Annie's first post-IPO financials show booming business

Annie's first post-IPO financials show booming business

Net sales increased 17.5 percent in Q4 to $43.0 million and 20.1 percent in FY12 to $141.3 million.

Annie's Inc., a leading natural and organic food company, announced financial results for the fourth quarter and fiscal year ended March 31, 2012.

Highlights:

  • Net sales increased 17.5 percent in Q4 to $43.0 million and 20.1 percent in FY12 to $141.3 million
  • Adjusted net income(1) increased 17.9 percent to $3.9 million in Q4 and 36.6 percent to $12.1 million in FY12
  • Adjusted EBITDA increased 28.7 percent to $21.3 million in FY12

"We are proud to present this first report of our financial results as a public company and are pleased with the strong growth and overall financial performance of our business," commented John Foraker, CEO of Annie's. "Fiscal 2012 was a record year, driven by strong growth in the natural and organic food market, as more parents seek healthier food options for their families. Annie's offers these parents a wide range of great tasting natural and organic food alternatives to mainstream packaged foods."

Fourth quarter results
For the fourth quarter of fiscal 2012, the Company reported net sales of $43.0 million, an increase of 17.5 percent over the fourth quarter of fiscal 2011.

Adjusted net income for the fourth quarter increased 17.9 percent to $3.9 million, or $0.24 per adjusted diluted share, which included $0.2 million, or $0.01 per share, in income tax benefits. Fourth quarter adjusted net income per share is based on 16.4 million adjusted diluted shares of common stock, which does not include new shares issued at the IPO. This compares to adjusted net income of $3.3 million, or $0.20 per adjusted diluted share, in the fourth quarter of the prior year. Adjusted net income excludes the impact of a $1.3 million non-recurring advisory agreement termination fee and a $1.2 million non-cash charge due to an increase in the fair value of the convertible preferred stock warrant liability offset by $0.5 million in income taxes related to these charges.

Net income for the fourth quarter of fiscal 2012 was $1.9 million, or $0.05 per diluted share. This compares to net income of $5.1 million, or $0.12 per diluted share, in the fourth quarter of the prior year. The decline in net income in the period was primarily related to charges incurred as a result of the Company's IPO and income taxes at an effective rate of 46 percent, as compared to only 4 percent in the fourth quarter of fiscal 2011 due primarily to the reversal of a valuation allowance on deferred tax assets in fiscal 2011.

Fiscal 2012 results
For fiscal 2012, the Company reported net sales of $141.3 million, an increase of 20.1 percent over the prior year.

Adjusted net income for fiscal 2012 increased 36.6 percent to $12.1 million, or $0.74 per adjusted diluted share, which included $0.5 million, or $0.03 per share, in income tax benefits. Fiscal 2012 adjusted net income per share is based on 16.3 million adjusted diluted shares of common stock, which does not include new shares issued at IPO. This excluded a $1.7 million non-cash charge due to an increase in the fair value of the convertible preferred stock warrant liability and a $1.3 million non-recurring advisory agreement termination fee, offset by $0.5 million in income taxes related to these charges. This compares to adjusted net income of $8.9 million, or $0.54 per adjusted diluted share, in fiscal 2011 which reflects the $11.3 million reversal of the valuation allowance.

Net income for the fiscal 2012 was $9.6 million, or $0.26 per diluted share. This compares to net income of $20.2 million, or $0.50 per diluted share for the prior fiscal year. The decline in year-over-year net income was primarily related to the $11.3 million reversal of a valuation allowance on deferred tax assets in fiscal 2011.

Adjusted EBITDA for fiscal 2012 increased 28.7 percent to $21.3 million.

(1) Adjusted net income, EBITDA, adjusted EBITDA and adjusted diluted shares are all non-GAAP financial measures presented in this press release and must be read in context with the disclosure and reconciling tables set forth below. See "Non-GAAP Financial Measures."

Recent developments
On April 2, 2012, Annie's completed an IPO and raised net proceeds of $11.4 million. The proceeds were used, in part, to pay down outstanding indebtedness under the credit facility.

Fiscal 2013 outlook
Annie's expects the following financial results for the upcoming fiscal year:

  • Net sales growth in the range of 16 percent to 19 percent
  • Adjusted net income in the range of $14.0 to $14.5 million representing year-over-year growth of 20 percent to 25 percent, excluding $0.5 million in one-time tax benefit taken in fiscal 2012
  • Adjusted net income per share in the range of $0.78 to $0.82 based on an estimated 17.8 million diluted shares

"As we enter fiscal 2013, we see continued positive momentum in our business, and we are well positioned with consumers to satisfy their increasing demand for natural and organic foods. Over the coming year, we will continue to focus on our strategic growth initiatives: building mainstream distribution, improving our in-store placements and driving deeper consumer awareness in order to expand Annie's household penetration. In addition, we intend to continue to invest in meaningful innovation to meet more of the needs of Annie's loyal fans. These efforts will further our mission to cultivate a healthier, happier world by spreading goodness through nourishing foods, honest words and conduct that is considerate and forever kind to the planet," concluded Foraker.

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