ST. LOUIS, Feb. 01, 2018 (GLOBE
NEWSWIRE) -- Post Holdings, Inc. (NYSE:POST), a consumer packaged
goods holding company, today reported results for the first fiscal
quarter ended December 31, 2017.
Highlights:
· Net
sales of $1.4 billion; operating profit of $164.5 million; net
earnings of $294.9 million and Adjusted EBITDA of $281.6
million
· Completed the acquisition of Bob Evans Farms on January 12,
2018; raised annual run-rate cost synergies to $35-$40 million by
fiscal year 2020
· Updated fiscal year 2018 Adjusted EBITDA (non-GAAP)
guidance range of $1.22-$1.25 billion
·
US tax reform estimated to reduce fiscal year 2018
cash taxes by approximately $30-$35 million
First Quarter Consolidated
Operating Results
Net sales were $1,433.1 million, an increase of
14.7%, or $183.3 million, compared to the prior year. Pro forma net
sales (as defined later in this release under "Pro Forma
Information") increased 3.9%, or $53.7 million, when compared to
the same period in fiscal year 2017. Gross profit was $451.7
million or 31.5% of net sales, an increase of $72.5 million
compared to the prior year gross profit of $379.2 million or 30.3%
of net sales.
Selling, general and administrative (SG&A)
expenses were $245.7 million or 17.1% of net sales, a decrease of
$18.4 million compared to the prior year SG&A expenses of
$264.1 million or 21.1% of net sales. SG&A expenses included a
provision for $9.0 million and $74.5 million in legal settlements
for first quarter 2018 and 2017, respectively. Excluding the impact
of the legal settlement provisions, current year SG&A expenses
increased $47.1 million driven by the inclusion of Weetabix and
increased transaction and integration expenses.
Operating profit was $164.5 million, an increase
of 115.9%, or $88.3 million, compared to the prior year. Net
earnings were $294.9 million, an increase of 189.7%, or $193.1
million, compared to net earnings of $101.8 million in the prior
year. Net earnings available to common shareholders were $291.5
million, or $3.82 per diluted common share. Net earnings and net
earnings available to common shareholders included a $263.6 million
one-time income tax net benefit and $37.3 million loss related to
early extinguishment of debt, both of which are discussed later in
this release. Adjusted net earnings were $67.9 million, or $0.88
per diluted common share.
Adjusted EBITDA was $281.6 million, an increase of
22.4%, or $51.5 million, compared to the prior year.
Post Consumer Brands
North American ready-to-eat
("RTE") cereal and granola.
Net sales were $456.0 million for the first
quarter, an increase of 1.9%, or $8.6 million, compared to the
reported prior year first quarter. Pro forma net sales (as defined
later in this release under "Pro Forma Information") declined 4.2%,
or $20.1 million, over the same period in fiscal year 2017, with
pro forma volumes (as defined later in this release under "Pro
Forma Information") declining 2.4%. Volume growth from licensed
products, Malt-O-Meal bag cereal and
government bid business and private label was offset by declines of
branded products. Pro forma net sales were negatively impacted by
this unfavorable volume mix and timing of promotional activity.
Segment profit was $72.9 million and $82.9 million
for first quarter 2018 and 2017, respectively. Segment Adjusted
EBITDA was $109.1 million and $111.8 million for first quarter 2018
and 2017, respectively.
Weetabix
International (primarily United
Kingdom) RTE cereal and muesli.
Net sales were $99.7 million for the first
quarter. Pro forma net sales (as defined later in this release
under "Pro Forma Information") decreased 1.2%, or $1.2 million,
over the same period in fiscal year 2017. Pro forma net sales
benefitted from a favorable foreign exchange translation rate
compared to the prior year which was offset by an unfavorable
product mix. Segment profit was $16.8 million and segment Adjusted
EBITDA was $25.6 million.
Michael Foods Group
Egg, potato, cheese and pasta
products.
Net sales were $577.1 million for the first
quarter, an increase of 6.9%, or $37.3 million, over the prior year
first quarter. Egg sales increased 9.3% driven by a 3.8% volume
increase and increased market-based pricing in the ingredient and
retail shell egg channels. Net sales and volume information for
potato, cheese and pasta products is disclosed in a table presented
later in this release.
Segment profit (loss) was $74.9 million and
($17.0) million for first quarter 2018 and 2017, respectively.
Segment profit for the first quarter of 2017 was negatively
impacted by a provision for $74.5 million in legal settlements
related to egg antitrust class action claims. Segment Adjusted
EBITDA was $113.4 million and $92.3 million for first quarter 2018
and 2017, respectively.
Active Nutrition
Protein shakes, bars and powders
and nutritional supplements.
Net sales were $186.0 million for the first
quarter, an increase of 20.9%, or $32.1 million, over the prior
year first quarter. Net sales growth was primarily driven by strong
growth for shake and powder products which were partially offset by
declines of bar products. Segment profit was $19.8 million and
$24.9 million for first quarter 2018 and 2017, respectively.
Segment profit for the first quarter of 2018 was negatively
impacted by a provision for $9.0 million for a legal settlement.
Segment Adjusted EBITDA was $35.3 million and $31.1 million for
first quarter 2018 and 2017, respectively.
Private Brands
Peanut and other nut butters and
dried fruit and nut products.
Net sales were $114.3 million for the first
quarter, an increase of 5.2%, or $5.6 million, compared to the
prior year first quarter, with volumes declining 1.6%. Volume
growth in tree nut butter and organic peanut butter was offset by
declines in certain lower margin dried fruit and nut products.
Segment profit was $8.4 million and $5.7 million for first quarter
2018 and 2017, respectively. Segment Adjusted EBITDA was $13.5
million and $10.6 million for first quarter 2018 and 2017,
respectively.
Interest, Loss on Extinguishment
of Debt, Other Income and Income Tax
Interest expense, net was $90.5 million for the
first quarter compared to $72.9 million for the prior year first
quarter. The increase primarily related to an increase in the
outstanding amount of debt principal, partially offset by a
decrease in the weighted-average interest rate.
Loss on extinguishment of debt of $37.3 million
was recorded in the first quarter of 2018 in connection with Post's
redemption of its 6.00% senior notes due 2022.
Other income, net relates to non-cash
mark-to-market adjustments and cash settlements on interest rate
swaps. Other income, net was $2.7 million for the first quarter of
2018, compared to $144.5 million for the first quarter of 2017.
Income tax benefit was $255.8 million in the first
quarter of 2018, compared to an expense of $46.0 million and an
effective income tax rate of 31.1% in the first quarter of
2017. In the first quarter of 2018, as a result of the
recently enacted U.S. Tax Cuts and Jobs Act, Post recorded a $263.6
million one-time income tax net benefit which included (i) a $270.7
million benefit related to an estimate of the remeasurement of
Post's existing deferred tax assets and liabilities considering
both the expected fiscal year 2018 blended U.S. federal corporate
tax rate of approximately 24.5% and a 21% rate for subsequent
fiscal years and (ii) a $7.1 million expense related to an estimate
of the transition tax on unrepatriated foreign earnings.
Share Repurchases
During the first quarter of fiscal year 2018, Post
repurchased 0.7 million shares for $56.0 million at an average
price of $78.01 per share. At the end of the first quarter of 2018,
Post had $176.3 million remaining under its share repurchase
authorization.
Recent Announcements
On January 10, 2018, Post announced it gave notice
for the redemption of all outstanding shares of its 3.75% Series B
Cumulative Perpetual Convertible Preferred Stock with a redemption
date of February 15, 2018.
On January 11, 2018, Post announced it plans to
combine its private brands businesses, which produce nut butter,
dried fruit and nut, pasta and granola products, and explore a
range of structural alternatives for these businesses, including an
initial public offering, a placement of private equity, a sale of
the businesses or a strategic combination.
On January 12, 2018, Post completed the
acquisition of Bob Evans Farms, Inc. ("Bob Evans"), a leading
producer and distributor of refrigerated potato, pasta and
vegetable-based side dishes, pork sausage, and a variety of
refrigerated and frozen convenience food items. Upon close of the
acquisition, Post formed a refrigerated retail business unit and a
foodservice business unit.
Outlook
Post management has updated its fiscal year 2018
Adjusted EBITDA range to be between $1.22-$1.25 billion, inclusive
of Bob Evans.
Post management estimates U.S. income tax reform
will reduce its fiscal year 2018 cash taxes by approximately
$30-$35 million.
Post today announced it now expects to realize
$35-$40 million in annual run-rate cost synergies related to the
acquisition of Bob Evans by fiscal year 2020, an increase from
Post's initial expectation of $25 million.
In fiscal year 2018, Post management now expects
to incur integration costs (which are an adjustment to non-GAAP
measures) for the integration of Weetabix and Bob Evans of
approximately $30 million comprised of severance, retention and
third party consulting expenses, an increase from Post's initial
expectation of approximately $25 million.
Post management expects fiscal year 2018 capital
expenditures, inclusive of Bob Evans, to range between $235-$245
million. This includes approximately $50 million related to the
previously announced cage-free housing conversion at the
Bloomfield, Nebraska facility.
The Company provides Adjusted EBITDA guidance only
on a non-GAAP basis and does not provide a reconciliation of its
forward-looking Adjusted EBITDA non-GAAP guidance measure to the
most directly comparable GAAP measure due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliation, including adjustments that could
be made for non-cash mark-to-market adjustments and cash
settlements on interest rate swaps, provision for legal settlement,
transaction and integration costs, restructuring and plant closure
costs, assets held for sale, mark-to-market adjustments on
commodity hedges and other charges reflected in the Company's
reconciliation of historical numbers, the amounts of which, based
on historical experience, could be significant. For additional
information regarding Post's non-GAAP measures, see the related
explanations presented under "Use of Non-GAAP Measures."
Use of Non-GAAP Measures
The Company uses certain non-GAAP measures in this
release to supplement the financial measures prepared in accordance
with U.S. generally accepted accounting principles (GAAP). These
non-GAAP measures include total segment profit, Adjusted net
earnings, Adjusted diluted earnings per common share, Adjusted
EBITDA and segment Adjusted EBITDA. The reconciliation of each of
these non-GAAP measures to the most directly comparable GAAP
measure is provided later in this release under "Explanation and
Reconciliation of Non-GAAP Measures."
Management uses certain of these non-GAAP
measures, including Adjusted EBITDA and segment Adjusted EBITDA, as
key metrics in the evaluation of underlying Company and segment
performance, in making financial, operating and planning decisions,
and, in part, in the determination of cash bonuses for its
executive officers and employees. Management believes the use of
these non-GAAP measures provides increased transparency and assists
investors in understanding the underlying operating performance of
the Company and its segments and in the analysis of ongoing
operating trends. Non-GAAP measures are not prepared in
accordance with GAAP, as they exclude certain items as described
later in this release. These non-GAAP measures may not be
comparable to similarly titled measures of other companies. For
additional information regarding the Company's non-GAAP measures,
see the related explanations provided under "Explanation and
Reconciliation of Non-GAAP Measures" later in this release.
Conference Call to Discuss
Earnings Results and Outlook
The Company will host a conference call on Friday,
February 2, 2018 at 9:00 a.m. EST to discuss financial results for
the first quarter of fiscal year 2018 and fiscal year 2018 outlook
and to respond to questions. Robert V. Vitale, President and Chief
Executive Officer, and Jeff A. Zadoks, Executive Vice President and
Chief Financial Officer, will participate in the call.
Interested parties may join the conference call by
dialing (877) 540-0891 in the United States and (678) 408-4007 from
outside of the United States. The conference identification number
is 2992278. Interested parties are invited to listen to the webcast
of the conference call, which can be accessed by visiting the
Investor Relations section of the Company's website at
www.postholdings.com.
A replay of the conference call will be available
through Saturday, February 17, 2018 by dialing (800) 585-8367 in
the United States and (404) 537-3406 from outside of the United
States and using the conference identification number 2992278. A
webcast replay also will be available for a limited period on the
Company's website in the Investor Relations section.
Prospective Financial
Information
Prospective financial information is necessarily
speculative in nature, and it can be expected that some or all of
the assumptions underlying the prospective financial information
described above will not materialize or will vary significantly
from actual results. For further discussion of some of the factors
that may cause actual results to vary materially from the
information provided above see "Forward-Looking Statements" below.
Accordingly, the prospective financial information provided above
is only an estimate of what the Company's management believes is
realizable as of the date of this release. It also should be
recognized that the reliability of any forecasted financial data
diminishes the farther in the future that the data is forecast. In
light of the foregoing, the information should be viewed in context
and undue reliance should not be placed upon it.
Forward-Looking
Statements
Certain matters discussed in this release and on
the conference call are forward-looking statements, including our
Adjusted EBITDA outlook for fiscal year 2018, our capital
expenditures expectations, including capital expenditures
expectations for the cage-free housing conversion and growth
initiatives and productivity, expected synergies from the
acquisition of Bob Evans, our integration costs expectations,
statements regarding the exploration of strategic alternatives for
Post's private brands businesses and the expected impact of
U.S. tax reform. These forward-looking statements are sometimes
identified from the use of forward-looking words such as "believe,"
"should," "could," "potential," "continue," "expect," "project,"
"estimate," "predict," "anticipate," "aim," "intend," "plan,"
"forecast," "target," "is likely," "will," "can," "may," "would" or
the negative of these terms or similar expressions, and include all
statements regarding future performance, earnings projections,
events or developments. There are a number of risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements made herein. These risks and
uncertainties include the following:
· our high leverage, our
ability to obtain additional financing (including both secured and
unsecured debt) and our ability to service our outstanding debt
(including covenants that restrict the operation of our
business);
· our ability to continue
to compete in our product markets and our ability to retain our
market position;
· our ability to
anticipate and respond to changes in consumer preferences and
trends and introduce new products;
· our ability to
identify, complete and integrate acquisitions and manage our
growth;
· significant volatility
in the costs of certain raw materials, commodities, packaging or
energy used to manufacture our products;
· our ability to
successfully implement business strategies to reduce
costs;
· allegations that our
products cause injury or illness, product recalls and product
liability claims and other litigation;
· legal and regulatory
factors, including advertising and labeling laws, changes in food
safety and laws and regulations governing animal feeding and
housing operations;
· the loss or bankruptcy
of a significant customer;
· consolidations in the
retail grocery and foodservice industries;
· our ability to promptly
and effectively integrate the Bob Evans business, including the
risk of our or Bob Evans's respective businesses experiencing
disruptions from ongoing business operations which may make it more
difficult than expected to maintain relationships with employees,
business partners or governmental entities, and our ability to
obtain expected cost savings and synergies of the acquisition
within the expected timeframe;
· losses incurred in any
appraisal proceedings brought in connection with our acquisition of
Bob Evans by Bob Evans stockholders who demanded appraisal of their
shares;
· costs associated with
Bob Evans's sale and separation of its restaurant business on April
28, 2017 (the "Bob Evans Restaurants Transaction"), which occurred
prior to our acquisition of Bob Evans, including costs that may
arise under Bob Evans's capacity as guarantor of payment and
performance conditions for certain leases, as well as costs
associated with a transition services agreement established as part
of the Bob Evans Restaurants Transaction;
· our ability to promptly
and effectively integrate the Weetabix business and obtain expected
cost savings and synergies of the acquisition within the expected
timeframe;
· the possibility that we
may not be able to create value in our private brands businesses
through strategic alternatives;
· the potential for
disruption to us or the private brands businesses resulting from
the exploration of strategic alternatives for the private brands
businesses;
· the possibility that we
may not be able to consummate any proposals for strategic
alternatives for our private brands businesses that may result from
our exploration due to, among other things, market, regulatory or
other factors;
· the ability of our
private label products to compete with nationally branded
products;
· disruptions or
inefficiencies in supply chain, which may result from our reliance
on third party manufacturers for certain of our products;
· the ultimate impact
litigation may have on us;
· our ability to
successfully operate our international operations in compliance
with applicable laws and regulations;
· changes in economic
conditions, disruptions in the U.S. and global capital and credit
markets and fluctuations in foreign currency exchange
rates;
· the impact of the
United Kingdom's exit from the European Union (commonly known as
"Brexit") on us and our operations;
· impairment in the
carrying value of goodwill or other intangibles;
· changes in estimates in
critical accounting judgments and changes to or new laws and
regulations affecting our business, including U.S. tax
reform;
· changes in weather
conditions, natural disasters, disease outbreaks and other events
beyond our control;
· loss of key employees,
labor strikes, work stoppages or unionization efforts;
· losses or increased
funding and expenses related to our qualified pension and other
postretirement plans;
· costs, business
disruptions and reputational damage associated with information
technology failures and/or information security breaches;
· our ability to protect
our intellectual property and other assets;
· significant differences
in our actual operating results from our guidance regarding our
future performance;
· our ability to satisfy
the requirements of Section 404 of the Sarbanes-Oxley Act of 2002,
including with respect to acquired businesses; and
· other
risks and uncertainties described in the Company's filings with the
Securities and Exchange Commission.
These forward-looking statements represent the
Company's judgment as of the date of this release. The Company
disclaims, however, any intent or obligation to update these
forward-looking statements.
This release does not constitute an offer to sell
or the solicitation of an offer to buy any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such offering, solicitation or sale would be unlawful.
About Post Holdings, Inc.
Post Holdings, Inc., headquartered in St. Louis,
Missouri, is a consumer packaged goods holding company operating in
the center-of-the-store, foodservice, food ingredient,
refrigerated, active nutrition and private label food categories.
Through its Post Consumer Brands business, Post is a leader in the
North American ready-to-eat cereal category offering a broad
portfolio including recognized brands such as Honey Bunches of
Oats®, Pebbles(TM), Great Grains® and Malt-O-Meal® bag cereal. Post
also is a leader in the United Kingdom ready-to-eat cereal category
with the iconic Weetabix® brand. Through Michael Foods, Post
supplies innovative, value-added egg and refrigerated potato
products to the foodservice and food ingredient channels. Through
its refrigerated retail business, Post is a leader in the
refrigerated side dish category offering potato, egg, sausage and
cheese products through the Bob Evans®, All Whites®, Better'n
Eggs®, Simply Potatoes® and Crystal Farms® brands. Post's Active
Nutrition platform aids consumers in adopting healthier lifestyles
through brands such as Premier Protein®, PowerBar® and Dymatize®.
Post's Private Brands business manufactures private label peanut
butter and other nut butter, dried fruit and nut, pasta and granola
products. For more information, visit www.postholdings.com.
Contact:
Investor Relations
Brad Harper
brad.harper@postholdings.com
(314) 644-7626
Media Relations
Lisa Hanly
lisa.hanly@postholdings.com
(314) 665-3180
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) |
(in millions, except per share
data) |
|
|
|
Three Months Ended
December 31, |
|
2017 |
|
2016 |
Net Sales |
$ |
1,433.1 |
|
|
$ |
1,249.8 |
|
Cost of
goods sold |
981.4 |
|
|
870.6 |
|
Gross Profit |
451.7 |
|
|
379.2 |
|
|
|
|
|
Selling,
general and administrative expenses |
245.7 |
|
|
264.1 |
|
Amortization of intangible assets |
41.5 |
|
|
38.9 |
|
Other
operating expenses, net |
- |
|
|
- |
|
Operating Profit |
164.5 |
|
|
76.2 |
|
|
|
|
|
Interest
expense, net |
90.5 |
|
|
72.9 |
|
Loss on
extinguishment of debt |
37.3 |
|
|
- |
|
Other
income, net |
(2.7 |
) |
|
(144.5 |
) |
Earnings before Income Taxes |
39.4 |
|
|
147.8 |
|
Income
tax (benefit) expense |
(255.8 |
) |
|
46.0 |
|
Net Earnings Including Noncontrolling Interest |
295.2 |
|
|
101.8 |
|
Less: Net
earnings attributable to noncontrolling interest |
0.3 |
|
|
- |
|
Net Earnings |
294.9 |
|
|
101.8 |
|
Preferred
stock dividends |
(3.4 |
) |
|
(3.4 |
) |
Net Earnings Available to Common Shareholders |
$ |
291.5 |
|
|
$ |
98.4 |
|
|
|
|
|
Earnings per Common Share: |
|
|
|
Basic |
$ |
4.42 |
|
|
$ |
1.42 |
|
Diluted |
$ |
3.82 |
|
|
$ |
1.27 |
|
|
|
|
|
Weighted-Average Common Shares Outstanding: |
|
|
|
Basic |
66.0 |
|
|
69.2 |
|
Diluted |
77.3 |
|
|
80.3 |
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) |
(in millions) |
|
|
|
|
|
December 31, 2017 |
|
September 30, 2017 |
|
|
|
|
ASSETS |
Current Assets |
|
|
|
Cash and
cash equivalents |
$ |
1,944.5 |
|
|
$ |
1,525.9 |
|
Restricted cash |
2.6 |
|
|
4.2 |
|
Receivables, net |
468.3 |
|
|
480.6 |
|
Inventories |
587.2 |
|
|
573.5 |
|
Prepaid
expenses and other current assets |
47.0 |
|
|
31.7 |
|
Total Current Assets |
3,049.6 |
|
|
2,615.9 |
|
|
|
|
|
Property,
net |
1,678.4 |
|
|
1,690.7 |
|
Goodwill |
4,039.2 |
|
|
4,032.0 |
|
Other
intangible assets, net |
3,316.6 |
|
|
3,353.9 |
|
Other
assets |
196.0 |
|
|
184.3 |
|
Total Assets |
$ |
12,279.8 |
|
|
$ |
11,876.8 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
Current Liabilities |
|
|
|
Current
portion of long-term debt |
$ |
22.1 |
|
|
$ |
22.1 |
|
Accounts
payable |
351.2 |
|
|
336.0 |
|
Other
current liabilities |
378.9 |
|
|
346.3 |
|
Total Current Liabilities |
752.2 |
|
|
704.4 |
|
|
|
|
|
Long-term
debt |
7,512.6 |
|
|
7,149.1 |
|
Deferred
income taxes |
643.6 |
|
|
905.8 |
|
Other
liabilities |
331.0 |
|
|
327.8 |
|
Total Liabilities |
9,239.4 |
|
|
9,087.1 |
|
|
|
|
|
Shareholders' Equity |
|
|
|
Preferred
stock |
- |
|
|
- |
|
Common
stock |
0.7 |
|
|
0.7 |
|
Additional paid-in capital |
3,565.6 |
|
|
3,566.5 |
|
Accumulated deficit |
(81.1 |
) |
|
(376.0 |
) |
Accumulated other comprehensive loss |
(27.6 |
) |
|
(40.0 |
) |
Treasury
stock, at cost |
(427.2 |
) |
|
(371.2 |
) |
Total Shareholders' Equity excluding Noncontrolling
Interest |
3,030.4 |
|
|
2,780.0 |
|
Noncontrolling Interest |
10.0 |
|
|
9.7 |
|
Total Shareholders' Equity |
3,040.4 |
|
|
2,789.7 |
|
Total Liabilities and Shareholders' Equity |
$ |
12,279.8 |
|
|
$ |
11,876.8 |
|
|
|
|
|
|
|
|
|
|
SELECTED CONDENSED CONSOLIDATED CASH FLOW
INFORMATION (Unaudited) |
(in millions) |
|
|
|
Three Months Ended
December 31, |
|
2017 |
|
2016 |
Cash provided by (used in): |
|
|
|
Operating
activities |
$ |
204.5 |
|
|
$ |
(19.4 |
) |
Investing
activities, including capital expenditures of $46.7 and $31.8 |
(46.2 |
) |
|
(121.8 |
) |
Financing
activities |
259.6 |
|
|
(132.6 |
) |
Effect of
exchange rate changes on cash and cash equivalents |
0.7 |
|
|
(0.7 |
) |
Net increase (decrease) in cash and cash
equivalents |
$ |
418.6 |
|
|
$ |
(274.5 |
) |
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION (Unaudited) |
(in millions) |
|
|
|
|
|
|
|
Three Months Ended
December 31, |
|
|
2017 |
|
2016 |
Net Sales |
|
|
|
|
Post Consumer Brands |
$ |
456.0 |
|
|
$ |
447.4 |
|
|
Weetabix |
99.7 |
|
|
- |
|
|
Michael Foods Group |
577.1 |
|
|
539.8 |
|
|
Active Nutrition |
186.0 |
|
|
153.9 |
|
|
Private Brands |
114.3 |
|
|
108.7 |
|
|
Total |
$ |
1,433.1 |
|
|
$ |
1,249.8 |
|
Segment Profit (Loss) |
|
|
|
|
Post Consumer Brands |
$ |
72.9 |
|
|
$ |
82.9 |
|
|
Weetabix |
16.8 |
|
|
- |
|
|
Michael Foods Group |
74.9 |
|
|
(17.0 |
) |
|
Active Nutrition |
19.8 |
|
|
24.9 |
|
|
Private Brands |
8.4 |
|
|
5.7 |
|
|
Total
segment profit |
192.8 |
|
|
96.5 |
|
|
General corporate expenses and other |
28.3 |
|
|
20.3 |
|
|
Interest expense, net |
90.5 |
|
|
72.9 |
|
|
Loss on extinguishment of debt |
37.3 |
|
|
- |
|
|
Other income, net |
(2.7 |
) |
|
(144.5 |
) |
|
|
Earnings before Income Taxes |
$ |
39.4 |
|
|
$ |
147.8 |
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
MICHAEL FOODS GROUP SEGMENT INFORMATION (Unaudited)
The below table presents net sales and volume
percentage changes for the current quarter compared to the prior
year quarter for additional products within the Michael Foods Group
segment.
|
|
|
|
|
Product |
|
Net Sales Percentage Change |
|
Volume Percentage Change |
Potato |
|
11.8 |
% |
|
11.6 |
% |
Cheese |
|
(6.1 |
%) |
|
(6.4 |
%) |
Pasta |
|
5.0 |
% |
|
5.8 |
% |
|
|
|
|
|
|
|
PRO FORMA
INFORMATION
Pro forma net sales and pro forma volumes, as used
in the text of this release, are defined as the comparison of the
GAAP results for the three-month period ended December 31, 2017 to
the same three-month period in fiscal 2017, adjusted to include
results of the acquired business for the period presented in the
table below. Pro forma net sales and pro forma volumes have not
been prepared in accordance with the requirements of Article 11 of
Regulation S-X.
|
|
|
|
|
|
|
Business |
|
Type |
|
Segment |
|
Pro Forma Period |
Weetabix |
|
Acquisition |
|
Post
Consumer Brands |
|
October 2, 2016 - December 31, 2016
|
|
|
and
Weetabix |
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET SALES TO PRO FORMA
NET SALES (Unaudited) |
(in millions) |
|
|
|
Three Months Ended December 31, |
|
2017 |
|
2016 |
Net
Sales |
$ |
1,433.1 |
|
|
$ |
1,249.8 |
|
Pre-acquisition net sales from Weetabix |
- |
|
|
129.6 |
|
Pro Forma
Net Sales |
$ |
1,433.1 |
|
|
$ |
1,379.4 |
|
|
|
|
|
Post
Consumer Brands Net Sales |
$ |
456.0 |
|
|
$ |
447.4 |
|
Pre-acquisition net sales from Weetabix |
- |
|
|
28.7 |
|
Pro Forma
Net Sales |
$ |
456.0 |
|
|
$ |
476.1 |
|
|
|
|
|
Weetabix
Net Sales |
$ |
99.7 |
|
|
$ |
- |
|
Pre-acquisition net sales from Weetabix |
- |
|
|
100.9 |
|
Pro Forma
Net Sales |
$ |
99.7 |
|
|
$ |
100.9 |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF POST CONSUMER BRANDS
VOLUMES PERCENTAGE CHANGE |
TO PRO FORMA POST CONSUMER BRANDS VOLUMES
PERCENTAGE CHANGE (Unaudited) |
|
|
|
Three Months Ended December 31,
2017 |
Volumes
Percentage Change |
3.0 |
% |
Impact of
inclusion of pre-acquisition volumes of Weetabix |
(5.4 |
%) |
Pro Forma
Volumes Percentage Change |
(2.4 |
%) |
|
|
|
EXPLANATION AND
RECONCILIATION OF NON-GAAP MEASURES
The Company uses certain non-GAAP measures in this
release to supplement the financial measures prepared in accordance
with U.S. generally accepted accounting principles (GAAP). These
non-GAAP measures include total segment profit, Adjusted net
earnings, Adjusted diluted earnings per common share, Adjusted
EBITDA and segment Adjusted EBITDA. The reconciliation of each of
these non-GAAP measures to the most directly comparable GAAP
measure is provided in the tables following this section.
Non-GAAP measures are not prepared in accordance
with GAAP, as they exclude certain items as described below. These
non-GAAP measures may not be comparable to similarly titled
measures of other companies.
Total segment profit
Total segment profit represents the aggregation of the segment
profit for each of the Company's reportable segments. The Company
believes total segment profit is useful to investors in evaluating
the Company's operating performance because it facilitates
period-to-period comparison of results of segment operations.
Adjusted net earnings and Adjusted diluted
earnings per common share
The Company believes Adjusted net earnings and Adjusted diluted
earnings per common share are useful to investors in evaluating the
Company's operating performance because they exclude items that
affect the comparability of the Company's financial results and
could potentially distort an understanding of the trends in
business performance.
Adjusted net earnings and Adjusted diluted
earnings per common share are adjusted for the following items:
a. Non-cash mark-to-market
adjustments and cash settlements on interest rate swaps: The
Company has excluded the impact of non-cash mark-to-market
adjustments and cash settlements on interest rate swaps due to the
inherent uncertainty and volatility associated with such amounts
based on changes in assumptions with respect to estimates of fair
value and economic conditions and the amount and frequency of such
adjustments and settlements are not consistent.
b. Premium on debt extinguishment: The
Company has excluded payments for premiums on debt extinguishment
as such payments are inconsistent in amount and frequency.
Additionally, the Company believes that these costs do not reflect
expected ongoing future operating expenses and do not contribute to
a meaningful evaluation of the Company's current operating
performance or comparisons of the Company's operating performance
to other periods.
c. Provision for legal settlement: The
Company has excluded gains and losses recorded to recognize the
anticipated or actual resolution of certain litigation as the
Company believes such gains and losses do not reflect expected
ongoing future operating income and expenses and do not contribute
to a meaningful evaluation of the Company's current operating
performance or comparisons of the Company's operating performance
to other periods.
d. Transaction costs and integration
costs: The Company has excluded transaction costs related to
professional service fees and other related costs associated with
signed and closed business combinations and divestitures and
integration costs incurred to integrate acquired or to-be-acquired
businesses as the Company believes that these exclusions allow for
more meaningful evaluation of the Company's current operating
performance and comparisons of the Company's operating performance
to other periods. The Company believes such costs are generally not
relevant to assessing or estimating the long-term performance of
acquired assets as part of the Company or the performance of the
divested assets, and are not factored into management's evaluation
of potential acquisitions or its performance after completion of an
acquisition or the evaluation to divest an asset. In addition, the
frequency and amount of such charges varies significantly based on
the size and timing of the acquisitions and divestitures and the
maturity of the businesses being acquired or divested. Also, the
size, complexity and/or volume of past acquisitions and
divestitures, which often drive the magnitude of such expenses, may
not be indicative of the size, complexity and/or volume of future
acquisitions or divestitures. By excluding these expenses,
management is better able to evaluate the Company's ability to
utilize its existing assets and estimate the long-term value that
acquired assets will generate for the Company. Furthermore, the
Company believes that the adjustments of these items more closely
correlate with the sustainability of the Company's operating
performance.
e. Restructuring and plant closure
costs: The Company has excluded certain costs associated with
facility closures as the amount and frequency of such adjustments
are not consistent. Additionally, the Company believes that these
costs do not reflect expected ongoing future operating expenses and
do not contribute to a meaningful evaluation of the Company's
current operating performance or comparisons of the Company's
operating performance to other periods.
f. Assets held for sale: The Company has
excluded adjustments recorded to adjust the carrying value of
facilities and other assets classified as held for sale as such
adjustments represent non-cash items and the amount and frequency
of such adjustments are not consistent. Additionally, the Company
believes that these adjustments do not reflect expected ongoing
future operating expenses and do not contribute to a meaningful
evaluation of the Company's current operating performance or
comparisons of the Company's operating performance to other
periods.
g. Mark-to-market adjustments on commodity
and foreign exchange hedges: The Company has excluded the
impact of mark-to-market adjustments on commodity and foreign
exchange hedges due to the inherent uncertainty and volatility
associated with such amounts based on changes in assumptions with
respect to fair value estimates. Additionally, these adjustments
are primarily non-cash items and the amount and frequency of such
adjustments are not consistent.
h. Foreign currency gains and losses on
intercompany loans: The Company has excluded the impact of
foreign currency fluctuations related to intercompany loans
denominated in currencies other than the functional currency of the
respective legal entity in evaluating Company performance to allow
for more meaningful comparisons of performance to other
periods.
i. Income Tax: The Company has included
the income tax impact of the non-GAAP adjustments using its
estimated blended annual income tax rate or its effective income
tax rate, as noted in the footnote of the reconciliation tables, as
the Company believes that the Company's GAAP effective income tax
rate as reported is not representative of the income tax expense
impact of the adjustments.
j. Preferred stock: The Company has
included dividend and weighted-average diluted share adjustments
related to its convertible preferred stock using the "if-converted"
method when the convertible preferred stock is dilutive on an
adjusted basis.
k. U.S. tax reform net benefit: The
Company has excluded the impact of the one-time income tax net
benefit recorded in the first quarter of 2018 which reflected (i)
the benefit related to an estimate of the remeasurement of the
Company's existing deferred tax assets and liabilities considering
both the Company's expected fiscal year 2018 blended U.S. federal
corporate tax rate of approximately 24.5% and a 21% rate for
subsequent fiscal years and (ii) the expense related to an estimate
of a transition tax on unrepatriated foreign earnings. The Company
believes that the net benefit as reported is not representative of
the Company's current income tax position and exclusion of the
benefit allows for more meaningful comparisons of performance to
other periods.
Adjusted EBITDA and segment Adjusted
EBITDA
The Company believes that Adjusted EBITDA is useful to investors in
evaluating the Company's operating performance and liquidity
because (i) we believe it is widely used to measure a company's
operating performance without regard to items such as depreciation
and amortization, which can vary depending upon accounting methods
and the book value of assets, (ii) it presents a measure of
corporate performance exclusive of the Company's capital structure
and the method by which the assets were acquired, and (iii) it is a
financial indicator of a company's ability to service its debt, as
the Company is required to comply with certain covenants and
limitations that are based on variations of EBITDA in the Company's
financing documents. The Company believes that segment Adjusted
EBITDA is useful to investors in evaluating the Company's operating
performance because it allows for assessment of the operating
performance of each reportable segment. Management uses Adjusted
EBITDA to provide forward-looking guidance and uses Adjusted EBITDA
and segment Adjusted EBITDA to forecast future results.
Adjusted EBITDA and segment Adjusted EBITDA
reflect adjustments for interest expense, net, income tax (benefit)
expense, depreciation and amortization, and the following
adjustments discussed above: non-cash mark-to-market adjustments
and cash settlements on interest rate swaps, provision for legal
settlement, transaction costs and integration costs, restructuring
and plant closure costs, assets held for sale, mark-to-market
adjustments on commodity and foreign exchange hedges, and foreign
currency gains and losses on intercompany loans. Additionally,
Adjusted EBITDA and segment Adjusted EBITDA reflect adjustments for
the following items:
l. Loss on extinguishment
of debt: The Company has excluded losses recorded on
extinguishment of debt, inclusive of payments for premiums and the
write-off of debt issuance costs, as such losses are inconsistent
in amount and frequency. Additionally, the Company believes that
these costs do not reflect expected ongoing future operating
expenses and do not contribute to a meaningful evaluation of the
Company's current operating performance or comparisons of the
Company's operating performance to other periods.
m. Non-cash stock-based compensation:
The Company's compensation strategy includes the use of stock-based
compensation to attract and retain executives and employees by
aligning their long-term compensation interests with shareholders'
investment interests. The Company has excluded non-cash stock-based
compensation as non-cash stock-based compensation can vary
significantly based on reasons such as the timing, size and nature
of the awards granted and subjective assumptions which are
unrelated to operational decisions and performance in any
particular period and do not contribute to meaningful comparisons
of the Company's operating performance to other periods.
n. Noncontrolling interest adjustment:
The Company has included adjustments for interest expense, income
tax expense, and depreciation and amortization for consolidated
joint ventures which are attributable to the noncontrolling owners
of the consolidated joint ventures.
o. Equity method investment adjustment:
The Company has included adjustments for its portion of interest
expense, income tax expense, and depreciation and amortization for
unconsolidated joint ventures.
|
RECONCILIATION OF NET EARNINGS AVAILABLE
TO COMMON SHAREHOLDERS |
TO ADJUSTED NET EARNINGS
(Unaudited) |
(in millions) |
|
|
|
|
|
Three Months Ended
December 31, |
|
|
2017 |
|
2016 |
Net Earnings Available to Common
Shareholders |
$ |
291.5 |
|
|
$ |
98.4 |
|
Dilutive preferred stock dividends |
3.4 |
|
|
3.4 |
|
Net Earnings for Diluted Earnings per
Share |
294.9 |
|
|
101.8 |
|
|
|
|
|
Adjustments: |
|
|
|
|
Non-cash
mark-to-market adjustments and cash settlements on interest rate
swaps |
(2.7 |
) |
|
(144.5 |
) |
|
Premium
on debt extinguishment |
30.8 |
|
|
- |
|
|
Provision
for legal settlement |
9.0 |
|
|
74.5 |
|
|
Transaction costs |
3.0 |
|
|
0.1 |
|
|
Integration costs |
10.6 |
|
|
0.5 |
|
|
Restructuring and plant closure costs |
- |
|
|
0.2 |
|
|
Assets
held for sale |
- |
|
|
(0.2 |
) |
|
Mark-to-market adjustments on commodity and foreign exchange
hedges |
(2.2 |
) |
|
(3.4 |
) |
|
Foreign
currency loss on intercompany loans |
- |
|
|
0.2 |
|
|
Total Net Adjustments |
48.5 |
|
|
(72.6 |
) |
Income tax effect on adjustments (1) |
(11.9 |
) |
|
22.6 |
|
U.S. tax reform net benefit |
(263.6 |
) |
|
- |
|
Adjusted Net Earnings |
$ |
67.9 |
|
|
$ |
51.8 |
|
|
|
|
|
|
(1) Income tax
effect on adjustments is calculated using Post's expected fiscal
year 2018 blended U.S. federal corporate income tax rate of
approximately 24.5% for the three months ended December 31, 2017
and Post's effective income tax rate of 31.1% for the three months
ended December 31, 2016. |
|
|
RECONCILIATION OF DILUTED EARNINGS PER
COMMON SHARE |
TO ADJUSTED DILUTED EARNINGS PER COMMON
SHARE (Unaudited) |
|
|
|
|
|
Three Months Ended
December 31, |
|
|
2017 |
|
2016 |
Diluted Earnings per Common Share |
$ |
3.82 |
|
|
$ |
1.27 |
|
|
|
|
|
Adjustments: |
|
|
|
|
Non-cash
mark-to-market adjustments and cash settlements on interest rate
swaps |
(0.03 |
) |
|
(1.80 |
) |
|
Premium
on debt extinguishment |
0.40 |
|
|
- |
|
|
Provision
for legal settlement |
0.11 |
|
|
0.93 |
|
|
Transaction costs |
0.04 |
|
|
- |
|
|
Integration costs |
0.13 |
|
|
0.01 |
|
|
Mark-to-market adjustments on commodity and foreign exchange
hedges |
(0.03 |
) |
|
(0.04 |
) |
|
Total Net Adjustments |
0.62 |
|
|
(0.90 |
) |
Income tax effect on adjustments (1) |
(0.15 |
) |
|
0.28 |
|
U.S. tax reform net benefit |
(3.41 |
) |
|
- |
|
Adjusted Diluted Earnings per Common
Share |
$ |
0.88 |
|
|
$ |
0.65 |
|
|
|
|
|
|
(1) Income tax
effect on adjustments is calculated using Post's expected fiscal
year 2018 blended U.S. federal corporate income tax rate of
approximately 24.5% for the three months ended December 31, 2017
and Post's effective income tax rate of 31.1% for the three months
ended December 31, 2016. |
|
|
RECONCILIATION OF NET EARNINGS TO
ADJUSTED EBITDA (Unaudited) |
(in millions) |
|
|
|
Three Months Ended
December 31, |
|
2017 |
|
2016 |
Net Earnings |
$ |
294.9 |
|
|
$ |
101.8 |
|
Income
tax (benefit) expense |
(255.8 |
) |
|
46.0 |
|
Interest
expense, net |
90.5 |
|
|
72.9 |
|
Loss on
extinguishment of debt |
37.3 |
|
|
- |
|
Non-cash
mark-to-market adjustments and cash settlements on interest rate
swaps |
(2.7 |
) |
|
(144.5 |
) |
Depreciation and amortization |
90.5 |
|
|
77.1 |
|
Provision
for legal settlement |
9.0 |
|
|
74.5 |
|
Non-cash
stock-based compensation |
6.8 |
|
|
4.9 |
|
Transaction costs |
3.0 |
|
|
0.1 |
|
Integration costs |
10.6 |
|
|
0.5 |
|
Restructuring and plant closure costs |
- |
|
|
0.2 |
|
Assets
held for sale |
- |
|
|
(0.2 |
) |
Mark-to-market adjustments on commodity and foreign exchange
hedges |
(2.2 |
) |
|
(3.4 |
) |
Noncontrolling interest adjustment |
(0.2 |
) |
|
- |
|
Equity
method investment adjustment |
(0.1 |
) |
|
- |
|
Foreign
currency loss on intercompany loans |
- |
|
|
0.2 |
|
Adjusted EBITDA |
$ |
281.6 |
|
|
$ |
230.1 |
|
Adjusted EBITDA as a percentage of Net Sales |
19.6 |
% |
|
18.4 |
% |
|
|
|
|
|
|
|
RECONCILIATION OF SEGMENT PROFIT TO
ADJUSTED EBITDA (Unaudited) |
THREE MONTHS ENDED DECEMBER 31,
2017 |
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post
Consumer
Brands |
|
Weetabix |
|
Michael
Foods
Group |
|
Active
Nutrition |
|
Private
Brands |
|
Corporate/
Other |
|
Total |
Segment Profit |
$ |
72.9 |
|
|
$ |
16.8 |
|
|
$ |
74.9 |
|
|
$ |
19.8 |
|
|
$ |
8.4 |
|
|
$ |
- |
|
|
$ |
192.8 |
|
General
corporate expenses and other |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(28.3 |
) |
|
(28.3 |
) |
Operating Profit |
72.9 |
|
|
16.8 |
|
|
74.9 |
|
|
19.8 |
|
|
8.4 |
|
|
(28.3 |
) |
|
164.5 |
|
Depreciation and amortization |
32.6 |
|
|
7.1 |
|
|
38.0 |
|
|
6.5 |
|
|
5.1 |
|
|
1.2 |
|
|
90.5 |
|
Provision
for legal settlement |
- |
|
|
- |
|
|
- |
|
|
9.0 |
|
|
- |
|
|
- |
|
|
9.0 |
|
Non-cash
stock-based compensation |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
6.8 |
|
|
6.8 |
|
Transaction costs |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
3.0 |
|
|
3.0 |
|
Integration costs |
3.4 |
|
|
2.3 |
|
|
0.5 |
|
|
- |
|
|
- |
|
|
4.4 |
|
|
10.6 |
|
Mark-to-market adjustments on commodity and foreign exchange
hedges |
0.2 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(2.4 |
) |
|
(2.2 |
) |
Noncontrolling interest adjustment |
- |
|
|
(0.5 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(0.5 |
) |
Equity
method investment adjustment |
- |
|
|
(0.1 |
) |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(0.1 |
) |
Adjusted EBITDA |
$ |
109.1 |
|
|
$ |
25.6 |
|
|
$ |
113.4 |
|
|
$ |
35.3 |
|
|
$ |
13.5 |
|
|
$ |
(15.3 |
) |
|
$ |
281.6 |
|
Adjusted EBITDA as a percentage of Net Sales |
23.9 |
% |
|
25.7 |
% |
|
19.6 |
% |
|
19.0 |
% |
|
11.8 |
% |
|
- |
|
|
19.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF SEGMENT PROFIT (LOSS)
TO ADJUSTED EBITDA (Unaudited) |
THREE MONTHS ENDED DECEMBER 31,
2016 |
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post
Consumer
Brands |
|
Weetabix |
|
Michael
Foods
Group |
|
Active
Nutrition |
|
Private
Brands |
|
Corporate/
Other |
|
Total |
Segment Profit (Loss) |
$ |
82.9 |
|
|
$ |
- |
|
|
$ |
(17.0 |
) |
|
$ |
24.9 |
|
|
$ |
5.7 |
|
|
$ |
- |
|
|
$ |
96.5 |
|
General
corporate expenses and other |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(20.3 |
) |
|
(20.3 |
) |
Operating Profit (Loss) |
82.9 |
|
|
- |
|
|
(17.0 |
) |
|
24.9 |
|
|
5.7 |
|
|
(20.3 |
) |
|
76.2 |
|
Depreciation and amortization |
28.4 |
|
|
- |
|
|
36.7 |
|
|
6.2 |
|
|
4.9 |
|
|
0.9 |
|
|
77.1 |
|
Provision
for legal settlement |
- |
|
|
- |
|
|
74.5 |
|
|
- |
|
|
- |
|
|
- |
|
|
74.5 |
|
Non-cash
stock-based compensation |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
4.9 |
|
|
4.9 |
|
Transaction costs |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
0.1 |
|
|
0.1 |
|
Integration costs |
0.5 |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
0.5 |
|
Restructuring and plant closure costs |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
0.2 |
|
|
0.2 |
|
Assets
held for sale |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(0.2 |
) |
|
(0.2 |
) |
Mark-to-market adjustments on commodity hedges |
- |
|
|
- |
|
|
(1.9 |
) |
|
- |
|
|
- |
|
|
(1.5 |
) |
|
(3.4 |
) |
Foreign
currency loss on intercompany loans |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
0.2 |
|
|
0.2 |
|
Adjusted EBITDA |
$ |
111.8 |
|
|
$ |
- |
|
|
$ |
92.3 |
|
|
$ |
31.1 |
|
|
$ |
10.6 |
|
|
$ |
(15.7 |
) |
|
$ |
230.1 |
|
Adjusted EBITDA as a percentage of Net Sales |
25.0 |
% |
|
- |
|
|
17.1 |
% |
|
20.2 |
% |
|
9.8 |
% |
|
- |
|
|
18.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Post Holdings, Inc. via Globenewswire
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