Net Revenue Growth of 18.1% Delivers 12th
Consecutive Quarter of Growth Provides 2021 Outlook
Hostess Brands, Inc. (NASDAQ: TWNK, TWNKW) (“Hostess” or the
“Company”), today reported its financial results for the fourth
quarter and year ended December 31, 2020.
“I am proud of the many accomplishments our team achieved during
this unprecedented year. Hostess achieved our 12th consecutive
quarter of net revenue growth with double-digit revenue and EBITDA
growth in the fourth quarter. We remain informed, nimble and
focused on our commitment to keeping our employees and communities
safe and healthy as we continue to service our customers and
consumers,” commented Andy Callahan, Hostess Brands, Inc. President
and Chief Executive Officer. “As we turn to fiscal year 2021, we
are confident we will continue our profitable growth momentum and
shareholder value creation over the long term behind our strong
execution, high penetration in growing consumer segments, expansion
of Voortman and ability to deleverage with our strong cash
flow.”
Fourth Quarter 2020 Financial Highlights as Compared to the
Prior Year Period1:
- Net revenue was $256.0 million, an increase of 18.1%, driven
primarily by strong performance of Voortman Cookies Limited
(“Voortman”) and Hostess® branded sales, partially offset by other
non-Hostess® branded sales.
- Gross profit was $95.8 million, an increase of 35.3%. On an
adjusted basis, gross profit increased 27.2%, primarily due to
improved price and mix, the accretive margin expansion generated
from Voortman and operational efficiencies.
- Net income was $24.4 million, or $0.18 per diluted share
compared to $23.6 million, or $0.17 per diluted share. Adjusted net
income increased $5.9 million, or 25.9%, to $28.7 million,
resulting in $0.21 adjusted EPS compared to $0.16 adjusted EPS. The
increases in adjusted net income and adjusted EPS were primarily
due to the accretion from Voortman and an increase in Hostess®
branded sales.
- Adjusted EBITDA was $63.7 million, or 24.9% of net revenue, an
increase of 21.6%. The increase was primarily driven by Voortman's
adjusted EBITDA contribution and higher Hostess® branded
sales.
- Cash and cash equivalents were $173.0 million as of December
31, 2020 resulting in a leverage ratio of 3.9x.
Other Quarter Highlights:
- Executed initial sell-in of 2021 innovation slate which
establishes platforms for incremental future growth in both the
sweet baked goods and specialty better-for-you cookie
categories.
- Continued strong profit accretion from Voortman following the
completion of key integration activities.
- Simplified capital structure with the final exchange of Class B
units and removal of the non-controlling interest.
- Increased total Hostess manufacturer point of sale by 4.9%,
ahead of the Sweet Baked Goods category, driven by Hostess® branded
growth.
Full Year 2020 Financial Highlights as Compared to the Prior
Year Period1:
- Net revenue increased 15.7%*, and adjusted net revenue
increased 16.4%*, driven by Voortman and Hostess® branded
growth.
- Gross profit increased 21.1%*, and adjusted gross profit
increased 21.2%*.
- Net income was $68.4 million and adjusted EBITDA was $240.1
million. Adjusted EBITDA increased 20.1%*.
- Cash from operations for the year ended December 31, 2020 was
$159.2 million compared to $144.0 million.
*Excludes the In-Store Bakery business sold
in 2019
2021 Outlook
Assuming there are no significant disruptions due to the
COVID-19 pandemic, the Company expects the following consolidated
financial results for the full year 20212:
- Adjusted net revenue growth of 3.0% to 4.5%;
- Adjusted EBITDA of $255 million to $265 million, an increase of
6.3% to 10.4% from 2020;
- Adjusted EPS of $0.80 to $0.85, an increase of 6.7% to 13.3%
from 2020**;
- Leverage ratio of approximately 3x at the end of 2021 compared
to 3.9x at December 31, 2020**;
- Capital expenditures of approximately $60 million to $65
million, which includes a $25 million investment to increase the
Company's cake production capacity to support continued
growth;
- Income tax rate of approximately 27%, reflecting the
elimination of the non-controlling interest in the fourth quarter
of 2020 and higher state taxes.
** Outlook assumes an effective net share settlement of
outstanding warrants which expire in November 2021 and no other
strategic uses of cash.
The Company reaffirms its long-term financial objectives of
organic revenue growth, adjusted EBITDA margins and free cash flow
conversion in the top-quartile of its peers.
Fourth Quarter 2020 Compared to Fourth Quarter 2019
Net revenue was $256.0 million, an increase of 18.1%, or $39.3
million, compared to $216.7 million. Growth was driven by the
acquisition of Voortman which contributed $28.7 million. Sweet
baked goods net revenue increased $10.6 million, or 4.9% driven by
higher volume of core products partially offset by lower sales of
private label and non-Hostess® branded products.
Gross profit was $95.8 million, or 37.4% of net revenue,
compared to $70.8 million, or 32.7% of net revenue. Adjusted gross
profit was $95.8 million, or 37.4% of net revenue, compared to
$75.3 million, or 34.7% of net revenue. Gross margin benefited from
product mix, lower promotional activity, the accretion of Voortman,
and operating efficiencies.
Operating costs and expenses were $51.5 million, or 20.1% of net
revenue, compared to $31.2 million, or 14.4% of net revenue. The
increase was attributed to lapping the prior-year benefits from
remeasurements of a foreign currency contract and the tax
receivable agreement as well as the 2020 addition of Voortman
operating costs, higher employee incentive costs due to timing of
accruals and an impairment of property and equipment.
The Company's effective tax rate was 25.6%, compared to 20.2%.
The increase in the effective tax rate is due to the Class A for
Class B share exchanges during 2020.
Net income was $24.4 million compared to $23.6 million and
dilutive EPS was $0.18 compared to $0.17. Adjusted net income was
$28.7 million, compared to $22.8 million and adjusted EPS was
$0.21, compared to $0.16. Adjusted net income increased as a result
of the higher volume and increase in gross profit noted above,
partially offset by higher operating costs and depreciation and
amortization as a result of the Voortman acquisition.
Adjusted EBITDA was $63.7 million, or 24.9% of net revenue,
compared to $52.4 million, or 24.2% of net revenue. The increase
was driven by $8.6 million of adjusted EBITDA from Voortman and
higher volume of Hostess® branded products.
During the fourth quarter, all remaining shares of Class B
common stock were exchanged for Class A common stock. This exchange
eliminated the non-controlling interest reported on the Company's
consolidated statement of operations simplifying the Company's
organizational structure. As part of this exchange, and under the
securities repurchase authorization announced in the third quarter,
the Company repurchased 0.4 million of its Class A shares for $6.0
million in cash and 2 million private placement warrants for $2.0
million in cash. The Company has $92.0 million remaining under its
securities repurchase program.
Conference Call and Webcast
The Company will host a conference call and webcast with an
accompanying presentation today, February 24, 2021 at 4:30 p.m. EST
to discuss the results for the fourth quarter. Investors interested
in participating in the live call can dial (877) 451-6152 from the
U.S. and (201) 389-0879 internationally. A telephone replay will be
available approximately two hours after the call concludes through
March 10, 2021, by dialing (844) 512-2921 from the U.S., or (412)
317-6671 from international locations, and entering confirmation
code 13714974. The simultaneous, live webcast and presentation will
be available on the Investor Relations section of the Company’s
website at www.hostessbrands.com. The webcast will be archived for
30 days.
About Hostess Brands, Inc.
Hostess Brands, Inc. is a leading packaged food company focused
on developing, manufacturing, marketing, selling and distributing
snacks in North America. The Hostess® brand's history dates back to
1919, when the Hostess® CupCake was introduced to the public,
followed by Twinkies® in 1930. Today, the Company produces a
variety of new and classic treats in addition to Twinkies® and
CupCakes, including Donettes®, Ding Dongs®, Zingers®, Danishes,
Honey Buns and Coffee Cakes. In January 2020, the Company acquired
Voortman Cookies Limited which produces a variety of cookies and
wafers products, including sugar-free products under the Voortman®
brand. For more information about Hostess® products and Hostess
Brands, please visit hostesscakes.com. Follow Hostess on Twitter:
@Hostess_Snacks; on Facebook: facebook.com/Hostess; on Instagram:
Hostess_Snacks; and on Pinterest: pinterest.com/hostesscakes.
The Company has one reportable segment: Snacking (formerly
referred to as Sweet Baked Goods, or “SBG”). The Snacking segment
consists of sweet baked goods, cookies, bread and buns and frozen
retail products that are sold under the Hostess®, Dolly Madison®,
Cloverhill®, Big Texas®, and Voortman® brands. Through August 30,
2019, we operated in two reportable segments: SBG and In-Store
Bakery (“ISB”). The In-Store Bakery segment consisted of Superior
on Main® and private label products sold through the in-store
bakery section of grocery and club stores. The Company divested its
In-Store Bakery segment's operations on August 30, 2019.
Forward-Looking Statements
This press release contains statements reflecting the Company's
views about its future performance that constitute “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended and Section 21E of the Securities Exchange Act
of 1934, as amended, that involve substantial risks and
uncertainties. Forward-looking statements are generally identified
through the inclusion of words such as “believes,” “expects,”
“intends,” “estimates,” “projects,” “anticipates,” “will,” “plan,”
“may,” “should,” or similar language. Statements addressing the
Company's future operating performance and statements addressing
events and developments that the Company expects or anticipates
will occur are also considered as forward-looking statements. All
forward-looking statements included herein are made only as of the
date hereof. The Company undertakes no obligation to update any
forward-looking statement, whether as a result of new information,
future events, or otherwise.
These statements inherently involve risks and uncertainties that
could cause actual results to differ materially from those
anticipated in such forward-looking statements. These risks and
uncertainties include, but are not limited to, maintaining,
extending and expanding the Company's reputation and brand image;
protecting intellectual property rights; leveraging the Company's
brand value to compete against lower-priced alternative brands;
correctly predicting, identifying and interpreting changes in
consumer preferences and demand and offering new products to meet
those changes; operating in a highly competitive industry; the
ability to pass cost increases on to our customers; the ability to
maintain or add additional shelf or retail space for the Company's
products; the continued ability to produce and successfully market
products with extended shelf life; our ability to successfully
integrate, achieve expected synergies and manage our acquired
businesses and brands; the ability to drive revenue growth in key
products or add products that are faster-growing and more
profitable; adverse impact or disruption to our business caused by
COVID-19 or future outbreaks of highly infectious or contagious
diseases; volatility in commodity, energy, and other input prices
and the ability to adjust pricing to cover increased costs;
dependence on major customers; significant changes in the
availability and pricing of transportation; geographic focus could
make the Company particularly vulnerable to economic and other
events and trends in North America; increased costs in order to
comply with governmental regulation; general political, social and
economic conditions; a portion of the workforce belongs to unions
and strikes or work stoppages could cause the business to suffer;
product liability claims, product recalls, or regulatory
enforcement actions; unanticipated business disruptions; dependence
on third parties for significant services; insurance may not
provide adequate levels of coverage against claims; failures,
unavailability, or disruptions of the Company's information
technology systems; dependence on key personnel or a highly skilled
and diverse workforce; and the Company's ability to finance
indebtedness on terms favorable to the Company; and other risks as
set forth from time to time in the Company's Securities and
Exchange Commission filings.
As a result of a number of known and unknown risks and
uncertainties, the Company's actual results or performance may be
materially different from those expressed or implied by these
forward-looking statements. Risks and uncertainties are identified
and discussed in Item 1A-Risk Factors in the Company's Annual
Report on Form 10-K for 2020 to be filed today. All subsequent
written or oral forward-looking statements attributable to us or
persons acting on the Company's behalf are expressly qualified in
their entirety by these risk factors. The Company undertakes no
obligation to update any forward-looking statement, whether as a
result of new information, future events, or otherwise.
______________________________
1 This press release contains certain
non-GAAP financial measures, including adjusted revenue, adjusted
gross profit, adjusted gross margin, adjusted EBITDA, adjusted
operating income, adjusted net income attributed to Class A
stockholders and adjusted earnings per share ("EPS"). Please refer
to the schedules in the press release for reconciliations of
non-GAAP financial measures to the comparable GAAP measure. Unless
otherwise stated, all comparisons of financial measures in this
press release are to the fourth quarter or full year of 2019, as
applicable. All measures of market performance contained in this
press release, including point of sale and market share, include
all Company branded products within the SBG category as reported by
Nielsen but do not include other products sold outside of the SBG
category. All market data in this press release refer to the
13-week period ended December 26, 2020 and the prior-year
comparable period. The Company's leverage ratio is net debt (total
long-term debt less cash) divided by adjusted EBITDA.
2 The Company provides guidance only on a
non-generally accepted accounting principles (non-GAAP) basis and
does not provide a reconciliation of the Company's forward-looking
financial expectations to the most directly comparable GAAP
financial measure because of the inherent difficulty in forecasting
and quantifying certain amounts that are necessary for such
reconciliation; including adjustments that could be made for
deferred taxes; remeasurement of the Tax Receivable Agreement,
transformation expenses and other non-operating gains or losses
reflected in the Company's reconciliation of historic non-GAAP
financial measures, the amount of which could be material. Please
refer to the Reconciliation of Non-GAAP Financial Measures included
in this press release for further information about the use of
these measures.
HOSTESS BRANDS, INC.
CONSOLIDATED BALANCE
SHEETS
(Unaudited, amounts in
thousands, except shares and per share data)
December 31,
December 31,
2020
2019
ASSETS
Current assets:
Cash and cash equivalents
$
173,034
$
285,087
Accounts receivable, net
125,550
104,892
Inventories
49,348
47,608
Prepaids and other current assets
21,614
15,569
Total current assets
369,546
453,156
Property and equipment, net
303,959
242,384
Intangible assets, net
1,967,903
1,853,315
Goodwill
706,615
535,853
Other assets, net
17,446
12,993
Total assets
$
3,365,469
$
3,097,701
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Long-term debt and lease obligations
payable within one year
$
13,811
$
11,883
Tax receivable agreement obligations
payable within one year
11,800
12,100
Accounts payable
61,428
68,566
Customer trade allowances
46,779
45,715
Accrued expenses and other current
liabilities
55,715
21,661
Total current liabilities
189,533
159,925
Long-term debt and lease obligations
1,113,037
975,405
Tax receivable agreement obligations
144,744
126,096
Deferred tax liability
295,009
256,051
Other long-term liabilities
1,560
—
Total liabilities
1,743,883
1,517,477
Class A common stock, $0.0001 par value,
200,000,000 shares authorized, 130,347,464 and 122,108,086 issued
and outstanding at December 31, 2020 and 2019, respectively
13
12
Class B common stock, $0.0001 par value,
50,000,000 shares authorized, none issued or outstanding at
December 31, 2020, 8,409,834 issued and outstanding at December 31,
2019
—
1
Additional paid in capital
1,238,765
1,152,055
Accumulated other comprehensive loss
(10,407
)
(756
)
Retained earnings
399,215
334,480
Treasury stock
(6,000
)
—
Stockholders’ equity
1,621,586
1,485,792
Non-controlling interest
—
94,432
Total liabilities, stockholders’ equity
and non-controlling interest
$
3,365,469
$
3,097,701
HOSTESS BRANDS, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited, amounts in
thousands, except shares and per share data)
Three Months Ended
Year Ended
December 31,
2020
December 31,
2019
December 31,
2020
December 31,
2019
Net revenue
$
256,043
$
216,666
$
1,016,609
$
907,675
Cost of goods sold
160,270
145,890
660,970
607,841
Gross profit
95,773
70,776
355,639
299,834
Operating costs and expenses:
Advertising and marketing
12,741
9,589
45,724
39,775
Selling expense
7,556
6,897
46,729
30,719
General and administrative
21,599
14,940
92,860
69,423
Amortization of customer relationships
6,177
5,628
26,510
23,377
Business combination transaction costs
—
1,914
4,282
1,914
Tax receivable agreement liability
remeasurement
150
(1,110
)
760
186
Gain on foreign currency contract
—
(7,128
)
—
(7,128
)
Other operating expenses
3,318
512
3,464
5,472
Total operating costs and expenses
51,541
31,242
220,329
163,738
Operating income
44,232
39,534
135,310
136,096
Other expense:
Interest expense, net
10,256
9,519
42,826
39,870
Other expense
1,220
483
3,723
1,769
Total other expense
11,476
10,002
46,549
41,639
Income before income taxes
32,756
29,532
88,761
94,457
Income tax expense
8,383
5,977
20,405
16,892
Net income
24,373
23,555
68,356
77,565
Less: Net income attributable to the
non-controlling interest
761
1,834
3,621
14,450
Net income attributable to Class A
shareholders
$
23,612
$
21,721
$
64,735
$
63,115
Earnings per Class A share:
Basic
$
0.18
$
0.18
$
0.52
$
0.57
Diluted
$
0.18
$
0.17
$
0.51
$
0.55
Weighted-average shares outstanding:
Basic
127,958,039
121,219,637
124,927,535
110,540,264
Diluted
132,402,533
126,108,531
127,723,488
114,699,447
Results of
Operations by Segment
Three Months Ended
Year Ended
(In thousands)
December 31,
2020
December 31,
2019
December 31,
2020
December 31,
2019
Net Revenue
Snacking
$
256,043
$
216,666
$
1,016,609
$
878,973
In-Store Bakery
—
—
—
28,702
$
256,043
$
216,666
$
1,016,609
$
907,675
Gross Profit
Snacking
$
95,773
$
70,776
$
355,639
$
293,648
In-Store Bakery
—
—
—
6,186
$
95,773
$
70,776
$
355,639
$
299,834
HOSTESS BRANDS, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited, amounts in
thousands)
Year Ended
December 31,
2020
December 31,
2019
Operating activities
Net income
$
68,356
$
77,565
Depreciation and amortization
54,940
43,334
Impairment and loss on sale of assets
3,329
1,976
Non-cash loss on debt modification
—
531
Debt discount (premium) amortization
1,289
(747
)
Tax receivable agreement remeasurement and
gain on buyout
760
185
Non-cash fees on sale of business
—
1,414
Unrealized loss (gain) on foreign
currency
2,061
(7,128
)
Non-cash lease expense
571
—
Share-based compensation
8,671
9,231
Deferred taxes
16,806
14,121
Change in operating assets and
liabilities, net of acquisitions and dispositions:
Accounts receivable
4,434
(2,570
)
Inventories
5,824
(12,477
)
Prepaids and other current assets
(5,301
)
265
Accounts payable and accrued expenses
1,900
14,072
Customer trade allowances
(4,397
)
4,202
Net cash provided by operating
activities
159,243
143,974
Investing activities
Purchases of property and equipment
(51,983
)
(34,875
)
Acquisition of business, net of cash
(316,013
)
—
Proceeds from sale of business, net of
cash
—
63,345
Acquisition and development of software
assets
(6,269
)
(5,609
)
Net cash provided by (used in) investing
activities
(374,265
)
22,861
Financing activities
Repayments of long-term debt and financing
lease obligations
(11,168
)
(9,894
)
Proceeds from long-term debt origination,
net of fees paid
136,888
—
Debt refinancing costs
—
(7,433
)
Distributions to non-controlling
interest
(3,422
)
(6,658
)
Repurchase of warrants
(2,000
)
—
Repurchase of common stock
(6,000
)
—
Payment of taxes related to the net
issuance of employee stock awards
(1,440
)
(1,431
)
Payments on tax receivable agreement
(10,327
)
(2,732
)
Proceeds from the exercise of warrants
690
23
Net cash provided by (used in) financing
activities
103,221
(28,125
)
Effect of exchange rate changes on cash
and cash equivalents
(252
)
—
Net increase (decrease) in cash and
cash equivalents
(112,053
)
138,710
Cash and cash equivalents at beginning of
period
285,087
146,377
Cash and cash equivalents at end of
period
$
173,034
$
285,087
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest
$
41,776
$
43,986
Taxes paid
$
5,825
$
1,840
Supplemental disclosure of non-cash
investing:
Accrued capital expenditures
$
4,718
$
2,910
HOSTESS BRANDS, INC. RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES
Adjusted net revenue, adjusted gross profit, adjusted operating
income, adjusted net income, adjusted Class A net income, adjusted
EBITDA and adjusted EPS collectively referred to as “Non-GAAP
Financial Measures,” are commonly used in the Company's industry
and should not be construed as an alternative to net revenue, gross
profit, operating income, net income, net income attributed to
Class A stockholders or earnings per share as indicators of
operating performance (as determined in accordance with GAAP).
These Non-GAAP Financial Measures may not be comparable to
similarly titled measures reported by other companies. The Company
has included these Non-GAAP Financial Measures because it believes
the measures provide management and investors with additional
information to measure the Company's performance, estimate the
Company's value and evaluate the Company's ability to service
debt.
Non-GAAP Financial Measures are adjusted to exclude certain
items that affect comparability. The adjustments are itemized in
the tables below. You are encouraged to evaluate these adjustments
and the reason the Company considers them appropriate for
supplemental analysis. In evaluating adjustments, you should be
aware that in the future the Company may incur expenses that are
the same as or similar to some of the adjustments set forth below.
The presentation of Non-GAAP Financial Measures should not be
construed as an inference that future results will be unaffected by
unusual or recurring items.
The Company defines adjusted EBITDA as net income adjusted to
exclude (i) interest expense, net, (ii) depreciation and
amortization (iii) income taxes and (iv) share-based compensation,
as further adjusted to eliminate the impact of certain items that
the Company does not consider indicative of its ongoing operating
performance. Adjusted EBITDA has limitations as an analytical tool,
and you should not consider it in isolation, or as a substitute for
analysis of the Company's results as reported under GAAP. For
example, adjusted EBITDA:
- does not reflect the Company's capital expenditures, future
requirements for capital expenditures or contractual
commitments;
- does not reflect changes in, or cash requirements for, the
Company's working capital needs;
- does not reflect the significant interest expense, or the cash
requirements necessary to service interest or principal payments,
on the Company's debt; and
- does not reflect payments related to income taxes, the Tax
Receivable Agreement or distributions to the non-controlling
interest to reimburse its tax liability.
HOSTESS BRANDS, INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(Unaudited, amounts in
thousands, except per share data)
Three Months Ended December
31, 2020
Net Revenue
Gross Profit
Operating Income
Net Income
Class A Net Income
Diluted EPS
GAAP Results
$
256,043
$
95,773
$
44,232
$
24,373
$
23,612
$
0.18
Non-GAAP adjustments:
Foreign currency impacts
—
—
—
671
649
0.01
Acquisition, disposal and integration
related costs (1)
—
—
309
309
299
—
Impairment of property and equipment
—
—
3,009
3,009
2,909
0.02
Tax Receivable Agreement remeasurement
—
—
150
150
150
—
Other
—
—
—
549
531
—
Remeasurement of tax liabilities
—
—
—
767
767
0.01
Tax impact of adjustments
—
—
—
(1,089
)
(1,089
)
(0.01
)
Adjusted Non-GAAP results
$
256,043
$
95,773
$
47,700
28,739
$
27,828
$
0.21
Income tax
8,705
Interest expense
10,256
Depreciation and amortization
13,941
Share-based compensation
2,088
Adjusted EBITDA
$
63,729
(1) Acquisition, disposal and integration
operating costs are included in other operating expenses on the
consolidated statement of operations.
Three Months Ended December
31, 2019
Net Revenue
Gross Profit
Operating Income
Net Income
Class A Net Income
Diluted EPS
GAAP Results
$
216,666
$
70,776
$
39,534
$
23,555
$
21,721
$
0.17
Non-GAAP adjustments:
Foreign currency impacts
—
—
(7,127
)
(7,127
)
(6,721
)
(0.07
)
Acquisition, disposal and integration
related costs
—
—
1,926
1,926
1,816
0.02
Facility transition costs (1)
—
4,565
5,917
5,917
5,580
0.06
Tax Receivable Agreement remeasurement
—
—
(1,110
)
(1,110
)
(1,110
)
(0.01
)
Impairment of property and equipment,
intangible assets and goodwill
—
—
500
500
472
—
Remeasurement of tax liabilities
—
—
—
(892
)
(892
)
(0.01
)
Loss on debt refinancing
—
—
—
530
500
—
Other
—
—
—
(47
)
(44
)
—
Tax impact of adjustments
—
—
—
(423
)
(423
)
—
Adjusted Non-GAAP results
$
216,666
$
75,341
$
39,640
22,829
$
20,899
$
0.16
Income tax
7,292
Interest expense
9,519
Depreciation and amortization
10,657
Share-based compensation
2,073
Adjusted EBITDA
$
52,370
(1) Facility transition operating costs
are included in general and administrative expenses on the
consolidated statement of operations.
HOSTESS BRANDS, INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(Unaudited, amounts in
thousands, except per share data)
Year Ended December 31,
2020
Net Revenue
Gross Profit
Operating Income
Net Income
Class A Net Income
Diluted EPS
GAAP Results
$
1,016,609
$
355,639
$
135,310
$
68,356
64,735
$
0.51
Non-GAAP adjustments:
Foreign currency impacts
—
—
—
2,065
1,966
0.02
Acquisition, disposal and integration
related costs (1)
6,821
7,963
29,166
29,166
27,569
0.22
Facility transition costs (2)
—
3,681
5,710
5,710
5,396
0.04
Impairment of property and equipment
—
—
3,009
3,009
2,909
0.02
Tax Receivable Agreement remeasurement
—
—
760
760
760
—
COVID-19 costs (3)
—
2,082
2,388
2,388
2,257
0.02
Other
—
—
100
1,766
1,681
0.01
Remeasurement of tax liabilities
—
—
—
(455
)
(455
)
—
Tax impact of adjustments
—
—
—
(10,961
)
(10,961
)
(0.09
)
Adjusted Non-GAAP results
$
1,023,430
$
369,365
$
176,443
101,804
$
95,857
$
0.75
Income tax
31,821
Interest expense
42,826
Depreciation and amortization
54,940
Share-based compensation
8,671
Adjusted EBITDA
$
240,062
(1) Adjustments to net revenue represent
initial slotting fees paid to customers to obtain space in customer
warehouses for the Voortman transition. Adjustments to operating
costs included $8.0 million of selling expense, $8.9 million of
general and administrative expenses and $4.3 million of business
combination transaction costs on the consolidated statement of
operations.
(2) Facility transition operating costs
are included in general and administrative expenses on the
consolidated statement of operations.
(3) COVID-19 operating costs are included
in general and administrative expenses on the consolidated
statement of operations. Total COVID-19 non-GAAP adjustments
primarily consist of costs of incremental cleaning and sanitation,
personal protective equipment and employee bonuses in the first
half of 2020.
HOSTESS BRANDS, INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(Unaudited, amounts in
thousands, except per share data)
Year Ended December 31,
2019
Net Revenue
Gross Profit
Operating Income
Net Income
Class A Net Income
Diluted EPS
GAAP Results
$
907,675
$
299,834
$
136,096
$
77,565
$
63,115
$
0.55
Non-GAAP adjustments:
Foreign currency impacts
—
—
(7,127
)
(7,127
)
(6,721
)
(0.07
)
Acquisition, disposal and integration
related costs
—
1,563
5,484
5,484
5,172
0.05
Special employee incentive compensation
(1)
—
33
1,910
1,910
1,801
0.02
Facility transition costs (2)
—
9,381
12,080
12,080
11,392
0.10
Tax Receivable Agreement remeasurement
—
—
186
186
186
—
Impairment of property and equipment,
intangible assets and goodwill
—
—
1,976
1,976
1,863
0.02
Loss on debt refinancing
—
—
1,487
2,023
1,908
0.02
Remeasurement of tax liabilities
—
—
—
(4,564
)
(4,564
)
(0.05
)
Other
—
—
—
1,233
1,163
0.01
Tax impact of adjustments
—
—
—
(3,918
)
(3,918
)
(0.04
)
Adjusted Non-GAAP results
$
907,675
$
310,811
$
152,092
86,848
$
71,397
$
0.61
Income tax
25,374
Interest expense
39,870
Depreciation and amortization
43,334
Share-based compensation
9,231
Adjusted EBITDA
$
204,657
(1) Special employee incentive
compensation is included in general and administrative expenses on
the consolidated statement of operations.
(2) Facility transition operating costs
are included in general and administrative expenses on the
consolidated statement of operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210224006067/en/
Investors, please contact: Chris Mandeville and Anna Kate Heller
ICR 203-682-8304 Chris.Mandeville@icrinc.com and
AnnaKate.Heller@icrinc.com
Media, please contact: The LAKPR Group Hannah Arnold
harnold@lakpr.com or Marie Espinel mespinel@lakpr.com
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