Amplify Snack Brands (BETR) IPO Opens 6% Lower

Today's IPO for Amplify Snack Brands, Inc. (NYSE: BETR) opened for trading at $17 after pricing 15,000,000 shares of common stock to be sold by certain stockholders of Amplify at a public offering price of $18, above the expected $14-$16 range.

All shares are being sold by existing stockholders, including certain directors and officers of the Company. Amplify will not receive any of the proceeds from the offering.

Goldman, Sachs & Co., Jefferies, Credit Suisse and SunTrust Robinson Humphrey are acting as joint book-running managers for the offering. William Blair and Piper Jaffray are acting as co-managers.

Amplify Snack Brands is a snack food company focused on developing and marketing products that appeal to consumers’ growing preference for Better-For-You (BFY) snacks. Through their simple, major allergen-free and non-GMO ingredients, Amplify’s brands embody the Company’s BFY mission and have amassed a loyal customer base across a wide range of food distribution channels in the United States.

The company's SkinnyPop was the fastest growing brand of scale in 2014, increasing its share of the sub-segment by 6.5 percentage points to 12.1% and accounting for more than 40% of total sub-segment growth. SkinnyPop’s growth has been driven by continued gains in both distribution and sales velocity. Between 2012 and 2014, SkinnyPop’s sales velocity accelerated from $48 to $141, even as ACV increased from 17% to 52% over the same period, underscoring the brand’s ability to grow store level productivity even as they increased the number of retail locations where SkinnyPop is available.

Financial Performance:

• Net sales increased from $55.7 million in the year ended December 31, 2013 to $132.4 million in the Pro Forma Year Ended December 31, 2014 (Unaudited), representing growth of 137.6%, and increased from $61.2 million in the six months ended June 30, 2014 to $91.6 million in the six months ended June 30, 2015, representing growth of 49.8%;
• Consistent gross profit and Adjusted EBITDA (as defined below) margins of 58.6% and 44.5%, respectively, for the year ended December 31, 2013, 56.1% and 44.2%, respectively, for the Pro Forma Year Ended December 31, 2014 (Unaudited), 56.3% and 46.9%, respectively, for the six months ended June 30, 2014, and 55.8% and 41.5%, respectively for the six months ended June 30, 2015;
• Net income under GAAP decreased from $24.8 million in the year ended December 31, 2013 to $13.6 million for the Pro Forma Year Ended December 31, 2014 (Unaudited), representing a decrease of 45%, and decreased from $28.6 million for the six months ended June 30, 2014 to $8.5 million for the six months ended June 30, 2015, representing a decrease of 70.4%;
• Adjusted EBITDA increased from $24.8 million in the year ended December 31, 2013 to $58.5 million in the Pro Forma Year Ended December 31, 2014 (Unaudited), representing growth of 136.0% and increased from $28.7 million in the six months ended June 30, 2014 to $38.0 million in the six months ended June 30, 2015, representing growth of 32.7%; and
• Cash from operating activities was $26.3 million for the Predecessor period from January 1, 2014 to July 16, 2014, $12.7 million for the Successor period from July 17, 2014 to December 31, 2014 and $25.5 million for the six months ended June 30, 2015 and operating cash flow less capital expenditures was $26.1 million for the Predecessor period from January 1, 2014 to July 16, 2014, $12.5 million for the Successor period from July 17, 2014 to December 31, 2014 and $25.2 million for the six months ended June 30, 2015, driven by our asset-light and outsourced manufacturing model, which requires low levels of capital investment.

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