BellRing Brands(US:BRBR)2026-02-03 18:56Financial Performance - Net sales for the three months ended December 31, 2025, increased by $4.4 million, or 1%, to $537.3 million compared to $532.9 million in the prior year[88]. - Operating profit decreased by $36.8 million, or 32%, to $78.5 million, primarily due to higher net product costs of $35.9 million[90]. - Net earnings fell by $33.2 million, or 43%, to $43.7 million compared to $76.9 million in the prior year[88]. - Cash used in operating activities was $3.1 million for the three months ended December 31, 2025, compared to cash provided of $3.0 million in the prior year[100]. Debt and Financing - Interest expense increased by $5.6 million, or 39%, to $20.0 million, attributed to higher outstanding borrowings under the Revolving Credit Facility[91]. - The company borrowed $180.0 million and repaid $80.0 million under its Revolving Credit Facility during the three months ended December 31, 2025[94]. - As of December 31, 2025, the Company had outstanding principal value indebtedness of $840.0 million related to its 7.00% Senior Notes and $350.0 million under its Revolving Credit Facility, with variable interest rates of 5.78%[116]. - The fair value of the Company's debt, excluding borrowings under its Revolving Credit Facility, was $869.2 million as of December 31, 2025, with a hypothetical 10% decrease in interest rates potentially changing the fair value of fixed rate debt by approximately $4 million[117]. - The Company has a total of $250.0 million in borrowings under its Revolving Credit Facility as of September 30, 2025[116]. Cash Flow and Investments - Cash used in investing activities increased by $2.9 million, driven by higher capital expenditures[101]. - The company expects to generate positive cash flows from operations over the next twelve months, sufficient to meet future working capital requirements[96]. Tax and Compliance - The effective income tax rate increased to 25.3% for the three months ended December 31, 2025, compared to 23.8% in the prior year[92]. - The Company must satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, which poses compliance risks[118]. Risk Factors - The Company is exposed to commodity price risks, with a hypothetical 10% adverse change in non-fat dry milk prices potentially impacting the fair value of its commodity-related derivatives portfolio by approximately $9 million and $12 million as of December 31, 2025, and September 30, 2025, respectively[114]. - The Company is exposed to foreign currency risks, particularly related to transactions in Canadian dollars, but these are not expected to significantly impact future earnings or cash flows[115]. - A hypothetical 10% increase in interest rates would have had an immaterial impact on interest expense and interest paid during the three months ended December 31, 2025[117]. - The Company faces risks related to hiring and retaining talented personnel, employee absenteeism, and labor strikes, which could affect operations[118]. - Significant differences in actual operating results from guidance provided may pose risks to the Company's performance expectations[118]. - The Company does not hold or trade derivatives for speculation or profit, meaning changes in derivative values are offset by corresponding changes in underlying commodity exposures[114]. Shareholder Actions - The company repurchased 3.0 million shares of common stock at an average price of $31.95 per share, totaling $97.8 million[95].