TreeHouse(THS) - 2025 Q3 - Quarterly Results

Financial Performance - Net sales for Q3 2025 totaled $840.3 million, a slight increase of 0.1% from $839.1 million in Q3 2024[2] - Net sales for Q3 2025 were $840.3 million, slightly up from $839.1 million in Q3 2024, while net sales for the nine months ended September 30, 2025, were $2,430.3 million, down from $2,448.3 million in the same period last year[24] - Gross profit for Q3 2025 increased to $157.9 million, compared to $131.2 million in Q3 2024, resulting in a gross margin improvement[24] - The Company reported adjusted net sales of $841.9 million for Q3 2025, with a gross profit margin of 17.7%[36] - For the nine months ended September 30, 2025, net sales were $2,430.3 million, with a gross profit of $412.3 million, reflecting a gross margin of 17.0%[37] - The adjusted net sales for the nine months ended September 30, 2024, were $2,465.9 million, with an adjusted gross profit of $417.9 million, reflecting a gross margin of 16.9%[38] Profitability and Loss - Gross profit margin improved to 18.8% in Q3 2025, up from 15.6% in Q3 2024, primarily due to $17.5 million in insurance recoveries related to product recalls[3] - The company reported a net loss of $265.8 million for Q3 2025, significantly higher than the net loss of $3.4 million in Q3 2024, with a net loss margin of 31.6%[24][29] - Adjusted EBITDA for Q3 2025 was $91.6 million, down from $102.5 million in Q3 2024, reflecting a decrease of $10.9 million due to volume/mix and macroeconomic trends[8] - Adjusted EBITDA for Q3 2025 was $91.6 million, down from $102.5 million in Q3 2024, with an adjusted EBITDA margin of 10.9%[29] - The company reported a net loss of $300.5 million for the nine months ended September 30, 2025, with a diluted loss per share of $5.95[37] Operating Expenses - Total operating expenses rose to $412.0 million in Q3 2025, compared to $99.4 million in Q3 2024, largely due to the goodwill impairment and increased restructuring costs[5] - Total operating expenses for the nine months ended September 30, 2025, were $296.2 million, with total other expenses amounting to $109.0 million[37] - The Company incurred $289.7 million in non-cash impairment charges related to goodwill during Q3 2025, compared to $19.3 million for property, plant, and equipment in Q2 2024[30] Cash Flow and Debt - Net cash used in operating activities for the first nine months of 2025 was $62.5 million, an increase of $32.1 million compared to $30.4 million in the same period of 2024[8] - Cash and cash equivalents decreased to $21.0 million as of September 30, 2025, from $289.6 million at the end of 2024[26] - Long-term debt increased to $1,486.1 million as of September 30, 2025, up from $1,401.3 million at the end of 2024[24] - The company reported a significant increase in interest expense to $23.9 million in Q3 2025, compared to $16.0 million in Q3 2024[24] Acquisition and Restructuring - TreeHouse Foods announced a definitive agreement to be acquired by Investindustrial for a total of $2.9 billion, leading to the withdrawal of future guidance[9] - The company will not host its conference call due to the pending acquisition transaction[9] - Restructuring activities recognized $2.9 million and $8.7 million in accelerated depreciation for Q3 and nine months ended September 30, 2025, respectively, with no such charges in the same periods of 2024[30] - The Company recognized $1.9 million in costs related to acquisitions and divestitures during the nine months ended September 30, 2025[30] Other Financial Metrics - Effective income tax rate was 0.6% in Q3 2025, a significant drop from 20.9% in Q3 2024, primarily due to the goodwill impairment[7] - Free cash flow for the nine months ended September 30, 2025, was $(134.6) million, compared to $(120.6) million for the same period in 2024[41] - Non-GAAP adjustments for product recalls included insurance recoveries of $13.0 million and $23.0 million for Q3 and nine months ended September 30, 2025, respectively[31] - Non-cash unrealized changes in fair value from derivative contracts were treated as Non-GAAP adjustments, impacting total other expense by $12.7 million[30]