Lamb Weston President and CEO Tom Werner ringsa ceremonial bell after taking part in the company's IPO on the floor of the New York Stock Exchange (NYSE) in New York City, NY, U.S. November 15, 2016 (Courtesy: Reuters / Yahoo Finance)
Potato Processor Lamb Weston publishes a quarterly report for the very first time
Lamb Weston Holdings, Inc. (NYSE:LW) has just published its second quarter 2017 results.
Highlights Q2 FY2017:
- Net Sales increased 7% to $791 million
- Net Income attributable to Lamb Weston increased 19% to $87 million from $73 million; Adjusted Net Income attributable to Lamb Weston(1) increased 27% to $93 million
- Adjusted EBITDA including unconsolidated joint ventures(1) increased 19% to $168 million
- Diluted EPS was $0.59, up from $0.50 in the prior year period; Adjusted Diluted EPS(1) was $0.63
“We’re very excited to begin our journey as an independent company and are pleased with our better-than-expected second quarter and year-to-date results.”
“Our focus on execution in this favorable environment is evident in our strong first half performance, and we’ve raised our sales and earnings outlook accordingly.”
“Demand for frozen potato products continues to grow around the world.”
“We’re managing through a tight capacity environment and driving supply chain efficiencies to meet current demand until our capacity expansion comes online in the second half of calendar 2017.”
“We believe that we’re well positioned to capture growth over the long term through our strong relationships with customers, our innovation and our global footprint.”
Summary of Second Quarter and FY 2017 Year-to-Date Results
Q2 2017 Commentary
Net sales were $791 million, up 7 percent versus the year-ago period. Volume increased 4 percentage points as productivity programs and strong manufacturing plant performance stretched available capacity, allowing the Company to meet demand growth in both North America and international markets. Price/mix increased 3 percentage points due to pricing actions and favorable product and customer mix.
Income from operations increased 15 percent to $126 million from $110 million in the prior year period, and included $9 million of costs related to the spinoff from Conagra Brands, Inc. (formerly ConAgra Foods, Inc., “Conagra”). The increase was largely due to favorable price/mix and volume, as well as supply chain efficiencies. Raw potato costs were essentially flat versus the prior year period. Selling, general and administrative expense increased, largely due to incremental costs associated with being a stand-alone business as well as higher incentive compensation costs.
Adjusted EBITDA including unconsolidated joint ventures was $168 million, an increase of 19 percent versus the prior year period, mainly reflecting growth in income from operations, partially offset by lower equity method investment earnings.
Diluted EPS increased 18 percent to $0.59 from $0.50 in the prior year period, and Adjusted Diluted EPS was $0.63, up 26 percent. The increases were largely due to higher income from operations, partially offset by higher interest costs and lower equity method investment earnings. The effective tax rate(2) was 27 percent in second quarter of fiscal 2017. The lower rate is primarily attributable to an increase in costs determined to be deductible, as well as a discrete benefit from fiscal 2016 foreign taxes.
Q2 2017 Segment Highlights
Global Segment Summary
Global Segment Product Contribution Margin increased 17 percent to $92 million, driven by favorable price/mix, volume growth and supply chain efficiency savings.
Foodservice Segment Summary
Foodservice Segment Product Contribution Margin increased 39 percent to $80 million, driven by favorable price/mix, supply chain efficiency savings and volume growth.
Retail Segment Summary
Retail Segment Product Contribution Margin increased 36 percent to $21 million, driven by favorable price/mix, the timing of advertising spending, supply chain efficiency savings and volume growth.
End notes:
- Adjusted EBITDA, Adjusted EBITDA including unconsolidated joint ventures, Adjusted Income from Operations, Adjusted Net Income attributable to Lamb Weston, Adjusted Diluted EPS and Segment Product Contribution Margin are non-GAAP financial measures. Please refer to the full release for information and discussion of non-GAAP financial measures and the reconciliations.
- The effective tax rate is calculated as the ratio of income tax expense to pre-tax income, inclusive of equity method investment earnings.
Review the full financial release
PotatoPro has only published selected parts of the financial release of Lamb Weston Holdings as general background information on the potato processing company Lamb Weston and developments in the global french fry market.For detailed information on Lamb Weston Holdings, Inc as well as any investment decisions, we refer to the full financial release.
You can find the full release here
Source
Lamb Weston Holdings, Inc
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