LENEXA, KS — On Nov. 9, Hostess Brands, Inc. reported its financial results for the three and nine months ended Sept. 30.
“Our solid momentum continued in the third quarter enabling us to exceed our top and bottom-line expectations. Third quarter sales increased by 10% as strong execution across our retail network and exciting innovation generated meaningful volume growth in both Hostess and Voortman branded portfolios. I am proud of the way in which our team is performing in a dynamic and challenging operating environment as productivity initiatives and higher price realization offset rising inflation allowing us to maintain our attractive margin structure,” commented Andy Callahan, the Company’s President and Chief Executive Officer.
He continued, “We are raising our full-year net revenue guidance while maintaining our EBITDA and EPS outlook as we continue to invest in our capabilities, advertising and marketing to generate top-tier growth and shareholder value over the long-term.”
Third Quarter 2021 Financial Highlights
- Net revenue of $288.0 million increased 10.4% from the same period last year, reflecting strong Hostess® and Voortman® branded growth across multiple channels.
- Gross profit increased 8.6% to $99.0 million. On an adjusted basis, gross profit increased 8.9% to $99.3 million, or 34.5% of net revenues, as higher volume, favorable product mix, pricing and productivity offset rising inflation.
- Net income was $26.2 million or $0.19 per diluted share. Adjusted net income increased 14.2% to $28.9 million and resulted in adjusted EPS of $0.21 compared to $0.19 in the prior year period.
- Adjusted EBITDA increased 7.6% to $64.8 million, or 22.5% of net revenue, as higher gross profits were partially offset by higher advertising and marketing spend.
- Cash and cash equivalents were $228.1 million as of September 30, 2021. Net leverage ratio declined to 3.3x driven by improved operating cash flow.
- Raising full year 2021 guidance for net revenue growth to 9.0% - 10.0% and reiterating adjusted EBITDA and adjusted EPS guidance of $260 million - $268 million and $0.83 - $0.87.
The company also announced that Brian Purcell, Executive Vice President, Chief Financial Officer, resigned from the company, effective Nov. 9 and that the company’s Board of Directors has appointed Michael Gernigin, the company’s Senior Vice President and Corporate Controller, as the company’s Chief Accounting Officer and Interim Chief Financial Officer until a permanent successor has been named.
“We appreciate Brian’s contributions to Hostess and wish him the best in his future endeavors,” commented Andy Callahan. He continued, “Mike, who has been with the company since 2016, is a strong finance and accounting executive and is well-positioned to lead the talented finance organization while we search for a new permanent CFO.”