Blue Buffalo Pet Products Inc.’s net income for the fourth quarter was US$10 million, down 54.4% from the same period a year ago. Adjusted net income was US$31 million, up 35.2%.
Net income for the full year 2015 was US$89 million, down 12.3% from the previous year. Adjusted full-year net income was US$122 million, up 14.9%.
“I am pleased with our fourth quarter results. Blue Buffalo delivered a strong finish to a strong year. We continued to gain share, improve our margins and invest in new legs of growth,” said CEO Kurt Schmidt.
During the fourth quarter of 2015, Blue Buffalo Co. Ltd., a wholly owned subsidiary of the company, entered into a settlement agreement with respect to previously disclosed consumer class action lawsuits filed against BBC and consolidated in the United States District Court for the Eastern District of Missouri. In connection with the settlement agreement, the company has recorded a non-cash, pre-tax charge of US$32 million.
For the full year 2016, the company expects to deliver net sales between US$1.12 billion and $1.14 billion and adjusted diluted earnings per share of $0.72 to $0.74. The outlook for full year 2016 adjusted earnings per share excludes costs related to litigation.
Given the success with its Heartland manufacturing plant, the company is announcing an expanded three-year, US$200 million capital investment program to build two new manufacturing facilities as well as research and development center. The new capital investment program will be funded by existing available cash. The company expects 2016 capital expenditures to be approximately US$70 million to US$80 million.
While cat trends continue, the pandemic has added to overall slow-growth treatment of the cat food market.
Premiumization and humanization, as well as automation, fueled continued operation growth in spite of the COVID-19 pandemic.