current operating performance or comparisons of BellRing's
operating performance to other periods.
d. Foreign currency gain/loss on intercompany loans:
BellRing has excluded the impact of foreign currency
fluctuations related to intercompany loans denominated
in currencies other than the functional currency of
the respective legal entity in evaluating BellRing's
performance to allow for more meaningful comparisons
of performance to other periods.
e. Separation costs: BellRing has excluded certain expenses
incurred in connection with secondary offerings of
shares of BellRing common stock previously held by
Post, as the amount and frequency of such expenses
are not consistent. Additionally, BellRing believes
that these costs do not reflect expected ongoing future
operating expenses and do not contribute to a meaningful
evaluation of BellRing's current operating performance
or comparisons of BellRing's operating performance
to other periods.
f. Income tax effect on adjustments: BellRing has included
the income tax impact of the non-GAAP adjustments
using a rate described in the applicable footnote
of the reconciliation tables, as BellRing believes
that its GAAP effective income tax rate as reported
is not representative of the income tax expense impact
of the adjustments.
Adjusted EBITDA and Adjusted EBITDA as a percentage of net sales
BellRing believes that Adjusted EBITDA is useful to investors in evaluating BellRing's operating performance and liquidity because (i) BellRing believes it is widely used to measure a company's operating performance without regard to items such as depreciation and amortization, which can vary depending upon accounting methods and the book value of assets, (ii) it presents a measure of corporate performance exclusive of BellRing's capital structure and the method by which the assets were acquired and (iii) it is a financial indicator of a company's ability to service its debt, as BellRing is required to comply with certain covenants and limitations that are based on variations of EBITDA in its financing documents. Management uses Adjusted EBITDA to provide forward-looking guidance and to forecast future results. BellRing believes that Adjusted EBITDA as a percentage of net sales is useful to investors in evaluating BellRing's operating performance because it allows for more meaningful comparison of operating performance across periods.
Adjusted EBITDA reflects adjustments for income tax expense, interest expense, net and depreciation and amortization including accelerated amortization, and the following adjustments discussed above: mark-to-market adjustments on commodity hedges, provision for legal matters, foreign currency gain/loss on intercompany loans and separation costs. Additionally, Adjusted EBITDA reflects an adjustment for the following item:
g. Stock-based compensation: BellRing's compensation
strategy includes the use of BellRing stock-based
compensation to attract and retain executives and
employees by aligning their long-term compensation
interests with BellRing's stockholders' investment
interests. BellRing's director compensation strategy
includes an election by any director who earns retainers
in which the director may elect to defer compensation
granted as a director to BellRing common stock, earning
a match on the deferral, both of which are stock-settled
upon the director's retirement from the BellRing board
of directors. BellRing has excluded stock-based compensation
as stock-based compensation can vary significantly
based on reasons such as the timing, size and nature
of the awards granted and subjective assumptions which
are unrelated to operational decisions and performance
in any particular period and does not contribute to
meaningful comparisons of BellRing's operating performance
to other periods.
RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS (Unaudited)
(in millions)
Three Months
Ended September Twelve Months Ended
30, September 30,
----------------- -------------------------
2024 2023 2024 2023
---- -----
Net Earnings $71.7 $46.1 $246.5 $ 165.5
Adjustments:
Accelerated
amortization -- 7.1 17.4 7.1
Mark-to-market
adjustments on
commodity
hedges (5.7) (0.8) (5.3) 3.1
Provision for
legal matters -- 5.0 -- 5.0
Foreign
currency gain
on
intercompany
loans (0.3) -- (0.2) (0.6)
Separation
costs -- -- -- 0.7
Total Net
Adjustments (6.0) 11.3 11.9 15.3
Income tax
effect on
adjustments(1) 1.4 (2.7) (2.9) (3.6)
Adjusted Net
Earnings $67.1 $54.7 $255.5 $ 177.2
==== ==== ===== =====
(1) Income tax effect on adjustments was calculated
on all items, except for separation costs, using a
rate of 24.0%. For the twelve months ended September
30, 2023, income tax effect for separation costs was
calculated using a rate of 8.0%.
RECONCILIATION OF DILUTED EARNINGS PER COMMON SHARE
TO ADJUSTED DILUTED EARNINGS PER COMMON SHARE (Unaudited)
Three Months Ended Twelve Months Ended
September 30, September 30,
------------------- -------------------
2024 2023 2024 2023
----- -----
Diluted Earnings
per share of
Common Stock $ 0.55 $ 0.35 $ 1.86 $ 1.23
Adjustments:
Accelerated
amortization -- 0.05 0.13 0.05
Mark-to-market
adjustments on
commodity
hedges (0.05) (0.01) (0.04) 0.02
Provision for
legal matters -- 0.04 -- 0.04
Separation
costs -- -- -- 0.01
Total Net
Adjustments (0.05) 0.08 0.09 0.12
Income tax
effect on
adjustments(1) 0.01 (0.02) (0.02) (0.03)
----- ----- ----- -----
Adjusted Diluted
Earnings per
share of Common
Stock $ 0.51 $ 0.41 $ 1.93 $ 1.32
(1) Income tax effect on adjustments was calculated
on all items, except for separation costs, using a
rate of 24.0%. For the twelve months ended September
30, 2023, income tax effect for separation costs was
calculated using a rate of 8.0%.
RECONCILIATION OF NET EARNINGS TO ADJUSTED EBITDA (Unaudited)
(in millions)
Three Months Ended Twelve Months Ended
September 30, September 30,
----------------------- ------------------------
2024 2023 2024 2023
---- ---- ----- ----
Net Earnings $ 71.7 $46.1 $246.5 $165.5
Income tax
expense 25.9 15.9 82.9 54.9
Interest
expense, net 14.5 16.1 58.3 66.9
Depreciation
and
amortization,
including
accelerated
amortization 4.7 12.5 36.5 28.3
Stock-based
compensation 5.7 3.7 21.5 14.5
Provision for
legal matters -- 5.0 -- 5.0
Mark-to-market
adjustments on
commodity
hedges (5.7) (0.8) (5.3) 3.1
Foreign
currency gain
on
intercompany
loans (0.3) -- (0.2) (0.6)
Separation
costs -- -- -- 0.7
Adjusted EBITDA $116.5 $98.5 $440.2 $338.3
===== ==== ==== ===== ===== ====
Net Earnings as
a percentage
of Net Sales 12.9% 9.8% 12.3% 9.9%
===== ==== === ===== ===== ===
Adjusted EBITDA
as a
percentage of
Net Sales 21.0% 20.8% 22.1% 20.3%
(END) Dow Jones Newswires
November 18, 2024 17:00 ET (22:00 GMT)
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