Fourth Quarter Net Sales of $88.6 Million
Company Provides Full Year Fiscal 2017
Outlook
Amplify Snack Brands, Inc. (“Amplify” or the “Company”)
(NYSE:BETR), a leading marketer and manufacturer of branded
better-for-you snack food products, today reported financial
results for the three months and year ended December 31, 2016.
Three Months Ended December 31, 2016 Highlights
- Net sales were $88.6 million, up 91.1%
year-over-year
- Gross profit was $36.8 million,
representing 41.5% of net sales
- GAAP net income was $8.5 million, or
$0.11 per fully diluted share
- Non-GAAP adjusted net income was $6.6
million, or $0.09 per fully diluted share
- Adjusted EBITDA was $23.5 million,
representing 26.6% of net sales
Full Year Ended December 31, 2016 Highlights
- Net sales were $270.8 million, up 47.2%
year-over-year
- Gross profit was $130.1 million,
representing 48.0% of net sales
- GAAP net income was $27.3 million, or
$0.36 per fully diluted share
- Non-GAAP adjusted net income was $37.0
million, or $0.49 per fully diluted share
- Adjusted EBITDA was $84.9 million,
representing 31.4% of net sales
“2016 was a year of transformation for Amplify. We strategically
expanded and diversified our better-for-you product offering and
began to make key leadership team additions to further strengthen
our execution to deliver the growth we know our company is capable
of achieving over the next several years,” said Tom Ennis,
Amplify’s President and Chief Executive Officer. “Our fourth
quarter financial performance reflects the strong momentum for our
SkinnyPop, Paqui and Oatmega brands, and the addition of Tyrrells.
We continued to generate best-in-class velocities while
simultaneously increasing our points of distribution and gaining
market share across a wide range of sales channels. Looking ahead,
we have a robust innovation pipeline and remain very excited about
our acquisition of Tyrrells as we begin to leverage our cross
selling opportunities during 2017.”
Three Months Ended December 31, 2016
Net sales increased 91.1% to $88.6 million compared to $46.4
million for the three months ended December 31, 2015. The increase
in net sales reflects a full quarter contribution from both
Tyrrells’ international portfolio of brands as well as Oatmega,
continued solid growth of the SkinnyPop brand and new distribution
and increased velocities of the Paqui brand. Foreign currency
exchange had an immaterial impact on the Company’s operating
results for the three months ended December 31, 2016.
Gross profit was $36.8 million, or 41.5% of net sales, compared
to $26.2 million, or 56.5% of net sales for the three months ended
December 31, 2016. The decrease in gross margin percentage for the
three months ended December 31, 2016 was primarily due to the
acquisition of Tyrrells.
GAAP SG&A was $20.0 million compared to $13.9 million for
the three months ended December 31, 2015. GAAP net income was $8.5
million, or $0.11 per fully diluted share, compared to net income
of $4.4 million, or $0.06 per fully diluted share, for the three
months ended December 31, 2015. Adjusted net income, which is a
non-GAAP financial measure used by the Company that makes certain
adjustments to net income calculated under GAAP, was $6.6 million,
or $0.09 per fully diluted share, based on 76.8 million diluted
shares outstanding, compared to adjusted net income of $9.5 million
for the three months ended December 31, 2015, or $0.13 per fully
diluted share, based on 74.9 million diluted shares
outstanding.
Adjusted EBITDA, which is a non-GAAP financial measure used by
the Company that makes certain adjustments to net income calculated
under GAAP, increased 25.6% to $23.5 million from $18.7 million for
the three months ended December 31, 2015, primarily reflecting
higher net sales and gross profit, partially offset by higher
SG&A. As a percentage of net sales, Adjusted EBITDA was 26.6%
compared to 40.4% in the three months ended December 31, 2015. The
decrease in Adjusted EBITDA as a percentage of sales was primarily
driven by a full quarter contribution of Tyrrells and Oatmega and
strategic investments in consumer marketing activities to drive
brand awareness and trial, as well as investment in infrastructure
and personnel.
Year Ended December 31, 2016
Net sales for the year ended December 31, 2016 increased 47.2%
to $270.8 million, compared to $183.9 million for the year ended
December 31, 2015. The increase in net sales reflects continued
strong growth of the SkinnyPop brand, the addition of the Tyrrells
international portfolio of brands and Oatmega which the Company
acquired in 2016, and new distribution and increased velocities of
the Paqui brand.
GAAP net income increased $17.4 million to $27.3 million, or
$0.36 per fully diluted share, compared to net income of $9.9
million, or $0.13 per fully diluted share, for the year ended
December 31, 2015. Adjusted net income, which is a non-GAAP
financial measure used by the Company that makes certain
adjustments to net income calculated under GAAP, was $37.0 million,
or $0.49 per fully diluted share, based on 75.6 million diluted
shares outstanding, compared to adjusted net income of $37.6
million for the year ended December 31, 2015, or $0.50 per fully
diluted share, based on 74.7 million diluted shares
outstanding.
Adjusted EBITDA, a non-GAAP financial measure, increased 13.4%
to $84.9 million from $74.9 million for the year ended December 31,
2015. Adjusted EBITDA as a percentage of net sales for the year
ended December 31, 2016 was 31.4%, compared to 40.7% for the year
ended December 31, 2015.
Segment Review
As a result of the Tyrrells acquisition, the Company has created
two reportable segments to align its external financial reporting
with its operating and internal financial model. The two reportable
segments include (i) North America and (ii) International.
North America:
For the year ended December 31, 2016, North America segment net
sales and operating income were $229.7 million and $82.3 million,
respectively. This compares with North America segment net sales
and operating income of $183.9 million and $76.5 million,
respectively for the year ended December 31, 2015.
International:
For the year ended December 31, 2016, International segment net
sales and operating income were $41.1 million and $2.8 million,
respectively.
Balance Sheet and Cash Flow
As of December 31, 2016, the Company had cash and cash
equivalents of $10.3 million and net availability under its $50.0
million revolving line of credit of $40.1 million. Net debt, as
defined under the Company’s credit facility, represents outstanding
indebtedness less cash and cash equivalents, was $604.6 million as
of December 31, 2016, compared to $182.5 million as of December 31,
2015. The increase was primarily attributable to the acquisition of
the Tyrrells portfolio of international brands during the year
ended December 31, 2016. Amplify’s leverage ratio as calculated
under the Company’s credit facility increased to 5.9x trailing
twelve month EBITDA at December 31, 2016. The Company remains
committed to reducing its long-term net leverage to under 4.5x.
Outlook
For the full year 2017 the Company expects to report:
- Net sales of $404 million to $420
million
- Adjusted EBITDA of $103 million to $111
million
- Adjusted EPS of $0.43 to $0.51
- Effective non-GAAP tax rate of 34% to
36%
- Cash and non-cash interest expense of
approximately $43 million to $45 million
- Fully diluted share count of
approximately 77.0 million shares
- The Company’s outlook assumes an
estimated foreign currency exchange rate of 1.24 USD:GBP
As a result of the timing of planned distribution and sales
gains across the Company’s business segments, it expects the rate
of year-over-year growth for both sales and profitability to
increase as the year progresses. The Company expects to generate
approximately 45% of its annual 2017 net sales in the first half of
2017 and 55% in the second half of 2017 and expects to generate
approximately 40% of its Adjusted EBITDA contribution in the first
of 2017 and 60% in the second half of 2017, respectively.
The Company has not reconciled its expected Adjusted EBITDA to
net income or Adjusted EPS to earnings per share under “Outlook”
because it has not finalized calculations for several factors
necessary to provide the reconciliations, including net income,
interest expense and income tax expense. In addition, certain items
that impact net income and other reconciling metrics are out of the
Company’s control and/or cannot be reasonably predicted at this
time.
Conference Call and Webcast
The Company will host a conference call with members of the
executive management team to discuss these results today,
Wednesday, March 8, 2016 at 3:30 p.m. Central time (4:30 p.m.
Eastern time). Investors interested in participating in the live
call can dial 877-407-9039 from the U.S. International callers can
dial 201-689-8470.
In addition, the call will be broadcast live over the Internet
hosted at the “Investor Relations” section of the Company's website
at http://amplifysnackbrands.com. The webcast will be archived for
30 days. A telephone replay will be available approximately two
hours after the call concludes and will be available through
Wednesday, March 22, 2017, by dialing 844-512-2921 from the U.S.,
or 412-317-6671 from international locations, and entering
confirmation code 13656196.
About Amplify Snack Brands, Inc.
Headquartered in Austin, Texas, Amplify Snack Brands is a high
growth snack food company focused on developing and marketing
products that appeal to consumers’ growing preference for
Better-For-You (BFY) snacks. Our brands SkinnyPop®, Tyrrells®,
Paqui®, Oatmega®, Lisa’s® Chips, The Wholesome Food CompanyTM, and
Thomas ChipmanTM embody our BFY mission of “snacking without
compromise” and have amassed a loyal customer base across a wide
range of food distribution channels in the United States, United
Kingdom, Canada, Europe and Australia. For additional information,
please visit: http://amplifysnackbrands.com.
Looking Statements
This press release contains certain forward-looking statements
regarding our performance, including in the section titled
“Outlook.” Forward-looking statements generally relate to future
events or our future financial or operating performance. In some
cases, you can identify forward-looking statements because they
contain words such as “may”, “will”, “should”, “expects”, “plans”,
“anticipates”, “could”, “intends”, “target”, “projects”,
“contemplates”, “believes”, “estimates”, “predicts”, “potential” or
“continue” or the negative of these words or other similar terms or
expressions that concern our expectations, strategy, plans or
intentions. Forward-looking statements are subject to known and
unknown risks and uncertainties and are based on potentially
inaccurate assumptions that could cause actual results to differ
materially from those expected or implied by the forward-looking
statements. If any such risks or uncertainties materialize or if
any of the assumptions prove incorrect, our results could differ
materially from the results expressed or implied by the
forward-looking statements we make.
The important factors that could cause actual results to differ
materially from those in any forward-looking statements include,
but are not limited to, the following: (i) changes in consumer
preferences and discretionary spending may have a material adverse
effect on our brand loyalty, net sales, results of operations and
financial condition, (ii) we rely on sales to a limited number of
distributors and retailers for the substantial majority of our net
sales, and the loss of one or more such distributors or retailers
may harm our business, (iii) sales of a limited number of SkinnyPop
products and flavors contributed all of our historical
profitability and cash flow and a reduction in the sale of our
SkinnyPop products would have a material adverse effect on our
ability to remain profitable and achieve future growth, and (iv)
our ability to successfully integrate the Tyrrells business and our
other recent acquisitions with our existing operations.
Further information on these and other factors that could affect
our financial results and the forward-looking statements in this
press release are included in our Annual Report on Form 10-K for
the year ended December 31, 2016 and our Quarterly Reports on Form
10-Q, as filed with the Securities and Exchange Commission (“SEC”)
and in other filings we will make with the SEC from time to time,
particularly under the caption Risk Factors.
You should not place undue reliance upon forward-looking
statements as predictions of future events. Amplify has based the
forward-looking statements contained in this press release on its
current expectations and projections about future events and trends
that it believes may affect its business, financial condition,
results of operations and prospects. The forward-looking statements
made in this press release relate only to events as of the date on
which the statements are made. Amplify undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as may be required by law.
Non-GAAP Measures
In order to aid understanding of Amplify’s business performance,
it has presented results in conformity with accounting principles
generally accepted in the United States (“GAAP”) and has also
presented Adjusted SG&A, Adjusted EBITDA and Adjusted net
income and the corresponding earnings per share, which are non-GAAP
measures that are explained and reconciled to the comparable GAAP
measures in the tables included in this release.
Management believes that Adjusted SG&A, Adjusted EBITDA and
Adjusted net income and the corresponding earnings per share, which
are non-GAAP measurements, are meaningful to investors because they
provide a view of the Company with respect to ongoing operating
results. Adjusted EBITDA and Adjusted net income are not and should
not be considered alternatives to net income or any other figure
calculated in accordance with GAAP, or as an indicator of operating
performance. The Company’s calculation of Adjusted SG&A,
Adjusted EBITDA and Adjusted net income and the corresponding
earnings per share may differ from methods used by other companies.
Management believes that these non-GAAP measurements are important
to help gain an understanding of the Company's overall operating
results in the periods presented. Such non-GAAP measurements are
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 or Adjusted
EPS to earnings per share under “Outlook” because we have not
finalized our calculations of several factors necessary to provide
the reconciliations, 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.
Amplify Snack Brands, Inc. and Consolidated
Subsidiaries Consolidated Balance Sheets (in
thousands) December 31, 2016 December 31,
2015 Assets (unaudited) Current assets: Cash and cash
equivalents $ 10,323 $ 18,751 Accounts receivable, net 42,852
11,977 Inventories 18,250 6,829 Other current assets 7,804
1,293 Total current assets 79,229 38,850 Property and
equipment, net 45,884 2,153 Other assets: Goodwill 151,953 47,421
Intangible assets, net 559,996 269,468 Other non-current assets (1)
1,178 40
Total assets $ 838,240
$ 357,932 Liabilities and Shareholders’ Equity
Current liabilities: Accounts payable and accrued liabilities $
45,087 $ 14,532 Senior term loan- current portion 5,936 12,750
Founder contingent consideration - 25,197 Tax receivable
obligation- current portion 7,114 6,632 Note payable, net 991 -
Other current liabilities 908 217 Total current
liabilities 60,036 59,328 Long-term liabilities: Senior term loan
(1) 571,576 181,704 Revolving credit facility 7,210 - Notes
payable, net 6,678 3,757 Tax receivable obligation 81,905 89,498
Deferred tax liabilities 54,890 5,115 Other liabilities
4,211 3,107 Total long-term liabilities 726,470 283,181
Total shareholders’ equity 51,734 15,423
Total
liabilities and shareholders’ equity $ 838,240
$ 357,932 (1) In the first quarter of 2016,
the Company adopted Accounting Standard Update (“ASU”) No. 2015-03,
which requires debt issuance costs to be presented as a reduction
to the carrying value of the related debt liability, rather than as
a deferred charge (asset). This presentation resulted in debt
issuance costs being presented in the same manner that debt
discounts have historically been presented. As a result, the
Company reclassified $2.9 million of debt issuance costs from Other
assets to a deduction from the carrying value of the Senior term
loan as of December 31, 2015.
Amplify Snack
Brands, Inc. and Consolidated Subsidiaries Consolidated
Statements of Operations For the Three Months and Year Ended
December 31, 2016 and 2015 (unaudited, in thousands, except
share and per share data) Three Months Ended
Year Ended
December 31, 2016
December 31, 2015
December 31, 2016
December 31, 2015
Net sales $ 88,618 $ 46,372 $ 270,811 $ 183,915 Cost of
goods sold 51,807 20,185 140,698
80,972
Gross profit 36,811 26,187
130,113 102,943 Operating expenses: Sales and
marketing 9,498 4,747 32,049 18,527 General and administrative
10,517 9,176 38,205 46,261 Loss (gain) on change in fair value of
contingent consideration
- 1,521 (505 ) 1,521 Total
operating expenses 20,015 15,444 69,749
66,309
Operating income 16,796
10,743 60,364 36,634 Interest expense 11,110
3,104 22,898 12,428 Other income (2,066 ) - (6,287 ) - Loss on
extinguishment of debt - - 1,100
- Income before income taxes 7,752 7,639 42,653 24,206
Income tax (benefit) expense (726 ) 3,229
15,360 14,321
Net income $ 8,478
$ 4,410 $ 27,293 $
9,885 Earnings per share:
Basic and diluted
$ 0.11 $ 0.06 $
0.36 $ 0.13 Weighted average
common shares
outstanding:
Basic 76,777,838
74,865,563 75,471,059
74,747,605 Diluted 76,811,822
74,865,563 75,553,885
74,747,605 Amplify Snack Brands,
Inc. and Consolidated Subsidiaries Reconciliation of GAAP
Net Income to Adjusted EBITDA and Adjusted Net Income (in
thousands) Three Months Ended Year Ended
December 31, 2016
December 31, 2015
December 31, 2016
December 31, 2015
Net income $ 8,478 $
4,410 $ 27,293 $ 9,885 Non-GAAP
adjustments: Interest expense 11,110 3,104 22,898 12,428 Income tax
(benefit) expense (726 ) 3,229 15,360 14,321 Depreciation expense
1,617 104 2,431 310 Amortization of intangible assets 1,883 1,063
5,316 4,228 Equity-based compensation expense 1,697 870 5,669 3,305
Inventory fair value adjustment 694 - 694 - Loss (gain) on change
in fair value of
contingent consideration
-
1,521
(505 )
1,521
Tax receivable agreement revaluation (516 ) - (516 ) - Foreign
currency (gains) losses (1,538 ) - (5,759 ) - Loss on
extinguishment of debt - - 1,100 - Founder contingent compensation
- 4,456 - 18,261
Transaction-related expenses: IPO-related
expenses (1) - (13 ) - 9,339 Equity offering-related expenses (2)
133 - 748 - Acquisition-related expenses (3) 591 (1 ) 10,089 461
Executive recruitment (4) 113 - 113 742 Recapitalization expenses
(5) - - - 91
Adjusted EBITDA $ 23,536 $
18,743 $ 84,931 $ 74,892 Less:
Interest expense 11,110 3,104 22,898 12,428 Depreciation expense
1,617 104 2,431
310
Adjusted net income before taxes 10,809
15,535 59,602 62,154 Adjusted income tax
expense 4,205 6,059 22,623
24,536
Adjusted net income $
6,604 $ 9,476 $
36,979 $ 37,618 Adjusted
earnings per share- diluted $ 0.09
$ 0.13 $ 0.49 $
0.50 Weighted average common shares
outstanding- diluted
76,811,822 74,865,563
75,553,885 74,747,605 (1)
Includes performance bonuses and related payroll taxes paid to
employees upon the completion of the IPO, a financial advisory fee
paid to an advisor in connection with the IPO, and legal,
accounting, consulting, printing, filing and listing fees paid in
connection with the IPO process. (2) Includes legal, accounting,
printing and filing fees paid in connection with the our secondary
equity public offering, which closed in May 2016, and our shelf
registration with the SEC in November 2016. (3) Includes legal,
accounting and consulting fees along with severance expenses and
integration costs incurred in connection with our acquisition of
Tyrrells brands in September 2016, Oatmega brands in April 2016 and
Paqui brands in April 2015. (4) Represents the recognized expense
associated with sign-on and retention bonuses for certain executive
hires and certain recruiting fees. (5) Represents expenses we
incurred in connection with a distribution paid in May 2015 to
members of the former parent entity of the Company.
Amplify Snack Brands, Inc.
Reconciliation of GAAP Selling and
Marketing and General and Administrative (“SG&A”)
Expenses
to Adjusted SG&A Expenses (In thousands)
Three Months Ended Year Ended
December 31, 2016
December 31, 2015
December 31, 2016
December 31, 2015
SG&A $ 20,015 $
13,923 $ 70,254 $ 64,788 Less:
Depreciation expense (474 ) (50 ) (681 ) (111 ) Amortization of
intangible assets (1,883 ) (1,063 ) (5,316 ) (4,228 ) Equity-based
compensation expense (1,697 ) (870 ) (5,669 ) (3,305 ) Founder
contingent compensation - (4,456 ) - (18,261 )
Transaction-related expenses: IPO-related expenses (1) - 13
- (9,339 ) Equity offering-related expenses (2)) (133 ) - (748 ) -
Acquisition-related expenses (3) (591 ) 1 (10,089 ) (461 )
Executive recruitment (4) (113 ) - (113 ) (742 ) Recapitalization
expenses (5) - - -
(91 )
Adjusted SG&A $ 15,124
$ 7,498 $ 47,638 $
28,250 (1) Includes performance bonuses and
related payroll taxes paid to employees upon the completion of the
IPO, a financial advisory fee paid to an advisor in connection with
the IPO, and legal, accounting, consulting, printing, filing and
listing fees paid in connection with the IPO process. (2) Includes
legal, accounting, printing and filing fees paid in connection with
the our secondary equity public offering, which closed in May 2016,
and our shelf registration with the SEC in November 2016. (3)
Includes legal, accounting and consulting fees along with severance
expenses and integration costs incurred in connection with our
acquisition of the Tyrrells brands in September 2016, Oatmega
brands in April 2016 and Paqui brands in April 2015. (4) Represents
the recognized expense associated with sign-on and retention
bonuses for certain executive hires and certain recruiting fees.
(5) Represents expenses we incurred in connection with a
distribution paid in May 2015 to members of the former parent
entity of the Company.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170308006145/en/
Investors:Amplify Snack Brands, Inc.Josh Gittler,
512-640-8377jgittler@amplifysnacks.comorICRKatie Turner,
646-277-1228katie.turner@icrinc.com
AMPLIFY SNACK BRANDS, INC (NYSE:BETR)
Historical Stock Chart
From Aug 2024 to Sep 2024
AMPLIFY SNACK BRANDS, INC (NYSE:BETR)
Historical Stock Chart
From Sep 2023 to Sep 2024