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. -0- *T 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
----------------------------------------------========================
*T
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