Lamb Weston Holdings, Inc. Reports Fiscal Third Quarter 2018 Results and Updates Full Year Outlook
Third Quarter 2018 Highlights
- Net sales increased 12% to $863 million
- Income from operations increased 17% to $169 million; Adjusted Income from Operations
(1) increased 14% to $171 million
- Adjusted EBITDA including unconsolidated joint ventures (1) increased
25% to $238 million
- Diluted EPS increased to $1.06 from $0.57 in third quarter 2017; $0.31 of the increase related to
U.S. tax reform, including a $0.16 benefit from discrete items and a $0.15 benefit from a lower tax rate
- Adjusted Diluted EPS (1) increased to $0.91 from $0.59 in third
quarter 2017, and includes a $0.15 benefit from a lower tax rate as a result of U.S. tax reform
Updated FY 2018 Outlook
- Net sales expected to increase at upper end of mid-single digits range, up from a previous
estimate of mid-single digits
- Adjusted EBITDA including unconsolidated joint ventures (1) expected
to be $805 million-$810 million, up from a previous estimate of $780 million-$790 million
Lamb Weston Holdings, Inc. (NYSE: LW) announced today its third quarter 2018 results and updated its outlook for fiscal
2018.
“Our strong top- and bottom-line performance in the third quarter reflects the benefits of our capital expansion investments,
our focus on delivering industry-leading customer service and our commitment to operational excellence,” said Tom Werner, President
and CEO. “Across each of our core businesses, we grew volume and improved price/mix to drive profit growth and expand margins. Our
new production line in Richland, Washington is up and running, providing us with greater flexibility across our manufacturing
network to support further growth, innovation and limited time offerings for our customers, as well as allowing us to better manage
costs, capacity utilization and service levels. In Europe, our joint venture delivered another solid quarter by growing volume and
reducing costs. As a result of our strong year-to-date performance and continued expectation of a favorable operating environment,
we’ve raised our annual outlook for sales growth and Adjusted EBITDA.”
| Summary of Third Quarter FY 2018 Results |
| ($ in millions, except per share) |
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Year-Over-Year |
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Year-Over-Year |
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Q3 2018 |
|
Growth Rates |
|
YTD 2018 |
|
Growth Rates |
| Net sales |
|
$ |
863.4 |
|
12% |
|
$ |
2,505.5 |
|
7% |
| Income from operations |
|
$ |
169.2 |
|
17% |
|
$ |
446.6 |
|
13% |
| Net income attributable to Lamb Weston |
|
$ |
156.8 |
|
86% |
|
$ |
316.8 |
|
26% |
| Diluted EPS |
|
$ |
1.06 |
|
86% |
|
$ |
2.14 |
|
26% |
|
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| Adjusted EBITDA including unconsolidated joint ventures(1) |
|
$ |
237.6 |
|
25% |
|
$ |
617.9 |
|
16% |
| Adjusted Diluted EPS(1) |
|
$ |
0.91 |
|
54% |
|
$ |
2.01 |
|
12% |
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Q3 2018 Commentary
Net sales were $863.4 million, up 12 percent versus the year-ago period. Price/mix increased 7 percent due to pricing actions
and favorable product and customer mix. Volume increased 5 percent, with growth in each operating segment.
Income from operations rose 17 percent to $169.2 million from the prior year period, and included $1.7 million of costs related
to the spinoff from Conagra Brands, Inc. (formerly ConAgra Foods, Inc., “Conagra”), compared with $5.1 million of expenses incurred
in the prior year period related to the spinoff from Conagra.
Excluding these comparability items, income from operations grew $20.6 million, or 14 percent, driven by higher gross profit.
Gross profit increased $36.9 million, due to favorable price/mix and volume, partially offset by packaging, commodity,
manufacturing, transportation and warehousing cost inflation, and higher depreciation expense primarily associated with the
Company’s new french fry production line in Richland, Washington. The rise in gross profit was partially offset by a $16.3 million
increase in selling, general and administrative expenses, excluding comparability items. The higher SG&A was largely a result
of incremental labor and benefits and infrastructure costs associated with being a stand-alone company, higher incentive
compensation expense accruals based on operating performance and increased investments in advertising and promotional support.
Adjusted EBITDA including unconsolidated joint ventures(1) was $237.6 million, up 25 percent versus the prior year
quarter, reflecting growth in income from operations and equity method investment earnings.
Diluted EPS increased $0.49 to $1.06 from $0.57 in the prior year period. Approximately $0.31 of the increase relates to the Tax
Cuts and Jobs Act (the “Tax Act”) enacted in December 2017, and included a $0.16 benefit from discrete items and a $0.15 benefit
related to adopting a lower tax rate. The remaining increase was driven by growth in income from operations and equity method
investment earnings.
Adjusted Diluted EPS(1) increased $0.32 to $0.91 from $0.59 in the prior year period, and includes a $0.15 benefit
related to adopting a lower tax rate as a result of the Tax Act. The remaining increase was driven by growth in income from
operations and equity method investment earnings.
The effective tax rate(2) was 4.5 percent in the third quarter of fiscal 2018, versus 33.4 percent in the prior year
period. Compared with the third quarter of fiscal 2017, the Tax Act(3) decreased income tax expense by approximately $47
million. This decrease includes a provisional $24.0 million net discrete benefit, comprised 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, which is payable over eight years. In
addition, the third quarter decrease in tax expense also includes an approximate $23 million tax benefit related to the lower U.S.
corporate tax rate, which included approximately $14 million benefit related to earnings reported in the first half of fiscal 2018
and $9 million related to fiscal third quarter earnings. In the third quarter of fiscal 2018, the Company’s effective tax rate,
excluding $24.0 million of comparability items arising from the Tax Act, was 18.9%. The Company will continue to refine these
amounts within the measurement period allowed by Staff Accounting Bulletin (“SAB”) No. 118, which will not exceed one year from the
enactment date of the Tax Act.
Q3 2018 Segment Highlights
Global
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Global Segment Summary |
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Year-Over-Year |
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Q3 2018 |
|
Growth Rates |
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Price/Mix |
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Volume |
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($ in mil.) |
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Net sales |
|
$ |
448.7 |
|
15% |
|
9% |
|
6% |
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Segment product contribution margin(1) |
|
$ |
114.8 |
|
23% |
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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 15 percent to $448.7 million. Price/mix increased 9 percent, reflecting price
increases as well as improvement in customer and product mix. Volume increased 6 percent, driven by the benefit of significant
limited time product offerings and solid growth in sales to strategic customers in the U.S.
Global segment product contribution margin(1) increased 23 percent to $114.8 million, driven by favorable price/mix
and volume growth. The increase was partially offset by packaging, commodity, manufacturing, transportation and warehousing cost
inflation, as well as higher depreciation expense associated with the new Richland production line.
Foodservice
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Foodservice Segment Summary |
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Year-Over-Year |
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Q3 2018 |
|
Growth Rates |
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Price/Mix |
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Volume |
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($ in mil.) |
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Net sales |
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$ |
253.5 |
|
5% |
|
5% |
|
0% |
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Segment product contribution margin(1) |
|
$ |
90.0 |
|
7% |
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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 5 percent to $253.5 million. Price/mix increased 5 percent, as
compared to a 10 percent increase in the prior year quarter, reflecting pricing actions taken in the current year, the carryover
effect of pricing actions taken in fiscal year 2017, and improvement in customer and product mix. Volume increased nominally as
growth of higher-margin Lamb Weston-branded and operator-labeled products offset the loss of some lower-margin, distributor-label
product volumes.
Foodservice segment product contribution margin(1) increased 7 percent to $90.0 million, driven by favorable
price/mix, partially offset by packaging, commodity, manufacturing, transportation and warehousing cost inflation, as well as
higher depreciation expense associated with the new Richland production line.
Retail
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Retail Segment Summary |
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Year-Over-Year |
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Q3 2018 |
|
Growth Rates |
|
Price/Mix |
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Volume |
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($ in mil.) |
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Net sales |
|
$ |
130.2 |
|
31% |
|
9% |
|
22% |
|
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Segment product contribution margin(1) |
|
$ |
30.5 |
|
32% |
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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 31 percent to $130.2 million. Volume increased 22 percent, primarily driven by distribution
gains of Grown in Idaho and other branded products, as well as the timing of shipments of private label products. Price/mix
increased 9 percent, due to higher prices across the private label and branded portfolios, as well as improved mix, partially
offset by higher trade investments to support expanded distribution of Grown in Idaho branded products.
Retail segment product contribution margin(1) increased 32 percent to $30.5 million, mainly due to higher volume and
price/mix. The increase was partially offset by packaging, manufacturing, transportation and warehousing cost inflation, as well as
higher trade investments and advertising and promotional support behind Grown in Idaho branded products.
Equity Method Investment Earnings
Equity method investment earnings from unconsolidated joint ventures in the U.S. and Europe were $26.4 million and $12.7 million
for the third quarter of fiscal 2018 and 2017, respectively. These amounts included a $2.5 million unrealized gain related to
mark-to-market adjustments associated with currency and commodity hedging contracts in the current quarter and a $1.4 million loss
in the prior year quarter. Excluding these adjustments, earnings from equity method investments increased $9.8 million, driven by
solid operating results in Europe and the U.S., including lower raw potato and production costs in Europe, volume growth, an
approximate $4 million gain related to a divestiture of a non-core business, and a $2.0 million foreign currency translation
benefit.
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 costs related to tax reform, the spinoff from Conagra, and
other items impacting comparability.
The Company updated its outlook for fiscal year 2018 as follows:
| |
|
FY 2018 Outlook Summary |
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|
Net sales growth rate |
|
Upper End of Mid-Single Digit Range |
|
|
|
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|
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|
|
|
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|
Adjusted EBITDA including unconsolidated joint ventures(1) |
|
$805 million-$810 million |
|
|
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|
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|
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Interest expense |
|
Approximately $110 million |
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Effective tax rate(2) excluding comparability items |
|
Approximately 28% |
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|
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Cash used for capital expenditures |
|
$270 million-$280 million |
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As summarized in the table above, the Company expects:
- Net sales to grow at the upper end of the mid-single digit range, driven by solid price/mix and
volume growth. The Company’s previous estimate was for net sales to grow mid-single digits.
- Adjusted EBITDA including unconsolidated joint ventures(1) to be in the range of $805
million to $810 million, including higher selling, general and administrative expenses as a percentage of sales for fiscal 2018
due to the full-year impact of incremental labor and benefits and infrastructure costs associated with being a stand-alone public
company, higher incentive compensation expense accruals as a result of the Company’s operating performance, and higher
advertising and promotional expense in support of the introduction of the Company’s Grown in Idaho product line in retail.
Using the mid-point of the range, this represents an increase of approximately 17% percent versus a fiscal 2017 pro forma
Adjusted EBITDA including unconsolidated joint ventures(1) of $692 million. The Company’s previous estimate was for
Adjusted EBITDA including unconsolidated joint ventures(1) to be in the range of $780 million to $790 million.
In addition, the Company expects:
- Total interest expense for fiscal 2018 to be approximately $110 million, which is an increase of
approximately $50 million from fiscal 2017 due to the full-year impact of the Company’s capital structure after the spinoff from
Conagra. The Company’s previous estimate was for total interest expense to be in the range of $105 million to $110 million.
- A blended estimated effective tax rate(2) excluding comparability items of approximately
28 percent, which reflects the effect of a lower U.S. corporate tax rate as a result of the Tax Act. The Company’s previous
estimate was for an effective tax rate of 33 to 34 percent.
- Cash used for capital expenditures to be between $270 million and $280 million for fiscal 2018, up
from the Company’s previous estimate of $250 million. The increase of between $20 million and $30 million reflects the
acceleration of spending for the initial phase of construction of a new 300 million pound french fry production line at the
Company’s Hermiston, Oregon facility that will support customers’ growth in North America as well as Asia. The Company continues
to expect this $250 million production line to be completed during the fourth quarter of fiscal 2019.
End Notes
| (1) |
|
Adjusted EBITDA including unconsolidated joint ventures, pro forma 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. Pro forma Adjusted EBITDA including unconsolidated joint ventures includes
$15.0 million of stand-alone public company costs for a full year. See also “Outlook” in this press release for a discussion of
the earnings guidance on a non-GAAP basis. |
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| (2) |
|
The effective tax rate is calculated as the ratio of income tax expense to pre-tax
income, inclusive of equity method investment earnings. |
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| (3) |
|
The Tax Act enacted in December 2017, provided approximately $47 million, or $0.31
per diluted share, of income tax benefits during the third quarter, as follows (dollars in millions, except per share
amounts): |
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Income |
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Tax |
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Diluted |
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Benefit |
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EPS |
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|
Discrete items, net (a) |
|
$ |
24 |
|
$ |
0.16 |
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Benefit from lower tax rate (b) |
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Benefit related to earnings reported in first half of fiscal 2018 |
|
|
14 |
|
|
0.09 |
|
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|
|
Benefit related to third quarter fiscal 2018 earnings |
|
|
9 |
|
|
0.06 |
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|
23 |
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|
0.15 |
|
|
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Impact of Tax Act |
|
$ |
47 |
|
$ |
0.31 |
__________________
| |
|
(a) |
|
Includes a provisional $24.0 million, or $0.16 per diluted 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 its balance sheet at a lower tax rate, partially offset by a $14.7 million transition tax on its previously
untaxed foreign earnings, which is payable over eight years. The Company’s analysis of these items is not complete. The Company
will complete the accounting for these items during the measurement period allowed by SAB No. 118, which will not exceed one
year from the enactment date of the Tax Act. |
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(b) |
|
The Company is required to record the effect of changes in enacted tax laws or rates
in the interim period in which the change occurs. Accordingly, the Company recorded an approximate $23 million, or $0.15 per
diluted share, benefit from a lower tax rate, in the third quarter. Approximately $14 million of the benefit is attributable to
the earnings reported in the first half of fiscal 2018. |
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| |
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Since the Company’s fiscal year-end is the last Sunday in May, the impact of the
lower U.S. corporate income tax rate is phased in, resulting in a U.S. statutory federal tax rate of approximately 29% for the
fiscal year ending May 27, 2018, and a 21% U.S. statutory federal rate for fiscal years thereafter. The Company is estimating
an effective tax rate, excluding discrete items, of approximately 28% for the fiscal 2018 full year. |
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Webcast and Conference Call Information
Lamb Weston will host a conference call to review its third quarter 2018 results at 10:00 a.m. ET today. Investors and analysts
may access the call toll-free by dialing (800) 239-9838, and using the event confirmation code of 8591354. 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
“continue,” “focus,” “deliver,” “expect,” “drive,” “support,” “grow,” “will,” “manage,” “expand,” 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 uncertainty 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; the competitive environment
and related conditions in the markets in which it operates; political and economic conditions of the countries in which it conducts
business and other factors related to its international operations; disruption of its access to export mechanisms; its ability to
complete proposed acquisitions or integrate acquired businesses or execute on large capital projects; 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; the impact of the Tax Act, including the effect on net deferred
tax liabilities and the discrete transition tax on unremitted foreign earnings; 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, pro forma 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.
|
|
Condensed Combined and Consolidated Statements of Earnings
|
|
(unaudited, dollars in millions, except per-share amounts)
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Thirteen Weeks Ended |
|
Thirty-Nine Weeks Ended |
|
|
February 25, |
|
February 26, |
|
February 25, |
|
February 26, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 (1) |
| Net sales |
|
$ |
863.4 |
|
$ |
768.5 |
|
$ |
2,505.5 |
|
$ |
2,335.5 |
| Cost of sales |
|
|
619.5 |
|
|
561.5 |
|
|
1,855.7 |
|
|
1,749.0 |
| Gross profit |
|
|
243.9 |
|
|
207.0 |
|
|
649.8 |
|
|
586.5 |
| Selling, general and administrative expenses (2) |
|
|
74.7 |
|
|
61.8 |
|
|
203.2 |
|
|
190.8 |
| Income from operations |
|
|
169.2 |
|
|
145.2 |
|
|
446.6 |
|
|
395.7 |
| Interest expense, net |
|
|
28.5 |
|
|
26.3 |
|
|
81.1 |
|
|
34.5 |
| Income before income taxes and equity method earnings |
|
|
140.7 |
|
|
118.9 |
|
|
365.5 |
|
|
361.2 |
| Income tax expense (3) |
|
|
7.5 |
|
|
44.0 |
|
|
93.1 |
|
|
129.0 |
| Equity method investment earnings |
|
|
26.4 |
|
|
12.7 |
|
|
58.5 |
|
|
29.5 |
| Net income |
|
|
159.6 |
|
|
87.6 |
|
|
330.9 |
|
|
261.7 |
| Less: Income attributable to noncontrolling interests |
|
|
2.8 |
|
|
3.4 |
|
|
14.1 |
|
|
10.7 |
| Net income attributable to Lamb Weston Holdings, Inc. |
|
$ |
156.8 |
|
$ |
84.2 |
|
$ |
316.8 |
|
$ |
251.0 |
| Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
1.07 |
|
$ |
0.57 |
|
$ |
2.15 |
|
$ |
1.71 |
| Diluted |
|
$ |
1.06 |
|
$ |
0.57 |
|
$ |
2.14 |
|
$ |
1.70 |
| Dividends declared per common share |
|
$ |
0.19125 |
|
$ |
0.18750 |
|
$ |
0.56625 |
|
$ |
0.18750 |
|
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| Computation of diluted earnings per share: |
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|
|
|
|
|
|
|
|
| Net income attributable to Lamb Weston Holdings, Inc. |
|
$ |
156.8 |
|
$ |
84.2 |
|
$ |
316.8 |
|
$ |
251.0 |
| Less: Increase in redemption value of noncontrolling interests in excess of
earnings allocated |
|
|
0.9 |
|
|
0.7 |
|
|
2.2 |
|
|
1.6 |
| Net income available to Lamb Weston common stockholders |
|
$ |
155.9 |
|
$ |
83.5 |
|
$ |
314.6 |
|
$ |
249.4 |
| Diluted weighted average common shares outstanding |
|
|
147.1 |
|
|
146.5 |
|
|
146.9 |
|
|
146.5 |
| Diluted earnings per share |
|
$ |
1.06 |
|
$ |
0.57 |
|
$ |
2.14 |
|
$ |
1.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
__________________
| (1) |
|
On November 9, 2016, Lamb Weston Holdings, Inc. (“Lamb Weston”) separated from
Conagra Brands, Inc. (formerly ConAgra Foods, Inc., “Conagra”) and became an independent publicly-traded company through the
pro rata distribution by Conagra of 100% of the outstanding common stock of Lamb Weston to Conagra stockholders (the
“Separation”). The combined and consolidated earnings in all periods prior to November 9, 2016, were carved out of Conagra’s
consolidated financial statements. These financial statements may not reflect what the Company’s results of operations would
have been had it operated as a separate stand-alone public company and may not be indicative of its future results of
operations. These financial statements should be read together with the consolidated financial statements and notes in the
Company’s fiscal 2017 Form 10-K and fiscal 2018 third quarter Form 10-Q. |
|
|
|
| (2) |
|
The thirteen and thirty-nine weeks ended February 25, 2018, include $1.7 million and
$7.9 million, respectively, of pre-tax expenses related to the Separation as discussed in footnote (1) above. The thirteen and
thirty-nine weeks ended February 26, 2017, include $5.1 million and $23.8 million, respectively, of Separation-related
expenses. In all periods, the expenses related primarily to professional fees and other employee-related costs. |
|
|
|
| (3) |
|
The Tax Act decreased income tax expense by approximately $47 million. This decrease
includes a provisional $24.0 million net discrete benefit which consists 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, which is payable over eight years. In
addition, the decrease in income tax expense includes an approximate $23 million tax benefit related to the lower U.S.
corporate tax rate. The Company will continue to refine these amounts within the measurement period allowed by SAB No.118,
which will not exceed one year from the enactment date of the Tax Act. |
|
|
|
|
Lamb Weston Holdings, Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(unaudited, dollars in millions, except share data)
|
|
|
|
|
|
|
|
|
|
February 25, |
|
May 28, |
|
|
2018 |
|
2017 |
| ASSETS |
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
49.4 |
|
|
$ |
57.1 |
|
| Receivables, less allowance for doubtful accounts of $0.6 and $0.5 |
|
|
236.6 |
|
|
|
185.2 |
|
| Inventories |
|
|
630.5 |
|
|
|
525.0 |
|
| Prepaid expenses and other current assets |
|
|
81.7 |
|
|
|
90.9 |
|
| Total current assets |
|
|
998.2 |
|
|
|
858.2 |
|
| Property, plant and equipment, net |
|
|
1,356.8 |
|
|
|
1,271.2 |
|
| Goodwill |
|
|
135.7 |
|
|
|
133.0 |
|
| Intangible assets, net |
|
|
35.9 |
|
|
|
37.2 |
|
| Equity method investments |
|
|
217.4 |
|
|
|
178.6 |
|
| Other assets |
|
|
9.9 |
|
|
|
7.4 |
|
| Total assets |
|
$ |
2,753.9 |
|
|
$ |
2,485.6 |
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
| Short-term borrowings |
|
$ |
31.6 |
|
|
$ |
22.0 |
|
| Current portion of long-term debt and financing obligations |
|
|
39.3 |
|
|
|
37.9 |
|
| Accounts payable |
|
|
292.4 |
|
|
|
295.0 |
|
| Accrued liabilities |
|
|
216.0 |
|
|
|
200.5 |
|
| Total current liabilities |
|
|
579.3 |
|
|
|
555.4 |
|
| Long-term liabilities: |
|
|
|
|
|
|
| Long-term debt, excluding current portion |
|
|
2,344.4 |
|
|
|
2,365.0 |
|
| Deferred income taxes |
|
|
80.4 |
|
|
|
90.5 |
|
| Other noncurrent liabilities |
|
|
87.4 |
|
|
|
71.2 |
|
| Total long-term liabilities |
|
|
2,512.2 |
|
|
|
2,526.7 |
|
| Commitments and contingencies |
|
|
|
|
|
|
| Redeemable noncontrolling interest |
|
|
54.6 |
|
|
|
50.7 |
|
| Stockholders' equity: |
|
|
|
|
|
|
| Common stock of $1.00 par value, 600,000,000 shares authorized; 146,282,248 and
146,080,901 shares issued |
|
|
146.3 |
|
|
|
146.1 |
|
| Additional distributed capital |
|
|
(904.1 |
) |
|
|
(904.8 |
) |
| Retained earnings |
|
|
354.5 |
|
|
|
121.0 |
|
| Accumulated other comprehensive income (loss) |
|
|
13.4 |
|
|
|
(9.3 |
) |
| Treasury stock, at cost, 52,092 and 6,143 common shares |
|
|
(2.3 |
) |
|
|
(0.2 |
) |
| Total stockholders' deficit |
|
|
(392.2 |
) |
|
|
(647.2 |
) |
| Total liabilities and stockholders’ equity |
|
$ |
2,753.9 |
|
|
$ |
2,485.6 |
|
|
|
|
|
|
|
|
|
|
|
Lamb Weston Holdings, Inc.
|
|
Condensed Combined and Consolidated Statements of Cash Flows
|
|
(unaudited, dollars in millions)
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended |
|
|
February 25, |
|
February 26, |
|
|
2018 |
|
2017 |
| Cash flows from operating activities |
|
|
|
|
|
|
| Net income |
|
$ |
330.9 |
|
|
$ |
261.7 |
|
| Adjustments to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
| Depreciation and amortization of intangibles and debt issuance costs |
|
|
104.1 |
|
|
|
79.6 |
|
| Stock-based compensation expense |
|
|
15.1 |
|
|
|
9.8 |
|
| Earnings of joint ventures in excess of distributions |
|
|
(22.0 |
) |
|
|
(7.3 |
) |
| Deferred income taxes |
|
|
(16.0 |
) |
|
|
(6.6 |
) |
| Other |
|
|
(7.5 |
) |
|
|
3.1 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
| Receivables |
|
|
(51.4 |
) |
|
|
(31.7 |
) |
| Inventories |
|
|
(105.4 |
) |
|
|
(73.5 |
) |
| Income taxes payable/receivable, net |
|
|
38.0 |
|
|
|
— |
|
| Prepaid expenses and other current assets |
|
|
(11.5 |
) |
|
|
(24.3 |
) |
| Accounts payable |
|
|
31.6 |
|
|
|
17.9 |
|
| Accrued liabilities |
|
|
4.3 |
|
|
|
25.4 |
|
| Net cash provided by operating activities |
|
$ |
310.2 |
|
|
$ |
254.1 |
|
| Cash flows from investing activities |
|
|
|
|
|
|
| Additions to property, plant and equipment |
|
|
(204.4 |
) |
|
|
(204.5 |
) |
| Proceeds from sale of assets |
|
|
0.1 |
|
|
|
2.0 |
|
| Additions to other long-term assets |
|
|
(2.5 |
) |
|
|
— |
|
| Net cash used for investing activities |
|
$ |
(206.8 |
) |
|
$ |
(202.5 |
) |
| Cash flows from financing activities |
|
|
|
|
|
|
| Proceeds from short-term borrowings, net |
|
|
9.4 |
|
|
|
67.3 |
|
| Proceeds from issuance of debt |
|
|
— |
|
|
|
798.1 |
|
| Debt repayments |
|
|
(29.9 |
) |
|
|
(4.7 |
) |
| Net transfers to Conagra |
|
|
— |
|
|
|
(38.8 |
) |
| Dividends paid |
|
|
(82.2 |
) |
|
|
(27.4 |
) |
| Cash distributions paid to Conagra at Separation |
|
|
— |
|
|
|
(823.5 |
) |
| Payments of debt issuance costs |
|
|
— |
|
|
|
(12.3 |
) |
| Cash distributions paid to noncontrolling interest |
|
|
(12.4 |
) |
|
|
(9.0 |
) |
| Other |
|
|
(1.3 |
) |
|
|
0.2 |
|
| Net cash used for financing activities |
|
$ |
(116.4 |
) |
|
$ |
(50.1 |
) |
| Effect of exchange rate changes on cash and cash equivalents |
|
|
5.3 |
|
|
|
(0.4 |
) |
| Net increase (decrease) in cash and cash equivalents |
|
|
(7.7 |
) |
|
|
1.1 |
|
| Cash and cash equivalents, beginning of the period |
|
|
57.1 |
|
|
|
36.4 |
|
| Cash and cash equivalents, end of period |
|
$ |
49.4 |
|
|
$ |
37.5 |
|
|
|
|
|
|
|
|
|
Lamb Weston Holdings, Inc.
|
|
Segment Information
|
|
(unaudited, dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
|
|
|
|
|
|
Year-Over- |
|
|
|
|
|
|
February 25, |
|
February 26, |
|
Year Growth |
|
|
|
|
|
|
2018 |
|
2017 |
|
Rates |
|
Price/Mix |
|
Volume |
| Segment sales |
|
|
|
|
|
|
|
|
|
|
|
|
| Global |
|
$ |
448.7 |
|
$ |
391.6 |
|
15% |
|
9% |
|
6% |
| Foodservice |
|
|
253.5 |
|
|
242.2 |
|
5% |
|
5% |
|
0% |
| Retail |
|
|
130.2 |
|
|
99.7 |
|
31% |
|
9% |
|
22% |
| Other |
|
|
31.0 |
|
|
35.0 |
|
(11%) |
|
1% |
|
(12%) |
|
|
$ |
863.4 |
|
$ |
768.5 |
|
12% |
|
7% |
|
5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment product contribution margin (1) |
|
|
|
|
|
|
|
|
|
|
|
|
| Global |
|
$ |
114.8 |
|
$ |
93.2 |
|
23% |
|
|
|
|
| Foodservice |
|
|
90.0 |
|
|
84.1 |
|
7% |
|
|
|
|
| Retail |
|
|
30.5 |
|
|
23.1 |
|
32% |
|
|
|
|
| Other |
|
|
0.9 |
|
|
2.2 |
|
(59%) |
|
|
|
|
|
|
|
236.2 |
|
|
202.6 |
|
17% |
|
|
|
|
| Other selling, general, and administrative expenses (2) |
|
|
67.0 |
|
|
57.4 |
|
17% |
|
|
|
|
| Income from operations |
|
$ |
169.2 |
|
$ |
145.2 |
|
17% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items impacting comparability (2) |
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses related to the Separation |
|
$ |
1.7 |
|
$ |
5.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted income from operations (3) |
|
$ |
170.9 |
|
$ |
150.3 |
|
14% |
|
|
|
|
__________________
| (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 February 25, 2018 and February 26, 2017, include $1.7
million and $5.1 million, respectively, of pre-tax expenses related to the Separation. The expenses related primarily to
professional fees and other employee-related costs. Other selling, general and administrative expenses include all selling,
general and administrative expenses other than advertising and promotion expenses. |
|
|
|
| (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.
|
|
Segment Information
|
|
(unaudited, dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended |
|
|
|
|
|
|
|
|
Year-Over- |
|
|
|
|
|
|
February 25, |
|
February 26, |
|
Year Growth |
|
|
|
|
|
|
2018 |
|
2017 |
|
Rates |
|
Price/Mix |
|
Volume |
| Segment sales |
|
|
|
|
|
|
|
|
|
|
|
|
| Global |
|
$ |
1,279.5 |
|
$ |
1,203.4 |
|
6% |
|
4% |
|
2% |
| Foodservice |
|
|
805.8 |
|
|
753.0 |
|
7% |
|
6% |
|
1% |
| Retail |
|
|
324.2 |
|
|
285.8 |
|
13% |
|
3% |
|
10% |
| Other |
|
|
96.0 |
|
|
93.3 |
|
3% |
|
6% |
|
(3%) |
|
|
$ |
2,505.5 |
|
$ |
2,335.5 |
|
7% |
|
5% |
|
2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment product contribution margin (1) |
|
|
|
|
|
|
|
|
|
|
|
|
| Global |
|
$ |
277.7 |
|
$ |
259.1 |
|
7% |
|
|
|
|
| Foodservice |
|
|
273.1 |
|
|
243.8 |
|
12% |
|
|
|
|
| Retail |
|
|
66.3 |
|
|
63.6 |
|
4% |
|
|
|
|
| Other |
|
|
16.0 |
|
|
5.0 |
|
NM |
|
|
|
|
|
|
|
633.1 |
|
|
571.5 |
|
11% |
|
|
|
|
| Other selling, general, and administrative expenses (2) |
|
|
186.5 |
|
|
175.8 |
|
6% |
|
|
|
|
| Income from operations |
|
$ |
446.6 |
|
$ |
395.7 |
|
13% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items impacting comparability (2) |
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses related to the Separation |
|
$ |
7.9 |
|
$ |
23.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted income from operations (3) |
|
$ |
454.5 |
|
$ |
419.5 |
|
8% |
|
|
|
|
__________________
| (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 thirty-nine weeks ended February 25, 2018 and February 26, 2017, include $7.9
million and $23.8 million, respectively, of pre-tax expenses related to the Separation. The expenses related primarily to
professional fees and other employee-related costs. Other selling, general and administrative expenses include all selling,
general and administrative expenses other than advertising and promotion expenses. |
|
|
|
| (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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended February 25, 2018 |
|
|
|
|
|
|
|
|
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 |
|
$ |
169.2 |
|
$ |
28.5 |
|
$ |
7.5 |
|
$ |
26.4 |
|
$ |
159.6 |
|
|
$ |
2.8 |
|
$ |
156.8 |
|
|
$ |
1.06 |
|
| Items impacting comparability (1) (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses related to the Separation |
|
|
1.7 |
|
|
— |
|
|
0.5 |
|
|
— |
|
|
1.2 |
|
|
|
— |
|
|
1.2 |
|
|
|
0.01 |
|
| Tax Reform (2) |
|
|
— |
|
|
— |
|
|
24.0 |
|
|
— |
|
|
(24.0 |
) |
|
|
— |
|
|
(24.0 |
) |
|
|
(0.16 |
) |
| Total items impacting comparability |
|
|
1.7 |
|
|
— |
|
|
24.5 |
|
|
— |
|
|
(22.8 |
) |
|
|
— |
|
|
(22.8 |
) |
|
|
(0.15 |
) |
| Adjusted (4) |
|
$ |
170.9 |
|
$ |
28.5 |
|
$ |
32.0 |
|
$ |
26.4 |
|
$ |
136.8 |
|
|
$ |
2.8 |
|
$ |
134.0 |
|
|
$ |
0.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended February 26, 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 |
|
$ |
145.2 |
|
$ |
26.3 |
|
$ |
44.0 |
|
$ |
12.7 |
|
$ |
87.6 |
|
|
$ |
3.4 |
|
$ |
84.2 |
|
|
$ |
0.57 |
|
| Items impacting comparability (1) (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses related to the Separation |
|
|
5.1 |
|
|
— |
|
|
1.9 |
|
|
— |
|
|
3.2 |
|
|
|
— |
|
|
3.2 |
|
|
|
0.02 |
|
| Total items impacting comparability |
|
|
5.1 |
|
|
— |
|
|
1.9 |
|
|
— |
|
|
3.2 |
|
|
|
— |
|
|
3.2 |
|
|
|
0.02 |
|
| Adjusted (4) |
|
$ |
150.3 |
|
$ |
26.3 |
|
$ |
45.9 |
|
$ |
12.7 |
|
$ |
90.8 |
|
|
$ |
3.4 |
|
$ |
87.4 |
|
|
$ |
0.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended February 25,
2018 |
|
|
|
|
|
|
|
|
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 |
|
$ |
446.6 |
|
$ |
81.1 |
|
$ |
93.1 |
|
$ |
58.5 |
|
$ |
330.9 |
|
|
$ |
14.1 |
|
$ |
316.8 |
|
|
$ |
2.14 |
|
| Items impacting comparability (1) (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses related to the Separation |
|
|
7.9 |
|
|
— |
|
|
2.8 |
|
|
— |
|
|
5.1 |
|
|
|
— |
|
|
5.1 |
|
|
|
0.03 |
|
| Tax Reform (2) |
|
|
— |
|
|
— |
|
|
24.0 |
|
|
— |
|
|
(24.0 |
) |
|
|
— |
|
|
(24.0 |
) |
|
|
(0.16 |
) |
| Total items impacting comparability |
|
|
7.9 |
|
|
— |
|
|
26.8 |
|
|
— |
|
|
(18.9 |
) |
|
|
— |
|
|
(18.9 |
) |
|
|
(0.13 |
) |
| Adjusted (4) |
|
$ |
454.5 |
|
$ |
81.1 |
|
$ |
119.9 |
|
$ |
58.5 |
|
$ |
312.0 |
|
|
$ |
14.1 |
|
$ |
297.9 |
|
|
$ |
2.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended February 26,
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 |
|
$ |
395.7 |
|
$ |
34.5 |
|
$ |
129.0 |
|
$ |
29.5 |
|
$ |
261.7 |
|
|
$ |
10.7 |
|
$ |
251.0 |
|
|
$ |
1.70 |
|
| Items impacting comparability (1) (3): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses related to the Separation |
|
|
23.8 |
|
|
— |
|
|
8.8 |
|
|
— |
|
|
15.0 |
|
|
|
— |
|
|
15.0 |
|
|
|
0.10 |
|
| Total items impacting comparability |
|
|
23.8 |
|
|
— |
|
|
8.8 |
|
|
— |
|
|
15.0 |
|
|
|
— |
|
|
15.0 |
|
|
|
0.10 |
|
| Adjusted (4) |
|
$ |
419.5 |
|
$ |
34.5 |
|
$ |
137.8 |
|
$ |
29.5 |
|
$ |
276.7 |
|
|
$ |
10.7 |
|
$ |
266.0 |
|
|
$ |
1.80 |
|
__________________
| (1) |
|
See footnotes (2) and (3) to the Condensed Combined and Consolidated Statements of
Earnings above for a discussion of the items impacting comparability. |
|
|
|
| (2) |
|
The Tax Act decreased income tax expense by approximately $47 million. This decrease
includes a provisional $24.0 million net discrete benefit which consists 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, which is payable over eight years. In
addition, the decrease in income tax expense includes an approximate $23 million tax benefit related to the lower U.S.
corporate tax rate. The Company will continue to refine these amounts within the measurement period allowed by SAB No.118,
which will not exceed one year from the enactment date of the Tax Act. |
|
|
|
| (3) |
|
Items impacting comparability are tax-effected at the marginal rate based on the
applicable tax jurisdiction. |
|
|
|
| (4) |
|
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 |
|
Thirty-Nine Weeks Ended |
|
Fifty-Two Weeks Ended |
|
|
February 25, |
|
February 26, |
|
February 25, |
|
February 26, |
|
May 28, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
2017 |
| Net income attributable to Lamb Weston Holdings, Inc. |
|
$ |
156.8 |
|
|
$ |
84.2 |
|
|
$ |
316.8 |
|
|
$ |
251.0 |
|
|
$ |
326.9 |
|
| Income attributable to noncontrolling interests |
|
|
2.8 |
|
|
|
3.4 |
|
|
|
14.1 |
|
|
|
10.7 |
|
|
|
13.3 |
|
| Equity method investment earnings |
|
|
(26.4 |
) |
|
|
(12.7 |
) |
|
|
(58.5 |
) |
|
|
(29.5 |
) |
|
|
(53.3 |
) |
| Interest expense, net |
|
|
28.5 |
|
|
|
26.3 |
|
|
|
81.1 |
|
|
|
34.5 |
|
|
|
61.2 |
|
| Income tax expense |
|
|
7.5 |
|
|
|
44.0 |
|
|
|
93.1 |
|
|
|
129.0 |
|
|
|
170.2 |
|
| Income from operations |
|
|
169.2 |
|
|
|
145.2 |
|
|
|
446.6 |
|
|
|
395.7 |
|
|
|
518.3 |
|
| Depreciation and amortization |
|
|
36.4 |
|
|
|
26.4 |
|
|
|
100.7 |
|
|
|
78.2 |
|
|
|
106.6 |
|
| Items impacting comparability (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses related to the Separation |
|
|
1.7 |
|
|
|
5.1 |
|
|
|
7.9 |
|
|
|
23.8 |
|
|
|
26.5 |
|
| Non-cash gain on assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3.1 |
) |
| Adjusted EBITDA (2) (3) |
|
|
207.3 |
|
|
|
176.7 |
|
|
|
555.2 |
|
|
|
497.7 |
|
|
|
648.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unconsolidated Joint Ventures (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity method investment earnings |
|
|
26.4 |
|
|
|
12.7 |
|
|
|
58.5 |
|
|
|
29.5 |
|
|
|
53.3 |
|
|
Interest expense, income tax expense, and depreciation and amortization included in equity method
investment earnings
|
|
|
7.8 |
|
|
|
5.7 |
|
|
|
21.4 |
|
|
|
16.9 |
|
|
|
22.5 |
|
| Add: EBITDA from unconsolidated joint ventures |
|
|
34.2 |
|
|
|
18.4 |
|
|
|
79.9 |
|
|
|
46.4 |
|
|
|
75.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Consolidated Joint Ventures (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income attributable to noncontrolling interests |
|
|
(2.8 |
) |
|
|
(3.4 |
) |
|
|
(14.1 |
) |
|
|
(10.7 |
) |
|
|
(13.3 |
) |
|
Interest expense, income tax expense, and depreciation and amortization included in income
attributable to noncontrolling interests
|
|
|
(1.1 |
) |
|
|
(0.9 |
) |
|
|
(3.1 |
) |
|
|
(2.7 |
) |
|
|
(3.7 |
) |
| Subtract: EBITDA from consolidated joint ventures |
|
|
(3.9 |
) |
|
|
(4.3 |
) |
|
|
(17.2 |
) |
|
|
(13.4 |
) |
|
|
(17.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA including unconsolidated joint ventures (2) |
|
$ |
237.6 |
|
|
$ |
190.8 |
|
|
$ |
617.9 |
|
|
$ |
530.7 |
|
|
$ |
707.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling, general and administrative expenses (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma Adjusted EBITDA including unconsolidated joint ventures (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
692.1 |
|
__________________
| (1) |
|
See footnote (2) to the Condensed Combined and 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. |
|
|
|
| (5) |
|
Pro forma Adjusted EBITDA including unconsolidated joint ventures includes a full
year of stand-alone public company costs. |
|
|
|
Lamb Weston Holdings, Inc.
Investors:
Dexter Congbalay, 224-306-1535
dexter.congbalay@lambweston.com
or
Media:
Shelby Stoolman, 208-424-5461
shelby.stoolman@lambweston.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20180405005100/en/