Annie’s, Inc. (BNNY) F1Q13 Earnings Call July 24, 2012 5:00 pm ET Executives Erica Abrams – Investor Relations John M. Foraker – Chief Executive Officer Kelly J. Kennedy – Chief Financial Officer and Treasurer Analysts Marcela Giraldo – Credit Suisse Edward Aaron – RBC Capital Markets Ryan Sundby – William Blair & Co. Presentation Operator
Additional information is also available in our Annual Report filed on Form 10-K for the fiscal year ended March 31, 2012. All information provided in our release and in the enticement today is as of July 24, 2012 and we undertake no duty to update this information for any reason, unless required by law.Certain financial measures that we use on this conference call such as adjusted net income are not prepared in accordance with GAAP, and have been adjusted to eliminate the impact of certain non-recurring, expired or non-cash expenses or charges, as the case maybe. Our GAAP results and reconciliation of GAAP to non-GAAP financial measures can be found in our earnings press release. This conference call is being webcast, and an archive of the webcast will be available on the investor relations section of our website at Annies.com, it’s also available live at this time. In addition, on July 17, 2012 we filed a registration statement for a follow-on offering by certain of our existing stockholders of up to 3.65 million shares of our common stock, which includes an over allotment option granted to the underwriters. In the secondary offering, no shares will be sold by the company, and therefore the company will not receive any proceeds from the offering. The company will assume certain expenses of the offering as set forth in the registration statement. This offering is tending and there can be no assurances as to when it maybe completed if it all. We will not comment further regarding the follow-on offering on this call, either in our prepared remarks or in the Q&A session that follows. Now, I will turn the call over to John. Please go ahead. John M. Foraker Thank you. And thank you everyone for joining us today as we report Annie’s first quarter of fiscal 2013, and our second quarter as a public company. Today, I’ll provide a brief overview of our business results in the quarter, and we’ll then turn the call over to Kelly Kennedy, our CFO to review our financials. For the first quarter, we’re reporting solid financial results driven by robust consumer trends and good execution across the business.
We achieved 20% top line growth to $34.3 million in net sales, and net income of $2.1 million or adjusted EPS of $0.12. Shipment growth was led by particularly strong performance in both the natural and grocery channel. Consumption growth remained very strong in all three of our key channels natural, grocery and mass this quarter following in aggregate range of approximately 16% to 18%. The acceleration of consumption trends that we saw in our Q3 and Q4 timeframe last fiscal year continued unabated in Q1.Our meals category was the real star in Q1 showing 40% growth driven by macaroni and cheese, which is benefiting from execution of our mainline distribution initiative. While Mac & Cheese was the predominant driver of meal growth in Q1, sales also benefited from our initial Organic Rising Crust Pizza launch. Our four strategic growth drivers are: number one expanding mainstream distribution. Number two, improving placement locations in stores. Three, increasing our brand awareness and household penetration, and four, continuing to deliver exciting innovation that our consumers love. In the first quarter, we saw continued progress in both building deeper distribution and in our efforts to move our best selling items out of standalone natural section, and into mainline grocery aisles. When we are located in the main aisle, we know we have a much better growth and share opportunities in our category. Retailers continue to embrace the initiative understanding that it results in greater customer satisfaction, store loyalty and profit potential. Read the rest of this transcript for free on seekingalpha.com