Hostess Brands Reports Third Quarter 2022 Results

Double-digit Top and Bottom Line Growth

Raises Full Year Sales Growth, Adjusted EBITDA and Adjusted EPS Guidance

Hostess Brands, Inc. (NASDAQ: TWNK) (the “Company”, “we”, “our”) today reported its financial results for the three and nine months ended September 30, 2022.

“Hostess Brands delivered another quarter of record-high sales, highlighting the strength of our snacking-oriented portfolio, impactful innovation that targets growing snacking occasions, and successful pricing actions to offset elevated inflation. The resiliency of our operating model and the agility of our talented team enabled us to deliver double-digit adjusted EBITDA growth in a volatile environment," commented Andy Callahan, the Hostess Brands’ President and Chief Executive Officer.

He continued, “Given our strong year-to-date results and continued momentum, Hostess Brands is raising its full-year net revenue, adjusted EBITDA, and adjusted EPS guidance as we continue to make investments in innovation and advertising to generate top-tier growth over the longer-term.”

Third Quarter 2022 Financial Highlights1

  • Net revenue of $346.2 million increased 20.2% from the same period last year as higher price/mix accounted for 20.1% of the quarterly growth, with remaining growth attributed to higher volume.
  • Gross profit increased 16.6% to $115.4 million, or 33.3% of net revenue, while on an adjusted basis, gross profit increased 16.9% to $116.1 million, or 33.5% of net revenue. Third quarter gross margins declined by 105 basis points, 93 basis points on an adjusted basis, from year-ago levels as favorable price/mix and productivity were more than offset by 18.5% inflation and inefficiencies caused by continued supply-chain fragility.
  • Net income was $66.3 million or $0.48 per diluted share driven in part by a $33.0 million gain on receipt of Voortman insurance proceeds. Adjusted net income and adjusted EPS, which exclude the receipt of Voortman insurance proceeds, were $32.2 million, and $0.23, respectively, both increased in comparison to the same period last year.
  • Adjusted EBITDA increased 12.2% to $72.7 million. Adjusted EBITDA margin of 21.0% declined from 22.5% in the prior year period due to lower gross margins and higher operating expenses.
  • Cash and cash equivalents and short-term investments were $232.7 million as of September 30, 2022, resulting in a net leverage ratio of 2.9x.
  • Capital expenditures increased to $63.8 million from $36.7 million in the prior-year period. The Company now expects capital expenditures to be in the $125 - $135 million range in 2022.
  • Raising full year 2022 net revenue guidance to 17% - 19% growth, as well as raising full year adjusted EBITDA and adjusted EPS guidance to $290 - $293 million and $0.96 - $0.98, respectively.

Other Highlights

  • The Company’s Sweet Baked Goods point-of-sale (“POS”) increased 17.0%, maintaining its share of category dollar sales at 21.4%.
  • Voortman® branded POS grew 28.8% and its share of the Cookie category increased by 26 basis points driven in part by the ongoing momentum in the faster-growing sugar-free sub-segment.
  • Full year inflation is expected to be in the high teens for the full year, in-line with previous estimates.
  • Repurchased $94.1 million of shares year-to-date through September 30, 2022, the majority of which were under the previously announced $150 million share repurchase program.
  • Year-to-date planned increase in advertising and marketing driving consumer demand. Incremental investments planned in the fourth quarter to support the launch of our Bouncers™ innovation.

Guidance and Outlook

The Company is raising its full year 2022 guidance:

 

Updated Guidance

 

Previous Guidance

Net revenue growth

17% - 19%

 

At least 15%

Adjusted EBITDA

$290 - $293 million

 

Towards the higher end of $280 - $290 million

Adjusted EPS (diluted)

$0.96 - $0.98

 

$0.93 - $0.98

Capital expenditures

$125 - $135 million

(Including capacity expansion)

 

$120 - $140 million

(Including capacity expansion)

Effective tax rate

27.0%

 

27.0%

Weighted average shares outstanding

~138 million

 

138.5 – 139.5 million

The Company provides guidance on a non-generally accepted accounting principles (non-GAAP) basis and does not provide a reconciliation of the Company’s forward-looking financial expectations to the most directly comparable GAAP financial measure because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for deferred taxes, remeasurement of the tax receivable agreement, and other non-operating gains or losses reflected in the Company’s reconciliation of historic non-GAAP financial measures, the amount of which could be material. Please refer to the Reconciliation of Non-GAAP Financial Measures included in this press release for further information about the use of these measures.

Third Quarter 2022 Compared to Third Quarter 2021

Net revenue was $346.2 million, an increase of 20.2%, or $58.2 million, from the prior-year period. Contribution from pricing actions and product mix provided 20.1% of the growth, while higher volume accounted for 0.1% of the quarterly growth. Compared to the same period last year, sweet baked goods net revenue of $307.3 million increased 18.7% or $48.5 million, while cookies net revenue of $38.9 million increased 33.2% or $9.7 million.

Gross profit was $115.4 million or 33.3% of net revenue, compared to 34.4% for the same period last year. Gross margin declined 105 basis points, 93 basis points on an adjusted basis, as favorable price/mix, including revenue growth management initiatives, and productivity benefits were more than offset by inflation and inefficiencies caused by supply-chain fragility. Adjusted gross profit increased 16.9% on pricing actions and productivity partially offset by inflation.

Operating income was $54.4 million, an increase of 16.7% from the prior-year period. Adjusted operating income of $54.2 million increased 9.7% from the same period last year, as higher gross profit more than offset higher workforce investments, depreciation and advertising.

Adjusted EBITDA of $72.7 million, or 21.0% of net revenue, increased 12.2% from the same period last year as higher gross profit was partially offset by higher operating expenses.

The Company’s effective tax rate was 12.8% compared to 27.4% in the prior year. The effective tax rate for the three months ended September 30, 2022, was impacted favorably by the $33.0 million non-taxable gain related to receipt of proceeds under the Voortman acquisition representation and warranty insurance policy and a tax benefit related to revaluing our deferred tax liabilities due to a change in the estimated state tax rate. The current year effective tax rate, excluding these and other immaterial discrete items, was 26.7%, consistent with the prior-year period.

Net income was $66.3 million, a significant increase from $26.2 million from the prior-year period due to the $33.0 million gain from receipt of the Voortman insurance proceeds. Adjusted net income of $32.2 million increased 11.4% from the same period last year. Diluted EPS was $0.48 compared to $0.19 in the prior-year period due to the changes in net income. Adjusted EPS was $0.23 compared to $0.21 in the prior-year period due to the increase in adjusted net income.

Operating cash flows for the nine months ended September 30, 2022 were $164.2 million, as compared to $147.6 million for the same period last year. Operating cash flow benefited from increased profitability, including receipt of the Voortman insurance proceeds of $33.0 million, partially offset by an increase in tax payments and an increase in working capital.

Conference Call and Webcast

The Company will host a conference call and webcast with an accompanying presentation today, November 2, 2022 at 4:30 p.m. ET to discuss the results for the third quarter. Investors interested in participating in the live call can dial 877-451-6152 from the U.S. and +1-201-389-0879 internationally. A telephone replay will be available approximately two hours after the call concludes through November 16, 2022, by dialing 844-512-2921 from the U.S., or +1-412-317-6671 internationally, and entering confirmation code 13733435. The simultaneous, live webcast and presentation will be available on the Investor Relations section of the Company’s website at www.hostessbrands.com. The webcast will be archived for 30 days.

About Hostess Brands, Inc.

Hostess Brands, Inc. (NASDAQ: TWNK) is a snacking powerhouse with a portfolio of iconic brands and a mission to inspire moments of joy by putting our heart into everything we do. Hostess Brands is proud to make America’s No. 1 cupcake, mini donut and sugar-free cookie brands. With annual sales exceeding $1.1 billion and employing approximately 2,600 dedicated team members, Hostess Brands produces new and classic snacks, including Hostess® Donettes®, Twinkies®, CupCakes, Ding Dongs® and Zingers®, as well as a variety of Voortman® cookies and wafers. For more information about Hostess Brands please visit hostessbrands.com.

Forward-Looking Statements

This press release contains statements reflecting the Company’s views about its future performance that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. Forward-looking statements are generally identified through the inclusion of words such as “believes,” “expects,” “intends,” “estimates,” “projects,” “anticipates,” “will,” “plan,” “may,” “should,” or similar language. Statements addressing the Company’s future operating performance and statements addressing events and developments that the Company expects or anticipates will occur are also considered as forward-looking statements. All forward-looking statements included herein are made only as of the date hereof. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

These statements inherently involve risks and uncertainties that could cause actual results to differ materially from those anticipated in such forward-looking statements. These risks and uncertainties include, but are not limited to, maintaining, extending and expanding the Company’s reputation and brand image; protecting intellectual property rights; leveraging the Company’s brand value to compete against lower-priced alternative brands; correctly predicting, identifying and interpreting changes in consumer preferences and demand and offering new products to meet those changes; operating in a highly competitive industry; the continued ability to produce and successfully market products with extended shelf life; the ability to pass cost increases on to our customers; the ability to maintain or add additional shelf or retail space for the Company’s products; our ability to identify or complete strategic acquisitions, alliances, divestitures or joint ventures; our ability to successfully integrate, achieve expected synergies and manage our acquired businesses and brands; the ability to drive revenue growth in key products or add products that are faster-growing and more profitable; adverse impact or disruption to our business caused by COVID-19 or future outbreaks of highly infectious or contagious diseases; volatility in commodity, energy, and other input prices and the ability to adjust pricing to cover increased costs; significant changes in the availability and pricing of transportation; dependence on major customers; increased labor and employee related costs; strikes or work stoppages; product liability claims, product recalls, or regulatory enforcement actions; dependence on third parties for significant services; unanticipated business disruptions; geographic focus could make the Company particularly vulnerable to economic and other events and trends in North America; consolidation of retail customers; unsuccessful implementation of business strategies to reduce costs; increased costs to comply with governmental regulation; failures, unavailability, or disruptions of the Company’s information technology systems; dependence on key personnel or a highly skilled and diverse workforce; the Company’s ability to finance indebtedness on terms favorable to the Company; and other risks as set forth from time to time in the Company’s Securities and Exchange Commission filings.

As a result of a number of known and unknown risks and uncertainties, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Risks and uncertainties are identified and discussed in Item 1A-Risk Factors in the Company’s Annual Report on Form 10-K for 2021. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are expressly qualified in their entirety by these risk factors. The Company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.

 

HOSTESS BRANDS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, amounts in thousands, except shares and per share data)

 

 

September 30,

2022

 

 

December 31,

2021

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

190,828

 

 

 

$

249,159

 

Short-term investments

 

41,891

 

 

 

 

 

Accounts receivable, net

 

199,917

 

 

 

 

148,180

 

Inventories

 

65,444

 

 

 

 

52,813

 

Prepaids and other current assets

 

10,914

 

 

 

 

10,564

 

Total current assets

 

508,994

 

 

 

 

460,716

 

Property and equipment, net

 

385,085

 

 

 

 

335,305

 

Intangible assets, net

 

1,926,758

 

 

 

 

1,944,392

 

Goodwill

 

706,615

 

 

 

 

706,615

 

Other assets, net

 

72,732

 

 

 

 

19,283

 

Total assets

$

3,600,184

 

 

 

$

3,466,311

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Long-term debt and lease obligations payable within one year

$

14,251

 

 

 

$

14,170

 

Tax receivable agreement payments payable within one year

 

11,100

 

 

 

 

11,600

 

Accounts payable

 

95,958

 

 

 

 

68,104

 

Customer trade allowances

 

68,799

 

 

 

 

52,746

 

Accrued expenses and other current liabilities

 

54,513

 

 

 

 

47,009

 

Total current liabilities

 

244,621

 

 

 

 

193,629

 

Long-term debt and lease obligations

 

1,088,914

 

 

 

 

1,099,975

 

Tax receivable agreement obligations

 

124,592

 

 

 

 

134,265

 

Deferred tax liability

 

343,009

 

 

 

 

317,847

 

Other long-term liabilities

 

1,568

 

 

 

 

1,605

 

Total liabilities

 

1,802,704

 

 

 

 

1,747,321

 

 

 

 

 

 

Class A common stock, $0.0001 par value, 200,000,000 shares authorized, 142,567,808 issued and 134,570,118 shares outstanding as of September 30, 2022 and 142,031,329 shares issued and 138,278,573 shares outstanding as of December 31, 2021

 

14

 

 

 

 

14

 

Additional paid in capital

 

1,307,813

 

 

 

 

1,303,254

 

Accumulated other comprehensive income (loss)

 

36,172

 

 

 

 

(506

)

Retained earnings

 

606,703

 

 

 

 

475,400

 

Treasury stock

 

(153,222

)

 

 

 

(59,172

)

Stockholders’ equity

 

1,797,480

 

 

 

 

1,718,990

 

Total liabilities and stockholders’ equity

$

3,600,184

 

 

 

$

3,466,311

 

 

HOSTESS BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, amounts in thousands, except shares and per share data)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

2022

 

September 30,

2021

 

September 30,

2022

 

September 30,

2021

Net revenue

$

346,226

 

 

$

287,969

 

$

1,018,749

 

 

$

844,875

Cost of goods sold

 

230,805

 

 

 

188,990

 

 

 

675,004

 

 

 

545,271

 

Gross profit

 

115,421

 

 

 

98,979

 

 

 

343,745

 

 

 

299,604

 

Operating costs and expenses:

 

 

 

 

 

 

 

Advertising and marketing

 

15,816

 

 

 

14,767

 

 

 

43,353

 

 

 

39,692

 

Selling

 

9,696

 

 

 

8,166

 

 

 

29,610

 

 

 

26,250

 

General and administrative

 

30,502

 

 

 

23,565

 

 

 

90,301

 

 

 

69,254

 

Amortization of customer relationships

 

5,878

 

 

 

5,877

 

 

 

17,634

 

 

 

17,633

 

Tax receivable agreement remeasurement

 

(860

)

 

 

 

 

 

(860

)

 

 

 

Total operating costs and expenses

 

61,032

 

 

 

52,375

 

 

 

180,038

 

 

 

152,829

 

Operating income

 

54,389

 

 

 

46,604

 

 

 

163,707

 

 

 

146,775

 

Other expense (income):

 

 

 

 

 

 

 

Interest expense, net

 

10,276

 

 

 

9,928

 

 

 

29,683

 

 

 

29,899

 

Change in fair value of warrant liabilities

 

 

 

 

228

 

 

 

 

 

 

683

 

Other expense (income)

 

(31,921

)

 

 

378

 

 

 

(31,992

)

 

 

1,808

 

Total other expense (income)

 

(21,645

)

 

 

10,534

 

 

 

(2,309

)

 

 

32,390

 

Income before income taxes

 

76,034

 

 

 

36,070

 

 

 

166,016

 

 

 

114,385

 

Income tax expense

 

9,765

 

 

 

9,878

 

 

 

34,713

 

 

 

31,614

 

Net income

$

66,269

 

 

$

26,192

 

 

$

131,303

 

 

$

82,771

 

 

 

 

 

 

 

 

 

Earnings per Class A share:

 

 

 

 

 

 

 

Basic

$

0.49

 

 

$

0.20

 

 

$

0.95

 

 

$

0.63

 

Diluted

$

0.48

 

 

$

0.19

 

 

$

0.95

 

 

$

0.60

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

 

136,436,428

 

 

 

129,846,551

 

 

 

137,636,441

 

 

 

130,679,974

 

Diluted

 

137,604,256

 

 

 

138,058,866

 

 

 

138,702,172

 

 

 

138,036,371

 

 

HOSTESS BRANDS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, amounts in thousands)

 

 

Nine Months Ended

 

September 30, 2022

 

 

September 30, 2021

Operating activities

 

 

 

 

Net income

$

131,303

 

 

 

$

82,771

 

Depreciation and amortization

 

44,500

 

 

 

 

37,992

 

Debt discount amortization

 

921

 

 

 

 

931

 

Tax receivable agreement remeasurement

 

(860

)

 

 

 

 

Change in fair value of warrant liabilities

 

 

 

 

 

683

 

Unrealized foreign exchange losses (gains)

 

790

 

 

 

 

(177

)

Non-cash lease expense

 

375

 

 

 

 

971

 

Share-based compensation

 

7,600

 

 

 

 

7,005

 

Deferred taxes

 

12,104

 

 

 

 

18,280

 

Change in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

(51,904

)

 

 

 

(31,240

)

Inventories

 

(12,631

)

 

 

 

39

 

Prepaids and other current assets

 

(468

)

 

 

 

13,991

 

Accounts payable and accrued expenses

 

16,332

 

 

 

 

7,949

 

Customer trade allowances

 

16,143

 

 

 

 

8,441

 

Net cash provided by operating activities

 

164,205

 

 

 

 

147,636

 

 

 

 

 

 

Investing activities

 

 

 

 

Purchases of property and equipment

 

(55,240

)

 

 

 

(33,360

)

Acquisition of short-term investments

 

(62,891

)

 

 

 

 

Proceeds from maturity of short-term investments

 

21,000

 

 

 

 

 

Acquisition and development of software assets

 

(8,578

)

 

 

 

(3,330

)

Net cash used in investing activities

 

(105,709

)

 

 

 

(36,690

)

 

 

 

 

 

Financing activities

 

 

 

 

Repayments of long-term debt and lease obligations

 

(8,375

)

 

 

 

(8,375

)

Repurchase of common stock

 

(94,050

)

 

 

 

(50,063

)

Tax payments related to issuance of shares to employees

 

(5,582

)

 

 

 

(1,277

)

Cash received from exercise of options and warrants

 

2,541

 

 

 

 

13,285

 

Payments on tax receivable agreement

 

(9,313

)

 

 

 

(9,270

)

Net cash used in financing activities

 

(114,779

)

 

 

 

(55,700

)

Effect of exchange rate changes on cash and cash equivalents

 

(2,048

)

 

 

 

(184

)

Net increase (decrease) in cash and cash equivalents

 

(58,331

)

 

 

 

55,062

 

Cash and cash equivalents at beginning of period

 

249,159

 

 

 

 

173,034

 

Cash and cash equivalents at end of period

$

190,828

 

 

 

$

228,096

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

Cash paid during the period for:

 

 

 

 

Interest, net of amounts capitalized

$

29,342

 

 

 

$

29,019

 

Net taxes paid

$

19,023

 

 

 

$

1,568

 

Supplemental disclosure of non-cash investing:

 

 

 

 

Accrued capital expenditures

$

23,103

 

 

 

$

5,603

 

HOSTESS BRANDS, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Adjusted gross profit, adjusted gross profit margin, adjusted operating income, adjusted net income, adjusted net income margin, adjusted EBITDA, adjusted EBITDA margin and adjusted EPS collectively referred to as “Non-GAAP Financial Measures,” are commonly used in the Company’s industry and should not be construed as an alternative to net revenue, gross profit, operating income, net income or earnings per share as indicators of operating performance (as determined in accordance with GAAP). These Non-GAAP Financial Measures may not be comparable to similarly titled measures reported by other companies. The Company has included these Non-GAAP Financial Measures because it believes the measures provide management and investors with additional information to measure the Company’s performance, estimate the Company’s value and evaluate the Company’s ability to service debt.

Non-GAAP Financial Measures are adjusted to exclude certain items that affect comparability. The adjustments are itemized in the tables below. You are encouraged to evaluate these adjustments and the reason the Company considers them appropriate for supplemental analysis. In evaluating adjustments, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments set forth below. The presentation of Non-GAAP Financial Measures should not be construed as an inference that future results will be unaffected by unusual or recurring items.

The Company defines adjusted EBITDA as net income adjusted to exclude (i) interest expense, net, (ii) depreciation and amortization (iii) income taxes and (iv) share-based compensation, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing operating performance. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. For example, adjusted EBITDA:

  • does not reflect the Company’s capital expenditures, future requirements for capital expenditures or contractual commitments;
  • does not reflect changes in, or cash requirements for, the Company’s working capital needs;
  • does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on the Company’s debt; and
  • does not reflect payments related to income taxes or the tax receivable agreement.

 

HOSTESS BRANDS, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited, amounts in thousands, except percentages and per share data)

 

 

 

Three Months Ended September 30, 2022

 

 

Gross Profit

 

Gross

Margin

 

Operating

Income

 

Net Income

 

Net Income

Margin

 

Diluted EPS

GAAP Results

 

$

115,421

 

33.3

%

 

$

54,389

 

 

$

66,269

 

 

19.1

%

 

$

0.48

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency remeasurement

 

 

 

 

 

 

 

 

 

 

1,009

 

 

0.3

 

 

 

0.01

 

Tax receivable agreement remeasurement

 

 

 

 

 

 

 

(860

)

 

 

(860

)

 

(0.3

)

 

 

(0.01

)

Gain on Voortman insurance proceeds (1)

 

 

 

 

 

 

 

 

 

 

(32,970

)

 

(9.5

)

 

 

(0.24

)

Accelerated depreciation related to network optimization

 

 

681

 

 

0.2

 

 

 

681

 

 

 

681

 

 

0.2

 

 

 

0.01

 

Other

 

 

 

 

 

 

 

(17

)

 

 

23

 

 

 

 

 

 

Remeasurement of tax liabilities

 

 

 

 

 

 

 

 

 

 

(2,161

)

 

(0.6

)

 

 

(0.02

)

Discrete income tax expense

 

 

 

 

 

 

 

 

 

 

644

 

 

0.2

 

 

 

 

Tax impact of adjustments

 

 

 

 

 

 

 

 

 

 

(462

)

 

(0.1

)

 

 

 

Adjusted Non-GAAP results

 

$

116,102

 

 

33.5

%

 

$

54,193

 

 

 

32,173

 

 

9.3

 

 

$

0.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax

 

 

 

 

 

 

 

 

11,744

 

 

3.4

 

 

 

Interest expense

 

 

 

 

 

 

 

 

10,276

 

 

3.0

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

15,869

 

 

4.5

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

2,613

 

 

0.8

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

$

72,675

 

 

21.0

%

 

 

(1) Gain from receipt of insurance proceeds under the representation and warranty insurance policy purchased in connection with the Voortman acquisition in 2020 included in other expense (income) on the condensed consolidated statement of operations.

 

Three Months Ended September 30, 2021

 

 

Gross Profit

 

Gross

Margin

 

Operating

Income

 

Net Income

 

Net Income

Margin

 

Diluted EPS

GAAP Results

 

$

98,979

 

34.4

%

 

$

46,604

 

$

26,192

 

 

9.1

%

 

$

0.19

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency remeasurement

 

 

 

 

 

 

 

 

 

 

(249

)

 

(0.1

)

 

 

 

Project consulting costs (1)

 

 

 

 

 

 

 

1,604

 

 

 

1,604

 

 

0.6

 

 

 

0.01

 

Change in fair value of warrant liabilities

 

 

 

 

 

 

 

 

 

 

228

 

 

0.1

 

 

 

 

Other (2)

 

 

370

 

 

0.1

 

 

 

1,185

 

 

 

1,810

 

 

0.6

 

 

 

0.01

 

Tax impact of adjustments

 

 

 

 

 

 

 

 

 

 

(674

)

 

(0.2

)

 

 

 

Adjusted Non-GAAP results

 

$

99,349

 

 

34.5

%

 

$

49,393

 

 

 

28,911

 

 

10.1

 

 

$

0.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax

 

 

 

 

 

 

 

 

10,552

 

 

3.7

 

 

 

Interest expense

 

 

 

 

 

 

 

 

9,928

 

 

3.4

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

12,769

 

 

4.4

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

2,642

 

 

0.9

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

$

64,802

 

 

22.5

%

 

 

(1) Project consulting costs are included in general and administrative on the condensed consolidated statement of operations.

(2) Costs related to certain corporate initiatives, of which $0.4 million is included in cost of goods sold, $0.8 million is included in general and administrative and $0.6 million is included in other expense (income) on the condensed consolidated statement of operations.

 

 

Nine Months Ended September 30, 2022

 

 

Gross Profit

 

Gross

Margin

 

Operating

Income

 

Net Income

 

Net Income

Margin

 

Diluted EPS

GAAP Results

 

$

343,745

 

33.7

%

 

$

163,707

 

 

$

131,303

 

 

12.9

%

 

$

0.95

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency remeasurement

 

 

 

 

 

 

 

 

 

 

789

 

 

0.1

 

 

 

0.01

 

Project consulting costs (1)

 

 

 

 

 

 

 

3,887

 

 

 

3,887

 

 

0.4

 

 

 

0.03

 

Tax receivable agreement remeasurement

 

 

 

 

 

 

 

(860

)

 

 

(860

)

 

(0.1

)

 

 

(0.01

)

Gain on Voortman insurance proceeds (2)

 

 

 

 

 

 

 

 

 

 

(32,970

)

 

(3.2

)

 

 

(0.24

)

Accelerated depreciation related to network optimization

 

 

776

 

 

0.1

 

 

 

776

 

 

 

776

 

 

0.1

 

 

 

0.01

 

Other (3)

 

 

161

 

 

 

 

 

161

 

 

 

350

 

 

 

 

 

 

Remeasurement of tax liabilities

 

 

 

 

 

 

 

 

 

 

(2,161

)

 

(0.2

)

 

 

(0.02

)

Discrete income tax expense

 

 

 

 

 

 

 

 

 

 

1,156

 

 

0.1

 

 

 

0.01

 

Tax impact of adjustments

 

 

 

 

 

 

 

 

 

 

(1,566

)

 

(0.2

)

 

 

(0.01

)

Adjusted Non-GAAP results

 

$

344,682

 

 

33.8

%

 

$

167,671

 

 

 

100,704

 

 

9.9

 

 

$

0.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax

 

 

 

 

 

 

 

 

37,284

 

 

3.7

 

 

 

Interest expense

 

 

 

 

 

 

 

 

29,683

 

 

2.9

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

43,726

 

 

4.3

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

7,600

 

 

0.7

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

$

218,997

 

 

21.5

%

 

 

(1) Project consulting costs are included in general and administrative on the condensed consolidated statement of operations.

(2) Gain from receipt of insurance proceeds under the representation and warranty insurance policy purchased in connection with the Voortman acquisition in 2020 included in other expense (income) on the condensed consolidated statement of operations.

(3) Costs related to certain corporate initiatives, of which $0.2 million is included in cost of goods sold and $0.2 million is included in other expense (income) on the condensed consolidated statement of operations.

 

Nine Months Ended September 30, 2021

 

Gross Profit

 

Gross

Margin

 

Operating

Income

 

Net Income

 

Net Income

Margin

 

Diluted EPS

GAAP Results

$

299,604

 

35.5

%

 

$

146,775

 

$

82,771

 

 

9.8

%

 

$

0.60

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency remeasurement

 

 

 

 

 

 

 

 

 

(178

)

 

 

 

 

 

Project consulting costs (1)

 

 

 

 

 

 

2,503

 

 

 

2,503

 

 

0.3

 

 

 

0.02

 

Change in fair-value of warrant liabilities

 

 

 

 

 

 

 

 

 

683

 

 

0.1

 

 

 

 

Other (2)

 

528

 

 

 

 

 

1,352

 

 

 

3,334

 

 

0.4

 

 

 

0.03

 

Tax impact of adjustments

 

 

 

 

 

 

 

 

 

(1,102

)

 

(0.1

)

 

 

(0.01

)

Adjusted Non-GAAP results

$

300,132

 

 

35.5

%

 

$

150,630

 

 

$

88,011

 

 

10.5

 

 

$

0.64

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax

 

 

 

 

 

 

 

32,716

 

 

3.9

 

 

 

Interest expense

 

 

 

 

 

 

 

29,899

 

 

3.5

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

37,992

 

 

4.5

 

 

 

Share-based compensation

 

 

 

 

 

 

 

7,005

 

 

0.8

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

$

195,623

 

 

23.2

%

 

 

(1) Project consulting costs are included in general and administrative on the condensed consolidated statement of operations.

(2) Costs related to certain corporate initiatives, of which $0.5 million is included in cost of goods sold, $0.8 million is included in general and administrative and $2.0 million is included in other expense (income) on the condensed consolidated statement of operations.

 

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