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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