Hostess Brands: Announces Strong Q4-2021 Financial Results

Lenexa / KS. (twnk) Hostess Brands Inc., one of the largest manufacturers and marketers of sweet baked goods in the United States including «Twinkies», «Ding Dongs», «Ho Hos», «Donettes» and a variety of new and classic treats, reported its financial results for the fourth quarter and year ended December 31, 2021.

«The Hostess team once again showcased its resilience and tenacity by delivering record high quarterly sales and adjusted Ebitda, well-ahead of expectations. Our double-digit top-line growth and stable margins in the fourth quarter, and for the full year, reflect higher volumes, multiple pricing actions, increasingly impactful innovation, omni-channel presence and outstanding execution. We continue to perform at best-in-class levels while navigating inflation and supply chain challenges,» commented Andy Callahan, the Company’s President and Chief Executive Officer.

He continued, «Our strong 2022 financial guidance reflects our confidence in maintaining our ongoing profitable growth momentum. We are even more excited to share our long-term strategic vision and planned investments to continue to deliver top-tier shareholder returns at our Investor Day presentation, beginning at noon ET today.»

Fourth Quarter 2021 Financial Highlights versus Q4-2020

• Net revenue of USD 297.2 million increased 16.1 percent from the same period last year, reflecting strong Hostess® and Voortman® branded growth across all channels.
• Gross profit increased 15.2 percent from the year-ago period to USD 110.4 million, or 37.1 percent of net revenue. On an adjusted basis, gross profit increased 15.4 percent and gross margin was relatively flat at 37.2 percent as higher price, volume leverage, and productivity initiatives offset double-digit inflation.
• Net income of USD 36.5 million, or USD 0.25 per diluted share compared to a net loss of USD 1.4 million, or USD 0.01 per diluted share in the same period last year. Adjusted net income increased USD 5.3 million, or 18.5 percent, to USD 34.0 million, resulting in USD 0.25 adjusted EPS compared to USD 0.21 in the year-ago period.
• Adjusted Ebitda increased 14.9 percent to USD 73.2 million, or 24.6 percent of net revenue. The increase was driven by higher gross profit, partially offset by investments in its workforce and selling expenses to support double-digit net revenue growth.
• Cash and cash equivalents were USD 249.2 million as of December 31, 2021. Net leverage ratio improved from 3.9x to 3.1x driven by improved operating cash flow.

Other Highlights

• Hostess manufacturer point-of-sale («POS») increased 24.1 percent for the quarter and its share of the Sweet Baked Goods category increased by 218 basis points to 21.5 percent. The ongoing Hostess® momentum is driven by the strength of its core portfolio and greater contributions from new innovation including Baby Bundts, Muff’n Stix and Strawberry Cheesecake Donettes®.
• Voortman® branded POS grew 19.7 percent for the quarter, more than 2x faster than the overall Cookie category, reflecting ongoing distribution gains and strong consumer demand.
• Successfully implemented additional pricing actions as the Company continues to execute its revenue management initiatives to maintain its industry-leading margin structure.
• Installed a new cake production line in 2021 and purchased a facility in the first quarter of 2022 for the Company’s planned bakery in Arkansas to support growing consumer demand.
• Executed USD 61.1 million of total repurchases under the previously announced USD 100 million securities repurchase authorization, including USD 53.2 million during 2021.

For additional information please read the company’s PDF file below (87 KB).

20220302-HOSTESS-Q4-2021.