Income Statement
Lamb Weston Holdings, Inc.
Consolidated Statements of Earnings
(unaudited, in millions, except per share amounts)
Thirteen Weeks Ended Twenty-Six Weeks Ended
November 29, November 24, November 29, November 24,
2020 (1) 2019 2020 (1) 2019
Net sales $ 896.1 $ 1,019.2 $ 1,767.6 $ 2,008.2
Cost of sales 672.6 734.1 1,330.3 1,474.5
Gross profit 223.5 285.1 437.3 533.7
Selling, general and administrative expenses 83.9 91.6 162.0 170.2
Income from operations 139.6 193.5 275.3 363.5
Interest expense, net 30.0 25.4 60.3 53.6
Income before income taxes and equity method earnings 109.6 168.1 215.0 309.9
Income tax expense 31.9 42.7 59.9 79.4
Equity method investment earnings 19.2 15.0 31.1 25.6
Net income $ 96.9 $ 140.4 $ 186.2 $ 256.1
Earnings per share
Basic $ 0.66 $ 0.96 $ 1.27 $ 1.75
Diluted $ 0.66 $ 0.95 $ 1.27 $ 1.74
Dividends declared per common share $ 0.23 $ 0.20 $ 0.46 $ 0.40
Computation of diluted earnings per share:
Net income $ 96.9 $ 140.4 $ 186.2 $ 256.1
Diluted weighted average common shares outstanding 147.1 147.1 147.1 147.1
Diluted earnings per share $ 0.66 $ 0.95 $ 1.27 $ 1.74
(1) The thirteen and twenty-six weeks ended November 29, 2020, include incremental costs resulting from the pandemic's effect on the Company's manufacturing and supply chain operations, costs related to processing raw potatoes out of storage longer than prior years, as well as incremental warehousing and transportation costs, and costs to enhance employee safety measures, including purchases of safety and health screening equipment, and retaining sales employees.
Balance Sheet
Lamb Weston Holdings, Inc.
Consolidated Balance Sheets
(unaudited, dollars in millions, except share data)
November 29, May 31,
2020 2020
ASSETS
Current assets:
Cash and cash equivalents $ 763.9 $ 1,364.0
Receivables, less allowance for doubtful accounts of $1.0 and $1.3 353.2 342.1
Inventories 630.5 486.7
Prepaid expenses and other current assets 38.2 109.8
Total current assets 1,785.8 2,302.6
Property, plant and equipment, net 1,485.2 1,535.0
Operating lease assets 155.1 167.0
Equity method investments 291.4 250.2
Goodwill 325.1 303.8
Intangible assets, net 37.9 38.3
Other assets 78.6 65.4
Total assets $ 4,159.1 $ 4,662.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ - $ 498.7
Current portion of long-term debt and financing obligations 31.8 48.8
Accounts payable 377.4 244.4
Accrued liabilities 205.1 233.0
Total current liabilities 614.3 1,024.9
Long-term liabilities:
Long-term debt and financing obligations, excluding current portion 2,719.4 2,992.6
Deferred income taxes 158.0 152.5
Other noncurrent liabilities 258.5 252.3
Total long-term liabilities 3,135.9 3,397.4
Commitments and contingencies
Stockholders' equity:
Common stock of $1.00 par value, 600,000,000 shares authorized; 147,466,446 and 146,993,751 shares issued 147.5 147.0
Additional distributed capital (850.4) (862.9)
Retained earnings 1,182.8 1,064.6
Accumulated other comprehensive income (loss) 7.0 (40.5)
Treasury stock, at cost, 1,111,364 and 954,858 common shares (78.0) (68.2)
Total stockholders' equity 408.9 240.0
Total liabilities and stockholders' equity $ 4,159.1 $ 4,662.3
Cash Flows
Lamb Weston Holdings, Inc.
Consolidated Statements of Cash Flows
(unaudited, dollars in millions)
Twenty-Six Weeks Ended
November 29, November 24,
2020 2019
Cash flows from operating activities
Net income $ 186.2 $ 256.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles and debt issuance costs 95.7 91.7
Stock-settled, stock-based compensation expense 11.3 12.6
Earnings of joint ventures in excess of distributions (24.4) (7.6)
Deferred income taxes 2.5 17.2
Other 15.5 2.0
Changes in operating assets and liabilities, net of acquisition:
Receivables (8.5) (55.2)
Inventories (140.3) (133.4)
Income taxes payable/receivable, net 33.0 17.5
Prepaid expenses and other current assets 51.8 46.3
Accounts payable 138.5 126.4
Accrued liabilities (42.5) (28.3)
Net cash provided by operating activities $ 318.8 $ 345.3
Cash flows from investing activities
Additions to property, plant and equipment (42.3) (88.1)
Additions to other long-term assets (11.4) (19.3)
Acquisition of business, net of cash acquired - (116.7)
Investment in equity method joint venture - (17.1)
Other 0.4 1.0
Net cash used for investing activities $ (53.3) $ (240.2)
Cash flows from financing activities
Proceeds (payments) of short-term borrowings, net (498.8) 1.4
Repayments of debt and financing obligations (289.6) (318.1)
Dividends paid (67.2) (58.5)
Repurchase of common stock and common stock withheld to cover taxes (9.8) (17.8)
Payments of debt issuance costs (2.8) -
Proceeds from issuance of debt - 299.3
Other 1.0 0.1
Net cash used for financing activities $ (867.2) $ (93.6)
Effect of exchange rate changes on cash and cash equivalents 1.6 0.1
Net increase (decrease) in cash and cash equivalents (600.1) 11.6
Cash and cash equivalents, beginning of the period 1,364.0 12.2
Cash and cash equivalents, end of period $ 763.9 $ 23.8
Segments
Lamb Weston Holdings, Inc.
Segment Information
(unaudited, dollars in millions)
Thirteen Weeks Ended
Year-Over-
November 29, November 24, Year Growth
2020 2019 Rates Price/Mix Volume
Segment sales
Global $ 475.9 $ 539.6 (12%) (1%) (11%)
Foodservice 241.1 304.9 (21%) 4% (25%)
Retail 140.7 132.1 7% 7% 0%
Other 38.4 42.6 (10%) 5% (15%)
$ 896.1 $ 1,019.2 (12%) 2% (14%)
Segment product contribution margin (1) (2)
Global $ 92.7 $ 128.9 (28%)
Foodservice 87.7 111.3 (21%)
Retail 30.1 28.5 6%
Other 10.5 10.4 1%
221.0 279.1 (21%)
Advertising and promotion expenses 2.5 6.0 (58%)
Gross profit $ 223.5 $ 285.1 (22%)
Twenty-Six Weeks Ended
Year-Over-
November 29, November 24, Year Growth
2020 2019 Rates Price/Mix Volume
Segment sales
Global $ 923.4 $ 1,057.2 (13%) (1%) (12%)
Foodservice 477.8 610.3 (22%) 5% (27%)
Retail 294.6 261.4 13% 7% 6%
Other 71.8 79.3 (9%) 2% (11%)
$ 1,767.6 $ 2,008.2 (12%) 2% (14%)
Segment product contribution margin (1) (2)
Global $ 170.5 $ 231.6 (26%)
Foodservice 173.5 213.8 (19%)
Retail 65.9 57.4 15%
Other 23.7 20.1 18%
433.6 522.9 (17%)
Advertising and promotion expenses 3.7 10.8 (66%)
Gross profit $ 437.3 $ 533.7 (18%)
(1) Product contribution margin represents net sales less cost of sales and advertising and promotion expenses. Product contribution margin includes advertising and promotion expenses because the amounts are directly associated with segment performance; it excludes general corporate expenses and interest expense because management believes these amounts are not directly associated with segment performance.
(2) See footnote (1) to the Consolidated Statements of Earnings above for a discussion of the incremental costs resulting from the pandemic's effect on the Company's financial results for the thirteen and twenty-six weeks ended November 29, 2020.
Recon of Non GAAP
Lamb Weston Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures
(unaudited, dollars in millions)
To supplement the financial information included in this press release, the Company has presented EBITDA including unconsolidated joint ventures, which is a non-GAAP financial measure. The following table reconciles net income to EBITDA including unconsolidated joint ventures.
Thirteen Weeks Ended Twenty-Six Weeks Ended
November 29, November 24, November 29, November 24,
2020 2019 2020 2019
Net income $ 96.9 $ 140.4 $ 186.2 $ 256.1
Equity method investment earnings (19.2) (15.0) (31.1) (25.6)
Interest expense, net 30.0 25.4 60.3 53.6
Income tax expense 31.9 42.7 59.9 79.4
Income from operations 139.6 193.5 275.3 363.5
Depreciation and amortization 46.6 44.7 92.2 87.8
EBITDA (1) 186.2 238.2 367.5 451.3
Unconsolidated Joint Ventures (2)
Equity method investment earnings 19.2 15.0 31.1 25.6
Interest expense, income tax expense, and depreciation and
amortization included in equity method investment earnings 7.8 7.7 16.4 16.9
Add: EBITDA from unconsolidated joint ventures 27.0 22.7 47.5 42.5
EBITDA including unconsolidated joint ventures (1) $ 213.2 $ 260.9 $ 415.0 $ 493.8
(1) EBITDA including unconsolidated joint ventures is a non-GAAP financial measure. Lamb Weston presents this measure because the Company believes it provides a means to evaluate the performance of the Company on an ongoing basis using the same measure frequently used by the Company's management and assists in providing a meaningful comparison between periods. Any analysis of non-GAAP financial measures should be done only in conjunction with results presented in accordance with GAAP. This non-GAAP measure is not intended to be a substitute for GAAP financial measures and should not be used as such. See also "Non-GAAP Financial Measures" in this press release.
(2) Lamb Weston holds equity interests in three potato processing joint ventures, including 50% of Lamb-Weston/Meijer v.o.f., Lamb-Weston/RDO Frozen, and Lamb Weston Alimentos Modernos S.A., which it accounts for its ownership under the equity method of accounting. See Note 6, Investments in Joint Ventures, of the Notes to Consolidated Financial Statements in "Part II, Item 8. Financial Statements and Supplementary Data" in the Company's fiscal 2020 Form 10-K, for more information.

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Lamb Weston Holdings Inc. published this content on 07 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 January 2021 14:27:00 UTC