Post Holdings Reports Results for the Second Quarter of Fiscal Year 2014
Highlights:
- Net sales of
$438.0 million , including$198.5 million from acquisitions - Closed three acquisitions in the second quarter:
Dakota Growers Pasta Company ,Golden Boy Foods andDymatize Enterprises - RTE cereal U.S. dollar market share up 0.9 share points to 11.3% for the 13 weeks ended
March 29, 2014 - Adjusted EBITDA of
$63.5 million , including$23.7 million from acquisitions
Post operates four reportable segments:
Second Quarter Consolidated Operating Results
Second quarter net sales were
Gross profit increased
Selling, general and administrative (SG&A) expenses for the second quarter increased
Starting in the second quarter of fiscal year 2014, Post now reports foreign currency gains and losses separately from SG&A. Accordingly, SG&A for prior periods has been adjusted to align with fiscal 2014 presentation. Losses on foreign currency, which in 2014 were primarily related to hedge of the Golden Boy purchase price, were
Adjusted EBITDA was
For the second quarter, the net loss attributable to common stockholders was ($22.6) million, or (
Six Month Consolidated Operating Results
Net sales for the six months ended
Gross profit increased
SG&A expenses increased
Losses on foreign currency were
Adjusted EBITDA was
For the six months ended
Net sales were
Softness in the ready-to-eat (RTE) cereal category during the quarter negatively impacted
According to
In fiscal year 2014, Post changed its methodology for allocating certain corporate costs to segment profit. Accordingly, segment profit for fiscal year 2013 has been adjusted to align with fiscal year 2014 presentation. This change only impacted the
Net sales for the segment were
Net sales on a comparable basis is the comparison of the net sales for the
For the six months ended
Active Nutrition
Active Nutrition is comprised of
Net sales for the segment were
Net sales on a comparable basis is the comparison of the net sales for the Active Nutrition segment on a three month basis for the period ended
Net sales growth for the segment was driven by new Premier Nutrition products, Premier Nutrition channel expansion into food/drug/mass channels and strong consumer demand for Dymatize products at key customers. However, consumer traffic at key Dymatize retailers was depressed by the severe winter weather and negatively impacted Dymatize results in the second quarter of 2014 compared to the year ago pre-acquisition quarter. Additionally, supply chain issues caused missed shipments. Management has identified these issues and is addressing improvements to demand planning and manufacturing processes.
Active Nutrition segment profit and segment Adjusted EBITDA for second quarter 2014 were
For the six months ended
The
Net sales for the segment were
Net sales on a comparable basis is the comparison of the
The
Interest and Income Tax
Net interest expense was
Income tax benefit was
The elevated effective income tax rate for both periods is a function of Post’s estimated range of earnings (loss) before income taxes for fiscal 2014 excluding the impact of pending acquisitions (as discussed below). Small variations in earnings (loss) before income taxes and permanent differences are anticipated to have a magnified impact on the effective income tax rate for fiscal 2014. Post management expects its effective tax rate will stabilize and will be approximately 32%-35% in fiscal year 2015.
Update on Acquisitions and Financing
In a release dated
Concurrent with the signing of the agreement, Post obtained financing commitments under which various lenders have committed to provide up to
On
Outlook
Including results of all completed acquisitions to date (which excludes the pending acquisitions of the PowerBar and
On
Additionally, Post management has provided the below information to assist the investment community:
- Pro Forma Adjusted EBITDA for the last twelve months ended
March 31, 2014 , calculated as if all acquisitions completed to date were owned for the entire period, would have been$321.2 million . - Post management currently expects Pro Forma Adjusted EBITDA for the twelve-month period ended
September 30, 2014 , calculated as if all acquisitions completed to date were owned for the entire period, will be between$320 million and $340 million . - Michael Foods Adjusted EBITDA for the last twelve months ended
March 29, 2014 was$238.8 million , which does not give effect toMichael Foods’ acquisition ofPrimera Foods Corporation for periods prior to the date that acquisition was completed (June 27 , 2013). - Post management currently estimates that Adjusted EBITDA for Michael Foods for calendar 2014 will be between
$255 million and $270 million , prior to giving effect to synergies currently expected to be recognized in connection with the combination of Post andMichael Foods . - Post management currently expects to recognize approximately
$10 million in annual run-rate pre-tax synergies in fiscal year 2015 from improved commodity purchasing as well as indirect purchasing and professional services, as a result of benefits of scale from the acquisition ofMichael Foods . - The second phase of Post’s previously announced
Modesto, California facility closure is expected to be completed bySeptember 2014 , with the total net pretax annual cash savings of approximately$14 million expected to be fully phased in by fiscal year 2015. - Post management currently expects combined ongoing annual capital spending for Post and
Michael Foods will be between$80 million and $90 million . - Post management currently estimates that its effective tax rate will stabilize and will be approximately 32%-35% in fiscal year 2015.
Use of Non-GAAP Measures
Management has determined that the Adjusted EBITDA, segment Adjusted EBITDA, Pro Forma Adjusted EBITDA, Adjusted net earnings (loss) available to common stockholders, Adjusted diluted earnings (loss) per common share and total segment profit metrics presented herein are key metrics that will help investors understand the ultimate income and near-term cash flows generated by the Post business.
Adjusted EBITDA and segment Adjusted EBITDA are non-GAAP measures which represent net earnings excluding income taxes, net interest expense, net other nonoperating income/expense, depreciation and amortization, non-cash stock based compensation, restructuring and plant closure costs, acquisition related transaction costs, integration costs, inventory valuation adjustments on acquired businesses, costs to effect Post’s separation from
Pro Forma Adjusted EBITDA is a non-GAAP measure that represents a further supplemental measure of Post’s performance and ability to service debt. Post prepares Pro Forma Adjusted EBITDA by further adjusting Adjusted EBITDA to give effect to Post’s completed acquisitions, as well as of the pending
Adjusted net earnings (loss) available to common stockholders is a non-GAAP measure which represents net earnings available to common stockholders excluding costs to effect Post’s separation from Ralcorp and to establish stand-alone systems and processes, restructuring and plant closure costs, acquisition related transaction costs, integration costs, inventory valuation adjustments on acquired businesses, losses on hedge of purchase price of foreign currency denominated acquisitions, legal settlement and intangible asset impairments, if any. The Company believes Adjusted net earnings (loss) available to common stockholders and Adjusted diluted earnings (loss) per common share are useful to investors in evaluating the Company’s operating performance because they exclude items that could affect the comparability of Post’s financial results and could potentially distort the trends in business performance.
Total segment profit is a non-GAAP measure which represents the aggregation of the segment profit for each of Post’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.
The calculations of Adjusted EBITDA, segment Adjusted EBITDA, Pro Forma Adjusted EBITDA, Adjusted net earnings (loss) available to common stockholders, Adjusted diluted earnings (loss) per common share and total segment profit are not specified by
Use of Forward-Looking Non-GAAP Measures
Post has presented in this release certain forward-looking statements about future financial performance of the Post business and
Conference Call to Discuss Earnings Results and Outlook
The Company will host a conference call on
Interested parties may join the conference call by dialing (877) 540-0891 in
A replay of the conference call will be available through
Prospective Financial Information
Prospective financial information is necessarily speculative in nature, and it can be expected that some or all of the assumptions upon which the prospective financial information described under “Outlook” 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 management believes is realizable as of the date of this press release. It should also 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 press release and on the conference call are forward-looking statements, including the expected timing of the completion of the acquisitions of the PowerBar and
About
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|||||||||||||||
(in millions, except per share data) |
|||||||||||||||
Quarter Ended March 31, |
Six Months Ended March 31, |
||||||||||||||
2014 |
2013 |
2014 |
2013 |
||||||||||||
Net Sales |
$ |
438.0 |
$ |
248.2 |
$ |
735.0 |
$ |
485.1 |
|||||||
Cost of goods sold |
308.6 |
145.7 |
491.1 |
276.9 |
|||||||||||
Gross Profit |
129.4 |
102.5 |
243.9 |
208.2 |
|||||||||||
Selling, general and administrative expenses |
104.8 |
69.9 |
186.2 |
142.1 |
|||||||||||
Amortization of intangible assets |
12.7 |
3.2 |
18.4 |
6.4 |
|||||||||||
Loss on foreign currency |
11.9 |
0.2 |
13.5 |
0.1 |
|||||||||||
Restructuring expense |
0.2 |
— |
0.7 |
— |
|||||||||||
Other operating expenses, net |
0.1 |
0.3 |
0.2 |
0.4 |
|||||||||||
Operating (Loss) Profit |
(0.3) |
28.9 |
24.9 |
59.2 |
|||||||||||
Interest expense |
37.3 |
21.6 |
66.3 |
40.8 |
|||||||||||
(Loss) Earnings before Income Taxes |
(37.6) |
7.3 |
(41.4) |
18.4 |
|||||||||||
Income tax (benefit) provision |
(19.3) |
2.2 |
(20.7) |
5.7 |
|||||||||||
Net (Loss) Earnings |
(18.3) |
5.1 |
(20.7) |
12.7 |
|||||||||||
Preferred stock dividends |
(4.3) |
(0.8) |
(6.9) |
(0.8) |
|||||||||||
Net (Loss) Earnings Available to Common Stockholders |
$ |
(22.6) |
$ |
4.3 |
$ |
(27.6) |
$ |
11.9 |
|||||||
(Loss) Earnings per Common Share: |
|||||||||||||||
Basic |
$ |
(0.67) |
$ |
0.13 |
$ |
(0.83) |
$ |
0.36 |
|||||||
Diluted |
$ |
(0.67) |
$ |
0.13 |
$ |
(0.83) |
$ |
0.36 |
|||||||
Weighted-Average Common Shares Outstanding: |
|||||||||||||||
Basic |
33.6 |
32.7 |
33.1 |
32.6 |
|||||||||||
Diluted |
33.6 |
32.9 |
33.1 |
32.8 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
(in millions) |
|||||||
March 31, 2014 |
September 30, 2013 |
||||||
ASSETS |
|||||||
Current Assets |
|||||||
Cash and cash equivalents |
$ |
825.9 |
$ |
402.0 |
|||
Restricted cash |
1.8 |
38.1 |
|||||
Receivables, net |
185.5 |
83.2 |
|||||
Inventories |
224.5 |
121.9 |
|||||
Deferred income taxes |
24.7 |
11.9 |
|||||
Prepaid expenses and other current assets |
53.2 |
11.0 |
|||||
Total Current Assets |
1,315.6 |
668.1 |
|||||
Property, net |
491.1 |
388.5 |
|||||
Goodwill |
1,910.8 |
1,489.7 |
|||||
Other intangible assets, net |
1,420.7 |
898.4 |
|||||
Deferred income taxes |
2.1 |
2.4 |
|||||
Other assets |
43.8 |
26.7 |
|||||
Total Assets |
$ |
5,184.1 |
$ |
3,473.8 |
|||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||
Current Liabilities |
|||||||
Accounts payable |
$ |
112.6 |
$ |
77.1 |
|||
Other current liabilities |
117.1 |
68.9 |
|||||
Total Current Liabilities |
229.7 |
146.0 |
|||||
Long-term debt |
2,302.1 |
1,408.6 |
|||||
Deferred income taxes |
440.2 |
304.3 |
|||||
Other liabilities |
120.7 |
116.3 |
|||||
Total Liabilities |
3,092.7 |
1,975.2 |
|||||
Stockholders’ Equity |
|||||||
Preferred stock |
0.1 |
— |
|||||
Common stock |
0.4 |
0.3 |
|||||
Additional paid-in capital |
2,138.2 |
1,517.2 |
|||||
Retained earnings |
21.0 |
47.6 |
|||||
Accumulated other comprehensive loss |
(14.9) |
(13.1) |
|||||
Treasury stock, at cost |
(53.4) |
(53.4) |
|||||
Total Stockholders’ Equity |
2,091.4 |
1,498.6 |
|||||
Total Liabilities and Stockholders’ Equity |
$ |
5,184.1 |
$ |
3,473.8 |
SELECTED CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited) |
|||||||
(in millions) |
|||||||
Six Months Ended March 31, |
|||||||
2014 |
2013 |
||||||
Cash provided by (used in): |
|||||||
Operating activities |
$ |
18.5 |
$ |
18.6 |
|||
Investing activities |
(1,050.6) |
(20.2) |
|||||
Financing activities |
1,463.2 |
309.1 |
|||||
Effect of exchange rates on cash and cash equivalents |
(7.2) |
(0.3) |
|||||
Net increase in cash and cash equivalents |
$ |
423.9 |
$ |
307.2 |
SEGMENT INFORMATION (Unaudited) |
|||||||||||||||||
(in millions) |
|||||||||||||||||
Quarter Ended March 31, |
Six Months Ended March 31, |
||||||||||||||||
2014 |
2013 |
2014 |
2013 |
||||||||||||||
Net Sales |
|||||||||||||||||
Post Foods |
$ |
239.5 |
$ |
245.4 |
$ |
476.4 |
$ |
482.3 |
|||||||||
Attune Foods |
22.2 |
2.8 |
45.4 |
2.8 |
|||||||||||||
Active Nutrition |
70.6 |
— |
107.8 |
— |
|||||||||||||
Private Brands |
105.7 |
— |
105.7 |
— |
|||||||||||||
Eliminations |
— |
— |
(0.3) |
— |
|||||||||||||
Total |
$ |
438.0 |
$ |
248.2 |
$ |
735.0 |
$ |
485.1 |
|||||||||
Segment Profit |
|||||||||||||||||
Post Foods |
$ |
41.7 |
$ |
45.3 |
$ |
88.2 |
$ |
92.3 |
|||||||||
Attune Foods |
1.9 |
(0.6) |
4.5 |
(0.6) |
|||||||||||||
Active Nutrition |
0.2 |
— |
4.4 |
— |
|||||||||||||
Private Brands |
0.8 |
— |
0.8 |
— |
|||||||||||||
Total segment profit |
44.6 |
44.7 |
97.9 |
91.7 |
|||||||||||||
General corporate expenses and other |
30.9 |
15.8 |
54.5 |
32.5 |
|||||||||||||
Accelerated depreciation on plant closure |
2.0 |
— |
4.7 |
— |
|||||||||||||
Losses on hedge of purchase price of foreign currency denominated |
11.8 |
— |
13.1 |
— |
|||||||||||||
Restructuring expenses |
0.2 |
— |
0.7 |
— |
|||||||||||||
Interest expense |
37.3 |
21.6 |
66.3 |
40.8 |
|||||||||||||
(Loss) Earnings before Income Taxes |
$ |
(37.6) |
$ |
7.3 |
$ |
(41.4) |
$ |
18.4 |
RECONCILIATION OF NET EARNINGS (LOSS) TO ADJUSTED EBITDA (Unaudited) |
|||||||||||||||
(in millions) |
|||||||||||||||
Quarter Ended March 31, |
Six Months Ended March 31, |
||||||||||||||
2014 |
2013 |
2014 |
2013 |
||||||||||||
Net (Loss) Earnings |
$ |
(18.3) |
$ |
5.1 |
$ |
(20.7) |
$ |
12.7 |
|||||||
Income tax (benefit) provision |
(19.3) |
2.2 |
(20.7) |
5.7 |
|||||||||||
Interest expense, net |
37.3 |
21.6 |
66.3 |
40.8 |
|||||||||||
Depreciation and amortization, including accelerated depreciation |
30.1 |
16.2 |
51.2 |
32.4 |
|||||||||||
Restructuring and plant closure costs |
1.3 |
— |
3.5 |
— |
|||||||||||
Non-cash stock-based compensation |
4.0 |
2.9 |
7.4 |
5.4 |
|||||||||||
Acquisition related transaction costs |
10.5 |
— |
13.9 |
— |
|||||||||||
Integration costs |
1.3 |
— |
1.3 |
— |
|||||||||||
Losses on hedge of purchase price of foreign currency denominated acquisitions |
11.8 |
— |
13.1 |
— |
|||||||||||
Legal settlement |
(2.0) |
— |
(2.0) |
— |
|||||||||||
Mark to market adjustments on economic hedges |
(0.6) |
0.1 |
(1.5) |
0.8 |
|||||||||||
Inventory valuation adjustments on acquired businesses |
7.3 |
0.5 |
7.3 |
0.5 |
|||||||||||
Spin-Off costs/post Spin-Off non-recurring costs |
0.1 |
2.4 |
0.3 |
5.2 |
|||||||||||
Adjusted EBITDA |
$ |
63.5 |
$ |
51.0 |
$ |
119.4 |
$ |
103.5 |
|||||||
Adjusted EBITDA as a percentage of Net Sales |
14.5 |
% |
20.5 |
% |
16.2 |
% |
21.3 |
% |
RECONCILIATION OF SEGMENT PROFIT TO ADJUSTED EBITDA (Unaudited) |
|||||||||||||||||||||||
QUARTER ENDED MARCH 31, 2014 |
|||||||||||||||||||||||
(in millions) |
|||||||||||||||||||||||
Post Foods |
Attune Foods |
Active Nutrition |
Private Brands |
Corporate/ Other |
Total |
||||||||||||||||||
Segment Profit |
$ |
41.7 |
$ |
1.9 |
$ |
0.2 |
$ |
0.8 |
$ |
— |
$ |
44.6 |
|||||||||||
General corporate expenses and other |
— |
— |
— |
— |
(30.9) |
(30.9) |
|||||||||||||||||
Losses on hedge of purchase price of foreign currency denominated acquisitions |
— |
— |
— |
— |
(11.8) |
(11.8) |
|||||||||||||||||
Accelerated depreciation on plant closure |
— |
— |
— |
— |
(2.0) |
(2.0) |
|||||||||||||||||
Restructuring expense |
— |
— |
— |
— |
(0.2) |
(0.2) |
|||||||||||||||||
Operating Profit |
41.7 |
1.9 |
0.2 |
0.8 |
(44.9) |
(0.3) |
|||||||||||||||||
Depreciation and amortization, including accelerated depreciation |
12.7 |
1.7 |
4.3 |
7.3 |
4.1 |
30.1 |
|||||||||||||||||
Restructuring and plant closure costs |
— |
— |
— |
— |
1.3 |
1.3 |
|||||||||||||||||
Non-cash stock-based compensation |
— |
— |
— |
— |
4.0 |
4.0 |
|||||||||||||||||
Acquisition related transaction costs |
— |
— |
0.2 |
— |
10.3 |
10.5 |
|||||||||||||||||
Integration costs |
— |
— |
— |
— |
1.3 |
1.3 |
|||||||||||||||||
Losses on hedge of purchase price of foreign currency denominated acquisitions |
— |
— |
— |
— |
11.8 |
11.8 |
|||||||||||||||||
Legal settlement |
— |
— |
— |
— |
(2.0) |
(2.0) |
|||||||||||||||||
Mark to market adjustments on economic hedges |
— |
— |
— |
— |
(0.6) |
(0.6) |
|||||||||||||||||
Spin-Off costs/post Spin-Off non-recurring costs |
— |
— |
— |
— |
0.1 |
0.1 |
|||||||||||||||||
Inventory valuation adjustments on acquired businesses |
— |
— |
2.0 |
5.3 |
— |
7.3 |
|||||||||||||||||
Adjusted EBITDA |
$ |
54.4 |
$ |
3.6 |
$ |
6.7 |
$ |
13.4 |
$ |
(14.6) |
$ |
63.5 |
|||||||||||
Adjusted EBITDA as a percentage of Net Sales |
22.7 |
% |
16.2 |
% |
9.5 |
% |
12.7 |
% |
— |
14.5 |
% |
RECONCILIATION OF SEGMENT PROFIT TO ADJUSTED EBITDA (Unaudited) |
|||||||||||||||||||||||
QUARTER ENDED MARCH 31, 2013 |
|||||||||||||||||||||||
(in millions) |
|||||||||||||||||||||||
Post Foods |
Attune Foods |
Active Nutrition |
Private Brands |
Corporate/ Other |
Total |
||||||||||||||||||
Segment Profit |
$ |
45.3 |
$ |
(0.6) |
$ |
— |
$ |
— |
$ |
— |
$ |
44.7 |
|||||||||||
General corporate expenses and other |
— |
— |
— |
— |
(15.8) |
(15.8) |
|||||||||||||||||
Operating Profit |
45.3 |
(0.6) |
— |
— |
(15.8) |
28.9 |
|||||||||||||||||
Depreciation and amortization |
14.9 |
0.1 |
— |
— |
1.2 |
16.2 |
|||||||||||||||||
Non-cash stock-based compensation |
— |
— |
— |
— |
2.9 |
2.9 |
|||||||||||||||||
Mark to market adjustments on economic hedges |
— |
— |
— |
— |
0.1 |
0.1 |
|||||||||||||||||
Spin-Off costs/post Spin-Off non-recurring costs |
— |
— |
— |
— |
2.4 |
2.4 |
|||||||||||||||||
Inventory valuation adjustment on acquired business |
— |
0.5 |
— |
— |
— |
0.5 |
|||||||||||||||||
Adjusted EBITDA |
$ |
60.2 |
$ |
— |
$ |
— |
$ |
— |
$ |
(9.2) |
$ |
51.0 |
|||||||||||
Adjusted EBITDA as a percentage of Net Sales |
24.5 |
% |
— |
% |
— |
— |
— |
20.5 |
% |
RECONCILIATION OF SEGMENT PROFIT TO ADJUSTED EBITDA (Unaudited) |
|||||||||||||||||||||||
SIX MONTHS ENDED MARCH 31, 2014 |
|||||||||||||||||||||||
(in millions) |
|||||||||||||||||||||||
Post |
Attune |
Active |
Private |
Corporate/ |
Total |
||||||||||||||||||
Segment Profit |
$ |
88.2 |
$ |
4.5 |
$ |
4.4 |
$ |
0.8 |
$ |
— |
$ |
97.9 |
|||||||||||
General corporate expenses and other |
— |
— |
— |
— |
(54.5) |
(54.5) |
|||||||||||||||||
Losses on hedge of purchase price of foreign currency denominated acquisitions |
— |
— |
— |
— |
(13.1) |
(13.1) |
|||||||||||||||||
Accelerated depreciation on plant closure |
— |
— |
— |
— |
(4.7) |
(4.7) |
|||||||||||||||||
Restructuring expense |
— |
— |
— |
— |
(0.7) |
(0.7) |
|||||||||||||||||
Operating Profit |
88.2 |
4.5 |
4.4 |
0.8 |
(73.0) |
24.9 |
|||||||||||||||||
Depreciation and amortization, including accelerated depreciation |
25.9 |
3.5 |
5.9 |
7.3 |
8.6 |
51.2 |
|||||||||||||||||
Restructuring and plant closure costs |
— |
— |
— |
— |
3.5 |
3.5 |
|||||||||||||||||
Non-cash stock-based compensation |
— |
— |
— |
— |
7.4 |
7.4 |
|||||||||||||||||
Acquisition related transaction costs |
— |
— |
0.2 |
— |
13.7 |
13.9 |
|||||||||||||||||
Integration costs |
— |
— |
— |
— |
1.3 |
1.3 |
|||||||||||||||||
Losses on hedge of purchase price of foreign currency denominated acquisitions |
— |
— |
— |
— |
13.1 |
13.1 |
|||||||||||||||||
Legal settlement |
(2.0) |
(2.0) |
|||||||||||||||||||||
Mark to market adjustments on economic hedges |
— |
— |
— |
— |
(1.5) |
(1.5) |
|||||||||||||||||
Spin-Off costs/post Spin-Off non-recurring costs |
— |
— |
— |
— |
0.3 |
0.3 |
|||||||||||||||||
Inventory valuation adjustments on acquired businesses |
— |
— |
2.0 |
5.3 |
— |
7.3 |
|||||||||||||||||
Adjusted EBITDA |
$ |
114.1 |
$ |
8.0 |
$ |
12.5 |
$ |
13.4 |
$ |
(28.6) |
$ |
119.4 |
|||||||||||
Adjusted EBITDA as a percentage of Net Sales |
24.0 |
% |
17.6 |
% |
11.6 |
% |
12.7 |
% |
— |
16.2 |
% |
RECONCILIATION OF SEGMENT PROFIT TO ADJUSTED EBITDA (Unaudited) |
|||||||||||||||||||||||
SIX MONTHS ENDED MARCH 31, 2013 |
|||||||||||||||||||||||
(in millions) |
|||||||||||||||||||||||
Post Foods |
Attune Foods |
Active Nutrition |
Private Brands |
Corporate/ Other |
Total |
||||||||||||||||||
Segment Profit |
$ |
92.3 |
$ |
(0.6) |
$ |
— |
$ |
— |
$ |
— |
$ |
91.7 |
|||||||||||
General corporate expenses and other |
— |
— |
— |
— |
(32.5) |
(32.5) |
|||||||||||||||||
Operating Profit |
92.3 |
(0.6) |
— |
— |
(32.5) |
59.2 |
|||||||||||||||||
Depreciation and amortization |
30.0 |
0.1 |
— |
— |
2.3 |
32.4 |
|||||||||||||||||
Non-cash stock-based compensation |
— |
— |
— |
— |
5.4 |
5.4 |
|||||||||||||||||
Mark to market adjustments on economic hedges |
— |
— |
— |
— |
0.8 |
0.8 |
|||||||||||||||||
Spin-Off costs/post Spin-Off non-recurring costs |
— |
— |
— |
— |
5.2 |
5.2 |
|||||||||||||||||
Inventory valuation adjustment on acquired business |
— |
0.5 |
— |
— |
— |
0.5 |
|||||||||||||||||
Adjusted EBITDA |
$ |
122.3 |
$ |
— |
$ |
— |
$ |
— |
$ |
(18.8) |
$ |
103.5 |
|||||||||||
Adjusted EBITDA as a percentage of Net Sales |
25.4 |
% |
— |
% |
— |
— |
— |
21.3 |
% |
RECONCILIATION OF NET EARNINGS (LOSS) AVAILABLE TO COMMON STOCKHOLDERS |
||||||||||||||||
TO ADJUSTED NET EARNINGS (LOSS) AVAILABLE TO COMMON STOCKHOLDERS (Unaudited) |
||||||||||||||||
(in millions, except per share data) |
||||||||||||||||
Quarter Ended March 31, |
Six Months Ended March 31, |
|||||||||||||||
2014 |
2013 |
2014 |
2013 |
|||||||||||||
Net (Loss) Earnings Available to Common Stockholders |
$ |
(22.6) |
$ |
4.3 |
$ |
(27.6) |
$ |
11.9 |
||||||||
Adjustments: |
||||||||||||||||
Restructuring and plant closure costs, including accelerated depreciation |
3.3 |
— |
8.2 |
— |
||||||||||||
Acquisition related transaction costs |
10.5 |
— |
13.9 |
— |
||||||||||||
Integration costs |
1.3 |
— |
1.3 |
— |
||||||||||||
Losses on hedge of purchase price of foreign currency denominated acquisitions |
11.8 |
— |
13.1 |
— |
||||||||||||
Legal settlement |
(2.0) |
— |
(2.0) |
— |
||||||||||||
Mark to market adjustments on economic hedges |
(0.6) |
0.1 |
(1.5) |
0.8 |
||||||||||||
Inventory valuation adjustments on acquired businesses |
7.3 |
0.5 |
7.3 |
0.5 |
||||||||||||
Spin-Off costs/post Spin-Off non-recurring costs |
0.1 |
2.4 |
0.3 |
5.2 |
||||||||||||
Total Net Adjustments |
31.7 |
3.0 |
40.6 |
6.5 |
||||||||||||
Income tax effect on adjustments |
(16.3) |
(1.0) |
(20.3) |
(2.1) |
||||||||||||
Adjusted Net (Loss) Earnings Available to Common Stockholders |
$ |
(7.2) |
$ |
6.3 |
$ |
(7.3) |
$ |
16.3 |
||||||||
Weighted-Average Shares Outstanding – Diluted |
33.6 |
32.9 |
33.1 |
32.8 |
||||||||||||
Adjusted Diluted (Loss) Earnings per Common Share |
$ |
(0.21) |
$ |
0.19 |
$ |
(0.22) |
$ |
0.50 |
HISTORICAL SEGMENT INFORMATION (Unaudited) |
|||||||||||||||||
(in millions) |
|||||||||||||||||
Beginning with the quarter ended December 31, 2013, the Company changed its methodology for allocating certain Corporate costs to segment profit. This change only impacted the Post Foods segment profit. Accordingly, segment profit for the fiscal year ended September 30, 2013 has been adjusted to align with current fiscal year presentation. |
|||||||||||||||||
The following tables present adjusted information about the Company’s operating segments for the historical periods of the fiscal year ended September 30, 2013. |
|||||||||||||||||
Quarter Ended |
|||||||||||||||||
December 31, 2012 |
March 31, 2013 |
June 30, 2013 |
September 30, 2013 |
||||||||||||||
Net Sales |
|||||||||||||||||
Post Foods |
$ |
236.9 |
$ |
245.4 |
$ |
246.6 |
$ |
253.9 |
|||||||||
Attune Foods |
— |
2.8 |
10.8 |
24.2 |
|||||||||||||
Active Nutrition |
— |
— |
— |
13.9 |
|||||||||||||
Private Brands |
— |
— |
— |
— |
|||||||||||||
Eliminations |
— |
— |
(0.1) |
(0.3) |
|||||||||||||
Total |
$ |
236.9 |
$ |
248.2 |
$ |
257.3 |
$ |
291.7 |
|||||||||
Segment Profit |
|||||||||||||||||
Post Foods |
$ |
47.0 |
$ |
45.3 |
$ |
47.3 |
$ |
47.8 |
|||||||||
Attune Foods |
— |
(0.6) |
0.2 |
2.9 |
|||||||||||||
Active Nutrition |
— |
— |
— |
1.0 |
|||||||||||||
Private Brands |
— |
— |
— |
— |
|||||||||||||
Total segment profit |
47.0 |
44.7 |
47.5 |
51.7 |
|||||||||||||
General corporate expenses and other |
16.7 |
15.8 |
15.5 |
18.8 |
|||||||||||||
Accelerated depreciation on plant closure |
— |
— |
4.8 |
4.8 |
|||||||||||||
Restructuring expenses |
— |
— |
3.0 |
0.8 |
|||||||||||||
Impairment of goodwill and other intangible assets |
— |
— |
— |
2.9 |
|||||||||||||
Interest expense |
19.2 |
21.6 |
19.2 |
25.5 |
|||||||||||||
Earnings (Loss) before Income Taxes |
$ |
11.1 |
$ |
7.3 |
$ |
5.0 |
$ |
(1.1) |
HISTORICAL SEGMENT INFORMATION (Continued) (Unaudited) |
|||||||||||||
(in millions) |
|||||||||||||
Six Months Ended |
Nine Months Ended |
Year Ended |
|||||||||||
March 31, 2013 |
June 30, 2013 |
September 30, 2013 |
|||||||||||
Net Sales |
|||||||||||||
Post Foods |
$ |
482.3 |
$ |
728.9 |
$ |
982.8 |
|||||||
Attune Foods |
2.8 |
13.6 |
37.8 |
||||||||||
Active Nutrition |
— |
— |
13.9 |
||||||||||
Private Brands |
— |
— |
— |
||||||||||
Eliminations |
— |
(0.1) |
(0.4) |
||||||||||
Total |
$ |
485.1 |
$ |
742.4 |
$ |
1,034.1 |
|||||||
Segment Profit |
|||||||||||||
Post Foods |
$ |
92.3 |
$ |
139.6 |
$ |
187.4 |
|||||||
Attune Foods |
(0.6) |
(0.4) |
2.5 |
||||||||||
Active Nutrition |
— |
— |
1.0 |
||||||||||
Private Brands |
— |
— |
— |
||||||||||
Total segment profit |
91.7 |
139.2 |
190.9 |
||||||||||
General corporate expenses and other |
32.5 |
48.0 |
66.8 |
||||||||||
Accelerated depreciation on plant closure |
— |
4.8 |
9.6 |
||||||||||
Restructuring expenses |
— |
3.0 |
3.8 |
||||||||||
Impairment of goodwill and other intangible assets |
— |
— |
2.9 |
||||||||||
Interest expense |
40.8 |
60.0 |
85.5 |
||||||||||
Earnings before Income Taxes |
$ |
18.4 |
$ |
23.4 |
$ |
22.3 |
RECONCILIATION OF NET EARNINGS (LOSS) TO ADJUSTED EBITDA (Unaudited) |
|||
(in millions) |
|||
Twelve Month Period Ended March 31, 2014 |
|||
Net (Loss) |
$ |
(18.2) |
|
Income tax (benefit) |
(19.3) |
||
Interest expense, net |
111.0 |
||
Depreciation and amortization, including accelerated depreciation |
95.6 |
||
Restructuring and plant closure costs |
8.3 |
||
Non-cash stock-based compensation |
12.5 |
||
Acquisition related transaction costs |
16.6 |
||
Integration costs |
1.3 |
||
Losses on hedge of purchase price of foreign currency denominated acquisitions |
13.1 |
||
Impairment on intangible assets |
2.9 |
||
Legal settlement |
(2.0) |
||
Mark to market adjustments on economic hedges |
(1.4) |
||
Inventory valuation adjustments on acquired businesses |
8.2 |
||
Spin-Off costs/post Spin-Off non-recurring costs |
4.0 |
||
Adjusted EBITDA |
$ |
232.6 |
|
Acquisition adjustments for completed acquisitions |
88.6 |
||
Pro Forma Adjusted EBITDA |
$ |
321.2 |
|
Pro Forma Adjusted EBITDA for Michael Foods, inclusive of $10 million of synergies |
248.8 |
||
Pro Forma Adjusted EBITDA |
$ |
570.0 |
Post prepares Pro Forma Adjusted EBITDA by further adjusting Adjusted EBITDA to give effect to recent acquisitions, as well as its pending acquisition of
Acquisition adjustments for completed acquisitions represent management’s estimate of the Adjusted EBITDA of the Hearthside assets, Premier Nutrition,
Acquisition adjustments for pending acquisition of
RECONCILIATION OF EARNINGS (LOSS) BEFORE TAX TO ADJUSTED EBITDA (Unaudited) |
|||||||||||||||||||
PARTIAL YEAR ACQUISITION ADJUSTMENTS |
|||||||||||||||||||
(in millions) |
|||||||||||||||||||
Hearthside |
Premier |
Dakota Growers(3) |
Golden Boy(4) |
Dymatize(5) |
|||||||||||||||
4/1/13 through 5/27/13 |
4/1/13 through 8/31/13 |
4/1/13 through 12/31/13 |
4/1/13 through 1/31/14 |
4/1/13 through 1/31/14 |
|||||||||||||||
Earnings (Loss) before tax |
$ |
2.2 |
$ |
(1.2) |
$ |
20.3 |
$ |
(3.5) |
$ |
(0.5) |
|||||||||
Depreciation and amortization |
0.7 |
3.3 |
7.7 |
5.7 |
8.8 |
||||||||||||||
Interest expense, net |
— |
1.4 |
0.8 |
2.8 |
9.7 |
||||||||||||||
Stock/incentive compensation |
— |
0.8 |
— |
— |
— |
||||||||||||||
Transaction expenses |
— |
4.8 |
0.3 |
24.3 |
1.6 |
||||||||||||||
Commodity hedging gains |
— |
— |
(2.6) |
— |
— |
||||||||||||||
Plant start-up costs |
— |
— |
— |
0.3 |
— |
||||||||||||||
Board of director costs |
— |
— |
— |
— |
0.2 |
||||||||||||||
Other |
— |
0.1 |
0.2 |
(0.5) |
0.9 |
||||||||||||||
Adjusted EBITDA |
$ |
2.9 |
$ |
9.2 |
$ |
26.7 |
$ |
29.1 |
$ |
20.7 |
The amounts in the table are derived from the financial statements for those businesses that were prepared by their respective pre-acquisition management and from due diligence procedures performed by Post. These amounts represent management’s estimates as of the date of this release only. These financial statements have not been audited or reviewed by independent auditors or any other accounting firm. Please refer to the note to the second “RECONCILIATION OF NET EARNINGS (LOSS) TO ADJUSTED EBITDA” table in this release for additional information regarding Adjusted EBITDA of the businesses identified above.
(1) Gives effect to the acquisition of the Hearthside assets, which was consummated on
(2) Adjustment gives effect to the acquisition of Premier Nutrition, which was consummated on
(3) Adjustment gives effect to the acquisition of
(4) Adjustment gives effect to the acquisition of Golden Boy, which was consummated effective
(5) Adjustment gives effect to the acquisition of Dymatize, which was consummated effective
RECONCILIATION OF EARNINGS (LOSS) BEFORE TAX TO ADJUSTED EBITDA (Unaudited) |
|||||||||||||||||||||||
ACQUISITION ADJUSTMENTS |
|||||||||||||||||||||||
(in millions) |
|||||||||||||||||||||||
Twelve Month Period Ended March 31, 2014 |
|||||||||||||||||||||||
Hearthside Assets |
Premier |
Dakota |
Golden Boy(1) |
Dymatize |
Michael Foods(2) |
||||||||||||||||||
Earnings (Loss) before tax |
$ |
9.8 |
$ |
6.7 |
$ |
19.2 |
$ |
(3.6) |
$ |
(3.0) |
$ |
32.6 |
|||||||||||
Depreciation and amortization |
6.7 |
7.1 |
12.9 |
7.8 |
11.4 |
110.6 |
|||||||||||||||||
Interest expense, net |
— |
1.4 |
0.8 |
4.8 |
9.7 |
91.4 |
|||||||||||||||||
Stock/incentive compensation |
— |
0.8 |
— |
— |
— |
2.2 |
|||||||||||||||||
Inventory valuation adjustments on acquired businesses |
0.9 |
— |
4.1 |
1.2 |
2.0 |
— |
|||||||||||||||||
Transaction expenses |
— |
5.0 |
0.3 |
24.3 |
1.6 |
1.1 |
|||||||||||||||||
Unrealized loss on currency transactions |
— |
— |
— |
— |
— |
1.3 |
|||||||||||||||||
Commodity hedging gains |
— |
— |
(2.6) |
— |
— |
— |
|||||||||||||||||
Plant start-up costs |
— |
— |
— |
0.3 |
— |
— |
|||||||||||||||||
Board of director costs |
— |
— |
— |
— |
0.2 |
— |
|||||||||||||||||
Equity sponsor management fee |
— |
— |
— |
— |
— |
2.7 |
|||||||||||||||||
Legal settlement |
— |
— |
— |
— |
— |
(1.5) |
|||||||||||||||||
Other |
— |
0.1 |
0.2 |
(0.5) |
0.9 |
(1.6) |
|||||||||||||||||
Adjusted EBITDA |
$ |
17.4 |
$ |
21.1 |
$ |
34.9 |
$ |
34.3 |
$ |
22.8 |
$ |
238.8 |
The amounts in the table are derived from the financial statements for those businesses that were prepared by their respective pre-acquisition management (or in the case of
(1) Golden Boy amounts for the period prior to Post’s ownership,
(2)