Inventure Group Inc. Reports Operating Results (10-Q)
POORE BROS INC. is engaged in the production marketing and distribution of salty snack food products that are sold primarily through grocery retail chains in the southwestern U.S. and through vend distributors across the U.S. Inventure Group Inc. has a market cap of $51.7 million; its shares were traded at around $2.83 with a P/E ratio of 15.7 and P/S ratio of 0.4. Highlight of Business Operations: Net income was $1.0 million, or $0.06 per basic and diluted share, compared to net income of $0.7 million, or $0.04 per basic and diluted share in the second quarter of last year.
For the six months ended June 27, 2009 net revenues increased 13.9%, or $7.7 million, to $63.1 million, compared with net revenue of $55.4 million in the first half of the previous year. Total net revenues for the six months ended June 27, 2009 include $22.4 million from Rader Farms, representing an increase of 13.7%, or $2.7 million, from the $19.7 million of net revenues from Rader Farms in the first six months of 2008. For the snack business, total net revenues for the six months ended June 27, 2009 were 40.7 million, representing an increase of 14.0%, or $5.0 million, from the $35.7 million of snack net revenues for the six months of 2008.
Gross profit for the six months ended June 27, 2009 was $12.4 million, or 19.7% of net revenues, compared to $10.4 million, or 18.7% of net revenues for the six months ended June 30, 2008. This increase of $2.0 million, or 20%, was attributable to the revenue growth at both the Snack and Rader divisions, growth in pounds processed through the snack division plant, and the composition of inventory utilized at Rader Farms during the period. Rader Farms margins can vary depending on the mix of grown versus purchased berries. During the six month period ended June 27, 2009, the mix was more heavily weighted to grown berries. These gains were partially offset by a shift in sales in the snack division to lower margin channels, a resultant impact of the current economic environment and price increases in certain commodities.
Net interest expense was $0.4 million in the first six months of 2009 compared to net interest expense of $0.7 million in the first six months of 2008. The decrease relates to the companys $3.0 million reduction in its outstanding line of credit balance from $8.2 million at December 27, 2008 to $5.2 million at June 27, 2009. In addition, the company changed their accounting treatment of swap instruments. See Interest Rate Swaps for further detail. The Company recognized $0.1 million of interest expense as a result of an interest rate swap in the first six months of 2008, with no similar expense incurred in the first six months of 2009.
Net income for the six months ended June 27, 2009 was $1.9 million, or $0.11 per basic share and $0.10 per diluted share, compared with net income of $1.1 million, or $0.06 per basic and diluted share, in the prior-year period.
Net working capital was $5.8 million (a current ratio of 1.2:1) at June 27, 2009 and $4.5 million (a current ratio of 1.2:1) at December 27, 2008. For the six months ended June 27, 2009, the Company generated cash flow of $6.2 million from operating activities, invested $1.3 million in equipment, utilized $3.6 million to pay down its line of credit and other debt and purchased $0.5 million of treasury shares. For the six months ended June 28, 2008, the Company generated cash flow of $5.3 million from operating activities, invested $2.2 million in equipment and utilized $3.0 million to pay down its line of credit and other debt. Inventories increased $2.6 million while accounts payable increased $5.5 million as compared to December 27, 2008 balances, primarily due to increased plant processing efficiencies realized at the Rader division, as well as purchasing increases of fruit inventory ahead of the Rader harvest season.
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