Post(POST) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION. Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements of Post Holdings, Inc. for the periods ended March 31, 2025, including statements of operations, comprehensive income, balance sheets, cash flows, and shareholders' equity, along with accompanying notes detailing accounting policies, recent standards, business combinations, debt, and segment information Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | Six Months Ended March 31, 2025 (in millions) | Six Months Ended March 31, 2024 (in millions) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Sales | $1,952.1 | $1,999.0 | $3,926.8 | $3,964.9 | | Gross Profit | $545.8 | $579.6 | $1,141.1 | $1,152.2 | | Operating Profit | $182.2 | $190.1 | $396.3 | $399.4 | | Net Earnings | $62.6 | $97.2 | $175.9 | $185.3 | | Basic EPS | $1.11 | $1.60 | $3.07 | $3.06 | | Diluted EPS | $1.03 | $1.48 | $2.83 | $2.83 | Condensed Consolidated Statements of Comprehensive Income (Unaudited) | Metric | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | Six Months Ended March 31, 2025 (in millions) | Six Months Ended March 31, 2024 (in millions) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Earnings Including Noncontrolling Interest | $62.6 | $97.3 | $176.0 | $185.4 | | Total Other Comprehensive Income (Loss) Including Noncontrolling Interest | $50.0 | $(18.3) | $(59.3) | $46.8 | | Total Comprehensive Income | $112.6 | $77.4 | $116.6 | $231.0 | Condensed Consolidated Balance Sheets (Unaudited) | Metric | March 31, 2025 (in millions) | September 30, 2024 (in millions) | | :----- | :--------------------------- | :------------------------------- | | Total Current Assets | $2,167.5 | $2,231.6 | | Total Assets | $12,799.1 | $12,854.2 | | Total Current Liabilities | $1,015.8 | $944.9 | | Total Liabilities | $8,957.7 | $8,752.9 | | Total Shareholders' Equity | $3,841.4 | $4,101.3 | Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric | Six Months Ended March 31, 2025 (in millions) | Six Months Ended March 31, 2024 (in millions) | | :----- | :-------------------------------------------- | :-------------------------------------------- | | Net Cash Provided by Operating Activities | $471.1 | $424.0 | | Net Cash Used in Investing Activities | $(342.2) | $(432.6) | | Net Cash (Used in) Provided by Financing Activities | $(292.7) | $237.1 | | Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | $(165.6) | $230.4 | | Cash, Cash Equivalents and Restricted Cash, End of Period | $625.3 | $347.6 | Condensed Consolidated Statements of Shareholders' Equity (Unaudited) | Metric | March 31, 2025 (in millions) | March 31, 2024 (in millions) | | :----- | :--------------------------- | :--------------------------- | | Common Stock | $0.9 | $0.9 | | Additional Paid-in Capital | $5,330.4 | $5,240.1 | | Retained Earnings | $1,959.1 | $1,601.8 | | Accumulated Other Comprehensive Loss | $(52.9) | $(37.0) | | Treasury Stock, at cost | $(3,406.9) | $(2,773.1) | | Total Shareholders' Equity | $3,841.4 | $3,990.7 | Notes to Condensed Consolidated Financial Statements (Unaudited) NOTE 1 — BASIS OF PRESENTATION - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules, consistent with the audited consolidated financial statements in the Annual Report on Form 10-K for the fiscal year ended September 30, 2024[17] - Interim results include normal recurring adjustments and accruals, but are not necessarily indicative of full fiscal year results[18] NOTE 2 — RECENTLY ISSUED ACCOUNTING STANDARDS - The Company is evaluating the impact of ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years beginning after December 15, 2026[20] - The Company is evaluating the impact of ASU 2023-09 (Improvements to Income Tax Disclosures), effective for fiscal years beginning after December 15, 2024[21] - The Company is evaluating the impact of ASU 2023-07 (Improvements to Reportable Segment Disclosures), effective for fiscal years beginning after December 15, 2023, requiring retrospective adoption[22] NOTE 3 — EQUITY INTERESTS, NONCONTROLLING INTEREST AND RELATED PARTY TRANSACTIONS - The Company holds a 60.5% common equity interest in 8th Avenue, accounted for using the equity method due to substantive participating rights held by third parties preventing a controlling voting interest[23] - The Company fully consolidates Weetabix East Africa (50.2% ownership) due to controlling voting and financial interest, reporting its assets and operations in the Weetabix segment[28] | Related Party | Transaction Type | Three Months Ended March 31, 2025 (in millions) | Six Months Ended March 31, 2025 (in millions) | | :------------ | :--------------- | :---------------------------------------------- | :-------------------------------------------- | | 8th Avenue | Net Sales | $2.3 | $4.7 | | 8th Avenue | Purchases & Royalties | $21.9 | $42.2 | | Premier Nutrition (BellRing) | Net Sales of RTD shakes | $19.9 | $24.0 | NOTE 4 — BUSINESS COMBINATIONS - On March 3, 2025, the Company acquired Potato Products of Idaho, L.L.C. (PPI) for $120.0 million, a manufacturer of refrigerated and frozen potato products, reported in the Refrigerated Retail and Foodservice segments[33][34] | PPI Acquisition Impact (Six Months Ended March 31, 2025) | Amount (in millions) | | :------------------------------------------------------- | :------------------- | | Net Sales attributable to PPI | $2.3 | | Operating Loss attributable to PPI | $0.7 | | Goodwill generated | $65.1 | - In fiscal 2024, the Company acquired Perfection Pet Foods, LLC for $235.0 million (private label pet food) and Deeside Cereals I Ltd for £11.3 million (U.K. private label cereals), recording a $10.6 million gain on bargain purchase for Deeside[39][40] NOTE 5 — RESTRUCTURING - In March 2025, the Company finalized plans to close Post Consumer Brands cereal manufacturing facilities in Sparks, Nevada, and Cobourg, Ontario, expected to be completed in Q1 fiscal 2026[45] - The Lancaster, Ohio facility closure was completed in Q1 fiscal 2025, incurring $8.0 million in total restructuring charges[46][47] | Facility | Total Expected Restructuring Charges (in millions) | Cumulative Charges Incurred to Date (in millions) | Remaining Expected Charges (in millions) | | :------- | :----------------------------------------------- | :---------------------------------------------- | :--------------------------------------- | | Lancaster | $8.0 | $8.0 | $0.0 | | Sparks | $7.3 | $3.9 | $3.4 | | Cobourg | $5.6 | $3.6 | $2.0 | | Total | $20.9 | $15.5 | $5.4 | NOTE 6 — EARNINGS PER SHARE | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :----- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Basic EPS | $1.11 | $1.60 | $3.07 | $3.06 | | Diluted EPS | $1.03 | $1.48 | $2.83 | $2.83 | | Weighted-Average Shares for Basic EPS (millions) | 56.4 | 60.8 | 57.3 | 60.6 | | Weighted-Average Shares for Diluted EPS (millions) | 63.1 | 67.6 | 64.1 | 67.5 | NOTE 7 — INVENTORIES | Inventory Type | March 31, 2025 (in millions) | September 30, 2024 (in millions) | | :------------- | :--------------------------- | :------------------------------- | | Raw materials and supplies | $137.3 | $144.4 | | Work in process | $27.8 | $20.8 | | Finished products | $521.3 | $554.7 | | Flocks | $32.2 | $34.3 | | Total Inventories | $718.6 | $754.2 | NOTE 8 — PROPERTY, NET | Metric | March 31, 2025 (in millions) | September 30, 2024 (in millions) | | :----- | :--------------------------- | :------------------------------- | | Property, at cost | $4,479.2 | $4,336.1 | | Accumulated depreciation | $(2,098.0) | $(2,024.4) | | Property, net | $2,381.2 | $2,311.7 | NOTE 9 — GOODWILL | Segment | Goodwill (net) March 31, 2025 (in millions) | Goodwill (net) September 30, 2024 (in millions) | | :------ | :------------------------------------------ | :---------------------------------------------- | | Post Consumer Brands | $1,694.9 | $1,695.2 | | Weetabix | $906.1 | $937.4 | | Foodservice | $1,389.2 | $1,355.3 | | Refrigerated Retail | $744.0 | $712.8 | | Total Goodwill (net) | $4,734.2 | $4,700.7 | - Goodwill increased by $65.1 million from the PPI acquisition, allocated between Foodservice ($33.9 million) and Refrigerated Retail ($31.2 million)[55] - Currency translation adjustments led to a $31.6 million decrease in goodwill, primarily affecting the Weetabix segment[55] NOTE 10 — INTANGIBLE ASSETS, NET | Intangible Asset Type | Net Amount March 31, 2025 (in millions) | Net Amount September 30, 2024 (in millions) | | :-------------------- | :-------------------------------------- | :------------------------------------------ | | Customer relationships (amortized) | $1,481.4 | $1,549.2 | | Trademarks, brands and licensing agreements (amortized) | $754.1 | $539.9 | | Trademarks and brands (not amortized) | $803.9 | $1,056.9 | | Total Intangible Assets, net | $3,039.4 | $3,146.0 | - During Q1 fiscal 2025, a brand with a carrying value of $243.9 million was reclassified from an indefinite-lived to a definite-lived intangible asset and is now amortized over 20 years[56] NOTE 11 — DERIVATIVE FINANCIAL INSTRUMENTS - The Company uses derivative financial instruments (futures, options, forwards, swaps) to manage commodity price, interest rate, and foreign currency exchange rate risks, not for speculative purposes[57] | Derivative Type | Notional Amount March 31, 2025 (in millions) | Notional Amount September 30, 2024 (in millions) | | :-------------- | :------------------------------------------- | :----------------------------------------------- | | Commodity and energy contracts | $129.3 | $111.8 | | FX contracts | $22.0 | $40.5 | | Interest rate swaps | $300.0 | $300.0 | | Derivative Instruments | Statement of Operations Location | Three Months Ended March 31, 2025 (in millions) | Three Months Ended March 31, 2024 (in millions) | Six Months Ended March 31, 2025 (in millions) | Six Months Ended March 31, 2024 (in millions) | | :--------------------- | :------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Commodity and energy contracts | Cost of goods sold | $3.8 | $15.8 | $4.6 | $24.9 | | FX contracts | Selling, general and administrative expenses | $0.9 | $0.0 | $(1.4) | $0.0 | | Interest rate swaps | Expense (income) on swaps, net | $5.5 | $(13.3) | $(9.9) | $7.8 | NOTE 12 — FAIR VALUE MEASUREMENTS | Category | Total Fair Value March 31, 2025 (in millions) | Total Fair Value September 30, 2024 (in millions) | | :------- | :-------------------------------------------- | :------------------------------------------------ | | Assets (Total) | $63.8 | $57.3 | | Liabilities (Total) | $53.6 | $64.7 | - Deferred compensation investments and equity security investments are measured at fair value using the market approach (Level 1 inputs), while derivative assets and liabilities are measured using the income approach (Level 2 inputs)[65][66][67] - The fair value of the Company's debt (excluding municipal bond) was $6,885.2 million as of March 31, 2025, and $6,880.7 million as of September 30, 2024[67] NOTE 13 — LONG-TERM DEBT | Debt Instrument | March 31, 2025 (in millions) | September 30, 2024 (in millions) | | :-------------- | :--------------------------- | :------------------------------- | | 2.50% convertible senior notes maturing August 2027 | $575.0 | $575.0 | | 4.50% senior notes maturing September 2031 | $980.6 | $980.6 | | 4.625% senior notes maturing April 2030 | $1,385.4 | $1,385.4 | | 5.50% senior notes maturing December 2029 | $1,235.0 | $1,235.0 | | 5.625% senior notes maturing January 2028 | $0.0 | $464.9 | | 6.25% senior secured notes maturing February 2032 | $1,000.0 | $1,000.0 | | 6.250% senior notes maturing October 2034 | $600.0 | $0.0 | | 6.375% senior notes maturing March 2033 | $1,200.0 | $1,200.0 | | Municipal bond | $3.0 | $4.2 | | Total Long-term debt (net) | $6,944.6 | $6,811.6 | - On October 9, 2024, the Company issued $600.0 million of 6.250% senior notes maturing in October 2034, using proceeds to redeem the remaining 5.625% senior notes maturing January 2028[78] - The Revolving Credit Facility was amended on February 20, 2024, increasing the aggregate principal amount to $1,000.0 million and extending maturity to February 20, 2029. No amounts were outstanding as of March 31, 2025[82][84] NOTE 14 — COMMITMENTS AND CONTINGENCIES - Management believes that the ultimate liability from pending legal proceedings, asserted legal claims, and known potential legal claims will not be material to the Company's consolidated financial condition, results of operations, or cash flows[91] NOTE 15 — PENSION AND OTHER POSTRETIREMENT BENEFITS - The Company maintains qualified defined benefit plans in the U.S., U.K., and Canada, primarily for Post Consumer Brands and Weetabix segments, and an unfunded non-qualified SERP for management[92] | Metric | North America Pension Plans (in millions) | Other International Pension Plans (in millions) | North American Other Postretirement Benefit Plans (in millions) | | :----- | :---------------------------------------- | :---------------------------------------------- | :-------------------------------------------------------------- | | Net periodic benefit cost (income) for 3 months ended March 31, 2025 | $0.1 | $(2.4) | $0.5 | | Net periodic benefit cost (income) for 6 months ended March 31, 2025 | $0.3 | $(4.8) | $1.0 | NOTE 16 — SHAREHOLDERS' EQUITY | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :----- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Shares repurchased (millions) | 1.7 | 0.1 | 3.3 | 0.5 | | Average price per share | $110.19 | $103.88 | $112.19 | $87.23 | | Total share repurchase costs (in millions) | $193.4 | $8.1 | $375.5 | $44.8 | NOTE 17 — SEGMENTS - The Company operates in four reportable segments: Post Consumer Brands (North American RTE cereal, pet food, peanut butter), Weetabix (U.K. RTE cereal, muesli, protein shakes), Foodservice (egg and potato products), and Refrigerated Retail (side dish, egg, cheese, sausage products)[101] | Segment | Net Sales (3 Months Ended March 31, 2025, in millions) | Net Sales (3 Months Ended March 31, 2024, in millions) | Segment Profit (3 Months Ended March 31, 2025, in millions) | Segment Profit (3 Months Ended March 31, 2024, in millions) | | :------ | :----------------------------------------------------- | :----------------------------------------------------- | :---------------------------------------------------------- | :---------------------------------------------------------- | | Post Consumer Brands | $987.9 | $1,065.5 | $139.6 | $139.7 | | Weetabix | $131.7 | $138.0 | $18.2 | $18.1 | | Foodservice | $607.9 | $554.8 | $61.5 | $64.5 | | Refrigerated Retail | $224.6 | $240.4 | $16.2 | $22.4 | | Total | $1,952.1 | $1,999.0 | $235.5 | $244.7 | | Product Category | Net Sales (3 Months Ended March 31, 2025, in millions) | Net Sales (3 Months Ended March 31, 2024, in millions) | | :--------------- | :----------------------------------------------------- | :----------------------------------------------------- | | Cereal | $655.9 | $706.6 | | Eggs and egg products | $549.7 | $517.0 | | Pet food | $433.1 | $460.7 | | Side dishes (including potato products) | $170.7 | $184.8 | | Cheese and dairy | $37.0 | $41.4 | | Sausage | $40.0 | $40.1 | | Peanut butter | $20.6 | $27.3 | | Protein-based products | $29.9 | $8.4 | | Other | $15.2 | $12.7 | | Total | $1,952.1 | $1,999.0 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a detailed analysis of Post Holdings, Inc.'s consolidated operating results, financial condition, liquidity, and capital resources for the periods ended March 31, 2025, discussing key factors, market trends, and segment performance OVERVIEW - Post Holdings, Inc. is a consumer packaged goods holding company with four reportable segments: Post Consumer Brands, Weetabix, Foodservice, and Refrigerated Retail[106][108] - Recent acquisitions include Potato Products of Idaho (PPI) in March 2025, and Perfection Pet Foods and Deeside Cereals in December 2023[106][107] - Key market trends impacting the company include HPAI outbreaks affecting egg supply, inflationary pressures on input costs, and shifting consumer preferences towards private label or value products[109][110] RESULTS OF OPERATIONS | Metric | 3 Months Ended March 31, 2025 (in millions) | 3 Months Ended March 31, 2024 (in millions) | Change ($) | Change (%) | | :----- | :------------------------------------------ | :------------------------------------------ | :--------- | :--------- | | Net Sales | $1,952.1 | $1,999.0 | $(46.9) | (2)% | | Operating Profit | $182.2 | $190.1 | $(7.9) | (4)% | | Net Earnings | $62.6 | $97.2 | $(34.6) | (36)% | | Metric | 6 Months Ended March 31, 2025 (in millions) | 6 Months Ended March 31, 2024 (in millions) | Change ($) | Change (%) | | :----- | :------------------------------------------ | :------------------------------------------ | :--------- | :--------- | | Net Sales | $3,926.8 | $3,964.9 | $(38.1) | (1)% | | Operating Profit | $396.3 | $399.4 | $(3.1) | (1)% | | Net Earnings | $175.9 | $185.3 | $(9.4) | (5)% | - Net sales decreased by 2% for the three months and 1% for the six months ended March 31, 2025, primarily due to lower sales in Post Consumer Brands, Refrigerated Retail, and Weetabix, partially offset by Foodservice[113][114] - Operating profit decreased by 4% for the three months and 1% for the six months ended March 31, 2025, mainly due to lower segment profit in Refrigerated Retail, Foodservice, and Post Consumer Brands, and higher general corporate expenses[115][116] - Interest expense, net, increased by 9% and 8% for the three and six months, respectively, driven by higher average outstanding debt and a higher weighted-average interest rate (5.3% for both periods in 2025 vs. 5.1% in 2024)[117][118] - The Company recognized a net loss of $5.8 million on extinguishment of debt for the six months ended March 31, 2025, primarily from the redemption of 5.625% senior notes[120] - Expense (income) on swaps, net, was $5.5 million expense for the three months and $(9.9) million income for the six months ended March 31, 2025, related to mark-to-market adjustments and settlements on interest rate swaps[123] - The effective income tax rate was 24.3% and 22.9% for the three and six months ended March 31, 2025, respectively[125] SEGMENT RESULTS Post Consumer Brands | Metric | 3 Months Ended March 31, 2025 (in millions) | 3 Months Ended March 31, 2024 (in millions) | Change ($) | Change (%) | | :----- | :------------------------------------------ | :------------------------------------------ | :--------- | :--------- | | Net Sales | $987.9 | $1,065.5 | $(77.6) | (7)% | | Segment Profit | $139.6 | $139.7 | $(0.1) | (0)% | - Net sales decreased 7% for the three months and 5% for the six months, driven by lower cereal (category declines) and pet food volumes (reductions in private label/co-manufactured products, distribution losses)[128][129][130] - Segment profit for the three months was flat, with lower net sales offset by $11.8 million lower raw material costs and $11.5 million lower advertising and consumer spending[131] - Segment profit for the six months decreased 1%, impacted by lower net sales and $6.2 million increased integration costs, partially offset by $27.3 million lower raw material costs, $11.9 million lower advertising, and $7.4 million lower manufacturing costs[132] Weetabix | Metric | 3 Months Ended March 31, 2025 (in millions) | 3 Months Ended March 31, 2024 (in millions) | Change ($) | Change (%) | | :----- | :------------------------------------------ | :------------------------------------------ | :--------- | :--------- | | Net Sales | $131.7 | $138.0 | $(6.3) | (5)% | | Segment Profit | $18.2 | $18.1 | $0.1 | 1% | - Net sales decreased 5% for the three months and 3% for the six months, primarily due to 7% lower volumes from strategic product exits, reduced promotional activity, and cereal category declines, alongside an unfavorable foreign currency impact[133][134] - Segment profit for the three months increased 1%, driven by higher average net selling prices and $0.7 million lower freight costs, partially offset by $1.8 million higher raw material costs[135] - Segment profit for the six months decreased 13%, mainly due to $3.9 million higher raw material costs, partially offset by higher average net selling prices[136] Foodservice | Metric | 3 Months Ended March 31, 2025 (in millions) | 3 Months Ended March 31, 2024 (in millions) | Change ($) | Change (%) | | :----- | :------------------------------------------ | :------------------------------------------ | :--------- | :--------- | | Net Sales | $607.9 | $554.8 | $53.1 | 10% | | Segment Profit | $61.5 | $64.5 | $(3.0) | (5)% | - Net sales increased 10% for the three months and 9% for the six months, primarily driven by higher egg product sales due to incremental HPAI pricing and ready-to-drink shake sales[137][138][139] - Segment profit for the three months decreased 5%, driven by $56.5 million higher raw material costs, partially offset by higher net sales and $5.1 million lower manufacturing costs[139] - Segment profit for the six months increased 5%, driven by higher net sales and $4.5 million lower freight costs, partially offset by $81.4 million higher raw material costs[140] Refrigerated Retail | Metric | 3 Months Ended March 31, 2025 (in millions) | 3 Months Ended March 31, 2024 (in millions) | Change ($) | Change (%) | | :----- | :------------------------------------------ | :------------------------------------------ | :--------- | :--------- | | Net Sales | $224.6 | $240.4 | $(15.8) | (7)% | | Segment Profit | $16.2 | $22.4 | $(6.2) | (28)% | - Net sales decreased 7% for the three months and 6% for the six months, primarily due to lower volumes in side dishes (holiday demand shift, price elasticities) and cheese/dairy (distribution losses)[141][142] - Segment profit for the three months decreased 28%, driven by $8.2 million higher raw material costs and lower net sales, partially offset by $2.2 million lower manufacturing costs[143] - Segment profit for the six months decreased 30%, driven by $14.3 million higher raw material costs, $3.1 million higher manufacturing costs, and lower net sales, partially offset by $2.1 million lower freight costs[144] General Corporate Expenses and Other | Metric | 3 Months Ended March 31, 2025 (in millions) | 3 Months Ended March 31, 2024 (in millions) | Change ($) | Change (%) | | :----- | :------------------------------------------ | :------------------------------------------ | :--------- | :--------- | | General corporate expenses and other | $60.6 | $51.8 | $8.8 | 17% | - General corporate expenses increased 17% for the three months, primarily due to $10.1 million increased net losses from mark-to-market adjustments on equity security investments[145] - General corporate expenses decreased 6% for the six months, driven by $12.7 million increased net gains from mark-to-market adjustments on economic hedges, partially offset by $7.8 million increased net losses on equity security investments[146] LIQUIDITY AND CAPITAL RESOURCES - The Company expects positive cash flows from operations, cash on hand, and credit facilities to be sufficient for working capital, purchase commitments, interest payments, R&D, capital expenditures, and other financing needs for the foreseeable future[148] - During the six months ended March 31, 2025, the Company issued $600.0 million of 6.250% senior notes, redeemed $464.9 million of 5.625% senior notes, and repurchased 3.3 million shares of common stock for $375.5 million[152][158] | Cash Flow Activity | Six Months Ended March 31, 2025 (in millions) | Six Months Ended March 31, 2024 (in millions) | | :----------------- | :-------------------------------------------- | :-------------------------------------------- | | Operating activities | $471.1 | $424.0 | | Investing activities | $(342.2) | $(432.6) | | Financing activities | $(292.7) | $237.1 | - Cash provided by operating activities increased by $47.1 million, driven by timing of trade payables, larger inventory cash inflows, and lower tax payments, partially offset by higher interest payments and decreased net cash receipts on swaps/FX contracts[155] - Cash used in investing activities was $342.2 million, primarily for the PPI acquisition ($124.3 million) and capital expenditures ($229.5 million)[156] - Cash used in financing activities was $292.7 million, reflecting debt issuance, redemptions, and significant share repurchases[158] - The Company was in compliance with its secured net leverage ratio covenant (not to exceed 4.25:1.00) as of March 31, 2025, and does not anticipate non-compliance[160][161] CRITICAL ACCOUNTING ESTIMATES - There have been no significant changes to the Company's critical accounting estimates since September 30, 2024, as detailed in its Annual Report on Form 10-K[164] RECENTLY ISSUED ACCOUNTING STANDARDS - Refer to Note 2 within 'Notes to Condensed Consolidated Financial Statements' for a discussion regarding recently issued accounting standards[166] CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS - This report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations[168][169] - Key risks include supply chain disruptions, economic conditions, input cost volatility, competition, labor issues, high leverage, cybersecurity incidents, product liability claims, and integration of acquisitions[168][172] - The Company undertakes no obligation to publicly update any forward-looking statements[169] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details the Company's exposure to market risks, including commodity price, foreign currency, and interest rate risks, and outlines the derivative financial instruments used to manage these exposures Commodity Price Risk - The Company is exposed to commodity price risks for raw materials, ingredients, packaging, energy, and fuel, using futures and options to manage these exposures[170] - A hypothetical 10% adverse change in principal hedged commodities (natural gas, heating oil, soybean oil, corn, wheat, dairy) would decrease the fair value of the derivatives portfolio by approximately $1 million as of March 31, 2025, and September 30, 2024[170] Foreign Currency Risk - The Company is exposed to foreign currency exchange rate fluctuations through its foreign subsidiaries, mitigating this risk with foreign currency exchange contracts (options, forwards, currency swaps)[171] - A hypothetical 10% change in USD-GBP and Euro-GBP exchange rates would change the fair value of the foreign currency derivatives portfolio by approximately $2 million as of March 31, 2025, and $4 million as of September 30, 2024[171] Interest Rate Risk - As of March 31, 2025, the Company had $6,979.0 million in outstanding principal value of indebtedness, with $6,976.0 million bearing interest at a weighted-average fixed rate of 5.3%[173] - A hypothetical 10% decrease in interest rates would increase the fair value of fixed rate debt by approximately $135 million as of March 31, 2025[174] - The Company had interest rate swaps with a notional value of $300.0 million as of March 31, 2025, where a hypothetical 10% increase in interest rates would decrease their fair value by approximately $9 million[175] Item 4. Controls and Procedures This section details the management's evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2025, providing reasonable assurance of achieving control objectives[176] Changes in Internal Control Over Financial Reporting - There were no significant changes in the Company's internal control over financial reporting during the quarter ended March 31, 2025, that materially affected or are reasonably likely to materially affect it[177] PART II. OTHER INFORMATION. Item 1. Legal Proceedings This section refers to the legal proceedings information detailed in Note 14 of the financial statements and confirms no material environmental proceedings requiring disclosure - Information regarding legal proceedings is incorporated by reference from Note 14 of the Condensed Consolidated Financial Statements[178] - There are no environmental proceedings to disclose for the period, based on a $1.0 million monetary sanctions threshold[179] Item 1A. Risk Factors This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024 - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended September 30, 2024[180] - Additional risks not currently known or deemed immaterial may also impact the business[180] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section provides details on the Company's common stock repurchases during the fiscal quarter ended March 31, 2025, and outlines the current share repurchase authorization | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs | | :----- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------------------------------- | | January 1, 2025 - January 31, 2025 | 985,152 | $108.47 | $200,228,325 | | February 1, 2025 - February 28, 2025 | 565,660 | $112.21 | $436,529,287 | | March 1, 2025 - March 31, 2025 | 187,478 | $113.17 | $415,311,955 | | Total (Quarter) | 1,738,290 | $110.19 | $415,311,955 (remaining) | - On February 4, 2025, the Board cancelled a prior $500.0 million repurchase authorization and approved a new $500.0 million authorization, effective February 10, 2025, expiring February 10, 2027[182] Item 5. Other Information This section confirms that no director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended March 31, 2025 - No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended March 31, 2025[183] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including organizational documents, indentures for various senior notes, director restricted stock unit agreements, and certifications - Exhibits include Restatement of Articles of Incorporation, Amended and Restated Bylaws, and Indentures for various senior notes (2029, 2030, 2031, 2027 Convertible, 2032 Secured, 2033, 2034 Notes)[185] - Also included are forms of Non-Employee Director Restricted Stock Unit Agreements and certifications by Robert V. Vitale (CEO) and Matthew J. Mainer (CFO) under Sarbanes-Oxley Act sections 302 and 906[185] SIGNATURES - The report was signed on May 9, 2025, by Matthew J. Mainer, Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) of Post Holdings, Inc.[189]