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Press Release: Post Holdings Reports Results for the First Quarter of Fiscal Year 2021

· 02/04/2021 17:00
-- First quarter net sales of $1.5 billion -- Operating profit of $166.3 million; net earnings of $81.2 million; Adjusted EBITDA of $284.4 million -- Reaffirmed first half fiscal year 2021 Adjusted EBITDA (non-GAAP) guidance of $520-$550 million

Post Holdings Reports Results for the First Quarter of Fiscal Year 2021

ST. LOUIS, Feb. 04, 2021 (GLOBE NEWSWIRE) -- Post Holdings, Inc. (NYSE:POST), a consumer packaged goods holding company, today reported results for the first fiscal quarter ended December 31, 2020.

Highlights:

Basis of Presentation

On 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 BellRing's consolidated net earnings/loss and net assets to noncontrolling interest within Post's financial statements. On July 1, 2020, Post completed the acquisition of Henningsen Foods, Inc. ("Henningsen"), the results of which are included in the Foodservice segment.

First Quarter Consolidated Operating Results

Net sales were $1,458.0 million, an increase of 0.1%, or $1.2 million, compared to $1,456.8 million in the prior year period. Net sales growth in BellRing Brands, Refrigerated Retail, Weetabix and Post Consumer Brands was offset by declines in Foodservice. Gross profit was $455.4 million, or 31.2% of net sales, a decrease of $16.1 million compared to the prior year period gross profit of $471.5 million, or 32.4% of net sales.

Selling, general and administrative ("SG&A") expenses were $251.1 million, or 17.2% of net sales, an increase of $15.8 million compared to $235.3 million, or 16.2% of net sales, in the prior year period. SG&A expenses for the first quarter of 2021 included a provision of $15.0 million for a legal settlement, which was treated as an adjustment for non-GAAP measures. Operating profit was $166.3 million, a decrease of 15.2%, or $29.7 million, compared to $196.0 million in the prior year period.

Net earnings were $81.2 million, a decrease of 18.1%, or $18.0 million, compared to $99.2 million in the prior year period. Net earnings included income on swaps, net of $41.6 million and $61.4 million in the first quarter of 2021 and 2020, respectively, which is discussed later in this release and was treated as an adjustment for non-GAAP measures. Net earnings included equity method losses, net of tax of $7.9 million and $7.3 million in the first quarter of 2021 and 2020, respectively. Net earnings excluded net earnings attributable to noncontrolling interest of $9.8 million and $7.9 million in the first quarter of 2021 and 2020, respectively. Diluted earnings per common share were $1.21, compared to $1.38 in the prior year period. Adjusted net earnings were $48.0 million, or $0.72 per diluted common share, compared to $52.9 million, or $0.73 per diluted common share, in the prior year period.

Adjusted EBITDA was $284.4 million, a decrease of 6.2%, or $18.7 million, compared to $303.1 million in the prior year period, with the decrease driven primarily by Foodservice. Adjusted EBITDA in the first quarter of 2021 and 2020 included an adjustment of $9.5 million and $7.4 million, respectively, 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 Brands

North American ready-to-eat ("RTE") cereal.

For the first quarter, net sales were $445.0 million, an increase of 0.9%, or $3.8 million, compared to the prior year period, and benefited from a favorable mix. Volumes were flat as growth in Post branded cereals was offset by declines in private label and government bid business (primarily resulting from the decision to exit certain low-margin business), licensed brand cereal and Malt-O-Meal bag cereal. Segment profit was $70.5 million, a decrease of 12.5%, or $10.1 million, compared to the prior year period. Segment profit for the first quarter of 2021 was negatively impacted by a provision of $15.0 million for a legal settlement, which was treated as an adjustment for non-GAAP measures. Segment Adjusted EBITDA was $113.7 million, an increase of 3.6%, or $4.0 million, compared to the prior year period.

Financial results for the first quarter of 2021 were negatively impacted by an estimated $9.8 million and $5.6 million in lost revenue and profit contribution, respectively, resulting from COVID-19 related production shutdowns and employee leaves at the Battle Creek, Michigan RTE cereal facility.

Weetabix

Primarily United Kingdom RTE cereal and muesli.

For the first quarter, net sales were $113.5 million, an increase of 11.8%, or $12.0 million, compared to the prior year period, and reflected a favorable foreign currency exchange rate tailwind of approximately 280 basis points. Volume growth of 8.3% was driven by biscuit products, extruded products (primarily resulting from lapping capacity constraints in the prior year period), private label products and exports, which were partially offset by declines in bar and drink products (resulting from reduced on-the-go consumption in reaction to the COVID-19 pandemic). Segment profit was $28.1 million, an increase of 18.6%, or $4.4 million, compared to the prior year period. Segment Adjusted EBITDA was $37.3 million, an increase of 16.9%, or $5.4 million, compared to the prior year period.

Foodservice

Primarily egg and potato products.

For the first quarter, net sales were $354.5 million, a decrease of 15.7%, or $66.1 million, compared to the prior year period, and included a 210 basis point benefit from Henningsen. Volumes for the first quarter decreased 20.0%, driven by lower away-from-home demand in reaction to the COVID-19 pandemic in various channels, including full service restaurants, quick service restaurants, education and travel and lodging. Volumes included an approximately 370 basis point benefit from the participation in a government-backed food initiative and 90 basis point benefit from Henningsen. Egg volumes declined 15.5% and included an approximately 480 basis point benefit from the participation in a government-backed food initiative and a 60 basis point benefit from Henningsen. Potato volumes declined 38.3%.

Segment profit was $10.8 million, a decrease of 77.0%, or $36.2 million, compared to the prior year period. Segment Adjusted EBITDA was $40.4 million, a decrease of 46.3%, or $34.9 million, compared to the prior year period. First quarter 2021 segment profit and segment Adjusted EBITDA were negatively impacted by (i) lost contribution margin on reduced volumes and unfavorable customer, product and channel mix, (ii) an unfavorable egg price/cost relationship associated with the timing of changes in input prices, (iii) unfavorable fixed cost absorption driven by a reduction in volumes produced and (iv) lower net pricing (resulting from an unfavorable mix and temporary price reductions to move excess inventory).

Refrigerated Retail

Primarily side dish, egg, cheese and sausage products.

For the first quarter, net sales were $263.1 million, an increase of 5.3%, or $13.2 million, compared to the prior year period and benefited from improved average net pricing in side dish and cheese products. Volumes increased 1.1%, led by a 13.3% increase in side dish volumes. Egg volumes declined 11.9% resulting from the decision to exit certain low-margin business. Volume information for additional products is disclosed in a table presented later in this release. Segment profit was $33.7 million, an increase of 29.6%, or $7.7 million, compared to the prior year period. Segment Adjusted EBITDA was $51.8 million, an increase of 18.3%, or $8.0 million, compared to the prior year period.

BellRing Brands

Ready-to-drink ("RTD") protein shakes, other RTD beverages, powders and nutrition bars.

For the first quarter, net sales were $282.4 million, an increase of 15.7%, or $38.4 million, compared to the prior year period. Premier Protein net sales increased 17.4%, with volumes up 21.9%. Net sales benefited from RTD shake distribution gains for both existing and new products, incremental promotional activity and a modest increase in customer trade inventory levels to support certain promotional events that occurred early in January 2021. Net sales for Dymatize increased 16.2% and for all other products decreased 11.2%.

Segment profit was $47.8 million, a decrease of 3.0%, or $1.5 million, compared to the prior year period and included $4.6 million of restructuring and facility closure costs, which were partially offset by $1.5 million of lower transaction costs related to BellRing's separation from Post. Restructuring and facility closure costs and transaction costs were treated as adjustments for non-GAAP measures. Segment Adjusted EBITDA was $60.7 million, an increase of 3.6%, or $2.1 million, compared to the prior year period.

As of December 31, 2020, BellRing had $686.2 million in total principal value of debt and $50.8 million in cash and cash equivalents.

For further information, please refer to the BellRing first quarter 2021 earnings release and conference call (the details of which are included later in this release).

Interest, Loss on Extinguishment of Debt, Income on Swaps and Income Tax

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February 04, 2021 17:00 ET (22:00 GMT)