Post Holdings Reports Results for the Second Quarter of Fiscal Year 2015
Highlights:
-
Adjusted EBITDA of
$149.2 million ; net sales of$1,052.7 million -
Completed the acquisition of MOM Brands, a leader in the RTE cereal value segment, on
May 4, 2015 ;$50 million in run-rate cost synergies accelerated to the second full fiscal year after closing - Provides update on avian influenza
Second Quarter Consolidated Operating Results
Second quarter net sales were
Gross profit increased
Adjusted EBITDA was
Other operating expenses, net were
Net earnings available to common shareholders were
Six Month Consolidated Operating Results
Net sales for the six months ended
SG&A expenses for the six month period were
Adjusted EBITDA was
Other operating expenses, net were
For the six months ended
Consumer Brands
Consumer Brands includes the
Net sales were
For the six months ended
Net sales were
For the six months ended
Private Label
Private Label includes the Golden Boy peanut butter, other nut butters and dried fruit and nut businesses and the
Net sales were
For the six months ended
Interest and Income Tax
Net interest expense was
Income tax benefit was
Update on Acquisition and Financing
On
In connection with the MOM Brands closing, Post also closed its previously announced
Update on Avian Influenza and Outlook
As announced on
Prior to the acquisition of MOM Brands, Post management had estimated fiscal 2015 Adjusted EBITDA to be between
Post management expects fiscal 2015 capital expenditures, including MOM Brands, to be between
Use of Non-GAAP Measures
Certain financial measures in this release are non-GAAP measures, including Adjusted EBITDA. Management believes the use of such non-GAAP measures provides increased transparency and assists investors in understanding the underlying operating performance of the Company and its segments and in the analysis of ongoing operating trends. These measures may not be comparable to similarly-titled measures of other companies. See the tables provided in this release for reconciliations to the most directly comparable GAAP financial measures.
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
Forward-Looking Statements
Certain matters discussed in this release and on the conference call are forward-looking statements, including our expectations regarding the timing of realizing the run-rate cost synergies contemplated by the MOM Brands acquisition and the potential upside for such synergies; our Adjusted EBITDA outlook for fiscal 2015; our estimates for MOM Brands at approximately
About
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||
(in millions, except per share data) | ||||
Quarter Ended March 31, |
Six Months Ended March 31, |
|||
2015 | 2014 | 2015 | 2014 | |
Net Sales | $ 1,052.7 | $ 438.0 | $ 2,126.6 | $ 735.0 |
Cost of goods sold | 777.2 | 308.6 | 1,602.0 | 491.1 |
Gross Profit | 275.5 | 129.4 | 524.6 | 243.9 |
Selling, general and administrative expenses | 173.7 | 105.0 | 339.7 | 186.9 |
Amortization of intangible assets | 33.7 | 12.7 | 67.2 | 18.4 |
Loss on foreign currency | 2.7 | 11.9 | 3.9 | 13.5 |
Other operating expenses, net | 15.7 | 0.1 | 23.2 | 0.2 |
Operating Profit (Loss) | 49.7 | (0.3) | 90.6 | 24.9 |
Interest expense, net | 59.8 | 37.3 | 119.9 | 66.3 |
Other expense, net | 28.8 | — | 83.4 | — |
Loss before Income Taxes | (38.9) | (37.6) | (112.7) | (41.4) |
Income tax benefit | (69.4) | (19.3) | (45.9) | (20.7) |
Net Earnings (Loss) | 30.5 | (18.3) | (66.8) | (20.7) |
Preferred stock dividends | (4.2) | (4.3) | (8.5) | (6.9) |
Net Earnings (Loss) Available to Common Shareholders | $ 26.3 | $ (22.6) | $ (75.3) | $ (27.6) |
Net Earnings (Loss) per Common Share: | ||||
Basic | $ 0.48 | $ (0.67) | $ (1.45) | $ (0.83) |
Diluted | $ 0.45 | $ (0.67) | $ (1.45) | $ (0.83) |
Weighted-Average Common Shares Outstanding: | ||||
Basic | 54.5 | 33.6 | 52.1 | 33.1 |
Diluted | 67.6 | 33.6 | 52.1 | 33.1 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||
(in millions) | ||
March 31, 2015 | September 30, 2014 | |
ASSETS | ||
Current Assets | ||
Cash and cash equivalents | $ 579.0 | $ 268.4 |
Restricted cash | 13.6 | 84.8 |
Receivables, net | 348.7 | 413.7 |
Inventories | 461.9 | 380.7 |
Deferred income taxes | 22.8 | 27.0 |
Prepaid expenses and other current assets | 49.2 | 44.4 |
Total Current Assets | 1,475.2 | 1,219.0 |
Property, net | 827.4 | 831.9 |
Goodwill | 2,943.1 | 2,886.7 |
Other intangible assets, net | 2,694.2 | 2,643.0 |
Other assets | 75.3 | 150.5 |
Total Assets | $ 8,015.2 | $ 7,731.1 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Current Liabilities | ||
Current portion of long-term debt | $ 24.9 | $ 25.6 |
Accounts payable | 229.3 | 225.0 |
Other current liabilities | 282.9 | 269.3 |
Total Current Liabilities | 537.1 | 519.9 |
Long-term debt | 3,815.1 | 3,830.5 |
Deferred income taxes | 859.2 | 915.1 |
Other liabilities | 279.9 | 182.4 |
Total Liabilities | 5,491.3 | 5,447.9 |
Shareholders’ Equity | ||
Preferred stock | 0.1 | 0.1 |
Common stock | 0.5 | 0.5 |
Additional paid-in capital | 3,017.1 | 2,669.3 |
Accumulated deficit | (372.5) | (305.7) |
Accumulated other comprehensive loss | (67.9) | (27.6) |
Treasury stock, at cost | (53.4) | (53.4) |
Total Shareholders’ Equity | 2,523.9 | 2,283.2 |
Total Liabilities and Shareholders’ Equity | $ 8,015.2 | $ 7,731.1 |
SELECTED CONDENSED CONSOLIDATED CASH FLOW INFORMATION (Unaudited) | ||
(in millions) | ||
Six Months Ended March 31, |
||
2015 | 2014 | |
Cash provided by (used in): | ||
Operating activities | $ 158.4 | $ 18.5 |
Investing activities, including capital expenditures of $45.6 and $26.7 | (160.6) | (1,050.6) |
Financing activities | 314.3 | 1,463.2 |
Effect of exchange rate changes on cash and cash equivalents | (1.5) | (7.2) |
Net increase in cash and cash equivalents | $ 310.6 | $ 423.9 |
SEGMENT INFORMATION (Unaudited) | ||||
(in millions) | ||||
Quarter Ended March 31, |
Six Months Ended March 31, |
|||
2015 | 2014 | 2015 | 2014 | |
Net Sales | ||||
Consumer Brands | $ 378.5 | $ 310.1 | $ 726.4 | $ 584.2 |
Michael Foods Group | 550.3 | 66.7 | 1,149.6 | 66.7 |
Private Label | 124.9 | 61.2 | 252.7 | 84.4 |
Eliminations | (1.0) | — | (2.1) | (0.3) |
Total | $1,052.7 | $ 438.0 | $2,126.6 | $ 735.0 |
Segment Profit (Loss) | ||||
Consumer Brands | $ 46.3 | $ 38.6 | $ 77.6 | $ 86.0 |
Michael Foods Group | 39.8 | (1.2) | 81.9 | (1.2) |
Private Label | 10.4 | 3.9 | 17.3 | 6.5 |
Total segment profit | 96.5 | 41.3 | 176.8 | 91.3 |
General corporate expenses and other | 31.4 | 27.8 | 63.7 | 48.6 |
Accelerated depreciation on plant closure | — | 2.0 | — | 4.7 |
Losses on hedge of purchase price of foreign currency denominated acquisition | — | 11.8 | — | 13.1 |
Loss on assets held for sale | 15.4 | — | 22.5 | — |
Interest expense | 59.8 | 37.3 | 119.9 | 66.3 |
Other expense, net | 28.8 | — | 83.4 | — |
Loss before Income Taxes | $ (38.9) | $ (37.6) | $ (112.7) | $ (41.4) |
SUPPLEMENTAL SEGMENT INFORMATION | ||
Results include two acquisitions completed in fiscal 2015 and four acquisitions completed in fiscal 2014. Each acquired business is included in results as of its respective closing date as listed below: | ||
Business | Segment | Acquisition Date |
Dakota Growers Pasta Company | Michael Foods Group | January 1, 2014 |
Golden Boy Foods | Private Label | February 1, 2014 |
Dymatize Enterprises | Consumer Brands | February 1, 2014 |
Michael Foods | Michael Foods Group | June 2, 2014 |
PowerBar and Musashi and related assets | Consumer Brands | October 1, 2014 |
American Blanching Company | Private Label | November 1, 2014 |
RECONCILIATION OF NET EARNINGS (LOSS) TO ADJUSTED EBITDA (Unaudited) | ||||
(in millions) | ||||
Quarter Ended March 31, |
Six Months Ended March 31, |
|||
2015 | 2014 | 2015 | 2014 | |
Net Earnings (Loss) | 30.5 | (18.3) | (66.8) | (20.7) |
Income tax benefit | (69.4) | (19.3) | (45.9) | (20.7) |
Interest expense, net | 59.8 | 37.3 | 119.9 | 66.3 |
Depreciation and amortization, including accelerated depreciation | 63.2 | 30.1 | 126.3 | 51.2 |
Non-cash stock-based compensation | 10.4 | 4.0 | 16.7 | 7.4 |
Acquisition related transaction costs | 1.7 | 10.5 | 6.7 | 13.9 |
Integration costs | 2.8 | 1.3 | 4.9 | 1.3 |
Non-cash mark-to-market adjustments and settlements on interest rate swaps | 28.8 | — | 83.4 | — |
Loss on assets held for sale | 15.4 | — | 22.5 | — |
Gain on change in fair value of acquisition earn-out | — | — | (0.7) | — |
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 commodity hedges | 0.6 | (0.6) | (1.4) | (1.5) |
Inventory valuation adjustments on acquired businesses | — | 7.3 | 3.2 | 7.3 |
Gain from insurance proceeds | (1.0) | — | (1.0) | — |
Foreign currency loss on intercompany loans | 2.7 | — | 4.1 | — |
Restructuring and plant closure costs | 3.8 | 1.3 | 4.6 | 3.5 |
Purchase price adjustment | (0.2) | — | (0.2) | — |
Spin-Off costs/post Spin-Off non-recurring costs | 0.1 | 0.1 | 0.5 | 0.3 |
Adjusted EBITDA | $ 149.2 | $ 63.5 | $ 276.8 | $ 119.4 |
Adjusted EBITDA as a percentage of Net Sales | 14.2 % | 14.5 % | 13.0 % | 16.2 % |
RECONCILIATION OF SEGMENT PROFIT TO ADJUSTED EBITDA (Unaudited) | |||||
QUARTER ENDED MARCH 31, 2015 | |||||
(in millions) | |||||
Consumer Brands |
Michael Foods Group |
Private Label |
Corporate/ Other |
Total |
|
Segment Profit | $ 46.3 | $ 39.8 | $ 10.4 | $ — | $ 96.5 |
General corporate expenses and other | — | — | — | (31.4) | (31.4) |
Loss on assets held for sale | — | — | — | (15.4) | (15.4) |
Operating Profit | 46.3 | 39.8 | 10.4 | (46.8) | 49.7 |
Depreciation and amortization | 18.9 | 36.5 | 6.5 | 1.3 | 63.2 |
Non-cash stock-based compensation | — | — | — | 10.4 | 10.4 |
Acquisition related transaction costs | — | — | — | 1.7 | 1.7 |
Integration costs | 1.5 | — | — | 1.3 | 2.8 |
Loss on assets held for sale | — | — | — | 15.4 | 15.4 |
Mark-to-market adjustments on commodity hedges | — | 1.0 | — | (0.4) | 0.6 |
Gain from insurance proceeds | — | (1.0) | — | — | (1.0) |
Foreign currency loss on intercompany loans | 0.2 | 1.4 | — | 1.1 | 2.7 |
Restructuring and plant closure costs | — | — | — | 3.8 | 3.8 |
Purchase price adjustment | — | — | — | (0.2) | (0.2) |
Spin-Off costs/post Spin-Off non-recurring costs | — | — | — | 0.1 | 0.1 |
Adjusted EBITDA | $ 66.9 | $ 77.7 | $ 16.9 | $ (12.3) | $ 149.2 |
Adjusted EBITDA as a percentage of Net Sales | 17.7 % | 14.1 % | 13.5 % | — | 14.2 % |
RECONCILIATION OF SEGMENT PROFIT (LOSS) TO ADJUSTED EBITDA (Unaudited) | |||||
QUARTER ENDED MARCH 31, 2014 | |||||
(in millions) | |||||
Consumer Brands |
Michael Foods Group |
Private Label |
Corporate/ Other |
Total |
|
Segment Profit (Loss) | $ 38.6 | $ (1.2) | $ 3.9 | $ — | $ 41.3 |
General corporate expenses and other | — | — | — | (27.8) | (27.8) |
Losses on hedge of purchase price of foreign currency denominated acquisition | — | — | — | (11.8) | (11.8) |
Accelerated depreciation on plant closure | — | — | — | (2.0) | (2.0) |
Operating Profit (Loss) | 38.6 | (1.2) | 3.9 | (41.6) | (0.3) |
Depreciation and amortization, including accelerated depreciation | 17.0 | 5.2 | 3.8 | 4.1 | 30.1 |
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 acquisition | — | — | — | 11.8 | 11.8 |
Legal settlement | — | — | — | (2.0) | (2.0) |
Mark-to-market adjustments on commodity hedges | — | — | — | (0.6) | (0.6) |
Restructuring and plant closure costs | — | — | — | 1.3 | 1.3 |
Spin-Off costs/post Spin-Off non-recurring costs | — | — | — | 0.1 | 0.1 |
Inventory valuation adjustments on acquired businesses | 2.0 | 4.1 | 1.2 | — | 7.3 |
Adjusted EBITDA | $ 57.8 | $ 8.1 | $ 8.9 | $ (11.3) | $ 63.5 |
Adjusted EBITDA as a percentage of Net Sales | 18.6 % | 12.1 % | 14.5 % | — | 14.5 % |
RECONCILIATION OF SEGMENT PROFIT TO ADJUSTED EBITDA (Unaudited) | |||||
SIX MONTHS ENDED ENDED MARCH 31, 2015 | |||||
(in millions) | |||||
Consumer Brands |
Michael Foods Group |
Private Label |
Corporate/ Other |
Total |
|
Segment Profit | $ 77.6 | $ 81.9 | $ 17.3 | $ — | $ 176.8 |
General corporate expenses and other | — | — | — | (63.7) | (63.7) |
Loss on assets held for sale | — | — | — | (22.5) | (22.5) |
Operating Profit | 77.6 | 81.9 | 17.3 | (86.2) | 90.6 |
Depreciation and amortization | 38.0 | 73.1 | 12.5 | 2.7 | 126.3 |
Non-cash stock-based compensation | — | — | — | 16.7 | 16.7 |
Acquisition related transaction costs | — | — | — | 6.7 | 6.7 |
Integration costs | 3.5 | — | — | 1.4 | 4.9 |
Loss on assets held for sale | — | — | — | 22.5 | 22.5 |
Gain on change in fair value of acquisition earn-out | — | — | — | (0.7) | (0.7) |
Mark-to-market adjustments on commodity hedges | — | (6.1) | — | 4.7 | (1.4) |
Inventory valuation adjustments on acquired businesses | 1.9 | — | 1.3 | — | 3.2 |
Gain from insurance proceeds | — | (1.0) | — | — | (1.0) |
Foreign currency loss on intercompany loans | 0.4 | 2.2 | 0.1 | 1.4 | 4.1 |
Restructuring and plant closure costs | — | — | — | 4.6 | 4.6 |
Purchase price adjustment | — | — | — | (0.2) | (0.2) |
Spin-Off costs/post Spin-Off non-recurring costs | — | — | — | 0.5 | 0.5 |
Adjusted EBITDA | $ 121.4 | $ 150.1 | $ 31.2 | $ (25.9) | $ 276.8 |
Adjusted EBITDA as a percentage of Net Sales | 16.7 % | 13.1 % | 12.3 % | — | 13.0 % |
RECONCILIATION OF SEGMENT PROFIT (LOSS) TO ADJUSTED EBITDA (Unaudited) | |||||
SIX MONTHS ENDED ENDED MARCH 31, 2014 | |||||
(in millions) | |||||
Consumer Brands |
Michael Foods Group |
Private Label |
Corporate/ Other |
Total |
|
Segment Profit (Loss) | $ 86.0 | $ (1.2) | $ 6.5 | $ — | $ 91.3 |
General corporate expenses and other | — | — | — | (48.6) | (48.6) |
Losses on hedge of purchase price of foreign currency denominated acquisition | — | — | — | (13.1) | (13.1) |
Accelerated depreciation on plant closure | — | — | — | (4.7) | (4.7) |
Operating Profit (Loss) | 86.0 | (1.2) | 6.5 | (66.4) | 24.9 |
Depreciation and amortization, including accelerated depreciation | 31.8 | 5.2 | 5.6 | 8.6 | 51.2 |
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 acquisition | — | — | — | 13.1 | 13.1 |
Legal settlement | — | — | — | (2.0) | (2.0) |
Mark-to-market adjustments on commodity hedges | — | — | — | (1.5) | (1.5) |
Restructuring and plant closure costs | — | — | — | 3.5 | 3.5 |
Spin-Off costs/post Spin-Off non-recurring costs | — | — | — | 0.3 | 0.3 |
Inventory valuation adjustments on acquired businesses | 2.0 | 4.1 | 1.2 | — | 7.3 |
Adjusted EBITDA | $ 120.0 | $ 8.1 | $ 13.3 | $ (22.0) | $ 119.4 |
Adjusted EBITDA as a percentage of Net Sales | 20.5 % | 12.1 % | 15.8 % | — | 16.2 % |
RECONCILIATION OF NET EARNINGS (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | ||||
TO ADJUSTED NET EARNINGS (LOSS) AVAILABLE TO COMMON SHAREHOLDERS (Unaudited) | ||||
(in millions, except per share data) | ||||
Quarter Ended March 31, |
Six Months Ended March 31, |
|||
2015 | 2014 | 2015 | 2014 | |
Net Earnings (Loss) Available to Common Shareholders | $ 26.3 | $ (22.6) | $ (75.3) | $ (27.6) |
Adjustments: | ||||
Acquisition related transaction costs | 1.7 | 10.5 | 6.7 | 13.9 |
Integration costs | 2.8 | 1.3 | 4.9 | 1.3 |
Non-cash mark-to-market adjustments and settlements on interest rate swaps | 28.8 | — | 83.4 | — |
Loss on assets held for sale | 15.4 | — | 22.5 | — |
Gain on change in fair value of acquisition earn-out | — | — | (0.7) | — |
Losses on hedge of purchase price of foreign currency denominated acquisition | — | 11.8 | — | 13.1 |
Legal settlement | — | (2.0) | — | (2.0) |
Mark-to-market adjustments on commodity hedges | 0.6 | (0.6) | (1.4) | (1.5) |
Inventory valuation adjustments on acquired businesses | — | 7.3 | 3.2 | 7.3 |
Gain from insurance proceeds | (1.0) | — | (1.0) | — |
Foreign currency loss on intercompany loans | 2.7 | — | 4.1 | — |
Restructuring and plant closure costs, including accelerated depreciation | 3.8 | 3.3 | 4.6 | 8.2 |
Purchase price adjustment | (0.2) | — | (0.2) | — |
Spin-Off costs/post Spin-Off non-recurring costs | 0.1 | 0.1 | 0.5 | 0.3 |
Total Net Adjustments | 54.7 | 31.7 | 126.6 | 40.6 |
Income tax effect on adjustments | (22.3) | (16.3) | (51.5) | (20.3) |
Adjusted Net Earnings (Loss) Available to Common Shareholders | $ 58.7 | $ (7.2) | $ (0.2) | $ (7.3) |
Weighted-Average Shares Outstanding – Diluted | 67.6 | 33.6 | 52.1 | 33.1 |
Adjusted Diluted Net Earnings (Loss) per Common Share | $ 0.87 | $ (0.21) | $ 0.00 | $ (0.22) |