. (Nasdaq:SNAK) today reported financial results for the first quarter ended March 29, 2008.
Net revenues for the first quarter of fiscal 2008 were $26.2 million, representing an increase of 54% compared to the first quarter of fiscal 2007. Excluding the impact of Rader Farms(tm), which contributed $9.6 million of net revenue in the quarter, the snack division revenue was $16.6 million, representing a decrease of 2.5% as compared to the snack division revenues in the same period of last year. The positive impact of price increases implemented during the quarter, the addition of BURGER KING(tm) potato snack products and the growth in Boulder Canyon(tm) Natural snack products ("Boulder") of 27% as compared to the same period of last year were all offset by a decrease in revenues from TGI Friday's(r) salted snacks.
Key Financial Metrics:
* Gross Profit was $5.1 million, representing an increase of 64% and
1.2 percentage points as a percent of Net Revenue compared to $3.1
million of gross profit recognized in the same period of last year.
Key drivers include Rader Farms(tm), which contributed $1.9 million
of gross profit, price increases implemented within the snack
division and the impact of a continuous improvement program.
* Selling, General and Administrative ("SG&A") expenses increased
$0.9 million as compared to the first quarter of fiscal 2007 but
decreased as a percentage of net revenues to 14.6% as compared to
17.1% in the same period of last year. The acquisition of Rader
Farms(tm), while adding some overall SG&A costs, is the main cause
of the decrease in SG&A as a percent of net revenues.
* Operating Income of $1.3 million was 569% higher and 3.7 percentage
points higher as a percent of Net Revenue than the $0.2 million of
operating income recognized in the first quarter of fiscal 2007.
* Net Income was $0.4 million, or 2 cents per share, an increase of
290% compared to $0.1 million and 1 cent per share for the same
period of last year.
* Earnings before interest, taxes, depreciation and amortization
("EBITDA") was $2.0 million for the quarter, an increase of 260%
and 4.4 percentage points as a percent of Net Revenue as compared
to the prior year. A table reconciling EBITDA to net income is
presented at the end of the condensed consolidated financial
statements included in this release.
* Total Debt was reduced by $2.6 million as compared to year end 2007
as a result of the strong financial returns and a focus on managing
working capital.
"We are very pleased with our performance in the first quarter of this year," noted Eric Kufel, CEO of the Inventure Group. "We have seen improvement in all of our financial benchmarks for the quarter and this was attributable to a number of factors, including: Rader Farms(tm) continuing to deliver meaningful revenue and profit growth for the company; the snack division price increases have improved margins from last year; the Boulder brand continues to perform well, up 27% in the quarter versus last year's first quarter; and the BURGER KING(tm) potato snack products have shown promising results thus far and a further roll out is planned for the second quarter and beyond. Operations execution was excellent, as plant costs per pound decreased from the same period of last year. Finally, our focus on working capital management has allowed us to reduce overall debt by $2.6 million in just one fiscal quarter."
Kufel continued, "The one challenge for the quarter was lower sales in the TGI Friday's(r) snack business, down 19% as compared to the prior year. We couldn't overcome the increase in sales occurring at the very end of last year in advance of our price increases. We continue to focus significant energy and resources on this business with new products, geographic expansion and new outlets.
"In summary, our overall financial performance was significantly improved in the first quarter. Looking forward we plan on a continued double digit revenue growth for Rader Farms(tm) by adding new customers and new branded products rolling out this summer; further roll out of BURGER KING(tm) to additional channels as well as adding at least one additional flavor; further double digit growth on Boulder Canyon(tm), and a continued focus on operations and managing costs."
About The Inventure Group, Inc.
With manufacturing facilities in Arizona, Indiana and Washington, The Inventure Group is a marketer and manufacturer of Intensely Different(tm) specialty brands in indulgent and better-for-you food categories under a variety of Company owned or licensed brand names, including T.G.I. Friday's(r), BURGER KING(tm), Rader Farms(r), Boulder Canyon(tm) Natural Foods, Poore Brothers(r), Tato Skins(r) and Bob's Texas Style(r). For further information about The Inventure Group or this release, please contact Steve Weinberger, Chief Financial Officer, at (623) 932-6200, or logon to http://www.inventuregroup.net.
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
-------------
March 29, March 31,
2008 2007
---- ----
(unaudited) (unaudited)
Net revenue $ 26,171,075 $ 16,979,895
Cost of revenue 21,096,340 13,883,336
------------ ------------
Gross profit 5,074,735 3,096,559
Selling, general & administrative expenses 3,815,655 2,907,694
------------ ------------
Operating income 1,259,080 188,865
Interest income (expense), net (552,911) 20,143
------------ ------------
Income before income taxes 706,169 209,007
Income tax provision 294,873 103,500
------------ ------------
Net income $ 411,296 $ 105,507
============ ============
Earnings (loss) per common share:
---------------------------------
Basic $ 0.02 $ 0.01
============ ============
Diluted $ 0.02 $ 0.01
============ ============
Weighted average number of common shares:
-----------------------------------------
Basic 18,810,994 19,302,251
============ ============
Diluted 18,811,208 19,317,893
============ ============
THE INVENTURE GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 29, Dec. 29,
2008 2007
---- ----
(unaudited) (unaudited)
Current assets $ 21,483,306 $ 22,572,697
Property and equipment, net 23,821,748 23,436,752
Other assets, net 14,673,867 14,681,269
------------ ------------
Total assets $ 59,978,921 $ 60,690,719
============ ============
Line of credit $ 5,119,898 $ 7,452,309
Other current liabilities 12,910,510 11,486,331
Long-term debt 12,145,405 12,445,383
Other long-term liabilities 1,716,537 1,574,727
------------ ------------
Total liabilities 31,892,350 32,958,750
Shareholders' equity 31,068,877 30,713,543
Treasury Stock, at cost (2,982,306) (2,981,574)
------------ ------------
Total liabilities and shareholders'
equity $ 59,978,921 $ 60,690,719
============ ============
THE INVENTURE GROUP, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
RECONCILIATION
(unaudited)
Three Months Ended
March 29,
----------------------
2008 2007
-------------------------------------------- ---------- ----------
Reconciliation - EBITDA (1):
Reported net income $ 411,296 $ 105,507
Add back: Interest, net 552,911 (20,143)
Add back: Income tax expense 294,873 103,500
Add back: Depreciation 691,438 359,579
Add back: Amortization of intangible assets 21,360 1,458
---------- ----------
EBITDA $1,971,878 $ 549,901
========== ==========
(1) 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. Further, EBITDA may not be comparable to similarly
titled measures used by other companies.