PHOENIX, Aug. 5, 2015 (GLOBE NEWSWIRE) -- Inventure Foods, Inc., a leading specialty food marketer and manufacturer, today reported financial results for the second quarter and six months ended June 27, 2015.
Second Quarter Fiscal 2015
Consolidated net revenues decreased 7.6% to $66.4 million compared to $71.9 million in the prior year period. An increase of 13.7% in snack segment net revenues, was offset by a 20.9% decrease in frozen segment net revenues. Excluding the Fresh Frozen business, consolidated net revenues increased 4.9% and the frozen segment net revenues decreased 3.2%.
Gross profit decreased $5.4 million to $8.0 million, or 12.1% as a percentage of net revenues, compared to $13.5 million, or 18.7% as a percentage of net revenues, in the second quarter of 2014. This was primarily due to a gross profit decline of $4.5 million and $0.9 million in the Company's frozen and snack segments, respectively.
Selling, general and administrative ("SG&A") expenses were $10.2 million for the second quarter of 2015, compared to $9.0 million in the prior year period. Excluding the impact of the product recall*, which primarily reflects incremental professional fees, SG&A expenses were $9.0 million, consistent with the prior year period. As a percentage of net revenues, SG&A expenses increased 90 basis points to 13.5% in the second quarter of 2015, compared to 12.6% in the second quarter of 2014. This was primarily the result of increased sales and marketing expenses.
Net loss was $(2.0) million, or $(0.10) loss per share, for the second quarter of 2015, compared to net income of $2.5 million, or $0.12 diluted earnings per share, for the prior year period. Excluding the costs associated with the product recall*, adjusted net loss* was $(0.5) million, or $(0.02) loss per share, for the second quarter of 2015, compared to adjusted net income* of $2.1 million, or $0.11 diluted earnings per share, for the second quarter of 2014. Net income and adjusted net income* have not been adjusted for the negative impact to earnings associated with sales interruptions from the product recall of approximately $1.5 million, pre-tax, and the higher kettle chip production cost of $1.2 million, pre-tax, as a result of using outsourced production capabilities in order to meet demand.
Adjusted EBITDA* was $2.0 million, for the second quarter of 2015, compared to $5.9 million in the prior year period. Adjusted net income* and Adjusted EBITDA* for the second quarter of 2014 includes the removal of a $0.5 million pre-tax contingent consideration adjustment related to the Fresh Frozen acquisition.
Segment Review
The Company has two reportable segments: frozen and snack. The frozen product segment includes frozen fruits, vegetables and beverages, for sale primarily to groceries, club stores and mass merchandisers. The snack segment includes manufactured potato chips, kettle chips, potato crisps, potato skins, pellet snacks, sheeted dough products, cereal and extruded product for sale primarily to snack food distributors and retailers.
Frozen Segment: Net revenues during the second quarter of 2015 decreased 20.9% to $34.9 million, compared to $44.1 million in the prior year period, reflecting reduced sales of the Company's frozen vegetable products. Excluding the Fresh Frozen business, net revenues for the second quarter of 2015 decreased 3.2%. Gross profit for the second quarter of 2015 was $2.6 million. Excluding the Fresh Frozen business, gross profit was $3.2 million, compared to $5.3 million in the prior year period, and gross margin as a percentage of revenues decreased 660 basis points to 11.0%, compared to 17.6% in the prior year period.
Net revenues during the six months ended June 27, 2015 were $86.2 million, a decrease of 1.8%, from $87.8 million in the prior year period. Excluding the Fresh Frozen business, net revenues for the first six months of 2015 increased 8.7%. Gross profit for the six months ended June 27, 2015 was $(4.9) million. Excluding the Fresh Frozen business, gross profit for the first six months of 2015 was $9.6 million, compared to $10.2 million in the prior year period, and gross margin as a percentage of revenue decreased to 14.8%, compared to 17.3% in the prior year, primarily as a result of the increased slotting and promotional trade spend investments as well as increased freight cost.
Snack Segment: Net revenues during the second quarter increased 13.7% to $31.5 million, compared to $27.7 million in the prior year period, reflecting increased sales of Boulder Canyon and premium private label products. Gross profit was $5.4 million, compared to $6.4 million in the prior year period. Gross margin as a percentage of revenue decreased to 17.2%, compared to 22.9% in the prior year period, primarily as a result of $1.2 million of increased costs to produce certain kettle chips due to capacity constraints at the Company's Goodyear, Arizona facility.
Net revenues during the six months ended June 27, 2015 were $57.8 million, an increase 12.0% from $51.6 million in the prior year period. Gross profit for the six months ended June 27, 2015 was $9.2 million, compared to $10.1 million in the prior year period. Gross margin as a percentage of revenue decreased to 16.0% compared to 19.5% in the prior year, primarily as a result of $1.6 million of increased costs to produce certain kettle chips due to capacity constraints at the Company's Goodyear, Arizona facility. Full report here.
