First Quarter 2024 Financial Results Overview [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Freshpet, Inc. reported strong first quarter 2024 results, with significant increases in net sales, gross margin, net income, and Adjusted EBITDA compared to the prior year period, driven by volume growth and operational improvements Q1 2024 Financial Highlights | Metric | Q1 2024 ($ million) | Q1 2023 ($ million) | Change (YoY) | | :----- | :------ | :------ | :----------- | | Net Sales | $223.8 | $167.5 | +33.6% | | Gross Margin | 39.4% | 30.3% | +9.1 pp | | Adjusted Gross Margin | 45.3% | 38.5% | +6.8 pp | | Net Income (Loss) | $18.6 | $(24.8) | N/A (swing to profit) | | Adjusted EBITDA | $30.6 | $3.0 | +$27.6 | [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Billy Cyr highlighted the strong Q1 results as evidence of achieving long-term financial goals, attributing robust net sales growth to the business model and consumer proposition, and margin expansion to operational improvements and increased scale - CEO Billy Cyr emphasized that strong Q1 results demonstrate the company's ability to meet long-term financial goals, driven by robust net sales growth and margin expansion from operational improvements and scale[2](index=2&type=chunk) Detailed Financial Performance (Q1 2024) [Net Sales](index=1&type=section&id=Net%20Sales) Freshpet's net sales for Q1 2024 significantly increased by 33.6% year-over-year, primarily driven by strong volume gains Net Sales Performance | Metric | Q1 2024 ($ million) | Q1 2023 ($ million) | YoY Change | | :----- | :------ | :------ | :--------- | | Net Sales | $223.8 | $167.5 | +33.6% | | Volume Gains | N/A | N/A | +30.6% | [Gross Profit (GAAP & Adjusted)](index=1&type=section&id=Gross%20Profit%20(GAAP%20%26%20Adjusted)) Gross profit and Adjusted Gross Profit both saw substantial increases in Q1 2024, with margins improving due to better plant expense leverage, reduced quality costs, and lower input costs as a percentage of sales Gross Profit Performance | Metric | Q1 2024 ($ million) | Q1 2023 ($ million) | YoY Change | | :----- | :------ | :------ | :--------- | | Gross Profit | $88.2 | $50.8 | +73.6% | | Gross Margin | 39.4% | 30.3% | +9.1 pp | | Adjusted Gross Profit | $101.5 | $64.4 | +57.6% | | Adjusted Gross Margin | 45.3% | 38.5% | +6.8 pp | - The increase in gross profit as a percentage of net sales was primarily due to improved leverage on plant expenses, reduced quality costs, and lower input cost as a percentage of sales[4](index=4&type=chunk) [Selling, General and Administrative Expenses (GAAP & Adjusted)](index=1&type=section&id=Selling,%20General%20and%20Administrative%20Expenses%20(GAAP%20%26%20Adjusted)) SG&A expenses increased in absolute terms but decreased significantly as a percentage of net sales in Q1 2024, driven by reduced logistics costs, lower media spend as a percentage of net sales, and decreased share-based compensation SG&A Expenses Performance | Metric | Q1 2024 ($ million) | Q1 2023 ($ million) | YoY Change | | :----- | :------ | :------ | :--------- | | SG&A Expenses | $79.7 | $72.3 | +10.2% | | SG&A as % of Net Sales | 35.6% | 43.1% | -7.5 pp | | Adjusted SG&A | $70.9 | $61.5 | +15.3% | | Adjusted SG&A as % of Net Sales | 31.7% | 36.7% | -5.0 pp | - The decrease in SG&A as a percentage of net sales was mainly a result of reduced logistics costs and media as a percentage of net sales, in addition to lower share-based compensation[5](index=5&type=chunk) [Net Income (Loss)](index=1&type=section&id=Net%20Income%20(Loss)) Freshpet achieved a net income of $18.6 million in Q1 2024, a significant improvement from a net loss in the prior year, attributed to higher sales, improved gross margin, reduced logistics costs, and a gain on equity investment Net Income (Loss) | Metric | Q1 2024 ($ million) | Q1 2023 ($ million) | | :----- | :------ | :------ | | Net Income (Loss) | $18.6 | $(24.8) | - The improvement in net income was due to contribution from higher sales, improved gross margin, reduced logistics costs as a percentage of net sales, and a gain on equity investment of **$9.9 million**, partially offset by increased SG&A including increased media spend of **$6.1 million**[6](index=6&type=chunk) [Adjusted EBITDA](index=1&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA saw a substantial increase in Q1 2024, primarily driven by increased Adjusted Gross Profit, partially offset by higher Adjusted SG&A expenses Adjusted EBITDA Performance | Metric | Q1 2024 ($ million) | Q1 2023 ($ million) | YoY Change | | :----- | :------ | :------ | :--------- | | Adjusted EBITDA | $30.6 | $3.0 | +$27.6 | - The increase in Adjusted EBITDA was a result of increased Adjusted Gross Profit partially offset by higher Adjusted SG&A expenses[8](index=8&type=chunk) Balance Sheet and Cash Flows [Condensed Consolidated Balance Sheets Summary](index=2&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20Summary) As of March 31, 2024, Freshpet maintained a strong cash position and managed its debt, with plans to utilize its balance sheet to support long-term capacity needs Key Balance Sheet Figures (as of March 31, 2024) | Metric | Amount ($ thousands) | | :----- | :-------------------- | | Cash and cash equivalents | $257,894 | | Debt outstanding (net) | $393,600 | [Condensed Consolidated Statement of Cash Flows Summary](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows%20Summary) Cash from operations significantly improved in Q1 2024, reflecting better operational efficiency compared to the prior year period Cash from Operations | Metric | Q1 2024 ($ million) | Q1 2023 ($ million) | YoY Change | | :----- | :------ | :------ | :--------- | | Cash from operations | $5.4 | $(13.7) | +$19.1 | Full Year 2024 Outlook [Updated Guidance](index=2&type=section&id=Updated%20Guidance) Freshpet updated its full-year 2024 guidance, raising its Adjusted EBITDA target while maintaining net sales and capital expenditure projections Full Year 2024 Guidance Update | Metric | Previous Guidance ($ million) | Updated Guidance ($ million) | Change | | :----- | :---------------- | :--------------- | :----- | | Net sales | At least $950 | At least $950 | Unchanged | | Adjusted EBITDA | $100 to $110 | At least $120 | Raised | | Capital expenditures | ~$210 | ~$210 | Unchanged | Company Information & Disclosures [About Freshpet](index=3&type=section&id=About%20Freshpet) Freshpet is dedicated to improving the lives of pets through fresh, real food made from locally farmed meats, vegetables, and fruits, prepared in small batches and kept refrigerated - Freshpet's mission is to improve the lives of dogs and cats through fresh, real food, prepared with natural ingredients in small batches and kept refrigerated[15](index=15&type=chunk) - Freshpet foods are available in select mass, grocery (including online), natural food, club, and pet specialty retailers across the United States, Canada, and Europe[16](index=16&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements regarding future profitability, performance, shareholder value, and 2024 guidance, which are subject to risks and uncertainties as detailed in SEC filings - Statements in this release regarding future profitability, consistent performance, shareholder value, and 2024 guidance (net sales, Adjusted EBITDA, capital expenditures) are forward-looking and subject to risks and uncertainties outlined in the Company's SEC filings[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Freshpet utilizes non-GAAP financial measures such as Adjusted Gross Profit, Adjusted SG&A, EBITDA, and Adjusted EBITDA to provide investors with a clearer view of ongoing operating results, supplementing GAAP measures for analysis and comparative evaluation - Non-GAAP financial measures (Adjusted Gross Profit, Adjusted SG&A, EBITDA, Adjusted EBITDA) are used to supplement GAAP measures, offering insights into ongoing operating results and aiding investor analysis and comparative evaluation[19](index=19&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - Adjusted Gross Profit is defined as gross profit before depreciation expense, non-cash share-based compensation and loss on disposal of manufacturing equipment[20](index=20&type=chunk) - Adjusted EBITDA represents EBITDA plus specific adjustments including loss/gain on equity investment, loss on disposal of property, plant and equipment, non-cash share-based compensation, ERP implementation costs, capped call fees, and activism engagement advisory fees[22](index=22&type=chunk) Supplemental Financial Data [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets (Table)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Table)) The condensed consolidated balance sheets provide a detailed snapshot of Freshpet's financial position as of March 31, 2024, and December 31, 2023, including assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets | | March 31, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $257,894 | $296,871 | | Accounts receivable, net of allowance for doubtful accounts | 68,507 | 56,754 | | Inventories, net | 71,865 | 63,238 | | Prepaid expenses | 5,757 | 7,615 | | Other current assets | 2,935 | 2,841 | | Total Current Assets | 406,958 | 427,319 | | Property, plant and equipment, net | 1,005,759 | 979,164 | | Deposits on equipment | 1,295 | 1,895 | | Operating lease right of use assets | 3,237 | 3,616 | | Long term investment in equity securities | 33,446 | 23,528 | | Other assets | 29,895 | 28,899 | | Total Assets | $1,480,590 | $1,464,421 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | CURRENT LIABILITIES: | | | | Accounts payable | $46,591 | $36,096 | | Accrued expenses | 32,193 | 49,816 | | Current operating lease liabilities | 1,174 | 1,312 | | Current finance lease liabilities | 1,988 | 1,998 | | Total Current Liabilities | $81,946 | $89,222 | | Convertible senior notes | 393,588 | 393,074 | | Long term operating lease liabilities | 2,333 | 2,591 | | Long term finance lease liabilities | 24,879 | 26,080 | | Total Liabilities | $502,746 | $510,967 | | Commitments and contingencies | — | — | | STOCKHOLDERS' EQUITY: | | | | Common stock — voting, $0.001 par value, 200,000 shares authorized, 48,449 issued | | | | and 48,435 outstanding on March 31, 2024, and 48,277 issued and 48,263 outstanding | | | | on December 31, 2023 | 48 | 48 | | Additional paid-in capital | 1,288,890 | 1,282,984 | | Accumulated deficit | (310,129) | (328,731) | | Accumulated other comprehensive loss | (709) | (591) | | Treasury stock, at cost — 14 shares on March 31, 2024 and on December 31, 2023 | (256) | (256) | | Total Stockholders' Equity | 977,844 | 953,454 | | Total Liabilities and Stockholders' Equity | $1,480,590 | $1,464,421 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Table)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)%20(Table)) The condensed consolidated statements of operations detail Freshpet's revenues, expenses, and net income (loss) for the three months ended March 31, 2024, and 2023, showing a significant swing to profitability Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | | For the Three Months Ended March 31, 2024 ($ thousands) | For the Three Months Ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | NET SALES | $223,849 | $167,522 | | COST OF GOODS SOLD | 135,691 | 116,762 | | GROSS PROFIT | 88,158 | 50,760 | | SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES | 79,695 | 72,271 | | INCOME (LOSS) FROM OPERATIONS | 8,463 | (21,511) | | OTHER INCOME (EXPENSES): | | | | Interest and Other Income, net | 3,335 | 946 | | Interest Expense | (3,060) | (3,171) | | Gain on Equity Investment | 9,918 | - | | | 10,193 | (2,225) | | INCOME (LOSS) BEFORE INCOME TAXES | 18,656 | (23,736) | | INCOME TAX EXPENSE | 54 | 70 | | LOSS ON EQUITY METHOD INVESTMENT | - | 980 | | INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $18,602 | $(24,786) | | OTHER COMPREHENSIVE (LOSS) INCOME: | | | | Change in Foreign Currency Translation | $(118) | $6 | | TOTAL OTHER COMPREHENSIVE (LOSS) INCOME | (118) | 6 | | TOTAL COMPREHENSIVE INCOME (LOSS) | $18,484 | $(24,780) | | NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO COMMON | | | | STOCKHOLDERS | | | | -BASIC | $0.38 | $(0.52) | | -DILUTED | $0.37 | $(0.52) | | WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING | | | | -BASIC | 48,320 | 48,047 | | -DILUTED | 50,049 | 48,047 | [Condensed Consolidated Statement of Cash Flows (Table)](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows%20(Table)) The condensed consolidated statement of cash flows outlines the cash generated and used by Freshpet across operating, investing, and financing activities for the three months ended March 31, 2024, and 2023, showing improved operating cash flow Condensed Consolidated Statement of Cash Flows | | For the Three Months Ended March 31, 2024 ($ thousands) | For the Three Months Ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | **CASH FLOWS FROM OPERATING ACTIVITIES:** | | | | Net income (loss) | $18,602 | $(24,786) | | Adjustments to reconcile net income (loss) to net cash flows provided by (used in) | | | | operating activities: | | | | Provision for loss (gains) on accounts receivable | 4 | (2) | | Loss on disposal of property, plant and equipment | 150 | 268 | | Share-based compensation | 6,221 | 8,415 | | Inventory obsolescence | 699 | (29) | | Depreciation and amortization | 15,902 | 14,492 | | Write-off and amortization of deferred financing costs and loan discount | 514 | 2,478 | | Change in operating lease right of use asset | 379 | 357 | | Loss on equity method investment | — | 980 | | Gain on equity investment | (9,918) | — | | Changes in operating assets and liabilities: | | | | Accounts receivable | (11,757) | 9,182 | | Inventories | (7,817) | (8,000) | | Prepaid expenses and other current assets | 548 | 2,525 | | Other assets | (691) | (3,664) | | Accounts payable | 9,909 | (10,724) | | Accrued expenses | (16,943) | (4,869) | | Operating lease liability | (396) | (363) | | Net cash flows provided by (used in) operating activities | 5,406 | (13,740) | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | Purchase of short-term investments | — | (49,326) | | Acquisitions of property, plant and equipment, software and deposits on equipment | (46,473) | (58,039) | | Net cash flows used in investing activities | (46,473) | (107,365) | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | Proceeds from exercise of options to purchase common stock | 2,815 | 834 | | Tax withholdings related to net shares settlements of restricted stock units | (223) | (602) | | Purchase of capped call options | — | (66,211) | | Proceeds from issuance of convertible senior notes | — | 393,518 | | Debt issuance costs | — | (2,026) | | Principal payments under finance lease obligations | (502) | — | | Net cash flows provided by financing activities | 2,090 | 325,513 | | NET CHANGE IN CASH AND CASH EQUIVALENTS | (38,977) | 204,408 | | CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 296,871 | 132,735 | | CASH AND CASH EQUIVALENTS, END OF PERIOD | $257,894 | $337,143 | [Non-GAAP Reconciliations](index=8&type=section&id=Non-GAAP%20Reconciliations) [Gross Profit to Adjusted Gross Profit Reconciliation (Table)](index=8&type=section&id=Gross%20Profit%20to%20Adjusted%20Gross%20Profit%20Reconciliation%20(Table)) This table reconciles GAAP Gross Profit to Adjusted Gross Profit for the three months ended March 31, 2024, and 2023, detailing adjustments for depreciation, non-cash share-based compensation, and loss on disposal of manufacturing equipment Reconciliation Between Gross Profit and Adjusted Gross Profit | | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | Gross profit | $88,158 | $50,760 | | Depreciation expense | 10,675 | 10,721 | | Non-cash share-based compensation (a) | 2,622 | 2,956 | | Loss on disposal of manufacturing equipment | 21 | — | | Adjusted Gross Profit | $101,476 | $64,437 | | Adjusted Gross Profit as a % of Net Sales | 45.3% | 38.5% | [SG&A Expenses to Adjusted SG&A Expenses Reconciliation (Table)](index=9&type=section&id=SG%26A%20Expenses%20to%20Adjusted%20SG%26A%20Expenses%20Reconciliation%20(Table)) This table reconciles GAAP SG&A expenses to Adjusted SG&A expenses for the three months ended March 31, 2024, and 2023, outlining adjustments for depreciation, non-cash share-based compensation, disposal losses, ERP costs, capped call fees, and activism engagement fees Reconciliation Between SG&A Expenses and Adjusted SG&A Expenses | | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | SG&A expenses | $79,695 | $72,271 | | Depreciation and amortization expense | 5,070 | 3,771 | | Non-cash share-based compensation (a) | 3,600 | 5,459 | | Loss on disposal of equipment | 129 | 268 | | Enterprise Resource Planning (b) | — | 801 | | Capped Call Transactions fees (c) | — | 113 | | Activism engagement (d) | — | 389 | | Adjusted SG&A Expenses | $70,896 | $61,470 | | Adjusted SG&A Expenses as a % of Net Sales | 31.7% | 36.7% | [Net Income (Loss) to Adjusted EBITDA Reconciliation (Table)](index=10&type=section&id=Net%20Income%20(Loss)%20to%20Adjusted%20EBITDA%20Reconciliation%20(Table)) This table reconciles GAAP Net Income (Loss) to Adjusted EBITDA for the three months ended March 31, 2024, and 2023, detailing adjustments for depreciation, interest, income tax, equity investment gains/losses, disposal losses, share-based compensation, ERP costs, capped call fees, and activism engagement fees Reconciliation Between Net Income (Loss) and Adjusted EBITDA | | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :--- | :--- | :--- | | Net income (loss) | $18,602 | $(24,786) | | Depreciation and amortization | 15,745 | 14,492 | | Interest income, net of interest expense | (275) | 2,225 | | Income tax expense | 54 | 70 | | EBITDA | $34,126 | $(7,999) | | Loss on equity method investment | — | 980 | | Gain on equity investment | (9,918) | — | | Loss on disposal of property, plant and equipment | 150 | 268 | | Non-cash share-based compensation (a) | 6,221 | 8,415 | | Enterprise Resource Planning (b) | — | 801 | | Capped Call Transactions fees (c) | — | 113 | | Activism engagement (d) | — | 389 | | Adjusted EBITDA | $30,579 | $2,967 | | Adjusted EBITDA as a % of Net Sales | 13.7% | 1.8% | [Conference Call & Webcast Information](index=3&type=section&id=Conference%20Call%20%26%20Webcast%20Information) Freshpet hosted a conference call and webcast on May 6, 2024, to discuss its Q1 2024 financial results, with replay options available for listeners - A conference call and webcast were held on May 6, 2024, at 8:00 a.m. Eastern Time, with replay available through May 20, 2024[13](index=13&type=chunk)[14](index=14&type=chunk)

SECAUCUS, N.J., April 16, 2024 (GLOBE NEWSWIRE) -- Freshpet, Inc. (NASDAQ:FRPT) ("Freshpet" or the "Company") today announced it will report results for the first quarter ended March 31, 2024 on Monday, May 6, 2024 before market open. The Company will host a conference call with members of the executive management team to discuss these results with additional comments and details. The conference call is scheduled to begin at 8:00 a.m. ET on Monday, May 6, 2024. To participate on the live call, listeners in ...

The Consumer Staples group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has Freshpet (FRPT) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.Freshpet is a member of the Consumer Staples sector. This group includes 191 individual stocks and currently holds a Zacks Sector Rank of #14. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring th ...

Investors interested in Consumer Staples stocks should always be looking to find the best-performing companies in the group. Has Freshpet (FRPT) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Staples sector should help us answer this question.Freshpet is a member of the Consumer Staples sector. This group includes 194 individual stocks and currently holds a Zacks Sector Rank of #14. The Zacks Sector Rank considers 16 dif ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Whil ...

Shares of Freshpet (FRPT -3.92%) were barking up a tree this week as the maker of perishable dog and cat food delivered a strong fourth-quarter earnings report with a solid improvement in profitability and another quarter of strong revenue growth.As of Thursday's close, the stock was up 23% for the week. Freshpet gets a boneFreshpet's revenue in the quarter rose 29.9% to $215.4 million, well ahead of the analyst consensus of $204.4 million. The company marked its sixth straight year of revenue growth above ...

For those looking to find strong Consumer Staples stocks, it is prudent to search for companies in the group that are outperforming their peers. Freshpet (FRPT) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.Freshpet is one of 193 individual stocks in the Consumer Staples sector. Collectively, these companies sit at #14 in the Zacks Sector Ra ...

Freshpet, Inc. (FRPT) delivered remarkable fourth-quarter 2023 results, with the top and bottom lines increasing year over year. Also, both metrics beat the Zacks Consensus Estimate.The company has enhanced its organizational structure, achieving improved margins through enhanced operational efficiency in logistics, input costs and quality. This progress is reflected in its confidence in achieving its long-term Fresh Future goals.FRPT’s strategic initiatives include expanding production capacity to meet dem ...

About this content About Josh Lamb After graduating from the University of Kent in the summer of 2022 with a degree in History, Josh joined Proactive later that year as a journalist in the UK editorial team. Josh has reported on a range of areas whilst at Proactive, including energy companies during a time of global crisis, aviation and airlines as the sector recovers from the pandemic, as well as covering economic, social and governance issues. Read more About the publisher Proactive financial news and ...

Shares of pet food company Freshpet (FRPT 17.35%) surged higher on Monday after the company reported completed financial results for 2023. As of 10:40 a.m. ET, Freshpet stock was up 19% and had hit new 52-week highs.Business is booming for FreshpetIn the fourth quarter of 2023, Freshpet had net sales of $215 million, its highest ever and up 30% from the prior-year period. This was almost $12 million more than what management had expected. And the good news is that its growth was driven by a 25% increase in ...