SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

   Non-TechSmart Balance (SMBL) A smart and balanced investment!


Previous 10 Next 10 
From: Glenn Petersen4/24/2009 9:14:07 AM
   of 33
 
[t]SMBL[/t] gets a mention in Business Week's "Inside Wall Street" column:

Healthy Milk from Smart Balance

Fat-free milk that tastes like whole milk, enhanced with Omega-3? That's what Smart Balance (SMBL) is counting on to boost sales—along with its "naturally trans-fat-free margarine" and other foods using a proprietary vegetable oil blend. Its milk was launched in Florida in 2007 and in the Northeast last year. Milk sales in Florida hit $4 million in 2008 and could reach $10 million-$12 million in 2009. Shares have risen to 6.82 from 4 in October.

Ken Gau of investment firm Waddell & Reed, which owns stock, says Smart Balance's growth will be driven by such new products. Rising sales "give us confidence the company is on track to achieve first-quarter growth in the range of 18%," says Jon Anderson of William Blair, which has done banking for Smart Balance. He sees profits of 30 cents a share on sales of $266 million in 2009 and forecasts 47 cents on $320 million in 2010.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.

—Gene Marcial

Story link

Share RecommendKeepReplyMark as Last Read


From: Glenn Petersen5/7/2009 2:01:57 PM
   of 33
 
InPlay 8:32AM Smart Balance beats by $0.02, beats on revs (SMBL) 7.38 : Reports Q1 (Mar) earnings of $0.02 per share, $0.02 better than the First Call consensus of ($0.00); revenues rose 23.2% year/year to $62.6 mln vs the $59.4 mln consensus. "Smart Balance's outlook for the first half of 2009 percentage growth in net sales versus 2008 is high teens to mid-twenties. The Company expects continued volume growth led by increased distribution and new products in spreads, peanut butter, cooking oil and popcorn, as well as expansion of its milk products. The food industry is experiencing uncertainty in 2009 around consumer reaction to the economy, potentially delaying trial by prospective consumers of the Company's premium-priced products. Gross profit as a percent of net sales is expected to improve to 45%+ in 2009 as input costs for the year are expected to be lower than 2008. Marketing investments will increase in 2009 versus 2008 as the Company will continue to aggressively support its core user base and develop awareness among new consumers."

Smart Balance Announces 2009 First Quarter Results

On Thursday May 7, 2009, 8:30 am EDT

- Net sales $62.6 million, up 23% versus year ago

- Becomes second largest marketer of branded spreads in U.S.

PARAMUS, N.J., May 7 /PRNewswire-FirstCall/ -- Smart Balance, Inc. (Nasdaq: SMBL - News) today announced its results for the first quarter ended March 31, 2009. The Company reported net sales of $62.6 million, an increase of 23.3% versus year ago, and earnings per share of $0.02, versus a loss of $0.02 per share in 2008.

The first quarter net sales increase versus 2008 was due to higher pricing carried over from the prior year and a 6% increase in case shipments. The improvement in earnings per share was due to increased gross profits and lower financing-related costs partially offset by higher operating expenses.

The Company increased market share in its core category of spreads by 1.5 points to 15.1% in the first quarter versus the same quarter in 2008, representing the 29th consecutive quarter of market share growth, according to Information Resources, Inc. (IRI) data. With that increase, Smart Balance became the second largest marketer of branded spreads in the United States, based on dollar sales in retail food outlets, according to IRI data.

"I am pleased with both our revenue growth and our earnings per share," said Stephen B. Hughes, Smart Balance Chairman and CEO. "Despite the challenging economic environment, consumers are embracing our premium priced value proposition as evidenced by our continued share growth. Reaching the number two market share position in our core category is an important milestone on the road to building Smart Balance® into a billion dollar brand."

Gross profit margin for the quarter was 45.1%, versus 45.0% for the first quarter of 2008, as the rate of selling price increases was offset by the rate of commodity cost increases and coupon redemption expenses.

2009 First-Quarter Results

Net sales for the first quarter of 2009 increased 23.3% to $62.6 million from $50.8 million for the first quarter of 2008. The increase was primarily due to a combination of higher prices and increased case shipments, partially offset by higher coupon redemption expenses. Selling prices for the Company's spreads, which represent approximately 76% of its net sales, were increased three times in 2008 to cover rising commodity costs, consistent with competitive actions in the industry.

The increase in cases shipped was due primarily to the introduction of milk in the Northeast, growth in the core category of spreads, and higher sales of cooking oil. The 6% growth in cases occurred despite the increase in retail inventories in the prior year as part of the Company's distribution expansion.

Consumer purchases of the Company's products at retail grew 31.8% for the quarter versus 2008, based on IRI data and company estimates. The net sales increase of 23.3% was lower than the consumer purchases growth primarily due to the inventory build in 2008 and higher coupon redemption expenses in 2009 net sales. Differences between net sales and consumer purchases at retail may arise due to changes in inventories at retailers, timing of promotions and price variations. However, these differences are normally minor on an annual basis.

Gross profit increased $5.5 million to $28.3 million for the first quarter of 2009 from $22.8 million in 2008 due to the benefit of higher pricing and the growth in case shipments, partially offset by increases in product input costs, notably vegetable oils, and higher coupon redemption expenses.

Operating income increased $1.2 million, or 60%, to $3.2 million for the first quarter of 2009 compared with $2.0 million in 2008 as the $5.5 million increase in gross margin was partially offset by a $4.2 million increase in operating expenses. The increase in operating expenses reflected higher marketing investments and continued expansion of general and administrative expenses, primarily increased staff and related costs, to support a $500 million business.

Excluding the impact of non-cash charges, operating income increased $1.8 million to $8.4 million in 2009 from $6.6 million in 2008. See the table below for the non-cash items affecting operating income.

Items Affecting Operating Income - First Quarter

$in Millions 2009 2008

Operating Income 3.2 2.0
--- ---
Non-cash charges affecting Operating
Income:
FAS 123R Stock Option Expense 4.0 3.5
Depreciation & Amortization 1.2 1.1
--- ---
5.2 4.6
--- ---
Operating Income excluding non-cash
charges 8.4 6.6
=== ===


Net income for the first quarter of 2009 was $1.1 million compared to a loss of $1.2 million for the first quarter of 2008, an increase of $2.3 million, reflecting the gains at operating income, lower interest and other expenses and the gain on derivatives liability related to an interest rate swap, partially offset by higher provisions for income taxes. Included in the 2008 interest expense is a prepayment penalty of $0.6 million for the $30 million prepayment of the second lien debt. Other expense in 2008 reflects $0.9 million of accelerated amortization of deferred financing costs resulting from the prepayment of debt.

Excluding the after-tax impact of non-cash charges, net income for the first quarter of 2009 was $4.0 million versus $2.1 million in 2008. See the table below for non-cash items affecting net income (loss).

Items Affecting Net Income (Loss) - First Quarter

$in Millions 2009 2008

Net Income(Loss) 1.1 (1.2)
--- ---
Non-cash charges after-tax affecting Net
Income(Loss):
FAS 123R Stock Option Expense 2.4 2.1
Depreciation & Amortization 0.8 0.7
Change in Fair Value of an Interest Rate
Swap (0.3) -
Accelerated Financing Amortization - 0.5
--- ---
2.9 3.3
--- ---
Net Income excluding non-cash charges
after-tax 4.0 2.1
=== ===


Outlook

Smart Balance's outlook for the first half of 2009 percentage growth in net sales versus 2008 is high teens to mid-twenties. The Company expects continued volume growth led by increased distribution and new products in spreads, peanut butter, cooking oil and popcorn, as well as expansion of its milk products. The food industry is experiencing uncertainty in 2009 around consumer reaction to the economy, potentially delaying trial by prospective consumers of the Company's premium-priced products.

Gross profit as a percent of net sales is expected to improve to 45%+ in 2009 as input costs for the year are expected to be lower than 2008. Marketing investments will increase in 2009 versus 2008 as the Company will continue to aggressively support its core user base and develop awareness among new consumers.

<snip>


SMART BALANCE, INC. AND SUBSIDIARY
Consolidated Balance Sheets
(In thousands, except share data)

March 31, December 31,
2009 2008
-------- ----------
Assets (unaudited)
Current assets:
Cash and cash equivalents $8,136 $5,492
Accounts receivable, net of allowance
of: 2009 - $313 and 2008 - $256 14,832 14,283
Accounts receivable - other 889 692
Inventories 8,421 9,322
Prepaid taxes 840 709
Prepaid expenses and other assets 10,103 1,019
Deferred tax asset 509 650
------ ------
Total current assets 43,730 32,167
------ ------
Property and equipment, net 4,389 4,301
------ ------
Other assets:
Goodwill 374,886 374,886
Intangible assets, net 154,207 155,223
Deferred costs, net 1,674 1,737
Other assets 428 222
------- -------
Total other assets 531,195 532,068
------- -------
Total assets $579,314 $568,536
======= =======
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $30,591 $24,938
Income taxes payable 2,482 1,080
------ ------
Total current liabilities 33,073 26,018
------ ------
Long term debt 69,504 69,504
Derivative liability 4,587 5,132

Deferred tax liability 45,165 46,268
Other liabilities 377 163
------- -------
Total liabilities 152,706 147,085
------- -------

Commitment and contingencies
Stockholders' equity
Preferred stock, $.0001 par value,
50,000,000 shares authorized - -
Common stock, $.0001 par value,
250,000,000 shares authorized;
62,630,683 (2009) and 62,630,683 (2008)
issued and outstanding 6 6
Additional paid in capital 511,388 507,377
Retained deficit (84,786) (85,932)
------- -------
Total stockholders' equity 426,608 421,451
------- -------
Total liabilities and stockholders'
equity $579,314 $568,536
======= =======

SMART BALANCE, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share data)

Three Months Ended
March 31,
------------------
2009 2008
---- ----
Net sales $62,599 $50,790
Cost of goods sold 34,345 27,940
------ ------
Gross profit 28,254 22,850
------ ------
Operating expenses:
Marketing 8,800 7,398
Selling 4,517 4,146
General and administrative 11,729 9,346
------ ------
Total operating expenses 25,046 20,890
------ -----
Operating income 3,208 1,960
------ -----
Other income (expense):
Interest income 1 251
Interest expense (1,679) (3,232)
Gain on derivative liability 546 -
Other expense, net (143) (941)
----- -----
Total other income (expense) (1,275) (3,922)
----- -----
Income (loss) before income
taxes 1,933 (1,962)
Provision (benefit) for
income taxes 787 (785)
Net income (loss) $1,146 $(1,177)
===== =====

Income (loss) per share:
Basic $0.02 $(0.02)
==== ====
Diluted $0.02 $(0.02)
==== ====
Weighted average shares
outstanding:
Basic 62,630,683 62,196,988
========== ==========
Diluted 62,706,184 62,196,988
========== ==========


finance.yahoo.com

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Glenn Petersen who wrote (20)5/7/2009 3:47:31 PM
From: Arthur Radley
   of 33
 
Glenn,
Any time a premium brand name can gain market share in this kind of economic envirnoment, is impressive. IMO, SMBL will be bought in the near future.......this operation is merely about 50-60 key employees with marketing savvy.....they have no manfg. capability...so one of the big food companies will gobble them up.

Share RecommendKeepReplyMark as Last ReadRead Replies (1)


To: Arthur Radley who wrote (21)6/8/2009 3:15:39 PM
From: Arthur Radley
   of 33
 
Smart Balance Keeps Tight Focus on Creativity
Heart-Healthy Food Developer Outsources Manufacturing, Distribution to Target In-House Strength on New Produc

By JOANN S. LUBLIN
PARAMUS, N.J. -- The product-development laboratory at Smart Balance Inc., a food marketer keen to grow through innovation, contains chemical analyzers, lab benches and refrigerated cases. But there are rarely people.

"We don't have legions of white coats," explains Robert S. Gluck, Smart Balance's chief operating officer. Six of its staffers are charged with developing products, but they often work in suppliers' facilities nowhere near its headquarters here.

Smart Balance helps people stay lean with "heart healthy" merchandise, including low-cholesterol spreads, peanut butter, popcorn, cooking oil and milk. The company itself is lean as well, with just 67 employees and scant fixed assets. Its "virtual" business model outsources almost everything else, including manufacturing, product distribution and sales. The unusual approach is attracting attention, especially as recession-battered businesses slow new-product introduction



"We are a pretty aggressive innovator despite the economic downturn," says Chief Executive Steve Hughes. Smart Balance's revenue doubled last year to about $222 million, and the company reported its first quarterly profit in the first quarter. Mr. Hughes thinks revenue can reach $1 billion by 2014, with most of the increase coming from new products. Even then, he expects the company will employ only about 125 people.

Kara Gruver, head of the North American consumer-products practice for consultants Bain & Co. says Smart Balance's model "plays to their strengths," by keeping new-product development and marketing in house, while tapping outsiders for most other functions. (Smart Balance is not a Bain client.) She says more consumer-products companies are looking at outsourcing, as sales lag and capital remains scarce.

Smart Balance spreads were introduced in 1996 by GFA Brands Inc., a small food marketer that crafted a trans-fat-free margarine after licensing a patented blend of natural vegetable oils developed at Brandeis University. The blend raises a consumer's ratio of "good" to "bad" cholesterol. Retail sales grew quickly, spurred by studies showing that trans fats clog arteries and increase the risk of heart disease.

Recipe for Lean Innovation?
Steve Hughes, CEO of Smart Balance Inc., suggests these key ingredients for developing new products with little staff.

Establish a clear vision and long-range blueprint.
Outsource all activities someone else can do better.
Relentlessly commit to continuous improvement.
Develop a strong internal team and external business partnerships.
Create a focused new-product process mixing creativity and practicality.
Invest in building the brand, rather than physical assets.
Messrs. Hughes and Gluck, food-industry veterans, bought GFA Brands for $490 million in May 2007, and later changed the company's name. Their subsequent plunge into peddling milk illustrates their lean innovation method.

Peter L. Dray, executive vice president of product development for the company's operating unit, started tinkering with milk in 2005. He hoped to add Vitamin E and Omega 3 fatty acids, which are said to cut the risk of heart disease, cancer and arthritis.

The problem: Omega 3, which is derived from fish oil, "becomes rancid and tastes fishy very quickly," Mr. Dray says. He previously had solved that problem for Smart Balance peanut butter. But it's more challenging to add Omega 3 to a lower-fat product like milk, he says.

Mr. Dray enlisted help from a Brandeis scientist and a research-and-development consultant. When GFA's new owners made the project a top priority in 2007, Mr. Dray ran tests and trial production runs at a dairy processor. He hired an outside laboratory to assess nutritional claims. Another agency handled consumer taste tests, with some help. "I drank a half gallon every three days," Mr. Dray recalls.

Smart Balance began selling the milk in Florida grocery stores in October 2007. Sales hit $4 million in 2008. The company expanded into the Northeast in January. Mr. Hughes hopes to capture 2% of the nation's $12 billion in annual grocery milk sales by 2011.


"We are a pretty aggressive innovator despite the economic downturn," says Smart Balance Chief Executive Steve Hughes.

Mr. Dray believes the virtual model helps Smart Balance innovate. "There aren't as many roadblocks," he says.

Now, Smart Balance intends to hasten its innovation pace, with a new product or food category every year. Officials say they're eying heart-healthy ice cream, coffee creamers, salad dressing and sour cream.

Mr. Gluck says experienced product developers like Mr. Dray help Smart Balance succeed with a larger share of its innovations than the typical food and beverage business. But he concedes that its small staff means the company can't pursue every potentially good idea. He says he recently nixed marketing colleagues' suggestion for a low-oil snack chip.

"We'd have to compete with Frito-Lay," Mr. Gluck says. "There have been lots of big companies that tried to take them on -- and not very successfully."

Bain's Ms. Gruver says Smart Balance may be rolling out new products too quickly, before existing offerings reach their full potential. "Companies who launch products too quickly are likely not maximizing the profits of the entire portfolio," she says.

Mr. Hughes says the company can boost profits from existing products while adding new ones. Mr. Gluck says Smart Balance will add product-development employees as it grows, including more researchers and quality-control staffers.

Mr. Dray also knows he can tap an extensive network of experts, amassed during 25 years in the food business. "We have a big Rolodex here," he observes.

Share RecommendKeepReplyMark as Last Read


From: Arthur Radley6/18/2009 1:04:11 PM
   of 33
 
businessweek.com

Great business model......added a few more shares today!

Share RecommendKeepReplyMark as Last Read


From: Arthur Radley6/20/2009 4:07:08 PM
   of 33
 
This guy knows what he is doing.........

Steve Hughes:

Chairman and Chief Executive Officer

Stephen Hughes serves as the chairman and chief executive officer of Smart Balance Inc. He is recognized as a leader of innovation and for creating shareholder value in the consumer package goods food and beverage industry.

In 1988, Hughes led the team that launched ConAgra's Healthy Choice line, building the brand's revenue to $1 billion in four years. Subsequently, he led the turnaround of Tropicana's US business, which doubled the company's revenues from $1 billion to $2 billion in four years. Later, as president and chief executive officer of Celestial Seasonings, Inc., he increased revenue and market capitalization from $80 million to $387 million over a three-year period. He then joined the White Wave division of Dean Foods as executive vice president, building the company's revenues in the Silk brand from $175 million to $400 million in two years. Hughes founded Boulder Specialty Brands in 2005 and completed the acquisition of GFA Inc., makers of Smart Balance, in May of 2007.

Hughes graduated with bachelor's degree in economics and political science from Denison University and earned his master's degree in business administration with a concentration in marketing and finance from the University of Chicago.

Share RecommendKeepReplyMark as Last Read


From: Arthur Radley7/25/2009 12:01:31 PM
   of 33
 
starnewsonline.com

Good info on SMBL

Share RecommendKeepReplyMark as Last Read


From: Arthur Radley7/27/2009 1:41:57 PM
   of 33
 
Smart Balance Dn On Report Unilever To Remove Artificial Trans Fat
12:53 pm ET 07/27/2009 - Dow Jones

This only confirms that SMBL was right in creating their product in the first place.

Share RecommendKeepReplyMark as Last Read


From: Arthur Radley7/27/2009 2:08:49 PM
   of 33
 
The last sentences confirms(IMO) my position that this is a positive for SMBL as Unilever is stating that this is the market to be in for food products.

By Shara Tibken
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Shares of Smart Balance Inc. (SMBL) dropped as much as
13% Monday following reports a competitor is planning to remove all artificial
trans fat from its spreads, hurting a marketing advantage of the buttery spread
maker.

USA Today reported that Unilever NV (UN) - the largest seller of soft
margarine - intends to announce plans Monday to remove all partially
hydrogenated oils, or artificial trans fats, from its spreads, including I
Can't Believe It's Not Butter and Shedd's Spread Country Crock. The article
said the change is to begin by next month and be done by the second quarter of
2010.

A representative from Unilever confirmed that the company plans to make an
announcement Monday.

Canaccord Adams analyst Scott Van Winkle said the announcement would take
away one of the marketing benefits Smart Balance has over its competition.

"This is a long-term risk because it takes away the advantage of having the
claim it has the lowest level of trans fats," Van Winkle said in an interview.

U.S. Food and Drug Administration regulations allow products with less than
0.5 grams of trans fat per serving to be labeled as containing no trans fat.
Unlike Unilever's spreads, Smart Balance's products currently contain no
hydrogenated oils - which the company cites as an advantage over its
competition.

One of Smart Balance's recent marketing campaigns has included a push toward
making consumers aware of the health problems associated with partially
hydrogenated oil, or trans fat, which its competitors use in their products.

"Even 1 gram of trans fat increases the risk of heart disease 15x more than 1
gram of saturated fat," an ad on Smart Balance's Web site said. "Choose Smart
Balance Buttery Spread with absolutely no hydrogenated oils and less trans
fat."

A representative from Smart Balance wasn't immediately available to comment.

In recent trading, Smart Balance tumbled 11% to $6 after earlier falling as
low as $5.84. Shares are down 15% over the past 12 months. American depositary
shares of Unilever, meanwhile, were down 7 cents to $26.38.

Northland Securities analyst Chris Krueger said the sell-off Monday is an
overreaction as Unilever plans to replace the partially hydrogenated oils with
a mixture of palm and interesterified fat, or plant oil.

He said interesterified fat could also be unhealthy, as it may be bad for
HDL, or good, cholesterol or raise blood sugar.

In addition, Krueger said Smart Balance could possibly benefit from
Unilever's marketing campaign against partially hydrogenated oil as it would be
another option for more health-conscious consumers.

"If Unilever is not going to use hydrogenated oil, the thought at first
glance is this is real competition, and Unilever is going to take some share
back from Smart Balance," Krueger told Dow Jones Newswires.

But he added that Unilever, which spends a lot of money on advertising, could
make a push for encouraging consumers to use products that don't include
hydrogenated oils.

"This could hurt the rest of the buttery spread categories except for the
ones that don't use hydrogenated fats," including Smart Balance, Krueger said.
"It could be that a rising tide lifts all boats."

Share RecommendKeepReplyMark as Last Read


From: Glenn Petersen8/6/2009 12:27:03 PM
   of 33
 
InPlay 8:31AM Smart Balance reports EPS in-line, misses on revs (SMBL) 6.03 : Reports Q2 (Jun) earnings of $0.02 per share, in-line with the First Call consensus of $0.02; revenues rose 21.3% year/year to $58.2 mln vs the $61 mln consensus. Smart Balance's outlook for the second half of 2009 calls for percentage volume growth in case shipments of approximately 10%. The Company expects continued volume growth led by increased distribution and new products in spreads, peanut butter, cooking oil and popcorn, as well as expansion of its milk products and new products.

Company press release

Share RecommendKeepReplyMark as Last ReadRead Replies (1)
Previous 10 Next 10