The Inventure Group, Inc. Reports Third Quarter 2006 Financial Results

Share Name	Share Symbol	Market	Type
Inventure Foods, Inc. (MM)	NASDAQ:SNAK	NASDAQ	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	3.995	3.24	4.01				0	01:00:00

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The Inventure Group, Inc. (Nasdaq: SNAK) today reported financial results for the third quarter ended September 30, 2006. Net revenues for the third quarter of fiscal 2006 were $17.6 million, down 5% compared to $18.6 million in the third quarter of 2005. The Company noted that third quarter 2005 results included an extra week of revenue as its fiscal calendar produces a fifty three week year every four years and the extra week occurred in third quarter 2005. Normalizing revenue to account for the additional week, the Company delivered modest net revenue growth despite significantly decreasing its promotional spending. This growth was due to increased base business on the Company�s potato chip brands and several new T.G.I. Friday�s� brand snack customers including Home Depot. Net income for the third quarter of fiscal 2006 was $0.3 million, or $0.02 per basic and diluted share, compared to a net loss of $(0.3) million, or $(0.01) per basic and diluted share in the third quarter of 2005. The substantial improvement in net income was due to a 34% increase in gross profit due to increased promotional spending efficiencies as well as reduced selling, general and administrative costs related to the company�s margin improvement programs. Mr. Eric J. Kufel, President and Chief Executive Officer, commented, �The Company is pleased with its progress in the third quarter as profitability exceeded internal expectations. In the past nine months we have built a capable new leadership team, shifted our promotional strategy away from deep discounts to more value-added growth programs and executed multiple business process improvement projects. As a result, we believe we are now well positioned to deliver profitable growth in 2007 and beyond.� The Company reported that it is about to begin test marketing several new products, including several new T.G.I. Friday�s� brand products including Pizza chips and a new version of Quesadilla snack chips, new Boulder Canyon Natural Foods� products including Spinach and Artichoke flavor chips and new Poore Brothers� brand products including Sweet Maui Onion and Three Cheese Jalapeno. The Company continues to conduct product development work on all brands and is contemplating several new licensing opportunities. The Company has added contract manufacturing customers to leverage its excess capacity and expects to grow its contract manufacturing base in 2007 due to several new initiatives now underway. �In closing, we believe we have significantly strengthened the Company�s operating capabilities in 2006 and we plan to realize the benefits of those efforts in 2007 by focusing on revenue and profit growth through expanding distribution on our existing brands, increasing our pipeline of new products and acquisition opportunities, continuing to improve our key processes and systems, leveraging our manufacturing capacity and building upon our Intensely Different� culture,� 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� snack foods under a variety of owned or licensed brand names, including T.G.I. Friday's�, Tato Skins�, Poore Brothers�, Bob's Texas Style�, and Boulder Canyon Natural Foods�. For further information about The Inventure Group or this release, please contact Steve Weinberger, Chief Financial Officer, at (623) 932-6200, 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. THE INVENTURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME � Quarter Ended Nine Months Ended Sept. 30, 2006 Oct. 1, 2005 Sept. 30, 2006 Oct. 1, 2005 (unaudited) (unaudited) (unaudited) (unaudited) Net revenue $ 17,576,141� $ 18,625,985� $ 53,669,053� $ 58,316,381� Cost of revenue 13,929,567� 16,095,991� 43,224,109� 46,528,681� (Gain) on sale of Equipment/Brand discontinuance costs --� (194,359) --� (194,359) Gross profit 3,646,574� 2,724,353� 10,444,944� 11,982,059� Selling, general & administrative expenses 3,166,404� 3,233,188� 9,053,623� 9,875,876� Operating income (loss) 480,170� (508,835) 1,391,321� 2,106,183� Interest income (expense), net 73,356� 68,998� 176,953� 94,728� Income (loss) before income tax benefit (provision) 553,526� (439,837) 1,568,274� 2,200,911� Income tax benefit (provision) 224,100� 171,302� (627,700) (854,008) Net income (loss) $ 329,426� $ (268,535) $ 940,574� $ 1,346,903� Earnings (loss) per common share: Basic $ 0.02� $ (0.01) $ 0.05� $ 0.07� Diluted $ 0.02� $ (0.01) $ 0.05� $ 0.07� Weighted average number of common shares: Basic 19,505,400� 19,842,862� 19,497,476� 19,728,863� Diluted 19,625,173� 19,842,862� 19,603,203� 20,018,528� THE INVENTURE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS � Sept. 30, 2006 Dec. 25, 2005 (unaudited) (unaudited) Current assets $ 20,119,252� $ 21,411,795� Property and equipment, net 9,447,656� 10,109,654� Other assets, net 10,276,016� 10,282,120� Total assets $ 39,842,924� $ 41,803,569� � Current liabilities $ 5,749,354� $ 7,522,523� Long-term debt 1,642,732� 1,681,432� Other long-term liabilities 2,266,281� 2,356,757� Total liabilities 9,658,367� 11,560,712� Shareholders� equity 30,184,557� 30,242,857� Total liabilities and shareholders� equity $ 39,842,924� $ 41,803,569� THE INVENTURE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS � Nine Months Ended Sept. 30, 2006 Oct. 1, 2005 (unaudited) (unaudited) Net cash flows from operating activities $ 1,662,821� $ 1,996,762� Net cash flows used in investing activities (297,674) (106,769) Net cash flows used in financing activities (1,706,657) (518,484) Net increase (decrease) in cash (341,510) 1,371,509� Cash and cash equivalents at beginning of period 9,695,245� 9,675,490� Cash and cash equivalents at end of period $ 9,353,735� $ 11,046,999� The Inventure Group, Inc. (Nasdaq: SNAK) today reported financial results for the third quarter ended September 30, 2006. Net revenues for the third quarter of fiscal 2006 were $17.6 million, down 5% compared to $18.6 million in the third quarter of 2005. The Company noted that third quarter 2005 results included an extra week of revenue as its fiscal calendar produces a fifty three week year every four years and the extra week occurred in third quarter 2005. Normalizing revenue to account for the additional week, the Company delivered modest net revenue growth despite significantly decreasing its promotional spending. This growth was due to increased base business on the Company's potato chip brands and several new T.G.I. Friday's(R) brand snack customers including Home Depot. Net income for the third quarter of fiscal 2006 was $0.3 million, or $0.02 per basic and diluted share, compared to a net loss of $(0.3) million, or $(0.01) per basic and diluted share in the third quarter of 2005. The substantial improvement in net income was due to a 34% increase in gross profit due to increased promotional spending efficiencies as well as reduced selling, general and administrative costs related to the company's margin improvement programs. Mr. Eric J. Kufel, President and Chief Executive Officer, commented, "The Company is pleased with its progress in the third quarter as profitability exceeded internal expectations. In the past nine months we have built a capable new leadership team, shifted our promotional strategy away from deep discounts to more value-added growth programs and executed multiple business process improvement projects. As a result, we believe we are now well positioned to deliver profitable growth in 2007 and beyond." The Company reported that it is about to begin test marketing several new products, including several new T.G.I. Friday's(R) brand products including Pizza chips and a new version of Quesadilla snack chips, new Boulder Canyon Natural Foods(TM) products including Spinach and Artichoke flavor chips and new Poore Brothers(R) brand products including Sweet Maui Onion and Three Cheese Jalapeno. The Company continues to conduct product development work on all brands and is contemplating several new licensing opportunities. The Company has added contract manufacturing customers to leverage its excess capacity and expects to grow its contract manufacturing base in 2007 due to several new initiatives now underway. "In closing, we believe we have significantly strengthened the Company's operating capabilities in 2006 and we plan to realize the benefits of those efforts in 2007 by focusing on revenue and profit growth through expanding distribution on our existing brands, increasing our pipeline of new products and acquisition opportunities, continuing to improve our key processes and systems, leveraging our manufacturing capacity and building upon our Intensely Different(TM) culture," 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 Steve Weinberger, Chief Financial Officer, at (623) 932-6200, 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. -0- *T THE INVENTURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Quarter Ended Nine Months Ended ------------------------- Sept. 30, Oct. 1, Sept. 30, Oct. 1, 2006 2005 2006 2005 ------------ ------------ ------------ ------------ (unaudited) (unaudited) (unaudited) (unaudited) Net revenue $17,576,141 $18,625,985 $53,669,053 $58,316,381 Cost of revenue 13,929,567 16,095,991 43,224,109 46,528,681 (Gain) on sale of Equipment/Brand discontinuance costs -- (194,359) -- (194,359) ------------ ------------ ------------ ------------ Gross profit 3,646,574 2,724,353 10,444,944 11,982,059 Selling, general & administrative expenses 3,166,404 3,233,188 9,053,623 9,875,876 ------------ ------------ ------------ ------------ Operating income (loss) 480,170 (508,835) 1,391,321 2,106,183 Interest income (expense), net 73,356 68,998 176,953 94,728 ------------ ------------ ------------ ------------ Income (loss) before income tax benefit (provision) 553,526 (439,837) 1,568,274 2,200,911 Income tax benefit (provision) 224,100 171,302 (627,700) (854,008) ------------ ------------ ------------ ------------ Net income (loss) $329,426 $(268,535) $940,574 $1,346,903 ============ ============ ============ ============ Earnings (loss) per common share: ------------------- Basic $0.02 $(0.01) $0.05 $0.07 ============ ============ ============ ============ Diluted $0.02 $(0.01) $0.05 $0.07 ============ ============ ============ ============ Weighted average number of common shares: ------------------- Basic 19,505,400 19,842,862 19,497,476 19,728,863 ============ ============ ============ ============ Diluted 19,625,173 19,842,862 19,603,203 20,018,528 ============ ============ ============ ============ *T -0- *T THE INVENTURE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Sept. 30, Dec. 25, 2006 2005 ------------- -------------- (unaudited) (unaudited) Current assets $20,119,252 $21,411,795 Property and equipment, net 9,447,656 10,109,654 Other assets, net 10,276,016 10,282,120 ------------- -------------- Total assets $39,842,924 $41,803,569 ============= ============== Current liabilities $5,749,354 $7,522,523 Long-term debt 1,642,732 1,681,432 Other long-term liabilities 2,266,281 2,356,757 ------------- -------------- Total liabilities 9,658,367 11,560,712 Shareholders' equity 30,184,557 30,242,857 ------------- -------------- Total liabilities and shareholders' equity $39,842,924 $41,803,569 ============= ============== *T -0- *T THE INVENTURE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended ----------------------------- Sept. 30, Oct. 1, 2006 2005 ------------- -------------- (unaudited) (unaudited) Net cash flows from operating activities $1,662,821 $1,996,762 Net cash flows used in investing activities (297,674) (106,769) Net cash flows used in financing activities (1,706,657) (518,484) ------------- -------------- Net increase (decrease) in cash (341,510) 1,371,509 Cash and cash equivalents at beginning of period 9,695,245 9,675,490 ------------- -------------- Cash and cash equivalents at end of period $9,353,735 $11,046,999 ============= ============== *T

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SNAK Inventure Foods, Inc. (MM)