Post Holdings Reports Results for the Fourth Quarter and Fiscal
Year 2018
Post Holdings, Inc. (NYSE:POST), a consumer packaged goods holding
company, today reported results for the fourth quarter and fiscal
year ended September 30, 2018.
Highlights:
- Fourth Quarter net sales of $1.6 billion; operating
profit of $70.9 million; net loss of $15.6 million and Adjusted
EBITDA of $320.6 million
- Fiscal Year net sales of $6.3 billion; operating profit
of $587.5 million; net earnings of $467.3 million and Adjusted
EBITDA of $1.23 billion
- Completed separate capitalization of 8th Avenue Food
& Provisions with affiliates of Thomas H. Lee Partners on
October 1, 2018
- Announces intent to pursue IPO of Active Nutrition
business
- Fiscal year 2019 Adjusted EBITDA (non-GAAP) guidance
range of $1.19-$1.24 billion, excluding 8th Avenue
Fourth Quarter Consolidated Operating
Results
Net sales were $1,629.9 million, an increase of 12.5%, or $181.4
million, compared to the prior year period. Pro forma net sales (as
defined later in this release under “Pro Forma Information”)
increased 4.4%, or $68.8 million, when compared to the same period
in fiscal year 2017. Gross profit was $478.0 million or 29.3% of
net sales, an increase of $40.9 million compared to the prior year
gross profit of $437.1 million or 30.2% of net sales. Gross profit
for the fourth quarter of 2017 was negatively impacted by an
inventory adjustment of $18.2 million resulting from purchase
accounting and was treated as an adjustment for non-GAAP
measures.
Selling, general and administrative (SG&A) expenses were
$239.6 million or 14.7% of net sales, a decrease of $12.2 million
compared to the prior year SG&A expenses of $251.8 million or
17.4% of net sales. SG&A expenses for fourth quarter 2018 and
2017 included $9.3 million and $23.0 million of transaction costs,
respectively, related to the separate capitalization of 8th Avenue
Food & Provisions (“8th Avenue”) and the acquisition of
Weetabix, respectively, and were treated as adjustments for
non-GAAP measures.
Operating profit was $70.9 million, a decrease of 38.9%, or
$45.2 million, compared to the prior year period. Operating profit
was negatively impacted by non-cash other intangible asset
impairment of $124.9 million in the fourth quarter of 2018 and
non-cash goodwill impairment of $26.5 million in the fourth quarter
of 2017, which are discussed later in this release and were treated
as adjustments for non-GAAP measures.
Net loss was $15.6 million, a decrease of 295.0%, or $23.6
million, compared to net earnings of $8.0 million in the prior year
period. Net loss for the fourth quarter of 2018 included a $25.2
million gain and net earnings for the fourth quarter of 2017
included an $8.5 million loss, both of which primarily related to
non-cash mark-to-market adjustments on interest rate swaps, which
is discussed later in this release and was treated as an adjustment
for non-GAAP measures. Net loss attributable to common shareholders
was $17.6 million, or $0.26 per diluted common share, compared to
the prior year period net earnings available to common shareholders
of $4.7 million, or $0.07 per diluted common share. Adjusted net
earnings were $81.5 million, or $1.08 per adjusted diluted common
share, compared to the prior year period adjusted net earnings of
$61.7 million, or $0.80 per adjusted diluted common share.
Adjusted EBITDA was $320.6 million, an increase of 11.9%, or
$34.2 million, compared to the prior year period.
Fiscal Year 2018 Consolidated Operating
Results
Net sales were $6,257.2 million, an increase of 19.7%, or
$1,031.4 million, compared to the prior year. Gross profit was
$1,866.8 million or 29.8% of net sales, an increase of $292.7
million compared to the prior year gross profit of $1,574.1 million
or 30.1% of net sales.
SG&A expenses were $975.2 million or 15.6% of net sales, an
increase of $107.8 million compared to the prior year SG&A
expenses of $867.4 million or 16.6% of net sales. SG&A expenses
for fiscal years 2018 and 2017 included a provision for $17.3
million and $73.6 million in legal settlements, respectively.
Excluding the impact of the legal settlement provisions, current
year SG&A expenses increased $164.1 million when compared to
the prior year. The increase was primarily driven by (i) the
inclusion of Weetabix and Bob Evans, (ii) increased integration
expenses and (iii) a prior year benefit of $30.0 million of net
foreign currency gains for the purchase price of Weetabix. SG&A
expenses for fiscal year 2018 included $28.8 million of integration
expenses, an increase of $20.0 million compared to the prior year,
which were treated as an adjustment for non-GAAP measures.
Operating profit was $587.5 million, an increase of 12.9%, or
$67.2 million, compared to the prior year. Operating profit was
negatively impacted by non-cash other intangible asset impairment
of $124.9 million in fiscal year 2018 and non-cash goodwill
impairment of $26.5 million in fiscal year 2017, which are
discussed later in this release and were treated as adjustments for
non-GAAP measures.
Net earnings were $467.3 million, an increase of 867.5%, or
$419.0 million, compared to net earnings of $48.3 million in the
prior year. Net earnings for fiscal year 2018 included a $270.9
million one-time income tax net benefit, a $95.6 million gain
primarily related to non-cash mark-to-market adjustments on
interest rate swaps and a $31.1 million net loss on extinguishment
of debt, each of which are discussed later in this release and were
treated as adjustments for non-GAAP measures. Net earnings for
fiscal year 2017 included a $222.9 million net loss on
extinguishment of debt and a $91.8 million gain primarily related
to non-cash mark-to-market adjustments on interest rate swaps, both
of which are discussed later in this release and were treated as
adjustments for non-GAAP measures. Net earnings available to common
shareholders were $457.3 million, or $6.16 per diluted common
share, compared to the prior year net earnings available to common
shareholders of $34.8 million, or $0.50 per diluted common share.
Adjusted net earnings were $309.6 million, or $4.08 per diluted
common share, compared to the prior year adjusted net earnings of
$211.0 million, or $2.67 per adjusted diluted common share.
Adjusted EBITDA was $1,230.7 million, an increase of 24.4%, or
$241.6 million, compared to the prior year.
Post Consumer Brands
North American ready-to-eat (“RTE”) cereal.
Net sales were $471.0 million for the fourth quarter, an
increase of 1.6%, or $7.5 million, compared to the prior year
period, with volumes increasing 2.2%. Volume growth from certain
licensed products, Honey Bunches of Oats and Pebbles was partially
offset by volume declines from Malt-O-Meal bag cereal and private
label as well as higher trade spending. Segment profit was $84.6
million and $86.3 million for fourth quarter 2018 and 2017,
respectively. Segment Adjusted EBITDA was $114.0 million and $122.8
million for fourth quarter 2018 and 2017, respectively.
For fiscal year 2018, net sales were $1,831.7 million, an
increase of 5.1%, or $89.2 million, compared to the prior year.
Segment profit was $329.2 million, compared to $354.9 million in
the prior year. Segment Adjusted EBITDA was $458.2 million,
compared to $477.8 million in the prior year.
Weetabix
International (primarily United Kingdom) RTE cereal and
muesli.
Net sales were $107.6 million for the fourth quarter, a decrease
of 4.3%, or $4.8 million, compared to the prior year period, with
volumes declining 7.9%. Segment profit was $28.6 million and $14.5
million for fourth quarter 2018 and 2017, respectively. Fourth
quarter 2017 segment profit was negatively impacted by an inventory
adjustment of $15.2 million resulting from purchase accounting
which was treated as an adjustment to non-GAAP measures. Segment
Adjusted EBITDA was $36.8 million and $37.2 million for fourth
quarter 2018 and 2017, respectively.
For fiscal year 2018, net sales were $423.4 million, an increase
of $311.0 million compared to the prior year. Segment profit was
$87.2 million, compared to $14.5 million in the prior year. Segment
Adjusted EBITDA was $125.9 million, compared to $37.2 million in
the prior year.
Refrigerated Food
Refrigerated foodservice, primarily egg and potato, and
refrigerated retail, inclusive of side dishes, egg, cheese and
sausage.
Net sales were $614.2 million for the fourth quarter, an
increase of 29.3%, or $139.2 million, compared to the reported
prior year fourth quarter. Pro forma net sales increased 4.5%, or
$26.6 million, over the same period in fiscal year 2017. Pro forma
foodservice net sales (approximately 65% of the Refrigerated Food
segment net sales) increased 7.0%, with pro forma foodservice
volumes increasing 3.6%. Foodservice egg net sales increased 9.2%,
driven by a 5.1% volume increase and increased market-based
pricing. Pro forma retail net sales (approximately 35% of the
Refrigerated Food segment net sales) and volumes were flat as an
increase in pro forma retail side dish volume of 6.6% was offset by
pro forma volume declines in retail egg and sausage products. The
pro forma net sales and volume references are defined later in this
release under “Pro Forma Information.” Volume information for
additional products is disclosed in a table presented later in this
release.
Segment profit was $59.3 million and $55.3 million for fourth
quarter 2018 and 2017, respectively. Segment profit for fourth
quarter 2018 was negatively impacted by a provision for $6.0
million for a legal settlement which was treated as an adjustment
for non-GAAP measures. Segment Adjusted EBITDA was $113.0 million
and $87.5 million for fourth quarter 2018 and 2017,
respectively.
For fiscal year 2018, net sales were $2,337.9 million, an
increase of 25.0%, or $467.1 million, over the reported prior year.
Segment profit was $247.6 million, compared to $110.6 million in
the prior year. Segment profit for fiscal year 2018 was negatively
impacted by integration expenses of $12.7 million, a provision for
$8.3 million for a legal settlement and an inventory adjustment of
$4.8 million resulting from purchase accounting, each of which were
treated as adjustments for non-GAAP measures. Segment profit for
fiscal year 2017 was negatively impacted by a provision for $74.5
million in legal settlements which was treated as an adjustment for
non-GAAP measures. Segment Adjusted EBITDA was $441.8 million,
compared to $308.6 million in the prior year.
Active Nutrition
Protein shakes, powders and bars and nutritional
supplements.
Net sales were $219.9 million for the fourth quarter, an
increase of 13.8%, or $26.6 million, compared to the prior year
period. Net sales growth was driven by 25% net sales growth for
shake products, which was partially offset by net sales declines of
bar products. Segment profit was $38.3 million and $22.3 million
for fourth quarter 2018 and 2017, respectively. Segment Adjusted
EBITDA was $44.8 million and $28.8 million for fourth quarter 2018
and 2017, respectively.
For fiscal year 2018, net sales were $827.5 million, an increase
of 16.0%, or $114.3 million, over the prior year. Segment profit
was $124.4 million, compared to $96.4 million in the prior year.
Segment profit for fiscal year 2018 was negatively impacted by a
provision for $9.0 million for a legal settlement which was treated
as an adjustment for non-GAAP measures. Segment Adjusted EBITDA was
$159.3 million, compared to $121.7 million in the prior year.
Private Brands
Nut butter, dried fruit and nut, granola and pasta business, now
known as 8th Avenue.
Net sales were $220.8 million for the fourth quarter, an
increase of 7.5%, or $15.5 million, compared to the prior year
period. Volumes grew 1.1% driven by increases in dried fruit and
nut and nut butter, which were partially offset by declines in
pasta and granola. Segment profit was $17.0 million and $16.9
million for fourth quarter 2018 and 2017, respectively. Segment
profit for fourth quarter 2018 was negatively impacted by $9.5
million in transaction expenses related to the separate
capitalization of 8th Avenue. Segment Adjusted EBITDA was $30.5
million and $29.6 million for fourth quarter 2018 and 2017,
respectively.
For fiscal year 2018, net sales were $848.9 million, an increase
of 7.3%, or $57.7 million, over the prior year. Segment profit was
$60.8 million, compared to $58.1 million in the prior year. Segment
profit for fiscal year 2018 was negatively impacted by $9.5 million
in transaction expenses related to the separate capitalization of
8th Avenue. Segment Adjusted EBITDA was $111.5 million, compared to
$107.0 million in the prior year.
Impairment of Goodwill and Other Intangible
Assets
Non-cash goodwill and other intangible asset impairment charges
of $124.9 million and $26.5 million were recorded in the fourth
quarter of 2018 and 2017, respectively, within the Weetabix and
Active Nutrition segments, respectively. The intangible asset
impairment charge in the fourth quarter of 2018 related to the
Weetabix trademark and resulted from reduced branded cereal volumes
related to Weetabix’s pricing reset and shifting consumer
preferences to private label products. The goodwill impairment
charge in the fourth quarter of 2017 resulted from a reassessment
of long-term expectations for Dymatize.
Interest, (Gain) Loss on Extinguishment of Debt, Income
(Expense) on Swaps and Income Tax
Interest expense, net was $99.1 million for the fourth quarter,
compared to $85.2 million for the prior year fourth quarter. For
fiscal year 2018, interest expense, net was $387.3 million,
compared to $314.8 million for fiscal year 2017. The increase for
both periods primarily related to an increase in the outstanding
amount of debt principal. Interest expense, net for the fourth
quarter of 2018 and fiscal year 2018 included $4.9 million and
$13.4 million, respectively, of interest expense payable, under
certain circumstances, to former holders of shares of Bob Evans
common stock who have demanded appraisal of their shares under
Delaware law and have not withdrawn their demands.
Gain on extinguishment of debt, net of $0.4 million was recorded
in the fourth quarter of 2018 in connection with Post’s early
repayment through open market purchases of $6.5 million in total
principal value of certain senior notes. Loss on extinguishment of
debt, net of $31.1 million was recorded in fiscal year 2018 in
connection with Post’s (i) redemption of its 6.00% senior notes,
(ii) early repayment through open market purchases of $267.8
million in total principal value of certain senior notes and (iii)
opportunistic repricing of its approximately $2.2 billion term
loan. Loss on extinguishment of debt, net of $222.9 million was
recorded in fiscal year 2017 in connection with the extinguishment
of the entire remaining principal balance of the 7.75%, 6.75% and
7.375% senior notes and a portion of the principal balance of the
8.00% senior notes.
Income (expense) on swaps, net relates to non-cash
mark-to-market adjustments and cash settlements on interest rate
and cross-currency swaps. Income on swaps, net was $25.2 million
for the fourth quarter of 2018, compared to an expense of $8.5
million for the fourth quarter of 2017. For fiscal year 2018,
income on swaps, net was $95.6 million, compared to $91.8 million
in fiscal year 2017.
Income tax expense was $12.5 million in the fourth quarter of
2018, compared to $14.4 million in the fourth quarter of 2017. For
fiscal year 2018, income tax benefit was $204.0 million, compared
to an expense of $26.1 million for fiscal year 2017. In fiscal year
2018, as a result of the U.S. Tax Cuts and Jobs Act, Post recorded
a $270.9 million one-time income tax net benefit which included (i)
a $281.2 million benefit related to an estimate of the
remeasurement of Post’s existing deferred tax assets and
liabilities considering both the fiscal year 2018 blended U.S.
federal corporate income tax rate of 24.5% and a 21% rate for
subsequent fiscal years and (ii) a $10.3 million expense related to
an estimate of the transition tax on unrepatriated foreign
earnings.
Share Repurchases
Post did not repurchase any shares of stock during the fourth
quarter of fiscal year 2018. During fiscal year 2018, Post
repurchased 2.8 million shares for $218.6 million at an average
price of $76.19 per share. At the end of the fourth quarter of
2018, Post had $308.0 million remaining under its share repurchase
authorization.
8th Avenue
On October 1, 2018, Post completed the previously announced
transaction with affiliates of Thomas H. Lee Partners, L.P. to
separately capitalize 8th Avenue, the holding company for Post’s
private brands business. Effective October 1, 2018, 8th Avenue is
no longer consolidated in Post’s financial statements, Post’s 60.5%
retained interest in 8th Avenue’s common equity is accounted for
using equity method accounting, and Post’s private brands business
is no longer considered a reportable segment of Post.
Active Nutrition Business IPO
As announced in a separate release today, Post plans to pursue
an initial public offering (“IPO”) of shares of common stock of a
company which will be comprised of its high growth Active Nutrition
business. Darcy Horn Davenport, current President of Active
Nutrition, will serve as CEO of the new public company, and Rob
Vitale, Post’s President and CEO, will also serve as Executive
Chairman of the new public company’s board of directors. Post
intends to sell approximately 20% of the ownership of the new
public company. The transaction is expected to be completed in the
second half of fiscal year 2019, subject to prevailing market and
other conditions and receipt of other required approvals.
There can be no assurance that the IPO of Post’s Active
Nutrition business will occur on the anticipated timeline, if at
all. There can be no guarantees that Post or the Active Nutrition
business will realize the expected benefits of the potential IPO.
Post does not intend to comment on or provide updates regarding
these matters unless and until it determines that further
disclosure is appropriate or required based on the then-current
facts and circumstances. 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.
Outlook
Post management expects fiscal year 2019 Adjusted EBITDA to
range between $1.19-$1.24 billion, which excludes any earnings from
Post’s investment in 8th Avenue which will be accounted for using
equity method accounting.
In fiscal year 2019, Post management expects to incur the
following costs, which are treated as adjustments to non-GAAP
measures:
- $15-$18 million of restructuring and plant closure costs
associated with the closure of certain cereal facilities, comprised
of severance, retention and related expenses and accelerated
depreciation; and
- $6-$8 million of integration costs, comprised of severance,
retention and third party consulting expenses.
Post management expects fiscal year 2019 capital expenditures to
range between $300-$310 million, including the following:
- $80-$85 million related to the previously announced new
precooked egg facility in Norwalk, Iowa;
- approximately $30 million related to the previously announced
cage-free housing conversion at the Bloomfield, Nebraska facility;
and
- $20-$25 million to upgrade certain manufacturing product lines
in Corby, U.K. into a single facility and to complete the start-up
and transfer of production to other facilities related to the
Clinton, Massachusetts cereal facility closure.
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 and
foreign exchange 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.”
8th Avenue Outlook
For 8th Avenue, Post management expects fiscal year 2019
Adjusted EBITDA to range between $110-$120 million. As of October
1, 2018, 8th Avenue is capitalized with $648 million of senior
secured debt and $250 million of preferred equity.
Post provides Adjusted EBITDA guidance for 8th Avenue 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 transaction and
integration costs and other charges reflected in 8th Avenue’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
Post will host a conference call on Friday, November 16, 2018 at
9:00 a.m. EST to discuss financial results for the fourth quarter
and fiscal year 2018, fiscal year 2019 outlook and the Active
Nutrition IPO 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 5686449.
Interested parties are invited to listen to the webcast of the
conference call, which can be accessed by visiting the Investor
Relations section of Post’s website at www.postholdings.com.
A replay of the conference call will be available through
Friday, November 30, 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 5686449. A webcast
replay also will be available for a limited period on Post’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 Post’s Adjusted
EBITDA outlook for fiscal year 2019, statements regarding the IPO
of Post’s Active Nutrition business, including the expected
timetable for completing the IPO and the amount of equity Post
expects to sell in the new public company, Post’s capital
expenditures expectations, including capital expenditures
expectations related to the new precooked egg facility, the
cage-free housing conversion, upgrading certain manufacturing
product lines in Corby and the start-up and transfer of production
to other facilities related to the Clinton cereal facility closure,
Post’s integration, restructuring and plant closure cost
expectations and Post management’s Adjusted EBITDA outlook for 8th
Avenue for fiscal year 2019. 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 but are not limited to the
following:
- Post’s high leverage, Post’s ability to obtain additional
financing (including both secured and unsecured debt) and Post’s
ability to service its outstanding debt (including covenants that
restrict the operation of its business);
- Post’s ability to continue to compete in its product categories
and Post’s ability to retain its market position and favorable
perceptions of its brands;
- Post’s ability to anticipate and respond to changes in consumer
preferences and trends and introduce new products;
- the possibility that Post may not be able to consummate the
initial public offering of its Active Nutrition business on the
expected timeline or at all, that Post may not be able to create
value in its Active Nutrition business through such transaction or
that the pursuit of such transaction could be disruptive to Post
and its Active Nutrition business;
- Post’s ability to identify, complete and integrate acquisitions
and manage its growth;
- Post’s ability to promptly and effectively realize the expected
synergies of its acquisition of Bob Evans Farms, Inc. (“Bob Evans”)
within the expected timeframe;
- higher freight costs, significant volatility in the costs or
availability of certain raw materials, commodities or packaging
used to manufacture Post’s products or higher energy costs;
- impairment in the carrying value of goodwill or other
intangibles;
- Post’s ability to successfully implement business strategies to
reduce costs;
- allegations that Post’s products cause injury or illness,
product recalls and withdrawals and product liability claims and
other litigation;
- legal and regulatory factors, such as compliance with existing
laws and regulations and changes to and new laws and regulations
affecting Post’s business, including current and future laws and
regulations regarding food safety, advertising and labeling and
animal feeding and housing operations;
- the loss of, a significant reduction of purchases by or the
bankruptcy of a major customer;
- consolidations in the retail and foodservice distribution
channels;
- losses incurred in the appraisal proceedings brought in
connection with Post’s acquisition of Bob Evans by former Bob Evans
stockholders who demanded appraisal of their shares;
- the ultimate impact litigation or other regulatory matters may
have on Post;
- disruptions or inefficiencies in the supply chain, including as
a result of Post’s reliance on third party manufacturers for
certain of its products, changes in weather conditions, natural
disasters, agricultural diseases and pests and other events beyond
Post’s control;
- Post’s ability to successfully collaborate with the private
equity firm Thomas H. Lee Partners, L.P., whose affiliates invested
with Post in 8th Avenue;
- costs associated with Bob Evans’s obligations in connection
with the sale and separation of its restaurant business in April
2017, which occurred prior to Post’s acquisition of Bob Evans,
including certain indemnification obligations under the restaurants
sale agreement and Bob Evans’s payment and performance obligations
as a guarantor for certain leases;
- the ability of Post’s and Post’s customers’ private brand
products to compete with nationally branded products;
- Post’s ability to successfully operate its international
operations in compliance with applicable laws and regulations;
- changes in economic conditions, disruptions in the United
States and global capital and credit markets, changes in interest
rates and fluctuations in foreign currency exchange rates;
- the impact of the United Kingdom’s exit from the European Union
(commonly known as “Brexit”) on Post and its operations;
- changes in estimates in critical accounting judgments,
including those based on tax reform;
- loss of key employees, labor strikes, work stoppages or
unionization efforts;
- losses or increased funding and expenses related to Post’s
qualified pension or other postretirement plans;
- costs, business disruptions and reputational damage associated
with information technology failures, cybersecurity incidents or
information security breaches;
- Post’s ability to protect its intellectual property and other
assets;
- significant differences in Post’s and 8th Avenue’s actual
operating results from Post’s guidance regarding its and 8th
Avenue’s future performance;
- Post’s ability to satisfy the requirements of Section 404 of
the Sarbanes-Oxley Act of 2002; and
- other risks and uncertainties described in Post’s filings with
the SEC.
These forward-looking statements represent Post’s judgment as of
the date of this release. Post disclaims, however, any intent or
obligation to update these forward-looking statements.
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, refrigerated, foodservice, food ingredient,
and active nutrition 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™, 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. As a leader in refrigerated foods, Post delivers
innovative, value-added egg and refrigerated potato products to the
foodservice channel and the retail refrigerated side dish category,
offering side dishes and egg, sausage and cheese products through
the Bob Evans®, Simply Potatoes®, All Whites®, Better’n Eggs® and
Crystal Farms® brands. Post’s Active Nutrition platform brings good
energy to a wide range of consumers looking to live healthy lives
through brands such as Premier Protein®, PowerBar® and Dymatize®.
Post participates in the private brand food category through its
partnership with Thomas H. Lee Partners in 8th Avenue Food &
Provisions, a leading, private brand centric, consumer products
holding company. For more information, visit
www.postholdings.com.
Contact: |
|
Investor
RelationsJennifer Meyerjennifer.meyer@postholdings.com(314)
644-7665 |
Media
RelationsLisa Hanlylisa.hanly@postholdings.com(314)
665-3180 |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)(in millions, except per
share data)
|
Three Months Ended September 30, |
|
Year Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net
Sales |
$ |
1,629.9 |
|
|
$ |
1,448.5 |
|
|
$ |
6,257.2 |
|
|
$ |
5,225.8 |
|
Cost of goods sold |
1,151.9 |
|
|
1,011.4 |
|
|
4,390.4 |
|
|
3,651.7 |
|
Gross
Profit |
478.0 |
|
|
437.1 |
|
|
1,866.8 |
|
|
1,574.1 |
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
239.6 |
|
|
251.8 |
|
|
975.2 |
|
|
867.4 |
|
Amortization of intangible
assets |
42.3 |
|
|
42.3 |
|
|
177.4 |
|
|
159.1 |
|
Impairment of goodwill and
other intangible assets |
124.9 |
|
|
26.5 |
|
|
124.9 |
|
|
26.5 |
|
Other operating expenses,
net |
0.3 |
|
|
0.4 |
|
|
1.8 |
|
|
0.8 |
|
Operating
Profit |
70.9 |
|
|
116.1 |
|
|
587.5 |
|
|
520.3 |
|
|
|
|
|
|
|
|
|
Interest expense, net |
99.1 |
|
|
85.2 |
|
|
387.3 |
|
|
314.8 |
|
(Gain) loss on extinguishment
of debt, net |
(0.4 |
) |
|
— |
|
|
31.1 |
|
|
222.9 |
|
(Income) expense on swaps,
net |
(25.2 |
) |
|
8.5 |
|
|
(95.6 |
) |
|
(91.8 |
) |
(Loss) Earnings before
Income Taxes and Equity Method Loss |
(2.6 |
) |
|
22.4 |
|
|
264.7 |
|
|
74.4 |
|
Income tax expense
(benefit) |
12.5 |
|
|
14.4 |
|
|
(204.0 |
) |
|
26.1 |
|
Equity method loss, net of
tax |
0.3 |
|
|
— |
|
|
0.3 |
|
|
— |
|
Net (Loss) Earnings
Including Noncontrolling Interest |
(15.4 |
) |
|
8.0 |
|
|
468.4 |
|
|
48.3 |
|
Less: Net earnings
attributable to noncontrolling interest |
0.2 |
|
|
— |
|
|
1.1 |
|
|
— |
|
Net (Loss)
Earnings |
(15.6 |
) |
|
8.0 |
|
|
467.3 |
|
|
48.3 |
|
Preferred stock dividends |
(2.0 |
) |
|
(3.3 |
) |
|
(10.0 |
) |
|
(13.5 |
) |
Net (Loss) Earnings
Available to Common Shareholders |
$ |
(17.6 |
) |
|
$ |
4.7 |
|
|
$ |
457.3 |
|
|
$ |
34.8 |
|
|
|
|
|
|
|
|
|
(Loss) Earnings per
Common Share: |
|
|
|
|
|
|
|
Basic |
$ |
(0.26 |
) |
|
$ |
0.07 |
|
|
$ |
6.87 |
|
|
$ |
0.51 |
|
Diluted |
$ |
(0.26 |
) |
|
$ |
0.07 |
|
|
$ |
6.16 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
Weighted-Average
Common Shares Outstanding: |
|
|
|
|
|
|
|
Basic |
66.6 |
|
|
66.1 |
|
|
66.6 |
|
|
67.8 |
|
Diluted |
66.6 |
|
|
68.3 |
|
|
75.9 |
|
|
69.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)(in millions)
|
September 30, 2018 |
|
September 30, 2017 |
ASSETS |
Current
Assets |
|
|
|
Cash and cash equivalents |
$ |
989.7 |
|
|
$ |
1,525.9 |
|
Restricted cash |
4.8 |
|
|
4.2 |
|
Receivables, net |
462.3 |
|
|
480.6 |
|
Inventories |
484.2 |
|
|
573.5 |
|
Current assets held for sale |
195.0 |
|
|
— |
|
Prepaid expenses and other current assets |
64.3 |
|
|
31.7 |
|
Total Current Assets |
2,200.3 |
|
|
2,615.9 |
|
|
|
|
|
Property, net |
1,709.7 |
|
|
1,690.7 |
|
Goodwill |
4,499.6 |
|
|
4,032.0 |
|
Other intangible assets,
net |
3,539.3 |
|
|
3,353.9 |
|
Other assets held for
sale |
856.6 |
|
|
— |
|
Other assets |
252.0 |
|
|
184.3 |
|
Total Assets |
$ |
13,057.5 |
|
|
$ |
11,876.8 |
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
Current
Liabilities |
|
|
|
Current portion of long-term debt |
$ |
22.1 |
|
|
$ |
22.1 |
|
Accounts payable |
365.1 |
|
|
336.0 |
|
Current liabilities held for sale |
65.6 |
|
|
— |
|
Other current liabilities |
339.3 |
|
|
346.3 |
|
Total Current Liabilities |
792.1 |
|
|
704.4 |
|
|
|
|
|
Long-term debt |
7,232.1 |
|
|
7,149.1 |
|
Deferred income taxes |
778.4 |
|
|
905.8 |
|
Other liabilities held for
sale |
695.1 |
|
|
— |
|
Other liabilities |
499.3 |
|
|
327.8 |
|
Total Liabilities |
9,997.0 |
|
|
9,087.1 |
|
|
|
|
|
Shareholders’
Equity |
|
|
|
Preferred stock |
— |
|
|
— |
|
Common stock |
0.8 |
|
|
0.7 |
|
Additional paid-in capital |
3,590.9 |
|
|
3,566.5 |
|
Retained earnings (accumulated deficit) |
88.0 |
|
|
(376.0 |
) |
Accumulated other comprehensive loss |
(39.4 |
) |
|
(40.0 |
) |
Treasury stock, at cost |
(589.9 |
) |
|
(371.2 |
) |
Total Shareholders’ Equity excluding Noncontrolling
Interest |
3,050.4 |
|
|
2,780.0 |
|
Noncontrolling Interest |
10.1 |
|
|
9.7 |
|
Total Shareholders’ Equity |
3,060.5 |
|
|
2,789.7 |
|
Total Liabilities and Shareholders’ Equity |
$ |
13,057.5 |
|
|
$ |
11,876.8 |
|
|
SELECTED CONDENSED CONSOLIDATED CASH FLOW
INFORMATION (Unaudited)(in millions)
|
Year Ended September 30, |
|
2018 |
|
2017 |
Cash provided by (used
in): |
|
|
|
Operating activities |
$ |
719.3 |
|
|
$ |
386.7 |
|
Investing activities, including capital expenditures of $225.0 and
$190.4 |
(1,676.9 |
) |
|
(2,090.8 |
) |
Financing activities |
423.4 |
|
|
2,053.1 |
|
Effect of exchange rate changes on cash and cash equivalents |
(2.0 |
) |
|
33.3 |
|
Net (decrease) increase in cash and cash
equivalents |
$ |
(536.2 |
) |
|
$ |
382.3 |
|
|
SEGMENT INFORMATION
(Unaudited)(in millions)
|
|
|
Three Months Ended September 30, |
|
Year Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net
Sales |
|
|
|
|
|
|
|
|
Post Consumer
Brands |
$ |
471.0 |
|
|
$ |
463.5 |
|
|
$ |
1,831.7 |
|
|
$ |
1,742.5 |
|
|
Weetabix |
107.6 |
|
|
112.4 |
|
|
423.4 |
|
|
112.4 |
|
|
Refrigerated
Food |
614.2 |
|
|
475.0 |
|
|
2,337.9 |
|
|
1,870.8 |
|
|
Active
Nutrition |
219.9 |
|
|
193.3 |
|
|
827.5 |
|
|
713.2 |
|
|
Private
Brands |
220.8 |
|
|
205.3 |
|
|
848.9 |
|
|
791.2 |
|
|
Eliminations |
(3.6 |
) |
|
(1.0 |
) |
|
(12.2 |
) |
|
(4.3 |
) |
|
Total |
$ |
1,629.9 |
|
|
$ |
1,448.5 |
|
|
$ |
6,257.2 |
|
|
$ |
5,225.8 |
|
Segment
Profit |
|
|
|
|
|
|
|
|
Post Consumer
Brands |
$ |
84.6 |
|
|
$ |
86.3 |
|
|
$ |
329.2 |
|
|
$ |
354.9 |
|
|
Weetabix |
28.6 |
|
|
14.5 |
|
|
87.2 |
|
|
14.5 |
|
|
Refrigerated
Food |
59.3 |
|
|
55.3 |
|
|
247.6 |
|
|
110.6 |
|
|
Active
Nutrition |
38.3 |
|
|
22.3 |
|
|
124.4 |
|
|
96.4 |
|
|
Private
Brands |
17.0 |
|
|
16.9 |
|
|
60.8 |
|
|
58.1 |
|
|
Total segment profit |
227.8 |
|
|
195.3 |
|
|
849.2 |
|
|
634.5 |
|
|
General corporate
expenses and other |
32.0 |
|
|
52.7 |
|
|
136.8 |
|
|
87.7 |
|
|
Impairment of
goodwill and other intangible assets |
124.9 |
|
|
26.5 |
|
|
124.9 |
|
|
26.5 |
|
|
Interest expense,
net |
99.1 |
|
|
85.2 |
|
|
387.3 |
|
|
314.8 |
|
|
(Gain) loss on
extinguishment of debt, net |
(0.4 |
) |
|
— |
|
|
31.1 |
|
|
222.9 |
|
|
(Income) expense
on swaps, net |
(25.2 |
) |
|
8.5 |
|
|
(95.6 |
) |
|
(91.8 |
) |
|
|
(Loss) Earnings before
Income Taxes and Equity Method Loss |
$ |
(2.6 |
) |
|
$ |
22.4 |
|
|
$ |
264.7 |
|
|
$ |
74.4 |
|
|
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 September 30, 2018 to the same
three-month period in fiscal year 2017, adjusted to include results
of the acquired businesses for the periods 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 Periods |
|
|
|
|
|
|
|
|
|
|
|
Bob Evans |
|
Acquisition |
|
Refrigerated Food |
|
July 1, 2017 - September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET SALES TO PRO FORMA
NET SALES (Unaudited)(in millions)
|
Three Months Ended September 30, |
|
2018 |
|
2017 |
Net Sales |
$ |
1,629.9 |
|
|
$ |
1,448.5 |
|
Pre-acquisition pro forma net sales from Bob Evans |
— |
|
|
113.0 |
|
Pre-acquisition intercompany net sales |
— |
|
|
(0.4 |
) |
Pro Forma Net Sales |
$ |
1,629.9 |
|
|
$ |
1,561.1 |
|
|
|
|
|
Refrigerated Food Net
Sales |
$ |
614.2 |
|
|
$ |
475.0 |
|
Pre-acquisition pro forma net sales from Bob Evans |
— |
|
|
113.0 |
|
Pre-acquisition intercompany net sales |
— |
|
|
(0.4 |
) |
Pro Forma Refrigerated Food
Net Sales |
$ |
614.2 |
|
|
$ |
587.6 |
|
|
SUPPLEMENTAL REFRIGERATED FOOD SEGMENT
INFORMATION (Unaudited)
The below table presents volume percentage changes for the
current quarter compared to the prior year quarter for products
within the Refrigerated Food segment, some of which are presented
on a pro forma basis.
Channel |
|
Product |
|
Volume Percentage Change |
Foodservice |
|
All (pro forma) |
|
3.6% |
Foodservice |
|
Egg |
|
5.1% |
Foodservice |
|
Potato (pro forma) |
|
1.5% |
Retail |
|
All (pro forma) |
|
(0.1%) |
Retail |
|
Side dishes (pro forma) |
|
6.6% |
Retail |
|
Egg |
|
(10.1%) |
Retail |
|
Cheese |
|
(0.2%) |
Retail |
|
Sausage (pro forma) |
|
(4.2%) |
|
|
|
|
|
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 profitTotal 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
shareThe 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:
- Payments of debt extinguishment costs, net: The Company has
excluded payments and other expenses for premiums on debt
extinguishment, net of gains realized on debt repurchased at a
discount, 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.
- Non-cash mark-to-market adjustments and cash settlements on
interest rate and cross-currency swaps: The Company has excluded
the impact of non-cash mark-to-market adjustments and cash
settlements on interest rate and cross-currency 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 as the amount and frequency of
such adjustments and settlements are not consistent.
- Impairment of goodwill and other intangible assets: The Company
has excluded expenses for impairments of goodwill and other
intangible assets as such non-cash amounts are inconsistent in
amount and frequency and 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.
- 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.
- Net foreign currency gains and losses for purchase price of
acquisition: The Company has excluded net foreign currency gains
and losses for the purchase price of acquisitions as the Company
believes such gains and losses do not reflect expected ongoing
future operating income and expense 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.
- 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 such
costs 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.
- Restructuring and plant closure costs, including accelerated
depreciation: 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.
- 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.
- Inventory valuation adjustments on acquired businesses: The
Company has excluded the impact of fair value step-up adjustments
to inventory in connection with business combinations as such
adjustments represent non-cash items, are not consistent in amount
and frequency and are significantly impacted by the timing and size
of the Company’s acquisitions.
- 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.
- 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.
- 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 then statutory 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.
- U.S. tax reform net expense (benefit): The Company has excluded
the impact of the one-time income tax net benefit recorded in
fiscal year 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 current
fiscal year 2018 blended U.S. federal corporate income tax rate of
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.
- 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.
Adjusted EBITDA and segment Adjusted EBITDAThe 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 expense (benefit), depreciation and
amortization, including accelerated depreciation, and the following
adjustments discussed above: non-cash mark-to-market adjustments
and cash settlements on interest rate and cross-currency swaps,
impairment of goodwill and other intangible assets, provision for
legal settlement, net foreign currency gains and losses for
purchase price of acquisition, transaction costs and integration
costs, restructuring and plant closure costs excluding accelerated
depreciation, assets held for sale, inventory valuation adjustments
on acquired businesses, 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:
- (Gain) loss on extinguishment of debt, net: The
Company has excluded gains and losses recorded on extinguishment of
debt, inclusive of payments for premiums, the write-off of debt
issuance costs and the write-off of net unamortized debt premiums
and discounts, net of gains realized on debt repurchased at a
discount, as such losses are inconsistent in amount and frequency.
Additionally, the Company believes that these 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.
- 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.
- 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.
- 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 (LOSS) EARNINGS
AVAILABLE TO COMMON SHAREHOLDERSTO ADJUSTED NET
EARNINGS (Unaudited)(in millions)
|
|
Three Months Ended September 30, |
|
Year Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net (Loss)
Earnings Available to Common Shareholders |
$ |
(17.6 |
) |
|
$ |
4.7 |
|
|
$ |
457.3 |
|
|
$ |
34.8 |
|
Dilutive preferred
stock dividends |
— |
|
|
— |
|
|
10.0 |
|
|
— |
|
Net (Loss)
Earnings for Diluted Earnings per Share |
(17.6 |
) |
|
4.7 |
|
|
467.3 |
|
|
34.8 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Payments of debt
extinguishment costs, net |
(0.4 |
) |
|
— |
|
|
26.0 |
|
|
219.8 |
|
|
Non-cash mark-to-market
adjustments and cash settlements on interest rate and
cross-currency swaps |
(25.2 |
) |
|
8.5 |
|
|
(95.6 |
) |
|
(91.8 |
) |
|
Impairment of goodwill and
other intangible assets |
124.9 |
|
|
26.5 |
|
|
124.9 |
|
|
26.5 |
|
|
Provision for legal
settlement |
6.0 |
|
|
— |
|
|
17.3 |
|
|
73.6 |
|
|
Net foreign currency losses
(gains) for purchase price of acquisition |
— |
|
|
3.5 |
|
|
— |
|
|
(30.0 |
) |
|
Transaction costs |
9.3 |
|
|
23.0 |
|
|
35.6 |
|
|
29.1 |
|
|
Integration costs |
1.8 |
|
|
3.0 |
|
|
28.8 |
|
|
8.8 |
|
|
Restructuring and plant
closure costs, including accelerated depreciation |
3.8 |
|
|
— |
|
|
7.8 |
|
|
0.2 |
|
|
Assets held for sale |
— |
|
|
— |
|
|
— |
|
|
(0.2 |
) |
|
Inventory valuation
adjustments on acquired businesses |
— |
|
|
18.2 |
|
|
4.2 |
|
|
18.2 |
|
|
Mark-to-market adjustments on
commodity and foreign exchange hedges |
2.2 |
|
|
(0.1 |
) |
|
0.7 |
|
|
(3.9 |
) |
|
Foreign currency (gain) loss
on intercompany loans |
(0.6 |
) |
|
— |
|
|
0.2 |
|
|
— |
|
|
Total Net
Adjustments |
121.8 |
|
|
82.6 |
|
|
149.9 |
|
|
250.3 |
|
Income tax effect
on adjustments (1) |
(29.8 |
) |
|
(28.9 |
) |
|
(36.7 |
) |
|
(87.6 |
) |
U.S. tax reform
net expense (benefit) |
5.1 |
|
|
— |
|
|
(270.9 |
) |
|
— |
|
Non-GAAP dilutive
preferred stock dividends adjustment (2) |
2.0 |
|
|
3.3 |
|
|
— |
|
|
13.5 |
|
Adjusted
Net Earnings |
$ |
81.5 |
|
|
$ |
61.7 |
|
|
$ |
309.6 |
|
|
$ |
211.0 |
|
|
|
|
|
|
|
|
|
|
(1) Income tax
effect on adjustments is calculated using Post’s fiscal year 2018
blended U.S. federal corporate income tax rate of 24.5% for the
three months and year ended September 30, 2018 and Post’s then
statutory rate of 35.0% for the three months and year ended
September 30, 2017. |
(2) Potentially
dilutive convertible preferred stock is calculated using the
“if-converted” method. On a GAAP basis, the convertible preferred
stock was anti-dilutive for the three months ended September 2018
and the three months and year ended September 30, 2017. On an
adjusted basis, the convertible preferred stock was dilutive for
all periods. The adjustment in the table above reflects the add
back of dividends related to the convertible preferred stock that
was dilutive on an adjusted basis. |
RECONCILIATION OF WEIGHTED-AVERAGE
DILUTED SHARES OUTSTANDINGTO ADJUSTED
WEIGHTED-AVERAGE DILUTED SHARES OUTSTANDING
(Unaudited)(in millions)
|
|
Three Months Ended September 30, |
|
Year Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Weighted-average
shares for diluted earnings per share |
66.6 |
|
|
68.3 |
|
|
75.9 |
|
|
69.9 |
|
Effect of
securities that were anti-dilutive for diluted earnings per
share: |
|
|
|
|
|
|
|
|
Stock options |
2.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
Stock appreciation rights |
0.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
Restricted stock awards |
0.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
Preferred shares conversion to
common (1) |
5.9 |
|
|
9.1 |
|
|
— |
|
|
9.1 |
|
Adjusted
weighted-average shares for adjusted diluted earnings per
share |
75.2 |
|
|
77.4 |
|
|
75.9 |
|
|
79.0 |
|
|
|
|
|
|
|
|
|
|
(1) Potentially
dilutive convertible preferred stock is calculated using the
“if-converted” method. On a GAAP basis, the convertible preferred
stock was anti-dilutive for the three months ended September 2018
and the three months and year ended September 30, 2017. On an
adjusted basis, the convertible preferred stock was dilutive for
all periods. The adjustment in the table above reflects the add
back of dividends related to the convertible preferred stock that
was dilutive on an adjusted basis. |
|
RECONCILIATION OF DILUTED (LOSS) EARNINGS
PER COMMON SHARETO ADJUSTED DILUTED EARNINGS PER
COMMON SHARE (Unaudited)
|
|
Three Months Ended September 30, |
|
Year Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Diluted
(Loss) Earnings per Common Share |
$ |
(0.26 |
) |
|
$ |
0.07 |
|
|
$ |
6.16 |
|
|
$ |
0.50 |
|
Adjustment
to Diluted (Loss) Earnings per Common Share (1) |
0.03 |
|
|
(0.01 |
) |
|
— |
|
|
(0.06 |
) |
Adjusted
Diluted (Loss) Earnings per Common Share, as calculated using
adjusted weighted-average diluted shares (1) |
(0.23 |
) |
|
0.06 |
|
|
6.16 |
|
|
0.44 |
|
|
|
|
|
|
|
|
|
Adjustments (2): |
|
|
|
|
|
|
|
|
Payments of debt
extinguishment costs, net |
(0.01 |
) |
|
— |
|
|
0.34 |
|
|
2.78 |
|
|
Non-cash mark-to-market
adjustments and cash settlements on interest rate and
cross-currency swaps |
(0.33 |
) |
|
0.11 |
|
|
(1.26 |
) |
|
(1.16 |
) |
|
Impairment of goodwill and
other intangible assets |
1.66 |
|
|
0.34 |
|
|
1.65 |
|
|
0.34 |
|
|
Provision for legal
settlement |
0.08 |
|
|
— |
|
|
0.23 |
|
|
0.93 |
|
|
Net foreign currency losses
(gains) for purchase price of acquisition |
— |
|
|
0.05 |
|
|
— |
|
|
(0.38 |
) |
|
Transaction costs |
0.12 |
|
|
0.30 |
|
|
0.47 |
|
|
0.37 |
|
|
Integration costs |
0.02 |
|
|
0.04 |
|
|
0.38 |
|
|
0.11 |
|
|
Restructuring and plant
closure costs, including accelerated depreciation |
0.05 |
|
|
— |
|
|
0.10 |
|
|
— |
|
|
Inventory valuation
adjustments on acquired businesses |
— |
|
|
0.23 |
|
|
0.05 |
|
|
0.23 |
|
|
Mark-to-market adjustments on
commodity and foreign exchange hedges |
0.03 |
|
|
— |
|
|
0.01 |
|
|
(0.05 |
) |
|
Foreign currency gain on
intercompany loans |
(0.01 |
) |
|
— |
|
|
— |
|
|
— |
|
|
Total Net
Adjustments |
1.61 |
|
|
1.07 |
|
|
1.97 |
|
|
3.17 |
|
Income tax effect
on adjustments (3) |
(0.40 |
) |
|
(0.37 |
) |
|
(0.48 |
) |
|
(1.11 |
) |
U.S. tax reform
net benefit |
0.07 |
|
|
— |
|
|
(3.57 |
) |
|
— |
|
Non-GAAP dilutive
preferred stock dividends adjustment (4) |
0.03 |
|
|
0.04 |
|
|
— |
|
|
0.17 |
|
Adjusted
Diluted Earnings per Common Share |
$ |
1.08 |
|
|
$ |
0.80 |
|
|
$ |
4.08 |
|
|
$ |
2.67 |
|
|
|
|
|
|
|
|
|
|
(1) Represents
the effect of the change in adjusted weighted-average diluted
shares (as reconciled in the prior table), after consideration of
the adjustments (which are presented in this table). |
(2) Per share
adjustments are based on adjusted weighted-average diluted shares
(as reconciled in the prior table). |
(3) Income tax
effect on adjustments is calculated using Post’s fiscal year 2018
blended U.S. federal corporate income tax rate of 24.5% for the
three months and year ended September 30, 2018 and Post’s then
statutory rate of 35.0% for the three months and year ended
September 30, 2017. |
(4) Potentially
dilutive convertible preferred stock is calculated using the
“if-converted” method. On a GAAP basis, the convertible preferred
stock was anti-dilutive for the three months ended September 2018
and the three months and year ended September 30, 2017. On an
adjusted basis, the convertible preferred stock was dilutive for
all periods. The adjustment in the table above reflects the add
back of dividends related to the convertible preferred stock that
was dilutive on an adjusted basis. |
|
RECONCILIATION OF NET (LOSS) EARNINGS TO
ADJUSTED EBITDA (Unaudited)(in
millions)
|
Three Months Ended September 30, |
|
Year Ended September 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net (Loss)
Earnings |
$ |
(15.6 |
) |
|
$ |
8.0 |
|
|
$ |
467.3 |
|
|
$ |
48.3 |
|
Income tax expense
(benefit) |
12.5 |
|
|
14.4 |
|
|
(204.0 |
) |
|
26.1 |
|
Interest expense, net |
99.1 |
|
|
85.2 |
|
|
387.3 |
|
|
314.8 |
|
(Gain) loss on extinguishment
of debt, net |
(0.4 |
) |
|
— |
|
|
31.1 |
|
|
222.9 |
|
Non-cash mark-to-market
adjustments and cash settlements on interest rate and
cross-currency swaps |
(25.2 |
) |
|
8.5 |
|
|
(95.6 |
) |
|
(91.8 |
) |
Depreciation and amortization,
including accelerated depreciation |
97.6 |
|
|
90.2 |
|
|
398.4 |
|
|
323.1 |
|
Impairment of goodwill and
other intangible assets |
124.9 |
|
|
26.5 |
|
|
124.9 |
|
|
26.5 |
|
Provision for legal
settlement |
6.0 |
|
|
— |
|
|
17.3 |
|
|
73.6 |
|
Net foreign currency losses
(gains) for purchase price of acquisition |
— |
|
|
3.5 |
|
|
— |
|
|
(30.0 |
) |
Non-cash stock-based
compensation |
7.7 |
|
|
6.2 |
|
|
30.9 |
|
|
23.6 |
|
Transaction costs |
9.3 |
|
|
23.0 |
|
|
35.6 |
|
|
29.1 |
|
Integration costs |
1.8 |
|
|
3.0 |
|
|
28.8 |
|
|
8.8 |
|
Restructuring and plant
closure costs, excluding accelerated depreciation |
1.4 |
|
|
— |
|
|
3.9 |
|
|
0.2 |
|
Assets held for sale |
— |
|
|
— |
|
|
— |
|
|
(0.2 |
) |
Inventory valuation
adjustments on acquired businesses |
— |
|
|
18.2 |
|
|
4.2 |
|
|
18.2 |
|
Mark-to-market adjustments on
commodity and foreign exchange hedges |
2.2 |
|
|
(0.1 |
) |
|
0.7 |
|
|
(3.9 |
) |
Noncontrolling interest
adjustment |
(0.2 |
) |
|
(0.4 |
) |
|
(0.7 |
) |
|
(0.4 |
) |
Equity method investment
adjustment |
0.1 |
|
|
0.2 |
|
|
0.4 |
|
|
0.2 |
|
Foreign currency (gain) loss
on intercompany loans |
(0.6 |
) |
|
— |
|
|
0.2 |
|
|
— |
|
Adjusted
EBITDA |
$ |
320.6 |
|
|
$ |
286.4 |
|
|
$ |
1,230.7 |
|
|
$ |
989.1 |
|
Adjusted EBITDA as a
percentage of Net Sales |
19.7 |
% |
|
19.8 |
% |
|
19.7 |
% |
|
18.9 |
% |
|
RECONCILIATION OF SEGMENT PROFIT TO
ADJUSTED EBITDA (Unaudited)THREE MONTHS ENDED
SEPTEMBER 30, 2018(in millions)
|
Post Consumer Brands |
|
Weetabix |
|
Refrigerated Food |
|
Active Nutrition |
|
Private Brands |
|
Corporate/ Other |
|
Total |
Segment
Profit |
$ |
84.6 |
|
|
$ |
28.6 |
|
|
$ |
59.3 |
|
|
$ |
38.3 |
|
|
$ |
17.0 |
|
|
$ |
— |
|
|
$ |
227.8 |
|
General corporate expenses and
other |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(32.0 |
) |
|
(32.0 |
) |
Impairment of other intangible
assets |
— |
|
|
(124.9 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(124.9 |
) |
Operating Profit
(Loss) |
84.6 |
|
|
(96.3 |
) |
|
59.3 |
|
|
38.3 |
|
|
17.0 |
|
|
(32.0 |
) |
|
70.9 |
|
Depreciation and amortization,
including accelerated depreciation |
28.9 |
|
|
8.8 |
|
|
46.1 |
|
|
6.5 |
|
|
4.0 |
|
|
3.3 |
|
|
97.6 |
|
Impairment of other intangible
assets |
— |
|
|
124.9 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
124.9 |
|
Provision for legal
settlement |
— |
|
|
— |
|
|
6.0 |
|
|
— |
|
|
— |
|
|
— |
|
|
6.0 |
|
Non-cash stock-based
compensation |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7.7 |
|
|
7.7 |
|
Transaction costs |
— |
|
|
— |
|
|
(0.1 |
) |
|
— |
|
|
9.5 |
|
|
(0.1 |
) |
|
9.3 |
|
Integration costs |
0.5 |
|
|
— |
|
|
1.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
1.8 |
|
Restructuring and plant
closure costs, excluding accelerated depreciation |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1.4 |
|
|
1.4 |
|
Mark-to-market adjustments on
commodity and foreign exchange hedges |
— |
|
|
— |
|
|
0.4 |
|
|
— |
|
|
— |
|
|
1.8 |
|
|
2.2 |
|
Noncontrolling interest
adjustment |
— |
|
|
(0.4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.4 |
) |
Equity method investment
adjustment |
— |
|
|
(0.2 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.2 |
) |
Foreign currency gain on
intercompany loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.6 |
) |
|
(0.6 |
) |
Adjusted
EBITDA |
$ |
114.0 |
|
|
$ |
36.8 |
|
|
$ |
113.0 |
|
|
$ |
44.8 |
|
|
$ |
30.5 |
|
|
$ |
(18.5 |
) |
|
$ |
320.6 |
|
Adjusted EBITDA as a
percentage of Net Sales |
24.2 |
% |
|
34.2 |
% |
|
18.4 |
% |
|
20.4 |
% |
|
13.8 |
% |
|
— |
|
|
19.7 |
% |
|
RECONCILIATION OF SEGMENT PROFIT TO
ADJUSTED EBITDA (Unaudited)THREE MONTHS ENDED
SEPTEMBER 30, 2017(in millions)
|
Post Consumer Brands |
|
Weetabix |
|
Refrigerated Food |
|
Active Nutrition |
|
Private Brands |
|
Corporate/ Other |
|
Total |
Segment
Profit |
$ |
86.3 |
|
|
$ |
14.5 |
|
|
$ |
55.3 |
|
|
$ |
22.3 |
|
|
$ |
16.9 |
|
|
$ |
— |
|
|
$ |
195.3 |
|
General corporate income and
other |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(52.7 |
) |
|
(52.7 |
) |
Impairment of goodwill |
— |
|
|
— |
|
|
— |
|
|
(26.5 |
) |
|
— |
|
|
— |
|
|
(26.5 |
) |
Operating Profit
(Loss) |
86.3 |
|
|
14.5 |
|
|
55.3 |
|
|
(4.2 |
) |
|
16.9 |
|
|
(52.7 |
) |
|
116.1 |
|
Depreciation and
amortization |
30.9 |
|
|
7.7 |
|
|
31.7 |
|
|
6.5 |
|
|
12.4 |
|
|
1.0 |
|
|
90.2 |
|
Net foreign currency losses
for purchase price of acquisition |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3.5 |
|
|
3.5 |
|
Non-cash stock-based
compensation |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6.2 |
|
|
6.2 |
|
Transaction costs |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
23.0 |
|
|
23.0 |
|
Integration costs |
2.7 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
3.0 |
|
Impairment of goodwill |
— |
|
|
— |
|
|
— |
|
|
26.5 |
|
|
— |
|
|
— |
|
|
26.5 |
|
Inventory valuation
adjustments on acquired businesses |
3.0 |
|
|
15.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
18.2 |
|
Mark-to-market adjustments on
commodity and foreign exchange hedges |
(0.1 |
) |
|
— |
|
|
0.5 |
|
|
— |
|
|
— |
|
|
(0.5 |
) |
|
(0.1 |
) |
Noncontrolling interest
adjustment |
— |
|
|
(0.4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.4 |
) |
Equity method investment
adjustment |
— |
|
|
0.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
Adjusted
EBITDA |
$ |
122.8 |
|
|
$ |
37.2 |
|
|
$ |
87.5 |
|
|
$ |
28.8 |
|
|
$ |
29.6 |
|
|
$ |
(19.5 |
) |
|
$ |
286.4 |
|
Adjusted EBITDA as a
percentage of Net Sales |
26.5 |
% |
|
33.1 |
% |
|
18.4 |
% |
|
14.9 |
% |
|
14.4 |
% |
|
— |
|
|
19.8 |
% |
|
RECONCILIATION OF SEGMENT PROFIT TO
ADJUSTED EBITDA (Unaudited)YEAR ENDED SEPTEMBER
30, 2018(in millions)
|
Post Consumer Brands |
|
Weetabix |
|
Refrigerated Food |
|
Active Nutrition |
|
Private Brands |
|
Corporate/ Other |
|
Total |
Segment
Profit |
$ |
329.2 |
|
|
$ |
87.2 |
|
|
$ |
247.6 |
|
|
$ |
124.4 |
|
|
$ |
60.8 |
|
|
$ |
— |
|
|
$ |
849.2 |
|
General corporate expenses and
other |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(136.8 |
) |
|
(136.8 |
) |
Impairment of other intangible
assets |
— |
|
|
(124.9 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(124.9 |
) |
Operating Profit
(Loss) |
329.2 |
|
|
(37.7 |
) |
|
247.6 |
|
|
124.4 |
|
|
60.8 |
|
|
(136.8 |
) |
|
587.5 |
|
Depreciation and amortization,
including accelerated depreciation |
122.0 |
|
|
38.1 |
|
|
163.3 |
|
|
25.9 |
|
|
40.9 |
|
|
8.2 |
|
|
398.4 |
|
Impairment of other intangible
assets |
— |
|
|
124.9 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
124.9 |
|
Provision for legal
settlement |
— |
|
|
— |
|
|
8.3 |
|
|
9.0 |
|
|
— |
|
|
— |
|
|
17.3 |
|
Non-cash stock-based
compensation |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
30.9 |
|
|
30.9 |
|
Transaction costs |
— |
|
|
— |
|
|
2.4 |
|
|
— |
|
|
9.5 |
|
|
23.7 |
|
|
35.6 |
|
Integration costs |
7.4 |
|
|
2.3 |
|
|
12.7 |
|
|
— |
|
|
0.3 |
|
|
6.1 |
|
|
28.8 |
|
Restructuring and plant
closure costs, excluding accelerated depreciation |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3.9 |
|
|
3.9 |
|
Inventory valuation
adjustments on acquired businesses |
(0.6 |
) |
|
— |
|
|
4.8 |
|
|
— |
|
|
— |
|
|
— |
|
|
4.2 |
|
Mark-to-market adjustments on
commodity and foreign exchange hedges |
0.2 |
|
|
— |
|
|
2.7 |
|
|
— |
|
|
— |
|
|
(2.2 |
) |
|
0.7 |
|
Noncontrolling interest
adjustment |
— |
|
|
(1.8 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1.8 |
) |
Equity method investment
adjustment |
— |
|
|
0.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.1 |
|
Foreign currency loss on
intercompany loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
|
0.2 |
|
Adjusted
EBITDA |
$ |
458.2 |
|
|
$ |
125.9 |
|
|
$ |
441.8 |
|
|
$ |
159.3 |
|
|
$ |
111.5 |
|
|
$ |
(66.0 |
) |
|
$ |
1,230.7 |
|
Adjusted EBITDA as a
percentage of Net Sales |
25.0 |
% |
|
29.7 |
% |
|
18.9 |
% |
|
19.3 |
% |
|
13.1 |
% |
|
— |
|
|
19.7 |
% |
|
RECONCILIATION OF SEGMENT PROFIT TO
ADJUSTED EBITDA (Unaudited)YEAR ENDED SEPTEMBER
30, 2017(in millions)
|
Post Consumer Brands |
|
Weetabix |
|
Refrigerated Food |
|
Active Nutrition |
|
Private Brands |
|
Corporate/ Other |
|
Total |
Segment
Profit |
$ |
354.9 |
|
|
$ |
14.5 |
|
|
$ |
110.6 |
|
|
$ |
96.4 |
|
|
$ |
58.1 |
|
|
$ |
— |
|
|
$ |
634.5 |
|
General corporate expenses and
other |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(87.7 |
) |
|
(87.7 |
) |
Impairment of goodwill |
— |
|
|
— |
|
|
— |
|
|
(26.5 |
) |
|
— |
|
|
— |
|
|
(26.5 |
) |
Operating
Profit |
354.9 |
|
|
14.5 |
|
|
110.6 |
|
|
69.9 |
|
|
58.1 |
|
|
(87.7 |
) |
|
520.3 |
|
Depreciation and
amortization |
112.4 |
|
|
7.7 |
|
|
125.4 |
|
|
25.3 |
|
|
48.6 |
|
|
3.7 |
|
|
323.1 |
|
Provision for legal
settlement |
(0.9 |
) |
|
— |
|
|
74.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
73.6 |
|
Net foreign currency losses
for purchase price of acquisition |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(30.0 |
) |
|
(30.0 |
) |
Non-cash stock-based
compensation |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
23.6 |
|
|
23.6 |
|
Transaction costs |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
29.1 |
|
|
29.1 |
|
Integration costs |
8.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
8.8 |
|
Impairment of goodwill |
— |
|
|
— |
|
|
— |
|
|
26.5 |
|
|
— |
|
|
— |
|
|
26.5 |
|
Restructuring and plant
closure costs |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
|
0.2 |
|
Assets held for sale |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.2 |
) |
|
(0.2 |
) |
Inventory valuation
adjustments on acquired businesses |
3.0 |
|
|
15.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
18.2 |
|
Mark-to-market adjustments on
commodity and foreign exchange hedges |
(0.1 |
) |
|
— |
|
|
(1.9 |
) |
|
— |
|
|
— |
|
|
(1.9 |
) |
|
(3.9 |
) |
Noncontrolling interest
adjustment |
— |
|
|
(0.4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.4 |
) |
Equity method investment
adjustment |
— |
|
|
0.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.2 |
|
Adjusted
EBITDA |
$ |
477.8 |
|
|
$ |
37.2 |
|
|
$ |
308.6 |
|
|
$ |
121.7 |
|
|
$ |
107.0 |
|
|
$ |
(63.2 |
) |
|
$ |
989.1 |
|
Adjusted EBITDA as a
percentage of Net Sales |
27.4 |
% |
|
33.1 |
% |
|
16.5 |
% |
|
17.1 |
% |
|
13.5 |
% |
|
— |
|
|
18.9 |
% |
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