Inventure Foods, Inc. (Nasdaq: SNAK), a leading specialty food maker and marketer, reported record financial results for the first quarter ending March 26, 2011, highlighted by net revenue growth in both the Snack and Rader divisions and record first quarter earnings of $0.08 per fully diluted share.
In first Quarter 2011, Inventure Foods generated net revenue of $36.6 million for the first quarter, an increase of 16.7%, or $5.2 million versus the prior-year first quarter. Snack division net revenue posted a 12.4% increase over the same quarter a year ago to $21.7 million, which was led by a 44.7% increase in revenues and continued strong demand for Boulder Canyon Natural Foods™ products. The Snack division also experienced a second consecutive quarter of resurgent growth in the T.G.I.Friday's® brand, which increased 17.6% from the prior year. Other key growth drivers for the division included a 31.3% gain in Private Label and a 7.7% increase in the BURGER KING™ brand. These gains were partially offset by a decline in the Poore Brothers® brand.
Rader division net revenue, which includes Jamba® All Natural Smoothies, totaled $14.9 million for the quarter, up 23.6% over the prior-year period. Excluding Jamba®, Rader division net revenues increased 6.7% for the quarter. Jamba® net revenue for the quarter totaled $2.1 million ($2.5 million gross), which was in line with the Company's expectations, and reflected the start of Jamba's® nationwide rollout and the adding of a fourth flavor, Caribbean Passion®.
Consolidated net income for the quarter was $1.4 million, or $0.08 per fully diluted share, compared to $1.2 million, or $0.07 per fully diluted share, in the first quarter of 2010.
Consolidated EBITDA for the quarter was $3.5 million, or 9.6% of net revenue, an increase of 9.1% compared to the first quarter of last year. A table reconciling EBITDA to net income is presented at the end of the consolidated financial statements included in this release.
Other first quarter financial highlights include:
- Gross profit of $7.9 million, or 21.6% of net revenues, was up 15.8% in dollars and down 20 basis points compared to last year. This was due to a sizable increase in Snack division margins, which was attributable to strong volume growth in the Company's profitable brands and profitable channels. The impact on overall Snack margins was particularly evident in the 40% increase in pounds driven through the Bluffton facility. This increase was partially offset by lower margins at Rader Farms, attributable to the higher cost of berries relative to the prior year.
- Selling, General and Administrative (SG&A) expenses totaled $5.5 million for the quarter, or 15.0% of net revenues - an increase of $0.9 million and 50 basis points compared to the first quarter of the prior year. Continued investment in both Boulder Canyon™ and Jamba®, including increased marketing, sampling, and public relations efforts, drove a majority of this increase and reflects the Company's sustained focus on its Healthy/Natural brand investment.
"Our record first quarter 2011 earnings have carried Inventure Foods' momentum into the new year,"said Terry McDaniel, Chief Executive Officer of Inventure Foods. "We are off to quality starts in both our Snack and Rader divisions as we continue to deliver year-over-year revenue and earnings growth. Our Healthy/Natural portfolio now represents 53% of total revenue, having increased 27% from the first quarter of 2010. As we continue to focus resources on building our "better-for-you"group of products, we hope that it will continue to gain a larger share of total company revenues.
"We continue to invest in our brands, supporting them with talented new sales hires to strengthen our Jamba® and Boulder Canyon® expansion, while targeting our SG&A spend to deliver successful trade and promotional efforts across the portfolio. Jamba® continues to perform above our expectations, delivering $2.5 million in gross revenues, which was achieved with very little new business. We believe Jamba® is poised for a strong second quarter as we continue to execute the national roll-out. Early customer feedback and acceptance has been very encouraging and reflective of our expectations relating to the original roll out. Boulder Canyon continues its strong momentum as we expand geographically and add new products to the portfolio. We are also excited by the resurgent first quarter growth of T.G.I.Friday's®. The 7.0% increase in our Indulgent/Specialty portfolio was primarily the result of its strength."
McDaniel concluded: "In terms of capital, we continue to position ourselves for the future with meaningful capital expenditures. We are currently on track to complete the addition of several new kettles while increasing the number of packaging lines at our Goodyear facility, a project that began last year in order to further expand capacity and increase efficiencies. In summary, we are very pleased with Inventure's first quarter results and continued momentum in our brands."
