Diamond Foods Inc. (DMND, Financial) filed Quarterly Report for the period ended 2010-04-30.
Diamond Foods Inc. has a market cap of $826.4 million; its shares were traded at around $39.11 with a P/E ratio of 22.1 and P/S ratio of 1.5. The dividend yield of Diamond Foods Inc. stocks is 0.4%.DMND is in the portfolios of Ron Baron of Baron Funds, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, RS Investment Management.
Advertising. Advertising expenses were $7.6 million and $26.0 million for the three and nine months ended April 30, 2010 compared to $9.0 million and $21.1 million for the three and nine months ended April 30, 2009. Advertising expenses as a percentage of net sales were 5.5% and 5.2% for the three and nine months ended April 30, 2010 compared to 8.1% and 4.6% for the three and nine months ended April 30, 2009. The decrease in advertising expenses for the three months ended April 30, 2010 is primarily due to differences in timing of advertising activities between years. The increase in advertising expenses for the nine months ended April 30, 2010 related principally to the production and airing of three new Pop Secret TV commercials, the production of the Super Bowl commercial and increased media spending associated with the Diamond, Emerald and Pop Secret brands.
Interest expense, net. Net interest expense was $1.9 million and $4.1 million for the three and nine months ended April 30, 2010 compared to $1.3 million and $4.9 million for the three and nine months ended April 30, 2009. Net interest expense as a percentage of net sales was 1.4% and 0.8% for the three and nine months ended April 30, 2010 compared to 1.2% and 1.1% for the three and nine months ended April 30, 2009. For the three months ended April 30, 2010, the increase was primarily attributable to the borrowings used to fund the Kettle Foods acquisition. For the nine months ended April 30, 2010, the decrease was mainly due to lower average borrowing levels and interest rates.
During the nine months ended April 30, 2010, cash used in operating activities was $9.6 million compared to $17.3 million of cash generated during the nine months ended April 30, 2009. The decrease in cash from operating activities was primarily due to increased investments in inventory. Cash used in investing activities was $621.8 million in 2010 compared to $194.7 million in 2009. This change was mainly due to the acquisition of Kettle Foods. Cash provided by financing activities was $612.0 million in 2010 compared to $104.7 million in 2009. The increase was primarily attributable to long-term borrowings used to fund the Kettle Foods acquisition.
Our new Secured Credit Facility consists of a $200 million revolving credit facility and a $400 million term loan facility. Scheduled principal payments on the outstanding term loan are $10 million in fiscal year 2010, $40 million in each of the succeeding four years (due quarterly), and $10 million for each of the first two quarters in fiscal year 2015, with the remaining principal balance and any outstanding loans under the revolving credit facility to be repaid on the fifth anniversary of initial funding. Borrowings under the Secured Credit Facility will bear interest, at our option, at either the agents base rate or the LIBOR rate, plus a margin for LIBOR loans ranging from 2.25% to 3.50%, based on the consolidated leverage ratio (defined as the ratio of total debt to EBITDA). For the quarter ended April 30, 2010, a loss on extinguishment of debt of $1.8 million was recorded as a result of replacing the existing Credit Facility with the new Secured Credit Facility. Substantially all of the Companys tangible and intangible assets are considered collateral security under the Secured Credit Facility. The available borrowing capacity as of April 30, 2010 was $41.5 million through the revolving line of credit.
Working capital and stockholders equity were $65.3 million and $372.8 million at April 30, 2010 compared to $51.4 million and $173.3 million at July 31, 2009 and $46.5 million and $169.4 million at April 30, 2009. The increase in working capital was mainly due to increased investments in inventory.
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Diamond Foods Inc. has a market cap of $826.4 million; its shares were traded at around $39.11 with a P/E ratio of 22.1 and P/S ratio of 1.5. The dividend yield of Diamond Foods Inc. stocks is 0.4%.DMND is in the portfolios of Ron Baron of Baron Funds, Columbia Wanger of Columbia Wanger Asset Management, Columbia Wanger of Columbia Wanger Asset Management, RS Investment Management.
Highlight of Business Operations:
Net sales were $138.7 million and $503.5 million for the three and nine months ended April 30, 2010. Net sales were $111.0 million and $457.1 million for the three and nine months ended April 30, 2009. For the three months ended April 30, 2010, the increase in net sales was primarily due to increased snack sales (including Kettle Foods net sales of $22.7 million), as well as increased sales of culinary products. This was offset in part by lower International Non-Retail sales. For the nine months ended April 30, 2010, the increase in net sales was primarily due to an increase in snack sales (including Kettle Foods net sales of $22.7 million), and increased International Non-Retail and North American Ingredient/Food Service sales.Advertising. Advertising expenses were $7.6 million and $26.0 million for the three and nine months ended April 30, 2010 compared to $9.0 million and $21.1 million for the three and nine months ended April 30, 2009. Advertising expenses as a percentage of net sales were 5.5% and 5.2% for the three and nine months ended April 30, 2010 compared to 8.1% and 4.6% for the three and nine months ended April 30, 2009. The decrease in advertising expenses for the three months ended April 30, 2010 is primarily due to differences in timing of advertising activities between years. The increase in advertising expenses for the nine months ended April 30, 2010 related principally to the production and airing of three new Pop Secret TV commercials, the production of the Super Bowl commercial and increased media spending associated with the Diamond, Emerald and Pop Secret brands.
Interest expense, net. Net interest expense was $1.9 million and $4.1 million for the three and nine months ended April 30, 2010 compared to $1.3 million and $4.9 million for the three and nine months ended April 30, 2009. Net interest expense as a percentage of net sales was 1.4% and 0.8% for the three and nine months ended April 30, 2010 compared to 1.2% and 1.1% for the three and nine months ended April 30, 2009. For the three months ended April 30, 2010, the increase was primarily attributable to the borrowings used to fund the Kettle Foods acquisition. For the nine months ended April 30, 2010, the decrease was mainly due to lower average borrowing levels and interest rates.
During the nine months ended April 30, 2010, cash used in operating activities was $9.6 million compared to $17.3 million of cash generated during the nine months ended April 30, 2009. The decrease in cash from operating activities was primarily due to increased investments in inventory. Cash used in investing activities was $621.8 million in 2010 compared to $194.7 million in 2009. This change was mainly due to the acquisition of Kettle Foods. Cash provided by financing activities was $612.0 million in 2010 compared to $104.7 million in 2009. The increase was primarily attributable to long-term borrowings used to fund the Kettle Foods acquisition.
Our new Secured Credit Facility consists of a $200 million revolving credit facility and a $400 million term loan facility. Scheduled principal payments on the outstanding term loan are $10 million in fiscal year 2010, $40 million in each of the succeeding four years (due quarterly), and $10 million for each of the first two quarters in fiscal year 2015, with the remaining principal balance and any outstanding loans under the revolving credit facility to be repaid on the fifth anniversary of initial funding. Borrowings under the Secured Credit Facility will bear interest, at our option, at either the agents base rate or the LIBOR rate, plus a margin for LIBOR loans ranging from 2.25% to 3.50%, based on the consolidated leverage ratio (defined as the ratio of total debt to EBITDA). For the quarter ended April 30, 2010, a loss on extinguishment of debt of $1.8 million was recorded as a result of replacing the existing Credit Facility with the new Secured Credit Facility. Substantially all of the Companys tangible and intangible assets are considered collateral security under the Secured Credit Facility. The available borrowing capacity as of April 30, 2010 was $41.5 million through the revolving line of credit.
Working capital and stockholders equity were $65.3 million and $372.8 million at April 30, 2010 compared to $51.4 million and $173.3 million at July 31, 2009 and $46.5 million and $169.4 million at April 30, 2009. The increase in working capital was mainly due to increased investments in inventory.
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