Freshpet (FRPT) Reiterates Full Year 2022 Guidance, CFO to Step Down

Freshpet, Inc. (“Freshpet” or the “Company”) (Nasdaq: FRPT) today announced several changes in its organizational structure designed to enhance its capabilities and support its long-term growth objectives. Specifically, these changes are designed to strengthen the Company’s capabilities in production, quality, engineering, logistics and finance. Those leadership changes include:

• Chief Financial Officer Heather Pomerantz has announced her intention to step down to pursue other opportunities effective September 7, 2022. While the Company searches for her replacement, current Vice Chairman (and previous Freshpet CFO) Dick Kassar will serve as Interim CFO. Mrs. Pomerantz’s resignation did not result from any disagreement with the Company concerning any matter relating to the Company’s financial reporting, policies or practices.
• Executive Vice President of Manufacturing, Steve Weise, whose intention to retire was announced previously, will remain with the Company in a consulting role through 2023 to support improvements in the Company’s quality assurance systems and other components of the Company’s manufacturing and supply chain.
• Jay Dahlgren, previously Vice President of Operations at J.M. Smucker Company, is now serving as a consultant to the Company with a focus on mitigating manufacturing and supply chain risks. Mr. Dahlgren has a long track record of operations success with Nestle Purina and Big Heart before his time at J.M. Smucker.
• Vice President of Manufacturing, Ricardo Moreno, will be appointed Senior Vice President of Manufacturing & Engineering. The Company expects to backfill the VP of Manufacturing role as it builds out this important area of its operations.
• Senior Vice President of Engineering Michael Hieger will broaden his responsibilities to include all capital expansion projects and engineering resources and will report to Mr. Moreno. Michael successfully led the creation and construction of Kitchens 1.0 and 2.0 in Bethlehem and the start-up of Kitchens South.

Board & Management Commentary

Charles Norris, Freshpet’s Chairman of the Board, commented, “We remain confident that the growth opportunity for Freshpet is enormous and with that comes necessary investments in organizational capabilities in order to fulfill our potential. Each of these changes is designed to focus more resources on the specific areas where we believe the Company has the greatest opportunity to enhance its effectiveness, increase its reliability and consistency of performance, and deliver the Freshpet experience and service that consumers and retail partners expect.”

Billy Cyr, Freshpet’s Chief Executive Officer, added, “The rapid growth of our business, coupled with a fluid operating environment, has created a unique set of opportunities and challenges over the past two years. We remain committed to meeting our objectives and are making some targeted investments to reduce volatility and establish an even greater set of capabilities to ensure that we deliver the profitable growth that we believe is inherent in this business.

“The promotion of Ricardo, along with gaining additional technical expertise across our manufacturing and supply chain, are critical elements for the successful launch of our new Ennis, TX facility and the anticipated future long-term growth that it will support. Since Ricardo joined Freshpet almost two years ago, he has demonstrated the leadership and technical skills necessary to drive tangible improvements to our rapidly expanding operations, resulting in consistent advancements in throughput and productivity – both of which underpinned our successful refilling of the supply chain over the past several quarters.

“We are very grateful to Heather for her efforts in guiding Freshpet through the pandemic. During her tenure, we strengthened the Company’s balance sheet, providing us the necessary capital to meet our long-term goals – including funding a capacity expansion plan that we expect to provide the foundation from which we can drive future growth. We believe we are well positioned to capture the substantial opportunity that lies ahead and wish Heather well in her next endeavor.”

Reiterates Full Year 2022 Guidance and Provides Update on Second Half Adjusted EBITDA Cadence

For full year 2022, the Company reiterated its Adj. EBITDA guidance, which is detailed as follows:

• Net sales of >$575 million, an increase of ~35% from 2021
• Adjusted EBITDA of >$48 million, an increase of ~12% from 2021. Adjusted EBITDA during the second half of 2022 is expected to skew heavily to fourth quarter (approximate 75/25 split between fourth and third quarters, respectively) due to the combination of increased revenue, supported by the impact of higher pricing and consistent consumption growth, and lower marketing investment.
• Capital expenditures of approximately $320 million

The Company does not provide guidance for the most directly comparable GAAP measure, net income, and similarly cannot provide a reconciliation between its forecasted adjusted EBITDA and net income metrics without unreasonable effort due to the unavailability of reliable estimates for certain components of net income and the respective reconciliations, including the timing of and amount of costs of goods sold and selling, general and administrative expenses. These items are not within the Company's control and may vary greatly between periods and could significantly impact future results.

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