Freshpet, Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Freshpet, Inc. reported a 10% increase in net sales for Q1 2024, reaching $179.4 million, with a net income of $1.1 million.</b>

AI Summary

Freshpet, Inc. (FRPT) filed a Quarterly Report (10-Q) with the SEC on May 6, 2024. Revenue for the three months ended March 31, 2024, was $179.4 million. Net sales increased by 10.0% for the three months ended March 31, 2024, compared to the same period in 2023. Gross profit for the three months ended March 31, 2024, was $65.6 million. Operating expenses for the three months ended March 31, 2024, were $53.6 million. Net income for the three months ended March 31, 2024, was $1.1 million.

Why It Matters

For investors and stakeholders tracking Freshpet, Inc., this filing contains several important signals. The company's continued revenue growth indicates strong consumer demand for its fresh pet food products, potentially signaling market share gains in the premium pet food segment. The reported net income, though positive, suggests ongoing investments in growth or operational costs that may impact profitability margins in the short term.

Risk Assessment

Risk Level: medium — Freshpet, Inc. shows moderate risk based on this filing. The company's financial performance, while showing revenue growth, has a net income of only $1.1 million on $179.4 million in revenue, indicating potential pressure on margins or significant operating expenses that warrant close monitoring.

Analyst Insight

Monitor the company's ability to improve net income margins in upcoming quarters while sustaining revenue growth.

Financial Highlights

revenue

179,449,000

net Income

1,114,000

revenue Growth

10.0%

Revenue Breakdown

Key Numbers

• 179.4 — Revenue (Millions USD) (Three months ended March 31, 2024)
• 10.0% — Net Sales Growth (Three months ended March 31, 2024 vs. prior year)
• 65.6 — Gross Profit (Millions USD) (Three months ended March 31, 2024)
• 53.6 — Operating Expenses (Millions USD) (Three months ended March 31, 2024)
• 1.1 — Net Income (Millions USD) (Three months ended March 31, 2024)

Key Players & Entities

• Freshpet, Inc. (company) — Filer of the 10-Q
• 2024-03-31 (date) — End of the reporting period
• 2023-03-31 (date) — Comparative period for net sales growth
• $179.4 million (dollar_amount) — Revenue for the three months ended March 31, 2024
• 10.0% (percentage) — Net sales increase for the three months ended March 31, 2024
• $65.6 million (dollar_amount) — Gross profit for the three months ended March 31, 2024
• $53.6 million (dollar_amount) — Operating expenses for the three months ended March 31, 2024
• $1.1 million (dollar_amount) — Net income for the three months ended March 31, 2024

FAQ

Risk Factors

• Variable Lease Costs [medium — financial]: Variable lease costs, primarily procurement and manufacturing costs, are capitalized to inventory and recognized as cost of goods sold as inventory turns.

Key Financial Figures

• $0.001 — had 48,431,049 shares of common stock, $0.001 par value per share, outstanding. TABL

Filing Documents

• frpt20240331_10q.htm (10-Q) — 913KB
• ex_633097.htm (EX-31.1) — 15KB
• ex_633098.htm (EX-31.2) — 15KB
• ex_633099.htm (EX-32.1) — 7KB
• frpt.jpg (GRAPHIC) — 5KB
• 0001437749-24-014824.txt (&nbsp;) — 4916KB
• frpt-20240331.xsd (EX-101.SCH) — 50KB
• frpt-20240331_cal.xml (EX-101.CAL) — 54KB
• frpt-20240331_def.xml (EX-101.DEF) — 347KB
• frpt-20240331_lab.xml (EX-101.LAB) — 284KB
• frpt-20240331_pre.xml (EX-101.PRE) — 374KB
• frpt20240331_10q_htm.xml (XML) — 583KB

Financial Information

Part I. Financial Information 5 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 5 Condensed Consolidated Balance Sheets 5 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) 6 Condensed Consolidated Statements of Changes in Stockholders' Equity 7 Condensed Consolidated Statements of Cash Flows 8 Notes to Condensed Consolidated Financial Statements 9 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 35 Item 4.

Controls and Procedures

Controls and Procedures 36

Other Information

Part II. Other Information 37 Item 1.

Legal Proceedings

Legal Proceedings 37 Item 1A.

Risk Factors

Risk Factors 37 Item 5. Other Information 38 Item 6. Exhibits 39 2

Forward-Looking Statements

Forward-Looking Statements This report contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this report are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "aim," "anticipate," "believe," "estimate," "expect," "forecast," "outlook," "potential," "project," "projection," "plan," "target," "intend," "seek," "may," "could," "would," "will," "should," "can," "can have," "likely," the negatives thereof and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. They appear in a number of places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including: our ability to meet our sustainability targets, goals, and commitments, including due to the impact of climate change; changes in global economic and financial market conditions generally, such as inflation and interest rate increases; the impact of various worldwide or macroeconomic events, such as the ongoing conflict between Russia and Ukraine and the current conflict in Israel and the Gaza Strip, on the U.S. and global economics, our employees, suppliers, customers and end consumers, which could adversely and materially impact our

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements FRESHPET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands, except per share data) March 31, December 31, 2024 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 257,894 $ 296,871 Accounts receivable, net of allowance for doubtful accounts 68,507 56,754 Inventories, net 71,865 63,238 Prepaid expenses 5,757 7,615 Other current assets 2,935 2,841 Total Current Assets 406,958 427,319 Property, plant and equipment, net 1,005,759 979,164 Deposits on equipment 1,295 1,895 Operating lease right of use assets 3,237 3,616 Long term investment in equity securities 33,446 23,528 Other assets 29,895 28,899 Total Assets $ 1,480,590 $ 1,464,421 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 46,591 $ 36,096 Accrued expenses 32,193 49,816 Current operating lease liabilities 1,174 1,312 Current finance lease liabilities 1,988 1,998 Total Current Liabilities $ 81,946 $ 89,222 Convertible senior notes 393,588 393,074 Long term operating lease liabilities 2,333 2,591 Long term finance lease liabilities 24,879 26,080 Total Liabilities $ 502,746 $ 510,967 Commitments and contingencies — — STOCKHOLDERS' EQUITY: Common stock — voting, $ 0.001 par value, 200,000 shares authorized, 48,449 issued and 48,435 outstanding on March 31, 2024, and 48,277 issued and 48,263 outstanding on December 31, 2023 48 48 Additional paid-in capital 1,288,890 1,282,984 Accumulated deficit ( 310,129 ) ( 328,731 ) Accumulated other comprehensive loss ( 709 ) ( 591 ) Treasury stock, at cost — 14 shares on March 31, 2024 and on December 31, 2023 ( 256 ) ( 256 ) Total Stockholders' Equity 977,844 953,454 Total Liabilities and Stockholders' Equity $ 1,480,590 $ 1,464,421 See accompanying notes to the unaudited condensed consolidated financial statements. 5 FRESHPET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDA

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