POST Post Holdings Inc

ST. LOUIS, Feb. 6, 2025 /PRNewswire/ -- Post Holdings, Inc. (NYSE:POST), a consumer packaged goods holding company, today reported results for the first fiscal quarter ended December 31, 2024.

Highlights:

• First quarter net sales of $2.0 billion
• Operating profit of $214.1 million; net earnings of $113.3 million and Adjusted EBITDA (non-GAAP)* of $369.9 million
• Raised fiscal year 2025 Adjusted EBITDA (non-GAAP)* outlook to $1,420-$1,460 million

Basis of Presentation

On December 1, 2023, Post completed its acquisition of substantially all of the assets of Perfection Pet Foods, LLC ("Perfection"), the results of which are included in the Post Consumer Brands segment. On December 1, 2023, Post completed its acquisition of Deeside Cereals I Ltd ("Deeside"), the results of which are included in the Weetabix segment.

First Quarter Consolidated Operating Results

Net sales were $1,974.7 million, an increase of 0.4%, or $8.8 million, compared to $1,965.9 million in the prior year period and included $60.8 million and $21.8 million in net sales from acquisitions in the current and prior year periods, respectively. Excluding the benefit from acquisitions in the current and prior year periods, net sales growth in Foodservice (driven by volume growth and incremental highly pathogenic avian influenza pricing) was offset by declines in Post Consumer Brands (driven by volume declines in pet food), Refrigerated Retail (driven by lower side dish volumes and distribution losses in lower margin cheese and egg products) and Weetabix (driven by declines in non-biscuit branded and private label products). Gross profit was $595.3 million, or 30.1% of net sales, an increase of 4.0%, or $22.7 million, compared to $572.6 million, or 29.1% of net sales, in the prior year period.

Selling, general and administrative ("SG&A") expenses were $331.6 million, or 16.8% of net sales, an increase of 2.7%, or $8.7 million, compared to $322.9 million, or 16.4% of net sales, in the prior year period. SG&A expenses in the first quarters of fiscal year 2025 and 2024 included $15.6 million and $6.5 million, respectively, in integration costs, which were primarily related to pet food acquisitions and were treated as adjustments for non-GAAP measures. Operating profit was $214.1 million, an increase of 2.3%, or $4.8 million, compared to $209.3 million in the prior year period.

Net earnings were $113.3 million, an increase of 28.6%, or $25.2 million, compared to $88.1 million in the prior year period. Net earnings included the following:

Diluted earnings per common share were $1.78, compared to $1.35 in the prior year period. Adjusted net earnings (non-GAAP)* were $111.9 million, compared to $113.7 million in the prior year period. Adjusted diluted earnings per common share (non-GAAP)* were $1.73, compared to $1.69 in the prior year period.

Adjusted EBITDA was $369.9 million, an increase of 2.9%, or $10.4 million, compared to $359.5 million in the prior year period.

Post Consumer Brands

Primarily North American ready-to-eat ("RTE") cereal, pet food and peanut butter.

For the first quarter, net sales were $963.9 million, a decrease of 2.5%, or $24.7 million, compared to the prior year period. Net sales included $54.4 million and $19.5 million in the first quarters of fiscal year 2025 and 2024, respectively, attributable to Perfection. Excluding the benefit from Perfection in the current and prior year periods, volumes decreased 8.8%. Pet food volumes decreased by 13.0%, primarily driven by rationalization of and pricing actions in low-margin products, shifts in customer inventories in the current and prior year periods, and consumption declines. Cereal volumes decreased 2.3%, primarily driven by category declines. Segment profit was $131.0 million, a decrease of 1.3%, or $1.7 million, compared to the prior year period. Segment Adjusted EBITDA (non-GAAP)* was $204.8 million, an increase of 7.9%, or $15.0 million, compared to the prior year period.

Weetabix

Primarily United Kingdom RTE cereal, muesli and protein-based shakes.

For the first quarter, net sales were $127.6 million, a decrease of 1.2%, or $1.5 million, compared to the prior year period. Net sales reflected a foreign currency exchange rate tailwind of approximately 300 basis points and included $6.4 million and $2.3 million in the first quarters of fiscal year 2025 and 2024, respectively, in net sales attributable to Deeside. Excluding the impact of Deeside in the current and prior year periods, volumes decreased 11.6%, primarily driven by the impact of planned lower promotional activity, the strategic exit of low-performing products and cereal category declines. Segment profit was $15.9 million, a decrease of 24.3%, or $5.1 million, compared to the prior year period. Segment Adjusted EBITDA was $28.0 million, a decrease of 8.5%, or $2.6 million, compared to the prior year period.

Foodservice

Primarily egg and potato products.

For the first quarter, net sales were $616.6 million, an increase of 8.7%, or $49.5 million, compared to the prior year period. Volumes increased 2.8%, primarily driven by distribution gains in both eggs and potatoes and the inclusion of ready-to-drink shakes in the current year period. Segment profit was $86.1 million, an increase of 13.7%, or $10.4 million, compared to the prior year period. Segment Adjusted EBITDA was $116.8 million, an increase of 10.4%, or $11.0 million, compared to the prior year period.

Refrigerated Retail

Primarily side dish, egg, cheese and sausage products.

For the first quarter, net sales were $266.6 million, a decrease of 5.1%, or $14.3 million, compared to the prior year period. Volumes decreased 4.4%, as growth in sausage was offset by declines in side dishes, cheese and eggs. Volume information by product is disclosed in a table presented later in this release. Segment profit was $24.2 million, a decrease of 32.0%, or $11.4 million, compared to the prior year period. Segment Adjusted EBITDA was $41.6 million, a decrease of 22.4%, or $12.0 million, compared to the prior year period.

Interest, Loss (Gain) on Extinguishment of Debt, (Income) Expense on Swaps and Income Tax

Interest expense, net was $84.1 million in the first quarter of fiscal year 2025, compared to $78.1 million in the first quarter of fiscal year 2024. The increase in interest expense, net in the first quarter of fiscal year 2025 was driven by higher average outstanding principal amounts of debt and a higher weighted-average interest rate, partially offset by higher interest income compared to the prior year period.

Loss on extinguishment of debt, net of $5.8 million was recorded in the first quarter of fiscal year 2025 in connection with Post's redemption of its outstanding 5.625% senior notes due January 2028. Gain on extinguishment of debt, net of $3.1 million was recorded in the first quarter of fiscal year 2024, primarily in connection with Post's partial repurchase of its 4.50% senior notes due September 2031.

(Income) expense on swaps, net relates to mark-to-market adjustments on interest rate swaps. Income on swaps, net was $15.4 million in the first quarter of fiscal year 2025, compared to expense of $21.1 million in the prior year period.

Income tax expense was $32.1 million in the first quarter of fiscal year 2025, an effective income tax rate of 22.1%, compared to $28.5 million in the first quarter of fiscal year 2024, an effective income tax rate of 24.4%.

Share Repurchases and New Share Repurchase Authorization

During the first quarter of fiscal year 2025, Post repurchased 1.6 million shares of its common stock for $181.1 million at an average price of $114.39 per share. Subsequent to the end of the first quarter of fiscal year 2025 through February 6, 2025, Post repurchased 1.0 million shares for $106.9 million at an average price of $108.47 per share. On February 4, 2025, Post's Board of Directors approved a new $500 million share repurchase authorization. Shares repurchased under the new authorization may begin on February 10, 2025. As of February 6, 2025, Post had $200.2 million remaining under its existing $500 million share repurchase authorization, which became effective on August 5, 2024 and will be cancelled effective February 9, 2025.

Repurchases may be made from time to time in the open market, in private purchases, through forward, derivative, accelerated repurchase or automatic purchase transactions, or otherwise. Any shares repurchased would be held as treasury stock. The authorization does not, however, obligate Post to acquire any particular number of shares, and repurchases may be suspended or terminated at any time at Post's discretion.

Outlook

Post management raised its guidance range for fiscal year 2025 Adjusted EBITDA to $1,420-$1,460 million from $1,410-$1,460 million. This guidance includes several key assumptions for Post's Foodservice segment related to avian influenza:

• Post estimates the cost before pricing impact on the second fiscal quarter to be a headwind in the range of $30-$50 million when compared to first fiscal quarter results. Given the volatility in egg market prices, the actual result could vary significantly from this range.
• Post expects to recover any second fiscal quarter cost before pricing impact in the balance of the fiscal year.
• Post management's guidance range assumes recovery of lost egg supply over the remainder of the fiscal year and there are no additional avian influenza outbreaks within Post's controlled farms.

Post management expects fiscal year 2025 capital expenditures to range between $380-$420 million, which includes Post Consumer Brands investment in network optimization and pet food safety and capacity, for aggregate expenditures of $90-$100 million. This also includes Foodservice investment in the completion of the Norwalk, Iowa precooked egg facility expansion and continued cage-free egg facility expansion, for aggregate expenditures of $80-$90 million.

Post 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 income/expense on swaps, net, gain/loss on extinguishment of debt, net, integration and transaction costs, mark-to-market adjustments on commodity and foreign exchange hedges, mark-to-market adjustments on equity security investments, equity method investment adjustment and other charges reflected in Post's reconciliations of historical numbers, the amounts of which, based on historical experience, could be significant. For additional information regarding Post's non-GAAP measures, see the related explanations presented under "Use of Non-GAAP Measures."

Use of Non-GAAP Measures

Post uses certain non-GAAP measures in this release to supplement the financial measures prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP"). These non-GAAP measures include Adjusted net earnings/loss, Adjusted diluted earnings/loss per common share, Adjusted EBITDA, segment Adjusted EBITDA, Adjusted EBITDA as a percentage of Net Sales, segment Adjusted EBITDA as a percentage of Net Sales and free cash flow. 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 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."

Conference Call to Discuss Earnings Results and Outlook

Post will host a conference call on Friday, February 7, 2025 at 9:00 a.m. ET to discuss financial results for the first quarter of fiscal year 2025 and fiscal year 2025 outlook and to respond to questions. Robert V. Vitale, President and Chief Executive Officer, Jeff A. Zadoks, Executive Vice President and Chief Operating Officer, and Matthew J. Mainer, Executive Vice President, Chief Financial Officer and Treasurer, will participate in the call.

Interested parties may join the conference call by dialing (800) 445-7795 in the U.S. and (785) 424-1699 from outside of the U.S. The conference identification number is POSTQ125. Interested parties are invited to listen to the webcast of the conference call, which can be accessed by visiting the Investors portion of Post's website at www.postholdings.com.

A replay of the conference call will be available through Friday, February 14, 2025 by dialing (800) 839-1246 in the U.S. and (402) 220-0464 from outside of the U.S. A webcast replay also will be available for a limited period on Post's website in the Investors section.

Prospective Financial Information

Prospective financial information is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the prospective financial information described above will not materialize or will vary significantly from actual results. For further discussion of some of the factors that may cause actual results to vary materially from the prospective financial information provided in this release, see "Forward-Looking Statements" below. Accordingly, the prospective financial information provided in this release is only an estimate of what Post'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 forecasted. In light of the foregoing, the information should be viewed in context and undue reliance should not be placed upon it.

Forward-Looking Statements

Certain matters discussed in this release and on Post's conference call are forward-looking statements, including Post's Adjusted EBITDA outlook for fiscal year 2025, Post's expectations regarding the financial impact of avian influenza and Post's capital expenditure outlook for fiscal year 2025. 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:

• disruptions or inefficiencies in Post's supply chain, inflation, tariffs, labor shortages, public health crises, climatic events, avian influenza and other agricultural diseases and pests, fires and other events beyond Post's control;
• changes in economic conditions, financial instability, disruptions in capital and credit markets, changes in interest rates and fluctuations in foreign currency exchange rates;
• volatility in the cost or availability of inputs to Post's businesses (including raw materials, energy and other supplies and freight);
• Post's and its customers' ability to compete in their respective product categories, including the success of pricing, advertising and promotional programs and the ability to anticipate and respond to changes in consumer and customer preferences and behaviors;
• Post's ability to hire and retain talented personnel, increases in labor-related costs, employee safety, labor strikes, work stoppages, unionization efforts and other labor disruptions;
• Post's high leverage, its ability to obtain additional financing and service its outstanding debt (including covenants restricting the operation of its businesses) and a potential downgrade in Post's credit ratings;
• Post's ability to successfully implement business strategies to reduce costs;
• Post's reliance on third parties and others for the manufacture of many of its products;
• costs, business disruptions and reputational damage associated with information technology failures, cybersecurity incidents, information security breaches or enterprise resource planning system implementations;
• allegations that Post's products cause injury or illness, product recalls and withdrawals, product liability claims and other related litigation;
• compliance with existing and changing laws and regulations;
• the impact of litigation;
• Post's ability to successfully integrate the pet food assets and operations acquired in April 2023 and in the Perfection acquisition, deliver on the expected financial contribution, cost savings and synergies from these acquisitions and maintain relationships with employees, customers and suppliers for the acquired businesses, while maintaining focus on Post's pre-acquisition businesses;
• Post's ability to identify, complete and integrate or otherwise effectively execute acquisitions or other strategic transactions;
• the loss of, a significant reduction of purchases by or the bankruptcy of a major customer;
• the success of new product introductions;
• differences in Post's actual operating results from any of its guidance regarding Post's future performance;
• impairment in the carrying value of goodwill, other intangibles or long-lived assets;
• risks associated with Post's international businesses;
• business disruption or other losses from changes in governmental administrations, political instability, terrorism, war or armed hostilities or geopolitical tensions;
• risks related to the intended tax treatment of Post's divestitures of its interest in BellRing Brands, Inc.;
• Post's ability to protect its intellectual property and other assets and to license third-party intellectual property;
• costs associated with the obligations of Bob Evans Farms, Inc. ("Bob Evans") in connection with the sale of its restaurants business, including certain indemnification obligations and Bob Evans's payment and performance obligations as a guarantor for certain leases;
• changes in critical accounting estimates;
• losses or increased funding and expenses related to Post's qualified pension or other postretirement plans;
• conflicting interests or the appearance of conflicting interests resulting from any of Post's directors and officers also serving as directors or officers of other companies; and
• other risks and uncertainties described in Post's filings with the Securities and Exchange Commission.

These forward-looking statements represent Post's judgment as of the date of this release. Post disclaims, however, any intent or obligation to update these forward-looking statements.

About Post Holdings, Inc.

Post Holdings, Inc., headquartered in St. Louis, Missouri, is a consumer packaged goods holding company with businesses operating in the center-of-the-store, refrigerated, foodservice and food ingredient categories. Its businesses include Post Consumer Brands, Weetabix, Michael Foods and Bob Evans Farms. Post Consumer Brands is a leader in the North American ready-to-eat cereal and pet food categories and also markets Peter Pan^® peanut butter. Weetabix is home to the United Kingdom's number one selling ready-to-eat cereal brand, Weetabix^®. Michael Foods and Bob Evans Farms are leaders in refrigerated foods, delivering innovative, value-added egg and refrigerated potato side dish products to the foodservice and retail channels. Post participates in the private brand food category through its ownership interest in 8th Avenue Food & Provisions, Inc. For more information, visit www.postholdings.com.

Contact:
Investor Relations
Daniel O'Rourke
daniel.orourke@postholdings.com
(314) 806-3959

Media Relations
Tara Gray
tara.gray@postholdings.com
(314) 644-7648

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 MEASURES

Post uses certain non-GAAP measures in this release to supplement the financial measures prepared in accordance with U.S. GAAP. These non-GAAP measures include Adjusted net earnings/loss, Adjusted diluted earnings/loss per common share, Adjusted EBITDA, segment Adjusted EBITDA, Adjusted EBITDA as a percentage of Net Sales, segment Adjusted EBITDA as a percentage of Net Sales and free cash flow. 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.

Adjusted net earnings/loss and Adjusted diluted earnings/loss per common share
Post believes Adjusted net earnings/loss and Adjusted diluted earnings/loss 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.

Adjusted net earnings/loss and Adjusted diluted earnings/loss per common share are adjusted for the following items:

Adjusted EBITDA, segment Adjusted EBITDA, Adjusted EBITDA as a percentage of Net Sales and segment Adjusted EBITDA as a percentage of Net Sales
Post believes that Adjusted EBITDA is useful to investors in evaluating Post'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 Post's capital structure and the method by which the assets were acquired and (iii) it is a financial indicator of a company's ability to service its debt, as Post is required to comply with certain covenants and limitations that are based on variations of EBITDA in its financing documents. Post believes that segment Adjusted EBITDA is useful to investors in evaluating Post's operating performance because it allows for assessment of the operating performance of each reportable segment. Management uses Adjusted EBITDA to provide forward-looking guidance and uses Adjusted EBITDA and segment Adjusted EBITDA to forecast future results. Post believes that Adjusted EBITDA as a percentage of Net Sales and segment Adjusted EBITDA as a percentage of Net Sales are measures useful to investors in evaluating Post's operating performance because they allow for meaningful comparison of operating performance across periods.

Adjusted EBITDA and segment Adjusted EBITDA reflect adjustments for income tax expense/benefit, interest expense, net and depreciation and amortization, and the following adjustments discussed above: income/expense on swaps, net, integration costs and transaction costs, restructuring and facility closure costs, mark-to-market adjustments on commodity and foreign exchange hedges, gain on bargain purchase, mark-to-market adjustments on equity security investments, inventory revaluation adjustment on acquired businesses, advisory income, asset disposal costs and provision for legal settlements. Additionally, Adjusted EBITDA and segment Adjusted EBITDA reflect adjustments for the following items:

Free cash flow
Free cash flow is a non-GAAP measure which represents net cash provided by operating activities less capital expenditures. Post believes free cash flow is useful to investors in evaluating Post's ability to service debt and repurchase shares of common stock.

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SOURCE Post Holdings, Inc.