Boulder Brands Q2 Adj. Profit Meets View, Revenues Beat; Affirms 2014 Outlook

(RTTNews) - Health and wellness food solutions provider Boulder Brands, Inc. (BDBD) on Thursday reported a 10 percent decline in profit for the second quarter from last year as double-digit revenue growth was more than offset by lower margins as well as higher costs and expenses, including elevated egg-white prices.

However, adjusted earnings per share for the quarter matched analysts' expectations and revenues beat their estimates. Looking ahead, Boulder Brands affirmed its financial outlook for fiscal 2014.

Stephen Hughes, Chairman and Chief Executive Officer of Boulder Brands said, "While first half profits continue to be muted due to elevated egg-white prices and the mix shift to Natural, we are experiencing strong sales momentum and anticipate significant margin improvement and further distribution gains from our core initiatives in the second half. Importantly, we now have egg-whites locked in for the duration of the year."

The Boulder, Colorado-based company's second-quarter net income attributable to stockholders was $2.79 million or $0.04 per share, down from $3.10 million or $0.05 per share in the same period last year.

Excluding restructuring, acquisition and integration costs as well as non-recurring charges, adjusted net income for the latest quarter was $3.3 million or $0.05 per share, compared to $3.8 million or $0.06 per share in the prior-year quarter.

On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.05 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 19 percent to $131.35 million from $110.67 million in the same period last year, reflecting strong growth from the company's natural segment. Analysts had a consensus revenue estimate of $130.29 million for the quarter.

Organic net sales for the quarter increased 19.4 percent.

Quarterly net sales for the Natural segment increased 46 percent from the year-ago period to $80.1 million. Organic net sales for the Natural Segment, which include EVOL in the prior-year comparison, increased 34.8 percent.

The company's gluten-free brands - Udi's and Glutino - reported net sales growth of 33.7 percent and 9.3 percent, respectively, which was driven by distribution gains for Udi's and continued strength in the gluten-free category.

However, net sales for the Balance segment declined 8 percent from last year to $51.3 million, negatively impacted by the licensing of Smart Balance Milk that began in July 2013.

The company's gross margin for the quarter narrowed to 35.7 percent from 41.8 percent in the year-ago period, primarily impacted by an increase in egg white prices and the mix shift to the Natural segment, which has lower gross margin.

Looking ahead to fiscal 2014, Boulder Brands affirmed its guidance for net sales in a range of $540 to $550 million, adjusted EBITDA of $89 to $91 million, and earnings per share in a range of $0.39 to $0.41.

Analysts expect the company to report earnings of $0.40 per share for the year on revenue of $544.94 million.

BDBD is currently trading at $12.64, up $0.82 or 6.99 percent on a volume of 522,386 shares.