Lamb Weston(LW) - 2024 Q4 - Annual Results

International Segment Performance - International segment net sales increased by $1,003.2 million to $2,104.4 million, with $1,107.4 million attributed to the consolidation of LW EMEA and LWAMSA[1] - Excluding acquisitions, international segment net sales declined by $104.2 million, or 9 percent, with a volume decline of 15 percent[2] - Adjusted EBITDA for the international segment increased by $100.9 million to $331.9 million, driven by incremental earnings from LW EMEA consolidation[4] - The international segment saw a significant increase in sales by 91% to $2,104.4 million, driven by a volume increase of 85%[44] - International segment net sales decreased by $35.7 million, or 7 percent, to $498.7 million, with volume down 9 percent[80] Financial Performance - Net income for the fifty-two weeks ended May 26, 2024, was $725.5 million, a decrease of 28.0% compared to $1,008.9 million for the same period last year[27] - Net income for fiscal year 2024 decreased by 28% to $726 million, with diluted EPS declining by 28% to $4.98[63] - Adjusted EBITDA for fiscal year 2024 increased by 13% to $1,416.7 million[63] - Adjusted net income for Q4 2024 decreased by 40% to $113.7 million, with adjusted diluted EPS declining by 40% to $0.78[69] - The diluted EPS for the thirteen weeks ended May 26, 2024, was $0.89, reflecting a decrease from the previous year[45] Cash Flow and Capital Expenditures - Net cash provided by operating activities for fiscal 2024 was $798.2 million, an increase of $36.5 million compared to the prior year[9] - Capital expenditures during fiscal 2024 were $991.8 million, up $255.8 million, primarily for capacity expansion and ERP upgrades[9] - Cash used for capital expenditures in fiscal 2025 is expected to be approximately $850 million, focusing on capacity expansion and information systems upgrades[14] - Cash used for investing activities decreased to $984.1 million, down 26.7% from $1,340.9 million in the prior year[35] Sales and Revenue Trends - Net sales for fiscal year 2024 increased by 21% to $6,468 million, including $1,107 million from acquisitions[63] - Segment net sales for North America decreased by 4% to $1,113.2 million, while international sales decreased by 7% to $498.7 million, resulting in total segment net sales of $1,611.9 million, down 5% year-over-year[37] - In Q4 2024, net sales declined by 5% to $1,611.9 million, with volume down 8% due to market share losses and a voluntary product withdrawal[66] - The company experienced a 21% year-over-year growth in total segment net sales, reaching $6,467.6 million for the thirteen weeks ended May 26, 2024[44] Expenses and Charges - SG&A expenses increased by $151.4 million to $701.4 million, including $12.8 million related to LW EMEA integration[90] - The company recorded a $95.9 million charge for the write-off of excess raw potatoes in North America, impacting net income by approximately $72 million after-tax[27] - The implementation of a new ERP system is estimated to have reduced net sales by approximately $135 million, negatively impacting net income by about $95 million[27] - Adjusted Gross Profit declined by $72.2 million to $363.0 million, impacted by a $40 million charge from a voluntary product withdrawal and lower sales volumes[72] Debt and Equity - Long-term debt and financing obligations, excluding current portion, rose to $3,440.7 million from $3,248.4 million, an increase of 5.9%[32] - The company reported a total stockholders' equity of $1,787.8 million as of May 26, 2024, up from $1,411.3 million a year earlier, indicating a growth of 26.6%[32] - The company issued $592.0 million in debt, with repayments totaling $401.1 million, resulting in a net cash used for financing activities of $48.0 million[35] Market Outlook - The company expects fiscal 2025 net sales between $6.6 billion and $6.8 billion, reflecting growth of approximately 2 percent to 5 percent[12] - Fiscal 2025 net income is projected to be between $630 million and $705 million, with diluted EPS ranging from $4.35 to $4.85[13] - The company expects fiscal 2025 to be challenging due to a supply-demand imbalance in the market[62]