Post Holdings (POST) Q4 2012 earnings summary

Executive summary

• FY2012 net sales fell 1% to $958.9M as volume declined 3%; higher average selling prices partly offset lower cereal-category demand and competitive pressure.

• Net earnings were $49.9M, versus a $424.3M loss in FY2011, which included a $566.5M goodwill and intangible impairment; the business completed its separation from Ralcorp in February 2012.

Financial highlights

• FY2012 revenue was $958.9M, down $9.3M YoY; gross profit was $428.9M versus $451.6M, while operating profit was $139.1M versus an operating loss of $368.6M.

• Net income was $49.9M and diluted EPS was $1.45, compared with a net loss of $424.3M and diluted loss per share of $12.33 in FY2011.

• FY2012 SG&A was $274.5M, including $12.5M of separation and stand-alone transition costs; excluding those costs, SG&A was 27.3% of sales versus 24.7% in FY2011.

• Q4 FY2012 revenue was $247.2M, gross profit $110.1M, net income $10.8M and diluted EPS $0.31.

Outlook and guidance

• Certain commodity prices, following FY2012 increases, were expected to rise further in FY2013; value-line Good Morenings was planned for expansion in FY2013.

• Management expected operating cash flows and current and future credit facilities to cover working capital, R&D, capital expenditures, pension contributions and other financing needs for the foreseeable future.

• Growth priorities included marketing and innovation behind established brands, cost control, more efficient manufacturing and distribution, and expansion into complementary categories, markets and channels.