Property, Plant and Equipment

12 Months Ended

Dec. 31, 2015

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

Note 4 – Property, Plant and Equipment:

Property, plant and equipment, net are summarized as follows:

	December 31,
	2015			2014
Refrigeration Equipment	$	55,020,179		$	47,789,991
Machinery and Equipment		21,324,085			19,677,778
Building, Land, and Improvements		15,205,494			9,985,917
Furniture and Office Equipment		2,287,396			1,826,249
Leasehold Improvements		140,672			627,962
Construction in Progress		19,388,195			1,941,754
Automotive Equipment		317,292			314,885
		113,683,313			82,164,536
Less: Accumulated Depreciation and Amortization		(30,890,306	)		(24,338,575	)
	$	82,793,007		$	57,825,961

Depreciation and amortization expense related to property, plant and equipment totaled approximately $7,433,876, $6,356,736 and $5,945,077 for the years ended December 31, 2015, 2014 and 2013, respectively; of which $2,566,013, $2,453,883 and $2,204,282 was recorded in cost of goods sold for 2015, 2014 and 2013, respectively; with the remainder of depreciation and amortization expense being recorded to selling, general and administrative expense.

During June 2013, the Company made a decision to exit its leased manufacturing facility in Quakertown, Pennsylvania. The Company recognized accelerated depreciation of approximately $827,370 during 2013 related to the facility assets that were not going to be redeployed at the Company’s manufacturing facility. These assets were written down to their net realizable value and sold during 2014. The proceeds received from the sale of assets were less than the book value of the assets.

During the first quarter of 2014, the Company completed a project to analyze the estimated future years of service on its existing refrigeration equipment. Based on this analysis, the Company estimated that the useful life of its refrigeration equipment increased from 6 to 9 years. The Company applied this change in estimate prospectively, which reduced depreciation by approximately $1.8 million in 2014 and reduced depreciation by approximately $2.0 million for 2015. The useful life of the other classes of property, plant and equipment remains unchanged.

In June 2015, the Company purchased a building and 6.5 acres of land adjacent to the Company’s manufacturing facility in Bethlehem, Pennsylvania. The assets have been recorded in Building, Land and Improvements at a cost of approximately $5.0 million, of which approximately $2.1 million was the value of the land, with the remaining portion representing the value of the building.

Due to continued growth, the Company has undertaken a capital expansion project at its Freshpet Kitchens manufacturing facility to expand the plant capacity and increase distribution. The Company expects to invest approximately $30.0 to $32.0 million in capital expenditures, with $17.6 million of capital expenditures recorded during 2015, with the remaining spend to be incurred during 2016.