Q2 2025 Performance - Adjusted Net Sales reached $801.4 million, exceeding the upper end of guidance[7, 8] - Adjusted EBITDA was $73.3 million, also surpassing the upper end of guidance[7, 8] - Adjusted EBITDA margin increased by 20 bps to 9.1%[38] - Adjusted Net Sales increased 1.4% year-over-year[38, 40] Full Year 2025 Outlook - The company anticipates Adjusted EBITDA in the range of $345 million to $375 million[7] - Free Cash Flow is expected to be at least $130 million[7] - Adjusted Net Sales growth is projected to be between -0.5% and 1.0%, equating to $3.360 to $3.415 billion[7, 48] Sales Drivers - Volume/mix had a negative impact of (6.2)%, influenced by margin management and the griddle recall[40] - The Harris Tea acquisition contributed positively with 4.5%[40] - Pricing adjustments resulted in a benefit of 4.2%[40] Capital Allocation - Capital expenditures are planned at approximately $125 million to enhance capabilities in growing categories[44, 48]

[Executive Summary](index=1&type=section&id=Executive%20Summary) TreeHouse Foods reported strong Q2 2025 results, exceeding guidance and maintaining confidence in full-year targets, driven by improved execution and private brand strength [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) TreeHouse Foods, Inc. reported strong second-quarter 2025 financial results, with adjusted net sales and adjusted EBITDA exceeding guidance, and remains confident in achieving its full-year 2025 guidance | Metric | Q2 2025 (Millions) | | :------------------- | :----------------- | | Net Sales | $798.0 | | Adjusted Net Sales | $801.4 | | Net Loss | $(2.9) | | Adjusted EBITDA | $73.3 | - **Adjusted net sales** and **adjusted EBITDA** both exceeded the upper-end of the company's guidance range[2](index=2&type=chunk) - The Company remains confident in its ability to achieve its **2025 guidance**[4](index=4&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Steve Oakland highlighted strong Q2 results, attributing success to improved execution driving margin improvement and cash flow growth, and believes private brands are well-positioned to offer value and achieve profit and cash flow growth - CEO Steve Oakland appreciated the team's effort for **strong Q2 results**, with **adjusted net sales** and **adjusted EBITDA** exceeding guidance[2](index=2&type=chunk) - The company is focused on driving **margin improvement** and **cash flow growth** through improved execution[2](index=2&type=chunk) - **Private brands** are considered attractively positioned, offering needed value to customers and consumers, enabling **profit and cash flow growth**[2](index=2&type=chunk) [Second Quarter 2025 Financial Results](index=1&type=section&id=SECOND%20QUARTER%202025%20FINANCIAL%20RESULTS) This section details TreeHouse Foods' Q2 2025 financial performance, including net sales growth, improved gross profit, reduced operating expenses, and changes in net loss and cash flow [Net Sales](index=1&type=section&id=Net%20Sales) Net sales for Q2 2025 increased by 1.2% to $798.0 million, primarily driven by the acquisition of a private brand tea business, favorable pricing, and distribution gains, partially offset by volume/mix declines due to margin management, macroeconomic trends, a frozen griddle product recall, and the RTD business exit | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | Change (%) | | :---------------- | :----------------- | :----------------- | :---------------- | :--------- | | Net Sales | $798.0 | $788.5 | $9.5 | 1.2% | Drivers of Net Sales Change (Q2 2025 vs. Q2 2024) | Factor | Three Months (%) | | :-------------------------- | :--------------- | | Business acquisition | 4.5% | | Pricing | 4.2% | | Margin management | (2.6)% | | Consumption/other | (2.4)% | | Griddle recall service impacts | (1.2)% | | Volume/mix | (6.2)% | | Business exit | (1.0)% | | Product recall returns | (0.2)% | | Foreign currency | (0.1)% | | **Total change in net sales** | **1.2%** | - The **net sales increase** was primarily due to the **acquisition of the private brand tea business**, **favorable pricing** to recover commodity inflation, and **distribution gains**[5](index=5&type=chunk) - Offsetting factors included **volume/mix declines** related to planned **margin management**, **macroeconomic consumption trends**, service impacts from a **frozen griddle product recall**, and the **RTD business exit**[5](index=5&type=chunk) [Gross Profit](index=2&type=section&id=Gross%20Profit) Gross profit as a percentage of net sales increased by 1.1 percentage points to 17.4% in Q2 2025, mainly due to insurance recoveries from product recalls, favorable margins from the Harris Tea acquisition, and supply chain savings, partially offset by commodity cost inflation and unfavorable fixed cost absorption | Metric | Q2 2025 | Q2 2024 | Change (pp) | | :-------------------------- | :------ | :------ | :---------- | | Gross Profit (% of net sales) | 17.4% | 16.3% | +1.1 | | Gross Profit (Millions) | $139.2 | $128.3 | +$10.9 | - The increase in **gross profit percentage** was primarily due to **$13.1 million of insurance recoveries** related to voluntary product recalls, **favorable margin from the Harris Tea acquisition**, and **supply chain savings initiatives**[6](index=6&type=chunk) - Partially offset by **commodity cost inflation** and **unfavorable fixed cost absorption** due to declining consumption trends[6](index=6&type=chunk) [Total Operating Expenses](index=2&type=section&id=Total%20Operating%20Expenses) Total operating expenses decreased by $20.4 million to $111.9 million in Q2 2025, mainly due to a non-cash impairment charge recorded in Q2 2024 related to the Ready-to-drink beverages asset group and ongoing cost reduction activities in 2025 | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :---------------------- | :----------------- | :----------------- | :---------------- | | Total Operating Expenses | $111.9 | $132.3 | $(20.4) | - The decrease was primarily due to a **$19.3 million non-cash impairment charge** in Q2 2024 related to the Ready-to-drink beverages asset group[7](index=7&type=chunk) - **Cost reduction activities** in 2025 also contributed to the decrease[7](index=7&type=chunk) [Total Other Expense](index=2&type=section&id=Total%20Other%20Expense) Total other expense increased by $16.0 million to $32.9 million in Q2 2025, driven by an unfavorable $16.2 million change in non-cash mark-to-market impacts from hedging activities and a $6.6 million increase in interest expense due to higher borrowings, partially offset by a favorable currency exchange rate impact | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :----------------- | :----------------- | :----------------- | :---------------- | | Total Other Expense | $32.9 | $16.9 | $16.0 | - Increase due to a **$16.2 million unfavorable change** in non-cash mark-to-market impacts from hedging activities (commodity contracts, interest rate swaps)[8](index=8&type=chunk) - Increase of **$6.6 million in interest expense** primarily due to increased borrowings on the Revolving Credit Facility[8](index=8&type=chunk) - Partially offset by a **favorable currency exchange rate impact of $6.2 million** between the U.S. and Canada[8](index=8&type=chunk) [Income Taxes](index=2&type=section&id=Income%20Taxes) The effective income tax rate significantly increased to 48.2% in Q2 2025 from 20.1% in Q2 2024, primarily due to shifts in non-deductible executive compensation and the estimated annual pre-tax earnings | Metric | Q2 2025 | Q2 2024 | Change (pp) | | :-------------------- | :------ | :------ | :---------- | | Effective Tax Rate | 48.2% | 20.1% | +28.1 | | Income Tax Benefit (Millions) | $(2.7) | $(4.2) | +$1.5 | - The change in **effective tax rate** is primarily driven by changes in **non-deductible executive compensation** and **estimated annual pre-tax earnings**[9](index=9&type=chunk) [Net Loss and Adjusted EBITDA](index=2&type=section&id=Net%20Loss%20and%20Adjusted%20EBITDA) Net loss improved to $(2.9) million in Q2 2025 from $(16.7) million in Q2 2024, while Adjusted EBITDA increased by $2.7 million to $73.3 million, driven by supply chain savings, the Harris Tea acquisition, and cost reduction activities, partially offset by commodity cost inflation and unfavorable fixed cost absorption | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | | :---------------- | :----------------- | :----------------- | :---------------- | | Net Loss | $(2.9) | $(16.7) | +$13.8 | | Adjusted EBITDA | $73.3 | $70.6 | +$2.7 | - The increase in **Adjusted EBITDA** is primarily due to **supply chain savings initiatives**, the **accretive impact of the Harris Tea acquisition**, and **cost reduction activities**[10](index=10&type=chunk) - Offset by **commodity cost inflation** and **unfavorable fixed cost absorption** due to declining consumption trends[10](index=10&type=chunk) [Net Cash Used In Operating Activities](index=2&type=section&id=Net%20Cash%20Used%20In%20Operating%20Activities) Net cash used in operating activities increased by $28.9 million to $100.7 million in the first six months of 2025, mainly due to a decrease in cash flows from the Receivables Sales Program, partially mitigated by higher cash earnings from pricing actions to recover commodity inflation | Metric | 6 Months 2025 (Millions) | 6 Months 2024 (Millions) | Change (Millions) | | :-------------------------------- | :----------------------- | :----------------------- | :---------------- | | Net Cash Used In Operating Activities | $(100.7) | $(71.8) | $(28.9) | - The increase in **cash used** was primarily attributable to a **decrease in cash flows from the Receivables Sales Program**[10](index=10&type=chunk) - Partially offset by **higher cash earnings** reflecting the Company's pricing actions to recover commodity inflation[10](index=10&type=chunk) [Outlook](index=3&type=section&id=OUTLOOK) TreeHouse Foods provides its full-year 2025 guidance, maintaining adjusted EBITDA and free cash flow targets while updating adjusted net sales, and outlines expectations for the third quarter [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) TreeHouse Foods is maintaining its 2025 adjusted EBITDA and free cash flow guidance, while updating adjusted net sales guidance to reflect commodity-based pricing actions, now expecting adjusted net sales to range from $3.360 billion to $3.415 billion, representing a slight decline to modest growth year-over-year - TreeHouse Foods is maintaining its previously issued **2025 adjusted EBITDA** and **free cash flow guidance**[11](index=11&type=chunk) - **Adjusted net sales guidance** updated to reflect commodity-based pricing actions[11](index=11&type=chunk) Full Year 2025 Guidance | Metric | Guidance Range | | :-------------------- | :-------------------------------- | | Adjusted Net Sales | $3.360 billion to $3.415 billion (0.5% decline to 1% growth YoY) | | Adjusted EBITDA | $345 million to $375 million | | Free Cash Flow | At least $130 million | | Net Interest Expense | $80 million to $90 million | | Capital Expenditures | Approximately $125 million | - **Volume/mix** is still expected to decline approximately **1% year-over-year**, while **pricing** is expected to provide a **low-single-digit benefit**[14](index=14&type=chunk) [Third Quarter 2025 Expectations](index=3&type=section&id=Third%20Quarter%202025%20Expectations) For the third quarter of 2025, TreeHouse Foods expects adjusted net sales between $840 million and $870 million, indicating approximately flat growth at the mid-point, with adjusted EBITDA projected to be in the range of $90 million to $110 million Third Quarter 2025 Expectations | Metric | Guidance Range | | :-------------------- | :-------------------------- | | Adjusted Net Sales | $840 million to $870 million | | Adjusted EBITDA | $90 million to $110 million | - Third quarter **adjusted net sales** are expected to represent approximately **flat growth at the mid-point**[14](index=14&type=chunk) - **Organic volume and mix** are expected to decline **high-single digits**, driven primarily by continued margin management actions, with **pricing** providing an approximately **4% benefit**[14](index=14&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=COMPARISON%20OF%20NON-GAAP%20INFORMATION%20TO%20GAAP%20INFORMATION) This section explains the company's use of Non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted Net Sales, and Free Cash Flow, to provide clearer insights into operational performance [Overview of Non-GAAP Measures](index=4&type=section&id=Overview%20of%20Non-GAAP%20Measures) The company uses Non-GAAP financial measures to provide additional insights into financial performance, believing they offer useful information for investors to make meaningful comparisons between periods and view the business from management's perspective, with reconciliations to GAAP measures provided - **Non-GAAP financial measures** are included to provide useful information to financial statement users, allowing for meaningful comparisons of earnings performance between periods[15](index=15&type=chunk)[16](index=16&type=chunk) - Management uses **Non-GAAP measures** for assessing operating performance, incentive compensation, and resource allocation decisions[17](index=17&type=chunk)[18](index=18&type=chunk) - **Reconciliations between GAAP and Non-GAAP measures** are provided, but forward-looking Non-GAAP measures cannot be reconciled to GAAP without unreasonable effort due to inherent uncertainties[16](index=16&type=chunk)[19](index=19&type=chunk) [EBITDA and Adjusted EBITDA](index=4&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) EBITDA is defined as net loss before interest expense, interest income, income tax benefit, and depreciation and amortization, while Adjusted EBITDA further adjusts for items significantly affecting comparability between periods, such as product recalls, restructuring, acquisitions, impairments, and mark-to-market adjustments, to provide a clearer view of core operating performance - **EBITDA** is defined as net loss before interest expense, interest income, income tax benefit, and depreciation and amortization expense[17](index=17&type=chunk) - **Adjusted EBITDA** reflects adjustments to EBITDA for items that management believes significantly affect the assessment of earnings results between periods, such as product recalls, restructuring programs, acquisition costs, impairment of assets, and mark-to-market adjustments on derivative contracts[17](index=17&type=chunk) - These measures are used by management to assess operating performance and incentive compensation, and by investors as a measure of operating performance and for debt covenant calculations[17](index=17&type=chunk) [Adjusted Net Sales and Other Adjusted Measures](index=4&type=section&id=Adjusted%20Net%20Sales%20and%20Other%20Adjusted%20Measures) Adjusted net sales, cost of sales, gross profit, operating expenses, operating income, other expense, income tax expense, and net income are GAAP line items adjusted for specific items like product recalls, restructuring, acquisition costs, and mark-to-market impacts to provide a comparable view of performance, with Adjusted diluted EPS calculated based on adjusted net income - **Adjusted net sales**, cost of sales, gross profit, total operating expenses, operating income, total other expense, income tax expense, and net income are GAAP measures adjusted for items impacting comparability[18](index=18&type=chunk) - Adjustments include product recalls, restructuring programs, acquisition/divestiture costs, loss on extinguishment of debt, asset impairment, foreign currency exchange impact, and mark-to-market adjustments on derivative contracts[18](index=18&type=chunk) - **Adjusted diluted EPS** is determined by dividing adjusted net income (loss) by the weighted average diluted common shares outstanding, reflecting adjustments to GAAP EPS for items significantly affecting earnings results between periods[18](index=18&type=chunk) [Free Cash Flow](index=5&type=section&id=Free%20Cash%20Flow) Free cash flow, a Non-GAAP measure, is calculated as net cash used in operating activities less capital expenditures and proceeds from sales of fixed assets, and is considered an important liquidity measure indicating cash generated from operations available for mandatory payments and investment opportunities - **Free cash flow** is a Non-GAAP measure representing net cash used in operating activities, less capital expenditures and proceeds from sales of fixed assets[20](index=20&type=chunk) - It is an important measure of **liquidity**, providing insight into cash available for mandatory payment obligations and investment opportunities[20](index=20&type=chunk) [About TreeHouse Foods](index=5&type=section&id=ABOUT%20TREEHOUSE%20FOODS) TreeHouse Foods, Inc. is a leading North American private brands snacking and beverage manufacturer focused on customer engagement, delivering excellent service, and building capabilities to drive mutually profitable growth, supported by investments in depth, capabilities, and operational efficiencies - **TreeHouse Foods, Inc.** is a leading private brands snacking and beverage manufacturer in North America[21](index=21&type=chunk) - The company's purpose is to engage and delight customers, striving to deliver **excellent service** and build capabilities to drive **mutually profitable growth**[21](index=21&type=chunk) - This purpose is supported by investment in depth, capabilities, and operational efficiencies aimed at capitalizing on **long-term growth prospects** in its operating categories[21](index=21&type=chunk) [Forward-Looking Statements](index=6&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section contains forward-looking statements based on current beliefs and assumptions, subject to various risks and uncertainties that could cause actual results to differ materially, and the company does not intend to update these statements, cautioning against undue reliance - The press release contains **forward-looking statements** based on current beliefs and assumptions, subject to risks and uncertainties[23](index=23&type=chunk) - **Actual results may vary materially** from those described due to factors such as quality issues, supply chain disruptions, raw material and commodity costs, labor issues, and market changes[23](index=23&type=chunk) - The company does not intend to update these statements and cautions readers not to unduly rely on them[23](index=23&type=chunk) [Financial Statements](index=7&type=section&id=FINANCIAL%20INFORMATION) This section presents the company's condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows for the reported periods [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, TreeHouse Foods reported total assets of $4,044.1 million, an increase from $3,980.0 million at December 31, 2024, with key changes including a significant decrease in cash and cash equivalents, an increase in receivables and inventories, and an increase in long-term debt Condensed Consolidated Balance Sheets (Selected Items, in millions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $17.1 | $289.6 | | Receivables, net | $212.0 | $146.8 | | Inventories | $634.8 | $539.3 | | Total current assets | $908.1 | $1,009.7 | | Goodwill | $1,892.1 | $1,819.3 | | Total assets | $4,044.1 | $3,980.0 | | Total current liabilities | $720.2 | $744.9 | | Long-term debt | $1,496.7 | $1,401.3 | | Total liabilities | $2,519.0 | $2,431.1 | | Total stockholders' equity | $1,525.1 | $1,548.9 | - **Cash and cash equivalents** decreased significantly from **$289.6 million** at December 31, 2024, to **$17.1 million** at June 30, 2025[25](index=25&type=chunk) - **Long-term debt** increased from **$1,401.3 million** to **$1,496.7 million**[25](index=25&type=chunk) [Condensed Consolidated Statements of Operations](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three months ended June 30, 2025, net sales were $798.0 million, an increase from $788.5 million in the prior year, and the company reported a net loss of $(2.9) million, an improvement from $(16.7) million in Q2 2024, while for the six months, net sales decreased slightly and net loss widened to $(34.7) million Condensed Consolidated Statements of Operations (Selected Items, in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $798.0 | $788.5 | $1,590.0 | $1,609.2 | | Gross profit | $139.2 | $128.3 | $254.4 | $240.3 | | Total operating expenses | $111.9 | $132.3 | $232.6 | $249.5 | | Operating income (loss) | $27.3 | $(4.0) | $21.8 | $(9.2) | | Total other expense | $32.9 | $16.9 | $71.0 | $27.0 | | Loss before income taxes | $(5.6) | $(20.9) | $(49.2) | $(36.2) | | Net loss | $(2.9) | $(16.7) | $(34.7) | $(28.4) | | Diluted EPS | $(0.06) | $(0.32) | $(0.69) | $(0.54) | - **Net sales** for the three months ended June 30, 2025, increased by **$9.5 million (1.2%)** year-over-year[3](index=3&type=chunk)[27](index=27&type=chunk) - **Net loss** for the three months ended June 30, 2025, improved to **$(2.9) million** from **$(16.7) million** in the prior year[10](index=10&type=chunk)[27](index=27&type=chunk) - For the six months ended June 30, 2025, **net sales decreased by $19.2 million (1.2%)** year-over-year, and **net loss widened to $(34.7) million** from $(28.4) million[3](index=3&type=chunk)[27](index=27&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash used in operating activities increased to $(100.7) million from $(71.8) million in the prior year, net cash used in investing activities significantly increased to $(258.5) million primarily due to a $209.3 million acquisition, and net cash provided by financing activities was $89.2 million, a reversal from cash used in the prior year, driven by increased borrowings and refinanced term loans Condensed Consolidated Statements of Cash Flows (Selected Items, in millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(100.7) | $(71.8) | | Net cash used in investing activities | $(258.5) | $(49.7) | | Net cash provided by (used in) financing activities | $89.2 | $(92.9) | | Net decrease in cash and cash equivalents | $(272.5) | $(214.5) | | Cash and cash equivalents, end of period | $17.1 | $105.8 | - **Net cash used in investing activities** increased significantly due to a **$209.3 million acquisition**, net of cash acquired[29](index=29&type=chunk) - **Financing activities** shifted from using **$92.9 million** in 2024 to providing **$89.2 million** in 2025, largely due to borrowings and refinanced term loans[29](index=29&type=chunk) [Reconciliation of Non-GAAP to GAAP Measures](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20to%20GAAP%20Measures) This section provides detailed reconciliations of various Non-GAAP financial measures, such as EBITDA, Adjusted EBITDA, adjusted net income, and free cash flow, to their most directly comparable GAAP counterparts [Reconciliation of Net Loss to EBITDA and Adjusted EBITDA](index=11&type=section&id=RECONCILIATION%20OF%20NET%20LOSS%20TO%20EBITDA%20AND%20ADJUSTED%20EBITDA) This section provides a reconciliation of GAAP net loss to Non-GAAP EBITDA and Adjusted EBITDA, showing that for Q2 2025, Adjusted EBITDA was $73.3 million, up from $70.6 million in Q2 2024, with key adjustments including mark-to-market impacts, restructuring costs, acquisition-related costs, foreign currency effects, product recalls (including insurance recoveries), loss on extinguishment of debt, and impairment charges Reconciliation of Net Loss to EBITDA and Adjusted EBITDA (in millions) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------------------------------ | :------ | :------ | :------------ | :------------ | | Net loss (GAAP) | $(2.9) | $(16.7) | $(34.7) | $(28.4) | | EBITDA (Non-GAAP) | $58.5 | $30.8 | $72.8 | $63.7 | | Adjustments (total) | $14.8 | $39.8 | $58.0 | $52.9 | | Adjusted EBITDA (Non-GAAP) | $73.3 | $70.6 | $130.8 | $116.6 | | Adjusted EBITDA margin (% of adjusted net sales) | 9.1% | 8.9% | 8.2% | 7.2% | - Adjustments for Q2 2025 included **$14.7 million for mark-to-market impacts**, **$12.7 million for restructuring**, **$0.7 million for acquisition costs**, **$(3.7) million for foreign currency gain**, and **$(9.6) million for product recalls** (net of insurance recoveries)[32](index=32&type=chunk) - Product recall adjustments for Q2 2025 included **$(10.0) million insurance recovery** for frozen waffle products and **$(3.1) million for broth products**, offset by estimated product returns and claims[33](index=33&type=chunk)[34](index=34&type=chunk) [Reconciliation of Adjusted Financial Measures](index=13&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20MEASURES) This section reconciles various GAAP financial measures (Net Sales, Cost of Sales, Gross Profit, Operating Expenses, Operating Income, Other Expense, Income Tax Expense, Net Income) to their adjusted Non-GAAP counterparts for the three and six months ended June 30, 2025 and 2024, detailing the impact of specific adjustments to derive adjusted performance metrics and adjusted diluted EPS Adjusted Net Income and EPS (Q2 2025, in millions, except per share) | Metric | As reported (GAAP) | Adjustments | As adjusted (Non-GAAP) | | :-------------------- | :----------------- | :---------- | :--------------------- | | Net (loss) income | $(2.9) | $11.7 | $8.8 | | Diluted EPS | $(0.06) | | $0.17 | Adjusted Net Income and EPS (6 Months 2025, in millions, except per share) | Metric | As reported (GAAP) | Adjustments | As adjusted (Non-GAAP) | | :-------------------- | :----------------- | :---------- | :--------------------- | | Net (loss) income | $(34.7) | $45.0 | $10.3 | | Diluted EPS | $(0.69) | | $0.20 | - Adjustments for Q2 2025 included **$14.7 million for mark-to-market impacts**, **$15.6 million for restructuring**, **$0.7 million for acquisition costs**, **$(3.7) million for foreign currency gain**, **$(9.6) million for product recalls** (net of insurance recoveries), and **$6.0 million for taxes on adjusting items**[39](index=39&type=chunk) - For Q2 2024, significant adjustments included **$19.3 million for impairment** and **$7.5 million for product recalls**, which significantly improved adjusted net income and EPS compared to GAAP[41](index=41&type=chunk) [Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow](index=15&type=section&id=RECONCILIATION%20OF%20NET%20CASH%20USED%20IN%20OPERATING%20ACTIVITIES%20TO%20FREE%20CASH%20FLOW) This section reconciles net cash used in operating activities (GAAP) to free cash flow (Non-GAAP), showing that for the six months ended June 30, 2025, free cash flow was $(149.9) million, a decrease from $(121.5) million in the prior year, primarily due to increased capital expenditures and higher net cash used in operating activities Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow (in millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash flow used in operating activities (GAAP) | $(100.7) | $(71.8) | | Capital expenditures | $(54.0) | $(51.1) | | Proceeds from sales of fixed assets | $4.8 | $1.4 | | Free cash flow (Non-GAAP) | $(149.9) | $(121.5) | - **Free cash flow** for the first six months of 2025 was **$(149.9) million**, compared to **$(121.5) million** in the same period of 2024, indicating a larger cash outflow[44](index=44&type=chunk) - The change was influenced by an increase in **capital expenditures** from **$(51.1) million** to **$(54.0) million**[44](index=44&type=chunk)

Core Insights - TreeHouse Foods reported strong financial results for Q2 2025, with adjusted net sales and adjusted EBITDA exceeding guidance [2][3] - The company is focused on margin improvement and cash flow growth, emphasizing the importance of private brands in the current market [2][3] Financial Performance - Net sales for Q2 2025 were $798.0 million, a 1.2% increase from $788.5 million in Q2 2024 [3] - Adjusted EBITDA for Q2 2025 was $73.3 million, up from $70.6 million in Q2 2024, reflecting a $2.7 million increase [8][11] - Gross profit margin improved to 17.4% in Q2 2025 from 16.3% in Q2 2024, primarily due to insurance recoveries and supply chain savings [4] Operating Expenses - Total operating expenses decreased to $111.9 million in Q2 2025 from $132.3 million in Q2 2024, largely due to a prior non-cash impairment charge [5] - Total other expenses increased to $32.9 million in Q2 2025 from $16.9 million in Q2 2024, driven by unfavorable changes in hedging activities and increased interest expenses [6] Tax and Net Loss - The effective tax rate rose to 48.2% in Q2 2025 from 20.1% in Q2 2024, influenced by non-deductible executive compensation [7] - The net loss for Q2 2025 was $2.9 million, an improvement from a net loss of $16.7 million in Q2 2024 [8][11] Cash Flow and Outlook - Net cash used in operating activities was $100.7 million in the first half of 2025, compared to $71.8 million in the same period of 2024 [9] - The company maintains its 2025 adjusted EBITDA and free cash flow guidance, with adjusted net sales expected to range from $3.360 billion to $3.415 billion [10][12] Future Expectations - For Q3 2025, adjusted net sales are projected to be between $840 million and $870 million, with organic volume expected to decline [25] - Adjusted EBITDA for Q3 2025 is anticipated to be in the range of $90 million to $110 million [25]

Company Overview - TreeHouse Foods (THS) is currently rated with a Zacks Rank 1 (Strong Buy) and has a Value grade of A [4][3] - The stock is trading at a P/E ratio of 10.68, significantly lower than its industry's average of 16.42 [4] Valuation Metrics - THS has a P/B ratio of 0.69, compared to the industry's average P/B of 1.86, indicating it may be undervalued [5] - The P/CF ratio for THS is 6.61, which is attractive when compared to the industry's average P/CF of 15.14 [6] Investment Potential - The combination of THS's low valuation metrics and strong earnings outlook suggests it is likely being undervalued, making it a compelling value stock at this time [7]

Group 1 - TreeHouse Foods, Inc. will report its financial results for the second quarter ended June 30, 2025, on July 31, 2025, before market open [1] - An earnings call and webcast will be held at 8:30 a.m. ET to discuss the results and provide an outlook for the remainder of the fiscal year [1][2] - A replay of the webcast will be available on the company's investor relations website after the call [2] Group 2 - TreeHouse Foods is a leading private brands snacking and beverage manufacturer in North America, focusing on customer engagement and satisfaction [3] - The company aims to deliver excellent service and build capabilities to drive mutually profitable growth for itself and its customers [3] - Investments in operational efficiencies and capabilities are intended to capitalize on long-term growth prospects in its operating categories [3]

Core Insights - The article emphasizes the importance of value investing, which focuses on identifying undervalued companies through fundamental analysis and traditional valuation metrics [2][3] Company Analysis: TreeHouse Foods (THS) - TreeHouse Foods currently holds a Zacks Rank of 1 (Strong Buy) and an A grade for Value, indicating strong potential for investment [4] - The stock is trading at a P/E ratio of 10.78, significantly lower than the industry average of 16.17, suggesting it may be undervalued [4] - THS has a P/B ratio of 0.69, compared to the industry average of 1.84, further indicating its undervaluation [5] - The P/CF ratio for THS is 6.62, which is also lower than the industry average of 14.96, reinforcing the notion that the stock is undervalued based on cash flow strength [6] - Overall, the metrics suggest that THS is likely undervalued and presents an impressive value stock opportunity at this time [7]

Summary of Treehouse Foods Conference Call Company Overview - Treehouse Foods is a leading private brand food manufacturer in North America, involved in a wide range of product categories from opening price point to national brand equivalents [2][12] - The company has undergone a transformation focusing on portfolio optimization, stronger operating capabilities, and improved balance sheet, aiming for dependable profit growth by 2025 [2] Industry Insights - The food industry is currently experiencing flat growth, particularly in the top quartile, but Treehouse sees this as a unique opportunity for growth [4] - Private label products have shown consistent growth over the past few decades, particularly in snacking and beverage categories [4][5][6] - The COVID-19 pandemic temporarily disrupted growth, but the private label segment rebounded quickly post-stimulus [5][6] Market Dynamics - Private label penetration is increasing across various demographics, especially among Gen Z and Millennials [7] - Retail partners are leveraging private label to build customer loyalty, with Walmart being a significant player in this space [9][10] - Retailers like Aldi and Costco are expanding their private label offerings, indicating a growing trend [10] Financial Performance and Projections - For 2025, Treehouse expects adjusted net sales between $3.34 billion and $3.4 billion, reflecting a slight decline in volume mix but offset by pricing strategies [45] - EBITDA is projected to be between $345 million and $375 million, showing year-over-year improvement driven by supply chain savings and margin management [47] Strategic Initiatives - The company is focusing on supply chain improvements, including the implementation of the Treehouse Management Operating System (TMOS) to enhance operational efficiency [26][27] - Procurement cost savings have been a significant driver of margin improvement, leveraging scale to negotiate better pricing on ingredients and packaging [29] - Treehouse is streamlining its logistics network to reduce distribution points and improve service to customers [30] Margin Management - The company aims to maximize plant utilization and eliminate complexity in its operations to enhance margins [32][33] - Recent organizational changes have been made to improve customer focus and decision-making speed [34] Capital Allocation - Treehouse prioritizes investing in the business for risk-adjusted returns, with a focus on organic growth through capital expenditures and potential bolt-on acquisitions [38][39] - The acquisition of Harris Tea is highlighted as a strategic move to enhance capabilities in the tea category [42] Conclusion - Treehouse Foods is positioned to capitalize on the growing private label market, with a focus on operational efficiency and margin management to drive profitability [48][49] - The company is confident in its ability to navigate the current economic environment and deliver solid financial performance moving forward [49][56]

Core Viewpoint - TreeHouse Foods, Inc. is actively participating in investor conferences in June 2025, indicating a commitment to engaging with investors and showcasing its growth potential [1][2]. Group 1: Investor Conferences - TreeHouse Foods will participate in the William Blair 45th Annual Growth Conference on June 4, 2025, with a presentation scheduled for 8:40 a.m. CT and will offer 1x1 meetings [1]. - The company will also attend the Jefferies Consumer Conference on June 17, 2025, providing opportunities for 1x1 meetings [2]. Group 2: Company Overview - TreeHouse Foods is a leading manufacturer of private brands in the snacking and beverage sectors in North America, focusing on customer engagement and satisfaction [3]. - The company aims to deliver excellent service and build capabilities to drive profitable growth for both itself and its customers, supported by investments in operational efficiencies [3].

Financial Performance - Net sales for Q1 2025 were $792.0 million, a decrease of 3.9% compared to $820.7 million in Q1 2024[11] - Gross profit increased to $115.2 million in Q1 2025, up from $112.0 million in Q1 2024, resulting in a gross margin of 14.5%[11] - The net loss for Q1 2025 was $31.8 million, compared to a net loss of $11.7 million in Q1 2024, reflecting a significant increase in losses[11] - Operating loss for Q1 2025 was $5.5 million, compared to an operating loss of $5.2 million in Q1 2024[11] - Interest expense increased to $19.3 million in Q1 2025, up from $15.6 million in Q1 2024[11] - The company reported a comprehensive loss of $31.6 million for Q1 2025, compared to a comprehensive loss of $14.3 million in Q1 2024[13] - Adjusted EBITDA increased by $11.5 million or 25.0% to $57.5 million in Q1 2025 from $46.0 million in Q1 2024[118] - Adjusted net income improved to $1.5 million in Q1 2025, compared to a loss of $1.8 million in Q1 2024, representing a change of $3.3 million or 183.3%[118] Assets and Liabilities - Total current assets decreased to $775.5 million as of March 31, 2025, down from $1,009.7 million at the end of 2024[9] - Total liabilities decreased slightly to $2,408.4 million as of March 31, 2025, compared to $2,431.1 million at the end of 2024[9] - Cash and cash equivalents dropped significantly to $16.4 million at the end of Q1 2025, down from $289.6 million at the end of 2024[9] - The outstanding accounts receivable sold under the Receivables Sales Program was $282.5 million as of March 31, 2025, down from $375.0 million at December 31, 2024[37] - The company reported total inventories of $589.2 million as of March 31, 2025, an increase from $539.3 million at December 31, 2024[39] - Total property, plant, and equipment as of March 31, 2025, was $1,617.9 million, with accumulated depreciation of $860.4 million[49] - Goodwill increased from $1,819.3 million at December 31, 2024, to $1,889.1 million at March 31, 2025, primarily due to an acquisition[50] Restructuring and Costs - The company incurred total costs of $18.3 million related to restructuring programs for the three months ended March 31, 2025, compared to $6.7 million for the same period in 2024, reflecting a significant increase[33] - The company expects total costs related to the exit of the Ready-to-drink business to be approximately $5.0 million, with cumulative costs incurred to date at $3.8 million[28] - The company announced the closure of its New Hampton facility, expecting total costs related to this closure to be approximately $13.0 million, with $3.2 million incurred for the three months ended March 31, 2025[29] - The company expects to incur approximately $14.0 million in total costs related to the closure of its Dallas facility, with cumulative costs incurred to date at $12.9 million[31] - Employee-related costs associated with restructuring programs amounted to $10.1 million for the three months ended March 31, 2025, compared to $2.6 million for the same period in 2024[33] Acquisitions - The company completed the acquisition of Harris Tea for approximately $207.6 million, with net sales of $38.6 million and income before income taxes of $1.9 million from the acquisition included in the financial statements[40][41] - The company recognized $69.7 million of goodwill from the acquisition of Harris Tea, primarily due to growth opportunities and customer synergies[42] - The acquisition of Pickle Branded Assets was completed on January 2, 2024, for a total consideration of approximately $25.9 million in cash[47] - The purchase price allocation for the Pickle Branded Assets included $25.2 million for inventories and $0.7 million for trademarks[48] Debt and Financing - Total outstanding debt as of March 31, 2025, was $1,434.3 million, an increase from $1,409.1 million at December 31, 2024[54] - The Company incurred a loss on extinguishment of debt totaling $2.6 million during the quarter ended March 31, 2025[57] - As of March 31, 2025, the Company had $25.0 million drawn from its $500.0 million Revolving Credit Facility, with remaining availability of $443.1 million[58] - The Company entered into a $480.0 million Term Loan A on January 17, 2025, with a maturity date of January 17, 2030[61] - Deferred financing costs amounted to $11.5 million as of March 31, 2025, up from $6.7 million at December 31, 2024[65] Stock and Compensation - The company authorized a $400 million stock repurchase program, with $393.5 million remaining available as of March 31, 2025[66] - For the three months ended March 31, 2025, TreeHouse Foods repurchased no shares, while 1.2 million shares were repurchased in the same period of 2024 at an average price of $36.61 per share[67] - Total compensation expense related to stock-based payments was $5.6 million for the three months ended March 31, 2025, compared to $5.7 million in 2024[71] - The fair value of vested restricted stock units was $8.3 million for the three months ended March 31, 2025, down from $8.8 million in 2024[75] - Unrecognized compensation costs related to nonvested performance units were approximately $11.0 million as of March 31, 2025, expected to be recognized over 2.1 years[80] Cash Flow - Cash flows used in operating activities were $53.5 million for Q1 2025, compared to $52.4 million in Q1 2024[18] - Free cash flow for the three months ended March 31, 2025, was $(75.3) million, compared to $(80.5) million for the same period in 2024[159] - Net cash used in investing activities surged to $231.1 million in Q1 2025, primarily due to a $209.3 million acquisition of a private brand tea business[132] Other Financial Metrics - The effective tax rate for the three months ended March 31, 2025, was 27.1%, compared to 23.5% for the same period in 2024[52] - The company recorded a product recall liability of $12.8 million as of March 31, 2025, up from $9.6 million as of December 31, 2024, due to a voluntary recall of frozen waffle products[84] - The company recognized a total unrealized loss of $17.0 million on derivative contracts for the three months ended March 31, 2025, compared to a gain of $7.0 million for the same period in 2024[97] - The company operates one reportable segment focused on manufacturing and distributing private brand food and beverages primarily in North America[98] - The company is seeking to recover recall-related costs through insurance coverage, with the total actual costs subject to uncertainties[85]

TreeHouse Foods, Inc. (THS) reported first-quarter 2025 results with the top and bottom lines surpassing the Zacks Consensus Estimate. Although net sales declined year over year amid economic headwinds, the company’s earnings improved. Management maintained its full-year guidance.TreeHouse Foods’ Quarterly Performance: Key InsightsTreeHouse Foods posted adjusted earnings of 3 cents per share, surpassing the Zacks Consensus Estimate, which was pegged at a loss of 21 cents. The bottom line improved from a los ...