Freshpet reported financial results for its fourth quarter ended December 31, 2014. Net sales increased 38.3% to $24.5 million compared to $17.7 million in the fourth quarter of 2013.
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Fourth quarter net sales growth was driven by increased velocity in grocery, mass, pet specialty, natural and other retail channels in the fourth quarter of 2014. The Company also experienced an increase in Freshpet fridges to 13,386 from 10,836 in the fourth quarter of 2013.
Gross profit was $12.0 million, or 48.9% of net sales, compared to $6.4 million, or 36.2% of net sales, for the same quarter last year. The increase in gross profit for the fourth quarter of 2014 reflects higher net sales and lower manufacturing costs per pound, partially offset by higher depreciation from the use of the Company's new Freshpet Kitchens in Bethlehem, Pennsylvania.
Selling, general and administrative expenses (SG&A) were $11.4 million compared to $8.3 million for the same quarter last year. After adjusting $1.1 million and $0.2 million for non-cash items related to stock compensation and the fair valuation of warrants in 2014 and 2013, respectively, the adjusted SG&A decreased as a percentage of net sales to 41.9% compared to 45.2% of net sales in the fourth quarter of 2013.
Net loss was $16.4 million compared to $5.2 million in the fourth quarter of 2013. Net loss in the fourth quarter of 2014 includes $15.5 million of fees on debt guarantee and $0.7 million of write-offs of loan origination fees and note discounts associated with the pay down of debt upon the initial public offering (IPO).
Net loss in the fourth quarter of 2013 included $1.9 million of fees on debt guarantee. Excluding these items, net loss was $0.2 million in the fourth quarter of 2014, compared to $3.3 million in the fourth quarter of 2013. The Company will no longer incur fees on debt guarantee in future periods.
Adjusted EBITDA increased $1.7 million to $4 million from $2.3 million in the fourth quarter of 2013. Adjusted EBITDA is a non-GAAP financial measure. Please refer to the financial tables in this press release for a reconciliation of all non-GAAP financial measures. ■