Freshpet(US:FRPT)2023-08-06 16:00Financial Performance - Total net sales for the second quarter of 2023 reached $183.3 million, a 25.6% increase from $146.0 million in the same period of 2022[16] - Gross profit for the second quarter of 2023 was $59.2 million, compared to $51.1 million in the second quarter of 2022, reflecting a gross margin improvement[16] - The company reported a net loss attributable to common stockholders of $16.9 million for the second quarter of 2023, a decrease from a loss of $20.6 million in the same quarter of 2022[16] - For the six months ended June 30, 2023, the net loss was $41,738,000, compared to a net loss of $38,128,000 for the same period in 2022, indicating an increase in losses of approximately 6.9%[21] - The company experienced a loss from operations of $16.8 million in the second quarter of 2023, slightly improved from a loss of $18.1 million in the same period of 2022[16] Assets and Liabilities - Total current assets increased to $487.1 million as of June 30, 2023, up from $262.0 million at the end of 2022, primarily driven by higher cash and cash equivalents[12] - Total liabilities surged to $472.6 million as of June 30, 2023, compared to $93.8 million at the end of 2022, largely due to the issuance of convertible senior notes[12] - The company’s accumulated deficit increased to $336.9 million as of June 30, 2023, from $295.1 million at the end of 2022[12] - Cash and cash equivalents increased significantly to $244.0 million as of June 30, 2023, compared to $132.7 million at the end of 2022[12] - As of June 30, 2023, total inventories amounted to $65.3 million, compared to $58.3 million as of December 31, 2022, reflecting an increase of 11.8%[42] Expenses - Selling, general, and administrative expenses for the second quarter of 2023 were $76.0 million, up from $69.2 million in the same quarter of 2022[16] - The company reported share-based compensation expenses of $16,862,000 for the six months ended June 30, 2023, up from $12,589,000 in the prior year, reflecting a 34.5% increase[21] - The company recorded depreciation and amortization expense of $28,930,000 for the first half of 2023, compared to $15,888,000 in the same period of 2022, indicating an increase of 82%[21] Cash Flows - Total cash flows used in operating activities for the first half of 2023 were $(231,000), a significant improvement compared to $(62,402,000) in the same period of 2022[21] - Freshpet's cash flows used in investing activities totaled $(215,948,000) for the first half of 2023, compared to $(118,006,000) in the same period of 2022, representing an increase of approximately 83%[21] - Proceeds from the issuance of convertible senior notes amounted to $393,518,000, contributing to net cash flows provided by financing activities of $327,492,000 for the first half of 2023[21] Investments and Capital Expenditures - The company invested $102,507,000 in property, plant, and equipment during the first half of 2023, compared to $94,872,000 in the same period of 2022, marking an increase of about 8.7%[21] - The carrying amount of property, plant, and equipment, net, was $865.2 million as of June 30, 2023, an increase from $800.6 million at the end of 2022[43] Debt 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[29][30] - The effective interest rate for the Convertible Notes is 3.59%, with total interest expense for the six months ended June 30, 2023, amounting to $3,896[58][60] - As of June 30, 2023, the carrying value of the Convertible Notes was $391,882, while the fair value was $476,327[59] Legal and Regulatory Matters - The company is involved in various claims and legal actions, including a breach of contract claim with Phillips Feed Service, seeking damages in excess of $8,300[77] Market and Economic Conditions - The company is exposed to commodity price volatility and inflation risks, which could increase operating costs as a percentage of net sales if not addressed[157]