Inventure Group Inc. Reports Operating Results (10-Q)
Inventure Foods Inc. has a market cap of $77.9 million; its shares were traded at around $4.3229 with a P/E ratio of 16.1 and P/S ratio of 0.6. Inventure Foods Inc. had an annual average earning growth of 82.3% over the past 5 years.
Highlight of Business Operations: Net revenues increased 16.7%, or $5.2 million, to $36.6 million for the quarter ended March 26, 2011 compared with net revenues of $31.4 million for the first quarter in 2010. Snack segment net revenues were $21.7 million, up $2.4 million and 12.4% from prior year. Snack segment growth was driven by an increase of 44.7% for Boulder Canyon as a result of category growth, new distribution, success of new items and investment in marketing and people to support the brand and an increase of 17.6% for T.G.I.Fridays® as a result of volume growth. Total snack segment pounds sold were up 6.6% for the quarter. Berry segment net revenues were $14.9 million, an increase of $2.8 million or 23.6%. The berry segment revenue increase was a result of strong volume growth in both existing and new customers and the successful launch of our Jamba® All Natural Smoothies make-at-home kits. Excluding Jamba® sales, the berry segment was up 6.7%. Total berry segment pounds sold were up 20% for the quarter.
Gross profit for 2011 increased $1.1 million or 15.8% to $7.9 million, and decreased as a percentage of net revenues to 21.6% for the quarter ended March 26, 2011 as compared to 21.8% in the first quarter of 2010. Snack segment gross profit of $4.4 million increased $1.3 million or 41.6% and increased as a percentage of net revenues to 20.1% as compared to 16.0% in 2010. The increase in snack gross profit dollars was primarily driven by strong volume growth of more profitable brands and channels and a 40% increase in pounds driven through the Bluffton facility. The berry segment gross profit of $3.6 million was down $0.2 million or 5.4%, and decreased as a percentage of net revenues to 23.9% from 31.2%. The decrease in gross profit dollars for the berry segment was attributable to the impact of higher cost of berries relative to the prior year.
Net income for the quarter ended March 26, 2011 was $1.4 million, representing a $0.2 million or 12.8% increase when compared to $1.2 million for the prior year quarter as a result of the factors discussed above. The net income for the first quarter of 2011 equated to $0.08 per basic share and diluted share, compared with $0.07 per basic and diluted share in the first quarter of 2010.
Net cash provided by operating activities was $4.1 million for the quarter ended March 26, 2011 and $5.0 million for the quarter ended March 27, 2010. The overall $0.9 million decrease was primarily a result of cash used to build inventory in the first quarter of 2011 of $0.3 million compared to cash provided by inventories of $3.1 million in the same period in 2010. The $3.4 million year over year increase in inventory was the primary driver of the $2.6 million year over year increase in accounts payable and accrued liabilities. Our net revenue growth resulted in increases in accounts receivable of $1.8 million in the first quarter of 2011 compared to $0.9 million in the first quarter of 2010.
Net cash used in investing activities, all representing capital expenditures, was $2.5 million in the first quarter of 2011 compared to $1.0 million in the first quarter of 2010. Capital expenditures of $2.5 million in 2011 relate to the purchase of manufacturing equipment of $1.9 million, mostly for new kettles and packaging equipment at our Goodyear facility, building improvements of $0.3 million, and furniture and office equipment of $0.3 million. Capital expenditures of $1.0 million in the first quarter of 2010 relates to manufacturing equipment of $0.8 million, primarily relating to the installation of the Jamba line, and building improvements of $0.2 million. In 2011, we plan to spend approximately $9.0 million in capital expenditures, primarily at our manufacturing facilities. Capital expenditures are funded primarily by net cash flow from operating activities, cash on hand, and available credit from our credit facility.
Net cash used in financing activities for the first quarter of 2011 was $1.7 million compared to $3.9 million in the first quarter of 2010. The $2.2 million decrease in net cash used in financing activities was a result of borrowing $2.1 million less on our revolving line of credit year over year. The reduction of borrowings on our credit facility is due to additional cash generated from operations.
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