Post(POST)2022-05-06 17:09Spin-off and Acquisitions - The BellRing Spin-off was completed on March 10, 2022, resulting in Post Holdings owning approximately 14.2% of BellRing Common Stock and shareholders receiving 1.267788 shares of BellRing for each share of Post common stock held [158][161][163]. - The company acquired the private label RTE cereal business from TreeHouse Foods on June 1, 2021, and the Egg Beaters brand on May 27, 2021, both contributing to the Post Consumer Brands and Refrigerated Retail segments [174]. - The company completed the sale of Willamette Egg Farms on December 1, 2021, prior to which its results were included in the Refrigerated Retail segment [171]. Financial Performance - Net sales increased by $208.2 million, or 17%, for the three months ended March 31, 2022, compared to the same period last year, driven by growth across all segments and contributions from prior year acquisitions [183]. - Operating profit decreased by $29.5 million, or 23%, for the three months ended March 31, 2022, due to increased corporate expenses and lower segment profit in Refrigerated Retail and Post Consumer Brands [185]. - Net earnings increased by $413.4 million, or 376%, for the three months ended March 31, 2022, compared to the same period last year [181]. - Net sales increased by $369.9 million, or 16%, for the six months ended March 31, 2022, attributed to growth in Foodservice, Post Consumer Brands, and Weetabix segments [184]. - Operating profit decreased by $69.8 million, or 28%, for the six months ended March 31, 2022, due to increased corporate expenses and lower segment profit in Refrigerated Retail [186]. Segment Performance - Net sales for the Post Consumer Brands segment increased by $93.2 million, or 19%, for the three months ended March 31, 2022, driven by prior year acquisitions and increased average net selling prices [201]. - Segment profit for the Post Consumer Brands segment decreased by $12.3 million, or 13%, for the three months ended March 31, 2022, primarily due to raw material inflation and higher manufacturing costs [203]. - Net sales for the Foodservice segment increased by $82.7 million, or 22%, for the three months ended March 31, 2022, positively impacted by the acquisition of Almark and higher egg product sales [209]. - Segment profit for the Foodservice segment increased by $11.2 million, or 127%, for the three months ended March 31, 2022, driven by higher net sales despite raw material inflation [212]. - Net sales for the Refrigerated Retail segment increased by $28.1 million, or 12%, for the three months ended March 31, 2022, influenced by prior year acquisitions and price increases [214]. Inflation and Cost Pressures - Inflationary pressures from raw materials, packaging, wages, and freight have negatively impacted profit margins across all segments, prompting the company to take pricing actions [176]. - The COVID-19 pandemic has caused ongoing economic disruptions, impacting supply chains and resulting in missed sales and higher manufacturing costs [176]. - Segment profit decreased by $27.3 million, or 47%, for the six months ended March 31, 2022, primarily due to increased manufacturing costs of $20.6 million and raw material inflation of $13.7 million [217]. Cash Flow and Financing Activities - Cash provided by operating activities for the six months ended March 31, 2022, increased by $55.1 million compared to the prior year period, driven by favorable changes in trade accounts payables and lower tax payments [232]. - Cash used in investing activities for the six months ended March 31, 2022, was $43.0 million, primarily due to capital expenditures of $102.5 million, partially offset by proceeds from the sale of a business and assets held for sale totaling $50.5 million [233]. - Cash used in financing activities for the six months ended March 31, 2022 was $276.9 million, compared to $273.3 million for the same period in 2021 [235][237]. Debt and Interest Expenses - Interest expense, net increased by $3.7 million, or 4%, for the three months ended March 31, 2022, primarily due to the issuance of senior notes [187]. - The company recognized a loss of $19.3 million related to the partial redemption of senior notes during the three and six months ended March 31, 2022 [191]. - The company repaid approximately 65% of its outstanding 5.75% senior notes using proceeds from an incremental term loan of $840.0 million [227]. Tax and Equity Interests - The effective income tax rate was 3.7% for the three months ended March 31, 2022, significantly lower than the 19.8% for the same period in 2021, primarily due to a non-cash mark-to-market adjustment on the investment in BellRing [196]. - A gain of $447.7 million was recorded related to the company's 14.2% equity interest in BellRing for both the three and six months ended March 31, 2022 [195]. Corporate Expenses and Risks - General corporate expenses increased by $62.2 million, or 215%, for the six months ended March 31, 2022, driven by separation-related expenses of $28.4 million and increased net losses related to mark-to-market adjustments of $19.8 million [220]. - The company faces risks related to supply chain disruptions, high leverage, and potential impacts from the COVID-19 pandemic [246].