Whole Earth Brands Inc (FREE) Reports Q3 2023 Results with Margin Improvement and Record Sales ...
Whole Earth Brands Inc (NASDAQ:FREE) reports a year-over-year increase in adjusted gross profit margin for Q3 2023.
Flavors & Ingredients segment achieves a record sales quarter, with 4.2% growth.
Branded CPG segment sees a slight decline in net product revenue, attributed to lower volumes and tariffs.
Company revises full-year 2023 outlook due to current market conditions and geopolitical events.
On November 9, 2023, Whole Earth Brands Inc (NASDAQ:FREE) announced its financial results for the third quarter ended September 30, 2023. The company reported its third consecutive quarter of margin improvement and a record sales quarter for its Flavors & Ingredients segment.
Financial Performance Overview
The Branded CPG segment experienced a 2.0% decrease in product revenues, totaling $103.3 million, primarily due to a decline in Wholesome bulk sugar sales aimed at avoiding incremental tariffs. Excluding this factor, the segment's constant currency revenue was essentially flat. The Flavors & Ingredients segment, however, saw a 4.2% increase in product revenues, reaching $31.2 million.
Operating income for the Branded CPG segment increased to $7.2 million, up from $5.5 million in the previous year, while the Flavors & Ingredients segment's operating income rose to $8.4 million from $7.3 million. Corporate expenses increased to $9.0 million, compared to $6.0 million in the prior year, due to higher bonus expense and costs associated with the company's strategic review.
Balance Sheet and Cash Flow Highlights
As of September 30, 2023, Whole Earth Brands Inc (NASDAQ:FREE) had $24.2 million in cash and cash equivalents, and $424.5 million of long-term debt, net of unamortized debt issuance costs. The company also reported $10.6 million in cash provided by operating activities and $6.5 million in free cash flow for the nine months ended September 30, 2023.
Revised Outlook for 2023
Whole Earth Brands Inc (NASDAQ:FREE) has revised its outlook for the full year 2023, acknowledging the impact of current geopolitical events, the inflationary environment, and foreign currency exchange rate fluctuations.
Management Commentary
Executive Chairman Irwin D. Simon stated,
We are pleased to deliver a year-over-year increase in adjusted gross profit margin in the third quarter, which represents an improvement of 270 basis points over the prior three consecutive quarters this year."
Co-CEO Jeff Robinson commented on the growth of the Flavors & Ingredients business, and Co-CEO Rajnish Ohri highlighted the focus on improving cash generation within the Branded CPG business.
Conference Call and Webcast
The company hosted a conference call and webcast to review its third quarter results on November 9, 2023. A replay of the call will be available until November 23, 2023, and the live audio webcast can be accessed on the Company's Investor Relations website.
About Whole Earth Brands
Whole Earth Brands is a global food company specializing in premium plant-based sweeteners, flavor enhancers, and other foods. The company's portfolio includes brands such as Whole Earth, Pure Via, Wholesome, Swerve, Canderel, and Equal. Whole Earth Brands is committed to providing high-quality, plant-based products to more than 100 countries worldwide.
For detailed financial tables and further information, please refer to the full earnings release and filings on the U.S. Securities and Exchange Commission's website.
Explore the complete 8-K earnings release (here) from Whole Earth Brands Inc for further details.
This article first appeared on GuruFocus.
