Poore Brothers (NASDAQ:SNAK)
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Poore Brothers, Inc. (Nasdaq: SNAK) today reported
financial results for the first quarter ended April 1, 2006.
Net revenues for the first quarter of fiscal 2006 were $17.6
million, 6% above last year's first quarter net revenues of $16.6
million. Net income was $0.1 million, or $0.00 per basic and diluted
share, compared to net income of $0.2 million, or $0.01 per basic and
diluted share last year. Net revenue growth was primarily attributable
to T.G.I. Friday's(R) snacks, Boulder Canyon Natural Foods(TM) snacks
and Cinnabon(R) cookies, offset by a slight decline from Poore
Brothers(R) snacks. The net income decline resulted from increased
trade spending, stock option expensing and higher raw material costs
offset by reduced selling, general and administrative costs and a $0.3
million pre-tax reversal of a fourth quarter 2005 Cinnabon(R) cookie
unsaleable reserve.
Mr. Eric J. Kufel, Chief Executive Officer, commented, "We are in
the midst of implementing significant changes throughout the Poore
Brothers organization. Since the beginning of the year we have taken
multiple actions to improve our operating capabilities and
profitability. Specifically, we reduced trade spending from second
half 2005 levels, executed price increases across nearly all company
brands, implemented selling, general and administrative cost
reductions, led trade spending and product development process
improvements and streamlined and strengthened the management team.
"We are implementing a strategy that emphasizes profitable growth
by leveraging existing brands and available manufacturing capacity. We
intend to launch unique new products under the T.G.I. Friday's(R),
Poore Brothers(R), and Boulder Canyon Natural Foods(TM) brands,
several of which are better-for-you snacks. The Company is also in
development work on Panda Express(R) and Cinnabon(R) products, which
we believe will result in a diverse pipeline of new snack food
concepts that we intend to test in late 2006 and throughout 2007,"
continued Mr. Kufel.
Recently, the Company began test marketing a Hispanic-targeted
snack chip under a developmental license leveraging the Clamato(R)
brand, a leading beverage amongst Hispanic consumers. This niche
product is currently being tested in the vending channel.
Mr. Kufel concluded, "While pleased with the early progress of our
initiatives to increase Poore Brothers profitability, we recognize
meaningful growth in shareholder value will come from building brands
that generate consistent long-term revenue and profit growth. While we
continue to seek acquisitions, our immediate focus is improving
profitability by leveraging our existing family of Intensely
Different(TM) brands, excess manufacturing capacity, strong balance
sheet and an organization committed to improving shareholder value."
About Poore Brothers, Inc.
With facilities in Indiana and Arizona, Poore Brothers is a
marketer and manufacturer of Intensely Different(TM) snack foods under
a variety of owned or licensed brand names, including T.G.I.
Friday's(R), Cinnabon(R), Tato Skins(R), Poore Brothers(R), Bob's
Texas Style(R), and Boulder Canyon Natural Foods(TM). For further
information about Poore Brothers or this release, please contact Eric
Kufel, Chief Executive Officer, at (623) 932-6255, or logon to
http://www.poorebrothers.com.
Statements contained in this press release that are not historical
facts are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Because such
statements include risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking
statements. Factors that may cause actual results to differ from the
forward-looking statements contained in this press release and that
may affect the Company's prospects in general include, but are not
limited to, the potential need for additional financing,
acquisition-related risks, significant competition, customer
acceptance of new products, dependence upon major customers,
dependence upon existing and future license agreements, general risks
related to the food products industry, and such other factors as are
described in the Company's filings with the Securities and Exchange
Commission.
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POORE BROTHERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Quarter Ended
-------------------------
April 1, March 26,
2006 2005
------------ ------------
(unaudited) (unaudited)
Net revenue $17,595,248 $16,556,875
Cost of revenue 14,497,539 13,169,025
------------ ------------
Gross profit 3,097,709 3,387,850
Selling, general & administrative expenses 3,016,343 3,047,797
------------ ------------
Operating income 81,366 340,053
Interest income (expense), net 40,817 1,299
------------ ------------
Income before income tax provision 122,183 341,352
Income tax provision 54,019 133,000
------------ ------------
Net income $ 68,164 $ 208,352
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Earnings per common share:
--------------------------
Basic $ 0.00 $ 0.01
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Diluted $ 0.00 $ 0.01
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Weighted average number of common shares:
-----------------------------------------
Basic 20,073,111 19,647,561
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Diluted 20,097,237 19,854,440
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POORE BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
April 1, December 31,
2006 2005
------------ ------------
(unaudited) (unaudited)
Current assets $21,002,542 $21,411,795
Property and equipment, net 9,908,040 10,109,654
Other assets, net 10,280,661 10,282,120
------------ ------------
Total assets $41,191,243 $41,803,569
============ ============
Current liabilities $ 6,757,235 $ 7,522,523
Long-term debt 1,668,821 1,681,432
Other long-term liabilities 2,261,707 2,356,757
------------ ------------
Total liabilities 10,687,763 11,560,712
Shareholders' equity 30,503,480 30,242,857
------------ ------------
Total liabilities and shareholders'
equity $41,191,243 $41,803,569
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POORE BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Quarter Ended
------------------------
April 1, March 26,
2006 2005
----------- ------------
(unaudited) (unaudited)
Net cash flows from operating activities $ (187,575) $ 1,216,110
Net cash flows from investing activities (110,781) (183,700)
Net cash flows from financing activities (21,541) (233,611)
----------- ------------
Net increase (decrease) in cash (319,897) 798,799
Cash and cash equivalents at beginning of
period 9,695,245 9,675,490
----------- ------------
Cash and cash equivalents at end of period $9,375,348 $10,474,289
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