Third Quarter 2019 Highlights
- Net sales increased 7% to $927 million
- Income from operations increased 15% to $194 million; Adjusted
Income from Operations(1) increased 13% to
$194 million
- Adjusted EBITDA including unconsolidated joint ventures(1)
increased 7% to $253 million
- Diluted EPS decreased to $0.95 from $1.06, because diluted EPS for
the third quarter 2018 included a $0.16 net benefit from discrete
items attributable to U.S. tax reform
- Adjusted Diluted EPS(1) increased to $0.95
from $0.91
- Returned $36 million of cash to stockholders in the form of both
dividends and share repurchases
Updated FY 2019 Outlook
- Net sales expected to increase high single digits, up from a
previous estimate of mid-to-high single digits
- Adjusted EBITDA including unconsolidated joint ventures(1)
expected to be $895 million-$905 million, up from a previous estimate
of $870 million-$880 million
EAGLE, Idaho--(BUSINESS WIRE)--
Lamb Weston Holdings, Inc. (NYSE: LW) announced today its fiscal third
quarter 2019 results and updated its full year outlook.
“Our base business in North America and Asia continued to drive solid
sales and earnings growth in the third quarter, more than offsetting
softer results in Europe that are being affected by a historically poor
potato crop,” said Tom Werner, President and CEO. “Strong execution by
our commercial teams drove an overall good balance of price/mix
improvement and volume growth, while our supply chain team generated
operating efficiencies and cost savings to expand gross margins. In
addition, we continued to make good progress on our initiatives to
invest in production capacity, as well as operating, sales and product
innovation capabilities that we believe will support sustainable,
profitable growth over the long term. With our solid third quarter
results, operating momentum and favorable trends in global demand, we
have again raised our annual outlook for sales growth and EBITDA.”
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| | |
|
| |
| Summary of Third Quarter FY 2019 Results |
| ($ in millions, except per share) |
| | | | | | | | | | | | | | |
|
| | | | | | | Year-Over-Year | | | | | | Year-Over-Year |
| | | | Q3 2019 | | | Growth Rates | | | YTD 2019 | | | Growth Rates |
|
Net sales
| | | |
$
|
926.8
| | |
7
|
%
| | |
$
|
2,753.1
| | |
10
|
%
|
|
Income from operations
| | | |
$
|
193.8
| | |
15
|
%
| | |
$
|
520.4
| | |
17
|
%
|
|
Net income attributable to Lamb Weston
| | | |
$
|
141.4
| | |
(10
|
%)
| | |
$
|
368.2
| | |
16
|
%
|
|
Diluted EPS
| | | |
$
|
0.95
| | |
(10
|
%)
| | |
$
|
2.42
| | |
13
|
%
|
| | | | | | | | | | | | | | |
|
|
Adjusted EBITDA including unconsolidated joint ventures(1) | | | |
$
|
253.2
| | |
7
|
%
| | |
$
|
688.9
| | |
11
|
%
|
|
Adjusted Diluted EPS(1) | | | |
$
|
0.95
| | |
4
|
%
| | |
$
|
2.48
| | |
23
|
%
|
| | | | | | | | | | | | | | |
|
Q3 2019 Commentary
Net sales increased $63.4 million to $926.8 million, up 7 percent versus
the year-ago period. Volume increased 4 percent, primarily driven by
growth in the Company’s Global segment. Price/mix increased 3 percent
due to pricing actions and favorable mix. Approximately 2 percentage
points of the volume increase, and $18.5 million of the net sales
increase, related to increased revenue for customized products made to
customers’ unique recipes for which the timing of revenue recognition
changed with the Company’s adoption of Accounting Standards Update
2014-09, Revenue from Contracts with Customers (“new revenue
standard”) at the beginning of fiscal 2019 (see footnote (1) to the
Consolidated Statements of Earnings below).
Income from operations rose 15 percent to $193.8 million versus the
year-ago period, which included $1.7 million of pre-tax costs in the
prior year period related to the Company’s separation from Conagra
Brands, Inc. (formerly ConAgra Foods, Inc., “Conagra”) on November 9,
2016.
Excluding this comparability item, income from operations grew $22.9
million, or 13 percent, driven by higher sales and gross profit. Gross
profit increased $31.1 million due to favorable price/mix, volume growth
and supply chain efficiency savings, as well as a $5.7 million benefit
related to an increase in sales of customized products under the new
revenue standard. This increase was partially offset by input,
manufacturing and transportation cost inflation. In addition, gross
profit included a $4.0 million gain related to unrealized mark-to-market
adjustments and realized settlements associated with commodity hedging
contracts in the current quarter, compared with a $1.3 million loss
related to these items in the prior year period.
The rise in gross profit was partially offset by an $8.2 million
increase in selling, general and administrative expenses (“SG&A”),
excluding comparability items. The increase was largely driven by higher
expenses related to information technology services and infrastructure,
as well as investments in the Company’s sales, marketing and operating
capabilities. In addition, advertising and promotional expense increased
approximately $1 million versus the prior year period.
Adjusted EBITDA including unconsolidated joint ventures(1)
increased $15.6 million to $253.2 million, up 7 percent versus the prior
year period, primarily due to growth in income from operations and an
approximate $4 million incremental benefit from acquiring the remaining
50.01% equity interest in the Company’s joint venture (the “BSW
Acquisition”), Lamb Weston BSW, LLC (“Lamb Weston BSW”), partially
offset by lower equity method investment earnings.
Diluted EPS decreased $0.11, or 10 percent, to $0.95. The prior year
quarter included a $0.16 net discrete benefit (as described below)
attributable to the effects of the U.S. Tax Cuts and Jobs Act (the “Tax
Act”) enacted in December 2017.
Adjusted Diluted EPS(1) increased $0.04, or 4 percent, to
$0.95. The increase primarily reflects growth in income from operations,
which included a $0.02 benefit from the adoption of the new revenue
standard, and an approximately $0.02 benefit from the BSW Acquisition,
partially offset by lower equity method investment earnings and higher
tax expense.
The Company’s effective tax rate(2) in the third quarter of
fiscal 2019 was 21.9 percent. The lower rate in the third quarter of
fiscal 2018 of 4.5 percent versus 21.9 percent in the current year
period is primarily attributable to the effects of the Tax Act. The
third quarter of fiscal 2018 included an approximate $24 million, or
$0.16 per share, net discrete benefit, comprised of a $38.7 million
benefit from the estimated impact of remeasuring the Company’s net U.S.
deferred tax liabilities on the Company’s balance sheet at a lower tax
rate, partially offset by a $14.7 million transition tax on the
Company’s previously untaxed foreign earnings. Since the Company was
required to record the effect of changes in enacted tax laws or rates in
the interim period in which the change occurred, the Company recorded an
approximate $14 million benefit from a lower U.S. statutory tax rate, in
the third quarter of fiscal 2018, on earnings reported in the first half
of fiscal 2018. As a result, the effective tax rate for the third
quarter of fiscal 2018, excluding the approximate $38 million of tax
benefits attributable to the effects of the Tax Act, was 27.2%, which is
higher than the 21.9% effective tax rate in the third quarter of fiscal
2019, primarily because the timing of the Company’s fiscal year-end
resulted in an approximate 29% U.S. statutory rate in fiscal 2018,
compared with a 21% U.S. statutory rate in fiscal 2019.
Q3 2019 Segment Highlights
Global
|
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| | |
|
| |
|
| |
|
| |
| Global Segment Summary |
| | | | | | | | | | | | | |
|
| | | | | | | | Year-Over-Year | | | | | | |
| | | | | Q3 2019 | | | Growth Rates | | | Price/Mix | | | Volume |
| | | | | ($ in mil.) | | | | | | | | | |
|
Net sales
| | | |
$
|
498.2
| | |
11
|
%
| | |
2
|
%
| | |
9
|
%
|
|
Segment product contribution margin(1) | | | |
$
|
128.8
| | |
13
|
%
| | | | | | |
| | | | | | | | | | | | | | |
|
Net sales for the Global segment, which is comprised of the top 100
North American based restaurant chain customers as well as the Company’s
international business, increased $49.5 million to $498.2 million, up 11
percent compared to the prior year period. Volume increased 9 percent,
driven by growth in sales to strategic customers in the U.S. and key
international markets, as well as the benefit of limited time product
offerings. Price/mix increased 2 percent, largely reflecting pricing
adjustments associated with multi-year contracts. Approximately 4
percentage points of the volume increase, and $16.6 million of the net
sales increase, related to an increase in the sale of customized
products.
Global segment product contribution margin(1) increased $14.9
million to $128.8 million, up 13 percent compared to the prior year
period. Favorable price/mix, volume growth and supply chain efficiency
savings drove the increase, more than offsetting input, manufacturing
and transportation cost inflation.
Foodservice
|
|
|
| | |
|
| |
|
| |
|
| |
| Foodservice Segment Summary |
| | | | | | | | | | | | | |
|
| | | | | | | | Year-Over-Year | | | | | | |
| | | | | Q3 2019 | | | Growth Rates | | | Price/Mix | | | Volume |
| | | | | ($ in mil.) | | | | | | | | | |
|
Net sales
| | | |
$
|
265.5
| | |
5
|
%
| | |
4
|
%
| | |
1
|
%
|
|
Segment product contribution margin(1) | | | |
$
|
94.8
| | |
6
|
%
| | | | | | |
| | | | | | | | | | | | | | |
|
Net sales for the Foodservice segment, which services North American
foodservice distributors and restaurant chains outside the top 100 North
American based restaurant chain customers, increased $12.0 million to
$265.5 million, up 5 percent compared to the prior year period, and
included a negative $0.2 million impact from the adoption of the new
revenue standard. Price/mix increased 4 percent, primarily reflecting
pricing actions initiated in the fall of 2018, as well as improved mix.
Volume increased 1 percent, led by growth in branded products.
Foodservice segment product contribution margin(1) increased
$5.3 million to $94.8 million, up 6 percent compared to the prior year
period, as favorable price/mix and supply chain efficiency savings more
than offset input, manufacturing and transportation cost inflation.
Retail
|
|
|
| | |
|
| |
|
| |
|
| |
| Retail Segment Summary |
| | | | | | | | | | | | | |
|
| | | | | | | | Year-Over-Year | | | | | | |
| | | | | Q3 2019 | | | Growth Rates | | | Price/Mix | | | Volume |
| | | | | ($ in mil.) | | | | | | | | | |
|
Net sales
| | | |
$
|
129.0
| | |
(1
|
%)
| | |
1
|
%
| | |
(2
|
%)
|
|
Segment product contribution margin(1) | | | |
$
|
29.1
| | |
(4
|
%)
| | | | | | |
| | | | | | | | | | | | | |
|
Net sales for the Retail segment, which includes sales of branded and
private label products to grocery, mass merchant and club customers in
North America, declined $1.2 million to $129.0 million, down 1 percent
compared to the prior year period, and included a $0.5 million benefit
from the adoption of the new revenue standard. Price/mix increased 1
percent, largely due to improved mix. Despite a significant increase in
shipments of branded products, volume declined 2 percent, primarily due
to the timing of private label product shipments in the prior year
period.
Retail segment product contribution margin(1) declined $1.2
million to $29.1 million, down 4 percent compared to the prior year
period, as input, manufacturing and transportation cost inflation, along
with lower sales volumes, more than offset favorable price/mix.
Advertising and promotional expense also increased versus the prior year
period, primarily in support of Grown in Idaho branded products.
Equity Method Investment Earnings
Equity method investment earnings from unconsolidated joint ventures in
Europe and the U.S. were $14.2 million and $26.4 million for the third
quarter of fiscal 2019 and 2018, respectively. These amounts included a
$0.9 million unrealized loss related to mark-to-market adjustments
associated with currency and commodity hedging contracts in the current
quarter and a $2.5 million gain related to these items in the prior year
quarter. Excluding these adjustments, earnings from equity method
investments declined $8.8 million compared to the prior year period,
largely reflecting higher raw potato prices and lower sales volumes
associated with a poor crop in Europe.
Outlook
The Company updated its outlook for fiscal year 2019 as follows:
|
|
|
| |
| FY 2019 Outlook Summary |
| | | |
|
|
Net sales growth rate
| | | |
High Single Digits
|
|
|
|
|
|
|
| | | |
|
|
Adjusted EBITDA including unconsolidated joint ventures(1) | | | | $895 million to $905 million |
|
|
|
|
|
|
| | | |
|
Interest expense
| | | |
Approximately $110 million |
|
|
|
|
|
|
| | | |
|
|
Effective tax rate(2) excluding comparability items
| | | |
22% to 23%
|
|
|
|
|
|
|
| | | |
|
|
Cash used for capital expenditures
| | | |
Approximately $350 million |
| | | |
|
As summarized in the table above, the Company expects:
-
Net sales to grow high single digits. The Company’s previous estimate
was for net sales to grow mid-to-high single digits.
-
Adjusted EBITDA including unconsolidated joint ventures(1)
in the range of $895 million to $905 million, an increase from the
Company’s previous estimate of $870 million to $880 million. For
fiscal 2019, the Company expects:
-
The rate of gross profit dollar growth to be more than net sales
growth.
-
To incur significantly higher SG&A as it invests to upgrade its
information systems and enterprise resource planning
infrastructure, as well as sales, marketing, innovation,
operations and other functional capabilities, designed to drive
operating efficiencies and support future growth.
-
Equity method investment earnings to decline versus the prior
year, reflecting the effect of significantly higher raw potato
prices in Europe due to a poor crop.
-
An $8 million to $10 million benefit from the BSW Acquisition.
In addition, the Company expects:
-
Total interest expense to be approximately $110 million.
-
An effective tax rate(2) of 22 percent to 23 percent, down
from the Company’s previous estimate of approximately 23 percent.
-
Cash used for capital expenditures of approximately $350 million.
-
Total depreciation and amortization expense of approximately $150
million.
End Notes
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|
(1)
| | | |
Adjusted EBITDA including unconsolidated joint ventures, Adjusted
Income from Operations, Adjusted Diluted EPS and segment product
contribution margin are non-GAAP financial measures. Please see the
discussion of non-GAAP financial measures, including a discussion of
earnings guidance provided on a non-GAAP basis, and the
reconciliations at the end of this press release for more
information.
|
| | | |
|
|
(2)
| | | |
The effective tax rate is calculated as the ratio of income tax
expense to pre-tax income, inclusive of equity method investment
earnings.
|
| | | |
|
Webcast and Conference Call Information
Lamb Weston will host a conference call to review its third quarter 2019
results at 10:00 a.m. ET today. Investors and analysts may access the
call toll-free by dialing (888) 394-8218, and using the event
confirmation code of 6061757. A listen-only webcast will be provided at www.lambweston.com.
About Lamb Weston
Lamb Weston, along with its joint venture partners, is a leading
supplier of frozen potato, sweet potato, appetizer and vegetable
products to restaurants and retailers around the world. For more than 60
years, Lamb Weston has led the industry in innovation, introducing
inventive products that simplify back-of-house management for its
customers and make things more delicious for their customers. From the
fields where Lamb Weston potatoes are grown to proactive customer
partnerships, Lamb Weston always strives for more and never settles.
Because, when we look at a potato, we see possibilities. Learn more
about us at lambweston.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws. Words such as “continue,”
“expect,” “drive,” “support,” “grow,” “will,” “expand,” “make,”
“invest,” and variations of such words and similar expressions are
intended to identify forward-looking statements. Examples of
forward-looking statements include, but are not limited to, statements
regarding the Company’s plans, execution, and business outlook and
prospects. These forward-looking statements are based on management’s
current expectations and are subject to uncertainties and changes in
circumstances. Readers of this press release should understand that
these statements are not guarantees of performance or results. Many
factors could affect the Company’s actual financial results and cause
them to vary materially from the expectations contained in the
forward-looking statements, including those set forth in this press
release. These risks and uncertainties include, among other things: the
Company’s ability to successfully execute its long-term value creation
strategies; its ability to execute on large capital projects, including
construction of new production lines; the competitive environment and
related conditions in the markets in which it and its joint ventures
operate; political and economic conditions of the countries in which it
and its joint ventures conduct business and other factors related to its
international operations; disruption of its access to export mechanisms;
risks associated with possible acquisitions, including its ability to
complete acquisitions or integrate acquired businesses; its debt levels;
the availability and prices of raw materials; changes in its
relationships with its growers or significant customers; the success of
its joint ventures; actions of governments and regulatory factors
affecting its businesses or joint ventures; the ultimate outcome of
litigation or any product recalls; levels of pension, labor and
people-related expenses; its ability to pay regular quarterly cash
dividends and the amounts and timing of any future dividends; and other
risks described in the Company’s reports filed from time to time with
the Securities and Exchange Commission. The Company cautions readers not
to place undue reliance on any forward-looking statements included in
this press release, which speak only as of the date of this press
release. The Company undertakes no responsibility for updating these
statements, except as required by law.
Non-GAAP Financial Measures
To supplement the financial information included in this press release,
the Company has presented Adjusted Income from Operations, Adjusted
EBITDA including unconsolidated joint ventures, Adjusted Diluted EPS,
segment product contribution margin and adjusted income tax expense, net
income, net income attributable to Lamb Weston and net income available
to Lamb Weston stockholders, each of which is considered a non-GAAP
financial measure. The non-GAAP financial measures provided should be
viewed in addition to, and not as an alternative for, financial measures
prepared in accordance with accounting principles generally accepted in
the United States of America ("GAAP") that are presented in this press
release. The non-GAAP financial measures presented may differ from
similarly titled non-GAAP financial measures presented by other
companies, and other companies may not define these non-GAAP financial
measures the same way. These measures are not substitutes for their
comparable GAAP financial measures, such as net income, diluted earnings
per share, cash flow from operations, or other measures prescribed by
GAAP, and there are limitations to using non-GAAP financial measures.
Management uses these non-GAAP financial measures to assist in comparing
the Company's performance on a consistent basis for purposes of business
decision making by removing the impact of certain items that management
believes do not directly reflect the Company's underlying operations.
Management believes that presenting these non-GAAP financial measures
provides investors with useful information because they (i) provide
meaningful supplemental information regarding financial performance by
excluding certain items, (ii) permit investors to view performance using
the same tools that management uses to budget, make operating and
strategic decisions, and evaluate historical performance, and (iii)
otherwise provide supplemental information that may be useful to
investors in evaluating the Company's results. The Company believes that
the presentation of these non-GAAP financial measures, when considered
together with the corresponding GAAP financial measures and the
reconciliations to those measures, provides investors with additional
understanding of the factors and trends affecting the Company's business
than could be obtained absent these disclosures.
The Company also provides earnings guidance on a non-GAAP basis. The
Company cannot predict certain elements that are included in reported
GAAP results, including items such as strategic developments,
acquisition and integration costs, and other items impacting
comparability. This list is not inclusive of all potential items, and
the Company will update as necessary as these items are evaluated on an
ongoing basis, can be highly variable and could be significant to its
GAAP measures. As such, prospective quantification of these items is not
feasible and a full reconciliation of non-GAAP Adjusted EBITDA including
unconsolidated joint ventures to GAAP net income has not been provided.
|
|
Lamb Weston Holdings, Inc. |
Consolidated Statements of Earnings |
(unaudited, dollars in millions, except per share amounts)
|
|
|
|
|
|
| | |
|
| | |
|
| | |
|
| | |
| | | | Thirteen Weeks Ended (1) | | | Thirty-Nine Weeks Ended (1) |
| | | | February 24, | | | February 25, | | | February 24, | | | February 25, |
| | | | 2019 (2) | | | 2018 | | | 2019 (2) | | | 2018 |
|
Net sales
| | | |
$
|
926.8
| | |
$
|
863.4
| | |
$
|
2,753.1
| | |
$
|
2,505.5
|
|
Cost of sales
| | | |
|
653.4
| | |
|
621.1
| | |
|
2,000.1
| | |
|
1,858.7
|
|
Gross profit
| | | | |
273.4
| | | |
242.3
| | | |
753.0
| | | |
646.8
|
|
Selling, general and administrative expenses (2)
| | | |
|
79.6
| | |
|
73.1
| | |
|
232.6
| | |
|
200.2
|
|
Income from operations
| | | | |
193.8
| | | |
169.2
| | | |
520.4
| | | |
446.6
|
|
Interest expense, net
| | | |
|
27.0
| | |
|
28.5
| | |
|
80.0
| | |
|
81.1
|
|
Income before income taxes and equity method earnings
| | | | |
166.8
| | | |
140.7
| | | |
440.4
| | | |
365.5
|
|
Income tax expense
| | | | |
39.6
| | | |
7.5
| | | |
107.9
| | | |
93.1
|
|
Equity method investment earnings
| | | |
|
14.2
| | |
|
26.4
| | |
|
44.3
| | |
|
58.5
|
|
Net income
| | | | |
141.4
| | | |
159.6
| | | |
376.8
| | | |
330.9
|
|
Less: Income attributable to noncontrolling interests
| | | |
|
—
| | |
|
2.8
| | |
|
8.6
| | |
|
14.1
|
|
Net income attributable to Lamb Weston Holdings, Inc.
| | | |
$
|
141.4
| | |
$
|
156.8
| | |
$
|
368.2
| | |
$
|
316.8
|
|
Earnings per share
| | | | | | | | | | | | | | | | | |
|
Basic
| | | |
$
|
0.96
| | |
$
|
1.07
| | |
$
|
2.44
| | |
$
|
2.15
|
|
Diluted
| | | |
$
|
0.95
| | |
$
|
1.06
| | |
$
|
2.42
| | |
$
|
2.14
|
|
Dividends declared per common share
| | | |
$
|
0.20000
| | |
$
|
0.19125
| | |
$
|
0.58250
| | |
$
|
0.56625
|
| | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | |
|
|
Computation of diluted earnings per share:
| | | | | | | | | | | | | | | | | |
|
Net income attributable to Lamb Weston Holdings, Inc.
| | | |
$
|
141.4
| | |
$
|
156.8
| | |
$
|
368.2
| | |
$
|
316.8
|
|
Less: Increase in redemption value of noncontrolling interests in
excess of earnings allocated, net of tax benefits (3)
| | | |
|
0.5
| | |
|
0.9
| | |
|
11.4
| | |
|
2.2
|
|
Net income available to Lamb Weston common stockholders
| | | |
$
|
140.9
| | |
$
|
155.9
| | |
$
|
356.8
| | |
$
|
314.6
|
|
Diluted weighted average common shares outstanding
| | | |
|
147.4
| | |
|
147.1
| | |
|
147.3
| | |
|
146.9
|
|
Diluted earnings per share (3)
| | | |
$
|
0.95
| | |
$
|
1.06
| | |
$
|
2.42
| | |
$
|
2.14
|
| | | | | | | | | | | | | | | | |
|
_________________
|
(1)
|
|
|
|
On May 28, 2018, the Company adopted Accounting Standards Update
2014-09, Revenue from Contracts with Customers (“new revenue
standard”), using the modified retrospective method. The Company
recognized a $13.7 million cumulative effect of initially applying
the new revenue standard as an adjustment to opening retained
earnings. The comparative information has not been restated and
continues to be reported under the accounting standards in effect
for those periods.
|
| | | |
|
| | | |
Sales of customized products are generally recurring, thereby
limiting the net impact of the adoption of the new revenue standard.
During the thirteen and thirty-nine weeks ended February 24, 2019,
the new revenue standard increased sales $18.5 million and $21.1
million, net income $4.4 million and $5.1 million, and diluted
earnings per share $0.02 and $0.03, respectively. See Note 2,
Revenue from Contracts with Customers, of the Condensed Notes to
Consolidated Financial Statements in “Part I, Item 1. Financial
Statements” in the Company’s fiscal 2019 third quarter Form 10-Q,
for more information.
|
| | | |
|
(2)
| | | |
The thirteen and thirty-nine weeks ended February 25, 2018,
include $1.7 million and $7.9 million, respectively, of expenses
related to the Company’s separation from Conagra. These expenses
related primarily to professional fees and other employee-related
costs.
|
| | | |
|
(3)
| | | |
The thirty-nine weeks ended February 24, 2019, included accretion,
net of tax benefits, of $10.0 million, or $0.07 per share, which
the Company recorded to increase the redeemable noncontrolling
interest to the amount the Company paid to acquire the remaining
50.01% interest in Lamb Weston BSW. While the accretion, net of
tax benefits, reduced net income available to Lamb Weston common
stockholders and earnings per share, it did not impact net income
in the Consolidated Statements of Earnings. Net income includes
100% of Lamb Weston BSW’s earnings beginning November 2, 2018, the
date the Company entered into the definitive agreement to acquire
the remaining interest in Lamb Weston BSW. See Note 10,
Investments in Joint Ventures, of the Condensed Notes to
Consolidated Financial Statements in “Part I, Item 1. Financial
Statements” in the Company’s fiscal 2019 third quarter Form 10-Q,
for more information.
|
| | | |
|
| | | |
The thirteen weeks ended February 24, 2019, included $0.5 million,
or $0.01 per share, decrease in tax benefits related to the purchase
of the remaining 50.01% interest in Lamb Weston BSW.
|
| | | |
|
|
|
Lamb Weston Holdings, Inc. |
Consolidated Balance Sheets |
(unaudited, dollars in millions, except share amounts)
|
|
|
|
| | |
|
| | |
| | | | February 24, | | | May 27, |
| | | | 2019 (1) | | | 2018 |
| ASSETS | | | | | | | | | |
|
Current assets:
| | | | | | | | | |
|
Cash and cash equivalents
| | | |
$
|
17.2
| | | |
$
|
55.6
| |
|
Receivables, less allowance for doubtful accounts of $0.7 and $0.6 | | | | |
359.3
| | | | |
225.9
| |
|
Inventories
| | | | |
588.2
| | | | |
549.7
| |
|
Prepaid expenses and other current assets
| | | |
|
103.3
|
| | |
|
99.2
|
|
| Total current assets | | | |
|
1,068.0
|
| | |
|
930.4
|
|
|
Property, plant and equipment, net
| | | | |
1,557.0
| | | | |
1,420.8
| |
|
Goodwill
| | | | |
208.8
| | | | |
135.1
| |
|
Intangible assets, net
| | | | |
38.3
| | | | |
35.4
| |
|
Equity method investments
| | | | |
222.8
| | | | |
219.8
| |
|
Other assets
| | | |
|
16.3
|
| | |
|
11.1
|
|
| Total assets | | | |
$
|
3,111.2
|
| | |
$
|
2,752.6
|
|
| | | | | | | | |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | |
|
Current liabilities:
| | | | | | | | | |
|
Short-term borrowings
| | | |
$
|
98.7
| | | |
$
|
9.6
| |
|
Current portion of long-term debt and financing obligations
| | | | |
37.4
| | | | |
38.7
| |
|
Accounts payable
| | | | |
308.8
| | | | |
254.4
| |
|
Accrued liabilities
| | | |
|
221.7
|
| | |
|
216.0
|
|
| Total current liabilities | | | |
|
666.6
|
| | |
|
518.7
|
|
|
Long-term liabilities:
| | | | | | | | | |
|
Long-term debt, excluding current portion
| | | | |
2,288.6
| | | | |
2,336.7
| |
|
Deferred income taxes
| | | | |
126.6
| | | | |
92.1
| |
|
Other noncurrent liabilities
| | | |
|
85.6
|
| | |
|
84.3
|
|
| Total long-term liabilities | | | |
|
2,500.8
|
| | |
|
2,513.1
|
|
|
Commitments and contingencies
| | | | | | | | | |
| Redeemable noncontrolling interest | | | | |
—
| | | | |
55.6
| |
|
Stockholders' equity:
| | | | | | | | | |
|
Common stock of $1.00 par value, 600,000,000 shares authorized;
146,620,264 and 146,395,866 shares issued
| | | | |
146.6
| | | | |
146.4
| |
|
Additional distributed capital
| | | | |
(896.8
|
)
| | | |
(900.4
|
)
|
|
Retained earnings
| | | | |
722.5
| | | | |
426.4
| |
|
Accumulated other comprehensive loss
| | | | |
(13.3
|
)
| | | |
(4.3
|
)
|
|
Treasury stock, at cost, 236,774 and 63,534 common shares
| | | |
|
(15.2
|
)
| | |
|
(2.9
|
)
|
| Total stockholders' deficit | | | |
|
(56.2
|
)
| | |
|
(334.8
|
)
|
| Total liabilities and stockholders’ equity | | | |
$
|
3,111.2
|
| | |
$
|
2,752.6
|
|
_________________
|
|
(1)
|
|
|
|
See footnote (1) to the Consolidated Statements of Earnings above
for a discussion of the impact of adopting the new revenue standard.
|
| | | |
|
|
|
Lamb Weston Holdings, Inc. |
Consolidated Statements of Cash Flows |
(unaudited, dollars in millions)
|
|
|
|
| | |
|
| | |
| | | | Thirty-Nine Weeks Ended |
| | | | February 24, | | | February 25, |
| | | | 2019 | | | 2018 |
| Cash flows from operating activities | | | | | | | | | |
|
Net income
| | | |
$
|
376.8
| | | |
$
|
330.9
| |
|
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | | | | | | |
|
Depreciation and amortization of intangibles and debt issuance costs
| | | | |
117.5
| | | | |
104.1
| |
|
Stock-settled, stock-based compensation expense
| | | | |
13.7
| | | | |
10.1
| |
|
Earnings of joint ventures in excess of distributions
| | | | |
(9.0
|
)
| | | |
(22.0
|
)
|
|
Deferred income taxes
| | | | |
38.5
| | | | |
(16.0
|
)
|
|
Pension expense, net of contributions
| | | | |
5.6
| | | | |
4.2
| |
|
Other
| | | | |
(1.5
|
)
| | | |
(6.7
|
)
|
|
Changes in operating assets and liabilities, net of acquisition:
| | | | | | | | | |
|
Receivables
| | | | |
(43.3
|
)
| | | |
(51.4
|
)
|
|
Inventories
| | | | |
(104.7
|
)
| | | |
(105.4
|
)
|
|
Income taxes payable/receivable, net
| | | | |
14.1
| | | | |
38.0
| |
|
Prepaid expenses and other current assets
| | | | |
(7.0
|
)
| | | |
(11.5
|
)
|
|
Accounts payable
| | | | |
51.6
| | | | |
31.6
| |
|
Accrued liabilities
| | | |
|
(7.9
|
)
| | |
|
4.3
|
|
| Net cash provided by operating activities | | | |
$
|
444.4
|
| | |
$
|
310.2
|
|
| Cash flows from investing activities | | | | | | | | | |
|
Additions to property, plant and equipment
| | | | |
(244.2
|
)
| | | |
(204.4
|
)
|
|
Acquisition of business, net of cash acquired
| | | | |
(88.6
|
)
| | | |
—
| |
|
Other
| | | |
|
(1.1
|
)
| | |
|
(2.4
|
)
|
| Net cash used for investing activities | | | |
$
|
(333.9
|
)
| | |
$
|
(206.8
|
)
|
| Cash flows from financing activities | | | | | | | | | |
|
Proceeds from short-term borrowings, net
| | | | |
89.3
| | | | |
9.4
| |
|
Debt repayments
| | | | |
(57.1
|
)
| | | |
(29.9
|
)
|
|
Dividends paid
| | | | |
(84.0
|
)
| | | |
(82.2
|
)
|
|
Acquisition of noncontrolling interest
| | | | |
(78.2
|
)
| | | |
—
| |
|
Repurchase of common stock and common stock withheld to cover taxes
| | | | |
(12.3
|
)
| | | |
(2.1
|
)
|
|
Cash distributions paid to noncontrolling interest
| | | | |
(6.1
|
)
| | | |
(12.4
|
)
|
|
Other
| | | |
|
1.1
|
| | |
|
0.8
|
|
| Net cash used for financing activities | | | |
$
|
(147.3
|
)
| | |
$
|
(116.4
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
| | | | |
(1.6
|
)
| | | |
5.3
| |
| Net decrease in cash and cash equivalents | | | | |
(38.4
|
)
| | | |
(7.7
|
)
|
| Cash and cash equivalents, beginning of the period | | | |
|
55.6
|
| | |
|
57.1
|
|
| Cash and cash equivalents, end of period | | | |
$
|
17.2
|
| | |
$
|
49.4
|
|
|
|
Lamb Weston Holdings, Inc. |
Segment Information |
(unaudited, dollars in millions)
|
|
|
|
|
|
| | |
| | |
| |
| |
| |
| | | | Thirteen Weeks Ended |
| | | | | | | | | | Year-Over- | | | | |
| | | | February 24, | | February 25, | | Year
Growth | | | | |
| | | | 2019 | | 2018 | | Rates | | Price/Mix | | Volume |
| Segment sales (1) | | | | | | | | | | | | | | |
|
Global
| | | |
$
|
498.2
| |
$
|
448.7
| |
11
|
%
| |
2
|
%
| |
9
|
%
|
|
Foodservice
| | | | |
265.5
| | |
253.5
| |
5
|
%
| |
4
|
%
| |
1
|
%
|
|
Retail
| | | | |
129.0
| | |
130.2
| |
(1
|
%)
| |
1
|
%
| |
(2
|
%)
|
|
Other
| | | |
|
34.1
| |
|
31.0
| |
10
|
%
| |
6
|
%
| |
4
|
%
|
| | | | $ | 926.8 | | $ | 863.4 | |
7
|
%
| |
3
|
%
| |
4
|
%
|
| | | | | | | | | | | | | |
|
| Segment product contribution margin (1) (2) | | | | | | | | | | | | | | |
|
Global
| | | |
$
|
128.8
| |
$
|
113.9
| |
13
|
%
| | | | |
|
Foodservice
| | | | |
94.8
| | |
89.5
| |
6
|
%
| | | | |
|
Retail
| | | | |
29.1
| | |
30.3
| |
(4
|
%)
| | | | |
|
Other
| | | |
|
11.8
| |
|
0.9
| |
NM
| | | | | |
| | | |
|
264.5
| |
|
234.6
| |
13
|
%
| | | | |
|
Other selling, general, and administrative expenses (3)
| | | |
|
70.7
| |
|
65.4
| |
8
|
%
| | | | |
|
Income from operations
| | | | $ | 193.8 | | $ | 169.2 | |
15
|
%
| | | | |
| | | | | | | | | | | | | |
|
|
Items impacting comparability (3)
| | | | | | | | | | | | | | |
|
Expenses related to the Separation
| | | |
$
|
—
| |
$
|
1.7
| | | | | | |
| | | |
|
| |
|
| | | | | | |
| Adjusted income from operations (4) | | | | $ | 193.8 | | $ | 170.9 | |
13
|
%
| | | | |
| | | | | | | | | | | | | | |
|
_________________
|
|
(1)
|
|
|
|
See footnote (1) to the Consolidated Statements of Earnings above
for a discussion of the impact of adopting the new revenue standard.
|
| | | |
|
|
(2)
| | | |
Product contribution margin is defined as net sales, less cost of
sales and advertising and promotion expenses. Segment product
contribution margin excludes general corporate expenses and interest
expense because management believes these amounts are not directly
associated with segment performance for the period.
|
| | | |
|
|
(3)
| | | |
The thirteen weeks ended February 25, 2018 includes $1.7 million of
expenses related to the Company’s separation from Conagra. These
expenses related primarily to professional fees and other
employee-related costs.
|
| | | |
|
|
(4)
| | | |
Adjusted income from operations is a non-GAAP financial measure.
Management excludes items impacting comparability between periods as
it believes these items are not necessarily reflective of the
ongoing operations of the Company. This non-GAAP measure provides a
means to evaluate the performance of Lamb Weston’s segments and the
Company on an ongoing basis using the same measures that are
frequently used by the Company’s management and assists in providing
a meaningful comparison between periods. Any analysis of non-GAAP
financial measures should be done only in conjunction with results
presented in accordance with GAAP. The non-GAAP measures are not
intended to be substitutes for GAAP financial measures and should
not be used as such.
|
|
|
Lamb Weston Holdings, Inc. |
Segment Information |
(unaudited, dollars in millions)
|
|
|
|
|
|
| | |
|
| | |
|
| |
|
| |
|
| |
| | | | Thirty-Nine Weeks Ended |
| | | | | | | | | | | | Year-Over- | | | | | | |
| | | | February 24, | | | February 25, | | | Year
Growth | | | | | | |
| | | | 2019 | | | 2018 | | | Rates | | | Price/Mix | | | Volume |
| Segment sales (1) | | | | | | | | | | | | | | | | | | |
|
Global
| | | |
$
|
1,434.9
| | |
$
|
1,279.5
| | |
12
|
%
| | |
6
|
%
| | |
6
|
%
|
|
Foodservice
| | | | |
843.0
| | | |
805.8
| | |
5
|
%
| | |
5
|
%
| | |
0
|
%
|
|
Retail
| | | | |
369.1
| | | |
324.2
| | |
14
|
%
| | |
6
|
%
| | |
8
|
%
|
|
Other
| | | |
|
106.1
| | |
|
96.0
| | |
11
|
%
| | |
9
|
%
| | |
2
|
%
|
| | | | $ | 2,753.1 | | | $ | 2,505.5 | | |
10
|
%
| | |
6
|
%
| | |
4
|
%
|
| | | | | | | | | | | | | | | | | |
|
| Segment product contribution margin (1) (2) | | | | | | | | | | | | | | | | | | |
|
Global
| | | |
$
|
335.6
| | |
$
|
275.9
| | |
22
|
%
| | | | | | |
|
Foodservice
| | | | |
294.2
| | | |
272.2
| | |
8
|
%
| | | | | | |
|
Retail
| | | | |
77.8
| | | |
66.1
| | |
18
|
%
| | | | | | |
|
Other
| | | |
|
24.0
| | |
|
16.0
| | |
50
|
%
| | | | | | |
| | | |
|
731.6
| | |
|
630.2
| | |
16
|
%
| | | | | | |
|
Other selling, general, and administrative expenses (3)
| | | |
|
211.2
| | |
|
183.6
| | |
15
|
%
| | | | | | |
|
Income from operations
| | | | $ | 520.4 | | | $ | 446.6 | | |
17
|
%
| | | | | | |
| | | | | | | | | | | | | | | | | |
|
|
Items impacting comparability (3)
| | | | | | | | | | | | | | | | | | |
|
Expenses related to the Separation
| | | |
$
|
—
| | |
$
|
7.9
| | | | | | | | | |
| | | |
|
| | |
|
| | | | | | | | | |
| Adjusted income from operations (4) | | | | $ | 520.4 | | | $ | 454.5 | | |
14
|
%
| | | | | | |
_________________
|
|
(1)
|
|
|
|
See footnote (1) to the Consolidated Statements of Earnings above
for a discussion of the impact of adopting the new revenue standard.
|
| | | |
|
|
(2)
| | | |
Product contribution margin is defined as net sales, less cost of
sales and advertising and promotion expenses. Segment product
contribution margin excludes general corporate expenses and interest
expense because management believes these amounts are not directly
associated with segment performance for the period.
|
| | | |
|
|
(3)
| | | |
The thirty-nine weeks ended February 25, 2018 includes $7.9 million
of expenses related to the Company’s separation from Conagra. These
expenses related primarily to professional fees and other
employee-related costs.
|
| | | |
|
|
(4)
| | | |
Adjusted income from operations is a non-GAAP financial measure.
Management excludes items impacting comparability between periods as
it believes these items are not necessarily reflective of the
ongoing operations of the Company. This non-GAAP measure provides a
means to evaluate the performance of Lamb Weston’s segments and the
Company on an ongoing basis using the same measures that are
frequently used by the Company’s management and assists in providing
a meaningful comparison between periods. Any analysis of non-GAAP
financial measures should be done only in conjunction with results
presented in accordance with GAAP. The non-GAAP measures are not
intended to be substitutes for GAAP financial measures and should
not be used as such.
|
|
|
Lamb Weston Holdings, Inc. |
Reconciliation of Non-GAAP Financial Measures |
(unaudited, dollars in millions, except per share amounts)
|
|
|
|
| | |
|
| | |
|
| | |
|
| | |
|
| | | |
| | | |
| | | |
| | |
| | | | Thirteen Weeks Ended February 24, 2019 |
| | | | | | | | | | | | | Equity | | | | | | Net Income | | | Net Income | | | |
| | | | Income | | | | | | Income | | | Method | | | | | | Attributable | | | Available to | | | |
| | | | From | | | Interest | | | Tax | | | Investment | | | | | | to Lamb | | | Lamb Weston | | | Diluted |
| | | | Operations | | | Expense | | | Expense | | | Earnings | | | Net Income | | | Weston | | | Stockholders | | | EPS |
|
As reported
| | | |
$
|
193.8
| | |
$
|
27.0
| | |
$
|
39.6
| | |
$
|
14.2
| | |
$
|
141.4
| | | |
$
|
141.4
| | | |
$
|
140.9
| | | |
$
|
0.95
| |
|
Items impacting comparability (1) (2):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Tax benefits related to increase in redemption value of
noncontrolling interests
| | | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | | |
—
| | | | |
0.5
| | | | |
0.01
| |
|
Transition tax adjustment (3)
| | | |
|
—
| | |
|
—
| | |
|
1.0
| | |
|
—
| | |
|
(1.0
|
)
| | |
|
(1.0
|
)
| | |
|
(1.0
|
)
| | |
|
(0.01
|
)
|
|
Total items impacting comparability
| | | |
|
—
| | |
|
—
| | |
|
1.0
| | |
|
—
| | |
|
(1.0
|
)
| | |
|
(1.0
|
)
| | |
|
(0.5
|
)
| | |
|
—
|
|
|
Adjusted (4)
| | | | $ | 193.8 | | | $ | 27.0 | | | $ | 40.6 | | | $ | 14.2 | | | $ | 140.4 |
| | | $ | 140.4 |
| | | $ | 140.4 |
| | | $ | 0.95 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | Thirteen Weeks Ended February 25, 2018 |
| | | | | | | | | | | | | Equity | | | | | | Net Income | | | Net Income | | | |
| | | | Income | | | | | | Income | | | Method | | | | | | Attributable | | | Available to | | | |
| | | | From | | | Interest | | | Tax | | | Investment | | | | | | to Lamb | | | Lamb Weston | | | Diluted |
| | | | Operations | | | Expense | | | Expense | | | Earnings | | | Net Income | | | Weston | | | Stockholders | | | EPS |
|
As reported
| | | |
$
|
169.2
| | |
$
|
28.5
| | |
$
|
7.5
| | |
$
|
26.4
| | |
$
|
159.6
| | | |
$
|
156.8
| | | |
$
|
155.9
| | | |
$
|
1.06
| |
|
Items impacting comparability (1) (2):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Expenses related to the Separation
| | | | |
1.7
| | | |
—
| | | |
0.5
| | | |
—
| | | |
1.2
| | | | |
1.2
| | | | |
1.2
| | | | |
0.01
| |
|
Tax reform (5)
| | | |
|
—
| | |
|
—
| | |
|
24.0
| | |
|
—
| | |
|
(24.0
|
)
| | |
|
(24.0
|
)
| | |
|
(24.0
|
)
| | |
|
(0.16
|
)
|
|
Total items impacting comparability
| | | |
|
1.7
| | |
|
—
| | |
|
24.5
| | |
|
—
| | |
|
(22.8
|
)
| | |
|
(22.8
|
)
| | |
|
(22.8
|
)
| | |
|
(0.15
|
)
|
|
Adjusted (4)
| | | | $ | 170.9 | | | $ | 28.5 | | | $ | 32.0 | | | $ | 26.4 | | | $ | 136.8 |
| | | $ | 134.0 |
| | | $ | 133.1 |
| | | $ | 0.91 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | Thirty-Nine Weeks Ended February 24, 2019 |
| | | | | | | | | | | | | Equity | | | | | | Net Income | | | Net Income | | | |
| | | | Income | | | | | | Income | | | Method | | | | | | Attributable | | | Available to | | | |
| | | | From | | | Interest | | | Tax | | | Investment | | | | | | to Lamb | | | Lamb Weston | | | Diluted |
| | | | Operations | | | Expense | | | Expense | | | Earnings | | | Net Income | | | Weston | | | Stockholders | | | EPS |
|
As reported
| | | |
$
|
520.4
| | |
$
|
80.0
| | |
$
|
107.9
| | |
$
|
44.3
| | |
$
|
376.8
| | | |
$
|
368.2
| | | |
$
|
356.8
| | | |
$
|
2.42
| |
|
Items impacting comparability (1) (2):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Increase in redemption value of noncontrolling interests, net of tax
benefits
| | | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | |
—
| | | | |
—
| | | | |
10.0
| | | | |
0.07
| |
|
Transition tax adjustment (3)
| | | |
|
—
| | |
|
—
| | |
|
1.0
| | |
|
—
| | |
|
(1.0
|
)
| | |
|
(1.0
|
)
| | |
|
(1.0
|
)
| | |
|
(0.01
|
)
|
|
Total items impacting comparability
| | | |
|
—
| | |
|
—
| | |
|
1.0
| | |
|
—
| | |
|
(1.0
|
)
| | |
|
(1.0
|
)
| | |
|
9.0
|
| | |
|
0.06
|
|
|
Adjusted (4)
| | | | $ | 520.4 | | | $ | 80.0 | | | $ | 108.9 | | | $ | 44.3 | | | $ | 375.8 |
| | | $ | 367.2 |
| | | $ | 365.8 |
| | | $ | 2.48 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | | Thirty-Nine Weeks Ended February 25, 2018 |
| | | | | | | | | | | | | Equity | | | | | | Net Income | | | Net Income | | | |
| | | | Income | | | | | | Income | | | Method | | | | | | Attributable | | | Available to | | | |
| | | | From | | | Interest | | | Tax | | | Investment | | | | | | to Lamb | | | Lamb Weston | | | Diluted |
| | | | Operations | | | Expense | | | Expense | | | Earnings | | | Net Income | | | Weston | | | Stockholders | | | EPS |
|
As reported
| | | |
$
|
446.6
| | |
$
|
81.1
| | |
$
|
93.1
| | |
$
|
58.5
| | |
$
|
330.9
| | | |
$
|
316.8
| | | |
$
|
314.6
| | | |
$
|
2.14
| |
|
Items impacting comparability (1) (2):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Expenses related to the Separation
| | | | |
7.9
| | | |
—
| | | |
2.8
| | | |
—
| | | |
5.1
| | | | |
5.1
| | | | |
5.1
| | | | |
0.03
| |
|
Tax reform (5)
| | | |
|
—
| | |
|
—
| | |
|
24.0
| | |
|
—
| | |
|
(24.0
|
)
| | |
|
(24.0
|
)
| | |
|
(24.0
|
)
| | |
|
(0.16
|
)
|
|
Total items impacting comparability
| | | |
|
7.9
| | |
|
—
| | |
|
26.8
| | |
|
—
| | |
|
(18.9
|
)
| | |
|
(18.9
|
)
| | |
|
(18.9
|
)
| | |
|
(0.13
|
)
|
|
Adjusted (4)
| | | | $ | 454.5 | | | $ | 81.1 | | | $ | 119.9 | | | $ | 58.5 | | | $ | 312.0 |
| | | $ | 297.9 |
| | | $ | 295.7 |
| | | $ | 2.01 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
_________________
|
|
(1)
|
|
|
|
See footnotes (1), (2), and (3) to the Consolidated Statements of
Earnings above for a discussion of the items impacting comparability.
|
| | | |
|
|
(2)
| | | |
Items impacting comparability are tax-effected at the marginal rate
based on the applicable tax jurisdiction.
|
| | | |
|
|
(3)
| | | |
The thirteen and thirty-nine weeks ended February 24, 2019, included
a $1.0 million decrease in income tax expense related to the true-up
of the transition tax on previously untaxed foreign earnings under
the Tax Act.
|
| | | |
|
|
(4)
| | | |
Adjusted income from operations, income tax expense, net income, net
income attributable to Lamb Weston, net income available to Lamb
Weston stockholders, and diluted earnings per share are non-GAAP
financial measures. Management excludes items impacting
comparability between periods as it believes these items are not
necessarily reflective of the ongoing operations of Lamb Weston.
These non-GAAP measures provide a means to evaluate the performance
of Lamb Weston on an ongoing basis using the same measures that are
frequently used by the Company’s management and assist in providing
a meaningful comparison between periods. Any analysis of non-GAAP
financial measures should be done only in conjunction with results
presented in accordance with GAAP. The non-GAAP measures are not
intended to be substitutes for GAAP financial measures and should
not be used as such.
|
| | | |
|
|
(5)
| | | |
During the thirteen and thirty-nine weeks ended February 25, 2018
the Tax Act decreased income tax expense by a $24.0 million net
discrete benefit which consisted of a $38.7 million non-cash benefit
from the re-measurement of the Company’s net U.S. deferred tax
liabilities using the new U.S. statutory tax rate, partially offset
by a $14.7 million transition tax on the Company’s previously
untaxed foreign earnings.
|
| | | |
|
Lamb Weston Holdings, Inc.
Reconciliation of Non-GAAP
Financial Measures
(unaudited, dollars in millions)
To supplement the financial information included in this press release,
the Company has presented Adjusted EBITDA including unconsolidated joint
ventures, which is considered a non-GAAP financial measure. The
following table reconciles net income attributable to Lamb Weston to
Adjusted EBITDA including unconsolidated joint ventures.
|
|
|
| | |
|
| | |
|
| | |
|
| | |
| | | | Thirteen Weeks Ended | | | Thirty-Nine Weeks Ended |
| | | | February 24, | | | February 25, | | | February 24, | | | February 25, |
| | | | 2019 | | | 2018 | | | 2019 | | | 2018 |
|
Net income attributable to Lamb Weston Holdings, Inc.
| | | |
$
|
141.4
| | | |
$
|
156.8
| | | |
$
|
368.2
| | | |
$
|
316.8
| |
|
Income attributable to noncontrolling interests
| | | | |
—
| | | | |
2.8
| | | | |
8.6
| | | | |
14.1
| |
|
Equity method investment earnings
| | | | |
(14.2
|
)
| | | |
(26.4
|
)
| | | |
(44.3
|
)
| | | |
(58.5
|
)
|
|
Interest expense, net
| | | | |
27.0
| | | | |
28.5
| | | | |
80.0
| | | | |
81.1
| |
|
Income tax expense
| | | |
|
39.6
|
| | |
|
7.5
|
| | |
|
107.9
|
| | |
|
93.1
|
|
|
Income from operations
| | | |
|
193.8
|
| | |
|
169.2
|
| | |
|
520.4
|
| | |
|
446.6
|
|
|
Depreciation and amortization
| | | | |
39.2
| | | | |
36.4
| | | | |
114.0
| | | | |
100.7
| |
|
Items impacting comparability (1)
| | | | | | | | | | | | | | | | | |
|
Expenses related to the Separation
| | | |
|
—
|
| | |
|
1.7
|
| | |
|
—
|
| | |
|
7.9
|
|
|
Adjusted EBITDA (2) (3)
| | | |
|
233.0
|
| | |
|
207.3
|
| | |
|
634.4
|
| | |
|
555.2
|
|
| | | | | | | | | | | | | | | | |
|
|
Unconsolidated Joint Ventures (4)
| | | | | | | | | | | | | | | | | |
|
Equity method investment earnings
| | | | |
14.2
| | | | |
26.4
| | | | |
44.3
| | | | |
58.5
| |
Interest expense, income tax expense, and depreciation and
amortization included in equity method investment earnings
| | | |
|
6.0
|
| | |
|
7.8
|
| | |
|
20.5
|
| | |
|
21.4
|
|
|
Add: EBITDA from unconsolidated joint ventures
| | | |
|
20.2
|
| | |
|
34.2
|
| | |
|
64.8
|
| | |
|
79.9
|
|
| | | | | | | | | | | | | | | | |
|
|
Consolidated Joint Ventures (4)
| | | | | | | | | | | | | | | | | |
|
Income attributable to noncontrolling interests
| | | | |
—
| | | | |
(2.8
|
)
| | | |
(8.6
|
)
| | | |
(14.1
|
)
|
Interest expense, income tax expense, and depreciation and
amortization included in income attributable to noncontrolling
interests
| | | |
|
—
|
| | |
|
(1.1
|
)
| | |
|
(1.7
|
)
| | |
|
(3.1
|
)
|
|
Subtract: EBITDA from consolidated joint ventures
| | | |
|
—
|
| | |
|
(3.9
|
)
| | |
|
(10.3
|
)
| | |
|
(17.2
|
)
|
| | | |
|
| | |
|
| | |
|
| | |
|
|
|
Adjusted EBITDA including unconsolidated joint ventures (2)
| | | |
$
|
253.2
|
| | |
$
|
237.6
|
| | |
$
|
688.9
|
| | |
$
|
617.9
|
|
_________________
|
|
(1)
|
|
|
|
See footnote (2) to the Consolidated Statements of Earnings above
for a discussion of the items impacting comparability.
|
| | | |
|
|
(2)
| | | |
Adjusted EBITDA including unconsolidated joint ventures is a
non-GAAP financial measure. Management excludes items impacting
comparability between periods as it believes these items are not
necessarily reflective of the ongoing operations of the Company.
Lamb Weston presents this measure because the Company believes it
provides a means to evaluate the performance of the Company on an
ongoing basis using the same measure frequently used by the
Company’s management and assists in providing a meaningful
comparison between periods. Any analysis of non-GAAP financial
measures should be done only in conjunction with results presented
in accordance with GAAP. This non-GAAP measure is not intended to be
a substitute for GAAP financial measures and should not be used as
such.
|
| | | |
|
|
(3)
| | | |
Adjusted EBITDA includes EBITDA from consolidated joint ventures.
|
| | | |
|
|
(4)
| | | |
Lamb Weston holds equity interests in two potato processing joint
ventures, including 50% of Lamb-Weston/RDO Frozen and
Lamb-Weston/Meijer v.o.f., which it accounts for its ownership under
the equity method of accounting. Prior to purchasing the remaining
50.01% interest in its Lamb Weston BSW joint venture, Lamb Weston
consolidated the financial statements of Lamb Weston BSW. In
connection with the purchase, Lamb Weston began recognizing 100% of
Lamb Weston BSW’s earnings in its Consolidated Statements of
Earnings on November 2, 2018. See Note 10, Investments in Joint
Ventures, of the Condensed Notes to Consolidated Financial
Statements in “Part I, Item 1. Financial Statements” in the
Company’s fiscal 2019 third quarter Form 10-Q, for more information.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190402005406/en/
For more information, please contact:
Investors:
Dexter
Congbalay
224-306-1535
[email protected]
Media:
Shelby Stoolman
208-424-5461
[email protected]
Source: Lamb Weston Holdings, Inc.
