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x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2017
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o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
(State or other jurisdiction of incorporation or organization) |
47‑4168492
(I.R.S. Employer Identification No.) |
1 East Armour Boulevard
Kansas City, MO (Address of principal executive offices) |
64111
(Zip Code) |
Title of Each Class
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Name of Each Exchange on Which Registered
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Class A Common Stock, par value of $0.0001 per share
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NASDAQ Capital Market
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56,499,890 Warrants, each exercisable for half share of Class A Common Stock
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NASDAQ Capital Market
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Large accelerated filer
x
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Accelerated
filer
o
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Non‑accelerated filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company
o
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Emerging growth company
o
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Page
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Part I
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||
Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Part II
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||
Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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Part III
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||
Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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Part IV
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||
Item 15.
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Exhibits, Financial Statement Schedules
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Twinkies®
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Coffee Cakes
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Donettes®
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Cinnamon Rolls
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Cupcakes
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Honey Buns
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Ding Dongs®
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Sno Balls®
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Fruit Pies
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Chocodiles®
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Mini Muffins
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Brownies
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Ho Hos®
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Bread and Buns
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Suzy Qs®
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Jumbo Muffins
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Danish
|
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Eclairs
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Iced Cookies
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Hostess Bake Shop™
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Madeleines
|
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Hostess Bakery Petites™
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Zingers®
|
|
|
•
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Dean Metropolous
|
•
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Bill Toler
|
•
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Mark R. Stone
|
•
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Laurence Bodner
|
•
|
Neil P. DeFeo
|
•
|
Jerry D. Kaminski
|
•
|
Craig D. Steeneck
|
–
|
Core distribution expansion
|
–
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Innovation
|
–
|
Expansion of white space
|
–
|
Platform for future acquisitions
|
•
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Complementing our existing product offering by launching classic products not yet launched or entirely new products in SBG sub-segments where we currently do not compete;
|
•
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Launching line extensions to drive sub-brand reach;
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•
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Unlocking new consumer segments with new benefits and / or occasions; and
|
•
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Expanding into new categories and markets to drive highly incremental growth.
|
•
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lower than anticipated future earnings in jurisdictions where we have lower statutory tax rates and higher than anticipated future earnings in jurisdictions where we have higher statutory tax rates.
|
•
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requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, capital expenditures, and future business opportunities or to pay dividends;
|
•
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exposing us to the risk of increased interest rates because all of our borrowings, including our borrowings under our credit facilities, are at variable rates;
|
•
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making it more difficult for us to make payments on our indebtedness;
|
•
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increasing our vulnerability to general economic and industry conditions;
|
•
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restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
|
•
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subjecting us to restrictive covenants that may limit our flexibility in operating our business;
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•
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limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and
|
•
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placing us at a competitive disadvantage compared to our competitors who are less highly leveraged.
|
•
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labor availability and costs for hourly and management personnel;
|
•
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profitability of our products, especially in new markets and due to seasonal fluctuations;
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•
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changes in interest rates;
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•
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impairment of long-lived assets;
|
•
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macroeconomic conditions, both nationally and locally;
|
•
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disruption in production by us or a co-manufacturer;
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•
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negative publicity relating to products we sell;
|
•
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changes in consumer preferences and competitive conditions;
|
•
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expansion to new markets;
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•
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fluctuations in commodity prices; and
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•
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actions by our competitors (e.g., pricing promotions).
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•
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a staggered board providing for three classes of directors, which limits the ability of a stockholder or group to gain control of our board;
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•
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no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;
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•
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the right of our board to elect a director to fill a vacancy created by the expansion of our board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our board;
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•
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a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
|
•
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a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by members of our board, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
|
•
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the requirement that changes or amendments to certain provisions of our certificate of incorporation or bylaws must be approved by holders of at least two-thirds of our common stock; and
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•
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advance notice procedures that stockholders must comply with in order to nominate candidates to our board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
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(1)
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Consists of shares subject to outstanding stock options, restricted stock units and performance restricted stock units under the Hostess Brands, Inc. 2016 Equity Incentive Plan (the “2016 Plan”), some of which are vested and some of which remain subject to the vesting and/or performance criteria of the respective equity award.
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(2)
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Represents the weighted average exercise price of 827,620 stock options and excludes the impact of 1,448,736 shares of restricted stock units for which no exercise price is payable
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(3)
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Consists of shares available for future issuance under the 2016 Plan.
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Statement of Operations Data
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|||||||||||||||||||||||||
(In thousands except for share and per share data)
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Year Ended
December 31, 2017
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|
From November 4, 2016
through December 31, 2016 |
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From January 1, 2016
through November 3, 2016 |
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Year Ended
December 31, 2015
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Year Ended
December 31, 2014 |
|
February 6, 2013
(Inception)
through December 31, 2013
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||||||||||||
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(Successor)
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|
(Successor)
|
|
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(Predecessor)
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(Predecessor)
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(Predecessor)
|
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(Predecessor)
|
||||||||||||
Net revenue
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$
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776,188
|
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|
$
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111,998
|
|
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$
|
615,588
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|
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$
|
620,815
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$
|
554,695
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|
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$
|
237,418
|
|
Gross profit
|
326,898
|
|
|
38,714
|
|
|
|
266,529
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|
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262,203
|
|
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233,932
|
|
|
91,920
|
|
||||||
Operating income (loss)
|
233,992
|
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(9,607
|
)
|
|
|
122,872
|
|
|
|
155,908
|
|
|
119,467
|
|
|
23,330
|
|
||||||
Income (loss) before income taxes
|
190,904
|
|
|
(16,247
|
)
|
|
|
60,864
|
|
|
|
88,760
|
|
|
81,464
|
|
|
(5,594
|
)
|
||||||
Net income (loss)
|
258,108
|
|
|
(8,485
|
)
|
|
|
60,425
|
|
|
|
88,760
|
|
|
81,464
|
|
|
(5,594
|
)
|
||||||
Net income (loss) attributable to the non-controlling interest
|
34,211
|
|
|
(4,081
|
)
|
|
|
3,214
|
|
|
|
4,507
|
|
|
4,267
|
|
|
—
|
|
||||||
Net income (loss) attributable to Class A shareholders
|
$
|
223,897
|
|
|
$
|
(4,404
|
)
|
|
|
$
|
57,211
|
|
|
|
$
|
84,253
|
|
|
$
|
77,197
|
|
|
$
|
(5,594
|
)
|
Earnings (loss) per Class A share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|||||||||||
Basic
|
$
|
2.26
|
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted
|
$
|
2.13
|
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
99,109,629
|
|
|
97,791,658
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted
|
105,307,293
|
|
|
97,791,658
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Data
|
|||||||||||||||||||||||||
(In thousands)
|
|
Year Ended
December 31, 2017
|
|
From November 4, 2016
through December 31, 2016
|
|
|
From January 1, 2016
through November 3, 2016
|
|
Year Ended
December 31, 2015
|
|
Year Ended
December 31, 2014
|
|
February 6, 2013
(Inception)
through December 31, 2013
|
||||||||||||
|
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
|
(Predecessor)
|
|
(Predecessor)
|
||||||||||||
Net cash provided by (used in)
operating activities
|
|
$
|
163,685
|
|
|
$
|
13,611
|
|
|
|
$
|
102,221
|
|
|
$
|
132,972
|
|
|
$
|
108,329
|
|
|
$
|
(29,672
|
)
|
Net cash provided by (used in) investing activities
|
|
(35,209
|
)
|
|
(428,196
|
)
|
|
|
(76,579
|
)
|
|
17,880
|
|
|
(91,393
|
)
|
|
(422,498
|
)
|
||||||
Net cash provided by (used in) financing activities
|
|
(19,630
|
)
|
|
(232,345
|
)
|
|
|
(31,596
|
)
|
|
(296,002
|
)
|
|
(9,769
|
)
|
|
654,626
|
|
Balance Sheet Data
|
||||||||||||||||||||||
(In thousands)
|
|
December 31,
2017
|
|
December 31,
2016
|
|
|
December 31,
2015
|
|
December 31,
2014
|
|
February 6, 2013
(Inception)
through December 31, 2013
|
|
||||||||||
|
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
|
(Predecessor)
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
135,701
|
|
|
$
|
26,855
|
|
|
|
$
|
64,473
|
|
|
$
|
209,623
|
|
|
$
|
202,456
|
|
|
Property and equipment, net
|
|
174,121
|
|
|
153,224
|
|
|
|
128,078
|
|
|
112,732
|
|
|
88,269
|
|
|
|||||
Total assets
|
|
2,966,275
|
|
|
2,847,892
|
|
|
|
643,529
|
|
|
765,494
|
|
|
683,678
|
|
|
|||||
Long-term debt and capital lease obligation
|
|
987,920
|
|
|
993,374
|
|
|
|
1,193,667
|
|
|
473,175
|
|
|
479,602
|
|
|
|||||
Non-controlling interest
|
|
342,240
|
|
|
334,192
|
|
|
|
(37,991
|
)
|
|
4,267
|
|
|
—
|
|
|
Other Financial Data
(1)
|
|||||||||||||||||||||||||
(In thousands)
|
|
Year Ended
December 31, 2017
|
|
From
November 4, 2016
through
December 31, 2016 |
|
|
From
January 1, 2016
through November 3, 2016
|
|
Year Ended
December 31, 2015 |
|
Year Ended
December 31, 2014 |
|
February 6, 2013
(Inception)
through December 31, 2013
|
||||||||||||
|
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
|
(Predecessor)
|
|
(Predecessor)
|
||||||||||||
Adjusted EBITDA
|
|
$
|
230,212
|
|
|
$
|
31,894
|
|
|
|
$
|
183,409
|
|
|
$
|
177,930
|
|
|
$
|
145,343
|
|
|
$
|
40,285
|
|
Adjusted Gross Profit and Adjusted Gross Margin
|
||||||||||||||||||||||||
(In thousands)
|
Year Ended
December 31, 2017
|
|
From
November 4, 2016
through December 31, 2016 |
|
|
From
January 1, 2016 through November 3, 2016 |
|
Year Ended
December 31, 2015
|
|
Year Ended
December 31, 2014 |
|
February 6, 2013
(Inception)
through December 31, 2013
|
||||||||||||
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
|
(Predecessor)
|
|
(Predecessor)
|
||||||||||||
Net revenue
|
$
|
776,188
|
|
|
$
|
111,998
|
|
|
|
$
|
615,588
|
|
|
$
|
620,815
|
|
|
$
|
554,695
|
|
|
$
|
237,418
|
|
Cost of goods sold
|
449,290
|
|
|
73,284
|
|
|
|
346,864
|
|
|
355,963
|
|
|
320,763
|
|
|
145,498
|
|
||||||
Special employee incentive compensation
|
—
|
|
|
—
|
|
|
|
2,195
|
|
|
2,649
|
|
|
—
|
|
|
—
|
|
||||||
Gross Profit
|
$
|
326,898
|
|
|
$
|
38,714
|
|
|
|
$
|
266,529
|
|
|
$
|
262,203
|
|
|
$
|
233,932
|
|
|
$
|
91,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Special employee incentive compensation (i)
|
—
|
|
|
—
|
|
|
|
2,195
|
|
|
2,649
|
|
|
—
|
|
|
—
|
|
||||||
Inventory fair value adjustment (ii)
|
—
|
|
|
8,914
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Adjusted Gross Profit
|
$
|
326,898
|
|
|
$
|
47,628
|
|
|
|
$
|
268,724
|
|
|
$
|
264,852
|
|
|
$
|
233,932
|
|
|
$
|
91,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross Margin - GAAP
|
42.1
|
%
|
|
34.6
|
%
|
|
|
43.3
|
%
|
|
42.2
|
%
|
|
42.2
|
%
|
|
38.7
|
%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted Gross Margin
|
42.1
|
%
|
|
42.5
|
%
|
|
|
43.7
|
%
|
|
42.7
|
%
|
|
42.2
|
%
|
|
38.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
2017
|
|
2016
|
|
|
|
2015
|
|||||||||||||||||||||
(
In thousands, except share and per share data
)
|
Year
Ended
December 31
|
|
%
of Net Revenues |
|
From November 4
through
December 31
|
|
%
of Net Revenues |
|
|
From January 1
through
November 3
|
|
%
of Net Revenues |
|
Year
Ended
December 31
|
|
%
of Net Revenues |
||||||||||||
|
(Successor)
|
|
|
|
(Successor)
|
|
|
|
|
(Predecessor)
|
|
|
|
(Predecessor)
|
|
|
||||||||||||
Net revenue
|
$
|
776,188
|
|
|
100.0
|
%
|
|
$
|
111,998
|
|
|
100.0
|
%
|
|
|
$
|
615,588
|
|
|
100.0
|
%
|
|
$
|
620,815
|
|
|
100.0
|
%
|
Cost of goods sold
|
449,290
|
|
|
57.9
|
|
|
73,284
|
|
|
65.4
|
|
|
|
346,864
|
|
|
56.3
|
|
|
355,963
|
|
|
57.3
|
|
||||
Special employee incentive compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2,195
|
|
|
0.4
|
|
|
2,649
|
|
|
0.4
|
|
||||
Gross profit
|
326,898
|
|
|
42.1
|
|
|
38,714
|
|
|
34.6
|
|
|
|
266,529
|
|
|
43.3
|
|
|
262,203
|
|
|
42.2
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||
Advertising and marketing
|
33,004
|
|
|
4.3
|
|
|
5,245
|
|
|
4.7
|
|
|
|
30,626
|
|
|
5.0
|
|
|
31,967
|
|
|
5.1
|
|
||||
Selling expense
|
32,086
|
|
|
4.1
|
|
|
5,033
|
|
|
4.5
|
|
|
|
25,730
|
|
|
4.2
|
|
|
29,484
|
|
|
4.7
|
|
||||
General and administrative
|
52,943
|
|
|
6.8
|
|
|
7,322
|
|
|
6.5
|
|
|
|
38,391
|
|
|
6.2
|
|
|
31,531
|
|
|
5.1
|
|
||||
Special employee incentive compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2,503
|
|
|
0.4
|
|
|
1,274
|
|
|
0.2
|
|
||||
Amortization of customer relationships
|
23,855
|
|
|
3.1
|
|
|
3,922
|
|
|
3.5
|
|
|
|
1,185
|
|
|
0.2
|
|
|
851
|
|
|
0.1
|
|
||||
Impairment on property and equipment
|
1,003
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
|
7,300
|
|
|
1.2
|
|
|
2,700
|
|
|
0.4
|
|
||||
Loss on sale/abandonment of property and equipment, and bakery shutdown costs (recoveries)
|
(144
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2,551
|
|
|
0.4
|
|
|
4,182
|
|
|
0.7
|
|
||||
Business combination transaction costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
31,832
|
|
|
5.2
|
|
|
—
|
|
|
—
|
|
||||
Related party expenses
|
381
|
|
|
—
|
|
|
26,799
|
|
|
23.9
|
|
|
|
3,539
|
|
|
0.6
|
|
|
4,306
|
|
|
0.7
|
|
||||
Tax receivable agreement liability remeasurement
|
(50,222
|
)
|
|
(6.5
|
)
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total operating costs and expenses
|
92,906
|
|
|
12.0
|
|
|
48,321
|
|
|
43.1
|
|
|
|
143,657
|
|
|
23.3
|
|
|
106,295
|
|
|
17.1
|
|
||||
Operating income
|
233,992
|
|
|
30.1
|
|
|
(9,607
|
)
|
|
(8.6
|
)
|
|
|
122,872
|
|
|
20.0
|
|
|
155,908
|
|
|
25.1
|
|
||||
Other expense:
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense, net
|
39,174
|
|
|
5.0
|
|
|
6,649
|
|
|
5.9
|
|
|
|
60,384
|
|
|
9.8
|
|
|
50,011
|
|
|
8.1
|
|
||||
Loss (gain) on modification of debt
|
2,554
|
|
|
0.3
|
|
|
(763
|
)
|
|
(0.7
|
)
|
|
|
—
|
|
|
—
|
|
|
25,880
|
|
|
4.2
|
|
||||
Other expense (income)
|
1,360
|
|
|
0.2
|
|
|
754
|
|
|
0.7
|
|
|
|
1,624
|
|
|
0.3
|
|
|
(8,743
|
)
|
|
(1.4
|
)
|
||||
Total other expense
|
43,088
|
|
|
5.6
|
|
|
6,640
|
|
|
5.9
|
|
|
|
62,008
|
|
|
10.1
|
|
|
67,148
|
|
|
10.8
|
|
||||
Income before income taxes
|
190,904
|
|
|
24.6
|
|
|
(16,247
|
)
|
|
(14.5
|
)
|
|
|
60,864
|
|
|
9.9
|
|
|
88,760
|
|
|
14.3
|
|
||||
Income tax expense (benefit)
|
(67,204
|
)
|
|
(8.7
|
)
|
|
(7,762
|
)
|
|
(6.9
|
)
|
|
|
439
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss)
|
258,108
|
|
|
33.3
|
|
|
(8,485
|
)
|
|
(7.6
|
)
|
|
|
60,425
|
|
|
9.8
|
|
|
88,760
|
|
|
14.3
|
|
||||
Less: Net income attributable to the non-controlling interest
|
34,211
|
|
|
4.4
|
|
|
(4,081
|
)
|
|
(3.6
|
)
|
|
|
3,214
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to Class A shareholders
|
$
|
223,897
|
|
|
28.8
|
%
|
|
$
|
(4,404
|
)
|
|
(3.9
|
)%
|
|
|
$
|
57,211
|
|
|
9.3
|
%
|
|
$
|
88,760
|
|
|
14.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings per Class A share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
2.26
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted
|
$
|
2.13
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
99,109,629
|
|
|
|
|
97,791,658
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted
|
105,307,293
|
|
|
|
|
97,791,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
(i)
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
|
|
|
2016
|
|
|
|
2015
|
||||||||||||||||
(
In thousands, except share and per share data
)
|
Year
Ended
December 31
|
|
From November 4
through
December 31
|
|
|
From January 1
through
November 3
|
|
Pro Forma
Adjustments
|
|
(Unaudited)
Year Ended
December 31
|
|
%
of
Net Revenues
|
|
Year
Ended
December 31
|
|||||||||||||
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|
|
|
Pro Forma
Combined |
|
|
|
(Predecessor)
|
|||||||||||||
Net revenue
|
$
|
776,188
|
|
|
$
|
111,998
|
|
|
|
$
|
615,588
|
|
|
$
|
—
|
|
|
$
|
727,586
|
|
|
100.0
|
%
|
|
620,815
|
|
|
Cost of goods sold
|
449,290
|
|
|
73,284
|
|
|
|
346,864
|
|
|
(8,541
|
)
|
ii
|
411,607
|
|
|
56.6
|
|
|
355,963
|
|
||||||
Special employee incentive compensation
|
—
|
|
|
—
|
|
|
|
2,195
|
|
|
(2,195
|
)
|
iii
|
—
|
|
|
—
|
|
|
2,649
|
|
||||||
Gross profit
|
326,898
|
|
|
38,714
|
|
|
|
266,529
|
|
|
10,736
|
|
|
315,979
|
|
|
43.4
|
|
|
262,203
|
|
||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
||||||||||||
Advertising and marketing
|
33,004
|
|
|
5,245
|
|
|
|
30,626
|
|
|
—
|
|
|
35,871
|
|
|
4.9
|
|
|
31,967
|
|
||||||
Selling expense
|
32,086
|
|
|
5,033
|
|
|
|
25,730
|
|
|
—
|
|
|
30,763
|
|
|
4.2
|
|
|
29,484
|
|
||||||
General and administrative
|
52,943
|
|
|
7,322
|
|
|
|
38,391
|
|
|
(3,902
|
)
|
iv
|
41,811
|
|
|
5.7
|
|
|
31,531
|
|
||||||
Special employee incentive compensation
|
—
|
|
|
—
|
|
|
|
2,503
|
|
|
(2,503
|
)
|
iii
|
—
|
|
|
—
|
|
|
1,274
|
|
||||||
Amortization of customer relationships
|
23,855
|
|
|
3,922
|
|
|
|
1,185
|
|
|
20,050
|
|
v
|
25,157
|
|
|
3.5
|
|
|
851
|
|
||||||
Impairment on property and equipment
|
1,003
|
|
|
—
|
|
|
|
7,300
|
|
|
—
|
|
|
7,300
|
|
|
1.0
|
|
|
2,700
|
|
||||||
Loss on sale/abandonment of property and equipment, and bakery shutdown costs (recoveries)
|
(144
|
)
|
|
—
|
|
|
|
2,551
|
|
|
—
|
|
|
2,551
|
|
|
0.4
|
|
|
4,182
|
|
||||||
Business combination transaction costs
|
—
|
|
|
—
|
|
|
|
31,832
|
|
|
(31,257
|
)
|
vi
|
575
|
|
|
0.1
|
|
|
—
|
|
||||||
Related party expenses
|
381
|
|
|
26,799
|
|
|
|
3,539
|
|
|
(26,747
|
)
|
vii
|
3,591
|
|
|
0.5
|
|
|
4,306
|
|
||||||
Tax receivable agreement liability remeasurement
|
(50,222
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total operating costs and expenses
|
92,906
|
|
|
48,321
|
|
|
|
143,657
|
|
|
(44,359
|
)
|
|
147,619
|
|
|
20.3
|
|
|
106,295
|
|
||||||
Operating income
|
233,992
|
|
|
(9,607
|
)
|
|
|
122,872
|
|
|
55,095
|
|
|
168,360
|
|
|
23.1
|
|
|
155,908
|
|
||||||
Other expense:
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
||||||||||||
Interest expense, net
|
39,174
|
|
|
6,649
|
|
|
|
60,384
|
|
|
(15,592
|
)
|
viii
|
51,441
|
|
|
7.1
|
|
|
50,011
|
|
||||||
Loss (gain) on modification of debt
|
2,554
|
|
|
(763
|
)
|
|
|
—
|
|
|
—
|
|
|
(763
|
)
|
|
(0.1
|
)
|
|
25,880
|
|
||||||
Other expense
|
1,360
|
|
|
754
|
|
|
|
1,624
|
|
|
—
|
|
|
2,378
|
|
|
0.3
|
|
|
(8,743
|
)
|
||||||
Total other expense
|
43,088
|
|
|
6,640
|
|
|
|
62,008
|
|
|
(15,592
|
)
|
|
53,056
|
|
|
7.3
|
|
|
67,148
|
|
||||||
Income before income taxes
|
190,904
|
|
|
(16,247
|
)
|
|
|
60,864
|
|
|
70,687
|
|
|
115,304
|
|
|
15.8
|
|
|
88,760
|
|
||||||
Income tax expense (benefit)
|
(67,204
|
)
|
|
(7,762
|
)
|
|
|
439
|
|
|
40,185
|
|
ix
|
32,862
|
|
|
4.5
|
|
|
—
|
|
||||||
Net income (loss)
|
258,108
|
|
|
(8,485
|
)
|
|
|
60,425
|
|
|
30,502
|
|
|
82,442
|
|
|
11.3
|
|
|
88,760
|
|
||||||
Less: Net income attributable to the non-controlling interest
|
34,211
|
|
|
(4,081
|
)
|
|
|
3,214
|
|
|
29,565
|
|
x
|
28,698
|
|
|
3.9
|
|
|
4,507
|
|
||||||
Net income attributable to Class A shareholders
|
$
|
223,897
|
|
|
$
|
(4,404
|
)
|
|
|
$
|
57,211
|
|
|
$
|
937
|
|
|
$
|
53,744
|
|
|
7.4
|
%
|
|
$
|
84,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Earnings per Class A share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Basic
|
$
|
2.26
|
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
$
|
0.55
|
|
|
|
|
|
|||||||
Diluted
|
$
|
2.13
|
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
$
|
0.54
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Basic
|
99,109,629
|
|
|
97,791,658
|
|
|
|
|
|
(180,000
|
)
|
xi
|
97,611,658
|
|
|
|
|
|
|||||||||
Diluted
|
105,307,293
|
|
|
97,791,658
|
|
|
|
|
|
2,393,000
|
|
xii
|
100,184,658
|
|
|
|
|
|
i.
|
The amounts in these columns represent the Successor’s and Predecessor’s historical results of operations for the periods reflected.
|
ii.
|
Approximately $8.9 million of this adjustment reflects the non-cash impact of the remeasurement of inventory at fair value as a result of the Business Combination. In addition, the adjustment reflects the incremental depreciation expense associated with the allocation of purchase price to property and equipment and is recorded in cost of goods sold.
|
iii.
|
For cost of goods sold, this adjustment represents special payments we made to certain employees at our bakery facilities of $2.2 million and for the operating costs this adjustment represents special payments to corporate employees of $2.5 million as compensation for their efforts in connection with the Business Combination.
|
iv.
|
Represents compensation for management profits interest plan of approximately $3.9 million that was recognized as part of the Business Combination. See Note 3 to the Consolidated Financial Statements for additional information.
|
v.
|
Represents additional amortization expense associated with the fair value recognized for customer relationships in connection with the Business Combination.
|
vi.
|
This adjustment consists primarily of legal and professional fees, and other costs associated with the Business Combination.
|
vii.
|
Represents non-cash expenses incurred by Successor for stock awarded to Mr. Metropoulos as required under his new employment arrangements.
|
viii.
|
Represents the reduction in interest expense due to the repayment of a portion of Hostess Holdings debt as part of the Business Combination.
|
ix.
|
Represents the effective income tax rate of 28.5% for the Successor, giving effect to the non-controlling interest, and not giving effect to the adjustment made to the valuation allowance on the Company’s historical deferred tax assets.
|
x.
|
Represents the elimination of historical income attributable to the non-controlling interest and attributes a portion of the pro forma income to the non-controlling interest created in the Business Combination. Income is allocated to the non-controlling interest based on its pro rata share of the total equity of Hostess Holdings.
|
xi.
|
This adjustment annualized the basic weighted average number of Class A shares outstanding.
|
xii.
|
This adjustment includes the dilutive impact of the outstanding warrants that are considered anti-dilutive on a historical basis.
|
•
|
does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments;
|
•
|
does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
does not reflect the significant interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt;
|
•
|
does not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future; and
|
•
|
does not reflect payments related to income taxes, the tax receivable agreement or distributions to the non-controlling interest to reimburse its tax liability.
|
Reconciliation of Adjusted EBITDA
|
|||||||||||||||||||||
(In thousands)
|
|
Year Ended
December 31,
2017
|
|
From
November 4, 2016
through
December 31, 2016
|
|
|
From
January 1, 2016
through
November 3, 2016
|
|
Pro Forma
Combined
December 31, 2016
(1)
|
|
Year Ended
December 31,
2015
|
||||||||||
|
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|
|
|
(Predecessor)
|
||||||||||
Net income
|
|
$
|
258,108
|
|
|
$
|
(8,485
|
)
|
|
|
$
|
60,425
|
|
|
$
|
82,442
|
|
|
$
|
88,760
|
|
Plus non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income tax provision
|
|
(67,204
|
)
|
|
(7,762
|
)
|
|
|
439
|
|
|
32,862
|
|
|
—
|
|
|||||
Interest expense, net
|
|
39,174
|
|
|
6,649
|
|
|
|
60,384
|
|
|
51,441
|
|
|
50,011
|
|
|||||
Depreciation and amortization
|
|
38,170
|
|
|
5,843
|
|
|
|
10,265
|
|
|
36,520
|
|
|
9,836
|
|
|||||
Executive chairman agreement termination and execution
|
i.
|
—
|
|
|
26,747
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Share-based compensation
|
|
7,413
|
|
|
|
|
|
3,891
|
|
|
—
|
|
|
1,381
|
|
||||||
Tax receivable agreement liability remeasurement
|
ii.
|
(50,222
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other (income) expense
|
iii.
|
1,360
|
|
|
751
|
|
|
|
1,624
|
|
|
2,375
|
|
|
(8,743
|
)
|
|||||
Loss (gain) on debt modification
|
iv.
|
2,554
|
|
|
(763
|
)
|
|
|
—
|
|
|
(763
|
)
|
|
25,880
|
|
|||||
Impairment of property and equipment
|
v
|
1,003
|
|
|
—
|
|
|
|
7,300
|
|
|
7,300
|
|
|
2,700
|
|
|||||
Loss on sale/abandonment of property and equipment and bakery shutdown costs (recovery)
|
vi.
|
(144
|
)
|
|
—
|
|
|
|
2,551
|
|
|
2,551
|
|
|
4,182
|
|
|||||
Inventory fair value adjustment
|
vii.
|
—
|
|
|
8,914
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Special employee incentive compensation
|
viii.
|
—
|
|
|
—
|
|
|
|
4,698
|
|
|
—
|
|
|
3,923
|
|
|||||
Business combination transaction costs
|
ix.
|
—
|
|
|
—
|
|
|
|
31,832
|
|
|
575
|
|
|
—
|
|
|||||
Adjusted EBITDA
|
|
$
|
230,212
|
|
|
$
|
31,894
|
|
|
|
$
|
183,409
|
|
|
$
|
215,303
|
|
|
$
|
177,930
|
|
i.
|
For the Successor period November 4, 2016 through December 31, 2016, we expensed $26.7 million related to stock awarded to Mr. Metropoulos as required under his new employment arrangements.
|
ii.
|
During the year ended December 31, 2017, we recognized a gain of
$50.2 million
related to the adjustment to the tax receivable agreement related to Tax Reform, slightly offset by a loss due a change in a state tax rate.
|
iii.
|
For the year ended December 31, 2017, other expense primarily included professional fees incurred related to the secondary public offering of common stock and the registration of certain privately held warrants. For the Successor period November 4, 2016 through December 31, 2016, and the pro forma combined year ended December 31, 2016, we recorded expenses of $0.8 million which primarily consisted of legal and professional fees and other post-Business Combination costs such as fees related to securities filings. For the Predecessor period from January 1, 2016 through November 3, 2016, and the pro forma combined year ended December 31, 2016, other expense consisted of transaction costs attributable to the pursuit of a potential acquisition that has since been abandoned, offset partially by a gain from the settlement of a recall matter with one of our suppliers of approximately $0.8 million. For the year ended December 31, 2015, other income consisted of $12.0 million of proceeds from the sale of foreign trademark rights and certain “know how” in certain countries in the Middle East, partially offset by $3.3 million for professional service fees related to the pursuit of a potential sale transactions.
|
iv.
|
For the year ended December 31, 2017 and the period from November 4, 2016, through December 31, 2016, and the pro forma combined year ended December 31, 2016, the Company incurred losses on debt modification of $2.6 million resulting from refinancing transactions on its first lien term loan, and a $0.8 million gain on the extinguishment of the former first lien, respectively. For the year ended December 31, 2015, the Company recorded a loss on extinguishment related to its 2013 Term Loan of $25.9 million.
|
v.
|
For the year ended December 31, 2017, we transitioned the production of one of our products to a third party and recognized an impairment loss resulting from the idling of the related production equipment. For the period January 1, 2016 through November 3, 2016, and for the pro forma combined year ended December 31, 2016, we closed multiple production lines at the Indianapolis, Indiana bakery and transitioned production to other facilities resulting in a loss of $7.3 million.
|
vi.
|
For the Predecessor period January 1, 2016 through November 3, 2016 and the pro forma combined year ended December 31, 2016, we incurred a loss on a sale/abandonment of property and bakery shutdown costs, primarily due to utilities, insurance, taxes and maintenance expenses related to the Schiller Park, Illinois bakery. During the year ended December 31, 2017, we recovered $0.1 million of this cost.
|
vii.
|
For the Successor period November 4, 2016 through December 31, 2016, we remeasured inventory at fair value at the Closing Date, resulting in additional non-cash cost of goods sold of $8.9 million.
|
viii.
|
For the Predecessor period January 1, 2016 through November 3, 2016, a special bonus payment of $2.5 million and $2.2 million was paid to employees at the bakery facilities and corporate employees, respectively, as compensation for their efforts in the Business Combination. For the year ended December 31, 2015, a special bonus payment of $2.6 million and $1.3 million was paid to employees at the bakery facilities and corporate employees, respectively, as compensation for their efforts in the recapitalization of the Company.
|
ix.
|
For the Predecessor period from January 1, 2016 through November 3, 2016, business combination transaction costs consisted primarily of professional and legal costs. For the pro forma combined year ended December 31, 2016, business combination transaction costs consisted primarily of transactional costs attributable to the acquisition of Superior in May 2016.
|
|
Audited Segment Financial Data
|
||||||||||||||||
(In thousands)
|
Year Ended
December 31, 2017 |
|
|
From November 4
through December 31, 2016 |
|
|
From January 1
through
November 3, 2016
|
|
Year Ended
December 31,
2015
|
||||||||
|
(Successor)
|
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Sweet Baked Goods
|
$
|
733,827
|
|
|
|
$
|
105,211
|
|
|
|
$
|
595,645
|
|
|
$
|
620,815
|
|
In-Store Bakery
|
42,361
|
|
|
|
6,787
|
|
|
|
19,943
|
|
|
—
|
|
||||
Net revenue
|
$
|
776,188
|
|
|
|
$
|
111,998
|
|
|
|
$
|
615,588
|
|
|
$
|
620,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross profit:
|
|
|
|
|
|
|
|
|
|
||||||||
Sweet Baked Goods
|
$
|
316,916
|
|
|
|
$
|
37,387
|
|
|
|
$
|
262,930
|
|
|
$
|
262,203
|
|
In-Store Bakery
|
9,982
|
|
|
|
1,327
|
|
|
|
3,599
|
|
|
—
|
|
||||
Gross profit
|
$
|
326,898
|
|
|
|
$
|
38,714
|
|
|
|
$
|
266,529
|
|
|
$
|
262,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures (1):
|
|
|
|
|
|
|
|
|
|
||||||||
Sweet Baked Goods
|
$
|
35,609
|
|
|
|
$
|
7,544
|
|
|
|
$
|
31,254
|
|
|
$
|
27,252
|
|
In-Store Bakery
|
774
|
|
|
|
83
|
|
|
|
223
|
|
|
—
|
|
||||
Capital expenditures
|
$
|
36,383
|
|
|
|
$
|
7,627
|
|
|
|
$
|
31,477
|
|
|
$
|
27,252
|
|
(1)
|
Capital expenditures consists of purchases of property and equipment and acquisition and development of software assets paid in cash or acquired through accounts payable during the year ended December 31, 2017 (Successor), from November 4, 2016 through December 31, 2016 (Successor), from January 1, 2016 through November 3, 2016 (Predecessor) and the year ended December 31, 2015 (Predecessor).
|
Contractual Commitments as of December 31, 2017
|
Total
Committed
|
|
Less than
1 year
|
|
1 to 3 years
|
|
3 to 5
years
|
|
More
than
5 years
|
||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Tax receivable agreement
|
$
|
124,360
|
|
|
$
|
14,200
|
|
|
$
|
15,000
|
|
|
$
|
14,400
|
|
|
$
|
80,760
|
|
First lien term loan
|
993,762
|
|
|
9,938
|
|
|
19,876
|
|
|
963,948
|
|
|
—
|
|
|||||
Interest payments on term loan
|
173,174
|
|
|
35,344
|
|
|
69,624
|
|
|
68,206
|
|
|
—
|
|
|||||
Operating leases
|
2,610
|
|
|
2,043
|
|
|
567
|
|
|
—
|
|
|
|
||||||
Capital lease
|
633
|
|
|
200
|
|
|
400
|
|
|
33
|
|
|
—
|
|
|||||
Ingredient procurement
|
64,235
|
|
|
61,166
|
|
|
3,069
|
|
|
—
|
|
|
—
|
|
|||||
Packaging procurement
|
35,401
|
|
|
35,401
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
1,394,175
|
|
|
$
|
158,292
|
|
|
$
|
108,536
|
|
|
$
|
1,046,587
|
|
|
$
|
80,760
|
|
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
Audited Consolidated Financial Statements
|
|
Report of Independent Registered Public Accounting Firm
|
|
Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016
|
|
Consolidated Statements of Operations for the year ended December 31, 2017 (Successor), from November 4, 2016 through December 31, 2016 (Successor), and from January 1, 2016 through November 3, 2016 (Predecessor), and the year ended December 31, 2015 (Predecessor)
|
|
Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2017 (Successor), from November 4, 2016 through December 31, 2016 (Successor), and from January 1, 2016 through November 3, 2016 (Predecessor), and the year ended December 31, 2015 (Predecessor)
|
|
Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2017 (Successor), from November 4, 2016 through December 31, 2016 (Successor), and Partners’ Equity (Deficit) from January 1, 2016 through November 3, 2016 (Predecessor) and the year ended December 31, 2015 (Predecessor)
|
|
Consolidated Statements of Cash Flows for the year ended December 31, 2017, November 4, 2016 through December 31, 2016 (Successor), and from January 1, 2016 through November 3, 2016 (Predecessor), and the year ended December 31, 2015 (Predecessor)
|
|
Notes to Consolidated Financial Statements
|
|
December 31,
|
|
|
December 31,
|
||||
ASSETS
|
2017
|
|
|
2016
|
||||
|
(Successor)
|
|
|
(Successor)
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
135,701
|
|
|
|
$
|
26,855
|
|
Accounts receivable, net
|
101,012
|
|
|
|
89,237
|
|
||
Inventories
|
34,345
|
|
|
|
30,444
|
|
||
Prepaids and other current assets
|
7,970
|
|
|
|
4,827
|
|
||
Total current assets
|
279,028
|
|
|
|
151,363
|
|
||
Property and equipment, net
|
174,121
|
|
|
|
153,224
|
|
||
Intangible assets, net
|
1,923,088
|
|
|
|
1,946,943
|
|
||
Goodwill
|
579,446
|
|
|
|
588,460
|
|
||
Other assets, net
|
10,592
|
|
|
|
7,902
|
|
||
Total assets
|
$
|
2,966,275
|
|
|
|
$
|
2,847,892
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Long-term debt and capital lease obligation payable within one year
|
$
|
11,268
|
|
|
|
$
|
11,496
|
|
Tax receivable agreement payments payable within one year
|
14,200
|
|
|
|
—
|
|
||
Accounts payable
|
49,992
|
|
|
|
34,083
|
|
||
Customer trade allowances
|
40,511
|
|
|
|
36,691
|
|
||
Accrued expenses and other current liabilities
|
11,880
|
|
|
|
21,656
|
|
||
Total current liabilities
|
127,851
|
|
|
|
103,926
|
|
||
Long-term debt and capital lease obligation
|
987,920
|
|
|
|
993,374
|
|
||
Tax receivable agreement
|
110,160
|
|
|
|
165,384
|
|
||
Deferred tax liability
|
267,771
|
|
|
|
353,797
|
|
||
Total liabilities
|
1,493,702
|
|
|
|
1,616,481
|
|
||
Commitments and Contingencies (Note 14)
|
|
|
|
|
||||
Class A common stock, $0.0001 par value, 200,000,000 shares authorized, 99,791,245 and 98,250,917 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
10
|
|
|
|
10
|
|
||
Class B common stock, $0.0001 par value, 50,000,000 shares authorized, 30,319,564 and 31,704,988 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
3
|
|
|
|
3
|
|
||
Additional paid in capital
|
920,723
|
|
|
|
912,824
|
|
||
Accumulated other comprehensive income
|
1,318
|
|
|
|
—
|
|
||
Retained earnings (accumulated deficit)
|
208,279
|
|
|
|
(15,618
|
)
|
||
Stockholders’ equity
|
1,130,333
|
|
|
|
897,219
|
|
||
Non-controlling interest
|
342,240
|
|
|
|
334,192
|
|
||
Total liabilities, stockholders’ equity and non-controlling interest
|
$
|
2,966,275
|
|
|
|
$
|
2,847,892
|
|
|
Year Ended
December 31, 2017 |
|
From
November 4, 2016 through December 31, 2016 |
|
|
From
January 1, 2016 through November 3, 2016 |
|
Year Ended
December 31, 2015 |
||||||||
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
||||||||
Net revenue
|
$
|
776,188
|
|
|
$
|
111,998
|
|
|
|
$
|
615,588
|
|
|
$
|
620,815
|
|
Cost of goods sold
|
449,290
|
|
|
73,284
|
|
|
|
346,864
|
|
|
355,963
|
|
||||
Special employee incentive compensation
|
—
|
|
|
—
|
|
|
|
2,195
|
|
|
2,649
|
|
||||
Gross profit
|
326,898
|
|
|
38,714
|
|
|
|
266,529
|
|
|
262,203
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Advertising and marketing
|
33,004
|
|
|
5,245
|
|
|
|
30,626
|
|
|
31,967
|
|
||||
Selling expense
|
32,086
|
|
|
5,033
|
|
|
|
25,730
|
|
|
29,484
|
|
||||
General and administrative
|
52,943
|
|
|
7,322
|
|
|
|
38,391
|
|
|
31,531
|
|
||||
Special employee incentive compensation
|
—
|
|
|
—
|
|
|
|
2,503
|
|
|
1,274
|
|
||||
Amortization of customer relationships
|
23,855
|
|
|
3,922
|
|
|
|
1,185
|
|
|
851
|
|
||||
Impairment of property and equipment
|
1,003
|
|
|
—
|
|
|
|
7,300
|
|
|
2,700
|
|
||||
Loss on sale/abandonment of property and equipment, and bakery shutdown costs (recoveries)
|
(144
|
)
|
|
—
|
|
|
|
2,551
|
|
|
4,182
|
|
||||
Business combination transaction costs
|
—
|
|
|
—
|
|
|
|
31,832
|
|
|
—
|
|
||||
Related party expenses
|
381
|
|
|
26,799
|
|
|
|
3,539
|
|
|
4,306
|
|
||||
Tax receivable agreement liability remeasurement
|
(50,222
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Total operating costs and expenses
|
92,906
|
|
|
48,321
|
|
|
|
143,657
|
|
|
106,295
|
|
||||
Operating income (loss)
|
233,992
|
|
|
(9,607
|
)
|
|
|
122,872
|
|
|
155,908
|
|
||||
Other (income) expense:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
39,174
|
|
|
6,649
|
|
|
|
60,384
|
|
|
50,011
|
|
||||
Loss (gain) on modification of debt
|
2,554
|
|
|
(763
|
)
|
|
|
—
|
|
|
25,880
|
|
||||
Other expense (income)
|
1,360
|
|
|
754
|
|
|
|
1,624
|
|
|
(8,743
|
)
|
||||
Total other expense
|
43,088
|
|
|
6,640
|
|
|
|
62,008
|
|
|
67,148
|
|
||||
Income (loss) before income taxes
|
190,904
|
|
|
(16,247
|
)
|
|
|
60,864
|
|
|
88,760
|
|
||||
Income tax expense (benefit)
|
(67,204
|
)
|
|
(7,762
|
)
|
|
|
439
|
|
|
—
|
|
||||
Net income (loss)
|
258,108
|
|
|
(8,485
|
)
|
|
|
60,425
|
|
|
88,760
|
|
||||
Less: Net income (loss) attributable to the non-controlling interest
|
34,211
|
|
|
(4,081
|
)
|
|
|
3,214
|
|
|
4,507
|
|
||||
Net income (loss) attributable to Class A shareholders/partners
|
$
|
223,897
|
|
|
$
|
(4,404
|
)
|
|
|
$
|
57,211
|
|
|
$
|
84,253
|
|
Earnings (loss) per Class A share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$2.26
|
|
(0.05
|
)
|
|
|
|
|
|
|||||||
Diluted
|
$2.13
|
|
(0.05
|
)
|
|
|
|
|
|
|||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
99,109,629
|
|
|
97,791,658
|
|
|
|
|
|
|
||||||
Diluted
|
105,307,293
|
|
|
97,791,658
|
|
|
|
|
|
|
|
Year Ended
December 31, 2017 |
|
|
From
November 4, 2016 through December 31, 2016 |
|
|
From
January 1, 2016 through November 3, 2016 |
|
Year Ended
December 31, 2015 |
||||||||
|
(Successor)
|
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
||||||||
Net income (loss)
|
$
|
258,108
|
|
|
|
$
|
(8,485
|
)
|
|
|
$
|
60,425
|
|
|
$
|
88,760
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||
Unrealized income on interest rate swap designated as a cash flow hedge
|
2,878
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Income tax expense
|
(890
|
)
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Comprehensive income (loss)
|
260,096
|
|
|
|
(8,485
|
)
|
|
|
60,425
|
|
|
88,760
|
|
||||
Less: Comprehensive income (loss) attributed to non-controlling interest
|
34,881
|
|
|
|
(4,081
|
)
|
|
|
3,214
|
|
|
4,507
|
|
||||
Comprehensive income (loss) attributed to class A shareholders/partners
|
$
|
225,215
|
|
|
|
$
|
(4,404
|
)
|
|
|
$
|
57,211
|
|
|
$
|
84,253
|
|
Partners’ Equity (Deficit)
Hostess Holdings, LP
(Predecessor)
|
||||||||||||||||||||
|
|
Class A
|
|
Class C
|
|
Total Partners’
Equity (Deficit) |
|
Non-controlling
Interest |
||||||||||||
Balance – January 1, 2015
|
|
$
|
191,989
|
|
|
$
|
53,100
|
|
|
$
|
245,089
|
|
|
$
|
4,267
|
|
||||
Distributions to partners
|
|
(533,030
|
)
|
|
(419,823
|
)
|
|
(952,853
|
)
|
|
(46,765
|
)
|
||||||||
Unit based compensation
|
|
948
|
|
|
433
|
|
|
1,381
|
|
|
—
|
|
||||||||
Net income
|
|
64,009
|
|
|
20,244
|
|
|
84,253
|
|
|
4,507
|
|
||||||||
Balance – December 31, 2015
|
|
(276,084
|
)
|
|
(346,046
|
)
|
|
(622,130
|
)
|
|
(37,991
|
)
|
||||||||
Distributions to partners
|
|
(9,817
|
)
|
|
(13,765
|
)
|
|
(23,582
|
)
|
|
(1,027
|
)
|
||||||||
Unit based compensation
|
|
1,945
|
|
|
1,945
|
|
|
3,890
|
|
|
—
|
|
||||||||
Net income
|
|
28,605
|
|
|
28,606
|
|
|
57,211
|
|
|
3,214
|
|
||||||||
Balance – November 3, 2016
|
|
$
|
(255,351
|
)
|
|
$
|
(329,260
|
)
|
|
$
|
(584,611
|
)
|
|
$
|
(35,804
|
)
|
Stockholders’ Equity
Hostess Brands, Inc.
(Successor)
|
||||||||||||||||||||||||||||||||||
|
Class A Voting
Common Stock |
|
Class B Voting
Common Stock |
|
Additional
Paid-in Capital |
|
Accumulated Other Comprehensive Loss
|
|
Accumulated
Losses / Retained Earnings |
|
Total
Stockholders’ Equity |
|
Non-controlling
Interest |
|||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance–November 4, 2016
|
97,589,217
|
|
|
$
|
10
|
|
|
29,870,688
|
|
|
$
|
3
|
|
|
$
|
901,157
|
|
|
$
|
—
|
|
|
$
|
(11,214
|
)
|
|
$
|
889,956
|
|
|
$
|
326,601
|
|
|
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,404
|
)
|
|
(4,404
|
)
|
|
(4,081
|
)
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
2,496,000
|
|
|
—
|
|
|
5,718
|
|
|
—
|
|
|
—
|
|
|
5,718
|
|
|
17,889
|
|
||||||||
Exchanges
|
661,700
|
|
|
—
|
|
|
(661,700
|
)
|
|
—
|
|
|
6,217
|
|
|
—
|
|
|
—
|
|
|
6,217
|
|
|
(6,217
|
)
|
||||||||
Tax receivable agreement arising from exchanges, net of income taxes of $420
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
||||||||
Balance–December 31, 2016
|
98,250,917
|
|
|
10
|
|
|
31,704,988
|
|
|
3
|
|
|
912,824
|
|
|
—
|
|
|
(15,618
|
)
|
|
897,219
|
|
|
334,192
|
|
||||||||
Comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,318
|
|
|
223,897
|
|
|
225,215
|
|
|
34,881
|
|
||||||||
Share-based compensation, net of income taxes of $2,610
|
154,849
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,803
|
|
|
—
|
|
|
—
|
|
|
4,803
|
|
|
—
|
|
||||||||
Exchanges
|
1,385,424
|
|
|
—
|
|
|
(1,385,424
|
)
|
|
—
|
|
|
13,848
|
|
|
—
|
|
|
—
|
|
|
13,848
|
|
|
(13,848
|
)
|
||||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,985
|
)
|
||||||||
Payment of taxes for employee stock awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(436
|
)
|
|
—
|
|
|
—
|
|
|
(436
|
)
|
|
—
|
|
||||||||
Exercise of public warrants
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||||
Tax receivable agreement arising from exchanges, net of income taxes of $1,898
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,317
|
)
|
|
—
|
|
|
—
|
|
|
(10,317
|
)
|
|
—
|
|
||||||||
Balance–December 31, 2017
|
99,791,245
|
|
|
$
|
10
|
|
|
30,319,564
|
|
|
$
|
3
|
|
|
$
|
920,723
|
|
|
$
|
1,318
|
|
|
$
|
208,279
|
|
|
$
|
1,130,333
|
|
|
$
|
342,240
|
|
|
Year Ended
December 31, 2017 |
|
November 4, 2016
through December 31, 2016 |
|
|
January 1, 2016
through November 3, 2016 |
|
Year Ended
December 31, 2015 |
||||||||
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
||||||||
Operating activities
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
258,108
|
|
|
$
|
(8,485
|
)
|
|
|
$
|
60,425
|
|
|
$
|
88,760
|
|
Depreciation and amortization
|
38,170
|
|
|
5,843
|
|
|
|
10,265
|
|
|
9,836
|
|
||||
Impairment of property
|
1,003
|
|
|
—
|
|
|
|
7,300
|
|
|
2,700
|
|
||||
Non-cash loss (gain) on debt modification
|
1,453
|
|
|
(3,974
|
)
|
|
|
—
|
|
|
16,005
|
|
||||
Debt discount (premium) amortization
|
(925
|
)
|
|
(197
|
)
|
|
|
2,790
|
|
|
3,423
|
|
||||
Tax receivable agreement remeasurement
|
(50,222
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Stock-based compensation
|
7,413
|
|
|
26,748
|
|
|
|
3,890
|
|
|
1,381
|
|
||||
Loss on sale/abandonment of property and equipment
|
11
|
|
|
—
|
|
|
|
2,551
|
|
|
3,001
|
|
||||
Deferred taxes
|
(81,270
|
)
|
|
(7,815
|
)
|
|
|
—
|
|
|
—
|
|
||||
Change in operating assets and liabilities
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(11,775
|
)
|
|
3,705
|
|
|
|
(19,869
|
)
|
|
(1,077
|
)
|
||||
Inventories
|
(3,901
|
)
|
|
8,895
|
|
|
|
(2,994
|
)
|
|
(5,611
|
)
|
||||
Prepaids and other current assets
|
(3,039
|
)
|
|
(1,694
|
)
|
|
|
(1,049
|
)
|
|
(441
|
)
|
||||
Accounts payable and accrued expenses
|
4,839
|
|
|
(11,296
|
)
|
|
|
33,886
|
|
|
10,480
|
|
||||
Customer trade allowances
|
3,820
|
|
|
2,225
|
|
|
|
4,828
|
|
|
4,364
|
|
||||
Other
|
—
|
|
|
(344
|
)
|
|
|
198
|
|
|
151
|
|
||||
Net cash provided by operating activities
|
163,685
|
|
|
13,611
|
|
|
|
102,221
|
|
|
132,972
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Purchases of property and equipment
|
(32,913
|
)
|
|
(6,494
|
)
|
|
|
(28,633
|
)
|
|
(25,082
|
)
|
||||
Acquisition of business, net of cash
|
—
|
|
|
(421,242
|
)
|
|
|
(49,735
|
)
|
|
—
|
|
||||
Proceeds from sale of assets
|
85
|
|
|
—
|
|
|
|
4,000
|
|
|
425
|
|
||||
Proceeds from sale of marketable securities
|
—
|
|
|
—
|
|
|
|
—
|
|
|
42,960
|
|
||||
Restricted cash release
|
—
|
|
|
—
|
|
|
|
—
|
|
|
1,762
|
|
||||
Acquisition and development of software assets
|
(2,381
|
)
|
|
(460
|
)
|
|
|
(2,211
|
)
|
|
(2,185
|
)
|
||||
Net cash used in investing activities
|
(35,209
|
)
|
|
(428,196
|
)
|
|
|
(76,579
|
)
|
|
17,880
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repayments of long-term debt and capital lease obligation
|
(5,144
|
)
|
|
(217,400
|
)
|
|
|
(6,987
|
)
|
|
(498,565
|
)
|
||||
Proceeds from issuance of long-term debt
|
—
|
|
|
—
|
|
|
|
—
|
|
|
1,225,000
|
|
||||
Payment of deferred underwriting costs
|
—
|
|
|
(13,125
|
)
|
|
|
—
|
|
|
—
|
|
||||
Debt fees
|
(1,066
|
)
|
|
(1,820
|
)
|
|
|
—
|
|
|
(22,819
|
)
|
||||
Distributions to partners
|
—
|
|
|
—
|
|
|
|
(23,582
|
)
|
|
(952,853
|
)
|
||||
Distributions to non-controlling interest
|
(12,985
|
)
|
|
—
|
|
|
|
(1,027
|
)
|
|
(46,765
|
)
|
||||
Payment of taxes related to the net issuance of employee stock awards
|
(436
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from the exercise of warrants
|
1
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Net cash used in financing activities
|
(19,630
|
)
|
|
(232,345
|
)
|
|
|
(31,596
|
)
|
|
(296,002
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
108,846
|
|
|
(646,930
|
)
|
|
|
(5,954
|
)
|
|
(145,150
|
)
|
||||
Cash and cash equivalents at beginning of period
|
26,855
|
|
|
673,785
|
|
|
|
64,473
|
|
|
209,623
|
|
||||
Cash and cash equivalents at end of period
|
$
|
135,701
|
|
|
$
|
26,855
|
|
|
|
$
|
58,519
|
|
|
$
|
64,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest
|
$
|
45,431
|
|
|
$
|
—
|
|
|
|
$
|
68,606
|
|
|
$
|
34,710
|
|
Taxes paid
|
$
|
16,617
|
|
|
$
|
43
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Supplemental disclosure of non-cash investing
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Purchases of property and equipment funded by accounts payable
|
$
|
1,089
|
|
|
$
|
673
|
|
|
|
$
|
633
|
|
|
$
|
(15
|
)
|
(In thousands)
|
December 31,
2017 |
|
December 31, 2016
|
||||
|
(Successor)
|
|
(Successor)
|
||||
Ingredients and packaging
|
$
|
14,826
|
|
|
$
|
12,712
|
|
Finished goods
|
15,471
|
|
|
14,229
|
|
||
Inventory in transit to customers
|
4,048
|
|
|
3,503
|
|
||
|
$
|
34,345
|
|
|
$
|
30,444
|
|
(% of Consolidated Net Revenues)
|
December 31,
2017 |
|
|
From
November 4, 2016 through December 31, 2016 |
|
|
From January 1, 2016
through November 3, 2016 |
|
Year Ended
December 31,
2015
|
||||
|
(Successor)
|
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
||||
Sweet Baked Goods
|
19.7
|
%
|
|
|
19.3
|
%
|
|
|
21.2
|
%
|
|
21.0
|
%
|
In-Store Bakery
|
0.7
|
%
|
|
|
0.7
|
%
|
|
|
0.4
|
%
|
|
0.0
|
%
|
Total
|
20.4
|
%
|
|
|
20.0
|
%
|
|
|
21.6
|
%
|
|
21.0
|
%
|
(In thousands except share data)
|
|
|
||
Class B units of Hostess Holdings, LP subject to six month sales restriction
|
|
24,424,259
|
|
|
Fair value per unit
|
|
$
|
10.83
|
|
|
|
$
|
264,515
|
|
(In thousands except share data)
|
|
|
||
Class B units of Hostess Holdings, LP not subject to sales restrictions
|
|
5,446,429
|
|
|
Fair value per unit
|
|
$
|
11.40
|
|
|
|
$
|
62,086
|
|
Per share price based on average market price on the day of the Business Combination
|
|
$
|
11.40
|
|
Discount for lack of marketability
|
|
5.0
|
%
|
|
|
|
$
|
10.83
|
|
|
|
Year Ended
December 31, 2016
|
||
(In thousands)
|
|
(Pro Forma)
|
||
|
|
(Unaudited)
|
||
Net Revenue
|
|
$
|
727,586
|
|
Net Income
|
|
82,442
|
|
(1)
|
Amounts recorded for property and equipment includes land, building, plant machinery and equipment.
|
(2)
|
Amounts recorded for intangible assets includes customer relationships, trade names and trademarks.
|
(3)
|
Amounts recorded for goodwill are generally not expected to be deductible for tax purposes.
|
|
Restricted Stock
Units |
|
Weighted Average
Grant Date Fair Value |
|||
Unvested units as of December 31, 2016 (Successor)
|
—
|
|
|
$
|
—
|
|
Total Granted
|
1,448,736
|
|
|
15.73
|
|
|
Forfeited
|
(390,038
|
)
|
|
15.78
|
|
|
Vested
(1)
|
(142,804
|
)
|
|
15.55
|
|
|
Unvested as of December 31, 2017 (Successor)
|
915,894
|
|
|
$
|
15.73
|
|
|
|
Shares of
Restricted Stock |
|
Weighted Average
Grant Date Fair Value |
|||
Unvested units as of December 31, 2016 (Successor)
|
|
—
|
|
|
—
|
|
|
Granted
|
|
510,000
|
|
|
$
|
15.73
|
|
Forfeited
|
|
(435,000
|
)
|
|
15.78
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Unvested as of December 31, 2017 (Successor)
|
|
75,000
|
|
|
$
|
13.43
|
|
|
Year
Ended
December 31, 2017
|
Expected volatility
(1)
|
0.2746%
|
Expected dividend yield
(2)
|
—%
|
Expected option term
(3)
|
6.24 years
|
Risk-free rate
(4)
|
2.09%
|
(1)
|
The expected volatility assumption was calculated based on a peer group analysis of stock price volatility with a look back period based on the expected term and ending on the grant date.
|
(2)
|
As of December 31, 2017, the Company has not paid any dividends on our common stock. As of the stock option grant date, the Company does not anticipate paying any dividends on common stock over the term of the stock options. Option holders have no right to dividends prior to the exercise of the options.
|
(3)
|
The Company utilized the simplified method to determine the expected term of the stock options since the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.
|
(4)
|
The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant which corresponds to the expected term of the stock options.
|
|
Number
of Options |
|
Weighted Average
Remaining Contractual Life (years) |
|
Weighted
Average Exercise Price |
|
Weighted
Average Grant Date Fair Value |
||||||
Outstanding as of December 31, 2016 (Successor)
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Granted
|
1,202,613
|
|
|
5.52
|
|
|
15.75
|
|
|
4.99
|
|
||
Exercised
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(374,993
|
)
|
|
5.47
|
|
|
15.78
|
|
|
5.04
|
|
||
Outstanding as of December 31, 2017 (Successor)
|
827,620
|
|
|
5.54
|
|
|
$
|
15.74
|
|
|
$
|
4.97
|
|
Exercisable as of December 31, 2017 (Successor)
|
241.931
|
|
|
5.47
|
|
|
15.78
|
|
|
5.04
|
|
(In thousands)
|
December 31,
2017
|
|
|
December 31,
2016
|
||||
|
(Successor)
|
|
|
(Successor)
|
||||
Land and buildings
|
$
|
32,088
|
|
|
|
$
|
30,275
|
|
Machinery and equipment
|
141,995
|
|
|
|
112,221
|
|
||
Construction in progress
|
13,489
|
|
|
|
12,334
|
|
||
|
187,572
|
|
|
|
154,830
|
|
||
Less accumulated depreciation
|
(13,451
|
)
|
|
|
(1,606
|
)
|
||
|
$
|
174,121
|
|
|
|
$
|
153,224
|
|
(In thousands)
|
Year Ended
December 31, 2017 |
|
From November 4
through
December 31, 2016
|
|
|
From January 1
through
November 3, 2016
|
|
Year Ended
December 31, 2015 |
||||||||
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Sweet Baked Goods
|
$
|
733,827
|
|
|
$
|
105,211
|
|
|
|
$
|
595,645
|
|
|
$
|
620,815
|
|
In-Store Bakery
|
42,361
|
|
|
6,787
|
|
|
|
19,943
|
|
|
—
|
|
||||
Net revenue
|
$
|
776,188
|
|
|
$
|
111,998
|
|
|
|
$
|
615,588
|
|
|
$
|
620,815
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization (2):
|
|
|
|
|
|
|
|
|
||||||||
Sweet Baked Goods
|
$
|
35,441
|
|
|
$
|
5,245
|
|
|
|
$
|
9,221
|
|
|
$
|
9,836
|
|
In-Store Bakery
|
2,729
|
|
|
598
|
|
|
|
1,044
|
|
|
—
|
|
||||
Depreciation and amortization
|
$
|
38,170
|
|
|
$
|
5,843
|
|
|
|
$
|
10,265
|
|
|
$
|
9,836
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
||||||||
Sweet Baked Goods
|
$
|
316,916
|
|
|
$
|
37,387
|
|
|
|
$
|
262,930
|
|
|
$
|
262,203
|
|
In-Store Bakery
|
9,982
|
|
|
1,327
|
|
|
|
3,599
|
|
|
—
|
|
||||
Gross profit
|
$
|
326,898
|
|
|
$
|
38,714
|
|
|
|
$
|
266,529
|
|
|
$
|
262,203
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures (1):
|
|
|
|
|
|
|
|
|
||||||||
Sweet Baked Goods
|
$
|
35,609
|
|
|
$
|
7,544
|
|
|
|
$
|
31,254
|
|
|
$
|
27,252
|
|
In-Store Bakery
|
774
|
|
|
83
|
|
|
|
223
|
|
|
—
|
|
||||
Capital expenditures
|
$
|
36,383
|
|
|
$
|
7,627
|
|
|
|
$
|
31,477
|
|
|
$
|
27,252
|
|
(1)
|
Capital expenditures consists of purchases of property and equipment and acquisition and development of software assets paid in cash or acquired through accounts payable during the year ended December 31, 2017 (Successor), from November 4, 2016 through December 31, 2016 (Successor), from January 1 through November 3, 2016 (Predecessor) and the year ended December 31, 2016 (Predecessor).
|
(2)
|
Depreciation and amortization include charges to net income classified as costs of goods sold and general and administrative expenses on the consolidated statement of operations.
|
(In thousands)
|
December 31,
2017 |
|
|
December 31,
2016 |
||||
|
(Successor)
|
|
|
(Successor)
|
||||
Total segment assets:
|
|
|
|
|
|
|
||
Sweet Baked Goods
|
$
|
2,884,642
|
|
|
|
$
|
2,754,514
|
|
In-Store Bakery
|
81,633
|
|
|
|
93,378
|
|
||
Total segment assets
|
$
|
2,966,275
|
|
|
|
$
|
2,847,892
|
|
(In thousands)
|
Sweet Baked Goods
|
|
In-Store Bakery
|
|
Total
|
||||||
Balance as of December 31, 2015
|
$
|
56,992
|
|
|
$
|
—
|
|
|
$
|
56,992
|
|
Acquisition of Superior
|
—
|
|
|
24,227
|
|
|
24,227
|
|
|||
Elimination of Predecessor goodwill
|
(56,992
|
)
|
|
(24,227
|
)
|
|
(81,219
|
)
|
|||
Business combination
|
542,410
|
|
|
46,050
|
|
|
588,460
|
|
|||
Balance as of December 31, 2016 (Successor)
|
542,410
|
|
|
46,050
|
|
|
588,460
|
|
|||
Measurement period adjustments
|
(12,987
|
)
|
|
3,973
|
|
|
(9,014
|
)
|
|||
Balance as of December 31, 2017 (Successor)
|
$
|
529,423
|
|
|
$
|
50,023
|
|
|
$
|
579,446
|
|
(In thousands)
|
December 31,
2017
|
|
December 31,
2016
|
||||
|
(Successor)
|
|
(Successor)
|
||||
Intangible assets with indefinite lives (trademarks and tradenames)
|
$
|
1,408,848
|
|
|
$
|
1,408,848
|
|
Intangible assets with definite lives (customer relationships)
|
542,011
|
|
|
542,011
|
|
||
Less accumulated amortization (customer relationships)
|
(27,771
|
)
|
|
(3,916
|
)
|
||
Intangible assets, net
|
$
|
1,923,088
|
|
|
$
|
1,946,943
|
|
(In thousands)
|
December 31, 2017
|
|
|
December 31, 2016
|
||||
|
(Successor)
|
|
|
(Successor)
|
||||
Annual incentive compensation
|
$
|
4,259
|
|
|
|
$
|
5,997
|
|
Payroll, vacation and other compensation
|
4,342
|
|
|
|
5,121
|
|
||
Self-insurance reserves
|
1,192
|
|
|
|
2,091
|
|
||
Accrued interest
|
338
|
|
|
|
4,885
|
|
||
Current income taxes payable
|
99
|
|
|
|
2
|
|
||
Workers compensation reserve
|
1,650
|
|
|
|
1,321
|
|
||
Litigation
|
—
|
|
|
|
1,100
|
|
||
Other
|
—
|
|
|
|
1,139
|
|
||
|
$
|
11,880
|
|
|
|
$
|
21,656
|
|
(In thousands)
|
|
|
||
Balance December 31, 2016 (Successor)
|
|
$
|
165,384
|
|
Measurement period adjustments
|
|
(3,017
|
)
|
|
Exchanges of Class B units for Class A shares
|
|
12,215
|
|
|
Remeasurement due to change in state tax rate
|
|
1,589
|
|
|
Remeasurement due to Tax Cuts and Jobs Act
|
|
(51,811
|
)
|
|
Balance December 31, 2017 (Successor)
|
|
$
|
124,360
|
|
(In thousands)
|
|
||
2018
|
$
|
14,200
|
|
2019
|
7,600
|
|
|
2020
|
7,400
|
|
|
2021
|
7,200
|
|
|
2022
|
7,200
|
|
|
Thereafter
|
80,760
|
|
(In thousands)
|
December 31,
2017
|
|
|
December 31,
2016 |
||||
|
(Successor)
|
|
|
(Successor)
|
||||
Third First Lien Term Loan (3.6% as of December 31, 2017)
|
|
|
|
|
||||
Principal
|
$
|
993,762
|
|
|
|
$
|
998,750
|
|
Unamortized debt premium and issuance costs
|
4,857
|
|
|
|
5,396
|
|
||
|
998,619
|
|
|
|
1,004,146
|
|
||
Capital lease obligation (6.8% as of December 31, 2017)
|
569
|
|
|
|
724
|
|
||
Total debt and capital lease obligation
|
999,188
|
|
|
|
1,004,870
|
|
||
Less: Amounts due within one year
|
(11,268
|
)
|
|
|
(11,496
|
)
|
||
Long-term portion
|
$
|
987,920
|
|
|
|
$
|
993,374
|
|
|
|
Year Ended
December 31, 2017 |
|
From November 4, 2016
through December 31, 2016 |
||||
|
|
(Successor)
|
|
(Successor)
|
||||
Numerator:
|
|
|
|
|
||||
Net income (loss) attributable to Class A shareholders (in thousands)
|
|
$
|
223,897
|
|
|
$
|
(4,404
|
)
|
Denominator:
|
|
|
|
|
||||
Weighted-average Class A shares outstanding - basic (excluding non-vested restricted stock awards)
|
|
99,109,629
|
|
|
97,791,658
|
|
||
Dilutive effect of warrants
|
|
6,113,053
|
|
|
—
|
|
||
Dilutive effect of RSAs and RSUs
|
|
84,611
|
|
|
—
|
|
||
Weighted-average shares outstanding - diluted
|
|
105,307,293
|
|
|
97,791,658
|
|
||
Earnings (loss) per Class A share - basic
|
|
$
|
2.26
|
|
|
$
|
(0.05
|
)
|
Earnings (loss) per Class A share - dilutive
|
|
$
|
2.13
|
|
|
$
|
(0.05
|
)
|
(In thousands)
|
Year Ended
December 31,
2017
|
|
November 4, 2016
through
December 31, 2016
|
|
|
January 1, 2016
through
November 3, 2016
|
||||||
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
||||||
Current tax expense (benefit)
|
|
|
|
|
|
|
||||||
Federal
|
$
|
11,163
|
|
|
$
|
9
|
|
|
|
$
|
35
|
|
State and local
|
2,903
|
|
|
43
|
|
|
|
12
|
|
|||
Total Current
|
14,066
|
|
|
52
|
|
|
|
47
|
|
|||
|
|
|
|
|
|
|
||||||
Deferred tax expense (benefit)
|
|
|
|
|
|
|
||||||
Federal
|
(93,457
|
)
|
|
$
|
(6,751
|
)
|
|
|
343
|
|
||
State and local
|
12,187
|
|
|
(1,063
|
)
|
|
|
49
|
|
|||
Total Deferred
|
(81,270
|
)
|
|
(7,814
|
)
|
|
|
392
|
|
|||
Income tax expense (benefit), net
|
$
|
(67,204
|
)
|
|
$
|
(7,762
|
)
|
|
|
$
|
439
|
|
|
Year Ended
December 31,
2017
|
|
November 4, 2016
through
December 31, 2016
|
|
|
January 1, 2016
through
November 3, 2016
|
|||
|
(Successor)
|
|
(Successor)
|
|
|
(Predecessor)
|
|||
U. S. federal statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
|
35.0
|
%
|
|
|
|
|
|
|
|
|||
State and local income taxes, net of federal benefit
|
3.8
|
|
|
4.1
|
|
|
|
0.1
|
|
Income attributable to non-controlling interest
|
(6.3
|
)
|
|
(8.8
|
)
|
|
|
—
|
|
Nontaxable partnerships
|
—
|
|
|
—
|
|
|
|
(34.4
|
)
|
Valuation allowance
|
—
|
|
|
17.2
|
|
|
|
—
|
|
Tax Cuts and Jobs Act
|
(66.2
|
)
|
|
—
|
|
|
|
—
|
|
Change in state tax rate
|
1.2
|
|
|
—
|
|
|
|
—
|
|
Other
|
(2.7
|
)
|
|
0.3
|
|
|
|
—
|
|
Effective income tax rate
|
(35.2
|
)%
|
|
47.8
|
%
|
|
|
0.7
|
%
|
(In thousands)
|
Year Ended
December 31, 2017
|
|
Year Ended
December 31, 2016
|
|
||||
|
(Successor)
|
|
(Successor)
|
|
||||
Deferred tax assets
|
|
|
|
|
||||
Imputed interest
|
$
|
4,967
|
|
|
$
|
10,113
|
|
|
Net operating loss carryforwards
|
578
|
|
|
9,574
|
|
|
||
Tax credits
|
2,337
|
|
|
2,019
|
|
|
||
Other
|
1,002
|
|
|
1,472
|
|
|
||
Subtotal
|
8,884
|
|
|
23,178
|
|
|
||
Valuation allowance
|
(242
|
)
|
|
(205
|
)
|
|
||
Total deferred tax assets
|
8,642
|
|
|
22,973
|
|
|
||
|
|
|
|
|
||||
Deferred tax liabilities
|
|
|
|
|
||||
Investment in partnership
|
(266,900
|
)
|
|
(363,439
|
)
|
|
||
Property and equipment
|
(1,394
|
)
|
|
(1,857
|
)
|
|
||
Goodwill and intangible assets
|
(7,512
|
)
|
|
(11,474
|
)
|
|
||
Other
|
(607
|
)
|
|
—
|
|
|
||
Total deferred tax liabilities
|
(276,413
|
)
|
|
(376,770
|
)
|
|
||
|
|
|
|
|
||||
Total deferred tax assets and liabilities
|
$
|
(267,771
|
)
|
|
$
|
(353,797
|
)
|
|
(In millions)
|
Total Committed
|
Commitments within 1 year
|
Commitments beyond 1 year
|
||||||
Ingredients
|
$
|
64.2
|
|
$
|
61.2
|
|
$
|
3.0
|
|
Packaging
|
35.4
|
|
35.4
|
|
—
|
|
|
|
Three Months Ended
|
||||||||||||||
(In thousands)
|
|
December 31,
2017
|
|
September 30,
2017
|
|
June 30,
2017
|
|
March 31,
2017
|
||||||||
|
|
(Successor)
|
|
(Successor)
|
|
(Successor)
|
|
(Successor)
|
||||||||
Net revenue
|
|
$
|
196,221
|
|
|
$
|
192,250
|
|
|
$
|
203,178
|
|
|
$
|
184,538
|
|
Operating income
|
|
100,762
|
|
|
38,716
|
|
|
49,792
|
|
|
44,723
|
|
||||
Net income
|
|
189,574
|
|
|
16,130
|
|
|
28,207
|
|
|
24,199
|
|
||||
Net income (loss) attributable to Class A shareholders/partners
|
|
179,686
|
|
|
9,549
|
|
|
18,830
|
|
|
15,832
|
|
||||
Earnings (loss) per Class A share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.80
|
|
|
.10
|
|
.19
|
|
.16
|
||||||
Diluted
|
|
$
|
1.74
|
|
|
.09
|
|
.18
|
|
.15
|
(In thousands)
|
|
From
November 4, 2016
through
December 31, 2016
|
|
|
From
October 1, 2016
through
November 3, 2016
|
|
Three Months
Ended
September 30,
2016
|
|
Three Months
Ended
June 30,
2016
|
|
Three Months
Ended
March 31,
2016
|
||||||||||
|
|
(Successor)
|
|
|
(Predecessor)
|
|
(Predecessor)
|
|
(Predecessor)
|
|
(Predecessor)
|
||||||||||
Net revenue
|
|
$
|
111,998
|
|
|
|
$
|
66,831
|
|
|
$
|
196,197
|
|
|
$
|
192,343
|
|
|
$
|
160,217
|
|
Operating income
|
|
(9,607
|
)
|
|
|
(15,022
|
)
|
|
51,667
|
|
|
48,600
|
|
|
37,640
|
|
|||||
Net income (loss)
|
|
(8,485
|
)
|
|
|
(21,084
|
)
|
|
33,513
|
|
|
29,472
|
|
|
18,537
|
|
|||||
Income (Loss) per Class A share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
Class A Common Stock
|
|
Warrants
|
||||||||||||
Year Ended December 31, 2017
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
$
|
16.48
|
|
|
$
|
12.75
|
|
|
$
|
3.00
|
|
|
$
|
1.73
|
|
Second Quarter
|
17.18
|
|
|
14.93
|
|
|
3.57
|
|
|
2.43
|
|
||||
Third Quarter
|
16.55
|
|
|
13.00
|
|
|
3.04
|
|
|
1.69
|
|
||||
Fourth Quarter
|
15.40
|
|
|
11.00
|
|
|
2.49
|
|
|
1.23
|
|
||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
||||||||
First Quarter
|
$
|
10.00
|
|
|
$
|
9.50
|
|
|
$
|
0.40
|
|
|
$
|
0.21
|
|
Second Quarter
|
9.80
|
|
|
9.50
|
|
|
0.36
|
|
|
0.16
|
|
||||
Third Quarter
|
11.16
|
|
|
9.72
|
|
|
1.38
|
|
|
0.25
|
|
||||
Fourth Quarter
|
13.50
|
|
|
10.67
|
|
|
1.98
|
|
|
1.13
|
|
Item 9A.
|
Controls and Procedures
|
Exhibit No.
|
|
Description
|
|
|
2.1*
|
|
|
|
|
3.1
|
|
|
|
|
3.2
|
|
|
|
|
4.1
|
|
|
|
|
4.2
|
|
|
|
|
4.3
|
|
|
|
|
10.1
|
|
|
|
|
10.2
|
|
|
|
|
10.3
|
|
|
|
|
10.4
|
|
|
|
|
10.5
|
|
|
|
|
10.6
|
|
|
|
|
10.7
|
|
|
|
|
10.8
|
|
|
|
|
10.8.1
|
|
|
|
|
10.9
|
|
|
|
|
10.10
|
|
|
|
|
10.11
|
|
|
|
|
10.12
|
|
|
|
|
10.13
|
|
|
|
10.14
|
|
|
|
|
10.15
|
|
|
|
|
10.16
|
|
|
|
|
10.17
|
|
|
|
|
10.18
|
|
|
|
|
10.19
|
|
|
|
|
21.1
|
|
|
|
|
23.1
|
|
|
|
|
31.1
|
|
|
|
|
31.2
|
|
|
|
|
32.1
|
|
|
|
|
32.2
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
(1)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on July 5, 2016 and incorporated herein by reference.
|
(2)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on November 9, 2016 and incorporated herein by reference.
|
(3)
|
Filed as an exhibit of the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2015 and incorporated herein by reference.
|
(4)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on July 27, 2016 and incorporated herein by reference.
|
(5)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on August 15, 2016 and incorporated herein by reference.
|
(6)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2018 and incorporated herein by reference.
|
(7)
|
Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on November 20, 2017 and incorporated herein by reference.
|
HOSTESS BRANDS, INC.
|
|
|
|
By
|
/s/ Thomas Peterson
|
|
Thomas Peterson
Executive Vice President, Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ William Toler
|
|
President and Chief Executive Officer
(principal executive officer)
|
|
February 28, 2018
|
William Toler
|
|
|
|
|
/s/ Thomas Peterson
|
|
Executive Vice President, Chief Financial Officer
(principal financial officer and principal accounting officer)
|
|
February 28, 2018
|
Thomas Peterson
|
|
|
|
|
/s/ C. Dean Metropoulos
|
|
Executive Chairman
|
|
February 28, 2018
|
C. Dean Metropoulos
|
|
|
|
|
/s/ Mark Stone
|
|
Director
|
|
February 28, 2018
|
Mark Stone
|
|
|
|
|
/s/ Laurence Bodner
|
|
Director
|
|
February 28, 2018
|
Laurence Bodner
|
|
|
|
|
/s/ Neil P. DeFeo
|
|
Director
|
|
February 28, 2018
|
Neil P. DeFeo
|
|
|
|
|
/s/ Jerry D. Kaminski
|
|
Director
|
|
February 28, 2018
|
Jerry D. Kaminski
|
|
|
|
|
/s/ Craig D. Steeneck
|
|
Director
|
|
February 28, 2018
|
Craig D. Steeneck
|
|
|
|
|
1.
|
You have decided to retire but wish to delay your actual retirement date until the first quarter of 2018. The actual retirement date (the “Retirement Date”) agreed to by the parties shall be the earlier of the date a new CEO is hired and begins his\her duties with the Company or March 1, 2018.
|
2.
|
You have agreed to remain as President\CEO of the Company until the Retirement Date. Because we wish to have no gap period or interruption of leadership and being uncertain as to the date of the appointment of a new CEO, Dean Metropoulos as Executive Chairman will increase his involvement in the Company over the next several weeks as necessary. You will work collaboratively with him.
|
3.
|
For as long as you remain actively employed with the Company, (a) you will remain on the payroll of the Company at your current rate of base salary and (b) you will continue to have all expenses reimbursed in accordance with the Company’s existing policies or any subsequent policy adopted which are incurred in the performance of your duties for the Company.
|
4.
|
Subject to paragraph 6 below, you will be eligible for a bonus payment for 2017 according to the terms of the 2017 Company Incentive Plan assuming that a bonus is approved by the Board of Directors for senior executives. You will not have to be an employee of the Company when such payment is made.
|
5.
|
You will be eligible to vest in 75,000 shares of the restricted stock on January 1, 2018 and 109,374 non-qualified stock options on November 4, 2017 that were awarded to you on March 23, 2017 by the Company, subject to the terms of the applicable award agreements; provided that, you will not be required to remain employed through the applicable vesting date if such date occurs after the Retirement Date. However, you hereby waive any and all other rights that you had or may have to any other equity awarded by the Company, including any other shares of restricted stock, stock options and performance stock units.
|
6.
|
You will sign the Company’s standard Release Agreement within the time period specified therein, which will include a non-solicitation and a non-compete restriction for a period of 18 months after your Retirement Date (the “Release”). Such Release will not prohibit you from investing in a company that may compete with the Company as long as your investment is for less than 5% of the total equity of the company and you otherwise comply with the terms and conditions of the Release. To avoid any future misunderstanding, and to be clear as to the intent of the parties hereto, it is agreed that such an investment would be a passive investment by you with no other duties, responsibilities or involvement of any kind in the company invested in until the expiration of your non-compete obligations under the Release. The Company’s obligations under paragraphs 4 above and 8 below are contingent upon and not effective until the Release is irrevocable.
|
7.
|
You will remain on the Board of Directors of the Company until a new CEO is chosen by the Company and elected to the Board. The parties hereto may extend your service on the Board as they may mutually agree in the future.
|
8.
|
You will be eligible to receive COBRA continuation coverage under the Company’s health care plans through 12\31\18 at the employee contribution rates as those rates may change with any renewal of benefit plans between your Retirement Date and 12\31\18. To the extent such COBRA continuation coverage continues beyond December 31, 2018 in accordance with COBRA, you will be required to pay the full COBRA rates.
|
|
|
|
Sincerely,
|
|
|
|
|
|
|
|
|
|
The Company
|
|
|
|
|
|
|
|
|
|
By:
|
Michael J. Cramer
|
|
|
|
Its:
|
EVP and CAO
|
|
|
|
|
|
AGREED AND ACCEPTED:
|
|
|
|
|
|
|
|
|
|
/s/ William D. Toler
|
|
|
|
|
William D. Toler
|
|
|
|
|
1.
|
On the Effective Date, you will become EVP & COO of the Company.
|
2.
|
In addition to your current duties, you will be a part of the Company’s acquisition team and shall, as directed by the CEO, (a) assume such other duties with respect to post acquisition activities of any acquired company or assets, (2) oversee innovation within the Company and (3) assume such other and further duties as the CEO directs over time.
|
3.
|
Your base salary shall be raised from $403,000 on an annualized basis to $425,000 on an annualized basis. You will be eligible for merit increase in June of 2018 based on the recommendation of the CEO, subject, however to review and approval of same by the Compensation Committee of the Board of Directors. During the 2 year term noted in paragraph 5 below, your base salary shall not be reduced below the base salary noted above unless there is a general reduction for all senior management employees during this term or the reduction is for Cause. Your target bonus opportunity under the Hostess Brands, Inc. Incentive Plan (Exempt Non-Sales) shall remain at 75% of your base salary.
|
4.
|
You will be issued additional equity as follows:
|
•
|
5,000 Restricted Stock Units vesting over a 3 year period with the initial vesting date to be 1 year from the Effective Date.
|
•
|
20,000 Stock Options vesting over a 4 year period with the initial vesting date to be 1 year from the Effective Date. The strike price shall be the closing price of the stock on the grant date.
|
5.
|
(a) You shall be guaranteed employment or severance in lieu thereof, at the Company’s discretion, as provided in this Section 5(a) for a period of two years from the Effective Date (the “Guarantee Period”). In the event you are terminated prior to the end of the Guarantee Period and are entitled to severance payments under the Company’s Key Executive Severance Benefit Plan (the “Severance Plan”), you will be entitled to receive, upon termination, the balance of your base salary at your then current salary level for the remainder of the Guarantee Period (a “Severance Eligible Termination”). Any severance paid to you shall be first paid under, and subject to the terms and conditions of, the Severance Plan and will be an offset to severance benefits payable to you under this agreement, and the severance benefits, if any, payable to you under this agreement after taking into account such offset will not commence until the first payroll date following the completion of the severance payments to you under the Severance Plan and will continue to be paid in accordance with the payroll schedule. Notwithstanding the above, you shall never receive less for your Severance Eligible Termination than you would receive under the Severance Plan.
|
Very truly yours,
|
|
|
|
|
|
|
|
|
|
Michael J. Cramer
|
|
|
|
|
EVP|CAO
|
|
|
|
|
|
|
|
|
|
Reviewed and Accepted:
|
|
|
|
|
/s/ Andrew W. Jacobs
|
|
|
|
|
Andy Jacobs
|
|
|
|
|
|
|
|
|
|
Dated this
6th
day of
December
, 2017
|
|
|
Name
|
|
State
of Organization
|
|
Percent Owned
by the Registrant
|
Hostess Holdings, L.P.
|
|
Delaware
|
|
76.7%
|
Name
|
|
State of Organization
or Incorporation
|
|
Percent Owned directly
or indirectly
by Hostess Holdings, L.P.
|
New Hostess Holdco, LLC
|
|
Delaware
|
|
100%
|
Hostess Holdco, LLC
|
|
Delaware
|
|
100%
|
HB Holdings, LLC
|
|
Delaware
|
|
100%
|
Hostess Brands, LLC
|
|
Delaware
|
|
100%
|
Hostess Brands Services, LLC
|
|
Delaware
|
|
100%
|
HB Holdings (RE), LLC
|
|
Delaware
|
|
100%
|
New HB Acquisition (RE), LLC
|
|
Delaware
|
|
100%
|
Hostess Superior Cake Products, Inc.
|
|
Delaware
|
|
100%
|
Superior Cake Products, Inc.
|
|
Delaware
|
|
100%
|
Date: February 28, 2018
|
|
/s/ William D. Toler
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
Date: February 28, 2018
|
|
/s/ Thomas A. Peterson
|
|
|
Executive Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
|
Date: February 28, 2018
|
|
/s/ William D. Toler
|
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
Date: February 28, 2018
|
|
/s/ Thomas A. Peterson
|
|
|
Executive Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
|