TreeHouse Foods, Inc. Reports Fourth Quarter 2017 Results, Provides 2018 Guidance; Company Announces SG&A Reduction Target of $30 Million in 2018; $55 Million Run Rate Expected at the end of 2018

TreeHouse 2020 is a comprehensive strategic blueprint that consists of aggressive actions to manage the Company's category and customer portfolio and optimize its manufacturing and supply chain. It is a multi-year plan designed to improve TreeHouse's operating margin structure by approximately 300 basis points by the end of 2020 by fully integrating its business and reducing its cost structure in order to invest in market-differentiated capabilities that will serve the rapidly evolving needs of its customers that are strategically focused and highly committed to their corporate brands.

Phase 1 of the TreeHouse 2020 restructuring program achieved the following milestones in 2017:

• Closed the Plymouth, Indiana and Brooklyn Park, Minnesota plants;
• 19 production lines permanently shuttered; and
• 27% of SKUs eliminated, slightly ahead of the Company's previously communicated 25% goal.

The Company outlined the following TreeHouse 2020 action steps for calendar year 2018:

• the partial closure of Dothan, Alabama expected in the second quarter of 2018;
• the final phase of closure of the Battle Creek, Michigan facility announced on January 31, 2018;
• the closure of the Visalia, California facility which is targeted for closure by the end of first quarter 2019;
• at least 15 production lines permanently shuttered; and
• the full roll-out of the TreeHouse Management Operating System (TMOS) to 12 plants in 2018.

In addition to TreeHouse 2020, TreeHouse has completed a comprehensive review of SG&A and related expenses in partnership with a major global consulting firm to provide an independent perspective of improvement potential across all of its functions, business units, and geographies based on industry benchmarks. As such, the Company plans to reduce salaried headcount across the organization by mid-year 2018. TreeHouse expects savings in calendar 2018 to total approximately $30 million, with a run rate impact of $55 million exiting 2018.

OUTLOOK

"2018 will be a transition year," said Mr. Reed. "Although the retail grocery landscape continues to evolve, private label absolutely continues to be the right place to be within food and beverage. It will take some time for our TreeHouse 2020 initiatives to manifest themselves in our results. However, we are well on our way to simplifying, reshaping, and optimizing our manufacturing and distribution footprint so that we can be a more efficient and effective operating company going forward."

In 2018, the Company believes the overall food and beverage industry will further evolve, as the marketplace for customer brands continues to transform, both through traditional brick and mortar channels and through the growth of e-commerce channels. TreeHouse remains committed to growing the top line over time, improving its operating margins through the TreeHouse 2020 restructuring program and delivering strong free cash flow.

TreeHouse net sales are expected to decrease in 2018 to approximately $5.9 to $6.1 billion, driven by the sale of the Soup and Infant Feeding business in May 2017 and the Company's planned SKU reduction initiatives. Additionally, in 2018, the Company will be lapping the adverse effects of bid pricing concessions from 2017 and cycling through business that has been lost.

Earnings before interest and taxes ("EBIT") is expected to be between $265 to $305 million, or approximately 4.5% to 5.0% of sales, representing a decline in comparison to 2017.

Net interest expense is expected to be between $118 and $120 million and assumes a rising interest rate environment as the year progresses.

The effective tax rate is expected to decrease to a range of 25% to 26%, primarily due to tax reform.

The Company's earnings per fully diluted share guidance is between $2.00 and $2.40 in 2018.  The Company also anticipates diluted weighted average shares outstanding will average in a range of 56 to 57 million shares in 2018, including anticipated share repurchases. 

In regard to the first quarter of 2018, the Company expects earnings in the range of $0.10 to $0.20 per fully diluted share.  The expected decrease compared to the first quarter of 2017 is due to lower volumes, the timing of higher commodity and freight costs versus pricing actions that will take effect in later quarters and operational inefficiencies.

FOURTH QUARTER 2017 FINANCIAL RESULTS

Net sales for the fourth quarter of 2017 totaled $1.7 billion compared to $1.8 billion for the same period last year, a decrease of (4.3)%. The change in net sales from 2016 to 2017 was due to the following:

The change in net sales was more than explained by the divestiture of the canned soup and infant feeding business ("SIF") which contributed (6.7)% to the year-over-year decline.  Volume/mix was favorable compared to the prior year primarily related to the Snacks, Beverages, and Condiments segments. Pricing and foreign currency were also slightly favorable.  On a comparable basis, excluding the SIF business and an extra week of Private Brands in 2016, the Company reported sales growth of 2.4%.

Gross profit as a percentage of net sales was 15.3% in the fourth quarter of 2017, compared to 19.7% in the fourth quarter of 2016. Included in cost of sales was $32.8 million related to restructuring and margin improvement activities in the fourth quarter of 2017 compared to $4.0 million in the prior year. These transactions lowered gross profit as a percentage of net sales by 2.0% in the fourth quarter of 2017 and 0.2% in the fourth quarter of 2016. The remaining 2.6% decrease in gross profit as a percentage of net sales was primarily due to higher commodity costs (primarily cashews, almonds, durum, dairy, and soybean oil), higher operating costs, and unfavorable mix, partially offset by a reduction in variable incentive compensation and depreciation.

Operating expenses increased $178.8 million, or 30.1%, in the fourth quarter of 2017 compared to the fourth quarter of 2016. Included in operating expenses in the fourth quarter of 2017 was $569.7 million related to impairment of goodwill and other intangible assets; acquisition, integration, divestiture, and related costs; debt refinancing costs; and restructuring and margin improvement activities in the fourth quarter of 2017. Impairment of goodwill and other intangible assets; acquisition, integration, divestiture, and related costs; and restructuring and margin improvement activities totaled $365.8 million in the fourth quarter of 2016. This increase of $203.9 million more than explains the overall increase in operating expenses year-over-year. Excluding these charges, operating expenses decreased $25.1 million in the fourth quarter of 2017 compared to 2016. This decline was primarily related to cost savings, lower variable incentive compensation of $6.4 million, and lower stock compensation expense of $2.3 million.

Total other expenses, which includes interest expense, interest income, gain on foreign currency exchange, and other income, net increased $5.3 million compared to the fourth quarter of 2016 primarily due to lower gains from hedging activities and $3.3 million of debt refinancing cost included in the fourth quarter of 2017, partially offset by favorable fluctuations between the U.S. and Canadian dollar during the respective periods.

Income tax expense (benefit) of $(229.4) million was recorded in the fourth quarter of 2017. The Company's fourth quarter 2017 effective income tax rate was 42.6% compared to (6.2%) in the prior year's fourth quarter.  The change in the rate year-over-year is primarily due to the impairment of goodwill that is not deductible for tax purposes, the benefit related to the recognition of foreign tax credits, and a one-time benefit due to the enactment of the Tax Cuts and Jobs Act.  Excluding the impact of non-recurring items, the fourth quarter effective tax rate would have been 8.2%.  Our effective tax rate may change from period to period based on recurring and non-recurring factors including the jurisdictional mix of earnings, enacted tax legislation, state income taxes, settlement of tax audits, and the expiration of the statute of limitations in relation to unrecognized tax benefits.

Net loss for the fourth quarter of 2017 was $(309.0) million, compared to a net loss of $(281.8) million for the same period of the previous year. Adjusted EBITDAS³ was $162.7 million in the fourth quarter of 2017, a (22.6)% decrease compared to the fourth quarter of 2016. The decrease in adjusted EBITDAS was primarily due to higher commodity costs, higher operating costs, and unfavorable mix, partially offset by a reduction in variable incentive compensation, stock comp, and cost savings.

The Company's fourth quarter 2017 results included ten items noted below that, in management's judgment, affect the assessment of earnings.

RECONCILIATION OF DILUTED LOSS PER SHARE TO ADJUSTED DILUTED EARNINGS PER SHARE
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2017				2016				2017				2016
		(unaudited)								(unaudited)
Diluted loss per share per GAAP		$	(5.40)			$	(4.96)			$	(5.01)			$	(4.10)
Impairment of goodwill and other intangible assets			9.57				6.19				9.55				6.30
Acquisition, integration, divestiture, and related costs			0.05				0.17				1.76				1.06
Restructuring and margin improvement activities			0.84				0.14				1.52				0.37
Debt refinancing			0.09				—				0.09				—
Mark-to-market adjustments			(0.05)				(0.18)				(0.04)				(0.25)
Foreign currency loss (gain) on re-measurement of intercompany notes			0.03				0.04				(0.10)				(0.05)
Product recall (reimbursement) costs			—				—				(0.15)				0.28 Werbung Mehr Nachrichten zur Treehouse Foods Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 24.04.24 - PR Newswire BlackRock Income and Growth Investment Trust Plc - Transaction in Own Shares 24.04.24 - PR Newswire Fidelity Emerging Markets Ltd - Monthly Factsheet 24.04.24 - PR Newswire Boeing Company - First Quarter Financial Results Solarboom 2024:    5 Gründe die für diese Aktie sprechen… weiterlesen» Anzeige wo-site-teaser-box-16746_site-teaser-box_2024-04-24_08%253A00%253A00_2024-04-25_09%253A00%253A59