Amira Nature Foods Ltd Announces Fourth Quarter and Full Year Fiscal 2014 Financial Results

Fourth Quarter Revenue Increased 33.0% to $186.6 Million and Adjusted EBITDA Increased 45.4% to $26.4 Million
Full Year Revenue Increased 32.3% to $547.3 Million and Adjusted EBITDA Increased 44.0% to $75.5 Million

DUBAI, United Arab Emirates--- Amira Nature Foods Ltd (the "Company") (ANFI), a leading global provider of packaged Indian specialty rice, today reported financial results for the fourth quarter and full year ended March 31, 2014.

Fourth Quarter Financial Highlights:

• Revenue increased 33.0% to $186.6 million compared to $140.2 million
• Adjusted EBITDA increased 45.4% to $26.4 million compared to $18.1 million

• Adjusted EBITDA margin increased by more than 100 bps to 14.1% of sales
• Adjusted profit after tax increased 97.2% to $16.8 million compared to $8.5 million
• Basic earnings per share⁽¹⁾ was $0.47 compared to $0.24
• Adjusted earnings per share was $0.47 compared to $0.24

Fiscal Year 2014 Financial Highlights:

• Revenue increased 32.3% to $547.3 million compared to $413.7 million
• Adjusted EBITDA increased 44.0% to $75.5 million compared to $52.4 million
• Adjusted EBITDA margin increased by more than 100 bps to 13.8% of sales
• Profit after tax increased 98.1% to $38.1 million compared to $19.2 million
• Adjusted profit after tax, which excludes non-cash expenses for share based compensation of approximately $2.9 million, increased 93.2% to $41.0 million compared to $21.2 million
• Basic and diluted earnings per share⁽¹⁾ was $1.04 compared to $0.63
• Adjusted earnings per share was $1.14 compared to $0.59

(All comparisons above are to the fourth quarter and fiscal year 2014, respectively. Non-IFRS financial measures are reconciled in the tables below.)

Karan A. Chanana, Amira's Chairman and Chief Executive Officer, stated, “We are very pleased with our performance in the fourth quarter and full year 2014, where we grew sales dramatically, improved operating margins, nearly doubled income and made significant investment for continued future growth.”

He continued, “We are focused on a dramatically increasing class of consumers in our home market, while also exploiting new opportunities around the world to further grow our business. To bolster our growth in India we established eight company owned and managed distribution centers in key cities around the country and plan to add seven more distribution centers by the end of the fiscal 2015 to further support our success in India.”

“Internationally, we have made key investments in core regions, including our acquisition of Basmati Rice GmbH which added to our positions in Germany and throughout Continental Europe. We continued to invest in the UK, increasing our marketing spend and building our presence to more than 3,000 distribution points, and in the US where we have nearly doubled our revenues over the past year.”

Bruce Wacha, Amira’s Chief Financial Officer, added, “The Company had a very strong fourth quarter and fiscal 2014 performance, reporting yet another record year. Our revenue grew by more than 30%, our operating margins grew by more than 100 bps, Adjusted EBITDA increased by approximately 45% and Adjusted earnings per share grew by nearly 100%. We have continued to invest in future growth while maintaining a conservative balance sheet of just 2.4x total debt to Adjusted EBITDA and 2.0x net debt to Adjusted EBITDA.”

Fourth Quarter Fiscal 2014 Results

Revenue for the fourth quarter of fiscal 2014 increased 33.0% to $186.6 million, compared to $140.2 million for the same period in fiscal 2013. The revenue increase was primarily due to increased pricing and sales volumes in India and internationally. Revenue in the fourth quarter also benefited from the inclusion of Basmati Rice GmbH, which was acquired in January 2014.

Revenue in the fourth quarter of fiscal 2014 for Amira and third party branded products was $158.3 million up approximately $20 million compared to $138.5 million for the same period in fiscal 2013. Sales to the Company’s institutional customers were up significantly, contributing $28.3 million in revenue for the quarter.

Margins also increased due to improved pricing dynamics, operating efficiencies and economies of scale. Cost of materials including change in inventory of finished goods were $137.4 million, or 73.7% of sales in the fourth quarter of fiscal 2014, compared to $109.0 million, or 77.7% of sales in the fourth quarter of fiscal 2013. Freight, forwarding and handling expenses were $7.5 million, or 4.0% of revenue compared to $5.4 million, or 3.8% of revenue, in the prior year’s fourth quarter.

Adjusted EBITDA increased 45.4% to $26.4 million in the fourth quarter of fiscal 2014, compared to $18.1 million in the same period last year. Adjusted EBITDA margin increased by more than 100 bps to 14.1% in the fourth quarter of 2014. A reconciliation of Adjusted EBITDA to the IFRS measure of profit after tax is provided in the “Non-IFRS Financial Measures” section of this release.

Adjusted profit after tax for the fourth quarter of fiscal 2014 increased 97.2% to $16.8 million, compared to $8.5 million in the fourth quarter of fiscal 2014. Basic earnings per share⁽¹⁾ was $0.47 compared to $0.24 for the fourth quarter of fiscal 2013. A reconciliation of adjusted profit after tax to the IFRS measure of profit after tax is provided in the “Non-IFRS Financial Measures” section of this release.

Adjusted earnings per share was $0.47 compared to $0.24 in the fourth quarter of fiscal 2013. Reconciliations of adjusted earnings per share to basic and diluted earnings per share is provided in the “Non-IFRS Financial Measures” section of this release.

Fiscal Year 2014 Results

For the full year fiscal 2014, revenue increased 32.3% to $547.3 million, compared to $413.7 million in fiscal 2013. Adjusted EBITDA increased 44.0% to $75.5 million, compared to $52.4 million in fiscal 2013 and Adjusted EBITDA margins increased by more than 100 bps to 13.8%. Profit after tax increased 98.1% to $38.1 million, compared to $19.2 million in fiscal 2013. Adjusted profit after tax, which excludes non-cash expenses for share based compensation of approximately $2.9 million, increased 93.2% to $41.0 million, compared to $21.2 million in fiscal 2013. A reconciliation of adjusted EBITDA and adjusted profit after tax to the IFRS measure of profit after tax is provided in the “Non-IFRS Financial Measures” section of this release.

Basic and diluted earnings per share⁽¹⁾ for fiscal 2014 was $1.04 compared to $0.63 each in fiscal 2013. Adjusted earnings per share was $1.14 in fiscal 2014 compared to $0.59 in fiscal 2013. Reconciliations of adjusted earnings per share, to basic and diluted earnings per share are provided in the “Non-IFRS Financial Measures” section of this release.

Balance Sheet and Cash Flow Highlights

At March 31, 2014, the Company’s cash and cash equivalents was $36.6 million, adjusted net working capital was $299.2 million, or 54.6% of sales, compared to $256.2 million, or 61.9% of sales, in the prior year. Net debt (after deducting cash and cash equivalents) as of March 31, 2014 was $148.2 million. Net debt to Adjusted EBITDA was 2.0x, compared to 2.4x at the end of fiscal 2013. As of March 31, 2014, inventory was $255.0 million, or 46.6% of sales, compared to $181.5 million, or 43.9% of sales, as of March 31, 2013. As of March 31, 2014, trade receivables were $80.9 million, or 14.8% of sales, compared to $66.8 million, or 16.1% of sales, in the prior year. Reconciliations of adjusted net working capital and net debt to the IFRS measures of working capital and total current and non-current debt, respectively, are provided in the “Non-IFRS Financial Measures” section of this release.

Fiscal 2015 Outlook

For 2015, the Company expects revenue and Adjusted EBITDA to increase by more than 20%. The Company maintains its long term outlook for $1 billion in revenue and $150 million in Adjusted EBITDA as has been previously communicated to investors as part of its initial public offering. This outlook is based on current foreign exchange rates.

Conference Call

The Company will hold an investor conference call with presentation slides on June 17, 2014 at 8:30 a.m. Eastern time. The dial-in number for this conference call is (877) 407-3982 for North American listeners and (201) 493-6780 for international listeners. Live audio of the conference call and presentation slides will be simultaneously webcast in the investor relations section of the Company’s website at http://www.amirafoods.com.

An audio replay will be available following the completion of the conference call by dialing (877) 870-5176 for North American listeners or (858) 384-5517 for international listeners. The webcast of the teleconference will be archived and available on the Company’s website.

About Amira Nature Foods

Founded in 1915, Amira has evolved into a leading global provider of branded packaged Indian specialty rice, with sales in over 40 countries today. Amira sells Basmati rice, which is a premium long-grain rice grown only in certain regions of the Indian sub-continent, under its flagship Amira brand as well as under other third party brands. Amira sells its products through a broad distribution network in both the developed and emerging markets. Amira’s global headquarters are in Dubai, United Arab Emirates, and it also has offices in India, Malaysia, Singapore, Germany, the United Kingdom, and the United States. For more information please visit www.amira.net.

Cautionary Note on Forward-Looking Statements

This release contains forward-looking statements within the meaning of the U.S. federal securities laws. These forward-looking statements generally can be identified by phrases such as that we or our members of management “believe,” “expect,” “anticipate,” “foresee,” “forecast,” “estimate” or other words or phrases of similar import. Specifically, these statements include, among other things, statements that describe our expectations for the growth of our business, expansion into new geographic markets, maintaining and expanding our relationship with key retail partners, the financial impact of new sales contracts on our revenue, our plans to make significant capital expenditures, and other statements of management’s beliefs, intentions or goals. It is uncertain whether any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what impact they will have on our results of operations, financial condition, or the price of our ordinary shares. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements, including but not limited to our ability to penetrate and increase the acceptance of our products in new geographic markets; our ability to perform our agreements with customers and further develop our relationships with key retail partners; our ability to recognize revenue from our contracts; continued competitive pressures in the marketplace; our reliance on a few customers for a substantial part of our revenue; our ability to implement our plans, forecasts and other expectations with respect to our business and realize additional opportunities for growth; and the other risks and important factors contained and identified in our filings with the Securities and Exchange Commission. All forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by these risk factors. Since we operate in an emerging and evolving environment and new risk factors and uncertainties emerge from time to time, you should not rely upon forward-looking statements as predictions of future events. Except as required under the securities laws of the United States, we undertake no obligation to update any forward-looking or other statements herein to reflect events or circumstances after the date hereof, whether as a result of new information, future events or otherwise.

(1) Basic earnings per share is calculated by dividing our profit after tax as, reduced by the amount of a non-controlling interest reflecting the remaining approximately 19.6% of Amira India that is not indirectly owned by us, by the number of our weighted average outstanding ordinary shares during the applicable period, and diluted earnings per share is calculated by dividing our profit after tax as reduced by the amount of a non-controlling interest reflecting the remaining approximately 19.6% of Amira India that is not indirectly/ directly owned by us, by the number of our weighted average outstanding ordinary shares adjusted by dilutive impact of equivalent stock options granted. The dilutive impact of total share options (360,257 and 361,278) granted to a director in fiscal years 2013 and 2014 was insignificant and hence there is no change in Basic and diluted earnings per share.

Non-IFRS Financial Measures

In evaluating our business, we consider and use the non-IFRS measures EBITDA, Adjusted EBITDA, adjusted profit after tax, adjusted earnings per share, adjusted net working capital and net debt as supplemental measures to review and assess our operating performance. The presentation of these non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. We define: (1) EBITDA as profit after tax plus finance costs (net of finance income), non-recurring IPO-related expenses, income tax expense and depreciation and amortization; (2) Adjusted EBITDA, as EBITDA plus approximately $2.9 million and $0.2 million of non - cash expense for share based compensation for FY2014 and FY2013, respectively (3) Adjusted profit after tax, as profit after tax plus $1.8 million in non-recurring IPO-related expenses for FY13 and approximately $2.9 million and $0.2 million of non - cash expense for share based compensation for FY2014 and FY2013, respectively; (4) adjusted earnings per share as the quotient of: (a) adjusted profit after tax and (b) the sum of our outstanding ordinary shares and the ordinary shares subject to the exchange agreement between us and the non-controlling shareholders of Amira India, during the applicable period; (5) adjusted net working capital as total current assets minus: (a) cash and cash equivalents and (b) trade payables, current tax liabilities (net) and other current liabilities; and (6) net debt as total current and non-current debt minus cash and cash equivalents.

We use both EBITDA and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis, as a measure for planning and forecasting overall expectations, for evaluating actual results against such expectations and as a performance evaluation metric, including as part of assessing and administering our executive and employee incentive compensation programs. We believe that the use of EBITDA and Adjusted EBITDA as non-IFRS measures facilitates investors’ assessment of our operating performance from period to period and from company to company by backing out potential differences caused by variations in items such as capital structure (affecting relative finance or interest expenses), non-recurring IPO-related expenses the book amortization of intangibles (affecting relative amortization expenses), the age and book value of property and equipment (affecting relative depreciation expenses) and other non-cash expenses. We also present these non-IFRS measures because we believe they are frequently used by securities analysts, investors and other interested parties as measures of the financial performance of companies in our industry.

We present adjusted EBITDA, adjusted profit after tax, adjusted earnings per share, adjusted net working capital and net debt because we believe these measures provide additional metrics to evaluate our operations and, when considered with both our IFRS results and the reconciliation to profit after tax, basic and diluted earnings per share, working capital and total current and non-current debt, respectively, provide a more complete understanding of our business than could be obtained absent this disclosure. We also believe that these non-IFRS financial measures are useful to investors in assessing the operating performance of our business after reflecting the adjustments described above.

The following is a reconciliation of profit after tax to EBITDA and Adjusted EBITDA:

The following is a reconciliation of profit after tax to adjusted profit after tax (excluding IPO-related expenses):

The following is a reconciliation of earnings per share and adjusted earnings per share:

The following is a reconciliation of working capital (total current assets minus total current liabilities) and adjusted net working capital:

The following is a reconciliation of total current and non-current debt to net debt: