Freshpet, Inc. Reports First Quarter 2015 Financial Results
First Quarter Net Sales Increased Approximately 40% to
Company Reiterates Guidance
First Quarter 2015 Financial Highlights Compared to Prior Year Period
- Net sales were
$27.1 million , up 39.8% - Gross margin increased 100 basis points to 49.0%
- Adjusted EBITDA increased
$1.2 million to $2.0 million - Freshpet Fridges increased 20.9% to 14,019 from 11,596
"We believe we are off to a great start in 2015 and our first quarter performance reflects strong sales velocity across each of our retail channels," said
First Quarter 2015
Net sales increased 39.8% to
Gross profit was
Selling, general and administrative expenses ("SG&A") were
Net loss was
Adjusted EBITDA increased
Cash and Net Debt
As of
In conjunction with its initial public offering, the Company entered into a
Outlook
The Company reiterated its guidance for 2015. For full year 2015, excluding any potential incremental impact associated with the Freshpet Baked test product, the Company expects the following full year results compared to prior year:
- Net sales of
$112.0 to $114.5 million , an increase of 29% to 32%. - Adjusted EBITDA of
$16.0 to $17.5 million an increase of$10.5 to $12.0 . - Freshpet Fridges of approximately 15,100 to 15,600, an increase of approximately 13% to 17%.
Conference Call and Webcast
The Company will host a conference call with members of the executive management team to discuss these results with additional comments and details. The conference call is scheduled to begin at
In addition, the call will be broadcast live over the Internet hosted at the "Investor Relations" section of the Company's website at www.freshpet.com and will be archived online through
About
Forward Looking Statements
Certain statements in this release may constitute "forward-looking" statements. These statements are based on management's current opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results. These forward-looking statements are only predictions, not historical fact, and involve certain risks and uncertainties, as well as assumptions. Actual results, levels of activity, performance, achievements and events could differ materially from those stated, anticipated or implied by such forward-looking statements. While
Non-GAAP Measures
Management believes that EBITDA and Adjusted EBITDA, which are non-GAAP measurements, are meaningful to investors because they provide a view of the Company with respect to ongoing operating results. EBITDA, which represents net loss plus depreciation and amortization, interest expense (including fees on debt guarantee), and income tax expense, and Adjusted EBITDA, which represents EBITDA plus loss on disposal of equipment, new plant startup expenses and processing, share based compensation, launch expenses, and warrant expenses, are shown as supplemental disclosures because these figures are widely used by the investment community for analysis and comparative evaluation and each of these measures provides an additional metric to evaluate the Company's operations and, when considered with both the Company's U.S. GAAP results and the reconciliation to net loss, provides a more complete understanding of the Company's business than could be obtained absent this disclosure. EBITDA and Adjusted EBITDA are not and should not be considered alternatives to net loss or any other figure calculated in accordance with U.S. GAAP, or as an indicator of operating performance. The Company's calculation of EBITDA and Adjusted EBITDA may differ from methods used by other companies. Management believes that these non-GAAP measurements are important to an understanding of the Company's overall operating results in the periods presented. Such non-GAAP measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. We have not reconciled our expected Adjusted EBITDA to net income under "Outlook" because we have not finalized our calculations of several factors necessary to provide the reconciliation, including net income, interest expense and income tax expense. In addition, certain items that impact net income and other reconciling metrics are out of our control and/or cannot be reasonably predicted at this time.
| FRESHPET INC. AND SUBSIDIARY | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (unaudited) | ||
| March 31, | December 31, | |
| 2015 | 2014 | |
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and equivalents | $24,918,508 | $36,259,252 |
| Short-term investments | 7,499,205 | -- |
| Accounts receivable, net | 6,533,594 | 5,360,400 |
| Inventories, net | 7,427,084 | 7,314,151 |
| Prepaid expenses and other current assets | 719,257 | 1,291,379 |
| Total Current Assets | 47,097,648 | 50,225,182 |
| Property, plant and equipment, net | 61,953,765 | 57,825,961 |
| Deposits on equipment | 2,318,191 | 2,883,234 |
| Other assets | 1,624,924 | 1,527,483 |
| Total Assets | $112,994,528 | $112,461,860 |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||
| CURRENT LIABILITIES: | ||
| Accounts payable | 7,238,095 | 5,423,905 |
| Accrued expenses | 2,226,982 | 2,938,316 |
| Total Current Liabilities | $9,465,077 | $8,362,221 |
| OTHER LIABILITIES: | ||
| Accrued warrants | 821,046 | 706,940 |
| Total Liabilities | $10,286,123 | $9,069,161 |
| STOCKHOLDERS' EQUITY: | ||
| Common stock | 33,470 | 33,468 |
| Additional paid-in capital | 290,119,660 | 288,216,882 |
| Accumulated deficit | (187,444,725) | (184,857,651) |
| Total Stockholders' Equity | $102,708,405 | $103,392,699 |
| Total Liabilities and Stockholders' Equity | $112,994,528 | $112,461,860 |
| FRESHPET INC. AND SUBSIDIARY | ||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
| (unaudited) | ||
| For the three months ended March 31, | ||
| 2015 | 2014 | |
| NET SALES | $27,054,674 | $19,350,197 |
| COST OF GOODS SOLD | 13,801,655 | 10,057,072 |
| GROSS PROFIT | 13,253,019 | 9,293,125 |
| SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES | 15,791,703 | 11,594,529 |
| LOSS FROM OPERATIONS | (2,538,684) | (2,301,404) |
| OTHER EXPENSES: | ||
| Other Income/(Expenses) | 4,148 | (41,598) |
| Fees on Debt Guarantee | -- | (1,837,247) |
| Interest Expense | (37,538) | (953,975) |
| (33,390) | (2,832,820) | |
| LOSS BEFORE INCOME TAXES | (2,572,074) | (5,134,224) |
| INCOME TAX EXPENSE | 15,000 | 8,000 |
| NET LOSS | (2,587,074) | (5,142,224) |
| NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (2,587,074) | $ (7,485,640) |
| NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||
| -BASIC | $ (0.08) | $ (0.53) |
| -DILUTED | $ (0.08) | $ (0.53) |
| WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING USED IN COMPUTING NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||
| -BASIC | 33,469,749 | 14,035,660 |
| -DILUTED | 33,469,749 | 14,035,660 |
| FRESHPET INC. AND SUBSIDIARY | ||
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||
| (unaudited) | ||
| For the three months ended | ||
| March 31, | ||
| 2015 | 2014 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net loss | $ (2,587,074) | $ (5,142,224) |
| Adjustments to reconcile net loss to net cash flows from operating activities: | ||
| Provision for losses on accounts receivable | (918) | 169,846 |
| Loss on disposal of equipment and deposits on equipment | 8,723 | 34,766 |
| Fees on debt guarantee | -- | 1,837,247 |
| Share-based compensation | 1,860,112 | 242,926 |
| Revaluation of outstanding warrants | 114,106 | -- |
| Change in reserve for inventory obsolescence | 6,006 | 91,529 |
| Depreciation and amortization | 1,754,905 | 1,588,005 |
| Amortization of deferred financing costs and loan discount | 35,294 | 63,024 |
| Changes in operating assets and liabilities | ||
| Accounts receivable | (1,172,276) | (1,741,546) |
| Inventories | (118,939) | 719,411 |
| Prepaid expenses and other current assets | 572,122 | 61,007 |
| Other assets | (130,025) | (109,906) |
| Accounts payable | 1,477,326 | 1,681,848 |
| Accrued expenses and accrued interest on long-term debt | (711,334) | 286,408 |
| Net cash flows provided by (used in) operating activities | 1,108,028 | (217,659) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Purchases of short-term investments (FDIC insured certificates of deposit, all of which have a maturity date between 3 and 12 months) | (7,499,205) | -- |
| Acquisitions of property, plant and equipment, software and deposits on equipment | (4,964,527) | (4,756,757) |
| Proceeds from sale of equipment | -- | 232,699 |
| Net cash flows used in investing activities | (12,463,732) | (4,524,058) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Borrowings on Note Payable | -- | 2,000,000 |
| Exercise of options to purchase common stock | 14,960 | -- |
| Proceeds preferred stock - Series C issued | -- | 2,499,998 |
| Net cash flows from financing activities | 14,960 | 4,499,998 |
| NET CHANGE IN CASH AND EQUIVALENTS | (11,340,744) | (241,719) |
| CASH AND EQUIVALENTS, BEGINNING OF YEAR | 36,259,252 | 2,444,754 |
| CASH AND EQUIVALENTS, END OF PERIOD | $24,918,508 | $2,203,035 |
| FRESHPET INC AND SUBSIDIARY | ||
| RECONCILIATION BETWEEN NET LOSS AND ADJUSTED EBITDA | ||
| (Dollars in thousands) | ||
| For the three months ended | ||
| March 31, | ||
| 2015 | 2014 | |
| Net Loss | $ (2,587) | $ (5,142) |
| Fees on debt guarantee | -- | 1,837 |
| Depreciation and amortization | 1,755 | 1,588 |
| Interest expense | 38 | 954 |
| Income tax expense | 15 | 8 |
| EBITDA | $ (779) | $ (755) |
| Loss on disposal of equipment | 9 | 35 |
| Launch expense | 804 | 1,132 |
| New plant start up expenses and processing | -- | 113 |
| Noncash stock based compensation | 1,860 | 243 |
| Warrant fair valuation | 114 | -- |
| Adjusted EBITDA | $ 2,008 | $ 768 |
CONTACT: ICR
Katie Turner
646-277-1228
katie.turner@icrinc.com
Michael Fox
203-682-8218
Michael.fox@icrinc.com
Freshpet, Inc.