Poore Brothers, Inc. reported record financial results for the quarter and nine-month period ended Sept. 30, 2001, attributing much of the success to the widening market reach of its "T.G.I. Friday's" brand salted snacks. Poore Bros. and the famous restaurant chain entered into a licensing agreement in January of this year, and "T.G.I. Friday's" single-serve snacks have been well received in vending.
The company reported that third quarter revenues increased 37% to $14.7 million, a record for Poore Bros.' seasonally slower third quarter, compared with year-ago revenues of $10.7 million. Net income increased 41% to $160,951, or $0.01 per basic diluted share, compared with net income of $113,831, or $0.01 per basic and diluted share, in the prior-year quarter.
Nine-month revenues increased 44% to a record $44.6 million, compared with revenues of $31.0 million in the year-ago period. Net income increased 39% to $934,026, or $0.06 per basic and $0.05 per diluted share, compared with net income of $674,139, or $0.05 per basic and diluted share, in the prior-year period.
Third quarter and nine-month revenue growth was primarily driven by the ongoing introduction of "T.G.I. Friday's" brand salted snacks in select geographic markets and distribution channels. Net income growth in both the third quarter and nine-month periods occurred despite significant ongoing investments in enhanced manufacturing capabilities, as well as sales, marketing and administrative expenses to support the introduction of "T.G.I. Friday's" brand salted snacks.
"We are very pleased with the company's third quarter and nine-month financial results," commented Eric J. Kufel, president and CEO of Poore Bros. "Implementation of our 'T.G.I. Friday's' brand salted snacks' multi-year launch strategy has allowed us to rapidly increase revenue while continuing to deliver increased profitability, despite the significant organizational investments and marketing expenses necessary to successfully execute a brand launch. Our 'intensely different' team is successfully executing what many others believe cannot be done, which is to maintain profitability during the first year of launching a major new brand."
Senior vice-president and chief financial officer Thomas W. Freeze added that the company remains confident in the lower end of its revenue guidance for fiscal 2001, with 40 to 50% growth over last year's $41.7 million in revenues.
"For fiscal 2002, our preliminary goal is 20 to 30% revenue growth and improving profitability. We expect 2002 revenue growth to come from completion of our 'T.G.I. Friday's' rollout plan into key distribution channels, from the introduction of several new 'T.G.I. Friday's' brand salted snack products, and from growth in our potato chip business. We are also exploring several new brand concepts which may result in future market tests," said Freeze.
As previously announced, Poore Bros. expects ongoing variability in quarterly results due to potential large introductory orders associated with entering new distribution channels or geographies, combined with the current slowing economic conditions, Freeze explained. "Despite these potential fluctuations in future quarterly financial results, we plan to focus on improving profit margins by continuing to drive profitable revenue growth, improving our operating efficiencies and reducing non-essential costs," he added. "The company has made significant investments in people and manufacturing capabilities in 2001, and we believe we can leverage our enhanced capabilities to continue rapid revenue growth in 2002 and improve profitability."
Kufel emphasized that Poore Bros. remains committed to focusing on improving profitability as it strives to achieve its goal of delivering $100 million in "intensely different" snack food brand revenues.
Poore Bros. "intensely different" snack food brands include "T.G.I. Friday's" snack chips; "Poore Brothers" brand potato chips; "Bob's Texas Style" potato chips; "Boulder Potato Company" potato chips; "Tato Skins" potato snacks; and "Pizzarias" pizza chips. The company also produces private-label potato chips for major retailers in Arizona and California.