TGI Friday's brand continues to struggle

by Eric Schroeder
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PHOENIX – Record quarterly revenues were not enough to spur an earnings gain at Inventure Foods, Inc. in the third quarter. Net income in the quarter ended June 29 was $1,407,000, equal to 7 cents per share on the common stock, down 13 percent from $1,623,000, or 9 cents per share, in the same period a year ago.
Sales for the quarter were $53,677,000, up 12 percent from $48,016,000 during the same period of the previous year.

“We are pleased with double-digit net revenue growth across the vast majority of our brand portfolio during the second quarter,” said Terry McDaniel, CEO. “Our healthy/natural portfolio continues to track strongly in the marketplace and provided for 65 percent of net revenues during the quarter. In addition, the healthy/natural portfolio net revenues increased 16.9 percent in the quarter versus the prior year, attributable to strong performance in our frozen fruit products, continued increases in our Boulder Canyon brand, as well as favorable results in our frozen beverage businesses. Our Jamba At-Home smoothies benefited from the successful launch of the Green Fusion flavor, and our market share in the category continues to increase.”

Revenues also received a boost from new additions during the third quarter, as Seattle’s Best Coffee frozen coffee blends contributed $2 million in gross revenues and newly acquired Willamette Valley Fruit Co. added $1 million in net revenues.

Inventure’s snack division net revenue increased nearly 4 percent over the same quarter a year ago to $25.8 million. TGI Friday’s brand sales decreased 18 percent in the quarter, partially offset by a 10 percent increase in sales of Boulder Canyon Natural Foods, a 37 percent increase in sales of premium private label products and a 244 percent gain in co-packed product sales.

McDaniel said Inventure has a strong line-up of new products and strong merchandising activity in place to help improve the performance of the TGI Friday’s brand in the second half of fiscal 2013.

Inventure has started production on a new co-packing agreement with a prominent snack food company, McDaniel said. He added the company has signed a second co-packing agreement with a top-tier consumer packaged goods company that will utilize Inventure’s new filled technology that started shipping at the end of June.

“This remains a complementary and growing part of our business and is a direct result of our investments in our Bluffton (Ind.) facility,” he said.

Frozen segment net sales, which include Jamba All Natural Smoothies, totaled $27.9 million in the second quarter, up 20 percent from the same period a year ago. Net revenues of frozen berries increased 17 percent due to continued sales growth of branded frozen fruit, complemented by the addition of Willamette Valley Fruit Co.

For the six months ended June 29, overall net income at Inventure Foods was $2,463,000, or 13c per share, down 26 percent from $3,345,000, or 18c per share, in the same period a year ago. Net revenues were $102,214,000, up 8 percent from $95,036,000.
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