Freshpet, Inc. Reports First Quarter 2016 Results
First Quarter Net Sales Increased Approximately 16%
Company Reiterates 2016 Guidance
First Quarter 2016 Financial Highlights Compared to Prior Year Period
- Net sales were
$31.5 million , up 16.3% - Adjusted EBITDA was
$2.5 million , up 23.7% - Freshpet Fridges increased 10.1% to 15,429 from 14,019
“We are pleased with our start to 2016 and the significant progress we made across key operational and financial business metrics,” said
First Quarter 2016
Net sales increased 16.3% to
Gross profit was
Selling, general and administrative expenses (“SG&A”) were
Net loss was
Adjusted EBITDA was
Cash and Net Debt
During the first quarter of 2016, the Company generated cash of
Outlook
The Company reiterated its guidance for 2016. For full year 2016, the Company expects the following results compared to the prior year:
- To exceed net sales of
$137 million , an increase of approximately 18% - To exceed Adjusted EBITDA of
$18.5 million , an increase of approximately 67% - To exceed
Freshpet fridges of 16,600, an increase of approximately 10%
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" section of the Company's website at www.freshpet.com and will be archived online through
About
Connect with
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https://plus.google.com/+Freshpet
https://en.wikipedia.org/wiki/Freshpet
https://www.youtube.com/user/freshpet400
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 Adjusted EBITDA, which is a non-GAAP measure, is meaningful to investors because it provides a view of the Company with respect to ongoing operating results. EBITDA represents net loss plus depreciation and amortization, interest expense, and income tax expense, and Adjusted EBITDA represents EBITDA plus loss on disposal of equipment, plant startup expense, share based compensation, warrant fair valuation and launch expenses. Adjusted EBITDA is shown as a supplemental disclosure in this release because it is widely used by the investment community for analysis and comparative evaluation and provides an additional metric to evaluate the Company’s operations and, when considered with both the Company’s GAAP results and the reconciliation to net income (loss), provides a more complete understanding of the Company’s business than could be obtained absent this disclosure. Adjusted EBITDA is not and should not be considered an alternative to net income (loss) or any other figure calculated in accordance with GAAP, or as an indicator of operating performance. The Company’s calculation of Adjusted EBITDA may differ from methods used by other companies. Management believes that this non-GAAP measure is important to an understanding of the Company's overall operating results in the periods presented. Adjusted EBITDA is not recognized in accordance with 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 SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
March 31, 2016 |
December 31, 2015 |
|||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 266,129 | $ | 8,029,413 | ||||
Short-term investments | — | 3,250,000 | ||||||
Accounts receivable, net of allowance for doubtful accounts | 7,133,456 | 7,030,719 | ||||||
Inventories, net | 8,183,496 | 6,853,447 | ||||||
Prepaid expenses and other current assets | 1,204,530 | 229,631 | ||||||
Total Current Assets | 16,787,611 | 25,393,210 | ||||||
Property, plant and equipment, net | 92,671,432 | 82,793,007 | ||||||
Deposits on equipment | 3,020,939 | 3,243,519 | ||||||
Other assets | 1,800,692 | 1,667,838 | ||||||
Total Assets | $ | 114,280,674 | $ | 113,097,574 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | 7,245,531 | 6,668,643 | ||||||
Accrued expenses | 3,681,036 | 2,274,557 | ||||||
Accrued warrants | 146,192 | 204,314 | ||||||
Total Current Liabilities | $ | 11,072,759 | $ | 9,147,514 | ||||
Total Liabilities | $ | 11,072,759 | $ | 9,147,514 | ||||
STOCKHOLDERS' EQUITY: | ||||||||
Common stock | 33,538 | 33,537 | ||||||
Additional paid-in capital | 293,514,642 | 292,484,986 | ||||||
Accumulated deficit | (190,340,265) | (188,568,463) | ||||||
Total Stockholders' Equity | 103,207,915 | 103,950,060 | ||||||
Total Liabilities and Stockholders' Equity | $ | 114,280,674 | $ | 113,097,574 |
FRESHPET INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
(Unaudited) | ||||||||
For the Three Months Ended | ||||||||
March 31, | ||||||||
2016 | 2015 | |||||||
NET SALES | $ | 31,453,700 | $ | 27,054,674 | ||||
COST OF GOODS SOLD | 16,565,813 | 13,801,655 | ||||||
GROSS PROFIT | 14,887,887 | 13,253,019 | ||||||
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES | 16,487,082 | 15,677,598 | ||||||
LOSS FROM OPERATIONS | (1,599,195) | (2,424,579) | ||||||
OTHER EXPENSES: | ||||||||
Other Expenses, net | (40,869) | (109,957) | ||||||
Interest Expense | (116,738) | (37,538) | ||||||
(157,607) | (147,495) | |||||||
LOSS BEFORE INCOME TAXES | (1,756,802) | (2,572,074) | ||||||
INCOME TAX EXPENSE | 15,000 | 15,000 | ||||||
NET LOSS | (1,771,802) | (2,587,074) | ||||||
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ | (1,771,802) | $ | (2,587,074) | ||||
NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||||||||
-BASIC | $ | (0.05) | $ | (0.08) | ||||
-DILUTED | $ | (0.05) | $ | (0.08) | ||||
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING USED IN COMPUTING NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ||||||||
-BASIC | 33,537,280 | 33,469,749 | ||||||
-DILUTED | 33,537,280 | 33,469,749 |
FRESHPET INC. AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited) | |||||||
For the Three Months Ended | |||||||
March 31, | |||||||
2016 | 2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net loss | $ | (1,771,802) | $ | (2,587,074) | |||
Adjustments to reconcile net loss to net cash flows provided by operating activities: | |||||||
Provision for losses (gains) on accounts receivable | 7,805 | (918) | |||||
Loss on disposal of equipment and deposits on equipment | 143,407 | 8,723 | |||||
Share based compensation | 1,006,046 | 1,860,112 | |||||
Fair value adjustment for outstanding warrants | (58,122) | 114,106 | |||||
Change in reserve for inventory obsolescence | 133,174 | 6,006 | |||||
Depreciation and amortization | 2,071,272 | 1,754,905 | |||||
Amortization of deferred financing costs and loan discount | 35,901 | 35,294 | |||||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (110,542) | (1,172,276) | |||||
Inventories | (1,463,223) | (118,939) | |||||
Prepaid expenses and other current assets | (974,899) | 572,122 | |||||
Other assets | (184,987) | (130,025) | |||||
Accounts payable | 1,774,682 | 1,477,326 | |||||
Accrued expenses | 1,406,479 | (711,334) | |||||
Net cash flows provided by operating activities | 2,015,191 | 1,108,028 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of short-term investments | — | (7,499,205) | |||||
Proceeds from maturities of short-term investments | 3,250,000 | — | |||||
Acquisitions of property, plant and equipment, software and deposits on equipment | (13,045,117) | (4,964,527) | |||||
Proceeds from sale of equipment | 5,672 | — | |||||
Net cash flows used in investing activities | (9,789,445) | (12,463,732) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Exercise of options to purchase common stock | 10,970 | 14,960 | |||||
Net cash flows provided by financing activities | 10,970 | 14,960 | |||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (7,763,284) | (11,340,744) | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 8,029,413 | 36,259,252 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 266,129 | $ | 24,918,508 |
FRESHPET INC. AND SUBSIDIARIES | ||||||||
RECONCILIATON BETWEEN NET (LOSS) AND ADJUSTED EBITDA | ||||||||
Certain totals may not sum due to rounding | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2016 | 2015 | |||||||
(Dollars in thousands) | ||||||||
Net (loss) | $ | (1,772) | $ | (2,587) | ||||
Depreciation and amortization | 2,071 | 1,755 | ||||||
Interest expense | 117 | 38 | ||||||
Income tax expense | 15 | 15 | ||||||
EBITDA | $ | 431 | $ | (779) | ||||
Loss on disposal of equipment | 143 | 9 | ||||||
Launch expense | 722 | 804 | ||||||
Plant startup expenses | 238 | — | ||||||
Noncash stock based compensation | 1,006 | 1,860 | ||||||
Warrant fair valuation | (58) | 114 | ||||||
Adjusted EBITDA | $ | 2,483 | $ | 2,008 |
CONTACT ICR Katie Turner 646-277-1228 katie.turner@icrinc.comMichael Fox 203-682-8218 Michael.fox@icrinc.com
Source: Freshpet, Inc.