Hostess Brands — Q1 2019 Earnings Presentation
17 slides from Hostess Brands's earnings presentation, May 8, 2019
Slide 1: First Quarter 2019 Earnings Investor Presentation
® First Quarter 2019 Earnings Investor Presentation May 8, 2019
Slide 2: Disclaimer: Forward Looking Statements
Disclaimer Forward Looking Statements This investor presentation contains statements reflecting our views about the future performance of Hostess Brands, Inc. and its subsidiaries (referred to as “Hostess Brands” or the “Company”) that constitute “forward-looking statements” that involve substantial
Slide 3: Hostess Brands Key Highlights
Hostess Brands Celebrating 100 Years of Delighting Consumers Key Highlights LTM Net Sales: $864 million Efficient Continuous Manufacturing Proven LTM Adj. EBITDA: Iconic Brands 18% $189 million Innovation to and Distribution Scalable Market Share Drive Growth Model Platform LTM Operating Cash Flow:
Slide 4: At Hostess Brands: Core Competencies and Growth Strategy
At Hostess Brands . . . We delight consumers and build iconic brands supported by our core competencies to drive profitable growth Strong Brand Equity Strong Brand Our Growth Strategy Equity Ø Strengthening our core Hostess brand and expanding into adjacent categories through innovation and strong p
Slide 5: Strong Market Position Growing in the SBG Category
Strong Market Position Growing in the SBG Category Market Share Point-of-Sale 18.1% $1,199 4.1% CAGR $1,154 17.4% $1,109 GainingPoint Almost Annually 1 Share 16.6% $1,021 15.4% in millions 2016 2017 2018 2019 2016 2017 2018 2019 SBG Category POS Source: Nielsen, Total Nielsen Universe for the SBG Ca
Slide 6: Sustainable, Profitable Growth Through Strengthening Scalable Platforms
Sustainable, Profitable Growth Through Strengthening Scalable Platforms ▪ Core Hostess continues to grow with strong customer partnerships and sharpened analytical capabilities ▪ Innovation focus to fuel growth in the core and complementary indulgent and snacking categories based on consumer-centric
Slide 7: Progress Against 2019 Growth Pillars
Progress Against 2019 Growth Pillars Pillars for Growth First Quarter 2019 Actions ü Grow the Core Profitably drive core growth by Multi-faceted price increase across all channels completed ü building the consumer brand and building customer Developing new tools and capabilities to improve analytics
Slide 8: Current Results and Outlook
Current Results and Outlook
Slide 9: First Quarter 2019 Highlights
First Quarter 2019 Highlights ▪ Net revenue increased $14.0 million, or 6.7%, to $222.7 million. Organic growth contributed $7.2 million or 345 basis points of incremental net revenue primarily from strong growth in the club channel and higher revenue due to price increases. The acquisition of the C
Slide 10: Consolidated Financial Results
Consolidated Financial Results Meaningful Growth in Revenue and Gross Profit Quarter Ended March 31, Change ($ in millions, except per share data) 2019 2018 $ % Net Revenue $ 222.7 $ 208.7 $ 14.0 6.7% Adjusted Gross Profit $ 76.8 $ 72.2 $ 4.6 6.4% Adjusted Gross Margin 34.5% 34.6% -10 bps —% Adjuste
Slide 11: Quarterly Point of Sale & Market Share Across Multiple Channels
Quarterly Point of Sale & Market Share Across Multiple Channels POS Change 1.8% 2.4% (1.9)% 5.1% 78.3% (11.4)% $140 $120 $100 ) s $80 n o i l l i M $60 ( POS Dollars $40 $20 $0 Convenience Grocery Drug Dollar Club Mass Q1 2018 Q1 2019 Market Share 23.0% 13.3% 44.3% 22.5% 20.5% 15.9% Market Share 20
Slide 12: Full-Year 2019 Guidance
Full-Year 2019 Guidance Reaffirming Previous Guidance 2018 2019 Guidance ($ in millions, except ratio, per share data and tax rate) Growth well above Net Revenue $850.4 the SBG Category Adjusted EBITDA $186.2 $200 - $210 Adjusted EPS $0.54 $0.57 - $0.62 Leverage Ratio 4.5x 3.5x - 3.7x Cash Flow from
Slide 13: A Look Ahead to 2019
A Look Ahead to 2019 Revenue Growth Well Above the SBG Category & Significant Adjusted EBITDA Growth Q1 Q2 Q3 Q4 þ Execute Pricing & ¨ Expand Distribution ¨ Continue ¨ Finish 2019 Launch Breakfast of New Products Distribution Build Strong with of Breakfast & Significant ¨ Accelerate Growth Other Inn
Slide 14: Appendix
Appendix
Slide 15: Non-GAAP Reconciliations: Adjusted Gross Profit & Adjusted Gross Margin
Non-GAAP Reconciliations Adjusted Gross Profit & Adjusted Gross Margin Three Months Three Months Ended Ended ($ in millions) 3/31/2019 3/31/2018 Net revenue $ 222.7 $ 208.7 Cost of goods sold 147.6 137.5 Gross profit $ 75.2 $ 71.2 Gross margin 33.8% 34.1% Non-GAAP adjustments: Acquisition and integr
Slide 16: Non-GAAP Reconciliations: Adjusted EBITDA
Non-GAAP Reconciliations Adjusted EBITDA Three Months Three Months Ended Ended ($ in millions) 3/31/2019 3/31/2018 Net income $ 26.6 $ 29.3 Non-GAAP adjustments: Income tax provision (1.2) 6.5 Interest expense, net 10.2 9.3 Depreciation and amortization 10.9 10.1 Share-based compensation 2.3 1.6 Tax
Slide 17: Non-GAAP Reconciliations: Adjusted Net Income & Adjusted EPS
Non-GAAP Reconciliations Adjusted Net Income & Adjusted EPS Three Months Three Months Ended Ended ($ in millions, except shares and per share) 3/31/2019 3/31/2018 Net income $ 26.6 $ 29.3 Non-GAAP adjustments: Tax Receivable Agreement remeasurement and gain on buyout (1.8) (12.4) Remeasurement of de