FINANCIAL REVIEW
R. Steve Kinsey
Chief Financial Officer and Chief Accounting Officer
INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES
The company prepares its consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). However, from time to time, the company may present in its public statements, press releases and SEC filings, non-GAAP financial measures such as, EBITDA, adjusted EBITDA, adjusted EBIT, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted operating income, adjusted EPS, adjusted income tax expense, adjusted selling, distribution and administrative expenses (SD&A), gross margin excluding depreciation and amortization and the ratio of net debt to adjusted EBITDA. The reconciliations attached provide reconciliations of the non-GAAP measures used in this presentation or release to the most comparable GAAP financial measure. The company's definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. The company defines EBITDA earnings before interest, taxes, depreciation and amortization. The company believes that EBITDA is a useful tool for managing the operations of its business and is an indicator of the company's ability to incur and service indebtedness and generate free cash flow. EBITDA is used as the primary performance measure in the company's 2014 Omnibus Equity and Incentive Compensation Plan. Furthermore, pursuant to the terms of our credit facility, EBITDA is used to determine the company's compliance with certain financial covenants. The company also believes that EBITDA measures are commonly reported and widely used by investors and other interested parties as measures of a company's operating performance and debt servicing ability because EBITDA measures assist in comparing performance on a consistent basis without regard to depreciation or amortization, which can vary significantly depending upon accounting methods and non-operating factors (such as historical cost). EBITDA is also a widely-accepted financial indicator of a company's ability to incur and service indebtedness. EBITDA should not be considered an alternative to (a) income from operations or net income (loss) as a measure of operating performance; (b) cash flows provided by operating, investing and financing activities (as determined in accordance with GAAP) as a measure of the company's ability to meet its cash needs; or (c) any other indicator of performance or liquidity that has been determined in accordance with GAAP. The company defines adjusted EBITDA, adjusted EBIT, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted operating income, adjusted EPS, adjusted income tax expense, adjusted SD&A, respectively, excluding the impact of asset impairment charges, Project Centennial consulting costs, lease terminations and legal settlements, acquisition-related costs, and pension plan settlements. Adjusted income tax expense also excludes the impact of tax reform. The company believes that these measures, when considered together with its GAAP financial results, provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges. Net debt to EBITDA is used as a measure of financial leverage employed by the company. Gross margin excluding depreciation and amortization is used as a performance measure to provide additional transparent information regarding our results of operations on a consolidated and segment basis. Changes in depreciation and amortization are separately discussed and include depreciation and amortization for materials, supplies, labor and other production costs and operating activities. Presentation of gross margin includes depreciation and amortization in the materials, supplies, labor and other production costs according to GAAP. Our method of presenting gross margin excludes the depreciation and amortization components, as discussed above. The reconciliations attached provide reconciliations of the non- GAAP measures used in this presentation or release to the most comparable GAAP financial measure.
2
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted, except per share data)
Reconciliation of Net (Loss) Income to EBITDA | ||||||||
and Adjusted EBITDA | ||||||||
For the 16 Week | For the 16 Week | |||||||
Period Ended | Period Ended | |||||||
April 18, 2020 | April 20, 2019 | |||||||
Net (loss) income | $ | (5,772) | $ | 65,866 | ||||
Income tax (benefit) expense | (2,019) | 20,199 | ||||||
Interest expense, net | 3,314 | 3,824 | ||||||
Depreciation and amortization | 44,663 | 44,819 | ||||||
EBITDA | 40,186 | 134,708 | ||||||
Other pension cost | 143 | 692 | ||||||
Pension plan settlement and curtailment loss | 116,207 | - | ||||||
Other pension plan termination costs | 133 | - | ||||||
Recovery on inferior ingredients | - | (413) | ||||||
Restructuring and related impairment charges | - | 718 | ||||||
Project Centennial consulting costs | 3,392 | - | ||||||
Legal settlements | 3,220 | 150 | ||||||
Executive retirement agreement | - | 1,331 | ||||||
Canyon acquisition costs | - | 22 | ||||||
Adjusted EBITDA | $ | 163,281 | $ | 137,208 | ||||
Sales | $ | 1,349,444 | $ | 1,263,895 | ||||
Adjusted EBITDA margin | 12.1% | 10.9% | ||||||
3
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted, except per share data)
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
For the 12 Week | |||||
Period Ended | |||||
December 28, 2019 | |||||
Net income | $ | 2,219 | |||
Income tax expense (benefit) | (1,047) | ||||
Interest expense, net | 2,170 | ||||
Depreciation and amortization | 32,884 | ||||
EBITDA | 36,226 | ||||
Other pension cost | 519 | ||||
Loss (recovery) on inferior ingredients | 376 | ||||
Restructuring and related impairment charges | 17,482 | ||||
Project Centennial consulting costs | 784 | ||||
Legal settlements (recovery) | 29,150 | ||||
Adjusted EBITDA | $ | 84,537 | |||
Sales | $ | 917,759 | |||
Adjusted EBITDA margin | 9.2% |
4
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted, except per share data)
Reconciliation of (Loss) Earnings per Share to | ||||||
Adjusted Earnings per Share | ||||||
For the 16 Week | For the 16 Week | |||||
Period Ended | Period Ended | |||||
April 18, 2020 | April 20, 2019 | |||||
Net (loss) income per diluted common share | $ | (0.03) | $ | 0.31 | ||
Recovery on inferior ingredients | - | NM | ||||
Restructuring and related impairment charges | - | NM | ||||
Project Centennial consulting costs | 0.01 | - | ||||
Legal settlements | 0.01 | NM | ||||
Executive retirement agreement | - | NM | ||||
Canyon acquisition costs | - | NM | ||||
Pension plan settlement and curtailment loss | 0.41 | - | ||||
Other pension plan termination costs | NM | - | ||||
Adjusted net income per diluted common share | $ | 0.41 | $ | 0.32 |
NM - not meaningful.
Certain amounts may not add due to rounding.
5
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted, except per share data)
Reconciliation of Earnings per Share - | ||||||
Full Year Fiscal 2020 Guidance | ||||||
Range Estimate | ||||||
Net income per diluted common share | $ | 0.57 | to | $ | 0.65 | |
Project Centennial consulting costs | 0.01 | 0.01 | ||||
Legal settlements | 0.01 | 0.01 | ||||
Pension plan settlement and curtailment loss | 0.41 | 0.41 | ||||
Other pension plan termination costs | NM | to | NM | |||
Adjusted net income per diluted common share | $ | 1.00 | $ | 1.08 | ||
Certain amounts may not add due to rounding.
6
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted)
Reconciliation of Debt to Net Debt and Calculation of Net
Debt to Trailing Twelve Month Adjusted EBITDA Ratio
As of | ||
Current maturities of long-term debt | April 18, 2020 | |
$ | 1,245 | |
Long-term debt | 1,069,352 | |
Total debt | 1,070,597 | |
Less: Cash and cash equivalents | 252,683 | |
Net Debt | $ | 817,914 |
Adjusted EBITDA for the Trailing Twelve Months Ended April 18, 2020 | $ | 448,799 |
Ratio of Net Debt to Trailing Twelve Month Adjusted EBITDA | 1.8 |
7
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted)
Reconciliation of Debt to Net Debt and Calculation of Net
Debt to Trailing Twelve Month Adjusted EBITDA Ratio
As of | ||
December 28, 2019 | ||
Current maturities of long-term debt | $ | 3,730 |
Long-term debt | 862,778 | |
Total debt | 866,508 | |
Less: Cash and cash equivalents | 11,044 | |
Net Debt | $ | 855,464 |
Adjusted EBITDA for the Trailing Twelve Months Ended December 28, 2019 | $ | 422,726 |
Ratio of Net Debt to Trailing Twelve Month Adjusted EBITDA | 2.0 | |
8
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted)
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
For the 12 | For the 12 | For the 16 | Trailing 52 | |||||||||||||
Week Period | Week Period | For the 12 Week | Week Period | Week Period | ||||||||||||
Ended | Ended | Period Ended | Ended | Ended | ||||||||||||
July 13, 2019 | October 5, 2019 | December 28, 2019 | April 18, 2020 | April 18, 2020 | ||||||||||||
Net income (loss) | $ | 53,095 | $ | 43,358 | $ | 2,219 | $ | (5,772) | $ | 92,900 | ||||||
Income tax expense (benefit) | 15,951 | 12,442 | (1,047) | (2,019) | 25,327 | |||||||||||
Interest expense, net | 2,769 | 2,334 | 2,170 | 3,314 | 10,587 | |||||||||||
Depreciation and amortization | 33,329 | 33,196 | 32,884 | 44,663 | 144,072 | |||||||||||
EBITDA | 105,144 | 91,330 | 36,226 | 40,186 | 272,886 | |||||||||||
Other pension cost | 519 | 518 | 519 | 143 | 1,699 | |||||||||||
Project Centennial consulting costs | - | - | 784 | 3,392 | 4,176 | |||||||||||
Restructuring and related impairment charges | 2,047 | 3,277 | 17,482 | - | 22,806 | |||||||||||
Other pension plan termination costs | - | - | - | 133 | 133 | |||||||||||
Pension plan settlement and curtailment loss | - | - | - | 116,207 | 116,207 | |||||||||||
Legal settlements (recovery) | (1,286) | - | 29,150 | 3,220 | 31,084 | |||||||||||
Executive retirement agreement | (568) | - | - | - | (568) | |||||||||||
Loss on inferior ingredients | - | - | 376 | - | 376 | |||||||||||
Adjusted EBITDA | $ | 105,856 | $ | 95,125 | $ | 84,537 | $ | 163,281 | $ | 448,799 | ||||||
9
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted)
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
For the 52 Week | |||||
Period Ended | |||||
December 28, 2019 | |||||
Net income | $ | 164,538 | |||
Income tax expense (benefit) | 47,545 | ||||
Interest expense, net | 11,097 | ||||
Depreciation and amortization | 144,228 | ||||
EBITDA | 367,408 | ||||
Other pension cost (benefit) | 2,248 | ||||
Project Centennial consulting costs | 784 | ||||
Acquisition-related costs | 22 | ||||
Restructuring and related impairment charges | 23,524 | ||||
Legal settlements (recovery) | 28,014 | ||||
Executive retirement agreement | 763 | ||||
Loss (recovery) on inferior ingredients | (37) | ||||
Adjusted EBITDA | $ | 422,726 | |||
10
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this presentation that are not historical facts are forward-looking statements. Forward-looking statements relate to current expectations regarding our future financial condition, performance and results of operations and the ultimate impact of the novel strain of coronavirus (COVID-19) pandemic on our business, results of operations and financial condition, planned capital expenditures, long-term objectives of management, supply and demand, pricing trends and market forces, and integration plans and expected benefits of transactions and are often identified by the use of words and phrases such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "would," "is likely to," "is expected to" or "will continue," or the negative of these terms or other comparable terminology. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Other factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the company's prospects in general include, but are not limited to, (a) the ultimate impact of the COVID-19 outbreak and measures taken in response thereto on our business, results of operations and financial condition, which are highly uncertain and are difficult to predict,
- general economic and business conditions and the competitive conditions in the baked foods industry, including promotional and price competition, (c) changes in consumer demand for our products, including changes in consumer behavior, trends and preferences, including health and whole grain trends, and the movement toward more inexpensivestore-branded products, (d) the success of productivity improvements and new product introductions, (e) a significant reduction in business with any of our major customers including a reduction from adverse developments in any of our customer's business, (f) fluctuations in commodity pricing, (g) energy and raw material costs and availability and hedging and counterparty risk, (h) our ability to fully integrate recent acquisitions into our business, (i) our ability to achieve cash flow from capital expenditures and acquisitions and the availability of new acquisitions that build shareholder value, (j) our ability to successfully implement our business strategies, including those strategies the company has initiated under Project Centennial, which may involve, among other things, the integration of recent acquisitions or the acquisition or disposition of assets at presently targeted values, the deployment of new systems and technology and an enhanced organizational structure, (k) consolidation within the baking industry and related industries, (l) disruptions in our direct-store delivery system, including litigation or an adverse ruling from a court or regulatory or government body that could affect the independent contractor classification of our independent distributors, (m) increasing legal complexity and legal proceedings that we are or may become subject to, (n) product recalls or safety concerns related to our products, and (o) the failure of our information technology systems to perform adequately, including any interruptions, intrusions or security breaches of such systems. The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other public disclosures made by the company, including the risk factors included in our most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and disclosures made in other filings with the SEC and company press releases, for other factors that may cause actual results to differ materially from those projected by the company. We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law.
11
FINANCIAL REVIEW
R. Steve Kinsey
Chief Financial Officer and Chief Accounting Officer
INFORMATION REGARDING NON-GAAP FINANCIAL MEASURES
The company prepares its consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). However, from time to time, the company may present in its public statements, press releases and SEC filings, non-GAAP financial measures such as, EBITDA, adjusted EBITDA, adjusted EBIT, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted operating income, adjusted EPS, adjusted income tax expense, adjusted selling, distribution and administrative expenses (SD&A), gross margin excluding depreciation and amortization and the ratio of net debt to adjusted EBITDA. The reconciliations attached provide reconciliations of the non-GAAP measures used in this presentation or release to the most comparable GAAP financial measure. The company's definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. The company defines EBITDA earnings before interest, taxes, depreciation and amortization. The company believes that EBITDA is a useful tool for managing the operations of its business and is an indicator of the company's ability to incur and service indebtedness and generate free cash flow. EBITDA is used as the primary performance measure in the company's 2014 Omnibus Equity and Incentive Compensation Plan. Furthermore, pursuant to the terms of our credit facility, EBITDA is used to determine the company's compliance with certain financial covenants. The company also believes that EBITDA measures are commonly reported and widely used by investors and other interested parties as measures of a company's operating performance and debt servicing ability because EBITDA measures assist in comparing performance on a consistent basis without regard to depreciation or amortization, which can vary significantly depending upon accounting methods and non-operating factors (such as historical cost). EBITDA is also a widely-accepted financial indicator of a company's ability to incur and service indebtedness. EBITDA should not be considered an alternative to (a) income from operations or net income (loss) as a measure of operating performance; (b) cash flows provided by operating, investing and financing activities (as determined in accordance with GAAP) as a measure of the company's ability to meet its cash needs; or (c) any other indicator of performance or liquidity that has been determined in accordance with GAAP. The company defines adjusted EBITDA, adjusted EBIT, EBITDA margin, adjusted EBITDA margin, adjusted net income, adjusted operating income, adjusted EPS, adjusted income tax expense, adjusted SD&A, respectively, excluding the impact of asset impairment charges, Project Centennial consulting costs, lease terminations and legal settlements, acquisition-related costs, and pension plan settlements. Adjusted income tax expense also excludes the impact of tax reform. The company believes that these measures, when considered together with its GAAP financial results, provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges. Net debt to EBITDA is used as a measure of financial leverage employed by the company. Gross margin excluding depreciation and amortization is used as a performance measure to provide additional transparent information regarding our results of operations on a consolidated and segment basis. Changes in depreciation and amortization are separately discussed and include depreciation and amortization for materials, supplies, labor and other production costs and operating activities. Presentation of gross margin includes depreciation and amortization in the materials, supplies, labor and other production costs according to GAAP. Our method of presenting gross margin excludes the depreciation and amortization components, as discussed above. The reconciliations attached provide reconciliations of the non- GAAP measures used in this presentation or release to the most comparable GAAP financial measure.
2
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted, except per share data)
Reconciliation of Net (Loss) Income to EBITDA | ||||||||
and Adjusted EBITDA | ||||||||
For the 16 Week | For the 16 Week | |||||||
Period Ended | Period Ended | |||||||
April 18, 2020 | April 20, 2019 | |||||||
Net (loss) income | $ | (5,772) | $ | 65,866 | ||||
Income tax (benefit) expense | (2,019) | 20,199 | ||||||
Interest expense, net | 3,314 | 3,824 | ||||||
Depreciation and amortization | 44,663 | 44,819 | ||||||
EBITDA | 40,186 | 134,708 | ||||||
Other pension cost | 143 | 692 | ||||||
Pension plan settlement and curtailment loss | 116,207 | - | ||||||
Other pension plan termination costs | 133 | - | ||||||
Recovery on inferior ingredients | - | (413) | ||||||
Restructuring and related impairment charges | - | 718 | ||||||
Project Centennial consulting costs | 3,392 | - | ||||||
Legal settlements | 3,220 | 150 | ||||||
Executive retirement agreement | - | 1,331 | ||||||
Canyon acquisition costs | - | 22 | ||||||
Adjusted EBITDA | $ | 163,281 | $ | 137,208 | ||||
Sales | $ | 1,349,444 | $ | 1,263,895 | ||||
Adjusted EBITDA margin | 12.1% | 10.9% | ||||||
3
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted, except per share data)
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
For the 12 Week | |||||
Period Ended | |||||
December 28, 2019 | |||||
Net income | $ | 2,219 | |||
Income tax expense (benefit) | (1,047) | ||||
Interest expense, net | 2,170 | ||||
Depreciation and amortization | 32,884 | ||||
EBITDA | 36,226 | ||||
Other pension cost | 519 | ||||
Loss (recovery) on inferior ingredients | 376 | ||||
Restructuring and related impairment charges | 17,482 | ||||
Project Centennial consulting costs | 784 | ||||
Legal settlements (recovery) | 29,150 | ||||
Adjusted EBITDA | $ | 84,537 | |||
Sales | $ | 917,759 | |||
Adjusted EBITDA margin | 9.2% |
4
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted, except per share data)
Reconciliation of (Loss) Earnings per Share to | ||||||
Adjusted Earnings per Share | ||||||
For the 16 Week | For the 16 Week | |||||
Period Ended | Period Ended | |||||
April 18, 2020 | April 20, 2019 | |||||
Net (loss) income per diluted common share | $ | (0.03) | $ | 0.31 | ||
Recovery on inferior ingredients | - | NM | ||||
Restructuring and related impairment charges | - | NM | ||||
Project Centennial consulting costs | 0.01 | - | ||||
Legal settlements | 0.01 | NM | ||||
Executive retirement agreement | - | NM | ||||
Canyon acquisition costs | - | NM | ||||
Pension plan settlement and curtailment loss | 0.41 | - | ||||
Other pension plan termination costs | NM | - | ||||
Adjusted net income per diluted common share | $ | 0.41 | $ | 0.32 |
NM - not meaningful.
Certain amounts may not add due to rounding.
5
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted, except per share data)
Reconciliation of Earnings per Share - | ||||||
Full Year Fiscal 2020 Guidance | ||||||
Range Estimate | ||||||
Net income per diluted common share | $ | 0.57 | to | $ | 0.65 | |
Project Centennial consulting costs | 0.01 | 0.01 | ||||
Legal settlements | 0.01 | 0.01 | ||||
Pension plan settlement and curtailment loss | 0.41 | 0.41 | ||||
Other pension plan termination costs | NM | to | NM | |||
Adjusted net income per diluted common share | $ | 1.00 | $ | 1.08 | ||
Certain amounts may not add due to rounding.
6
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted)
Reconciliation of Debt to Net Debt and Calculation of Net
Debt to Trailing Twelve Month Adjusted EBITDA Ratio
As of | ||
Current maturities of long-term debt | April 18, 2020 | |
$ | 1,245 | |
Long-term debt | 1,069,352 | |
Total debt | 1,070,597 | |
Less: Cash and cash equivalents | 252,683 | |
Net Debt | $ | 817,914 |
Adjusted EBITDA for the Trailing Twelve Months Ended April 18, 2020 | $ | 448,799 |
Ratio of Net Debt to Trailing Twelve Month Adjusted EBITDA | 1.8 |
7
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted)
Reconciliation of Debt to Net Debt and Calculation of Net
Debt to Trailing Twelve Month Adjusted EBITDA Ratio
As of | ||
December 28, 2019 | ||
Current maturities of long-term debt | $ | 3,730 |
Long-term debt | 862,778 | |
Total debt | 866,508 | |
Less: Cash and cash equivalents | 11,044 | |
Net Debt | $ | 855,464 |
Adjusted EBITDA for the Trailing Twelve Months Ended December 28, 2019 | $ | 422,726 |
Ratio of Net Debt to Trailing Twelve Month Adjusted EBITDA | 2.0 | |
8
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Flowers Foods, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted)
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
For the 12 | For the 12 | For the 16 | Trailing 52 | |||||||||||||
Week Period | Week Period | For the 12 Week | Week Period | Week Period | ||||||||||||
Ended | Ended | Period Ended | Ended | Ended | ||||||||||||
July 13, 2019 | October 5, 2019 | December 28, 2019 | April 18, 2020 | April 18, 2020 | ||||||||||||
Net income (loss) | $ | 53,095 | $ | 43,358 | $ | 2,219 | $ | (5,772) | $ | 92,900 | ||||||
Income tax expense (benefit) | 15,951 | 12,442 | (1,047) | (2,019) | 25,327 | |||||||||||
Interest expense, net | 2,769 | 2,334 | 2,170 | 3,314 | 10,587 | |||||||||||
Depreciation and amortization | 33,329 | 33,196 | 32,884 | 44,663 | 144,072 | |||||||||||
EBITDA | 105,144 | 91,330 | 36,226 | 40,186 | 272,886 | |||||||||||
Other pension cost | 519 | 518 | 519 | 143 | 1,699 | |||||||||||
Project Centennial consulting costs | - | - | 784 | 3,392 | 4,176 | |||||||||||
Restructuring and related impairment charges | 2,047 | 3,277 | 17,482 | - | 22,806 | |||||||||||
Other pension plan termination costs | - | - | - | 133 | 133 | |||||||||||
Pension plan settlement and curtailment loss | - | - | - | 116,207 | 116,207 | |||||||||||
Legal settlements (recovery) | (1,286) | - | 29,150 | 3,220 | 31,084 | |||||||||||
Executive retirement agreement | (568) | - | - | - | (568) | |||||||||||
Loss on inferior ingredients | - | - | 376 | - | 376 | |||||||||||
Adjusted EBITDA | $ | 105,856 | $ | 95,125 | $ | 84,537 | $ | 163,281 | $ | 448,799 | ||||||
9
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Reconciliation of GAAP to Non-GAAP Measures
(000's omitted)
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
For the 52 Week | |||||
Period Ended | |||||
December 28, 2019 | |||||
Net income | $ | 164,538 | |||
Income tax expense (benefit) | 47,545 | ||||
Interest expense, net | 11,097 | ||||
Depreciation and amortization | 144,228 | ||||
EBITDA | 367,408 | ||||
Other pension cost (benefit) | 2,248 | ||||
Project Centennial consulting costs | 784 | ||||
Acquisition-related costs | 22 | ||||
Restructuring and related impairment charges | 23,524 | ||||
Legal settlements (recovery) | 28,014 | ||||
Executive retirement agreement | 763 | ||||
Loss (recovery) on inferior ingredients | (37) | ||||
Adjusted EBITDA | $ | 422,726 | |||
10
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this presentation that are not historical facts are forward-looking statements. Forward-looking statements relate to current expectations regarding our future financial condition, performance and results of operations and the ultimate impact of the novel strain of coronavirus (COVID-19) pandemic on our business, results of operations and financial condition, planned capital expenditures, long-term objectives of management, supply and demand, pricing trends and market forces, and integration plans and expected benefits of transactions and are often identified by the use of words and phrases such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "would," "is likely to," "is expected to" or "will continue," or the negative of these terms or other comparable terminology. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Other factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the company's prospects in general include, but are not limited to, (a) the ultimate impact of the COVID-19 outbreak and measures taken in response thereto on our business, results of operations and financial condition, which are highly uncertain and are difficult to predict,
- general economic and business conditions and the competitive conditions in the baked foods industry, including promotional and price competition, (c) changes in consumer demand for our products, including changes in consumer behavior, trends and preferences, including health and whole grain trends, and the movement toward more inexpensivestore-branded products, (d) the success of productivity improvements and new product introductions, (e) a significant reduction in business with any of our major customers including a reduction from adverse developments in any of our customer's business, (f) fluctuations in commodity pricing, (g) energy and raw material costs and availability and hedging and counterparty risk, (h) our ability to fully integrate recent acquisitions into our business, (i) our ability to achieve cash flow from capital expenditures and acquisitions and the availability of new acquisitions that build shareholder value, (j) our ability to successfully implement our business strategies, including those strategies the company has initiated under Project Centennial, which may involve, among other things, the integration of recent acquisitions or the acquisition or disposition of assets at presently targeted values, the deployment of new systems and technology and an enhanced organizational structure, (k) consolidation within the baking industry and related industries, (l) disruptions in our direct-store delivery system, including litigation or an adverse ruling from a court or regulatory or government body that could affect the independent contractor classification of our independent distributors, (m) increasing legal complexity and legal proceedings that we are or may become subject to, (n) product recalls or safety concerns related to our products, and (o) the failure of our information technology systems to perform adequately, including any interruptions, intrusions or security breaches of such systems. The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other public disclosures made by the company, including the risk factors included in our most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and disclosures made in other filings with the SEC and company press releases, for other factors that may cause actual results to differ materially from those projected by the company. We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law.
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Flowers Foods Inc. published this content on 20 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 May 2020 21:57:04 UTC