BellRing Brands, Inc. (NYSE:BRBR) (“BellRing”), a holding company
operating in the global convenient nutrition category, today
reported results for the first fiscal quarter ended December 31,
2022.
Highlights:
- First quarter net sales of $362.7
million
- Operating profit of $75.2
million; net earnings available to common
stockholders of $44.2 million and
Adjusted EBITDA of $84.9 million
- Affirmed fiscal year 2023 net sales guidance of between
$1.56-$1.64 billion; raises Adjusted EBITDA (non-GAAP)* guidance to
$306-$325 million
- Post Holdings completes its exit of BellRing
ownership
*BellRing provides Adjusted EBITDA guidance only on
a non-GAAP basis and does not provide a reconciliation of its
forward-looking Adjusted EBITDA non-GAAP guidance measure to the
most directly comparable GAAP measure due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliation, including the adjustments
described under “Outlook” below.
“We are pleased with our strong first quarter
performance, which came in ahead of our expectations. Our shake
production came in slightly higher than we forecasted, improving
both internal and customer trade inventory levels and driving
Premier Protein volumes back to growth. Premier Protein and
Dymatize saw healthy retail consumption growth in the quarter,
which has continued into January,” said Darcy H. Davenport,
President and Chief Executive Officer of BellRing. “The convenient
nutrition category continues to show momentum. Our new capacity
expansions remain on track. Our brands are resonating with
consumers and our first quarter results give us greater confidence
in our full year outlook and long-term prospects.”
Dollar consumption of Premier
Protein ready-to-drink (“RTD”) shakes and Dymatize United
States (“U.S.”) powder products increased 15.1% and 29.9%,
respectively, in the 13-week period ended January 1, 2023, as
compared to the same period in 2022 (inclusive of IRI Multi Outlet
including Convenience and management estimates of untracked
channels).
First Quarter Operating
Results
Net sales were $362.7 million, an increase of
18.3%, or $56.2 million, compared to the prior year period, driven
by 15.4% improvement in price/mix and 2.9% increase in volume.
Premier Protein net sales increased 22.9%, driven
by 18.0% improvement in price and 4.9% increase in volume. Premier
Protein RTD shake net sales increased 21.8%, driven by 16.7%
improvement in price and 5.1% increase in volume. Net sales
benefited from higher average net selling prices driven by price
increases to offset significant cost inflation. Higher RTD shake
production, along with RTD category growth, drove underlying net
sales growth. Partially offsetting this volume growth was the
lapping of temporarily discontinued flavors.
Dymatize net sales increased 2.5%, driven by 21.5%
improvement in price/mix, which was partially offset by 19.0%
decrease in volume. Price/mix benefited from higher average net
selling prices (driven by price increases to offset significant
cost inflation) and favorable product mix, which was partially
offset by increased promotional spending. Volume contraction was
driven by lapping discontinued products and shifts in quarterly
shipment timing within the international and specialty channels.
These declines were partially offset by volume growth driven by new
product distribution gains and promotional activities.
Gross profit was $121.8 million, or 33.6% of net
sales, an increase of 32.0%, or $29.5 million, compared to $92.3
million, or 30.1% of net sales, in the prior year period. The
higher gross profit margin was driven by improved pricing that
offset significant cost inflation, $3.8 million of production
attainment fees received in the current year period from shake
contract manufacturers and lapping logistics inefficiencies in the
prior year period (resulting from capacity constraints).
Selling, general and administrative (“SG&A”)
expenses were $41.7 million, or 11.5% of net sales, an increase of
$4.9 million compared to $36.8 million, or 12.0% of net sales, in
the prior year period. SG&A expenses included $0.3 million and
$2.0 million in the first quarter of 2023 and 2022, respectively,
of costs incurred in connection with BellRing’s separation from
Post Holdings, Inc. (“Post”), which were treated as adjustments for
non-GAAP measures.
Operating profit was $75.2 million, an increase of
48.6%, or $24.6 million, compared to $50.6 million in the prior
year period.
Net earnings available to common stockholders were
$44.2 million, an increase of 439.0%, or $36.0 million, compared to
$8.2 million in the prior year period. Net earnings available to
common stockholders in the prior year period excluded $31.1 million
of net earnings attributable to the Company’s redeemable
noncontrolling interest (“NCI”). Net earnings per diluted share of
common stock were $0.33, compared to $0.21 in the prior year
period. Adjusted net earnings available to common stockholders were
$44.9 million, or $0.33 per diluted share of common stock, compared
to $10.1 million, or $0.26 per diluted share of common stock, in
the prior year period.
Adjusted EBITDA was $84.9 million, an increase of
42.0%, or $25.1 million, compared to $59.8 million in the prior
year period. Adjusted EBITDA in the prior year period included an
adjustment for the portion of BellRing Brands, LLC’s (“BellRing
LLC”) consolidated net earnings which was allocated to NCI in the
period prior to Post’s distribution to its shareholders of 80.1% of
Post’s interest in BellRing (the “Distribution” and, together with
the transactions related thereto, the “Spin-off”), resulting in the
calculation of Adjusted EBITDA including 100% of BellRing.
Interest and Income Tax
Interest expense, net was $16.7 million in the
first quarter of 2023, compared to $8.4 million in the first
quarter of 2022. The increase was primarily driven by increases in
the aggregate principal amount of debt outstanding and the
weighted-average interest rate, both of which resulted from the
Spin-off transactions.
Income tax expense was $14.3 million in the first
quarter of 2023, an effective income tax rate of 24.4%, compared to
$2.9 million in the first quarter of 2022, an effective income tax
rate of 6.9%. In the three months ended December 31, 2022, the
increase in the effective income tax rate when compared to the
prior year period was driven primarily by inclusion of 100% of the
items of income, gain, loss and deduction of BellRing LLC in the
period subsequent to the Spin-off. In the three months ended
December 31, 2021, the effective income tax rate differed
significantly from the statutory rate as a result of taking into
account for U.S. federal, state and local income tax purposes its
distributive share of the items of income, gain, loss and deduction
of BellRing LLC in the period prior to the Spin-off.
Share Repurchases
During the first quarter of 2023, BellRing
repurchased 1.8 million shares for $41.2 million at an average
price of $23.33 per share, 0.9 million of which were repurchased in
November in connection with a secondary offering of shares
previously held by Post. As of December 31, 2022, BellRing had
$28.9 million remaining under its share repurchase
authorization.
Post Completes Exit of BellRing
Ownership
On November 25, 2022, Post transferred all of its
remaining shares of BellRing common stock to certain financial
institutions in satisfaction of certain indebtedness of Post. As a
result, Post no longer owns any shares of BellRing’s common
stock.
Basis of Presentation
On March 10, 2022, Post’s distribution to its
shareholders of 80.1% of its interest in BellRing was completed.
From October 21, 2019 through March 10, 2022, BellRing allocated a
portion of the consolidated net earnings of BellRing LLC to its
redeemable NCI, reflecting the entitlement of Post to a portion of
the consolidated net earnings. Subsequent to the Spin-off, any
remaining ownership of BellRing by Post no longer represented an
NCI to BellRing LLC.
Outlook
For fiscal year 2023, BellRing management continues
to expect net sales to range between $1.56-$1.64 billion and has
raised its Adjusted EBITDA outlook to range between $306-$325
million (resulting in net sales and Adjusted EBITDA growth of
14%-20% and 13%-20%, respectively, over fiscal year 2022). BellRing
management expects fiscal year 2023 capital expenditures of
approximately $4 million.
BellRing provides Adjusted EBITDA guidance only on
a non-GAAP basis and does not provide a reconciliation of its
forward-looking Adjusted EBITDA non-GAAP guidance measure to the
most directly comparable GAAP measure due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliation, including adjustments that could
be made for separation costs and other charges reflected in
BellRing’s reconciliation of historical numbers, the amounts of
which, based on historical experience, could be significant. For
additional information regarding BellRing’s non-GAAP measures, see
the related explanations presented under “Use of Non-GAAP
Measures.”
Use of Non-GAAP Measures
BellRing uses certain non-GAAP measures in this
release to supplement the financial measures prepared in accordance
with U.S. generally accepted accounting principles (“GAAP”). These
non-GAAP measures include Adjusted net earnings available to common
stockholders, Adjusted diluted earnings per share of common stock
and Adjusted EBITDA. The reconciliation of each of these non-GAAP
measures to the most directly comparable GAAP measure is provided
later in this release under “Explanation and Reconciliation of
Non-GAAP Measures.”
Management uses certain of these non-GAAP measures,
including Adjusted EBITDA, as key metrics in the evaluation of
underlying company performance, in making financial, operating and
planning decisions and, in part, in the determination of bonuses
for its executive officers and employees. Additionally, BellRing is
required to comply with certain covenants and limitations that are
based on variations of EBITDA in its financing documents.
Management believes the use of these non-GAAP measures provides
increased transparency and assists investors in understanding the
underlying operating performance of BellRing and in the analysis of
ongoing operating trends. Non-GAAP measures are not prepared
in accordance with GAAP, as they exclude certain items as described
later in this release. These non-GAAP measures may not be
comparable to similarly titled measures of other companies. For
additional information regarding BellRing’s non-GAAP measures, see
the related explanations provided under “Explanation and
Reconciliation of Non-GAAP Measures” later in this release.
Conference Call to Discuss Earnings Results
and Outlook
BellRing will host a conference call on Tuesday,
February 7, 2023 at 9:00 a.m. EST to discuss financial results for
the first quarter of fiscal year 2023 and fiscal year 2023 outlook
and to respond to questions. Darcy H. Davenport, President and
Chief Executive Officer, and Paul A. Rode, Chief Financial Officer,
will participate in the call.
Interested parties may join the conference call by
dialing (800) 245-3047 in the United States and (203) 518-9783 from
outside of the United States. The conference identification number
is BRBRQ123. Interested parties are invited to listen to the
webcast of the conference call, which can be accessed by visiting
the Investor Relations section of BellRing’s website at
www.bellring.com. A slide presentation containing supplemental
material will also be available at the same location on BellRing’s
website.
A replay of the conference call will be available
through Tuesday, February 14, 2023 by dialing (800) 695-0671 in the
United States and (402) 220-1397 from outside of the United States.
A webcast replay also will be available for a limited period on
BellRing’s website in the Investor Relations section.
Prospective Financial
Information
Prospective financial information is necessarily
speculative in nature, and it can be expected that some or all of
the assumptions underlying the prospective financial information
described above will not materialize or will vary significantly
from actual results. For further discussion of some of the factors
that may cause actual results to vary materially from the
information provided above, see “Forward-Looking Statements” below.
Accordingly, the prospective financial information provided above
is only an estimate of what BellRing’s management believes is
realizable as of the date of this release. It also should be
recognized that the reliability of any forecasted financial data
diminishes the farther in the future that the data is forecasted.
In light of the foregoing, the information should be viewed in
context and undue reliance should not be placed upon it.
Forward-Looking Statements
Certain matters discussed in this release and on
BellRing’s conference call are forward-looking statements,
including BellRing’s net sales and Adjusted EBITDA and capital
expenditures outlook for fiscal year 2023. These
forward-looking statements are sometimes identified from the use of
forward-looking words such as “believe,” “should,” “could,”
“potential,” “continue,” “expect,” “project,” “estimate,”
“predict,” “anticipate,” “aim,” “intend,” “plan,” “forecast,”
“target,” “is likely,” “will,” “can,” “may” or “would” or the
negative of these terms or similar expressions, and include all
statements regarding future performance, earnings projections,
events or developments. There are a number of risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements made herein. These risks and
uncertainties include, but are not limited to, the following:
- BellRing’s dependence on sales from its RTD protein
shakes;
- BellRing’s ability to continue to compete in its product
categories and its ability to retain its market position and
favorable perceptions of its brands;
- disruptions or inefficiencies in BellRing’s supply chain,
including as a result of BellRing’s reliance on third party
suppliers or manufacturers for the manufacturing of many of its
products, pandemics (including the COVID-19 pandemic) and other
outbreaks of contagious diseases, labor shortages, fires and
evacuations related thereto, changes in weather conditions, natural
disasters, agricultural diseases and pests and other events beyond
BellRing’s control;
- BellRing’s dependence on a limited number of third party
contract manufacturers for the manufacturing of most of its
products, including one manufacturer for the majority of its RTD
protein shakes;
- the ability of BellRing’s third party contract manufacturers to
produce an amount of BellRing’s products that enables BellRing to
meet customer and consumer demand for the products;
- BellRing’s reliance on a limited number of third party
suppliers to provide certain ingredients and packaging;
- significant volatility in the cost or availability of inputs to
BellRing’s business (including freight, raw materials, packaging,
energy, labor and other supplies);
- the impact of the COVID-19 pandemic, including negative impacts
on the global economy and capital markets, the health of BellRing’s
employees, BellRing’s ability and the ability of its third party
contract manufacturers to manufacture and deliver its products,
operating costs, demand for its on-the-go products and its
operations generally;
- BellRing’s ability to anticipate and respond to changes in
consumer and customer preferences and behaviors and introduce new
products;
- consolidation in BellRing’s distribution channels;
- BellRing’s ability to expand existing market penetration and
enter into new markets;
- the loss of, a significant reduction of purchases by or the
bankruptcy of a major customer;
- legal and regulatory factors, such as compliance with existing
laws and regulations, as well as new laws and regulations and
changes to existing laws and regulations and interpretations
thereof, affecting BellRing’s business, including current and
future laws and regulations regarding food safety, advertising,
labeling, tax matters and environmental matters;
- fluctuations in BellRing’s business due to changes in its
promotional activities and seasonality;
- BellRing’s ability to maintain the net selling prices of its
products and manage promotional activities with respect to its
products;
- BellRing’s leverage, its ability to obtain additional financing
(including both secured and unsecured debt) and its ability to
service its outstanding debt (including covenants that restrict the
operation of its business);
- the accuracy of BellRing’s market data and attributes and
related information;
- changes in estimates in critical accounting judgments;
- uncertain or unfavorable economic conditions that limit
customer and consumer demand for BellRing’s products or increase
its costs;
- risks related to BellRing’s ongoing relationship with Post
following BellRing’s separation from Post and the Spin-off,
including BellRing’s obligations under various agreements with
Post;
- conflicting interests or the appearance of conflicting
interests resulting from certain of BellRing’s directors also
serving as officers or directors of Post;
- risks related to the previously completed Spin-off, including
BellRing’s inability to take certain actions because such actions
could jeopardize the tax-free status of the Distribution and
BellRing’s possible responsibility for U.S. federal tax liabilities
related to the Distribution;
- the ultimate impact litigation or other regulatory matters may
have on BellRing;
- risks associated with BellRing’s international business;
- BellRing’s ability to protect its intellectual property and
other assets and to continue to use third party intellectual
property subject to intellectual property licenses;
- costs, business disruptions and reputational damage associated
with information technology failures, cybersecurity incidents
and/or information security breaches;
- impairment in the carrying value of goodwill or other
intangibles;
- BellRing’s ability to identify, complete and integrate or
otherwise effectively execute acquisitions or other strategic
transactions and effectively manage its growth;
- BellRing’s ability to satisfy the requirements of Section 404
of the Sarbanes-Oxley Act of 2002;
- significant differences in BellRing’s actual operating results
from any guidance BellRing may give regarding its performance;
- BellRing’s ability to hire and retain talented personnel,
employee absenteeism, labor strikes, work stoppages or unionization
efforts; and
- other risks and uncertainties described in BellRing’s filings
with the Securities and Exchange Commission.
These forward-looking statements represent
BellRing’s judgment as of the date of this release. BellRing
disclaims, however, any intent or obligation to update these
forward-looking statements.
About BellRing Brands, Inc.
BellRing Brands, Inc. is a rapidly growing leader
in the global convenient nutrition category offering ready-to-drink
shake and powder protein products. Its primary brands, Premier
Protein® and Dymatize®, appeal to a broad range of consumers and
are distributed across a diverse network of channels including
club, food, drug, mass, eCommerce, specialty and convenience.
BellRing’s commitment to consumers is to strive to make highly
effective products that deliver best-in-class nutritionals and
superior taste. For more information, visit www.bellring.com.
Contact:Investor RelationsJennifer
Meyerjennifer.meyer@bellringbrands.com(314) 644-7665
Media RelationsLisa
Hanlylisa.hanly@bellringbrands.com(314) 665-3180
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)(in
millions, except for per share data)
|
|
|
Three Months Ended December 31, |
|
|
2022 |
|
|
2021 |
Net
Sales |
$ |
362.7 |
|
$ |
306.5 |
Cost of goods sold |
|
240.9 |
|
|
214.2 |
Gross
Profit |
|
121.8 |
|
|
92.3 |
Selling, general and
administrative expenses |
|
41.7 |
|
|
36.8 |
Amortization of intangible
assets |
|
4.9 |
|
|
4.9 |
Operating
Profit |
|
75.2 |
|
|
50.6 |
Interest expense, net |
|
16.7 |
|
|
8.4 |
Earnings before Income
Taxes |
|
58.5 |
|
|
42.2 |
Income tax expense |
|
14.3 |
|
|
2.9 |
Net Earnings Including
Redeemable Noncontrolling Interest |
|
44.2 |
|
|
39.3 |
Less: Net earnings
attributable to redeemable noncontrolling interest |
|
— |
|
|
31.1 |
Net Earnings Available
to Common Stockholders |
$ |
44.2 |
|
$ |
8.2 |
|
|
|
|
Earnings per share of
Common Stock: |
|
|
|
Basic |
$ |
0.33 |
|
$ |
0.21 |
Diluted |
$ |
0.33 |
|
$ |
0.21 |
|
|
|
|
Weighted-Average shares of Common Stock
Outstanding: |
|
|
Basic |
|
134.9 |
|
|
39.4 |
Diluted |
|
135.1 |
|
|
39.6 |
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)(in millions)
|
|
|
|
|
December 31, 2022 |
|
September 30, 2022 |
|
|
|
|
ASSETS |
Current
Assets |
|
|
|
Cash and cash equivalents |
$ |
43.9 |
|
|
$ |
35.8 |
|
Receivables, net |
|
182.0 |
|
|
|
173.3 |
|
Inventories |
|
212.7 |
|
|
|
199.8 |
|
Prepaid expenses and other current assets |
|
15.4 |
|
|
|
12.4 |
|
Total Current Assets |
|
454.0 |
|
|
|
421.3 |
|
|
|
|
|
Property, net |
|
8.5 |
|
|
|
8.0 |
|
Goodwill |
|
65.9 |
|
|
|
65.9 |
|
Intangible assets, net |
|
198.5 |
|
|
|
203.3 |
|
Other assets |
|
8.1 |
|
|
|
8.7 |
|
Total Assets |
$ |
735.0 |
|
|
$ |
707.2 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
Current
Liabilities |
|
|
|
Accounts payable |
$ |
94.4 |
|
|
$ |
93.8 |
|
Other current liabilities |
|
54.7 |
|
|
|
49.7 |
|
Total Current Liabilities |
|
149.1 |
|
|
|
143.5 |
|
|
|
|
|
Long-term debt |
|
944.8 |
|
|
|
929.5 |
|
Deferred income taxes |
|
3.6 |
|
|
|
2.2 |
|
Other liabilities |
|
7.8 |
|
|
|
8.2 |
|
Total Liabilities |
|
1,105.3 |
|
|
|
1,083.4 |
|
|
|
|
|
Stockholders’
Deficit |
|
|
|
Common stock |
|
1.4 |
|
|
|
1.4 |
|
Additional paid-in capital |
|
8.4 |
|
|
|
7.0 |
|
Accumulated deficit |
|
(311.4 |
) |
|
|
(355.6 |
) |
Accumulated other comprehensive loss |
|
(2.8 |
) |
|
|
(4.3 |
) |
Treasury stock, at cost |
|
(65.9 |
) |
|
|
(24.7 |
) |
Total Stockholders’ Deficit |
|
(370.3 |
) |
|
|
(376.2 |
) |
Total Liabilities and Stockholders’ Deficit |
$ |
735.0 |
|
|
$ |
707.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED CONDENSED CONSOLIDATED CASH
FLOWS INFORMATION (Unaudited)(in
millions)
|
|
|
Three Months Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
Cash provided by (used
in): |
|
|
|
Operating activities |
$ |
36.3 |
|
|
$ |
(9.1 |
) |
Investing activities |
|
(0.3 |
) |
|
|
(0.6 |
) |
Financing activities |
|
(28.4 |
) |
|
|
(112.5 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
0.5 |
|
|
|
— |
|
Net increase
(decrease) in cash and cash equivalents |
$ |
8.1 |
|
|
$ |
(122.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPLANATION AND RECONCILIATION OF
NON-GAAP MEASURES
BellRing uses certain non-GAAP measures in this
release to supplement the financial measures prepared in accordance
with U.S. generally accepted accounting principles (“GAAP”). These
non-GAAP measures include Adjusted net earnings available to common
stockholders, Adjusted diluted earnings per share of common stock
and Adjusted EBITDA. The reconciliation of each of these non-GAAP
measures to the most directly comparable GAAP measure is provided
in the tables following this section. Non-GAAP measures are not
prepared in accordance with GAAP, as they exclude certain items as
described below. These non-GAAP measures may not be comparable to
similarly titled measures of other companies.
Adjusted net earnings available to common
stockholders and Adjusted diluted earnings per share of common
stockBellRing believes Adjusted net earnings available to common
stockholders and Adjusted diluted earnings per share of common
stock are useful to investors in evaluating BellRing’s operating
performance because they exclude items that affect the
comparability of BellRing’s financial results and could potentially
distort an understanding of the trends in business performance.
Adjusted net earnings available to common
stockholders and Adjusted diluted earnings per share of common
stock are adjusted for the following items:
a. |
Separation costs: BellRing has excluded certain expenses incurred
in connection with (i) Post’s distribution of 80.1% of its interest
in BellRing and (ii) secondary offerings of shares of BellRing
common stock previously held by Post, as the amount and frequency
of such expenses are not consistent. Additionally, BellRing
believes that these costs do not reflect expected ongoing future
operating expenses and do not contribute to a meaningful evaluation
of BellRing’s current operating performance or comparisons of
BellRing’s operating performance to other periods. |
b. |
Foreign currency gain/loss on intercompany loans: BellRing has
excluded the impact of foreign currency fluctuations related to
intercompany loans denominated in currencies other than the
functional currency of the respective legal entity in evaluating
BellRing’s performance to allow for more meaningful comparisons of
performance to other periods. |
c. |
Mark-to-market adjustments on commodity hedges: BellRing has
excluded the impact of mark-to-market adjustments on commodity
hedges due to the inherent uncertainty and volatility associated
with such amounts based on changes in assumptions with respect to
fair value estimates. Additionally, these adjustments are primarily
non-cash items and the amount and frequency of such adjustments are
not consistent. |
d. |
NCI adjustment: BellRing has included an adjustment to reflect the
removal of non-GAAP adjustments which are attributable to
redeemable NCI in the period prior to the Spin-off in the
calculation of Adjusted net earnings available to common
stockholders and Adjusted diluted earnings per share of common
stock, as BellRing believes this adjustment contributes to a more
meaningful evaluation of BellRing’s current operating
performance. |
e. |
Income tax effect on adjustments: BellRing has included the income
tax impact of the non-GAAP adjustments using a rate described in
the applicable footnote of the reconciliation tables, as BellRing
believes that its GAAP effective income tax rate as reported is not
representative of the income tax expense impact of the
adjustments. |
Adjusted EBITDABellRing believes that Adjusted EBITDA is useful
to investors in evaluating BellRing’s operating performance and
liquidity because (i) BellRing believes it is widely used to
measure a company’s operating performance without regard to items
such as depreciation and amortization, which can vary depending
upon accounting methods and the book value of assets, (ii) it
presents a measure of corporate performance exclusive of BellRing’s
capital structure and the method by which the assets were acquired
and (iii) it is a financial indicator of a company’s ability to
service its debt, as BellRing is required to comply with certain
covenants and limitations that are based on variations of EBITDA in
its financing documents. Management uses Adjusted EBITDA to provide
forward-looking guidance and to forecast future results.
Adjusted EBITDA reflects adjustments for income tax
expense, interest expense, net and depreciation and amortization,
and the following adjustments discussed above: separation costs,
foreign currency gain/loss on intercompany loans and mark-to-market
adjustments on commodity hedges. Additionally, Adjusted EBITDA
reflects adjustments for the following items:
f. |
Stock-based compensation: BellRing’s compensation strategy includes
the use of BellRing stock-based compensation to attract and retain
executives and employees by aligning their long-term compensation
interests with BellRing’s stockholders’ investment interests.
BellRing’s director compensation strategy includes an election by
any director who earns retainers in which the director may elect to
defer compensation granted as a director to BellRing common stock,
earning a match on the deferral, both of which are stock-settled
upon the director’s retirement from the BellRing board of
directors. BellRing has excluded stock-based compensation as
stock-based compensation can vary significantly based on reasons
such as the timing, size and nature of the awards granted and
subjective assumptions which are unrelated to operational decisions
and performance in any particular period and does not contribute to
meaningful comparisons of BellRing’s operating performance to other
periods. |
g. |
Net earnings attributable to redeemable noncontrolling interest:
BellRing has included adjustments for the portion of its
consolidated net earnings which were allocated to redeemable NCI
for the period prior to the Spin-off, allowing for the calculation
of Adjusted EBITDA to include 100% of BellRing as BellRing’s
management evaluates BellRing’s operating performance on a basis
that includes 100% of BellRing. |
|
|
|
|
RECONCILIATION OF NET EARNINGS AVAILABLE
TO COMMON STOCKHOLDERSTO ADJUSTED NET EARNINGS
AVAILABLE TO COMMON STOCKHOLDERS (Unaudited)(in
millions)
|
|
|
Three Months Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
Net Earnings Available
to Common Stockholders |
$ |
44.2 |
|
|
$ |
8.2 |
|
Dilutive impact of net
earnings attributable to NCI |
|
— |
|
|
|
0.1 |
|
Net Earnings Available
to Common Stockholders for Diluted Earnings per Share |
|
44.2 |
|
|
|
8.3 |
|
|
|
|
|
Adjustments: |
|
|
|
Separation costs |
|
0.3 |
|
|
|
2.0 |
|
Mark-to-market adjustments on commodity hedges |
|
1.2 |
|
|
|
(0.3 |
) |
Foreign currency (gain) loss on intercompany loans |
|
(0.6 |
) |
|
|
0.2 |
|
NCI adjustment |
|
— |
|
|
|
0.1 |
|
Total Net Adjustments |
|
0.9 |
|
|
|
2.0 |
|
Income tax effect on
adjustments (1) |
|
(0.2 |
) |
|
|
(0.2 |
) |
Adjusted Net Earnings
Available to Common Stockholders |
$ |
44.9 |
|
|
$ |
10.1 |
|
|
|
|
|
(1) For the period
subsequent to the Spin-off (October 1, 2022 through December 31,
2022), income tax effect on adjustments was calculated on all
items, except for separation costs, using a rate of 24.0%. For the
period prior to the Spin-off (October 1, 2021 through December 31,
2021), income tax effect on adjustments was calculated on all
items, except for separation costs and NCI adjustment, using a rate
of 7.0%, which represents the effective income tax rate on
BellRing’s distributive share from BellRing LLC. For the period
prior to the Spin-off, income tax effect for NCI adjustment was
calculated using a rate of 0.0%. For all periods, income tax effect
for separation costs was calculated using a rate of 8.0%. |
|
|
RECONCILIATION OF DILUTED EARNINGS PER
SHARE OF COMMON STOCK TO ADJUSTED DILUTED EARNINGS
PER SHARE OF COMMON STOCK (Unaudited)
|
|
|
Three Months Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
Diluted Earnings per
share of Common Stock |
$ |
0.33 |
|
|
$ |
0.21 |
|
|
|
|
|
Adjustments: |
|
|
|
Separation costs |
|
— |
|
|
|
0.05 |
|
Mark-to-market adjustments on commodity hedges |
|
0.01 |
|
|
|
(0.01 |
) |
Foreign currency (gain) loss on intercompany loans |
|
(0.01 |
) |
|
|
0.01 |
|
Total Net Adjustments |
|
— |
|
|
|
0.05 |
|
Income tax effect on
adjustments (1) |
|
— |
|
|
|
— |
|
Adjusted Diluted
Earnings per share of Common Stock |
$ |
0.33 |
|
|
$ |
0.26 |
|
|
|
|
|
(1) For the period
subsequent to the Spin-off (October 1, 2022 through December 31,
2022), income tax effect on adjustments was calculated on all
items, except for separation costs, using a rate of 24.0%. For the
period prior to the Spin-off (October 1, 2021 through December 31,
2021), income tax effect on adjustments was calculated on all
items, except for separation costs and NCI adjustment, using a rate
of 7.0%, which represents the effective income tax rate on
BellRing’s distributive share from BellRing LLC. For the period
prior to the Spin-off, income tax effect for NCI adjustment was
calculated using a rate of 0.0%. For all periods, income tax effect
for separation costs was calculated using a rate of 8.0%. |
|
|
RECONCILIATION OF NET EARNINGS AVAILABLE
TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA
(Unaudited)(in millions)
|
|
|
Three Months Ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
Net Earnings Available
to Common Stockholders |
$ |
44.2 |
|
|
$ |
8.2 |
|
Income tax expense |
|
14.3 |
|
|
|
2.9 |
|
Interest expense, net |
|
16.7 |
|
|
|
8.4 |
|
Depreciation and
amortization |
|
5.3 |
|
|
|
5.3 |
|
Stock-based compensation |
|
3.5 |
|
|
|
2.0 |
|
Separation costs |
|
0.3 |
|
|
|
2.0 |
|
Mark-to-market adjustments on
commodity hedges |
|
1.2 |
|
|
|
(0.3 |
) |
Foreign currency (gain) loss
on intercompany loans |
|
(0.6 |
) |
|
|
0.2 |
|
Net earnings attributable to
redeemable noncontrolling interest |
|
— |
|
|
|
31.1 |
|
Adjusted
EBITDA |
$ |
84.9 |
|
|
$ |
59.8 |
|
Adjusted EBITDA as a
percentage of Net Sales |
|
23.4 |
% |
|
|
19.5 |
% |
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