Blue Buffalo Pet Products, Inc. (the “Company”) (NASDAQ:BUFF), the
leading natural pet food company in the United States, today
announced its third quarter 2017 results.
- Third Quarter Highlights• Net sales of
$341 million, up 18.4%• Net income of $53 million, up 147.4%;
Adjusted Net Income of $53 million, up 19.1%• Adjusted EBITDA
of $89 million, up 20.0%• Diluted EPS of $0.27, up 148.4%
Adjusted Diluted EPS of $0.27, up 19.6%
- 2017 Outlook• Net sales between $1,250
and $1,265 million• Adjusted Diluted EPS between $0.91 and
$0.93
“We are excited about the progress of our launch
of BLUE Life Protection Formula into the mass and grocery channel
and look forward to growing our business as we expand distribution
over the next few years,” said Blue Buffalo CEO, Billy Bishop. “In
addition, we are continuing to invest behind our exclusive
specialty lines to maintain our leadership position in the
specialty channel.”
Third Quarter of 2017 Compared to Third
Quarter of 2016
Net sales increased $52.8 million, or 18.4%, to
$340.8 million, driven primarily by volume growth and favorable
product mix. Net sales of Dry Foods increased $31.1 million, or
13.3%, to $265.0 million while net sales of Wet Foods, Treats and
Other Products increased $21.7 million, or 40.1%, to $75.9
million.
Gross profit increased $27.6 million, or 20.7%,
to $160.8 million and gross margin was 47.2%, up 90 bps compared
with 46.3% in the third quarter of 2016. The increase in
gross margin was driven primarily by favorable product mix and
supply chain efficiencies, which were partially offset by higher
distribution and warehousing costs.
Selling, general, and administrative expenses
increased $9.7 million, or 14.8%, to $75.2 million. Adjusted
SG&A, which excludes litigation expenses and costs incurred for
our public offerings, increased $12.8 million, or 20.5%. The
increase was primarily due to our ongoing investment in advertising
and marketing consistent with our brand building strategy.
Net income increased $31.7 million, or 147.4%,
to $53.1 million in the third quarter of 2017, as compared to $21.5
million in the third quarter of 2016. Adjusted Net Income, which
excludes litigation expenses and costs incurred for our public
offerings, increased $8.5 million, or 19.1%, to $53.3 million in
the third quarter of 2017, compared to $44.7 million in the third
quarter of 2016. Diluted Earnings Per Share in the third
quarter of 2017 increased 148.4% to $0.27, compared to $0.11 in the
third quarter of 2016. Adjusted Diluted Earnings Per Share in the
third quarter of 2017 increased 19.6% to $0.27, compared to $0.22
in the third quarter of 2016.
First Nine Months of 2017 Compared to First Nine Months
of 2016
Net sales increased $82.9 million, or 9.7%, to
$937.6 million, driven primarily by volume growth and favorable
product mix. Net sales of Dry Foods increased $53.4 million, or
7.7%, to $747.6 million while net sales of Wet Foods, Treats and
Other Products increased $29.6 million, or 18.4%, to $190.0
million.
Gross profit increased $53.5 million, or 13.9%,
to $437.2 million and gross margin was 46.6%, up 170 bps compared
with 44.9% in the first nine months of 2016. The increase in
gross margin was driven primarily by supply chain efficiencies and
favorable product mix.
Selling, general, and administrative expenses
increased $20.0 million, or 10.5%, to $210.8 million.
Adjusted SG&A, which excludes litigation expenses and costs
incurred for our public offerings, increased $25.4 million, or
13.9%. The increase was primarily due to our ongoing investment in
advertising and marketing consistent with our brand building
strategy.
Net income increased $44.5 million, or 46.6%, to
$139.9 million as compared to $95.4 million in the first nine
months of 2016. Adjusted Net Income, which excludes litigation
expenses and costs incurred for our public offerings, increased
$19.9 million, or 16.4%, to $141.2 million in the first nine months
of 2017, compared to $121.3 million in the first nine months of
2016. Diluted Earnings Per Share in the first nine months of 2017
increased 46.6% to $0.70 compared to $0.48 in the first nine months
of 2016. Adjusted Diluted Earnings Per Share in the first nine
months of 2017 increased 16.4% to $0.71, compared to $0.61 in the
first nine months of 2016.
Net cash provided by operating activities was
$121.2 million in the first nine months of 2017 compared with
$111.5 million in the first nine months of 2016. Net cash provided
by operating activities for the first nine months of 2016 was
reduced by $20.0 million, which includes $12.0 million of cash tax
savings, related to our settlement agreement in the U.S. consumer
class action lawsuits. Cash and cash equivalents were $308.4
million as of September 30, 2017 as compared to $292.7 million
as of December 31, 2016. Capital expenditures for the first
nine months of 2017 and 2016 were $71.7 million and $17.9 million,
respectively.
Full Year 2017 Outlook
For the full year 2017, the Company expects to
deliver net sales between $1,250 million and $1,265 million. The
Company expects its Adjusted Diluted Earnings Per Share to be
between $0.91 and $0.93. The outlook for full year 2017 Adjusted
Earnings Per Share excludes costs related to litigation. The
Company expects 2017 capital expenditures to be between $150
million and $170 million. The full year 2017 effective tax rate is
expected to be between 36.4% and 36.9%.
Share Repurchase Program
During the three months ended September 30,
2017, the Company repurchased approximately 2.1 million shares of
its common stock through open market purchases at an average price
of $23.89, and a total cost of $50.0 million, including broker's
commissions. As of September 30, 2017, the share repurchase program
was fully executed.
Important Information Regarding Non-GAAP
Financial Measures
The Company presents non-GAAP financial
measures, including Adjusted Net Income, Adjusted EBITDA, Adjusted
Diluted EPS, Adjusted SG&A, Adjusted Income Taxes, Adjusted
Operating Income and Adjusted Gross Profit, in this press release
as management uses these measures in assessing our operating
performance, and we believe they are helpful to investors,
securities analysts and other interested parties, in evaluating the
performance of companies in our industry. We also believe that
these non-GAAP financial measures are useful to management and
investors, securities analysts and other interested parties as
measures of our comparative operating performance from period to
period. These non-GAAP financial measures are not measurements of
financial performance under GAAP. They should not be considered as
alternatives to cash flow from operating activities, as measures of
liquidity, or as alternatives to net income as a measure of our
operating performance or any other measures of performance derived
in accordance with GAAP. The methods used by the Company to
calculate its non-GAAP financial measures may differ significantly
from methods used by other companies to compute similar measures.
As a result, any non-GAAP financial measures presented herein may
not be comparable to similar measures provided by other companies.
Please see the schedules to this press release for additional
information and reconciliations of such non-GAAP financial measures
to the nearest GAAP measure. With respect to our expectations under
“Full Year 2017 Outlook” above, for Adjusted Diluted EPS a
reconciliation to the closest corresponding GAAP financial measure
is not available without unreasonable efforts on a forward-looking
basis due to the high variability, complexity and low visibility
with respect to litigation expenses excluded from this non-GAAP
financial measure. We expect the variability of these charges to
have a potentially unpredictable, and potentially significant,
impact on our future GAAP financial results.
Conference Call:
At 5 p.m. (Eastern Time) today, the Company will
host a conference call to provide additional commentary on third
quarter 2017 results. Further details will be accessible on the
Company’s website at http://ir.bluebuffalo.com. Participants may
dial 844-743-2498 in the United States or 661-378-9532
internationally and use the access code 99782268, or access the
webcast through the Company’s website at http://ir.bluebuffalo.com.
Participants are encouraged to dial into the call or link to the
webcast at least fifteen minutes prior to the scheduled start time.
A replay of the call will be available from November 7, 2017 to
November 21, 2017 following the call. To access the replay, dial
855-859-2056 or 404-537-3406 and use the access code 99782268. The
archive of the webcast will be available for a limited time on the
Company’s website at http://ir.bluebuffalo.com.
About Blue Buffalo
Blue Buffalo, based in Wilton, CT, is the
nation's leading natural pet food company, providing natural foods
and treats for dogs and cats under its BLUE Life Protection
Formula, BLUE Wilderness, BLUE Basics, BLUE Freedom, BLUE Natural
Veterinary Diet and BLUE Earth's Essentials lines. Paying tribute
to its founding mission, the Company, through the Blue Buffalo
Foundation, is a leading sponsor of pet cancer awareness and of
critical research studies of pet cancer, including causes,
treatments and the role of nutrition, at leading veterinary medical
schools and clinics across the United States. For more information
about Blue Buffalo, visit the Company’s website at
www.BlueBuffalo.com.
Forward-looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These statements include, but are not limited
to, statements related to the expectations regarding the
performance of the Company's business, financial results, liquidity
and capital resources and other non-historical statements,
including the statements in the “Full Year 2017 Outlook” section of
this press release. You can identify these forward-looking
statements by the use of words such as “outlook,” “forecast,”
“guidance,” “believes,” “expects,” “potential,” “continues,” “may,”
“will,” “should,” “could,” “seeks,” “approximately,” “projects,”
“predicts,” “intends,” “plans,” “estimates,” “anticipates” or the
negative version of these words or other comparable words. Such
forward-looking statements are subject to various risks and
uncertainties, including, among others, risks inherent to the pet
food industry, macroeconomic factors beyond the Company’s control,
competition for customers, risks related to the Company’s
manufacturing and supply chain, the success of the Company’s
Heartland manufacturing facility, risk of disruption at the
Company’s third party distribution centers, risks related to the
Company’s expansion outside the United States, the Company’s
ability to protect the Company’s intellectual property and that of
third parties, performance of the Company's information technology
systems, adverse litigation judgments or settlements and the
Company’s indebtedness. Additional factors that could cause the
Company's results to differ materially from those described in the
forward-looking statements can be found under the section entitled
“Risk Factors” in the Company’s Annual Report on Form 10-K, as
filed with the Securities and Exchange Commission (the “SEC”) on
March 1, 2017, as such risk factors may be updated from time to
time in our periodic filings with the SEC, and which are accessible
on the SEC’s website at www.sec.gov. Accordingly, there are or will
be important factors that could cause actual outcomes or results to
differ materially from those indicated in these statements. These
factors should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included
in this release and in the Company’s filings with the SEC. The
Company undertakes no obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as required by law.
Contacts:Investors & Financial Analysts
Michael NathensonEVP &
CFO203-665-3400investors@bluebuff.com
Media
Phil CheeversVP,
Communications203-665-3234media@bluebuff.com
Blue Buffalo Pet Products, Inc. |
Unaudited Condensed Consolidated Statements of
Income |
(dollars in thousands,
except for share data) |
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net sales |
$ |
340,845 |
|
|
$ |
287,996 |
|
|
$ |
937,627 |
|
|
$ |
854,682 |
|
Cost of sales |
180,028 |
|
|
154,787 |
|
|
500,398 |
|
|
470,938 |
|
Gross profit |
160,817 |
|
|
133,209 |
|
|
437,229 |
|
|
383,744 |
|
Selling, general and
administrative expenses |
75,188 |
|
|
65,493 |
|
|
210,799 |
|
|
190,849 |
|
Provision for legal
settlement |
— |
|
|
32,000 |
|
|
— |
|
|
32,000 |
|
Operating income |
85,629 |
|
|
35,716 |
|
|
226,430 |
|
|
160,895 |
|
Interest expense |
2,667 |
|
|
3,766 |
|
|
8,979 |
|
|
11,233 |
|
Interest income |
(488 |
) |
|
(137 |
) |
|
(787 |
) |
|
(361 |
) |
Other non-operating
(income) expense, net |
(52 |
) |
|
— |
|
|
32 |
|
|
— |
|
Income before income
taxes |
83,502 |
|
|
32,087 |
|
|
218,206 |
|
|
150,023 |
|
Provision for income
taxes |
30,365 |
|
|
10,605 |
|
|
78,297 |
|
|
54,584 |
|
Net income |
$ |
53,137 |
|
|
$ |
21,482 |
|
|
$ |
139,909 |
|
|
$ |
95,439 |
|
|
|
|
|
|
|
|
|
Basic net income per
common share |
$ |
0.27 |
|
|
$ |
0.11 |
|
|
$ |
0.71 |
|
|
$ |
0.49 |
|
Diluted net income per
common share |
$ |
0.27 |
|
|
$ |
0.11 |
|
|
$ |
0.70 |
|
|
$ |
0.48 |
|
Basic weighted average
shares |
196,121,691 |
|
|
196,445,684 |
|
|
196,577,436 |
|
|
196,311,529 |
|
Diluted weighted
average shares |
198,659,459 |
|
|
199,452,308 |
|
|
199,258,760 |
|
|
199,290,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blue Buffalo Pet Products, Inc. |
Unaudited Condensed Consolidated Balance
Sheets |
(dollars in thousands,
except for share data) |
|
|
September 30, 2017 |
|
December 31, 2016 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
308,382 |
|
|
$ |
292,656 |
|
Receivables, net |
150,545 |
|
|
115,446 |
|
Inventories |
77,862 |
|
|
70,941 |
|
Prepaid
expenses and other current assets |
7,712 |
|
|
6,130 |
|
Total
current assets |
544,501 |
|
|
485,173 |
|
|
|
|
|
Restricted cash |
781 |
|
|
781 |
|
Property, plant and
equipment, net |
242,702 |
|
|
162,232 |
|
Deferred income
taxes |
52 |
|
|
1,311 |
|
Other assets |
1,056 |
|
|
853 |
|
Total
assets |
$ |
789,092 |
|
|
$ |
650,350 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Current
maturities of long-term debt |
$ |
4,000 |
|
|
$ |
3,960 |
|
Accounts
payable |
56,473 |
|
|
35,238 |
|
Other
current liabilities |
68,436 |
|
|
59,629 |
|
Total
current liabilities |
128,909 |
|
|
98,827 |
|
|
|
|
|
Long-term debt |
390,776 |
|
|
379,177 |
|
Deferred income
taxes |
13,687 |
|
|
12,660 |
|
Other long-term
liabilities |
12,465 |
|
|
13,348 |
|
Total
liabilities |
545,837 |
|
|
504,012 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
Stockholders’
equity: |
|
|
|
Preferred
stock; $0.01 par value; 150,000,000 shares authorized; none issued
oroutstanding at September 30, 2017 and December 31, 2016 |
— |
|
|
— |
|
Common
stock, voting; $0.01 par value; 1,500,000,000 shares
authorized;197,344,697 and 196,524,010 shares issued at September
30, 2017 and December31, 2016, respectively |
1,973 |
|
|
1,965 |
|
Additional paid-in capital |
78,915 |
|
|
71,420 |
|
Retained
earnings |
212,601 |
|
|
72,692 |
|
Accumulated other comprehensive (loss) income |
(234 |
) |
|
261 |
|
Treasury
stock, at cost; 2,092,774 and no shares at September 30, 2017
andDecember 31, 2016, respectively |
(50,000 |
) |
|
— |
|
Total
stockholders’ equity |
243,255 |
|
|
146,338 |
|
Total liabilities and stockholders’ equity |
$ |
789,092 |
|
|
$ |
650,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blue Buffalo Pet Products, Inc. |
Unaudited Condensed Consolidated Statements of
Cash Flows |
(dollars in
thousands) |
|
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
Net
income |
$ |
139,909 |
|
|
$ |
95,439 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
7,767 |
|
|
6,766 |
|
Amortization of debt issuance costs |
247 |
|
|
91 |
|
Stock-based compensation |
2,976 |
|
|
3,051 |
|
(Gain)
loss on disposal of fixed assets |
562 |
|
|
(2 |
) |
Deferred
income taxes |
2,286 |
|
|
3,061 |
|
Provision
for legal settlement |
— |
|
|
32,000 |
|
Payment
of legal settlement |
— |
|
|
(32,000 |
) |
Effect of
changes in operating assets and liabilities: |
|
|
|
Receivables |
(35,324 |
) |
|
(12,282 |
) |
Inventories |
(6,850 |
) |
|
8,257 |
|
Prepaid
expenses and other assets |
(1,849 |
) |
|
(2,066 |
) |
Accounts
payable |
20,812 |
|
|
4,055 |
|
Other
liabilities |
(9,292 |
) |
|
5,158 |
|
Net cash
provided by operating activities |
121,244 |
|
|
111,528 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital
expenditures |
(71,665 |
) |
|
(17,901 |
) |
Restricted cash |
— |
|
|
(308 |
) |
Proceeds
from the sale of fixed assets |
— |
|
|
15 |
|
Net cash
used in investing activities |
(71,665 |
) |
|
(18,194 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Proceeds
from borrowings of new debt |
400,000 |
|
|
— |
|
Repayment
of long-term debt |
(382,147 |
) |
|
— |
|
Payments
related to long-term refinancing |
(4,382 |
) |
|
— |
|
Principal
payments on long-term debt |
(1,990 |
) |
|
(2,970 |
) |
Repurchases of common stock |
(50,000 |
) |
|
— |
|
Proceeds
from exercise of stock options |
4,527 |
|
|
1,805 |
|
Net cash
used in financing activities |
(33,992 |
) |
|
(1,165 |
) |
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
139 |
|
|
(60 |
) |
Net increase in cash
and cash equivalents |
15,726 |
|
|
92,109 |
|
Cash and cash
equivalents at beginning of period |
292,656 |
|
|
224,253 |
|
Cash and cash
equivalents at end of period |
$ |
308,382 |
|
|
$ |
316,362 |
|
|
|
|
|
Supplemental schedule
of non-cash investing activities: |
|
|
|
Accruals
related to property, plant and equipment |
17,125 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blue Buffalo Pet Products, Inc. |
Reconciliation of GAAP to Adjusted
Results* |
(dollars in millions,
except for share data) |
|
|
|
Three Months Ended September 30,
2017 |
|
|
|
GrossProfit |
|
% ofSales |
|
SG&A |
|
% ofSales |
|
OperatingIncome |
|
% ofSales |
|
IncomeTaxes |
|
% ofSales |
|
NetIncome |
|
% ofSales |
|
DilutedEPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
(GAAP) |
|
$ |
160.8 |
|
|
47.2 |
% |
|
$ |
75.2 |
|
|
22.1 |
% |
|
$ |
85.6 |
|
|
25.1 |
% |
|
$ |
30.4 |
|
|
8.9 |
% |
|
$ |
53.1 |
|
|
15.6 |
% |
|
$ |
0.27 |
|
|
Litigation expenses
(a) |
|
— |
|
|
|
|
0.2 |
|
|
0.1 |
% |
|
0.2 |
|
|
0.1 |
% |
|
0.1 |
|
|
— |
% |
|
0.1 |
|
|
— |
% |
|
— |
|
|
As
adjusted |
|
$ |
160.8 |
|
|
47.2 |
% |
|
$ |
75.0 |
|
|
22.0 |
% |
|
$ |
85.8 |
|
|
25.2 |
% |
|
$ |
30.4 |
|
|
8.9 |
% |
|
$ |
53.3 |
|
|
15.6 |
% |
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
2016 |
|
|
|
GrossProfit |
|
% ofSales |
|
SG&A |
|
% ofSales |
|
OperatingIncome |
|
% ofSales |
|
IncomeTaxes |
|
% ofSales |
|
NetIncome |
|
% ofSales |
|
DilutedEPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
(GAAP) |
|
$ |
133.2 |
|
|
46.3 |
% |
|
$ |
65.5 |
|
|
22.7 |
% |
|
$ |
35.7 |
|
|
12.4 |
% |
|
$ |
10.6 |
|
|
3.7 |
% |
|
$ |
21.5 |
|
|
7.5 |
% |
|
$ |
0.11 |
|
|
Litigation expenses
(a) |
|
— |
|
|
|
|
2.1 |
|
|
0.7 |
% |
|
2.1 |
|
|
0.7 |
% |
|
0.8 |
|
|
0.3 |
% |
|
1.3 |
|
|
0.5 |
% |
|
0.01 |
|
|
Public offering costs
(b) |
|
— |
|
|
|
|
1.2 |
|
|
0.4 |
% |
|
1.2 |
|
|
0.4 |
% |
|
(0.3 |
) |
|
(0.1 |
)% |
|
1.5 |
|
|
0.5 |
% |
|
0.01 |
|
|
Provision for legal
settlement (c) |
|
— |
|
|
|
|
— |
|
|
|
|
32.0 |
|
|
11.1 |
% |
|
11.6 |
|
|
4.0 |
% |
|
20.4 |
|
|
7.1 |
% |
|
0.10 |
|
|
As
adjusted |
|
$ |
133.2 |
|
|
46.3 |
% |
|
$ |
62.2 |
|
|
21.6 |
% |
|
$ |
71.0 |
|
|
24.6 |
% |
|
$ |
22.6 |
|
|
7.9 |
% |
|
$ |
44.7 |
|
|
15.5 |
% |
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
2017 |
|
|
|
GrossProfit |
|
% ofSales |
|
SG&A |
|
% ofSales |
|
OperatingIncome |
|
% ofSales |
|
IncomeTaxes |
|
% ofSales |
|
NetIncome |
|
% ofSales |
|
DilutedEPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
(GAAP) |
|
$ |
437.2 |
|
|
46.6 |
% |
|
$ |
210.8 |
|
|
22.5 |
% |
|
$ |
226.4 |
|
|
24.1 |
% |
|
$ |
78.3 |
|
|
8.4 |
% |
|
$ |
139.9 |
|
|
14.9 |
% |
|
$ |
0.70 |
|
|
Litigation expenses
(a) |
|
— |
|
|
|
|
2.1 |
|
|
0.2 |
% |
|
2.1 |
|
|
0.2 |
% |
|
0.8 |
|
|
0.1 |
% |
|
1.3 |
|
|
0.1 |
% |
|
0.01 |
|
|
As
adjusted |
|
$ |
437.2 |
|
|
46.6 |
% |
|
$ |
208.7 |
|
|
22.3 |
% |
|
$ |
228.5 |
|
|
24.4 |
% |
|
$ |
79.1 |
|
|
8.4 |
% |
|
$ |
141.2 |
|
|
15.1 |
% |
|
$ |
0.71 |
|
|
|
|
Nine Months Ended September 30,
2016 |
|
|
|
GrossProfit |
|
% ofSales |
|
SG&A |
|
% ofSales |
|
OperatingIncome |
|
% ofSales |
|
IncomeTaxes |
|
% ofSales |
|
NetIncome |
|
% ofSales |
|
DilutedEPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
As reported
(GAAP) |
|
$ |
383.7 |
|
|
44.9 |
% |
|
$ |
190.8 |
|
|
22.3 |
% |
|
$ |
160.9 |
|
|
18.8 |
% |
|
$ |
54.6 |
|
|
6.4 |
% |
|
$ |
95.4 |
|
|
11.2 |
% |
|
$ |
0.48 |
|
|
Litigation expenses
(a) |
|
— |
|
|
|
|
5.4 |
|
|
0.6 |
% |
|
5.4 |
|
|
0.6 |
% |
|
2.0 |
|
|
0.2 |
% |
|
3.5 |
|
|
0.4 |
% |
|
0.02 |
|
|
Public offering costs
(b) |
|
— |
|
|
|
|
2.1 |
|
|
0.2 |
% |
|
2.1 |
|
|
0.2 |
% |
|
— |
|
|
— |
% |
|
2.1 |
|
|
0.2 |
% |
|
0.01 |
|
|
Provision for legal
settlement (c) |
|
— |
|
|
|
|
— |
|
|
|
|
32.0 |
|
|
3.7 |
% |
|
11.6 |
|
|
1.4 |
% |
|
20.4 |
|
|
2.4 |
% |
|
0.10 |
|
|
As
adjusted |
|
$ |
383.7 |
|
|
44.9 |
% |
|
$ |
183.3 |
|
|
21.4 |
% |
|
$ |
200.4 |
|
|
23.5 |
% |
|
$ |
68.2 |
|
|
8.0 |
% |
|
$ |
121.3 |
|
|
14.2 |
% |
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts
may not be additive due to rounding. |
|
|
|
|
|
(a) Represents costs primarily related to our litigation
against the third party ingredient supplier and broker that sold us
mislabeled ingredients, as well as against our insurance providers,
in connection with the litigation with Nestlé Purina PetCare
Company that was settled in November 2016. |
|
(b)
Represents costs incurred for our public offerings. |
|
(c)
Represents a provision related to the Settlement Agreement entered
into in November 2016. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blue Buffalo Pet Products, Inc. |
Reconciliation of GAAP to Adjusted
Results* |
(dollars in millions,
except for share data) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2017 |
|
September 30, 2016 |
|
September 30, 2017 |
|
September 30, 2016 |
Net
income |
|
$ |
53.1 |
|
|
$ |
21.5 |
|
|
$ |
139.9 |
|
|
$ |
95.4 |
|
Interest expense,
net |
|
2.2 |
|
|
3.6 |
|
|
8.2 |
|
|
10.9 |
|
Provision for income
taxes |
|
30.4 |
|
|
10.6 |
|
|
78.3 |
|
|
54.6 |
|
Depreciation and
amortization |
|
2.5 |
|
|
2.3 |
|
|
7.8 |
|
|
6.8 |
|
EBITDA
(a) |
|
88.1 |
|
|
38.0 |
|
|
234.2 |
|
|
167.7 |
|
Litigation expenses
(b) |
|
0.2 |
|
|
2.1 |
|
|
2.1 |
|
|
5.4 |
|
Public offering costs
(c) |
|
— |
|
|
1.2 |
|
|
— |
|
|
2.1 |
|
Provision for legal
settlement (d) |
|
— |
|
|
32.0 |
|
|
— |
|
|
32.0 |
|
Stock-based
compensation (e) |
|
0.8 |
|
|
1.0 |
|
|
3.0 |
|
|
3.1 |
|
Adjusted
EBITDA |
|
$ |
89.2 |
|
|
$ |
74.3 |
|
|
$ |
239.2 |
|
|
$ |
210.2 |
|
|
|
|
|
|
|
|
|
|
* Amounts
may not be additive due to rounding. |
(a) EBITDA
represents net income plus interest expense, net, provision for
income taxes and depreciation and amortization. |
(b) Represents costs primarily related to our litigation
against the third party ingredient supplier and broker that sold us
mislabeled ingredients, as well as against our insurance providers,
in connection with the litigation with Nestlé Purina PetCare
Company that was settled in November 2016. |
(c)
Represents costs incurred for our public offerings. |
(d)
Represents a provision related to the Settlement Agreement entered
into in November 2016. |
(e)
Represents non-cash, stock-based compensation expense. |
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