CINCINNATI – AdvancePierre Foods reported a 6.1 percent increase in its fourth quarter 2016 net sales, but a 2.7 percent decrease in its 2016 fiscal year sales. The company finished its 2016 fiscal year with $1.568 billion in net sales.
Adjusted EBITDA advanced 17.9 percent from $68.9 million in Q4 2015 to $81.2 million in Q4 2016, and up 15.4 percent from $260.2 million at year-end 2015 to $300.2 million at year-end 2016.
“Our fourth quarter results were highlighted by profitable growth in each of our three core segments, strong cash flow generation, and the completion of another strategic business acquisition,” said AdvancePierre CEO John Simons. “In 2016 we delivered on our commitments to achieve solid organic growth, increase earnings, and deploy cash flow to reward our shareholders with an attractive dividend.”
The company completed the acquisition of Allied Specialty Foods Inc., a manufacturer of raw and cooked beef and chicken Philly steak products, from Steven Zoll, for $60 million in cash in October 2016.
On a segment basis, net sales for the Foodservice segment increased 2.4 percent to $219.9 million in the fourth quarter of 2016, compared to $214.7 million for the fourth quarter of 2015. The company reported that the Foodservice segment achieved growth across the majority of its product categories in both its Street and Schools customer sub-channels.
Operating income for the Foodservice segment increased 28.6 percent to $46.7 million in the fourth quarter of 2016, compared to $36.3 million for the fourth quarter of 2015, “reflecting positive price realization net of raw material deflation, higher volume, and productivity savings,” the company said in a statement.
Net sales for the Retail segment increased 8.1 percent to $106.4 million in the fourth quarter of 2016, compared to $98.4 million for the fourth quarter of 2015. “The increase in volume was primarily from increased consumption of stuffed entrées, and increased distribution of breakfast sandwiches, partially offset by the rationalization of certain private label lower margin fully cooked breaded poultry SKUs,” according to the company.
For the Convenience segment, net sales increased 20.7 percent to $62.2 million in the fourth quarter of 2016, compared to $51.5 million for the fourth quarter of 2015. The volume growth was driven by new product introductions and increased distribution to convenience stores.
For the year ahead, AdvancePierre expects net sales in the range of $1.640 billion to $1.670 billion, including 2 to 3 percent organic volume growth in each of its three core segments. The company expects Adjusted EBITDA in the range of $315 million to $325 million.
“We plan to continue to invest in highly accretive acquisitions and reduce leverage,” said AdvancePierre President Chris Sliva. “Our growth trajectory sets us apart from the broader food industry and we are well positioned to continue our momentum driven by execution of our continuous improvement process, ‘the APF Way’, in 2017 and beyond.”