Post Holdings, Inc., a consumer packaged goods holding company, previously reported a fire took place at its Michael Foods precooked egg facility in Klingerstown, PA, and, unrelated, a water boil order was issued by the municipal water association servicing its Michael Foods Lenox, IA precooked egg facility.
The cause of the fire at Klingerstown continues to be investigated with repairs to the roof and electrical infrastructure currently in process. The plant continues to operate, with additional production anticipated to return on June 19. Remaining oven production is expected to be brought back into service by mid-July, with the plant returning to full production then.
The Lenox facility restarted partial operations on June 7, with full production levels reached on June 11.
While underlying egg product demand remains strong, this disruption has resulted in modest service level issues and lost sales revenue. Post management estimates the financial impact of both incidents, inclusive of expenses and margin on lost sales revenue, to be between $5-$7 million to Adjusted EBITDA (non-GAAP), which will be reflected in Post’s financial results in its third quarter of fiscal 2018. The financial impact of each incident is expected to be insured to the extent each incident exceeds $2.5 million, with recovery occurring in the fourth quarter of fiscal 2018 or in early fiscal 2019.
Use of non-GAAP measure
Post uses the non-GAAP measure Adjusted EBITDA in this release to supplement its financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP). Adjusted EBITDA is not prepared in accordance with GAAP, as it excludes certain items, and may not be comparable to similarly-titled measures of other companies.
Post management uses certain non-GAAP measures, including Adjusted EBITDA, as key metrics in the evaluation of underlying Company and segment performance, in making financial, operating and planning decisions, and, in part, in the determination of cash bonuses for its executive officers and employees. Post management believes the use of non-GAAP measures, including Adjusted EBITDA, provides increased transparency and assists investors in understanding the underlying operating performance of Post and its segments and in the analysis of ongoing operating trends.
