Freshpet, Inc. (FRPT) has reported a 55.64 percent plunge in profit for the quarter ended Dec. 31, 2016. The company has earned $1.23 million, or $0.04 a share in the quarter, compared with $2.78 million, or $0.08 a share for the same period last year. Revenue during the quarter grew 12.78 percent to $34.06 million from $30.20 million in the previous year period. Gross margin for the quarter contracted 64 basis points over the previous year period to 44.68 percent. Total expenses were 95.45 percent of quarterly revenues, up from 90.50 percent for the same period last year. That has resulted in a contraction of 494 basis points in operating margin to 4.55 percent.
Operating income for the quarter was $1.55 million, compared with $2.87 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $6.37 million compared with $4.05 million in the prior year period. At the same time, adjusted EBITDA margin improved 530 basis points in the quarter to 18.71 percent from 13.40 percent in the last year period.
"The Company made solid progress during 2016. We increased both same store sales and new store distribution while also generating higher operating cash flow and improved profitability," said Billy Cyr, Freshpet's chief executive officer. "More importantly, we strategically prepared the Company for its next stage of growth with the completion of our manufacturing facility expansion. As we enter 2017, we believe the Company is well positioned to more rapidly grow the Freshpet brand with our proven marketing message, outstanding product quality, broad distribution, and financial flexibility to support the pursuit of more aggressive growth."
Freshpet, Inc. projects revenue to be $153 million for financial year 2017.
Operating cash flow improves significantly
Freshpet, Inc. has generated cash of $12.80 million from operating activities during the year, up 89.94 percent or $6.06 million, when compared with the last year. The company has spent $26.69 million cash to meet investing activities during the year as against cash outgo of $35.26 million in the last year. It has incurred net capital expenditure of $29.94 million on net basis during the year, down 6.47 percent or $2.07 million from year ago.
Cash flow from financing activities was $9.77 million for the year, up 3,248.07 percent or $9.48 million, when compared with the last year.
Cash and cash equivalents stood at $3.91 million as on Dec. 31, 2016, down 51.33 percent or $4.12 million from $8.03 million on Dec. 31, 2015.
Working capital drops significantly
Freshpet, Inc. has witnessed a decline in the working capital over the last year. It stood at $0.57 million as at Dec. 31, 2016, down 96.46 percent or $15.67 million from $16.25 million on Dec. 31, 2015. Current ratio was at 1.03 as on Dec. 31, 2016, down from 2.78 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 8 days for the quarter from 11 days for the last year period. Days sales outstanding went up to 12 days for the quarter compared with 11 days for the same period last year.
Days inventory outstanding has decreased to 13 days for the quarter compared with 19 days for the previous year period. At the same time, days payable outstanding went down to 17 days for the quarter from 19 for the same period last year.
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