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Boulder Brands (BDBD) Stock Plunges; Cuts Q3, Q4 EPS Expectations

October 22, 2014 9:49 AM EDT
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Price: $11.03 --0%

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(Updated - October 22, 2014 9:52 AM EDT)

Boulder Brands, Inc. (Nasdaq: BDBD) provided an update on its anticipated financial results for the third quarter ended September 30, 2014, and its outlook for the fourth quarter of 2014.

For the third quarter of 2014, the Company expects net sales to be approximately $133.9 million, an increase of 13% over the third quarter of 2013.

Organic net sales increased approximately 8% and organic consumption growth increased approximately 12%

Adjusted EBITDA for the third quarter of 2014 is expected to be be approximately $(2.12) after giving effect to the impairment charges detailed below. Excluding certain items, non-GAAP diluted earnings per share for the third quarter of 2014 is expected to be approximately $0.08 compared to prior guidance of $0.10 to $0.12.

*** The Street sees Q3 EPS of $0.11 on revenue of $142.11 million.

For the fourth quarter of 2014, the Company expects net sales to be in the range of $132 to $137 million.

Adjusted EBITDA for the fourth quarter of 2014 is expected to be in the range of $18 to $20 million.

Non-GAAP diluted earnings per share for the fourth quarter of 2014 is expected to be in the range of $0.04 to $0.06 compared to prior guidance of $0.18 to $0.20.

*** The Street is looking for Q4 EPS of $0.18.

In addition, we are anticipating preliminary estimated non-cash goodwill and trade name impairment charges aggregating $147.5 million relating to the Smart Balance business, of which a significant portion will not be tax deductible.

Chairman and Chief Executive Officer Stephen Hughes stated, "During the third quarter, we faced a number of headwinds that impacted our financial results.

Smart Balance continued to face challenges in the spreads category, resulting in a larger than expected decline. In addition, as noted on our second quarter call, the mix shift of our fast-growing, lower margin Natural segment is significantly outpacing our higher margin Balance segment and is therefore putting increased pressure on our gross margins."

Mr. Hughes concluded, "While we are disappointed with our results, consumption is in line with our guidance and tracking ahead of sales, which is a positive indicator for the health of our business. We expect consumption in the fourth quarter to be in line with the third quarter, but are expecting lower shipments due to a normalizing of certain inventories at our largest customer.

We look forward to detailing our strategy and outlook for the fourth quarter and 2015 on our upcoming earnings call."



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