BellRing Brands, Inc. (NYSE:BRBR) (“BellRing”), a holding company
operating in the global convenient nutrition category, today
reported results for the third fiscal quarter ended June 30, 2023.
Highlights:
- Third quarter net sales of
$445.9 million
- Operating profit of $76.0
million; net earnings available to common
stockholders of $44.3 million and
Adjusted EBITDA* of $86.9 million
- Generated $110.4 million
in cash from operations
- Raised fiscal year 2023 net sales
guidance to $1.63-$1.67 billion and Adjusted EBITDA* guidance to
$330-$338 million
*Adjusted EBITDA is a non-GAAP measure. For
additional information regarding non-GAAP measures, see the related
explanations presented under “Use of Non-GAAP Measures” later in
this release. BellRing provides Adjusted EBITDA guidance only on a
non-GAAP basis and does not provide a reconciliation of its
forward-looking Adjusted EBITDA non-GAAP guidance measure to the
most directly comparable GAAP measure due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliation, including the adjustments
described under “Outlook” later in this release.
“Our business momentum continued this quarter,
with our results coming in modestly ahead of our
expectations. Premier Protein saw consumption growth
accelerate this quarter on the reintroduction of our shake flavors,
and Dymatize’s consumption remained strong on distribution gains.
Both brands gained market share and new households, benefiting from
increased brand investment and continued category tailwinds,” said
Darcy H. Davenport, President and Chief Executive Officer of
BellRing. “Our shake capacity expansion is on track. One new
greenfield co-manufacturing facility came online in the quarter and
started up smoothly. Our third quarter performance and visibility
to the fourth quarter give us confidence in our ability to finish
the year in a strong position.”
Dollar consumption of Premier
Protein ready-to-drink (“RTD”) shakes and Dymatize powder
products increased 26.8% and 38.6%, respectively, in the 13-week
period ended July 2, 2023, as compared to the same period in 2022
(inclusive of United States (“U.S.”) IRI Multi Outlet including
Convenience and management estimates of untracked channels).
Third Quarter Operating
Results
Net sales were $445.9 million, an increase of
20.3%, or $75.3 million, compared to the prior year period, driven
by 11.0% improvement in price/mix and 9.3% increase in volume.
Premier Protein net sales increased 19.9%,
driven by 10.2% improvement in price/mix and 9.7% increase in
volume. Premier Protein RTD shake net sales increased 19.1%, driven
by 10.0% increase in volume and 9.1% improvement in price/mix.
Higher RTD shake production, along with the reintroduction of
certain shake flavors and RTD category growth drove volume growth.
Additionally, net sales benefited from higher average net selling
prices driven by price increases to offset significant cost
inflation.
Dymatize net sales increased 32.3%, driven by
46.4% increase in volume, which was partially offset by 14.1%
decrease in price/mix. Net sales benefited from volume growth
driven by (i) distribution gains and organic growth and (ii)
lapping prior year period temporary price elasticities. Volume
growth was partially offset by lower average net selling prices
driven by increased promotional spending and unfavorable product
mix shift when compared to the prior year period.
Gross profit was $136.0 million, or 30.5% of net
sales, an increase of 13.1%, or $15.8 million, compared to $120.2
million, or 32.4% of net sales, in the prior year period. Gross
profit included unfavorable mark-to-market adjustments on commodity
hedges of $1.9 million and $0.7 million in the third
quarter of 2023 and 2022, respectively, which were treated as
adjustments for non-GAAP measures. The lower gross profit
margin was driven by input cost inflation and higher promotional
activity, which was only partially offset by pricing actions and
favorable freight rates.
Selling, general and administrative (“SG&A”)
expenses were $55.1 million, or 12.4% of net sales, an increase of
$7.3 million compared to $47.8 million, or 12.9% of net sales, in
the prior year period. SG&A expenses in the third quarter of
2022 included $0.9 million of costs incurred in connection with
BellRing’s separation from Post Holdings, Inc. (“Post”), which were
treated as adjustments for non-GAAP measures. SG&A expenses in
the third quarter of 2023 included higher marketing and consumer
advertising expenses of $6.7 million and higher distribution and
warehousing expenses on higher volumes.
Operating profit was $76.0 million, an increase
of 12.6%, or $8.5 million, compared to $67.5 million in the prior
year period.
Net earnings available to common stockholders
were $44.3 million, an increase of 13.3%, or $5.2 million, compared
to $39.1 million in the prior year period. Net earnings per diluted
share of common stock were $0.33, compared to $0.29 in the prior
year period. Adjusted net earnings available to common
stockholders* were $45.7 million, or $0.34 per diluted share of
common stock*, compared to $42.5 million, or $0.31 per diluted
share of common stock*, in the prior year period.
Adjusted EBITDA* was $86.9 million, an increase
of 7.5%, or $6.1 million, compared to $80.8 million in the prior
year period.
*Adjusted net earnings available to common
stockholders, Adjusted diluted earnings per share of common stock
and Adjusted EBITDA are non-GAAP measures. For additional
information regarding non-GAAP measures, see the related
explanations presented under “Use of Non-GAAP Measures” later in
this release.
Nine Month Operating
Results
Net sales were $1,194.2 million, an increase of
20.3%, or $201.9 million, compared to the prior year period, driven
by 14.6% improvement in price/mix and 5.7% increase in volume.
Premier Protein net sales increased 22.8%, driven by 15.8%
improvement in price/mix and 7.0% increase in volume. Dymatize net
sales increased 15.4%, driven by 9.9% improvement in price/mix and
5.5% increase in volume.
Gross profit was $374.9 million, or 31.4% of net
sales, an increase of 25.2%, or $75.4 million, compared to $299.5
million, or 30.2% of net sales, in the prior year period. The
higher gross profit margin was driven by pricing actions that
offset significant cost inflation, lapping logistics inefficiencies
in the prior year period and favorable freight rates.
SG&A expenses were $151.1 million, or 12.7%
of net sales, an increase of $17.6 million compared to $133.5
million, or 13.5% of net sales, in the prior year period. SG&A
expenses included $0.7 million and $13.2 million in the nine months
ended June 30, 2023 and 2022, respectively, of costs incurred in
connection with BellRing’s separation from Post, which were treated
as adjustments for non-GAAP measures. SG&A expenses in the nine
months ended June 30, 2023 included higher marketing and consumer
advertising expenses of $15.1 million.
Net earnings available to common stockholders
were $119.4 million, an increase of 145.7%, or $70.8 million,
compared to $48.6 million in the prior year period. Net earnings
available to common stockholders in the prior year period included
loss on extinguishment of debt, net of $17.6 million, which is
discussed later in this release and was treated as an adjustment
for non-GAAP measures, and excluded $33.7 million of net earnings
attributable to the Company’s redeemable noncontrolling interest
(the “NCI”). Net earnings per diluted share of common stock were
$0.89, compared to $0.61 in the prior year period. Adjusted net
earnings available to common stockholders* were $122.6 million, or
$0.91 per diluted share of common stock*, compared to $67.0
million, or $0.84 per diluted share of common stock*, in the prior
year period. Diluted weighted-average shares of common stock
outstanding were 134.5 million, compared to 79.7 million in the
prior year period, with the increase driven by the Spin-off (see
definition below).
Adjusted EBITDA* was $239.8 million, an increase
of 25.2%, or $48.3 million, compared to $191.5 million in the prior
year period. Adjusted EBITDA in the prior year period included an
adjustment for the portion of BellRing Brands, LLC’s (“BellRing
LLC”) consolidated net earnings which was allocated to the NCI in
the period prior to Post’s distribution to its shareholders of
80.1% of Post’s interest in BellRing (the “Distribution” and,
together with the transactions related thereto, the “Spin-off”),
resulting in the calculation of Adjusted EBITDA including 100% of
BellRing.
*Adjusted net earnings available to common
stockholders, Adjusted diluted earnings per share of common stock
and Adjusted EBITDA are non-GAAP measures. For additional
information regarding non-GAAP measures, see the related
explanations presented under “Use of Non-GAAP Measures” later in
this release.
Interest, Loss on Extinguishment of Debt
and Income Tax
Interest expense, net was $17.3 million and
$15.9 million in the third quarter of 2023 and 2022, respectively,
with the increase primarily driven by an increase in the
weighted-average interest rate. Interest expense, net was $50.8
million and $32.8 million in the nine months ended June 30, 2023
and 2022, respectively, with the increase driven by an increase in
the aggregate principal amount of debt outstanding, primarily
resulting from the effect of the Spin-off transaction, and the
weighted-average interest rate.
Loss on extinguishment of debt, net of $17.6
million was recorded in the nine months ended June 30, 2022 in
connection with BellRing LLC’s repayment of the entire principal
amount of its term loan and termination of its prior credit
agreement.
Income tax expense was $14.4 million in the
third quarter of 2023, an effective income tax rate of 24.5%,
compared to $12.5 million in the third quarter of 2022, an
effective income tax rate of 24.2%. Income tax expense was $39.0
million in the nine months ended June 30, 2023, an effective income
tax rate of 24.6%, compared to $18.6 million in the nine months
ended June 30, 2022, an effective income tax rate of 18.4%. The
increase in the effective income tax rate in the nine months ended
June 30, 2023 when compared to the prior year period was driven by
the inclusion of 100% of the income, gain, loss and deduction of
BellRing LLC in the periods subsequent to the Spin-off, partially
offset by lapping in the prior year period certain
separation-related expenses incurred in connection with the
Spin-off that were treated as non-deductible.
Share Repurchases
During the third quarter of 2023, BellRing
repurchased 1.3 million shares for $49.0 million at an average
price of $36.13 per share. During the nine months ended June 30,
2023, BellRing repurchased 4.0 million shares for $117.5 million at
an average price of $29.08 per share. As of June 30, 2023, BellRing
had $31.0 million remaining under its share repurchase
authorization.
Basis of Presentation
On March 10, 2022, Post’s distribution to its
shareholders of 80.1% of its interest in BellRing was completed.
From October 21, 2019 through March 10, 2022, BellRing allocated a
portion of the consolidated net earnings of BellRing LLC to the
NCI, reflecting the entitlement of Post to a portion of the
consolidated net earnings. Subsequent to the Spin-off, any
remaining ownership of BellRing by Post did not represent a NCI to
BellRing LLC. On November 25, 2022, Post transferred its remaining
ownership in BellRing to certain financial institutions and, as a
result, no longer had ownership of any shares of BellRing’s common
stock.
Outlook
For fiscal year 2023, BellRing management has
raised its guidance range for net sales to $1.63-$1.67 billion from
$1.61-$1.66 billion and Adjusted EBITDA to $330-$338 million from
$320-$335 million (resulting in net sales and Adjusted EBITDA
growth of 19%-22% and 22%-25%, respectively, over fiscal year
2022). BellRing management expects fiscal year 2023 capital
expenditures of approximately $3 million.
BellRing provides Adjusted EBITDA guidance only
on a non-GAAP basis and does not provide a reconciliation of its
forward-looking Adjusted EBITDA non-GAAP guidance measure to the
most directly comparable GAAP measure due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliation, including adjustments that could
be made for mark-to-market adjustments on commodity hedges and
other charges reflected in BellRing’s reconciliation of historical
numbers, the amounts of which, based on historical experience,
could be significant. For additional information regarding
BellRing’s non-GAAP measures, see the related explanations
presented under “Use of Non-GAAP Measures.”
Use of Non-GAAP Measures
BellRing uses certain non-GAAP measures in this
release to supplement the financial measures prepared in accordance
with U.S. generally accepted accounting principles (“GAAP”). These
non-GAAP measures include Adjusted net earnings available to common
stockholders, Adjusted diluted earnings per share of common stock
and Adjusted EBITDA. The reconciliation of each of these non-GAAP
measures to the most directly comparable GAAP measure is provided
later in this release under “Explanation and Reconciliation of
Non-GAAP Measures.”
Management uses certain of these non-GAAP
measures, including Adjusted EBITDA, as key metrics in the
evaluation of underlying company performance, in making financial,
operating and planning decisions and, in part, in the determination
of bonuses for its executive officers and employees. Additionally,
BellRing 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 BellRing 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 BellRing’s non-GAAP
measures, see the related explanations provided under “Explanation
and Reconciliation of Non-GAAP Measures” later in this release.
Conference Call to Discuss Earnings
Results and Outlook
BellRing will host a conference call on Tuesday,
August 8, 2023 at 9:00 a.m. EDT to discuss financial results for
the third quarter of fiscal year 2023 and fiscal year 2023 outlook
and to respond to questions. Darcy H. Davenport, President and
Chief Executive Officer, and Paul A. Rode, Chief Financial Officer,
will participate in the call.
Interested parties may join the conference call
by registering in advance at the following link: BellRing Q3 2023
Earnings Conference Call. Upon registration, participants will
receive a dial-in number and a unique passcode to access the
conference call. Interested parties are invited to listen to the
webcast of the conference call, which can be accessed by visiting
the Investor Relations section of BellRing’s website at
www.bellring.com. A slide presentation containing supplemental
material will also be available at the same location on BellRing’s
website. A webcast replay also will be available for a limited
period on BellRing’s website in the Investor Relations 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
information provided above, see “Forward-Looking Statements” below.
Accordingly, the prospective financial information provided above
is only an estimate of what BellRing’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
BellRing’s conference call are forward-looking statements,
including BellRing’s net sales and Adjusted EBITDA and capital
expenditures outlook for fiscal year 2023. 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:
- BellRing’s dependence on sales from its RTD protein
shakes;
- BellRing’s ability to continue to compete in its product
categories and its ability to retain its market position and
favorable perceptions of its brands;
- disruptions or inefficiencies in BellRing’s supply chain,
including as a result of BellRing’s reliance on third party
suppliers or manufacturers for the manufacturing of many of its
products, pandemics and other outbreaks of contagious diseases,
labor shortages, fires and evacuations related thereto, changes in
weather conditions, natural disasters, agricultural diseases and
pests and other events beyond BellRing’s control;
- BellRing’s dependence on a limited number of third party
contract manufacturers for the manufacturing of most of its
products, including one manufacturer for the majority of its RTD
protein shakes;
- the ability of BellRing’s third party contract manufacturers to
produce an amount of BellRing’s products that enables BellRing to
meet customer and consumer demand for the products;
- BellRing’s reliance on a limited number of third party
suppliers to provide certain ingredients and packaging;
- significant volatility in the cost or availability of inputs to
BellRing’s business (including freight, raw materials, packaging,
energy, labor and other supplies);
- BellRing’s ability to anticipate and respond to changes in
consumer and customer preferences and behaviors and introduce new
products;
- consolidation in BellRing’s distribution channels;
- BellRing’s ability to expand existing market penetration and
enter into new markets;
- the loss of, a significant reduction of purchases by or the
bankruptcy of a major customer;
- legal and regulatory factors, such as compliance with existing
laws and regulations, as well as new laws and regulations and
changes to existing laws and regulations and interpretations
thereof, affecting BellRing’s business, including current and
future laws and regulations regarding food safety, advertising,
labeling, tax matters and environmental matters;
- fluctuations in BellRing’s business due to changes in its
promotional activities and seasonality;
- BellRing’s ability to maintain the net selling prices of its
products and manage promotional activities with respect to its
products;
- BellRing’s leverage, its ability to obtain additional financing
(including both secured and unsecured debt) and its ability to
service its outstanding debt (including covenants that restrict the
operation of its business);
- the accuracy of BellRing’s market data and attributes and
related information;
- changes in estimates in critical accounting judgments;
- uncertain or unfavorable economic conditions that limit
customer and consumer demand for BellRing’s products or increase
its costs;
- risks related to BellRing’s ongoing relationship with Post
following BellRing’s separation from Post and the Spin-off,
including BellRing’s obligations under various agreements with
Post;
- conflicting interests or the appearance of conflicting
interests resulting from certain of BellRing’s directors also
serving as officers or directors of Post;
- risks related to the Spin-off, including BellRing’s inability
to take certain actions because such actions could jeopardize the
tax-free status of the Distribution and BellRing’s possible
responsibility for U.S. federal tax liabilities related to the
Distribution;
- the ultimate impact litigation or other regulatory matters may
have on BellRing;
- risks associated with BellRing’s international business;
- BellRing’s ability to protect its intellectual property and
other assets and to continue to use third party intellectual
property subject to intellectual property licenses;
- costs, business disruptions and reputational damage associated
with information technology failures, cybersecurity incidents
and/or information security breaches;
- impairment in the carrying value of goodwill or other
intangibles;
- BellRing’s ability to identify, complete and integrate or
otherwise effectively execute acquisitions or other strategic
transactions and effectively manage its growth;
- BellRing’s ability to satisfy the requirements of Section 404
of the Sarbanes-Oxley Act of 2002;
- significant differences in BellRing’s actual operating results
from any guidance BellRing may give regarding its performance;
- BellRing’s ability to hire and retain talented personnel,
employee absenteeism, labor strikes, work stoppages or unionization
efforts; and
- other risks and uncertainties described in BellRing’s filings
with the Securities and Exchange Commission.
These forward-looking statements represent
BellRing’s judgment as of the date of this release. BellRing
disclaims, however, any intent or obligation to update these
forward-looking statements.
About BellRing Brands, Inc.
BellRing Brands, Inc. is a rapidly growing
leader in the global convenient nutrition category offering
ready-to-drink shake and powder protein products. Its primary
brands, Premier Protein® and Dymatize®, appeal to a broad range of
consumers and are distributed across a diverse network of channels
including club, food, drug, mass, eCommerce, specialty and
convenience. BellRing’s commitment to consumers is to strive to
make highly effective products that deliver best-in-class
nutritionals and superior taste. For more information, visit
www.bellring.com.
Contact:Investor
RelationsJennifer Meyerjennifer.meyer@bellringbrands.com (415)
814-9388
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)(in
millions, except for per share data)
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net Sales |
$ |
445.9 |
|
$ |
370.6 |
|
$ |
1,194.2 |
|
$ |
992.3 |
Cost of goods sold |
|
309.9 |
|
|
250.4 |
|
|
819.3 |
|
|
692.8 |
Gross
Profit |
|
136.0 |
|
|
120.2 |
|
|
374.9 |
|
|
299.5 |
Selling, general and
administrative expenses |
|
55.1 |
|
|
47.8 |
|
|
151.1 |
|
|
133.5 |
Amortization of intangible
assets |
|
4.9 |
|
|
4.9 |
|
|
14.6 |
|
|
14.7 |
Operating
Profit |
|
76.0 |
|
|
67.5 |
|
|
209.2 |
|
|
151.3 |
Interest expense, net |
|
17.3 |
|
|
15.9 |
|
|
50.8 |
|
|
32.8 |
Loss on extinguishment of
debt, net |
|
— |
|
|
— |
|
|
— |
|
|
17.6 |
Earnings before Income
Taxes |
|
58.7 |
|
|
51.6 |
|
|
158.4 |
|
|
100.9 |
Income tax expense |
|
14.4 |
|
|
12.5 |
|
|
39.0 |
|
|
18.6 |
Net Earnings Including
Redeemable Noncontrolling Interest |
|
44.3 |
|
|
39.1 |
|
|
119.4 |
|
|
82.3 |
Less: Net earnings
attributable to redeemable noncontrolling interest |
|
— |
|
|
— |
|
|
— |
|
|
33.7 |
Net Earnings Available
to Common Stockholders |
$ |
44.3 |
|
$ |
39.1 |
|
$ |
119.4 |
|
$ |
48.6 |
|
|
|
|
|
|
|
|
Earnings per share of
Common Stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.33 |
|
$ |
0.29 |
|
$ |
0.89 |
|
$ |
0.61 |
Diluted |
$ |
0.33 |
|
$ |
0.29 |
|
$ |
0.89 |
|
$ |
0.61 |
|
|
|
|
|
|
|
|
Weighted-Average shares of Common Stock
Outstanding: |
|
|
|
|
|
|
Basic |
|
132.4 |
|
|
136.3 |
|
|
133.6 |
|
|
79.5 |
Diluted |
|
133.8 |
|
|
136.7 |
|
|
134.5 |
|
|
79.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)(in millions)
|
June 30, 2023 |
|
September 30, 2022 |
|
|
|
|
ASSETS |
Current
Assets |
|
|
|
Cash and cash equivalents |
$ |
26.1 |
|
|
$ |
35.8 |
|
Receivables, net |
|
173.8 |
|
|
|
173.3 |
|
Inventories |
|
236.2 |
|
|
|
199.8 |
|
Prepaid expenses and other current assets |
|
14.1 |
|
|
|
12.4 |
|
Total Current Assets |
|
450.2 |
|
|
|
421.3 |
|
|
|
|
|
Property, net |
|
8.3 |
|
|
|
8.0 |
|
Goodwill |
|
65.9 |
|
|
|
65.9 |
|
Intangible assets, net |
|
188.8 |
|
|
|
203.3 |
|
Other assets |
|
9.2 |
|
|
|
8.7 |
|
Total Assets |
$ |
722.4 |
|
|
$ |
707.2 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
Current
Liabilities |
|
|
|
Accounts payable |
$ |
96.3 |
|
|
$ |
93.8 |
|
Other current liabilities |
|
71.5 |
|
|
|
49.7 |
|
Total Current Liabilities |
|
167.8 |
|
|
|
143.5 |
|
|
|
|
|
Long-term debt |
|
910.5 |
|
|
|
929.5 |
|
Deferred income taxes |
|
0.5 |
|
|
|
2.2 |
|
Other liabilities |
|
8.3 |
|
|
|
8.2 |
|
Total Liabilities |
|
1,087.1 |
|
|
|
1,083.4 |
|
|
|
|
|
Stockholders’
Deficit |
|
|
|
Common stock |
|
1.4 |
|
|
|
1.4 |
|
Additional paid-in capital |
|
15.6 |
|
|
|
7.0 |
|
Accumulated deficit |
|
(236.2 |
) |
|
|
(355.6 |
) |
Accumulated other comprehensive loss |
|
(2.5 |
) |
|
|
(4.3 |
) |
Treasury stock, at cost |
|
(143.0 |
) |
|
|
(24.7 |
) |
Total Stockholders’ Deficit |
|
(364.7 |
) |
|
|
(376.2 |
) |
Total Liabilities and Stockholders’ Deficit |
$ |
722.4 |
|
|
$ |
707.2 |
|
|
|
SELECTED CONDENSED CONSOLIDATED CASH
FLOWS INFORMATION (Unaudited)(in
millions)
|
Nine Months Ended June 30, |
|
2023 |
|
2022 |
Cash provided by (used
in): |
|
|
|
Operating activities |
$ |
130.7 |
|
|
$ |
11.4 |
|
Investing activities |
|
(1.0 |
) |
|
|
(1.2 |
) |
Financing activities |
|
(139.8 |
) |
|
|
(127.7 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
0.4 |
|
|
|
(0.4 |
) |
Net decrease in cash
and cash equivalents |
$ |
(9.7 |
) |
|
$ |
(117.9 |
) |
|
EXPLANATION AND RECONCILIATION OF
NON-GAAP MEASURES
BellRing uses certain non-GAAP measures in this
release to supplement the financial measures prepared in accordance
with U.S. generally accepted accounting principles (“GAAP”). These
non-GAAP measures include Adjusted net earnings available to common
stockholders, Adjusted diluted earnings per share of common stock
and Adjusted EBITDA. 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 available to common
stockholders and Adjusted diluted earnings per share of common
stockBellRing believes Adjusted net earnings available to common
stockholders and Adjusted diluted earnings per share of common
stock are useful to investors in evaluating BellRing’s operating
performance because they exclude items that affect the
comparability of BellRing’s financial results and could potentially
distort an understanding of the trends in business performance.
Adjusted net earnings available to common
stockholders and Adjusted diluted earnings per share of common
stock are adjusted for the following items:
- Loss on extinguishment, net:
BellRing has excluded losses recorded on extinguishment of debt,
inclusive of the write-off of debt issuance costs and deferred
financing fees and the write-off of net unamortized debt discounts,
as such losses are inconsistent in amount and frequency.
Additionally, BellRing believes that these losses do not reflect
expected ongoing future operating expenses and do not contribute to
a meaningful evaluation of BellRing’s current operating performance
or comparisons of BellRing’s operating performance to other
periods.
- Separation costs: BellRing has
excluded certain expenses incurred in connection with (i) Post’s
distribution of 80.1% of its interest in BellRing and (ii)
secondary offerings of shares of BellRing common stock previously
held by Post, as the amount and frequency of such expenses are not
consistent. Additionally, BellRing believes that these costs do not
reflect expected ongoing future operating expenses and do not
contribute to a meaningful evaluation of BellRing’s current
operating performance or comparisons of BellRing’s operating
performance to other periods.
- Mark-to-market adjustments on
commodity hedges: BellRing has excluded the impact of
mark-to-market adjustments on commodity hedges due to the inherent
uncertainty and volatility associated with such amounts based on
changes in assumptions with respect to fair value estimates.
Additionally, these adjustments are primarily non-cash items and
the amount and frequency of such adjustments are not
consistent.
- Resolution of dispute with former
contract manufacturer: BellRing has excluded certain non-cash
write-offs recorded in connection with the resolution of a dispute
with a former contract manufacturer as the amount and frequency of
such losses are not consistent. Additionally, BellRing believes
that these losses do not reflect expected ongoing future operating
expenses and do not contribute to a meaningful evaluation of
BellRing’s current operating performance to other periods.
- Foreign currency gain/loss on
intercompany loans: BellRing has excluded the impact of foreign
currency fluctuations related to intercompany loans denominated in
currencies other than the functional currency of the respective
legal entity in evaluating BellRing’s performance to allow for more
meaningful comparisons of performance to other periods.
- NCI adjustment: BellRing has
included an adjustment to reflect the removal of non-GAAP
adjustments which are attributable to the NCI in the periods prior
to the Spin-off in the calculation of Adjusted net earnings
available to common stockholders and Adjusted diluted earnings per
share of common stock, as BellRing believes this adjustment
contributes to a more meaningful evaluation of BellRing’s current
operating performance.
- Income tax
effect on adjustments: BellRing has included the income tax impact
of the non-GAAP adjustments using a rate described in the
applicable footnote of the reconciliation tables, as BellRing
believes that its GAAP effective income tax rate as reported is not
representative of the income tax expense impact of the
adjustments.
Adjusted EBITDA BellRing believes that Adjusted
EBITDA is useful to investors in evaluating BellRing’s operating
performance and liquidity because (i) BellRing 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 BellRing’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 BellRing is required to
comply with certain covenants and limitations that are based on
variations of EBITDA in its financing documents. Management uses
Adjusted EBITDA to provide forward-looking guidance and to forecast
future results.
Adjusted EBITDA reflects adjustments for income
tax expense, interest expense, net and depreciation and
amortization, and the following adjustments discussed above: loss
on extinguishment of debt, net, separation costs, mark-to-market
adjustments on commodity hedges, resolution of dispute with former
contract manufacturer and foreign currency gain/loss on
intercompany loans. Additionally, Adjusted EBITDA reflects
adjustments for the following items:
- Stock-based compensation:
BellRing’s compensation strategy includes the use of BellRing
stock-based compensation to attract and retain executives and
employees by aligning their long-term compensation interests with
BellRing’s stockholders’ investment interests. BellRing’s director
compensation strategy includes an election by any director who
earns retainers in which the director may elect to defer
compensation granted as a director to BellRing common stock,
earning a match on the deferral, both of which are stock-settled
upon the director’s retirement from the BellRing board of
directors. BellRing has excluded stock-based compensation as
stock-based compensation can vary significantly based on reasons
such as the timing, size and nature of the awards granted and
subjective assumptions which are unrelated to operational decisions
and performance in any particular period and does not contribute to
meaningful comparisons of BellRing’s operating performance to other
periods.
- Net earnings attributable to
redeemable noncontrolling interest: BellRing has included
adjustments for the portion of its consolidated net earnings which
were allocated to the NCI for the periods prior to the Spin-off,
allowing for the calculation of Adjusted EBITDA to include 100% of
BellRing as BellRing’s management evaluates BellRing’s operating
performance on a basis that includes 100% of BellRing.
RECONCILIATION OF NET EARNINGS AVAILABLE
TO COMMON STOCKHOLDERS TO ADJUSTED NET EARNINGS
AVAILABLE TO COMMON STOCKHOLDERS (Unaudited)(in
millions)
|
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net
Earnings Available to Common Stockholders |
$ |
44.3 |
|
|
$ |
39.1 |
|
|
$ |
119.4 |
|
|
$ |
48.6 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Loss on extinguishment of debt, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17.6 |
|
|
Separation costs |
|
— |
|
|
|
0.9 |
|
|
|
0.7 |
|
|
|
13.2 |
|
|
Mark-to-market adjustments on
commodity hedges |
|
1.9 |
|
|
|
0.7 |
|
|
|
3.9 |
|
|
|
0.2 |
|
|
Resolution of dispute with
former contract manufacturer |
|
— |
|
|
|
2.3 |
|
|
|
— |
|
|
|
2.3 |
|
|
Foreign currency loss (gain)
on intercompany loans |
|
— |
|
|
|
0.4 |
|
|
|
(0.6 |
) |
|
|
0.7 |
|
|
NCI adjustment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12.5 |
) |
|
Total Net
Adjustments |
|
1.9 |
|
|
|
4.3 |
|
|
|
4.0 |
|
|
|
21.5 |
|
Income tax effect
on adjustments (1) |
|
(0.5 |
) |
|
|
(0.9 |
) |
|
|
(0.8 |
) |
|
|
(3.1 |
) |
Adjusted
Net Earnings Available to Common Stockholders |
$ |
45.7 |
|
|
$ |
42.5 |
|
|
$ |
122.6 |
|
|
$ |
67.0 |
|
|
|
|
|
|
|
|
|
|
(1) For the periods subsequent to the Spin-off (October 1, 2022
through June 30, 2023 and March 11, 2022 through June 30, 2022),
income tax effect on adjustments was calculated on all items,
except for separation costs, using a rate of 24.0%. For the period
prior to the Spin-off (October 1, 2021 through March 10, 2022),
income tax effect on adjustments was calculated on all items,
except for separation costs and NCI adjustment, using a rate of
7.0%, which represents the effective income tax rate on BellRing’s
distributive share from BellRing LLC. For the period prior to the
Spin-off, income tax effect for NCI adjustment was calculated using
a rate of 0.0%. For all periods, income tax effect for separation
costs was calculated using a rate of 8.0%. |
RECONCILIATION OF DILUTED EARNINGS PER
SHARE OF COMMON STOCK TO ADJUSTED DILUTED EARNINGS
PER SHARE OF COMMON STOCK (Unaudited)
|
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Diluted
Earnings per share of Common Stock |
$ |
0.33 |
|
$ |
0.29 |
|
|
$ |
0.89 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Loss on extinguishment of debt, net |
|
— |
|
|
— |
|
|
|
— |
|
|
|
0.22 |
|
|
Separation costs |
|
— |
|
|
0.01 |
|
|
|
— |
|
|
|
0.17 |
|
|
Mark-to-market adjustments on
commodity hedges |
|
0.01 |
|
|
— |
|
|
|
0.03 |
|
|
|
— |
|
|
Resolution of dispute with
former contract manufacturer |
|
— |
|
|
0.02 |
|
|
|
— |
|
|
|
0.03 |
|
|
Foreign currency loss on
intercompany loans |
|
— |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
NCI adjustment |
|
— |
|
|
— |
|
|
|
— |
|
|
|
(0.16 |
) |
|
Total Net
Adjustments |
|
0.01 |
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.27 |
|
Income tax effect
on adjustments (1) |
|
— |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.04 |
) |
Adjusted
Diluted Earnings per share of Common Stock |
$ |
0.34 |
|
$ |
0.31 |
|
|
$ |
0.91 |
|
|
$ |
0.84 |
|
|
|
|
|
|
|
|
|
|
(1) For the periods subsequent to the Spin-off (October 1, 2022
through June 30, 2023 and March 11, 2022 through June 30, 2022),
income tax effect on adjustments was calculated on all items,
except for separation costs, using a rate of 24.0%. For the period
prior to the Spin-off (October 1, 2021 through March 10, 2022),
income tax effect on adjustments was calculated on all items,
except for separation costs and NCI adjustment, using a rate of
7.0%, which represents the effective income tax rate on BellRing’s
distributive share from BellRing LLC. For the period prior to the
Spin-off, income tax effect for NCI adjustment was calculated using
a rate of 0.0%. For all periods, income tax effect for separation
costs was calculated using a rate of 8.0%. |
RECONCILIATION OF NET EARNINGS AVAILABLE
TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA
(Unaudited)(in millions)
|
Three Months Ended June 30, |
|
Nine Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net Earnings Available to Common Stockholders |
$ |
44.3 |
|
|
$ |
39.1 |
|
|
$ |
119.4 |
|
|
$ |
48.6 |
|
Income tax expense |
|
14.4 |
|
|
|
12.5 |
|
|
|
39.0 |
|
|
|
18.6 |
|
Interest expense, net |
|
17.3 |
|
|
|
15.9 |
|
|
|
50.8 |
|
|
|
32.8 |
|
Depreciation and
amortization |
|
5.3 |
|
|
|
5.3 |
|
|
|
15.8 |
|
|
|
15.9 |
|
Loss on extinguishment of
debt, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
17.6 |
|
Separation costs |
|
— |
|
|
|
0.9 |
|
|
|
0.7 |
|
|
|
13.2 |
|
Stock-based compensation |
|
3.7 |
|
|
|
3.7 |
|
|
|
10.8 |
|
|
|
7.9 |
|
Mark-to-market adjustments on
commodity hedges |
|
1.9 |
|
|
|
0.7 |
|
|
|
3.9 |
|
|
|
0.2 |
|
Resolution of dispute with
former contract manufacturer |
|
— |
|
|
|
2.3 |
|
|
|
— |
|
|
|
2.3 |
|
Foreign currency loss (gain)
on intercompany loans |
|
— |
|
|
|
0.4 |
|
|
|
(0.6 |
) |
|
|
0.7 |
|
Net earnings attributable to
redeemable noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
33.7 |
|
Adjusted
EBITDA |
$ |
86.9 |
|
|
$ |
80.8 |
|
|
$ |
239.8 |
|
|
$ |
191.5 |
|
Adjusted EBITDA as a
percentage of Net Sales |
|
19.5 |
% |
|
|
21.8 |
% |
|
|
20.1 |
% |
|
|
19.3 |
% |
Grafico Azioni BellRing Brands (NYSE:BRBR)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni BellRing Brands (NYSE:BRBR)
Storico
Da Set 2023 a Set 2024