Freshpet(FRPT)2025-05-05 20:05Financial Performance - Net sales for the three months ended March 31, 2025, increased to $263,249,000, up from $223,849,000 in the same period of 2024, representing an increase of approximately 17.7%[14] - Gross profit for the same period was $103,788,000, compared to $88,158,000 in 2024, reflecting a gross margin improvement[14] - The company reported a net loss attributable to common stockholders of $12,697,000 for Q1 2025, compared to a net income of $18,602,000 in Q1 2024[14] - For the three months ended March 31, 2025, net sales reached $263,249,000, an increase of 17.7% compared to $223,849,000 for the same period in 2024[55] - Consolidated net loss for the quarter was $12,697 million, a significant decline from a net income of $18,602 million in the prior year[107] Expenses - The company incurred selling, general, and administrative expenses of $115,285,000 in Q1 2025, compared to $79,695,000 in Q1 2024, indicating a significant increase of approximately 44.7%[14] - The company reported a depreciation and amortization expense of $21,827,000 for Q1 2025, compared to $15,902,000 in Q1 2024, an increase of approximately 37.2%[19] - Input costs increased to $77,087 million from $69,824 million, reflecting a rise of 10.2% year-over-year[107] - Media costs rose to $39,791 million, up 24.0% from $32,090 million in the previous year[107] - Interest expense for the quarter was $3,459 million, up from $3,060 million, indicating a 13.1% increase[107] Assets and Liabilities - Total current assets decreased to $405,392,000 as of March 31, 2025, from $436,998,000 at the end of 2024, a decline of approximately 7.2%[11] - Total liabilities decreased slightly to $509,535,000 as of March 31, 2025, from $519,518,000 at the end of 2024[11] - Cash and cash equivalents at the end of Q1 2025 were $243,732,000, down from $268,633,000 at the end of 2024, a decrease of about 9.3%[19] - As of March 31, 2025, net inventories increased to $82,017 thousand from $80,794 thousand as of December 31, 2024, reflecting a growth of 1.5%[58] - Property, plant, and equipment, net, rose to $1,082,203 thousand as of March 31, 2025, compared to $1,065,869 thousand as of December 31, 2024, indicating an increase of 1.5%[60] Investments and Financing - The company issued $402.5 million of 3.00% Convertible Senior Notes in March 2023, which are accounted for as a single liability measured at amortized cost[33][34] - The carrying value of the convertible notes as of March 31, 2025, is $395,698 thousand, with a fair value of $589,019 thousand[70] - The effective interest rate for the convertible notes is 3.59%, with total interest expense for the three months ended March 31, 2025, amounting to $3,554 thousand[69][71] - The company entered into capped call transactions using $66,211 thousand of the net proceeds from the convertible notes to mitigate potential dilution[72] Market and Product Development - Freshpet continues to focus on expanding its market presence in the U.S., Canada, and other international markets, targeting major retail classes including Grocery and Pet Specialty[21] - The company is actively investing in new product development and technology to enhance its offerings in the natural fresh meals and treats segment for pets[21] - Sales from the grocery, mass, international, and digital channels amounted to $215,156,000, up from $184,429,000, reflecting a growth of 16.6%[55] - The pet specialty and club retailers generated sales of $48,093,000, which is a 22% increase from $39,420,000 in the prior year[55] Legal and Regulatory Matters - The company is involved in legal claims, including a breach of contract claim with Phillips Feed Service, with potential damages exceeding $8,300 thousand[97] Other Financial Information - The company maintains a full valuation allowance against its deferred tax assets as of December 31, 2024, due to the likelihood of non-realization[42][43] - The company has one operating and reportable segment, with financial information reviewed on a consolidated basis for resource allocation and performance evaluation[25] - The company did not identify any recognized or unrecognized subsequent events that require adjustment or disclosure in the financial statements[110] - The percentage of consolidated revenue recognized in Europe for the quarter was less than 1%[182] - The company is exposed to fluctuations in foreign exchange rates, particularly in the British pound sterling, Euro, and Canadian Dollar[182] - The company has not entered into any forward exchange contracts as of March 31, 2025[183]