Freshpet, Inc. (“Freshpet” or the “Company”) (NASDAQ:FRPT) today
reported financial results for its fourth quarter and full year
ended December 31, 2016.
Fourth Quarter 2016 Financial Highlights
Compared to Prior Year Period
- Net Sales of $34.1 million, up 13%
- Net Income of $1.2 million
- Adjusted EBITDA of $6.4 million, up 57%
- Freshpet Fridges increased 11% to 16,609 from 15,015
2016 Financial Highlights Compared to
Prior Year
- Net Sales of $133.1 million, up 15%
- Net Loss of $3.2 million
- Adjusted EBITDA of $17.7 million, up 59%
“The Company made solid progress during 2016. We
increased both same store sales and new store distribution while
also generating higher operating cash flow and improved
profitability,” said Billy Cyr, Freshpet’s Chief Executive Officer.
“More importantly, we strategically prepared the Company for its
next stage of growth with the completion of our manufacturing
facility expansion. As we enter 2017, we believe the Company is
well positioned to more rapidly grow the Freshpet brand with our
proven marketing message, outstanding product quality, broad
distribution, and financial flexibility to support the pursuit of
more aggressive growth.”
Fiscal Fourth Quarter 2016
Net sales increased 12.8% to $34.1 million for
the fourth quarter of 2016 compared to the same period in the prior
year, and the Company’s fresh refrigerated product offering grew
15.2% as compared to the same period in the prior year. Net sales
for the quarter were driven by velocity gains and a 10.6%
increase in Freshpet fridge store locations to 16,609 as of
December 31, 2016, as compared to the prior year period.
Gross profit was $15.2 million, or 44.7% as a
percentage of net sales, compared to $13.7 million, or 45.3% as a
percentage of net sales, in the same period last year. For the
fourth quarter 2016, Adjusted Gross Profit was $17.0 million, or
49.9% as a percentage of net sales, compared to $14.4 million, or
47.5% as a percentage of net sales, in the prior year period.
Adjusted Gross Profit is a Non-GAAP financial measure defined under
“Non-GAAP Measures,” and is reconciled to Gross Profit in the
financial tables that accompany this release.
Selling, general and administrative expenses
(“SG&A”) were $13.7 million compared to $10.8 million in the
prior year period. As a percentage of net sales, SG&A increased
to 40.1% for the fourth quarter of 2016 compared to 35.8% in the
fourth quarter of 2015. Adjusted SG&A as a percentage of net
sales decreased to 38.2% compared to 40.9% in the fourth quarter of
2015. Adjusted SG&A is a Non-GAAP financial measure defined
under “Non-GAAP Measures,” and is reconciled to SG&A in the
financial tables that accompany this release.
Net Income was $1.2 million for the fourth
quarter of 2016 compared to $2.8 million for the prior year period.
The fourth quarter ended December 31, 2016 and 2015 included a
reduction of expense related to performance-based stock
compensation awards of $0.1 and $2.6 million, respectively.
Adjusted EBITDA was $6.4 million for the fourth
quarter of 2016, compared to $4.0 million in the fourth quarter
2015. Adjusted EBITDA is a Non-GAAP financial measure defined
under “Non-GAAP Measures,” and is reconciled to net earnings in the
financial tables that accompany this release.
Full Year 2016
Net sales increased 14.5% to $133.1
million for the full year ended December 31, 2016 compared
to $116.2 million for the full year ended December 31,
2015. The Company’s fresh refrigerated product offering grew 15.4%
as compared to the prior year. Net sales for the year were driven
by increased velocity and an increase in Freshpet Fridge store
locations.
Gross profit was $60.4 million, or 45.4% as a
percentage of net sales, compared to $54.6 million, or 47.0% as
percentage of net sales, last year. Adjusted Gross Profit, which is
a non-GAAP financial measure, was $66.0 million, or 49.6% as a
percentage of net sales, compared to $57.2 million, or 49.2% as a
percentage of net sales, in the prior year.
SG&A was $62.6 million compared to $58.3
million last year. As a percentage of net sales, SG&A decreased
to 47.0% from 50.2% last year. Adjusted SG&A as a
percentage of net sales, which is a Non-GAAP financial measure,
decreased to 43.1% for 2016 compared to 46.5% for 2015.
Net loss for the year ended December 31,
2016 was $3.2 million compared to $3.7
million for the year ended December 31, 2015. The year ended
December 31, 2016 and 2015 included a reduction of expense related
to performance-based stock option compensation awards of $0.1 and
$2.6 million respectively.
Adjusted EBITDA, which is a Non-GAAP measure,
was $17.7 million, compared to $11.1 million in 2015.
Cash and Net Debt
For the year ended December 31, 2016, the
Company generated cash from operations of $12.8 million compared to
$6.7 million for the year ended December 31, 2015. As of
December 31, 2016, the Company had cash and cash equivalents of
$3.9 million, a decrease of $4.1 million from December 31, 2015
primarily due to capital expenditures related to the expansion of
the Company’s Freshpet Kitchens in Bethlehem, Pennsylvania. In
order to fund the expansion, the Company invested $17.6 million in
capital expenditures, borrowed $10.0 million and repaid $3.0
million and now has $30.0 million available under its Credit
Facility as of December 31, 2016. Debt outstanding, net of cash and
cash equivalents, as of December 31, 2016 was $3.1 million.
Outlook For Fiscal Year
2017
Mr. Cyr continued, “Through our analysis we know
that the Freshpet brand has very low awareness, but a very high
customer repeat rate. In 2017, we will begin to increase our
investment in media to drive brand awareness. Over time we
expect this new level of spend will increase same store sales and
grow new store penetration. We have tested this media strategy over
the last several months and are pleased with the results
to-date.”
The Company expects to see an accelerated rate
of growth, particularly for its fresh refrigerated products, as the
year develops.
In the near term, the Company expects its
strategic media investment to reduce Adjusted EBITDA, however, it’s
confident this will more rapidly grow the business and result in
significantly higher Adjusted EBITDA potential over the medium and
long-term. In addition, over the longer term, the Company
believes that expansion in gross profit from its cost savings and
margin improvement efforts will offset the incremental media
investment. There are significant cost savings and margin
improvement opportunities that can be realized now that the
Company’s technical talent has the opportunity to turn its
attention from the addition of plant capacity to optimization of
the manufacturing facilities recently completed. The Company
expects to begin to see the benefit from these efforts beginning
later in 2017 and continuing into 2018 and beyond.
For full year 2017, the Company expects
following results compared to the prior year:
- To exceed Net Sales of $153 million, an increase of
approximately 15%, (17% for its fresh refrigerated product
offering) with an increased rate of growth throughout the
year.
- To exceed Adjusted EBITDA of $16 million, a decrease of
approximately 10%. The planned strategic media investment
will reduce Adjusted EBITDA in the near-term, but the resulting
higher brand awareness is expected to generate increased Adjusted
EBITDA over time.
- To exceed Freshpet Fridges of over 18,200, an increase of
approximately 10%.
The Company does not provide guidance for the
most directly comparable GAAP measure, net income, and similarly
cannot provide a reconciliation between its forecasted Adjusted
EBITDA and net income metrics without unreasonable effort due to
the unavailability of reliable estimates for certain items, such as
non-cash gains or losses resulting from mark-to-market adjustments
of warrants. These items are not within the Company’s control and
may vary greatly between periods and could significantly impact
future financial results.
Conference Call, Webcast and Slide
Presentation
The Company will host a conference call and
webcast including an accompanying slide presentation where members
of the executive management team will discuss these results with
additional comments and details today at 4:30 p.m. ET. The
conference call and accompanying presentation slides will be
available live over the Internet through the “Investors” section of
the Company’s website at www.freshpet.com. To participate on the
live call listeners in North America may dial (877) 407-0792 and
international listeners may dial (201) 689-8263.
A replay of the conference call will be archived
on the Company’s website and telephonic playback will be available
from 7:30 p.m. ET on March 9, 2017, through March 23, 2017. North
American listeners may dial (844) 512-2921 and international
listeners may dial (412) 317-6671 the passcode is 13654710.
About Freshpet
Freshpet has a single-minded mission – to
improve the lives of dogs and cats everywhere through the power of
fresh, natural food. Packed with vitamins and proteins, our foods
offer fresh meats, poultry, and vegetables farmed locally. At our
Freshpet Kitchens, we thoughtfully prepare these natural
ingredients and everyday essentials, cooking them in small batches
at lower temperatures to preserve key nutrients. That way, your pet
gets the best. Freshpet refrigerated foods and treats are kept cool
from the moment they are made until they arrive at Freshpet Fridges
in your local market.
Our foods are available in select mass, grocery,
natural food, club, and pet specialty retailers across the United
States, Canada and are currently testing in the United Kingdom.
From the care we take to source our ingredients and make our food,
to the moment it reaches your home, our integrity, transparency and
social responsibility are the way we like to run our business. To
learn more, visit www.freshpet.com.
Connect with Freshpet:
https://www.facebook.com/Freshpet
https://twitter.com/Freshpet
http://instagram.com/Freshpet
http://pinterest.com/Freshpet
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 Freshpet believes that its
assumptions are reasonable, it is very difficult to predict the
impact of known factors, and, of course, it is impossible to
anticipate all factors that could affect actual results. There are
a number of risks and uncertainties that could cause actual results
to differ materially from forward-looking statements made herein
including, most prominently, the risks discussed under the heading
“Risk Factors” in the Company's latest annual report on Form 10-K
filed with the Securities and Exchange Commission. Such
forward-looking statements are made only as of the date of this
release. Freshpet undertakes no obligation to publicly update or
revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise
required by law. If we do update one or more forward-looking
statements, no inference should be made that we will make
additional updates with respect to those or other forward-looking
statements.
Non-GAAP Financial Measures
Freshpet uses the following non-GAAP financial
measures in its financial communications. These non-GAAP financial
measures (collectively, “the non-GAAP financial measures”) should
be considered as supplements to the GAAP reported measures, should
not be considered replacements for, or superior to, the GAAP
measures and may not be comparable to similarly named measures used
by other companies.
- Adjusted Gross Profit
- Adjusted Gross Profit as a % of net sales (Adjusted Gross
Margin)
- Adjusted SG&A Adjusted SG&A as a % of net sales
- EBITDA
- Adjusted EBITDA
Adjusted Gross Profit: Freshpet defines Adjusted
Gross Profit as Gross Profit before plant start-up expenses and
processing and plant depreciation expense.
Adjusted SG&A Expenses: Freshpet defines
Adjusted SG&A as SG&A expenses before non-cash items
related to share-based compensation, leadership transition
expenses, and fees related to a secondary offering.
EBITDA and Adjusted EBITDA: 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, secondary fees, leadership
transition expenses, and launch expenses.
Management believes that the non-GAAP measures,
are meaningful to investors because they provide a view of the
Company with respect to ongoing operating results. The non-GAAP
financial measures are shown as supplemental disclosures in this
release because they are widely used by the investment community
for analysis and comparative evaluation and provides additional
metrics to evaluate the Company’s operations and, when considered
with both the Company’s GAAP results and the reconciliation to the
most comparable GAAP measures, provides a more complete
understanding of the Company’s business than could be obtained
absent this disclosure. The non-GAAP measures are not and should
not be considered an alternative to the most comparable GAAP
measures or any other figure calculated in accordance with GAAP, or
as an indicator of operating performance. The Company’s calculation
of the non-GAAP financial measures may differ from methods used by
other companies. Management believes that the non-GAAP measures are
important to an understanding of the Company's overall operating
results in the periods presented. The non-GAAP financial measures
are not recognized in accordance with GAAP and should not be viewed
as an alternative to GAAP measures of performance.
FRESHPET INC. AND SUBSIDIARIES |
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
(Unaudited) |
|
|
|
|
December 31,2016 |
|
|
December 31,2015 |
|
ASSETS |
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
3,908,177 |
|
|
$ |
8,029,413 |
|
Short-term investments |
|
— |
|
|
|
3,250,000 |
|
Accounts
receivable, net of allowance for doubtful accounts |
|
8,886,790 |
|
|
|
7,030,719 |
|
Inventories, net |
|
5,402,735 |
|
|
|
6,853,447 |
|
Prepaid
expenses and other current assets |
|
1,045,651 |
|
|
|
229,631 |
|
Total
Current Assets |
|
19,243,353 |
|
|
|
25,393,210 |
|
Property, plant and
equipment, net |
|
101,493,080 |
|
|
|
82,793,007 |
|
Deposits on
equipment |
|
3,620,444 |
|
|
|
3,243,519 |
|
Other assets |
|
2,094,339 |
|
|
|
1,667,838 |
|
Total Assets |
$ |
126,451,216 |
|
|
$ |
113,097,574 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
Accounts
payable |
|
6,884,155 |
|
|
|
6,668,643 |
|
Accrued
expenses |
|
4,531,139 |
|
|
|
2,274,557 |
|
Accrued
warrants |
|
253,391 |
|
|
|
204,314 |
|
Borrowings under Credit Facilities |
|
7,000,000 |
|
|
|
— |
|
Total
Current Liabilities |
$ |
18,668,685 |
|
|
$ |
9,147,514 |
|
Total Liabilities |
$ |
18,668,685 |
|
|
$ |
9,147,514 |
|
STOCKHOLDERS'
EQUITY: |
|
|
|
|
|
|
|
Common
stock |
|
33,961 |
|
|
|
33,537 |
|
Additional paid-in capital |
|
299,477,706 |
|
|
|
292,484,986 |
|
Accumulated deficit |
|
(191,729,136 |
) |
|
|
(188,568,463 |
) |
Total
Stockholders' Equity |
|
107,782,531 |
|
|
|
103,950,060 |
|
Total Liabilities and
Stockholders' Equity |
$ |
126,451,216 |
|
|
$ |
113,097,574 |
|
|
|
|
|
|
|
|
|
FRESHPET INC. AND SUBSIDIARIES |
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME / (LOSS) |
|
(Unaudited) |
|
|
|
|
|
For the Three Months Ended |
|
|
For the Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
NET SALES |
|
$ |
34,061,456 |
|
|
$ |
30,201,788 |
|
|
$ |
133,053,517 |
|
|
$ |
116,186,372 |
|
COST OF GOODS SOLD |
|
|
18,841,142 |
|
|
|
16,512,375 |
|
|
|
72,682,634 |
|
|
|
61,537,230 |
|
GROSS PROFIT |
|
|
15,220,314 |
|
|
|
13,689,413 |
|
|
|
60,370,883 |
|
|
|
54,649,142 |
|
SELLING, GENERAL, AND
ADMINISTRATIVE EXPENSES |
|
|
13,669,325 |
|
|
|
10,820,726 |
|
|
|
62,585,833 |
|
|
|
58,296,814 |
|
INCOME/(LOSS) FROM
OPERATIONS |
|
|
1,550,989 |
|
|
|
2,868,687 |
|
|
|
(2,214,950 |
) |
|
|
(3,647,672 |
) |
OTHER
INCOME/(EXPENSES): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income/(Expenses), net |
|
|
(88,814 |
) |
|
|
116,621 |
|
|
|
(181,850 |
) |
|
|
448,943 |
|
Interest
Expense |
|
|
(208,022 |
) |
|
|
(192,530 |
) |
|
|
(698,119 |
) |
|
|
(454,567 |
) |
|
|
|
(296,836 |
) |
|
|
(75,909 |
) |
|
|
(879,969 |
) |
|
|
(5,624 |
) |
INCOME/(LOSS) BEFORE
INCOME TAXES |
|
|
1,254,153 |
|
|
|
2,792,778 |
|
|
|
(3,094,919 |
) |
|
|
(3,653,296 |
) |
INCOME TAX EXPENSE |
|
|
20,754 |
|
|
|
12,516 |
|
|
|
65,754 |
|
|
|
57,516 |
|
NET INCOME/(LOSS) |
|
|
1,233,399 |
|
|
|
2,780,262 |
|
|
|
(3,160,673 |
) |
|
|
(3,710,812 |
) |
NET INCOME/(LOSS)
ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
$ |
1,233,399 |
|
|
$ |
2,780,262 |
|
|
$ |
(3,160,673 |
) |
|
$ |
(3,710,812 |
) |
NET INCOME/(LOSS) PER
SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-BASIC |
|
$ |
0.04 |
|
|
$ |
0.08 |
|
|
$ |
(0.09 |
) |
|
$ |
(0.11 |
) |
-DILUTED |
|
$ |
0.04 |
|
|
$ |
0.08 |
|
|
$ |
(0.09 |
) |
|
$ |
(0.11 |
) |
WEIGHTED AVERAGE SHARES
OF COMMON STOCK OUTSTANDING USED IN COMPUTING NET INCOME/(LOSS) PER
SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-BASIC |
|
|
33,885,519 |
|
|
|
33,497,940 |
|
|
|
33,674,416 |
|
|
|
33,497,940 |
|
-DILUTED |
|
|
34,226,963 |
|
|
|
33,526,958 |
|
|
|
33,674,416 |
|
|
|
33,497,940 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FRESHPET INC. AND SUBSIDIARIES |
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS |
|
(Unaudited) |
|
|
|
|
For the Twelve Months Ended |
|
|
December 31, |
|
|
|
2016 |
|
|
|
2015 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net
loss |
$ |
(3,160,673 |
) |
|
$ |
(3,710,812 |
) |
Adjustments to reconcile net loss to net cash flows provided by
operating activities: |
|
|
|
|
|
|
|
Provision
for (gain)/loss on accounts receivable |
|
(5,164 |
) |
|
|
11,985 |
|
Loss on
disposal of equipment and deposits on equipment |
|
189,531 |
|
|
|
93,599 |
|
Share-based compensation |
|
4,193,490 |
|
|
|
3,923,857 |
|
Fair
value adjustment for outstanding warrants |
|
49,077 |
|
|
|
(502,626 |
) |
Change in
reserve for inventory obsolescence |
|
(117,944 |
) |
|
|
(105,022 |
) |
Depreciation and amortization |
|
9,887,168 |
|
|
|
7,573,535 |
|
Amortization of deferred financing costs and loan discount |
|
150,272 |
|
|
|
144,823 |
|
Changes
in operating assets and liabilities |
|
|
|
|
|
|
|
Accounts
receivable |
|
(1,850,907 |
) |
|
|
(1,682,304 |
) |
Inventories |
|
1,568,656 |
|
|
|
565,726 |
|
Prepaid
expenses and other current assets |
|
(816,020 |
) |
|
|
1,061,748 |
|
Other
assets |
|
(398,059 |
) |
|
|
(198,902 |
) |
Accounts
payable |
|
853,854 |
|
|
|
192,583 |
|
Accrued
expenses |
|
2,256,582 |
|
|
|
(629,373 |
) |
Net cash
flows provided by operating activities |
|
12,799,863 |
|
|
|
6,738,817 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Purchases
of short-term investments |
|
— |
|
|
|
(7,499,205 |
) |
Proceeds
from maturities of short-term investments |
|
3,250,000 |
|
|
|
4,249,205 |
|
Acquisitions of property, plant and equipment, software and
deposits on equipment |
|
(29,952,536 |
) |
|
|
(27,015,112 |
) |
Acquisitions of land and building |
|
— |
|
|
|
(5,026,250 |
) |
Proceeds
from sale of equipment |
|
13,442 |
|
|
|
30,957 |
|
Net cash
flows used in investing activities |
|
(26,689,094 |
) |
|
|
(35,260,405 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Exercise
of options to purchase common stock |
|
2,767,995 |
|
|
|
291,750 |
|
Proceeds
from borrowings under Credit Facilities |
|
10,000,000 |
|
|
|
— |
|
Repayment
of borrowings under Credit Facilities |
|
(3,000,000 |
) |
|
|
— |
|
Net cash
flows provided by financing activities |
|
9,767,995 |
|
|
|
291,750 |
|
NET CHANGE IN CASH AND
CASH EQUIVALENTS |
|
(4,121,236 |
) |
|
|
(28,229,839 |
) |
CASH AND CASH
EQUIVALENTS, BEGINNING OF YEAR |
|
8,029,413 |
|
|
|
36,259,252 |
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD |
$ |
3,908,177 |
|
|
$ |
8,029,413 |
|
|
|
|
|
|
|
|
|
FRESHPET INC. AND SUBSIDIARIES |
|
|
|
RECONCILIATION BETWEEN GROSS PROFIT AND
ADJUSTED GROSS PROFIT |
|
(Unaudited) |
|
|
|
(Amounts in thousands) |
|
Certain totals may not sum due to rounding |
|
|
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Gross Profit (as
reported) |
|
$ |
15,220 |
|
|
$ |
13,689 |
|
|
$ |
60,371 |
|
|
$ |
54,649 |
|
Depreciation expense
(a) |
|
|
1,368 |
|
|
|
669 |
|
|
|
4,028 |
|
|
|
2,566 |
|
Plant start-up expenses
and processing (b) |
|
|
420 |
|
|
|
— |
|
|
|
1,628 |
|
|
|
— |
|
Adjusted Gross
Profit |
|
$ |
17,008 |
|
|
$ |
14,359 |
|
|
$ |
66,027 |
|
|
$ |
57,216 |
|
Adjusted Gross Profit
as a % of Net Sales |
|
|
49.9 |
% |
|
|
47.5 |
% |
|
|
49.6 |
% |
|
|
49.2 |
% |
(a) Represents non-cash depreciation expense
included in Cost of Goods Sold.
(b) Represents additional operating costs
incurred in 2016 in connection with the startup of our new
manufacturing lines as part of the Freshpet Kitchens expansion
project.
|
|
FRESHPET INC. AND SUBSIDIARIES |
|
|
|
RECONCILIATION BETWEEN SG&A EXPENSES AND
ADJUSTED SG&A EXPENSES |
|
(Unaudited) |
|
|
|
(Amounts in thousands) |
|
Certain totals may not sum due to rounding |
|
|
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
SG&A Expenses (as
reported) |
|
$ |
13,669 |
|
|
$ |
10,821 |
|
|
$ |
62,586 |
|
|
$ |
58,297 |
|
Non-cash stock based
compensation (a) |
|
|
690 |
|
|
|
(1,546 |
) |
|
|
3,972 |
|
|
|
3,723 |
|
Secondary fees (b) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
593 |
|
Leadership transition
expenses (c) |
|
|
(36 |
) |
|
|
— |
|
|
|
1,291 |
|
|
|
— |
|
Adjusted
SG&A Expenses |
|
$ |
13,015 |
|
|
$ |
12,367 |
|
|
$ |
57,323 |
|
|
$ |
53,981 |
|
Adjusted SG&A
Expense as a % of Net Sales |
|
|
38.2 |
% |
|
|
40.9 |
% |
|
|
43.1 |
% |
|
|
46.5 |
% |
(a) Represents non-cash stock based compensation
expense.
(b) Represents fees associated with the
secondary public offering of our common stock, which was completed
on May 5, 2015.
(c) Represents charges associated within our former Chief
Executive Officer’s separation agreement as well as changes in
estimates associated with leadership transition costs.
|
|
FRESHPET INC. AND SUBSIDIARIES |
|
|
|
RECONCILIATION BETWEEN NET INCOME / (LOSS) AND
ADJUSTED EBITDA |
|
(Unaudited) |
|
|
|
(Amounts in thousands) |
|
Certain totals may not sum due to rounding |
|
|
|
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
Net income/(loss) |
|
$ |
1,233 |
|
|
$ |
2,780 |
|
|
$ |
(3,161 |
) |
|
$ |
(3,711 |
) |
Depreciation and
amortization |
|
|
2,929 |
|
|
|
2,031 |
|
|
|
9,887 |
|
|
|
7,574 |
|
Interest expense |
|
|
208 |
|
|
|
193 |
|
|
|
698 |
|
|
|
455 |
|
Income tax expense |
|
|
21 |
|
|
|
13 |
|
|
|
66 |
|
|
|
58 |
|
EBITDA |
|
$ |
4,391 |
|
|
$ |
5,016 |
|
|
$ |
7,490 |
|
|
$ |
4,376 |
|
Loss on disposal of
equipment |
|
|
20 |
|
|
|
10 |
|
|
|
190 |
|
|
|
94 |
|
Launch expense (a) |
|
|
775 |
|
|
|
686 |
|
|
|
2,813 |
|
|
|
2,626 |
|
Plant start-up expenses
and processing (b) |
|
|
420 |
|
|
|
— |
|
|
|
1,628 |
|
|
|
— |
|
Non-cash stock based
compensation (c) |
|
|
734 |
|
|
|
(1,566 |
) |
|
|
4,193 |
|
|
|
3,924 |
|
Warrant fair valuation
(d) |
|
|
68 |
|
|
|
(98 |
) |
|
|
49 |
|
|
|
(503 |
) |
Secondary fees (e) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
593 |
|
Leadership transition
expenses (f) |
|
|
(36 |
) |
|
|
|
|
|
|
1,291 |
|
|
|
— |
|
Adjusted
EBITDA |
|
$ |
6,372 |
|
|
$ |
4,048 |
|
|
$ |
17,654 |
|
|
$ |
11,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents new store marketing allowance of
$1,000 for each store added to our distribution network as well as
the non-capitalized freight costs associated with Freshpet Fridge
replacements. The expense enhances the overall marketing spend to
support our growing distribution network.
(b) Represents additional operating costs
incurred in 2016 in connection with the startup of our new
manufacturing lines as part of the Freshpet Kitchens expansion
project.
(c) Represents non-cash stock based compensation
expense.
(d) Represents the change of fair value for the
outstanding common stock warrants.
(e) Represents fees associated with the
secondary public offering of our common stock, which was completed
on May 5, 2015.
(f) Represents charges associated with our former Chief
Executive Officer’s separation agreement as well as changes in
estimates associated with leadership transition costs.
CONTACT
ICR
Katie Turner
646-277-1228
katie.turner@icrinc.com
Michael Fox
203-682-8218
Michael.fox@icrinc.com
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