Page 1

sovos brands Sovos Brands Reports Third Quarter 2021 Financial Results November 9 , 2021 Third Quarter Net Sales Increase 31 % Due to Strong Consumption and the Addition of Birch Benders Brand Net Sales Increase 17 % Provides Fiscal Year 2021 Net Sales and Adjusted EBITDA Guidance LOUISVILLE , Colo . , Nov. 09 , 2021 ( GLOBE NEWSWIRE ) -- Sovos Brands , Inc. ( Nasdaq : SOVO ) , the fastest - growing food company of scale in the United States , today reported financial results for its third quarter ended September 25 , 2021 . Highlights : • Market share for Rao's sauce reached an all - time high at 13.2 % , closing the gap to the # 2 player ; household penetration for Rao's sauce also reached a new record of 10.3 % , up three percentage points versus the prior year ¹ • Net sales were $ 178.7 million , a 31 % increase over the prior year period , led by robust growth in Rao's and noosa , as well as incremental sales from the acquisition of Birch Benders • Brand net sales , which includes Birch Benders for both periods , increased 17 % in the third quarter over the prior year period • Net loss was $ 4.6 million or a loss of $ 0.06 per diluted share ; adjusted net income³ was $ 7.1 million or $ 0.10 per diluted share • Adjusted EBITDA³ was $ 25.8 million , a 31 % increase over the prior year period , resulting in an adjusted EBITDA margin³ of 14.4 % consistent with the prior year period • Expects full year net sales of $ 710- $ 715 million and adjusted EBITDA³ of $ 113- $ 115 million Todd Lachman , President and Chief Executive Officer stated , " Following our successful IPO , our strong third quarter results of double - digit sales and adjusted EBITDA growth reflect our proven track record of acquiring , developing , and accelerating ' one of a kind ' food brands . Leveraging our Sovos Brands playbook , we are focused on accelerating the growth of our brands , increasing market share and outpacing the categories in which we compete . " Mr. Lachman continued , " Dollar consumption of our brands in our three largest categories - pasta sauce , yogurt and frozen - increased by double digits during the quarter , demonstrating the momentum of our core businesses . Under the leadership of the Sovos Brands team , we remain laser focused on increasing household penetration , successful category expansion and accretive acquisitions , and I am confident our industry - leading , profitable growth will create attractive shareholder returns long - term . " Net sales ( $ millions ) Net income ( loss ) ( $ millions ) Diluted EPS September 25 , $ 2020 Change 136.9 31 % $ 2.2 $ mum 0.03 $ 0.13 ( 23 ) % $ 19.7 31 % $ 14.4 % - % $ $ $ 2021 $ 13 weeks ended September 178.7 $ ( 4.6 ) $ ( 0.06 ) $ 0.10 $ 25.8 $ 14.4 % 39 weeks ended September September 26 , 25 , 2021 529.9 $ 5.8 $ 0.08 $ Adjusted diluted EPS3 Adjusted EBITDA³ ( $ millions ) Adjusted EBITDA margin³ ( % ) Successful Initial Public Offering ( IPO ) On September 22 , 2021 , the Company priced its initial public offering , in which it sold 23,334,000 shares resulting in net proceeds of $ 263.2 million on September 27 , 2021. Subsequent to the IPO , the underwriters exercised their option to purchase an additional 3,500,100 shares of common stock and on October 5 , 2021 , the Company closed its sale of these shares , resulting in net proceeds of $ 39.5 million . As of October 5 , 2021 , shares outstanding were approximately 101 million . Third Quarter 2021 Results 0.56 $ 88.7 $ 26 , 16.7 % 2020 398.3 11.3 0.15 0.44 67.0 Change 33 % ( 49 ) % ( 48 ) % 28 % 32 % 16.8 % ( 1 ) % Net sales of $ 178.7 million represented an increase of $ 41.8 million , or 31 % , for the 13 weeks ended September 25 , 2021 , compared to the 13 weeks ended September 26 , 2020. The Birch Benders brand , which was acquired in October 2020 and was therefore not included in results for the 13 weeks ended September 25 , 2020 , contributed $ 13.8 million of the increase . The remainder of the net sales increase was primarily attributable to increased shipments , with Rao's and noosa driving the most significant increases . Gross profit of $ 49.9 million increased 9 % versus the prior year period . Gross margin was 27.9 % versus 33.3 % for the prior year period . This decline was primarily due to higher logistics costs , input cost inflation and higher promotional spending compared to abnormally lower spending in the prior year period , as well as the acquisition of Birch Benders .