Milling & Baking News - August 19, 2014 - 21

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bakery we implemented to offset the
higher egg white costs. Third, we reformulated our ingredient profile,
which is now less dependent on egg
whites. And finally, we have a number
of operational initiatives as we focus
on continuous improvement projects

that are already beginning to contribute to margin enhancement."
For the six months ended June 30,
Boulder Brands companywide had net
income of $3,148,000, or 5c per share,
which was down from $7,055,000, or
12c per share, in the same time period of

the previous year. Six-month net sales of
$254,200,000 were up from $217,322,000.
Boulder Brands for the full fiscal year
continues to expect net sales in the range
of $540 million to $550 million and adjusted EBITDA to be in the range of $89
million to $91 million. MBN

Post Holdings grapples with
acquisition-related challenges
ST. LOUIS - Over the past 15 months,
Post Holdings, Inc. has completed six
acquisitions, transforming itself from a
ready-to-eat cereal business into a diverse
consumer packaged goods company. The
journey has not been easy, though, and
the St. Louis-based company sustained a
loss of $39.3 million in the third quarter
ended June 30 and a loss of $66.9 million
in the nine months ended June 30.
"During Q3, we experienced some
acquisition-related challenges, as well
as some of a legacy nature," Terry Block,
president and chief operating officer, said
during an Aug. 8 conference call with analysts. "More specifically, some headwinds
during the quarter included escalating
commodity input costs within active nutrition and private brands, previously
noted operational issues hampering both
cost and sales within active nutrition, and
greater-than-expected volume weakness
in R.-T.-E. cereal category declines."
In the third quarter ended June 30, Post
sustained a loss of $39.3 million, which
compared with income of $1.1 million,
equal to 3c per share on the common
stock, in the same period a year ago. Sales,
meanwhile, improved to $633 million

from $257.3 million, boosted by acquisitions, including Michael Foods, Golden
Boy Foods and Dymatize Enterprises.
Segment profit within the Post Foods
unit, which includes Post branded cereals, totaled $48.2 million in the third quarter, up 2% from $47.3 million a year ago.
Net sales were lower, though, easing to
$238.2 million from $246.6 million.
Given the environment, Mr. Block said
Post actually is doing relatively well in what
he described as a "challenged category."
"We have now had five consecutive
quarters of dollar share growth for Post in
total," he said. "Honey Bunches of Oats,
our largest brand, accelerated share gains
0.3 share points in Q3 and has grown share
in eight of the last nine months. This success has been driven by a strategic focus
on core items, which grew 4.8%, as well as
continued gains from realigning the pricing architecture across sizes. Pebbles also
had a strong dollar share growth, growing
0.5 points this quarter, driven by strength
behind our integrated marketing programming and strong performance from
our Pebbles Value Bags. The brand has
grown dollars almost 14%, and pounds
over 21%, for fiscal year to date.

Cargill earnings fall despite
better results from beef business
MINNEAPOLIS - Weak economic conditions in some countries, exchange rate
moves in Venezuela and the rejection of
corn shipments in China all affected Cargill negatively in the fiscal year ended
May 31. Fiscal-year earnings of $1.87 billion marked a 19% decrease from $2.31 billion in the previous fiscal year. Fiscal-year
revenues dipped 1% to $134.9 billion.
"Though we look back on a year in
which overall earnings fell short of expectations, we realized stronger operating results in several businesses, including a turnaround in our global beef
operations," said David MacLennan,
president and chief executive officer of
Minneapolis-based Cargill, when results
were issued Aug. 7. "We also made good
bakingbusiness.com / world-grain.com

Financial Results

progress on moves designed to sharpen
efficiency and support profitable growth
in fiscal 2015 and beyond."
The beef business led performance in
animal protein, helping earnings rise in
Animal Nutrition & Protein, one of Cargill's four segments. Within that segment,
U.S. pork operations rose on improved
life production and processing efficiency
and steady demand. Poultry operations
in Central America, Europe and Thailand
posted higher earnings.
Earnings in the Food Ingredients & Applications unit decreased after four straight
years of record performance. The drop
in earnings reflected weaker economic
conditions in some countries and a negative impact of the change in Venezuela's

"Great Grains, our third largest brand,
also grew dollar share during Q3. The
brand continues to be a strong performer
overall in the healthy segment. We remain
committed to demand generation, executing the fundamentals and investing to drive
increased consumption of our brands. Our
long-range innovation pipeline is stronger
than it has been in the past four years. In
2015, we have a robust lineup of new items
launching both in the R.-T.-E. cereal category and Beyond the Bowl. Lastly, we have
custom markets planned against multiple
breakthrough innovations, focused on addressing consumer desires for fresher, leaner and more convenient foods."
Attune Foods posted operating income
of $2 million in the third quarter, up from
$200,000 a year ago. Net sales jumped
119% to $23.7 million from $10.8 million.
The Active Nutrition group, which includes Premier Nutrition, Dymatize Enterprises Joint Juice and Supreme (and
later this year will add PowerBar and
Musashi), sustained an operating loss of
$2.5 million on sales of $86.7 million.
The Private Brands group, which includes
Dakota Growers Pasta and Golden Boy, had
operating profit of $5.9 million on sales of
$134.2 million in the third quarter. The business is expected to get a boost from the addition of American Blanching Co. (ABC),
which Post agreed to acquire on Aug. 7. MBN
effective currency exchange rates.
China rejecting certain U.S. corn shipments, which Cargill reported in the
third quarter, led to decreased earnings
in Origination & Processing. Poor performance in energy led to declining results
in Industrial & Financial Services. Within that segment, earnings rose in global
transportation and a U.S.-based steelmaking joint venture.
In the fourth quarter ended May 31, Cargill's net earnings of $424 million marked
a 12% decrease from $483 million in the
previous year's fourth quarter. Fourthquarter revenues rose 2% to $36.2 billion.
Cargill has $3.3 billion worth of food
and agricultural facilities under construction in 13 countries, Mr. MacLennan said.
"As these facilities come on-line, they
enhance Cargill's delivery of value-creating solutions to our food, agricultural
and other customers," he said. MBN
Milling & Baking News August 19, 2014 / 21

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Milling & Baking News - August 19, 2014

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