ST. LOUIS, May 07, 2020 (GLOBE NEWSWIRE) — Post Holdings, Inc. (NYSE:POST), a consumer packaged goods holding company, today reported results for the second fiscal quarter ended March 31, 2020.
Highlights for the second quarter of fiscal year 2020:Net sales of $1.5 billionOperating profit of $153.5 million; net loss of $191.4 million and Adjusted EBITDA of $291.7 millionAs a result of uncertainty around the duration, scope and ultimate financial impact of the COVID-19 pandemic, Post management is withdrawing its fiscal year 2020 outlookBasis of PresentationOn October 21, 2019, the initial public offering (the “IPO”) of a minority interest in the BellRing Brands business, Post’s historical active nutrition business, was completed. Post fully consolidates the results of BellRing Brands, Inc. (“BellRing”) and its subsidiaries within Post’s financial statements and effective October 21, 2019 allocates 28.8% of its consolidated net earnings/loss and net assets to noncontrolling interest within Post’s financial statements.Second Quarter Consolidated Operating ResultsNet sales were $1,494.2 million, an increase of 7.7%, or $106.4 million, compared to the prior year period net sales of $1,387.8 million. Gross profit was $438.8 million, or 29.4% of net sales, a decrease of $12.5 million compared to the prior year period gross profit of $451.3 million, or 32.5% of net sales.Selling, general and administrative (“SG&A”) expenses were $245.0 million, or 16.4% of net sales, an increase of $19.2 million compared to the prior year period SG&A expenses of $225.8 million, or 16.3% of net sales. Operating profit was $153.5 million, a decrease of 17.6%, or $32.8 million, compared to the prior year period operating profit of $186.3 million.Net loss was $191.4 million, a decrease of 535.0%, or $235.4 million, compared to the prior year period net earnings of $44.0 million. Net loss included loss on extinguishment of debt of $60.0 million in the second quarter of 2020. Net loss/earnings included expense on swaps, net of $224.6 million and $63.0 million in the second quarter of 2020 and 2019, respectively. Loss on extinguishment of debt and expense on swaps, net are discussed later in this release and were treated as adjustments for non-GAAP measures. Net loss/earnings included equity method losses, net of tax of $11.1 million and $8.8 million in the second quarter of 2020 and 2019, respectively. Net loss/earnings excluded net earnings attributable to noncontrolling interest of $5.6 million and $0.3 million in the second quarter of 2020 and 2019, respectively.Net loss attributable to common shareholders was $191.4 million, or $2.76 per diluted common share, compared to the prior year period net earnings available to common shareholders of $43.0 million, or $0.58 per diluted common share. Adjusted net earnings were $45.5 million, or $0.65 per diluted common share, compared to the prior year period Adjusted net earnings of $98.4 million, or $1.31 per diluted common share.Adjusted EBITDA was $291.7 million, a decrease of 2.4%, or $7.2 million, compared to the prior year period Adjusted EBITDA of $298.9 million. Adjusted EBITDA in the second quarter of 2020 included an adjustment of $5.2 million primarily for the portion of BellRing’s consolidated net earnings which was allocated to noncontrolling interest, resulting in Adjusted EBITDA including 100% of the consolidated Adjusted EBITDA of BellRing.Six Month Consolidated Operating ResultsNet sales were $2,951.0 million, an increase of 5.4%, or $151.9 million, compared to the prior year period net sales of $2,799.1 million. Gross profit was $910.3 million, or 30.8% of net sales, an increase of $32.5 million compared to the prior year period gross profit of $877.8 million, or 31.4% of net sales.SG&A expenses were $480.3 million, or 16.3% of net sales, an increase of $37.4 million compared to the prior year period SG&A expenses of $442.9 million, or 15.8% of net sales. Operating profit was $349.5 million, a decrease of 27.2%, or $130.7 million, compared to the prior year period operating profit of $480.2 million. Operating profit for the six months ended March 31, 2019 included a $127.3 million gain related to the separate capitalization of 8th Avenue Food & Provisions, Inc. (“8th Avenue”), which was treated as an adjustment for non-GAAP measures.Net loss was $92.2 million, a decrease of 154.4%, or $261.8 million, compared to the prior year period net earnings of $169.6 million. Net loss/earnings included loss on extinguishment of debt of $72.9 million and $6.1 million in the six months ended March 31, 2020 and March 31, 2019, respectively. Net loss/earnings included expense on swaps, net of $163.2 million and $114.7 million in the six months ended March 31, 2020 and March 31, 2019, respectively. Loss on extinguishment of debt and expense on swaps, net are discussed later in this release and were treated as adjustments for non-GAAP measures. Net loss/earnings included equity method losses, net of tax of $18.4 million and $19.5 million in the six months ended March 31, 2020 and March 31, 2019, respectively. Net loss/earnings excluded net earnings attributable to noncontrolling interest of $13.5 million and $0.6 million in the six months ended March 31, 2020 and March 31, 2019, respectively.Net loss attributable to common shareholders was $92.2 million, or $1.32 per diluted common share, compared to the prior year period net earnings available to common shareholders of $166.6 million, or $2.26 per diluted common share. Adjusted net earnings were $98.4 million, or $1.38 per diluted common share, compared to the prior year period Adjusted net earnings of $183.2 million, or $2.44 per diluted common share.Adjusted EBITDA was $594.8 million, an increase of 0.6%, or $3.4 million, compared to the prior year period Adjusted EBITDA of $591.4 million. Adjusted EBITDA for the six months ended March 31, 2020 included an adjustment of $12.6 million primarily for the portion of BellRing’s consolidated net earnings which was allocated to noncontrolling interest, resulting in Adjusted EBITDA including 100% of the consolidated Adjusted EBITDA of BellRing.Post Consumer BrandsNorth American ready-to-eat (“RTE”) cereal.For the second quarter, net sales were $507.9 million, an increase of 10.6%, or $48.8 million, compared to the prior year period. Volumes increased 14.2% and benefitted from (i) increased purchases resulting from consumer pantry loading and increased at-home consumption in reaction to the COVID-19 pandemic, (ii) the timing of promotional and merchandising support when compared to the prior year, (iii) new product introductions and (iv) private label distribution gains. Segment profit was $92.4 million, an increase of 11.1%, or $9.2 million, compared to the prior year period. Segment Adjusted EBITDA was $120.9 million, an increase of 6.9%, or $7.8 million, compared to the prior year period.For the six months ended March 31, 2020, net sales were $949.1 million, an increase of 3.8%, or $34.7 million, compared to the prior year period. Segment profit was $173.0 million, an increase of 3.5%, or $5.8 million, compared to the prior year period. Segment Adjusted EBITDA was $230.6 million, an increase of 1.7%, or $3.9 million, compared to the prior year period.WeetabixPrimarily United Kingdom RTE cereal and muesli.For the second quarter, net sales were $113.4 million, an increase of 8.9%, or $9.3 million, compared to the prior year period, reflecting 4.5% improved average net pricing and a 6.0% volume increase (driven by increased purchases resulting from consumer pantry loading in reaction to the COVID-19 pandemic), which were partially offset by an unfavorable foreign exchange rate headwind of approximately 180 basis points. Segment profit was $28.0 million, an increase of 18.6%, or $4.4 million, compared to the prior year period. Segment Adjusted EBITDA was $36.0 million, an increase of 12.5%, or $4.0 million, compared to the prior year period.For the six months ended March 31, 2020, net sales were $214.9 million, an increase of 4.8%, or $9.9 million, compared to the prior year period. Segment profit was $51.7 million, an increase of 21.6%, or $9.2 million, compared to the prior year period. Segment Adjusted EBITDA was $67.9 million, an increase of 14.9%, or $8.8 million, compared to the prior year period.FoodservicePrimarily egg and potato products.For the second quarter, net sales were $378.4 million, a decrease of 2.7%, or $10.7 million, compared to the prior year period. Volumes for the second quarter decreased 4.2% with egg volumes declining 4.5% and potato volumes declining 2.0%. Volume declines were driven by lower demand from foodservice customers resulting from the impact of the COVID-19 pandemic on various channels, including full service restaurants, quick service restaurants, education and travel and lodging, which was partially offset by higher volume in the food ingredient channel. Prior to the COVID-19 pandemic, volume growth for Post’s Foodservice segment was strong as volumes in January and February increased 5.4%, driven by increases of 3.7% in egg volumes and 13.9% in potato volumes.Segment profit was $23.8 million, a decrease of 49.8%, or $23.6 million, compared to the prior year period. Segment Adjusted EBITDA was $55.1 million, a decrease of 27.4%, or $20.8 million, compared to the prior year period. Second quarter 2020 segment profit and segment Adjusted EBITDA were negatively impacted by (i) unfavorable fixed cost absorption and $6.1 million of increased reserves for obsolete inventory on short-dated products, both of which resulted from the significant decline in foodservice product demand in reaction to the COVID-19 pandemic, (ii) startup costs at the new precooked egg facility in Norwalk, Iowa of approximately $4.2 million (excluding depreciation, an approximately $2.8 million negative impact to segment Adjusted EBITDA) and (iii) approximately $3.0 million of expenses, including a $2.5 million insurance deductible, incurred in connection with a previously reported fire at the Bloomfield, Nebraska laying facility.For the six months ended March 31, 2020, net sales were $799.0 million, an increase of 0.2%, or $1.8 million, compared to the prior year period. Segment profit was $70.8 million, a decrease of 29.3%, or $29.3 million, compared to the prior year period. Segment Adjusted EBITDA was $130.4 million, a decrease of 14.8%, or $22.6 million, compared to the prior year period.Refrigerated RetailSide dishes and egg, cheese and sausage products.For the second quarter, net sales were $237.6 million, an increase of 8.2%, or $18.1 million, compared to the prior year period, with volumes increasing 2.4%. Side dish net sales increased 23.3%, reflecting a meaningful improvement in average net pricing and a 13.1% volume increase (primarily driven by increased purchases resulting from consumer pantry loading and increased at-home consumption in reaction to the COVID-19 pandemic). Egg product net sales decreased 18.7% driven by losses in branded egg product volume and lower average net selling prices resulting from lower market-based egg prices. Volume information for additional products is disclosed in a table presented later in this release. Segment profit was $30.2 million, an increase of 14.0%, or $3.7 million, compared to the prior year period. Segment Adjusted EBITDA was $48.1 million, an increase of 1.7%, or $0.8 million, compared to the prior year period.For the six months ended March 31, 2020, net sales were $487.5 million, an increase of 1.3%, or $6.4 million, compared to the prior year period. Segment profit was $56.2 million, a decrease of 1.4%, or $0.8 million, compared to the prior year period. Segment Adjusted EBITDA was $91.9 million, a decrease of 3.6%, or $3.4 million, compared to the prior year period.BellRing BrandsReady-to-drink (“RTD”) protein shakes, other RTD beverages, powders and nutrition bars.For the second quarter, net sales were $257.5 million, an increase of 18.9%, or $41.0 million, compared to the prior year period. Net sales and volume growth were primarily driven by the Premier Protein brand as net sales increased 25.8%, with volumes increasing 27.1%. Premier Protein benefitted primarily from increased purchases resulting from consumer pantry loading in reaction to the COVID-19 pandemic, along with distribution gains for RTD protein shakes and incremental promotional activity .Segment profit was $35.1 million, a decrease of 20.2%, or $8.9 million, compared to the prior year period, with the decrease driven by $9.9 million of higher marketing and consumer advertising expenses and $2.5 million of incremental public company costs. Segment profit for the second quarter of 2020 and 2019 included transaction costs of $0.3 million and $0.1 million, respectively, to effect BellRing’s separation from Post and to support BellRing’s transition into a separate stand-alone publicly-traded entity, which were treated as adjustments for non-GAAP measures. Segment Adjusted EBITDA was $43.4 million, a decrease of 13.9%, or $7.0 million, compared to the prior year period.For the six months ended March 31, 2020, net sales were $501.5 million, an increase of 24.7%, or $99.2 million, compared to the prior year period. Segment profit was $84.4 million, an increase of 6.6%, or $5.2 million, compared to the prior year period and included $4.3 million of incremental public company costs. Segment profit for the six months ended March 31, 2020 and March 31, 2019 included transaction costs of $1.8 million and $0.1 million, respectively, to effect BellRing’s separation from Post and to support BellRing’s transition into a separate stand-alone publicly-traded entity, which were treated as adjustments for non-GAAP measures. Segment Adjusted EBITDA was $102.0 million, an increase of 10.9%, or $10.0 million, compared to the prior year period.As of March 31, 2020, BellRing had $811.3 million in total principal value of debt and $76.7 million in cash and cash equivalents.For further information, please refer to the BellRing second quarter 2020 earnings release and conference call (the details of which are included later in this release).Interest, Loss on Extinguishment of Debt, Expense on Swaps and Income TaxInterest expense, net was $94.0 million in the second quarter of 2020, compared to $85.5 million in the second quarter of 2019. For the six months ended March 31, 2020, interest expense, net was $196.9 million, compared to $144.9 million for the six months ended March 31, 2019. Interest expense, net in the second quarter of 2020 included $14.3 million attributable to BellRing in connection with the creation of BellRing’s capital structure in the first quarter of 2020. Interest expense, net in the six months ended March 31, 2020 included (i) $25.9 million attributable to BellRing and (ii) a loss of $7.2 million resulting from the reclassification of losses previously recorded in accumulated other comprehensive loss to interest expense. Interest expense, net in the six months ended March 31, 2019 included a gain of $30.5 million resulting from the reclassification of gains previously recorded in accumulated other comprehensive loss to interest expense. The remaining decrease for both periods was driven by repayment of Post’s term loan in the first quarter of fiscal year 2020 which resulted in an interest expense reduction of $15.3 million and $26.6 million in the three and six months ended March 31, 2020, respectively.Loss on extinguishment of debt, net of $60.0 million was recorded in the second quarter of 2020 in connection with (i) Post’s repayment of $1,000.0 million in total principal value of its 5.50% senior notes due in March 2025 and $122.2 million in total principal value of its 8.00% senior notes due in July 2025 and (ii) the amendment and restatement of Post’s credit agreement in March 2020. Loss on extinguishment of debt, net of $72.9 million was recorded in the six months ended March 31, 2020 in connection with (i) Post’s repayment of its 5.50% senior notes due in March 2025 and 8.00% senior notes due in July 2025, (ii) Post’s repayment of the entire principal balance of its term loan in the first quarter of fiscal year 2020, (iii) the assignment of debt to BellRing Brands, LLC related to the creation of BellRing’s capital structure in the first quarter of 2020 and (iv) the amendment and restatement of Post’s credit agreement in March 2020. Loss on extinguishment of debt, net of $6.1 million was recorded in the six months ended March 31, 2019 in connection with (i) Post’s repayment of $863.0 million in total principal value of its term loan, (ii) the assignment of debt to 8th Avenue related to its separate capitalization and (iii) Post’s open market purchases of $60.0 million in total principal value of certain senior notes.Expense on swaps, net relates to non-cash mark-to-market adjustments and cash settlements on interest rate swaps and was $224.6 million in the second quarter of 2020, compared to $63.0 million in the second quarter of 2019. For the six months ended March 31, 2020, expense on swaps, net was $163.2 million, compared to $114.7 million in the six months ended March 31, 2019.Income tax benefit was $47.1 million in the second quarter of 2020, an effective income tax rate of 21.2%, compared to $11.6 million in the second quarter of 2019, an effective income tax rate of negative 28.0%. For the six months ended March 31, 2020, income tax benefit was $16.7 million, an effective income tax rate of 21.7%, compared to an expense of $32.2 million in the six months ended March 31, 2019, an effective income tax rate of 14.5%. The effective income tax rate in both of the fiscal year 2019 periods differed significantly from the statutory rate as a result of discrete items occurring in the second quarter of 2019, primarily relating to excess tax benefits for share-based payments.Share RepurchasesDuring the second quarter of 2020, Post repurchased 2.0 million shares for $206.0 million at an average price of $101.75 per share. During the six months ended March 31, 2020, Post repurchased 4.2 million shares for $429.1 million at an average price of $102.38 per share. At the end of the second quarter of 2020, Post had $161.9 million remaining under its share repurchase authorization.COVID-19 CommentaryPost is closely monitoring the impact of the COVID-19 pandemic and is taking actions to ensure its ability to safeguard the health of its employees, maintain the continuity of its supply chain to serve customers and manage its financial performance and liquidity. On March 23, 2020, Post borrowed $500.0 million under its $750.0 million revolving credit facility. As of April 30, 2020, Post had approximately $1.35 billion in cash and cash equivalents on hand. On May 5, 2020, Post repaid $150.0 million of the outstanding principal value on its revolving credit facility.Post products sold through food, drug, mass, club and online have generally experienced an uplift in sales driven by consumer pantry loading and increased at-home consumption in reaction to the COVID-19 pandemic. Post expects some of the benefit of consumer trial (as consumers try products they may not have been previously purchasing) to convert into an intermediate term improvement in category trends across its retail businesses as household penetration accelerates across many brands. However, there is no guarantee that such increase in sales and/or intermediate term improvement in category trends will continue. Post’s foodservice business has been negatively impacted by lower demand resulting from the impact of the COVID-19 pandemic on various channels, including full service restaurants, quick service restaurants, education and travel and lodging.OutlookAs a result of uncertainty around the duration, scope and ultimate financial impact of the COVID-19 pandemic, Post management is withdrawing its fiscal year 2020 Adjusted EBITDA and capital expenditures outlook that was previously provided on February 6, 2020.BellRing OutlookBellRing management continues to expect its fiscal year 2020 net sales to range between $1.00-$1.05 billion, Adjusted EBITDA to range between $192-$202 million and capital expenditures to be approximately $4 million.BellRing 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 noncontrolling interest adjustment, separation costs and other charges reflected in BellRing’s reconciliation of historical numbers, the amounts of which, based on historical experience, could be significant. For additional information regarding BellRing’s non-GAAP measures, see the related explanations presented under “Use of Non-GAAP Measures” in BellRing’s second quarter 2020 earnings release. BellRing, as a separate publicly traded company, releases guidance regarding its future performance. These statements are prepared by BellRing’s management, and Post does not accept any responsibility for any such statements.8th Avenue Standalone Financial InformationPost owns a 60.5% common equity interest in 8th Avenue, which is an unconsolidated affiliate that sells private label nut butter, dried fruit and nuts, granola and pasta.For the second quarter, net sales were $233.1 million, an increase of 9.1%, or $19.4 million, compared to the prior year period. Net loss was $7.2 million, a decrease of 71.4%, or $3.0 million, compared to the prior year period. Adjusted EBITDA was $22.3 million, a decrease of 9.3%, or $2.3 million, compared to the prior year period.For the six months ended March 31, 2020, net sales were $451.5 million, an increase of 5.5%, or $23.7 million, compared to the prior year period. Net loss was $8.1 million, an improvement of 6.9%, or $0.6 million, compared to the prior year period. Adjusted EBITDA was $46.0 million, a decrease of 3.2%, or $1.5 million, compared to the prior year period.As of March 31, 2020, 8th Avenue is capitalized with $63.9 million of unrestricted cash and cash equivalents, $618.4 million of senior secured debt, $50.0 million under its revolving credit facility, $60.1 million related to a sale leaseback transaction, $250.0 million in principal amount of preferred equity and $44.9 million of accumulated, but unpaid, preferred dividends. Summarized financial information for 8th Avenue is disclosed later in this release.Post’s Use of Non-GAAP MeasuresPost 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 for Post and 8th Avenue 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. Additionally, Post is required to comply with certain covenants and limitations that are based on variations of EBITDA in its financing documents. Management believes the use of these non-GAAP measures provides increased transparency and assists investors in understanding the underlying operating performance of Post 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 Post’s non-GAAP measures, see the related explanations provided under “Explanation and Reconciliation of Non-GAAP Measures” later in this release.Post Conference Call to Discuss Earnings Results and OutlookPost will host a conference call on Friday, May 8, 2020 at 9:00 a.m. EDT to discuss financial results for the second quarter of fiscal year 2020 and fiscal year 2020 outlook and to respond to questions. Robert V. Vitale, President and Chief Executive Officer, and Jeff A. Zadoks, Executive Vice President and Chief Financial Officer, will participate in the call.Interested parties may join the conference call by dialing (877) 540-0891 in the United States and (678) 408-4007 from outside of the United States. The conference identification number is 7265844. 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, May 22, 2020 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 7265844. A webcast replay also will be available for a limited period on Post’s website in the Investor Relations section.BellRing Conference Call to Discuss Earnings Results and OutlookBellRing will host a conference call on Friday, May 8, 2020 at 10:30 a.m. EDT to discuss financial results for the second quarter of fiscal year 2020 and fiscal year 2020 outlook and to respond to questions. Darcy H. Davenport, President and Chief Executive Officer, and Paul A. Rode, Chief Financial Officer, will participate in the call.Interested parties may join the conference call by dialing (833) 954-1568 in the United States and (409) 216-6583 from outside of the United States. The conference identification number is 7392288. Interested parties are invited to listen to the webcast of the conference call, which can be accessed by visiting the Investor Relations section of BellRing’s website at www.bellring.com.A replay of the conference call will be available through Friday, May 22, 2020 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 7392288. A webcast replay also will be available for a limited period on BellRing’s website in the Investor Relations section.Prospective Financial InformationProspective 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 Post’s and BellRing’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 StatementsCertain matters discussed in this release and on Post’s conference call are forward-looking statements, including statements regarding the effect of the COVID-19 pandemic on Post’s business and Post’s continuing response to the COVID-19 pandemic, and BellRing’s net sales, Adjusted EBITDA and capital expenditures outlook for fiscal year 2020. 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” or “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:the impact of the COVID-19 pandemic, including negative impacts on the global economy and capital markets, Post’s ability to manufacture and deliver its products, operating costs, demand for its foodservice products and its operations generally;disruptions or inefficiencies in the supply chain, including as a result of Post’s reliance on third party suppliers or manufacturers for the manufacturing of many of its products, pandemics, changes in weather conditions, natural disasters, agricultural diseases and pests and other events beyond Post’s control;significant volatility in the costs or availability of certain commodities (including raw materials and packaging used to manufacture our products), higher freight costs or higher energy costs;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;loss of key employees, employee absenteeism, labor strikes, work stoppages or unionization efforts;
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 and customer preferences and trends and introduce new products;Post’s ability to identify, complete and integrate acquisitions and manage its growth;Post’s ability to promptly and effectively realize the strategic and financial benefits expected as a result of the IPO of a minority interest in its BellRing Brands business, which consists of its historical active nutrition business, and certain other transactions completed in connection with the IPO;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 or at all;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;the ultimate impact litigation or other regulatory matters may have on Post;Post’s ability to successfully collaborate with third parties that have invested with Post in 8th Avenue;costs associated with Bob Evans’s obligations in connection with the sale and separation of its restaurants 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 its customers’, and 8th Avenue’s and its customers’, private brand products to compete with nationally branded products;risks associated with Post’s international business;the impact of the United Kingdom’s exit from the European Union (commonly known as “Brexit”) on Post and its operations;costs, business disruptions and reputational damage associated with information technology failures, cybersecurity incidents or information security breaches;changes in estimates in critical accounting judgments;Post’s ability to protect its intellectual property and other assets;losses or increased funding and expenses related to Post’s qualified pension or other postretirement plans;significant differences in Post’s, 8th Avenue’s and BellRing’s actual operating results from any Post guidance regarding its and 8th Avenue’s future performance and BellRing’s guidance regarding its future performance;Post’s ability to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002; andother risks and uncertainties described in Post’s and BellRing’s filings with the Securities and Exchange Commission.These forward-looking statements represent Post’s judgment as of the date of this release except with respect to BellRing’s guidance regarding its future performance, which represents BellRing’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 convenient 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®, Better’n Eggs® and Crystal Farms® brands. Post’s publicly-traded subsidiary BellRing Brands, Inc. is a holding company operating in the global convenient nutrition category through its primary brands of Premier Protein®, Dymatize® and PowerBar®. Post participates in the private brand food category through its investment with third parties in 8th Avenue Food & Provisions, Inc., a leading, private brand centric, consumer products holding company. For more information, visit www.postholdings.com.Contact:
Investor Relations
Jennifer Meyer
jennifer.meyer@postholdings.com
(314) 644-7665Media Relations
Lisa Hanly
lisa.hanly@postholdings.com
(314) 665-3180
SUPPLEMENTAL REFRIGERATED RETAIL 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 Retail segment.EXPLANATION AND RECONCILIATION OF NON-GAAP MEASURESPost uses certain non-GAAP measures in this release to supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures include total segment profit, Adjusted net earnings, Adjusted diluted earnings per common share, Adjusted EBITDA and segment Adjusted EBITDA. The reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measure is provided in the tables following this section. Non-GAAP measures are not prepared in accordance with GAAP, as they exclude certain items as described below. These non-GAAP measures may not be comparable to similarly titled measures of other companies.Total segment profit
Total segment profit represents the aggregation of the segment profit for each of Post’s reportable segments, which is each of Post’s reportable segment’s earnings before income taxes and equity method earnings/loss before impairment of property, goodwill and other intangible assets, facility closure related costs, restructuring expenses, gain/loss on assets and liabilities held for sale, gain/loss on sale of businesses and facilities, interest expense and other unallocated corporate income and expenses. Post believes total segment profit is useful to investors in evaluating Post’s operating performance because it facilitates period-to-period comparison of results of segment operations.Adjusted net earnings and Adjusted diluted earnings per common share
Post believes Adjusted net earnings and Adjusted diluted earnings per common share are useful to investors in evaluating Post’s operating performance because they exclude items that affect the comparability of Post’s financial results and could potentially distort an understanding of the trends in business performance.
EXPLANATION AND RECONCILIATION OF 8TH AVENUE’S NON-GAAP MEASUREPost believes that Adjusted EBITDA is useful to investors in evaluating 8th Avenue’s operating performance and liquidity because (i) Post believes 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 8th Avenue’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. Management has historically used 8th Avenue’s Adjusted EBITDA to provide forward-looking guidance and to forecast future results.8th Avenue’s Adjusted EBITDA reflects adjustments for interest expense, net, income tax expense/benefit and depreciation and amortization, and the following adjustments:
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