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Freshpet, Inc. Reports First Quarter 2016 Results

May 04, 2016 (GLOBE NEWSWIRE via COMTEX) --

First Quarter Net Sales Increased Approximately 16%

Company Reiterates 2016 Guidance

SECAUCUS, N.J., May 04, 2016 (GLOBE NEWSWIRE) -- Freshpet, Inc. ("Freshpet" or the "Company") FRPT, +0.00% today reported financial results for its first quarter ended March 31, 2016.

First Quarter 2016 Financial Highlights Compared to Prior Year Period

  • Net sales were $31.5 million, up 16.3%
  • Adjusted EBITDA was $2.5 million, up 23.7%
  • Freshpet Fridges increased 10.1% to 15,429 from 14,019

"We are pleased with our start to 2016 and the significant progress we made across key operational and financial business metrics," said Richard Thompson, Freshpet's Chief Executive Officer. "In the first quarter we generated solid net sales and adjusted EBITDA growth as we continued to benefit from increased velocity per fridge and increased store count. We expect our efforts to drive greater leverage across our business model, improve profitability and enhance long-term shareholder value as we progress through 2016."

First Quarter 2016

Net sales increased 16.3% to $31.5 million for the first quarter of 2016. Net sales for the quarter were driven by velocity gains across all retail sales channels and the increase of Freshpet Fridge store locations, which grew to 15,429 as of March 31, 2016, an increase of 10.1% as compared to the prior year period.

Gross profit was $14.9 million, or 47.3% of net sales, compared to $13.3 million, or 49.0% of net sales, in the same period last year. Non-capitalizable start-up costs associated with the expansion of our Freshpet Kitchens reduced gross margin by approximately 80 basis points in the first quarter of 2016.

Selling, general and administrative expenses ("SG&A") were $16.5 million compared to $15.7 million in the same period in the prior year. As a percentage of net sales, SG&A decreased from 57.9% for the three months ended March 31, 2015 to 52.4% in the current year period. After adjusting $1.0 million and $1.8 million for non-cash items related to share-based compensation in the first quarter of 2016 and 2015, respectively, SG&A decreased as a percentage of net sales to 49.4% in the first quarter of 2016 compared to 51.3% of net sales in the first quarter of 2015.

Net loss was $1.8 million compared to a net loss of $2.6 million for the same period in 2015.

Adjusted EBITDA was $2.5 million for the first quarter of 2016, compared to $2.0 million in the same period in 2015.

Cash and Net Debt

During the first quarter of 2016, the Company generated cash of $2.0 million from operations compared to $1.1 million during the same period in 2015. As of March 31, 2016, the Company had cash and cash equivalents of $0.3 million and a line of credit for $40 million. The Company expects to draw $8 to $10 million by the third quarter of 2016, which is expected to be repaid in the first quarter of 2017. The $11.0 million decrease in cash, cash equivalents and short term investments from December 31, 2015 is primarily due to the capital expenditures related to the expansion of the Company's Freshpet Kitchens in Bethlehem, Pennsylvania. The Company expects to invest up to $7.0 million during the remainder of 2016 to complete that project on time and on budget.

Outlook

The Company reiterated its guidance for 2016. For full year 2016, the Company expects the following results compared to the prior year:

  • To exceed net sales of $137 million, an increase of approximately 18%
  • To exceed Adjusted EBITDA of $18.5 million, an increase of approximately 67%
  • To exceed Freshpet fridges of 16,600, an increase of approximately 10%

Conference Call and Webcast

The Company will host a conference call with members of the executive management team to discuss these results with additional comments and details. The conference call is scheduled to begin at 4:30 p.m. ET on Wednesday, May 4, 2016. To participate on the live call listeners in North America may dial (844) 452-6821 and international listeners may dial (724) 924-4985; the passcode is 94168308.

In addition, the call will be broadcast live over the Internet hosted at the "Investor" section of the Company's website at www.freshpet.com and...


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