First Quarter 2019 Highlights
- Net sales increased 12% to $915 million
- Income from operations increased 11% to $153 million; Adjusted
Income from Operations(1) increased 9% to
$153 million
- Adjusted EBITDA including unconsolidated joint ventures(1)
increased 11% to $213 million
- Diluted EPS increased to $0.73 from $0.56; and includes $0.10
benefit from a lower tax rate as a result of U.S. tax reform
- Adjusted Diluted EPS(1) increased to $0.73
from $0.57; and includes $0.10 benefit from a lower tax rate as a
result of U.S. tax reform
- Reaffirms FY 2019 outlook
EAGLE, Idaho--(BUSINESS WIRE)--
Lamb Weston Holdings, Inc. (NYSE: LW) announced today its fiscal first
quarter 2019 results.
“We’re pleased with our solid results in the first quarter, with each of
our core business segments driving sales growth and expanding product
contribution margins,” said Tom Werner, President and CEO. “Our results
continue to reflect the strong execution by our commercial, supply chain
and support teams, as well as our ongoing commitment to invest in our
production capacity, operating, sales and product innovation
capabilities to support our customers’ growth, improve operating
efficiency and execute on our strategies over the long term.”
“For the remainder of fiscal 2019, we continue to anticipate the
operating environment in North America will remain generally favorable,
with solid demand for frozen potato products and tight manufacturing
capacity. However, we expect that our European joint venture, Lamb
Weston/Meijer, will face challenges arising from a poor potato crop.
Although it’s too early to determine the full impact of these
challenges, we believe that Lamb Weston/Meijer’s pricing and cost
reduction actions, along with opportunities in our North American and
export businesses, enable us to remain on track to deliver on our fiscal
2019 targets.”
|
| |
| |
| Summary of First Quarter FY 2019 Results |
| ($ in millions, except per share) |
| | | |
|
| | | | Year-Over-Year |
| | Q1 2019 | | Growth Rates |
|
Net sales
| |
$
|
914.9
| |
12%
|
|
Income from operations
| |
$
|
152.6
| |
11%
|
|
Net income attributable to Lamb Weston
| |
$
|
107.8
| |
29%
|
|
Diluted EPS
| |
$
|
0.73
| |
30%
|
| | | |
|
|
Adjusted EBITDA including unconsolidated joint ventures(1) | |
$
|
212.9
| |
11%
|
|
Adjusted Diluted EPS(1) | |
$
|
0.73
| |
28%
|
| | | | |
|
Q1 2019 Commentary
Net sales were $914.9 million, up 12 percent versus the year-ago period.
Price/mix increased 8 percent due to pricing actions and favorable
product and customer mix. Volume increased 4 percent, driven by growth
in the Company’s Global and Retail segments.
Income from operations rose 11 percent to $152.6 million from the prior
year period, which included $2.2 million of pre-tax costs 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 $12.8
million, or 9 percent, driven by higher sales and gross profit. Gross
profit increased $34.3 million due to favorable price/mix, volume
growth, and supply chain efficiency savings. This increase was partially
offset by transportation, warehousing, input and manufacturing cost
inflation, and higher depreciation expense primarily associated with the
Company’s french fry production line in Richland, Washington, which
started operating in the second quarter of fiscal 2018. In addition,
gross profit included a $5.6 million loss related to unrealized
mark-to-market adjustments and realized settlements associated with
commodity hedging contracts in the current quarter, compared with a $3.2
million gain in the prior year period.
The rise in gross profit was partially offset by a $21.5 million
increase in selling, general and administrative expenses (“SG&A”),
excluding comparability items. The increase includes approximately $7
million of unfavorable foreign exchange, a $5 million increase in
incentive compensation expense, primarily reflecting an increase in
stock price and absolute shares outstanding, and a $3 million increase
in advertising and promotional support. The remainder of 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.
Adjusted EBITDA including unconsolidated joint ventures(1)
was $212.9 million, up 11 percent versus the prior year quarter,
primarily due to growth in income from operations.
Diluted EPS increased $0.17, or 30 percent, to $0.73, while Adjusted
Diluted EPS(1) increased $0.16, or 28 percent, to $0.73. A
lower U.S. corporate tax rate related to the U.S. Tax Cuts and Jobs Act
(the “Tax Act”) increased Diluted EPS $0.10. The remaining increase
reflects growth in income from operations.
The Company’s effective tax rate(2) was 23.5 percent in the
first quarter of fiscal 2019, versus 33.3 percent in the prior year
period. The lower rate in the first quarter of fiscal 2019 is
attributable to the effects of the Tax Act enacted in December 2017.
Q1 2019 Segment Highlights
Global
|
| | |
| |
| |
| |
| Global Segment Summary |
| | | | | | | | |
|
| | | | | Year-Over-Year | | | | |
| | Q1 2019 | | Growth Rates | | Price/Mix | | Volume |
| | ($ in mil.) | | | | | | |
|
Net sales
| |
$
|
466.8
| |
13%
| |
8%
| |
5%
|
|
Segment product contribution margin(1) | |
$
|
94.5
| |
27%
| | | | |
| | | | | | | | |
|
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 to $466.8 million, up 13 percent
compared to the prior year period. Price/mix increased 8 percent,
reflecting the carryover impact of pricing actions taken in the prior
year as well as improvement in customer and product mix. Volume
increased 5 percent, driven by the benefit of limited time product
offerings and growth in sales to strategic customers in the U.S. and key
international markets.
Global segment product contribution margin(1) increased to
$94.5 million, up 27 percent compared to the prior year period.
Favorable price/mix and volume growth drove the increase, which was
partially offset by transportation, warehousing, input and manufacturing
cost inflation, as well as higher depreciation expense primarily
associated with the Richland production line.
Foodservice
|
| |
| |
| |
| |
| Foodservice Segment Summary |
| | | | | | | |
|
| | | | Year-Over-Year | | | | |
| | Q1 2019 | | Growth Rates | | Price/Mix | | Volume |
| | ($ in mil.) | | | | | | |
|
Net sales
| |
$
|
297.8
| |
7%
| |
7%
| |
0%
|
|
Segment product contribution margin(1) | |
$
|
102.0
| |
12%
| | | | |
| | | | | | | | |
|
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 to $297.8 million,
up 7 percent compared to the prior year period. Price/mix increased 7
percent, reflecting carryover impact of pricing actions taken in the
prior year as well as improvement in customer and product mix. Volume
declined nominally as growth in sales of higher-margin Lamb
Weston-branded and operator-labeled products largely offset the loss of
some lower-margin, distributor-label product volumes.
Foodservice segment product contribution margin(1) increased
to $102.0 million, up 12 percent compared to the prior year period,
driven by favorable price/mix, partially offset by transportation,
warehousing, input and manufacturing cost inflation, as well as higher
depreciation expense primarily associated with the Richland production
line.
Retail
|
| |
| |
| |
| |
| Retail Segment Summary |
| | | | | | | |
|
| | | | Year-Over-Year | | | | |
| | Q1 2019 | | Growth Rates | | Price/Mix | | Volume |
| | ($ in mil.) | | | | | | |
|
Net sales
| |
$
|
116.2
| |
26%
| |
13%
| |
13%
|
|
Segment product contribution margin(1) | |
$
|
22.7
| |
38%
| | | | |
| | | | | | | | |
|
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, increased to $116.2 million, up 26 percent compared to
the prior year period. Price/mix increased 13 percent, due to higher
prices across the private label and branded portfolios, as well as
improved mix. Volume increased 13 percent, primarily driven by
distribution gains of Grown in Idaho and other branded products.
Retail segment product contribution margin(1) increased to
$22.7 million, up 38 percent compared to the prior year period, due to
higher price/mix, volume and lower trade expense. The increase was
partially offset by increased advertising and promotional support, as
well as transportation, warehousing, input and manufacturing cost
inflation.
Equity Method Investment Earnings
Equity method investment earnings from unconsolidated joint ventures in
the U.S. and Europe were $19.9 million and $20.0 million for the first
quarter of fiscal 2019 and 2018, respectively. These amounts included a
$0.7 million unrealized gain related to mark-to-market adjustments
associated with currency and commodity hedging contracts in the current
quarter and a $3.8 million gain in the prior year quarter. Excluding
these adjustments, earnings from equity method investments increased
$3.0 million compared to the prior year period, reflecting solid
operating results in Europe, largely driven by lower production costs
and volume growth, partially offset by lower price/mix.
Outlook
The Company provides earnings guidance on a non-GAAP basis and does not
reconcile guidance to GAAP as the Company cannot predict certain
elements that are included in reported GAAP results, including the
impact of U.S. tax reform and other items impacting comparability.
|
|
| |
| FY 2019 Outlook Summary |
| | |
|
|
Net sales growth rate
| | |
Mid-Single Digit Range
|
|
|
|
|
|
| | |
|
|
Adjusted EBITDA including unconsolidated joint ventures(1) | | | $860 million-$870 million |
|
|
|
|
|
| | |
|
|
Interest expense
| | |
Approximately $110 million |
|
|
|
|
|
| | |
|
|
Effective tax rate(2) excluding comparability items
| | |
Approximately 24%
|
|
|
|
|
|
| | |
|
|
Cash used for capital expenditures
| | |
Approximately $360 million |
|
|
|
|
|
| | |
|
For fiscal 2019, the Company continues to expect:
-
Net sales to grow mid-single digits, with price/mix higher in the
first half of fiscal 2019 versus the second half of the year,
reflecting the carryover impact of customer contract pricing
structures that took effect beginning in the second half of fiscal
2018.
-
Adjusted EBITDA including unconsolidated joint ventures(1)
in the range of $860 million to $870 million. The Company continues to
expect the rate of gross profit dollar growth to be at least in line
with net sales growth. The Company also continues to expect 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. In addition, this range includes the impact of the
Company exercising its contractual right to purchase the remaining
50.01% equity interest in its joint venture, Lamb Weston BSW, LLC,
that it currently does not own (the “call option”). The Company has
provided notice to exercise the call option, and expects to consummate
the transaction as soon as practicable.
In addition, the Company continues to expect:
-
Total interest expense to be approximately $110 million.
-
An effective tax rate(2) of approximately 24 percent.
-
Cash used for capital expenditures of approximately $360 million,
excluding acquisitions, of which approximately $200 million is related
to completing the construction of the Company’s 300 million pound
french fry production line in Hermiston, Oregon, which is expected to
be operational in May 2019.
-
Total depreciation and amortization expense of approximately $150
million.
End Notes
|
(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 and the reconciliations at
the end of this press release for more information. See also
“Outlook” in this press release for a discussion of earnings
guidance provided on a non-GAAP basis.
|
| |
|
|
(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 first quarter 2019
results at 10:00 a.m. ET today. Investors and analysts may access the
call toll-free by dialing (800) 289-0438, and using the event
confirmation code of 2196129. 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 our
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 “expand,”
“execute,” “believe,” “continue,” “deliver,” “expect,” “drive,”
“support,” “grow,” “will,” “invest,” “anticipate,” “target,” “improve,”
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, taxes, 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,
and segment product contribution margin, 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
provide 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.
|
| |
| |
Lamb Weston Holdings, Inc.
Consolidated Statements
of Earnings
(unaudited, dollars in millions, except
per-share amounts)
|
| | | |
|
| | Thirteen Weeks Ended (1) |
| | August 26, | | August 27, |
| | 2018 | | 2017 |
|
Net sales
| |
$
|
914.9
| |
$
|
817.5
|
|
Cost of sales
| |
|
684.3
| |
|
621.2
|
|
Gross profit
| | |
230.6
| | |
196.3
|
|
Selling, general and administrative expenses (2)
| |
|
78.0
| |
|
58.7
|
|
Income from operations
| | |
152.6
| | |
137.6
|
|
Interest expense, net
| |
|
26.8
| |
|
25.2
|
|
Income before income taxes and equity method earnings
| | |
125.8
| | |
112.4
|
|
Income tax expense
| | |
34.3
| | |
44.1
|
|
Equity method investment earnings
| |
|
19.9
| |
|
20.0
|
|
Net income
| | |
111.4
| | |
88.3
|
|
Less: Income attributable to noncontrolling interests
| |
|
3.6
| |
|
4.9
|
|
Net income attributable to Lamb Weston Holdings, Inc.
| |
$
|
107.8
| |
$
|
83.4
|
|
Earnings per share
| | | | |
|
Basic
| |
$
|
0.73
| |
$
|
0.56
|
|
Diluted
| |
$
|
0.73
| |
$
|
0.56
|
|
Dividends declared per common share
| |
$
|
0.19125
| |
$
|
0.1875
|
| | | |
|
| | | |
|
|
Computation of diluted earnings per share:
| | | | |
|
Net income attributable to Lamb Weston Holdings, Inc.
| |
$
|
107.8
| |
$
|
83.4
|
|
Less: Increase in redemption value of noncontrolling interests in
excess of earnings allocated
| |
|
0.9
| |
|
0.8
|
|
Net income available to Lamb Weston common stockholders
| |
$
|
106.9
| |
$
|
82.6
|
|
Diluted weighted average common shares outstanding
| |
|
147.2
| |
|
146.8
|
|
Diluted earnings per share
| |
$
|
0.73
| |
$
|
0.56
|
| | | | | |
|
|
(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 new revenue standard did not have a significant impact
on the Company’s results of operations. The comparative information
has not been restated and continues to be reported under the
accounting standards in effect for those periods. 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 first quarter Form 10-Q,
for more information.
|
|
|
|
(2) The thirteen weeks ended August 27, 2017 includes $2.2 million
of expenses related to the Company’s separation from Conagra Brands,
Inc. These expenses related primarily to professional fees and other
employee-related costs.
|
| | | | | |
|
|
| |
| |
Lamb Weston Holdings, Inc.
Consolidated Balance
Sheets
(unaudited, dollars in millions, except share data)
|
| | | |
|
| | August 26, | | May 27, |
| | 2018 (1) | | 2018 |
| ASSETS | | | | |
|
Current assets:
| | | | |
|
Cash and cash equivalents
| |
$
|
150.5
| | |
$
|
55.6
| |
|
Receivables, less allowance for doubtful accounts of $0.6 and $0.6 | | |
331.1
| | | |
225.9
| |
|
Inventories
| | |
447.7
| | | |
549.7
| |
|
Prepaid expenses and other current assets
| |
|
55.5
|
| |
|
99.2
|
|
| Total current assets | |
|
984.8
|
| |
|
930.4
|
|
|
Property, plant and equipment, net
| | |
1,467.9
| | | |
1,420.8
| |
|
Goodwill
| | |
133.3
| | | |
135.1
| |
|
Intangible assets, net
| | |
34.8
| | | |
35.4
| |
|
Equity method investments
| | |
221.7
| | | |
219.8
| |
|
Other assets
| |
|
11.8
|
| |
|
11.1
|
|
| Total assets | |
$
|
2,854.3
|
| |
$
|
2,752.6
|
|
| | | |
|
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
|
Current liabilities:
| | | | |
|
Short-term borrowings
| |
$
|
8.8
| | |
$
|
9.6
| |
|
Current portion of long-term debt and financing obligations
| | |
38.7
| | | |
38.7
| |
|
Accounts payable
| | |
270.2
| | | |
254.4
| |
|
Accrued liabilities
| |
|
200.6
|
| |
|
216.0
|
|
| Total current liabilities | |
|
518.3
|
| |
|
518.7
|
|
|
Long-term liabilities:
| | | | |
|
Long-term debt, excluding current portion
| | |
2,329.5
| | | |
2,336.7
| |
|
Deferred income taxes
| | |
109.9
| | | |
92.1
| |
|
Other noncurrent liabilities
| |
|
84.8
|
| |
|
84.3
|
|
| Total long-term liabilities | |
|
2,524.2
|
| |
|
2,513.1
|
|
|
Commitments and contingencies
| | | | |
| Redeemable noncontrolling interest | | |
57.2
| | | |
55.6
| |
|
Stockholders' equity:
| | | | |
|
Common stock of $1.00 par value, 600,000,000 shares authorized;
146,565,333 and 146,395,866 shares issued
| | |
146.6
| | | |
146.4
| |
|
Additional distributed capital
| | |
(896.4
|
)
| | |
(900.4
|
)
|
|
Retained earnings
| | |
519.7
| | | |
426.4
| |
|
Accumulated other comprehensive loss
| | |
(8.5
|
)
| | |
(4.3
|
)
|
|
Treasury stock, at cost, 117,577 and 63,534 common shares
| |
|
(6.8
|
)
| |
|
(2.9
|
)
|
| Total stockholders' deficit | |
|
(245.4
|
)
| |
|
(334.8
|
)
|
| Total liabilities and stockholders’ equity | |
$
|
2,854.3
|
| |
$
|
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)
|
| | | |
|
| | Thirteen Weeks Ended |
| | August 26, | | August 27, |
| | 2018 | | 2017 |
| Cash flows from operating activities | | | | |
|
Net income
| |
$
|
111.4
| | |
$
|
88.3
| |
|
Adjustments to reconcile net income to net cash provided by
operating activities:
| | | | |
|
Depreciation and amortization of intangibles and debt issuance costs
| | |
38.6
| | | |
31.0
| |
|
Stock-settled, stock-based compensation expense
| | |
4.2
| | | |
2.6
| |
|
Earnings of joint ventures in excess of distributions
| | |
(3.2
|
)
| | |
(7.1
|
)
|
|
Deferred income taxes
| | |
13.9
| | | |
11.5
| |
|
Pension expense, net of contributions
| | |
1.9
| | | |
2.0
| |
|
Other
| | |
1.2
| | | |
(8.9
|
)
|
|
Changes in operating assets and liabilities:
| | | | |
|
Receivables
| | |
(18.6
|
)
| | |
(28.5
|
)
|
|
Inventories
| | |
33.2
| | | |
30.7
| |
|
Income taxes payable/receivable, net
| | |
9.5
| | | |
3.4
| |
|
Prepaid expenses and other current assets
| | |
41.1
| | | |
26.8
| |
|
Accounts payable
| | |
17.1
| | | |
12.9
| |
|
Accrued liabilities
| |
|
(22.4
|
)
| |
|
(21.2
|
)
|
| Net cash provided by operating activities | |
$
|
227.9
|
| |
$
|
143.5
|
|
| Cash flows from investing activities | | | | |
|
Additions to property, plant and equipment
| | |
(87.0
|
)
| | |
(104.4
|
)
|
|
Other
| |
|
0.2
|
| |
|
—
|
|
| Net cash used for investing activities | |
$
|
(86.8
|
)
| |
$
|
(104.4
|
)
|
| Cash flows from financing activities | | | | |
|
Proceeds (repayments) of short-term borrowings, net
| | |
(1.0
|
)
| | |
10.2
| |
|
Debt repayments
| | |
(10.9
|
)
| | |
(9.9
|
)
|
|
Dividends paid
| | |
(28.0
|
)
| | |
(27.4
|
)
|
|
Cash distributions paid to noncontrolling interest
| | |
(2.9
|
)
| | |
(2.3
|
)
|
|
Other
| |
|
(3.1
|
)
| |
|
(1.1
|
)
|
| Net cash used for financing activities | |
$
|
(45.9
|
)
| |
$
|
(30.5
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
| | |
(0.3
|
)
| | |
4.1
| |
| Net increase in cash and cash equivalents | | |
94.9
| | | |
12.7
| |
| Cash and cash equivalents, beginning of the period | |
|
55.6
|
| |
|
57.1
|
|
| Cash and cash equivalents, end of period | |
$
|
150.5
|
| |
$
|
69.8
|
|
|
|
|
| |
| |
| |
| |
| |
Lamb Weston Holdings, Inc.
Segment Information
(unaudited,
dollars in millions)
|
| | | | | | | | | |
|
| | Thirteen Weeks Ended |
| | | | | | Year-Over- | | | | |
| | August 26, | | August 27, | | Year Growth | | | | |
| | 2018 | | 2017 | | Rates | | Price/Mix | | Volume |
| Segment sales | | | | | | | | | | |
|
Global
| |
$
|
466.8
| |
$
|
413.9
| |
13%
| |
8%
| |
5%
|
|
Foodservice
| | |
297.8
| | |
279.4
| |
7%
| |
7%
| |
0%
|
|
Retail
| | |
116.2
| | |
92.0
| |
26%
| |
13%
| |
13%
|
|
Other
| |
|
34.1
| |
|
32.2
| |
6%
| |
12%
| |
(6%)
|
| | $ | 914.9 | | $ | 817.5 | |
12%
| |
8%
| |
4%
|
| | | | | | | | | |
|
| Segment product contribution margin (1) | | | | | | | | | | |
|
Global
| |
$
|
94.5
| |
$
|
74.4
| |
27%
| | | | |
|
Foodservice
| | |
102.0
| | |
90.8
| |
12%
| | | | |
|
Retail
| | |
22.7
| | |
16.5
| |
38%
| | | | |
|
Other
| |
|
5.0
| |
|
11.2
| |
NM
| | | | |
| |
|
224.2
| |
|
192.9
| |
16%
| | | | |
|
Other selling, general, and administrative expenses (2)
| |
|
71.6
| |
|
55.3
| |
29%
| | | | |
|
Income from operations
| | $ | 152.6 | | $ | 137.6 | |
11%
| | | | |
| | | | | | | | | |
|
|
Items impacting comparability (2)
| | | | | | | | | | |
|
Expenses related to the Separation
| |
$
|
—
| |
$
|
2.2
| | | | | | |
| |
| |
| | | | | | |
| Adjusted income from operations (3) | | $ | 152.6 | | $ | 139.8 | |
9%
| | | | |
| | | | | | | | | |
|
(1) 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.
|
|
|
(2) The thirteen weeks ended August 27, 2017 includes $2.2 million
of expenses related to the Company’s separation from Conagra
Brands, Inc. These expenses related primarily to professional fees
and other employee-related costs.
|
| | | | | | | | | |
|
(3) 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. These non-GAAP measures
provide 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
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.
|
| | | | | | | | | |
|
|
|
Lamb Weston Holdings, Inc.
Reconciliation of
Non-GAAP Financial Measures
(unaudited, dollars in
millions, except per-share amounts)
|
|
|
There were no items impacting comparability during the thirteen
weeks ended August 26, 2018.
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| | Thirteen Weeks Ended August 27, 2017 |
| | | | | | | | Equity | | | | Less: Income | | Net Income | | |
| | | | | | Income | | Method | | | | Attributable to | | Attributable | | |
| | Income From | | Interest | | Tax | | Investment | | | | Noncontrolling | | to Lamb | | Diluted |
| | Operations | | Expense | | Expense | | Earnings | | Net Income | | Interests | | Weston | | EPS |
|
As reported
| |
$
|
137.6
| |
$
|
25.2
| |
$
|
44.1
| |
$
|
20.0
| |
$
|
88.3
| |
$
|
4.9
| |
$
|
83.4
| |
$
|
0.56
|
|
Items impacting comparability (1) (2):
| | | | | | | | | | | | | | | | |
|
Expenses related to the Separation
| |
|
2.2
| |
|
—
| |
|
0.8
| |
|
—
| |
|
1.4
| |
|
—
| |
|
1.4
| |
|
0.01
|
|
Total items impacting comparability
| |
|
2.2
| |
|
—
| |
|
0.8
| |
|
—
| |
|
1.4
| |
|
—
| |
|
1.4
| |
|
0.01
|
|
Adjusted (3)
| | $ | 139.8 | | $ | 25.2 | | $ | 44.9 | | $ | 20.0 | | $ | 89.7 | | $ | 4.9 | | $ | 84.8 | | $ | 0.57 |
| | | | | | | | | | | | | | | |
|
(1) See footnote (2) 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) Adjusted income from operations, income tax expense, equity
method investment earnings, net income, net income attributable to
Lamb Weston 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.
|
|
|
|
| |
| |
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 |
| | August 26, | | August 27, |
| | 2018 | | 2017 |
|
Net income attributable to Lamb Weston Holdings, Inc.
| |
$
|
107.8
| | |
$
|
83.4
| |
|
Income attributable to noncontrolling interests
| | |
3.6
| | | |
4.9
| |
|
Equity method investment earnings
| | |
(19.9
|
)
| | |
(20.0
|
)
|
|
Interest expense, net
| | |
26.8
| | | |
25.2
| |
|
Income tax expense
| |
|
34.3
|
| |
|
44.1
|
|
|
Income from operations
| |
|
152.6
|
| |
|
137.6
|
|
|
Depreciation and amortization
| | |
37.4
| | | |
29.8
| |
|
Items impacting comparability (1)
| | | | |
|
Expenses related to the Separation
| |
|
—
|
| |
|
2.2
|
|
|
Adjusted EBITDA (2) (3)
| |
|
190.0
|
| |
|
169.6
|
|
| | | |
|
|
Unconsolidated Joint Ventures (4)
| | | | |
|
Equity method investment earnings
| | |
19.9
| | | |
20.0
| |
Interest expense, income tax expense, and depreciation
and amortization included in equity method investment earnings
| |
|
7.5
|
| |
|
7.7
|
|
|
Add: EBITDA from unconsolidated joint ventures
| |
|
27.4
|
| |
|
27.7
|
|
| | | |
|
|
Consolidated Joint Ventures (4)
| | | | |
|
Income attributable to noncontrolling interests
| | |
(3.6
|
)
| | |
(4.9
|
)
|
Interest expense, income tax expense, and depreciation
and amortization included in income attributable to noncontrolling
interests
| |
|
(0.9
|
)
| |
|
(1.0
|
)
|
|
Subtract: EBITDA from consolidated joint ventures
| |
|
(4.5
|
)
| |
|
(5.9
|
)
|
| |
| |
|
|
Adjusted EBITDA including unconsolidated joint ventures (2)
| |
$
|
212.9
|
| |
$
|
191.4
|
|
| | | | | | | |
|
(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 three potato processing
joint ventures, including 49.99% of Lamb Weston BSW, LLC and 50%
of Lamb-Weston/RDO Frozen and Lamb-Weston/Meijer v.o.f. Lamb
Weston consolidates the financial statements of Lamb Weston BSW,
LLC and accounts for its ownership in the other joint ventures
under the equity method of accounting.
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20181002005222/en/
Lamb Weston Holdings, Inc.
Investors:
Dexter
Congbalay, 224-306-1535
[email protected]
or
Media:
Shelby
Stoolman, 208-424-5461
[email protected]
Source: Lamb Weston Holdings, Inc.
