WK Kellogg Co(KLG) - 2025 Q1 - Quarterly Results

Financial Performance - Reported net sales for Q3 2024 were $689 million, a 0.4% decline year-over-year[2]. - Adjusted net sales increased 0.7% year-over-year compared to standalone adjusted net sales[2]. - Reported net income for Q3 2024 was a loss of$ 11 million, a 126.2% decrease year-over-year[7]. - Adjusted EBITDA for Q3 2024 was $65 million, a 27.5% increase year-over-year compared to standalone adjusted EBITDA[7]. - Year-to-date reported net sales were$ 2,068 million, a 2.1% decline year-over-year[6]. - Year-to-date adjusted EBITDA was $217 million, a 5.3% increase year-over-year compared to standalone adjusted EBITDA[8]. - The company reaffirms 2024 adjusted net sales growth guidance at the lower end of the range, projected at (1.0)% to 1.0%[9]. - The company raises 2024 adjusted EBITDA growth guidance to a range of 5% to 6%, up from 3% to 5%[9]. Sales and Volume - Price/mix increased by 1.8% in Q3, while volume decreased by 1.1%[5]. - The company experienced a volume decline of 1.1% in tonnage for the quarter, while pricing/mix improved by 1.8%[44]. - Reported net sales for the quarter ended September 28, 2024, were$ 689 million, a decrease of 0.4% compared to $692 million for the same period in 2023[44]. - Year-to-date reported net sales were$ 2,068 million, down 2.1% from $2,112 million in the previous year[44]. Costs and Expenses - The cost of goods sold for the quarter was$ 495 million, slightly down from $496 million year-over-year[38]. - The company incurred restructuring costs of$ 38 million during the quarter[38]. - Free cash flow for the quarter was $2 million, a significant decrease from$ 91 million in the prior year[40]. - Cash and cash equivalents at the end of the period were $47 million, down from$ 89 million at the beginning of the period[42]. - The company incurred pre-tax mark-to-market losses of $3 million for the quarter ended September 28, 2024, and$ 5 million year-to-date[55]. - Separation costs related to the Spin-Off amounted to $6 million for the quarter and$ 22 million year-to-date as of September 28, 2024[56]. - Restructuring and non-recurring costs related to supply chain reconfiguration were $42 million for the quarter and$ 44 million year-to-date as of September 28, 2024[57]. - Other expense of $2 million was excluded from Adjusted EBITDA for the quarter ended September 28, 2024[58]. Assets and Liabilities - Total assets increased to$ 1.9 billion as of September 28, 2024, compared to $1.889 billion at the end of the previous year[42]. - Total current liabilities decreased to$ 770 million from $836 million at the end of the previous year[42]. - Long-term debt was reported at$ 472 million, down from $487 million at the end of the previous year[42]. - Net debt increased to$ 442 million as of September 28, 2024, compared to $410 million as of December 30, 2023[53]. Profitability Metrics - Adjusted gross profit for the quarter was$ 203 million, up from $193 million year-over-year, reflecting a strong adjusted gross margin of 29.4% compared to 27.9% in the prior year[45][46]. - Reported gross margin for the quarter was 28.1%, slightly down from 28.4% in the same quarter last year[46]. - Adjusted EPS for the quarter was$ 0.31, compared to $0.33 in the same quarter last year, reflecting a decrease of 6.1%[50]. - Standalone adjusted net income for the quarter was$ 27 million, representing an 8.0% increase from $25 million in the same quarter last year[47]. Historical Context - Historical intercompany sales and royalty agreements had a net sales impact of$ 8 million for the quarter ended September 30, 2023[59]. - Estimated standalone costs for the quarter ended September 30, 2023, were $6 million[60]. - The average number of diluted shares outstanding was 86 million for the quarter[36].