Post Holdings, Inc.

Hello and welcome to the Post Holdings First Quarter 2022 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 made available for replay beginning at 12 p.m. Eastern Time. The dial-in phone number is 800-839-5324. No passcode is required. At this time, all participants have been placed in a listen-only mode. It is now my pleasure to turn the floor over to Jennifer Meyer, Investor Relations of Post Holdings, for introductions. You may begin.

Good morning, and thank you for joining us today for Post's first quarter fiscal 2022 earnings call. With me today 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 the SEC filing section 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 risk and uncertainties that should be carefully considered by investors as actual results could differ materially from these statements. Additional information regarding these risks and uncertainties is discussed under the forward-looking statement section in the press release we issued yesterday and other press releases we have issued with respect to the proposed distribution of our interest in Bellring Brands, which are posted on our website. We also urge you to read the registration statements, the proxy statement and prospectuses, the related amendments of these filings, and other documents related to the proposed distribution of our interest and borrowing brands that have been and will be filed with the FCC because they contain important information. 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-Gantt measures to the nearest Gantt measure, DR Press released issues yesterday posted on our website. With that, I will turn the call over to Rob.

Thank you, Jennifer, and thank you all for joining us. Despite a challenging environment, we delivered a quarter largely in line with expectations, and we continue to maintain our expectations for the full year. However, as you all know, the degree of uncertainty remains high, and we face variables that lend both risk and upside to our outlook. While our outlook continues to be presented on a basis consolidated with bell ring, respective outlook remains largely unchanged. We will initiate post-Remainco guidance no later than our next earnings call, by which time we expect the separation to have been completed. With respect to the separation execution, I have some updates. First, we've been cleared by the SEC to move forward with the transaction. Second, we expect to complete the transaction by the end of March. We expect the amount of cash that will be distributed to Bellerin stockholders, including Post, to be approximately $400 million. Finally, we will pro-rata distribute approximately 78 million Bellerin shares rather than exchange any of them for Post shares. This transaction required and continues to require considerable effort across both organizations, and I want to thank everyone involved. With respect to near-term business results, each segment had two overarching themes. First, cost inflation ran ahead of pricing actions. We have taken the pricing needed to offset known inflation in all segments, but with varying effective dates. Second, each segment had unmet customer demand, resulting from shortages in labor inhibiting production and or shortages in transportation, resulting in unshift orders. In U.S. cereal, consumption for our branded products continues to run ahead of pre-COVID levels by nearly 2%. and our related market share is just shy of 20%. Pebbles, in particular, continues to show strong growth. Last quarter, I mentioned we may have seen an inflection point in the value trade, and so far that is holding. Our value segment sequentially improved throughout the quarter. A shift to value in the category is margin dilutive to post, but it's profit accretive. Food service performed as expected, meaning it had a weak profit quarter, as this segment was the one most dramatically impacted by costs running ahead of pricing. This refers to non-pass-through prices, as pass-through prices automatically reset. We have taken nearly $150 million in annualized pricing, with the majority beginning in Q2, but includes pricing occurring into the third quarter. Moreover, labor gaps persist in food service. However, no plant was worse and several improved. We continue to expect sequential improvement towards recovery to pre-pandemic levels of profit in 2023. During the second quarter, we are experiencing some soft demand resulting from the Omicron COVID variant. Nevertheless, we now understand that the volumes bounce back quickly as variants recede, and we expect the softness to be limited to a month or two. Refrigerator retail made great strides this quarter. Our staffing levels are much improved, and we saw far greater capacity utilization. Most products remain on allocation, so we remain below our potential, but I am quite pleased with the progress. Weedabix continues to be a rock-solid performer. All the factors our U.S. businesses face are present in the key U.K. market. Their pricing and mix is pacing favorably. Delrayne will have his call shortly. Suffice to say that it continues to perform well in a great category, but that current year results are constrained by insufficient capacity. On balance, I would say we navigated the first quarter effectively. We feel good about how we are managing the controllables, and we are remaining nimble enough to adapt to curveballs as they come our way. In terms of capital allocation, we continue to be an active buyer of our shares. Jeff will provide the details. We continue to actively explore acquisition opportunities, both large and small, across the business. We will not undertake an acquisition that jeopardizes our execution in a challenging year, but we believe there are opportunities to find value that complements our efforts. I want to close with some comments about our outlook. We expect to see similar aggregate results in Q2 with considerable improvement in food service and the expected sequential decline of Bellerin. We then expect significant second half acceleration stemming from price realization, improvements in supply chain execution, food service volume recovery, and Bellerin capacity expansion. As I mentioned, assuming the spin proceeds to plan, We will provide separate standalone guidance for the remaining business no later than our May call. Thank you for your time this morning and your continued support. With that, I will turn the call over to Jeff.