Diamond Foods Inc. (DMND, Financial) filed Quarterly Report for the period ended 2009-10-31.
Diamond Foods is a branded food company specializing in processing, marketing, and distributing culinary, snack, in-shell and ingredient nuts under the Diamond of California and Emerald of California brands. Diamond's products include walnuts, pine nuts, pecans, peanuts, macadamia nuts, hazelnuts, cashews, Brazil nuts and almonds. Diamond Foods Inc. has a market cap of $523.1 million; its shares were traded at around $31.64 with a P/E ratio of 21.8 and P/S ratio of 0.9. The dividend yield of Diamond Foods Inc. stocks is 0.6%.
Other expense. There was no other expense during the three months ended October 31, 2009. Other expense was $0.9 million and 0.5% as a percentage of net sales for the three months ended October 31, 2008. The other expense in 2008 was due to a $2.6 million payment on the early termination of debt, partially offset by a gain on the sale of emission reduction credits of $1.7 million.
During the three months ended October 31, 2009, cash used in operating activities was $11.5 million compared to $59.2 million for the three months ended October 31, 2008. The decrease was primarily due to improved profitability and better working capital management. Cash used in investing activities was $2.0 million during the three months ended October 31, 2009 compared to $193.8 million for the three months ended October 31, 2008. This change was mainly due to the acquisition of the Pop Secret popcorn business in 2008. Cash used in financing activities during the three months ended October 31, 2009 was $4.7 million compared to $183.5 million of cash provided by financing activities for the three months ended October 31, 2008. This change was mainly due to borrowings in 2008 to fund the Pop Secret acquisition.
On September 15, 2008, we replaced our $20 million Senior Notes due December 2013 (the Senior Notes), the Credit Agreement dated December 2, 2004, between us and Bank of the West, and the Master Loan Agreement dated February 23, 2004, between us and CoBank ACB, as amended (collectively, the Bank Debt) with a new five year unsecured $250 million Senior Credit Facility (the Credit Facility) with a syndicate of seven banks. The proceeds of the Credit Facility were used in part to fund the $190 million purchase of the Pop Secret business from General Mills and ongoing operational needs, as well as to repay the Senior Notes. An early termination fee of $2.6 million was incurred in connection with the prepayment of the Senior Notes.
The Credit Facility consists of a $125 million revolving credit line and a $125 million term loan. Principal payments on the term loan outstanding are $15 million, $20 million, $25 million and $55 million, annually over the succeeding four years (due quarterly, commencing October 31, 2009). We paid down $10 million on this term loan in fiscal year 2009. In addition, there is a provision that requires us to pay down the term loan at a faster rate in the event cash flows exceed certain specified levels. The interest rate for the entire Credit Facility is tied to LIBOR, plus a credit spread linked to our leverage ratio.
Working capital and stockholders equity were $63.5 million and $188.1 million at October 31, 2009 compared to $51.4 million and $173.3 million at July 31, 2009 and $34.6 million and $157.6 million at October 31, 2008. The increase in working capital was mainly due to the reduction of notes payable.
Read the The complete ReportDMND is in the portfolios of Bruce Kovner of Caxton Associates.
Diamond Foods is a branded food company specializing in processing, marketing, and distributing culinary, snack, in-shell and ingredient nuts under the Diamond of California and Emerald of California brands. Diamond's products include walnuts, pine nuts, pecans, peanuts, macadamia nuts, hazelnuts, cashews, Brazil nuts and almonds. Diamond Foods Inc. has a market cap of $523.1 million; its shares were traded at around $31.64 with a P/E ratio of 21.8 and P/S ratio of 0.9. The dividend yield of Diamond Foods Inc. stocks is 0.6%.
Highlight of Business Operations:
Advertising. Advertising expense was $6.3 million and $5.9 million, and 3.5% and 3.0% as a percentage of net sales for the three months ended October 31, 2009 and 2008, respectively. The increase was mainly due to the launch of our Feed Your Fingers campaign, which features in-store and online marketing.Other expense. There was no other expense during the three months ended October 31, 2009. Other expense was $0.9 million and 0.5% as a percentage of net sales for the three months ended October 31, 2008. The other expense in 2008 was due to a $2.6 million payment on the early termination of debt, partially offset by a gain on the sale of emission reduction credits of $1.7 million.
During the three months ended October 31, 2009, cash used in operating activities was $11.5 million compared to $59.2 million for the three months ended October 31, 2008. The decrease was primarily due to improved profitability and better working capital management. Cash used in investing activities was $2.0 million during the three months ended October 31, 2009 compared to $193.8 million for the three months ended October 31, 2008. This change was mainly due to the acquisition of the Pop Secret popcorn business in 2008. Cash used in financing activities during the three months ended October 31, 2009 was $4.7 million compared to $183.5 million of cash provided by financing activities for the three months ended October 31, 2008. This change was mainly due to borrowings in 2008 to fund the Pop Secret acquisition.
On September 15, 2008, we replaced our $20 million Senior Notes due December 2013 (the Senior Notes), the Credit Agreement dated December 2, 2004, between us and Bank of the West, and the Master Loan Agreement dated February 23, 2004, between us and CoBank ACB, as amended (collectively, the Bank Debt) with a new five year unsecured $250 million Senior Credit Facility (the Credit Facility) with a syndicate of seven banks. The proceeds of the Credit Facility were used in part to fund the $190 million purchase of the Pop Secret business from General Mills and ongoing operational needs, as well as to repay the Senior Notes. An early termination fee of $2.6 million was incurred in connection with the prepayment of the Senior Notes.
The Credit Facility consists of a $125 million revolving credit line and a $125 million term loan. Principal payments on the term loan outstanding are $15 million, $20 million, $25 million and $55 million, annually over the succeeding four years (due quarterly, commencing October 31, 2009). We paid down $10 million on this term loan in fiscal year 2009. In addition, there is a provision that requires us to pay down the term loan at a faster rate in the event cash flows exceed certain specified levels. The interest rate for the entire Credit Facility is tied to LIBOR, plus a credit spread linked to our leverage ratio.
Working capital and stockholders equity were $63.5 million and $188.1 million at October 31, 2009 compared to $51.4 million and $173.3 million at July 31, 2009 and $34.6 million and $157.6 million at October 31, 2008. The increase in working capital was mainly due to the reduction of notes payable.
Read the The complete ReportDMND is in the portfolios of Bruce Kovner of Caxton Associates.
