Lamb Weston Reports Fiscal First Quarter 2024 Results; Raises Fiscal Year 2024 Outlook
- Net sales increased 48% to $1,665 million
- Income from operations increased 106% to $323 million
- Adjusted Net Income increased 111% to $240 million
- Adjusted Diluted EPS increased 109% to $1.63 from $0.78
- Repurchased $100 million of common stock and paid $41 million in cash dividends
- Updated fiscal 2024 outlook with net sales of $6.8 billion to $7.0 billion and net income of $800 million to $870 million
- None.
First Quarter Fiscal 2024 Highlights
-
GAAP Results as Compared to First Quarter Fiscal 2023:
-
Net sales increased
48% to$1,665 million $375 million -
Income from operations increased
106% to$323 million -
Net income increased to
$235 million $232 million -
Diluted EPS remained flat at
$1.60
-
Net sales increased
-
Non-GAAP Results as Compared to First Quarter Fiscal 2023:
-
Adjusted Income from Operations(1) increased
104% to$330 million -
Adjusted Net Income(1)increased
111% to$240 million -
Adjusted Diluted EPS(1) increased
109% to$1.63 $0.78 -
Adjusted EBITDA(1) increased
76% to$413 million
-
Adjusted Income from Operations(1) increased
-
Repurchased
$100 million $41 million
Updated Fiscal 2024 Outlook
-
Net sales of
$6.8 billion $7.0 billion -
Net income of
$800 million $870 million $5.47 $5.92 -
Adjusted Net Income(1) of
$805 million $875 million $5.50 $5.95 -
Adjusted EBITDA(1) of
$1,540 million $1,620 million
“We delivered solid sales and earnings growth in the quarter, driven by the carryover benefit of pricing actions initiated last year as well as improved customer and product mix,” said Tom Werner, President and CEO. “Organic sales volumes were in line with expectations, and shipment trends improved as the quarter progressed.”
“We raised our earnings target for the year to reflect our performance in the quarter, as well as the current solid demand and pricing environment. We continue to expect the potato crop in our growing regions in
Summary of First Quarter FY 2024 Results |
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($ in millions, except per share) |
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Year-Over-Year |
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|
Q1 2024 |
|
Growth Rates |
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Net sales |
|
$ |
1,665.3 |
|
|
Income from operations |
|
$ |
323.3 |
|
|
Net income |
|
$ |
234.8 |
|
|
Diluted EPS |
|
$ |
1.60 |
|
|
|
|
|
|
|
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Adjusted Income from Operations (1) |
|
$ |
329.9 |
|
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Adjusted Net Income (1) |
|
$ |
239.5 |
|
|
Adjusted Diluted EPS(1) |
|
$ |
1.63 |
|
|
Adjusted EBITDA(1) |
|
$ |
412.8 |
|
|
Q1 2024 Commentary
Net sales increased
Net sales, excluding the incremental sales attributable to the Acquisitions, grew 15 percent versus the prior year quarter. Price/mix increased 23 percent, reflecting the benefit of pricing actions across both of the Company’s business segments to counter input and manufacturing cost inflation, the timing of trade spending in
Gross profit increased
Excluding unrealized mark-to-market gains and losses related to commodity derivatives and items impacting comparability, gross profit increased
Selling, general and administrative expenses (“SG&A”) increased
Excluding these items, SG&A increased
Income from operations increased
Net income was
Adjusted Net Income(1) was
The Company’s effective tax rate(2) in the first quarter was 22.9 percent, versus 24.1 percent in the prior year quarter. Excluding foreign currency exchange and unrealized mark-to-market derivative gains and losses and items impacting comparability in the first quarter of fiscal 2024 and 2023, the Company’s effective tax rate was 23.1 percent in the current quarter, and 25.0 percent in the prior year quarter. The Company’s effective tax rate varies from the
Q1 2024 Segment Highlights
Effective May 29, 2023, in connection with the Company’s Acquisitions and to align with its expanded global footprint, management, including the Company’s chief executive officer, who is its chief operating decision maker, began managing the Company’s operations as two business segments based on management’s change to the way it monitors performance, aligns strategies, and allocates resources. This resulted in a change from four reportable segments to two (
North America Summary
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Year-Over-Year |
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Q1 2024 |
|
Growth Rates |
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Price/Mix |
|
Volume |
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(dollars in millions) |
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|
|
|
|
Net sales |
|
$ |
1,135.4 |
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|
|
|
( |
Segment Adjusted EBITDA |
|
$ |
379.4 |
|
|
|
|
|
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Net sales for the
North America Segment Adjusted EBITDA increased
International Summary
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Year-Over-Year |
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Q1 2024 |
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Growth Rates |
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Price/Mix |
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Volume |
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(dollars in millions) |
|
|
|
|
|
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Net sales |
|
$ |
529.9 |
|
|
|
|
|
|
Segment Adjusted EBITDA |
|
$ |
89.6 |
|
|
|
|
|
|
Net sales for the International segment, which includes all sales to customers outside of
International Segment Adjusted EBITDA increased
Equity Method Investment Earnings
Equity method investment earnings from unconsolidated joint ventures were
Excluding these items, equity method investment earnings declined
Liquidity and Cash Flows
As of August 27, 2023, the Company had
Net cash provided by operating activities was
Capital Returned to Shareholders
In the first quarter of fiscal 2024, the Company returned
Fiscal 2024 Outlook
The Company raised its financial targets for fiscal 2024, which include:
-
Net sales of
$6.8 billion $7.0 billion $1.1 billion $1.2 billion U.S. and other key markets due to macroeconomic headwinds may also pressure volumes.
The Company previously expected to deliver net sales of$6.7 billion $6.9 billion $1.0 billion $1.1 billion
-
Net income of
$800 million $870 million $5.47 $5.92 $6.6 million $4.7 million $0.03 $725 million $790 million $4.95 $5.40
Excluding foreign currency exchange and unrealized mark-to-market derivative gains and losses and items impacting comparability, Adjusted Net Income(1) of$805 million $875 million $5.50 $5.95 $1,540 million $1,620 million 26% compared to fiscal 2023 using the mid-point). The Company expects higher sales and gross profit will largely drive anticipated earnings growth in fiscal 2024. The Company continues to expect gross profit growth will be partially offset by higher SG&A of$765 million $775 million $1,450 million $1,525 million
The Company also updated its target of interest expense, net to approximately
The Company continues to target:
-
Depreciation and amortization expense of approximately
$325 million
-
Cash used for capital expenditures of
$800 million $900 million China ,Idaho ,the Netherlands andArgentina , as well as capital investments to upgrade its information systems and ERP infrastructure; and
- An effective tax rate(2) (full year) of 23 percent to 24 percent.
End Notes
(1) |
Adjusted Income from Operations, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA are non-GAAP financial measures. Please see the discussion of non-GAAP financial measures, including a discussion of guidance provided on a non-GAAP basis, and the associated reconciliations at the end of this press release for more information. |
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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. |
Webcast and Conference Call Information
Lamb Weston will host a conference call to review its first quarter fiscal 2024 results at 10:00 a.m. EDT today, October 5, 2023. Participants in the
https://event.webcasts.com/starthere.jsp?ei=1633450&tp_key=3ea65b6559
A rebroadcast of the conference call will be available beginning on Friday, October 6, 2023, after 2:00 p.m. EDT at https://investors.lambweston.com/events-and-presentations.
About Lamb Weston
Lamb Weston is a leading supplier of frozen potato products to restaurants and retailers around the world. For more than 70 years, Lamb Weston has led the industry in innovation, introducing inventive products that simplify back-of-house management for its customers and make things more delicious for their customers. From the fields where Lamb Weston potatoes are grown to proactive customer partnerships, Lamb Weston always strives for more and never settles. Because, when we look at a potato, we see possibilities. Learn more about us at lambweston.com.
Non-GAAP Financial Measures
To supplement the financial information included in this press release, the Company has presented Adjusted EBITDA, Adjusted Income from Operations, Adjusted Net Income, Adjusted Diluted EPS, Adjusted Income Tax Expense, and Adjusted Equity Method Investment Earnings (Loss), each of which is considered a non-GAAP financial measure. The non-GAAP financial measures presented in this press release should be viewed in addition to, and not as an alternative for, financial measures prepared in accordance with accounting principles generally accepted in
Management uses these non-GAAP financial measures to assist in analyzing what management views as the Company's core operating performance for purposes of business decision making. Management believes that presenting these non-GAAP financial measures provides investors with useful supplemental information because they (i) provide meaningful supplemental information regarding financial performance by excluding foreign currency exchange and unrealized derivative activities and items affecting comparability between periods, (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 financial results. In addition, the Company believes that the presentation of these non-GAAP financial measures, when considered together with the most directly comparable GAAP financial measures and the reconciliations to those GAAP financial measures, provides investors with additional tools to understand the factors and trends affecting the Company's underlying business than could be obtained absent these disclosures.
The Company has also provided guidance in this press release with respect to certain non-GAAP financial measures, including non-GAAP Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA. The Company cannot predict certain items that are included in reported GAAP results, including items such as strategic developments, integration and acquisition costs and related fair value adjustments, impacts of unrealized mark-to-market derivative gains and losses, foreign currency exchange, and items impacting comparability. This list is not inclusive of all potential items, and the Company intends to update the list as appropriate as these items are evaluated on an ongoing basis. In addition, the items that cannot be predicted can be highly variable and could potentially have significant impacts on the Company’s GAAP measures. As such, prospective quantification of these items is not feasible without unreasonable efforts, and a reconciliation of forward-looking non-GAAP Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA to GAAP net income or diluted earnings per share has not been provided.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Words such as “expect,” “believe,” “will,” “continue,” “deliver,” “drive,” “grow,” “remain,” “invest,” “improve,” “manage,” “outlook,” “target,” 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, capital expenditures and investments, potato crop, pricing actions, integration of LW EMEA, and business and financial outlook and prospects, the Company’s industry, and global economic conditions. 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 these forward-looking statements and 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 availability and prices of raw materials and other commodities; labor shortages and other operational challenges; an uncertain general economic environment, including inflationary pressures and recessionary concerns, any of which could adversely impact the Company’s business, financial condition or results of operations, including the demand and prices for the Company’s products; risks associated with integrating acquired businesses, including LW EMEA; levels of labor and people-related expenses; the Company’s ability to successfully execute its long-term value creation strategies; the Company’s ability to execute on large capital projects, including construction of new production lines or facilities; the competitive environment and related conditions in the markets in which the Company operates; political and economic conditions of the countries in which the Company conducts business and other factors related to its international operations; disruptions in the global economy caused by conflicts such as the war in
Lamb Weston Holdings, Inc. Consolidated Statements of Earnings (unaudited, in millions, except per share amounts) |
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Thirteen Weeks Ended |
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August 27, |
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August 28, |
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2023 (1) |
|
2022 |
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Net sales |
|
$ |
1,665.3 |
|
|
$ |
1,125.6 |
|
Cost of sales (2) |
|
|
1,165.8 |
|
|
|
852.3 |
|
Gross profit |
|
|
499.5 |
|
|
|
273.3 |
|
Selling, general and administrative expenses (3) |
|
|
176.2 |
|
|
|
116.3 |
|
Income from operations |
|
|
323.3 |
|
|
|
157.0 |
|
Interest expense, net |
|
|
30.7 |
|
|
|
26.0 |
|
Income before income taxes and equity method earnings |
|
|
292.6 |
|
|
|
131.0 |
|
Income tax expense |
|
|
69.9 |
|
|
|
73.7 |
|
Equity method investment earnings (4) |
|
|
12.1 |
|
|
|
174.6 |
|
Net income |
|
$ |
234.8 |
|
|
$ |
231.9 |
|
Earnings per share: |
|
|
|
|
|
|
||
Basic |
|
$ |
1.61 |
|
|
$ |
1.61 |
|
Diluted |
|
$ |
1.60 |
|
|
$ |
1.60 |
|
Dividends declared per common share |
|
$ |
0.280 |
|
|
$ |
0.245 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
||
Basic |
|
|
145.7 |
|
|
|
144.0 |
|
Diluted |
|
|
146.6 |
|
|
|
144.6 |
|
________________________________________ |
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(1) |
The thirteen weeks ended August 27, 2023 included the consolidated financial statements of LW EMEA whereas in the same period in the prior year, LW EMEA’s financial results were recorded in “Equity method investment earnings.” For more information about the LW EMEA Acquisition, see Note 3, Acquisitions, of the Notes to Consolidated Financial Statements in the Company’s fiscal 2023 Annual Report on Form 10-K filed with the SEC on July 25, 2023 (the “Form 10-K”). |
(2) |
The thirteen weeks ended August 27, 2023 included |
|
The thirteen weeks ended August 28, 2022 included a |
(3) |
The thirteen weeks ended August 27, 2023 included (a) |
|
The thirteen weeks ended August 28, 2022 included |
(4) |
Equity method investment earnings for the thirteen weeks ended August 28, 2022 included a |
|
Equity method investment earnings for the thirteen weeks ended August 28, 2022 also included a |
Lamb Weston Holdings, Inc. Consolidated Balance Sheets (unaudited, in millions, except share data) |
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August 27, |
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May 28, |
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2023 |
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2023 |
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ASSETS |
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Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
163.3 |
|
|
$ |
304.8 |
|
Receivables, less allowance for doubtful accounts of |
|
|
725.7 |
|
|
|
724.2 |
|
Inventories |
|
|
872.9 |
|
|
|
932.0 |
|
Prepaid expenses and other current assets |
|
|
84.4 |
|
|
|
166.2 |
|
Total current assets |
|
|
1,846.3 |
|
|
|
2,127.2 |
|
Property, plant and equipment, net |
|
|
3,008.6 |
|
|
|
2,808.0 |
|
Operating lease assets |
|
|
145.6 |
|
|
|
146.1 |
|
Goodwill |
|
|
1,041.7 |
|
|
|
1,040.7 |
|
Intangible assets, net |
|
|
108.8 |
|
|
|
110.2 |
|
Other assets |
|
|
388.6 |
|
|
|
287.6 |
|
Total assets |
|
$ |
6,539.6 |
|
|
$ |
6,519.8 |
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
|
|
|
|
|
|
||
Short-term borrowings |
|
$ |
140.8 |
|
|
$ |
158.5 |
|
Current portion of long-term debt and financing obligations |
|
|
55.1 |
|
|
|
55.3 |
|
Accounts payable |
|
|
678.5 |
|
|
|
636.6 |
|
Accrued liabilities |
|
|
411.0 |
|
|
|
509.8 |
|
Total current liabilities |
|
|
1,285.4 |
|
|
|
1,360.2 |
|
Long-term liabilities: |
|
|
|
|
|
|
||
Long-term debt and financing obligations, excluding current portion |
|
|
3,248.5 |
|
|
|
3,248.4 |
|
Deferred income taxes |
|
|
255.8 |
|
|
|
252.1 |
|
Other noncurrent liabilities |
|
|
246.9 |
|
|
|
247.8 |
|
Total long-term liabilities |
|
|
3,751.2 |
|
|
|
3,748.3 |
|
Commitments and contingencies |
|
|
|
|
|
|
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Stockholders’ equity: |
|
|
|
|
|
|
||
Common stock of |
|
|
150.7 |
|
|
|
150.3 |
|
Treasury stock, at cost, 5,752,260 and 4,627,828 common shares |
|
|
(427.8 |
) |
|
|
(314.3 |
) |
Additional distributed capital |
|
|
(548.7 |
) |
|
|
(558.6 |
) |
Retained earnings |
|
|
2,354.6 |
|
|
|
2,160.7 |
|
Accumulated other comprehensive loss |
|
|
(25.8 |
) |
|
|
(26.8 |
) |
Total stockholders’ equity |
|
|
1,503.0 |
|
|
|
1,411.3 |
|
Total liabilities and stockholders’ equity |
|
$ |
6,539.6 |
|
|
$ |
6,519.8 |
|
|
|
|
|
|
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Lamb Weston Holdings, Inc. Consolidated Statements of Cash Flows (unaudited, in millions) |
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Thirteen Weeks Ended |
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|
August 27, |
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August 28, |
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|
|
2023 |
|
2022 |
||||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net income |
|
$ |
234.8 |
|
|
$ |
231.9 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization of intangibles and debt issuance costs |
|
|
70.1 |
|
|
|
49.8 |
|
Stock-settled, stock-based compensation expense |
|
|
9.9 |
|
|
|
7.6 |
|
Equity method investment earnings in excess of distributions |
|
|
(12.2 |
) |
|
|
(174.6 |
) |
Deferred income taxes |
|
|
3.6 |
|
|
|
34.5 |
|
Other |
|
|
9.3 |
|
|
|
(2.8 |
) |
Changes in operating assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
||
Receivables |
|
|
0.4 |
|
|
|
9.9 |
|
Inventories |
|
|
60.2 |
|
|
|
(51.5 |
) |
Income taxes payable/receivable, net |
|
|
61.2 |
|
|
|
42.3 |
|
Prepaid expenses and other current assets |
|
|
62.8 |
|
|
|
45.5 |
|
Accounts payable |
|
|
(22.4 |
) |
|
|
24.3 |
|
Accrued liabilities |
|
|
(143.1 |
) |
|
|
(24.8 |
) |
Net cash provided by operating activities |
|
$ |
334.6 |
|
|
$ |
192.1 |
|
Cash flows from investing activities |
|
|
|
|
|
|
||
Additions to property, plant and equipment |
|
|
(267.3 |
) |
|
|
(101.2 |
) |
Additions to other long-term assets |
|
|
(37.4 |
) |
|
|
(20.0 |
) |
Acquisition of interests in joint ventures, net |
|
|
— |
|
|
|
(42.3 |
) |
Other |
|
|
(0.1 |
) |
|
|
(3.4 |
) |
Net cash used for investing activities |
|
$ |
(304.8 |
) |
|
$ |
(166.9 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Proceeds from issuance of debt |
|
|
15.1 |
|
|
|
13.8 |
|
Repayments of short-term borrowings, net |
|
|
(18.9 |
) |
|
|
(8.0 |
) |
Repayments of debt and financing obligations |
|
|
(13.7 |
) |
|
|
(35.3 |
) |
Dividends paid |
|
|
(40.8 |
) |
|
|
(34.4 |
) |
Repurchase of common stock and common stock withheld to cover taxes |
|
|
(113.5 |
) |
|
|
— |
|
Other |
|
|
0.1 |
|
|
|
0.4 |
|
Net cash used for financing activities |
|
$ |
(171.7 |
) |
|
$ |
(63.5 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
0.4 |
|
|
|
(1.4 |
) |
Net decrease in cash and cash equivalents |
|
|
(141.5 |
) |
|
|
(39.7 |
) |
Cash and cash equivalents, beginning of period |
|
|
304.8 |
|
|
|
525.0 |
|
Cash and cash equivalents, end of period |
|
$ |
163.3 |
|
|
$ |
485.3 |
|
Lamb Weston Holdings, Inc. Segment Information (unaudited, in millions, except percentages) |
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Thirteen Weeks Ended |
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Year-Over- |
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August 27, |
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August 28, |
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Year Growth |
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2023 |
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2022 |
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Rates |
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Price/Mix |
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Volume |
||
Segment net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,135.4 |
|
$ |
955.6 |
|
|
|
|
|
( |
International (1) |
|
|
529.9 |
|
|
170.0 |
|
|
|
|
|
|
|
|
$ |
1,665.3 |
|
$ |
1,125.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Segment Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
379.4 |
|
$ |
231.8 |
|
|
|
|
|
|
International (1) |
|
|
89.6 |
|
|
33.1 |
|
|
|
|
|
|
________________________________________ |
|
(1) |
The Company acquired the remaining equity interest in LW EMEA in the fourth quarter of fiscal 2023. Accordingly, LW EMEA’s net sales and adjusted EBITDA are reported in the International segment for the thirteen weeks ended August 27, 2023, whereas in the same period in the prior year, the Company’s 50 percent equity interest in LW EMEA was recorded using equity method accounting. As a result, LW EMEA’s net sales are not included in the International segment’s net sales for the thirteen weeks ended August 28, 2022, and only 50 percent of LW EMEA’s adjusted EBITDA is reported in the International segment. |
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Segment Adjusted EBITDA includes equity method investment earnings and losses and excludes unallocated corporate costs, foreign currency exchange gains and losses, unrealized mark-to-market derivative gains and losses, and items discussed in footnotes (1)-(4) to the Consolidated Statements of Earnings. |
| Lamb Weston Holdings, Inc. Reconciliation of Non-GAAP Financial Measures (unaudited, in millions, except per share amounts) |
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Equity |
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Income |
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Income |
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Method |
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From |
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Interest |
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Tax Expense |
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Investment |
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Diluted |
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Thirteen Weeks Ended August 27, 2023 |
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Operations |
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Expense |
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(Benefit) (1) |
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Earnings (Loss) |
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Net Income |
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EPS |
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As reported |
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$ |
323.3 |
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$ |
30.7 |
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$ |
69.9 |
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$ |
12.1 |
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$ |
234.8 |
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$ |
1.60 |
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Unrealized derivative losses (gains) (2) |
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(27.3 |
) |
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— |
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(6.8 |
) |
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— |
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(20.5 |
) |
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(0.14 |
) |
Foreign currency exchange losses (2) |
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7.4 |
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— |
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1.9 |
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— |
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5.5 |
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0.04 |
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Items impacting comparability (2): |
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Inventory step-up from acquisition |
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22.5 |
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— |
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5.8 |
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— |
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16.7 |
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0.11 |
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Integration and acquisition-related items, net |
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4.0 |
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— |
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1.0 |
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— |
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3.0 |
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0.02 |
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Total adjustments |
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6.6 |
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— |
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1.9 |
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— |
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4.7 |
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0.03 |
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Adjusted (3) |
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$ |
329.9 |
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$ |
30.7 |
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$ |
71.8 |
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$ |
12.1 |
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$ |
239.5 |
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$ |
1.63 |
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Thirteen Weeks Ended August 28, 2022 |
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As reported |
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$ |
157.0 |
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$ |
26.0 |
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$ |
73.7 |
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$ |
174.6 |
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$ |
231.9 |
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$ |
1.60 |
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Unrealized derivative losses (gains) (2) |
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4.0 |
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— |
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(36.3 |
) |
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(144.5 |
) |
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(104.2 |
) |
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(0.72 |
) |
Foreign currency exchange losses (2) |
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1.0 |
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— |
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0.3 |
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— |
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0.7 |
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— |
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Item impacting comparability (2): |
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Gain on acquisition of interest in joint venture |
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— |
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— |
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— |
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(15.1 |
) |
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(15.1 |
) |
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(0.10 |
) |
Total adjustments |
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|
5.0 |
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— |
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(36.0 |
) |
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(159.6 |
) |
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(118.6 |
) |
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(0.82 |
) |
Adjusted (3) |
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$ |
162.0 |
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$ |
26.0 |
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$ |
37.7 |
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$ |
15.0 |
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$ |
113.3 |
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$ |
0.78 |
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________________________________________ |
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(1) |
Items are tax effected at the marginal rate based on the applicable tax jurisdiction. |
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(2) |
See footnotes (1)-(4) to the Consolidated Statements of Earnings for a discussion of the adjustment items. |
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(3) |
See “Non-GAAP Financial Measures” in this press release for additional information. |
Lamb Weston Holdings, Inc.
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To supplement the financial information included in this press release, the Company has presented Adjusted EBITDA which is defined as earnings, less interest expense, income tax expense, depreciation and amortization, foreign currency exchange and unrealized mark-to-market derivative gains and losses, and comparability items, and is a non-GAAP financial measure. The following table reconciles net income to Adjusted EBITDA. |
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Thirteen Weeks Ended |
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August 27, |
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August 28, |
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2023 |
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2022 |
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Net income |
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$ |
234.8 |
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$ |
231.9 |
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Interest expense, net |
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|
30.7 |
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26.0 |
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Income tax expense |
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|
69.9 |
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|
73.7 |
|
Income from operations including equity method investment earnings (1) |
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|
335.4 |
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|
331.6 |
|
Depreciation and amortization (2) |
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|
70.8 |
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|
57.6 |
|
Unrealized derivative losses (gains) |
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|
(27.3 |
) |
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|
4.0 |
|
Unconsolidated joint venture unrealized derivative gains |
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|
— |
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|
|
(144.5 |
) |
Foreign currency exchange losses |
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|
7.4 |
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|
1.0 |
|
Items impacting comparability (3): |
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Inventory step-up from acquisition |
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|
22.5 |
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|
— |
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Integration and acquisition-related items, net |
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|
4.0 |
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|
— |
|
Gain on acquisition of interest in joint venture |
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|
— |
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|
|
(15.1 |
) |
Adjusted EBITDA (4) |
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$ |
412.8 |
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$ |
234.6 |
|
________________________________________ |
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(1) |
Lamb Weston holds a 50 percent equity interest in a |
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(2) |
Depreciation and amortization included interest expense, income tax expense, and depreciation and amortization from equity method investments of |
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(3) |
See footnotes (1)-(4) to the Consolidated Statements of Earnings for more information. |
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|
(4) |
See “Non-GAAP Financial Measures” in this press release for additional information. |
Lamb Weston Holdings, Inc. Reconciliation of Non-GAAP Financial Measures (unaudited, in millions) |
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Thirteen Weeks Ended August 27, 2023 |
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International |
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Unallocated
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Total Company |
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Income from operations |
|
$ |
323.6 |
|
$ |
40.9 |
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$ |
(41.2 |
) |
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$ |
323.3 |
|
||
Equity method investment earnings |
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|
12.1 |
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|
|
— |
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|
— |
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|
|
12.1 |
|
Income from operations including equity method investment earnings |
|
|
335.7 |
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|
40.9 |
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|
|
(41.2 |
) |
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|
335.4 |
|
Depreciation and amortization (2) |
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|
43.7 |
|
|
|
26.2 |
|
|
|
0.9 |
|
|
|
70.8 |
|
Unrealized derivative losses (gains) (3) |
|
|
— |
|
|
|
— |
|
|
|
(27.3 |
) |
|
|
(27.3 |
) |
Foreign currency exchange losses |
|
|
— |
|
|
|
— |
|
|
|
7.4 |
|
|
|
7.4 |
|
Items impacting comparability (4): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Inventory step-up from acquisition |
|
|
— |
|
|
|
22.5 |
|
|
|
— |
|
|
|
22.5 |
|
Integration and acquisition-related items, net |
|
|
— |
|
|
|
— |
|
|
|
4.0 |
|
|
|
4.0 |
|
Adjusted EBITDA |
|
$ |
379.4 |
|
|
$ |
89.6 |
|
|
$ |
(56.2 |
) |
|
$ |
412.8 |
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||||
Thirteen Weeks Ended August 28, 2022 |
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|
|
|
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|
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|
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|
||||
Income from operations |
|
$ |
186.0 |
|
$ |
6.8 |
|
|
$ |
(35.8 |
) |
|
$ |
157.0 |
|
|
Equity method investment earnings |
|
|
4.5 |
|
|
|
25.6 |
|
|
|
144.5 |
|
|
|
174.6 |
|
Income from operations including equity method investment earnings |
|
|
190.5 |
|
|
|
32.4 |
|
|
|
108.7 |
|
|
|
331.6 |
|
Depreciation and amortization (2) |
|
|
41.3 |
|
|
|
15.8 |
|
|
|
0.5 |
|
|
|
57.6 |
|
Unrealized derivative losses (gains) (3) |
|
|
— |
|
|
|
— |
|
|
|
4.0 |
|
|
|
4.0 |
|
Foreign currency exchange losses |
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
|
|
1.0 |
|
Unconsolidated joint venture unrealized derivative gains (3) |
|
|
— |
|
|
|
— |
|
|
|
(144.5 |
) |
|
|
(144.5 |
) |
Item impacting comparability (4): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on acquisition of interest in joint ventures |
|
|
— |
|
|
|
(15.1 |
) |
|
|
— |
|
|
|
(15.1 |
) |
Adjusted EBITDA |
|
$ |
231.8 |
|
|
$ |
33.1 |
|
|
$ |
(30.3 |
) |
|
$ |
234.6 |
|
|
|
________________________________________ |
|
(1) |
The Company’s two segments include corporate support staff and services that are directly allocable to those segments. Unallocated corporate costs include costs related to corporate support staff and services, foreign exchange gains and losses, and unrealized mark-to-market derivative gains and losses. Support services include, but are not limited to, the Company’s administrative, information technology, human resources, finance, and accounting functions that are not specifically allocated to the segments. |
|
Unallocated corporate costs for the thirteen weeks ended August 27, 2023 included unallocated corporate costs of LW EMEA whereas in the same period in the prior year, the Company's portion of LW EMEA’s unallocated corporate costs were recorded in “Equity method investment earnings” in the International segment. |
(2) |
Depreciation and amortization included interest expense, income tax expense, and depreciation and amortization from equity method investments of |
(3) |
The thirteen weeks ended August 27, 2023, included a net |
|
The thirteen weeks ended August 28, 2022, included a net |
(4) |
See footnotes (1)-(4) to the Consolidated Statements of Earnings for more information. See “Non-GAAP Financial Measures” in this press release for additional information. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20231005046034/en/
For more information, please contact:
Investors:
Dexter Congbalay
224-306-1535
dexter.congbalay@lambweston.com
Media:
Shelby Stoolman
208-424-5461
shelby.stoolman@lambweston.com
Source: Lamb Weston Holdings, Inc.
FAQ
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