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Dec 31, 2020
TreeHouse Q4 2020 Earnings Report
Reported top-line growth, strong cash flow, and deleveraging, while also providing an update on the Riviana acquisition and value creation initiatives.
Key Takeaways
TreeHouse Foods reported a 3.3% increase in net sales and a 4.0% increase in organic net sales for the fourth quarter of 2020. Earnings per diluted share from continuing operations was $1.29, and adjusted earnings per diluted share from continuing operations was $1.07. The company completed the acquisition of Ebro's Riviana Foods U.S. branded pasta business in December and issued 2021 guidance for adjusted earnings per diluted share from continuing operations of $2.80 to $3.20 and revenue guidance of $4.40 to $4.60 billion.
Net sales grew by 3.3% with organic net sales up by 4.0% compared to Q4 2019.
Earnings per diluted share from continuing operations was $1.29, significantly higher than the $0.27 reported in Q4 2019.
Adjusted earnings per diluted share from continuing operations was $1.07, within the company's guidance range.
The acquisition of Ebro's Riviana Foods U.S. branded pasta business was completed in December, expected to contribute $25 to $30 million in adjusted EBITDA and $0.20 to $0.30 in adjusted earnings per diluted share in 2021.
Forward Guidance
TreeHouse Foods provided 2021 guidance ranges, anticipating continued focus on customer service amidst uncertainties related to COVID-19, while remaining confident in the private label opportunity.
Positive Outlook
- Adjusted earnings per diluted share from continuing operations of $2.80 to $3.20.
- Reported net sales between $4.40 to $4.60 billion.
- Adjusted EBITDA from continuing operations between $525 to $570 million.
- Adjusted effective tax rate between 24% and 25%.
- Diluted weighted average shares outstanding of approximately 56.0 to 56.5 million shares.
Challenges Ahead
- Significant inflation across several agricultural commodities, specifically oils (coconut, soybean, and palm), wheat, and oats.
- Uncertainties around COVID-19 persist and continue to affect the business.
- Interest expense between $84 and $90 million.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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