TreeHouse(US:THS)2025-05-06 20:20Financial 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]