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

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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

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.

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

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

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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.

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

Good info on SMBL

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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.

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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

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

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

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

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

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."

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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

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To: Glenn Petersen who wrote (28)12/30/2009 2:01:30 PM
From: Arthur Radley
   of 33

Is 2010 finally the year for SMBL? Has been a long slog.

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From: Glenn Petersen6/4/2012 9:31:07 AM
   of 33
Smart Balance has made a major acquisition.

The press release:

Smart Balance to buy Udi's Healthy Foods for $125M

Smart Balance Inc. agrees to acquire gluten-free food-maker Udi's for $125 million cash

Associated Press – Fri, Jun 1, 2012 10:14 PM EDT

DENVER (AP) -- The food company Smart Balance Inc. has agreed to pay $125 million in cash to acquire Denver-based Udi's Healthy Foods LLC, which makes Udi's Gluten Free Foods products.

Smart Balance, based in Paramus, N.J., said it expects future tax benefits of about $22 million, making the effective purchase price about $103 million.

It is buying Udi's from majority shareholder Hubson Acquisition LLC and minority shareholders, including the family of founder Udi Bar-on.

The transaction is expected to close in July.

The Udi's food empire started when Bar-on and his wife launched a sandwich operation that grew into catering, restaurant, cafe and bakery enterprises. Bar-on and his son then built a national business around gluten-free food. In 2010, E&A Industries, whose affiliate is Hubson Acquisition LLC, took a majority stake in the gluten-free food business to help it grow.

Udi's reported sales of $60.9 million in the 12 months that ended March 31. The companies said Udi's had $4.3 million in net sales in 2009.

Meanwhile, Bar-on's family said Friday it is retaining its Udi's Foods restaurant, bakery and catering business.

Smart Balance, which sells buttery spreads, cooking sprays and other products, bought another gluten-free food maker, Glutino, in August. Smart Balance told investors Friday that buying Udi's would diversify the company's portfolio of health and wellness brands while positioning it as a leader in gluten-free foods.

Shares of Smart Balance rose 14 cents to $6.07 on Friday.

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From: Glenn Petersen8/2/2012 12:40:35 PM
   of 33
InPlay 8:37AM Smart Balance reports EPS in-line, misses on revs, increases FY12 revenue guidance due to Udi Healthy Food acquisition ( SMBL) 9.50 : Reports Q2 (Jun) earnings of $0.05 per share, in-line with the Capital IQ Consensus Estimate consensus of $0.05; revenues rose 28.8% year/year to $76 mln vs the $77.44 mln consensus. With the acquisition of Udi's Healthy Foods, LLC expected to benefit SMBL's results beginning in the third quarter, the company increased its 2012 outlook and provided a preliminary outlook for 2013. Co now sees FY12 revs of $360-$370 mln, up from prior guidance of $320-$330 mln, and may not compare to $336.3 mln consensus. Sees gross margin of 42-44%. For FY13, company revs of $440-450 mln, may not compare to $374.4 mln consensus, and operating income to be in the range of $70-$75 mln.

The press release:

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