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Amplify Snack Brands, Inc. Reports First Quarter 2016 Financial Results

AUSTIN, Texas, May 02, 2016 (BUSINESS WIRE) -- Amplify Snack Brands, Inc. (“Amplify” or the “Company”) BETR, +0.00% today reported financial results for the three months ended March 31, 2016.

  • Net sales were $54.3 million, up 22.7% year-over-year
  • Gross profit was $28.4 million, representing 52.3% of net sales
  • GAAP net income was $8.4 million, or $0.11 per fully diluted share
  • Non-GAAP adjusted net income was $10.1 million, or $0.13 per fully diluted share
  • Adjusted EBITDA was $19.6 million, representing 36.0% of net sales

“We started 2016 with continued and excellent momentum,” said Tom Ennis, Amplify’s President and Chief Executive Officer. “Our performance was driven by distribution gains and strong velocity of the SkinnyPop brand across sales channels and we are off to a great start with our national launch of the Paqui brand. As we have historically done during our first fiscal quarter, we made significant and planned trade promotion investments to support both the SkinnyPop and Paqui brands, resulting in robust productivity during the period while also driving increased trial and brand awareness in both new and existing distribution channels. Based on these positive financial results and the momentum of the existing business, we are raising our financial outlook for the year.”

Three Months Ended March 31, 2016

Net sales increased 22.7% to $54.3 million compared to $44.3 million for the three months ended March 31, 2015. The increase in net sales reflects increased distribution and continued strong brand velocity across sales channels for the SkinnyPop brand, as well as new distribution of the Paqui brand.

Gross profit was $28.4 million, or 52.3% of net sales, compared to $24.4 million, or 55.1% of net sales for the three months ended March 31, 2015. Gross margin for the three months ended March 31, 2016 reflects a higher level of planned trade promotional activity, partially offset by improved rates on materials and ingredients. Consistent with the first quarter last year, the Company spent a significant amount on trade promotions for the SkinnyPop brand. The Company also made the strategic decision to provide additional trade support for the initial national launch of the Paqui brand at select retail accounts.

Adjusted EBITDA, which is a non-GAAP financial measure used by the Company that makes certain adjustments to net income calculated under GAAP, increased 1.7% to $19.6 million from $19.2 million for the three months ended March 31, 2015, primarily reflecting higher net sales and gross profit, and largely offset by higher Adjusted SG&A. The increase in Adjusted SG&A was primarily driven by infrastructure investments in personnel and systems, increased consumer marketing activities to drive brand awareness and trial, and new costs associated with operating as a public company. As a percentage of net sales, Adjusted EBITDA was 36.0% compared to 43.4% in the three months ended March 31, 2015.

GAAP net income increased 71.3% to $8.4 million, or $0.11 per fully diluted share, compared to net income of $4.9 million, or $0.07 per fully diluted share, for the three months ended March 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 $10.1 million, or $0.13 per fully diluted share, compared to adjusted net income of $10.0 million for the three months ended March 31, 2015, or $0.13 per fully diluted share.

Balance Sheet and Cash Flow

As of March 31, 2016, the Company had cash and cash equivalents of $7.4 million and net availability under its revolving line of credit of $25.0 million. Net debt, as defined under the Company’s credit facility, represents outstanding indebtedness less cash and cash equivalents, was $191.2 million as of March 31, 2016, compared to $182.5 million as of December 31, 2015. The increase was attributable to a decrease in cash associated with a $23.0 million payment of the founder contingent compensation liability that was made during the three months ended March 31, 2016. The Company expects to pay the remaining estimated $2.2 million founder contingent compensation liability once the tax gross-up amount is determined upon the completion of our final 2015 tax return. Amplify’s leverage ratio as calculated under the Company’s credit facility increased to 2.5x trailing twelve month EBITDA at March 31, 2016, up from 2.4x at December 31, 2015.

Acquisition of Boundless Nutrition

The Company is pleased to announce the strategic acquisition of Boundless Nutrition, a better-for-you snack food company, which closed on Friday, April 29, 2016. Based in Austin, Texas, Boundless Nutrition manufactures and distributes its broad range of Oatmega® bars and Perfect Cookie™ products in the natural, grocery, mass and foodservice sales channels across the U.S. Boundless Nutrition generated net sales of approximately $7.0 million over the last twelve months ending March 31, 2016, representing growth of over 100% on a year-over-year basis. The Company expects the acquisition to be accretive to EPS in 2016.

“We are excited to enhance our existing brand portfolio with the addition of the Boundless Nutrition portfolio,” commented Mr. Ennis. “We have been attracted to the size and growth rates of the snack bar category for some time and the Boundless Nutrition brands have shown very strong momentum as consumers are increasingly looking for great tasting, convenient, on-the-go protein snack options. Boundless Nutrition’s brands are in the early stages of their growth cycle, which is being driven by the products’ delicious flavor profile, distinct brand positioning, high-quality ingredients and blue-chip channel partners. We believe Amplify has the...


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