x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2016 OR |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO ______ |
Delaware | 46-0552933 | |
(State or Other Jurisdiction of | (I.R.S. Employer Identification No.) | |
Incorporation or Organization) |
Large Accelerated Filer ( ) | Accelerated Filer ( ) | |
Non-Accelerated Filer (X) | Smaller Reporting Company ( ) | |
(Do not check if a smaller reporting company) |
Common Stock | Outstanding Shares at November 10, 2016 | ||
Common stock, par value $0.01 per share | 196,515,280 |
Page | |||
• | We may not be able to successfully implement our growth strategy on a timely basis or at all; |
• | The growth of our business depends on our ability to accurately predict consumer trends and demand and successfully introduce new products and product line extensions and improve existing products; |
• | Any damage to our reputation or our brand could have a material adverse effect on our business, financial condition, and results of operations; |
• | Our growth and business are dependent on trends that may change or not continue, and our historical growth may not be indicative of our future growth; |
• | There may be decreased spending on pets in a challenging economic climate; |
• | Our business depends, in part, on the sufficiency and effectiveness of our marketing and trade promotion programs; |
• | If we are unable to maintain or increase prices, our margins may decrease; |
• | We are dependent on a relatively limited number of customers for a significant portion of our sales; |
• | We rely upon a limited number of contract manufacturers to provide a significant portion of our supply of products; and |
September 30, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 316,362 | $ | 224,253 | |||
Receivables, net | 92,398 | 80,103 | |||||
Inventories | 75,400 | 83,482 | |||||
Prepaid expenses and other current assets | 6,515 | 4,492 | |||||
Total current assets | 490,675 | 392,330 | |||||
Restricted cash | 781 | 473 | |||||
Property, plant and equipment, net | 126,282 | 115,160 | |||||
Deferred income taxes | 1,696 | 3,907 | |||||
Deferred debt issuance costs, net | 104 | 196 | |||||
Other assets | 517 | 480 | |||||
Total assets | $ | 620,055 | $ | 512,546 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||
Current liabilities: | |||||||
Current maturities of long-term debt | $ | 3,960 | $ | 3,960 | |||
Accounts payable | 35,478 | 31,428 | |||||
Other current liabilities | 72,394 | 70,459 | |||||
Total current liabilities | 111,832 | 105,847 | |||||
Long-term debt | 380,167 | 383,137 | |||||
Deferred income taxes | 4,117 | 3,268 | |||||
Other long-term liabilities | 14,291 | 11,013 | |||||
Total liabilities | 510,407 | 503,265 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity (deficit): | |||||||
Preferred stock; $0.01 par value; 150,000,000 shares authorized; none issued or outstanding at September 30, 2016 and December 31, 2015 | — | — | |||||
Common stock, voting; $0.01 par value; 1,500,000,000 shares authorized; 196,515,280 and 196,216,596 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 1,965 | 1,962 | |||||
Additional paid-in capital | 69,752 | 64,899 | |||||
Retained earnings (accumulated deficit) | 37,890 | (57,549 | ) | ||||
Accumulated other comprehensive income (loss) | 41 | (31 | ) | ||||
Total stockholders’ equity | 109,648 | 9,281 | |||||
Total liabilities and stockholders’ equity | $ | 620,055 | $ | 512,546 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net sales | $ | 287,996 | $ | 259,437 | $ | 854,682 | $ | 762,209 | |||||||
Cost of sales | 154,787 | 151,152 | 470,938 | 454,595 | |||||||||||
Gross profit | 133,209 | 108,285 | 383,744 | 307,614 | |||||||||||
Selling, general and administrative expenses | 65,493 | 58,664 | 190,849 | 165,723 | |||||||||||
Provision for legal settlement | 32,000 | — | 32,000 | — | |||||||||||
Operating income | 35,716 | 49,621 | 160,895 | 141,891 | |||||||||||
Interest expense, net | 3,629 | 3,722 | 10,872 | 11,097 | |||||||||||
Income before income taxes | 32,087 | 45,899 | 150,023 | 130,794 | |||||||||||
Provision for income taxes | 10,605 | 18,833 | 54,584 | 51,044 | |||||||||||
Net income | $ | 21,482 | $ | 27,066 | $ | 95,439 | $ | 79,750 | |||||||
Basic net income per common share | $ | 0.11 | $ | 0.14 | $ | 0.49 | $ | 0.41 | |||||||
Diluted net income per common share | $ | 0.11 | $ | 0.14 | $ | 0.48 | $ | 0.40 | |||||||
Basic weighted average shares | 196,445,684 | 196,062,348 | 196,311,529 | 195,852,404 | |||||||||||
Diluted weighted average shares | 199,452,308 | 198,254,808 | 199,290,017 | 198,028,543 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income | $ | 21,482 | $ | 27,066 | $ | 95,439 | $ | 79,750 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Foreign currency translation adjustment | 6 | — | 72 | — | ||||||||||||
Other comprehensive income (loss), before tax | 6 | — | 72 | — | ||||||||||||
Income tax expense on other comprehensive income (loss) | — | — | — | — | ||||||||||||
Other comprehensive income (loss), net of tax | 6 | — | 72 | — | ||||||||||||
Comprehensive income | $ | 21,488 | $ | 27,066 | $ | 95,511 | $ | 79,750 |
Common shares outstanding | Common stock | Additional paid-in capital | (Accumulated deficit) retained earnings | Accumulated other comprehensive (loss) | Total | |||||||||||||||||
Balance at December 31, 2015 | 196,216,596 | $ | 1,962 | $ | 64,899 | $ | (57,549 | ) | $ | (31 | ) | $ | 9,281 | |||||||||
Other comprehensive income | — | — | — | — | 72 | 72 | ||||||||||||||||
Issuance of restricted stock awards | 31,871 | — | 814 | — | — | 814 | ||||||||||||||||
Exercise of stock options | 266,813 | 3 | 1,802 | — | — | 1,805 | ||||||||||||||||
Tax benefit from exercise of stock options | — | — | — | — | — | — | ||||||||||||||||
Stock-based compensation expense | — | — | 2,237 | — | — | 2,237 | ||||||||||||||||
Net income | — | — | — | 95,439 | — | 95,439 | ||||||||||||||||
Balance at September 30, 2016 | 196,515,280 | $ | 1,965 | $ | 69,752 | $ | 37,890 | $ | 41 | $ | 109,648 |
Nine Months Ended September 30, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 95,439 | $ | 79,750 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 6,766 | 5,981 | |||||
Amortization of debt issuance costs | 91 | 91 | |||||
Stock-based compensation | 3,051 | 2,935 | |||||
Deferred compensation | — | 19 | |||||
(Gain) loss on disposal of fixed assets | (2 | ) | 69 | ||||
Deferred income taxes | 3,061 | (1,790 | ) | ||||
Tax benefit from exercise of stock options | — | (1,551 | ) | ||||
Provision for legal settlement | 32,000 | — | |||||
Payment of class action legal settlement | (32,000 | ) | — | ||||
Effect of changes in operating assets and liabilities: | |||||||
Receivables | (12,282 | ) | 2,178 | ||||
Inventories | 8,257 | (8,282 | ) | ||||
Prepaid expenses and other assets | (2,066 | ) | (3 | ) | |||
Accounts payable | 4,055 | 4,387 | |||||
Other liabilities | 5,158 | 10,263 | |||||
Net cash provided by operating activities | 111,528 | 94,047 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (17,901 | ) | (5,374 | ) | |||
Restricted cash | (308 | ) | — | ||||
Proceeds from the sale of fixed assets | 15 | — | |||||
Net cash used in investing activities | (18,194 | ) | (5,374 | ) | |||
Cash flows from financing activities: | |||||||
Principal payments on long-term debt | (2,970 | ) | (2,970 | ) | |||
Proceeds from exercise of stock options | 1,805 | 1,910 | |||||
Tax benefit from exercise of stock options | — | 1,551 | |||||
Net cash (used in) provided by financing activities | (1,165 | ) | 491 | ||||
Effect of exchange rate changes on cash and cash equivalents | (60 | ) | — | ||||
Net increase in cash and cash equivalents | 92,109 | 89,164 | |||||
Cash and cash equivalents at beginning of period | 224,253 | 95,788 | |||||
Cash and cash equivalents at end of period | $ | 316,362 | $ | 184,952 |
(dollars in thousands) | September 30, 2016 | December 31, 2015 | |||||
Trade receivables, net | $ | 84,148 | $ | 66,648 | |||
Other receivables | 8,250 | 13,455 | |||||
Total | $ | 92,398 | $ | 80,103 |
(dollars in thousands) | September 30, 2016 | December 31, 2015 | |||||
Finished goods | $ | 69,746 | $ | 76,987 | |||
Work in process | 354 | 352 | |||||
Raw materials | 2,558 | 2,583 | |||||
Packaging and supplies | 2,742 | 3,560 | |||||
Total | $ | 75,400 | $ | 83,482 |
(dollars in thousands) | September 30, 2016 | December 31, 2015 | |||||
Buildings | $ | 59,314 | $ | 59,315 | |||
Machinery and equipment | 49,058 | 47,234 | |||||
Computer software | 13,087 | 11,641 | |||||
Computer equipment | 4,523 | 4,055 | |||||
Furniture and fixtures | 1,743 | 1,585 | |||||
Leasehold improvements | 1,477 | 1,413 | |||||
Land improvements | 493 | 493 | |||||
Land | 366 | 346 | |||||
Buildings improvements | 184 | 86 | |||||
Construction in progress | 17,443 | 3,673 | |||||
147,688 | 129,841 | ||||||
Accumulated depreciation and amortization | (21,406) | (14,681) | |||||
Total | $ | 126,282 | $ | 115,160 |
(dollars in thousands) | September 30, 2016 | December 31, 2015 | |||||
Term loan | $ | 384,127 | $ | 387,097 | |||
Less current maturities | (3,960 | ) | (3,960 | ) | |||
Total long-term debt | $ | 380,167 | $ | 383,137 |
2016 | 2015 | ||||||
Volatility | 32.58 | % | 23.85 | % | |||
Risk-free interest rate | 1.23 | % | 1.88 | % | |||
Expected term (years) | 5 | 6.5 | |||||
Dividend yield | — | — | |||||
Grant-date fair value | $ | 7.81 | $ | 5.74 |
Number of Shares | Weighted Average Exercise Price Per Share | |||||
Options outstanding at December 31, 2015 | 4,366,297 | $ | 6.24 | |||
Granted | 396,688 | $ | 25.47 | |||
Exercised | (266,813 | ) | $ | 6.54 | ||
Forfeited | (69,417 | ) | $ | 13.59 | ||
Expired | (11,566 | ) | $ | 6.97 | ||
Options outstanding at September 30, 2016 | 4,415,189 | $ | 7.83 | |||
Options exercisable at September 30, 2016 | 2,102,214 | $ | 5.80 |
RSAs | RSUs | ||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||
Outstanding at December 31, 2015 | — | $ | — | — | $ | — | |||||||
Granted | 31,871 | $ | 25.57 | 87,203 | $ | 25.48 | |||||||
Vested | (31,871 | ) | $ | 25.57 | — | $ | — | ||||||
Forfeited | — | $ | — | (1,635 | ) | $ | 25.57 | ||||||
Outstanding at September 30, 2016 | — | $ | — | 85,568 | $ | 25.48 |
(dollars in thousands) | |||
2016 (period from October 1, to December 31, 2016) | $ | 918 | |
2017 | 3,582 | ||
2018 | 2,037 | ||
2019 | 553 | ||
2020 | 56 | ||
Total | $ | 7,146 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(dollars in thousands, except for per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net income | $ | 21,482 | $ | 27,066 | $ | 95,439 | $ | 79,750 | |||||||
Basic weighted average number of shares outstanding | 196,445,684 | 196,062,348 | 196,311,529 | 195,852,404 | |||||||||||
Dilutive effect of stock options and RSUs | 3,006,624 | 2,192,460 | 2,978,488 | 2,176,139 | |||||||||||
Diluted weighted average number of shares outstanding | 199,452,308 | 198,254,808 | 199,290,017 | 198,028,543 | |||||||||||
Basic net income per common share | $ | 0.11 | $ | 0.14 | $ | 0.49 | $ | 0.41 | |||||||
Diluted net income per common share | $ | 0.11 | $ | 0.14 | $ | 0.48 | $ | 0.40 | |||||||
Anti-dilutive shares excluded from diluted earnings per share computation | 385,861 | 86,733 | 407,845 | 29,229 |
Three Months Ended September 30, | % of Net Sales | ||||||||||||
(dollars in thousands, except for per share amounts and percentages) | 2016 | 2015 | 2016 | 2015 | |||||||||
Net sales | $ | 287,996 | $ | 259,437 | 100.0 | % | 100.0 | % | |||||
Cost of sales | 154,787 | 151,152 | 53.7 | % | 58.3 | % | |||||||
Gross profit | 133,209 | 108,285 | 46.3 | % | 41.7 | % | |||||||
Selling, general, and administrative expenses | 65,493 | 58,664 | 22.7 | % | 22.6 | % | |||||||
Provision for legal settlement | 32,000 | — | 11.1 | % | — | % | |||||||
Operating income | 35,716 | 49,621 | 12.4 | % | 19.1 | % | |||||||
Interest expense, net | 3,629 | 3,722 | 1.3 | % | 1.4 | % | |||||||
Income before income taxes | 32,087 | 45,899 | 11.1 | % | 17.7 | % | |||||||
Provision for income taxes | 10,605 | 18,833 | 3.7 | % | 7.3 | % | |||||||
Net income | $ | 21,482 | $ | 27,066 | 7.5 | % | 10.4 | % | |||||
Basic net income per common share | $ | 0.11 | $ | 0.14 | |||||||||
Diluted net income per common share | $ | 0.11 | $ | 0.14 |
Nine Months Ended September 30, | % of Net Sales | ||||||||||||
(dollars in thousands, except for per share amounts and percentages) | 2016 | 2015 | 2016 | 2015 | |||||||||
Net sales | $ | 854,682 | $ | 762,209 | 100.0 | % | 100.0 | % | |||||
Cost of sales | 470,938 | 454,595 | 55.1 | % | 59.6 | % | |||||||
Gross profit | 383,744 | 307,614 | 44.9 | % | 40.4 | % | |||||||
Selling, general, and administrative expenses | 190,849 | 165,723 | 22.3 | % | 21.7 | % | |||||||
Provision for legal settlement | 32,000 | — | 3.7 | % | — | % | |||||||
Operating income | 160,895 | 141,891 | 18.8 | % | 18.6 | % | |||||||
Interest expense, net | 10,872 | 11,097 | 1.3 | % | 1.5 | % | |||||||
Income before income taxes | 150,023 | 130,794 | 17.6 | % | 17.2 | % | |||||||
Provision for income taxes | 54,584 | 51,044 | 6.4 | % | 6.7 | % | |||||||
Net income | $ | 95,439 | $ | 79,750 | 11.2 | % | 10.5 | % | |||||
Basic net income per common share | $ | 0.49 | $ | 0.41 | |||||||||
Diluted net income per common share | $ | 0.48 | $ | 0.40 |
• | $10.7 million of incremental expense related to our ongoing investments in advertising and marketing ($6.8 million) consistent with our strategy to invest in our brand and product lines and investments made in strategic initiatives ($3.9 million); partially offset by |
• | $5.1 million decrease in expense related to public offerings. |
• | $22.2 million of incremental expense related to strategic initiatives ($12.2 million) and our ongoing investments in advertising and marketing ($10.0 million) consistent with our strategy to invest in our brand and product lines; partially offset by |
• | $6.4 million decrease in expense related to public offerings. |
• | a pledge of 100% of the capital stock of the borrower and 100% of the equity interests directly held by the borrower and each guarantor in any wholly-owned material subsidiary of the borrower or any guarantor (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, will not include more than 65% of the voting stock of such non-U.S. subsidiary), subject to certain exceptions; and |
• | a security interest in, and mortgages on, substantially all tangible and intangible assets of the borrower |
31.1 | Certification of Periodic Report by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). |
31.2 | Certification of Periodic Report by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). |
101.INS | XBRL Instance Document (filed herewith). |
101.SCH | XBRL Taxonomy Extension Schema Document (filed herewith). |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith). |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (filed herewith). |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document (filed herewith). |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith). |
BLUE BUFFALO PET PRODUCTS, INC. | |
By: | /s/ Kurt Schmidt |
Kurt Schmidt | |
Chief Executive Officer (Principal Executive Officer) | |
By: | /s/ Michael Nathenson |
Michael Nathenson | |
Executive Vice President, Chief Financial Officer and Treasurer | |
(Principal Financial and Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2016 of Blue Buffalo Pet Products, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(c) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2016 of Blue Buffalo Pet Products, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(c) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
• | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
• | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented therein. |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 10, 2016 |
|
Entity [Abstract] | ||
Entity Registrant Name | Blue Buffalo Pet Products, Inc. | |
Entity Central Index Key | 0001609989 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 196,515,280 |
Unaudited Condensed Consolidated Balance Sheets Parenthetical - $ / shares |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 150,000,000 | 150,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,500,000,000 | 1,500,000,000 |
Common stock, shares, issued | 196,515,280 | 196,216,596 |
Common stock, shares, outstanding | 196,515,280 | 196,216,596 |
Unaudited Condensed Consolidated Statements of Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Statement [Abstract] | ||||
Net sales | $ 287,996 | $ 259,437 | $ 854,682 | $ 762,209 |
Cost of sales | 154,787 | 151,152 | 470,938 | 454,595 |
Gross profit | 133,209 | 108,285 | 383,744 | 307,614 |
Selling, general and administrative expenses | 65,493 | 58,664 | 190,849 | 165,723 |
Provision for legal settlement | 32,000 | 0 | 32,000 | 0 |
Operating income | 35,716 | 49,621 | 160,895 | 141,891 |
Interest expense, net | 3,629 | 3,722 | 10,872 | 11,097 |
Income before income taxes | 32,087 | 45,899 | 150,023 | 130,794 |
Provision for income taxes | 10,605 | 18,833 | 54,584 | 51,044 |
Net income | $ 21,482 | $ 27,066 | $ 95,439 | $ 79,750 |
Basic net income per common share (in usd per share) | $ 0.11 | $ 0.14 | $ 0.49 | $ 0.41 |
Diluted net income per common share (in usd per share) | $ 0.11 | $ 0.14 | $ 0.48 | $ 0.40 |
Basic weighted average shares | 196,445,684 | 196,062,348 | 196,311,529 | 195,852,404 |
Diluted weighted average shares | 199,452,308 | 198,254,808 | 199,290,017 | 198,028,543 |
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 21,482 | $ 27,066 | $ 95,439 | $ 79,750 |
Foreign currency translation adjustment | 6 | 0 | 72 | 0 |
Other comprehensive income (loss), before tax | 6 | 0 | 72 | 0 |
Income tax expense on other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), net of tax | 6 | 0 | 72 | 0 |
Comprehensive income | $ 21,488 | $ 27,066 | $ 95,511 | $ 79,750 |
Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands |
Total |
Common stock |
Additional paid-in capital |
(Accumulated deficit) retained earnings |
Accumulated other comprehensive (loss) |
---|---|---|---|---|---|
Balance at December 31, 2015 (shares) at Dec. 31, 2015 | 196,216,596 | 196,216,596 | |||
Balance at December 31, 2015 at Dec. 31, 2015 | $ 9,281 | $ 1,962 | $ 64,899 | $ (57,549) | $ (31) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Other comprehensive income | $ 72 | 72 | |||
Issuance of restricted stock (shares) | 31,871 | ||||
Issuance of restricted stock awards | $ 814 | $ 0 | 814 | ||
Exercise of stock options (shares) | 266,813 | 266,813 | |||
Exercise of stock options | $ 1,805 | $ 3 | 1,802 | ||
Tax benefit from exercise of stock options | 0 | 0 | |||
Stock-based compensation expense | 2,237 | 2,237 | |||
Net income | $ 95,439 | 95,439 | |||
Balance at June 30, 2016 (shares) at Sep. 30, 2016 | 196,515,280 | 196,515,280 | |||
Balance at September 30, 2016 at Sep. 30, 2016 | $ 109,648 | $ 1,965 | $ 69,752 | $ 37,890 | $ 41 |
The Company |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company Blue Buffalo Pet Products, Inc. (“BBPP”) and together with its subsidiaries (the “Company,” “we,” “us,” “its,” and “our”) was incorporated in the state of Delaware in July 2012 and conducts its business exclusively through its wholly-owned operating subsidiary, Blue Buffalo Company, Ltd. (“Blue”) (formerly The Blue Buffalo Company, LLC) and its subsidiaries. Blue was formed in August 2002, and is the parent company of five wholly-owned subsidiaries: Great Plains Leasing, LLC, Heartland Pet Food Manufacturing Holding, LLC, Sierra Pet Products, LLC, Blue Buffalo Pet Products Canada, Ltd., and Blue Buffalo Japan Kabushiki Kaisha. Additionally, Blue Buffalo Import Mexico, S. de R.L. de C.V. and Blue Buffalo Mexico, S. de R.L. de C.V. are indirect wholly-owned subsidiaries of BBPP. BBPP and its subsidiaries develop, produce, market, and sell pet food under the BLUE Life Protection Formula, BLUE Wilderness, BLUE Basics, BLUE Freedom, and BLUE Natural Veterinary Diet lines. Our products are produced domestically at our Heartland facility and through contract manufacturers for distribution to retailers in specialty channels throughout the United States of America, Canada, Japan, and Mexico. In July 2012, Blue formed Heartland Pet Food Manufacturing, Inc. (“Heartland”) for the purpose of commencing internal manufacturing operations to eventually supplement its contract manufacturers. Manufacturing operations commenced at our Heartland facility in Joplin, Missouri in September 2014. In April 2016, Blue formed Heartland Pet Food Manufacturing Holding, LLC for the purpose of consolidating all manufacturing entities under one holding company. In April 2016, Heartland Pet Food Manufacturing Indiana, LLC was formed for our planned internal manufacturing operations in Indiana. Initial Public Offering On July 27, 2015, BBPP completed the initial public offering (“IPO”) of shares of its common stock. Existing stockholders of BBPP sold 38,906,286 shares of common stock in the IPO at an initial offering price of $20.00 per share, including 5,074,732 shares of common stock pursuant to the full exercise of the underwriters’ option to purchase additional shares. In addition, BBPP issued 30,682 shares of common stock to approximately 1,700 non-management employees at no cost to them. Secondary Public Offerings On July 5, 2016, BBPP completed a secondary public offering (“SPO”) of shares of its common stock. Certain existing stockholders of BBPP sold 17,250,000 shares of common stock at a SPO price of $22.00 per share, including 2,250,000 shares of common stock pursuant to the full exercise of the underwriters' option to purchase additional shares. On September 16, 2016, BBPP completed an additional SPO of shares of its common stock. Certain existing stockholders of BBPP sold 14,300,000 shares of common stock at a SPO price of $25.62 per share. |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of BBPP and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair statement of the results for interim periods. Results of operations for interim periods may not be representative of results to be expected for a full year. Certain prior year amounts have been reclassified to conform to the current period presentation. On July 7, 2015, BBPP effected a 4.2-for-1 stock split of all outstanding shares of BBPP’s common stock. All share, option, and per share information presented in the accompanying unaudited condensed consolidated financial statements have been adjusted to reflect the stock split on a retroactive basis for all periods presented and all share information is rounded down to the nearest whole share after reflecting the stock split. Certain information and footnote disclosure normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements and related notes for the year ended December 31, 2015, included in BBPP’s Annual Report on Form 10-K, filed with the SEC pursuant to Rule 424(b) of the Securities Act, on March 10, 2016. Accounting Standards Adopted in 2016 In March 2016, the FASB Issued ASU No. 2016-09, “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company elected to early adopt ASU 2016-09 in the third quarter of Fiscal 2016 which requires the Company to reflect any adjustments as of January 1, 2016, the beginning of the annual period that includes the interim period of adoption. Under ASU 2016-09, all excess tax benefits and deficiencies related to employee share-based compensation will be recognized within the provision for income taxes rather than additional paid-in capital under the prior guidance. The adoption of ASU 2016-09 resulted in the recognition of excess tax benefits in our provision for income taxes of $1.4 million for the nine months ended September 30, 2016. Upon early adopting ASU 2016-09, the Company elected to change its accounting policy to record forfeitures as they occur rather than based on an estimate. This change was applied on a modified retrospective basis and the cumulative-effect adjustment was not recorded to retained earnings as of January 1, 2016 as the amount was immaterial. Additionally, under the guidance of ASU 2016-09, the Company is required to present excess tax benefits as an operating activity in the same manner as other cash flows related to income taxes on the statement of cash flows rather than as a financing activity. The Company elected not to adjust prior year cash presentations as the impact was not material. In August 2015, the FASB issued ASU No. 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting (SEC Update).” The new standard is intended to address the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements which was previously not addressed in ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” The Company adopted this standard on January 1, 2016. The adoption of this standard did not have a material impact on the Company’s results of operations, cash flows or financial position. Accounting Standards to be Adopted In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which clarifies the principles for recognizing revenue. The guidance is applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Further, the guidance requires improved disclosures as well as additional disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. In 2015, the FASB issued a deferral of the effective date of the standard to the first quarter of 2018, with early adoption in Fiscal 2017 permitted. In 2016, FASB issued final amendments clarifying the implementation guidance for principal versus agent considerations, identifying performance obligations and the accounting for intellectual property licenses. Upon becoming effective, the Company will apply the amendments in the updated standard either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. The Company is currently evaluating the impact of adopting this standard on its consolidated results of operations, financial condition and cash flows, and have not yet selected a transition approach. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) that replaces existing lease guidance. The new standard is intended to provide enhanced transparency and comparability of organizations by requiring lease assets and lease liabilities to be recognized on the balance sheet and disclosing key information about lease arrangements. The new guidance will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. The standard is effective for the Company beginning January 1, 2019, with early application permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments,” which amends ASC 230, Statement of Cash Flows. This ASU provides guidance on the statement of cash flows presentation of certain transactions where diversity in practice exists. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements. |
Receivables |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivables | Receivables Receivables consisted of the following:
Other receivables consist primarily of reimbursable amounts due from co-manufacturers for packaging of $3.3 million and $3.5 million and income tax receivables of $4.9 million and $9.5 million at September 30, 2016 and December 31, 2015, respectively. |
Inventories |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consisted of the following:
|
Property, Plant, and Equipment |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant, and equipment | Property, Plant and Equipment Property, plant and equipment consisted of the following:
Depreciation and amortization expense was approximately $2.3 million and $2.1 million for the three months ended September 30, 2016 and 2015, respectively, and approximately $6.8 million and $6.0 million for the nine months ended September 30, 2016 and 2015, respectively. In August of 2016, Heartland and the City of Joplin, Missouri, or Joplin, entered into agreements by which Joplin agreed to issue up to an aggregate principal amount of approximately $83.3 million of industrial revenue bonds to purchase the land on which the current Heartland facility resides and the land on which the expansion of the Heartland facility will reside, and the associated buildings, structures, and fixtures, including the additional manufacturing equipment which will be included in the expansion of the Heartland facility (collectively, the “Property”). Heartland agreed to purchase such industrial revenue bonds and which Property was then agreed to be leased back to Heartland. As Heartland will become the owner of the Property at the end of the lease term, the lease meets the requirements of a capital lease and the equipment and land are recorded as property, plant and equipment our balance sheet. The Company has the right and intends to set-off any obligation to make payments under the lease agreement with the amounts due under the industrial revenue bonds. As of September 30, 2016, Joplin had issued and Heartland had purchased approximately $0.1 million of industrial revenue bonds and Joplin had purchased from, and leased back to, Heartland the land for a corresponding amount. |
Long-term Debt |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Long-term debt | Long-term Debt Long-term debt consisted of the following:
At September 30, 2016, we had $384.1 million of term loan borrowings (fair value of $385.6 million) at an effective interest rate of 3.63% and no outstanding borrowings under the revolving credit facility. At December 31, 2015, the Company had $387.1 million of term loan borrowings (fair value of $385.2 million) at an effective interest rate of 3.87% and no outstanding borrowings under the revolving credit facility. Principal payments on the term loan borrowings are due and payable in quarterly installments of approximately $1.0 million with the then expected remaining balance of $373.2 million due on August 8, 2019. During each of the three-month periods ended September 30, 2016 and 2015, the Company recorded amortization expense for deferred debt issuance costs of approximately $30,000. During each of the nine-month periods ended September 30, 2016 and September 30, 2015, the Company recorded amortization expense for deferred debt issuance costs of approximately $91,000. The Company’s term loan and revolving credit facility (the “Amended Facility”) contains and defines financial covenants, including a secured leverage ratio (defined as, with certain adjustments, the ratio of (i) the Company’s indebtedness less unrestricted cash and cash equivalents up to $40.0 million to (ii) consolidated net income before interest, taxes, depreciation and amortization) for the most recently ended 4 quarters not to exceed 3.75:1.00. The Amended Facility also sets forth mandatory and optional prepayment conditions, including an annual excess cash flow requirement, as defined, that may result in our use of cash to reduce our debt obligations. For the year ended December 31, 2015, the Company was not required to make an excess cash flow payment. As of September 30, 2016, the Company believes it was in compliance with its financial debt covenants. |
Fair Value Measurements |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Fair Value Measurements The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, other current liabilities, and debt, none of which are measured at fair value on a recurring basis. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate their fair value due to the short-term nature of these financial instruments. The Company’s long-term financial liabilities consist of the long-term debt. Long-term debt is recorded on the unaudited condensed consolidated balance sheets at issuance price and adjusted for any applicable unamortized discounts or premiums. The Company accounts for its fair value measurements in accordance with accounting guidance which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The fair value hierarchy for disclosure of fair value measurements is as follows: Level 1- Quoted prices in active markets for identical assets or liabilities Level 2- Quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3- Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) At September 30, 2016 and December 31, 2015, the Company had approximately $285.7 million and $195.4 million, respectively, of cash invested in money market deposit accounts which were included in cash and cash equivalents on the accompanying unaudited condensed consolidated balance sheets (Level 1). The Company reports transfers in and out of Levels 1, 2 and 3, as applicable, using the fair value of the individual securities as of the beginning of the reporting period in which the transfer(s) occurred. There were no transfers in or out of Level 1, 2, or 3 during the nine months ended September 30, 2016 and the year ended December 31, 2015. Assets that are measured at fair value on a nonrecurring basis relate primarily to our tangible fixed assets. For these assets, the Company does not periodically adjust carrying value to fair value, except in the event of impairment. When the Company determines that an impairment has occurred, the carrying value is reduced to fair value and the difference is recorded as an impairment loss in our consolidated statements of income. As of September 30, 2016, the carrying value of the Company’s outstanding borrowings under the Amended Facility was approximately $384.1 million as compared to a fair value of $385.6 million (Level 2). As of December 31, 2015, the carrying value of the Company’s outstanding borrowings under the Amended Facility was approximately $387.1 million as compared to a fair value of $385.2 million (Level 2). The estimated fair value of the Company’s debt was based primarily on reported market values, recently completed market transactions and estimates based upon interest rates, maturities and credit risk. |
Stock-Based Compensation |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | Stock-Based Compensation Incentive Plans Under the Company’s 2012 Blue Buffalo Pet Products, Inc. Stock Purchase and Option Plan (the “Plan”), the Board of Directors is authorized to award stock options (ISOs and non-qualified), stock appreciation rights (SARs), restricted stock, performance units, performance-based stock awards, dividend equivalent rights and other stock-based grants. Participation in the Plan is limited to key employees, officers and directors. On March 4, 2013, the Plan was amended to increase the maximum number of shares of stock available under the Plan by 210,000 shares to 14,242,061 shares (the “Amended Plan”). As of September 30, 2016, there were 5,230,642 shares of common stock reserved under the Amended Plan. As of September 30, 2016, the maximum number of shares available for grant under the Amended Plan was 89,035. In July 2015, the Board of Directors adopted and our shareholders approved the Company’s 2015 Omnibus Incentive Plan (“2015 Plan”). The 2015 Plan provides that the total number of shares of common stock that may be issued under our 2015 Plan is 8,400,000. The 2015 Plan provides for the grant of stock options (ISOs and non-qualified), SARs, restricted stock awards (RSAs), restricted stock units (RSUs), performance units, performance-based stock awards, dividend equivalent rights and other stock-based incentive awards. As of September 30, 2016, the maximum number of shares available for grant under the 2015 Plan was 7,843,075. Stock Options The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options on the date of grant. Stock options granted under the 2012 plan are subject to pro-rata vesting and grants under the 2015 Plan are subject to cliff vesting. The fair value of stock options is expensed on a straight-line basis over the vesting period. Prior to the Company’s initial public offering, the Company used a third party valuation specialist to assist it in the estimation of the fair value of its common stock. The Company believed these valuations to be appropriate; however, the valuation of the equity of any private company involves various estimates and assumptions that may differ from actual values. Effective with our initial public offering, the Company bases its common stock value on quoted market prices. The expected volatility assumption is based on the combination of the Company's historical volatility and selected companies from its peer group. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury implied yield at the date of grant. The weighted-average expected term is determined with reference to historical exercise and post-vesting cancellation experience, and the vesting period and contractual term of the awards. The following are the weighted-average assumptions used for grants issued during the nine month periods ended September 30:
The following table summarizes stock option activity during the year and also presents stock options outstanding and exercisable as of September 30, 2016 (dollars in millions, except for per share data):
During the three and nine months ended September 30, 2016, the Company granted 20,166 and 130,208 ISO and 834 and 266,480 non-qualified stock option grants, respectively. Restricted Stock The following table summarizes RSA and RSU activity for the nine months ended September 30, 2016:
During the three and nine months ended September 30, 2016, members of the Company's Board of Directors received a fully-vested grant of 31,871 RSAs with a three-year holding restriction under the 2015 Plan. The total fair value of these restricted stock awards on the date of grant was $0.8 million, of which the full amount was recognized as a component of stock-based compensation expense during the three and nine months ended September 30, 2016. During the three and nine months ended September 30, 2016, the Company granted 4,210 and 87,203 RSUs, respectively under the 2015 Plan to its employees. The stock-based compensation cost for RSUs is measured based on the closing fair market value of the Company's common stock on the date of grant. RSUs have a three-year cliff vesting term. The total fair value of these restricted stock units on the date of grant was $2.2 million, which will be recognized as a component of stock-based compensation expense and amortized on a straight-line basis over the three-year vesting term. Stock-based Compensation Expense Stock-based compensation costs charged to operations (as a component of selling, general, and administrative expenses) during the three months ended September 30, 2016 and 2015 was approximately $1.0 million and $2.0 million, respectively. Stock-based compensation costs charged to operations (as a component of selling, general, and administrative expenses) during the nine months ended September 30, 2016 and 2015 was approximately $3.1 million and $2.9 million, respectively. In accordance with the early adoption of ASU 2016-09, the Company recorded $1.4 million of excess tax benefits from the exercise of stock options to our provision for income taxes during the three and nine months ended September 30, 2016. Under the previous guidance, the Company recorded $1.6 million of excess tax benefits from the exercise of stock options to additional paid-in capital during the three and nine months ended September 30, 2015. Unrecognized stock-based compensation related to outstanding unvested stock options is expected to be recognized in the Company’s statements of income as follows (by fiscal year):
|
Earnings Per Share |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share | Earnings Per Share The details of the computation of basic and diluted earnings per common share are as follows:
|
Related Parties |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties Invus Partners LLC which, as of September 30, 2016, beneficially owned 44.5% of the Company's outstanding common stock, holds $19.8 million of the Company’s outstanding debt under the Amended Facility. Several of the members of the Company's Board of Directors (“BOD”) are members of Invus Partners LLC, as well as managing directors and officers of the general partner of Invus Partners LLC. In addition, Kunkemueller Enterprises LP, which is owned in part by the wife of one of the members of our BOD, holds $1.4 million of our debt under the Amended Facility. |
Legal Proceedings |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings In the normal course of business, we are subject to proceedings, lawsuits and other claims and assessments, which typically include consumer complaints and post-termination employment claims. We have assessed such contingent liabilities and believe that other than the litigations described below the potential of these liabilities is not expected to have a material, if any, effect on our financial position, our results of operations or our cash flows. Nestlé Purina and Related Litigations On May 6, 2014, Nestlé Purina Petcare Company (“Nestlé Purina”) filed a lawsuit against us in the United States District Court for the Eastern District of Missouri, which alleged that we had engaged in false advertising, commercial disparagement, unfair competition, and unjust enrichment (the “Nestlé Purina litigation”). Nestlé Purina asserted that, contrary to our advertising and labeling claims, certain BLUE products contained chicken or poultry by-product meals, artificial preservatives and/or corn and that certain products in the BLUE grain-free lines contained grains. Nestlé Purina also alleged that we made false claims that our products (including LifeSource Bits) provide superior nutrition and health benefits compared to our competitors’ products. In addition, Nestlé Purina contended that we were unjustly enriched as consumers have paid a premium for BLUE products in reliance on these alleged false and misleading statements, at the expense of our competitors. Nestlé Purina sought an injunction prohibiting us from making these alleged false and misleading statements, as well as treble damages, restitution and disgorgement of our profits, among other things. In addition, Nestlé Purina issued press releases and made other public announcements, including advertising and promotional communications through emails and internet and social media websites that made claims similar to those contained in their lawsuit. Nestlé Purina sought a declaratory judgment that these statements were true and did not constitute defamation. On February 29, 2016, Nestlé Purina filed a third amended complaint adding BLUE's wholly-owned subsidiary Great Plains Leasing LLC, new causes of action under Connecticut and Missouri state law, and updating Nestlé Purina’s factual allegations. In the course of pretrial discovery in the consolidated Nestlé Purina lawsuit, beginning in September 2014 documents and information were revealed that indicate that a facility owned by a major supplier of ingredients to the pet food industry, including Blue Buffalo, for a period of time, had mislabeled as “chicken meal” or “turkey meal” ingredients that contained other poultry-based ingredients that were inappropriate for inclusion in “chicken meal” or “turkey meal” under industry standards, and it appeared that this mislabeling was deliberate. This conduct was undertaken by the supplier without our knowledge, and we have since ceased purchasing ingredients from this facility. This supplier was one of our primary sources of chicken meal and turkey meal. As a result of the supplier’s conduct, our advertising claims of “no chicken or poultry by-product meals” were inaccurate as to products containing the mislabeled ingredients. Therefore, we were exposed to false advertising liability to Nestlé Purina and are similarly exposed to such liability to others to the extent a claimant can prove they were injured by our actions. Such liability may be material. We brought third-party indemnity and damages claims, with respect to the Nestlé Purina lawsuit, against the supplier that mislabeled the ingredients, as well as a broker involved in those transactions for such mislabeled ingredients. The trial court narrowed certain of our third party claims in response to motions to dismiss filed by the third parties but allowed numerous claims to proceed. In addition, we maintain insurance coverage for some of the Nestlé Purina claims. However, we may not be able to fully recover from such supplier, broker or from our insurance the full amount of any damages we might incur in these matters. On October 15, 2014, we initiated a separate lawsuit against Nestlé Purina in state court in Connecticut. Nestlé Purina subsequently removed the case to the United States District Court for the District of Connecticut, and the Connecticut District Court then granted Nestlé Purina’s motion to transfer this matter to the same court where Nestlé Purina’s lawsuit against us was pending. Our complaint in this matter alleged that Nestlé Purina has intentionally engaged in false advertising, unfair trade practices and unjust enrichment in the promotion and advertisement of numerous of its products. In particular, our complaint alleged that Nestlé Purina deceptively advertised that certain high-quality, wholesome ingredients were present in certain of Nestlé Purina’s most popular pet food products in greater amounts, or were more prevalent in the products in relation to other ingredients, than was actually the case. In addition, our complaint alleged that Nestlé Purina deceptively advertised certain of its products as healthy and nutritious when in fact Nestlé Purina knew that these products were unsafe and were responsible for illness and even death in many of the dogs that consumed them. And our complaint alleged that Nestlé Purina falsely claims its “Just Right” brand of dog food was personalized to match each dog’s unique nutritional needs when it consists of only a limited set of basic ingredient formulas, each of which is substantially similar to the others. Our complaint sought an injunction prohibiting Nestlé Purina from continuing these false and misleading advertisements, as well as damages and disgorgement of profits, among other things. On July 31, 2015, Nestlé Purina filed an amended answer in this case that also asserted counterclaims against us. Nestlé Purina asserted that our complaint did not state viable claims, but that if a ruling was entered against it then “in the alternative” asserted counterclaims that relate to the advertising of a variety of our products, which Nestlé Purina contended were misleading or deceptive as to the amounts of certain ingredients in those products. On August 28, 2015, we amended our complaint to include allegations that Nestlé Purina falsely claimed that its “Bright Mind” dog food was proven to promote alertness, mental sharpness, memory, trainability, attention, and interactivity in dogs age seven and older, when in fact such claims were unsubstantiated and false. In response to Nestlé Purina’s amended answer and counterclaims, we filed a motion to dismiss the counterclaims in their entirety on October 2, 2015. On June 13, 2016, the trial court dismissed all but two of Nestlé Purina’s counterclaims. On November 2, 2016, we entered into a settlement agreement with Nestlé Purina pursuant to which we paid Nestlé Purina $32.0 million, each party dismissed all of its claims and counterclaims against the other with prejudice, and we dismissed, with prejudice, our claims against Nestlé Purina’s advertising and public relations agencies. All other terms of the settlement are confidential. We plan to continue to pursue our claims against the third party ingredient supplier and broker that sold us mislabeled ingredients, as well as against our insurance providers as further described below. In addition, a number of related putative consumer class action lawsuits were filed in various states in the U.S. making allegations similar to Nestlé Purina’s and seeking monetary damages and injunctive relief. We also brought damages and indemnity claims against our former ingredient supplier and broker with respect to the class action lawsuits. In December 2015, we entered into a settlement agreement with the plaintiffs to resolve all of the U.S. class action lawsuits (the “Settlement”). Under the terms of the Settlement we agreed to pay $32.0 million into a settlement fund, and on January 8, 2016, we paid this $32.0 million into an escrow account pending final court approval. Attorneys’ fees awarded by the court and all costs of notice and claims administration will be paid from the settlement fund. The Settlement received final court approval on May 19, 2016, and has since been appealed to the United States Court of Appeals for the Eighth Circuit. The amount that each class member who submits a claim for reimbursement will receive will depend on the total amount of Blue Buffalo products purchased by the claimant during the class period and certain other conditions including whether the claimant has a proof of purchase. The Settlement value does not take into account any potential recovery from insurance or from our former ingredient supplier or broker, against whom we will continue to pursue our claims for indemnity and other damages. In addition to the U.S. class actions, which are the subject of the Settlement, in February 2016, a putative class action was filed in the Ontario Superior Court of Justice in Ottawa, Ontario, seeking damages and injunctive relief based on allegations similar to those made in the U.S. class actions. We believe the claims are without merit and plan to vigorously defend ourselves. On July 5, 2016, Travelers Property and Casualty Company of America and The Travelers Indemnity Company of Connecticut (together, “Travelers”), which provided our primary and excess commercial general liability insurance coverage from February 2007 to February 2011 (collectively, the “Travelers Policies”), filed a lawsuit against us in Superior Court for the State of Delaware. The lawsuit sought a declaratory judgment that Travelers has no obligation under the Travelers Policies (a) to provide coverage to us for attorneys’ fees and costs that we have incurred or will incur in connection with the prosecution of any of our third party claims against the ingredient supplier and broker that sold us mislabeled “chicken meal” or “turkey meal” ingredients; and (b) to indemnify us for any of the $32.0 million paid in the settlement of the consumer class action lawsuits. On August 1, 2016, Travelers voluntarily dismissed this action. On July 11, 2016, we filed a lawsuit in State of Connecticut Superior Court against Travelers as well as the Hartford Fire Insurance Company, Hartford Underwriters Insurance Company, and Hartford Casualty Insurance Company (collectively, “Hartford”). Hartford has provided our primary and excess commercial general liability insurance coverage since February 2011 (collectively, the “Hartford Policies”). Our lawsuit alleges that Travelers and Hartford, among other things, (a) breached their duties under the Travelers Policies and the Hartford Policies, respectively, by failing to (i) pay all reasonable defense fees and costs in connection with the Nestlé Purina litigation, the U.S. class action lawsuits and the putative class action in Ontario; and (ii) indemnify us for the $32.0 million U.S. class action settlement; (b) breached their covenants of good faith and fair dealing owed to us and acted in bad faith; and (c) violated the Connecticut Unfair Insurance Practices Act and the Connecticut Unfair Trade Practices Act. Our lawsuit also seeks declaratory judgment that we are entitled under the Travelers Policies and Hartford Policies to (x) a full defense, including payment of all reasonable and necessary defense fees and costs, in the Nestlé Purina litigation and the putative class action in Ontario; (y) coverage for the legal fees and costs incurred in our prosecution of any of our third party claims against the ingredient supplier and broker that sold us mislabeled “chicken meal” or “turkey meal” ingredients; and (z) full indemnity against (i) the settlement in the Nestlé Purina litigation, (ii) any settlement or judgment in the putative class action in Ontario and (iii) the $32.0 million settlement in the U.S. class action lawsuits. |
Receivables (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of composition of receivables | Receivables consisted of the following:
|
Inventories (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventories | Inventories consisted of the following:
|
Property, Plant, and Equipment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property, plant and equipment | Property, plant and equipment consisted of the following:
|
Long-term Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of long-term debt | Long-term debt consisted of the following:
|
Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of of Stock Option Weighted Average Assumptions | The following are the weighted-average assumptions used for grants issued during the nine month periods ended September 30:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock option activity | The following table summarizes stock option activity during the year and also presents stock options outstanding and exercisable as of September 30, 2016 (dollars in millions, except for per share data):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of RSA and RSU activity | The following table summarizes RSA and RSU activity for the nine months ended September 30, 2016:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of unrecognized compensation cost | Unrecognized stock-based compensation related to outstanding unvested stock options is expected to be recognized in the Company’s statements of income as follows (by fiscal year):
|
Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliations of Basic and Diluted Shares Calculations | The details of the computation of basic and diluted earnings per common share are as follows:
|
The Company (Details) |
Sep. 16, 2016
$ / shares
shares
|
Jul. 05, 2016
$ / shares
shares
|
Jul. 27, 2015
employee
$ / shares
shares
|
Sep. 30, 2016
subsidiary
|
---|---|---|---|---|
Subsidiary, Sale of Stock [Line Items] | ||||
Number of wholly-owned subsidiaries | subsidiary | 5 | |||
Number of shares issued to non-management employees | 30,682 | |||
Number of non-management employees receiving shares | employee | 1,700 | |||
IPO and IPO Over-Allotment | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares sold | 38,906,286 | |||
Initial public offering share price (in usd per share) | $ / shares | $ 20.00 | |||
IPO Over-allotment option | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares sold | 5,074,732 | |||
SPO and SPOf Over-Allotment | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares sold | 14,300,000 | 17,250,000 | ||
Initial public offering share price (in usd per share) | $ / shares | $ 25.62 | $ 22.00 | ||
SPO Over-Allotment | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares sold | 2,250,000 |
Basis of Presentation (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Jul. 07, 2015 |
Sep. 30, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
|
Class of Stock [Line Items] | |||
Stock split ratio | 4.2 | ||
Effective income tax rate reconciliation, share-based compensation, excess tax benefit, amount | $ 1.4 | $ 1.4 |
Receivables (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Receivables [Abstract] | ||
Trade receivables, net | $ 84,148 | $ 66,648 |
Other receivables | 8,250 | 13,455 |
Total | 92,398 | 80,103 |
Due from co-manufacturers | 3,300 | 3,500 |
Income taxes receivable | $ 4,900 | $ 9,500 |
Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished goods | $ 69,746 | $ 76,987 |
Work in process | 354 | 352 |
Raw materials | 2,558 | 2,583 |
Packaging and supplies | 2,742 | 3,560 |
Total | $ 75,400 | $ 83,482 |
Long-term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Disclosure [Abstract] | ||
Term loan | $ 384,127 | $ 387,097 |
Less current maturities | (3,960) | (3,960) |
Total long-term debt | $ 380,167 | $ 383,137 |
Long-term Debt - Narrative (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Debt Instrument [Line Items] | |||||
Carrying value | $ 384,127,000 | $ 384,127,000 | $ 387,097,000 | ||
Amortization of debt issuance costs | 30,000 | $ 30,000 | 91,000 | $ 91,000 | |
Amended Facility | |||||
Debt Instrument [Line Items] | |||||
Carrying value | 384,100,000 | 384,100,000 | 387,100,000 | ||
Unrestricted cash and cash equivalents limit for the secured leverage ratio | $ 40,000,000 | $ 40,000,000 | |||
Secured leverage ratio | 3.75 | 3.75 | |||
Amended Facility | Term loan | |||||
Debt Instrument [Line Items] | |||||
Carrying value | $ 384,100,000 | $ 384,100,000 | 387,100,000 | ||
Fair value | $ 385,600,000 | $ 385,600,000 | $ 385,200,000 | ||
Effective interest rate | 3.63% | 3.63% | 3.87% | ||
Quarterly principal payment | $ 1,000,000 | ||||
End of term payment | $ 373,200,000 | 373,200,000 | |||
Amended Facility | Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Outstanding borrowings | $ 0 | $ 0 | $ 0 |
Fair Value Measurements (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value | $ 384,127 | $ 387,097 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash invested in money market deposit accounts | 285,700 | 195,400 |
Amended Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value | 384,100 | 387,100 |
Amended Facility | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value | $ 385,600 | $ 385,200 |
Stock-Based Compensation Schedule of Weighted Average Assumptions (Details) - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Volatility | 32.58% | 23.85% |
Risk-free interest rate | 1.23% | 1.88% |
Expected term (years) | 5 years | 6 years 6 months |
Dividend yield | 0.00% | 0.00% |
Grant-date fair value | $ 7.81 | $ 5.74 |
Stock-Based Compensation - Schedule of Unrecognized Compensation Cost (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
2016 (period from July 1, to December 31, 2016) | $ 918 |
2017 | 3,582 |
2018 | 2,037 |
2019 | 553 |
2020 | 56 |
Total | $ 7,146 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 21,482 | $ 27,066 | $ 95,439 | $ 79,750 |
Basic weighted average number of shares outstanding (shares) | 196,445,684 | 196,062,348 | 196,311,529 | 195,852,404 |
Dilutive effect of stock options (shares) | 3,006,624 | 2,192,460 | 2,978,488 | 2,176,139 |
Diluted weighted average number of shares outstanding (shares) | 199,452,308 | 198,254,808 | 199,290,017 | 198,028,543 |
Basic net income per common share (in usd per share) | $ 0.11 | $ 0.14 | $ 0.49 | $ 0.41 |
Diluted net income per common share (in usd per share) | $ 0.11 | $ 0.14 | $ 0.48 | $ 0.40 |
Anti-dilutive shares excluded from diluted earnings per share computation (shares) | 385,861 | 86,733 | 407,845 | 29,229 |
Related Parties (Details) $ in Millions |
Sep. 30, 2016
USD ($)
|
---|---|
Related Party Transaction [Line Items] | |
Beneficial Ownership by Invus Partners LLC | 44.50% |
Invus Partners LLC | Affiliated Entity | |
Related Party Transaction [Line Items] | |
The Company's outstanding debt held by related parties | $ 19.8 |
Kunkemueller Enterprises LP | Affiliated Entity | |
Related Party Transaction [Line Items] | |
The Company's outstanding debt held by related parties | $ 1.4 |
Legal Proceedings Legal Proceedings (Details) $ in Thousands |
9 Months Ended | ||||
---|---|---|---|---|---|
Nov. 02, 2016
USD ($)
|
Jun. 13, 2016
claim
|
Jan. 08, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
|
Loss Contingencies [Line Items] | |||||
Payment of legal settlement | $ | $ 32,000 | $ 32,000 | $ 32,000 | $ 0 | |
Nestle Purina Litigation, Counterclaims Not Dismissed, Number [Member] | |||||
Loss Contingencies [Line Items] | |||||
New claims filed, number | claim | 2 |
55JG(D9
MN3^[=.O@VHLX9>*\&3=VT-1A\*H\5FF1E^SHA2XPD;A?,"N".?6K+3)ZC9X%
M>O8S?7-)WT2'F\5A\;- ?BF01X$\"J3IM1$C9K]@BMO_FK"S/56@NW!U#*EQ
M&FS V!C
M, D SUUBJTNL%9"+0&+M6.+>L=2:(#4)X(,Z1PQ.,Q"CU,$ILSIEQ@G9G)+1
M:<(\]X# :J(?*P7L( &M4PJA^YQ"9$^!'&;5@"*0A EV6*?0ON4@-EZA@T1H
MKSC\0L7V[0*CYQ6O#0B&&*C//+* -%%XCA1%(HIO[[PRFL$8L)I\5\_N@VH+2
M67Y[.>&G%Y@"/YK!)M".G3II7ZXI.LW.=:P'P$U\HV:J'8$7F:KL\1%^8'YL
M.X&V3*KQ8J; @3$)RE81KKU@A=*$+ZE&8U$M%$H4_XRKZ,,ZQ3_Y[4R[3,AF0K82;I-@/#8*
M-G]RR\M"XT3,P/W9I5L'UU[$*1/GS;BQ@Z8.@Y?%L4QOTH(=O= 9)A+W,V9%
M,*=^L45&+]&S0,_^3<_/Z7ETF,\._T-@
\:H(GTW;;_F%WOC&FU1T+
MN8K#8*NS]>&BT)NV/TVZ\]I^9+$7K=FY;T:'#U>+?U!+ P04 " !+JVI)
MGCV/0!T" !G!@ &0 'AL+W=O3N4O3TS'Y0=6X[C8[2V/OEKT$MI6'6)'A*,&KL*W9;<%8;-\WL7,'%AH61
M_?1,W=[*\@]02P,$% @ 2ZMJ24%M<#[S @ K@H !D !X;"]W;W)K
MR26GO+(QQ_)&%>>\'\DFWC"M'.D?N)_ 2A/[C*QL:*=
M0N^T3-F-#I<_U67527>'5%:@R0FHHX?>X!=-E@HF>[06/&(-2!\ DXXU7'6\
M]ODX),"O0S #2\24:]#]5CT7<^Z9F * UPNU8<$6HV!37N#A:+239M\GP9N_
MG5QV&"9@!C4,F,>:*MW8T:8!F&0MVTN=,-.
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M6'D0+;).QW03...L>&!A&,.Y(SY&X4%V
=*IX+B0%
M"I D<((KYFV$V_6:?= V**8Z ;%=Z'4?'> ]:,B@&5+&+IGO4V^@#!L:3LJ'
MG;QAE9-A!<[E78*