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 and the anticipated impact of COVID-19 on our business, profitability or results of operations 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) the completion of our quarter-end closing process, which requires the exercise of judgment by management, including procedures necessary to finalize our financial statements for the quarter; (b) the effects of global, political, market, health and other conditions, including the impact of COVID-19 and measures or voluntary actions, including social distancing, shelter-in-place, shutdowns of nonessential or other businesses, such as any of our production or warehouse facilities, and similar measures imposed by governmental or regulatory authorities or undertaken by us in an effort to combat the spread of COVID-19; (c) general economic and business conditions and the competitive conditions in the baked foods industry, including promotional and price competition, (d) 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, (e) the success of productivity improvements and new product introductions, (f) a significant reduction in business with any of our major customers including a reduction from adverse developments in any of our customer’s business, (g) fluctuations in commodity pricing, (h) energy and raw material costs and availability and hedging and counterparty risk, (i) our ability to fully integrate recent acquisitions into our business, (j) our ability to achieve cash flow from capital expenditures and acquisitions and the availability of new acquisitions that build shareholder value, (k) our ability to successfully implement our business strategies, including those strategies the company has initiated under Project Centennial, which may involve, among other things, the integration of recent acquisitions or the acquisition or disposition of assets at presently targeted values, the deployment of new systems and technology and an enhanced organizational structure, (l) 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, (m) increasing legal complexity and legal proceedings that we are or may become subject to, (o) product recalls or safety concerns related to our products, and (p) 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 public 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.
Information 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, the company may present in its public statements, press releases and SEC filings, non-GAAP financial measures such as adjusted net income per diluted share. The company defines adjusted net income per diluted share as net income per diluted share excluding the impact of asset impairment charges, Project Centennial consulting costs, lease terminations and legal settlements, acquisition-related costs, and pension plan settlements. The company believes that this measure, when considered together with its GAAP financial results, provides management and investors with a more complete understanding of its business operating results, including underlying trends, by excluding the effects of certain charges. The company’s definition of this non-GAAP measure may differ from similarly titled measures used by others. This non-GAAP measure should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.
The table below provides a reconciliation of preliminary net income per diluted share to preliminary adjusted net income per diluted share, which is the most comparable GAAP financial measure, for the second quarter.
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Flowers Foods, Inc. Reconciliation of GAAP to non-GAAP Measures | |
| | | Reconciliation of Preliminary Earnings per Share | |
| | | For the 12 Weeks Ended July 11, 2020 | |
| | | Range Estimate | |
Net income per diluted common share | | $ | 0.25 | | | | to | | | $ | 0.28 | |
Project Centennial consulting costs | | | 0.02 | | | | | | | | 0.02 | |
Restructuring and related impairment charges* | | | 0.04 | | | | | | | | 0.04 | |
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Adjusted net income per diluted common share | | $ | 0.30 | | | | to | | | $ | 0.33 | |
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Certain amounts may not add due to rounding.
| * | Charges primarily consist of a trademark impairment and impairment of certain assets held for sale. Does not include charges related to the above-referenced reduction-in-force, which are expected to be recorded in the company’s fiscal third quarter. |
