Freshpet, Inc. · NASDAQ:FRPT
Freshpet — Investor Presentation (April 2015)
37 slides from Freshpet's investor presentation, Apr 1, 2015
Slide 1: Investor Relations Presentation April 2015
Investor Relations Presentation April 2015
Slide 2: Forward Looking Statements and Non-GAAP Financial Measures
Forward Looking Statements and Non-GAAP Financial Measures Forward Looking Statements Certain statements in this presentation may constitute "forward-looking" statements. These statements are based on management's current opinions, expectations, beliefs, plans, objectives, assumptions or projections
Slide 3: Introduction & Overview
Freshpet Introduction & Overview
Slide 4: Who is Freshpet
Who is Freshpet We are an innovation driven brand disrupting a huge, growing industry We are positioned at the confluence of pet parenting and consumer health & wellness with a socially responsible brand We are redefining what good pet food is in ways that are intuitive to consumers We deliver a val
Slide 5: Compelling Growth
Compelling Growth We believe we are one of North America’s fastest growing pet food companies First mover with a highly differentiated product Scalable and difficult-to-replicate business model Mission-focused: bringing the power of natural, fresh food to dogs and cats Proven in the field: Freshpet
Slide 6: We Operate in a Large and Growing Category
We Operate in a Large and Growing Category Source: Euromonitor, Packaged Facts Includes dog and cat food, and treats Growth multiples based on net sales CAGRs for 2008 – 2012 period Rising Pet Ownership Increasing Pet Humanization Consumer Focus on Health & Wellness Pet Food is a Highly Involved Cat
Slide 7: We Are Disrupting the Pet Food Industry
We Are Disrupting the Pet Food Industry Traditional Pet Food The Freshpet Difference Unchanged for 70 years 8 years of continuous innovation Wet Dog Food Dry Dog Food Fresh ingredients, with all-natural meats and veggies sourced in North America Gently cooked without preservatives at the Freshpet Ki
Slide 8: Freshpet Is Accessible To The Average Consumer
Freshpet Is Accessible To The Average Consumer Source: IRI Total US Multi Outlet Average Price latest 12wks ending March 23, 2014 and brand website feeding guidelines – smallest size for all competitive SKUs listed. Leading Brands
Slide 9: Experienced Team With A Proven Track Record
Experienced Team With A Proven Track Record Name Title Years of Packaged Good Experience Previous Experience Richard Thompson Chief Executive Officer 30+ Dick Kassar Chief Financial Officer 29+ Scott Morris Chief Marketing Officer 21+ Cathal Walsh Senior VP of Cooler Operations 17+ Michael Hieger Se
Slide 10: Freshpet Culture: Pets, People, Planet
Freshpet Culture: Pets, People, Planet Bring the Power of Fresh to Pets Care for the Freshpet Family Be Good Stewards of the Environment Highest quality food Freshpet Nutrition Council Donations to charities Participation in Random Acts of Kindness The Freshpet Foundation Treat team members with res
Slide 11: Value Proposition
Freshpet Value Proposition
Slide 12: The Freshpet Value Creation Platform
The Freshpet Value Creation Platform Delivers benefits in traffic, frequency and retailer margins Alignment with deep pet parent emotional motivations Pet food that is differentiated in attributes & appearance Technology, processes, and infrastructure that we developed Only refrigerated pet food net
Slide 13: Our Brand and Product Know-How Are Foundational
Our Brand and Product Know-How Are Foundational Our Brand Our Values Our Products Our Expertise Consumers want pets to eat better and healthier foods Targeted to consumers seeking to fulfill emotional motivations Mission focused and values driven Simple, transparent & honest Doing what is best for p
Slide 14: Manufacturing & Supply Chain
Manufacturing & Supply Chain Unique National Distribution Unique Freshpet Kitchens Only pet food company with an established refrigerated supply chain in North America Partnered with leading food distributor for refrigerated transportation right from Freshpet Kitchens to: - Grocery accounts in North
Slide 15: Control Over Merchandise Space
Control Over Merchandise Space Our Freshpet Fridges allow us unparalleled control over our merchandising space Powerful and distinct brand ambassadors Opportunity for unparalleled communication with our consumers We don’t fight for shelf space with other manufacturers Major barrier to entry for futu
Slide 16: We Create A Strong Value Proposition For Retailers
We Create A Strong Value Proposition For Retailers Freshpet Attracts New Consumers2 Freshpet Grows The Pet Category In Grocery1 Freshpet Increases Shopper Frequency3 24% of shoppers were new to the retailers’ category Average purchase cycle of Freshpet is 1.5x the category Stores with Freshpet grow
Slide 17: Growth Strategy
Freshpet Growth Strategy
Slide 18: We Have Multiple Levers For Long Term Growth
We Have Multiple Levers For Long Term Growth Grow Points of Distribution Grow Awareness and Adoption New Product Innovation Leverage Scalable Infrastructure 1 2 3 4
Slide 19: Grow Points of Distribution
Growth Points of Distribution Freshpet is sold across all major classes of retail including grocery, mass, club, pet specialty and natural Opportunity to approximately double store count at existing retail partners alone Substantial runway to penetrate new retail accounts Attractive economics: 15 mo
Slide 20: Grow Awareness And Adoption
Grow Awareness And Adoption Guerilla Marketing Digital & Social Media Differentiated Packaging Retail Merchandising Freshpet Toolbox to Connect with Consumers National TV Advertising Less than 20% of dog owners today have ever heard of Freshpet Freshpet Share of Dry and Wet Dog Food Source: Market s
Slide 21: New Product Innovation
New Product Innovation Fresh Raw Launched in 3Q14 Fresh Raw vs. Competitors’ Frozen Raw Frozen Raw is a $300mm category today (1) Shredded Launching in 2015 Looks like food people eat at home Convenient, easy to use packaging Further differentiates product portfolio in the pet food space Cat Food In
Slide 22: Leverage Scalable Infrastructure
Leverage Scalable Infrastructure Freshpet Fridge growth Awareness & adoption New product innovation Operating Leverage in 2014 Incremental Sales Flow Through Increasing capacity utilization Fully-staffed manufacturing team Have historically taken pricing to offset cost inflation Corporate infrastruc
Slide 23: Financial Performance
Freshpet Financial Performance
Slide 24: Strong Growth Through Distribution And Consumer Adoption
Strong Growth Through Distribution And Consumer Adoption CAGR: +49% Freshpet Fridge Store Locations Net Sales ($ mm) CAGR: +24%
Slide 25: Recent Performance
Recent Performance Net Sales ($ mm) Freshpet Fridge Store Locations 24% Growth 38% Growth Q4 Q4 Q4 Q4 Q4 Q4 Note: Represents three month periods ended December 31, 2014 and 2013 *Adjusted for $1.2 million and $0.2 million for non-cash items related to stock compensation and the fair valuation of war
Slide 26: Balance Sheet And Liquidity
Balance Sheet And Liquidity Cash and cash equivalents of $36 million Availability of $40 million under new credit facilities, with ability to access an additional $10 million accordion Liquidity of $86 million ($40 million available under new credit facilities, plus $10 million accordion, plus $36 m
Slide 27: Guidance and Long-Term Financial Targets
Guidance and Long-Term Financial Targets Long-Term Financial Targets FY 2015 Guidance* *As of March 31, 2015, all comparisons made to the prior year. Reflects Adjusted EBITDA as defined in the Prospectus. Freshpet Fridges15,100 - 15,600 13% - 17% increase Net Sales$112.0 - $114.5 million29% - 32% in
Slide 28: Investment Summary
Investment Summary We are an innovation driven brand disrupting a huge, growing industry We are positioned at the confluence of pet parenting and consumer health & wellness with a socially responsible brand We are redefining what good pet food is in ways that are intuitive to consumers We deliver a
Slide 29: Appendix
Freshpet Appendix
Slide 30: Historical Summary Financials
Historical Summary Financials FYE December ($ millions) Annual 2013 2014 Y-o-Y Growth Fridges 10,836 13,386 24% Net Sales $63.2 $86.8 37% Gross Profit Margin 43.1% 48.7% 560bps Adj. SG&A* % Net Sales 61.1% 53.9% (720)bps EBITDA (7.0) (0.3) $6.7 Adj. EBITDA $(0.2) $5.5 $5.7 Capital Expenditures $24.6
Slide 31: Our Customers: Evolution of Store Count by Class of Retail
4Q13 4Q14 Our Customers Evolution of Store Count by Class of Retail *Freshpet began selling in the natural retail class in 2012 Total Freshpet Fridges 4Q14 = 13,386 Total Freshpet Fridges 4Q13 = 10,836
Slide 32: EBITDA Reconciliation
EBITDA Reconciliation Annual FYE December ($ millions) 2013 2014 Net Loss $(21.7) $(37.3) Fees on debt guarantee(a) 5.2 25.9 Depreciation & amortization 5.9 6.4 Interest expense 3.5 4.6 Income tax expense 0.0 0.0 EBITDA(1) $(7.0) $(0.3) Loss on disposal of equipment 0.5 0.3 Launch expense(b) 3.3 3.5
Slide 33: EBITDA Reconciliation (footnotes)
EBITDA Reconciliation Represents fees on debt guarantee and preferred stock accretion. In connection with the IPO, we converted the fees on debt guarantee and Series C Preferred Stock into shares of our common stock. The fees on debt guarantee settlement caused a non-cash mark-to-market adjustment w
Slide 34: Consolidated Balance Sheets
FesnPeT mc. vo SuBSIOURY RAFT Ce oF ISOLIDATED BALANCE SHEETS, ASSETS (CURRENT ASSETS ‘Cash and equivalents ‘on December 31,2014 and $243,777 on December 31,2013 Inventories, net Prepaid expenses and other current assets sets Property, plant ang equipment net Deposits on equipment assets Total Asset
Slide 35: Consolidated Statements of Operations
FRESHPET INC. AND SUBSIDIARY ‘NET SALES COST OF Goops SOLD GROSS PROFIT SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES GAIN (LOSS) FROM OPERATIONS OTHER EXPENSES: Other Fees on Debt Guarantee Interest expense ‘LOSS BEFORE INCOME TAXES INCOME TAX EXPENSE NET LOSS TOTAL COMPREHENSIVE LOSS ‘NET LO’ ETO
Slide 36: Consolidated Statement of Cash Flows
FRESHPETINC. AND SUBSIDIARY ‘CONSOLIDATED STATEMENT OF CASH FLOWS (CASH FLOWS FROM OPERATING ACTIMTES: Netoss Prowsion foriosses on account Lose on aposa et equpmnt ad gaps on equomen ‘Amortzaton of aeetegnancing costs and loan lecount (Changes in operating assets andiaities Inventories Prepaid expe
Slide 37: Reconciliation Between Net Loss and Adjusted EBITDA
Net Loss Fees on debt guarantee Depreciation and amortization Interest expense Income tax expense EBITDA Loss on ssbceal of equipment Launch e FRESHPET INC & SUBSIDIARY RECONCILIATION BETWEEN NET LOSS AND ADJUSTED EBITDA (Amounts in millions) Certain totals do not sum due to rounding ‘Twelve Months