THS Investor Day. November 14, 2016

Transcription

1 THS Investor Day November 14, TreeHouse Foods, Inc

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3 THS Investor Day Internet Access Network: HYATT-MEETING Password: TREEHOUSE1414 November 14, TreeHouse Foods, Inc

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5 THS Investor Day Internet Access Network: HYATT-MEETING Password: TREEHOUSE1414 November 14, TreeHouse Foods, Inc

6 Forward-looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as guidance, may, should, could, expects, seeks to, anticipates, plans, believes, estimates, approximately, nearly, intends, predicts, projects, potential, promises or continue or the negative of such terms and other comparable terminology. These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and unknown risks, uncertainties and other factors that may cause the Company or its industry s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievement expressed or implied by these forward looking statements. TreeHouse s Form 10-K for the period ending December 31, 2015 and other filings with the SEC, discuss some of the risk factors that could contribute to these differences. You are cautioned not to unduly rely on such forward-looking statements, which speak only as of the date made, when evaluating the information presented during this conference call. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in expectations with regard thereto, or any other change in events, conditions or circumstances on which any statement is based. For the purpose of our discussion today, statements such as Private Brands or the Private Brands business refer to the ConAgra Private Brands business. Private label, on the other hand, refers to the customer and corporate brand industry. 6

7 Other Information Preliminary Financial Information The preliminary financial information with respect to the Company on a standalone basis after giving effect to the Acquisition and the carve-out transactions included in the Evaluation Materials does not represent a comprehensive statement of the financial results for the Company or of the seller. Such preliminary financial information has been derived from the seller s internal books and records, and the seller s independent auditors have not completed their audit of such preliminary financial information and, as a result, such information is preliminary and subject to change (and such changes could be material). The carveout financial information varies from, and is not directly comparable to, the historical financial information of seller on a consolidated basis and any such differences may be material. No representations or warranties are made with respect to the accuracy or completeness of the preliminary financial information. Accordingly, you should not place undue reliance on such financial information. Statement Regarding Non-GAAP Measures This presentation contains non-gaap financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. For purposes of Regulation G, a non-gaap financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. Adjusted EBITDA, Adjusted EBITDAS and Pro Forma Adjusted EBITDAS and any ratios derived therefrom, are non-gaap financial measures that exclude certain items such as stock-based compensation and other items as more fully disclosed herein. These measures should be considered in addition to results prepared in accordance with GAAP, but are not a substitute for GAAP results. A historical reconciliation of Non-GAAP measures presented to the comparable GAAP information can be found herein. This non-gaap financial information is provided as additional information for the Recipients and is not in accordance with or an alternative to GAAP. Given the inherent uncertainty regarding adjusted items in any future period, a reconciliation of forward-looking financial measures to the most directly comparable GAAP measure is not feasible. 7

8 Today s Agenda Topic Delivering Our Transformation Strategy & Integration Go-To-Market Condiments Division Snacks Division Meals Division Baked Goods Division Beverages Division Supply Chain Financial Overview Presenter Sam K. Reed Rachel R. Bishop Dennis F. Riordan Michael C. Axelrod Keiran M. Kelly Triona C. Schmelter Chris C. Wilkins Craig J. Lemieux C. Shay Braun William J. Kelley Jr. 8

9 Delivering Our Transformation Sam K. Reed Chairman and Chief Executive Officer 2016 TreeHouse Foods, Inc

10 A Private Label Pilgrim s Progress 1994 Ralcorp Spinoff 2005 Dream of a World to Come 2013 Evolution of Private Label 2014 Branding of Private Label 2015 Transformation of TreeHouse 2016 Delivering Our Transformation 10

11 Two Decades of Growing Strong, Standing Tall Pastries Plus 11

12 Our Investment Premise Customer Brands Unparalleled Opportunity TreeHouse Scale & Skill Integration & Synergy Consumer & Customer Category & Capability Competitive Advantage United TreeHousehold Innovative Growth Accretive Simplification Transformative Progress Shareholder Value 12

13 Delivering The Promise of Our Transformation Strategic Industry Leadership Private Brands Revival The 4 C s Customer & Consumer Engagement Organizational Alignment TreeHouse Brand of Private Label Top & Bottom Line Progression 13

14 Our Private Label Pilgrimage Vision - Stand Straight & True - Prosper In All Seasons - Endure Test of Time Mission - Deliver Our Transformation, if with tactical difficulty, then with strategic certainty and undaunted courage. Values - Long Term Shareholder Return 14

15 Growing Strong, Standing Tall 15

16 Strategy & Integration Rachel R. Bishop Chief Strategy Officer 2016 TreeHouse Foods, Inc

17 Our Organizational Compass Categories: Profitability & Growth Customers: Value-Add & Collaboration Consumers: Occasion & Need State Capabilities: Collaborative Teams & Functional Excellence 17

18 Decade of Change Pickles Non Dairy Creamer Aseptic Baked Goods Beverages Condiments Meals Snacks 18

19 Change Is Our Only Constant Channel Retailer Consumer Regulatory Technology

20 Intersection of Food & Technology Meals Kits Retail Foodservice Online Grocery Restaurant Delivery

21 Day 1 Integration 21

22 Continuation of Transformational Strategy Initial organization designs Fully integrated Condiments leadership and system Sales force organization communication April 2016 July 2016 November 2016 September 2016 January 2017 Network optimization Division structure design Full implementation First Quarter

23 Key Integration Accomplishments Employees / Organization Network Optimization Technology Omaha Real Estate

24 Synergy Plan % of Overall Synergies Organizational Effectiveness ~25% Supply Chain ~50% Plant & Distribution Network ~25% 0% 20% 40% 60% 80% 100%

25 Integration PMO Transition 2016: Dedicated integration activities across functions Division Strategy & Planning 2017: Activities occur within day-to-day roles Sales & Go To Market Human Resources Customer Service Revenue & Quality Improvement IT / TSA Operations & Supply Chain Procurement Business Reporting Corporate Finance Culture & Communications

26 Capabilities and Infrastructure

27 Go-To-Market Dennis F. Riordan President, TreeHouse Foods 2016 TreeHouse Foods, Inc

28 The TreeHouse Brand Is a Promise to Customers Broad Portfolio of products efficiently distributed Consumer insights and category management. New product development Our brand is our promise to our customers that we will meet their needs and levels of service. Cost Cost Service. levels Quality Customer responsiveness

29 Historical Structure Customer focused organization Customer teams responsible for selling all 26 product categories Specialization for Food Away from Home and Industrial segments

30 New Alignment Strategy Focus Customer Knowledge Strategic Imperatives Corporate Strategies Consumer Dynamics Customer Centric Product Dynamics Category Captains Competitive State Category Dynamics Product Focus

31 Division Selling Go-To-Market Strategy Strategic Selling Mass Merchants Grocery & Specialty Limited Assort & Wholesale Food Away From Home Business Development Baked Goods 200+ Sales Executives Beverages Condiments Meals ~30 Sales Executives Snacks

32 Our Strategic Imperatives TreeHouse Foods Grow Our current business Optimize Our current production Expand Our current channels and offerings

33 5 Divisions with 16 Business Units Baked Goods Beverages Condiments Meals Snacks Cookies & Crackers In-store Bakery Refrigerated / Frozen Sweet & Salty Beverage Enhancers Coffee & Tea Non Dairy Creamer Refrigerated Beverages Dressings Pickles & Salsa Sauces & Toppings Pasta / Dry Dinners RTE Cereal / Hot Cereal Soup / Broth Snack Nuts Trail Mix & Bars

34 TreeHouse 2017 Reporting Overview THS Total Core Categories Net Sales Snacks 21.0% 22.0% Baked Goods Meals 21.0% 15.0% Beverages 21.0% *Broth current sits in Meals, but for THS will reside in Beverages Condiments

35 Go-To- Market Cross Functional Division Enabling Growth Division Teams Dedicated To Merchandising, Assortment, Pricing, & Shelving Performance Execution Focus On Division Initiatives Insight & Analytic Driven Solutions Yielding Category Growth Broad Portfolio & Customer Knowledge Delivering Win-Win Supply Chain Programs Deep Customer Understanding Guiding Common Goal Achievement Divisional Cross Functional Teams Committed To Specific Customer Growth Initiatives Simplified, Enterprise Processes Designed For Efficiency & Speed Center-Based Functional Expert Resources Driving Strategic Projects

36 Condiments Division Michael C. Axelrod Division President, Condiments 2016 TreeHouse Foods, Inc

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38 Condiments Overview Condiments Category Information Operational Footprint Pickles Mexican Sauces Preserves, Jams Pasta Sauce Single Serve Dressing Refrigerated Dressing Mayo Syrups Green Bay, WI Chicago, IL Dixon, IL Plymouth, IN San Antonio, TX Winona, ON North East, PA Buckner, KY Faison, NC Atlanta, GA

39 Expand Optimize Grow Condiments Priorities Grow portfolio in existing customers Improve our operating platform Innovate portfolio selectively Expand into emerging channels

40 Snacks Division Keiran M. Kelly Division President, Snacks 2016 TreeHouse Foods, Inc

41 Snacks Overview Snacks Category Information Operational Footprint Nuts & Seeds Dried Fruit Trail Mix Minneapolis, MN Lakeville, MN Snack Bars Better-for-You Bars El Paso, TX Dothan, AL Robersonville, NC

42 Expand Optimize Grow Snacks Priorities Leverage value-added innovation Manage network costs Solidify procurement relationships Augment distribution opportunities

43 Meals Division Triona C. Schmelter Division President, Meals 2016 TreeHouse Foods, Inc

44 Meals Overview Meals Category Information Operational Footprint Pasta Dry Dinners Hot Cereal RTE Cereal Canned Soup Baby Food Brooklyn Park, MN Cedar Rapids, IA Sparks, NV Excelsior Springs, MO Tolleson, AZ Medina, NY Kenosha, WI Battle Creek, MI Pittsburgh, PA Lancaster, OH Columbia, SC Verolanuova, IT Fara, IT

45 Expand Optimize Grow Meals Priorities Maximize in store potential Optimize cost structure and cash flow Lead with Consumer Relevant Innovation

46 Baked Goods Division Chris C. Wilkins Division President, Baked Goods 2016 TreeHouse Foods, Inc

47 Baked Goods Overview Baked Goods Category Information Operational Footprint Crackers Cookies Pretzels Pita Refrigerated Dough Frozen Griddle In-store Bakery Lodi, CA Ogden, UT Visalia, CA Fridley, MN Milwaukee, WI South Beloit, IL Carrolton, TX Kitchener, ON Georgetown, ON Princeton, KY Tonawanda, NY Brantford, ON Womelsdorf, PA Hanover, PA Lancaster, PA Forrest Park, GA

48 Expand Optimize Grow Baked Goods Priorities Leverage value-added innovation Minimize network complexity Drive customer penetration and channel expansion

49 Beverages Division Craig J. Lemieux Division President, Beverages 2016 TreeHouse Foods, Inc

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51 Beverages Overview Beverages Category Information Powdered Beverages Single Cup Coffee Powdered Creamer Bagged Tea Operational Footprint Vancouver, BC Manawa, WI New Hampton, IA Richmond Hill, ON Wayland, MI Pecatonica, IL Cambridge, MD Broth / Stock Cold Brew Coffee

52 Expand Optimize Grow Beverages Priorities Expand leadership in Single Serve Beverages Grow Cold Brew Coffee and premium Ready-To-Drink beverages Optimize operations through continuous improvement Diversify offerings by channel beyond traditional grocery

53 Supply Chain C. Shay Braun Chief Supply Chain Officer 2016 TreeHouse Foods, Inc

54 Our Challenges Are Magnified Through the Lens of Complexity Network Optimization Key Process Standardization Key Network Regulatory Process Optimization Standardization Compliance Regulatory Compliance

55 Current Network Manufacturing Facility Distribution Facility Customer Ship-to Points Note: does not include inbound freight. 55

56 Complexity Must Be Managed Differently Comparison of Three Important Customers Total Business Size (lbs) 6x 6x 10x 10x A B C Avg. Business Size/Ship-To (lbs) 6x 6x 10x 3x A B C B has as many ship-to locations as A; however, much smaller in business sizes per ship-to

57 Network Optimization by Customer Customer B Customer C Customer A 3 rd Party Rochelle 3 RD Party Plant Direct Mixing Centers Outsource

58 Complexity Reduction Is Underway Network Optimization Resource Prioritization Process Standardization Reduced SKU Count Complexity Reduction Reduced Compliance 58

59 Financial Overview William J. Kelley Jr. Vice President and Corporate Controller 2016 TreeHouse Foods, Inc

60 September YTD 2016 Highlights Positives Negatives YTD volume/mix growth of 2.8% in NARG segment with two consecutive quarters growth of +4% or more Solid margin improvement continues in legacy BVF business Most input costs trended favorably, helping margins Continued unfavorable pricing in NARG reaching 0.7% YTD due to lower commodity costs Snack nuts continue to face headwinds from competitive pricing pressures and commodity price inflation Continued sales pressure in the cookies, bars and snack nuts negatively impacted overall profitability 60

61 Sales Growth by Value Channel Consistent with industry trends, TreeHouse is experiencing strong sales growth in the Natural/Organic/Better-For-You and premium channels as consumer sentiment continues to shift to healthier products with cleaner ingredient labels. This trend is expected to continue and TreeHouse has dedicated the appropriate resources in order to meet consumer demand. 61

62 TreeHouse YTD 2016 Financial Performance ($ in millions) 1 Adj. EBITDA YTD 2016 Earnings YTD 2015 YTD 2016 $ Change % Change Net Sales $ 2,341.0 $ 4,398.4 $ 2, % Gross Profit $ $ $ % % Margin 19.8% 17.6% Net Income $ 77.7 $ 49.5 $ (28.2) -36.3% % Margin 3.3% 1.1% $ $ $ % % Margin 11.7% 10.2% Source: TreeHouse public filings. 1) Adjusted EBITDA is a non-gaap measure commonly used by management to assess operating performance. For a reconciliation of Adjusted EBITDA to the most comparable GAAP measure, see Appendix. Net sales increased from prior year driven by the inclusion of sales from the 2016 acquisition of the Private Brands Business and favorable volume/mix in the North American Retail Grocery segment, partially offset by lower pricing and unfavorable foreign exchange. Gross margins as a percent of net sales decreased from prior year primarily due to lower margin products from the Private Brands acquisition (170 bps of the decline), unfavorable foreign exchange, increased operating costs, and approximately $5.5 million of costs related to the product recall. Also, included in gross margins was the impact of approximately $8.4 million of acquisition and integration costs and $3.9 million of restructuring costs in the first nine months of 2016 compared to only a combined $0.7 million in the prior year. These unfavorable impacts to gross margin as a percent of net sales year-over-year were partially offset by lower input costs. Net income decreased as additional income from the Private Brands business and favorable input costs was more than offset by unfavorable foreign exchange, higher operating expenses (including acquisition and integration costs) and higher interest expense as a result of the Private Brands acquisition. Adjusted EBITDA increased due to the inclusion of operating income from the Private Brands acquisition and favorable commodity costs, partially offset by higher costs due to the growth of the Company and variable compensation. 62

63 Operating Segments Results ($ in 000 s) North American Retail Grocery Food Away From Home Industrial & Export Inc/(Dec) Inc/(Dec) Inc/(Dec) YTD 2016 Net Sales $ 1,768,938 $ 3,599, % $ 280,726 $ 394, % $ 291,327 $ 414, % DOI $ 242,220 $ 442, % $ 39,454 $ 51, % $ 51,727 $ 50, % DOI % 13.7% 12.3% 14.1% 13.0% 17.8% 12.2% Net sales increased for the nine months ended September 30, 2016 due to acquisitions and favorable volume/mix in the North American Retail Grocery segment, partially offset by lower pricing. Margin declined in the North American Retail Grocery segment primarily due to lower margin Private Brands business and unfavorable foreign exchange (YTD), partially offset by lower commodity costs, improved sales mix, and lower freight rates. 63

64 Sales Roll-Forward ($ in 000 s) North American Food Away Industrial Retail Grocery From Home & Export YTD 2015 Net Sales $ 1,768, % $ 280, % $ 291, % Volume / Mix 50, % (10,501) -3.7% (20,666) -7.1% Pricing (13,077) -0.7% (249) -0.1% (2,230) -0.8% Acquisitions 1,805, % 125, % 146, % Foreign Currency (11,797) -0.6% (1,115) -0.4% (1,020) -0.3% YTD 2016 Net Sales $ 3,599, % $ 394, % $ 414, % 64

65 TreeHouse Debt Capacity Outstanding as of 9/30/2016 Availability Interest Rate Expiration Revolving Credit $279 mm $571 mm (2) 2.47% (3) February 2021 Term Loan A $290 mm 2.47% (3) February 2021 Term Loan A-1 $183 mm 2.47% (3) February 2021 Term Loan A-2 $1,012 mm 2.47% (3) February High Yield Notes $400 mm 4.875% March High Yield Notes $775 mm 6.00% February 2024 Total Debt $2,943 mm (1) Proforma leverage was 3.8 times at 9/30/2016 Notes: (1) Includes $4 million of tax increment financing and other debt. (2) Letters of credit issued but undrawn totaling $50 million have been included as a reduction to the calculation of available credit. (3) Average interest rate on debt outstanding under the Credit Facility for the three months ended September 30,

66 2017 Working Assumptions Our focus is starting 2017 with momentum as we execute our Executive Management changes in Q The back office integration of TreeHouse Private Brands continues to go well and we are on track as we execute our detailed work plans. In 2016, we had favorable input costs through nine months as cost decreases in soybean oil, dairy, cucumbers, coffee, plastics and diesel were partially offset by increases in corn sweeteners and glass. We expect agricultural commodities to increase next year from 2016 s very favorable costs. Through nine months of 2016, unfavorable foreign exchange negatively impacted our results compared to We are currently expecting foreign exchange to be flat to slightly favorable in 2017 when compared to

67 2017 Working Assumptions With a shift in our annual equity compensation grant from Q2, historically, to Q1 in 2017 and beyond, weighted average shares outstanding will also show a more pronounced increase between the first and second quarters. Tax rates are expected to be in the 34% - 35% range. Interest expense could potentially increase as rates are anticipated to rise slightly in 2017, offset by continuing debt pay down. 67

68 Key Investment Highlights We Are North America s Largest Private Label Food and Beverage Manufacturer We Have an Experienced Operating Team Led by Industry Veterans We Have Significant Opportunities for Margin Enhancement We Generate Substantial Free Cash Flow for Debt Repayment and Growth Growth Through Acquisitions Remains a Significant Opportunity 68 68

69 Growing Strong, Standing Tall 69

70 Q&A Craig Lemieux Division President Beverages Bill Kelley Vice President Corporate Controller Shay Braun Chief Supply Chain Officer Mike Axelrod Division President Condiments Triona Schmelter Division President Meals Chris Wilkins Division President Baked Goods Keiran Kelly Division President Snacks 70

71 Appendix 2016 TreeHouse Foods, Inc

72 TreeHouse Third Quarter 2016 Financial Performance ($ in millions) Q3'15 Q3'16 $ Change % Change Net Sales $ $ 1,586.9 $ % Gross Profit $ $ $ % % Margin 19.9% 18.0% Net Income $ 28.4 $ 37.2 $ % % Margin 3.6% 2.3% 1 Q Earnings Adj. EBITDA $ 99.8 $ $ % Net sales increased from prior year driven by the inclusion of business from the acquisition of the private brands operations of ConAgra Foods, Inc. ( Private Brands ) and favorable volume/mix in the North American Retail Grocery segment, partially offset by lower pricing. Gross margins as a percent of net sales decreased from prior year primarily due to lower margin products from the Private Brands acquisition (200 bps of the decline), partially offset by lower input costs and favorable sales mix. Included in gross margins was the impact of $1.2 million of costs related to restructuring activities and the product recall that began in the second quarter of These costs were insignificant in the prior year. Net Income increased primarily due additional income from the Private Brands business, favorable input costs, and favorable sales mix, partially offset by higher operating expenses and interest expense compared to the prior year as a result of the Private Brands acquisition. Adjusted EBITDA increased due to the inclusion of operating income from the Private Brands acquisition and favorable commodity costs, partially offset by higher costs due to the growth of the Company and variable compensation. % Margin 12.5% 10.7% Source: TreeHouse public filings. 1) Adjusted EBITDA is a non-gaap measure commonly used by management to assess operating performance. For a reconciliation of Adjusted EBITDA to the most comparable GAAP measure, see Appendix

73 Comparison of GAAP Information to Adjusted Information COMPARISON OF GAAP INFORMATION TO ADJUSTED INFORMATION We have included in this presentation measures of financial performance that are not defined by GAAP ( non-gaap ). A non-gaap financial measure is a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the Company s Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Income, Condensed Consolidated Statements of Comprehensive Income, and the Condensed Consolidated Statements of Cash Flows. We believe these measures provide useful information to the users of the financial statements as we also have included these measures in other communications and publications. For each of these non-gaap financial measures, we provide a reconciliation between the non-gaap measure and the most directly comparable GAAP measure, an explanation of why management believes the non-gaap measure provides useful information to financial statement users, and any additional purposes for which management uses the non-gaap measure. This non-gaap financial information is provided as additional information for the financial statement users and is not in accordance with, or an alternative to, GAAP. These non-gaap measures may be different from similar measures used by other companies. Adjusted Net Income and Adjusted EBITDA, Adjusting for Certain Items Affecting Comparability Adjusted net income represents GAAP net income as reported in the Condensed Consolidated Statements of Income adjusted for items that, in management s judgment, significantly affect the assessment of earnings results between periods. This information is provided in order to allow investors to make meaningful comparisons of the Company s earnings performance between periods and to view the Company s business from the same perspective as Company management. This measure is also used as a component of the Board of Director s measurement of the Company s performance for incentive compensation purposes. As the Company cannot predict the timing and amount of charges that include, but are not limited to, items such as acquisition, integration, and related costs, mark-to-market adjustments on derivative contracts, foreign currency exchange impact on the re-measurement of intercompany notes, or facility closings and reorganizations, management does not consider these costs when evaluating the Company s performance, when making decisions regarding the allocation of resources, in determining incentive compensation for management, or in determining earnings estimates. Adjusted EBITDA represents adjusted net income before interest expense, interest income, income tax expense, depreciation and amortization expense, and non-cash stock-based compensation expense. Adjusted EBITDA is a performance measure commonly used by management to assess operating performance, and the Company believes it is commonly reported and widely used by investors and other interested parties, as a measure of a company s operating performance between periods. A full reconciliation between the relevant GAAP measure of reported net income for the three and nine month periods ended September 30, 2016 and 2015 calculated according to GAAP and adjusted net income and adjusted EBITDA is below. For more information on non-gaap measures, please see the Company s most recent SEC filings

74 Comparison of GAAP Information to Adjusted Information TREEHOUSE FOODS, INC. RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME AND ADJUSTED EBITDA (In thousands) Three Months Ended Nine Months Ended September 30, September 30, (unaudited) (unaudited) Net income per GAAP $ 37,174 $ 28,441 $ 49,476 $ 77,655 Product recall costs (1) ,344 - Foreign currency loss (gain) on re-measurement of intercompany notes (2) 1,408 8,508 (5,213) 16,850 Mark-to-market adjustments (3) (6,831) 2,017 (3,861) (378) Acquisition, integration, and related costs (4) 4,497 3,003 50,586 4,991 Restructuring/facility consolidation costs (5) 5, , Less: Tax impact of adjusting items (1,943) (4,429) (22,171) (7,346) Adjusted net income $ 40,297 $ 37,694 $ 97,062 $ 92,276 Interest expense 30,749 10,914 87,955 33,978 Interest income (108) (265) (3,569) (2,228) Income taxes 15,434 11,834 20,527 36,208 Depreciation and amortization (6) 72,965 30, ,289 91,847 Stock-based compensation expense (7) 8,188 5,040 22,180 15,503 Add: Tax impact of adjusting items 1,943 4,429 22,171 7,346 Adjusted EBITDA $ 169,468 $ 99,811 $ 449,615 $ 274,930 Location in Condensed Consolidated Statements of Income Three Months Ended Nine Months Ended September 30, September 30, (unaudited) (unaudited) (1) Product recall costs Net sales $ (96) $ - $ 9,845 $ - (2) Foreign currency loss (gain) on remeasurement of intercompany notes Cost of sales 211-5,499 - (Gain) loss on foreign currency exchange 1,408 8,508 (5,213) 16,850 (3) Mark-to-market adjustments Other (income) expense, net (6,831) 2,017 (3,861) (378) (4) Acquisition, integration, and related costs General and administrative 4,468 2,962 42,041 4,223 Cost of sales , Other (income) expense, net Selling and distribution (5) Restructuring/facility consolidation costs Other operating expense, net 4, , Cost of sales 988-3,929 - (6) Depreciation and amortization included in Cost of sales 2,342-4,844 - restructuring/facility consolidation costs General and administrative (7) Stock-based compensation expense included in General and administrative acquisition, integration, and related costs 74 74