Inventure Foods, Inc., a specialty food maker and marketer serving the vending industry in addition to other retail channels, reported record financial results for the fourth quarter and year ending Dec. 25, 2010, highlighted by the company's continued brand investment and broader product distribution.
Inventure generated net revenue for the quarter of $33.6 million, an increase of 20.3 percent versus the prior year fourth quarter, which was attributable to strong gains in both the Snack and Rader Divisions. Snack Division revenues for the quarter were $20.7 million, an increase of 8.9 percent compared to the prior year quarter. Boulder Canyon Natural Foods™ led the way with sales growth of 62.8 percent, while private label increased 16.7 percent and T.G.I. Friday's® experienced a return to growth, up 3.6 percent for the quarter. These gains were partially offset by continued softness in Burger King™, which was down 8.8 percent for the quarter.
The Rader Division, which includes Jamba® All Natural Smoothies, was up 44.5 percent for the quarter. Excluding Jamba®, Rader Division sales increased 35.6 percent for the quarter, reflecting continued volume growth and a price increase. Jamba® net revenues were $0.8 million ($1.2 million gross), which was in line with company expectations as this category typically experiences a holiday slowdown during the months of November and December.
Consolidated net income for the quarter was $0.6 million, or $0.03 per fully diluted share, includes a charge for the write-off of $0.6 million of old trademarks. Excluding the write-off, EPS would have been $0.05 per fully diluted share, compared to $0.03 in 2009.
Consolidated adjusted EBITDA, adjusted for the trademark write-offs, for the quarter was $2.8 million, or 8.2 percent of net revenue, an increase of 39.2 percent and 110 basis points compared to the fourth quarter of last year.
Other fourth quarter financial highlights include:
- Gross profit of $7.1 million, or 21.2 percent of revenues, up 52.9 percent and 450 basis points compared to last year. Key drivers of the increase included volume growth at Rader Farms and the impact of the Rader Farms price increase during the quarter.
- Selling, general and administrative (SG&A) expenses, excluding the impact of the trademark write-off, were $5.4 million, or 16.2 percent of revenues, an increase of $1.8 million and 330 basis points compared to the year-ago period. The increase was primarily due to investments in both Boulder Canyon™ and Jamba®, including additional hiring and increased marketing and sampling expenses.
Net revenues for 2010 were $134.0 million, an increase of 10.7 percent compared to 2009. Snack division revenues were $85.5 million, an increase of 6.1 percent from last year. Improved results included an increase in Boulder Canyon™ revenues of 61.6 percent, while T.G.I. Friday's® was virtually flat and Burger King™ was down 8.2 percent for the year.
Rader division revenues were $48.5 million, an increase of 19.9 percent from last year. Excluding Jamba®, Rader revenues for the year were up 11.4 percent, reflecting continued growth in both existing and new customers. Jamba® revenues were $3.4 million ($4.9 million gross) for the year, which exceeded all internal expectations.
Consolidated net income for the year was $4.5 million, or $0.24 per fully diluted share, compared to $3.8 million, or $0.21 per fully diluted share, in 2009. Excluding the trademark write-offs, EPS was $0.26 on a fully diluted basis.
Consolidated adjusted EBITDA totaled $11.9 million, an increase of 12.6 percent over last year, despite a $4.7 million increase in SG&A compared to 2009.
Other full-year financial highlights include:
- Gross profit of $28.8 million, or 21.5 percent of revenues, an increase of 20.9 percent and 180 basis points compared to last year.
- SG&A Expenses, excluding the trademark write-offs, were $20.8 million, or 15.5 percent of revenues, an increase of $4.1 million, or 170 basis points compared to the prior year.
"It was a great team effort to post another record year of performance and we have a number of solid growth initiatives in place that should further strengthen our position for the future," said Terry McDaniel, CEO of Inventure Foods in a prepared statement. "Boulder Canyon™ is showing exceptional growth as we continue to accelerate investment in this brand. We recently announced plans to rollout Jamba® nationally and are meeting with a number of customers along the East Coast. We have also stabilized T.G.I. Friday's®, which continues to be a very important profit contributor for the company."
McDaniel continued: "2010 was an eventful year. Our Rader business is expanding through new products and new distribution in North America and through ongoing growth within our current customer base. We also launched our most exciting new product to date – the Jamba® All Natural Smoothies make-at-home kit – and achieved gross sales of almost $5.0 million during our initial rollout, which covered less than half the year in only a limited number of markets. We are off to a great start in 2011 as this category historically picks up at this time of year. Although our costs associated with our investment in the national Jamba® All Natural Smoothies roll out may impact total company earnings in 2011, we expect Jamba® to drive continued sales and earnings growth in the long-term. On the cost side, we were able to achieve approximately $2.6 million in savings during the year by maintaining our focus on expense control, which will ultimately fund a number of our investments."
"Inventure has successfully concluded its fourth consecutive year of revenue and earnings growth. During the past four years we experienced a 91.9 percent increase in net revenue and a 308.7 percent increase in net income. During the year, revenues of our Healthy/Natural portfolio of products, which consist of Boulder Canyon™, Rader Farms®, and Jamba® increased by 26.6 percent. We remain focused on making further investments in brand support, people, plants, and new product development, which will help drive growth and shareholder value into the future."