Summary of INVENTURE GROUP, INC.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q, including all documents incorporated by reference, includes "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, and The Inventure Group, Inc. (the "Company") desires to take advantage of the "safe harbor" provisions thereof. Therefore, the Company is including this statement for the express purpose of availing itself of the protections of the safe harbor with respect to all of such forward-looking statements. In this Quarterly Report on Form 10-Q, the words "anticipates," "believes," "expects," "intends," "estimates," "projects," "will likely result," "will continue," "future" and similar terms and expressions identify forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties, including specifically the possibility that the Company will need additional financing due to future operating losses or in order to implement the Company's business strategy, the possible diversion of management resources from the day-to-day operations of the Company as a result of strategic acquisitions, potential difficulties resulting from the integration of acquired businesses with the Company's business, other acquisition-related risks, lack of consumer acceptance of existing and future products, dependence upon key license agreements, dependence upon major customers, significant competition, risks related to the food products industry, deteriorating economic conditions, volatility of the market price of the Company's common stock, par value $.01 per share (the "Common Stock"), the possible de-listing of the Common Stock from the Nasdaq Capital Market if the Company fails to satisfy the applicable listing criteria (including a minimum share price) in the future and those other risks and uncertainties discussed herein, that could cause actual results to differ materially from historical results or those anticipated. In light of these risks and uncertainties, there can be no assurance that the forward-looking information contained in this Quarterly Report on Form 10-Q will in fact transpire or prove to be accurate. Readers are cautioned to consider the specific risk factors described herein and in "Risk Factors" in the Company' Annual Report on Form 10-K for the fiscal year ended December 27, 2008 and not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that may arise after the date hereof. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this section.

Results of Operations

Quarter ended June 27, 2009 compared to the quarter ended June 28, 2008

Net revenues for the second quarter of fiscal 2009 were $33.4 million, up $4.2 million, or 14.3% higher than the same period last year.

Snack division net revenues were $21.7 million, up 13.5% versus the same period last year. The company attributed the increase in net revenue in the Snack division to higher year-over-year product sales across the majority of its products including Boulder Canyon™ Natural Foods (up 25.7 %), T.G.I. Friday's®(up 3.5 %), BURGER KING™(up 45.9 %) and Private Label (up 155 %). These increases were partially offset by a year-over-year decline in sales at the Poore Brothers® brand. In the Rader Farms division, net revenues were $11.7 million, an increase of 15.7% over last year.

Gross profit for the quarter ended June 27, 2009 increased 19.8% or $1.0 million as compared to the quarter ended June 28, 2008, and also increased as a percentage of net revenues (19.0% of net revenue for 2009 and 18.1% of net revenue for 2008). The increase was attributable to the sales increases at both the Snack and Rader divisions, as well as the impact of increased pounds processed through the Snack plants.

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Selling, general and administrative expenses were $4.4 million in the second quarter of 2009 as compared to $4.0 million in the second quarter of 2008. These expenses decreased to 13.1% of net revenues in 2009, as compared to 13.6% of net revenues in 2008. This decrease is primarily attributable to the higher sales volume during the quarter, as well as a continued emphasis on cost controls.

Net interest expense was $235,898 in the second quarter of 2009 compared to net interest expense of $128,326 in the second quarter of 2008. The decrease primarily relates to a change in accounting treatment of swap instruments. See "Interest Rate Swaps" for further detail. The Company recognized $113,521 of interest income as a result of an interest rate swap in the first quarter of 2008, with no similar benefit incurred in the second quarter of 2009.

Net income was $1.0 million, or $0.06 per basic and diluted share, compared to net income of $0.7 million, or $0.04 per basic and diluted share in the second quarter of last year.

Six months ended June 27, 2009 compared to the six months ended June 28, 2008

For the six months ended June 27, 2009 net revenues increased 13.9%, or $7.7 million, to $63.1 million, compared with net revenue of $55.4 million in the first half of the previous year. Total net revenues for the six months ended June 27, 2009 include $22.4 million from Rader Farms, representing an increase of 13.7%, or $2.7 million, from the $19.7 million of net revenues from Rader Farms in the first six months of 2008. For the snack business, total net revenues for the six months ended June 27, 2009 were 40.7 million, representing an increase of 14.0%, or $5.0 million, from the $35.7 million of snack net revenues for the six months of 2008.

Gross profit for the six months ended June 27, 2009 was $12.4 million, or 19.7% of net revenues, compared to $10.4 million, or 18.7% of net revenues for the six months ended June 30, 2008. This increase of $2.0 million, or 20%, was attributable to the revenue growth at both the Snack and Rader divisions, growth in pounds processed through the snack division plant, and the composition of inventory utilized at Rader Farms during the period. Rader Farms margins can vary depending on the mix of grown versus purchased berries. During the six month period ended June 27, 2009, the mix was more heavily weighted to grown berries. These gains were partially offset by a shift in sales in the snack division to lower margin channels, a resultant impact of the current economic environment and price increases in certain commodities.

Selling, general and administrative expenses increased to $8.9 million for the six months ended June 27, 2009 from $7.8 million for the six months ended June 28, 2008. Selling, general and administrative expenses were 14.0% of total net revenues for the six months ended June 27, 2009 and June 28, 2008. The consistent percentage is due primarily to the increase in net revenues, offset by the company's continued investment in information technology and increased investment in selling and marketing at Rader Farms.

Net interest expense was $0.4 million in the first six months of 2009 compared to net interest expense of $0.7 million in the first six months of 2008. The decrease relates to the company's $3.0 million reduction in its outstanding line of credit balance from $8.2 million at December 27, 2008 to $5.2 million at June 27, 2009. In addition, the company changed their accounting treatment of swap instruments. See "Interest Rate Swaps" for further detail. The Company recognized $0.1 million of interest expense as a result of an interest rate swap in the first six months of 2008, with no similar expense incurred in the first six months of 2009.

Net income for the six months ended June 27, 2009 was $1.9 million, or $0.11 per basic share and $0.10 per diluted share, compared with net income of $1.1 million, or $0.06 per basic and diluted share, in the prior-year period.

Liquidity and Capital Resources

Net working capital was $5.8 million (a current ratio of 1.2:1) at June 27, 2009 and $4.5 million (a current ratio of 1.2:1) at December 27, 2008. For the six months ended June 27, 2009, the Company generated cash flow of $6.2 million from operating activities, invested $1.3 million in equipment, utilized $3.6 million to pay down its line of credit and other debt and purchased $0.5 million of treasury shares. For the six months ended June 28, 2008, the Company generated cash flow of $5.3 million from operating activities, invested $2.2 million in equipment and utilized $3.0 million to pay down its line of credit and other debt. Inventories increased $2.6 million while accounts payable increased $5.5 million as compared to December 27, 2008 balances, primarily due to increased plant processing efficiencies realized at the Rader division, as well as purchasing increases of fruit inventory ahead of the Rader harvest season.

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The Company's Goodyear, Arizona manufacturing and distribution facility is subject to a $1.6 million mortgage loan from Morgan Guaranty Trust Company of New York, bears interest at 9.03% per annum and is secured by the building and the land on which it is located. The loan matures on July 1, 2012; however monthly principal and interest installments of $16,825 are determined based on a twenty-year amortization period.

The Company's Bluffton, Indiana manufacturing and distribution facility was purchased for $3.0 million in December, 2006. The facility is subject to a $2.3 million mortgage loan from U.S. Bank National Association, bears interest at the 30 day LIBOR plus 165 basis points and is secured by the building and the land on which it is located. The interest rate associated with this debt instrument was fixed to 6.85% via an interest rate swap agreement with U.S. Bank National Association in December 2006. The loan matures in December, 2016; however monthly principal and interest installments of $18,392 are determined based on a twenty-year amortization period.

To fund the acquisition of Rader Farms the Company entered into a Loan Agreement (the "Loan Agreement") with U.S. Bank National Association ("U.S. Bank"). Each of our subsidiaries is a guarantor of the Loan Agreement, which is secured by a pledge of all of the assets of our consolidated group. The borrowing capacity available to us under the Loan Agreement consists of notes representing:

† a $15,000,000 revolving line of credit maturing on June 30, 2011; based on asset eligibility, there was $3.8 million of borrowing availability under the line of credit at June 27, 2009

† an equipment term loan, secured by the equipment acquired, subject to a $5.8 million mortgage loan from U.S. Bank National Association, and bearing interest at the 30 day LIBOR plus 165 basis points. The loan matures in May, 2014 and monthly principal installments are $71,429 plus interest and

† a real estate term loan, secured by a leasehold interest in the real property we are leasing from the former owners of Rader Farms in connection with the acquisition, subject to a $4.0 million real estate term loan from U.S. Bank National Association, and bearing interest at the 30 day LIBOR plus 165 basis points. The interest rate associated with this debt instrument was fixed to 4.28% via an interest rate swap agreement with U.S. Bank National Association in January 2008. The loan matures in July, 2017; however monthly principal and interest installments of $36,357 are determined based on a fifteen-year amortization period.

All borrowings under the revolving line of credit will bear interest at either
(i) the prime rate of interest announced by U.S. Bank from time to time or
(ii) LIBOR, plus the LIBOR Rate Margin (as defined in the revolving credit facility note). The term loan will bear interest at LIBOR, plus the LIBOR Rate Margin (as defined in the term loan note).

As is customary in such financings, U.S. Bank may terminate its commitments and accelerate the repayment of amounts outstanding and exercise other remedies upon the occurrence of an event of default (as defined in the Loan Agreement), subject, in certain instances, to the expiration of an applicable cure period. The agreement requires the Company to maintain compliance with certain financial covenants, including a minimum tangible net worth, a minimum fixed charge coverage ratio and a maximum leverage ratio. At June 27, 2009, the Company was in compliance with all of the financial covenants.

Interest Rate Swaps

See Footnote 5 "Long-Term Debt" in the Company's "Notes to Unaudited Condensed Consolidated Financial Statements" for detail regarding the Company's interest rate swaps.

Contractual Obligations

The Company's future contractual obligations consist principally of long-term debt, operating leases, minimum commitments regarding third party warehouse operations services, remaining minimum royalty payments due licensors pursuant to brand licensing agreements and severance charges to terminated executives. As of June 27, 2009 there have been no material changes to the Company's contractual obligations since its December 27, 2008 fiscal year end, other than scheduled payments. The Company currently has no material marketing or capital expenditure commitments.

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Management's Plans

In connection with the implementation of the Company's business strategy, the Company may incur operating losses in the future and may require future debt or equity financings (particularly in connection with future strategic acquisitions, new brand introductions or capital expenditures). Expenditures relating to acquisition-related integration costs, market and territory expansion and new product development and introduction may adversely affect promotional and operating expenses and consequently may adversely affect operating and net income. These types of expenditures are expensed for accounting purposes as incurred, while revenue generated from the result of such expansion or new products may benefit future periods. Management believes that the Company will generate positive cash flow from operations during the next twelve months, which, along with its existing working capital and borrowing facilities, will enable the Company to meet its operating cash requirements for the next twelve months, including planned capital expenditures, including planned improvements to our Goodyear, Arizona facility in 2009. The belief is based on current operating plans and certain assumptions, including those relating to the Company's future revenue levels and expenditures, industry and general economic conditions and other conditions. For instance, if current general economic conditions continue or worsen, we believe that our sales forecasts may prove to be less reliable than they have in the past as consumers may change their buying habits with respect to snack food products. Unexpected price increases for commodities used in our snack products, or adverse weather conditions affecting our Rader Farms crop yield could also impact our financial condition. If any of these factors change, the Company may require future debt or equity financings to meet its business requirements. There can be no assurance that any required financings will be available or, if available, will be on terms attractive to the Company.

Critical Accounting Policies and Estimates

There have been no significant changes to the Company's critical accounting policies and estimates since the filing of its Form 10-K for the year ended December 27, 2008.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations" ("SFAS No. 141(R)"), which replaces SFAS No. 141, "Business Combinations." SFAS No. 141(R) retains the underlying concepts of SFAS No. 141 that require all business combinations to be accounted for at fair value under the acquisition method of accounting, however, SFAS No. 141(R) significantly changes certain aspects of the prior guidance including: (i) acquisition-related costs, except for those costs incurred to issue debt or equity securities, will no longer be capitalized and must be expensed in the period incurred;
(ii) non-controlling interests will be valued at fair value at the acquisition date; (iii) in-process research and development will be recorded at fair value as an indefinite-lived intangible asset at the acquisition date;
(iv) restructuring costs associated with a business combination will no longer be capitalized and must be expensed subsequent to the acquisition date; and
(v) changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date will no longer be recorded as an adjustment of goodwill, rather such changes will be recognized through income tax expense or directly in contributed capital. SFAS 141(R) is effective for all business combinations having an acquisition date on or after the beginning of the first annual period subsequent to December 15, 2008, with the exception of the accounting for valuation allowances on deferred taxes and acquired tax contingencies.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No. 51("SFAS 160"). SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the controlling and noncontrolling interests and requires the separate disclosure of income attributable to controlling and noncontrolling interests. SFAS 160 is effective for fiscal years and interim periods beginning after December 15, 2008. The adoption of SFAS 160 had no impact on the Company's financial position, results of operations or liquidity.

In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133 ("SFAS 161"). SFAS 161 applies to all entities and requires specified disclosures for derivative instruments and related hedge items accounted for under SFAS 133, Accounting for Derivative Instruments and Hedging Activities . SFAS 161 requires enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and their effect on an entity's financial position, financial performance, and cash flows. SFAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. The adoption of SFAS 161 had no impact on the Company's financial position, results of operations or liquidity.

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FASB Staff Position No. 107-1 and Accounting Principles Board (APB) 28-1, "Interim Disclosures about Fair Value of Financial Instruments," were issued to outline the required financial statement disclosures relating to fair value of financial instruments during interim reporting periods. FASB Staff Position No. 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly," was issued to provide additional guidance in evaluating the fair value of a financial instrument when the volume and level of activity for the asset or liability has significantly decreased. FASB Staff Position No. 115-2 and FASB Staff Position No. 124-2, "Recognition and Presentation of Other-Than-Temporary Impairments," were issued to provide additional guidance on presenting impairment losses on securities.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events ("SFAS 165"). SFAS 165 defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued, and establishes general standards of accounting for and disclosure of subsequent events. SFAS 165 also includes a required disclosure of the date through which an entity has evaluated subsequent events, which for public entities is the date upon which the financial statements are issued. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009, and shall be applied prospectively. The Company adopted SFAS 165 for the interim period ended June 27, 2009. The Company evaluated subsequent events through August 11, 2009, which is the date upon which the Company's consolidated financial statements for the interim period ended June 27, 2009 were issued. The adoption of SFAS 165 did not have an impact on the Company's financial position, results of operations or liquidity.

The Company does not expect the adoption of these new pronouncements to have a material effect on its consolidated results of operations or financial condition.