Post Holdings, Inc.

Welcome to the Post Holdings First Quarter 2020 Earnings Conference Call and Webcast. Hosting the call today from Post are Rob Vitale, President and Chief Executive Officer, and Jeff Zadoks, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 12 p.m. Eastern Time. The dial-in number is 800-585-8367. Again, the number is 800-585-8367. and the passcode is 1371013. At this time, all participants have been placed in a listen-only mode. It is now my pleasure to turn the floor over to Matt Mainer of Post Holdings for introductions. You may now begin.

Thank you. Good morning, and thank you for joining us today. With me are Rob Vitale, our president and CEO, and Jeff Zadoks, our CFO. Rob and Jeff will begin with prepared remarks and afterwards we'll have a brief question and answer session. The press release that supports these remarks is posted on our website in both the investor relations and SEC filing sections at postholdings.com. In addition, the release is available on the SEC's website. Before we continue, I would like to remind you that this call will contain forward-looking statements which are subject to risks and uncertainties that should be carefully considered by investors as actual results could differ materially from these statements. These forward-looking statements are current as of the date of this call, and management undertakes no obligation to update these statements. As a reminder, this call is being recorded, and an audio replay will be available on our website. And finally, this call will discuss certain non-GAAP measures. For reconciliation of these non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. With that, I will turn the call over to Rob.

Thanks, Matt. Thank you all for joining us. I wasn't sure I was going to do this, but I think before I go into my prepared remarks, I'm going to share with you that I am about 90% of the way back from a domestic virus I've been fighting this week. So bear with me through hacks and other things as we share with you our results for the quarter. So with that, the first quarter came in largely in line with expectations. We communicated a 2020 plan with modest second half favorability. and in total, our quarter is consistent with our cadence expectations. As always, there are some puts and takes across the business. This morning, in my prepared remarks, I will provide some additional clarity around 2020 outlook, a brief business update and comment on capital allocation. To start, I want to give some additional detail around the quarterly cadence. While revenue is closer to evenly split between halves, our plan called for and continues to call for first half adjusted EBITDA to represent approximately 46 to 47% of the year. This compares to a first second half split in 2019 of 49.51. We expect the acceleration into the second half for the following reasons. A serial promotional calendar that is weighted to the second half. Navigating potato side dish production constraints that have resulted in customer allocations. The timing of pricing moves. Cycling startup costs for our Norwalk plant, back half cost reductions versus first half investment in cost reductions, and the timing of key promotional events for Bellring customers, coupled with heavy premier protein advertising spend in Q2. Turning to the business, Bellring is off to a great start. Their call is coming up shortly, so I won't steal any of their thunder. From a post perspective, the focus remains on how to best strategically manage the asset and allocate its capital. This will be a story in the making and one that looks quite promising. Our domestic cereal had an expected decline in consumption as we lapped aggressive promotional events in grocery and club. As I mentioned, our promotional calendar this year favors the second half. More structurally, we were early in license weeks and we are seeing the impact of competitive reactions. We have a promising innovation pipeline and continue to be confident in the near and longer term trajectory of the business. The category itself was a relatively bright spot this quarter. Inclusive of non-measured channels, it grew approximately 0.5%. Weedabix continues to perform well, and we would like to find a way to build around this team. Food service eggs and potatoes and Bob Evans side dishes had solid growth. However, we had weakness in retail eggs and cheese. Across the integrated supply chain, we incurred costs tied to supporting potato demand, and we are struggling with a labor shortage in some key rural markets. Both factors pressured profit growth in an otherwise solid quarter. Both issues will linger to a degree throughout the year. Eighth Avenue made solid progress to recover from a weak 2019. It also executed a strategic purchase in acquiring peanut butter manufacturing assets from ConAgra. We continue to expect adjusted EBITDA of $100 to $105 million before consideration of the ConAver purchase. Turning to capital allocation, our attempt to acquire the Treehouse private label serial assets met with opposition from the FTC. We believe it was the wrong conclusion, but we ultimately agreed with Treehouse that protracted litigation was in neither party's best interest. We continue to search for M&A prospects, but we always do so against an array of capital allocation choices, including buying our own shares. This quarter we acquired 2.2 million shares of Post. Despite the commitment to share repurchases, we ended the quarter at leverage levels that for Post are historically low. With that, I will now turn the call over to Jeff.