TreeHouse Foods (THS) 16 Feb 242023 Q4 Earnings call transcript

Welcome to the TreeHouse Foods Fourth Quarter 2023 Conference Call. [Operator Instructions] Please note, this event is being recorded.

At this time, I would like to turn the call over to TreeHouse Foods for the reading of the safe harbor statement.

Good morning, and thank you for joining us today. Earlier this morning, we issued our earnings release and posted our earnings deck, both of which are available within the Investor Relations section of our website at treehousefoods.com.

of would on advise to today's the harbor we forward-looking that fall begin, Litigation safe made Securities statements call provisions we like of you to all within Reform Before Act Private XXXX. the are intended based forward-looking are and expectations statements. uncertainties current risks to differ projections actual may cause on results involve materially and statements These and that from our is the those risks contained SEC. concerning company's with in Information filings the

be found direct deck. A can reconciliation comparable to appendix the most non-GAAP earnings the of GAAP in tables measures their today's and release measures of

that, call Mr. Chairman, With let to me Oakland. the now President, over and turn CEO our Steve

everyone. as you, and Relations Investor Thank me in Please our good new welcoming Matt morning, Officer. Matt, join

full highlight financial provide I well as our as of year XXXX Today, with quarter share will a results guidance. you XXXX our and fourth

On quarter, the and a some XXXX takeaways operating full Slide but by beverages see from year I represented the you X, discussing key brand snacking start Fiscal simplified, private year. first highlights to for company. can our more want as

our including levels. focus, our sharpened priorities, our supply strategic better in to and higher-margin build executed depth chain improve on this we our optimize successfully higher-growth, With initiatives categories, service

of with As sales growth better of and our a supply We annual net we align priorities. XX%. delivered growth a finished chain it while X% investing stronger year adjusted result, portfolio, capabilities to all enhanced the depth, in with EBITDA these and

is impede addition repurchase to the allocated balance our strategically executing the the to to sheet invest also in of capital and sheet million on allocation XXXX. by and which in shareholders balance our $XXX not business, We are We strong investments capital capital strength used a shareholders. return balanced businesses. a to across strategy, is capital did our share maintaining in across This returning to

with us will tailwinds. share competitive our portfolio an Importantly, across industry focus our strategic enhanced strong to relevance reshaped enable gain and consumer increase and

brands national we again further to relative discuss in outperformed shortly. market brand detail will which this private the Specifically, quarter,

opportunities confident on That ahead and we execution remain the focus for brands, near to customers being shareholders. private for in capture across realized the growth. our paramount for We said, both we our term, that with are our well remains businesses the positioned delivering

in We in drive believe opportunity these And investing year. our for supply are and the performance to predictability. coming TreeHouse to provide consistency even chain capabilities better I achieve significant

to a now fourth results summary Slide Turning brief our X. of quarter on

the cookies In the will in fourth of to restart more and and our supply third by XXXX. our As were results. businesses, quarter, and we recall dollars that facility, the discrete broth provide significant quarter, first a a spent will our on some how pretzels extend we broth which in occurred later that disruption reminder, restore late in quarter into impacted we chain detail half plan to business we fourth

midpoint the results This sales impact outlook in expect reflects from of With flat given Pat XXXX, net all the restart we year top $XXX.X nearly to in I our just in above progress against to current of $X.X $X.XX where guidance will came range, the continued supply which EBITDA for representing line of facility, our supply million, the our we in mentioned. Adjusted the the savings just half was broth billion expect on businesses. million, full sales down issues initiatives chain $XXX while expectations provide with X% the to billion, pressure line across this year-over-year, of at year. was detail the our greater considered, guidance chain range of reflects net the first to which, of continue the growth. which of year-over-year

complete, when in currently are restoring laser facility, Richmond on much full plan, to focused Ontario. executing our production, we business that in broth and a other Hill, like our result operations are will a world-class broth We turnaround

be second growth we Given volume in stronger backdrop, the our half of expect this to the year.

million. Additionally, range adjusted Again, will Pat $XXX we $XXX EBITDA of provide expect million more detail. to in the

dive TreeHouse portfolio continued year, our I'll into on advance an update. strategic Throughout to growth, in that, higher strategy higher With the our margin effort categories. focus to

on we our detailed As Slide position are in most advantaged an across categories. X, of today

significant with supply positioning, competitive enhancing XXXX, execution chain, In where our building we a our we capital, out in consistency of see invested on growth driving opportunities. capabilities focus

furthered by to noncore earlier are addition pickles, which making strategy a which the coffee snack completed our and investments of bars portfolio in business, year. seasoned divestiture This growth We in we also all is pretzels, categories. this

on to chain moving our initiatives. supply Now

margin continued have Slide of diligent adjusted as basis supply performance, X, chain, our which our positioning see you on supply our year. customers. this directly remain on invest chain and initiatives. strengthens believe points We partnerships can XXX gross execution margin to TMOS We improved we and with into strategy contributed expansion efforts including competitive other to our have and implementing These

Continued progress in further chain coming margins. us should allow expand supply to the on these initiatives years

start share TMOS to savings or effectiveness, our are even initiatives we in I'm And resulted that off equipment a more XXXX, in OEE, to compared cost in our overall XXXX, happy of to projects a place. the prior with in X-point increase strong year.

progress stages continues according to we exercise, plan. of are the our early procurement which Additionally, in to savings

enables relationships Importantly, and we category with current do to eager growing, base our finding business are brands our to strategic total with with suppliers. In this and supply potential lower our build TreeHouse. us private scale volumes environment,

designed margin to Additionally, we plans our are network progress future making in These improvement. optimization plans. drive are

to migrating Texas, operations facility. and by one Northlake, simplify will currently deliver planned synergies new in a eliminating which excellence single-serve of our coffee coffee our center network are our portion We of

in these We are the quarters. pleased with designed making to are on future we're progress improvement initiatives, drive margin which

supply track approximately gross will are growth of million chain XXXX, $XXX which long-term We support on savings through to achieve our offering.

surrounding the and industry brands. broader Next, the trends I like provide to on some would private context

while The be other CPG heard category you macro continues concerns overall As in general by volumes, pressure inflationary among resulted and to of unit these broader economic effect food flat, sales The you've CPG environment net have private outperform brands. overall beverage relative from the to year-over-year. to to consumption consumers. market the remained seen volumes, national our across on continuing challenged similar companies, industry. and lower weighed has nearly what These dynamics brand declined

look at X in capabilities we're we positioning portfolio price, If outpaced improved investments measured excluding we top our of the our competitive market year in and making and XXXX. our full X believe performance, our retail categories, into heading the

the shelf Similar categories quarters, especially few Turning quarter past to want that prices to reflect inflation, the fourth which to TreeHouse to in X. operates. we emphasize in in the retailers Slide increased

You dollar for shelf prices of will illustrates that reached which meaningful goods see absolute a that brand private high delivers basket the consumers. a savings year, for in December, the

saved a Specifically, branded would basket basket relative goods of $XX within our goods. of on a quarter, our to categories have approximately shopper this past a

quarterly important retailers above weeks. most have that private during role Slide and consecutive XXX On play Private brand season. pronounced the trends X, unit is was at It also holiday unit all-time for over share reiterate brands Again, the private for these remain share high noting to consumers. and gained XX% Brands a continues worth

industry. greater the their bringing and Additionally, the proposition beneficial many most apparent. branded We in private we've that marketing back investments to peers the shelf, make to in drive brand be to discuss is believe our consumer plans across promotion volume heard where of will the value recovery

key are we've look believe a levels. historic On these price X, continued remain growth in gaps We which gaps provided Slide when price categories, the of share elevated contributor Brands. a at our compared Private to to

private touch voice a as hear and merchandising. briefly their for to continue retailers Additionally, I desire we brand private wanted upon to promotions return support brands to to

promotional a for higher in on Slide this of shopper our while tend get overall, of a retailers national brands right we've investment. private What X, higher brands believe side On generates level brand to categories. found and label and the historically data means to We to national a private traffic is included the drive importance loyalty. as return promotion illustrates of brands performance we that private promotion

specifically, the national but activity fourth relates increased promotional As it relatively remained the private to brands. quarter low for brands, among

believe heavier increase private promotion. should performed still despite We positioned well well are we activity brands. to Importantly, this return we promotional level of

on Pat Before on a on our also strong energized significant year. XXXX detail the and pipeline past Despite our team the our you to investments turn as our financial I'd and outlook, the ongoing year. forward drive and like our is balance of in over place and I our and strong updated begin continued net for in We've more capital our With look achievements people to uncertainty, throughout performance growth. our keeping from to economic strategy, our supply in chain I call of our financial structure. categories to with progress made sales right am the current sheet some reinforce the we execute position company to

turn Pat. I'll over the Now call to

Expressing remain in and summary quarter our I'll year. my a a confident to fourth to in the on of in results XXXX to XX. am TreeHouse XXXX. with Slide appreciation the for I strong close we team everything entire of accomplished ability execute proud start our

in Adjusted adjusted of the We million sales in was EBITDA with performance the our to gross adjusted of margin, low both and returned end drove versus line adjusted at the $XXX.X range $XXX.X of expectations. and EBITDA sales improvement almost which prior net million margin year, at Net delivered our declined midpoint. guidance which XX%. EBITDA

through Let me in detail. walk this greater

at XX, a sales look we Slide net provided year-over-year our On drivers.

discrete partially business was seasoned last to the that Our our acquisition. driven remaining decline were as at as The and and lower-margin offset disruptions well of we chain net exit pretzel items sales due decline primarily our was broth within by by from discussed These coffee volume cookie pretzel business. planned challenges primarily our quarter. facility supply

roughly years, to flat last pressure. lapped we've now inflationary the as couple over pricing that of from pricing Our recover taken was actions the we've primarily

or was walk to Volume our and through in including drivers. contributed of commodities, profit XX, absorption, $XX you net million. Moving a PNOC, the I'll Slide of headwind quarter. $XX million pricing mix,

of to inputs all-time lower and levels. historical While commodities elevated packaging have seen our some we remain moved highs, compared still to ingredient relative recent many

you hard the our would improvement work executing at current As are drive our logistics profitability expect, environment. given teams and throughout procurement network to initiatives

our drive a retain and for year-over-year, Supply in million plants, labor attract $X in to XXXX. where mainly plan investments and workers growth we due Operations to drag in to Next, Chain primarily

Other by year-over-year. operating of exit the a SG&A This negatively was profit services agreement. transition a temporary with impacted of associated $X million result largely and expenses Lastly,

work with transformation. pleased in down services, that team's divestiture our I'm in milestone significant which finalizing those represented a winding and efficiently our

to on on sheet XX. Slide the Moving balance

improved our In position the we to we leverage the credit under Coupled our borrowings of in ratio adjusted million with facility the seller Xx. performance, quarter, continue $XXX repayment EBITDA a We note at year our of receivable. approximately be with of revolving received strength. repaid approximately and ended

million Turning the to we We including capabilities in and priorities. sheet, building our balance million $XXX in of capital recap, CapEx $XXX our we pretzels. strengthen We consistent our cash we Slide deployed of leverage, and to business XX. capital investment depth XXXX, operate, and the To in where through and categories million our repurchases. $XXX returned in share deployed with to X reducing improved shareholders invested coffee position,

XXXX, will strategy. supply and focused against efficiency near-term continue growth. of category chain remain increasing and allocation further our and Much to our to be fuel into Moving leadership execute on our our spend we gaining offerings capital depth will disciplined of

while spend outlook for volumes about a Brands seen are we assuming no over macro not and in beverage and has it consumption consumption our I'd on has in Private term. national From XXXX. a food to overall Now been to Slide the few a moments XX. year Therefore, guidance to near last volume we significant thinking weakness been framing we've our like perspective, changes the We prudent the in consumption turning historical XXXX. return brand the volume Recently, how assume trends year. categories. in to down, believe flat is environment to are

year, strengthened a of number pickles. to top grow line businesses our our we coffee, last in we Having and pretzels including particularly capabilities said see organically, the opportunities where that,

is quickly our capabilities and bid for we which and profitable growth on from new are opportunity for hear to retail partners. drive innovation, our another grocery partnering enabling and volume depth items, both to continue including interest retailers company TreeHouse enhanced in Our opportunities, seasonal

half of the In from recent pretzel during as pickle January. have we our volume well from coffee addition benefit growth in organic acquisitions of business the to first year Bick's opportunities, that annual the and we volume the acquired these the as

outlined, line will with constrained that is to we be the restart grow in continue our in broth While we well our XXXX previously the believe to ability facility. to positioned annual our efforts sales by temporarily targets to business grow

sales Slide $X.X that With range growth. to flat X% expect we reflects XX which this in year-over-year net to a of represents mind, billion billion, $X.XX in

to business, particularly half We the of will expect approximately which the growth facility net the from sales $XX contribution our of impact the million, due partially be in year. broth the rest first the mutes

overall positive for From expect mix pricing modest We our a planning to a decline and slightly volume are for we year. the year-over-year. be perspective,

EBITDA Moving to profitability, $XXX in $XXX million we expect range million. adjusted a to of

and are we've track significant in XXXX. we confident that are made our savings We supply on in believe to the initiatives progress implementing gross in deliver chain savings

adjusted profit of constrain line approximately made impact broth the restart guidance, have $XX in year. for broth is and We EBITDA will the related our estimate impact with our the million the to facility as expect our already case the top facility However, we we investments growth. from the volume be

free we at $XXX expect of least Additionally, flow cash million.

net expense expenditures approximately $XX Finally, and $XXX of of million $XX we million anticipate to interest capital million.

these facility, that With last and single-digit XXXX, build and decline pickles. the we quarter, Also, of regard performance pretzels at also sales Based from of from we discussed The would digits, on a primarily volume. driven approximately the midpoint. to you be be we pricing million, now to offset pipeline sales partially the organic will will year-over-year benefit recover impact to lapping actions $XXX million remind our expect historically a are broth volume low sales $XXX are significant to by which cumulative factors, our net the X% year. we acquisition of which by down expecting high-single in saw the adversely QX decline a that I'll impact inflation the in strong represents first coffee, our the net which contribution

related the decline. we our EBITDA profitability, will from volume be to The expect facility driver broth of be the adjusted absorption of million. year-over-year terms of unfavorable million In and $XX in $XX QX range to significant a impact

higher certain labor in expect to and operating markets. with talent selective we the costs making agreement due TSA are to Additionally, and exited investments attract associated expenses retain we the temporary in

on in the in I'd outlines what Slide to context business sales the also like provide cadence. We've our of adjusted included portfolio and a you historical net general as can reshaped some of cadence additional result our expect XXXX. EBITDA which and XX our appendix,

our standpoint typically experienced lower strongest As in by a of sales lowest it with period. driven is we fourth higher quarter the first the relates volume half half the our to which year, the sales, sales the seasonally second year, and second in quarter from quarter seasonally being of

in adjusted more and pronounced also stronger demand higher split slightly The on is which pronounced quarter. most driven EBITDA, is utilization, fourth the by

impacting adjusted we historical constraints cadence. in half facility, and our second due the Given half us first weighted sales to to our XXXX expect the EBITDA broth be more our performance than would

to over back for it turn Steve Steve? I'll that, With closing remarks.

proof EBITDA testament team. of provides I'd past on the our to growth that our adjusted and this net of entire our we annual deliver Day year. We long-term outlined approximately XX%. this of like reiterate a dedication year Pat. growth year is at point algorithm sales our performance TreeHouse X% our to of growth I last Investor that to believe a delivered Thanks, ability

more become to allowed transformation profitable smaller sales Our TreeHouse net has on base. our

but for are million impact path As the you EBITDA. adjusted see broth $XXX on facility, can Slide XX, the to on we in our of

the term. remain private current line outlined our the flat, Current trend have near what are growth prudent brands in challenged. impacting to consumption we outlook. while remains drive growth a And top ability believe trends We is outperforming,

Over the the we categories still opportunity growth. our term, for provide strong believe long

me second the half a to factors that year ability delivering Given like confidence to our the is of give our in achieve few to key on goals. our reiterate I'd outlook, that

made investments to coffee, won business starts are First, that categories that wins, refrigerated new we've capabilities second in these particularly we've in the year. new The the of pickles. and business dough half strengthen enabling like our shipping

strongest has Second, the business. relationships since of commercial in our robust company pipeline XXXX, a customer our a sales I testament strength the teams, had we and is the which It's operations. to the for have joined their

Third, of had in savings than ever year cost throughout rollout chain starting we our additional TMOS supply projects to place are more savings and the we've continued with expect drive XXXX.

fully And as and these pretzels finally, we XXXX, should second keep we've to in made enable the mind that during move us the investments seasonal their broth, in into categories half of service cookies, peak.

look to I'm the and transformative to portfolio that have positioned that taken sharpen our ahead, the strengthen and the profitability we've we company capabilities focus As actions growth outlined. that we've our confident deliver well

turn up that, open over call the to line operator your With to I'll the to questions. the

Shamir [Operator Instructions] Barclays. from question comes of Your Johnny the line first from

the Andrew first the and I still is also the quarter facility, first that year-over-year broth I first to year Lazar. off, ago Steve Pat, EBITDA comp in it's be exclude in restarting material $XX a guess of pretty in impact if And lower quarter the we difficult is expected part that way. the mentioned. from you know million

you we EBITDA I confidence play remainder the your And how going other of driving should on that things does guess year? what's there Like obviously, be the in for first of? this? are the see growth, aware quarter the that that in into

XX you tried comments about Andrew, be things to to to had this other if going QX, of. we guided back XX. And what we talked we I went some you a would make to cadence when need business. aware of is I there's it the of the on Pat. historical don't that say was think the in

of range from a QX think, you And that range, so perspective. would I in something normalized think what that is in

ex QX. the for is we're impact a number So we reasonable describing think actually broth the QX

really the lapping it's pull think and I QX some some XXXX. in of then the we that volume just did So pricing forward of of

you in maybe as more sort as do was maybe, little such branded in levels up maybe categories managed pass-through the you press pricing a that as normal release, some you certain back more their And more can levels? promotional in Is Or players categories. deflationary so, then And widespread? of kind Got maybe price just ramp if it coffee? actions it. primarily And it that like I into mentioned, of think potential is to get bit. it gaps see

I'll we contractual price-throughs pricing most and Yes, up have commodity clause them. is an deflation are of Yes. and on that down, go passed volatile in Sure, a They that have take of example a deflation -- Andrew. contracts automatically. of most great so It's through escalator inflation. the Coffee that. and right, those through deescalator that.

private But you The about quarter, label talked right? call, was the gain know share when last -- peak a you pre-pandemic much the interesting to still this -- right? CPG, in saw we It's being mentioned quarter back And was the promotion. year not that we all promoted on quite. about basket quarter about $XX, think more $XX, levels, fourth we the I right? for almost In talked

didn't So and promotion to year, I between do the disappointed, was promoted inventory gap still frankly, -- we private We during even quarter. the of it. quite branded. label the a category pretty in had the label there's private promoted more or most that see quarter substantial

performance they the deliver that frankly, retailers brand doing without it gave relative quite the numbers confidence to could it. But think, I of their

little to promotion forward on side. more look a our would actually we So

next of Stifel. Matt comes Smith Your from question the from line

TreeHouse, at excluding favorable below that volumes, investments the the if growth for particular. of outlook, and label improve look to private underlying X% broadly impact in XXXX are But in well X% the we acquisitions broth you've still business, portfolio environment called the to out the target. in You made the

about? about You that talk offset the in but keeping wins Can improvement no that outlook? be business factors you you talked below the new and about that you've or should assumption offset partially talked consumption, by

Sure. Sure.

guided environment midpoint it about guess of about year, right? of to for I happen, 'XX. a deflation, flat to growth are where X% couple units and we've have next now, that. got think a guided And a that if means for macro percent for year We growth talk or we've is unit make you Let's this that

X% that with our of stronger to we underlying have, guiding prudent And meet we and the that just so we business to think new in you've consumer see this happen. that, to than strength guidance environment, if our at But the we uncertain got wouldn't the time. didn't and businesses, that make about both order we think isn't do grow

a in business. the contending actually could other January. what I of back Is level the losses, manufacturers? if the Are to if growth label at volumes to by where market with are is running? in broth ask rebuild and question category that broth contract you of is share And case, period returned seeing the Private relating And label follow-up gains there your up the facility the expectations business? even you're after a time private

It's great maximum a significantly interesting. category is private our We have though, is our we've facilities, Ontario that up right? X its broth that plant ramped to customers, had producing -- given have to we're And Richmond we you us. less. label for a remind to capacity. Hill, Private label I'd allocate broth

sales. we losing So are some

point. the from I they've think customer this recognizes service us up the into and both had the quality

somewhere some work way source reputation enough broth this will be customers our But our to there'll that built significant and forward. have probably think going else. through be that broth So business we've we'll I

Your next question comes from Stephens. the from Jim line Salera of

more it could that move that, drill have the that? that broth guys the you on visibility confident you provided it good have fixing piece. changes situation know as obviously, there you really down have in we about you're you any XXXX? bit we into on into underway feel Or numbers Is and little around do risk -- I before guys a that. you If talked

a we've been the because just right? I what of world-class We in very cautiously guided do we've here, think run think risk, broth have cautious we I guided here. facility.

think where And we the I resources. it have know where this and one right we to needs be. So was

it on results that a business bought years bought this then. right? since not right? drag It to a happen, We ago, XX years ago. TreeHouse make $X.XX has We've the been XX spared

we I it's or think faced when capital, I people, mean of full a should it's we this in and stepped we full And recall process. rebuild of look, a really some recognized in recall -- product. -- the We it's this third business. quarter did

be it a will it historically world-class TreeHouse driver It -- with has a we're be a will So done for drag. been when this.

We addressed that We of needs to We and piece. XXXX, with early you dough the We facilities that X were dough worst our right? year. in the you started year. talked this cookies in about in And capital cookies. didn't drivers our addressed And last business. because some broth unfortunately, legacy of see

of we I parts But more think we'll vendor us when our make our sufficient addressed riskiest the to we will programs finish going And much be will we have a maintenance reliable business this. and ongoing consistent think X forward.

And press Great. you actually that release, remarks -- up companies a And talked this in labor guys the other that's then if I I something have in reported. little that the but seen a or bit prepared inflation. come with couple think of is remember can't about we've

during And that same I given warehouse I that has around labor of -- pool. But rolled a would back. was some labor guess lot obviously, of that and COVID, like there think competition

labor the level inflation. that so there's And same of surprised I'm I still guess

around If just you challenges and some of color you're the seeing give could that there? any

availability the the inflation, see we and relatively being labor but I still Yes. the market. same workforce level labor and if know don't of the of elevated it's

to I in that something challenging is others. be we'll the some in worry about, market-wise. markets think geographies we an not we're it employer on operate we competitive, driver don't more And choice the ensure of and focused are it's so than which we're that but major being

a the was say lag would those would renewed for contracts Yes. renewed, labor that tend tends right? a -- So renewed. those few them. contracts be also there's probably a that of labor expense to rates more happen favorable at And are impact in are new unionized. when contracts little -- of expect are And until I facilities those bit And to I the the

we bit think we'll it's going forward. we what as not So not I business. when think of little risks inflation a it's have the said, labor Pat But our of -- of in our think

Your from line comes the Moskow Cowen. next TD question of Rob from

of I had couple questions, a Steve.

want was, that to the The activity just first branded I you've seen understand remarks branded prepared from players. about

you're said at you when promotional. those And a showed, plans, be they that category look think narrow, think slide it more I that that taken plans price more growth. the you that that encouraged I it you've to more But me look they continue get seem to will and help look those X, would getting at this like it intend showing will I is to gap and more that Slide on does narrow.

does understand more your for gaps? I it did price -- correctly, this what as So positive that I comments understand And is of a than mean negative? the

Sure. Sure.

now grew, are price returning gaps, label levels where okay? And to are price gaps. penny those not price remember, private percentage gaps historic So

So used of costs right? XX% that a now to $X, that cost product $X,

moment label think up branded. AG to in consumer the of old shelf at [indiscernible] So looks the I moment shelf, walks when and both and private front the of of the truth, truth about the right is the comment

penny So now. the absolute environment, we think the significant, gap even retailers the our is in better consumer of along in the so front with have quality that promotional assortment right

decisions label shelf, the price need made at eyes are in Private the of right? We front shelf.

the penny that drive of hope we given front that label category will So in get of private the its if us growth now. confident traffic absolute you grow, categories gaps are that shelf, share we're and to

follow-up. Okay. my And then

some does quarter and that take as account extent you well. think issues I To And those the think you did said third ago. issues issues? numbers, in those from hurt into all? had that cookies year OEE at points a improved broth then I if X in pretzels what How

Yes.

TMOS across whole investment got network. in our think I we've

So we plants. have multiple

in one talking that service effectively, invested we operate the middle the season. network plant plant And plants. we about That then we maintenance was to us bit have put and about a obviously, impact where And we're there. allowed and where so and other some in year, the the dough. didn't talked as of a We

where broth think we've as that's further on, go I a service at investments seeing other from our look most made facility we pay off those So earlier where in really the the can one we And with drive we we're think, standpoint efficiencies. there. you're places, improvement to starting last

things to to will executed plans in savings being continues XXXX. about confidence be opportunity gives there cost XXXX our we got margin executed that that that we or efficient in 'XX place, continue a more think We lot waste around network, next eliminate us into year. think be can and how for and throughout in we've And we be of are plan

just we our and do of you all Well, so Rob, aggregate know, facilities. XX

broth So of is plant the them. one

that that did so last that, Even just it probably and tamp year, first in will number And bit, X But with down -- quarters, the we gives a down right? but grew a in it X% right? tamp OEE, you sense.

TreeHouse and network is fair, why cost we progress at not is, opportunity the savings be grow, is there's the that was kind that's of room -- and at we're the to making right? have Now we're substantial there news to it. in attacking of There top the network, in good -- our some our We have OEE hill, right?

from Jefferies. Your comes from Rob of the Dickerson question next line

mix to of X down mid-single pricing say, net. like, guidance mean I rightsize digits, down just little it I for sounds want year, the be to the some, the to vol it might modestly. with comment down cadence I the to by guess, of bit QX, is for maybe right? year like back X, X, then I mean but a kind let's kind the about, ask of it given more seems pricing just

get to of investment to in flex. it then seem question time, contractual, same would like, little the tremendous there's year-over-year bit dynamic, QX. guide, pass-through kind of seem like full back price a on amount it's like more to maybe that just the would But a it given not there's the at And year Andrew's

move kind you we of dynamic can any the year-over-year kind of see how color So just as that out playing pricing as you through year. to give

impact our is cost pricing, of true have really the things, Steve we're of in of Yes. and with lower full types Maybe I'll pass-through single-digit that's and sort start that or commodities And those some we where year. of the described, low what anticipating pass-through.

year. from that be profit, the consistent think we will through a So

I low-single So terms seeing think that much we're in difference of digit. in don't QX

the have have then consumption QX. of carry I trends and we QX about saw that that's and broth you'll you'll same think in we I thought how think QX, the really impact, some into

And trying label. you private the guess, some that in with you retailers it. on just I that proactive to re-merchandise Day. of shelf can conversations to fortunate that -- were like it are just able pipeline back it Investor the enough Clearly, velocity? we certain conviction see Have Got that and retailers your drive had very the to get give innovation then, innovation clearly, of in terms seems Okay.

awards some right? how reason guide the mean January is have I We in what confident That's of got we're business Rob. the works. this start actually We've some Yes, to new coffee, so out will visibility go stuff pickles. there is contracts of in that we've far 'XX, done pretzels, that. that

So next when They those Investor of the over the year. in you and pipeline, year we into on saw are things. and shelf were the we'll this see at presenting course now Day, those the we

yes, So that great into have now. we right visibility

sometimes month the pretty the visibility we right? X. We've happens, be -- that there now. is good But been so or if date that on won't a conservative right that Now pushes impacted

quick it. super. provide And just one sneak for right, I the think you All then DNA in. year, guide don't to a

I you Sometimes have don't know if you do. that?

Yes. significant that We you changes. can offline, give

line Your from question next from of Reuter America. William Bank of comes the

I X. have

is outlook for categories, your for year? non-pass-through costs what's the your input first in The

Yes.

overall. think I commodity continue see elevated relatively to we

modest key a couple seeing a in in overall, some -- perhaps But commodities. to of couple deflation, And not so still disinflation we're elevated things remain of seeing history. relatively significant we're that

relatively similar kind of really -- so last And year. to to smaller

increasing the out clearly into that Meal I M&A from interest couple ones is then in in leverage bigger. in And and outlook some for the after beyond? and last little and guess, expand year, were categories They try were low you Okay. a Your leverage Prep new or What's a to received acquisitions. -- XXXX of are further? size existing your you proceeds modest completed divestiture, some build

this it, right, more It don't allocation significantly. just execute see increase leverage in to you strategy. drive we'll operators. the right? the think year We in cash need depth our categories, flow make we will us given have capital be can businesses think I Well, our invest better articulated the and to We attractive

and to make investments will maintenance. we be be that us the It There'll have events invested more those third There'll let that are automation be CapEx expense, fortify high like apply quarter, at in some right? efficient had through some so our us places right? and in don't chain supply labor plants we It's to what that value.

the shareholders, it will So of right? really balance feel to like note us then transaction that maintaining now we the do all And of allow paydown X those returning to things. the capital sheet and be and

line [Operator Carla Instructions] JPMorgan. Your Casella the from next of from question comes

following Somewhat Bill's question. on

cash that of using now balance get to You're you debt? I'm to on recouping sitting out large leverage, just anticipate excess more accrued. And but any down netting your that after wondering, do X.Xx pay cash a you're to your

we We laid in The leverage historical the goal priorities. not think of we've balance out our solid want the that TreeHouse. go to return to level had maintain to sheet. I is levels

is invest think our first go I business. And back in so priority the to

where the And TreeHouse. greatest we so clearly that's for see opportunity

way continue to last it we'll And saw very in us a do do disciplined like year. you

those. do cash across relatively that. all leverage, other. I of the very not we'll need one And go And at levels spend a or the We're a lower we balanced if to in of so hurry in approach we'll think to maintain stay way

is rest are Carla, bonds of current I swaps the Our debt debt proud we're today. priced the with is the X% right? -- to other market our say would our of incredibly thing really and structure, the

that think shareholders And a investing returning makes of so those we some -- to right sense lot now. business of in our funds that and

differently. think that we'll more or overnight it us reason in pay it no So I look hurry. for it to -- what of that the lot a I a pay equal change, should fact than think But There's given deposits, at down our debt is. structure

X.Xx? targeting to That And sense. level you're X comfort makes complete average still with your

right. That's

Yes. correct. That's

Okay. freight the more freight color labor, other? impacted bit a in the us follow-up drivers of terms it biggest cost. the And on quarter? the one question much little And give -- you just within are lower then -- of what then Can the benefited gas, how freight? Is

Yes.

think somewhat seen market I we've freight stabilized.

over our kind is expense lot of don't I last know distribution the that's don't a think -- happened couple of quarters. that it's driver. it's within on know I of that P&L. the and the that I largest

shipment of outlook customers. our to will in And terms lot think our continue to is think I of we that, is that. to centers that a how our distribution or it be consistent about

So think of... terms about that in

I as more slowed key the freight a availability, freight much is, In bit, is economy down Yes. mean, the available.

interesting so over of capacity we've that see And rates drives down. forward. if we it I will But what as down, time think little be rate come go a seen spot happens that. The bit we'll right? has carrier

carrier time full the shows to be The time. we've is up got because is, best on in availability. able We're on thing great

the it case, is ago, as you the case So year that so was or know, a not but today.

from guidance clarification. for those in for one million $XX might in $XX then your Or showed top onetime impact your and other of that the XXXX, that of the adjustment be facility $XX great. On will just items EBITDA onetime items broth call adjusted that you'll that out your million -- without with on EBITDA? is you EBITDA? be million That's And Okay. disruption,

I look that slightly at different. No. would

that really sales while the and is we do what $XX the profits we million of lost can't think I deliver ramp-up.

do facility we're a of all we of getting need and so lines disciplined our of And fourth the done investment sort that in very the and quarter, majority and that up running. we've to the now on ramp-up of

the And we're I guide that's is business just -- trying that what that's are impact is rest to is show those the -- doing. of -- the the say that what really adjustments, wouldn't then so and of

from next William Jon of comes Your from the Andersen question line Blair.

there On think, better competitive in-store presentation, the liquid beverages as categories, categories positioning [indiscernible] Slide you'd in are that where X tea. call out or see you I and the X bakery,

sit you a the Just action those to What that? is? wondering where if plan is little bit you competition? talk improve what can vis-a-vis And about opportunity the

to Sure. make you we a need that are think preferred of that us have And investments us we right? the feel vendor to if capability we're seen the doing but to And good consumer there, categories what and make year, gone kind you back some you'd so is you categories, give customer. put showing depth coffee have would with we're -- I a

coffee business. we excellence. enormous Northlake acquisition coffees, on coffee had an center the Northlake impact the coffee quickly So called of our But very the has very,

would We tea in the like that business. do to

small thing, beverages, we're there, about there, a subscale will niche we Our mostly do very our a we but lot just aseptic coffee business then there. there, doing for And And that's back we we're business, the think right? of think think we were small. liquid if right? think right subscale be things ready-to-drink We beverages. and we us. That's producing And like it's you

we're a grocery the when category table of but in So great that table. cookie bakery, walk we is think largest category, a bakery you which in one that see participate kinds big in-store provider, only on things. those right? it's In a -- we're you So and in-store we provider, store scale

So is the that that the really it. an and placements us the infrastructure to on there the that don't use simple, but We with connection It's frosted-sugar have opportunity cookies customer right? for best that maybe table, in of table, make to more on participate rest simply right? we

buy. whether capabilities, that's do or we places so we at they maybe for be foreshadow the look would capabilities, build where at hunt least and And

Okay. That's helpful.

I you've need more You you the do process. it is, I this in Are of problem work invested there if is should and to like in? guess, facilities them call broth, beyond which kind in -- investments that mentioned know remediation cookies, that routine don't any this X dough I point? Or other plants

at savings year? Day, just then middle what from million savings in last $XXX us second the those cost part, of update can at Investor you And XXXX, presented through on if the all of on you cadence gross it's just changed

the take one. you maybe Pat, one, second first the take I'll Sure. Sure.

I were cookie our for do that dough They the think that of during period we underinvested and when incredibly look, COVID you run thought hard plants number were a of -- our had plants maintenance. in kind couldn't years.

were in our for needed But And those those and areas frankly, autonomous in 'XX, to we're forward. broth. the the work maintenance engineering have invest. pull I We had knew we doing, plant quite maintenance We caught invested just teams. year. so funds needed we planned we like broth organization feel our And last

having us keep in I same ongoing efforts the will our from the problems think future. kind of

facility quite and we're last was Broth our right? in a financials, maybe that's This has and addressing a been years system the has that on XX goal real be a Cambridge drag. is. be should driver, what driver. So should drag risk think frankly, our I our It for

And then most has regarding savings, terms so that the first, take cost launch. of maturity TMOS I if in

And this enter with place. so we will number projects year in a of

think And is of TMOS so over that ratable period. X-year relatively

our base. the with the year, is that getting and renegotiating reaction response contracts. happening we're pleased really we're the procurement, a work part here across where in From the we're But of first

half starting would ramp up of as year. so to of this back think into that I And the

XXXX. low-hanging that little pay things but the earlier, will savings into bulk that's in and few -- bit of I think few happening this the a second of of the off There's a half year

our the for logistics, where Meal in sold in reached Prep the business the network quarter similar then major logistics we separated milestone fourth that And we we a business. from

going work optimize our about we're go so And the now to network.

as And over into so to year course of that and up pay off think into ramping late 'XX 'XX. and starting the this of really

that given more though, and we on run savings exercise, this especially progress more of the procurement the plan. in place projects and guide did maturity, I have in model TMOS the

sort year. of the think this far derisks so And so it I plan

would I Steve session. question-and-answer over to our the remarks. like back to closing conference for turn concludes This Oakland

look with our sharing just and like today, Yes. thank for go forward to us being we this as on I'd we all progress year. to you

day, So talk and great soon. to have a we'll you, all,

conference concludes This today's call.

disconnect. now may You