CHICAGO, April 5,
2023 /PRNewswire/ -- Today Conagra Brands, Inc.
(NYSE: CAG) reported results for the third quarter of fiscal
year 2023, which ended on February 26,
2023. All comparisons are against the prior-year fiscal
period, unless otherwise noted.
Highlights
- Third quarter net sales increased 5.9%; organic net sales
increased 6.1%
- Operating margin increased 355 basis points in the quarter to
15.9%; adjusted operating margin increased 321 basis points to
16.9%
- Diluted earnings per share (EPS) for the third quarter
increased 57.8% to $0.71, and
adjusted EPS increased 31.0% to $0.76
- The company is updating its fiscal 2023 guidance to
reflect:
-
- Organic net sales growth of 7% to 7.5% compared to fiscal
2022
- Adjusted operating margin between 15.5% and 15.6%
- Adjusted EPS between $2.70 and
$2.75 representing growth of 14% to
17% compared to fiscal 2022
CEO Perspective
Sean
Connolly, president and chief executive officer of Conagra
Brands, commented, "We delivered another quarter of strong
results reflecting the ongoing strength of our brands and
successful execution of the Conagra Way playbook. Our top-line
posted solid growth as we demonstrated strong pricing execution
with modest elasticities. Additionally, our productivity and
service level improvement allowed us to continue to make meaningful
progress on our adjusted gross margin and adjusted operating margin
recovery, despite more impactful supply chain disruptions than
anticipated. In response to our continued business momentum and
ongoing operating dynamics, we are raising our fiscal 2023
EPS guidance and narrowing our ranges for organic net sales
growth and adjusted operating margin. We remain committed to
executing on our strategic business priorities
including generating value for our shareholders."
Total Company Third Quarter Results
In the
quarter, net sales increased 5.9% to $3.1 billion.
The increase in net sales primarily reflects:
- a 0.2% decrease from the unfavorable impact of foreign
exchange; and
- a 6.1% increase in organic net sales.
The 6.1% increase in organic net sales was driven by
a 15.1% improvement in price/mix, which was partially offset
by a 9.0% decrease in volume. Price/mix was driven by the
company's inflation-driven pricing actions. The volume
decrease was primarily driven by the elasticity impact from
inflation-driven pricing actions and supply chain, including
manufacturing disruptions.
Gross profit increased 20.3% to $839 million in
the quarter, and adjusted gross profit increased 23.9%
to $869 million. Third quarter gross profit benefited
from higher organic net sales and productivity, which more
than offset the negative impacts of cost of goods sold inflation
(including unfavorable commodity positions) and unfavorable
operating leverage. Gross margin increased 325 basis
points to 27.2% in the quarter, and adjusted gross
margin increased 409 basis points to 28.1%.
Selling, general, and administrative expense (SG&A), which
includes advertising and promotional expense
(A&P), increased 3.2% to $349 million in the
quarter and adjusted SG&A, which excludes
A&P, increased 12.4% to $266 million driven by
increased incentive compensation compared to the prior
year quarter.
A&P for the quarter
increased 23.9% to $81 million, driven
primarily by increased investment in modern marketing, including
social and digital platforms.
Net interest expense was $104 million in the quarter.
Compared to the prior-year period, net interest
expense increased 10.3% or $10 million, primarily
due to a higher weighted average interest rate on outstanding
debt.
The average diluted share count in the quarter was 479
million shares.
In the quarter, net income attributable to Conagra Brands
increased 56.4% to $342 million, or $0.71 per
diluted share. Adjusted net income attributable to Conagra
Brands increased 31.3% to $366 million,
or $0.76 per diluted share. The increase was driven
primarily by the increase in gross profit.
Adjusted EBITDA, which includes equity method investment
earnings and pension and postretirement non-service
income, increased 21.1% to $669 million in the
quarter, primarily driven by the increase in adjusted gross
profit, slightly offset by lower pension income.
Grocery & Snacks Segment Third Quarter
Results
Reported and organic net sales for the Grocery &
Snacks segment increased 3.7% to $1.2 billion in the
quarter.
In the quarter, price/mix increased 13.7% and
volume decreased 10.0%. Price/mix was driven by
favorability in inflation-driven pricing. The volume decrease was
primarily driven by the elasticity impact from inflation-driven
pricing actions and shortages from supply chain
disruptions. In the quarter, the company gained share in
snacking categories including meat snacks and microwave popcorn,
and some staples categories including refried beans and Asian
sauces and marinades.
Operating profit for the segment increased 10.8%
to $256 million in the quarter. Adjusted operating
profit increased 8.0% to $257 million as higher
organic net sales and productivity more than offset the negative
impacts of cost of goods sold inflation (including unfavorable
commodity positions), continued elevated supply chain costs,
and increased A&P and SG&A.
Refrigerated & Frozen Segment Third Quarter
Results
Reported and organic net sales for the Refrigerated
& Frozen segment increased 5.6% to $1.3 billion
in the quarter.
In the quarter, price mix increased 15.4% and
volume decreased 9.8%. Price/mix was driven by
favorability in inflation-driven pricing. The volume decrease was
primarily driven by the elasticity impact from inflation-driven
pricing actions and shortages from supply chain
disruptions. In the quarter, the company gained share in
categories such as frozen sides, plant-based protein, and frozen
breakfast sausage.
Operating profit for the segment
increased 66.9% to $264 million in the quarter.
Adjusted operating profit increased 53.8% to $271
million as higher organic net sales and productivity more than
offset the negative impacts of cost of goods sold
inflation (including unfavorable commodity positions),
unfavorable operating leverage, and increased A&P and
SG&A.
International Segment Third Quarter Results
Net
sales for the International segment increased 7.7%
to $260 million in the quarter reflecting:
- a 1.8% decrease from the unfavorable impact of foreign
exchange; and
- a 9.5% increase in organic net sales.
On an organic net sales basis,
price/mix increased 16.5% and
volume decreased 7.0%. Price/mix was driven by
inflation-driven pricing. The volume decrease was primarily a
result of the elasticity impact from inflation-driven pricing
actions.
Operating profit for the segment increased 24.3%
to $37 million in the quarter. Adjusted operating
profit increased 23.9% to $37 million as the
benefits from higher organic net sales
and productivity were more than offset by the
negative impact of cost of goods sold inflation (including
unfavorable commodity positions), unfavorable operating
leverage and continued elevated supply chain costs.
Foodservice Segment Third Quarter
Results
Reported and organic net sales for the Foodservice
segment increased 17.3% to $275 million in the
quarter.
In the quarter, price/mix increased 18.5% and
volume decreased 1.2%. Price/mix was driven
by inflation-driven pricing. The volume decline was primarily
a result of the elasticity impact from inflation-driven pricing
actions.
Operating profit for the segment increased 409.6%
to $24 million and adjusted operating
profit increased 69.7% to $25 million in the quarter
as the benefits of higher organic net sales and productivity more
than offset the impacts of cost of goods sold inflation (including
unfavorable commodity positions) and unfavorable operating
leverage.
Other Third Quarter Items
Corporate
expenses increased 40.3% to $91 million in the
quarter and adjusted corporate expense increased 14.3%
to $68 million in the quarter driven by increased
incentive compensation compared to the prior year quarter.
Pension and post-retirement non-service income was $6
million in the quarter compared to $16 million of income in
the prior-year period.
In the quarter, equity method investment earnings were $51
million driven by continued favorable market conditions for the
Ardent Mills joint venture, and the venture's effective management
through recent volatility in the wheat markets.
In the quarter, the effective tax rate was 22.6% compared
to 33.4% in the prior-year period. The adjusted effective tax
rate was 22.8% compared to 24.4% in the prior-year
period.
In the quarter, the company paid a dividend of $0.33 per share.
Outlook
The company is raising its full year fiscal
2023 adjusted EPS outlook and narrowing its guidance ranges on
organic net sales growth and adjusted operating margin in response
to year-to-date trends.
The company's updated fiscal 2023 guidance is as
follows:
- Organic net sales growth is expected to be 7% to 7.5% compared
to fiscal 2022
- Adjusted operating margin is expected to be between 15.5% and
15.6%
- Adjusted EPS is expected to be between $2.70 and $2.75,
representing growth of 14% to 17% compared to fiscal 2022
- Net Leverage Ratio of approximately 3.65x
- Capital expenditures of approximately $370M
- Interest expense of approximately $410M
- Adjusted effective tax rate of approximately 24%
- Pension income of approximately $25M
The inability to predict the amount and timing of the impacts of
foreign exchange, acquisitions, divestitures, and other items
impacting comparability makes a detailed reconciliation of
forward-looking non-GAAP financial measures impracticable. Please
see the end of this release for more information.
Items Affecting Comparability of EPS
The following are
included in the $0.71 EPS for the third quarter of
fiscal 2023 (EPS amounts are rounded and after tax).
Please see the reconciliation schedules at the end of this release
for additional details.
- Approximately $0.01 per diluted
share of net expense due to fire related costs
- Approximately $0.04 per diluted
share of net expense related to corporate hedging derivative
losses
The following are included in the $0.45 EPS for the third quarter of fiscal 2022
(EPS amounts are rounded and after tax). Please see the
reconciliation schedules at the end of this release for additional
details.
- Approximately $0.02 per diluted
share of net expense related to restructuring plans
- Approximately $0.06 per diluted
share of net expense related to impairment of businesses held for
sale
- Approximately $0.05 per diluted
share of net expense related to unusual tax items
Please note that certain prior year amounts have been
reclassified to conform with current year presentation.
Discussion of Results
Conagra Brands will host a
webcast and conference call at 9:30 a.m.
Eastern time today to discuss the results. The live audio
webcast and presentation slides will be available on
www.conagrabrands.com/investor-relations under Events &
Presentations. The conference call may be accessed by dialing
1-877-883-0383 for participants in the U.S. and 1-412-902-6506 for
all other participants and using passcode 2483233. Please dial in
10 to 15 minutes prior to the call start time. Following the
company's remarks, the conference call will include a
question-and-answer session with the investment community. A replay
of the webcast will be available on
www.conagrabrands.com/investor-relations under Events &
Presentations until April 5,
2024.
About Conagra Brands
Conagra Brands, Inc. (NYSE: CAG),
headquartered in Chicago, is one
of North America's leading branded
food companies. Guided by an entrepreneurial spirit, Conagra Brands
combines a rich heritage of making great food with a sharpened
focus on innovation. The company's portfolio is evolving to satisfy
people's changing food preferences. Conagra's iconic brands, such
as Birds Eye®, Duncan Hines®, Healthy Choice®,
Marie Callender's®, Reddi-wip®, and Slim Jim®, as well as
emerging brands, including Angie's® BOOMCHICKAPOP®, Duke's®, Earth
Balance®, Gardein®, and Frontera®, offer choices for every
occasion. For more information, visit www.conagrabrands.com.
Note on Forward-Looking Statements
This document
contains forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements are based
on management's current expectations and are subject to uncertainty
and changes in circumstances. Readers of this document should
understand that these statements are not guarantees of performance
or results. Many factors could affect our actual financial results
and cause them to vary materially from the expectations contained
in the forward-looking statements, including those set forth in
this document. These risks, uncertainties, and factors include,
among other things: the risk that the cost savings and any other
synergies from the acquisition of Pinnacle Foods Inc. (the Pinnacle
acquisition) may not be fully realized or may take longer to
realize than expected; the risk that the Pinnacle acquisition may
not be accretive within the expected timeframe or to the extent
anticipated; the risks that the Pinnacle acquisition and related
integration will create disruption to the company and its
management and impede the achievement of business plans; risks
related to our ability to achieve the intended benefits of other
recent acquisitions and divestitures; risks associated with general
economic and industry conditions; risks associated with our ability
to successfully execute our long-term value creation strategies;
risks related to our ability to deleverage on currently anticipated
timelines, and to continue to access capital on acceptable terms or
at all; risks related to our ability to execute operating and
restructuring plans and achieve targeted operating efficiencies
from cost-saving initiatives, and to benefit from trade
optimization programs; risks related to the effectiveness of our
hedging activities and ability to respond to volatility in
commodities; risks related to the company's competitive environment
and related market conditions; risks related to our ability to
respond to changing consumer preferences and the success of our
innovation and marketing investments; risks related to the ultimate
impact of any product recalls and litigation, including litigation
related to the lead-based paint and pigment matters, as well as any
securities litigation, including securities class action lawsuits;
risk associated with actions of governments and regulatory bodies
that affect our businesses, including the ultimate impact of new or
revised regulations or interpretations; risks related to the impact
of the COVID-19 pandemic on our business, suppliers, consumers,
customers and employees; risks related to our forecasts of consumer
eat-at-home habits as the impacts of the COVID-19 pandemic abate;
risks related to the availability and prices of supply chain
resources, including raw materials, packaging, and transportation
including any negative effects caused by changes in inflation
rates, weather conditions, health pandemics or outbreaks of
disease, actual or threatened hostilities or war, or other
geopolitical uncertainty; disruptions or inefficiencies in our
supply chain and/or operations, including from the COVID-19
pandemic; risks related to disruptions in the global economy caused
by the ongoing conflict between Russia and Ukraine; risks associated with actions by our
customers, including changes in distribution and purchasing terms;
risks and uncertainties associated with intangible assets,
including any future goodwill or intangible assets impairment
charges; risks related to a material failure in or breach of our or
our vendors' information technology systems; the amount and timing
of future dividends, which remain subject to Board approval and
depend on market and other conditions; risks related to the
company's ability to execute on its strategies or achieve
expectations related to environmental, social, and governance
matters, including as a result of evolving legal, regulatory, and
other standards, processes, and assumptions, the pace of scientific
and technological developments, increased costs, the availability
of requisite financing, and changes in carbon markets, and
other risks described in our reports filed from time to
time with the Securities and Exchange Commission. We caution
readers not to place undue reliance on any forward-looking
statements included in this document, which speak only as of the
date of this document. We undertake no responsibility to update
these statements, except as required by law.
Note on Non-GAAP Financial Measures
This document
includes certain non-GAAP financial measures, including adjusted
EPS, organic net sales, adjusted gross profit, adjusted operating
profit, adjusted SG&A, adjusted corporate expenses, adjusted
gross margin, adjusted operating margin, adjusted effective tax
rate, adjusted net income attributable to Conagra Brands, free cash
flow, net debt, net leverage ratio, and adjusted EBITDA. Management
considers GAAP financial measures as well as such non-GAAP
financial information in its evaluation of the company's financial
statements and believes these non-GAAP financial measures provide
useful supplemental information to assess the company's operating
performance and financial position. These measures should be viewed
in addition to, and not in lieu of, the company's diluted earnings
per share, operating performance and financial measures as
calculated in accordance with GAAP.
Organic net sales excludes, from reported net sales, the impacts
of foreign exchange, divested businesses and acquisitions, as well
as the impact of any 53rd week. All references to changes in
volume and price/mix throughout this release are on an organic net
sales basis.
References to adjusted items throughout this release refer to
measures computed in accordance with GAAP less the impact of items
impacting comparability. Items impacting comparability are income
or expenses (and related tax impacts) that management believes have
had, or are likely to have, a significant impact on the earnings of
the applicable business segment or on the total corporation for the
period in which the item is recognized, and are not indicative of
the company's core operating results. These items thus affect the
comparability of underlying results from period to period.
References to earnings before interest, taxes, depreciation, and
amortization (EBITDA) refer to net income attributable to Conagra
Brands before the impacts of discontinued operations, income tax
expense (benefit), interest expense, depreciation, and
amortization. References to adjusted EBITDA refer to EBITDA before
the impacts of items impacting comparability.
Hedge gains and losses are generally aggregated, and net amounts
are reclassified from unallocated corporate expense to the
operating segments when the underlying commodity or foreign
currency being hedged is expensed in segment cost of goods sold.
The net change in the derivative gains (losses) included in
unallocated corporate expense during the period is reflected as a
comparability item, Corporate hedging derivate gains (losses).
Note on Forward-Looking Non-GAAP Financial
Measures
Our fiscal 2023 guidance includes certain non-GAAP
financial measures (organic net sales growth, adjusted operating
margin, adjusted EPS, net leverage ratio, and adjusted effective
tax rate) that are presented on a forward-looking basis.
Historically, the company has calculated these non-GAAP financial
measures excluding the impact of certain items such as, but not
limited to, foreign exchange, acquisitions, divestitures,
restructuring expenses, the extinguishment of debt, hedging gains
and losses, impairment charges, legacy legal contingencies, and
unusual tax items. Reconciliations of these forward-looking
non-GAAP financial measures to the most directly comparable GAAP
financial measures are not provided because the company is unable
to provide such reconciliations without unreasonable effort, due to
the uncertainty and inherent difficulty of predicting the timing
and financial impact of such items. For the same reasons, the
company is unable to address the probable significance of the
unavailable information, which could be material to future
results.
Conagra Brands,
Inc.
Consolidated Statements
of Earnings
(in
millions)
(unaudited)
|
|
|
|
THIRD
QUARTER
|
|
|
|
Thirteen Weeks
Ended
|
|
|
Thirteen Weeks
Ended
|
|
|
|
|
|
|
|
February 26,
2023
|
|
|
February 27,
2022
|
|
|
Percent
Change
|
|
Net sales
|
|
$
|
3,086.5
|
|
|
$
|
2,913.7
|
|
|
|
5.9
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
2,247.7
|
|
|
|
2,216.5
|
|
|
|
1.4
|
%
|
Selling, general and
administrative expenses
|
|
|
348.8
|
|
|
|
338.0
|
|
|
|
3.2
|
%
|
Pension and
postretirement non-service income
|
|
|
(6.0)
|
|
|
|
(16.1)
|
|
|
|
(62.2)
|
%
|
Interest expense,
net
|
|
|
104.2
|
|
|
|
94.6
|
|
|
|
10.3
|
%
|
Income before income
taxes and equity method investment earnings
|
|
|
391.8
|
|
|
|
280.7
|
|
|
|
39.6
|
%
|
Income tax
expense
|
|
|
100.1
|
|
|
|
109.9
|
|
|
|
(8.9)
|
%
|
Equity method
investment earnings
|
|
|
50.5
|
|
|
|
48.1
|
|
|
|
4.9
|
%
|
Net income
|
|
$
|
342.2
|
|
|
$
|
218.9
|
|
|
|
56.3
|
%
|
Less: Net income
attributable to noncontrolling interests
|
|
|
0.5
|
|
|
|
0.5
|
|
|
|
8.4
|
%
|
Net income attributable
to Conagra Brands, Inc.
|
|
$
|
341.7
|
|
|
$
|
218.4
|
|
|
|
56.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Conagra Brands, Inc.
|
|
$
|
0.72
|
|
|
$
|
0.45
|
|
|
|
60.0
|
%
|
Weighted average shares
outstanding
|
|
|
477.5
|
|
|
|
480.3
|
|
|
|
(0.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Conagra Brands, Inc.
|
|
$
|
0.71
|
|
|
$
|
0.45
|
|
|
|
57.8
|
%
|
Weighted average share
and share equivalents outstanding
|
|
|
479.4
|
|
|
|
482.2
|
|
|
|
(0.6)
|
%
|
Conagra Brands,
Inc.
Consolidated Statements
of Earnings
(in
millions)
(unaudited)
|
|
|
|
THIRD QUARTER YEAR TO
DATE
|
|
|
|
Thirty-Nine
Weeks Ended
|
|
|
Thirty-Nine
Weeks Ended
|
|
|
|
|
|
|
|
February 26,
2023
|
|
|
February 27,
2022
|
|
|
Percent
Change
|
|
Net sales
|
|
$
|
9,303.7
|
|
|
$
|
8,625.9
|
|
|
|
7.9
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
6,822.3
|
|
|
|
6,500.5
|
|
|
|
5.0
|
%
|
Selling, general and
administrative expenses
|
|
|
1,463.1
|
|
|
|
993.5
|
|
|
|
47.3
|
%
|
Pension and
postretirement non-service income
|
|
|
(18.2)
|
|
|
|
(48.3)
|
|
|
|
(62.2)
|
%
|
Interest expense,
net
|
|
|
301.6
|
|
|
|
283.7
|
|
|
|
6.3
|
%
|
Income before income
taxes and equity method investment earnings
|
|
|
734.9
|
|
|
|
896.5
|
|
|
|
(18.0)
|
%
|
Income tax
expense
|
|
|
237.0
|
|
|
|
263.8
|
|
|
|
(10.2)
|
%
|
Equity method
investment earnings
|
|
|
149.0
|
|
|
|
97.8
|
|
|
|
52.3
|
%
|
Net income
|
|
$
|
646.9
|
|
|
$
|
730.5
|
|
|
|
(11.5)
|
%
|
Less: Net income
attributable to noncontrolling interests
|
|
|
0.8
|
|
|
|
1.2
|
|
|
|
(31.2)
|
%
|
Net income attributable
to Conagra Brands, Inc.
|
|
$
|
646.1
|
|
|
$
|
729.3
|
|
|
|
(11.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Conagra Brands, Inc.
|
|
$
|
1.35
|
|
|
$
|
1.52
|
|
|
|
(11.2)
|
%
|
Weighted average shares
outstanding
|
|
|
479.3
|
|
|
|
480.3
|
|
|
|
(0.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Conagra Brands, Inc.
|
|
$
|
1.34
|
|
|
$
|
1.51
|
|
|
|
(11.3)
|
%
|
Weighted average share
and share equivalents outstanding
|
|
|
481.0
|
|
|
|
482.2
|
|
|
|
(0.2)
|
%
|
Conagra Brands,
Inc.
Consolidated Balance
Sheets
(in
millions)
(unaudited)
|
|
|
|
February 26,
2023
|
|
|
May 29, 2022
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
71.2
|
|
|
$
|
83.3
|
|
Receivables, less
allowance for doubtful accounts of $3.7 and $3.9
|
|
|
960.0
|
|
|
|
867.4
|
|
Inventories
|
|
|
2,307.1
|
|
|
|
1,966.7
|
|
Prepaid expenses and
other current assets
|
|
|
116.4
|
|
|
|
116.3
|
|
Total current
assets
|
|
|
3,454.7
|
|
|
|
3,033.7
|
|
Property, plant and
equipment, net
|
|
|
2,702.0
|
|
|
|
2,737.2
|
|
Goodwill
|
|
|
11,178.1
|
|
|
|
11,329.2
|
|
Brands, trademarks and
other intangibles, net
|
|
|
3,564.5
|
|
|
|
3,857.8
|
|
Other assets
|
|
|
1,554.9
|
|
|
|
1,477.2
|
|
|
|
$
|
22,454.2
|
|
|
$
|
22,435.1
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
$
|
658.0
|
|
|
$
|
184.3
|
|
Current installments
of long-term debt
|
|
|
516.6
|
|
|
|
707.3
|
|
Accounts
payable
|
|
|
1,563.9
|
|
|
|
1,864.6
|
|
Accrued
payroll
|
|
|
159.0
|
|
|
|
151.7
|
|
Other accrued
liabilities
|
|
|
663.5
|
|
|
|
610.9
|
|
Total current
liabilities
|
|
|
3,561.0
|
|
|
|
3,518.8
|
|
Senior long-term debt,
excluding current installments
|
|
|
8,081.2
|
|
|
|
8,088.2
|
|
Other noncurrent
liabilities
|
|
|
1,873.7
|
|
|
|
1,965.9
|
|
Total stockholders'
equity
|
|
|
8,938.3
|
|
|
|
8,862.2
|
|
|
|
$
|
22,454.2
|
|
|
$
|
22,435.1
|
|
Conagra Brands, Inc.
and Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(in
millions)
(unaudited)
|
|
|
|
Thirty-Nine
Weeks Ended
|
|
|
Thirty-Nine
Weeks Ended
|
|
|
|
February 26,
2023
|
|
|
February 27,
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
646.9
|
|
|
$
|
730.5
|
|
Adjustments to
reconcile net income to net cash flows from operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
277.0
|
|
|
|
285.6
|
|
Asset impairment
charges
|
|
|
417.7
|
|
|
|
72.7
|
|
Equity method
investment earnings in excess of distributions
|
|
|
(69.8)
|
|
|
|
(59.7)
|
|
Stock-settled
share-based payments expense
|
|
|
68.8
|
|
|
|
26.8
|
|
Contributions to
pension plans
|
|
|
(9.6)
|
|
|
|
(8.6)
|
|
Pension
benefit
|
|
|
(10.4)
|
|
|
|
(38.5)
|
|
Other items
|
|
|
(1.1)
|
|
|
|
(31.6)
|
|
Change in operating
assets and liabilities excluding effects of business acquisitions
and dispositions:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
(96.7)
|
|
|
|
(120.7)
|
|
Inventories
|
|
|
(340.4)
|
|
|
|
(57.0)
|
|
Deferred income taxes
and income taxes payable, net
|
|
|
(58.8)
|
|
|
|
38.4
|
|
Prepaid expenses and
other current assets
|
|
|
2.4
|
|
|
|
(34.7)
|
|
Accounts
payable
|
|
|
(157.9)
|
|
|
|
(12.0)
|
|
Accrued
payroll
|
|
|
7.4
|
|
|
|
(32.4)
|
|
Other accrued
liabilities
|
|
|
53.4
|
|
|
|
19.3
|
|
Deferred employer
payroll taxes
|
|
|
(25.5)
|
|
|
|
(25.5)
|
|
Net cash flows from
operating activities
|
|
|
703.4
|
|
|
|
752.6
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
|
(267.4)
|
|
|
|
(364.2)
|
|
Sale of property,
plant and equipment
|
|
|
3.1
|
|
|
|
18.0
|
|
Purchase of marketable
securities
|
|
|
(3.4)
|
|
|
|
(2.5)
|
|
Sale of marketable
securities
|
|
|
3.4
|
|
|
|
2.4
|
|
Proceeds from
divestitures
|
|
|
—
|
|
|
|
0.1
|
|
Other items
|
|
|
4.1
|
|
|
|
3.3
|
|
Net cash flows from
investing activities
|
|
|
(260.2)
|
|
|
|
(342.9)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Issuances of
short-term borrowings, maturities greater than 90 days
|
|
|
239.5
|
|
|
|
392.6
|
|
Repayment of
short-term borrowings, maturities greater than 90 days
|
|
|
(259.8)
|
|
|
|
(392.6)
|
|
Net issuance
(repayment) of other short-term borrowings, maturities less than or
equal to 90 days
|
|
|
388.2
|
|
|
|
(344.6)
|
|
Issuance of long-term
debt
|
|
|
500.0
|
|
|
|
499.1
|
|
Repayment of long-term
debt
|
|
|
(708.0)
|
|
|
|
(43.1)
|
|
Debt issuance
costs
|
|
|
(4.1)
|
|
|
|
(2.5)
|
|
Repurchase of Conagra
Brands, Inc. common shares
|
|
|
(150.0)
|
|
|
|
(50.0)
|
|
Payment of intangible
asset financing arrangement
|
|
|
—
|
|
|
|
(12.6)
|
|
Cash dividends
paid
|
|
|
(466.4)
|
|
|
|
(431.9)
|
|
Exercise of stock
options and issuance of other stock awards, including tax
withholdings
|
|
|
0.9
|
|
|
|
(14.1)
|
|
Other items
|
|
|
5.2
|
|
|
|
(7.3)
|
|
Net cash flows from
financing activities
|
|
|
(454.5)
|
|
|
|
(407.0)
|
|
Effect of exchange rate
changes on cash and cash equivalents and restricted cash
|
|
|
(0.8)
|
|
|
|
(3.2)
|
|
Net change in cash and
cash equivalents and restricted cash
|
|
|
(12.1)
|
|
|
|
(0.5)
|
|
Cash and cash
equivalents and restricted cash at beginning of period
|
|
|
83.3
|
|
|
|
80.2
|
|
Cash and cash
equivalents and restricted cash at end of period
|
|
$
|
71.2
|
|
|
$
|
79.7
|
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
Q3
FY23
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total
Conagra
Brands
|
|
Net
Sales
|
|
$
|
1,243.7
|
|
|
$
|
1,307.7
|
|
|
$
|
259.7
|
|
|
$
|
275.4
|
|
|
$
|
3,086.5
|
|
Impact of foreign
exchange
|
|
|
—
|
|
|
|
—
|
|
|
|
4.3
|
|
|
|
—
|
|
|
|
4.3
|
|
Organic Net
Sales
|
|
$
|
1,243.7
|
|
|
$
|
1,307.7
|
|
|
$
|
264.0
|
|
|
$
|
275.4
|
|
|
$
|
3,090.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - Net Sales
|
|
|
3.7
|
%
|
|
|
5.6
|
%
|
|
|
7.7
|
%
|
|
|
17.3
|
%
|
|
|
5.9
|
%
|
Impact of foreign
exchange (pp)
|
|
|
—
|
|
|
|
—
|
|
|
|
1.8
|
|
|
|
—
|
|
|
|
0.2
|
|
Organic Net
Sales
|
|
|
3.7
|
%
|
|
|
5.6
|
%
|
|
|
9.5
|
%
|
|
|
17.3
|
%
|
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Organic)
|
|
|
(10.0)
|
%
|
|
|
(9.8)
|
%
|
|
|
(7.0)
|
%
|
|
|
(1.2)
|
%
|
|
|
(9.0)
|
%
|
Price/Mix
|
|
|
13.7
|
%
|
|
|
15.4
|
%
|
|
|
16.5
|
%
|
|
|
18.5
|
%
|
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
FY22
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total
Conagra
Brands
|
|
Net
Sales
|
|
$
|
1,199.0
|
|
|
$
|
1,238.6
|
|
|
$
|
241.2
|
|
|
$
|
234.9
|
|
|
$
|
2,913.7
|
|
Net sales from divested
businesses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Organic Net
Sales
|
|
$
|
1,199.0
|
|
|
$
|
1,238.6
|
|
|
$
|
241.2
|
|
|
$
|
234.9
|
|
|
$
|
2,913.7
|
|
|
|
Q3 FY23
YTD
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total
Conagra
Brands
|
|
Net
Sales
|
|
$
|
3,781.9
|
|
|
$
|
3,936.8
|
|
|
$
|
751.9
|
|
|
$
|
833.1
|
|
|
$
|
9,303.7
|
|
Impact of foreign
exchange
|
|
|
—
|
|
|
|
—
|
|
|
|
18.7
|
|
|
|
—
|
|
|
|
18.7
|
|
Organic Net
Sales
|
|
$
|
3,781.9
|
|
|
$
|
3,936.8
|
|
|
$
|
770.6
|
|
|
$
|
833.1
|
|
|
$
|
9,322.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - Net Sales
|
|
|
6.9
|
%
|
|
|
8.6
|
%
|
|
|
1.6
|
%
|
|
|
15.6
|
%
|
|
|
7.9
|
%
|
Impact of foreign
exchange (pp)
|
|
|
—
|
|
|
|
—
|
|
|
|
2.5
|
|
|
|
—
|
|
|
|
0.2
|
|
Organic Net
Sales
|
|
|
6.9
|
%
|
|
|
8.6
|
%
|
|
|
4.1
|
%
|
|
|
15.6
|
%
|
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Organic)
|
|
|
(9.4)
|
%
|
|
|
(6.0)
|
%
|
|
|
(8.4)
|
%
|
|
|
(3.0)
|
%
|
|
|
(7.4)
|
%
|
Price/Mix
|
|
|
16.3
|
%
|
|
|
14.6
|
%
|
|
|
12.5
|
%
|
|
|
18.6
|
%
|
|
|
15.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY22
YTD
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total
Conagra
Brands
|
|
Net
Sales
|
|
$
|
3,538.6
|
|
|
$
|
3,626.3
|
|
|
$
|
740.0
|
|
|
$
|
721.0
|
|
|
$
|
8,625.9
|
|
Net sales from divested
businesses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Organic Net
Sales
|
|
$
|
3,538.6
|
|
|
$
|
3,626.3
|
|
|
$
|
740.0
|
|
|
$
|
721.0
|
|
|
$
|
8,625.9
|
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
Q3
FY23
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total Conagra
Brands
|
|
Operating
Profit
|
|
$
|
256.4
|
|
|
$
|
263.6
|
|
|
$
|
37.1
|
|
|
$
|
23.8
|
|
|
$
|
(90.9)
|
|
|
$
|
490.0
|
|
Restructuring
plans
|
|
|
0.3
|
|
|
|
1.9
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
2.5
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Fire related
costs
|
|
|
—
|
|
|
|
5.2
|
|
|
|
—
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
6.6
|
|
Municipal water break
costs
|
|
|
0.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.3
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
22.7
|
|
|
|
22.7
|
|
Adjusted Operating
Profit
|
|
$
|
257.0
|
|
|
$
|
270.7
|
|
|
$
|
37.2
|
|
|
$
|
25.2
|
|
|
$
|
(67.8)
|
|
|
$
|
522.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
20.6
|
%
|
|
|
20.2
|
%
|
|
|
14.3
|
%
|
|
|
8.6
|
%
|
|
|
|
|
|
|
15.9
|
%
|
Adjusted Operating
Profit Margin
|
|
|
20.7
|
%
|
|
|
20.7
|
%
|
|
|
14.3
|
%
|
|
|
9.1
|
%
|
|
|
|
|
|
|
16.9
|
%
|
Year-over-year % change
- Operating Profit
|
|
|
10.8
|
%
|
|
|
66.9
|
%
|
|
|
24.3
|
%
|
|
|
409.6
|
%
|
|
|
40.3
|
%
|
|
|
36.4
|
%
|
Year-over year % change
- Adjusted Operating Profit
|
|
|
8.0
|
%
|
|
|
53.8
|
%
|
|
|
23.9
|
%
|
|
|
69.7
|
%
|
|
|
14.3
|
%
|
|
|
30.8
|
%
|
Year-over-year bps
change - Operating Profit
|
|
132 bps
|
|
|
740 bps
|
|
|
191 bps
|
|
|
665 bps
|
|
|
|
|
|
|
355 bps
|
|
Year-over-year bps
change - Adjusted Operating Profit
|
|
82 bps
|
|
|
650 bps
|
|
|
188 bps
|
|
|
282 bps
|
|
|
|
|
|
|
321 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
FY22
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total Conagra
Brands
|
|
Operating
Profit
|
|
$
|
231.5
|
|
|
$
|
158.0
|
|
|
$
|
29.9
|
|
|
$
|
4.7
|
|
|
$
|
(64.9)
|
|
|
$
|
359.2
|
|
Restructuring
plans
|
|
|
2.6
|
|
|
|
1.2
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
6.7
|
|
|
|
10.7
|
|
Impairment of
businesses held for sale
|
|
|
3.9
|
|
|
|
16.9
|
|
|
|
—
|
|
|
|
10.1
|
|
|
|
—
|
|
|
|
30.9
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.6
|
|
|
|
0.6
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.9)
|
|
|
|
(1.9)
|
|
Adjusted Operating
Profit
|
|
$
|
238.0
|
|
|
$
|
176.1
|
|
|
$
|
30.1
|
|
|
$
|
14.8
|
|
|
$
|
(59.5)
|
|
|
$
|
399.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
19.3
|
%
|
|
|
12.8
|
%
|
|
|
12.4
|
%
|
|
|
2.0
|
%
|
|
|
|
|
|
|
12.3
|
%
|
Adjusted Operating
Profit Margin
|
|
|
19.9
|
%
|
|
|
14.2
|
%
|
|
|
12.5
|
%
|
|
|
6.3
|
%
|
|
|
|
|
|
|
13.7
|
%
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
Q3 FY23
YTD
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total Conagra
Brands
|
|
Operating
Profit
|
|
$
|
847.2
|
|
|
$
|
297.6
|
|
|
$
|
100.9
|
|
|
$
|
53.5
|
|
|
$
|
(280.9)
|
|
|
$
|
1,018.3
|
|
Restructuring
plans
|
|
|
0.5
|
|
|
|
3.3
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
5.5
|
|
|
|
9.2
|
|
Impairment of
businesses held for sale
|
|
|
0.5
|
|
|
|
5.7
|
|
|
|
—
|
|
|
|
20.5
|
|
|
|
—
|
|
|
|
26.7
|
|
Goodwill and brand
impairment charges
|
|
|
—
|
|
|
|
385.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
385.7
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.8
|
|
|
|
0.8
|
|
Fire related
costs
|
|
|
—
|
|
|
|
13.1
|
|
|
|
—
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
14.5
|
|
Municipal water break
costs
|
|
|
3.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.5
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24.6
|
|
|
|
24.6
|
|
Adjusted Operating
Profit
|
|
$
|
851.7
|
|
|
$
|
705.4
|
|
|
$
|
100.8
|
|
|
$
|
75.4
|
|
|
$
|
(250.0)
|
|
|
$
|
1,483.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
22.4
|
%
|
|
|
7.6
|
%
|
|
|
13.4
|
%
|
|
|
6.4
|
%
|
|
|
|
|
|
|
10.9
|
%
|
Adjusted Operating
Profit Margin
|
|
|
22.5
|
%
|
|
|
17.9
|
%
|
|
|
13.4
|
%
|
|
|
9.1
|
%
|
|
|
|
|
|
|
15.9
|
%
|
Year-over-year % change
- Operating Profit
|
|
|
21.6
|
%
|
|
|
(38.5)
|
%
|
|
|
(0.2)
|
%
|
|
|
37.9
|
%
|
|
|
49.0
|
%
|
|
|
(10.0)
|
%
|
Year-over year % change
- Adjusted Operating Profit
|
|
|
16.4
|
%
|
|
|
33.7
|
%
|
|
|
(0.5)
|
%
|
|
|
39.6
|
%
|
|
|
29.8
|
%
|
|
|
21.4
|
%
|
Year-over-year bps
change - Operating Profit
|
|
|
272 bps
|
|
|
|
(579) bps
|
|
|
|
(24) bps
|
|
|
|
104 bps
|
|
|
|
|
|
|
|
(218) bps
|
|
Year-over-year bps
change - Adjusted Operating Profit
|
|
|
185 bps
|
|
|
|
337 bps
|
|
|
|
(28) bps
|
|
|
|
156 bps
|
|
|
|
|
|
|
|
178 bps
|
|
|
|
Q3 FY22
YTD
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total Conagra
Brands
|
|
Operating
Profit
|
|
$
|
696.6
|
|
|
$
|
483.9
|
|
|
$
|
101.1
|
|
|
$
|
38.8
|
|
|
$
|
(188.5)
|
|
|
$
|
1,131.9
|
|
Restructuring
plans
|
|
|
8.7
|
|
|
|
13.0
|
|
|
|
0.2
|
|
|
|
0.3
|
|
|
|
16.7
|
|
|
|
38.9
|
|
Impairment of
businesses held for sale
|
|
|
26.3
|
|
|
|
28.9
|
|
|
|
—
|
|
|
|
14.9
|
|
|
|
—
|
|
|
|
70.1
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.2
|
|
|
|
2.2
|
|
Proceeds received from
the sale of a legacy investment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3.3)
|
|
|
|
(3.3)
|
|
Legal
matters
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(14.6)
|
|
|
|
(14.6)
|
|
Consulting fees on tax
matters
|
|
|
—
|
|
|
|
1.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.7
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5.3)
|
|
|
|
(5.3)
|
|
Adjusted Operating
Profit
|
|
$
|
731.6
|
|
|
$
|
527.5
|
|
|
$
|
101.3
|
|
|
$
|
54.0
|
|
|
$
|
(192.8)
|
|
|
$
|
1,221.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
19.7
|
%
|
|
|
13.3
|
%
|
|
|
13.7
|
%
|
|
|
5.4
|
%
|
|
|
|
|
|
|
13.1
|
%
|
Adjusted Operating
Profit Margin
|
|
|
20.7
|
%
|
|
|
14.5
|
%
|
|
|
13.7
|
%
|
|
|
7.5
|
%
|
|
|
|
|
|
|
14.2
|
%
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
Q3
FY23
|
|
Gross
profit
|
|
|
Selling, general
and
administrative
expenses
|
|
|
Operating
profit1
|
|
|
Income before
income taxes
and equity
method
investment
earnings
|
|
|
Income tax
expense
|
|
|
Income tax
rate
|
|
|
Net income
attributable to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from income
attributable to
Conagra
Brands, Inc.
common
stockholders
|
|
Reported
|
|
$
|
838.8
|
|
|
$
|
348.8
|
|
|
$
|
490.0
|
|
|
$
|
391.9
|
|
|
$
|
100.1
|
|
|
|
22.6
|
%
|
|
$
|
341.7
|
|
|
$
|
0.71
|
|
% of Net
Sales
|
|
|
27.2
|
%
|
|
|
11.3
|
%
|
|
|
15.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
0.5
|
|
|
|
2.0
|
|
|
|
2.5
|
|
|
|
2.5
|
|
|
|
0.6
|
|
|
|
|
|
|
|
1.9
|
|
|
|
—
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
|
|
|
|
0.1
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
|
22.7
|
|
|
|
—
|
|
|
|
22.7
|
|
|
|
22.7
|
|
|
|
5.6
|
|
|
|
|
|
|
|
17.1
|
|
|
|
0.04
|
|
Advertising and
promotion expenses2
|
|
|
—
|
|
|
|
80.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Fire related
costs
|
|
|
6.4
|
|
|
|
0.2
|
|
|
|
6.6
|
|
|
|
6.6
|
|
|
|
1.7
|
|
|
|
|
|
|
|
4.9
|
|
|
|
0.01
|
|
Municipal water break
costs
|
|
|
0.3
|
|
|
|
—
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
—
|
|
|
|
|
|
|
|
0.3
|
|
|
|
—
|
|
Adjusted
|
|
$
|
868.7
|
|
|
$
|
265.9
|
|
|
$
|
522.3
|
|
|
$
|
424.2
|
|
|
$
|
108.1
|
|
|
|
22.8
|
%
|
|
$
|
366.0
|
|
|
$
|
0.76
|
|
% of Net
Sales
|
|
|
28.1
|
%
|
|
|
8.6
|
%
|
|
|
16.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year % of
net sales change - reported
|
|
|
325
bps
|
|
|
|
(30)
bps
|
|
|
|
355
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year % of
net sales change - adjusted
|
|
|
409
bps
|
|
|
|
50
bps
|
|
|
|
321
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - reported
|
|
|
20.3
|
%
|
|
|
3.2
|
%
|
|
|
36.4
|
%
|
|
|
39.6
|
%
|
|
|
(8.9)
|
%
|
|
|
|
|
|
|
56.4
|
%
|
|
|
57.8
|
%
|
Year-over-year
change - adjusted
|
|
|
23.9
|
%
|
|
|
12.4
|
%
|
|
|
30.8
|
%
|
|
|
32.1
|
%
|
|
|
20.1
|
%
|
|
|
|
|
|
|
31.3
|
%
|
|
|
31.0
|
%
|
|
|
Q3
FY22
|
|
Gross
profit
|
|
|
Selling, general
and
administrative
expenses
|
|
|
Operating
profit1
|
|
|
Income before
income taxes
and equity
method
investment
earnings
|
|
|
Income tax
expense
|
|
|
Income tax
rate
|
|
|
Net income
attributable to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from income
attributable to
Conagra
Brands, Inc.
common
stockholders
|
|
Reported
|
|
$
|
697.2
|
|
|
$
|
338.0
|
|
|
$
|
359.2
|
|
|
$
|
280.7
|
|
|
$
|
109.9
|
|
|
|
33.4
|
%
|
|
$
|
218.4
|
|
|
$
|
0.45
|
|
% of Net
Sales
|
|
|
23.9
|
%
|
|
|
11.6
|
%
|
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
5.6
|
|
|
|
5.1
|
|
|
|
10.7
|
|
|
|
10.7
|
|
|
|
2.5
|
|
|
|
|
|
|
|
8.2
|
|
|
|
0.02
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.2
|
|
|
|
|
|
|
|
0.4
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
|
(1.9)
|
|
|
|
—
|
|
|
|
(1.9)
|
|
|
|
(1.9)
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
(1.5)
|
|
|
|
—
|
|
Advertising and
promotion expenses2
|
|
|
—
|
|
|
|
64.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Impairment of
businesses held for sale
|
|
|
—
|
|
|
|
30.9
|
|
|
|
30.9
|
|
|
|
30.9
|
|
|
|
2.7
|
|
|
|
|
|
|
|
28.2
|
|
|
|
0.06
|
|
Unusual tax
items
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(25.0)
|
|
|
|
|
|
|
|
25.0
|
|
|
|
0.05
|
|
Adjusted
|
|
$
|
700.9
|
|
|
$
|
236.5
|
|
|
$
|
399.5
|
|
|
$
|
321.0
|
|
|
$
|
89.9
|
|
|
|
24.4
|
%
|
|
$
|
278.7
|
|
|
$
|
0.58
|
|
% of Net
Sales
|
|
|
24.1
|
%
|
|
|
8.1
|
%
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Operating profit is
derived from taking Income from continuing operations before income
taxes and equity method investment earnings, adding back Interest
expense, net and removing Pension and postretirement non-service
income.
|
2 Advertising and
promotion expense (A&P) has been removed from adjusted selling,
general and administrative expense because this metric is used in
reporting to management, and management believes this adjusted
measure provides useful supplemental information to assess the
company's operating performance. Please note that A&P is
not removed from adjusted profit measures.
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
Q3 FY23
YTD
|
|
Gross
profit
|
|
|
Selling, general
and
administrative
expenses
|
|
|
Operating
profit1
|
|
|
Income before
income taxes
and equity
method
investment
earnings
|
|
|
Income tax
expense
|
|
|
Income tax
rate
|
|
|
Net income
attributable to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from income
attributable to
Conagra
Brands, Inc.
common
stockholders
|
|
Reported
|
|
$
|
2,481.4
|
|
|
$
|
1,463.1
|
|
|
$
|
1,018.3
|
|
|
$
|
734.9
|
|
|
$
|
237.0
|
|
|
|
26.8
|
%
|
|
$
|
646.1
|
|
|
$
|
1.34
|
|
% of Net
Sales
|
|
|
26.7
|
%
|
|
|
15.7
|
%
|
|
|
10.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
0.8
|
|
|
|
8.4
|
|
|
|
9.2
|
|
|
|
9.2
|
|
|
|
2.3
|
|
|
|
|
|
|
|
6.9
|
|
|
|
0.01
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
0.8
|
|
|
|
0.2
|
|
|
|
|
|
|
|
0.6
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
|
24.6
|
|
|
|
—
|
|
|
|
24.6
|
|
|
|
24.6
|
|
|
|
6.1
|
|
|
|
|
|
|
|
18.5
|
|
|
|
0.04
|
|
Advertising and
promotion expenses2
|
|
|
—
|
|
|
|
221.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Fire related
costs
|
|
|
13.8
|
|
|
|
0.7
|
|
|
|
14.5
|
|
|
|
14.5
|
|
|
|
3.6
|
|
|
|
|
|
|
|
10.9
|
|
|
|
0.02
|
|
Municipal water break
costs
|
|
|
3.5
|
|
|
|
—
|
|
|
|
3.5
|
|
|
|
3.5
|
|
|
|
0.8
|
|
|
|
|
|
|
|
2.7
|
|
|
|
0.01
|
|
Impairment of
businesses held for sale
|
|
|
—
|
|
|
|
26.7
|
|
|
|
26.7
|
|
|
|
26.7
|
|
|
|
6.6
|
|
|
|
|
|
|
|
20.1
|
|
|
|
0.04
|
|
Goodwill and brand
impairment charges
|
|
|
—
|
|
|
|
385.7
|
|
|
|
385.7
|
|
|
|
385.7
|
|
|
|
58.9
|
|
|
|
|
|
|
|
326.8
|
|
|
|
0.68
|
|
Rounding
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
0.01
|
|
Adjusted
|
|
$
|
2,524.1
|
|
|
$
|
819.6
|
|
|
$
|
1,483.3
|
|
|
$
|
1,199.9
|
|
|
$
|
315.5
|
|
|
|
23.4
|
%
|
|
$
|
1,032.6
|
|
|
$
|
2.15
|
|
% of Net
Sales
|
|
|
27.1
|
%
|
|
|
8.8
|
%
|
|
|
15.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year % of
net sales change - reported
|
|
203
bps
|
|
|
421
bps
|
|
|
(218)
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year % of
net sales change - adjusted
|
|
230
bps
|
|
|
44
bps
|
|
|
178
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - reported
|
|
|
16.8
|
%
|
|
|
47.3
|
%
|
|
|
(10.0)
|
%
|
|
|
(18.0)
|
%
|
|
|
(10.2)
|
%
|
|
|
|
|
|
|
(11.4)
|
%
|
|
|
(11.3)
|
%
|
Year-over-year
change - adjusted
|
|
|
17.8
|
%
|
|
|
13.5
|
%
|
|
|
21.4
|
%
|
|
|
21.7
|
%
|
|
|
22.6
|
%
|
|
|
|
|
|
|
25.1
|
%
|
|
|
25.7
|
%
|
|
|
Q3 FY22
YTD
|
|
Gross
profit
|
|
|
Selling, general
and
administrative
expenses
|
|
|
Operating
profit1
|
|
|
Income before
income taxes
and equity
method
investment
earnings
|
|
|
Income tax
expense
|
|
|
Income tax
rate
|
|
|
Net income
attributable to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from income
attributable to
Conagra
Brands, Inc.
common
stockholders
|
|
Reported
|
|
$
|
2,125.4
|
|
|
$
|
993.5
|
|
|
$
|
1,131.9
|
|
|
$
|
896.5
|
|
|
$
|
263.8
|
|
|
|
26.5
|
%
|
|
$
|
729.3
|
|
|
$
|
1.51
|
|
% of Net
Sales
|
|
|
24.6
|
%
|
|
|
11.5
|
%
|
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
21.9
|
|
|
|
17.0
|
|
|
|
38.9
|
|
|
|
38.9
|
|
|
|
9.5
|
|
|
|
|
|
|
|
29.4
|
|
|
|
0.06
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
2.2
|
|
|
|
2.2
|
|
|
|
2.2
|
|
|
|
0.6
|
|
|
|
|
|
|
|
1.6
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
|
(5.3)
|
|
|
|
—
|
|
|
|
(5.3)
|
|
|
|
(5.3)
|
|
|
|
(1.3)
|
|
|
|
|
|
|
|
(4.0)
|
|
|
|
(0.01)
|
|
Advertising and
promotion expenses2
|
|
|
—
|
|
|
|
198.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Consulting fees on tax
matters
|
|
|
—
|
|
|
|
1.7
|
|
|
|
1.7
|
|
|
|
1.7
|
|
|
|
0.5
|
|
|
|
|
|
|
|
1.2
|
|
|
|
—
|
|
Impairment of
businesses held for sale
|
|
|
—
|
|
|
|
70.1
|
|
|
|
70.1
|
|
|
|
70.1
|
|
|
|
9.7
|
|
|
|
|
|
|
|
60.4
|
|
|
|
0.13
|
|
Proceeds received from
the sale of a legacy investment
|
|
|
—
|
|
|
|
(3.3)
|
|
|
|
(3.3)
|
|
|
|
(3.3)
|
|
|
|
(0.5)
|
|
|
|
|
|
|
|
(2.8)
|
|
|
|
(0.01)
|
|
Legal
matters
|
|
|
—
|
|
|
|
(14.6)
|
|
|
|
(14.6)
|
|
|
|
(14.6)
|
|
|
|
(3.6)
|
|
|
|
|
|
|
|
(11.0)
|
|
|
|
(0.02)
|
|
Unusual tax
items
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(21.4)
|
|
|
|
|
|
|
|
21.4
|
|
|
|
0.04
|
|
Rounding
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
0.01
|
|
Adjusted
|
|
$
|
2,142.0
|
|
|
$
|
721.9
|
|
|
$
|
1,221.6
|
|
|
$
|
986.2
|
|
|
$
|
257.3
|
|
|
|
23.7
|
%
|
|
$
|
825.5
|
|
|
$
|
1.71
|
|
% of Net
Sales
|
|
|
24.8
|
%
|
|
|
8.4
|
%
|
|
|
14.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Operating profit is
derived from taking Income from continuing operations before income
taxes and equity method investment earnings, adding back Interest
expense, net and removing Pension and postretirement non-service
income.
|
2 Advertising and
promotion expense (A&P) has been removed from adjusted selling,
general and administrative expense because this metric is used in
reporting to management, and management believes this adjusted
measure provides useful supplemental information to assess the
company's operating performance. Please note that A&P is
not removed from adjusted profit measures.
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
|
|
February 26,
2023
|
|
|
February 27,
2022
|
|
|
%
Change
|
|
Net cash flows from
operating activities
|
|
$
|
703.4
|
|
|
$
|
752.6
|
|
|
|
(6.5)
|
%
|
Additions to property,
plant and equipment
|
|
|
(267.4)
|
|
|
|
(364.2)
|
|
|
|
(26.6)
|
%
|
Free cash
flow
|
|
$
|
436.0
|
|
|
$
|
388.4
|
|
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
FY23
|
|
|
Q3
FY22
|
|
Notes
payable
|
|
|
|
|
|
$
|
658.0
|
|
|
$
|
362.8
|
|
Current installments of
long-term debt
|
|
|
|
|
|
|
516.6
|
|
|
|
706.3
|
|
Senior long-term debt,
excluding current installments
|
|
|
|
|
|
|
8,081.2
|
|
|
|
8,089.1
|
|
Total
Debt
|
|
|
|
|
|
$
|
9,255.8
|
|
|
$
|
9,158.2
|
|
Less: Cash
|
|
|
|
|
|
|
71.2
|
|
|
|
79.7
|
|
Net
Debt
|
|
|
|
|
|
$
|
9,184.6
|
|
|
$
|
9,078.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY23
LTM2
|
|
Net
Debt
|
|
|
|
|
|
|
|
|
|
$
|
9,184.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
|
|
|
|
|
|
|
|
$
|
805.0
|
|
Add Back: Income tax
expense
|
|
|
|
|
|
|
|
|
|
|
263.7
|
|
Income tax expense
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
0.1
|
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
397.8
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
308.7
|
|
Amortization
|
|
|
|
|
|
|
|
|
|
|
58.1
|
|
Earnings before
interest, taxes, depreciation, and amortization
(EBITDA)
|
|
|
|
|
|
|
|
|
|
$
|
1,833.4
|
|
Restructuring
plans1
|
|
|
|
|
|
|
|
|
|
|
18.3
|
|
Acquisitions and
divestitures
|
|
|
|
|
|
|
|
|
|
|
1.0
|
|
Consulting fees on tax
matters
|
|
|
|
|
|
|
|
|
|
|
1.1
|
|
Corporate hedging
derivative gains
|
|
|
|
|
|
|
|
|
|
|
25.5
|
|
Impairment of
businesses held for sale
|
|
|
|
|
|
|
|
|
|
|
26.7
|
|
Goodwill and brand
impairment charges
|
|
|
|
|
|
|
|
|
|
|
592.7
|
|
Legal
matters
|
|
|
|
|
|
|
|
|
|
|
(5.0)
|
|
Environmental
matters
|
|
|
|
|
|
|
|
|
|
|
(6.5)
|
|
Fire related
costs
|
|
|
|
|
|
|
|
|
|
|
25.8
|
|
Municipal water break
costs
|
|
|
|
|
|
|
|
|
|
|
3.5
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
$
|
2,516.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt to Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
3.65
|
|
|
1 Excludes
comparability items related to depreciation.
|
2 Last twelve
months
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
|
|
Q3
FY23
|
|
|
Q3
FY22
|
|
|
%
Change
|
|
Net income attributable
to Conagra Brands, Inc.
|
|
$
|
341.7
|
|
|
$
|
218.4
|
|
|
|
56.4
|
%
|
Add Back: Income tax
expense
|
|
|
100.1
|
|
|
|
109.9
|
|
|
|
|
|
Income tax expense
attributable to noncontrolling interests
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
|
|
Interest expense,
net
|
|
|
104.2
|
|
|
|
94.6
|
|
|
|
|
|
Depreciation
|
|
|
77.7
|
|
|
|
77.3
|
|
|
|
|
|
Amortization
|
|
|
13.8
|
|
|
|
14.8
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation, and amortization
|
|
$
|
637.3
|
|
|
$
|
514.8
|
|
|
|
23.8
|
%
|
Restructuring
plans1
|
|
|
2.1
|
|
|
|
8.1
|
|
|
|
|
|
Acquisitions and
divestitures
|
|
|
0.2
|
|
|
|
0.6
|
|
|
|
|
|
Corporate hedging
derivative losses (gains)
|
|
|
22.7
|
|
|
|
(1.9)
|
|
|
|
|
|
Fire related
costs
|
|
|
6.6
|
|
|
|
—
|
|
|
|
|
|
Municipal water break
costs
|
|
|
0.3
|
|
|
|
—
|
|
|
|
|
|
Impairment of
businesses held for sale
|
|
|
—
|
|
|
|
30.9
|
|
|
|
|
|
Adjusted Earnings
before interest, taxes, depreciation, and
amortization
|
|
$
|
669.2
|
|
|
$
|
552.5
|
|
|
|
21.1
|
%
|
|
|
|
|
Q3 FY23
YTD
|
|
|
Q3 FY22
YTD
|
|
|
%
Change
|
|
Net income attributable
to Conagra Brands, Inc.
|
|
$
|
646.1
|
|
|
$
|
729.3
|
|
|
|
(11.4)
|
%
|
Add Back: Income tax
expense
|
|
|
237.0
|
|
|
|
263.8
|
|
|
|
|
|
Income tax expense
attributable to noncontrolling interests
|
|
|
(0.3)
|
|
|
|
(0.4)
|
|
|
|
|
|
Interest expense,
net
|
|
|
301.6
|
|
|
|
283.7
|
|
|
|
|
|
Depreciation
|
|
|
233.7
|
|
|
|
241.1
|
|
|
|
|
|
Amortization
|
|
|
43.3
|
|
|
|
44.5
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation, and amortization
|
|
$
|
1,461.4
|
|
|
$
|
1,562.0
|
|
|
|
(6.4)
|
%
|
Restructuring
plans1
|
|
|
8.8
|
|
|
|
25.3
|
|
|
|
|
|
Acquisitions and
divestitures
|
|
|
0.8
|
|
|
|
2.2
|
|
|
|
|
|
Corporate hedging
derivative losses (gains)
|
|
|
24.6
|
|
|
|
(5.3)
|
|
|
|
|
|
Fire related
costs
|
|
|
14.5
|
|
|
|
—
|
|
|
|
|
|
Municipal water break
costs
|
|
|
3.5
|
|
|
|
—
|
|
|
|
|
|
Consulting fees on tax
matters
|
|
|
—
|
|
|
|
1.7
|
|
|
|
|
|
Impairment of
businesses held for sale
|
|
|
26.7
|
|
|
|
70.1
|
|
|
|
|
|
Proceeds from the sale
of a legacy investment
|
|
|
—
|
|
|
|
(3.3)
|
|
|
|
|
|
Legal
matters
|
|
|
—
|
|
|
|
(14.6)
|
|
|
|
|
|
Goodwill and brand
impairment charges
|
|
|
385.7
|
|
|
|
—
|
|
|
|
|
|
Adjusted Earnings
before interest, taxes, depreciation, and
amortization
|
|
$
|
1,926.0
|
|
|
$
|
1,638.1
|
|
|
|
17.6
|
%
|
|
1 Excludes
comparability items related to depreciation.
|
For more information, please contact:
MEDIA: Mike Cummins
312-549-5257
Michael.Cummins@conagra.com
INVESTORS: Melissa Napier
312-549-5738
IR@conagra.com
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SOURCE Conagra Brands, Inc.