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WK Kellogg Co(KLG) - 2025 Q2 - Quarterly Results
KLGWK Kellogg Co(KLG)2025-02-11 12:45

Financial Performance - Full year 2024 reported net sales decreased by 2.0% year-over-year to 2,708million[4]−Fullyear2024adjustednetincomedecreasedby9.12,708 million[4] - Full year 2024 adjusted net income decreased by 9.1% year-over-year to 149 million[4] - Full year 2024 adjusted EBITDA grew by 6.6% year-over-year to 275million[4]−Fourthquarterreportednetincomeincreasedby26.7275 million[4] - Fourth quarter reported net income increased by 26.7% year-over-year to 19 million[9] - Fourth quarter adjusted EBITDA increased by 7.5% year-over-year to 57million[9]−Thedeclineinnetsaleswasattributedtoachallengingbusinessenvironmentandunfavorableforeignexchangeimpacts[7]−WKKelloggCoreportednetsalesof57 million[9] - The decline in net sales was attributed to a challenging business environment and unfavorable foreign exchange impacts[7] - WK Kellogg Co reported net sales of 640 million for the quarter ended December 28, 2024, a decrease of 1.7% compared to 651millionforthesamequarterin2023[32]−AdjustednetincomefortheyearendedDecember28,2024,was651 million for the same quarter in 2023[32] - Adjusted net income for the year ended December 28, 2024, was 149 million, down from 171millioninthepreviousyear[43]−ReportedgrossprofitforQ42024was171 million in the previous year[43] - Reported gross profit for Q4 2024 was 200 million, compared to 186millioninQ42023,resultinginareportedgrossmarginof31.3186 million in Q4 2023, resulting in a reported gross margin of 31.3%[38] - Standalone adjusted EBITDA for the year ended December 28, 2024, was 275 million, an increase from 258millionin2023[46]SalesandVolume−Price/mixforfullyear2024increasedby2.7258 million in 2023[46] Sales and Volume - Price/mix for full year 2024 increased by 2.7%, while volume decreased by 3.7%[8] - The company experienced a volume decline of 5.6% in Q4 2024, while pricing/mix improved by 3.8%[35] Cash Flow and Expenses - Free cash flow for the year ended December 28, 2024, was reported at (29) million, a significant decrease from 272millioninthepreviousyear[33]−Thecostofgoodssoldforthesamequarterwas272 million in the previous year[33] - The cost of goods sold for the same quarter was 440 million, down from 465million,resultinginagrossprofitmarginimprovement[32]−OtherexpensesexcludedfromAdjustedEBITDAwere465 million, resulting in a gross profit margin improvement[32] - Other expenses excluded from Adjusted EBITDA were 2 million for the quarter ended December 28, 2024, and income of 5millionfortheyear[56]DebtandLiabilities−Interestexpensedecreasedto5 million for the year[56] Debt and Liabilities - Interest expense decreased to 7 million from 10millioninthepreviousyear,indicatingimproveddebtmanagement[32]−Thecompanyhasdefinednetdebtasthesumoflong−termdebtandcurrentmaturitieslesscashandcashequivalents,whichisusedtoevaluatechangesincapitalstructure[29]−Netdebtincreasedto10 million in the previous year, indicating improved debt management[32] - The company has defined net debt as the sum of long-term debt and current maturities less cash and cash equivalents, which is used to evaluate changes in capital structure[29] - Net debt increased to 495 million as of December 28, 2024, compared to 410millionasofDecember30,2023[51]−Currentliabilitiesroseslightlyto410 million as of December 30, 2023[51] - Current liabilities rose slightly to 841 million in 2024 from 836millionin2023[34]ShareholderReturns−Thequarterlydividendwasincreasedby3836 million in 2023[34] Shareholder Returns - The quarterly dividend was increased by 3% to 0.165 per share[16] - WK Kellogg Co's average diluted shares outstanding increased to 88 million from 86 million year-over-year[32] Restructuring and Separation Costs - The company incurred restructuring costs of 15millioninthelatestquarter,whiletherewerenosuchcostsinthesamequarterlastyear[32]−SeparationcostsrelatedtotheSpin−Offamountedto15 million in the latest quarter, while there were no such costs in the same quarter last year[32] - Separation costs related to the Spin-Off amounted to 6 million for the quarter ended December 28, 2024, and 29millionfortheyear,comparedto29 million for the year, compared to 13 million and 102millionforthequarterandyearendedDecember30,2023,respectively[54]−Restructuringcostsrelatedtosupplychainreconfigurationwere102 million for the quarter and year ended December 30, 2023, respectively[54] - Restructuring costs related to supply chain reconfiguration were 16 million for the quarter ended December 28, 2024, and 63millionfortheyear[55]−Estimatedstandalonecostsforoperatingasaseparatepubliccompanywere63 million for the year[55] - Estimated standalone costs for operating as a separate public company were 17 million for the year ended December 30, 2023[58] Other Financial Metrics - The company recorded a pre-tax mark-to-market gain of 6millionforcommodityandforeigncurrencycontractsforthequarterendedDecember28,2024,whileincurringalossof6 million for commodity and foreign currency contracts for the quarter ended December 28, 2024, while incurring a loss of 1 million for the same period in 2023[53] - The company recorded a loss of 8milliononmark−to−marketrelatedtopensionplansforthequarterendedDecember28,2024,comparedtoagainof8 million on mark-to-market related to pension plans for the quarter ended December 28, 2024, compared to a gain of 1 million for the same quarter in 2023[53] - The company recognized a net sales impact of 24millionfrompre−existingintercompanyroyaltyandsalesagreementsfortheyearendedDecember30,2023[57]−Thecompanyrecordedagrossprofitimpactof24 million from pre-existing intercompany royalty and sales agreements for the year ended December 30, 2023[57] - The company recorded a gross profit impact of 8 million from intercompany agreements for the year ended December 30, 2023[57]