post-20200630

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________

FORM 10-Q

__________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 1-35305

Post Holdings, Inc.

(Exact name of registrant as specified in its charter)


Missouri						45-3355106
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

2503 S. Hanley Road

St. Louis, Missouri 63144

(Address of principal executive offices) (Zip Code)

(314) 644-7600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	POST	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock, $0.01 par value – 67,704,337 shares as of August 3, 2020

Table of Contents

POST HOLDINGS, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited).	1

	Condensed Consolidated Statements of Operations (Unaudited).	1

	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited).	2

	Condensed Consolidated Balance Sheets (Unaudited).	3

	Condensed Consolidated Statements of Cash Flows (Unaudited).	4

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited).	5

	Notes to Condensed Consolidated Financial Statements (Unaudited).	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	44

Item 4.	Controls and Procedures.	45

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings.	46

Item 1A.	Risk Factors.	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	47

Item 6.	Exhibits.	49

	SIGNATURES.	50

Table of Contents

PART I. FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED).

POST HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except per share data)


	Three Months Ended June 30,						Nine Months Ended June 30,
	2020		2019		2020		2019
Net Sales	$	1,336.4	$	1,439.2	$	4,287.4	$	4,238.3
Cost of goods sold	899.6		977.1		2,940.3		2,898.4
Gross Profit	436.8		462.1		1,347.1		1,339.9
Selling, general and administrative expenses	224.2		223.2		704.5		666.1
Amortization of intangible assets	40.1		40.3		120.2		121.0
Gain on sale of business	—		—		—		(127.3)
Other operating expenses, net	0.4		0.4		0.8		1.7
Operating Profit	172.1		198.2		521.6		678.4
Interest expense, net	96.4		85.6		293.3		230.5
Loss on extinguishment of debt, net	—		—		72.9		6.1
Expense on swaps, net	29.2		86.2		192.4		200.9
Other income, net	(3.1)		(3.7)		(9.6)		(11.1)
Earnings (Loss) before Income Taxes and Equity Method Loss	49.6		30.1		(27.4)		252.0
Income tax expense (benefit)	5.0		7.4		(11.7)		39.6
Equity method loss, net of tax	4.2		6.2		22.6		25.7
Net Earnings (Loss) Including Noncontrolling Interests	40.4		16.5		(38.3)		186.7
Less: Net earnings attributable to noncontrolling interests	4.4		0.3		17.9		0.9
Net Earnings (Loss)	36.0		16.2		(56.2)		185.8
Less: Preferred stock dividends	—		—		—		3.0
Net Earnings (Loss) Available to Common Shareholders	$	36.0	$	16.2	$	(56.2)	$	182.8

Earnings (Loss) per Common Share:
Basic	$	0.53	$	0.22	$	(0.81)	$	2.61
Diluted	$	0.52	$	0.21	$	(0.81)	$	2.47

Weighted-Average Common Shares Outstanding:
Basic	68.1		73.3		69.4		70.1
Diluted	69.2		75.4		69.4		75.3

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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POST HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(in millions)


	Three Months Ended June 30,						Nine Months Ended June 30,
	2020		2019		2020		2019
Net Earnings (Loss) Including Noncontrolling Interests	$	40.4	$	16.5	$	(38.3)	$	186.7
Pension and postretirement benefits adjustments:

Reclassifications to net earnings (loss)	(0.6)		(1.2)		(1.6)		(3.5)

Hedging adjustments:
Net gain on derivatives	—		13.6		22.5		26.1
Reclassifications to net earnings (loss)	0.6		(0.4)		7.6		(30.9)

Foreign currency translation adjustments:
Unrealized foreign currency translation adjustments	(4.7)		(41.0)		0.9		(43.5)
Reclassifications to net earnings (loss) (see Note 4)	—		—		—		42.1
Tax benefit (expense) on other comprehensive income:
Pension and postretirement benefits adjustments:
Reclassifications to net earnings (loss)	0.3		0.3		0.5		0.8
Hedging adjustments:
Net gain/loss on derivatives	—		(2.8)		(5.4)		2.3
Reclassifications to net earnings (loss)	(0.1)		0.1		(1.7)		7.6
Total Other Comprehensive (Loss) Income Including Noncontrolling Interests	(4.5)		(31.4)		22.8		1.0
Less: Comprehensive income attributable to noncontrolling interests	4.5		0.2		15.0		1.1
Total Comprehensive Income (Loss)	$	31.4	$	(15.1)	$	(30.5)	$	186.6

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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POST HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions)


	June 30, 2020		September 30, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	1,043.6	$	1,050.7
Restricted cash	11.1		3.8
Receivables, net	419.5		445.1
Inventories	609.6		579.8


Prepaid expenses and other current assets	48.5		46.9
Total Current Assets	2,132.3		2,126.3
Property, net	1,721.8		1,736.0
Goodwill	4,401.4		4,399.8
Other intangible assets, net	3,219.5		3,338.5
Equity method investments	122.3		145.5


Other assets	330.4		205.5
Total Assets	$	11,927.7	$	11,951.6

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt	$	36.1	$	13.5
Accounts payable	314.6		395.6

Other current liabilities	397.3		393.8
Total Current Liabilities	748.0		802.9
Long-term debt	6,776.9		7,066.0
Deferred income taxes	767.3		688.5

Other liabilities	755.9		456.9
Total Liabilities	9,048.1		9,014.3

Shareholders’ Equity
Preferred stock	—		—
Common stock	0.8		0.8
Additional paid-in capital	4,218.0		3,734.8
Retained earnings	151.6		207.8
Accumulated other comprehensive loss	(71.1)		(96.8)
Treasury stock, at cost	(1,383.0)		(920.7)
Total Shareholders’ Equity Excluding Noncontrolling Interests	2,916.3		2,925.9
Noncontrolling interests	(36.7)		11.4
Total Shareholders’ Equity	2,879.6		2,937.3
Total Liabilities and Shareholders’ Equity	$	11,927.7	$	11,951.6

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

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POST HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in millions)


	Nine Months Ended June 30,
	2020		2019
Cash Flows from Operating Activities
Net (Loss) Earnings Including Noncontrolling Interests	$	(38.3)	$	186.7
Adjustments to reconcile net (loss) earnings including noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization	274.5		288.1
Unrealized loss on interest rate swaps	155.1		200.5
Gain on sale of business	—		(127.3)
Loss on extinguishment of debt, net	72.9		6.1


Non-cash stock-based compensation expense	37.2		28.4
Equity method loss, net of tax	22.6		25.7
Deferred income taxes	(61.8)		(39.7)
Other, net	7.4		3.4
Other changes in operating assets and liabilities:
Decrease (increase) in receivables, net	31.5		(8.1)
Increase in inventories	(30.1)		(77.4)
(Increase) decrease in prepaid expenses and other current assets	(7.6)		14.3
(Increase) decrease in other assets	(17.5)		1.4
Decrease in accounts payable and other current liabilities	(43.9)		(1.1)
Increase in non-current liabilities	6.4		3.8
Net Cash Provided by Operating Activities	408.4		504.8

Cash Flows from Investing Activities

Additions to property	(160.0)		(202.7)

Proceeds from sale of property and assets held for sale	2.5		2.1
Proceeds from sale of business	—		266.8
Insurance proceeds on property losses	10.0		—
Cross-currency swap cash settlements	52.7		30.5

Net Cash (Used in) Provided by Investing Activities	(94.8)		96.7

Cash Flows from Financing Activities
Proceeds from issuance of long-term debt	3,848.0		—




Repayments of long-term debt	(4,130.3)		(919.1)

Payments to appraisal rights holders	(3.8)		(253.6)
Purchases of treasury stock	(469.0)		(84.7)
Payments of preferred stock dividends	—		(4.0)
Proceeds from initial public offering	524.4		—
Payments of debt issuance costs and deferred financing fees	(40.8)		(8.7)
Refund of debt issuance costs	15.3		7.8
Payments of premiums on debt extinguishment	(49.8)		—
Proceeds from exercises of stock awards	3.9		41.5

Other, net	(11.8)		(7.5)
Net Cash Used in Financing Activities	(313.9)		(1,228.3)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	0.5		(1.2)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash	0.2		(628.0)
Cash, Cash Equivalents and Restricted Cash, Beginning of Year	1,054.5		994.5
Cash, Cash Equivalents and Restricted Cash, End of Period	$	1,054.7	$	366.5

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

POST HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

(in millions)


	As Of and For The Three Months Ended June 30,						As Of and For The Nine Months Ended June 30,
	2020		2019		2020		2019
Preferred Stock
Beginning and end of period	$	—	$	—	$	—	$	—
Common Stock
Beginning and end of period	0.8		0.8		0.8		0.8


Additional Paid-in Capital
Beginning of period	4,207.0		3,643.1		3,734.8		3,590.9

Activity under stock and deferred compensation plans	(0.9)		—		(7.9)		34.2
Non-cash stock-based compensation expense	11.9		10.3		35.5		28.4
Initial public offering, net of tax	—		—		455.6		—
Preferred stock conversion	—		—		—		(0.1)
End of period	4,218.0		3,653.4		4,218.0		3,653.4
Retained Earnings
Beginning of period	115.6		252.7		207.8		88.0
Net earnings (loss)	36.0		16.2		(56.2)		185.8
Adoption of accounting standards update	—		—		—		(0.9)
Preferred stock dividends declared	—		—		—		(4.0)
End of period	151.6		268.9		151.6		268.9
Accumulated Other Comprehensive Loss
Retirement Benefit Adjustments, net of tax
Beginning of period	25.8		36.1		26.6		37.9
Net change in retirement benefits, net of tax	(0.3)		(0.9)		(1.1)		(2.7)
End of period	25.5		35.2		25.5		35.2
Hedging Adjustments, net of tax
Beginning of period	69.8		32.0		44.5		37.4
Net change in hedges, net of tax	0.3		10.5		25.6		5.1
End of period	70.1		42.5		70.1		42.5
Foreign Currency Translation Adjustments
Beginning of period	(162.1)		(75.1)		(167.9)		(114.7)
Foreign currency translation adjustments	(4.6)		(41.0)		1.2		(1.4)
End of period	(166.7)		(116.1)		(166.7)		(116.1)
Treasury Stock
Beginning of period	(1,349.8)		(655.7)		(920.7)		(589.9)
Purchases of treasury stock	(33.2)		(22.9)		(462.3)		(88.7)
End of period	(1,383.0)		(678.6)		(1,383.0)		(678.6)
Total Shareholders’ Equity Excluding Noncontrolling Interests	2,916.3		3,206.1		2,916.3		3,206.1
Noncontrolling Interests
Beginning of period	(41.9)		11.0		11.4		10.1
Initial public offering	—		—		(64.9)		—
Net earnings attributable to noncontrolling interests	4.4		0.3		17.9		0.9
Activity under deferred compensation plan	0.1		—		0.1		—
Non-cash stock-based compensation expense	0.6		—		1.7		—
Net change in hedges, net of tax	0.2		—		(2.6)		—
Foreign currency translation adjustments	(0.1)		(0.1)		(0.3)		0.2
End of period	(36.7)		11.2		(36.7)		11.2
Total Shareholders’ Equity	$	2,879.6	$	3,217.3	$	2,879.6