Posted on 21 November 2016

Robert Vitale CEO of Post Holdings (“Post”) since November 2014 has grown principal outstanding debt to $4.6 billion as of 30 September 2016.

With (“Post”) revenue declining by 6% in the Q4 2016 on a comparable basis to Q4 2015, a loss of $37 million reported in Q4 2016 and (“Post”) largest business Michael Foods reporting in the (“Post”) 2016 10K revenue will continue to decline in 2017 and (“Post”) locked in antitrust lawsuits with plaintiff claims exceeding $1 billion, (“Post”) is heading towards insolvency in 2017.

Rob Vitale Post Holdings
From left to right: Robert Vitale CEO at ("Post"); and William Stiritz Chairman at ("Post")


1. Growth dependent solely on acquisitions & growing principal outstanding debt
2. $4.6 billion total debt as of 30 September 2016
3. Defendant in antitrust lawsuits with plaintiff claims exceeding $1 billion
4. No long-term supply agreements with largest customers Walmart, Syso, US Foods, Costco, Sam’s Club, Whole Foods and Trader Joe’s
5. Largest customers account for 85% of fiscal 2016 net sales with Walmart the largest customer accounting for 13% of fiscal 2016 net sales
6. Interest expense for fiscal 2016 passed $306 million with a revolving credit facility borrowing capacity of $388 million remaining
7. Interest expense up by 19% in 2016 driven by growing principal outstanding debt
8. Q4 2016 revenue declined by 6% on a comparable basis to Q4 2015
9. $37 million loss reported in Q4 2016
10. Management expect Michael Foods declining revenue to continue in 2017


(From page-11) Loss of a significant customer may adversely affect our results of operations.

The success of our businesses depends, in part, on our ability to maintain our level of sales and product distribution through high-volume food distributors, retailers, super centres and mass merchandisers. The competition to supply products to these high-volume stores is intense. Currently, we do not have long-term supply agreements with a substantial number of our retail customers, including our largest customers. These high-volume stores and mass merchandisers frequently reevaluate the products they carry. A decision by our major customers to decrease the amount of merchandise purchased from us,sell a national brand on an exclusive basis or change the manner of doing business with us could reduce our revenues and materially adversely affect our results of operations. In addition, our customers offer branded and private label products that compete directly with our products for retail shelf space and consumer purchases. Accordingly, there is a risk that our customers may give higher priority to their own products or to the products of our competitors. In the event of a loss of any of our large customers, or the bankruptcy or serious financial difficulty of any of our large customers, our sales may be adversely affected.

(From page 17) Risks Related to our Indebtedness

We have substantial debt and high leverage, which could have a negative impact on our financing options and liquidity position and which could adversely affect our business. We have a significant amount of debt.

We had $4,600.3 million in aggregate principal amount of total debt as of September 30, 2016. Additionally, our secured revolving credit facility has borrowing capacity of $388.2 million at September 30, 2016 (all of which would be secured when drawn). Our overall leverage and the terms of our financing arrangements could:

(a) limit our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, to fund growth or for general corporate purposes, even when necessary to maintain adequate liquidity, particularly if any ratings assigned to our debt securities by rating organizations were revised downward;
(b) make it more difficult for us to satisfy our obligations under the terms of our financing arrangements;
(c) limit our ability to refinance our indebtedness on terms acceptable to us or at all;
(d) limit our flexibility to plan for and to adjust to changing business and market conditions in the industries in which we operate and increase our vulnerability to general adverse economic and industry conditions;
(e) require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt, thereby limiting the availability of our cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements;
(f) increase our vulnerability to adverse economic or industry conditions; and
(g) subject us to higher levels of indebtedness than our competitors, which may cause a competitive disadvantage and may reduce our flexibility in responding to increased competition.


More Posts


Leave a comment

Search our store