SECAUCUS, N.J., Aug. 07, 2017 (GLOBE NEWSWIRE) -- Freshpet, Inc. (“Freshpet” or the “Company”) (NASDAQ:FRPT) today
reported financial results for its second quarter and six months ended June 30, 2017.
Second Quarter 2017 Financial Highlights
- Net Sales of $40.0 million, up 21.1% compared to the 2016 second quarter
- Net Loss of $2.7 million compared to a net loss of $3.2 million for the 2016 second quarter
- Adjusted EBITDA of $3.2 million compared to $3.5 million for the 2016 second quarter
- Freshpet Fridges increased 9.9% to 17,357 from 15,795 for the 2016 second quarter
“Our second quarter results reflect the initial strength of our stepped up advertising campaign and the merits of
our Feed the Growth strategy. We are very pleased the Freshpet brand experienced an acceleration in the rate of net sales
growth that was broad-based across all sales channels for the quarter,” said Billy Cyr, Freshpet’s Chief Executive Officer.
“Going forward, we expect to continue to generate solid growth as we progress through the year, and we remain confident in our
ability to achieve our longer term 2020 financial objectives.”
Second Quarter 2017
Second quarter of 2017 net sales increased 21.1% to $40.0 million compared to $33.0 million for the second quarter
of 2016. The Company’s core fresh refrigerated product offering grew 24.4% as compared to the same period in the prior year. Net
sales for the quarter were driven by velocity gains and a 9.9% increase in Freshpet fridge store locations to 17,357 as of June 30,
2017, as compared to the prior year period.
Gross profit was $18.2 million, or 45.5% as a percentage of net sales for the second quarter of 2017, compared to
$14.9 million, or 45.2% as a percentage of net sales, in the same period last year. For the second quarter 2017, Adjusted Gross
Profit was $19.6 million, or 49.1% as a percentage of net sales, compared to $16.1 million, or 48.7% 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 $20.0 million for the second quarter of 2017
compared to $17.9 million in the prior year period. As a percentage of net sales, SG&A decreased to 50.0% for the second
quarter of 2017 compared to 54.2% in the second quarter of 2016. Adjusted SG&A as a percentage of net sales increased to 47.1%
compared to 44.5% in the second quarter of 2016. The increase in SG&A is primarily due to the Company’s planned increased media
spend of $1.8 million compared to the prior year period. 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 Loss was $2.7 million for the second quarter of 2017 compared to a net loss of $3.2 million for the prior year
period. The decrease was primarily related to increased media spend, offset by increased net sales.
Adjusted EBITDA was $3.2 million for the second quarter of 2017, compared to $3.5 million in the second quarter
2016. 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.
First Six Months of 2017
Net sales increased 15.6% to $74.5 million for the six months ended June 30, 2017 compared to $64.5 million for the
prior year period. The Company’s core fresh refrigerated product offering grew 18.5% as compared to the same period in the prior
year. Net sales for the first six months of 2017 were driven by velocity gains and an increase in Freshpet fridge store locations
as compared to the prior year period.
Gross profit was $34.0 million, or 45.6% as a percentage of net sales for the six months ended June 30, 2017,
compared to $29.8 million, or 46.2% as a percentage of net sales, in the same period last year. For the six months ended June 30,
2017, Adjusted Gross Profit was $36.9 million, or 49.5%, as a percentage of net sales, compared to $31.9 million, or 49.5% 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 $38.5 million for the six months ended June 30, 2017
compared to $34.4 million in the prior year period. As a percentage of net sales, SG&A decreased to 51.7% for the six
months ended 2017 compared to 53.3% in the same period last year. Adjusted SG&A as a percentage of net sales increased to 49.0%
for the six months ended June 30, 2017 compared to 46.9% in the prior year period. The increase in SG&A is primarily due to the
Company’s planned increased media spend of $3.1 million compared to the prior year period. 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 Loss was $5.5 million for the six months ended June 30, 2017 compared to a net loss of $5.0 million for the
prior year period. The decrease was primarily related to increased media spend, partially offset by increased net sales.
Adjusted EBITDA was $5.1 million for the six months ended June 30, 2017, compared to $5.9 million in the prior year
period. 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.
Cash and Net Debt
As of June 30, 2017 the Company had cash and cash equivalents of $0.7 million; debt of $7.5 million and $28.0
million available under its Credit Facilities.
Outlook
For full year 2017, the Company increased its net sales outlook and reiterated its Adjusted EBITDA and Freshpet
Fridges outlook. The Company expects the following results:
- Net Sales to exceed $156 million, an increase of approximately 17% from the prior year, which reflects an increase from its
prior guidance of $153 million
- Adjusted EBITDA to exceed $16 million, a decrease of approximately 10% from the prior year, consistent with prior
guidance
- Freshpet Fridges of over 18,200, an increase of approximately 10% from the prior year, consistent with prior guidance
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 and Webcast
The Company will host a conference call and webcast with the executive management team to discuss these results
with additional comments and details today at 4:30 p.m. ET. The conference call webcast 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 today through August 21, 2017. North American listeners may dial (844) 512-2921 and international listeners may
dial (412) 317-6671 the passcode is 13666533.
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 several 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 because 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) |
| |
| |
June 30,
2017 |
|
|
December 31,
2016 |
|
| ASSETS |
|
|
|
|
|
|
|
| CURRENT ASSETS: |
|
|
|
|
|
|
|
| Cash and cash equivalents |
$ |
675,184 |
|
|
$ |
3,908,177 |
|
| Accounts receivable, net of allowance for doubtful accounts |
|
11,514,646 |
|
|
|
8,886,790 |
|
| Inventories, net |
|
7,686,101 |
|
|
|
5,402,735 |
|
| Prepaid expenses and other current assets |
|
1,382,285 |
|
|
|
1,045,651 |
|
| Total Current Assets |
|
21,258,216 |
|
|
|
19,243,353 |
|
| Property, plant and equipment, net |
|
101,658,434 |
|
|
|
101,493,080 |
|
| Deposits on equipment |
|
3,583,799 |
|
|
|
3,620,444 |
|
| Other assets |
|
2,239,533 |
|
|
|
2,094,339 |
|
| Total Assets |
$ |
128,739,982 |
|
|
$ |
126,451,216 |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
|
|
|
| Accounts payable |
|
7,579,513 |
|
|
|
6,884,155 |
|
| Accrued expenses |
|
5,073,975 |
|
|
|
4,531,139 |
|
| Accrued warrants |
|
632,072 |
|
|
|
253,391 |
|
| Borrowings under Credit Facilities |
|
7,500,000 |
|
|
|
7,000,000 |
|
| Total Current Liabilities |
$ |
20,785,560 |
|
|
$ |
18,668,685 |
|
| Total Liabilities |
$ |
20,785,560 |
|
|
$ |
18,668,685 |
|
| STOCKHOLDERS' EQUITY: |
|
|
|
|
|
|
|
Common stock — voting, $0.001 par value, 200,000,000 shares
authorized,
34,513,231 and 33,961,650 issued and outstanding on June 30, 2017 and
December 31, 2016, respectively |
|
34,513 |
|
|
|
33,961 |
|
| Additional paid-in capital |
|
305,180,732 |
|
|
|
299,477,706 |
|
| Accumulated deficit |
|
(197,260,823 |
) |
|
|
(191,729,136 |
) |
| Total Stockholders' Equity |
|
107,954,422 |
|
|
|
107,782,531 |
|
| Total Liabilities and Stockholders' Equity |
$ |
128,739,982 |
|
|
$ |
126,451,216 |
|
| FRESHPET INC. AND SUBSIDIARIES |
| |
| CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS |
| (Unaudited) |
| |
|
| |
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
| |
|
June 30, |
|
|
June 30, |
|
| |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| NET SALES |
|
$ |
39,968,983 |
|
|
$ |
33,002,209 |
|
|
$ |
74,482,918 |
|
|
$ |
64,455,910 |
|
| COST OF GOODS SOLD |
|
|
21,799,146 |
|
|
|
18,090,405 |
|
|
|
40,509,804 |
|
|
|
34,656,218 |
|
| GROSS PROFIT |
|
|
18,169,837 |
|
|
|
14,911,804 |
|
|
|
33,973,114 |
|
|
|
29,799,692 |
|
| SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES |
|
|
19,996,958 |
|
|
|
17,886,746 |
|
|
|
38,540,706 |
|
|
|
34,373,829 |
|
| LOSS FROM OPERATIONS |
|
|
(1,827,121 |
) |
|
|
(2,974,942 |
) |
|
|
(4,567,592 |
) |
|
|
(4,574,137 |
) |
| OTHER EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Expenses, net |
|
|
(614,586 |
) |
|
|
(93,768 |
) |
|
|
(556,909 |
) |
|
|
(134,637 |
) |
| Interest Expense |
|
|
(189,701 |
) |
|
|
(159,292 |
) |
|
|
(365,679 |
) |
|
|
(276,030 |
) |
| |
|
|
(804,287 |
) |
|
|
(253,060 |
) |
|
|
(922,588 |
) |
|
|
(410,667 |
) |
| LOSS BEFORE INCOME TAXES |
|
|
(2,631,408 |
) |
|
|
(3,228,002 |
) |
|
|
(5,490,180 |
) |
|
|
(4,984,804 |
) |
| INCOME TAX EXPENSE |
|
|
20,754 |
|
|
|
15,000 |
|
|
|
41,507 |
|
|
|
30,000 |
|
| NET LOSS |
|
|
(2,652,162 |
) |
|
|
(3,243,002 |
) |
|
|
(5,531,687 |
) |
|
|
(5,014,804 |
) |
| NET LOSS ATTRIBUTABLE TO COMMON |
|
$ |
(2,652,162 |
) |
|
$ |
(3,243,002 |
) |
|
$ |
(5,531,687 |
) |
|
$ |
(5,014,804 |
) |
| STOCKHOLDERS |
| NET LOSS PER SHARE ATTRIBUTABLE TO COMMON |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| STOCKHOLDERS |
| -BASIC |
|
$ |
(0.08 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.15 |
) |
| -DILUTED |
|
$ |
(0.08 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.15 |
) |
| WEIGHTED AVERAGE SHARES OF COMMON STOCK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OUTSTANDING USED IN COMPUTING NET LOSS PER |
| SHARE ATTRIBUTABLE TO COMMON |
| STOCKHOLDERS |
| -BASIC |
|
|
34,287,006 |
|
|
|
33,554,395 |
|
|
|
34,138,251 |
|
|
|
33,545,837 |
|
| -DILUTED |
|
|
34,287,006 |
|
|
|
33,554,395 |
|
|
|
34,138,251 |
|
|
|
33,545,837 |
|
| |
| FRESHPET INC. AND SUBSIDIARIES |
| |
| CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS |
| (Unaudited) |
| |
|
| |
For the Six Months Ended |
|
| |
June 30, |
|
| |
|
2017 |
|
|
|
2016 |
|
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
| Net loss |
$ |
(5,531,687 |
) |
|
$ |
(5,014,804 |
) |
| Adjustments to reconcile net loss to net cash flows provided by
operating activities: |
|
|
|
|
|
|
|
| Provision for loss on accounts receivable |
|
47,568 |
|
|
|
10,403 |
|
| Loss on disposal of equipment and deposits on equipment |
|
90,873 |
|
|
|
158,612 |
|
| Share-based compensation |
|
2,159,510 |
|
|
|
2,671,418 |
|
| Fair value adjustment for outstanding warrants |
|
378,681 |
|
|
|
28,175 |
|
| Change in reserve for inventory obsolescence |
|
104,572 |
|
|
|
128,112 |
|
| Depreciation and amortization |
|
6,195,619 |
|
|
|
4,237,677 |
|
| Amortization of deferred financing costs and loan discount |
|
81,502 |
|
|
|
72,069 |
|
| Changes in operating assets and liabilities |
|
|
|
|
|
|
|
| Accounts receivable |
|
(2,675,424 |
) |
|
|
(1,205,900 |
) |
| Inventories |
|
(2,387,938 |
) |
|
|
(1,139,291 |
) |
| Prepaid expenses and other current assets |
|
(336,634 |
) |
|
|
(562,498 |
) |
| Other assets |
|
(147,201 |
) |
|
|
(160,372 |
) |
| Accounts payable |
|
1,369,961 |
|
|
|
1,534,916 |
|
| Accrued expenses |
|
542,836 |
|
|
|
2,685,756 |
|
| Net cash flows provided by (used in) operating activities |
|
(107,762 |
) |
|
|
3,444,273 |
|
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
| Proceeds from maturities of short-term investments |
|
— |
|
|
|
3,250,000 |
|
| Acquisitions of property, plant and equipment, software and deposits
on equipment |
|
(7,169,300 |
) |
|
|
(21,248,425 |
) |
| Proceeds from sale of equipment |
|
— |
|
|
|
10,672 |
|
| Net cash flows used in investing activities |
|
(7,169,300 |
) |
|
|
(17,987,753 |
) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
| Exercise of options to purchase common stock |
|
3,544,069 |
|
|
|
233,156 |
|
| Proceeds from borrowings under Credit Facilities |
|
2,000,000 |
|
|
|
8,000,000 |
|
| Repayment of borrowings under Credit Facilities |
|
(1,500,000 |
) |
|
|
— |
|
| Net cash flows provided by financing activities |
|
4,044,069 |
|
|
|
8,233,156 |
|
| NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
(3,232,993 |
) |
|
|
(6,310,324 |
) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |
|
3,908,177 |
|
|
|
8,029,413 |
|
| CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ |
675,184 |
|
|
$ |
1,719,089 |
|
| |
| 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 |
|
|
Six Months
Ended
|
|
| |
|
June 30, |
|
|
June 30,
|
| |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| Gross Profit (as reported) |
|
$ |
18,170 |
|
|
$ |
14,912 |
|
|
$ |
33,973 |
|
|
$ |
29,800 |
|
| Depreciation expense (a) |
|
|
1,448 |
|
|
|
740 |
|
|
|
2,882 |
|
|
|
1,419 |
|
| Plant start-up expenses and processing (b) |
|
|
— |
|
|
|
430 |
|
|
|
— |
|
|
|
668 |
|
| Adjusted Gross Profit |
|
$ |
19,618 |
|
|
$ |
16,082 |
|
|
$ |
36,855 |
|
|
$ |
31,887 |
|
| Adjusted Gross Profit as a % of Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted Gross Profit |
|
$ |
19,618 |
|
|
$ |
16,082 |
|
|
$ |
36,855 |
|
|
$ |
31,887 |
|
| Net Sales |
|
$ |
39,969 |
|
|
$ |
33,002 |
|
|
$ |
74,483 |
|
|
$ |
64,456 |
|
| Adjusted Gross Profit as a % of Net Sales |
|
|
49.1 |
% |
|
|
48.7 |
% |
|
|
49.5 |
% |
|
|
49.5 |
% |
| |
|
| |
|
(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 |
|
|
Six Months
Ended
|
|
| |
|
June 30, |
|
|
June
30,
|
| |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| SG&A expenses (as reported) |
|
$ |
19,997 |
|
|
$ |
17,887 |
|
|
$ |
38,541 |
|
|
$ |
34,374 |
|
| Non-cash stock based compensation (a) |
|
|
1,163 |
|
|
|
1,609 |
|
|
|
2,053 |
|
|
|
2,566 |
|
| Leadership transition expenses (b) |
|
|
— |
|
|
|
1,580 |
|
|
|
— |
|
|
|
1,580 |
|
| Adjusted SG&A |
|
$ |
18,834 |
|
|
$ |
14,698 |
|
|
$ |
36,488 |
|
|
$ |
30,228 |
|
| Adjusted SG&A Expenses as a % of Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted SG&A Expenses |
|
$ |
18,834 |
|
|
$ |
14,698 |
|
|
$ |
36,488 |
|
|
$ |
30,228 |
|
| Net Sales |
|
$ |
39,969 |
|
|
$ |
33,002 |
|
|
$ |
74,483 |
|
|
$ |
64,456 |
|
| Adjusted SG&A as a % of Net Sales |
|
|
47.1 |
% |
|
|
44.5 |
% |
|
|
49.0 |
% |
|
|
46.9 |
% |
| |
a) Represents non-cash stock based
compensation expense.
|
| |
b) Represents costs detailed within our former
Chief Executive Officer’s separation agreement as well as
incremental costs associated with leadership transition.
|
| 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 |
|
|
Six Months
Ended
|
|
| |
|
June 30, |
|
|
June 30,
|
| |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| |
|
(Dollars in thousands) |
|
| Net loss |
|
$ |
(2,652 |
) |
|
$ |
(3,243 |
) |
|
$ |
(5,532 |
) |
|
$ |
(5,015 |
) |
| Depreciation and amortization |
|
|
3,146 |
|
|
|
2,166 |
|
|
|
6,195 |
|
|
|
4,237 |
|
| Interest expense |
|
|
190 |
|
|
|
159 |
|
|
|
366 |
|
|
|
276 |
|
| Income tax expense |
|
|
21 |
|
|
|
15 |
|
|
|
42 |
|
|
|
30 |
|
| EBITDA |
|
$ |
705 |
|
|
$ |
(903 |
) |
|
$ |
1,071 |
|
|
$ |
(472 |
) |
| Loss on disposal of equipment |
|
|
85 |
|
|
|
15 |
|
|
|
91 |
|
|
|
159 |
|
| Launch expense (a) |
|
|
675 |
|
|
|
588 |
|
|
|
1,430 |
|
|
|
1,310 |
|
| Plant start-up expenses and processing (b) |
|
|
— |
|
|
|
430 |
|
|
|
— |
|
|
|
668 |
|
| Non-cash stock based compensation (c) |
|
|
1,229 |
|
|
|
1,665 |
|
|
|
2,159 |
|
|
|
2,671 |
|
| Warrant fair valuation (d) |
|
|
487 |
|
|
|
86 |
|
|
|
379 |
|
|
|
28 |
|
| Leadership transition expenses (e) |
|
|
— |
|
|
|
1,580 |
|
|
|
— |
|
|
|
1,580 |
|
| Adjusted EBITDA |
|
$ |
3,181 |
|
|
$ |
3,461 |
|
|
$ |
5,130 |
|
|
$ |
5,944 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 start-up 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) Leadership Transition Expenses represent
costs detailed within our former Chief Executive Officer’s separation
agreement as well as incremental costs associated with leadership transition. |
CONTACT ICR Katie Turner 646-277-1228 katie.turner@icrinc.com Michael Fox 203-682-8218 Michael.fox@icrinc.com
