FY 2023 Net Sales Surpassed
Double-Digit Top and Bottom-Line Growth
Q4
Fourth Quarter Highlights:
- Net sales of
$292.1 million increased 11.4% year-over-year, representing the 10th consecutive quarter of double-digit net sales growth since IPO - Organic net sales growth of 25.3%1 was driven by 21.7% volume and 3.6% pricing growth
- Note: Organic net sales excludes the contribution from the Birch Benders brand and the extra week in the prior year period
- Rao’s net sales of
$234.3 million increased 24.9% year-over-year, or 34.7% on an organic basis1, benefitting from 36.2% dollar consumption growth for the entire franchise 2- Rao’s sauce dollar consumption grew 31.7% year-over-year, reflecting 410 bps of household penetration growth to 15.9%, the largest YoY gain in the brand’s history, and a meaningful increase in awareness to 63%2
- Rao’s franchise outside of sauce continued to expand, with combined dollar consumption for the frozen, soup, and pasta categories up 53.2% year-over-year, including the benefit from Rao’s frozen pizza which is off to a strong start2
- Gross margin increased 100-basis points to 30.0%; Adjusted gross margin3 increased 80-basis points to 30.0%
- Net income was
$15.5 million or$0.15 per diluted share; adjusted net income3 was$26.8 million or$0.26 per diluted share - Adjusted EBITDA3 of
$46.0 million grew 24.3% year-over-year, inclusive of a 12.4% year-over-year combined increase in Marketing and R&D expense
Fiscal Year 2023 Highlights:
- Net sales of
$1,020.4 million increased 16.2% year-over-year - Organic net sales growth1 of 24.6% was driven by 18.1% volume and 6.5% pricing growth
- Note: Organic net sales excludes the contribution from the Birch Benders brand and the extra week in the prior year period
- Rao’s continued its march towards
$1 billion of annual net sales, finishing the year with$774.7 million , up 33.5% year-over-year, or 36.8% on an organic basis1- Rao’s sauce dollar consumption grew 30.6% year-over-year, benefitting from strong gains in household penetration as a result of a material step up in distribution and awareness
- Rao’s franchise outside of sauce grew combined dollar consumption for the frozen, soup, and pasta categories 46.1% year-over-year2
- Gross margin increased 180-basis points to 29.9%; Adjusted gross margin3 increased 170-basis points to 30.0%
- Net income was
$30.2 million or$0.29 per diluted share, impacted by costs related to the pending merger with Campbell’s; adjusted net income3 was$82.9 million or$0.80 per diluted share - Adjusted EBITDA3 of
$156.1 million grew 30.3% year-over-year, inclusive of a 19.7% year-over-year combined increase in Marketing and R&D expense - Net Leverage4 of 1.6x improved from 2.9x in the prior year, reflecting strong fundamental performance and cash generation, with total cash finishing the year at
$232 million - Due to the pending merger with Campbell’s, the Company will not be providing guidance for Fiscal Year 2024
"Fiscal year 2023 was a landmark year for
Campbell Soup Company (“Campbell’s”) Merger Update
As previously disclosed, on
Summary of Reported (GAAP) and Adjusted3 Results
13 Weeks Ended | 14 Weeks Ended | Fiscal Year Ended | |||||||||||||||||||||
Change | Change | ||||||||||||||||||||||
Net sales ($ millions) | $ | 292.1 | $ | 262.1 | 11.4 | % | $ | 1,020.4 | $ | 878.4 | 16.2 | % | |||||||||||
Net income (loss) ($ millions) | $ | 15.5 | $ | (28.7 | ) | 154.1 | % | $ | 30.2 | $ | (53.5 | ) | 156.5 | % | |||||||||
Net income (loss) margin (%) | 5.3 | % | (11.0 | ) | % | 1630 | bps | 2.8 | % | (6.1 | ) | % | 890 | bps | |||||||||
Adjusted net income3 | $ | 26.8 | $ | 19.6 | 36.2 | % | $ | 82.9 | $ | 60.4 | 37.1 | % | |||||||||||
Diluted EPS | $ | 0.15 | $ | (0.28 | ) | 153.6 | % | $ | 0.29 | $ | (0.53 | ) | 154.7 | % | |||||||||
Adjusted diluted EPS3 | $ | 0.26 | $ | 0.19 | 36.8 | % | $ | 0.80 | $ | 0.60 | 33.3 | % | |||||||||||
Adjusted EBITDA3($ millions) | $ | 46.0 | $ | 37.0 | 24.3 | % | $ | 156.1 | $ | 119.8 | 30.3 | % | |||||||||||
Adjusted EBITDA margin3(%) | 15.7 | % | 14.1 | % | 160 | bps | 15.3 | % | 13.6 | % | 170 | bps | |||||||||||
Summary of Reported and Organic Net Sales Growth – Fourth Quarter and Fiscal Year 2023
13 Weeks Ended | ||||||||||||||||||||||||
Reported | M&A | Organic | Organic Net Sales Growth | |||||||||||||||||||||
% Change | Contribution | Contribution | % Change1 | Volume | Price | |||||||||||||||||||
Rao’s | 24.9 | % | 9.8 | % | 34.7 | % | ||||||||||||||||||
noosa | (9.1 | ) | % | 7.1 | % | (2.0 | ) | % | ||||||||||||||||
Michael Angelo’s | (10.1 | ) | % | 6.6 | % | (3.5 | ) | % | ||||||||||||||||
Total | 11.4 | % | 6.9 | % | 7.0 | % | 25.3 | % | 21.7 | % | 3.6 | % | ||||||||||||
Fiscal Year Ended | ||||||||||||||||||||||||
Reported | M&A | Organic | Organic Net Sales Growth | |||||||||||||||||||||
% Change | Contribution | Contribution | % Change1 | Volume | Price | |||||||||||||||||||
Rao’s | 33.5 | % | 3.3 | % | 36.8 | % | ||||||||||||||||||
noosa | 0.1 | % | 1.8 | % | 1.9 | % | ||||||||||||||||||
Michael Angelo’s | (12.7 | ) | % | 1.5 | % | (11.2 | ) | % | ||||||||||||||||
Total | 16.2 | % | 6.3 | % | 2.1 | % | 24.6 | % | 18.1 | % | 6.5 | % | ||||||||||||
Fourth Quarter 2023 Results
Net sales of
Gross profit of
Total operating expenses of
Net interest expense was
Net income was
Adjusted EBITDA3 of
Balance Sheet and Cash Flow Highlights
As of
Cash from operating activities for the full fiscal year was
Fiscal Year 2024 Outlook
Due to the pending merger with Campbell’s,
Footnotes:
(1) Organic net sales and organic net sales growth are defined as reported net sales or reported net sales growth excluding, when they occur, the impact of a 53rd week of shipments as well as acquisitions and divestitures. For discussions of fourth quarter and fiscal year 2023 results, organic net sales and organic net sales growth excluded the impact of the Birch Benders divestiture and the 53rd week in the prior year.
(2) Source: Market performance refers to dollar sales and unit growth rates as reported by Circana MULO in the 13-week or 52-week period ended
(3) Adjusted gross profit, adjusted gross margin, adjusted operating expense, adjusted operating income, EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, and adjusted diluted EPS are non-GAAP measures. For additional information, including a reconciliation of adjusted results to the most directly comparable measures presented in accordance with GAAP, see the Non-GAAP Financial Information and Reconciliation of Non-GAAP Financial Measures sections of this release.
(4) Net leverage is defined as Net Debt (Total Debt minus Cash) divided by trailing twelve month adjusted EBITDA.
Earnings Conference Call Details
Due to the pending merger with Campbell’s,
About
Contacts
Investors:
IR@sovosbrands.com
Media:
media@sovosbrands.com
Non-GAAP Financial Information
In addition to the Company’s results which are determined in accordance with generally accepted accounting principles in
EBITDA, Adjusted EBITDA, EBITDA margin, Adjusted EBITDA margin, organic net sales, organic net sales growth, adjusted gross profit, adjusted gross margin, adjusted operating expenses, adjusted operating income, adjusted income tax (expense), adjusted effective tax rate, adjusted net income and diluted earnings per share from adjusted net income are not defined under GAAP. Our use of the terms EBITDA, Adjusted EBITDA, EBITDA margin, Adjusted EBITDA margin, organic net sales, organic net sales growth, adjusted gross profit, adjusted gross margin, adjusted operating expenses, adjusted operating income, adjusted income tax (expense), adjusted effective tax rate, adjusted net income and diluted earnings per share from adjusted net income may not be comparable to similarly titled measures of other companies in our industry and are not measures of performance calculated in accordance with GAAP. Our presentation of non-GAAP financial measures is intended to provide supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. Non-GAAP financial measures should not be considered as alternatives to operating income (loss), net income (loss), earnings (loss) per share, net sales or any other performance measures derived in accordance with GAAP, or as measures of operating cash flows or liquidity.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the pending merger with Campbell’s. These forward-looking statements are based on Sovos Brands’ current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions, and changes in circumstances that may cause Sovos Brands’ actual results, performance, or achievements to differ materially from those expressed or implied in any forward-looking statement.
With respect to the pending merger with Campbell’s, these risks and uncertainties include, but are not limited to:
- the timing to consummate the pending merger;
- our ability to retain and hire key personnel and other employees, which could require us to use more expensive or less effective resources to support our business or otherwise adversely affect our business, financial condition and results of operations;
- the risk that a condition to closing of the pending merger may not be satisfied or that the closing of the pending merger might otherwise not occur;
- the risk that required regulatory approval for the pending merger, including under the HSR Act, is not obtained or is obtained subject to conditions that are not anticipated;
- the diversion of management time on merger-related issues; and
- the risk that the pending merger and its announcement could have an adverse effect on our ability to retain third-party relationships and related talent.
These and other risks and uncertainties, including risks related to our sales and costs, are more fully described in Sovos Brands’ filings with the
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except for share and per share data) (Unaudited) | ||||||||||||||||
13 Weeks Ended | 14 Weeks Ended | Fiscal Year Ended | ||||||||||||||
Net sales | $ | 292,051 | $ | 262,098 | $ | 1,020,421 | $ | 878,371 | ||||||||
Cost of sales | 204,577 | 186,181 | 714,935 | 631,706 | ||||||||||||
Gross profit | 87,474 | 75,917 | 305,486 | 246,665 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative | 51,329 | 45,696 | 200,847 | 163,025 | ||||||||||||
Depreciation and amortization | 6,054 | 7,173 | 24,077 | 28,785 | ||||||||||||
Loss on asset sale | — | 51,291 | — | 51,291 | ||||||||||||
Impairment of goodwill | — | — | — | 42,052 | ||||||||||||
Total operating expenses | 57,383 | 104,160 | 224,924 | 285,153 | ||||||||||||
Operating income (loss) | 30,091 | (28,243 | ) | 80,562 | (38,488 | ) | ||||||||||
Interest (income) | (2,859 | ) | (679 | ) | (8,503 | ) | (1,050 | ) | ||||||||
Interest expense | 10,936 | 10,116 | 42,580 | 28,901 | ||||||||||||
Interest expense, net | 8,077 | 9,437 | 34,077 | 27,851 | ||||||||||||
Income (loss) before income taxes | 22,014 | (37,680 | ) | 46,485 | (66,339 | ) | ||||||||||
Income tax (expense) benefit | (6,501 | ) | 8,993 | (16,311 | ) | 12,888 | ||||||||||
Net income (loss) | $ | 15,513 | $ | (28,687 | ) | $ | 30,174 | $ | (53,451 | ) | ||||||
Earnings (loss) per share: | ||||||||||||||||
Basic | $ | 0.15 | $ | (0.28 | ) | $ | 0.30 | $ | (0.53 | ) | ||||||
Diluted | $ | 0.15 | $ | (0.28 | ) | $ | 0.29 | $ | (0.53 | ) | ||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 101,435,281 | 100,961,986 | 101,303,730 | 100,917,978 | ||||||||||||
Diluted | 104,018,656 | 100,961,986 | 103,143,363 | 100,917,978 | ||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) (Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 231,988 | $ | 138,654 | ||||
Accounts receivable, net | 97,655 | 87,695 | ||||||
Inventories, net | 95,515 | 92,602 | ||||||
Prepaid expenses and other current assets | 7,843 | 11,974 | ||||||
Total current assets | 433,001 | 330,925 | ||||||
Property and equipment, net | 64,699 | 64,317 | ||||||
Operating lease right-of-use assets | 11,447 | 13,332 | ||||||
395,399 | 395,399 | |||||||
Intangible assets, net | 329,122 | 351,547 | ||||||
Other long-term assets | 1,313 | 3,279 | ||||||
TOTAL ASSETS | $ | 1,234,981 | $ | 1,158,799 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 64,486 | $ | 49,264 | ||||
Accrued expenses | 81,356 | 69,571 | ||||||
Current portion of long-term debt | 184 | 99 | ||||||
Current portion of long-term operating lease liabilities | 3,275 | 3,308 | ||||||
Total current liabilities | 149,301 | 122,242 | ||||||
Long-term debt, net of debt issuance costs | 483,800 | 482,344 | ||||||
Deferred income taxes | 60,157 | 63,644 | ||||||
Long-term operating lease liabilities | 11,388 | 14,063 | ||||||
Other long-term liabilities | 346 | 483 | ||||||
TOTAL LIABILITIES | 704,992 | 682,776 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Preferred Stock | — | — | ||||||
Common Stock | 101 | 101 | ||||||
Additional paid-in-capital | 602,123 | 577,664 | ||||||
Accumulated deficit | (73,117 | ) | (103,291 | ) | ||||
Accumulated other comprehensive income | 882 | 1,549 | ||||||
TOTAL STOCKHOLDERS’ EQUITY | 529,989 | 476,023 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,234,981 | $ | 1,158,799 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) | ||||||||
Fiscal Year Ended | ||||||||
Operating activities | ||||||||
Net income (loss) | $ | 30,174 | $ | (53,451 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 33,951 | 38,868 | ||||||
Equity-based compensation expense | 24,459 | 18,438 | ||||||
(Gain) loss on foreign currency contracts | (68 | ) | 33 | |||||
Non-cash interest expense | 921 | 59 | ||||||
Deferred income taxes | (3,271 | ) | (13,821 | ) | ||||
Amortization of debt issuance costs | 1,266 | 1,331 | ||||||
Non-cash operating lease expense | 2,711 | 2,418 | ||||||
Provision for excess and obsolete inventory | 3,310 | 2,482 | ||||||
Loss on disposal of property and equipment | 359 | — | ||||||
Impairment of goodwill | — | 42,052 | ||||||
Loss on asset sale | — | 51,291 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (9,960 | ) | (17,032 | ) | ||||
Inventories, net | (6,224 | ) | (48,891 | ) | ||||
Prepaid expenses and other current assets | (1,938 | ) | 603 | |||||
Other long-term assets | 73 | 388 | ||||||
Accounts payable | 15,482 | 11,552 | ||||||
Accrued expenses | 17,748 | 12,238 | ||||||
Other long-term liabilities | (135 | ) | 62 | |||||
Operating lease liabilities | (3,534 | ) | (3,225 | ) | ||||
Net cash provided by operating activities | 105,324 | 45,395 | ||||||
Investing activities | ||||||||
Proceeds from sale of business | — | 40,000 | ||||||
Purchases of property and equipment | (11,861 | ) | (12,817 | ) | ||||
Net cash (used in) investing activities | (11,861 | ) | 27,183 | |||||
Financing activities | ||||||||
Repayments of capital lease obligations | (129 | ) | (78 | ) | ||||
Net cash (used in) financing activities | (129 | ) | (78 | ) | ||||
Net increase in cash and cash equivalents | 93,334 | 72,500 | ||||||
Cash and cash equivalents at beginning of period | 138,654 | 66,154 | ||||||
Cash and cash equivalents at end of period | $ | 231,988 | $ | 138,654 | ||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) | ||||||||||||||||||||||||||||||||
13 Weeks Ended | 14 Weeks Ended | Fiscal Year Ended | ||||||||||||||||||||||||||||||
(In thousands) | % of Net sales | % of Net sales | % of Net sales | % of Net sales | ||||||||||||||||||||||||||||
Net income (loss)(1) | $ | 15,513 | 5.3 | % | $ | (28,687 | ) | (11.0 | ) | % | $ | 30,174 | 2.8 | % | $ | (53,451 | ) | (6.1 | ) | % | ||||||||||||
Interest (income) | (2,859 | ) | (1.0 | ) | (679 | ) | (0.3 | ) | (8,503 | ) | (0.8 | ) | (1,050 | ) | (0.1 | ) | ||||||||||||||||
Interest expense | 10,936 | 3.7 | 10,116 | 3.9 | 42,580 | 4.2 | 28,901 | 3.3 | ||||||||||||||||||||||||
Income tax (expense) benefit | (6,501 | ) | (2.3 | ) | 8,993 | 3.4 | (16,311 | ) | (1.6 | ) | 12,888 | 1.5 | ||||||||||||||||||||
Depreciation and amortization | 8,468 | 2.9 | 9,684 | 3.7 | 33,951 | 3.4 | 38,868 | 4.4 | ||||||||||||||||||||||||
EBITDA(1) | 38,559 | 13.2 | (18,559 | ) | (7.1 | ) | 114,513 | 11.2 | 380 | — | ||||||||||||||||||||||
Non-cash equity-based compensation(2) | 6,165 | 2.1 | 5,198 | 2.0 | 24,459 | 2.4 | 18,438 | 2.1 | ||||||||||||||||||||||||
Non-recurring costs(3) | 285 | 0.1 | 439 | 0.2 | 2,660 | 0.3 | 4,050 | 0.5 | ||||||||||||||||||||||||
(Gain) loss on foreign currency contracts(4) | (1,346 | ) | (0.5 | ) | (3,222 | ) | (1.2 | ) | (68 | ) | — | 33 | — | |||||||||||||||||||
Supply chain optimization(5) | — | — | 613 | 0.2 | 128 | — | 1,904 | 0.2 | ||||||||||||||||||||||||
Impairment of goodwill(6) | — | — | — | — | — | — | 42,052 | 4.8 | ||||||||||||||||||||||||
Transaction and integration costs(7) | 2,320 | 0.8 | 52,527 | 20.0 | 14,435 | 1.4 | 52,586 | 6.0 | ||||||||||||||||||||||||
Initial public offering readiness(8) | — | — | — | — | — | — | 384 | — | ||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | 45,983 | 15.7 | % | $ | 36,996 | 14.1 | % | $ | 156,127 | 15.3 | % | $ | 119,827 | 13.6 | % |
____________________________
(1) | Net income (loss) as a percentage of net sales is also referred to as net income (loss) margin. EBITDA and Adjusted EBITDA as a percentage of net sales are also referred to as EBITDA margin and Adjusted EBITDA margin. | |
(2) | Consists of non-cash equity-based compensation expense associated with the grant of equity-based compensation provided to officers, non-employee directors and employees. | |
(3) | Consists of costs for professional fees related to organizational optimization and capital markets activities. | |
(4) | Consists of unrealized (gain) loss on foreign currency contracts. | |
(5) | Consists of write-downs associated with packaging optimization and a strategic initiative to move co-packaging production from an international supplier to a domestic supplier. | |
(6) | Consists of expenses for impairment of goodwill. | |
(7) | Consists of costs associated with the pending merger, the divestiture of the Birch Benders brand and certain related assets and other potential transactions. | |
(8) | Consists of costs associated with building the organizational infrastructure to support a public company environment. | |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) | |||||||||||||||||
13 Weeks Ended | |||||||||||||||||
Reported | M&A | Organic | |||||||||||||||
(In thousands) | Contribution | Contribution | |||||||||||||||
Rao’s | $ | 234,333 | $ | $ | $ | 234,333 | |||||||||||
noosa | 40,038 | 40,038 | |||||||||||||||
Michael Angelo’s | 17,691 | 17,691 | |||||||||||||||
Birch Benders | (11 | ) | (11 | ) | |||||||||||||
Total | $ | 292,051 | $ | — | $ | — | $ | 292,051 | |||||||||
14 Weeks Ended | |||||||||||||||||
Reported | M&A | Organic | |||||||||||||||
Contribution(1) | Contribution(2) | ||||||||||||||||
Rao’s | $ | 187,688 | $ | $ | 13,743 | $ | 173,945 | ||||||||||
noosa | 44,064 | 3,206 | 40,858 | ||||||||||||||
Michael Angelo’s | 19,674 | 1,343 | 18,331 | ||||||||||||||
Birch Benders | 10,672 | 10,672 | — | ||||||||||||||
Total | $ | 262,098 | $ | 10,672 | $ | 18,292 | $ | 233,134 | |||||||||
Organic Net Sales Growth ($) | $ | 58,917 | |||||||||||||||
Organic Net Sales Growth (%) | 25.3 | % |
Fiscal Year Ended | |||||||||||||||||
Reported | M&A | Organic | |||||||||||||||
(In thousands) | Contribution | Contribution | |||||||||||||||
Rao’s | $ | 774,706 | $ | $ | $ | 774,706 | |||||||||||
noosa | 176,258 | 176,258 | |||||||||||||||
Michael Angelo’s | 70,639 | 70,639 | |||||||||||||||
Birch Benders | (1,182 | ) | (1,182 | ) | |||||||||||||
Total | $ | 1,020,421 | $ | — | $ | — | $ | 1,020,421 | |||||||||
Fiscal Year Ended | |||||||||||||||||
Reported | M&A | Organic | |||||||||||||||
Contribution(1) | Contribution(2) | ||||||||||||||||
Rao’s | $ | 580,088 | $ | $ | 13,743 | $ | 566,345 | ||||||||||
noosa | 176,166 | 3,206 | 172,960 | ||||||||||||||
Michael Angelo’s | 80,925 | 1,343 | 79,582 | ||||||||||||||
Birch Benders | 41,192 | 41,192 | — | ||||||||||||||
Total | $ | 878,371 | $ | 41,192 | $ | 18,292 | $ | 818,887 | |||||||||
Organic Net Sales Growth ($) | $ | 201,534 | |||||||||||||||
Organic Net Sales Growth (%) | 24.6 | % |
_________________________
(1) | Reflects net sales for Birch Benders brands generated in the fiscal year ended | |
(2) | Reflects net sales generated in the extra week by Rao’s, Michael Angelo’s and noosa brands. | |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) | |||||||||||||||||||||||||||||
13 Weeks Ended | |||||||||||||||||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||||||||||||
Gross profit | Operating expenses | Operating income | Interest (income) | Interest expense | Income tax (expense) | Net income | |||||||||||||||||||||||
As reported (GAAP) | $ | 87,474 | $ | 57,383 | $ | 30,091 | $ | (2,859 | ) | $ | 10,936 | $ | (6,501 | ) | $ | 15,513 | |||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Non-cash equity-based compensation(1) | — | (6,165 | ) | 6,165 | — | — | — | 6,165 | |||||||||||||||||||||
Non-recurring costs(2) | — | (285 | ) | 285 | — | — | — | 285 | |||||||||||||||||||||
Gain on foreign currency contracts(3) | — | 1,346 | (1,346 | ) | — | — | — | (1,346 | ) | ||||||||||||||||||||
Transaction and integration costs(6) | — | (2,320 | ) | 2,320 | — | — | — | 2,320 | |||||||||||||||||||||
Acquisition amortization(8) | — | (5,606 | ) | 5,606 | — | — | — | 5,606 | |||||||||||||||||||||
Tax effect of adjustments(9) | — | — | — | — | — | (304 | ) | (304 | ) | ||||||||||||||||||||
One-time tax (expense) items(10) | — | — | — | — | — | (1,489 | ) | (1,489 | ) | ||||||||||||||||||||
As adjusted | $ | 87,474 | $ | 44,353 | $ | 43,121 | $ | (2,859 | ) | $ | 10,936 | $ | (8,294 | ) | $ | 26,750 | |||||||||||||
As adjusted (% of net sales) | 30.0 | % (11) | 15.2 | % | 14.8 | % | (1.0 | ) | % | 3.7 | % | (2.8 | ) | % | 9.2 | % | |||||||||||||
Earnings per share: | |||||||||||||||||||||||||||||
Diluted | 0.15 | ||||||||||||||||||||||||||||
Adjusted Diluted | 0.26 | ||||||||||||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||||||||
Diluted for net income | 104,018,656 | ||||||||||||||||||||||||||||
Diluted for adjusted net income | 104,018,656 | ||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) | |||||||||||||||||||||||||||||
14 Weeks Ended | |||||||||||||||||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||||||||||||
Gross profit | Operating expenses | Operating income (loss) | Interest (income) | Interest expense | Income tax (expense) benefit | Net income (loss) | |||||||||||||||||||||||
As reported (GAAP) | $ | 75,917 | $ | 104,160 | $ | (28,243 | ) | $ | (679 | ) | $ | 10,116 | $ | 8,993 | $ | (28,687 | ) | ||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Non-cash equity-based compensation(1) | — | (5,198 | ) | 5,198 | — | — | — | 5,198 | |||||||||||||||||||||
Non-recurring costs(2) | — | (439 | ) | 439 | — | — | — | 439 | |||||||||||||||||||||
Gain on foreign currency contracts(3) | — | 3,222 | (3,222 | ) | — | — | — | (3,222 | ) | ||||||||||||||||||||
Supply chain optimization(4) | 613 | — | 613 | — | — | — | 613 | ||||||||||||||||||||||
Transaction and integration costs(6) | — | (52,527 | ) | 52,527 | — | — | — | 52,527 | |||||||||||||||||||||
Acquisition amortization(8) | — | (6,811 | ) | 6,811 | — | — | — | 6,811 | |||||||||||||||||||||
Tax effect of adjustments(9) | — | — | — | — | — | (23,258 | ) | (23,258 | ) | ||||||||||||||||||||
One-time tax (expense) items(10) | — | — | — | — | — | 9,223 | 9,223 | ||||||||||||||||||||||
As adjusted | $ | 76,530 | $ | 42,407 | $ | 34,123 | $ | (679 | ) | $ | 10,116 | $ | (5,042 | ) | $ | 19,644 | |||||||||||||
As adjusted (% of net sales) | 29.2 | % (11) | 16.2 | % | 13.0 | % | (0.3 | ) | % | 3.9 | % | (1.9 | ) | % | 7.5 | % | |||||||||||||
Earnings (loss) per share: | |||||||||||||||||||||||||||||
Diluted | (0.28 | ) | |||||||||||||||||||||||||||
Adjusted Diluted | 0.19 | ||||||||||||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||||||||
Diluted for net income | 100,964,827 | ||||||||||||||||||||||||||||
Diluted for adjusted net income | 101,449,086 | ||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) | |||||||||||||||||||||||||||||
Fiscal Year Ended | |||||||||||||||||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||||||||||||
Gross profit | Operating expenses | Operating income | Interest (income) | Interest expense | Income tax (expense) | Net income | |||||||||||||||||||||||
As reported (GAAP) | $ | 305,486 | $ | 224,924 | $ | 80,562 | $ | (8,503 | ) | $ | 42,580 | $ | (16,311 | ) | $ | 30,174 | |||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Non-cash equity-based compensation(1) | — | (24,459 | ) | 24,459 | — | — | — | 24,459 | |||||||||||||||||||||
Non-recurring costs(2) | — | (2,660 | ) | 2,660 | — | — | — | 2,660 | |||||||||||||||||||||
Gain on foreign currency contracts(3) | — | 68 | (68 | ) | — | — | — | (68 | ) | ||||||||||||||||||||
Supply chain optimization(4) | 128 | — | 128 | — | — | — | 128 | ||||||||||||||||||||||
Transaction and integration costs(6) | 150 | (14,285 | ) | 14,435 | — | — | — | 14,435 | |||||||||||||||||||||
Acquisition amortization(8) | — | (22,425 | ) | 22,425 | — | — | — | 22,425 | |||||||||||||||||||||
Tax effect of adjustments(9) | — | — | — | — | — | (9,493 | ) | (9,493 | ) | ||||||||||||||||||||
One-time tax (expense) items(10) | — | — | — | — | — | (1,862 | ) | (1,862 | ) | ||||||||||||||||||||
As adjusted | $ | 305,764 | $ | 161,163 | $ | 144,601 | $ | (8,503 | ) | $ | 42,580 | $ | (27,666 | ) | $ | 82,858 | |||||||||||||
As adjusted (% of net sales) | 30.0 | % (11) | 15.8 | % | 14.2 | % | (0.8 | ) | % | 4.2 | % | (2.7 | ) | % | 8.1 | % | |||||||||||||
Earnings per share: | |||||||||||||||||||||||||||||
Diluted | 0.29 | ||||||||||||||||||||||||||||
Adjusted Diluted | 0.80 | ||||||||||||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||||||||
Diluted for net loss | 103,143,363 | ||||||||||||||||||||||||||||
Diluted for adjusted net income | 103,143,363 | ||||||||||||||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) | |||||||||||||||||||||||||||||
Fiscal Year Ended | |||||||||||||||||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||||||||||||||
Gross profit | Operating expenses | Operating income (loss) | Interest (income) | Interest expense | Income tax (expense) benefit | Net income (loss) | |||||||||||||||||||||||
As reported (GAAP) | $ | 246,665 | $ | 285,153 | $ | (38,488 | ) | $ | (1,050 | ) | $ | 28,901 | $ | 12,888 | $ | (53,451 | ) | ||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Non-cash equity-based compensation(1) | — | (18,438 | ) | 18,438 | — | — | — | 18,438 | |||||||||||||||||||||
Non-recurring costs(2) | — | (4,050 | ) | 4,050 | — | — | — | 4,050 | |||||||||||||||||||||
Loss on foreign currency contracts(3) | — | (33 | ) | 33 | — | — | — | 33 | |||||||||||||||||||||
Supply chain optimization(4) | 1,904 | — | 1,904 | — | — | — | 1,904 | ||||||||||||||||||||||
Impairment of goodwill(5) | — | (42,052 | ) | 42,052 | — | — | — | 42,052 | |||||||||||||||||||||
Transaction and integration costs(6) | — | (52,586 | ) | 52,586 | — | — | — | 52,586 | |||||||||||||||||||||
Initial public offering readiness(7) | — | (384 | ) | 384 | — | — | — | 384 | |||||||||||||||||||||
Acquisition amortization(8) | — | (27,240 | ) | 27,240 | — | — | — | 27,240 | |||||||||||||||||||||
Tax effect of adjustments(9) | — | — | — | — | — | (31,730 | ) | (31,730 | ) | ||||||||||||||||||||
One-time tax (expense) items(10) | — | — | — | — | — | (1,079 | ) | (1,079 | ) | ||||||||||||||||||||
As adjusted | $ | 248,569 | $ | 140,370 | $ | 108,199 | $ | (1,050 | ) | $ | 28,901 | $ | (19,921 | ) | $ | 60,427 | |||||||||||||
As adjusted (% of net sales) | 28.3 | % (11) | 16.0 | % | 12.3 | % | (0.1 | ) | % | 3.3 | % | (2.3 | ) | % | 6.9 | % | |||||||||||||
Earnings (loss) per share: | |||||||||||||||||||||||||||||
Diluted | (0.53 | ) | |||||||||||||||||||||||||||
Adjusted Diluted | 0.60 | ||||||||||||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||||||||
Diluted for net income | 100,917,978 | ||||||||||||||||||||||||||||
Diluted for adjusted net income | 100,967,287 |
______________________
(1) | Consists of non-cash equity-based compensation expense associated with the grant of equity-based compensation provided to officers, non-employee directors and employees. | |
(2) | Consists of costs for professional fees related to organizational optimization and capital markets activities. | |
(3) | Consists of unrealized gain (loss) on foreign currency contracts. | |
(4) | Consists of write-downs associated with packaging optimization and a strategic initiative to move co-packaging production from an international supplier to a domestic supplier. | |
(5) | Consists of expenses for impairment of goodwill. | |
(6) | Consists of costs associated with the pending merger, the divestiture of the Birch Benders brand and certain related assets and other potential transactions. | |
(7) | Consists of costs associated with building the organizational infrastructure to support a public company environment. | |
(8) | Amortization costs associated with acquired trade names and customer lists. | |
(9) | Tax effect was calculated using the Company's adjusted annual effective tax rate. | |
(10) | Represents the removal of the tax effect of impairment of goodwill, costs associated with the pending merger, removal for remeasurement of deferred taxes related to intangibles for changes in deferred rate, the removal of the tax effect of non-deductible transaction costs and the removal of the excess tax benefits related to equity-based compensation vesting. | |
(11) | Adjusted gross profit as a percentage of net sales is also referred to as adjusted gross margin. | |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) | ||||||||||||||||||||
13 Weeks Ended | 14 Weeks Ended | Fiscal Year Ended | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Reported income tax (expense) benefit | $ | (6,501 | ) | $ | 8,993 | $ | (16,311 | ) | $ | 12,888 | ||||||||||
Non-cash equity-based compensation(1) | (347 | ) | (456 | ) | (1,194 | ) | (1,551 | ) | ||||||||||||
Non-recurring costs(2) | 431 | (25 | ) | (384 | ) | (424 | ) | |||||||||||||
Gain (loss) on foreign currency contracts(3) | — | 799 | — | (8 | ) | |||||||||||||||
Supply chain optimization(4) | — | (143 | ) | (27 | ) | (461 | ) | |||||||||||||
Impairment of goodwill(5) | — | 105 | — | (10,172 | ) | |||||||||||||||
Transaction and integration costs(6) | (497 | ) | (12,703 | ) | (3,395 | ) | (12,718 | ) | ||||||||||||
Initial public offering readiness(7) | — | 2 | — | (446 | ) | |||||||||||||||
Acquisition amortization(8) | (1,380 | ) | (1,614 | ) | (6,355 | ) | (7,029 | ) | ||||||||||||
Adjusted income tax (expense) | $ | (8,294 | ) | $ | (5,042 | ) | $ | (27,666 | ) | $ | (19,921 | ) | ||||||||
Reported effective tax rate | 29.5 | % | 23.9 | % | 35.1 | % | 19.4 | % | ||||||||||||
Non-cash equity-based compensation(1) | (1.2 | ) | (0.1 | ) | (1.1 | ) | 0.3 | |||||||||||||
Non-recurring costs(2) | 1.5 | — | (0.3 | ) | 0.1 | |||||||||||||||
Gain (loss) on foreign currency contracts(3) | — | 0.1 | — | — | ||||||||||||||||
Supply chain optimization(4) | — | — | — | 0.1 | ||||||||||||||||
Impairment of goodwill(5) | — | — | — | 1.7 | ||||||||||||||||
Transaction and integration costs(6) | (1.7 | ) | (1.5 | ) | (3.0 | ) | 2.1 | |||||||||||||
Initial public offering readiness(7) | — | — | — | 0.1 | ||||||||||||||||
Acquisition amortization(8) | (4.7 | ) | (0.2 | ) | (5.7 | ) | 1.2 | |||||||||||||
Adjusted effective tax rate | 23.4 | % | 22.2 | % | 25.0 | % | 25.0 | % |
____________________________
(1) | Tax effect adjustment of non-cash equity-based compensation expense associated with the grant of equity-based compensation provided to officers, non-employee directors and employees. | |
(2) | Tax effect adjustment of professional fees related to organizational optimization and costs for capital markets activities. | |
(3) | Tax effect adjustments of unrealized gain (loss) on foreign currency contracts. | |
(4) | Tax effect adjustments of write-downs associated with packaging optimization and a strategic initiative to move co-packaging production from an international supplier to a domestic supplier. | |
(5) | Tax effect adjustment of impairment of goodwill. | |
(6) | Tax effect adjustment of costs associated with the pending merger, the divestiture of the Birch Benders brand and certain related assets and other potential transactions. | |
(7) | Tax effect adjustment of costs associated with building the organizational infrastructure to support a public company environment. | |
(8) | Tax effect adjustment of amortization costs associated with acquired trade names and customer lists. | |
Source:
2024 GlobeNewswire, Inc., source