Post Holdings, Inc. (NYSE:POST) Q4 2023 Earnings Conference Call November 17, 2023 9:00 AM ET Company Participants Daniel O'Rourke - Investor Relations Robert Vitale - President and Chief Executive Officer Jeff Zadoks - Chief Operating Officer and Interim Chief Executive Officer Matt Mainer - Senior Vice President, Chief Financial Officer and Treasurer Conference Call Participants Andrew Lazar - Barclays Kenneth Goldman - JPMorgan David Palmer - Evercore ISI Matthew Smith - Stifel Michael Lavery - Piper San ...

Post Holdings, Inc. (NYSE:POST) Q3 2023 Earnings Conference Call August 4, 2023 9:00 AM ET Company Participants Daniel O'Rourke - IR Rob Vitale - President and CEO Matt Mainer - CFO Conference Call Participants Andrew Lazar - Barclays David Palmer - Evercore ISI Michael Lavery - Piper Sandler Bill Chappell - Truist Securities Robert Dickerson - Jefferies Jason English - Goldman Sachs Matt Smith - Stifel Operator Good day, and welcome to the Post Holdings Quarter Three 2023 Earnings Conference Call. At this ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Post Holdings, Inc.'s unaudited condensed consolidated financial statements for the quarter ended June 30, 2023 [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) Net sales increased for the quarter and nine months, while net earnings decreased due to significant prior-year gains Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Nine Months Ended June 30, 2023 | Nine Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $1,859.4 | $1,524.9 | $5,045.6 | $4,272.1 | | **Gross Profit** | $501.6 | $364.7 | $1,330.3 | $1,074.9 | | **Operating Profit** | $158.3 | $105.5 | $445.9 | $283.7 | | **Net Earnings** | $89.6 | $170.2 | $235.6 | $672.7 | | **Diluted EPS** | $1.38 | $2.72 | $3.82 | $10.82 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets increased to **$11.89 billion** driven by acquisitions, with total liabilities and shareholders' equity also rising Balance Sheet Highlights (in millions) | Account | June 30, 2023 | September 30, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $208.8 | $586.5 | | Goodwill | $4,649.0 | $4,349.6 | | Other intangible assets, net | $3,272.4 | $2,712.2 | | **Total Assets** | **$11,886.9** | **$11,308.0** | | Long-term debt | $6,186.1 | $5,956.6 | | **Total Liabilities** | **$7,927.1** | **$7,735.7** | | **Total Shareholders' Equity** | **$3,959.8** | **$3,265.7** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Operating cash flow significantly improved, while investing activities used more cash due to acquisitions, and financing activities included debt and share transactions Cash Flow Summary (in millions) | Cash Flow Activity | Nine Months Ended June 30, 2023 | Nine Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $480.5 | $218.1 | | Net Cash Used in Investing Activities | $(567.9) | $(133.1) | | Net Cash Used in Financing Activities | $(279.7) | $(635.9) | | **Net Decrease in Cash** | **$(363.3)** | **$(556.7)** | [Note 5 — Business Combinations](index=16&type=section&id=Note%205%20%E2%80%94%20BUSINESS%20COMBINATIONS) The company acquired Smucker's pet food business for **$1.21 billion** in cash and stock, contributing **$275.3 million** to net sales - The company acquired Smucker's pet food business (including brands like Rachael Ray Nutrish) for **$1,207.5 million**, comprising **$700.0 million** in cash and **$492.3 million** in Post common stock[63](index=63&type=chunk) Preliminary Purchase Price Allocation for Pet Food Acquisition (in millions) | Assets Acquired / Liabilities Assumed | Fair Value | | :--- | :--- | | Inventories | $204.6 | | Property, net | $191.7 | | Other intangible assets, net | $626.0 | | **Total identifiable net assets** | **$1,013.2** | | **Goodwill** | **$194.3** | | **Fair value of total consideration transferred** | **$1,207.5** | - The acquired Pet Food business contributed **$275.3 million** to net sales in the three and nine months ended June 30, 2023[64](index=64&type=chunk) [Note 15 — Long-Term Debt](index=24&type=section&id=Note%2015%20%E2%80%94%20LONG-TERM%20DEBT) Total long-term debt increased to **$6.19 billion**, with significant transactions including a new term loan and senior note repurchases Long-Term Debt Composition (in millions) | Debt Instrument | June 30, 2023 | September 30, 2022 | | :--- | :--- | :--- | | 2.50% convertible senior notes | $575.0 | $575.0 | | 4.50% senior notes | $1,129.3 | $1,270.5 | | 4.625% senior notes | $1,452.9 | $1,482.2 | | 5.50% senior notes | $1,235.0 | $1,235.0 | | Fourth Incremental Term Loan | $400.0 | — | | **Total Long-term debt (carrying value)** | **$6,186.1** | **$5,956.6** | - On April 26, 2023, the company borrowed **$400.0 million** via the Fourth Incremental Term Loan to fund the Pet Food acquisition[63](index=63&type=chunk)[129](index=129&type=chunk) - During the nine months ended June 30, 2023, the company repurchased **$141.2 million** of its 4.50% senior notes and **$29.3 million** of its 4.625% senior notes, resulting in a net gain on extinguishment of debt[134](index=134&type=chunk) [Note 19 — Segments](index=31&type=section&id=Note%2019%20%E2%80%94%20SEGMENTS) The company operates four segments, with Post Consumer Brands leading in sales and Foodservice being the most profitable with significant growth Segment Performance for Nine Months Ended June 30 (in millions) | Segment | Net Sales 2023 | Net Sales 2022 | Segment Profit 2023 | Segment Profit 2022 | | :--- | :--- | :--- | :--- | :--- | | Post Consumer Brands | $2,025.1 | $1,655.1 | $237.8 | $232.6 | | Weetabix | $377.2 | $360.5 | $58.8 | $81.8 | | Foodservice | $1,856.4 | $1,469.5 | $264.9 | $81.0 | | Refrigerated Retail | $786.4 | $787.4 | $57.2 | $41.0 | | **Total** | **$5,045.1** | **$4,272.5** | **$618.7** | **$436.4** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting increased net sales and operating profit driven by the Pet Food acquisition and Foodservice recovery [Overview](index=33&type=section&id=Overview) This section provides an overview of business segments, significant transactions, and market trends including supply chain challenges and avian influenza - On May 11, 2023, PHPC announced it would not complete a partnering transaction and would liquidate, resulting in the redemption of all public shares on May 30, 2023, and dissolution in June 2023[167](index=167&type=chunk)[169](index=169&type=chunk) - The company fully divested its remaining **14.2%** interest in BellRing Brands through two debt-for-equity exchanges, completing the final transaction on November 25, 2022[172](index=172&type=chunk)[174](index=174&type=chunk) - The company continues to face supply chain challenges and significant raw material and packaging inflation, mitigated by pricing actions, cost savings, and hedging, with pressures expected to continue through fiscal 2023[178](index=178&type=chunk) - Outbreaks of avian influenza in fiscal 2022 and early 2023 impacted the Foodservice and Refrigerated Retail segments, leading to increased costs and supply constraints, mitigated by volume management and pricing actions[181](index=181&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Net sales and operating profit significantly increased for both the quarter and nine-month period, driven by the Pet Food acquisition and Foodservice performance Overall Performance vs. Prior Year | Metric | Three Months Ended June 30, 2023 vs 2022 | Nine Months Ended June 30, 2023 vs 2022 | | :--- | :--- | :--- | | **Net Sales** | +$334.5M (+22%) | +$773.5M (+18%) | | **Operating Profit** | +$52.8M (+50%) | +$162.2M (+57%) | | **Net Earnings** | -$80.6M (-47%) | -$437.1M (-65%) | - Interest expense for the nine months ended June 30, 2023 decreased by **$43.2 million (18%)** year-over-year, driven by lower average debt balances and increased interest income from investments held in trust before the PHPC dissolution[189](index=189&type=chunk) [Segment Results](index=40&type=section&id=Segment%20Results) This section details segment performance, with Post Consumer Brands sales growing, Foodservice profit surging, Weetabix profit declining, and Refrigerated Retail profit improving Post Consumer Brands Performance (Q3 2023 vs Q3 2022) | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $871.3M | $574.7M | +52% | | Segment Profit | $83.0M | $81.8M | +1% | - Post Consumer Brands' sales increase was primarily due to **$275.3 million** from the Pet Food acquisition, with volume declining **6%** excluding Pet Food due to lapping prior year competitor out-of-stocks in nut butters[203](index=203&type=chunk) Weetabix Performance (Q3 2023 vs Q3 2022) | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $134.2M | $124.9M | +7% | | Segment Profit | $17.9M | $27.8M | -36% | - Weetabix's profit decline was driven by raw material inflation of **$10.6 million** and higher manufacturing costs of **$4.4 million**, not fully offset by price increases[210](index=210&type=chunk) Foodservice Performance (Q3 2023 vs Q3 2022) | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $622.7M | $579.0M | +8% | | Segment Profit | $107.7M | $45.9M | +135% | - Foodservice profit surged due to higher net sales, lower freight costs (**$10.0 million**), and lower raw material costs (**$6.3 million**) from favorable grain and egg market prices[216](index=216&type=chunk) Refrigerated Retail Performance (Q3 2023 vs Q3 2022) | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $230.7M | $246.4M | -6% | | Segment Profit | $18.0M | $10.4M | +73% | - Refrigerated Retail sales declined on **11%** lower volumes due to price elasticities, but profit increased due to pricing actions, lower manufacturing costs (**$7.2 million**), and lower freight costs (**$1.5 million**)[218](index=218&type=chunk)[220](index=220&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity remains solid with operating cash flow increasing, while major cash uses included the Pet Food acquisition and share repurchases - Cash from operating activities increased by **$260.8 million** year-over-year, driven by favorable working capital changes and lower interest and swap payments[234](index=234&type=chunk) - Key financing activities in the first nine months of fiscal 2023 included: - Borrowing **$400.0 million** via a new term loan - Issuing **5.4 million** shares for the Pet Food acquisition - Repurchasing **2.9 million** shares for **$250.5 million** - Repurchasing **$170.5 million** in principal of senior notes at a discount[226](index=226&type=chunk) - As of June 30, 2023, the company was in compliance with all financial covenants under its Credit Agreement, which include a secured net leverage ratio and a minimum interest coverage ratio[240](index=240&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from commodity prices, foreign currency exchange rates, and interest rates using derivative instruments - A hypothetical **10%** adverse change in the market price of principal hedged commodities would have decreased the fair value of the commodity derivatives portfolio by approximately **$4 million** as of June 30, 2023[251](index=251&type=chunk) - A hypothetical **10%** adverse change in foreign currency exchange rates would have reduced the fair value of the foreign currency derivatives portfolio by approximately **$1 million** as of June 30, 2023[253](index=253&type=chunk) - As of June 30, 2023, the company had **$6.2 billion** in debt, of which **$5.8 billion** was at a fixed rate; a hypothetical **10%** adverse change in interest rates would have decreased the fair value of its interest rate swaps by approximately **$13 million**[254](index=254&type=chunk)[256](index=256&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2023, with ongoing integration of internal controls for the Pet Food business - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[257](index=257&type=chunk) - The company is in the process of analyzing and implementing changes in controls and procedures related to the Pet Food acquisition[258](index=258&type=chunk) [PART II. OTHER INFORMATION](index=50&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company resolved long-standing antitrust lawsuits related to egg products and expects other pending legal actions to have no material financial impact - In September 2022, the company's subsidiary MFI settled the final remaining claims in a long-running antitrust matter related to egg products; no expense was recorded for this matter in the current fiscal year as it was settled and paid in fiscal 2022[139](index=139&type=chunk)[140](index=140&type=chunk) - Management believes that the ultimate liability from other various pending legal proceedings will not be material to the company's consolidated financial condition, results of operations, or cash flows[141](index=141&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) The company incorporates by reference prior risk factors, clarifying that existing food business risks now apply to the newly acquired Pet Food business - The company incorporates by reference the risk factors from its FY2022 Annual Report and Q2 2023 Quarterly Report[261](index=261&type=chunk) - Risks related to food for human consumption, the food and beverage category, and the industry should be read to include pet food, the pet food category, and the pet food industry, respectively, following the Pet Food acquisition[261](index=261&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **1.93 million** shares for **$167.2 million** during the quarter and approved a new **$400.0 million** share repurchase authorization Share Repurchases for Quarter Ended June 30, 2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2023 | 77,003 | $87.74 | | May 2023 | 901,238 | $87.18 | | June 2023 | 947,210 | $86.03 | | **Total** | **1,925,451** | **$86.64** | - On June 6, 2023, the Board terminated the prior share repurchase plan and approved a new authorization to repurchase up to **$400.0 million** of common stock, effective June 7, 2023, and expiring June 7, 2025[262](index=262&type=chunk)

Post Holdings, Inc. (NYSE:POST) Q2 2023 Earnings Conference Call May 5, 2023 9:00 AM ET Company Participants Daniel O’Rourke – Investor Relations Rob Vitale – President and Chief Executive Officer Matt Mainer – Chief Financial Officer and Treasurer Conference Call Participants Andrew Lazar – Barclays David Palmer – Evercore Matt Smith – Stifel Michael Lavery – Piper Sandler Bill Chappell – Truist Jason English – Goldman Sachs Operator Thank you for standing by, and welcome to the Post Holdings Second Quarte ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________ FORM 10-Q __________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 1-35305 Post Holdings, Inc. (Exact name of registrant as specified in its charter) Table of ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________ FORM 10-Q __________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 1-35305 Post Holdings, Inc. (Exact name of registrant as specified in i ...

Financial Data and Key Metrics Changes - The company reported consolidated net sales of $1.6 billion for Q1 2023, representing a 17% increase year-over-year, driven by pricing actions across segments, while overall volumes remained relatively flat [21] - Adjusted EBITDA for the quarter was $270 million, reflecting a solid performance despite significant cost inflation [21] - Gross margin expanded by 170 basis points compared to the previous year, with expectations of some fluctuations throughout the year [18] Business Line Data and Key Metrics Changes - **Post Consumer Brands**: Net sales increased by 9%, while volumes decreased by 1%. Average net pricing rose by 11%, driven by pricing actions, although this was partially offset by an unfavorable product mix [22] - **Foodservice**: Net sales grew by 37% and volume increased by 4%. Segment adjusted EBITDA reached $109 million, benefiting from improved pricing and volume growth [12] - **Weetabix**: Net sales were flat year-over-year, but in local currency, sales increased by approximately 14%. The impact of foreign currency translation was a headwind of about 1,400 basis points [11] Market Data and Key Metrics Changes - The company noted a shift towards more value price points, which has created a margin headwind, although the private label business grew by 13.6% [5] - The supply chain recovery is ongoing, with fill rates still below pre-pandemic levels, but improvements have been noted compared to the previous year [4][21] Company Strategy and Development Direction - The company is focusing on M&A opportunities in the current capital market environment, with a preference for both large and small acquisitions that could complement existing businesses or enter new categories [8] - The outlook for fiscal 2023 has been revised upwards, with adjusted EBITDA guidance increased to a range of $1.025 billion to $1.065 billion, reflecting year-to-date results and optimism about business conditions [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainable EBITDA level for the Foodservice segment, estimating it to be around $350 million for the second half of the fiscal year [3][6] - The company anticipates that margin pressures from elevated energy prices will persist throughout the year, particularly affecting Weetabix [7] Other Important Information - The company sold its remaining stake in BellRing brands, generating after-tax proceeds of $2 billion from an initial investment of over $700 million, which resulted in a distribution to shareholders of an additional $2 billion [9] - The company repurchased 300,000 shares at an average price of approximately $85 per share during the quarter [25] Q&A Session Summary Question: What drove the outperformance in the Foodservice segment? - Management indicated that the drivers for the Foodservice segment's strong performance were similar to those in the previous quarter, with ongoing impacts from avian influenza affecting pricing [43] Question: How is the company addressing the competition from private label products? - Management highlighted that traditional innovation, pack size revisions, and expanded advertising would be the first levers to defend against private label competition [54] Question: What is the outlook for margins in the Weetabix segment? - Management expects the EBITDA margin to remain stable, with fluctuations in gross margin possible, but overall performance is anticipated to be indicative of current levels [61] Question: When will the pricing of commodities start to improve? - Management indicated that improvements in commodity pricing are expected to begin in the current quarter and build throughout the year [81]

Financial Data and Key Metrics Changes - For Q4 2022, consolidated net sales were $1.6 billion, with adjusted EBITDA of $280 million, representing a 16.5% increase in net sales and a 32% increase in adjusted EBITDA year-over-year [17][8] - For the full year, adjusted EBITDA exceeded $960 million, reflecting an 8% growth compared to the previous year [8] Business Line Data and Key Metrics Changes - Post Consumer Brands saw net sales and volumes increase by 13% and 2% respectively, with cereal average net pricing up 10.5% [19] - The foodservice segment experienced a 37% increase in net sales and a 4% increase in volume, with adjusted EBITDA growing to $110 million [22] - Refrigerated Retail reported a 1% decrease in net sales and a 15% decrease in volumes, although adjusted EBITDA increased by 49% due to pricing actions [23][24] Market Data and Key Metrics Changes - Weetabix's net sales decreased by 8%, but were up approximately 8% in local currency, impacted by a weaker British pound [20] - The company noted a category trade down to private label products, particularly in North American cereal, while the UK faced more dramatic trade downs due to energy inflation [44] Company Strategy and Development Direction - The company aims to focus on margin restoration in 2023, with a multiyear effort to improve pricing discipline, stabilize supply chain costs, and enhance manufacturing reliability [12] - The company is positioned as an advantaged buyer in a challenging M&A environment, with plans to monetize its remaining ownership in BellRing [13][14] Management's Comments on Operating Environment and Future Outlook - Management characterized 2022 as dominated by inflation management and supply chain challenges, with expectations for margin recovery in 2023 [8] - There is confidence in the core franchise's continued strength, with expectations for above-average EBITDA growth over the next few years [11][12] Other Important Information - The company generated $165 million in cash flow from continuing operations in Q4, with full-year cash flow from continuing operations totaling $384 million [25] - Capital expenditures for 2023 are expected to remain elevated as the company completes its new manufacturing facility and invests in reliability projects [25] Q&A Session Summary Question: Guidance for fiscal '23 EBITDA - Management indicated that the guidance reflects some conservatism and that the fourth quarter overperformed, suggesting a cautious approach to future expectations [32][33] Question: Foodservice profitability and future expectations - Management noted that while the fourth quarter's performance was strong, it should not be annualized as a typical run rate, but they expect foodservice margins to normalize at higher levels than pre-pandemic [34][35][51] Question: Gross margin and pricing to cost inflation - Management expects gross margin expansion in 2023, driven by improved efficiency and pricing adjustments [41][42] Question: Trade down to private label and elasticity - Management observed some trade down to private label in North American cereal but noted that overall elasticity remains favorable [44] Question: Labor situation and its impact - Management reported improvements in labor availability but highlighted challenges with higher turnover and a less experienced workforce impacting efficiency [66] Question: Strategy for collaboration between business units - The new CFO emphasized the goal of enhancing collaboration between business units to improve cost structures and operational efficiencies [72]

Financial Data and Key Metrics Changes - Consolidated net sales for Q3 2022 were $1.5 billion, representing a 22% increase year-over-year, benefiting from approximately $63 million in incremental sales from recent acquisitions, pricing actions, and volume demand recovery [18][19] - Adjusted EBITDA for the quarter was $251 million, with a year-over-year increase in net sales driven by pricing actions and volume recovery [18][19] - Percentage margins declined year-over-year primarily due to the mechanics of the grain-based pricing model in foodservice and a mix shift in the overall business portfolio [6][16] Business Line Data and Key Metrics Changes - **Post Consumer Brands**: Net sales and volumes increased by 23% and 14% respectively, with adjusted EBITDA decreasing by 1.3% due to ongoing supply chain challenges and increased employee incentive costs [20] - **Weetabix**: Net sales increased by 1% despite a significant foreign currency translation headwind, with volumes declining by 6% excluding the benefit from the UFIT acquisition [21] - **Foodservice**: Net sales grew by 33% and volumes by 6%, with adjusted EBITDA increasing by 45% due to volume recovery and improved average net pricing [22] - **Refrigerated Retail**: Net sales increased by 12%, while volumes decreased by 3%. Adjusted EBITDA decreased to $30 million, pressured by dairy costs and avian influenza impacts [23] Market Data and Key Metrics Changes - North American cereal business saw branded share reach 20% and total private label reach 6.7%, with strong consumption in key brands [9] - The foodservice segment is expected to exceed pre-pandemic profit levels, with ongoing improvements in supply chain fulfillment [10] Company Strategy and Development Direction - The company is focused on M&A opportunities, having completed six tuck-in acquisitions in the last two years, and is exploring combinations for a SPAC despite a weak IPO market [14][15] - The company aims to improve supply chain reliability and productivity, expecting gradual improvements rather than a binary resolution [8][50] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about entering 2023 with momentum, citing improvements in supply chains and the potential for better margins as controllable cost management improves [16][50] - The company anticipates continued inflation and pricing actions, with a focus on maintaining effective throughput in supply chains [6][32] Other Important Information - The company repurchased approximately 1.9 million shares at an average price of $76.43 per share in Q3 2022, with a total of 3.8 million shares repurchased year-to-date [24] - Net leverage at the end of Q3 was approximately 6.2x, with expectations to reduce leverage by approximately half a turn through the intended debt-for-equity exchange of retained ownership in BellRing Brands [25] Q&A Session Summary Question: Sustainability of organic growth in Post Consumer Brands - Management noted that pricing is a significant component, with good volume growth across the value portfolio and additional distribution gains [32] Question: Guidance for fiscal year 2023 - Management indicated no reason to believe differently from previous expectations but emphasized the need for planning regarding inventory and productive capacity [34] Question: Profitability in Foodservice division - Management stated that avian influenza contributed approximately $10 million in the quarter, with expectations for continued growth in profitability [43] Question: Challenges in Refrigerated Retail division - Management acknowledged that avian influenza costs impacted margins, but emphasized the importance of third-party manufacturers in the supply chain [45] Question: Pricing net of commodities and supply chain friction costs - Management expects to have priced for inflation by the beginning of 2023, with a gradual improvement in supply chain execution anticipated [50] Question: Impact of workforce changes on supply chain - Management highlighted the need for diligent training and development due to a less experienced workforce, with a focus on asset reliability and maintenance in capital expenditures [58]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company reported increased net earnings for Q3 and nine months FY2022, primarily driven by a significant gain on its BellRing investment and favorable swap adjustments, despite operational profit declines from cost inflation and higher corporate expenses [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2022 net sales increased by **22.2%** to **$1,524.9 million**, but operating profit declined **31.9%** to **$105.5 million**, while net earnings swung to a **$170.2 million** profit due to investment gains and swap adjustments Q3 FY2022 vs Q3 FY2021 Statement of Operations (in millions, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Net Sales** | $1,524.9 | $1,247.5 | 22.2% | | **Gross Profit** | $364.7 | $368.1 | -0.9% | | **Operating Profit** | $105.5 | $155.0 | -31.9% | | **Net Earnings (Loss)** | $170.2 | $(54.3) | N/A | | **Diluted EPS from Continuing Operations** | $2.72 | $(1.30) | N/A | Nine Months FY2022 vs FY2021 Statement of Operations (in millions, except per share data) | Metric | Nine Months Ended June 30, 2022 | Nine Months Ended June 30, 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Net Sales** | $4,272.1 | $3,624.8 | 17.9% | | **Gross Profit** | $1,074.9 | $1,095.6 | -1.9% | | **Operating Profit** | $283.7 | $403.0 | -29.6% | | **Net Earnings** | $672.7 | $136.8 | 391.7% | | **Diluted EPS from Continuing Operations** | $10.47 | $1.38 | 658.7% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$11.56 billion** as of June 30, 2022, primarily due to the BellRing spin-off, while total liabilities also decreased to **$7.85 billion** and shareholders' equity increased to **$3.41 billion** Balance Sheet Summary (in millions) | Account | June 30, 2022 | September 30, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $2,291.0 | $2,086.1 | | **Total Assets** | $11,560.2 | $12,414.7 | | **Total Current Liabilities** | $757.7 | $1,049.2 | | **Long-term debt** | $6,032.4 | $6,441.6 | | **Total Liabilities** | $7,848.1 | $9,355.5 | | **Total Shareholders' Equity** | $3,406.7 | $2,754.2 | - The balance sheet reflects the removal of assets and liabilities related to discontinued operations (BellRing), which amounted to **$385.7 million** in current assets and **$248.9 million** in current liabilities as of September 30, 2021[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$218.1 million** for the nine months ended June 30, 2022, while investing activities used **$133.1 million** and financing activities used **$635.9 million**, driven by debt and share repurchases Cash Flow Summary - Nine Months Ended June 30 (in millions) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $218.1 | $395.3 | | **Net Cash Used in Investing Activities** | $(133.1) | $(737.4) | | **Net Cash Used in Financing Activities** | $(635.9) | $(75.2) | | **Net Decrease in Cash** | $(556.7) | $(411.1) | - Significant financing activities in the first nine months of 2022 included **$1,340.0 million** in debt proceeds, **$904.4 million** in debt repayments, **$343.0 million** in treasury stock purchases, and a net distribution of **$547.2 million** to BellRing Brands, Inc[13](index=13&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate actions, including the **80.1%** BellRing spin-off and its reclassification as discontinued operations, the **14.2%** retained equity stake, and the acquisition of Lacka Foods for **$32.2 million** - On March 10, 2022, the company completed the distribution of **80.1%** of its interest in BellRing Brands, Inc. to shareholders, with historical results now presented as discontinued operations[17](index=17&type=chunk) - The company's remaining **14.2%** equity interest in BellRing was remeasured to a fair value of **$482.8 million** as of June 30, 2022, resulting in a recognized gain of **$482.8 million** for the nine-month period[62](index=62&type=chunk) - On April 5, 2022, the company acquired Lacka Foods Limited for approximately **$32.2 million**, reported within the Weetabix segment[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **22%** increase in Q3 net sales, offset by a **32%** decline in operating profit due to cost inflation and higher corporate expenses, detailing segment performance, impacts of external factors, and liquidity management - The BellRing Spin-off, completed on March 10, 2022, represented a strategic shift, and BellRing's historical results are now presented as discontinued operations[161](index=161&type=chunk) - The business has been negatively impacted by external factors including labor shortages, input and freight inflation, supply chain disruptions from the COVID-19 pandemic, increased energy and commodity costs due to the conflict in Ukraine, and higher egg prices resulting from avian influenza[176](index=176&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk) Overall Financial Performance Summary (in millions) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | % Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $1,524.9 | $1,247.5 | 22% | | **Operating Profit** | $105.5 | $155.0 | (32)% | | **Net Earnings (Loss)** | $170.2 | $(54.3) | 413% | [Results of Operations](index=37&type=section&id=RESULTS%20OF%20OPERATIONS) Q3 2022 net sales increased **22%** to **$1.5 billion** and nine-month sales grew **18%** to **$4.3 billion**, but operating profit declined **32%** in Q3 and **30%** over nine months due to higher corporate expenses and lower segment profit, despite significant gains from interest rate swaps and the BellRing investment - Net sales increased by **$277.4 million (22%)** in Q3 and **$647.3 million (18%)** in the nine-month period, driven by growth across all segments and contributions from recent acquisitions[182](index=182&type=chunk)[183](index=183&type=chunk) - Operating profit decreased by **$49.5 million (32%)** in Q3 and **$119.3 million (30%)** in the nine-month period, primarily due to increased general corporate expenses and lower segment profit in most retail-facing segments[184](index=184&type=chunk)[185](index=185&type=chunk) - The company recognized a net gain of **$131.6 million** in Q3 and **$222.9 million** in the nine-month period from mark-to-market adjustments on interest rate swaps, compared to a loss and a smaller gain in the respective prior-year periods[193](index=193&type=chunk)[194](index=194&type=chunk) - A gain of **$35.1 million** in Q3 and **$482.8 million** in the nine-month period was recorded on the company's remaining **14.2%** investment in BellRing[196](index=196&type=chunk) [Segment Results](index=39&type=section&id=SEGMENT%20RESULTS) In Q3 2022, Foodservice profit increased **65%** due to pricing and volume recovery, while Post Consumer Brands' profit fell **7%** despite **23%** sales growth, and Weetabix and Refrigerated Retail profits also declined due to inflation and higher costs Q3 2022 Segment Performance (in millions) | Segment | Net Sales | % Change (YoY) | Segment Profit | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | **Post Consumer Brands** | $574.7 | 23% | $81.8 | (7)% | | **Weetabix** | $124.9 | 1% | $27.8 | (3)% | | **Foodservice** | $579.0 | 33% | $45.9 | 65% | | **Refrigerated Retail** | $246.4 | 12% | $10.4 | (27)% | - Post Consumer Brands' profit was negatively impacted by **$16.6 million** in raw material inflation, **$11.1 million** in increased freight costs, and **$10.8 million** in higher manufacturing costs[204](index=204&type=chunk) - Foodservice sales and profit growth were driven by higher average net selling prices, partly due to passing on higher raw material costs from grain markets and avian influenza, and volume recovery from the COVID-19 pandemic[211](index=211&type=chunk)[213](index=213&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Liquidity was shaped by significant capital allocation, including debt transactions related to the BellRing spin-off, new senior note issuance, and repurchases, with cash from operations decreasing to **$219.7 million** but sufficient liquidity maintained through cash and credit facilities - Key financing activities in the nine months ended June 30, 2022 included repurchasing **3.8 million** shares for **$339.0 million**, issuing **$500.0 million** of **5.50%** senior notes, and redeeming **$840.0 million** of **5.75%** senior notes[228](index=228&type=chunk) - The BellRing spin-off involved a complex debt-for-debt exchange where Post borrowed **$840.0 million** in a short-term loan, received **$840.0 million** in BellRing notes, and used those notes to repay the loan[228](index=228&type=chunk) - Cash provided by continuing operations decreased by **$29.7 million** compared to the prior year, driven by unfavorable changes in inventory pricing and timing of receivables[236](index=236&type=chunk) - As of June 30, 2022, the company was not required to comply with its secured net leverage ratio covenant as its outstanding revolving credit obligations did not exceed the **30%** threshold[242](index=242&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from commodity prices, foreign currency, and interest rates, managing them with derivatives; a **10%** adverse change in commodity prices would impact derivatives by **$6 million**, and a **10%** adverse change in interest rates would decrease interest rate swap fair value by **$38 million** - The company is exposed to commodity price risk for inputs like natural gas, soybean oil, corn, and wheat; a hypothetical **10%** adverse price change would decrease the fair value of its commodity derivatives portfolio by about **$6 million** as of June 30, 2022[256](index=256&type=chunk) - As of June 30, 2022, **$6.03 billion** of the company's total debt was fixed-rate, with a weighted-average interest rate of **5.0%**[259](index=259&type=chunk) - The company held interest rate swaps with a notional value of **$1,049.3 million**; a hypothetical **10%** adverse change in interest rates would decrease the fair value of these swaps by approximately **$38 million** as of June 30, 2022[261](index=261&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2022, with no significant changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[262](index=262&type=chunk) - No significant changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2022[263](index=263&type=chunk) [PART II. OTHER INFORMATION](index=49&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings information is incorporated by reference from Note 16, primarily discussing antitrust litigation against Michael Foods, with no environmental proceedings meeting the **$1.0 million** disclosure threshold - Information regarding legal proceedings is incorporated by reference from Note 16 of the financial statements[264](index=264&type=chunk) - The company has elected a disclosure threshold of **$1.0 million** for environmental proceedings involving a governmental entity and reports no such proceedings for the period[265](index=265&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report for fiscal year 2021 and the Q2 2022 Form 10-Q have occurred - There have been no material changes to the risk factors previously disclosed in the Annual Report for fiscal year 2021 and the Q2 2022 10-Q[266](index=266&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 FY2022, Post Holdings repurchased **1,907,301** shares of common stock at an average price of **$76.43** per share, with **$145.8 million** remaining available under the repurchase authorization Common Stock Repurchases (Q3 FY2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2022 | 849,077 | $74.10 | | May 2022 | 1,034,539 | $78.25 | | June 2022 | 23,685 | $80.54 | | **Total** | **1,907,301** | **$76.43** | - As of June 30, 2022, **$145.8 million** remained available under the company's stock repurchase authorization, which is effective through November 20, 2023[267](index=267&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including agreements related to the BellRing spin-off, corporate governance documents, debt indentures, and Sarbanes-Oxley certifications - Exhibits filed include agreements related to the BellRing spin-off, corporate governance documents, debt indentures, and Sarbanes-Oxley certifications[269](index=269&type=chunk)