Annie’s Inc. (NYSE: BNNY), a leading natural and organic food company, today announced financial results for its first quarter of fiscal 2014, ended June 30, 2013.
- Net sales for the first quarter were $39.0 million, an increase of 13.8 percent; Retail consumption remained strong, increasing approximately 20 percent
- Diluted EPS for the first quarter was $0.12; adjusted diluted EPS2 was $0.13, an increase of 5.0 percent
- Management reaffirms full-year guidance, including adjusted net sales growth of 18 percent to 20 percent and adjusted diluted EPS of $0.97 to $1.01, an increase of 21 percent to 26 percent
“Our products continue to perform exceptionally well in the marketplace, as we benefit from the strength of the Annie’s brand, the quality of our products, and our efforts to expand and improve distribution,” commented John Foraker, CEO of Annie’s. “Our strong retail execution is reflected in our consumption growth, which accelerated during the first quarter. While our financial results were negatively impacted by the timing of Easter deliveries and the implementation of an inventory optimization system by a large customer, we expect results for future periods to better reflect our underlying business momentum. We are encouraged by a strong start to our fiscal second quarter and remain on track to achieve our full-year financial targets.
“In addition to a healthy base business, we expect innovation to be a larger contributor to net sales growth over the balance of the year,” continued Foraker. “Retailer acceptance of our new microwavable mac & cheese cups has been strong, and initial orders are ahead of our expectations. Today, we also announced an exciting addition to our frozen line-up with our entry into family-size frozen entrées. Our introduction of frozen entrées is the latest example of our efforts to increase the relevance of the Annie’s brand by developing great-tasting, high-quality products that meet the needs of the entire family,” concluded Foraker.
First quarter results
For the first quarter, Annie’s reported net sales of $39.0 million, a 13.8 percent increase over last year’s first quarter. Shipments lagged consumption growth, which accelerated to approximately 20 percent1 in the quarter with all sales channels contributing double-digit growth. Net sales growth in the first quarter was led by snacks. Meals also contributed to net sales growth, but declined slightly as a percentage of net sales due to shipment timing associated with distributor inventory reductions. Dressings, condiments and other products experienced improved growth trends but declined as a percentage of net sales compared to the prior year.
EBITDA for the quarter was $3.8 million, with adjusted EBITDA increasing 6.9 percent to $4.4 million. Adjusted EBITDA grew at a slower rate than net sales due to a year-over-year decrease in gross margin percentage, which more than offset improved selling, general and administrative expenses as a percentage of net sales.
Net income for the quarter was $2.0 million, or $0.12 per diluted share, as compared to $2.1 million, or $0.12 per diluted share, in the first quarter of fiscal 2013. Adjusted net income was $2.2 million, or $0.13 per diluted share, as compared to adjusted net income of $2.1 million, or $0.12 per diluted share, in the first quarter of fiscal 2013.
Fiscal 2014 outlook
Annie’s continues to expect the following financial results for fiscal 2014:
- Adjusted net sales growth of 18 percent to 20 percent
- Adjusted EBITDA of $31 to $32 million
- Adjusted diluted EPS of $0.97 to $1.01, representing 21 percent to 26 percent growth, based on an estimated 17.5 million diluted shares outstanding