Post Holdings (POST) Q4 2016 earnings summary

Executive summary

• FY2016 net sales rose 8% to $5,026.8M; operating profit increased to $545.7M, while net loss narrowed to $3.3M from $115.3M.

• Growth reflected acquisitions and stronger Premier Protein and legacy cereal sales; results also improved with lower corporate costs and better segment profit in three of four segments.

Financial highlights

• Net sales were $5,026.8M vs. $4,648.2M; gross profit was $1,547.4M vs. $1,174.4M; operating profit was $545.7M vs. $212.7M.

• Net loss was $3.3M, or $0.41/share, compared with a $115.3M loss, or $2.33/share, in FY2015.

• Operating profit excluding FY2015's $60.8M impairment charge increased $272.2M, or 100%, driven by acquisitions, segment gains and lower corporate expenses.

• Operating cash flow increased to $502.4M from $451.6M; cash and equivalents ended FY2016 at $1,143.6M.

• Interest expense was $306.5M; debt-extinguishment loss was $86.4M and interest-swap losses were $182.9M, including $182.4M of non-cash mark-to-market losses.

Outlook and guidance

• Available cash, operating cash flow and current or potential credit facilities were expected to cover working capital, interest, capex, pensions and other financing needs for the foreseeable future.

• Expected FY2017 contributions were $6.0M to defined-benefit pension plans; future contributions remain dependent on actuarial assumptions, asset returns and regulation.

• NPE acquisition accounting remained incomplete after its October 3, 2016 close; the business was to be combined with the existing egg operations.