PHOENIX, March 30, 2017 (GLOBE NEWSWIRE) -- Inventure Foods, Inc. (NASDAQ:SNAK) (“Inventure Foods” or the “Company”), a leading specialty food marketer and manufacturer, today reported financial results for the fourth quarter and fiscal year ended December 31, 2016.
Fourth Quarter 2016 Highlights:
- Boulder Canyon net revenues increased 7.9%
- Rader Farms branded net revenues increased 31.7%
Fiscal Year 2016 Highlights:
- Boulder Canyon net revenues increased 3.1%
- Rader Farms branded net revenues increased 69.0%
- Snack products segment gross margin increased 100 basis points to 16.3%
(All comparisons above are to the fourth quarter and fiscal 2015)
“In 2016, we made progress on our efforts to strengthen our business to better position the Company to achieve the revenue and profit growth we believe the Company is capable of achieving over the long term,” said Terry McDaniel, Chief Executive Officer of Inventure Foods. “On an annual basis, we benefited from increased distribution and velocity gains for our key Boulder Canyon and Radar Farms brands. At the same time, we took decisive steps during the year to manage our business despite the challenges we faced.”
Mr. McDaniel continued, “As we announced last week, we are pleased to have completed an important first step in our ongoing strategic and financial review process to increase shareholder value with the sale of the Fresh Frozen Foods business. We believe many of the operational issues that we experienced in 2016 are behind us and we are diligently working to begin to turnaround our consolidated financial performance during 2017.”
Fourth Quarter Fiscal 2016
Consolidated net revenues decreased 7.7% to $63.4 million, compared to $68.7 million in the fourth quarter of the prior year period. Frozen products segment net revenues decreased 11.4% and snack products segment net revenues decreased 2.5%, which is discussed further under “Segment Review” below.
Gross profit was $5.8 million, compared to $7.3 million in the fourth quarter of 2015. This decrease in gross profit was attributable to a $0.2 million decrease in the frozen products segment and a $1.3 million decrease in the snack products segment, which is discussed further under “Segment Review”.
Selling, general and administrative (“SG&A”) expenses were $9.2 million for the fourth quarter of 2016. Excluding $0.1 million of product recall expenses recorded in SG&A in the fourth quarter of 2015, adjusted SG&A expenses* increased $0.3 million, and as a percentage of net revenues increased 160 basis points to 14.5% compared to 12.9% in the fourth quarter of 2015. This increase is primarily a result of increased legal fees of approximately $0.3 million associated with the Company’s previously announced strategic and financial review and other legal matters. During the fourth quarter of 2016, the Company recorded an impairment of the Fresh Frozen Foods trademark of $7.1 million and an impairment to goodwill related to the Fresh Frozen business of $8.3 million. The Company conducts impairment tests in the fourth quarter each year as part of its annual review and the Fresh Frozen related impairment charges reflect the decrease in sales of the brand since the previously announced voluntary product recall.
Interest expense was $2.8 million for the fourth quarter of 2016, a decrease of $0.1 million, compared to $2.9 million in the prior-year period as a result of bridge loan and debt extinguishment costs recorded in the prior year period, partially offset by increased borrowings and higher interest rates in the fourth quarter of 2016.
Income tax expense was $4.7 million for the fourth quarter of 2016 compared to an income tax benefit of $2.1 million in the prior-year period. During the fourth quarter of 2016, the Company recorded a valuation allowance of $12.6 million upon determining it is more likely than not that the deferred tax assets will not be realized.
Net loss was $(26.4) million, or $(1.34) diluted loss per share, for the fourth quarter of 2016, compared to net loss of $(2.5) million, or $(0.13) diluted loss per share, for the prior year period. Adjusted net loss* was $(3.9) million, or $(0.20) adjusted diluted loss per share* for the fourth quarter of 2016, compared to adjusted net loss* of $(1.6) million, or $(0.08) adjusted diluted loss per share*, for the fourth quarter of 2015.
Adjusted EBITDA* for the fourth quarter of 2016 was $(1.6) million, compared to adjusted EBITDA* of $0.6 million for the fourth quarter of 2015.
