Soupman Announces 58% Revenue Increase Versus Last Year and $1.6 Million Reduction in Liabilities for 2nd Quarter Fiscal 2016
04/19/2016 | 06:01am EDT
NEW YORK, April 19, 2016 (GLOBE NEWSWIRE) -- Soupman, Inc. (OTCQB:SOUP), makers of the most flavorful small batch soups in the world, today announced its financial results for the second quarter of fiscal 2016 ending February 29, 2016.
Highlights of the second quarter of fiscal 2016:
• Total revenues for the quarter increased by 58% to $0.9 million • Total liabilities for the quarter decreased by 17% or $1.6 million • New customers added in the quarter include Costco, Shoprite and Fairway Markets.
“Revenues for this second quarter ending 2/29/16 exceeded our internal expectations and is the second consecutive quarter that we achieved record sales. Soup sales (excluding franchise revenues) increased by 42%, led by a 51% increase in Tetra Pak sales to our national supermarket customers, including Kroger and Publix. As we model the business through the end of this year, we believe that our upward Tetra sales trends will continue. In the quarter we further reduced liabilities by an additional $1.6 million. Lastly, in the quarter we added Costco, Shoprite and Fairway as new accounts,” said Jamieson Karson, CEO of Soupman, Inc.
“We are investing in growing our Tetra business in a methodical and disciplined manner, utilizing customer selling data to pinpoint geographic areas where our resources will be most productively deployed. This includes using Larry Thomas, Seinfeld’s “Soupman”, to do media and personal appearances, supported by radio advertising, digital and print promotions, in-store displays, in-store promotions and sampling. The results from these efforts have successfully increased sales per supermarket in designated market areas. We expect that our recent results will lead to expanding our base of customers while adding more product assortment on shelf. We have added two new flavors for Fall Soup Season 2016: Shrimp Bisque and Turkey Stew. Both new flavors have deeply resonated with consumers in test and should be available on shelf at supermarkets around the country this September.”
Net revenue was $0.9 million for the three months ended February 29, 2016, an increase of 58%, compared to the three months ended February 28, 2015, due to strong growth in Tetra Pak sales. Moreover, sales for this second quarter increased 36% over sales for the 2016 first quarter. Gross profit was $0.1 million in the second quarter. Our gross profit declined as a percentage of sales due to (i) the reduction in sales under GAAP by granting discounts to our supermarket customers and (ii) the increase in cost of goods by increasing in-store promotional activity. In future quarters the company expects gross profit to increase due to a change in the methodology in which the company grants deductions to supermarket customers. Operating expenses were $1.0 million compared to $0.4 million in last year’s second quarter. The increase in operating expenses was primarily due to increased costs of marketing, advertising and promotion as it continued to invest in growing the Tetra business and an increase in compensation as the company added to the management team. It should be noted that a significant portion of new hire compensation is stock compensation, which under GAAP is included in operating expenses. Also, in that regard, the company hired Barbara Axelson, former salesperson at Campbells and transitioned out certain senior non-revenue generating personnel. Also, in the quarter the company took a one-time, non-recurring charge of approximately $3.9 million representing the difference in the value between the selling price of our Series B preferred shares and the market value of our common stock at the time of issuance, and also the conversion of certain notes payable at a discount to market value. These were noncash expenses and were recorded according to GAAP. Our operating loss was $0.9 million in the second quarter of fiscal 2016 compared to a $0.4 million operating loss in the first quarter of fiscal 2016 due to the expenses mentioned above.
Net loss for the three months ended February 29, 2016 was $4.8 million, or $0.06 per share because of the above mentioned charges, compared to a profit of $0.2 million for the three months ended February 28, 2015 which was favorably affected by a $0.07 gain in fair market value of a change in derivative liabilities. Per share results are based on average weighted shares outstanding of 75.1 million and 61.7 million for the second quarter of fiscal 2016 and 2015 respectively. Adjusted net loss excluding the one-time charges was $0.8 million.
Net revenue for the six months ended February 29, 2016 was $1.7 million, an increase of 34% over the prior six months due to an increase in our Tetra business. Gross profit was $0.4 million compared to $0.1 million for the same period last year.
The company also noted that in the quarter it entered into twenty-four month lock-up agreements with senior management and certain major stockholders limiting the amount of shares that may be sold in a particular month.
About Soupman, Inc.
The Original Soupman® offers over 50 varieties of soups including such famous flavors as Lobster Bisque, Crab Bisque, Chicken Gumbo, Crab Corn Chowder, Mulligatawny, Butternut Squash, Jambalaya, Shrimp Bisque, Italian Sausage, Eggplant Parmigiana, Tomato Basil and many more. The Original Soupman® soups are also available in 6 varieties in 17 ounce Tetra Pak cartons in grocery stores including Publix, Kroger, Ralph's, Vons, Pavilions, HEB and Safeway among many others. The soups can also be ordered online and at Amazon.com. For a store tracker or to order, go to www.originalsoupman.com.
Consumers can visit the Soupman at his original store in NYC on 55 Street & 8th Ave, on soupmobiles at local events throughout the nation and ladling soup for fans at MetLife stadium during the football season.
In 1984, The Original Soupman opened its doors at 55th Street & 8th Avenue in Manhattan and quickly became a worldwide destination. Rated #1 by Zagat and praised by the New York Times as "Art, not Soup," it set the standard for innovation and excellence long before the famous "Seinfeld" episode made it a cultural icon. We sell soup across America in Tetra Pak cartons to grocery stores next to Campbell's and Progresso as well in our franchise restaurants, soupmobiles and through foodservice companies. Jamieson Karson, former CEO of Steven Madden, LTD., is our Chairman and CEO. Steve Madden, Tim Gannon and Reggie Jackson are on our Board of Advisors. Soupman Inc., is a fully reporting public company trading on the OTCQB under the symbol SOUP. For additional information on our company please visit: www.originalsoupman.com OriginalSoupMan and "Like" us on Facebook.
Safe Harbor Statement:
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements are based on current expectations, estimates and projections made by management. The Company intends for the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements. Words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates" or variations of such words are intended to identify such forward-looking statements. The forward-looking statements contained in this press release include, statements regarding continuation of our upward Tetra sales trends, expanding our base of customers while adding more product assortment on shelf and the availability of two new flavors, Shrimp Bisque and Turkey Stew in supermarkets around the country in September... All forward-looking statements in this press release are made as of the date of this press release, and the Company assumes no obligation to update these forward-looking statements other than as required by law. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by any forward-looking statements such as our ability to continue to reduce liabilities and expand our product line and distribution, our ability to raise capital and position the Company for future growth, and the risk factors discussed in the Business and Management's Discussion and Analysis sections in our Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K. Copies of these filings are available www.originalsoupman.com.
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For Additional Information:
Robert N. Bertrand
President & CFO
PCG Advisory Group: