Hostess Brands, Inc. (NASDAQ:TWNK) Q1 2019 Earnings Conference Call Transcript

May 08, 2019 • 04:30 pm ET

Previous

Hostess Brands, Inc. (NASDAQ:TWNK) Q1 2019 Earnings Conference Call Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Operator
Operator

Greetings, and welcome to the Hostess Brands, Inc. First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Katie Turner. Thank you, Ms. Turner, you may begin.

Executive
Katie Turner

Good afternoon, and welcome to the Hostess Brands first quarter fiscal 2019 earnings conference call. By now everyone should have access to the earnings release for the period ended March 31, 2019 that went out this afternoon at approximately 4:05 p.m. Eastern time. The press release and an updated investor presentation are available on Hostess' website at www.hostessbrands.com. This call is being webcast and a replay will be available on the Company's website.

Hostess would like to remind you that today's discussion will include a number of forward-looking statements. If you refer to Hostess' earnings release as well as the Company's most recent filing, you'll see a discussion of the factors that could cause actual results to differ materially from these forward-looking statements. Please remember, the Company undertakes no obligation to update or revise these forward-looking statements.

The Company will make a number of references to non-GAAP financial measures. The Company believes these measures will provide investors with useful information on the underlying growth trends of the business and has included in its earnings release a full reconciliation of non-GAAP financial measures to the most comparable GAAP measures. And now I'd like to turn the call over to Hostess Brands' President and CEO, Andy Callahan.

Executive
Andrew P. Callahan

Thank you, Katie. Good afternoon, and thank you for joining us today. I'll begin our discussion with a brief overview of our first quarter business highlights and provide an update on our 2019 colors for growth. Then Tom Peterson, our CFO, will provide greater detail on our financial results and 2019 outlook. Finally, we'll be happy to take your questions.

We are encouraged by our strong start to 2019. Our financial results for the first quarter were fueled by the depth and breadth of our Sweet Baked Goods product offerings. Our team executed diligently on our 2019 pillars for growth with an increase in consolidated net revenue and adjusted EBITDA. In addition, our disciplined operational and integration efforts resulted in a positive contribution from the Cloverhill business. We continue to expect Cloverhill profitability to improve as the year progresses.

Here are a few first quarter highlights. Net revenue increased 6.7% to almost $223 million. These results were driven by additional sales volume in multiple channels, led by strong growth in the club channel, including expansion of our value brands, leveraging the Cloverhill business. We also benefited from the multifaceted price increases that were executed at the end of 2018. Point of sale increased 1.6% and market share of 18.2% was consistent with the prior-year period. As you may notice, for the quarter, our net revenue growth of 6.7% outpaced our Nielsen track point of sale increase