Inventure Group Inc. (SNAK, Financial) filed Quarterly Report for the period ended 2012-03-31.
Inventure Foods has a market cap of $101.8 million; its shares were traded at around $6.67 with a P/E ratio of 35 and P/S ratio of 0.6. Inventure Foods had an annual average earning growth of 14.5% over the past 10 years.
Selling, general and administrative (SG&A) expenses were $6.5 million or 13.8% of net revenues for the quarter ended March 31, 2012, an increase of $1.0 million, but down 120 basis points from 15.0% of net revenue compared to the first quarter of 2011. The increase in SG&A expense was largely due to higher variable broker commissions on increased sales volume, as well as continued investments in Jamba® and Boulder Canyon including increased marketing and sampling expenses.
Net cash provided by operating activities was $4.8 million for the quarter ended March 31, 2012 and $4.1 million for the quarter ended March 26, 2011. The overall $0.7 million increase was primarily a result of cash provided by inventories of $3.7 million in the first quarter of 2012 compared to cash used to build inventory of $0.3 million in the same period in 2011. The $3.9 million year over year decrease in inventory was the primary driver of the $4.4 million year over year decrease in accounts payable and accrued liabilities. Our net revenue growth resulted in increases in accounts receivable of $1.9 million in the first quarter of 2012 compared to $1.8 million in the first quarter of 2011.
We believe that our current financing arrangement with U.S. Bank will provide adequate ability to finance future capital expenditures. During the full year 2012, we plan to spend $6.6 million in capital expenditures, funded through working capital and various purchase or leasing arrangements. Additionally, on July 1, 2012 we plan to pay down the remaining balance of $1.3 million on the maturing mortgage loan on the Goodyear facility, funded with working capital. Our plans are not expected to materially affect our financial ratios or liquidity. In connection with the implementation of the our business strategy, we may incur operating losses in the future and may require future debt or equity financings (particularly in connection with future strategic acquisitions, new brand introductions or capital expenditures). Expenditures relating to acquisition-related integration costs, market and territory expansion and new product development and introduction may adversely affect promotional and operating expenses and consequently may adversely affect operating and net income. These types of expenditures are expensed for accounting purposes as incurred, while revenue generated from the result of such expansion or new products may benefit future periods. Management believes that we will generate positive cash flow from operations during the next twelve months, which, along with our existing working capital and borrowing facilities, will enable us to meet our operating cash requirements for the next twelve months. The belief is based on current operating plans and certain assumptions, including those relating to our future revenue levels and expenditures, industry and general economic conditions and other conditions. For instance, if current general economic conditions continue or worsen, we believe that our sales forecasts may prove to be less reliable than they have in the past as consumers may change their buying habits with respect to snack food products. Unexpected price increases for commodities used in our snack products, or adverse weather conditions affecting our Rader Farms crop yield could also impact our financial condition. If any of these factors change, we may require future debt or equity financings to meet our business requirements. Any required financings may not be available or, if available, may not be on terms attractive to us.
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Inventure Foods has a market cap of $101.8 million; its shares were traded at around $6.67 with a P/E ratio of 35 and P/S ratio of 0.6. Inventure Foods had an annual average earning growth of 14.5% over the past 10 years.
Highlight of Business Operations:
Gross profit for 2012 increased $1.4 million or 17.8% to $9.3 million, but decreased as a percentage of net revenues to 19.9% for the quarter ended March 31, 2012 as compared to 21.6% in the first quarter of 2011. Snack segment gross profit of $5.1 million increased $0.7 million or 16.4% and increased as a percentage of net revenues to 21.0% as compared to 20.1% in 2011. The increase in snack gross profit dollars was primarily driven by strong volume growth of more profitable brands and channels, increased efficiencies at our Goodyear facility as a result of our recent capital improvements and a 17% increase in pounds driven through the Bluffton facility. The frozen segment gross profit of $4.2 million increased $0.7 million or 19.6%, but decreased as a percentage of net revenues to 18.6% from 23.9%. The decrease in gross profit dollars for the frozen segment was attributable to a $1.1 million increase in above-the-line spending to support our Jamba® growth, and our need to source additional higher cost berries to support our increased sales volume.Selling, general and administrative (SG&A) expenses were $6.5 million or 13.8% of net revenues for the quarter ended March 31, 2012, an increase of $1.0 million, but down 120 basis points from 15.0% of net revenue compared to the first quarter of 2011. The increase in SG&A expense was largely due to higher variable broker commissions on increased sales volume, as well as continued investments in Jamba® and Boulder Canyon including increased marketing and sampling expenses.
Net cash provided by operating activities was $4.8 million for the quarter ended March 31, 2012 and $4.1 million for the quarter ended March 26, 2011. The overall $0.7 million increase was primarily a result of cash provided by inventories of $3.7 million in the first quarter of 2012 compared to cash used to build inventory of $0.3 million in the same period in 2011. The $3.9 million year over year decrease in inventory was the primary driver of the $4.4 million year over year decrease in accounts payable and accrued liabilities. Our net revenue growth resulted in increases in accounts receivable of $1.9 million in the first quarter of 2012 compared to $1.8 million in the first quarter of 2011.
We believe that our current financing arrangement with U.S. Bank will provide adequate ability to finance future capital expenditures. During the full year 2012, we plan to spend $6.6 million in capital expenditures, funded through working capital and various purchase or leasing arrangements. Additionally, on July 1, 2012 we plan to pay down the remaining balance of $1.3 million on the maturing mortgage loan on the Goodyear facility, funded with working capital. Our plans are not expected to materially affect our financial ratios or liquidity. In connection with the implementation of the our business strategy, we may incur operating losses in the future and may require future debt or equity financings (particularly in connection with future strategic acquisitions, new brand introductions or capital expenditures). Expenditures relating to acquisition-related integration costs, market and territory expansion and new product development and introduction may adversely affect promotional and operating expenses and consequently may adversely affect operating and net income. These types of expenditures are expensed for accounting purposes as incurred, while revenue generated from the result of such expansion or new products may benefit future periods. Management believes that we will generate positive cash flow from operations during the next twelve months, which, along with our existing working capital and borrowing facilities, will enable us to meet our operating cash requirements for the next twelve months. The belief is based on current operating plans and certain assumptions, including those relating to our future revenue levels and expenditures, industry and general economic conditions and other conditions. For instance, if current general economic conditions continue or worsen, we believe that our sales forecasts may prove to be less reliable than they have in the past as consumers may change their buying habits with respect to snack food products. Unexpected price increases for commodities used in our snack products, or adverse weather conditions affecting our Rader Farms crop yield could also impact our financial condition. If any of these factors change, we may require future debt or equity financings to meet our business requirements. Any required financings may not be available or, if available, may not be on terms attractive to us.
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