Reporting its Q4 and full-year results, Pinnacle said it was “critical” to rationalize Boulder SKUs (stock-keeping units) in order to capture synergies and “build the foundation for accelerated growth”.
Pinnacle announced in November that it was to acquire Boulder for $975m, with the deal completing last month.
Pinnacle this week said the SKU rationalization would impact 2016 net sales for Boulder, which produces brands including Udi’s Gluten Free and Glutino. Boulder reported full-year sales of $516.6m in 2015, while Pinnacle is estimating sales of between $460m and $480m this year.
Cost savings opportunities
"We are excited about our recent Boulder Brands acquisition, which provides a stronger presence in faster-growing health and wellness categories and a rich source of both acquisition synergies and other cost savings opportunities,” said Pinnacle Foods chief executive officer Bob Gamgort.
“In 2016, in addition to improving Boulder's cost structure, our focus will be on streamlining the portfolio and building the foundation for accelerated growth in 2017. As a result, we expect Boulder to be modestly accretive this year, with significant accretion thereafter.”
In its full-year results for 2015, Pinnacle reported a 2.5% year-on-year increase in consolidated net sales to $2.66bn. Excluding items affecting comparability, gross profit rose 5.4% to $749.8m.
Gardein acquisition
Net sales for Pinnacle’s North America Retail business, comprising the Birds Eye frozen and Duncan Hines grocery segments, grew 3.3% and reflected a 2.6% benefit from the company’s acquisition of vegan and vegetarian brand Gardein in November 2014.
"This past year was another strong one for Pinnacle, driven by strength of the base business, highly-successful innovation and the addition of Gardein to our portfolio,” said Gamgort.
“For the fourth consecutive year, we grew our composite market share, and we again delivered strong gross margin expansion and double-digit growth in adjusted diluted EPS."