Freshpet Shares Tumble Following Q3 Results

Shares of

dipped around 20 percent in after-hours trading on Wednesday after the company reported a wider-than-expected loss for the third quarter and lowered its FY15 forecast. The Secaucus, New Jersey-based company reported a quarterly loss of $1.7 million, or $0.05 per share, versus a year-ago loss of $9.5 million, or $1.19 per share. Its revenue rose 35.8 percent year-over-year to $30.6 million from $22.5 million. However, analysts were expecting a loss of $0.03 per share on revenue of $30.17 million. Its gross margin shrank to 45.9 percent from 48.3 percent. Adjusted EBITDA rose $1.2 million to $2.3 million. Its sales per refrigerated unit climbed 13 percent in the quarter. Selling, general and administrative expenses increased to $15.6 million from $12.2 million. As of September 30, 2015, Freshpet had cash and cash equivalents and short term investments of $19.0 million, versus $36.3 million as of December 31, 2014. Richard Thompson, Freshpet's Chief Executive Officer said, "We made meaningful progress across several areas of our business, however, we experienced lower than expected Freshpet Fridge growth and our gross margin was negatively affected by manufacturing inefficiencies from new product innovation and the near term cost of adjusting processes on our primary products. As a result, we have updated our annual guidance to reflect these headwinds, and are intently focused on the execution of our operational and financial objectives. Going forward, we will further improve our manufacturing costs and processes, drive greater leverage across our business model and in turn, enhance long-term shareholder value." For the year, Freshpet now projects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $10 million to $11 million, on revenue of $115.5 million to $117 million. The company had earlier expected adjusted EBITDA of $12.5 million to $14 million, on revenue of $117 million to $119.5 million. Freshpet shares dipped 19.95 percent to $6.70 in the after-hours trading session.