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Press Release: Post Holdings Reports Results for -2-

· 02/04/2021 17:00

Interest expense, net was $96.6 million in the first quarter of 2021, compared to $102.9 million in the first quarter of 2020. Interest expense, net in the first quarter of 2021 included (i) $12.8 million attributable to BellRing and (ii) a reduction in interest of approximately $3.6 million resulting from the repayment of the entire principal balance of Post's term loan in the first quarter of 2020. Interest expense, net in the first quarter of 2020 included (i) $11.6 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.

Loss on extinguishment of debt, net of $12.9 million was recorded in the first quarter of 2020 in connection with (i) Post's repayment of the entire principal balance of its term loan and (ii) the assignment of debt to BellRing Brands, LLC related to the creation of BellRing's capital structure in the first quarter of 2020.

Income on swaps, net relates to non-cash mark-to-market adjustments and cash settlements on interest rate swaps. Income on swaps, net was $41.6 million in the first quarter of 2021, compared to $61.4 million in the first quarter of 2020.

Income tax expense was $23.2 million in the first quarter of 2021, an effective income tax rate of 19.0%, compared to $30.4 million in the first quarter of 2020, an effective income tax rate of 21.0%.

Share Repurchases & New Share Repurchase Authorization

During the first quarter of 2021, Post repurchased 1.7 million shares of its common stock for $159.9 million at an average price of $93.43 per share. Subsequent to the end of the first quarter of 2021 and as of February 3, 2021, Post repurchased 0.8 million shares of its common stock for $80.6 million at an average price of $97.48 per share. On February 2, 2021, Post's Board of Directors approved a new $400 million share repurchase authorization. Share repurchases under the new authorization may begin on February 6, 2021. As of February 3, 2021, Post had repurchased $351.0 million under its previous $400 million share repurchase authorization, which became effective on August 8, 2020 and will be cancelled effective February 5, 2021.

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. The shares would be repurchased with cash on hand and cash from operations. Any shares repurchased would be held as treasury stock. The authorization does not, however, obligate Post to acquire any particular amount of shares, and repurchases may be suspended or terminated at any time at Post's discretion.

Recent Announcements

On January 25, 2021, Post completed the acquisition of the Peter Pan peanut butter brand from Conagra Brands, Inc.

On February 1, 2021, Post completed the acquisition of Almark Foods, a leading provider of hard-cooked and deviled egg products.

COVID-19 Commentary

Post is closely monitoring the impact of the COVID-19 pandemic on its business and remains focused on ensuring its ability to safeguard the health of its employees, including their economic health, maintaining the continuity of its supply chain to serve customers and consumers and preserving financial liquidity to mitigate the uncertainty caused by the pandemic.

Post products sold through food, drug, mass, club and eCommerce generally have continued to experience an uplift in sales in the first quarter of 2021, driven by increased at-home consumption in reaction to the COVID-19 pandemic.

Post's foodservice business continues to be negatively impacted by lower away-from-home 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. In the first quarter of 2021, Post's foodservice volumes continued to track with changes in the degree of restrictions on mobility and gathering, and this correlation is expected to continue to affect the trajectory of the volume recovery.

BellRing's primary categories, liquids and powders, have returned to growth relatively in line with their pre-pandemic growth rates. The bar category continues to experience year-over-year declines and BellRing's international sales continue to be soft when compared to the prior year.

As of December 31, 2020, Post had approximately $1.1 billion in cash and cash equivalents on hand and the available borrowing capacity under its revolving credit facility was $730.6 million (reflecting $19.4 million of outstanding letters of credit, a reduction in the borrowing capacity).

Outlook

Post management reaffirmed its expectation of Adjusted EBITDA for the first half of fiscal year 2021 to be between $520-$550 million, with the expectation of material improvement in the second half of fiscal year 2021.

Post management continues to expect fiscal year 2021 capital expenditures to range between $225-$250 million, including approximately $4 million attributable to BellRing.

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, noncontrolling interest adjustment, equity method investment adjustment, mark-to-market adjustments on commodity and foreign exchange hedges, adjustment to bargain purchase, provision for legal settlement, transaction and integration costs 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 "Post's Use of Non-GAAP Measures."

BellRing Outlook

For fiscal year 2021, BellRing management continues to expect net sales and Adjusted EBITDA to grow 8%-13% and 5%-10%, respectively, over fiscal year 2020 (resulting in a net sales range of $1.07-$1.12 billion and an Adjusted EBITDA range of $207-$217 million) and capital expenditures of 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, restructuring and facility closures costs, 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 first quarter of fiscal year 2021 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 Information

Post owns a 60.5% common equity interest in 8th Avenue Food & Provisions, Inc. ("8th Avenue"), which is an unconsolidated affiliate that manufactures and distributes private label peanut and other nut butters, dried fruit and nut products, granola and pasta.

For the first quarter, net sales were $229.0 million, an increase of 4.9%, or $10.6 million, compared to the prior year period. Net loss was $1.4 million, a decrease of 55.6%, or $0.5 million, compared to the prior year period. Adjusted EBITDA was $21.6 million, a decrease of 8.9%, or $2.1 million, compared to the prior year period.

As of December 31, 2020, 8th Avenue was capitalized with $12.6 million of unrestricted cash and cash equivalents, $614.5 million of senior secured debt, $60.1 million related to a sale-leaseback transaction, $250.0 million in principal amount of preferred equity and $70.4 million of accumulated, but unpaid, preferred dividends. Summarized financial information for 8th Avenue is disclosed later in this release.

For 8th Avenue, Post management continues to expect fiscal year 2021 Adjusted EBITDA to range between $100-$105 million.

Post provides Adjusted EBITDA guidance for 8th Avenue 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 transaction, integration and sale-leaseback costs, non-cash stock-based compensation and other charges reflected in 8th Avenue's reconciliation 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 "Post's Use of Non-GAAP Measures."

Post's Use of Non-GAAP Measures

Post 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."

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