THOMASVILLE, Ga., Aug. 7, 2019 /PRNewswire/ -- Flowers Foods, Inc.
(NYSE: FLO), producer of Nature's Own, Dave's Killer
Bread, Wonder, Tastykake, and other bakery
foods, today reported financial results for the company's 12-week
second quarter ended July 13,
2019.
Second Quarter Summary:
Compared to the prior year
second quarter where applicable
- Sales increased 3.7% to $975.8
million; net sales increased 1.8% excluding the acquisition
of Canyon Bakehouse.
- Diluted EPS increased $0.04 to
$0.25.
- Adjusted diluted EPS(1) was unchanged at
$0.25.
(1) Adjusted for
items affecting comparability. See reconciliations of non-GAAP
measures in the financial statements following this
release.
CEO's Remarks:
"This quarter's results reflect our
strategic priorities to focus on brands, manage costs, make smart
acquisitions, and develop the team. You can see this in our
continued top-line momentum and market share gains, which
illustrate the benefits of our pivot to a more brand-focused
organization," said Ryals McMullian, Flowers Foods' president and
CEO. "In the quarter, we continued to successfully rollout
Canyon Bakehouse across our distribution network,
implemented pricing to help mitigate inflationary pressures, and
delivered product innovation and marketing programs that supported
the growth of Dave's Killer Bread, Nature's Own, and
Wonder. Growth in bread brands more than offset reduced
sales of cake and foodservice products, as we continue to evolve
those portfolios to a more attractive margin profile."
Mr. McMullian continued, "Improving profitability is a priority.
We remain focused on the significant opportunities we see to attack
complexities, improve operational efficiencies, and address
inflationary pressures from commodities, labor, and transportation.
By focusing on sustainable, profitable growth in our core business,
and investing strategically in growing adjacencies, we intend to
drive free cash flow and deliver shareholder value."
Revised Guidance:
For the 52-week fiscal 2019 the
company expects
- Sales in the range of approximately $4.030 billion to $4.109
billion, representing growth of approximately 2.0% to
4.0%.
- Adjusted diluted EPS in the range of approximately $0.94 to $0.99,
adjusted for items affecting comparability.
The company's outlook includes the following assumptions:
- Canyon Bakehouse sales of approximately
$70 million to $80 million
- Depreciation and amortization in the range of $150 million to $155
million
- Other pension expense in the range of $2.5 million to $3.0
million
- Net interest expense of approximately $12 million
- An effective tax rate of approximately 24% to 25%
- Weighted average diluted share count for the year of
approximately 212 million shares
- Capital expenditures for the year in the range of $110 to $120
million
Matters Affecting Comparability:
Reconciliation of Earnings per Share to
Adjusted Earnings per Share
|
|
|
|
|
|
For the 12
Weeks Ended
|
|
Jul. 13,
2019
|
|
Jul. 14,
2018
|
|
|
|
|
Net income per
diluted common share
|
$
0.25
|
|
$
0.21
|
Loss on inferior
ingredients
|
-
|
|
0.02
|
Restructuring and
related impairment charges
|
0.01
|
|
NM
|
Project Centennial
consulting costs
|
-
|
|
0.01
|
Legal settlements
(recovery)
|
(0.01)
|
|
0.03
|
Executive retirement
agreement
|
NM
|
|
-
|
Pension plan
settlement loss
|
-
|
|
NM
|
Adjustment to prior
year provisional tax reform benefit
|
-
|
|
(0.03)
|
Adjusted net income
per diluted common share
|
$
0.25
|
|
$
0.25
|
|
|
|
|
NM - Not
Meaningful
|
Certain amounts
may not compute due to rounding.
|
Consolidated Second Quarter 2019 Results
Compared
to the prior year second quarter where applicable
- Sales increased 3.7% to $975.8
million.
- Percentage point change in sales attributed to:
-
- Pricing/mix: 1.9%
- Volume: -0.1%
- Acquisition: 1.9%
- Branded retail sales increased $25.8
million, or 4.6%, to $586.0
million, store branded retail sales increased $15.4 million, or 10.5% to $162.9 million, while non-retail and other sales
decreased $6.8 million, or 2.9%, to
$226.9 million.
- Branded retail sales increased due to the Canyon acquisition,
continued growth of Dave's Killer Bread branded products, as
well as the introduction of Sun-Maid breakfast bread late in
the third quarter of fiscal 2018, and more favorable price/mix.
Sales of branded cake decreased quarter over quarter mainly due to
softer volume resulting from product rationalization and a
competitive environment.
- Store branded retail sales increased primarily due to
gluten-free store-branded items produced by Canyon, volume growth
from additional distribution, other store branded breads and buns,
and positive price/mix, partially offset by volume declines in
store branded cake.
- Foodservice and vending volume declines drove the decrease in
non-retail and other sales, partly because of lost business due to
the yeast disruption in fiscal 2018.
- Operating income increased 38.4% to $72.3 million. Excluding matters affecting
comparability, adjusted operating income increased 7.4% to
$72.5 million.
- Adjusted EBITDA increased 3.2% to $105.9
million, representing 10.8% of sales, a 10-basis point
decrease.
- Materials, supplies, labor and other production costs
(exclusive of depreciation and amortization) were 52.1% of sales, a
20-basis point increase. These costs were higher as a percentage of
sales due to rising workforce-related costs, lower production
volumes and decreased manufacturing efficiencies, partially offset
by improved pricing/mix and lower ingredient costs as a percent of
sales.
- Selling, distribution and administrative (SD&A) expenses
were 36.8% of sales, a 150-basis point decrease. Excluding matters
affecting comparability, adjusted SD&A expenses were 37.0% of
sales, a 20-basis point decrease. A shift in product mix resulted
in lower distributor distribution fees as a percentage of sales,
partially offset by higher workforce-related costs and bad debt
expense.
- Depreciation and amortization (D&A) expenses were
$33.3 million, 3.4% of sales, a
30-basis point decrease.
Cash Flow, Capital Allocation, and Capital
Return
Year-to-date through the second quarter of fiscal
2019, cash flow from operating activities increased by $59.4 million to $208.1
million, capital expenditures decreased by $2.1 million to $47.4
million, and dividends paid increased by $5.3 million to $79.6
million. Year-to-date through the second quarter, the
company has made cash debt repayments of $86.8 million.
There remain 6.2 million shares authorized for repurchase under
the company's current share repurchase plan. The company expects to
continue to make opportunistic share repurchases from time to time
under this plan.
Conference Call
Flowers Foods will hold a conference
call to discuss its second quarter 2019 results at 8:30 a.m. (Eastern) on August 8, 2019. The call can be accessed by
following the webcast link on flowersfoods.com. The call also will
be archived on the company's website.
About Flowers Foods
Headquartered in Thomasville, Ga., Flowers Foods, Inc. (NYSE:
FLO) is one of the largest producers of fresh packaged bakery foods
in the United States with 2018
sales of $4.0 billion. Flowers
operates bakeries across the country that produce a wide range of
bakery products. Among the company's top brands are Nature's
Own, Dave's Killer Bread, Wonder, and
Tastykake. Learn more at www.flowersfoods.com.
FLO-IR FLO-CORP
Forward-Looking Statements
Statements contained in
this press release that are not historical facts are
forward-looking statements. Forward-looking statements relate to
current expectations regarding our future financial condition,
performance and results of operations, planned capital
expenditures, long-term objectives of management, supply and
demand, pricing trends and market forces, and integration plans and
expected benefits of transactions and are often identified by the
use of words and phrases such as "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intend," "may," "plan,"
"predict," "project," "should," "will," "would," "is likely to,"
"is expected to" or "will continue," or the negative of these terms
or other comparable terminology. All forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ from those projected. Other factors that may cause actual
results to differ from the forward-looking statements contained in
this release and that may affect the company's prospects in general
include, but are not limited to, (a) general economic and business
conditions and the competitive conditions in the baked foods
industry, including promotional and price competition, (b) changes
in consumer demand for our products, including changes in consumer
behavior, trends and preferences, including health and whole grain
trends, and the movement toward more inexpensive store-branded
products, (c) the success of productivity improvements and new
product introductions, (d) a significant reduction in business with
any of our major customers including a reduction from adverse
developments in any of our customer's business, (e) fluctuations in
commodity pricing, (f) energy and raw material costs and
availability and hedging and counterparty risk, (g) our ability to
fully integrate recent acquisitions into our business, (h) our
ability to achieve cash flow from capital expenditures and
acquisitions and the availability of new acquisitions that build
shareholder value, (i) our ability to successfully implement our
business strategies, including those strategies the company has
initiated under Project Centennial, which may involve, among other
things, the integration of recent acquisitions or the acquisition
or disposition of assets at presently targeted values, the
deployment of new systems and technology and an enhanced
organizational structure, (j) consolidation within the baking
industry and related industries, (k) disruptions in our
direct-store delivery system, including litigation or an adverse
ruling from a court or regulatory or government body that could
affect the independent contractor classification of our independent
distributors, (l) increasing legal complexity and legal proceedings
that we are or may become subject to, (m) product recalls or safety
concerns related to our products, and (n) the failure of our
information technology systems to perform adequately, including any
interruptions, intrusions or security breaches of such systems. The
foregoing list of important factors does not include all such
factors, nor necessarily present them in order of importance. In
addition, you should consult other public disclosures made by the
company, including the risk factors included in our most recently
filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q
filed with the Securities and Exchange Commission ("SEC") and
disclosures made in other filings with the SEC and company press
releases, for other factors that may cause actual results to differ
materially from those projected by the company. We caution you not
to place undue reliance on forward-looking statements, as they
speak only as of the date made and are inherently uncertain. The
company undertakes no obligation to publicly revise or update such
statements, except as required by law.
Information Regarding Non-GAAP Financial Measures
The
company prepares its consolidated financial statements in
accordance with U.S. Generally Accepted Accounting Principles
(GAAP). However, from time to time, the company may present in its
public statements, press releases and SEC filings, non-GAAP
financial measures such as, EBITDA, adjusted EBITDA, adjusted EBIT,
EBITDA margin, adjusted EBITDA margin, adjusted net income,
adjusted operating income, adjusted EPS, adjusted income tax
expense, adjusted selling, distribution and administrative expenses
(SD&A), gross margin excluding depreciation and amortization
and the ratio of net debt to adjusted EBITDA. The reconciliations
attached provide reconciliations of the non-GAAP measures used in
this presentation or release to the most comparable GAAP financial
measure. The company's definitions of these non-GAAP measures may
differ from similarly titled measures used by others. These
non-GAAP measures should be considered supplemental to, and not a
substitute for, financial information prepared in accordance with
GAAP.
The company defines EBITDA as income from operations adjusted
for depreciation and amortization. The company believes that EBITDA
is a useful tool for managing the operations of its business and is
an indicator of the company's ability to incur and service
indebtedness and generate free cash flow. EBITDA is used as the
primary performance measure in the company's 2014 Omnibus Equity
and Incentive Compensation Plan. Furthermore, pursuant to the terms
of our credit facility, EBITDA is used to determine the company's
compliance with certain financial covenants. The company also
believes that EBITDA measures are commonly reported and widely used
by investors and other interested parties as measures of a
company's operating performance and debt servicing ability because
EBITDA measures assist in comparing performance on a consistent
basis without regard to depreciation or amortization, which can
vary significantly depending upon accounting methods and
non-operating factors (such as historical cost). EBITDA is also a
widely-accepted financial indicator of a company's ability to incur
and service indebtedness.
EBITDA should not be considered an alternative to (a) income
from operations or net income (loss) as a measure of operating
performance; (b) cash flows provided by operating, investing and
financing activities (as determined in accordance with GAAP) as a
measure of the company's ability to meet its cash needs; or (c) any
other indicator of performance or liquidity that has been
determined in accordance with GAAP.
The company defines adjusted EBITDA, adjusted EBIT, EBITDA
margin, adjusted EBITDA margin, adjusted net income, adjusted
operating income, adjusted EPS, adjusted income tax expense,
adjusted selling, distribution and administrative expenses
(SD&A), respectively, excluding the impact of asset impairment
charges, Project Centennial consulting costs, lease terminations
and legal settlements, acquisition-related costs, and pension plan
settlements. Adjusted income tax expense also excludes the impact
of tax reform. The company believes that these measures, when
considered together with its GAAP financial results, provides
management and investors with a more complete understanding of its
business operating results, including underlying trends, by
excluding the effects of certain charges.
Net debt to EBITDA is used as a measure of financial leverage
employed by the company. Gross margin excluding depreciation and
amortization is used as a performance measure to provide additional
transparent information regarding our results of operations on a
consolidated and segment basis. Changes in depreciation and
amortization are separately discussed and include depreciation and
amortization for materials, supplies, labor and other production
costs and operating activities.
Presentation of gross margin includes depreciation and
amortization in the materials, supplies, labor and other production
costs according to GAAP. Our method of presenting gross margin
excludes the depreciation and amortization components, as discussed
above.
The reconciliations attached provide reconciliations of the
non-GAAP measures used in this presentation or release to the most
comparable GAAP financial measure.
Flowers Foods,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(000's
omitted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July 13,
2019
|
|
|
December 29,
2018
|
Assets
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
9,769
|
|
$
|
25,306
|
|
|
|
|
|
|
|
Other Current
Assets
|
|
|
532,291
|
|
|
492,073
|
|
|
|
|
|
|
|
Property, Plant &
Equipment, net
|
|
|
713,390
|
|
|
743,847
|
|
|
|
|
|
|
|
Right-of-Use Leases,
net
|
|
|
398,249
|
|
|
-
|
|
|
|
|
|
|
|
Distributor Notes Receivable
(1)
|
|
|
229,130
|
|
|
230,470
|
|
|
|
|
|
|
|
Other Assets
|
|
|
12,580
|
|
|
13,533
|
|
|
|
|
|
|
|
Cost in Excess of Net
Tangible Assets, net
|
|
|
1,324,383
|
|
|
1,340,308
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
3,219,792
|
|
$
|
2,845,537
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
Liabilities
|
|
$
|
432,596
|
|
$
|
389,443
|
|
|
|
|
|
|
|
Long-term Debt and Capital
Lease Liabilities (2)
|
|
|
893,483
|
|
|
1,001,536
|
|
|
|
|
|
|
|
Right-of-Use Lease
Liabilities (3)
|
|
|
405,410
|
|
|
-
|
|
|
|
|
|
|
|
Other Liabilities
|
|
|
194,034
|
|
|
196,291
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
1,294,269
|
|
|
1,258,267
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
|
$
|
3,219,792
|
|
$
|
2,845,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes current
portion of $27,401 and $26,345, respectively.
|
(2) Includes current
portion of $4,942 and $10,896, respectively.
|
(3) Includes current
portion of $57,407.
|
Flowers Foods,
Inc.
|
Consolidated
Statement of Operations
|
(000's omitted,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 12
Week
Period Ended
|
|
For the 12 Week
Period Ended
|
|
|
For the 28
Week
Period Ended
|
|
For the 28 Week
Period Ended
|
|
|
|
|
July 13,
2019
|
|
July 14,
2018
|
|
|
July 13,
2019
|
|
July 14,
2018
|
Sales
|
$
|
975,759
|
$
|
941,283
|
|
$
|
2,239,654
|
$
|
2,147,736
|
Materials, supplies,
labor and other production costs
(exclusive of depreciation and amortization shown
separately below)
|
|
508,552
|
|
488,871
|
|
|
1,160,693
|
|
1,113,993
|
Selling, distribution
and administrative expenses
|
|
359,497
|
|
360,365
|
|
|
835,546
|
|
814,828
|
Loss (recovery) on
inferior ingredients
|
|
-
|
|
3,884
|
|
|
(413)
|
|
3,884
|
Restructuring and
related impairment charges
|
|
2,047
|
|
801
|
|
|
2,765
|
|
2,060
|
Impairment of
assets
|
|
-
|
|
-
|
|
|
-
|
|
2,483
|
Multi-employer
pension plan withdrawal costs
|
|
-
|
|
-
|
|
|
-
|
|
2,322
|
Depreciation and
amortization expense
|
|
33,329
|
|
35,098
|
|
|
78,148
|
|
79,287
|
Income from
operations
|
|
72,334
|
|
52,264
|
|
|
162,915
|
|
128,879
|
Other pension cost
(benefit)
|
|
519
|
|
(298)
|
|
|
1,211
|
|
(1,033)
|
Pension plan
settlement loss
|
|
-
|
|
1,035
|
|
|
-
|
|
5,703
|
Interest expense,
net
|
|
2,769
|
|
1,748
|
|
|
6,593
|
|
4,649
|
Income before income
taxes
|
|
69,046
|
|
49,779
|
|
|
155,111
|
|
119,560
|
Income tax
expense
|
|
15,951
|
|
4,337
|
|
|
36,150
|
|
22,871
|
Net
income
|
$
|
53,095
|
$
|
45,442
|
|
$
|
118,961
|
$
|
96,689
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
diluted common share
|
$
|
0.25
|
$
|
0.21
|
|
$
|
0.56
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding
|
|
211,957
|
|
211,507
|
|
|
211,924
|
|
211,443
|
Flowers Foods,
Inc.
|
Condensed
Consolidated Statement of Cash Flows
|
(000's
omitted)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 12
Week
Period Ended
|
|
For the 12 Week
Period Ended
|
|
|
For the 28
Week
Period Ended
|
|
For the 28 Week
Period Ended
|
|
|
|
July 13,
2019
|
|
July 14,
2018
|
|
|
July 13,
2019
|
|
July 14,
2018
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
53,095
|
$
|
45,442
|
|
$
|
118,961
|
$
|
96,689
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
|
|
|
|
|
from operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Total non-cash
adjustments
|
|
42,792
|
|
53,202
|
|
|
97,569
|
|
115,386
|
|
Changes in assets and
liabilities and pension contributions
|
|
15,992
|
|
(47,133)
|
|
|
(8,473)
|
|
(63,452)
|
Net cash provided
by operating activities
|
|
111,879
|
|
51,511
|
|
|
208,057
|
|
148,623
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(26,651)
|
|
(22,984)
|
|
|
(47,412)
|
|
(49,534)
|
|
Proceeds from sale of
property, plant and equipment
|
|
308
|
|
791
|
|
|
543
|
|
1,290
|
|
Other
|
|
989
|
|
577
|
|
|
1,125
|
|
(801)
|
Net cash disbursed
for investing activities
|
|
(25,354)
|
|
(21,616)
|
|
|
(45,744)
|
|
(49,045)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
(40,314)
|
|
(38,045)
|
|
|
(79,610)
|
|
(74,288)
|
|
Exercise of stock
options
|
|
-
|
|
-
|
|
|
-
|
|
791
|
|
Stock
repurchases
|
|
-
|
|
-
|
|
|
(7,054)
|
|
(2,489)
|
|
Net change in debt
borrowings
|
|
(46,250)
|
|
(1,250)
|
|
|
(86,750)
|
|
(2,500)
|
|
Payments on financing
leases
|
|
(1,431)
|
|
-
|
|
|
(3,303)
|
|
-
|
|
Other
|
|
(345)
|
|
4,738
|
|
|
(1,133)
|
|
3,333
|
Net cash disbursed
for financing activities
|
|
(88,340)
|
|
(34,557)
|
|
|
(177,850)
|
|
(75,153)
|
Net increase
(decrease) in cash and cash equivalents
|
|
(1,815)
|
|
(4,662)
|
|
|
(15,537)
|
|
24,425
|
Cash and cash
equivalents at beginning of period
|
|
11,584
|
|
34,216
|
|
|
25,306
|
|
5,129
|
Cash and cash
equivalents at end of period
|
$
|
9,769
|
$
|
29,554
|
|
$
|
9,769
|
$
|
29,554
|
|
Flowers Foods,
Inc.
|
|
Sales by Sales
Class and Sales Bridge
|
|
(000's
omitted)
|
|
|
|
|
|
|
|
|
Sales by Sales
Class
|
For the 12
Week Period
Ended
|
For the 12
Week Period
Ended
|
|
|
|
|
|
July 13,
2019
|
July 14,
2018
|
$ Change
|
% Change
|
|
|
|
|
|
|
|
|
|
Branded
Retail
|
$
585,957
|
$
560,128
|
$
25,829
|
4.6
|
%
|
|
|
Store Branded
Retail
|
162,863
|
147,432
|
15,431
|
10.5
|
%
|
|
|
Non-Retail and
Other
|
226,939
|
233,723
|
(6,784)
|
-2.9
|
%
|
|
|
Total
Sales
|
$
975,759
|
$
941,283
|
$
34,476
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales by Sales
Class
|
For the 28
Week Period
Ended
|
For the 28
Week Period
Ended
|
|
|
|
|
|
July 13,
2019
|
July 14,
2018
|
$ Change
|
% Change
|
|
|
|
|
|
|
|
|
|
Branded
Retail
|
$
1,343,744
|
$
1,273,886
|
$
69,858
|
5.5
|
%
|
|
|
Store Branded
Retail
|
353,852
|
317,312
|
36,540
|
11.5
|
%
|
|
|
Non-Retail and
Other
|
542,058
|
556,538
|
(14,480)
|
-2.6
|
%
|
|
|
Total
Sales
|
$
2,239,654
|
$
2,147,736
|
$
91,918
|
4.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Bridge
|
|
|
Sales
Change
|
|
|
|
|
|
Net
|
excluding
|
Acquisition
|
Total
|
|
For the 12 Week
Period Ended July 13, 2019
|
Volume
|
Price/Mix
|
Acquisition
|
Contribution
|
Sales
Change
|
|
|
|
|
|
|
|
|
Flowers
Foods
|
-0.1
|
%
|
1.9
|
%
|
1.8
|
%
|
1.9
|
%
|
3.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
Bridge
|
|
|
Sales
Change
|
|
|
|
|
|
Net
|
excluding
|
Acquisition
|
Total
|
|
For the 28 Week
Period Ended July 13, 2019
|
Volume
|
Price/Mix
|
Acquisition
|
Contribution
|
Sales
Change
|
|
|
|
|
|
|
|
|
Flowers
Foods
|
-0.2
|
%
|
2.7
|
%
|
2.5
|
%
|
1.8
|
%
|
4.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flowers Foods,
Inc.
|
Reconciliation of
GAAP to Non-GAAP Measures
|
|
(000's omitted,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings per Share to Adjusted Earnings per Share
|
|
|
|
|
For the 12
Week
Period Ended
|
|
For the 12 Week
Period Ended
|
|
For the 28
Week
Period Ended
|
|
For the 28 Week
Period Ended
|
|
|
|
|
July 13,
2019
|
|
July 14,
2018
|
|
July 13,
2019
|
|
July 14,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
diluted common share
|
|
$
0.25
|
|
$
0.21
|
|
$
0.56
|
|
$
0.46
|
|
Loss (recovery) on
inferior ingredients
|
|
-
|
|
0.02
|
|
NM
|
|
0.02
|
|
Restructuring and
related impairment charges
|
|
0.01
|
|
NM
|
|
0.01
|
|
NM
|
|
Project Centennial
consulting costs
|
|
-
|
|
0.01
|
|
-
|
|
0.03
|
|
Legal settlements
(recovery)
|
|
(0.01)
|
|
0.03
|
|
NM
|
|
0.03
|
|
Executive retirement
agreement
|
|
NM
|
|
-
|
|
NM
|
|
-
|
|
Canyon acquisition
costs
|
|
-
|
|
-
|
|
NM
|
|
-
|
|
Pension plan
settlement loss
|
|
-
|
|
NM
|
|
-
|
|
0.02
|
|
Multi-employer
pension plan withdrawal costs
|
|
-
|
|
-
|
|
-
|
|
0.01
|
|
Adjustment to prior
year provisional tax reform benefit
|
|
-
|
|
(0.03)
|
|
-
|
|
(0.03)
|
|
Adjusted net income
per diluted common share
|
|
$
0.25
|
|
$
0.25
|
|
$
0.57
|
|
$
0.55
|
|
NM - not
meaningful.
|
|
|
|
|
|
|
|
|
|
Certain amounts
may not add due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Gross Margin
|
|
|
|
|
For the 12
Week
Period Ended
|
|
For the 12 Week
Period Ended
|
|
For the 28
Week
Period Ended
|
|
For the 28 Week
Period Ended
|
|
|
|
|
July 13,
2019
|
|
July 14,
2018
|
|
July 13,
2019
|
|
July 14,
2018
|
|
Sales
|
|
$
975,759
|
|
$
941,283
|
|
$
2,239,654
|
|
$
2,147,736
|
|
Materials, supplies,
labor and other production costs (exclusive of
depreciation and amortization)
|
|
508,552
|
|
488,871
|
|
1,160,693
|
|
1,113,993
|
|
Gross Margin
excluding depreciation and amortization
|
|
467,207
|
|
452,412
|
|
1,078,961
|
|
1,033,743
|
|
Less depreciation and
amortization for production activities
|
|
18,590
|
|
18,903
|
|
43,568
|
|
44,188
|
|
Gross
Margin
|
|
$
448,617
|
|
$
433,509
|
|
$
1,035,393
|
|
$
989,555
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization for production activities
|
|
$
18,590
|
|
$
18,903
|
|
$
43,568
|
|
$
44,188
|
|
Depreciation and
amortization for selling, distribution and
administrative activities
|
|
14,739
|
|
16,195
|
|
34,580
|
|
35,099
|
|
Total depreciation
and amortization
|
|
$
33,329
|
|
$
35,098
|
|
$
78,148
|
|
$
79,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Selling, Distribution and Administrative Expenses to Adjusted
SD&A
|
|
|
|
|
For the 12
Week
Period Ended
|
|
For the 12 Week
Period Ended
|
|
For the 28
Week
Period Ended
|
|
For the 28 Week
Period Ended
|
|
|
|
|
July 13,
2019
|
|
July 14,
2018
|
|
July 13,
2019
|
|
July 14,
2018
|
|
Selling, distribution
and administrative expenses (SD&A)
|
|
$
359,497
|
|
$
360,365
|
|
$
835,546
|
|
$
814,828
|
|
Project Centennial
consulting costs
|
|
-
|
|
(2,215)
|
|
-
|
|
(8,647)
|
|
Legal (settlements)
recovery
|
|
1,286
|
|
(8,345)
|
|
1,136
|
|
(9,695)
|
|
Executive retirement
agreement
|
|
568
|
|
-
|
|
(763)
|
|
-
|
|
Canyon acquisition
costs
|
|
-
|
|
-
|
|
(22)
|
|
-
|
|
Adjusted
SD&A
|
|
$
361,351
|
|
$
349,805
|
|
$
835,897
|
|
$
796,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted EBIT and Adjusted EBITDA
|
|
|
|
|
For the 12
Week
Period Ended
|
|
For the 12 Week
Period Ended
|
|
For the 28
Week
Period Ended
|
|
For the 28 Week
Period Ended
|
|
|
|
|
July 13,
2019
|
|
July 14,
2018
|
|
July 13,
2019
|
|
July 14,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
53,095
|
|
$
45,442
|
|
$
118,961
|
|
$
96,689
|
|
Income tax
expense
|
|
15,951
|
|
4,337
|
|
36,150
|
|
22,871
|
|
Interest expense,
net
|
|
2,769
|
|
1,748
|
|
6,593
|
|
4,649
|
|
Other pension cost
(benefit)
|
|
519
|
|
(298)
|
|
1,211
|
|
(1,033)
|
|
Pension plan
settlement loss
|
|
-
|
|
1,035
|
|
-
|
|
5,703
|
|
Earnings before
interest and income taxes
|
|
72,334
|
|
52,264
|
|
162,915
|
|
128,879
|
|
Loss (recovery) on
inferior ingredients
|
|
-
|
|
3,884
|
|
(413)
|
|
3,884
|
|
Restructuring and
related impairment charges
|
|
2,047
|
|
801
|
|
2,765
|
|
2,060
|
|
Project Centennial
consulting costs
|
|
-
|
|
2,215
|
|
-
|
|
8,647
|
|
Legal settlements
(recovery)
|
|
(1,286)
|
|
8,345
|
|
(1,136)
|
|
9,695
|
|
Executive retirement
agreement
|
|
(568)
|
|
-
|
|
763
|
|
-
|
|
Canyon acquisition
costs
|
|
-
|
|
-
|
|
22
|
|
-
|
|
Multi-employer
pension plan withdrawal costs
|
|
-
|
|
-
|
|
-
|
|
2,322
|
|
Adjusted
EBIT
|
|
72,527
|
|
67,509
|
|
164,916
|
|
155,487
|
|
Depreciation and
amortization
|
|
33,329
|
|
35,098
|
|
78,148
|
|
79,287
|
|
Adjusted
EBITDA
|
|
$
105,856
|
|
$
102,607
|
|
$
243,064
|
|
$
234,774
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
975,759
|
|
$
941,283
|
|
$
2,239,654
|
|
$
2,147,736
|
|
Adjusted EBITDA
margin
|
|
10.8%
|
|
10.9%
|
|
10.9%
|
|
10.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income Tax Expense to Adjusted Income Tax Expense
|
|
|
|
|
For the 12
Week
Period Ended
|
|
For the 12 Week
Period Ended
|
|
For the 28
Week
Period Ended
|
|
For the 28 Week
Period Ended
|
|
|
|
|
July 13,
2019
|
|
July 14,
2018
|
|
July 13,
2019
|
|
July 14,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
$
15,951
|
|
$
4,337
|
|
$
36,150
|
|
$
22,871
|
|
Tax impact
of:
|
|
|
|
|
|
|
|
|
|
|
Loss (recovery) on
inferior ingredients
|
|
-
|
|
981
|
|
(104)
|
|
981
|
|
|
Restructuring and
related impairment charges
|
|
517
|
|
202
|
|
698
|
|
520
|
|
|
Project Centennial
consulting costs
|
|
-
|
|
559
|
|
-
|
|
2,183
|
|
|
Legal settlements
(recovery)
|
|
(325)
|
|
2,107
|
|
(287)
|
|
2,448
|
|
|
Executive retirement
agreement
|
|
(143)
|
|
-
|
|
193
|
|
-
|
|
|
Canyon acquisition
costs
|
|
-
|
|
-
|
|
6
|
|
-
|
|
|
Pension plan
settlement loss
|
|
-
|
|
261
|
|
-
|
|
1,440
|
|
|
Multi-employer
pension plan withdrawal costs
|
|
-
|
|
-
|
|
-
|
|
586
|
|
|
Adjustment to prior
year provisional tax reform benefit
|
|
-
|
|
5,575
|
|
-
|
|
5,575
|
|
Adjusted income tax
expense
|
|
$
16,000
|
|
$
14,022
|
|
$
36,656
|
|
$
36,604
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted Net Income
|
|
|
|
|
For the 12
Week
Period Ended
|
|
For the 12 Week
Period Ended
|
|
For the 28
Week
Period Ended
|
|
For the 28 Week
Period Ended
|
|
|
|
|
July 13,
2019
|
|
July 14,
2018
|
|
July 13,
2019
|
|
July 14,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
53,095
|
|
$
45,442
|
|
$
118,961
|
|
$
96,689
|
|
Loss (recovery) on
inferior ingredients
|
|
-
|
|
2,903
|
|
(309)
|
|
2,903
|
|
Restructuring and
related impairment charges
|
|
1,530
|
|
599
|
|
2,067
|
|
1,540
|
|
Project Centennial
consulting costs
|
|
-
|
|
1,656
|
|
-
|
|
6,464
|
|
Legal settlements
(recovery)
|
|
(961)
|
|
6,238
|
|
(849)
|
|
7,247
|
|
Executive retirement
agreement
|
|
(425)
|
|
-
|
|
570
|
|
-
|
|
Canyon acquisition
costs
|
|
-
|
|
-
|
|
16
|
|
-
|
|
Pension plan
settlement loss
|
|
-
|
|
774
|
|
-
|
|
4,263
|
|
Multi-employer
pension plan withdrawal costs
|
|
-
|
|
-
|
|
-
|
|
1,736
|
|
Adjustment to prior
year provisional tax reform benefit
|
|
-
|
|
(5,575)
|
|
-
|
|
(5,575)
|
|
Adjusted net
income
|
|
$
53,239
|
|
$
52,037
|
|
$
120,456
|
|
$
115,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Earnings per Share - Full Year
Fiscal 2019 Guidance
|
|
|
|
|
|
|
|
|
Range
Estimate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
diluted common share
|
|
$
0.93
|
to
|
$
0.98
|
|
|
|
|
|
Matters affecting
comparability
|
|
0.01
|
|
0.01
|
|
|
|
|
|
Adjusted net income
per diluted common share
|
|
$
0.94
|
to
|
$
0.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/flowers-foods-inc-reports-second-quarter-2019-results-300898178.html
SOURCE Flowers Foods, Inc.