Post Holdings, Inc. Reports Results for the Fourth Quarter and Fiscal Year 2012

  Post Holdings, Inc. Reports Results for the Fourth Quarter and Fiscal Year
                                     2012

PR Newswire

ST. LOUIS, Nov. 28, 2012

ST. LOUIS, Nov. 28, 2012 /PRNewswire/ --Post Holdings, Inc. (NYSE:POST), a
leading manufacturer, marketer and distributor of branded ready to eat
cereals, today reported results for the quarter and full fiscal year ended
September 30, 2012.

(Logo: http://photos.prnewswire.com/prnh/20120523/CG12577LOGO)

Fourth Quarter and Fiscal Year Highlights:

  oU.S. dollar market share for expanded all outlets combined (xAOC) of 10.2%
    and 10.4% for the thirteen weeks and fifty-two weeks ended September 29,
    2012, respectively
  oNet sales of $247.2 million and $958.9 million for the 2012 fourth quarter
    and fiscal year, an increase of 4% and a decrease of 1%, respectively,
    versus the same time periods a year ago
  oAdjusted EBITDA of $53.5 million for the quarter, and $214.6 million for
    the fiscal year ended September 30, 2012

Ready to eat cereal category revenues were down slightly, -0.7%, for the
thirteen weeks ended September 29, 2012 as compared to the prior year, and
category volumes, measured in pounds, declined 2.1%, according to Nielsen.
Category dollars for the quarter were not down as significantly as consumption
volume due to slight increases in every day and promoted average selling
prices. The current year Nielsen data referenced in this press release is as
of September 29, 2012.

Post's U.S. xAOC dollar market share was 10.2% and 10.4% for the thirteen week
and fifty-two week periods ended September 29, 2012, respectively, flat versus
the year ago quarter and down 0.4 share points for the fifty-two week period
versus the same prior year time period. Post's xAOC pounds share increased
0.5 share points to 10.3% for the thirteen week period ended September 29,
2012, driven primarily by higher promotion and an increased distribution in
value channels which have a lower price per pound.

Post net sales increased 4.0% for the quarter ended September 30, 2012 as
compared to the prior year, primarily driven by 4.9% higher volumes, led by
Honey Bunches of Oats, Great Grains and Pebbles, partially offset by lower
overall net pricing from greater consumer promotion and increased value
distribution. For the fourth quarter versus the comparable prior year quarter,
Honey Bunches of Oats and Pebbles volumes increased 9.9% and 9.5%,
respectively, while Great Grains and Grape Nuts volumes grew 13.5% and 2.8%,
respectively. For the year ended September 30, 2012, net sales decreased 1.0%
versus a year ago. This decline was principally driven by 3.2% lower volumes
only partially offset by higher gross and net pricing. For the fiscal year,
Honey Bunches of Oats and Pebbles volumes were down 2.3% and 6.4%,
respectively, versus prior year, however, Great Grains experienced a year over
year volume increase of 10.1%.

Gross profit margin increased by approximately 130 basis points for the fourth
quarter versus prior year, largely driven by favorable manufacturing costs due
to improved fixed cost absorption from higher volumes and cost efficiencies,
partially offset by unfavorable commodity costs (primarily grains) and lower
net pricing. For the full year, gross profit margin decreased by
approximately 190 basis points versus the same time period a year ago driven
by higher raw materials cost (primarily grains) and unfavorable fixed cost
absorption resulting from lower production volumes.

Excluding the effect of $2.1 million and $2.8 million of costs related to the
transition and separation from Ralcorp incurred during the fourth quarter of
fiscal 2012 and 2011, respectively, selling, general and administrative
expenses as a percentage of net sales increased from 23.7% in the fourth
quarter of fiscal 2011 to 28.2%. This increase was primarily driven by
incremental holding company costs, higher operating company overhead for the
new direct sales force, bonus costs and slightly higher advertising and
consumer costs. Excluding the effect of $12.5 million and $2.8 million of
costs related to the transition and separation from Ralcorp incurred in fiscal
2012 and 2011, respectively, selling, general, and administrative expenses as
a percentage of net sales increased from 24.4% in fiscal 2011 to 27.3% in
fiscal 2012. The increase was primarily driven by incremental holding company
costs, and higher operating company overhead for the new direct sales force
and bonus costs partially offset by lower warehousing and broker expense.

Adjusted EBITDA for the quarter was $53.5 million versus $56.7 million for the
same time period a year ago and declined sequentially from $61.4 million. For
the full year, Adjusted EBITDA was $214.6 million versus $248.9 million for
the same period a year ago.

Income tax expense was $6.2 million, which represents an effective income tax
rate of 36.5%, for the fourth quarter, compared to a tax benefit of $32.5
million and an effective income tax rate of 6.3% for the same period a year
ago. For the full year, income tax expense was $30.5 million, an effective
income tax rate of 37.9%, compared to a benefit of $6.3 million and an
effective income tax rate of 1.5%, for the year ended September 30, 2011. The
current quarter and current year effective tax rates were both unfavorably
impacted by tax expense related to an uncertain tax position we expect to take
on our short period tax return for the period starting with the separation
from Ralcorp Holdings, Inc. and ending on September 30, 2012. The year to
date effective income tax rate was also unfavorably impacted by $4.6 million
of non-deductible outside service expenses incurred to effect the Company's
separation from Ralcorp, which resulted in incremental income tax expense of
approximately $1.8 million. The prior year quarterly and annual effective tax
rates were significantly impacted by the nondeductible goodwill impairment
expense incurred during the fourth quarter of fiscal 2011. Management
anticipates that the effective income tax rate will return to its historical
range of 32% - 35% in fiscal 2013.

Net earnings were $10.8 million, or $0.31 per diluted share, for the fourth
quarter. For the full year, net earnings were $49.9 million, or $1.45 per
diluted share. Adjusted net earnings and Adjusted diluted earnings per share
for the quarter were $11.9 million and $0.35, respectively. For the full year,
Adjusted net earnings and Adjusted diluted earnings per share were $52.7
million and $1.53, respectively. Management has provided these non-GAAP
measures because they are representative of Post as a stand-alone public
company and not an operating segment of Ralcorp.

On September 28, 2012, Post repurchased with cash 1.75 million shares of its
common stock, or approximately 5% of its shares outstanding, at $30.50 per
share, or approximately $53.4 million in aggregate. These shares were a
portion of the Post shares that were retained by Ralcorp in connection with
the spin-off of Post.

Outlook
Post management estimates that fiscal 2013 Adjusted EBITDA will be between
$210 and $225 million, after considering the estimated year-over-year
unfavorable commodity cost effect of between $10 and $15 million. Post
management further expects that capital expenditures will be in the range of
$30 to $35 million, inclusive of between $11 and $13 million of capital costs
associated with establishing stand-alone information systems separate from
Ralcorp. Finally, management expects net interest expense to be between $80
and $83 million in fiscal 2013.

Use of Non-GAAP Measures
Management has determined that the Adjusted EBITDA, Adjusted net earnings and
Adjusted diluted earnings per share metrics presented herein are key metrics
that will help investors understand the ultimate income and near-term cash
flows generated by our business. Adjusted EBITDA is a non-GAAP measure which
represents net earnings excluding income taxes, net interest expense, net
other nonoperating income/expense, depreciation and amortization, noncash
stock based compensation, nonrecurring cash compensation for
retention/severance, accounts receivable servicing fees, costs to effect
Post's separation from Ralcorp and to establish stand-alone systems and
processes, mark to market adjustments on economic hedges and intangible asset
impairments, if any, and including an estimate of incremental costs Post would
have incurred had it been a stand-alone public company during the periods
presented. The Company believes that Adjusted EBITDA is useful to an investor
in evaluating the Company's operating performance and liquidity because (i) 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 meaningful
measure of corporate performance exclusive of the Company's capital structure
and the method by which the assets were acquired, and (iii) it is a widely
accepted financial indicator of a company's ability to service its debt, as
the Company is required to comply with certain covenants and limitations that
are based on variations of EBITDA in the Company's financing documents.
Adjusted net earnings is a non-GAAP measure which represents net earnings
excluding costs to effect Post's separation from Ralcorp and to establish
stand-alone systems and processes, nonrecurring cash compensation for
retention/severance, items not transferred to Post after the separation from
Ralcorp such as equity income and currency gains on intercompany debt, and
includes an estimate of incremental selling, general and administrative costs
and interest expense Post would have incurred had it been a stand-alone public
company for the entire period reported. The Company believes Adjusted net
earnings and Adjusted diluted earnings per share are useful to investors in
evaluating the Company's operating performance because they provide investors
with insight into the Company's performance on a basis consistent with being a
stand-alone public company rather than an operating segment of Ralcorp. The
calculations of Adjusted EBITDA, Adjusted net earnings and Adjusted diluted
earnings per share are not specified by United States generally accepted
accounting principles. Our calculations of Adjusted EBITDA, Adjusted net
earnings and Adjusted diluted earnings per share may not be comparable to
similarly-titled measures of other companies. See the reconciliation tables
provided at the end of this press release.

Conference Call
The Company will host a conference call on Wednesday, November 28, 2012 at
4:30 p.m. Eastern Time. During the call, Terence E. Block, President and
Chief Operating Officer, and Robert V. Vitale, Chief Financial Officer, will
discuss the results for the fourth quarter of 2012 and provide fiscal 2013
guidance.

The call will be broadcast over the Internet and can be accessed by visiting
the investor relations section of the Company's website at www.postfoods.com.
Participants may join the conference call by dialing (877) 540-0891 in the
United States and (678) 408-4007 from outside the United States. The
conference identification number for all participants is 65051774.

For those unable to participate during the live call and webcast, a replay
will be available on the Company's website until December 12, 2012.

Forward-Looking Statements
Certain matters discussed in this press release and on the conference call are
forward-looking statements, including statements regarding our expected
effective income tax rates for fiscal 2013, our Adjusted EBITDA guidance for
fiscal 2013, expected capital spending in fiscal 2013, expected net interest
expense in fiscal 2013, and our expected unfavorable commodity cost effect in
fiscal 2013. Such statements involve certain risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements. Potential risks and uncertainties include the
impact of the announced restatement of Ralcorp's and Post's financial
statements; the impact of our separation from Ralcorp and risks relating to
our ability to operate effectively as a stand-alone, publicly traded company;
our high leverage and substantial debt, including covenants that will restrict
the operation of our business; significant increases in the costs of certain
commodities, packaging or energy used to manufacture our products; labor
strikes or work stoppages by our employees; our ability to achieve benefits
from our separation; our obligations to indemnify Ralcorp if the separation is
taxable under certain circumstances; restrictions on our taking certain
actions due to tax rules and covenants with Ralcorp; changes in our cost
structure, management, financing and business operations following the
separation; our ability to continue to compete in our product market against
manufacturers of both branded and private label cereal products and our
ability to retain our market position; our ability to maintain competitive
pricing, successfully introduce new products or successfully manage our costs;
our ability to successfully implement business strategies to reduce costs;
impairment in the carrying value of goodwill or other intangibles; the loss or
bankruptcy of a significant customer; allegations that our products cause
injury or illness, product recalls and product liability claims and other
litigation; our ability to anticipate changes in consumer preferences and
trends; changes in consumer demand for ready-to-eat cereals; our ability to
service our outstanding debt or obtain additional financing; disruptions in
the U.S. and global capital and credit markets; legal and regulatory factors
including changes in food safety, advertising and labeling laws and
regulations; disruptions or inefficiencies in supply chain; fluctuations in
foreign currency exchange rates; consolidations among the retail grocery and
foodservice industries; change in estimates in critical accounting judgments
and changes to or new laws and regulations affecting our business; losses or
increased funding and expenses related to our qualified pension plan; loss of
key employees; changes in weather conditions, natural disasters and other
events beyond our control; business disruptions caused by information
technology failures; and other risks described in the Company's filings with
the Securities and Exchange Commission. These forward-looking statements
represent the Company's judgment as of the date of this press release. The
Company disclaims, however, any intent or obligation to update these
forward-looking statements.

About Post Holdings, Inc.
Post Holdings, Inc. is the parent company of Post Foods, LLC. Post has
enriched the lives of consumers, bringing quality foods to the breakfast table
since the company's founding in 1895. Post's products are generally sold to
supermarket chains, wholesalers, supercenters, club stores, mass
merchandisers, distributors, convenience stores and the foodservice channel in
North America. Those products are manufactured at four facilities located in
Battle Creek, Michigan; Jonesboro, Arkansas; Modesto, California; and Niagara
Falls, Ontario. Post's portfolio of brands includes diverse offerings to meet
the taste and nutritional needs of all families, including such favorites as
Honey Bunches of Oats®, Pebbles™, Great Grains®, Post Shredded Wheat®, Post®
Raisin Bran, Grape-Nuts®, and Honeycomb®. Post is dedicated to health and
wellness, offering consumers a variety of cereal choices to meet their
nutritional needs from whole grain and fiber to lower sugar offerings. For
more information, visit www.postfoods.com.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except per share data)


                                    Quarter Ended         Year Ended
                                    September 30,
                                                          September 30,
                                    2012      2011        2012      2011
Net Sales                           $ 247.2   $ 237.8     $ 958.9   $ 968.2
Cost of goods sold                  137.1     135.0       530.0     516.6
Gross Profit                        110.1     102.8       428.9     451.6
Selling, general and                71.7      59.2        274.5     239.5
administrative expenses
Amortization of intangible assets   3.2       3.2         12.6      12.6
Impairment of intangible assets     —         534.4       —         566.5
Other operating expenses, net       2.1       0.5         2.7       1.6
Operating Profit (Loss)             33.1      (494.5)     139.1     (368.6)
Interest expense, net               16.1      12.9        60.3      51.5
Other expense (income), net         —         4.7         (1.6)     10.5
Earnings (Loss) before Income       17.0      (512.1)     80.4      (430.6)
Taxes
Income tax expense (benefit)        6.2       (32.5)      30.5      (6.3)
Net Earnings (Loss)                 $ 10.8    $ (479.6)   $ 49.9    $ (424.3)
Earnings (Loss) per share:
Basic                               $ 0.32    $ (13.94)   $ 1.45    $ (12.33)
Diluted                             $ 0.31    $ (13.94)   $ 1.45    $ (12.33)
Weighted-Average Common Shares
Outstanding:
Basic                               34.2      34.4        34.3      34.4
Diluted                             34.4      34.4        34.5      34.4



SELECTED CONSOLIDATED CASH FLOW INFORMATION (Unaudited)

(in millions)


                                                      Year Ended

                                                      September 30,
                                                      2012      2011
Cash provided by (used in):
Operating activities                                  $ 135.1   $ 143.8
Investing activities                                  (30.9)    (14.9)
Financing activities                                  (48.2)    (132.1)
Effect of exchange rates on cash and cash equivalents 0.5       0.1
Net increase (decrease) in cash and cash equivalents  $ 56.5    $ (3.1)





RECONCILIATION OF NET EARNINGS (LOSS) TO ADJUSTED EBITDA (Unaudited)

(in millions)


                                     Quarter Ended        Year Ended

                                     September 30,        September 30,
                                     2012     2011        2012      2011
Net Earnings (Loss)                  $ 10.8   $ (479.6)   $ 49.9    $ (424.3)
Income tax expense                   6.2      (32.5)      30.5      (6.3)
Interest expense, net                16.1     12.9        60.3      51.5
Other nonoperating income (expense),                                
net                                  —        4.7         (1.6)
                                                                    10.5
Depreciation and amortization        16.3     14.9        63.2      58.7
Impairment of intangible assets      —        534.4       —         566.5
Stock-based compensation             2.3      0.1         4.5       1.1
Nonrecurring cash                                                  
compensation/retention               —                    0.9
                                              —                     —
Accounts receivable servicing fees   —        (0.9)       (0.8)     (3.7)
Spin-Off costs/post Spin-Off         2.1      2.8         12.5      2.8
non-recurring costs
Mark to market adjustments on        (0.3)    3.6         0.3       7.1
economic hedges
Public company costs (1)             —        (3.7)       (5.1)     (15.0)
Adjusted EBITDA                      $ 53.5   $ 56.7      $ 214.6   $ 248.9
Adjusted EBITDA as a percentage of   21.6%    23.8%       22.4%     25.7%
Net Sales

    Represents Post management's estimate of the incremental cash costs Post
    would have incurred as a separate, stand-alone public company if the
(1) Company had been separated from Ralcorp for the entire period. These costs
    were not actually incurred in the historical periods presented above. The
    estimated costs have been deducted in the calculation of Adjusted EBITDA
    to provide a frame of reference for future periods.





RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS (Unaudited)

(in millions, except per share data)


                                      Quarter Ended       Year Ended September
                                      September 30, 2012  30, 2012
Net Earnings                          $     10.8          $      49.9
Adjustments to Net Earnings:
Nonrecurring cash                     —                   0.9
compensation/retention
Accounts receivable servicing fees    —                   (0.8)
Spin-Off costs/post Spin-Off          2.1                 12.5
non-recurring costs
Mark to market adjustments on         (0.3)               0.3
economic hedges
Other nonoperating income (expense),  —                   (1.6)
net
Incremental interest expense (1)      —                   (4.3)
Public company costs (2)              —                   (5.1)
                                      1.8                 1.9
Income tax effect on adjustments      (0.7)               (0.9)
Incremental tax expense for           —                   1.8
non-deductible transaction costs
Adjusted Net Earnings                 $     11.9          $      52.7
Weighted-Average Shares Outstanding - 34.4                34.5
Diluted
Adjusted Diluted Earnings per Share   $     0.35          $      1.53

    Represents Post management's estimate of incremental interest expense Post
    would have incurred if the debt incurred on February 3, 2012 to effect the
(1) spin-off from Ralcorp had been outstanding for all of fiscal 2012. These
    costs were not actually incurred in the historical periods presented
    above. The estimated costs have been deducted in the calculation of
    Adjusted Net Earnings to provide a frame of reference for future periods.
    Represents Post management's estimate of the incremental cash costs Post
    would have incurred as a separate, stand-alone public company if the
(2) Company had been separated from Ralcorp for the entire period. These costs
    were not actually incurred in the historical periods presented above. The
    estimated costs have been deducted in the calculation of Adjusted Net
    Earnings to provide a frame of reference for future periods.







SOURCE Post Holdings, Inc.

Website: http://www.postfoods.com
Contact: Pia Koster, Director, Investor Relations, +1-314-644-7678 (POST)