Freshpet(US:FRPT)2025-11-03 11:30Financial Performance - Net sales increased by 14.0% to $288.8 million in Q3 2025, up from $253.4 million in the prior year period, driven by volume gains of 12.9% and a favorable price/mix of 1.1%[4] - Gross profit for Q3 2025 was $114.2 million, representing 39.5% of net sales, a decrease from 40.4% in the prior year period, primarily due to reduced leverage on plant expenses[5] - Adjusted EBITDA for Q3 2025 was $54.6 million, compared to $43.5 million in the prior year period, reflecting increased Adjusted Gross Profit[8] - Net income for Q3 2025 was $101.7 million, significantly up from $11.9 million in the prior year, aided by a $77.9 million tax benefit due to sustained profitability[7] - For the first nine months of 2025, net sales rose by 14.6% to $816.8 million, compared to $712.5 million in the prior year period, driven by volume gains of 12.8%[8] - Adjusted Gross Profit for Q3 2025 was $132.8 million, or 46.0% of net sales, compared to 46.5% in the prior year period[5] - Net income attributable to common stockholders for Q3 2025 was $101.7 million, significantly higher than $11.9 million in Q3 2024[26] - Adjusted EBITDA for the nine months ended September 30, 2025 was $134,547,000, compared to $109,204,000 for the same period in 2024, reflecting a growth of 23.2%[33] - Adjusted EBITDA as a percentage of Net Sales improved to 18.9% in Q3 2025, up from 17.2% in Q3 2024[33] Expenses and Liabilities - SG&A expenses for Q3 2025 were $89.3 million, a decrease from $90.3 million in the prior year, with SG&A as a percentage of net sales decreasing by 480 basis points to 30.9%[5] - Adjusted SG&A expenses for Q3 2025 were $78.2 million, representing 27.1% of net sales, down from 29.3% in Q3 2024[30] - Total liabilities rose to $567.1 million as of September 30, 2025, up from $519.5 million at the end of 2024[24] - Interest expense net of interest income was $1,194,000 in Q3 2025, compared to a net income of $(40,000) in Q3 2024[33] - The company incurred $10,680,000 in distributor transition costs during the nine months ended September 30, 2025, due to a change in distribution partners[34] - The company reported a legal obligation expense of $716,000 in Q3 2025, with no corresponding expense in Q3 2024[34] Cash Flow and Assets - Cash and cash equivalents as of September 30, 2025, were $274.6 million, with outstanding debt of $396.8 million[10] - Cash and cash equivalents at the end of Q3 2025 were $274.6 million, slightly up from $268.6 million at the end of 2024[28] - The company reported net cash flows provided by operating activities of $105.5 million for the nine months ended September 30, 2025[28] - Total assets increased to $1.75 billion as of September 30, 2025, compared to $1.57 billion at the end of 2024[24] Guidance and Future Outlook - The company updated its 2025 guidance to reflect net sales growth of approximately 13%, down from a previous range of 13% to 16%[12] - The company expects to achieve positive free cash flow for fiscal year 2025, a year earlier than originally planned[3] - The company plans to continue expanding its market presence and investing in new product development to drive future growth[31] - The company anticipates continued sales growth in the pet specialty channel despite the transition to a new distribution partner[34] Depreciation and Other Costs - Depreciation and amortization expenses increased to $23,650,000 in Q3 2025 from $18,709,000 in Q3 2024, representing a rise of 26.0%[33] - The loss on disposal of property, plant, and equipment was $126,000 in Q3 2025, down from $768,000 in Q3 2024[33] - Income tax benefit for Q3 2025 was $(77,958,000), compared to an expense of $54,000 in Q3 2024[33]