Hostess Brands, Inc. Announces Fourth Quarter and Full Year 2016 Financial Results
Source Hostess Brands, Inc.
KANSAS CITY, Mo.--(BUSINESS WIRE)--Hostess Brands, Inc. (NASDAQ: TWNK, TWNKW)(the “Company”), one of the largest manufacturers and marketers in the United States of sweet baked goods, including Hostess® Twinkies®, Ding Dongs®, Ho Hos®, Donettes® and a variety of new and classic treats, today reported financial results for the fourth quarter and full year ended December 31, 2016.
The Company's results include those of Superior Cake Products, Inc. ("Superior") from May 10, 2016, the date of its acquisition. Through Superior, the Company competes in the in-store bakery section of grocery and club retailers.
On November 4, 2016, the Company completed the acquisition of a controlling interest in Hostess Holdings, L.P. and changed its name from Gores Holdings, Inc. to Hostess Brands, Inc. (the "Business Combination"). As a result, the Company's consolidated financial results are presented: (i) as of December 31, 2016 (Successor) and 2015 (Predecessor); (ii) for the period November 4, 2016 to December 31, 2016 (Successor); (iii) for the period January 1, 2016 to November 3, 2016 (Predecessor); and (iv) for the quarter ended December 31, 2015 and for the years ended December 31, 2015 and December 31, 2014 (Predecessor).
The Company has also presented supplemental unaudited pro forma combined financial information for the quarter and year ended December 31, 2016, giving effect to the Business Combination as if it had occurred on January 1, 2016. All references in this press release to results for the quarter and year ended December 31, 2016, refer to such unaudited pro forma combined results. The Company believes this pro forma information provides helpful supplemental information with respect to the performance of the Hostess business during this period.
The Company also has supplemented its discussion with a presentation of adjusted EBITDA and adjusted gross profit, each a non-GAAP financial measure. Please refer to the schedules in this press release for an explanation and reconciliations of these non-GAAP financial measures.
Fourth Quarter 2016 Pro Forma Combined Financial Highlights
- Pro forma combined net revenue increased 21.6%, or $31.8 million, to $178.8 million (revenue increased 14.8%, excluding Superior acquisition)
- Pro forma combined gross margin improved 150 basis points to 43.0%
- Pro forma combined net income was $22.0 million for the fourth quarter of 2016, an increase of $4.8 million compared to the fourth quarter of 2015
- Pro forma combined EPS on a fully diluted basis was $0.14 per share
- Pro forma combined adjusted EBITDA increased 25.4%, or $10.7 million, to $52.9 million
Fiscal 2016 Pro Forma Combined Financial Highlights
- Pro forma combined net revenue increased 17.2%, or $106.8 million, to $727.6 million (revenue increased 12.9% excluding Superior acquisition)
- Pro forma combined gross margin improved 116 basis points to 43.4%
- Pro forma combined net income was $82.4 million for 2016, a decrease of $6.3 million compared to 2015
- Pro forma combined EPS on a fully diluted basis was $0.54 per share
- Pro forma combined adjusted EBITDA increased 21.0%, or $37.4 million, to $215.3 million
(All comparisons above are with respect to the Predecessor's fourth quarter and year ended December 31, 2015)
“We are pleased with our strong revenue and profit growth for the year,” commented Bill Toler, President and Chief Executive Officer of the Company. “Our financial performance this year benefited from increased distribution and product innovation initiatives as well as continuing to build market share on our core products. We continue to feel confident with our momentum heading in to 2017.”
