PARSIPPANY, N.J., April 28, 2016 /PRNewswire/ -- Pinnacle Foods Inc. reported its financial results for the first quarter ended March 27, 2016 and reaffirmed its guidance for adjusted diluted earnings per share of $2.08 to $2.13 for the year, representing growth versus year-ago of approximately 10% at the midpoint.
Consolidated net sales in the first quarter of 2016 increased 13.4% versus year-ago, largely reflecting the benefits of the Boulder Brands acquisition, which closed on January 15, 2016, and growth of the Birds Eye Frozen segment, partially offset by lower sales of the Duncan Hines Grocery segment due, in part, to the impact of significant new product introductory expenses.
GAAP diluted earnings per share in the first quarter of 2016 totaled $0.21, including Boulder Brands acquisition-related fees and integration expenses of $0.21. Excluding these expenses and other items affecting comparability, which are described in the accompanying reconciliation tables, diluted earnings per share advanced 2.6% to $0.40, compared to $0.39 in the year-ago period.
First Quarter Consolidated Results
Net sales in the first quarter of 2016 increased 13.4% to $754.3 million, compared to net sales of $665.3 million in the year-ago period. This growth reflected a 15.2% benefit from the Boulder Brands acquisition and a 0.1% increase from net price realization, including the unfavorable impact on net pricing in the current quarter of higher new product introductory expenses. Partially offsetting this growth were lower volume/mix of 1.7% and unfavorable foreign currency translation of 0.2%.
Net sales for the Company's North America Retail business, which is comprised of the Birds Eye Frozen and Duncan Hines Grocery segments, decreased 1.0% in the first quarter of 2016 to $573.2 million, compared to $579.1 million in the year-ago period, reflecting lower volume/mix of 1.0% and unfavorable foreign currency translation of 0.3%, partially offset by slightly higher net price realization of 0.3%, which included the aforementioned impact of higher new product introductory expenses.
Gross profit in the first quarter of 2016 increased 15.6% versus year-ago to $198.6 million, or 26.3% of net sales, compared to gross profit of $171.7 million, or 25.8% of net sales, in the year-ago period. Excluding items affecting comparability, gross profit advanced 17.4% to $205.7 million and, as a percentage of net sales, gross profit margin expanded by approximately 90 basis points to 27.3%. This improvement largely reflected the benefits of productivity, improved product mix, including the impact of the Boulder Brands acquisition, and slightly favorable net price realization in spite of significantly higher new product introductory expenses. Partially offsetting these benefits were input cost inflation and higher depreciation expense.
Earnings before interest and taxes (EBIT) in the first quarter of 2016 totaled $80.3 million, compared to EBIT of $88.5 million in the year-ago period. Excluding items affecting comparability, EBIT in the first quarter advanced 11.8% to $106.8 million, compared to $95.5 million in the year-ago period, largely reflecting the strong growth in gross profit, partially offset by higher marketing investment and administrative expenses, driven by the Boulder Brands acquisition.
Adjusted EBITDA in the first quarter of 2016 grew 13.2% to $131.7 million, compared to $116.3 million in the first quarter of 2015. Adjusted EBITDA is a Non-GAAP measure defined below under "Non-GAAP Financial Measures," and is reconciled to net earnings in the tables that accompany this release.
Net interest expense for the quarter increased 47.0% to $31.6 million, compared to $21.5 million in the year-ago period, largely driven by additional debt issued to finance the Boulder Brands acquisition and, to a lesser extent, higher interest rates on base Pinnacle. The effective tax rate for the quarter, excluding items affecting comparability, declined to 37.0%, compared to 38.0% in the year-ago period, due to increased benefits from the Domestic Production Activities Deduction and federal and state tax credits, partially offset by the impact of a higher tax structure for Boulder Brands.
GAAP net earnings in the first quarter declined to $24.8 million, compared with net earnings of $41.5 million in the year-ago period. Excluding items affecting comparability, net earnings increased 3.3% to $47.4 million, compared to $45.9 million in the year-ago period, while diluted earnings per share advanced 2.6% to $0.40, compared with $0.39 in the year-ago period.
Net cash provided by operating activities totaled $77 million in the first quarter of 2016, compared to $71 million in the prior year quarter. Full report.
