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Amplify Snack Brands reports Q3 2016 financial results

Published 15 November 2016

Amplify Snack Brands, a marketer and manufacturer of branded better-for-you snack food products, reported financial results for the three and nine months ended September 30, 2016.

Three Months Ended September 30, 2016 Highlights

  • Net sales were $68.0 million, up 48.1% year-over-year
  • Gross profit was $32.3 million, representing 47.6% of net sales
  • GAAP net income was $1.6 million, or $0.02 per fully diluted share
  • Non-GAAP adjusted net income was $9.0 million, or $0.12 per fully diluted share
  • Adjusted EBITDA was $20.1 million, representing 29.6% of net sales

Nine Months Ended September 30, 2016 Highlights

  • Net sales were $182.2 million, up 32.5% year-over-year
  • Gross profit was $93.3 million, representing 51.2% of net sales
  • GAAP net income was $18.8 million, or $0.25 per fully diluted share
  • Non-GAAP adjusted net income was $30.4 million, or $0.40 per fully diluted share
  • Adjusted EBITDA was $61.4 million, representing 33.7% of net sales

“We are very pleased to have completed the Tyrrells acquisition in the third quarter. Through this transaction, we diversified our better-for-you snack food offerings, expanded our geographic presence, and gained a highly-talented international team as well as in-house manufacturing capabilities,” commented Tom Ennis, Amplify’s President and Chief Executive Officer. “Strong brand sales gains continued in the quarter, despite a more challenging market backdrop, and we experienced certain transitory operational execution issues that impacted our results.

Amplify is now a much stronger and more diversified company, and we’ve proactively taken steps to sharpen execution going forward. We remain very excited about the significant potential we have to leverage our newly expanded portfolio of terrific better-for-you brands to drive continued sales growth, profitability and value for our shareholders.”

Three Months Ended September 30, 2016

Net sales increased 48.1% to $68.0 million compared to $45.9 million for the three months ended September 30, 2015. The increase in net sales reflects solid growth of the SkinnyPop brand, new distribution of the Paqui brand, and the addition of the Oatmega brand. In addition, the Tyrrells international portfolio of brands which the Company acquired on September 2, 2016 contributed $8.6 million to net sales in the third quarter. The impact of foreign currency exchange on net sales and earnings in the quarter was immaterial based on the inclusion of Tyrrells results for a partial month of the three months ended September 30, 2016.

Gross profit was $32.3 million, or 47.6% of net sales, compared to $25.7 million, or 55.9% of net sales for the three months ended September 30, 2015. The decrease in gross margin percentage for the three months ended September 30, 2016 was primarily due to a higher level of trade promotional activity, a shift in mix of brand and customer sales, including the addition of Tyrrells, and a delay in timing of planned cost savings. The Tyrrells gross margin was 27.1% for the three months ended September 30, 2016.

GAAP SG&A was $24.9 million compared to $21.2 million for the third quarter ended September 30, 2015. GAAP net income was $1.6 million, or $0.02 per fully diluted share, compared to a net loss of $3.0 million, or a loss of $0.04 per fully diluted share, for the three months ended September 30, 2015.

Adjusted net income, which is a non-GAAP financial measure used by the Company that makes certain adjustments to net income calculated under GAAP, was $9.0 million, or $0.12 per fully diluted share, based on 75.6 million diluted shares outstanding, compared to adjusted net income of $9.2 million for the three months ended September 30, 2015, or $0.12 per fully diluted share, based on 75.0 million diluted shares outstanding.

Adjusted EBITDA, which is a non-GAAP financial measure used by the Company that makes certain adjustments to net income calculated under GAAP, increased 11.0% to $20.1 million from $18.1 million for the three months ended September 30, 2015, primarily reflecting higher net sales and gross profit, partially offset by higher Adjusted SG&A. Adjusted SG&A, which is a non-GAAP financial measure used by the Company that makes certain adjustments to SG&A calculated under GAAP, was $12.7 million, compared to Adjusted SG&A of $7.6 million for the three months ended September 30, 2015.

The increase in Adjusted SG&A was primarily driven by increased consumer marketing activities to drive brand awareness and customer trial, new costs associated with a full quarter contribution from Oatmega and a partial month contribution of Tyrrells, as well as investments in infrastructure and personnel. As a percentage of net sales, Adjusted EBITDA was 29.6% compared to 39.4% in the three months ended September 30, 2015.

Nine Months Ended September 30, 2016

Net sales for the nine months ended September 30, 2016 increased 32.5% to $182.2 million, compared to $137.5 million during the nine months ended September 30, 2015. The increase in net sales reflects solid growth of the SkinnyPop brand, new distribution of the Paqui and Oatmega brands, and the addition of the Tyrrells international portfolio of brands which the Company acquired on September 2, 2016.

GAAP net income increased $13.3 million to $18.8 million, or $0.25 per fully diluted share, compared to net income of $5.5 million, or $0.07 per fully diluted share, for the nine months ended September 30, 2015. Adjusted net income, which is a non-GAAP financial measure used by the Company that makes certain adjustments to net income calculated under GAAP, was $30.4 million, or $0.40 per fully diluted share, based on 75.1 million diluted shares outstanding, compared to adjusted net income of $28.1 million for the nine months ended September 30, 2015, or $0.38 per fully diluted share, based on 74.7 million diluted shares outstanding.

Adjusted EBITDA, a non-GAAP financial measure, increased 9.3% to $61.4 million from $56.1 million for the nine months ended September 30, 2015. Adjusted EBITDA as a percentage of net sales for the nine months ended September 30, 2016 was 33.7%, compared to 40.8% for the nine months ended September 30, 2015.



Source: Company Press Release