Pinnacle Foods Inc. (NYSE:PF) today reported its financial results
for the second quarter ended July 1, 2018 and reaffirmed its
guidance for Adjusted diluted earnings per share (EPS) for the year
of $2.85 to $2.95.
Diluted EPS in the second quarter of 2018, including items
affecting comparability1, increased to $0.47 versus $0.16 in the
year-ago period. Excluding items affecting comparability, Adjusted
diluted EPS advanced 11.3% to $0.59, compared to $0.53 in the
year-ago period.
Net sales for the second quarter declined 0.4% (excluding the
impact of Easter timing, net sales increased 1.1%) as continued
momentum in the Frozen and Boulder segments was offset by declines
in the Grocery and, to a lesser extent, Specialty segments. These
results translated into in-market consumption growth of 0.9% in the
quarter and composite market share that was even with the year-ago
period.2
Commenting on the results, Pinnacle Foods Chief Executive
Officer Mark Clouse stated, “Our overall second quarter result was
consistent with our expectations despite an increasingly
challenging operating environment. We delivered 140bps of Adjusted
gross margin expansion in the quarter, even as inflation –
particularly freight – remained a headwind for the entire industry.
Looking forward, while we expect inflation will remain elevated, we
remain confident in our ability to deliver our EPS guidance for the
year.”
Referring to the Company’s pending acquisition by Conagra
Brands, announced June 27th, 2018, Clouse further commented, “We
are very proud of what we have built at Pinnacle and the
shareholder returns we have delivered. We are also extremely
excited about the potential of a combined Conagra Brands and
Pinnacle Foods. The cost synergies of the combination alone are
compelling but the growth potential of the broader portfolio of
iconic brands also represents powerful possibilities”
___________________________
1 Adjusted financial metrics used throughout this release
exclude items affecting comparability and are non-GAAP measures.
Please see reconciliation to GAAP measures in the financial tables
that accompany this release.2 In-market performance (retail
consumption; market share) based on Pinnacle’s IRI custom category
definitions, period ending July 1, 2018 and excludes the Aunt
Jemima business.
Second Quarter Consolidated ResultsNet sales in
the second quarter of 2018 decreased 0.4% to $741.8 million,
compared to net sales of $744.6 million in the year-ago period.
This performance reflected net price realization of 1.4%, favorable
foreign currency exchange of 0.1% and the negligible net impact
from the AJ Exit3, more than offset by a 1.5% impact from the
phasing of Easter and lower volume/mix of 0.5%.
Gross profit in the second quarter of 2018 increased 29.0%
versus the year-ago period to $211.5 million, or 28.5% of net
sales, compared to gross profit of $163.9 million, or 22.0% of net
sales, in 2017. This performance reflected the favorable impact of
items affecting comparability versus the year-ago period, the
lapping of the Discrete Items4 and strong productivity. Partially
offsetting these growth drivers were input cost inflation, which
was primarily driven by higher transportation costs, and, to a
lesser extent, higher outsourcing costs related to innovation.
Adjusted gross profit increased 4.6% to $212.6 million and, as a
percentage of net sales, Adjusted gross profit margin increased
approximately 140 basis points to 28.7%.
Earnings before interest and taxes (EBIT) more than doubled to
$104.0 million, or 14.0% of net sales, compared to $44.0 million,
or 5.9% of net sales, in the prior-year period. This performance
largely reflected the strong gross profit growth as well as the
favorable impact of items affecting comparability versus the
prior-year period. Adjusted EBIT increased 5.7% to $120.7
million, or 16.3% of net sales, compared to $114.2 million, or
15.3% of net sales, in the year-ago period.
Net interest expense for the second quarter of 2018 increased
5.9% to $30.2 million, compared to $28.5 million in the year-ago
period, primarily reflecting the impact of items affecting
comparability in the current-year period associated with the May
2018 redemption of the 4.875% Senior Notes due 2021, partially
offset by the lower outstanding debt balance in 2018. Adjusted net
interest expense in the second quarter of $28.4 million was
essentially flat with the prior-year period, despite a rising
interest rate environment.
The effective tax rate (ETR) for the second quarter of 2018 was
23.9%, compared to a negative 19.9% in the year-ago period,
primarily reflecting unfavorable impact of items affecting
comparability in the prior-year period as well as the impact of
U.S. tax reform enacted in December 2017 and a one-time adjustment
to income tax liabilities that benefited the ETR by about 1.2
points. The Adjusted ETR for the second quarter declined to 23.3%,
compared to 26.2% in the prior-year.
Net earnings in the second quarter of 2018 increased to $56.3
million or $0.47 per diluted share, compared to $18.6 million, or
$0.16 per diluted share, in 2017. This performance was almost
entirely driven by the favorable impact of items affecting
comparability versus the year-ago period. Adjusted net earnings
advanced 12.0% to $70.8 million compared to $63.2 million in the
year-ago period, reflecting the favorable Adjusted EBIT and
favorable Adjusted ETR. Adjusted diluted EPS increased 11.3% to
$0.59, compared to $0.53 in the second quarter of 2017.
Net cash provided by operating activities increased to $93.2
million in the second quarter of 2018, compared to $57.4 million in
the year-ago period. For the first six months, net cash provided by
operating activities increased to $214.8 million, compared to
$120.3 million in the year-ago period, largely reflecting the
higher net earnings and favorable working capital.
___________________________
3 Aunt Jemima exit, including the Recall, of certain retail and
foodservice breakfast products (AJ Exit), initiated in May 2017.4
Discrete items include the costs associated with the AJ Exit as
well as the accelerated manufacturing investments that were
incurred, beginning May 2017
Second Quarter Segment Results
FrozenNet sales for the Frozen segment advanced
4.3% in the second quarter of 2018 to $308.5 million, compared to
$295.9 million in the year-ago period. This strong growth reflects
favorable volume/mix of 4.7%, net price realization of 1.2%, the
net benefit from lapping the AJ Exit of 0.8% and favorable foreign
currency exchange of 0.1%. These growth drivers were partially
offset the phasing of Easter, which was a negative 2.5% impact in
the quarter.
Driving the strong net sales growth in the Frozen segment was
continued strength of the Birds Eye vegetable business,
specifically behind the Veggie Made innovation platform that
launched in 2017 and now includes Veggie Made pasta, Veggie Made
fries and tots, Veggie Made mashed cauliflower and sweet potato and
Veggie Made riced cauliflower. Also contributing to the top-line
growth in the segment was the seafood business. Partially
offsetting this growth was lower sales in the highly competitive
frozen meals segment.
In-market performance for the Frozen segment remained very
strong in the second quarter, with retail consumption advancing
4.3%. Driving this retail consumption growth was Birds Eye
vegetables, which advanced 9.5%. Market share for the segment
advanced 0.3 points.
EBIT for the Frozen segment increased to $49.7 million in the
second quarter of 2018, compared to a loss of $12.3 million in
2017, largely reflecting the favorable impact of items affecting
comparability versus the prior-year period and the favorable impact
of lapping the Discrete Items. Also contributing to the EBIT growth
in the quarter was productivity and the higher net sales. These
growth drivers were partially offset by input cost inflation,
primarily related to higher transportation costs, and higher
outsourcing costs. Adjusted EBIT increased 32.2% to $50.3
million in the quarter, compared to $38.1 million in the year-ago
period.
GroceryNet sales for the Grocery segment
decreased 7.0% to $256.6 million in the second quarter of 2018,
compared to $276.1 million in the year-ago period. This performance
reflects unfavorable volume/mix of 6.0% and a 1.4% unfavorable
impact from the phasing of Easter, only partially offset by
favorable net price realization of 0.4%.
The net sales performance in the Grocery segment largely
reflects declines in the Duncan Hines baking business, specifically
in the core part of the business which was impacted by both the
phasing of Easter as well as the lapping of a very strong year-ago
period. Also contributing to the net sales decline in the quarter
was Wish-Bone salad dressings, as the overall dressings category
remains very competitive, as well as Smart Balance spreads.
Partially offsetting these declines was growth in Vlasic pickles
and the Armour canned meat business.
Retail consumption for the Grocery segment in the quarter
declined 5.5%, leading to a 0.2 point market share loss. Duncan
Hines baking products and Wish-Bone salad dressings were the main
drivers behind the decline in the quarter and were only partially
offset by consumption gains for Vlasic pickles and the Armour
canned meat business.
EBIT for the Grocery segment declined 15.7% to $52.1 million,
compared to $61.9 million in the year-ago period, primarily
reflecting higher input cost inflation, particularly transportation
costs, negative product mix and lower net sales, partially offset
by productivity and the favorable impact of items affecting
comparability versus the year-ago period. Adjusted EBIT decreased
16.7% to $52.5 million, compared to $63.1 million in the year-ago
period. BoulderNet sales for the
Boulder segment increased 4.5% to $98.9 million in the second
quarter of 2018, compared to $94.7 million in 2017. This
performance reflects continued volume/mix strength of 3.7% and net
price realization of 0.8%, which includes the unfavorable impact of
new product introductory costs.
The net sales performance for the Boulder segment reflected the
continued strength of the Gardein business along with growth of
Earth Balance. Partially offsetting this growth were lower net
sales of the gluten free portfolio.
Retail consumption for the Boulder segment was again strong,
advancing 7.2% in the quarter. This performance was driven by solid
growth of Gardein and Earth Balance, which grew consumption 37.9%
and 14.9%, respectively. Also contributing to the consumption
growth in the quarter was Udi’s bread, driven by the new
formulation which launched in the first quarter of 2018 and grew
consumption nearly 5% in the second quarter, partially offset by
the rest of the gluten free portfolio. Despite the strong
consumption in the quarter, market share declined 0.2 points as
category growth outpaced the segment.
EBIT for the Boulder segment increased 30.8% to $16.0 million in
the second quarter of 2018, compared to $12.2 million in the
prior-year period, primarily reflecting the favorable impact of
items affecting comparability versus the year-ago period as well as
productivity, partially offset by input cost inflation. Adjusted
EBIT increased 4.5% to $16.5 million, compared to $15.8 million in
2017.
SpecialtyNet sales for the Specialty segment
declined 0.3% to $77.7 million in the second quarter of 2018,
compared to $78.0 million in 2017, largely reflecting the 2.7% net
impact of the AJ Exit. Excluding the AJ Exit, the 2.4% net sales
growth for the segment was driven by favorable volume/mix of 3.7%,
partially offset by unfavorable net price realization of 1.3%.
EBIT for the Specialty segment increased to $9.5 million in the
quarter, compared to a loss of $10.6 million in the year-ago
period. This performance reflects the favorable impact versus
year-ago of items affecting comparability, the lapping of the
Discrete Items and productivity, partially offset by input cost
inflation. Adjusted EBIT more than doubled to $9.6 million,
compared to $4.4 million in the year-ago second quarter.
Outlook for 2018Forecasted Adjusted diluted EPS
metrics provided below are non-GAAP measures. The Company does not
provide guidance for the most directly comparable GAAP measure,
diluted EPS, and we similarly cannot provide a reconciliation
between our forecasted Adjusted diluted EPS and diluted EPS metrics
without unreasonable effort due to the unavailability of reliable
estimates for certain items, such as non-cash gains or losses
resulting from mark-to-market adjustments of hedging activities and
foreign currency impacts. These items are not within our
control and may vary greatly between periods and could
significantly impact future financial results.
The Company reaffirms guidance for 2018 Adjusted diluted EPS in
the range of $2.85 to $2.95. At the guidance mid-point, this
outlook represents growth of 16% versus the comparable 52-week
Adjusted diluted EPS of $2.50 in 2017.
Non-GAAP Financial MeasuresPinnacle uses the
following non-GAAP financial measures as defined by the SEC in its
financial communications. These non-GAAP financial measures should
be considered as supplements to the GAAP reported measures, should
not be considered replacements for, or superior to, the GAAP
measures and may not be comparable to similarly named measures used
by other companies.
- Adjusted Gross Profit
- Adjusted Gross Profit as a % of sales (Adjusted Gross Profit
Margin)
- Adjusted EBITDA
- Adjusted Earnings Before Interest and Taxes (Adjusted
EBIT)
- Adjusted Net Interest Expense
- Adjusted Net Earnings
- Adjusted Diluted Earnings Per Share
- Adjusted Effective Income Tax Rate (Adjusted ETR)
Adjusted Gross ProfitPinnacle defines Adjusted Gross Profit as
gross profit before accelerated depreciation related to
restructuring activities, certain non-cash items, acquisition,
merger and other restructuring charges and other adjustments. The
Company believes that the presentation of Adjusted Gross Profit is
useful to investors in the evaluation of the operating performance
of companies in similar industries. The Company believes this
measure is useful to investors because it increases transparency
and assists investors in understanding the underlying performance
of the Company and in the analysis of ongoing operating trends. In
addition, Adjusted Gross Profit is one of the components used to
evaluate the performance of Company’s management. Such targets
include, but are not limited to, measurement of sales efficiency,
productivity measures and recognition of acquisition synergies.
Adjusted EBITDAPinnacle defines Adjusted EBITDA as earnings
before interest expense, taxes, depreciation and amortization
(“EBITDA”), further adjusted to exclude certain non-cash items,
non-recurring items and certain other adjustment items permitted in
calculating Covenant Compliance EBITDA under the Senior Secured
Credit Facility and the indentures governing the Senior Notes.
Adjusted EBITDA does not include adjustments for equity-based
compensation and certain other adjustments related to acquisitions,
both of which are permitted in calculating Covenant Compliance
EBITDA.
Management uses Adjusted EBITDA as a key metric in the
evaluation of underlying Company performance, in making financial,
operating and planning decisions and, in part, in the determination
of cash bonuses for its executive officers and employees. The
Company believes this measure is useful to investors because it
increases transparency and assists investors in understanding the
underlying performance of the Company and in the analysis of
ongoing operating trends. Additionally, Pinnacle believes the
presentation of Adjusted EBITDA provides investors with useful
information, as it is an important component in measuring covenant
compliance in accordance with the financial covenants and
determining our ability to service debt and meet any payment
obligations. In addition, Pinnacle believes that Adjusted
EBITDA is frequently used by analysts, investors and other
interested parties in their evaluation of companies, many of which
present an Adjusted EBITDA measure when reporting their results.
The Company has historically reported Adjusted EBITDA to analysts
and investors and believes that its continued inclusion provides
consistency in financial reporting and enables analysts and
investors to perform meaningful comparisons of past, present and
future operating results. Adjusted EBITDA should not be
considered as an alternative to operating or net earnings (loss),
determined in accordance with GAAP, as an indicator of the
Company’s operating performance, as an alternative to cash flows
from operating activities, determined in accordance with GAAP, as
an indicator of cash flows, or as a measure of liquidity.
EBITDA and Adjusted EBITDA do not represent net earnings or
(loss) or cash flow from operations as those terms are defined by
Generally Accepted Accounting Principles (“GAAP”) and do not
necessarily indicate whether cash flows will be sufficient to fund
cash needs. In particular, the definitions of Adjusted EBITDA in
the Senior Secured Credit Facility and the indentures allow
Pinnacle to add back certain non-cash, extraordinary, unusual or
non-recurring charges that are deducted in calculating net earnings
or loss. However, these are expenses that may recur, vary greatly
and are difficult to predict. While EBITDA and Adjusted EBITDA and
similar measures are frequently used as measures of operations and
the ability to meet debt service requirements, they are not
necessarily comparable to other similarly titled captions of other
companies due to the potential inconsistencies in the method of
calculation.
Adjusted Earnings before Interest and Taxes (Adjusted
EBIT)Adjusted Earnings Before Interest and Taxes is provided
because Pinnacle believes it is useful information in understanding
our EBIT results by improving the comparability of year-to-year
results. Additionally, Adjusted EBIT provides transparent and
useful information to management, investors, analysts and other
parties in evaluating and assessing the Company and its segments,
primary operating results from period to period after removing the
impact of unusual, non-operational or restructuring-related
activities that affect comparability. Adjusted EBIT is one of the
measures management uses for planning and budgeting, monitoring and
evaluating financial and operating results and in the analysis of
ongoing operating trends.
Adjusted Net Interest ExpenseAdjusted Net Interest Expense is
provided to assist the reader by eliminating charges which result
from refinancing activities or unusual transactions. Management
believes that the Adjusted Net Interest Expense measure is useful
information to investors in order to demonstrate a measure of
interest expense that is associated with the ordinary course of
business operations and that it is more comparable to interest
expense in prior periods. Pinnacle uses Adjusted Net Interest
Expense to conduct and evaluate its business in order to evaluate
the effectiveness of the corporation’s financing strategies and to
analyze trends in interest expense, absent the effect of unusual
transactions.
Adjusted Net Earnings, Adjusted Effective Income Tax Rate and
Adjusted Diluted Earnings per ShareAdjusted Net Earnings, Adjusted
Effective Income Tax Rate and the related Adjusted Diluted Earnings
per Share metrics are provided to present the reader with the
after-tax impact of Adjusted EBIT and Adjusted Interest Expense,
net in order to improve the comparability and understanding of the
related GAAP measures. Adjusted Net Earnings, Adjusted Effective
Tax Rate and Adjusted Diluted Earnings per Share provide
transparent and useful information to management, investors,
analysts and other parties in evaluating and assessing our primary
operating results from period to period after removing the impact
of unusual, non-operational or restructuring-related activities
that affect comparability. Adjusted Net Earnings, Adjusted
Effective Income Tax Rate and Adjusted Diluted Earnings per Share
are measures used by management for planning and budgeting,
monitoring and evaluating financial and operating results.
Conference Call InformationIn conjunction with
this press release, the Company has released a pre-recorded
conference call and transcript that provides additional commentary
on the second quarter results. This recording and transcript can be
accessed in the Investor Center section of the Company’s corporate
website, www.pinnaclefoods.com. Investors and analysts can
also access the pre-recorded conference call by dialing (855)
859-2056 or (404) 537-3406 and referencing conference ID
4499007.
Pinnacle Foods ContactJennifer HalchakVice
President, Investor Relations973-541-8629
About Pinnacle Foods Inc.Pinnacle Foods Inc.
(NYSE:PF) is a leading manufacturer, marketer and distributor of
high-quality branded food products with a mission of unleashing
brand potential. With annual sales in excess of $3 billion,
our portfolio includes well-known brands competing in frozen,
refrigerated and shelf-stable formats, such as Birds Eye, Birds Eye
Voila!, Duncan Hines, Earth Balance, EVOL, gardein, Glutino,
Hungry-Man, Log Cabin, Udi’s, Vlasic, and Wish-Bone, along
with many others. The company is headquartered in Parsippany,
NJ and has nearly 5,000 employees across the U.S. and Canada.
For more information, please visit www.pinnaclefoods.com.
Forward-Looking StatementsThis release may
contain statements that predict or forecast future events or
results, depend on future events for their accuracy or otherwise
contain "forward-looking information." The words "estimates,"
"expects," "contemplates," "anticipates," "projects," "plans,"
"intends," "believes," "forecasts," "may," "should," and variations
of such words or similar expressions are intended to identify
forward-looking statements. These statements are made based on
management's current expectations and beliefs concerning future
events and various assumptions and are not guarantees of future
performance. Actual results may differ materially as a result of
various factors, some of which are beyond our control, including
but not limited to: general economic and business conditions,
deterioration of the credit and capital markets, industry trends,
our leverage and changes in our leverage, interest rate changes,
changes in our ownership structure, competition, the loss of any of
our major customers or suppliers, changes in demand for our
products, changes in distribution channels or competitive
conditions in the markets where we operate, costs of integrating
acquisitions, loss of our intellectual property rights,
fluctuations in price and supply of raw materials, seasonality, our
reliance on co-packers to meet our manufacturing needs,
availability of qualified personnel, changes in the cost of
compliance with laws and regulations, including environmental laws
and regulations, and the other risks and uncertainties detailed in
our filings, including our Form 10-K, with the Securities and
Exchange Commission on March 1, 2018. There may be other factors
that may cause our actual results to differ materially from the
forward-looking statements. We assume no obligation to update
the information contained in this announcement except as required
by applicable law.
PINNACLE FOODS INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)(thousands, except per share data)
| |
Three months ended |
|
Six months ended |
| |
July 1, 2018 |
|
June 25, 2017 |
|
July 1, 2018 |
|
June 25, 2017 |
| Net
sales |
$ |
741,761 |
|
|
$ |
744,608 |
|
|
$ |
1,520,593 |
|
|
$ |
1,510,682 |
|
| Cost of
products sold |
530,299 |
|
|
580,681 |
|
|
1,102,701 |
|
|
1,136,182 |
|
| Gross profit |
211,462 |
|
|
163,927 |
|
|
417,892 |
|
|
374,500 |
|
| |
|
|
|
|
|
|
|
| Marketing and selling expenses |
50,617 |
|
|
49,470 |
|
|
99,844 |
|
|
105,064 |
|
| Administrative expenses |
35,368 |
|
|
33,630 |
|
|
70,042 |
|
|
69,641 |
|
| Research and development expenses |
4,786 |
|
|
4,580 |
|
|
9,550 |
|
|
8,601 |
|
| Tradename impairment charges |
— |
|
|
27,430 |
|
|
— |
|
|
27,430 |
|
| Other expense, net |
17,445 |
|
|
5,288 |
|
|
20,310 |
|
|
9,518 |
|
| |
108,216 |
|
|
120,398 |
|
|
199,746 |
|
|
220,254 |
|
| Operating
income |
103,246 |
|
|
43,529 |
|
|
218,146 |
|
|
154,246 |
|
|
Non-operating income |
802 |
|
|
491 |
|
|
1,603 |
|
|
982 |
|
| Earnings
before interest and taxes |
104,048 |
|
|
44,020 |
|
|
219,749 |
|
|
155,228 |
|
| Interest expense |
30,184 |
|
|
28,507 |
|
|
72,078 |
|
|
109,238 |
|
| Interest income |
16 |
|
|
13 |
|
|
228 |
|
|
28 |
|
| Earnings
before income taxes |
73,880 |
|
|
15,526 |
|
|
147,899 |
|
|
46,018 |
|
| Provision
(benefit) for income taxes |
17,624 |
|
|
(3,092) |
|
|
34,729 |
|
|
4,251 |
|
| Net
earnings |
56,256 |
|
|
18,618 |
|
|
113,170 |
|
|
41,767 |
|
| Less: Net
(loss) earnings attributable to non-controlling interest |
(61) |
|
|
(51) |
|
|
(61) |
|
|
172 |
|
| Net
earnings attributable to Pinnacle Foods, Inc. and subsidiaries
common shareholders |
$ |
56,317 |
|
|
$ |
18,669 |
|
|
$ |
113,231 |
|
|
$ |
41,595 |
|
| |
|
|
|
|
|
|
|
| Net
earnings per share attributable to Pinnacle Foods, Inc. and
subsidiaries common shareholders: |
|
|
|
|
|
|
|
| Basic |
$ |
0.47 |
|
|
$ |
0.16 |
|
|
$ |
0.95 |
|
|
$ |
0.35 |
|
| Weighted average shares outstanding - basic |
118,774 |
|
|
118,114 |
|
|
118,635 |
|
|
117,869 |
|
| Diluted |
$ |
0.47 |
|
|
$ |
0.16 |
|
|
$ |
0.94 |
|
|
$ |
0.35 |
|
| Weighted average shares outstanding - diluted |
119,948 |
|
|
119,607 |
|
|
119,881 |
|
|
119,469 |
|
| Dividends declared |
$ |
0.325 |
|
|
$ |
0.285 |
|
|
$ |
0.650 |
|
|
$ |
0.570 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PINNACLE FOODS INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
(unaudited)(thousands, except share and per share
amounts)
| |
July 1, 2018 |
|
December 31, 2017 |
| Current
assets: |
|
|
|
| Cash and cash equivalents |
$ |
80,431 |
|
|
$ |
249,828 |
|
| Accounts receivable, net of allowances of $9,584 and $10,036,
respectively |
264,358 |
|
|
281,622 |
|
| Inventories |
507,937 |
|
|
489,806 |
|
| Other current assets |
15,889 |
|
|
11,061 |
|
| Total current assets |
868,615 |
|
|
1,032,317 |
|
| Plant assets, net of accumulated depreciation of $566,121 and
$566,202, respectively |
754,114 |
|
|
739,713 |
|
| Tradenames |
2,463,172 |
|
|
2,463,374 |
|
| Other assets, net |
173,971 |
|
|
164,899 |
|
| Goodwill |
2,175,290 |
|
|
2,177,961 |
|
| Total assets |
$ |
6,435,162 |
|
|
$ |
6,578,264 |
|
| |
|
|
|
| Current
liabilities: |
|
|
|
| Short-term borrowings |
$ |
1,842 |
|
|
$ |
2,739 |
|
| Current portion of long-term obligations |
54,126 |
|
|
33,934 |
|
| Accounts payable |
329,035 |
|
|
323,062 |
|
| Accrued trade marketing expense |
32,113 |
|
|
38,975 |
|
| Accrued liabilities |
119,945 |
|
|
122,131 |
|
| Dividends payable |
40,066 |
|
|
40,470 |
|
| Total current liabilities |
577,127 |
|
|
561,311 |
|
| Long-term debt |
2,703,917 |
|
|
2,925,594 |
|
| Pension and other postretirement benefits |
50,134 |
|
|
53,251 |
|
| Other long-term liabilities |
28,662 |
|
|
34,037 |
|
| Deferred tax liabilities |
643,792 |
|
|
623,833 |
|
| Total liabilities |
4,003,632 |
|
|
4,198,026 |
|
| Commitments
and contingencies |
|
|
|
|
Shareholders' equity: |
|
|
|
| Pinnacle preferred stock: $.01 per share, 50,000,000 shares
authorized, none issued |
— |
|
|
— |
|
| Pinnacle common stock: par value $.01 per share, 500,000,000
shares authorized; issued 120,184,208 and 120,018,215,
respectively |
1,202 |
|
|
1,200 |
|
| Additional paid-in-capital |
1,457,492 |
|
|
1,453,054 |
|
| Retained earnings |
1,027,855 |
|
|
987,238 |
|
| Accumulated other comprehensive loss |
(23,954) |
|
|
(30,250) |
|
| Capital stock in treasury, at cost, 1,000,000 common
shares |
(32,110) |
|
|
(32,110) |
|
| Total Pinnacle Foods Inc. and subsidiaries shareholders'
equity |
2,430,485 |
|
|
2,379,132 |
|
| Non-controlling interest |
1,045 |
|
|
1,106 |
|
| Total Equity |
2,431,530 |
|
|
2,380,238 |
|
| Total
liabilities and equity |
$ |
6,435,162 |
|
|
$ |
6,578,264 |
|
| |
|
|
|
|
|
|
|
PINNACLE FOODS INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)(thousands)
| |
Six months ended |
| |
July 1, 2018 |
|
June 25, 2017 |
| Cash flows
from operating activities |
|
|
|
| Net earnings |
$ |
113,170 |
|
|
$ |
41,767 |
|
| Non-cash charges (credits) to net earnings |
|
|
|
| Depreciation and amortization |
54,251 |
|
|
80,899 |
|
| Intangible asset impairment charge |
— |
|
|
27,430 |
|
| Amortization of debt acquisition costs and discount on term
loan |
1,612 |
|
|
2,597 |
|
| Call premium on note redemptions |
4,267 |
|
|
— |
|
| Recognition of deferred costs related to refinancing |
12,681 |
|
|
28,494 |
|
| Change in value of financial instruments, including amounts
reclassified from Accumulated Other Comprehensive Loss from
settlement of hedges |
1,078 |
|
|
25,043 |
|
| Equity-based compensation charges |
9,979 |
|
|
9,656 |
|
| Pension expense, net of contributions |
(2,641) |
|
|
(1,136) |
|
| Other long-term liabilities |
(6,331) |
|
|
(1,193) |
|
| Foreign exchange losses/(gains) |
894 |
|
|
(398) |
|
| Deferred income taxes |
12,348 |
|
|
(5,780) |
|
| Changes in working capital |
|
|
|
| Other liabilities - cash settlement of hedges related to
refinancing |
— |
|
|
(20,722) |
|
| Accounts receivable |
16,851 |
|
|
11,777 |
|
| Inventories |
(19,056) |
|
|
(31,745) |
|
| Accrued trade marketing expense |
(6,973) |
|
|
(17,748) |
|
| Accounts payable |
20,870 |
|
|
35,379 |
|
| Accrued liabilities |
1,091 |
|
|
(53,991) |
|
| Other current assets |
659 |
|
|
(9,981) |
|
| Net cash provided by operating activities |
214,750 |
|
|
120,348 |
|
| Cash flows
from investing activities |
|
|
|
| Capital expenditures |
(60,333) |
|
|
(49,355) |
|
| Proceeds from sale of plant assets |
— |
|
|
1,947 |
|
| Other investing |
608 |
|
|
— |
|
| Net cash used in investing activities |
(59,725) |
|
|
(47,408) |
|
| Cash flows
from financing activities |
|
|
|
| Proceeds from bank term loans |
2,289,380 |
|
|
2,262,000 |
|
| Repayments of long-term obligations |
(2,614,629) |
|
|
(2,472,320) |
|
| Proceeds from short-term borrowings |
— |
|
|
1,634 |
|
| Repayments of short-term borrowings |
(2,391) |
|
|
(2,240) |
|
| Borrowings under revolving credit facility |
100,000 |
|
|
— |
|
| Repayment of capital lease obligations |
(6,188) |
|
|
(4,216) |
|
| Dividends paid |
(78,171) |
|
|
(67,412) |
|
| Net proceeds from issuance of common stock |
2,046 |
|
|
9,051 |
|
| Taxes paid related to net share settlement of equity
awards |
(7,572) |
|
|
(8,926) |
|
| Debt acquisition costs |
(6,569) |
|
|
(12,937) |
|
| Net cash used in financing activities |
(324,094) |
|
|
(295,366) |
|
| Effect of
exchange rate changes on cash |
(328) |
|
|
219 |
|
| Net change
in cash and cash equivalents |
(169,397) |
|
|
(222,207) |
|
| Cash and
cash equivalents - beginning of period |
249,828 |
|
|
353,076 |
|
| Cash and
cash equivalents - end of period |
$ |
80,431 |
|
|
$ |
130,869 |
|
| |
|
|
|
|
Supplemental disclosures of cash flow information: |
|
|
|
| Interest
paid |
$ |
60,817 |
|
|
$ |
62,180 |
|
| Interest
received |
1,391 |
|
|
28 |
|
| Income
taxes paid |
44,617 |
|
|
47,569 |
|
| Non-cash
investing and financing activities: |
|
|
|
| New capital leases |
17,901 |
|
|
8,951 |
|
| Dividends payable |
40,066 |
|
|
35,244 |
|
| Accrued additions to plant assets |
12,518 |
|
|
10,422 |
|
| |
|
|
|
|
|
Pinnacle Foods
Inc.Reconciliation of Non-GAAP measures
(Unaudited)Adjusted Gross Profit and Adjusted Gross Profit as a %
of sales (1)(thousands)
| |
|
Three months ended |
|
Six months ended |
| |
|
July 1, 2018 |
|
June 25, 2017 |
|
July 1, 2018 |
|
June 25, 2017 |
|
Gross Profit (as reported) |
|
$ |
211,462 |
|
$ |
163,927 |
|
$ |
417,892 |
|
$ |
374,500 |
| Accelerated depreciation expense - Aunt Jemima and other
frozen breakfast products exit |
|
— |
|
23,602 |
|
|
— |
|
23,602 |
| Depreciation expense - Acquisition integration |
|
— |
|
— |
|
|
458 |
|
— |
| Non-cash items |
|
|
|
|
|
|
|
|
| Unrealized losses resulting from hedging (2) |
|
474 |
|
2,324 |
|
|
1,082 |
|
4,319 |
| Aunt Jemima and other frozen breakfast products exit (3) |
|
— |
|
5,078 |
|
|
— |
|
5,078 |
| Acquisition, merger and other restructuring charges |
|
|
|
|
|
|
|
|
| Restructuring and integration costs (4) |
|
686 |
|
4,021 |
|
|
3,649 |
|
9,037 |
| Employee severance (5) |
|
— |
|
— |
|
|
750 |
|
270 |
| Aunt Jemima and other frozen breakfast products exit (6) |
|
— |
|
4,324 |
|
|
— |
|
4,324 |
|
Adjusted Gross Profit |
|
$ |
212,622 |
|
$ |
203,276 |
|
|
423,831 |
|
$ |
421,130 |
|
Adjusted Gross Profit as a % of sales |
|
|
|
|
|
|
|
|
| Adjusted Gross Profit |
|
$ |
212,622 |
|
$ |
203,276 |
|
$ |
423,831 |
|
$ |
421,130 |
| Net sales |
|
$ |
741,761 |
|
$ |
744,608 |
|
$ |
1,520,593 |
|
1,510,682 |
| |
|
|
|
|
|
|
|
|
|
Adjusted Gross Profit as a % of sales |
|
28.7% |
|
27.3% |
|
|
27.9% |
|
27.9% |
| |
|
|
|
|
|
|
|
|
|
- Excludes Boulder Brands and Garden Protein anticipated
synergies which are included in calculating Covenant
compliance.
- Represents non-cash losses resulting from mark-to-market
obligations under derivative contracts.
- Primarily represents charges to adjust inventory to net
realizable value resulting from the exit of the business.
- For the three and six months ended July 1, 2018, primarily
represents integration costs of the Beaver Dam acquisition. For the
three and six months ended June 25, 2017 primarily represents
integration costs of the Garden Protein and Boulder Brands
acquisitions.
- Represents severance costs for terminated employees not related
to business acquisitions.
- Primarily represents employee termination costs and contract
termination fees resulting from the exit of the business.
Pinnacle Foods
Inc.Reconciliation of Non-GAAP measures
(Unaudited)Adjusted Net Earnings & Adjusted EPS (1)(thousands,
except per share amounts)
| |
|
Three months ended |
|
Six months ended |
| |
|
July 1, 2018 |
|
June 25, 2017 |
|
July 1, 2018 |
|
June 25, 2017 |
| Net
earnings |
|
$ |
56,256 |
|
|
$ |
18,618 |
|
|
$ |
113,170 |
|
|
$ |
41,767 |
|
| Accelerated depreciation expense - Aunt Jemima and other
frozen breakfast products exit |
|
— |
|
|
23,602 |
|
|
— |
|
|
23,602 |
|
| Accelerated amortization expense - Aunt Jemima and other
frozen breakfast products exit |
|
— |
|
|
3,783 |
|
|
— |
|
|
3,783 |
|
| Accelerated amortization expense - gardein Private Label
business exit |
|
— |
|
|
— |
|
|
— |
|
|
656 |
|
| Depreciation expense - Acquisition integration |
|
— |
|
|
— |
|
|
458 |
|
|
— |
|
| Non-cash items |
|
|
|
|
|
|
|
|
| Unrealized losses resulting from hedging (2) |
|
474 |
|
|
2,324 |
|
|
1,082 |
|
|
4,319 |
|
| Tradename impairment charges (3) |
|
— |
|
|
27,430 |
|
|
— |
|
|
27,430 |
|
| Foreign exchange losses/(gains) (4) |
|
369 |
|
|
(165) |
|
|
894 |
|
|
(398) |
|
| Wind down of Boulder Brands UK operations (5) |
|
— |
|
|
(771) |
|
|
— |
|
|
(771) |
|
| Aunt Jemima and other frozen breakfast products exit (6) |
|
— |
|
|
5,078 |
|
|
— |
|
|
5,078 |
|
| Acquisition, merger and other restructuring charges |
|
|
|
|
|
|
|
|
| Restructuring and integration costs (7) |
|
713 |
|
|
4,591 |
|
|
4,305 |
|
|
10,441 |
|
| Employee severance (8) |
|
— |
|
|
— |
|
|
750 |
|
|
977 |
|
| Aunt Jemima and other frozen breakfast products exit (9) |
|
— |
|
|
4,324 |
|
|
— |
|
|
4,324 |
|
| Merger agreement costs (10) |
|
10,836 |
|
|
— |
|
|
10,836 |
|
|
— |
|
| Other adjustment items |
|
|
|
|
|
|
|
|
| Redemption premium on the early extinguishment of debt
(11) |
|
4,267 |
|
|
— |
|
|
4,267 |
|
|
— |
|
| Interest expense (12) |
|
1,768 |
|
|
— |
|
|
12,681 |
|
|
49,451 |
|
| Tax Impact of adjustments to Adjusted Net Earnings (13) |
|
(3,883) |
|
|
(25,572) |
|
|
(8,850) |
|
|
(47,216) |
|
|
Adjusted Net Earnings |
|
$ |
70,800 |
|
|
$ |
63,242 |
|
|
$ |
139,593 |
|
|
$ |
123,443 |
|
|
Adjusted Earnings Per Share |
|
|
|
|
|
|
|
|
| Adjusted Net Earnings |
|
$ |
70,800 |
|
|
$ |
63,242 |
|
|
$ |
139,593 |
|
|
$ |
123,443 |
|
| Diluted weighted average outstanding shares |
|
119,948 |
|
|
119,607 |
|
|
119,881 |
|
|
119,469 |
|
|
Adjusted Earnings Per Share |
|
$ |
0.59 |
|
|
$ |
0.53 |
|
|
$ |
1.16 |
|
|
$ |
1.03 |
|
| |
|
|
|
|
|
|
|
|
|
Diluted earnings per share (as reported) |
|
$ |
0.47 |
|
|
$ |
0.16 |
|
|
$ |
0.94 |
|
|
$ |
0.35 |
|
| Accelerated depreciation expense - Aunt Jemima and other
frozen breakfast products exit |
|
— |
|
|
0.20 |
|
|
— |
|
|
0.20 |
|
| Accelerated amortization expense - Aunt Jemima and other
frozen breakfast products exit |
|
— |
|
|
0.03 |
|
|
— |
|
|
0.03 |
|
| Accelerated amortization expense - gardein Private Label
business exit |
|
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
| Non-cash items |
|
|
|
|
|
|
|
|
| Unrealized losses resulting from hedging (2) |
|
— |
|
|
0.02 |
|
|
0.01 |
|
|
0.04 |
|
| Tradename impairment charges (3) |
|
— |
|
|
0.23 |
|
|
— |
|
|
0.23 |
|
| Foreign exchange losses/(gains) (4) |
|
— |
|
|
— |
|
|
0.01 |
|
|
— |
|
| Wind down of Boulder Brands UK operations (5) |
|
— |
|
|
(0.01) |
|
|
— |
|
|
(0.01) |
|
| Aunt Jemima and other frozen breakfast products exit (6) |
|
— |
|
|
0.04 |
|
|
— |
|
|
0.04 |
|
| Acquisition, merger and other restructuring charges |
|
|
|
|
|
|
|
|
| Restructuring and integration costs (7) |
|
0.01 |
|
|
0.04 |
|
|
0.04 |
|
|
0.09 |
|
| Employee severance (8) |
|
— |
|
|
— |
|
|
0.01 |
|
|
0.01 |
|
| Aunt Jemima and other frozen breakfast products exit (9) |
|
— |
|
|
0.04 |
|
|
— |
|
|
0.04 |
|
| Merger agreement costs (10) |
|
0.09 |
|
|
— |
|
|
0.09 |
|
|
— |
|
| Other adjustment items |
|
|
|
|
|
|
|
|
| Redemption premium on the early extinguishment of debt
(11) |
|
0.04 |
|
|
— |
|
|
0.04 |
|
|
— |
|
| Interest expense (12) |
|
0.01 |
|
|
— |
|
|
0.11 |
|
|
0.41 |
|
| Tax Impact of adjustments to Adjusted Net Earnings (13) |
|
(0.03) |
|
|
(0.21) |
|
|
(0.07) |
|
|
(0.40) |
|
|
Adjusted Earnings Per Share |
|
$ |
0.59 |
|
|
$ |
0.53 |
|
|
$ |
1.16 |
|
|
$ |
1.03 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Excludes Boulder Brands and Garden Protein anticipated
synergies which are included in calculating Covenant
compliance.
- Represents non-cash losses resulting from mark-to-market
obligations under derivative contracts.
- For the three and six months ended June 25, 2017, represents
tradename impairment on Aunt Jemima.
- Represents foreign exchange gains and losses resulting from
intra-entity loans that are anticipated to be settled in the
foreseeable future.
- Represents adjustments resulting from the voluntary wind-down
of the Boulder Brands private-label gluten-free bakery operation
which is based in the United Kingdom.
- Primarily represents charges to adjust inventory to net
realizable value resulting from the exit of the business.
- For the three and six months ended July 1, 2018, primarily
represents integration costs of the Beaver Dam acquisition. For the
three and six months ended June 25, 2017 primarily represents
integration costs of the Garden Protein and Boulder Brands
acquisitions.
- Represents severance costs for terminated employees not related
to business acquisitions.
- Primarily represents employee termination costs and contract
termination fees resulting from the exit of the business.
- For the three and six months ended July 1, 2018, represents
various professional fees associated with the Merger
Agreement.
- For the three and six months ended July 1, 2018, represents
premiums paid on the May 30, 2018 redemption of $350.0 million of
4.875% Senior Notes due 2021.
- For the three months ended July 1, 2018, represents non-cash
charge for deferred financing costs resulting from the May 30, 2018
redemption of $350.0 million of 4.875% Senior Notes due 2021. For
the six months ended July 1, 2018, represents a $10.9 million
non-cash charge for deferred financing costs resulting from the
March 2018 term loan refinancing as well as deferred financing
costs resulting from the second quarter Senior Notes redemption.
For the six months ended June 25, 2017, represents charges
associated with the February 2017 term loan refinancing which
consisted of a $28.5 million non-cash charge for deferred financing
costs and original discount, a $20.7 million cash charge resulting
from the de-designation and settlement of interest rate swaps, and
a $0.2 million cash charge for other refinancing expenses.
- See Adjusted Effective Income Tax Rate reconciliation for
further details.
Pinnacle Foods
Inc.Reconciliation of Non-GAAP measures
(Unaudited)Adjusted EBIT & Adjusted EBITDA (1)(thousands)
| |
|
Three months ended |
|
Six months ended |
| |
|
July 1, 2018 |
|
June 25, 2017 |
|
July 1, 2018 |
|
June 25, 2017 |
| Net
earnings |
|
$ |
56,256 |
|
|
$ |
18,618 |
|
|
$ |
113,170 |
|
|
$ |
41,767 |
|
| Interest
expense, net |
|
30,168 |
|
|
28,494 |
|
|
71,850 |
|
|
109,210 |
|
| Provision
for income taxes |
|
17,624 |
|
|
(3,092 |
) |
|
34,729 |
|
|
4,251 |
|
| Earnings
before interest and taxes (as reported) |
|
104,048 |
|
|
44,020 |
|
|
219,749 |
|
|
155,228 |
|
| Accelerated depreciation expense - Aunt Jemima and other
frozen breakfast products exit |
|
— |
|
|
23,602 |
|
|
— |
|
|
23,602 |
|
| Accelerated amortization expense - Aunt Jemima and other
frozen breakfast products exit |
|
— |
|
|
3,783 |
|
|
— |
|
|
3,783 |
|
| Accelerated amortization expense - gardein Private Label
business exit |
|
— |
|
|
— |
|
|
— |
|
|
656 |
|
| Depreciation expense - Acquisition integration |
|
— |
|
|
— |
|
|
458 |
|
|
— |
|
| Non-cash items |
|
|
|
|
|
|
|
|
| Unrealized losses resulting from hedging (2) |
|
474 |
|
|
2,324 |
|
|
1,082 |
|
|
4,319 |
|
| Tradename impairment charges (3) |
|
— |
|
|
27,430 |
|
|
— |
|
|
27,430 |
|
| Foreign exchange losses/(gains) (4) |
|
369 |
|
|
(165) |
|
|
894 |
|
|
(398) |
|
| Wind down of Boulder Brands UK operations (5) |
|
— |
|
|
(771) |
|
|
— |
|
|
(771) |
|
| Aunt Jemima and other frozen breakfast products exit (6) |
|
— |
|
|
5,078 |
|
|
— |
|
|
5,078 |
|
| Acquisition, merger and other restructuring charges |
|
|
|
|
|
|
|
|
| Restructuring and integration costs (7) |
|
713 |
|
|
4,591 |
|
|
4,305 |
|
|
10,441 |
|
| Employee severance (8) |
|
— |
|
|
— |
|
|
750 |
|
|
977 |
|
| Aunt Jemima and other frozen breakfast products exit (9) |
|
— |
|
|
4,324 |
|
|
— |
|
|
4,324 |
|
| Merger agreement costs (10) |
|
10,836 |
|
|
— |
|
|
10,836 |
|
|
— |
|
| Other adjustment items |
|
|
|
|
|
|
|
|
| Redemption premium on the early extinguishment of debt
(11) |
|
4,267 |
|
|
— |
|
|
4,267 |
|
|
— |
|
|
Adjusted EBIT |
|
$ |
120,707 |
|
|
$ |
114,216 |
|
|
$ |
242,341 |
|
|
$ |
234,669 |
|
| Depreciation |
|
25,036 |
|
|
23,885 |
|
|
49,138 |
|
|
46,431 |
|
| Amortization |
|
2,327 |
|
|
2,541 |
|
|
4,655 |
|
|
6,427 |
|
|
Adjusted EBITDA |
|
$ |
148,070 |
|
|
$ |
140,642 |
|
|
$ |
296,134 |
|
|
$ |
287,527 |
|
| |
|
|
|
|
|
|
|
|
- Excludes Boulder Brands and Garden Protein anticipated
synergies which are included in calculating Covenant
compliance.
- Represents non-cash losses resulting from mark-to-market
obligations under derivative contracts.
- For the three and six months ended June 25, 2017, represents
tradename impairment on Aunt Jemima.
- Represents foreign exchange gains and losses resulting from
intra-entity loans that are anticipated to be settled in the
foreseeable future.
- Represents adjustments resulting from the voluntary wind-down
of the Boulder Brands private-label gluten-free bakery operation
which is based in the United Kingdom.
- Primarily represents charges to adjust inventory to net
realizable value resulting from the exit of the business.
- For the three and six months ended July 1, 2018, primarily
represents integration costs of the Beaver Dam acquisition. For the
three and six months ended June 25, 2017 primarily represents
integration costs of the Garden Protein and Boulder Brands
acquisitions.
- Represents severance costs for terminated employees not related
to business acquisitions.
- Primarily represents employee termination costs and contract
termination fees resulting from the exit of the business.
- For the three and six months ended July 1, 2018, represents
various professional fees associated with the Merger
Agreement.
- For the three and six months ended July 1, 2018, represents
premiums paid on the May 30, 2018 redemption of $350.0 million of
4.875% Senior Notes due 2021.
Pinnacle Foods
Inc.Reconciliation of Non-GAAP measures
(Unaudited)Adjusted Net Interest Expense(thousands)
| |
|
Three months ended |
|
Six months ended |
| |
|
July 1, 2018 |
|
June 25, 2017 |
|
July 1, 2018 |
|
June 25, 2017 |
| Interest expense |
|
$ |
30,184 |
|
|
$ |
28,507 |
|
|
$ |
72,078 |
|
|
$ |
109,238 |
|
| Interest income |
|
16 |
|
|
13 |
|
|
228 |
|
|
28 |
|
| Net
Interest Expense (as reported) |
|
30,168 |
|
|
28,494 |
|
|
71,850 |
|
|
109,210 |
|
| Cash settlement of hedges related to refinancing |
|
— |
|
|
— |
|
|
— |
|
|
(20,722) |
|
| Non-cash recognition of deferred costs related to refinancing
(1) |
|
— |
|
|
— |
|
|
(10,913) |
|
|
(28,494) |
|
| Non-cash recognition of deferred costs related to redemption
of 4.875% Senior Notes (2) |
|
(1,768) |
|
|
— |
|
|
(1,768) |
|
|
— |
|
| Other expenses related to refinancing |
|
— |
|
|
— |
|
|
— |
|
|
(235) |
|
|
Adjusted Net Interest Expense |
|
$ |
28,400 |
|
|
$ |
28,494 |
|
|
$ |
59,169 |
|
|
$ |
59,759 |
|
| |
|
|
|
|
|
|
|
|
- For the six months ended July 1, 2018, represents a
non-cash charge for deferred financing costs resulting from the
First Quarter 2018 Refinancing. For the six months ended
June 25, 2017, represents charges associated with the 2017
Refinancing which consisted of recognizing a non-cash charge for
deferred financing costs.
- For the three and six months ended July 1, 2018, represents
non-cash charge for deferred financing costs resulting from the May
30, 2018 redemption of $350.0 million of 4.875% Senior Notes due
2021.
Pinnacle Foods
Inc.Reconciliation of Non-GAAP measures
(Unaudited)Adjusted Effective Income Tax Rate
| |
|
Three months ended |
|
Six months ended |
| |
|
July 1, 2018 |
|
June 25, 2017 |
|
July 1, 2018 |
|
June 25, 2017 |
|
Effective income tax rate (as reported) |
|
23.9% |
|
|
(19.9)% |
|
|
23.5% |
|
|
9.2% |
|
| Deferred
tax asset adjustment (1) |
|
0.3% |
|
|
—% |
|
|
0.6% |
|
|
—% |
|
| Effect of
windfall benefit (2) |
|
0.2% |
|
|
33.2% |
|
|
0.3% |
|
|
16.1% |
|
| Transaction
costs (3) |
|
(1.0)% |
|
|
—% |
|
|
(0.5)% |
|
|
—% |
|
| State law
changes (4) |
|
(0.1)% |
|
|
12.7% |
|
|
(0.2)% |
|
|
3.8% |
|
| Other |
|
—% |
|
|
0.2% |
|
|
0.1% |
|
|
0.3% |
|
|
Adjusted Effective Income Tax Rate |
|
23.3% |
|
|
26.2% |
|
|
23.8% |
|
|
29.4% |
|
| |
|
|
|
|
|
|
|
|
- For the three and six months ended July 1, 2018, represents the
impact of a deferred tax asset adjustment in connection with the
Tax Cuts and Jobs Act of 2017
- For the three and six months ended July 1, 2018 and June 25,
2027, represents the differential in the weighted average effect,
on a GAAP compared to adjusted income basis, of our deduction for
excess tax benefits from share based payment transactions being
recorded as an item of continuing operations in accordance with ASU
2016-09, "Improvements to Employee Share-Based Payment Accounting"
effective for our 2017 fiscal year.
- For the three and six months ended July 1, 2018, represents
non-deductible transaction costs in connection with the merger
agreement with Conagra Brands, Inc.
- For the three and six months ended July 1, 2018, represents the
differential in the weighted averaged effect, on a GAAP compared to
adjusted income basis, of changes in state tax laws on our deferred
income tax liability.
| |
| Pinnacle Foods
Inc.Reconciliation of Non-GAAP measures
(Unaudited)Adjusted Segment amounts(thousands) |
| |
| |
|
Three months ended |
|
Six months ended |
| |
|
July 1, 2018 |
|
June 25, 2017 |
|
July 1, 2018 |
|
June 25, 2017 |
| Net sales -
Reported |
|
|
|
|
|
|
|
|
| Frozen |
|
$ |
308,504 |
|
|
$ |
295,893 |
|
|
$ |
653,375 |
|
|
$ |
616,835 |
|
|
Grocery |
|
256,620 |
|
|
276,057 |
|
|
517,627 |
|
|
535,407 |
|
|
Boulder |
|
98,898 |
|
|
94,654 |
|
|
196,654 |
|
|
191,946 |
|
|
Specialty |
|
77,739 |
|
|
78,004 |
|
|
152,937 |
|
|
166,494 |
|
| Total |
|
$ |
741,761 |
|
|
$ |
744,608 |
|
|
$ |
1,520,593 |
|
|
$ |
1,510,682 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Earnings before interest & taxes - Reported |
|
|
|
|
|
|
|
| Frozen |
|
$ |
49,740 |
|
|
$ |
(12,260) |
|
|
$ |
103,451 |
|
|
$ |
38,662 |
|
|
Grocery |
|
52,131 |
|
|
61,870 |
|
|
101,879 |
|
|
113,677 |
|
|
Boulder |
|
16,018 |
|
|
12,249 |
|
|
27,869 |
|
|
18,921 |
|
|
Specialty |
|
9,489 |
|
|
(10,648) |
|
|
17,705 |
|
|
(1,760) |
|
| Unallocated corporate expenses |
(23,330) |
|
|
(7,191) |
|
|
(31,155) |
|
|
(14,272) |
|
| Total |
|
$ |
104,048 |
|
|
$ |
44,020 |
|
|
$ |
219,749 |
|
|
$ |
155,228 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Adjustments
(Non GAAP - See separate table) |
|
|
|
|
|
|
|
|
| Frozen |
|
$ |
587 |
|
|
$ |
50,341 |
|
|
$ |
4,863 |
|
|
$ |
51,285 |
|
|
Grocery |
|
383 |
|
|
1,193 |
|
|
1,137 |
|
|
2,151 |
|
|
Boulder |
|
514 |
|
|
3,576 |
|
|
1,290 |
|
|
10,082 |
|
|
Specialty |
|
72 |
|
|
15,085 |
|
|
199 |
|
|
15,922 |
|
| Unallocated corporate expenses |
15,103 |
|
|
— |
|
|
15,103 |
|
|
— |
|
| Total |
|
$ |
16,659 |
|
|
$ |
70,195 |
|
|
$ |
22,592 |
|
|
$ |
79,440 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Earnings
before interest & taxes - Adjusted (Non GAAP - See separate
discussion and tables) |
|
|
|
|
|
|
|
|
| Frozen |
|
$ |
50,327 |
|
|
$ |
38,081 |
|
|
$ |
108,314 |
|
|
$ |
89,947 |
|
|
Grocery |
|
52,514 |
|
|
63,063 |
|
|
103,016 |
|
|
115,828 |
|
|
Boulder |
|
16,532 |
|
|
15,825 |
|
|
29,159 |
|
|
29,003 |
|
|
Specialty |
|
9,561 |
|
|
4,437 |
|
|
17,904 |
|
|
14,162 |
|
| Unallocated
corporate expenses |
|
(8,227) |
|
|
(7,191) |
|
|
(16,052) |
|
|
(14,272) |
|
| Total |
|
$ |
120,707 |
|
|
$ |
114,215 |
|
|
$ |
242,341 |
|
|
$ |
234,668 |
|
| |
|
|
|
|
|
|
|
|
| Pinnacle Foods
Inc.Reconciliation of Non-GAAP measures
(Unaudited)Supplemental Schedule of Adjustments
Detail(millions) |
| |
| |
|
Adjustments to Earnings Before Interest
and Taxes |
| |
|
Three months ended |
|
Six months ended |
| |
|
July 1, 2018 |
|
June 25, 2017 |
|
July 1, 2018 |
|
June 25, 2017 |
|
Frozen |
|
|
|
|
|
|
|
|
| Aunt Jemima
and other frozen breakfast products exit |
|
$ |
— |
|
|
$ |
49.4 |
|
|
$ |
— |
|
|
$ |
49.4 |
|
|
Restructuring and acquisition integration charges |
|
0.4 |
|
|
0.1 |
|
|
4.1 |
|
|
0.2 |
|
| Employee
severance |
|
— |
|
|
— |
|
|
0.3 |
|
|
0.1 |
|
| Unrealized
mark-to-market loss/(gain) |
|
0.2 |
|
|
0.8 |
|
|
0.5 |
|
|
1.6 |
|
|
Total Frozen |
|
$ |
0.6 |
|
|
$ |
50.3 |
|
|
$ |
4.9 |
|
|
$ |
51.3 |
|
| |
|
|
|
|
|
|
|
|
|
Grocery |
|
|
|
|
|
|
|
|
|
Restructuring and acquisition integration charges |
|
$ |
0.2 |
|
|
$ |
0.1 |
|
|
$ |
0.5 |
|
|
$ |
0.1 |
|
| Employee
severance |
|
— |
|
|
— |
|
|
0.3 |
|
|
0.1 |
|
| Unrealized
mark-to-market loss/(gain) |
|
0.2 |
|
|
1.1 |
|
|
0.3 |
|
|
2.0 |
|
|
Total Grocery |
|
$ |
0.4 |
|
|
$ |
1.2 |
|
|
$ |
1.1 |
|
|
$ |
2.2 |
|
| |
|
|
|
|
|
|
|
|
|
Boulder |
|
|
|
|
|
|
|
|
|
Restructuring and acquisition integration charges |
|
$ |
0.5 |
|
|
$ |
3.3 |
|
|
$ |
1.1 |
|
|
$ |
8.9 |
|
| Employee
severance |
|
— |
|
|
— |
|
|
0.1 |
|
|
0.7 |
|
| Unrealized
mark-to-market loss/(gain) |
|
— |
|
|
0.3 |
|
|
0.1 |
|
|
0.5 |
|
|
Total Boulder |
|
$ |
0.5 |
|
|
$ |
3.6 |
|
|
$ |
1.3 |
|
|
$ |
10.1 |
|
| |
|
|
|
|
|
|
|
|
|
Specialty |
|
|
|
|
|
|
|
|
| Aunt Jemima
and other frozen breakfast products exit |
|
$ |
— |
|
|
$ |
14.8 |
|
|
$ |
— |
|
|
$ |
14.8 |
|
|
Restructuring charges |
|
— |
|
|
0.2 |
|
|
— |
|
|
0.2 |
|
| Accelerated
amortization due to the exit of the gardein Private Label
business |
|
— |
|
|
— |
|
|
— |
|
|
0.7 |
|
| Employee
severance |
|
— |
|
|
— |
|
|
0.1 |
|
|
— |
|
| Unrealized
mark-to-market loss/(gain) |
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
0.2 |
|
|
Total Specialty |
|
$ |
0.1 |
|
|
$ |
15.1 |
|
|
$ |
0.2 |
|
|
$ |
15.9 |
|
| |
|
|
|
|
|
|
|
|
|
Unallocated Corporate Expenses |
|
|
|
|
|
|
|
|
| Merger
agreement costs |
|
$ |
10.8 |
|
|
$ |
— |
|
|
$ |
10.8 |
|
|
$ |
— |
|
| Redemption
premium on early extinguishment of debt |
|
4.3 |
|
|
— |
|
|
4.3 |
|
|
— |
|
|
Total Unallocated Corporate Expenses |
|
$ |
15.1 |
|
|
$ |
— |
|
|
$ |
15.1 |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PINNACLE FOODS INC. (NYSE:PF)
Historical Stock Chart
From Jan 2025 to Feb 2025
PINNACLE FOODS INC. (NYSE:PF)
Historical Stock Chart
From Feb 2024 to Feb 2025
