TreeHouse(US:THS)2025-11-10 21:25Financial Performance - Net sales for Q3 2025 were $840.3 million, a slight increase from $839.1 million in Q3 2024, while year-to-date sales decreased to $2,430.3 million from $2,448.3 million[11]. - Gross profit for Q3 2025 was $157.9 million, up from $131.2 million in Q3 2024, resulting in a gross margin improvement[11]. - The company reported a net loss of $265.8 million for Q3 2025, compared to a net loss of $3.4 million in Q3 2024, reflecting significant impairment charges[11]. - The company experienced a comprehensive loss of $267.4 million for Q3 2025, compared to a loss of $1.9 million in Q3 2024[14]. - For the nine months ended September 30, 2025, the net loss was $300.5 million, compared to a net loss of $31.8 million in the same period of 2024[19]. - Adjusted EBITDA for Q3 2025 was $91.6 million, down from $102.5 million in Q3 2024, reflecting a decrease of $10.9 million or 10.6%[137]. - The company reported a net loss of $287.2 million for the nine months ended September 30, 2025, with net sales of $2,362.8 million[170]. - The company recognized a non-cash goodwill impairment loss of $289.7 million during the third quarter of 2025 due to a sustained decrease in share price and market capitalization[199]. Assets and Liabilities - Total assets decreased to $3,776.0 million as of September 30, 2025, down from $3,980.0 million at the end of 2024[9]. - Current liabilities increased slightly to $748.8 million from $744.9 million in the previous period, while long-term debt rose to $1,486.1 million from $1,401.3 million[9]. - The accumulated deficit increased to $522.5 million as of September 30, 2025, compared to $222.0 million at the end of 2024[9]. - Cash and cash equivalents decreased to $21.0 million from $289.6 million at the end of 2024, indicating liquidity challenges[9]. - Total outstanding debt as of September 30, 2025, was $1,509.7 million, an increase from $1,409.1 million at December 31, 2024[61]. Operating Expenses - Operating expenses surged to $412.0 million in Q3 2025, significantly higher than $99.4 million in Q3 2024, primarily due to impairment charges[11]. - Total operating expenses rose to $644.6 million in the first nine months of 2025, an increase of $295.7 million, primarily due to a non-cash goodwill impairment loss of $289.7 million[150]. - Total other expense decreased to $13.4 million in Q3 2025 from $36.1 million in Q3 2024, a reduction of $22.7 million[142]. Cash Flow and Investments - Cash flows from operating activities resulted in a net cash used of $62.5 million, an increase from $30.4 million in the prior year[19]. - Net cash used in investing activities was $281.4 million, compared to $90.2 million in the same period of 2024[19]. - The company incurred capital expenditures of $84.8 million, slightly down from $91.6 million in the previous year[19]. Restructuring and Acquisitions - The company completed the acquisition of Harris Tea for approximately $207.6 million, contributing net sales of $110.6 million and income before income taxes of $8.1 million since acquisition[43][44]. - The company announced plans to close its Chicago pickle facility and South Beloit cookie facility, with production expected to cease by the end of 2025 and the first half of 2026, respectively, to optimize manufacturing efficiency[121]. - The total costs associated with restructuring programs for the nine months ended September 30, 2025, were $67.9 million, up from $25.0 million in 2024[30]. Inventory and Receivables - The company reported total inventories of $668.2 million as of September 30, 2025, up from $539.3 million at the end of 2024[42]. - The company sold $855.3 million in receivables under its Receivables Sales Program for the nine months ended September 30, 2025, with a loss on sale of $5.7 million[41]. Tax and Interest - The effective tax rates for the three and nine months ended September 30, 2025, were 0.6% and 5.1%, respectively, a significant decrease from 20.9% and 21.5% in the same periods of 2024[59]. - Interest paid increased to $76.9 million from $69.6 million year-over-year[20]. Market Trends and Challenges - Persistent inflationary pressures are impacting overall food and beverage consumption trends, with private brands gaining market share compared to national brands[132]. - The company experienced a decline in volume/mix of $72.1 million or 8.6% in Q3 2025, attributed to broader macroeconomic consumption trends[138]. Stock and Compensation - The company authorized a $400 million stock repurchase program, with $393.5 million remaining available as of September 30, 2025[75]. - Total compensation expense related to stock-based payments was $4.8 million for the three months ended September 30, 2025, compared to $4.5 million in 2024[79]. Product Recalls - The company recorded a product recall liability of $14.5 million for frozen waffle products as of September 30, 2025, up from $9.6 million as of December 31, 2024[96]. - The company recognized $30.0 million in total insurance recoveries related to the voluntary recall of frozen griddle products, which is the maximum recovery available for the recall[130].