# Bellring Brands, Inc.: Form 10-Q for the period ended Dec 31, 2024

- Company: [Bellring Brands, Inc.](/companies/brbr.md) (CIK 1772016)
- Form: 10-Q
- Filed: 2025-02-04
- Accepted by EDGAR: Feb 4, 2025, 12:27 ET
- Period: 2024-12-31
- Accession: 0001772016-25-000028
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1772016/000177201625000028/brbr-20241231.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1772016/000177201625000028/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-10-01 to 2024-12-31 | $532.9m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2024-10-01 to 2024-12-31 | $333.3m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2024-10-01 to 2024-12-31 | $199.6m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2024-10-01 to 2024-12-31 | $80.1m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-10-01 to 2024-12-31 | $115.3m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-10-01 to 2024-12-31 | $14.4m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-10-01 to 2024-12-31 | $24.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-10-01 to 2024-12-31 | $76.9m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-10-01 to 2024-12-31 | $0.59 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-10-01 to 2024-12-31 | $0.60 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-10-01 to 2024-12-31 | 131,100,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-10-01 to 2024-12-31 | $3.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-10-01 to 2024-12-31 | $1.3m | us-gaap:PaymentsToAcquireProductiveAssets |
| Share repurchases | 3 months, 2024-10-01 to 2024-12-31 | $11.8m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-12-31 | $49.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-12-31 | $649.5m | us-gaap:AssetsCurrent |
| Total assets | at 2024-12-31 | $885.2m | us-gaap:Assets |
| Current liabilities | at 2024-12-31 | $193.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-12-31 | $1.03bn | us-gaap:Liabilities |
| Long-term debt | at 2024-12-31 | $833.4m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2024-12-31 | −$146.6m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 18,275 characters.

The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity and capital resources of BellRing Brands, Inc. and its consolidated subsidiaries. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included herein, our audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 and the “Cautionary Statement on Forward-Looking Statements” section included below. The terms “our,” “we,” “us,” “Company” and “BellRing” refer to BellRing Brands, Inc. and its consolidated subsidiaries.

### OVERVIEW

We are a consumer products holding company operating in the global convenient nutrition category and are a provider of ready-to-drink (“RTD”) protein shakes and powders. We have a single operating and reportable segment, with our principal products being protein-based consumer goods. Our primary brands are *Premier Protein* and *Dymatize.*

### Market Trends

During fiscal 2024, inflationary pressures on protein costs eased while other costs, such as packaging and manufacturing, faced inflationary pressures. During fiscal 2025, input costs, including raw material, packaging and manufacturing costs, are expected to face inflationary pressures. Inflation could have a materially adverse impact on our business in the future if inflation rates were to significantly exceed our ability to achieve price increases or cost savings or if such price increases impact demand for our products.

For additional discussion, refer to “Liquidity and Capital Resources” and “Cautionary Statement on Forward-Looking Statements” within this section.

### RESULTS OF OPERATIONS

*dollars in millions*

|  | Three Months Ended December 31, 2024 | 2023 | Change in $% |  |
| --- | ---: | ---: | ---: | ---: |
| **Net Sales** | $532.9 | $430.4 | $102.5 | 24% |
| **Operating Profit** | $115.3 | $73.0 | $42.3 | 58% |
| Interest expense, net | 14.4 | 14.9 | (0.5) | (3)% |
| Income tax expense | 24.0 | 14.2 | 9.8 | 69% |
| **Net Earnings** | $76.9 | $43.9 | $33.0 | 75% |

### Net Sales

Net sales increased $102.5 million, or 24%, during the three months ended December 31, 2024 compared to the prior year period. Sales of *Premier Protein* products were up $96.0 million, or 26%, driven by 21% higher volumes. Volumes increased primarily due to distribution gains and incremental promotional activity. Average net selling prices increased due to targeted price increases, partially offset by increased promotional activity. Sales of *Dymatize* products were up $7.0 million, or 13%, driven by 12% higher volumes. *Dymatize* volumes increased primarily due to higher international volumes. Sales of all other products were down $0.5 million.

### Operating Profit

Operating profit increased $42.3 million, or 58%, during the three months ended December 31, 2024 compared to the prior year period. This increase was primarily driven by higher net sales, as previously discussed, accelerated amortization of $17.4 million recorded in the prior year period related to the discontinuance of the *PowerBar* business in North America and lower net product costs of $2.5 million (driven by lower manufacturing and freight costs, partially offset by higher raw material costs). These positive impacts were partially offset by increased advertising expense of $8.9 million, higher employee-related expenses of $4.2 million and higher warehousing and distribution costs of $3.8 million.

### Interest Expense, Net

Interest expense, net decreased $0.5 million during the three months ended December 31, 2024 compared to the prior year period. The weighted-average interest rate on our total outstanding debt was 7.0% for both the three months ended December 31, 2024 and 2023. See Note 11 within “Notes to Condensed Consolidated Financial Statements” for additional information on our debt.

### Income Tax Expense

Our effective income tax rate was 23.8% and 24.4% for the three months ended December 31, 2024 and 2023, respectively.

### LIQUIDITY AND CAPITAL RESOURCES

During the three months ended December 31, 2024, we borrowed and repaid $35.0 million, respectively, under our revolving credit facility, which is provided under our credit agreement entered into on March 10, 2022 (as amended, the “Credit Agreement”) in an aggregate principal amount of $250.0 million (the “Revolving Credit Facility”). As of December 31, 2024, there were no outstanding borrowings or letters of credit under the Revolving Credit Facility, providing us available borrowing capacity of $250.0 million. Letters of credit are available under the Revolving Credit Facility in an aggregate amount of up to $20.0 million. Our Credit Agreement provides for potential incremental revolving and term facilities at the Company’s request and at the discretion of the lenders or other persons providing such incremental facilities, in each case on terms to be determined, and also permits the Company to incur other secured or unsecured debt, in all cases subject to conditions and limitations as specified in the Credit Agreement.

During the three months ended December 31, 2024, we repurchased 0.1 million shares of our common stock at an average share price of $77.12 per share and at a total cost, including any accrued excise tax and broker’s commissions, of $11.0 million. In addition, during the three months ended December 31, 2024, we paid $0.8 million of excise tax that related to fiscal 2023 share repurchases.

We expect to generate positive cash flows from operations and believe our cash on hand, cash flows from operations and possible future credit facilities will be sufficient to satisfy our future working capital requirements, purchase commitments, research and development activities, debt repayments (including interest payments), share repurchases and other financing requirements for the foreseeable future. We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact meeting our capital needs during or beyond the next twelve months. Our ability to generate positive cash flows from operations is dependent on general economic conditions, competitive pressures and other business risk factors. We believe that we have sufficient liquidity and cash on hand to satisfy our cash needs. If we are unable to generate sufficient cash flows from operations, or otherwise to comply with the terms of our credit facilities, we may be required to seek additional financing alternatives.

Short-term financing needs primarily consist of working capital requirements and interest payments on our 7.00% senior notes maturing in March 2030 (the “7.00% Senior Notes”). Long-term financing needs include the repayment of our 7.00% Senior Notes. Additional long-term financing needs will depend largely on potential growth opportunities, including acquisition activity and other strategic transactions. Our asset-light business model requires modest capital expenditures, with annual capital expenditures over the last three fiscal years averaging less than 1% of net sales. No significant capital expenditures are planned during the next 12 months. Additionally, we may seek to repurchase shares of our common stock. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

The following table presents select cash flow data, which is discussed below.

*dollars in millions*

| Cash provided by (used in): | Three Months Ended December 31, 2024 | 2023 |
| --- | ---: | ---: |
| Operating activities | $3.0 | $74.2 |
| Investing activities | (1.3) | (0.2) |
| Financing activities | (23.2) | (37.8) |
| Effect of exchange rate changes on cash and cash equivalents | — | 0.4 |
| Net (decrease) increase in cash and cash equivalents | $(21.5) | $36.6 |

### Operating Activities

Cash provided by operating activities for the three months ended December 31, 2024 decreased $71.2 million compared to the prior year period. This decrease was primarily due to increased inventory levels in the current year period (driven by higher production), fluctuations in the timing of payments of trade payables and increased tax payments (net of refunds) of $5.3 million.

### Investing Activities

Cash used in investing activities for the three months ended December 31, 2024 increased $1.1 million compared to the prior year period resulting from a increase in capital expenditures.

### Financing Activities

Cash used in financing activities for the three months ended December 31, 2024 decreased $14.6 million compared to the prior year period, driven by higher borrowings of $35.0 million under the Revolving Credit Facility. This positive impact was partially offset by higher repayments of $10.0 million under the Revolving Credit Facility, higher tax withholding payments related to stock compensation plans of $8.0 million and higher payments of $2.4 million, including excise tax payments and broker’s commissions, for the repurchase of our common stock.

### Debt Covenants

The Credit Agreement contains affirmative and negative covenants applicable to us and our restricted subsidiaries customary for agreements of this type, including delivery of financial and other information; compliance with laws; maintenance of property, existence, insurance and books and records; providing inspection rights; obligation to provide collateral and guarantees by certain new subsidiaries; delivery of environmental reports; participation in an annual meeting with the agent and the lenders; further assurances; and limitations with respect to indebtedness, liens, fundamental changes, restrictive agreements, use of proceeds, amendments of organization documents, prepayments and amendments of certain indebtedness, dispositions of assets, acquisitions and other investments, sale leaseback transactions, changes in the nature of business, transactions with affiliates and dividends and redemptions or repurchases of stock. Under the terms of the Credit Agreement, we are also required to comply with a financial covenant requiring us to maintain a total net leverage ratio (as defined in the Credit Agreement) not to exceed 6.00:1.00, measured as of the last day of each fiscal quarter. We were in compliance with the financial covenant as of December 31, 2024, and we do not believe non-compliance is reasonably likely in the foreseeable future.

The Credit Agreement provides for potential incremental revolving and term facilities at our request and at the discretion of the lenders or other persons providing such incremental facilities, in each case on terms to be determined, and also permits us to incur other secured or unsecured debt, in all cases subject to conditions and limitations as specified in the Credit Agreement.

In addition, the indenture governing the 7.00% Senior Notes contains negative covenants customary for this type of agreement that limit our ability and the ability of our restricted subsidiaries to, among other things: borrow money or guarantee debt; create liens; pay dividends on, or redeem or repurchase, stock; make specified types of investments and acquisitions; enter into or permit to exist contractual limits on the ability of our subsidiaries to pay dividends to us; enter into transactions with affiliates; and sell assets or merge with other companies. Certain of these covenants are subject to suspension when and if the 7.00% Senior Notes receive investment grade ratings.

### CRITICAL ACCOUNTING ESTIMATES

Our critical accounting estimates are more fully described in our Annual Report on Form 10-K for the year ended September 30, 2024, as filed with the Securities and Exchange Commission (the “SEC”) on November 19, 2024. There have been no significant changes to our critical accounting estimates since September 30, 2024.

### RECENTLY ISSUED ACCOUNTING STANDARDS

See Note 2 within “Notes to Condensed Consolidated Financial Statements” for a discussion regarding recently issued accounting standards.

### CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

Forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, are made throughout this report, including statements regarding unanticipated developments that negatively impact our common stock . These forward-looking statements are sometimes identified from the use of forward-looking words such as “believe,” “should,” “could,” “potential,” “continue,” “expect,” “project,” “estimate,” “predict,” “anticipate,” “aim,” “intend,” “plan,” “forecast,” “target,” “is likely,” “will,” “can,” “may” or “would” or the negative of these terms or similar expressions elsewhere in this report. Our financial condition, results of operations and cash flows may differ materially from those in the forward-looking statements. Such statements are based on management’s current views and assumptions and involve risks and uncertainties that could affect expected results. Those risks and uncertainties include, but are not limited to, the following:

- our dependence on sales from our RTD protein shakes;
- our ability to continue to compete in our product categories and our ability to retain our market position and favorable perceptions of our brands;
- disruptions or inefficiencies in our supply chain, including as a result of our reliance on third-party suppliers or manufacturers for the manufacturing of many of our products, pandemics and other outbreaks of contagious diseases, labor shortages, fires and evacuations related thereto, changes in weather conditions, natural disasters, agricultural diseases and pests and other events beyond our control;
- our dependence on a limited number of third-party contract manufacturers for the manufacturing of most of our products, including one manufacturer for nearly half of our RTD protein shakes;
- the ability of our third-party contract manufacturers to produce an amount of our products that enables us to meet customer and consumer demand for the products;
- our reliance on a limited number of third-party suppliers to provide certain ingredients and packaging;
- significant volatility in the cost or availability of inputs to our business (including freight, raw materials, packaging, energy, labor and other supplies);
- our ability to anticipate and respond to changes in consumer and customer preferences and behaviors and introduce new products;
- consolidation in our distribution channels;
- our ability to expand existing market penetration and enter into new markets;
- the loss of, a significant reduction of purchases by or the bankruptcy of a major customer;
- legal and regulatory factors, such as compliance with existing laws and regulations, as well as new laws and regulations and changes to existing laws and regulations and interpretations thereof, affecting our business, including current and future laws and regulations regarding food safety, advertising, labeling, tax matters and environmental matters;
- fluctuations in our business due to changes in our promotional activities and seasonality;
- our ability to maintain the net selling prices of our products and manage promotional activities with respect to our products;
- our ability to obtain additional financing (including both secured and unsecured debt) and our ability to service our outstanding debt (including covenants that restrict the operation of our business);
- the accuracy of our market data and attributes and related information;
- changes in critical accounting estimates;
- uncertain or unfavorable economic conditions that limit customer and consumer demand for our products or increase our costs;
- risks related to our ongoing relationship with Post Holdings, Inc. (“Post”) following our separation from Post and Post’s distribution of our stock to its shareholders (the “Spin-off”), including our obligations under various agreements with Post;
- conflicting interests or the appearance of conflicting interests resulting from certain of our directors also serving as officers and/or directors of Post;
- risks related to the previously completed Spin-off;
- the ultimate impact litigation or other regulatory matters may have on us;
- risks associated with our international business;
- our ability to protect our intellectual property and other assets and to continue to use third-party intellectual property subject to intellectual property licenses;
- costs, business disruptions and reputational damage associated with technology failures, cybersecurity incidents and corruption of our data privacy protections;
- impairment in the carrying value of goodwill or other intangible assets;
- our ability to identify, complete and integrate or otherwise effectively execute acquisitions or other strategic transactions and effectively manage our growth;
- our ability to hire and retain talented personnel, employee absenteeism, labor strikes, work stoppages or unionization efforts;
- our ability to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002;
- significant differences in our actual operating results from any guidance we may give regarding our performance; and
- other risks and uncertainties included under “Risk Factors” in this report and in our Annual Report on Form 10-K for the fiscal year ended September 30, 2024, filed with the SEC on November 19, 2024.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.

## Market risk

As filed, 2,046 characters.

### Commodity Price Risk

In the ordinary course of business, the Company is exposed to commodity price risks relating to the purchases of raw materials. The Company manages the impact of cost increases, wherever possible, on commercially reasonable terms, by locking in prices on the quantities through purchase commitments required to meet production requirements. In addition, the Company may attempt to offset the effect of increased costs by raising prices to customers. However, for competitive reasons, the Company may not be able to pass along the full effect of increases in raw materials and other input costs as they are incurred.

### Foreign Currency Risk

Related to Active Nutrition International GmbH, whose functional currency is the Euro, the Company is exposed to risks of fluctuations in future cash flows and earnings due to changes in exchange rates.

### Interest Rate Risk

As of both December 31, 2024 and September 30, 2024, the Company had outstanding principal value indebtedness of $840.0 million related to its 7.00% Senior Notes and no amounts outstanding under its Revolving Credit Facility. Borrowings under the Revolving Credit Facility bear interest at variable rates.

As of December 31, 2024 and September 30, 2024, the fair value of the Company’s debt was $864.0 million and $880.6 million, respectively. Changes in interest rates impact fixed and variable rate debt differently. For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas a change in interest rates on variable rate debt will impact interest expense and cash flows. A hypothetical 10% decrease in interest rates would have increased the fair value of the fixed rate debt by approximately $14 million and $7 million as of December 31, 2024 and September 30, 2024, respectively. The Company had no variable rate debt outstanding as of December 31, 2024 or September 30, 2024. For additional information regarding the Company’s debt, see Note 11 within “Notes to Condensed Consolidated Financial Statements.”

## Controls and procedures

As filed, 932 characters.

#### Evaluation of Disclosure Controls and Procedures

Management, with the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of the Company, has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the CEO and CFO concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to provide reasonable assurance of achieving the desired control objectives.

#### Changes in Internal Control Over Financial Reporting

There were no significant changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 782 characters.

In addition to the information set forth elsewhere in this Quarterly Report on Form 10-Q (the “Quarterly Report”), you should carefully consider the risk factors we previously disclosed in our Annual Report on Form 10-K, filed with the SEC on November 19, 2024, as of and for the year ended September 30, 2024 (the “Annual Report”). As of the date of this Quarterly Report, there have been no material changes to the risk factors previously disclosed in the Annual Report. These risks could materially and adversely affect our business, financial condition, results of operations and cash flows. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations and cash flows.

Filed Feb 4, 2025.
Source: SEC EDGAR, the filing index for accession 0001772016-25-000028. Last ingested by Listed: Oct 27, 2026, 17:28 ET. No prices; not investment advice.