Lamb Weston Reports Fiscal Third Quarter 2024 Results; Updates Fiscal Year 2024 Outlook
Third Quarter Fiscal 2024 Highlights
-
GAAP and Non-GAAP results include a temporary, higher-than-expected impact from the transition to a new enterprise resource planning system in
North America and a$25 million pre-tax charge(1) for the write-off of excess raw potatoes -
GAAP Results as Compared to Third Quarter Fiscal 2023:
-
Net sales increased 16% to
$1,458 million , including$357 million of incremental sales attributable to the LW EMEA Acquisition -
Income from operations declined 16% to
$224 million -
Net income declined 17% to
$146 million -
Diluted EPS declined 17% to
$1.01
-
Net sales increased 16% to
-
Non-GAAP Results as Compared to Third Quarter Fiscal 2023:
-
Adjusted Income from Operations(2) declined from
$269 million to$263 million -
Adjusted Net Income(2) declined 18% to
$175 million -
Adjusted Diluted EPS(2)declined 18% to
$1.20 -
Adjusted EBITDA(2) declined from
$352 million to$344 million
-
Adjusted Income from Operations(2) declined from
-
Paid
$40 million in cash dividends to common shareholders
Updated Fiscal 2024 Outlook
-
Net sales of
$6.54 billion to$6.60 billion -
GAAP net income of
$770 million to$790 million , and Diluted EPS of$5.30 to$5.45 -
Adjusted EBITDA(2) of
$1,480 million to$1,510 million , which includes a temporary, higher-than-expected impact from the transition to a new ERP system inNorth America and a$96 million pre-tax charge(1) for the write-off of excess raw potatoes -
Adjusted Net Income(2) of
$800 million to$820 million and Adjusted Diluted EPS(2) of$5.50 to$5.65
“The transition to a new enterprise resource planning (ERP) system in
“As a result of the ERP transition’s impact and soft near-term restaurant traffic trends, we have reduced our annual sales and earnings guidance for the year. We remain confident in the underlying performance of the business, the health of the global frozen potato category and our ability to deliver sustainable, profitable growth over the long term.”
Summary of Third Quarter FY 2024 Results ($ in millions, except per share) |
|||||||||
|
Q3 2024 |
|
Year-Over-Year Growth Rates |
|
YTD FY 2024 |
|
Year-Over-Year Growth Rates |
||
Net sales |
$ |
1,458.3 |
|
16% |
|
$ |
4,855.7 |
|
33% |
Income from operations |
$ |
223.9 |
|
(16)% |
|
$ |
852.8 |
|
23% |
Net income |
$ |
146.1 |
|
(17)% |
|
$ |
595.8 |
|
17% |
Diluted EPS |
$ |
1.01 |
|
(17)% |
|
$ |
4.09 |
|
16% |
|
|
|
|
|
|
|
|
||
Adjusted Income from Operations(2) |
$ |
262.6 |
|
(2)% |
|
$ |
893.6 |
|
32% |
Adjusted Net Income (2) |
$ |
175.0 |
|
(18)% |
|
$ |
626.2 |
|
24% |
Adjusted Diluted EPS (2) |
$ |
1.20 |
|
(18)% |
|
$ |
4.29 |
|
23% |
Adjusted EBITDA (2) |
$ |
343.6 |
|
(2)% |
|
$ |
1,133.4 |
|
24% |
Q3 2024 Commentary
ERP Transition
At the beginning of the fiscal third quarter, the Company transitioned certain central systems and functions, including order to cash, produce to deliver, source to pay, and inventory management, among others in
In total, the Company estimates the ERP transition negatively impacted fiscal third quarter net income by approximately
-
Approximately
$7 million was recorded as a reduction in gross sales, and included accrued fees and charges for delayed or unfilled customer orders;
-
Approximately
$26 million was recorded in cost of sales, and included reduced fixed cost coverage and inefficiencies resulting from planned downtime at the Company's processing facilities, as well as additional freight charges; and
-
Approximately
$7 million was recorded in selling, general and administrative expenses, and largely included consulting expenses to restore order fulfillment rates.
Of the approximately
The Company believes the impact of the order fulfillment issues were contained to the fiscal third quarter as customer order fulfillment rates have been restored to pre-transition levels.
Q3 Results of Operations
Net sales increased
Net sales, excluding the incremental sales attributable to the LW EMEA Acquisition, were down
Gross profit increased
Adjusted Gross Profit(2) increased
The increase in Adjusted Gross Profit(2) was also partially offset by higher costs per pound, which largely reflected mid-single-digit cost inflation, in aggregate, for key inputs, including: raw potatoes, labor, energy, and ingredients such as grains and starches used in product coatings. The increase in per pound costs was partially offset by lower transportation rates and lower cost of edible oils.
Selling, general and administrative expenses (“SG&A”) increased
Adjusted SG&A(2) increased
Income from operations declined
Net income was
Adjusted Net Income(2) was
Adjusted EBITDA(2) declined
The Company’s effective tax rate(3) in the third quarter was 22.8 percent, versus 19.4 percent in the prior year quarter. The Company’s effective tax rate varies from the
Q3 2024 Segment Highlights
North America Summary |
||||||||
|
Q3 2024 |
|
Year-Over-Year Growth Rates |
|
Price/Mix |
|
Volume |
|
|
(dollars in millions) |
|
|
|
|
|
|
|
Net sales |
$ |
947.5 |
|
(12%) |
|
5% |
|
(17%) |
Segment Adjusted EBITDA |
$ |
285.9 |
|
(14%) |
|
|
|
|
Net sales for the
Price/mix increased 5 percent, reflecting the carryover benefit of inflation-driven pricing actions taken in fiscal 2023, as well as pricing actions for contracts with large and regional chain restaurant customers in fiscal 2024. The increase in price/mix was partially offset by lower customer transportation charges and unfavorable mix associated with the transition to a new ERP system.
North America Segment Adjusted EBITDA declined
International Summary |
||||||||
|
Q3 2024 |
|
Year-Over-Year Growth Rates |
|
Price/Mix |
|
Volume |
|
|
(dollars in millions) |
|
|
|
|
|
|
|
Net sales |
$ |
510.8 |
|
179% |
|
1% |
|
178% |
Segment Adjusted EBITDA |
$ |
101.7 |
|
88% |
|
|
|
|
Net sales for the International segment, which includes all sales to customers outside of
International Segment Adjusted EBITDA increased
Equity Method Investment Earnings (Loss)
Equity method investment earnings (loss) from unconsolidated joint ventures were earnings of
Adjusted Equity Method Investment Earnings(2) declined
Liquidity and Cash Flows
As of
Net cash provided by operating activities for the first three quarters of fiscal 2024 was
Capital Returned to Shareholders
In the third quarter of fiscal 2024, the Company returned
Fiscal 2024 Outlook
The Company updated its financial targets for fiscal 2024, as follows:
-
The Company updated its annual net sales target range to
$6.54 billion to$6.60 billion , which includes$1.1 billion of incremental sales attributable to the consolidation of the financial results of LW EMEA during the first three quarters of the fiscal year. The Company reduced its annual net sales target from its previous range of$6.8 billion to$7.0 billion to reflect the higher-than-expected impact on customer order fulfillment rates from the transition to a new ERP system during the Company’s fiscal third quarter, as well as soft near-term restaurant traffic and retail trends inNorth America and other key international markets. The Company is targeting net sales of$1.69 billion to$1.75 billion in the Company’s fiscal fourth quarter, with growth versus the prior year quarter driven by higher price/mix.
-
The Company updated its target ranges for net income to
$770 million to$790 million and Diluted EPS of$5.30 to$5.45 , including a net loss from foreign currency exchange and unrealized mark-to-market derivative gains and losses and items impacting comparability of$40.8 million ($30.4 million after-tax, or$0.20 per share) during the first three quarters of fiscal 2024. The Company previously targeted a net income range of$830 million to$900 million and a Diluted EPS range of$5.70 to$6.15 .
-
The Company updated its target range for Adjusted EBITDA(2) to
$1,480 million to$1,510 million , which includes a$95.9 million pre-tax charge(1) for the write-off of excess raw potatoes, as well as incremental costs associated with the higher-than-expected impact of the transition to a new ERP system during the fiscal third quarter. The Company previously targeted an Adjusted EBITDA(2) range of$1,540 million to$1,620 million . The Company is targeting Adjusted EBITDA(2) of$350 million to$375 million in the Company’s fiscal fourth quarter, and expects higher net sales and Adjusted Gross Profit(2) to drive earnings growth, partially offset by Adjusted SG&A(2) of$190 million to$195 million .
-
The Company updated its target ranges for Adjusted Net Income(2) to
$800 million to$820 million and Adjusted Diluted EPS(2) to$5.50 to$5.65 from its previous target ranges of$830 million to$900 million and$5.70 to$6.15 per share, respectively.
The Company updated other financial targets, as follows:
-
Cash used for capital expenditures of
$950 million , which is the upper end of its previous estimated range of$900 million to$950 million ; and
- An effective tax rate(3) (full year) at the lower end of its targeted range of 23 percent to 24 percent.
The Company maintained its targets for depreciation and amortization expense of approximately
End Notes |
|
(1) |
Both GAAP and Non-GAAP results for the thirteen weeks ended |
(2) |
Adjusted Gross Profit, Adjusted SG&A, Adjusted Income from Operations, Adjusted Equity Method Investment Earnings, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA, are non-GAAP financial measures. Please see the discussion of non-GAAP financial measures, including a discussion of guidance provided on a non-GAAP basis, and the associated reconciliations at the end of this press release for more information. |
(3) |
The effective tax rate is calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings. |
Webcast and Conference Call Information
https://event.webcasts.com/starthere.jsp?ei=1659128&tp_key=9deeb425d4
A rebroadcast of the conference call will be available beginning on
About
Non-GAAP Financial Measures
To supplement the financial information included in this press release, the Company has presented Adjusted Gross Profit, Adjusted SG&A, Adjusted Income from Operations, Adjusted Income Tax Expense (Benefit), Adjusted Equity Method Investment Earnings, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA, each of which is considered a non-GAAP financial measure. The non-GAAP financial measures presented in this press release should be viewed in addition to, and not as an alternative for, financial measures prepared in accordance with accounting principles generally accepted in
Management uses these non-GAAP financial measures to assist in analyzing what management views as the Company's core operating performance for purposes of business decision making. Management believes that presenting these non-GAAP financial measures provides investors with useful supplemental information because they (i) provide meaningful supplemental information regarding financial performance by excluding foreign currency exchange and unrealized derivative activities and items affecting comparability between periods, (ii) permit investors to view performance using the same tools that management uses to budget, make operating and strategic decisions, and evaluate the Company’s core operating performance across periods, and (iii) otherwise provide supplemental information that may be useful to investors in evaluating the Company's financial results. In addition, the Company believes that the presentation of these non-GAAP financial measures, when considered together with the most directly comparable GAAP financial measures and the reconciliations to those GAAP financial measures, provides investors with additional tools to understand the factors and trends affecting the Company's underlying business than could be obtained absent these disclosures.
The Company has also provided guidance in this press release with respect to certain non-GAAP financial measures, including non-GAAP Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA. The Company cannot predict certain items that are included in reported GAAP results, including items such as strategic developments, integration and acquisition costs and related fair value adjustments, impacts of unrealized mark-to-market derivative gains and losses, foreign currency exchange, and items impacting comparability. This list is not inclusive of all potential items, and the Company intends to update the list as appropriate as these items are evaluated on an ongoing basis. In addition, the items that cannot be predicted can be highly variable and could potentially have significant impacts on the Company’s GAAP measures. As such, prospective quantification of these items is not feasible without unreasonable efforts, and a reconciliation of forward-looking non-GAAP Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA to GAAP net income or diluted earnings per share has not been provided.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Words such as “expect,” “believes,” “will,” “deliver,” “drive,” “grow,” “remain,” “estimate,” “outlook,” “target,” and variations of such words and similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding: the Company’s business and financial outlook and prospects; the Company’s plans, execution, capital expenditures and investments; ERP system transition; and conditions in the Company’s industry and the global economy. These forward-looking statements are based on management’s current expectations and are subject to uncertainties and changes in circumstances. Readers of this press release should understand that these statements are not guarantees of performance or results. Many factors could affect these forward-looking statements and the Company’s actual financial results and cause them to vary materially from the expectations contained in the forward-looking statements, including those set forth in this press release. These risks and uncertainties include, among other things: the availability and prices of raw materials and other commodities; labor shortages and other operational challenges; an uncertain general economic environment, including inflationary pressures and recessionary concerns, any of which could adversely impact the Company’s business, financial condition or results of operations, including the demand and prices for the Company’s products; difficulties, disruptions or delays in implementing new technology, including the Company's new ERP system; risks associated with integrating acquired businesses, including LW EMEA; levels of labor and people-related expenses; the Company’s ability to successfully execute its long-term value creation strategies; the Company’s ability to execute on large capital projects, including construction of new production lines or facilities; the competitive environment and related conditions in the markets in which the Company operates; political and economic conditions of the countries in which the Company conducts business and other factors related to its international operations; disruptions in the global economy caused by conflicts such as the war in
Consolidated Statements of Earnings (unaudited, in millions, except per share amounts) |
||||||||||||
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|||||||||
|
|
|
|
|
|
|
|
|||||
Net sales |
$ |
1,458.3 |
|
$ |
1,253.6 |
|
|
$ |
4,855.7 |
|
$ |
3,655.7 |
Cost of sales (2) (3) |
|
1,054.6 |
|
|
855.8 |
|
|
|
3,476.9 |
|
|
2,603.0 |
Gross profit |
|
403.7 |
|
|
397.8 |
|
|
|
1,378.8 |
|
|
1,052.7 |
Selling, general and administrative expenses (4) |
|
179.8 |
|
|
131.5 |
|
|
|
526.0 |
|
|
357.6 |
Income from operations |
|
223.9 |
|
|
266.3 |
|
|
|
852.8 |
|
|
695.1 |
Interest expense, net |
|
35.7 |
|
|
25.8 |
|
|
|
95.5 |
|
|
76.4 |
Income before income taxes and equity method earnings |
|
188.2 |
|
|
240.5 |
|
|
|
757.3 |
|
|
618.7 |
Income tax expense |
|
43.1 |
|
|
42.1 |
|
|
|
179.3 |
|
|
152.6 |
Equity method investment earnings (loss) (2) (5) |
|
1.0 |
|
|
(23.3 |
) |
|
|
17.8 |
|
|
44.0 |
Net income (2) |
$ |
146.1 |
|
$ |
175.1 |
|
|
$ |
595.8 |
|
$ |
510.1 |
Earnings per share: |
|
|
|
|
|
|
|
|||||
Basic |
$ |
1.01 |
|
$ |
1.22 |
|
|
$ |
4.11 |
|
$ |
3.54 |
Diluted |
$ |
1.01 |
|
$ |
1.21 |
|
|
$ |
4.09 |
|
$ |
3.53 |
Dividends declared per common share |
$ |
0.360 |
|
$ |
0.280 |
|
|
$ |
0.920 |
|
$ |
0.770 |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|||||
Basic |
|
144.5 |
|
|
144.0 |
|
|
|
145.0 |
|
|
144.0 |
Diluted |
|
145.3 |
|
|
144.8 |
|
|
|
145.8 |
|
|
144.7 |
_______________________________________________ |
||
(1) |
The thirteen and thirty-nine weeks ended |
|
(2) |
Net income included the following: | |
|
a. |
A |
|
b. |
For both the thirteen and thirty-nine weeks ended |
(3) |
Cost of sales included activity related to the step-up and sale of inventory acquired in the LW EMEA Acquisition, which resulted in |
|
(4) |
Selling, general and administrative (SG&A) expenses included the following: | |
|
a. |
Net integration and acquisition-related expenses of |
|
b. |
Unrealized losses related to mark-to-market adjustments associated with currency hedging contracts of |
|
c. |
Foreign currency exchange losses of |
(5) |
Equity method investment earnings (loss) included a |
|
|
Equity method investment earnings (loss) for the thirty-nine weeks ended |
Consolidated Balance Sheets (unaudited, in millions, except share data) |
|||||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
62.3 |
|
|
$ |
304.8 |
|
Receivables, less allowance for doubtful accounts of |
|
736.2 |
|
|
|
724.2 |
|
Inventories |
|
1,210.0 |
|
|
|
932.0 |
|
Prepaid expenses and other current assets |
|
150.6 |
|
|
|
166.2 |
|
Total current assets |
|
2,159.1 |
|
|
|
2,127.2 |
|
Property, plant and equipment, net |
|
3,406.4 |
|
|
|
2,808.0 |
|
Operating lease assets |
|
135.9 |
|
|
|
146.1 |
|
|
|
1,056.6 |
|
|
|
1,040.7 |
|
Intangible assets, net |
|
106.4 |
|
|
|
110.2 |
|
Other assets |
|
381.3 |
|
|
|
287.6 |
|
Total assets |
$ |
7,245.7 |
|
|
$ |
6,519.8 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Short-term borrowings |
$ |
538.4 |
|
|
$ |
158.5 |
|
Current portion of long-term debt and financing obligations |
|
139.1 |
|
|
|
55.3 |
|
Accounts payable |
|
684.1 |
|
|
|
636.6 |
|
Accrued liabilities |
|
454.4 |
|
|
|
509.8 |
|
Total current liabilities |
|
1,816.0 |
|
|
|
1,360.2 |
|
Long-term liabilities: |
|
|
|
||||
Long-term debt and financing obligations, excluding current portion |
|
3,175.1 |
|
|
|
3,248.4 |
|
Deferred income taxes |
|
254.6 |
|
|
|
252.1 |
|
Other noncurrent liabilities |
|
241.8 |
|
|
|
247.8 |
|
Total long-term liabilities |
|
3,671.5 |
|
|
|
3,748.3 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Common stock of |
|
150.7 |
|
|
|
150.3 |
|
|
|
(480.1 |
) |
|
|
(314.3 |
) |
Additional distributed capital |
|
(521.0 |
) |
|
|
(558.6 |
) |
Retained earnings |
|
2,622.1 |
|
|
|
2,160.7 |
|
Accumulated other comprehensive loss |
|
(13.5 |
) |
|
|
(26.8 |
) |
Total stockholders’ equity |
|
1,758.2 |
|
|
|
1,411.3 |
|
Total liabilities and stockholders’ equity |
$ |
7,245.7 |
|
|
$ |
6,519.8 |
|
Consolidated Statements of Cash Flows (unaudited, in millions) |
|||||||
|
Thirty-Nine Weeks Ended |
||||||
|
|
|
|
||||
Cash flows from operating activities |
|
|
|
||||
Net income |
$ |
595.8 |
|
|
$ |
510.1 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization of intangibles and debt issuance costs |
|
220.0 |
|
|
|
153.3 |
|
Stock-settled, stock-based compensation expense |
|
34.4 |
|
|
|
28.0 |
|
Equity method investment earnings in excess of distributions |
|
(4.8 |
) |
|
|
(44.3 |
) |
Deferred income taxes |
|
1.3 |
|
|
|
(25.5 |
) |
Foreign currency remeasurement gain |
|
(0.1 |
) |
|
|
(21.2 |
) |
Other |
|
(2.9 |
) |
|
|
(22.3 |
) |
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
||||
Receivables |
|
(8.6 |
) |
|
|
(47.2 |
) |
Inventories |
|
(275.0 |
) |
|
|
(254.3 |
) |
Income taxes payable/receivable, net |
|
36.3 |
|
|
|
13.1 |
|
Prepaid expenses and other current assets |
|
(5.9 |
) |
|
|
5.9 |
|
Accounts payable |
|
(25.6 |
) |
|
|
16.7 |
|
Accrued liabilities |
|
(83.4 |
) |
|
|
22.8 |
|
Net cash provided by operating activities |
$ |
481.5 |
|
|
$ |
335.1 |
|
Cash flows from investing activities |
|
|
|
||||
Additions to property, plant and equipment |
|
(763.4 |
) |
|
|
(429.4 |
) |
Additions to other long-term assets |
|
(64.9 |
) |
|
|
(67.6 |
) |
Acquisition of interests in joint venture, net |
|
— |
|
|
|
(42.3 |
) |
Acquisition of business, net of cash acquired |
|
(11.2 |
) |
|
|
— |
|
Other |
|
14.7 |
|
|
|
3.6 |
|
Net cash used for investing activities |
$ |
(824.8 |
) |
|
$ |
(535.7 |
) |
Cash flows from financing activities |
|
|
|
||||
Proceeds from short-term borrowings, net |
|
379.1 |
|
|
|
— |
|
Proceeds from issuance of debt |
|
50.1 |
|
|
|
510.8 |
|
Repayments of debt and financing obligations |
|
(42.0 |
) |
|
|
(24.6 |
) |
Dividends paid |
|
(122.0 |
) |
|
|
(105.8 |
) |
Repurchase of common stock and common stock withheld to cover taxes |
|
(165.1 |
) |
|
|
(47.2 |
) |
Other |
|
— |
|
|
|
(1.9 |
) |
Net cash provided by financing activities |
$ |
100.1 |
|
|
$ |
331.3 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
0.7 |
|
|
|
19.3 |
|
Net (decrease) increase in cash and cash equivalents |
|
(242.5 |
) |
|
|
150.0 |
|
Cash and cash equivalents, beginning of period |
|
304.8 |
|
|
|
525.0 |
|
Cash and cash equivalents, end of period |
$ |
62.3 |
|
|
$ |
675.0 |
|
Segment Information (unaudited, in millions, except percentages) |
|||||||||||
|
Thirteen Weeks Ended |
||||||||||
|
|
|
|
|
Year-Over- Year Growth Rates |
|
Price/Mix |
|
Volume |
||
Segment net sales |
|
|
|
|
|
|
|
|
|
||
|
$ |
947.5 |
|
$ |
1,070.8 |
|
(12%) |
|
5% |
|
(17%) |
International (1) |
|
510.8 |
|
|
182.8 |
|
179% |
|
1% |
|
178% |
|
$ |
1,458.3 |
|
$ |
1,253.6 |
|
16% |
|
4% |
|
12% |
|
|
|
|
|
|
|
|
|
|
||
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
||
|
$ |
285.9 |
|
$ |
333.0 |
|
(14%) |
|
|
|
|
International (1) |
|
101.7 |
|
|
54.1 |
|
88% |
|
|
|
|
|
Thirty-Nine Weeks Ended |
||||||||||
|
|
|
|
|
Year-Over- Year Growth Rates |
|
Price/Mix |
|
Volume |
||
Segment net sales |
|
|
|
|
|
|
|
|
|
||
|
$ |
3,250.0 |
|
$ |
3,088.9 |
|
5% |
|
13% |
|
(8%) |
International (1) |
|
1,605.7 |
|
|
566.8 |
|
183% |
|
10% |
|
173% |
|
$ |
4,855.7 |
|
$ |
3,655.7 |
|
33% |
|
15% |
|
18% |
|
|
|
|
|
|
|
|
|
|
||
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
||
|
$ |
986.6 |
|
$ |
864.4 |
|
14% |
|
|
|
|
International (1) |
|
291.5 |
|
|
147.4 |
|
98% |
|
|
|
|
_______________________________________________ |
|
(1) |
The Company acquired the remaining equity interest in LW EMEA in the fourth quarter of fiscal 2023. Accordingly, LW EMEA’s net sales and adjusted EBITDA are reported in the International segment for the thirteen and thirty-nine weeks ended |
Segment Adjusted EBITDA includes equity method investment earnings and losses and excludes unallocated corporate costs, foreign currency exchange gains and losses, unrealized mark-to-market derivative gains and losses, and items discussed in footnotes (1)-(5) to the Consolidated Statements of Earnings. |
Reconciliation of Non-GAAP Financial Measures (unaudited, in millions, except per share amounts) |
|||||||||||||||||||||||||
Thirteen Weeks Ended |
|
Gross Profit |
|
SG&A |
|
Income From Operations |
|
Interest Expense |
|
Income Tax Expense (Benefit) (1) |
|
Equity Method Investment Earnings (Loss) |
|
Net Income |
|
Diluted EPS |
|||||||||
As reported |
|
$ |
403.7 |
|
$ |
179.8 |
|
|
$ |
223.9 |
|
$ |
35.7 |
|
$ |
43.1 |
|
$ |
1.0 |
|
$ |
146.1 |
|
$ |
1.01 |
Unrealized derivative losses (2) |
|
|
23.3 |
|
|
(4.0 |
) |
|
|
27.3 |
|
|
— |
|
|
7.0 |
|
|
— |
|
|
20.3 |
|
|
0.14 |
Foreign currency exchange losses (2) |
|
|
— |
|
|
(9.0 |
) |
|
|
9.0 |
|
|
— |
|
|
2.2 |
|
|
— |
|
|
6.8 |
|
|
0.04 |
Item impacting comparability (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Integration and acquisition-related items, net |
|
|
— |
|
|
(2.4 |
) |
|
|
2.4 |
|
|
— |
|
|
0.6 |
|
|
— |
|
|
1.8 |
|
|
0.01 |
Total adjustments |
|
|
23.3 |
|
|
(15.4 |
) |
|
|
38.7 |
|
|
— |
|
|
9.8 |
|
|
— |
|
|
28.9 |
|
|
0.19 |
Adjusted (3) |
|
$ |
427.0 |
|
$ |
164.4 |
|
|
$ |
262.6 |
|
$ |
35.7 |
|
$ |
52.9 |
|
$ |
1.0 |
|
$ |
175.0 |
|
$ |
1.20 |
Thirteen Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
As reported |
|
$ |
397.8 |
|
$ |
131.5 |
|
|
$ |
266.3 |
|
|
$ |
25.8 |
|
$ |
42.1 |
|
|
$ |
(23.3 |
) |
|
$ |
175.1 |
|
|
$ |
1.21 |
|
Unrealized derivative losses (2) |
|
|
5.1 |
|
|
— |
|
|
|
5.1 |
|
|
|
— |
|
|
13.5 |
|
|
|
47.1 |
|
|
|
38.7 |
|
|
|
0.27 |
|
Foreign currency exchange losses (2) |
|
|
— |
|
|
(1.8 |
) |
|
|
1.8 |
|
|
|
— |
|
|
0.4 |
|
|
|
— |
|
|
|
1.4 |
|
|
|
0.01 |
|
Item impacting comparability (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Integration and acquisition-related items, net |
|
|
— |
|
|
4.3 |
|
|
|
(4.3 |
) |
|
|
— |
|
|
(1.5 |
) |
|
|
— |
|
|
|
(2.8 |
) |
|
|
(0.02 |
) |
Total adjustments |
|
|
5.1 |
|
|
2.5 |
|
|
|
2.6 |
|
|
|
— |
|
|
12.4 |
|
|
|
47.1 |
|
|
|
37.3 |
|
|
|
0.26 |
|
Adjusted (3) |
|
$ |
402.9 |
|
$ |
134.0 |
|
|
$ |
268.9 |
|
|
$ |
25.8 |
|
$ |
54.5 |
|
|
$ |
23.8 |
|
|
$ |
212.4 |
|
|
$ |
1.47 |
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
As reported |
|
$ |
1,378.8 |
|
|
$ |
526.0 |
|
|
$ |
852.8 |
|
$ |
95.5 |
|
$ |
179.3 |
|
$ |
17.8 |
|
$ |
595.8 |
|
$ |
4.09 |
Unrealized derivative gains and losses (2) |
|
|
(3.8 |
) |
|
|
(5.4 |
) |
|
|
1.6 |
|
|
— |
|
|
0.5 |
|
|
— |
|
|
1.1 |
|
|
0.01 |
Foreign currency exchange losses (2) |
|
|
— |
|
|
|
(7.3 |
) |
|
|
7.3 |
|
|
— |
|
|
1.8 |
|
|
— |
|
|
5.5 |
|
|
0.03 |
Items impacting comparability (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Inventory step-up from acquisition |
|
|
20.7 |
|
|
|
— |
|
|
|
20.7 |
|
|
— |
|
|
5.3 |
|
|
— |
|
|
15.4 |
|
|
0.11 |
Integration and acquisition-related items, net |
|
|
— |
|
|
|
(11.2 |
) |
|
|
11.2 |
|
|
— |
|
|
2.8 |
|
|
— |
|
|
8.4 |
|
|
0.05 |
Total adjustments |
|
|
16.9 |
|
|
|
(23.9 |
) |
|
|
40.8 |
|
|
— |
|
|
10.4 |
|
|
— |
|
|
30.4 |
|
|
0.20 |
Adjusted (3) |
|
$ |
1,395.7 |
|
|
$ |
502.1 |
|
|
$ |
893.6 |
|
$ |
95.5 |
|
$ |
189.7 |
|
$ |
17.8 |
|
$ |
626.2 |
|
$ |
4.29 |
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
As reported |
|
$ |
1,052.7 |
|
$ |
357.6 |
|
|
$ |
695.1 |
|
|
$ |
76.4 |
|
$ |
152.6 |
|
|
$ |
44.0 |
|
|
$ |
510.1 |
|
|
$ |
3.53 |
|
Unrealized derivative losses (2) |
|
|
8.7 |
|
|
— |
|
|
|
8.7 |
|
|
|
— |
|
|
10.6 |
|
|
|
32.7 |
|
|
|
30.8 |
|
|
|
0.20 |
|
Foreign currency exchange losses (2) |
|
|
— |
|
|
(4.2 |
) |
|
|
4.2 |
|
|
|
— |
|
|
1.0 |
|
|
|
— |
|
|
|
3.2 |
|
|
|
0.02 |
|
Items impacting comparability (2): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Integration and acquisition-related items, net |
|
|
— |
|
|
30.8 |
|
|
|
(30.8 |
) |
|
|
— |
|
|
(8.8 |
) |
|
|
— |
|
|
|
(22.0 |
) |
|
|
(0.15 |
) |
Gain on acquisition of interest in joint venture |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(15.1 |
) |
|
|
(15.1 |
) |
|
|
(0.10 |
) |
Total adjustments |
|
|
8.7 |
|
|
26.6 |
|
|
|
(17.9 |
) |
|
|
— |
|
|
2.8 |
|
|
|
17.6 |
|
|
|
(3.1 |
) |
|
|
(0.03 |
) |
Adjusted (3) |
|
$ |
1,061.4 |
|
$ |
384.2 |
|
|
$ |
677.2 |
|
|
$ |
76.4 |
|
$ |
155.4 |
|
|
$ |
61.6 |
|
|
$ |
507.0 |
|
|
$ |
3.50 |
|
_______________________________________________ |
|
(1) |
Items are tax effected at the marginal rate based on the applicable tax jurisdiction. |
(2) |
See footnotes (2)-(5) to the Consolidated Statements of Earnings for a discussion of the adjustment items. |
(3) |
See “Non-GAAP Financial Measures” in this press release for additional information. |
Reconciliation of Non-GAAP Financial Measures (unaudited, in millions) |
||||||||||||||||
To supplement the financial information included in this press release, the Company has presented Adjusted EBITDA, which the Company defines as earnings, less interest expense, income tax expense, depreciation and amortization, foreign currency exchange and unrealized mark-to-market derivative gains and losses, and items impacting comparability. Adjusted EBITDA is a non-GAAP financial measure. The following table reconciles net income to Adjusted EBITDA. |
||||||||||||||||
|
|
Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (3) |
|
$ |
146.1 |
|
|
$ |
175.1 |
|
|
$ |
595.8 |
|
|
$ |
510.1 |
|
Interest expense, net |
|
|
35.7 |
|
|
|
25.8 |
|
|
|
95.5 |
|
|
|
76.4 |
|
Income tax expense |
|
|
43.1 |
|
|
|
42.1 |
|
|
|
179.3 |
|
|
|
152.6 |
|
Income from operations including equity method investment earnings (1) |
|
|
224.9 |
|
|
|
243.0 |
|
|
|
870.6 |
|
|
|
739.1 |
|
Depreciation and amortization (2) |
|
|
80.0 |
|
|
|
59.5 |
|
|
|
222.0 |
|
|
|
176.9 |
|
Unrealized derivative losses (3) |
|
|
27.3 |
|
|
|
5.1 |
|
|
|
1.6 |
|
|
|
8.7 |
|
Unconsolidated joint venture unrealized derivative losses (3) |
|
|
— |
|
|
|
47.1 |
|
|
|
— |
|
|
|
32.7 |
|
Foreign currency exchange losses (3) |
|
|
9.0 |
|
|
|
1.8 |
|
|
|
7.3 |
|
|
|
4.2 |
|
Items impacting comparability (3): |
|
|
|
|
|
|
|
|
||||||||
Inventory step-up from acquisition |
|
|
— |
|
|
|
— |
|
|
|
20.7 |
|
|
|
— |
|
Integration and acquisition-related items, net |
|
|
2.4 |
|
|
|
(4.3 |
) |
|
|
11.2 |
|
|
|
(30.8 |
) |
Gain on acquisition of interest in joint venture |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(15.1 |
) |
Adjusted EBITDA (4) |
|
$ |
343.6 |
|
|
$ |
352.2 |
|
|
$ |
1,133.4 |
|
|
$ |
915.7 |
|
|
|
|
|
|
|
|
|
|
||||||||
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
285.9 |
|
|
$ |
333.0 |
|
|
$ |
986.6 |
|
|
$ |
864.4 |
|
International |
|
|
101.7 |
|
|
|
54.1 |
|
|
|
291.5 |
|
|
|
147.4 |
|
Unallocated corporate costs (5) |
|
|
(44.0 |
) |
|
|
(34.9 |
) |
|
|
(144.7 |
) |
|
|
(96.1 |
) |
Adjusted EBITDA |
|
$ |
343.6 |
|
|
$ |
352.2 |
|
|
$ |
1,133.4 |
|
|
$ |
915.7 |
|
_______________________________________________ |
|
(1) |
|
(2) |
Depreciation and amortization included interest expense, income tax expense, and depreciation and amortization from equity method investments of |
(3) |
See footnotes (2)-(5) to the Consolidated Statements of Earnings for more information. |
(4) |
See “Non-GAAP Financial Measures” in this press release for additional information. |
(5) |
The Company’s two segments include corporate support staff and services that are directly allocable to those segments. Unallocated corporate costs include costs related to corporate support staff and services, foreign exchange gains and losses, and unrealized mark-to-market derivative gains and losses. Support services include, but are not limited to, the Company’s administrative, information technology, human resources, finance, and accounting functions that are not specifically allocated to the segments. |
|
Unallocated corporate costs for the thirteen and thirty-nine weeks ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240404698637/en/
Investors:
224-306-1535
dexter.congbalay@lambweston.com
Media:
208-424-5461
shelby.stoolman@lambweston.com
Source: