Post Holdings (POST) Q4 2017 earnings summary

Executive summary

• FY2017 net sales rose 4% to $5,225.8 million, while operating profit fell 5% to $520.3 million; acquisitions and Premier Protein growth supported sales, offset by weaker results at Michael Foods Group.

• Net earnings were $48.3 million and diluted EPS was $0.50; results included $222.9 million of debt-extinguishment losses and a $26.5 million goodwill impairment.

• Weetabix was acquired in July 2017; a Bob Evans acquisition was pending, with closing expected in fiscal Q2 2018, subject to conditions.

Financial highlights

• Net sales were $5,225.8 million, up $199.0 million or 4% YoY; gross profit was $1,574.1 million versus $1,547.4 million.

• Operating profit was $520.3 million, down $25.4 million or 5% YoY; excluding goodwill impairment, legal settlement provisions and the prior-year comparison impacts described in MD&A, profit increased $17.1 million or 3%.

• Net earnings were $48.3 million versus a $3.3 million loss; net earnings available to common shareholders were $34.8 million, with diluted EPS of $0.50 versus a $0.41 loss.

• Operating cash flow was $386.7 million, down $115.7 million YoY; cash and equivalents ended FY2017 at $1,525.9 million.

Outlook and guidance

• Bob Evans acquisition was expected to close in fiscal Q2 2018; consideration was $77.00 per share, expected to be funded with cash on hand and revolving-facility borrowings.

• FY2018 pension contributions were expected to total $14.8 million; planned capital investment and liquidity needs were expected to be supported by cash, operating cash flows and available credit facilities.

• Bob Evans integration, anticipated synergies, regulatory approvals and the closing timetable remained uncertain; failure to close could trigger a $50.0 million reverse termination fee in specified circumstances.