q4 & fy 2016 earnings presentation & project …€¦ · q4 2016 financial review 9 net...
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Q4 & FY 2016 EARNINGS PRESENTATION
& PROJECT CENTENNIAL UPDATE FEBRUARY 14, 2017
REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this press release that are not historical facts are forward-looking statements. Forward-looking statements relate to current expectations regarding our future financial condition, performance and results of operations, planned capital expenditures, long-term objectives of management, supply and demand, pricing trends and market forces, and integration plans and expected benefits of transactions and are often identified by the use of words and phrases such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "would," "is likely to," "is expected to" or "will continue," or the negative of these terms or other comparable terminology. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Other factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the company's prospects in general include, but are not limited to (a) competitive conditions in the baked foods industry, including promotional and price competition, (b) changes in consumer demand for our products, including changes in consumer behavior, trends and preferences, including health and whole grain trends, and the movement toward more inexpensive store-branded products, (c) the success of productivity improvements and new product introductions, (d) a significant reduction in business with any of our major customers including a reduction from adverse developments in any of our customer's business, (e) fluctuations in commodity pricing, (f) energy and raw material costs and availability and hedging and counterparty risk, (g) our ability to fully integrate recent acquisitions into our business, (h) our ability to achieve cash flow from capital expenditures and acquisitions and the availability of new acquisitions that build shareholder value; (i) our ability to successfully implement the initiatives contemplated by Project Centennial, (j) consolidation within the baking industry and related industries; (k) disruptions in our direct-store delivery system, including litigation or an adverse ruling from a court or regulatory or government body that could affect the independent contractor classification of our independent distributors; (l) increasing legal complexity and legal proceedings that we are or may become subject to; and (m) the failure of our information technology systems to perform adequately, including any interruptions, intrusions or security breaches of such systems. The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other disclosures made by the company, including the risk factors included in our most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and disclosures made in other filings with the SEC and company press releases, for other factors that may cause actual results to differ materially from those projected by the company. We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law.
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TODAY’S AGENDA
3
• Review Fourth Quarter & Full Year 2016 Results
• Outlook for Full Year 2017
• Project Centennial Update
• Q&A
Q4 & FY 2016 SUMMARY RESULTS
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(1) Adjusted for matters affecting comparability. See non-GAAP reconciliations at the end of the slide presentation.
Q416 FY16
Sales Change:
Branded Retail
Store-branded Retail
Non-retail & Other
Total
+0.9%
+3.3%
+0.7%
+1.2%
+6.1%
+1.9%
+0.6%
+3.9%
Diluted EPS
Adj. Dil. EPS1
-60.0%
Flat
-12.4%
-1.1%
PRIOR YEAR COMPARISONS:
CATEGORY REVIEW
5
-0.9%
1.1%
2.8%
1.5%
2.6%
-0.1%
0.4%
-0.5%
1.3%1.1%
1.5%
1.1%
0.6%
-0.2%
-0.5%
0.3%
-2.5%
-0.9%
0.4%0.3%
2.8%
0.3%
0.5%
-0.3%
0.6%
-0.7%
0.1%
-1.3% -1.2%-1.3% -1.4%
-0.3%
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Dollar Sales % Chg Unit Sales % Chg
Source: Flowers Custom Database – IRi Total US Mulo + C Store
FRESH PACKAGED BREADS
CATEGORY REVIEW
6
-9.6%
-6.8%
1.7%
6.0%
12.6%
9.5%
5.9%
4.2%
6.5% 6.7%
3.3% 3.3%
1.0%2.0%
1.0%
2.2%
-9.0%
-6.7%
0.0%
2.9%
9.3%
7.6%
4.4% 4.1%5.2%
4.7%
1.6% 1.5%
-0.1%
1.3%
-0.1%
0.9%
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Dollar Sales % Chg Unit Sales % Chg
Source: Flowers Custom Database – IRi Total US Mulo + C Store
TOTAL CATEGORY: COMMERCIAL CAKE
FLOWERS’ MARKET SHARE
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11.8
14.1 14.3 14.514.8
8.9
10.2
9.1 8.98.3
Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016
FLO Bread Share FLO Cake Share
Source: Flowers Custom Database – IRi Total US Mulo + C Store
ORGANICS GENERATING GROWTH
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$179.1
$220.2
$274.9
$356.8
2013 2014 2015 2016
35.3 34.6 38.3
43.7
2013 2014 2015 2016
DKB IS DRIVING FLOWERS’ MARKET SHARE GAINS IN THE KEY GROWTH SEGMENT OF THE CATEGORY
Source: IRI Custom Database Total US + Convenience, calendar year ending 1-Jan-2017.
TOTAL ORGANIC FRESH PACKAGED BREADS FLO DOLLAR SHARE OF TOTAL ORGANICS
Q4 2016 FINANCIAL REVIEW
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NET SALES $868.7M +1.2%
• Cycled acquisitions at beginning of quarter
• Price/Mix +0.1%; Volume +1.1%
• Volume gains driven by DKB, store brands, foodservice
STRONG CASH GENERATION
• Cash from Ops = $62.8 million, up versus prior year due to changes in hedge margin activity
• Capex = $34.3 million
• Dividends = $33.3 million
• Net debt payments of $32.8 million
ADJ. EBITDA1 $87.7M• Increased 1.2%
• 10.1% of sales, equal to prior year
• Lower input pricing offset by increased consulting costs
DILUTED EPS $0.06ADJ. DILUTED EPS2 $0.16
• Flat with prior year
• Higher interest expense offset by lower tax rate and fewer shares outstanding
(1) Earnings before interest, taxes, depreciation & amortization, adjusted for matters affecting comparability. See non-GAAP reconciliations at the end of this slide presentation.(2) Adjusted for matters affecting comparability. See non-GAAP reconciliations at the end of this slide presentation.
FY 2016 FINANCIAL REVIEW
10(1) Until cycled. The DKB acquisition was cycled 12-Sep-2016. The Alpine acquisition was cycled 13-Oct-2016.(2) Adjusted for matters affecting comparability. See non-GAAP reconciliations at the end of this slide presentation.
NET SALES $3.93B +3.9%
• Acquisitions1 contributed 4.0%
• Price/Mix -0.3%; Volume +0.2%
• Volume gains driven by DKB, foodservice, offset by lower cake and soft variety bread volumes
STRONG CASH GENERATION
• Cash from Ops = $346.0 million, up vs prior year due to changes in operating assets/liabilities
• Capex = $101.7 million
• Dividends = $131.1 million
• Net debt payments of $55.6 million
ADJ. EBITDA2 $446.8M• Increased 1.4%
• 11.4% of sales, down 0.3% versus prior year
• Lower input pricing offset by increased workforce-related, legal, consulting, and marketing costs
DILUTED EPS $0.78ADJ. DILUTED EPS2 $0.91
• Down $0.01 versus FY 2015 adj. EPS
• Impacted by lower adj. EBITDA margin, higher amortization, interest expense; offset by fewershares outstanding
PROJECT CENTENNIAL: UPDATE
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Diagnosis, Insights, and Value Creation Plan
Allen Shiver, CEO
Cost Initiatives & Outlook for FY 2017
Roadmap & Key Takeaways
Steve Kinsey, CFO Allen Shiver, CEO
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A COMPANY WITH A NATIONAL FOOTPRINT AND STRONG, RECOGNIZED BRANDS
FLOWERS FOODS TODAY
Through Project Centennial Flowers will:
• Better connect consumers with our brands through increased awareness and innovation
• Capitalize on emerging opportunities as consumer preferences evolve
• Remove operational complexity and drive margin expansion
Best-selling loaf bread in U.S.
Iconic snack cake brand
The white bread classic
Best-selling organic bread in U.S.
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PROJECT CENTENNIAL OVERVIEW
BUILD UPON HISTORY AND STRENGTHS
FOCUS ON THE CONSUMER
OPERATE WITH EFFICIENCY
• Growing sales, expanding margins and delivering shareholder value
• Reinvigorating core business, reducing costs to fuel growth and improving financial performance
• Designing a company and operating model to deliver sustainable long-term growth
GOALAttain the position and capability of a growth-oriented company and the efficiencies of a value company to deliver top-tier shareholder return
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COMPREHENSIVE EVALUATION OF FLOWERS FOODS
BAKERYVISITS
MARKETSTUDIES
CONSUMERRESEARCH
STAKEHOLDERINTERVIEWS
A THOROUGH DIAGNOSTIC PROCESS… …. THAT REVIEWED
CONSUMER SENTIMENT
BRAND POSITIONING
MARKET OPPORTUNITIES
OPERATIONS
COST STRUCTURE
CAPABILITIES
a
a
a
a
a
a
PROJECT CENTENNIAL VALUE CREATION PLAN
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PIVOTING FLOWERS TO THE CONSUMER
GROW SALES
EXPAND MARGINS
DISCIPLINED CAPITAL ALLOCATION
DELIVER SHAREHOLDER VALUE
1. Reinvigorate core business
2. Capitalize on product adjacencies
3. Reduce costs to fuel growth
4. Invest in capabilities
1. REINVIGORATE CORE BUSINESS
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Realize 2-4% topline CAGR from existing brands by FY2021
INVEST IN BRANDS• Align brands to consumers; invest in brand
growth and innovation
SIMPLIFY BRAND ASSORTMENT• Fewer SKUs, improved manufacturing efficiencies
SUPPORT PARTNERS• Improve business intelligence and execution
support
REFOCUSING ON CORE BRANDS, CAPABILITIES
2. CAPITALIZE ON PRODUCT ADJACENCIES
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EXPANDING POSITION IN HIGH-GROWTH CATEGORIES
BUILD ON LEADING FOODSERVICE POSITION• Flowers is the #1 provider of foodservice bakery
products; consumers are eating out more
• Expand share of growing specialty products
GROW IN-STORE DELI/BAKERY• Grow specialty brands on the store perimeter
REACH POTENTIAL IN CAKE• Evolve cake strategy to leverage dual-brand
capabilities
Diversify business into growing segments of the
bakery category
3. REDUCE COSTS TO FUEL GROWTH
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Targeting
at least 250bpsnet overall EBITDA
margin improvement by FY2021
EXECUTING ON OPPORTUNITIES TO DRIVE EFFICIENCIES, ENHANCE OPERATIONS
Identified at least
$45+ millionof run-rate indirect cost
reductions to beachieved by FY2018
LEVERAGE SCALE• Implement smart spending and strategic sourcing
programs to close spending gaps with peers
REMOVE COMPLEXITY• Standardize processes and centralize common functions
to reduce overhead
• Modernize network and engineer a platform to grow national brands
ENHANCE DISCIPLINE• Structure a continuous improvement process
• Formalize performance management systems
4. INVEST IN CAPABILITIES & GROWTH
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Reinvest a portion of savings into the company to grow shareholder value
DEVELOPING LEADING CAPABILITIES TO DIVERSIFY AND GROW
UPGRADE TECHNOLOGY• Support an increased focus on data and analytics
ENHANCE FP&A• Drive operations with centralized
and standardized analytical support
PERFORMANCE MANAGEMENT• Better align company with overall strategy
and drive accountability and responsibility
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PROJECT CENTENNIAL ROADMAP
TARGETING AT LEAST 250BPS OVERALL EBITDA MARGIN IMPROVEMENT BY FY2021
FY 2017-2018 FY 2019 & Beyond
FUND & DESIGNTHE FUTURE
TRANSFORM TOTHE FUTURE
Focus• Generate savings
• Design future organization
• Invest in growth
• Leverage capabilities
Targets• Sales growth: flat to +2%
• EBITDA margins: ~12% to 13%
• Sales growth: 3% to 4%
• EBITDA margins: ~13% to 14%
FY 2017 OUTLOOK
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REVENUE OTHER
ADJ EPS1
Flat to +2%
$0.85 to $0.95Adj EPS excludes: Mix plant gain on sale of $0.09 to $0.10, Project Centennial costs of $0.07 to $0.09
Depreciation & Amortization $145 to $150 million
Net interest expense $17 to $18 million
Effective tax rate Q1: ~39.5%; FY: ~35.5%
Diluted shares outstanding ~211.0 million
Capital expenditures $95 to $105 million
GAAP EPS $0.87 to $0.96
(1) Adjusted for matters affecting comparability. See non-GAAP reconciliations at the end of this slide presentation.
KEY TAKEAWAYS
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• Strong brands and a team committed to transforming the company
• Clear objectives to grow sales, expand margins, and deliver shareholder value
• Executing today on initiatives to reinvigorate the core, obtain fuel for growth, and improve financial performance
• Designing a company and operating model to deliver sustainable long-term growth
Q&A
23
REGARDING NON-GAAP FINANCIAL MEASURES
The company prepares its consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). However, from time to time, thecompany may present in its public statements, press releases and SEC filings, non-GAAP financial measures such as, EBITDA, adjusted EBITDA, adjusted EBITDA margin,adjusted net income, adjusted net income per diluted common share, adjusted selling, distribution and administrative expenses (SD&A), gross margin excludingdepreciation and amortization, adjusted income tax expense and the ratio of net debt to adjusted EBITDA. EBITDA is used as the primary performance measure in thecompany's 2014 Omnibus Equity and Incentive Compensation Plan. The company defines EBITDA as earnings from continuing operations before interest, income taxes,depreciation, amortization and income attributable to non-controlling interest. The company believes that EBITDA is a useful tool for managing the operations of itsbusiness and are an indicator of the company's ability to incur and service indebtedness and generate free cash flow. Furthermore, pursuant to the terms of our creditfacility, EBITDA is used to determine the company's compliance with certain financial covenants. The company also believes that EBITDA measures are commonlyreported and widely used by investors and other interested parties as measures of a company's operating performance and debt servicing ability because EBITDAmeasures assist in comparing performance on a consistent basis without regard to depreciation or amortization, which can vary significantly depending upon accountingmethods and non-operating factors (such as historical cost). EBITDA is also a widely-accepted financial indicator of a company's ability to incur and service indebtedness.EBITDA should not be considered an alternative to (a) income from operations or net income (loss) as a measure of operating performance; (b) cash flows provided byoperating, investing and financing activities (as determined in accordance with GAAP) as a measure of the company's ability to meet its cash needs; or (c) any otherindicator of performance or liquidity that has been determined in accordance with GAAP. Our method of calculating EBITDA may differ from the methods used by othercompanies, and, accordingly, may not be comparable to similarly titled measures used by other companies. Net debt to EBITDA is used as a measure of financial leverageemployed by the company. Our method of calculating net debt to EBITDA may differ from the methods used by other companies, and, accordingly, may not becomparable to similarly titled measures used by other companies. Gross margin excluding depreciation and amortization is used as a performance measure to provideadditional transparent information regarding our results of operations on a consolidated and segment basis. Changes in depreciation and amortization are separatelydiscussed and include depreciation and amortization for materials, supplies, labor and other production costs and operating activities. Presentation of gross marginincludes depreciation and amortization in the materials, supplies, labor and other production costs according to GAAP. Our method of presenting gross margin excludesthe depreciation and amortization components, as discussed above. This presentation may differ from the methods used by other companies and may not be comparableto similarly titled measures used by other companies. The company may from time-to-time discuss SD&A adjusted for items that are not continuing in nature. Thereconciliations attached provide reconciliations of the non-GAAP measures used in this presentation or release to the most comparable GAAP financial measure.
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
25
For the 12 Week
Period Ended
For the 12 Week
Period Ended
For the 52 Week
Period Ended
For the 52 Week
Period Ended
December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016
Net income per diluted common share 0.06$ 0.15$ 0.78$ 0.89$
Asset impairment and facility closure costs 0.07 0.01 0.07 0.01
Legal settlement 0.03 - 0.03 -
Pension settlement/debt extinguishment - - 0.02 -
Acquisition-related costs - - - 0.02
Adjusted net income per diluted common share 0.16$ 0.16$ 0.91$ 0.92$
Certain amounts may not compute due to rounding.
Reconciliation of Earnings per Share to Adjusted Earnings per Share
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
26
For the 12 Week
Period Ended
For the 12 Week
Period Ended
For the 52 Week
Period Ended
For the 52 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016
Net income 13,042$ 32,246$ 163,776$ 189,191$
Income tax expense 4,244 17,775 85,761 103,840
Interest expense, net 3,882 1,528 14,353 4,848
Depreciation and amortization 32,274 32,471 140,869 132,175
EBITDA 53,442 84,020 404,759 430,054
Asset impairment and facility closure costs 24,877 1,496 24,877 4,507
Pension plan settlement loss 173 - 6,646 -
Legal settlement 9,250 - 10,500 -
Acquisition-related costs - 1,196 - 6,187
Adjusted EBITDA 87,742$ 86,712$ 446,782$ 440,748$
Sales 868,717$ 858,363$ 3,926,885$ 3,778,505$
Adjusted EBITDA margin 10.1% 10.1% 11.4% 11.7%
Reconciliation of Net Income to Adjusted EBITDA
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
27
For the 12 Week
Period Ended
For the 12 Week
Period Ended
For the 52 Week
Period Ended
For the 52 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016
EBIT 22,080$ 51,293$ 260,495$ 302,361$
Asset impairment and facility closure costs 24,877 1,496 24,877 4,507
Legal settlement 9,250 - 10,500 -
Adjusted EBIT 56,207 52,789 295,872 306,868
Depreciation and amortization 27,103 27,698 120,009 115,801
Adjusted EBITDA 83,310$ 80,487$ 415,881$ 422,669$
Sales 730,487$ 714,949$ 3,284,177$ 3,179,348$
Adjusted EBITDA margin 11.4% 11.3% 12.7% 13.3%
Reconciliation of EBIT to Adjusted EBIT and Adjusted EBITDA - DSD
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
28
For the 12 Week
Period Ended
For the 12 Week
Period Ended
For the 52 Week
Period Ended
For the 52 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016
EBIT 11,703$ 13,599$ 58,465$ 55,266$
Depreciation and amortization 4,676 4,814 20,138 16,734
EBITDA 16,379$ 18,413$ 78,603$ 72,000$
Sales 138,230$ 143,414$ 642,708$ 599,157$
EBITDA margin 11.8% 12.8% 12.2% 12.0%
Reconciliation of EBIT to EBITDA - Warehouse Delivery
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
29
For the 12 Week
Period Ended
For the 12 Week
Period Ended
For the 52 Week
Period Ended
For the 52 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016
EBIT (12,615)$ (13,343)$ (55,070)$ (59,748)$
Pension plan settlement loss 173 - 6,646 -
Acquisition-related costs - 1,196 - 6,187
Adjusted EBIT (12,442)$ (12,147)$ (48,424)$ (53,561)$
Depreciation and amortization 495 (41) 722 (360)
Adjusted EBITDA (11,947)$ (12,188)$ (47,702)$ (53,921)$
Reconciliation of EBIT to Adjusted EBIT and Adjusted EBITDA - Corporate
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
30
(000's omitted) As of
December 31, 2016
Current maturities of long-term debt and capital lease obligations 11,490$
Long-term debt and capital lease obligations 946,667
Total debt and capital lease obligations 958,157
Less: Cash and cash equivalents 6,410
Net Debt 951,747$
Adjusted EBITDA for the Trailing Twelve Months Ended December 31, 2016 446,782$
Ratio of Net Debt to Trailing Twelve Month EBITDA 2.1
Reconciliation of Debt to Net Debt and Calculation of Net
Debt to Trailing Twelve Month Adjusted EBITDA Ratio
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
31
For the 12 Week
Period Ended
For the 12 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016
868,717$ 858,363$
450,462 455,939
Gross Margin excluding depreciation and amortization 418,255 402,424
Less depreciation and amortization for production activities 19,682 19,971
Gross Margin 398,573$ 382,453$
Depreciation and amortization for production activities 19,682$ 19,971$
12,592 12,500
Total depreciation and amortization 32,274$ 32,471$
Reconciliation of Gross Margin
SalesMaterials, supplies, labor and other production costs
(exclusive of depreciation and amortization)
Depreciation and amortization for selling, distribution and
administrative activities
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
32
For the 12 Week
Period Ended
For the 12 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016
339,763$ 316,908$
9,250 -
Less: Acquisition-related costs - 1,196
330,513$ 315,712$
Selling, distribution and administrative expenses
Less: Legal settlement
Adjusted selling, distribution and administrative expenses
Reconciliation of Selling, Distribution and Administrative Expenses to Adjusted SD&A
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
33
Net income per diluted common share 0.88$ to 0.93$
Pension settlement/debt extinguishment/legal settlement 0.02 0.02
Adjusted net income per diluted common share 0.90$ to 0.95$
Reconciliation of Earnings per Share -
Full Year Fiscal 2016 Guidance
Range Estimate
Net income per diluted common share 0.87$ to 0.96$
Costs associated with Project Centennial 0.07 0.09
Gain on sale of Specialty Blending (0.09) (0.10)
Adjusted net income per diluted common share 0.85$ to 0.95$
Reconciliation of Earnings per Share -
Full Year Fiscal 2017 Guidance
Range Estimate
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
34
For the 12 Week
Period Ended
For the 12 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016
4,244$ 17,775$
Asset impairment and facility closure costs 9,578 534
Pension plan settlement loss 67 -
Acquisition-related costs - 427
Legal settlement 3,561 -
17,450$ 18,736$
Tax impact of:
Adjusted income tax expense
Reconciliation of Income Tax Expense to Adjusted Income Tax Expense
Income tax expense
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
35
For the 12 Week
Period Ended
For the 12 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016
17,286$ 50,021$
24,877 1,496
Pension plan settlement loss 173 -
Legal settlement 9,250 -
Acquisition-related costs - 1,196
51,586$ 52,713$
Reconciliation of Income Before Income Taxes to Adjusted EBT
Income before income taxes
Asset impairment
Adjusted income before income taxes
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
36
For the 12 Week
Period Ended
For the 12 Week
Period Ended
For the 52 Week
Period Ended
For the 52 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016
Net income 13,042$ 32,246$ 163,776$ 189,191$
Asset impairment and facility closure costs 15,299 962 15,299 2,911
Pension plan settlement loss 106 - 4,087 -
Acquisition-related costs - 769 - 4,608
Legal settlement 5,689 - 6,458 -
Loss on extinguishment of debt - - 1,168 -
Adjusted net income 34,136$ 33,977$ 190,788$ 196,710$
Reconciliation of Net Income to Adjusted Net Income
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
37
For the 12 Week
Period Ended
For the 12 Week
Period Ended
For the 52 Week
Period Ended
For the 52 Week
Period Ended
(000's omitted) December 31, 2016 January 2, 2016 December 31, 2016 January 2, 2016
Adjusted EBITDA 87,742$ 86,712$ 446,782$ 440,748$
15,532 10,786 37,458 40,175
Pension contributions and changes in assets and liabilities 1,939 (34,634) 3,941 (43,240)
Income taxes (4,244) (17,775) (85,761) (103,840)
Interest expense, net (3,882) (1,528) (14,353) (4,848)
Asset impairment and facility closure costs (24,877) (1,496) (24,877) (4,507)
Pension plan settlement loss (173) - (6,646) -
Legal settlement (9,250) - (10,500) -
Acquisition-related costs - (1,196) - (6,187)
Cash Flow From Operations 62,787$ 40,869$ 346,044$ 318,301$
Adjustments to reconcile net income to net cash provided
by operating activities
Reconciliation of Adjusted EBITDA to Cash Flow from Operations