Poore Brothers (NASDAQ:SNAK)
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The Inventure Group, Inc. (FKA Poore Brothers, Inc.)
(Nasdaq:SNAK) today reported financial results for the second quarter
ended July 1, 2006.
Net revenues for the second quarter of fiscal 2006 were $18.5
million, compared to $23.1 million in the year-ago quarter. For
perspective, the Company reported $18.6 and $17.0 million in net
revenues for the third and fourth quarters of 2005 and $17.6 million
in the first quarter of 2006.
Net income for the second quarter of fiscal 2006 was $0.5 million,
or $0.03 per basic and diluted share, compared to net income of $1.4
million, or $0.07 per basic and diluted share in the second quarter of
2005. For perspective, the Company incurred $0.3 and $1.1 million net
losses for the third and fourth quarters of 2005 and $0.1 million in
net income in the first quarter of 2006.
Mr. Eric J. Kufel, President and Chief Executive Officer,
commented, "The Company has made considerable progress since last
December's management restructuring. We have streamlined and
strengthened the Company's leadership, repaired or exited unprofitable
customer relationships, brought greater discipline to our new product
and trade promotion processes, substantially reduced selling, general
and administrative costs and implemented price increases across nearly
all brands."
"As a result of these actions, with relatively consistent net
revenue, financial performance between second quarter 2006 and fourth
quarter 2005 improved significantly. Gross profit increased 76% from
$2.1 to $3.7 million (increasing these margins from 12% to 20% of net
revenues); selling, general and administrative expenses declined 24%
from $3.8 to $2.9 million (reducing these margins from 22% to 16% of
net revenues); and operating income improved $2.5 million from $(1.7)
to $0.8 million. Additionally, the Company's cash and short-term
investment balance grew approximately $2 million due to improved
working capital management," continued Mr. Kufel.
The Company also reported that it is preparing to test market
several new products in the second half of the year, including new
T.G.I. Friday's(R) brand products, new Boulder Canyon Natural Foods(R)
products and new Poore Brothers(R) brand products, some of which will
be "better-for-you" items. The Company continues to conduct product
development work on Panda Express(R) snack products. The Company also
stated that it plans to add contract manufacturing revenue in the
second half of the year to better leverage its excess capacity.
"Looking forward, we are focused on delivering profitable revenue
growth from our existing brands, expanding our pipeline of new brands
and new products, leveraging excess manufacturing capacity with
contract manufacturing and building a passionate culture of intensely
different(TM) entrepreneurs committed to improving long-term
shareholder value," concluded Mr. Kufel.
About The Inventure Group, Inc.
With facilities in Indiana and Arizona, The Inventure Group 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), Tato Skins(R), Poore Brothers(R), Bob's Texas Style(R),
and Boulder Canyon Natural Foods(TM). For further information about
The Inventure Group or this release, please contact Eric Kufel,
President and 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 Six Months Ended
------------------------- -------------------------
July 1, June 25, July 1, June 25,
2006 2005 2006 2005
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Net revenue $18,497,664 $23,133,522 $36,092,912 $39,690,397
Cost of revenue 14,797,005 17,263,665 29,294,543 30,432,690
----------- ----------- ----------- -----------
Gross profit 3,700,659 5,869,857 6,798,369 9,257,707
Selling, general &
administrative
expenses 2,870,876 3,594,891 5,887,219 6,642,688
----------- ----------- ----------- -----------
Operating
income 829,783 2,274,966 911,150 2,615,019
Interest (income)
expense, net (62,781) (24,431) (103,598) (25,730)
----------- ----------- ----------- -----------
Income before
income tax
provision 892,564 2,299,397 1,104,748 2,640,749
Income tax
provision 349,581 892,310 403,600 1,025,310
----------- ----------- ----------- -----------
Net income $ 542,983 $ 1,407,087 $ 611,148 $ 1,615,439
=========== =========== =========== ===========
Earnings per
common share:
------------------
Basic $ 0.03 $ 0.07 $ 0.03 $ 0.08
=========== =========== =========== ===========
Diluted $ 0.03 $ 0.07 $ 0.03 $ 0.08
=========== =========== =========== ===========
Weighted average
number of common
shares:
------------------
Basic 20,106,027 19,681,902 20,090,551 19,664,731
=========== =========== =========== ===========
Diluted 20,124,950 19,841,862 20,127,382 19,824,190
=========== =========== =========== ===========
POORE BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
July 1, June 25,
2006 2005
------------ ------------
(unaudited) (unaudited)
Current assets $22,385,170 $23,674,904
Property and equipment, net 9,679,102 10,478,724
Other assets, net 10,279,870 10,285,038
----------- -----------
Total assets $42,344,142 $44,438,666
=========== ===========
Current liabilities $ 7,259,727 $10,028,311
Long-term debt 1,655,923 1,705,820
Other long-term liabilities 2,263,994 2,041,539
----------- -----------
Total liabilities 11,179,644 13,775,670
Shareholders' equity 31,164,498 30,662,996
----------- -----------
Total liabilities and shareholders'
equity $42,344,142 $44,438,666
=========== ===========
POORE BROTHERS, INC. AND SUBSIDIARIES
-------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
Six Months Ended
----------------------------------------------------------------------
July 1, June 25,
2006 2005
----------------------------------------------------------------------
(unaudited) (unaudited)
----------------------------------------------------------------------
Net cash flows from operating activities $ 2,322,838 $ 3,349,223
----------------------------------------------------------------------
Net cash flows from investing activities (74,661) (272,985)
----------------------------------------------------------------------
----------------------------------------------------------------------
Net cash flows from financing activities (168,796) (332,224)
----------------------------------------------------------------------
Net increase in cash 2,079,381 2,744,014
----------------------------------------------------------------------
Cash and cash equivalents at beginning of
period 9,375,348 9,675,490
----------------------------------------------------------------------
Cash and cash equivalents at end of period $11,454,729 $12,419,504
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