Product recall a drag on Inventure earnings

by Eric Schroeder
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A voluntary recall of certain Fresh Frozen brand frozen vegetables and certain Jamba At Home smoothie kits crippled results at Inventure.

PHOENIX — A voluntary recall of certain Fresh Frozen brand frozen vegetables and certain Jamba At Home smoothie kits crippled results at specialty food maker Inventure Foods, Inc. in the first quarter of fiscal 2015. The company sustained a loss of $14,635,000 in the first quarter ended March 28, which compared with net income of $1,597,000, equal to 8c per share on the common stock, in the same period a year ago.  The most recent quarter included product recall charges of $9,919,000 and an intangible asset impairment charge of $5,939,000.

Net revenues for the first quarter were $77,607,000, up 15% from $67,509,000 a year ago.

“We started the year with positive sales momentum, led by a 22% increase in our healthy/natural product portfolio as our Boulder Canyon, Radar Farms, Fresh Frozen and Jamba brands all posted solid double digit increases in net revenues,” said Terry McDaniel, chief executive officer of Inventure Foods. “Our achievements in the first quarter were offset by the expenses associated with our voluntary product recall that we announced late last month, which in turn, negatively impacted our margin performance and profitability for the quarter. We remain committed to product quality and safety, and we will continue to work diligently to stabilize our Fresh Frozen business while maintaining momentum for our other brands.”

Gross profit in the Snack segment increased 2% to $3,800,000 in the first quarter, up from $3,700,000 a year ago. Revenues increased more than 10% to $26,300,000.

In the Frozen segment, Inventure sustained a first-quarter loss of $7,500,000, which compared with a gross profit of $7,800,000 a year ago. Excluding the impact of the product recall, gross profit also would have been around $7,800,000. Net revenues during the quarter increased 18% to $51,300,000, up from $43,700,000.

On April 23, Inventure announced a voluntary product recall for certain kinds of its Fresh Frozen line of frozen vegetables, and certain Jamba At Home line of smoothie kits, because the Jefferson, Ga., facility tested positive for Listeria monocytogenes.
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