Post Holdings Reports Results for the Fourth Quarter and Fiscal Year 2024

ST. LOUIS, Nov. 14, 2024 /PRNewswire/ -- Post Holdings, Inc. (NYSE:POST, Financial), a consumer packaged goods holding company, today reported results for the fourth fiscal quarter and fiscal year ended September 30, 2024.

Highlights:

• Fourth quarter net sales of $2.0 billion; operating profit of $190.9 million; net earnings of $81.6 million and Adjusted EBITDA (non-GAAP)* of $348.7 million
• Fiscal year net sales of $7.9 billion; operating profit of $793.5 million; net earnings of $366.7 million and Adjusted EBITDA of $1,403.6 million
• Fiscal year 2025 Adjusted EBITDA (non-GAAP)* expected to range between $1,410-$1,460 million

*For additional information regarding non-GAAP measures, such as Adjusted EBITDA, Adjusted net earnings, Adjusted diluted earnings per common share and segment Adjusted EBITDA, see the related explanations presented under "Use of Non-GAAP Measures" later in this release. 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 the adjustments described under "Outlook" below.

Basis of Presentation

On April 28, 2023, Post completed its acquisition of a portion of The J. M. Smucker Company's ("Smucker") pet food business ("Pet Food"), the results of which are included in the Post Consumer Brands segment. 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 also 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.

Fourth Quarter Consolidated Operating Results

Net sales were $2,010.1 million, an increase of 3.3%, or $64.7 million, compared to $1,945.4 million in the prior year period and included $67.0 million in net sales from Perfection. Excluding the benefit from acquisitions in the current year period, net sales growth in Foodservice (driven by volume growth and mix shift to higher value-added products) was offset by declines in Post Consumer Brands (driven by volume declines in co-manufactured pet food), Refrigerated Retail (driven by 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 $575.4 million, or 28.6% of net sales, an increase of 4.4%, or $24.0 million, compared to $551.4 million, or 28.3% of net sales, in the prior year period.

Selling, general and administrative ("SG&A") expenses were $341.7 million, or 17.0% of net sales, an increase of 10.4%, or $32.2 million, compared to $309.5 million, or 15.9% of net sales, in the prior year period. The increase was primarily driven by increased advertising and commercial spend in the current year period. Operating profit was $190.9 million, an increase of 24.8%, or $37.9 million, compared to $153.0 million in the prior year period. Operating profit in the prior year period included a non-cash goodwill impairment of $42.2 million, which is discussed later in this release and was treated as an adjustment for non-GAAP measures.

Net earnings were $81.6 million, an increase of 24.2%, or $15.9 million, compared to $65.7 million in the prior year period. Net earnings included the following:

Diluted earnings per common share were $1.28, compared to $1.01 in the prior year period. Adjusted net earnings (non-GAAP)* were $100.9 million, compared to $110.9 million in the prior year period. Adjusted diluted earnings per common share (non-GAAP)* were $1.53, compared to $1.63 in the prior year period.

Adjusted EBITDA was $348.7 million, a decrease of 0.1%, or $0.3 million, compared to $349.0 million in the prior year period.

Fiscal Year 2024 Consolidated Operating Results

Net sales were $7,922.7 million, an increase of 13.3%, or $931.7 million, compared to $6,991.0 million in the prior year. Gross profit was $2,304.9 million, or 29.1% of net sales, an increase of 22.5%, or $423.2 million, compared to $1,881.7 million, or 26.9% of net sales, in the prior year.

SG&A expenses were $1,330.4 million, or 16.8% of net sales, an increase of 23.4%, or $252.0 million, compared to $1,078.4 million, or 15.4% of net sales, in the prior year. SG&A expenses in the year ended September 30, 2024 included $36.5 million of integration costs, which were primarily related to the Pet Food acquisition and were treated as adjustments for non-GAAP measures, and $16.0 million of restructuring and facility closure costs, which were primarily related to the scheduled closing of Post's cereal manufacturing facility in Lancaster, Ohio and were treated as adjustments for non-GAAP measures. Operating profit was $793.5 million, an increase of 32.5%, or $194.6 million, compared to $598.9 million in the prior year. Operating profit in the year ended September 30, 2023 included a non-cash goodwill impairment of $42.2 million, which is discussed later in this release and was treated as an adjustment for non-GAAP measures.

Net earnings were $366.7 million, an increase of 21.7%, or $65.4 million, compared to $301.3 million in the prior year. Net earnings included the following:

Diluted earnings per common share were $5.64, compared to $4.82 in the prior year. Adjusted net earnings were $419.5 million, compared to $358.1 million in the prior year. Adjusted diluted earnings per common share were $6.27, compared to $5.34 in the prior year.

Adjusted EBITDA was $1,403.6 million, an increase of 13.8%, or $170.2 million, compared to $1,233.4 million in the prior year.

Post Consumer Brands

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

For the fourth quarter, net sales were $1,047.4 million, an increase of 3.9%, or $39.4 million, compared to the prior year period. Net sales included $67.0 million in the fourth quarter of 2024 attributable to Perfection. Excluding the benefit from Perfection in the current year period, volumes decreased 6.3%, primarily driven by declines in co-manufactured pet food. Segment profit was $140.2 million, a decrease of 0.6%, or $0.8 million, compared to the prior year period. Segment Adjusted EBITDA (non-GAAP)* was $203.7 million, an increase of 2.0%, or $4.0 million, compared to the prior year period.

For fiscal year 2024, net sales were $4,109.6 million, an increase of 35.5%, or $1,076.5 million, compared to the prior year. Segment profit was $541.2 million, an increase of 42.9%, or $162.4 million, compared to the prior year. Segment Adjusted EBITDA was $786.0 million, an increase of 35.9%, or $207.6 million, compared to the prior year.

Weetabix

Primarily United Kingdom ("U.K.") RTE cereal, muesli and protein-based shakes.

For the fourth quarter, net sales were $140.0 million, an increase of 3.8%, or $5.1 million, compared to the prior year period. Net sales included $6.8 million in the fourth quarter of 2024 attributable to Deeside and reflected a foreign currency exchange rate tailwind of approximately 270 basis points. Excluding the impact of Deeside, volumes decreased 6.5%, primarily driven by decreases in non-biscuit branded and private label products. Segment profit was $19.7 million, an increase of 30.5%, or $4.6 million, compared to the prior year period. Segment Adjusted EBITDA was $32.4 million, an increase of 30.1%, or $7.5 million, compared to the prior year period.

For fiscal year 2024, net sales were $543.2 million, an increase of 6.1%, or $31.1 million, compared to the prior year. Segment profit was $82.9 million, an increase of 12.2%, or $9.0 million, compared to the prior year. Segment Adjusted EBITDA was $125.0 million, an increase of 13.4%, or $14.8 million, compared to the prior year.

Foodservice

Primarily egg and potato products.

For the fourth quarter, net sales were $596.1 million, an increase of 4.7%, or $26.6 million, compared to the prior year period. Volumes increased 3.6%, primarily driven by distribution gains in both eggs and potatoes. Segment profit was $78.3 million, a decrease of 7.4%, or $6.3 million, compared to the prior year period. Segment Adjusted EBITDA was $107.5 million, a decrease of 8.1%, or $9.5 million, compared to the prior year period.

For fiscal year 2024, net sales were $2,307.1 million, a decrease of 4.9%, or $118.8 million, compared to the prior year. Segment profit was $308.1 million, a decrease of 11.8%, or $41.4 million, compared to the prior year. Segment Adjusted EBITDA was $435.4 million, a decrease of 9.4%, or $45.1 million, compared to the prior year.

Refrigerated Retail

Primarily side dish, egg, cheese and sausage products.

For the fourth quarter, net sales were $226.5 million, a decrease of 2.9%, or $6.8 million, compared to the prior year period. Volumes increased 0.7%, as growth in side dishes and sausage was partially offset by distribution losses in cheese and lower margin egg products. Volume information by product is disclosed in a table presented later in this release. Segment profit was $12.8 million, an increase of 6.7%, or $0.8 million, compared to the prior year period. Segment Adjusted EBITDA was $31.6 million, an increase of 2.9%, or $0.9 million, compared to the prior year period.

For fiscal year 2024, net sales were $962.2 million, a decrease of 5.6%, or $57.5 million, compared to the prior year. Segment profit was $75.9 million, an increase of 9.7%, or $6.7 million, compared to the prior year. Segment Adjusted EBITDA was $149.0 million, an increase of 1.2%, or $1.7 million, compared to the prior year.

Impairment of Goodwill and Other Intangible Assets

No goodwill impairment charge was recorded in fiscal year 2024. Non-cash goodwill impairment of $42.2 million was recorded in the fourth quarter of fiscal year 2023 related to Post's Cheese and Dairy reporting unit within the Refrigerated Retail segment. The goodwill impairment was driven primarily by the narrowing of the pricing gap between branded and private label competitors, resulting in distribution losses and declining profitability.

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

Interest expense, net was $79.6 million in the fourth quarter of fiscal year 2024, compared to $76.7 million in the fourth quarter of fiscal year 2023. Interest expense, net was $316.5 million in fiscal year 2024, compared to $279.1 million in fiscal year 2023. The increase in interest expense, net in fiscal year 2024 was primarily driven by higher average outstanding principal amounts of debt, a higher weighted-average interest rate and lower interest income compared to the prior year.

Loss on extinguishment of debt, net of $6.7 million was recorded in the three months ended September 30, 2024 in connection with Post's partial repurchase of its 5.625% senior notes due January 2028. Loss on extinguishment of debt, net of $2.1 million was recorded in the fiscal year ended September 30, 2024. Gain on extinguishment of debt, net of $19.3 million and $40.5 million was recorded in the three months and fiscal year ended September 30, 2023, respectively, primarily in connection with Post's partial repurchase of its 4.50% senior notes due September 2031 and 4.625% senior notes due April 2030.

Expense (income) on swaps, net relates to mark-to-market adjustments on interest rate swaps. Expense on swaps, net was $11.0 million in the fourth quarter of fiscal year 2024, compared to income of $19.5 million in the prior year period. Expense on swaps, net was $15.7 million in fiscal year 2024, compared to income of $39.9 million in fiscal year 2023.

Income tax expense was $16.3 million in the fourth quarter of fiscal year 2024, an effective income tax rate of 16.6%, compared to $29.3 million in the fourth quarter of fiscal year 2023, an effective income tax rate of 30.9%. For the three months ended September 30, 2024, the effective income tax rate differed significantly from the statutory tax rate primarily as a result of the release of a valuation allowance on certain state net operating losses. For the three months ended September 30, 2023, the effective income tax rate differed significantly from the statutory tax rate primarily as a result of a non-deductible goodwill impairment. Income tax expense was $105.1 million in fiscal year 2024, an effective income tax rate of 22.3%, compared to $99.7 million in fiscal year 2023, an effective income tax rate of 24.1%.

Share Repurchases

During the fourth quarter of fiscal year 2024, Post repurchased 0.4 million shares of its common stock for $48.2 million at an average price of $107.48 per share. During fiscal year 2024, Post repurchased 3.0 million shares for $300.8 million at an average price of $101.74 per share. Subsequent to the end of the fourth quarter of fiscal year 2024 through November 14, 2024, Post repurchased 0.1 million shares for $15.9 million at an average price of $112.41 per share. As of November 14, 2024, Post had $472.3 million remaining under its share repurchase authorization

Outlook

Post management expects Adjusted EBITDA for fiscal year 2025 to be between $1,410-$1,460 million. 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 and impairments on equity securities and 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."

Executive Promotion

Post today announced that Matt Mainer, Post's Chief Financial Officer and Treasurer, was promoted from Senior Vice President to Executive Vice President. This promotion was effective November 13, 2024.

Conference Call to Discuss Earnings Results and Outlook

Post will host a conference call on Friday, November 15, 2024 at 9:00 a.m. ET to discuss financial results for the fourth quarter and fiscal year 2024 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) 225-9448 in the U.S. and (203) 518-9708 from outside of the U.S. The conference identification number is POSTQ424. 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, November 22, 2024 by dialing (800) 839-5146 in the U.S. and (402) 220-1508 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 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, labor shortages, public health crises, climatic events, highly pathogenic 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 Pet Food and Perfection, 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 its 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. ("BellRing");
• 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
[email protected]
(314) 806-3959

Media Relations
Tara Gray
[email protected]
(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, impairment of goodwill and other intangible assets, mark-to-market adjustments on commodity and foreign exchange hedges and warrant liabilities, inventory revaluation adjustment on acquired businesses, restructuring and facility closure costs, mark-to-market adjustments and impairments on equity securities and investments, gain on dissolution of PHPC, gain on bargain purchase, costs expected to be indemnified, net, asset disposal costs, provision for legal settlements, gain/loss on sale of business and advisory income. 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.