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What changed in BELLRING BRANDS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BELLRING BRANDS, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+262 added−326 removedSource: 10-K (2023-11-21) vs 10-K (2022-11-17)

Top changes in BELLRING BRANDS, INC.'s 2023 10-K

262 paragraphs added · 326 removed · 237 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

68 edited+5 added−7 removed62 unchanged
Biggest changeThe brand’s Premier Protein with Oats shake line adds more balanced nutrition with 20 grams of protein plus 7 grams of fiber and can be enjoyed both hot and cold. Our RTD protein shakes are formulated to deliver great-tasting, leading protein levels while maintaining one of the leanest nutritional profiles in the category (as measured by sugar and calorie content).
Biggest changeOur RTD protein shakes are formulated to deliver great-tasting, leading protein levels while maintaining one of the leanest nutritional profiles in the category (as measured by sugar and calorie content). Premier Protein ’s powder portfolio consists primarily of 100% whey protein products. We believe the product profile appeals to consumers across age ranges in all four need states.
Our Customers Our customers are predominantly club stores, FDM customers, online retailers, specialty retailers, convenience stores and distributors. We sell our products domestically and in more than seventy countries globally.
Our Customers Our customers are predominantly club stores, FDM retailers, online retailers, specialty retailers, convenience stores and distributors. We sell our products domestically and in more than seventy countries globally.
In international markets, we sell our products through a combination of direct sales to retailers and to third party distributors. We utilize a direct sales force in key markets in the Western Europe for multiple channels, including specialty, FDM and eCommerce. We also sell through distributors in the specialty channel.
In international markets, we sell our products through a combination of direct sales to retailers and to third-party distributors. We utilize a direct sales force in key markets in Western Europe for multiple channels, including specialty, FDM and eCommerce. We also sell through distributors in the specialty channel.
Ms. Davenport has served as a member of the board of directors of Blentech Corporation, a company focusing on developing custom-made, food processing solutions including equipment, integrated systems and software, since January 2010. Ms. Davenport earned her undergraduate degree from Princeton University and her MBA from New York University’s Leonard N. Stern School of Business. Douglas J.
Davenport has served as a member of the board of directors of Blentech Corporation, a company focusing on developing custom-made, food processing solutions including equipment, integrated systems and software, since January 2010. Ms. Davenport earned her undergraduate degree from Princeton University and her MBA from New York University’s Leonard N. Stern School of Business. Douglas J.
Unless otherwise indicated or the context otherwise requires, all references in this report to “BellRing,” “we,” “our,” “us,” “the Company” and “our Company” refer to (1) Old BellRing and its consolidated subsidiaries during the periods prior to the 5 Table of Contents completion of the Spin-off, including BellRing LLC, Premier Nutrition Company, LLC (“Premier Nutrition”), Dymatize Enterprises, LLC (“Dymatize”), Supreme Protein, LLC (“Supreme Protein), the PowerBar brand and Active Nutrition International GmbH (“Active Nutrition International”) and (2) us and our consolidated subsidiaries during the periods subsequent to the Spin-off, including, BellRing LLC, Premier Nutrition, Dymatize, Supreme Protein and Active Nutrition International, in each case, unless otherwise stated or the context otherwise indicates.
Unless otherwise indicated or the context otherwise requires, all references in this report to “BellRing,” “we,” “our,” “us,” “the Company” and “our Company” refer to (1) Old BellRing and its consolidated subsidiaries during the periods prior to the 5 Table of Contents completion of the Spin-off, including BellRing LLC, Premier Nutrition Company, LLC (“Premier Nutrition”), Dymatize Enterprises, LLC (“Dymatize”), Supreme Protein, LLC (“Supreme Protein), the PowerBar brand and Active Nutrition International GmbH (“Active Nutrition International”) and (2) us and our consolidated subsidiaries during the periods subsequent to the Spin-off, including, BellRing LLC, Premier Nutrition, Dymatize, Supreme Protein, Active Nutrition International and Premier Nutrition Canada, Inc., in each case, unless otherwise stated or the context otherwise indicates.
See “Risk Factors” included in Item 1A of this report and Notes 1 and 14 within “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this report for more information about the Spin-off. Our Industry We operate in the global convenient nutrition category, a rapidly-growing and on-trend category within the food and beverage industry.
See “Risk Factors” included in Item 1A of this report and Notes 1 and 13 within “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this report for more information about the Spin-off. Our Industry We operate in the global convenient nutrition category, a rapidly-growing and on-trend category within the food and beverage industry.
Cornille earned his undergraduate degree from Rhodes College and attended Oxford University, St. John’s College. Mr. Cornille earned his MBA from Duke University - The Fuqua School of Business. Marc S. Mollere, age 55, has served as Senior Vice President and General Manager of International of Premier Nutrition, a subsidiary of ours, since 2020.
Cornille earned his undergraduate degree from Rhodes College and attended Oxford University, St. John’s College. Mr. Cornille earned his MBA from Duke University - The Fuqua School of Business. Marc S. Mollere, age 56, has served as Senior Vice President and General Manager of International of Premier Nutrition, a subsidiary of ours, since 2020.
Under the terms of a manufacturing agreement with the third party contract manufacturer, Premier Nutrition is required to purchase a minimum annual order volume of RTD protein shakes and has the right (but not the obligation) to order quantities in excess of a monthly minimum amount provided the third party contract manufacturer has the capacity and the ability to produce such additional quantities.
Under the terms of a manufacturing agreement with the third-party contract manufacturer, Premier Nutrition is required to purchase a minimum quarterly order volume of RTD protein shakes and has the right (but not the obligation) to order quantities in excess of a monthly minimum amount provided the third-party contract manufacturer has the capacity and the ability to produce such additional quantities.
Diversity, Equity, Inclusion and Belonging We recognize the importance of a diverse, equitable and inclusive culture for our employees and are dedicated to creating an inclusive environment that reflects the communities in which we live and work that creates belonging. We have implemented initiatives to track and improve our performance in these areas.
Diversity, Equity, Inclusion and Belonging We recognize the importance of a diverse, equitable and inclusive culture for our employees and are committed to creating an inclusive environment that reflects the communities in which we live and work that creates belonging. We have implemented initiatives to track and improve our performance in these areas.
Rosenthal earned his undergraduate degree from the University of Missouri-Columbia and juris doctorate from Washington University School of Law. Robin Singh, age 53, has served as Senior Vice President, Operations of Premier Nutrition, a subsidiary of ours, since March 2019. Prior to joining Premier Nutrition, Mr.
Rosenthal earned his undergraduate degree from the University of Missouri-Columbia and juris doctorate from Washington University School of Law. Robin Singh, age 54, has served as Senior Vice President, Operations of Premier Nutrition, a subsidiary of ours, since March 2019. Prior to joining Premier Nutrition, Mr.
Given the growth profile of our primary products, we continuously plan for incremental capacity, including adding new third party contract manufacturing partners in fiscal 2022 and working to qualify additional third party contract manufacturing partners and sites for fiscal 2023, and review additional strategic alternatives to support our business.
Given the growth profile of our primary products, we continuously plan for incremental capacity, including adding new third-party contract manufacturing partners in fiscal 2023 and working to qualify additional third-party contract manufacturing partners and sites for fiscal 2024, and review additional strategic alternatives to support our business.
Dymatize ’s marketing strategy is focused on retailer-specific programs, online and specialty print media and social media. Social media is a high-touch medium that resonates with Dymatize ’s core fitness-focused consumers. The brand also utilizes a social media influencer model, “Team Dymatize,” engaging with athletes.
Dymatize ’s marketing strategy is focused on retailer-specific programs, online and specialty print media and social media. Social media is a high-touch medium that resonates with Dymatize ’s core fitness-focused consumers. The brand also utilizes a social media influencer model, the “Squad,” engaging with athletes.
Our Dymatize brand is focused primarily on sports nutrition, which we define as consumers looking to supplement sports endurance and body building needs. Brand Overview Our primary brands, based on fiscal 2022 sales, are Premier Protein and Dymatize .
Our Dymatize brand is focused primarily on sports nutrition, which we define as consumers looking to supplement sports endurance and body building needs. Brand Overview Our primary brands, based on fiscal 2023 sales, are Premier Protein and Dymatize .
Mollere earned his BS in Marketing from Sam Houston State University. Paul A. Rode , age 52, has served as our Chief Financial Officer since September 2019 and serves as our principal financial officer and principal accounting officer. Mr.
Mollere earned his BS in Marketing from Sam Houston State University. Paul A. Rode , age 53, has served as our Chief Financial Officer since September 2019 and serves as our principal financial officer and principal accounting officer. Mr.
Our key trademarks include BellRing ®, BellRing Brands ®, Premier Protein ®, Premier Nutrition ®, Dymatize ®, ISO.100 ®, PowerBar ® and Joint Juice ®, each of which we own, as well as trademarks that we license from third parties, such as Pebbles ® and Dunkin ®.
Our key trademarks include BellRing ®, BellRing Brands ®, Premier Protein ®, Premier Nutrition ®, Dymatize ®, ISO.100 ® and PowerBar ®, each of which we own, as well as trademarks that we license from third parties, such as Pebbles ® and Dunkin ®.
Cornille , age 50, has served as Chief Growth Officer of Premier Nutrition, a subsidiary of ours, since November 2021. Prior to that, he served as Senior Vice President, Marketing of Premier Nutrition since July 2015. Prior to joining Premier Nutrition, Mr.
Cornille , age 51, has served as Chief Growth Officer of Premier Nutrition, a subsidiary of ours, since November 2021. Prior to that, he served as Senior Vice President, Marketing of Premier Nutrition since July 2015. Prior to joining Premier Nutrition, Mr.
Singh held various senior leadership positions at Mondelez International, 12 Table of Contents Inc., a publicly traded multinational snack food company, from 1996 until March 2019, including Vice President of Operations from July 2018 to March 2019, Director of Supply Chain Strategy and Supply Chain Reinvention North America from February 2016 to July 2018, and Director of Supply Planning North America from January 2014 to January 2016.
Singh held various senior leadership positions at Mondelez International, Inc., a publicly traded multinational snack food company, from 1996 until March 2019, including Vice President of Operations from July 2018 to March 2019, Director of Supply Chain Strategy and Supply Chain Reinvention North America from February 2016 to July 2018, and Director of Supply Planning North America from January 2014 to January 2016.
As part of its marketing strategy, Premier Protein leverages its fans’ enthusiasm for the brand to spread the word of our products. The brand utilizes an influencer marketing program called “Premier Shakers” that leverages micro-influencers, content creators and top-tier influencers to generate further awareness of Premier Protein . 7 Table of Contents Dymatize .
As part of its marketing strategy, Premier Protein leverages its fans’ enthusiasm for the brand to spread the word of our products. The brand utilizes an influencer marketing program called “Premier Shakers” that leverages micro-influencers, content creators and top-tier influencers to generate further awareness of Premier Protein . Dymatize .
Electricity and steam are used in the facilities that manufacture our products. In addition, considerable amounts of diesel fuel are used in connection with the distribution of our products. Manufacturing . We primarily engage third party contract manufacturers in North America and the European Union (the “E.U”). to produce our products.
Electricity and steam are used in the facilities that manufacture our products. In addition, considerable amounts of diesel fuel are used in connection with the distribution of our products. Manufacturing . We primarily engage third-party contract manufacturers in North America and the European Union (the “E.U.”). to produce our products.
Hanley Road, St. Louis, Missouri 63144-2503, Telephone: 314-644-7600). The information and other content contained on our website are not part of (or incorporated by reference in) this report or any other document we file with the SEC. Information about our Executive Officers The section below provides information regarding our executive officers as of November 17, 2022: Robert V.
Hanley Road, St. Louis, Missouri 63144-2503, Telephone: 314-644-7600). The information and other content contained on our website are not part of (or incorporated by reference in) this report or any other document we file with the SEC. Information about our Executive Officers The section below provides information regarding our executive officers as of November 21, 2023: Robert V.
In addition, some of our products are produced and marketed under contract as part of special certification programs such as organic, kosher or non-GMO, and must comply with the strict standards of federal, state and third party certifying organizations.
In addition, some of our products are produced and marketed under contract as part of special certification programs such as organic, kosher or non-GMO, and must comply with the strict standards of federal, state 9 Table of Contents and third-party certifying organizations.
We report to our stakeholders with respect to the results of our ESG initiatives on an annual basis, with our second annual Impact Report being published online later this year.
We report to our stakeholders with respect to the results of our ESG initiatives on an annual basis, with our third annual Impact Report being published online later this year.
Immediately following the Spin-off, Post owned 19,397,339 shares, or approximately 14.2%, of BellRing Common Stock. On August 11, 2022, Post disposed of 14,800,000 shares of BellRing Common Stock, which resulted in Post owning 4,597,339 shares, or approximately 3.4%, of BellRing Common Stock.
Immediately following the Spin-off, Post owned 19,397,339 shares, or approximately 14.2%, of BellRing Common Stock. On August 11, 2022, Post disposed of 14,800,000 shares of BellRing Common Stock, which resulted in Post owning 4,597,339 shares, or approximately 3.4%, of BellRing Common Stock as of September 30, 2022.
In fiscal 2022, we formed an Executive Sustainability Steering committee comprised of senior leaders within our organization, which provides guidance on goals and strategies and makes recommendations on disclosure and reporting guidelines. We also have a Sustainability Operations Committee comprised of technical experts within key business functions that meets regularly to implement programs and track progress on key objectives.
We have an Executive Sustainability Steering committee comprised of senior leaders within our organization, which provides guidance on goals and strategies and makes recommendations on disclosure and reporting guidelines. We also have a Sustainability Operations Committee comprised of technical experts within key business functions that meets regularly to implement programs and track progress on key objectives.
The agreement also contains detailed provisions regarding the product specifications and quality standards for the raw materials to be provided by the supplier, the rights of a party in the event the other party does not comply with its obligations under the agreement and other customary contractual terms and conditions. The agreement expires on October 30, 2024. Energy.
The agreement also contains detailed provisions regarding the product specifications and quality standards for the raw materials to be provided by the supplier, the rights of a party in the event the other party does not comply with its obligations under the agreement and other customary contractual terms and conditions. The agreement expires on June 30, 2028. Energy.
Internationally, our operations, including our manufacturing facility in Germany, are subject to local and national regulations similar to those applicable to us in the U.S. We have made, and will continue to make, expenditures to ensure compliance with environmental regulations. Human Capital We have approximately 380 employees as of November 1, 2022.
Internationally, our operations, including our manufacturing facility in Germany, are subject to local and national regulations similar to those applicable to us in the U.S. We have made, and will continue to make, expenditures to ensure compliance with environmental regulations. Human Capital We have approximately 420 employees as of November 1, 2023.
Of these employees, approximately 230 are in the U.S., approximately 135 are in Germany and approximately 15 are in other countries. Our people are critical to our success and we prioritize providing a safe, rewarding and respectful workplace where our people are provided with opportunities to pursue career paths based on skills, performance and mindset.
Of these employees, approximately 275 are in the U.S., approximately 135 are in Germany and approximately 10 are in other countries. Our people are critical to our success and we prioritize providing a safe, rewarding and respectful workplace where our people are provided with opportunities to pursue career paths based on skills, performance and mindset.
Supply availability and prices paid for raw materials can fluctuate widely due to external factors, such as pandemics (including the COVID-19 pandemic) and other outbreaks of contagious diseases, weather conditions, labor disputes, governmental programs, regulations and trade and tariff policies, industry consolidation, economic climate, energy shortages, transportation delays, commodity market prices, currency fluctuations and other unforeseen circumstances.
Supply availability and prices paid for raw materials can fluctuate widely due to external factors, such as pandemics and other outbreaks of contagious diseases, weather conditions, labor disputes, governmental programs, regulations and trade and tariff policies, industry consolidation, economic climate, energy shortages, transportation delays, commodity market prices, currency fluctuations and other unforeseen circumstances.
Talent Acquisition, Development, Engagement and Retention Acquiring, developing, engaging and retaining a diverse and talented workforce is key to accomplishing our goals and achieving business results. 10 Table of Contents Our talent acquisition processes include diversity training for recruiters and employee training on interview skills and processes to improve our candidate selection process.
Talent Acquisition, Development, Engagement and Retention Acquiring, developing, engaging and retaining a diverse and talented workforce is key to accomplishing our goals and achieving business results. Our talent acquisition processes include diversity training for recruiters and employee training on interview skills and processes to improve our candidate selection process.
Our Organizational Structure As a result of the Spin-off: • We became the new public parent company of, and successor issuer to, Old BellRing, and shares of our BellRing Common Stock were deemed to be registered under 12(b) of the Exchange Act, pursuant to Rule 12g-3(a) promulgated thereunder. • Old BellRing is our wholly-owned subsidiary. • As of September 30, 2022, all of our membership interests in BellRing LLC were contributed to Old BellRing such that Old BellRing is now the sole equity member of BellRing LLC.
Our Organizational Structure As a result of the Spin-off: • We became the new public parent company of, and successor issuer to, Old BellRing, and shares of our BellRing Common Stock were deemed to be registered under Section 12(b) of the Exchange Act, pursuant to Rule 12g-3(a) promulgated thereunder. • Old BellRing is our wholly-owned subsidiary. • All of our membership interests in BellRing LLC were contributed to Old BellRing and Old BellRing is the sole equity member of BellRing LLC.
Premier Protein ’s flagship RTD protein shakes are available in 14 flavors (including 3 seasonal flavors) and contain 30 grams of protein with only one gram of sugar and 160 calories. They are gluten- and soy-free, low fat and fortified with 24 vitamins and minerals.
Premier Protein ’s product portfolio consists primarily of RTD protein shakes and protein powders. Premier Protein ’s flagship RTD protein shakes are available in 14 flavors (including 3 seasonal flavors) and contain 30 grams of protein with only one gram of sugar and 160 calories. They are gluten- and soy-free, low fat and fortified with 24 vitamins and minerals.
In its fiscal year ended September 30, 2013, Post acquired Premier Nutrition, which, at the time, was a marketer and distributor of high-quality protein shakes and nutrition bars under the Premier Protein brand and nutritional supplements under the Joint Juice brand. Premier Nutrition, Inc. was founded in 1997, and Joint Juice, Inc. was founded in 1999.
In its fiscal year ended September 30, 2013, Post acquired Premier Nutrition Corporation, which, at the time, was a marketer and distributor of high-quality protein shakes and nutrition bars under the Premier Protein brand and nutritional supplements under the Joint Juice brand.
We own a manufacturing plant in Voerde, Germany that supplies nutrition bars and gels primarily for the European Union (the “E.U.”), Switzerland and the United Kingdom (the “U.K”). We regularly monitor the capacity and performance of our third party contract manufacturing partners and suppliers and qualify new contract manufacturing partners and suppliers as needed.
We own a manufacturing plant in Voerde, Germany that supplies nutrition bars and gels primarily for the E.U., Switzerland and the United Kingdom (the “U.K.”). We regularly monitor the capacity and performance of our third-party contract manufacturing partners and suppliers and qualify new contract manufacturing partners and suppliers as needed.
In North America, our products typically are shipped directly from our contract manufacturing partners to a network of third party warehouses. Products are distributed from third party warehouses to customer distribution centers or retail stores or are exported by our distribution partners to international customers.
In North America, our products typically are shipped directly from our contract manufacturing partners to a network of third-party warehouses. Products are distributed from third-party warehouses to customer distribution centers or retail stores or are exported by our distribution partners to international customers. Occasionally, we ship products directly from our third-party contract manufacturers to our customers’ distribution centers.
Our owned production plant in Voerde, Germany is additionally certified to one of the international Food Safety Standards (ISO/FSSC 22.000, IFS or BRC), SMETA 4-pillars (Labour, Environment, Health and Safety, Business Ethics) and OHSAS 18001 (Health and Safety). Distribution .
Our owned 8 Table of Contents production plant in Voerde, Germany is additionally certified to one of the international Food Safety Standards (FSSC 22.000, IFS or BRC), SMETA 4-pillars (Labour, Environment, Health and Safety, Business Ethics) and ISO 45001 (Health and Safety). Distribution .
In its fiscal year ended September 30, 2014, Post acquired Dymatize, which, at the time, was a manufacturer and marketer of high-quality protein powders and nutritional supplements under the Dymatize brand and nutrition bars under the Supreme Protein brand. Dymatize was founded in 1994 and purchased the S upreme Protein brand in 2012.
In its fiscal year ended September 30, 2014, Post acquired Dymatize, which, at the time, was a manufacturer and marketer of high-quality protein powders and nutritional supplements under the Dymatize brand and nutrition bars under the Supreme Protein brand.
From three separate and geographically diverse manufacturing locations, our largest third party contract manufacturer provided approximately 64.7% of our Premier Protein RTD shake supply for our year ended September 30, 2022.
From three separate and geographically diverse manufacturing locations, our largest third-party contract manufacturer provided approximately 53.8% of our Premier Protein RTD shake supply for our year ended September 30, 2023.
Immediately following the Spin-off, Post owned approximately 14.2% of BellRing Common Stock and the former holders of Old BellRing Class A Common Stock owned approximately 28.5% of BellRing Common Stock. As a result of the Spin-off, the dual class voting structure of Old BellRing was eliminated. As of September 30, 2022, Post owned approximately 3.4% of BellRing Common Stock.
Immediately following the Spin-off, Post owned approximately 14.2% of BellRing Common Stock and the former holders of Old BellRing Class A Common Stock owned approximately 28.5% of BellRing Common Stock. As a result of the Spin-off, the dual class voting structure of Old BellRing was eliminated. As of September 30, 2023, Post had no ownership of BellRing Common Stock.
Our largest customers, Costco and Walmart (which includes its affiliates, including Sam’s Club), accounted for approximately 63.5% of our net sales in our year ended September 30, 2022. No other customer accounted for more than 10% of our fiscal 2022 net sales.
Our largest customers, Costco, Walmart (which includes its affiliates, including Sam’s Club) and Amazon, accounted for approximately 75.3% of our net sales in our year ended September 30, 2023. No other customer accounted for more than 10% of our fiscal 2023 net sales.
Together our brands cover the major product forms in the convenient nutrition category and appeal to a broad range of consumer need states. Our percentage of net sales by brand for our year ended September 30, 2022 were as follows: Premier Protein , 81.0%; Dymatize , 15.4%; and other, 3.6%.
Together our brands cover the major product forms in the convenient nutrition category and appeal to a broad range of consumer need states. Our percentage of net sales by brand for our year ended September 30, 2023 were as follows: Premier Protein , 83.2%; Dymatize , 14.0%; and other, 2.8%.
We compete with other brands, including private label and store brand products, and with many nutritional food and beverage players. We have numerous competitors of varying sizes, including manufacturers of other branded food and beverage products, as well as manufacturers of private label products. Some of our competitors have substantially more financial, marketing and other resources than us.
We have numerous competitors of varying sizes, including manufacturers of other branded food and beverage products, as well as manufacturers of private label products. Some of our competitors have substantially more financial, marketing and other resources than us.
Davenport previously served as General Manager of Premier Nutrition from October 2014 to November 2016 and Vice President of Marketing from October 2011 to October 2014. Prior to joining Premier Nutrition, Ms. Davenport served as Director of Brand Marketing at Joint Juice, Inc., a liquid dietary supplement manufacturer, from May 2009 to October 2011, when it combined with Premier Nutrition.
Prior to joining Premier Nutrition, Ms. Davenport served as Director of Brand Marketing at Joint Juice, Inc., a liquid dietary supplement manufacturer, from May 2009 to October 2011, when it combined with Premier Nutrition. Ms.
In addition, our operations are subject to various federal, state and foreign laws and regulations regarding data privacy, including the General Data Protection Regulation, the E.U.’s retained law version of the General Data Protection Regulation and the California Privacy Rights Act, each of which applies to certain aspects of our business and deal with the collection and use of personal information obtained from data subjects.
In addition, our operations are subject to various federal, state and foreign laws and regulations regarding data privacy, data protection and data security, including the General Data Protection Regulation, the E.U.’s retained law version of the General Data Protection Regulation and the California Consumer Privacy Act, as amended by the California Privacy Rights Act, each of which applies to certain aspects of our business and regulate how businesses collect, use and protect personal information obtained from data subjects.
We are in the process of renegotiating the terms of this manufacturing agreement, which expires on December 31, 2022. We regularly evaluate our contract manufacturing arrangements to ensure the cost-effective manufacturing of our products. We select our manufacturing partners based on expertise, quality, cost and location.
This agreement expires on December 31, 2027. We regularly evaluate our contract manufacturing arrangements to ensure the cost-effective manufacturing of our products. We select our manufacturing partners based on expertise, quality, cost and location.
Rosenthal , age 51, has served as our Senior Vice President, General Counsel and Secretary since August 2019. Prior to joining BellRing, Mr. Rosenthal was an attorney at Husch Blackwell LLP from May 2019 to August 2019.
Rosenthal , age 52, has served as our Chief Legal Officer, Chief Compliance Officer and Secretary since September 2023 and, prior to that, served as our Senior Vice President, General Counsel and Secretary since August 2019. Prior to joining BellRing, Mr. Rosenthal was an attorney at Husch Blackwell LLP from May 2019 to August 2019.
The convenient nutrition industry, like many others, experienced inflationary pressure in our fiscal 2022, which resulted in significant price increases for our major dairy protein inputs. We continuously monitor supply and cost trends of these raw materials to enable us to obtain ingredients and packaging needed for our products.
The convenient nutrition industry, like many others, experienced inflationary pressure in our fiscal 2023. We continuously monitor supply and cost trends of these raw materials to enable us to obtain ingredients and packaging needed for our products.
In addition, under the terms of the manufacturing agreement, the third party contract manufacturer has 8 Table of Contents committed to produce an annual minimum volume of RTD protein shakes.
In addition, under the terms of the manufacturing agreement, the third-party contract manufacturer has committed to produce a quarterly minimum volume of RTD protein shakes.
Vitale served as Chief Financial Officer of Post from October 2011 until 11 Table of Contents November 2014. He served as President and Chief Executive Officer of AHM Financial Group, LLC, a diversified provider of insurance brokerage and wealth management services, from 2006 until 2011 and previously was a partner of Westgate Equity Partners, LLC, a consumer-oriented private equity firm.
He served as President and Chief Executive Officer of AHM Financial Group, LLC, a diversified provider of insurance brokerage and wealth management services, from 2006 until 2011 and previously was a partner of Westgate Equity Partners, LLC, a consumer-oriented private equity firm. Mr. Vitale earned his undergraduate degree from St.
Mr. Vitale is a member of the board of directors of 8th Avenue Food & Provisions, Inc., a private brand-centric consumer products holding company owned by Post and other third parties. Mr.
Vitale has been the President and Chief Executive Officer of Post, and a member of Post’s board of directors, since November 2014 and is a member of the board of directors of 8th Avenue Food & Provisions, Inc., a private brand-centric consumer products holding company owned by Post and other third parties. Previously, Mr.
Until the completion of the IPO, Ms. Davenport served as President of Post’s active nutrition business since October 2017 and as President of Premier Nutrition, which became a subsidiary of BellRing Inc. upon completion of our IPO, since November 2016. Ms.
Davenport served as President of Post’s active nutrition business since October 2017 and as President of Premier Nutrition, which became a subsidiary of BellRing Inc. upon completion of our IPO, since November 2016. Ms. Davenport previously served as General Manager of Premier Nutrition from October 2014 to November 2016 and Vice President of Marketing from October 2011 to October 2014.
Occasionally, we ship products directly from our third party contract manufacturers to our customers’ distribution centers. We maintain one third party warehouse location in Germany, which receives products from our production facility located in Voerde, Germany or directly from our third party contract manufacturers.
We maintain one third-party warehouse location in Germany, which receives products from our production facility located in Voerde, Germany or directly from our third-party contract manufacturers. Our branded products are distributed from third-party warehouses to customer distribution centers or retail stores or are exported to international customers.
Mr. Vitale earned his undergraduate degree from St. Louis University and his MBA from Washington University. Darcy H. Davenport , age 49, has served as our President and Chief Executive Officer since September 2019, has served as a member of our Board of Directors since the completion of our IPO and serves as our co-principal executive officer.
Louis University and his MBA from Washington University. 11 Table of Contents Darcy H. Davenport , age 50, has served as our President and Chief Executive Officer since September 2019 and has served as a member of our Board of Directors since the completion of our IPO. Until the completion of the IPO, Ms.
We have organically grown our net sales from $988.3 million in our year ended September 30, 2020 to $1,371.5 million in our year ended September 30, 2022. Over the same period, net earnings including redeemable noncontrolling interest increased from $100.1 million in our year ended September 30, 2020 to $116.0 million in our year ended September 30, 2022.
We have organically grown our net sales from $1,247.1 million in our year ended September 30, 2021 to $1,666.8 million in our year ended September 30, 2023. Over the same period, net earnings including redeemable noncontrolling interest increased from $114.4 million in our year ended September 30, 2021 to $165.5 million in our year ended September 30, 2023.
This team promotes product usage via personal social media channels to drive awareness for the brand among its target demographic. Our products are distributed through a network of third party common carriers.
This team promotes product usage via personal social media channels to drive awareness for the brand among its target demographic. 7 Table of Contents Our products are distributed through a network of third-party common carriers. Research and Development We continue to improve and expand our product offerings with new flavors, ingredients, packaging, product forms and process development technologies.
Our U.S. business represented 88.7% of our net sales in our year ended September 30, 2022 and our international business represented 11.3% of our net sales in our year ended September 30, 2022.
Our U.S. business represented 89.5% of our net sales in our year ended September 30, 2023, and our international business represented 10.5% of our net sales in our year ended September 30, 2023.
Three product forms accounted for the substantial majority of our fiscal 2022 net sales. In our year ended September 30, 2022, RTD protein shakes and other RTD beverages were 79.0% of our net sales, powders were 17.7% of our net sales and nutrition bars were 2.6% of our net sales.
Two product forms accounted for the substantial majority of our fiscal 2023 net sales. In our year ended September 30, 2023, RTD protein shakes and other RTD beverages were 79.6% of our net sales, and powders were 17.4% of our net sales. Premier Protein Our largest brand, Premier Protein , is a leading mainstream, lifestyle brand.
Raw materials used in our business consist of ingredients and packaging materials purchased from local, regional and international suppliers. Our principal ingredients include milk-based, whey-based and soy-based proteins, protein blends, sweeteners and vitamin and mineral blends. Our primary packaging materials include aseptic foil and plastic lined cardboard cartons, flexible and rigid plastic film and containers, beverage packaging and corrugate.
Our principal ingredients include milk-based, whey-based and soy-based proteins, protein blends, sweeteners and vitamin and mineral blends. Our primary packaging materials include aseptic foil and plastic lined cardboard cartons, flexible and rigid plastic film and containers, beverage packaging and corrugate. We purchase our raw materials in accordance with rigorous standards to assure food quality and safety.
We rely on a combination of trademark law, copyright law, trade secrets, non-disclosure and confidentiality agreements and provisions in agreements and other measures to establish and protect our proprietary rights to our products, packaging, processes and intellectual property. 9 Table of Contents Governmental Regulation and Environmental Matters We are subject to regulation by federal, state and local governmental entities and agencies in the U.S., as well as similar regulations in Canada, Mexico, Europe and other international locations, including food safety laws, labor and employment laws, laws governing advertising, privacy laws, consumer protection regulations, worker health and safety regulations, environmental laws and regulations and other laws and regulations.
Governmental Regulation and Environmental Matters We are subject to regulation by federal, state and local governmental entities and agencies in the U.S., as well as similar regulations in Canada, Mexico, Europe and other international locations, including food safety laws, labor and employment laws, laws governing advertising, privacy laws, consumer protection regulations, worker health and safety regulations, environmental laws and regulations and other laws and regulations.
Research and Development We continue to improve and expand our product offerings with new flavors, ingredients, packaging and process development technologies. We leverage our dedicated market research, consumer insights and innovation teams, supplemented by leading design firms, product development companies, third party flavor houses and consultants. Supply Chain Raw Materials .
We leverage our dedicated market research, consumer insights and innovation teams, supplemented by leading design firms, product development companies, third-party flavor houses and consultants. Supply Chain Raw Materials . Raw materials used in our business consist of ingredients and packaging materials purchased from local, regional and international suppliers.
During fiscal 2022, we also provided interactive anti-harassment and diversity training for both supervisory and non-supervisory taught by outside experts. Environmental, Social and Governance We recognize the importance of Environmental, Social and Governance ("ESG ") issues for all of our stakeholders and we are committed to incorporating ESG principles into our business strategies and organizational culture.
Environmental, Social and Governance We recognize the importance of Environmental, Social and Governance (“ESG”) issues for all of our stakeholders and we are committed to incorporating ESG principles into our business strategies and organizational culture.
In 2011, Joint Juice, Inc. acquired the Premier Protein brand and related assets from Premier Nutrition, Inc., and the resulting entity assumed the name Premier Nutrition Corporation. Effective September 30, 2019, Premier Nutrition Corporation converted to a limited liability company and changed its corporate name to Premier Nutrition Company, LLC.
Effective September 30, 2019, Premier Nutrition Corporation converted to a limited liability company and changed its corporate name to Premier Nutrition Company, LLC.
Vitale also has been the president and chief investment officer of Post Holdings Partnering Corporation, a publicly-traded affiliate of Post that is a special purpose acquisition company formed for the purpose of effecting a partnering transaction with one or more businesses, since January 2021, and has served on the board of directors of Energizer Holdings, Inc., a publicly traded manufacturer and distributor of primary batteries, portable lights and auto care, appearance, performance, refrigerant and fragrance products, since August 2017.
Vitale has served on the board of directors of Energizer Holdings, Inc., a publicly traded manufacturer and distributor of primary batteries, portable lights and auto care appearance, performance, refrigerant and fragrance products, since August 2017.
ISO.100 , the brand’s flagship product, has a global reach with sales in more than seventy countries. In addition to ISO.100 , Dymatize offers a suite of products to meet the needs of athletes. Dymatize products are sold in a variety of retail channels including specialty, FDM, club and eCommerce.
Our protein powder portfolio consists of three primary products: ISO.100 made with hydrolyzed 100% Whey Protein Isolate, Elite 100% Whey and Super Mass Gainer. ISO.100 , the brand’s flagship product, has a global reach with sales in more than seventy countries. In addition to ISO.100 , Dymatize offers a suite of products to meet the needs of athletes.
Mr. Singh attended The University of Western Ontario - Richard Ivey School of Business and the University of Guelph, Ontario. 13 Table of Contents
Mr. Singh attended the University of Guelph, Ontario where he received an Honors Bachelor of Science and the Richard Ivey School of Business at the University of Western Ontario where he received a certificate in the Ivey Operations Program. 12 Table of Contents
Premier Protein ’s powder portfolio consists of 100% whey protein products. We believe the product profile appeals to consumers across age ranges in all four need states. Dymatize Our Dymatize brand is a market leader targeting fitness enthusiasts who value the brand for its science-based product development, athletic performance focus and great taste.
Dymatize Our Dymatize brand is a market leader targeting fitness enthusiasts who value the brand for its science-based product development, athletic performance focus and great taste. The brand’s portfolio includes an assortment of sports nutrition products, including protein powders. The majority of Dymatize ’s sales are generated through protein powders.
Our branded products are distributed from third party warehouses to customer distribution centers or retail stores or are exported to international customers. Competition The convenient nutrition category in which we operate is highly competitive and highly sensitive to both pricing and promotion.
Competition The convenient nutrition category in which we operate is highly competitive and highly sensitive to both pricing and promotion. We compete with other brands, including private label and store brand products, and with many nutritional food and beverage players.
Vitale , age 56, has served as our Executive Chairman since September 2019 and serves as our co-principal executive officer. Mr. Vitale has been the President and Chief Executive Officer of Post, and a member of Post’s board of directors, since November 2014. Previously, Mr.
Vitale , age 57, has served as our Executive Chairman since September 2019. Mr.
We communicate transparently with our employees about the organization to keep our employees informed and engaged.
We communicate transparently with our employees about the organization to keep our employees informed and engaged. 10 Table of Contents We connect our employees to our values and culture by conducting periodic two-day workshops where they can learn about, discuss and engage with these topics to more fully appreciate our unique culture.
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Premier Protein Our largest brand, Premier Protein , is a leading mainstream, lifestyle brand. Premier Protein ’s product portfolio consists of RTD protein shakes, refreshing protein beverages and protein powders.
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On November 25, 2022, Post disposed of its remaining shares of BellRing Common Stock, which resulted in Post having no ownership of BellRing Common Stock as of September 30, 2023.
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The brand’s portfolio includes an assortment of sports nutrition products, including protein powders. The majority of Dymatize ’s sales are generated through protein powders. Our protein powder portfolio consists of three primary products: ISO.100 made with hydrolyzed 100% Whey Protein Isolate, Elite 100% Whey and Super Mass Gainer.
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We rely on a combination of trademark law, copyright law, trade secrets, non-disclosure and confidentiality agreements and provisions in agreements and other measures to establish and protect our proprietary rights to our products, packaging, processes and intellectual property.
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Demand for our products is impacted by changes in consumer behaviors and preferences, and we have experienced, and expect to continue to experience, changes in consumer consumption patterns as a result of the COVID-19 pandemic and broader economic conditions, including inflation.
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In addition, we invite esteemed speakers to our Emeryville offices to engage our employees in an interactive workshop format to further drive engagement with timely workplace initiatives.
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We continue to actively monitor the impact of these matters on our business; however, we are unable to accurately predict their future impact.
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We also provide interactive anti-harassment and diversity training for both supervisory and non-supervisory employees taught by outside experts. Our Board of Directors receives periodic updates regarding our diversity, equity, inclusion and belonging efforts.
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For further discussion regarding the impact of the COVID-19 pandemic and economic conditions on our business refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and “Risk Factors” in Item 1A of this report. For additional discussion, refer to “Cautionary Statement on Forward-Looking Statements” above.
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Vitale served as Chief Financial Officer of Post from October 2011 until November 2014. He was president and chief investment officer of Post Holdings Partnering Corporation, a publicly-traded affiliate of Post that was a special purpose acquisition company formed for the purpose of effecting a partnering transaction with one or more businesses, from January 2021 to June 2023. Mr.
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We purchase our raw materials in accordance with rigorous standards to assure food quality and safety.
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Many of the COVID-19 safety measures we originally implemented in fiscal 2020 also were utilized at various points during fiscal 2022, including, where practicable: practicing social distancing, providing personal protective equipment, encouraging hygiene practices advised by health authorities, restricting business travel and site visitors, increasing ventilation to promote air exchanges, placing air purifying units throughout our offices and implementing remote working for certain office employees.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeCertain of our officers and directors, including Robert V. Vitale, who serves as Executive Chairman of our Board of Directors, also serve as officers or directors of Post. Our officers and members of our Board of Directors have fiduciary duties to our stockholders. Likewise, any such persons who serve in similar capacities at Post have fiduciary duties to Post’s shareholders.
Biggest changeRisks Related to Our Relationship with Post We have overlapping directors and management with Post, which may lead to conflicting interests or the appearance of conflicting interests. Certain of our officers and directors, including Robert V. Vitale, who serves as Executive Chairman of our Board of Directors, also serve as officers or directors of Post.
General Risks Changes in tax laws may adversely affect us, and the IRS or a court may disagree with our tax positions, which may result in adverse effects on our business, financial condition, results of operations or cash flows.
General Risks Changes in tax laws may adversely affect us, and the IRS or a court may disagree with our tax positions, which may result in adverse effects on our business, financial condition, results of operations and cash flows.
If any of our significant information technology systems suffers severe damage, disruption or shutdown, including by malicious or unintentional actions of contractors or employees or by cyber attacks, and our business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition, results of operations and cash flows may be materially and adversely affected, and we could experience delays in reporting our financial results.
If any of our significant information technology systems suffers severe damage, disruption or shutdown, including by malicious or unintentional actions of contractors or employees or by cyber or ransomware attacks, and our business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition, results of operations and cash flows may be materially and adversely affected, and we could experience delays in reporting our financial results.
These risks include: • restrictions on the transfer of funds to and from foreign countries, including potentially negative tax consequences; • unfavorable changes in tariffs, quotas, trade barriers or other export or import restrictions; • unfavorable changes in local regulatory requirements that impact our ability to sell our products in that country; • unfavorable foreign exchange controls and currency exchange rates; • challenges associated with cross-border product distribution; • an outbreak of a contagious disease, such as COVID-19, which may cause us or our distributors, third party contract manufacturers, vendors or customers to temporarily suspend our or their respective operations in the affected city or country; • increased exposure to general market and economic conditions, political and economic uncertainty and volatility and other events, including social unrest, government shutdowns, terrorist activity, acts of war and travel restrictions, outside of the U.S.; • compliance with U.S. laws and regulations affecting operations outside of the U.S., including anti-corruption regulations (such as the U.S.
These risks include: • restrictions on the transfer of funds to and from foreign countries, including potentially negative tax consequences; • unfavorable changes in tariffs, quotas, trade barriers or other export or import restrictions; • unfavorable changes in local regulatory requirements that impact our ability to sell our products in that country; • unfavorable foreign exchange controls and currency exchange rates; • challenges associated with cross-border product distribution; • an outbreak of a contagious disease, which may cause us or our distributors, third-party contract manufacturers, vendors or customers to temporarily suspend our or their respective operations in the affected city or country; • increased exposure to general market and economic conditions, political and economic uncertainty and volatility and other events, including social unrest, government shutdowns, terrorist activity, acts of war and travel restrictions, outside of the U.S.; • compliance with U.S. laws and regulations affecting operations outside of the U.S., including anti-corruption regulations (such as the U.S.
Additionally, many of the raw materials used to make certain of our products, particularly milk-based protein and nuts, are vulnerable to spoilage and contamination by naturally occurring molds and pathogens, such as salmonella, and pests. These pathogens may survive in our products as a result of improper handling by customers or consumers.
Additionally, many of the raw materials used to make certain of our products, particularly milk-based protein, are vulnerable to spoilage and contamination by naturally occurring molds and pathogens, such as salmonella, and pests. These pathogens may survive in our products as a result of improper handling by customers or consumers.
Even if the Distribution otherwise qualifies as a tax-free transaction for U.S. federal income tax purposes, the Distribution will be taxable to Post (but not to Post shareholders) pursuant to Section 355(e) of the Internal Revenue Code (the “Code”) if there are (or have been) one or more acquisitions (including issuances), directly or indirectly (including through acquisitions of such stock after the completion of the Transactions), of our stock or the stock of Post, representing 50 percent or more, measured by vote or value, of the stock of any such corporation and the acquisition or acquisitions are deemed to be part of a plan or series of related transactions that include the Distribution.
Even if the Distribution otherwise qualifies as a tax-free transaction for U.S. federal income tax purposes, the Distribution will be taxable to Post (but not to Post shareholders) pursuant to Section 355(e) of the Code if there are (or have been) one or more acquisitions (including issuances), directly or indirectly (including through acquisitions of such stock after the completion of the Transactions), of our stock or the stock of Post, representing 50 percent or more, measured by vote or value, of the stock of any such corporation and the acquisition or acquisitions are deemed to be part of a plan or series of related transactions that include the Distribution.
Potential difficulties we may encounter as part of the integration process include, but are not limited to, the following: employees may voluntarily or involuntarily separate from employment with us or the acquired businesses because of the acquisitions; our management may have its attention diverted while trying to integrate the acquired businesses; we may encounter obstacles 22 Table of Contents when incorporating the acquired businesses into our operations and management; we may be required to recognize impairment charges; and integration may be more costly or more time consuming and complex or less effective than anticipated.
Potential difficulties we may encounter as part of the integration process include, but are not limited to, the following: employees may voluntarily or involuntarily separate from employment with us or the acquired businesses because of the acquisitions; our management may have its attention diverted while trying to integrate the acquired businesses; we may encounter obstacles when incorporating the acquired businesses into our operations and management; we may be required to recognize impairment charges; and integration may be more costly or more time consuming and complex or less effective than anticipated.
The completion of the Spin-off by Post was conditioned on the receipt by Post of an opinion of a nationally recognized accounting firm or law firm (the “distribution tax counsel” and, together with BellRing tax counsel, “tax counsel”) to the effect that the Separation, together with certain contributions made by Post to us, should qualify as a tax-free “reorganization” within the meaning of Sections 368(a) and 355 of the Code and the Distribution should qualify as a tax-free distribution eligible for nonrecognition within the meaning of Sections 355 and 361 of the Code.
The completion of the Spin-off by Post was conditioned on the receipt by Post of an opinion of a nationally recognized accounting firm or law firm (the “distribution tax counsel” and, together with BellRing tax counsel, “tax counsel”) to the effect that the Separation, together with certain contributions made by Post to us, should qualify as a tax-free “reorganization” within the meaning of Sections 368(a) and 355 of the Internal Revenue Code (the “Code”) and the Distribution should qualify as a tax-free distribution eligible for nonrecognition within the meaning of Sections 355 and 361 of the Code.
In addition, temporary workforce disruptions or the inability of our employees to safely perform their jobs for any reason, including as a result of illness (such as COVID-19), could adversely impact our business, financial condition, results of operations and cash flows. We depend upon the skills, working relationships and continued services of key personnel, including our senior management team.
In addition, temporary workforce disruptions or the inability of our employees to safely perform their jobs for any reason, including as a result of illness, could adversely impact our business, financial condition, results of operations and cash flows. We depend upon the skills, working relationships and continued services of key personnel, including our senior management team.
Our ability to meet expenses and debt service obligations will depend on our future performance, which will be affected by financial, business, economic and other factors, including the impact of pandemics (including the COVID-19 pandemic) and other outbreaks of contagious diseases, potential changes in consumer and customer preferences and behaviors, the success of product and marketing innovation and pressure from competitors.
Our ability to meet expenses and debt service obligations will depend on our future performance, which will be affected by financial, business, economic and other factors, including the impact of pandemics and other outbreaks of contagious diseases, potential changes in consumer and customer preferences and behaviors, the success of product and marketing innovation and pressure from competitors.
If we experience workforce disruptions or periods where our employees are unable to safely perform their jobs for any reason, including as a result of illness (such as COVID-19) or restrictions put in place by governmental authorities, our business, financial condition, results of operations and cash flows could be adversely affected.
If we experience workforce disruptions or periods where our employees are unable to safely perform their jobs for any reason, including as a result of illness or restrictions put in place by governmental authorities, our business, financial condition, results of operations and cash flows could be adversely affected.
Although we have not detected a material security breach or cybersecurity incident to date, we have been the target of events of this nature and expect them to continue. We also are subject to an evolving body of federal, state and foreign laws, regulations, guidelines and principles regarding data privacy, data protection and data security.
Although we have not detected a material security breach or cybersecurity incident to date, we have been the target of events of this nature and expect them to continue. 19 Table of Contents We also are subject to an evolving body of federal, state and foreign laws, regulations, guidelines and principles regarding data privacy, data protection and data security.
Any downgrade of our credit ratings by a credit rating agency, whether as a result of our actions or factors which are beyond our control, can increase our future borrowing costs, impair our ability to access capital and credit markets on terms commercially acceptable to us or at all and result in a reduction in our liquidity.
Any downgrade of our credit ratings by a credit rating agency, whether as a result of our actions or factors which are beyond our control, can increase our future borrowing costs, impair our ability to access capital and credit markets on 22 Table of Contents terms commercially acceptable to us or at all and result in a reduction in our liquidity.
Impairment in the carrying value of intangible assets could negatively impact our financial condition and results of operations. If our goodwill or other intangible assets become impaired, we will be required to record additional impairment charges, which may be significant. Our balance sheet includes intangible assets, including goodwill, trademarks, trade names and other acquired intangibles.
Impairment in the carrying value of intangible assets could negatively impact our financial condition and results of operations. If our goodwill or other intangible assets become impaired, we will be required to record impairment charges, which may be significant. Our balance sheet includes intangible assets, including goodwill, trademarks, trade names, customer relationships and other acquired intangibles.
The independent registered public accounting firm report included in this document relates to the Company's historical financial statements. It does not extend to any guidance and should not be read to do so.
The independent registered public accounting firm report included in this document relates to our historical financial statements. It does not extend to any guidance and should not be read to do so.
Moreover, our certificate of incorporation provides that we renounce any interests or expectancy in corporate opportunities which become known to (i) any of our directors, officers, managers, employees or agents who also are directors, officers, employees, agents or affiliates of Post or its affiliates (except that we and our subsidiaries are not deemed affiliates of Post or its affiliates for the purposes of the provision) or (ii) Post or its affiliates.
Moreover, our certificate of incorporation provides that we renounce any interests or expectancy in corporate opportunities which become known to (i) any of our directors, officers, managers, employees or agents who also are directors, officers, 24 Table of Contents employees, agents or affiliates of Post or its affiliates (except that we and our subsidiaries are not deemed affiliates of Post or its affiliates for the purposes of the provision) or (ii) Post or its affiliates.
If we do not successfully maintain and enhance our reputation and brand health, then our brands, product sales, financial condition and results of operations could be materially and adversely affected. 18 Table of Contents Consolidation in our distribution channels, and competitive, economic and other pressures facing our customers, may hurt our profit margins.
If we do not successfully maintain and enhance our reputation and brand health, then our brands, product sales, financial condition and results of operations could be materially and adversely affected. Consolidation in our distribution channels, and competitive, economic and other pressures facing our customers, may hurt our profit margins.
There can be no assurance that all of the functions provided to us by Post under the amended and restated master services agreement will be successfully executed by Post or that we will not have to expend significant efforts or costs materially in excess of those estimated in the master services agreement.
There can be no assurance that all of the functions provided to us by Post under the amended and restated master services agreement will be successfully executed by Post or that we will not have to 23 Table of Contents expend significant efforts or costs materially in excess of those estimated in the master services agreement.
If we fail to effectively manage our inventories, fluctuations in business as a result of promotional activities and seasonality may have an adverse impact on our financial condition, results of operations and cash flows. Our international operations subject us to additional risks.
If we fail to effectively manage our inventories, fluctuations in business as a result of promotional activities and seasonality may have an adverse impact on our financial condition, results of operations and cash flows. 17 Table of Contents Our international operations subject us to additional risks.
Prevailing economic conditions and financial, business, our future financial and operating performance, competitive, legislative, regulatory and other factors, many of which are beyond our control, including the impact of pandemics (including the COVID-19 pandemic) and other outbreaks of contagious diseases, will affect our ability to make these payments.
Prevailing economic conditions and financial, business, our future financial and operating performance, competitive, legislative, regulatory and other factors, many of which are beyond our control, including the impact of pandemics and other outbreaks of contagious diseases, will affect our ability to make these payments.
Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.
Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be 28 Table of Contents inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.
Our business, financial condition, results of operations and cash flows would be harmed by a decline in the market for our RTD protein shakes, increased competition in the market for those products, disruptions in our ability to produce those products, whether due to manufacturer inability, supply chain failures or otherwise (including as a result of the COVID-19 pandemic), or our failure or inability to provide sufficient investment to support and market those products as needed to maintain or grow their competitive position or to achieve more widespread market acceptance.
Our business, financial condition, results of operations and cash flows would be harmed by a decline in the market for our RTD protein shakes, increased competition in the market for those products, disruptions in our ability to produce those products, whether due to manufacturer inability, supply chain failures or otherwise, or our failure or inability to provide sufficient investment to support and market those products as needed to maintain or grow their competitive position or to achieve more widespread market acceptance.
We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as third party nondisclosure, confidentiality and assignment agreements and confidentiality provisions in third party agreements and the policing of third party misuses of our intellectual property.
We attempt to protect our intellectual property rights through a combination of patent, trademark, copyright and trade secret laws, as well as third-party nondisclosure, confidentiality and assignment agreements and confidentiality provisions in third-party agreements and the policing of third party misuses of our 18 Table of Contents intellectual property.
Damage or disruption to our collective supply, manufacturing or distribution capabilities resulting from weather, freight carrier availability, any potential effects of climate change, natural disaster, pandemics (such as the COVID-19 pandemic) or other outbreaks of contagious diseases, governmental restrictions or mandates, labor shortages, border closures, freight carrier availability, agricultural diseases, fires or evacuations related thereto, explosions, cyber incidents, terrorism, strikes or other labor unrest, repairs or enhancements at facilities manufacturing or delivering our products or other reasons could impair our ability to source inputs or manufacture, sell or timely deliver our products.
Damage or disruption to our collective supply, manufacturing or distribution capabilities resulting from weather, freight carrier availability, any potential effects of climate change, natural disaster, pandemics or other outbreaks of contagious diseases, governmental restrictions or mandates, labor shortages, border closures, freight carrier availability, agricultural diseases, fires or evacuations related thereto, explosions, cyber incidents, terrorism, strikes or other labor unrest, repairs or enhancements at facilities manufacturing or delivering our products or other reasons could impair our ability to source inputs or manufacture, sell or timely deliver our products.
During the course of its testing, our management may identify material weaknesses or significant deficiencies which may 32 Table of Contents not be remedied in time to meet the deadlines imposed by SOX and SEC rules.
During the course of its testing, our management may identify material weaknesses or significant deficiencies which may not be remedied in time to meet the deadlines imposed by SOX and SEC rules.
Consequently, fluctuations in the value 20 Table of Contents of foreign currencies relative to the U.S. dollar may negatively affect the value of these items in our consolidated financial statements. Our principal currency exposures are to the Canadian dollar and the Euro.
Consequently, fluctuations in the value of foreign currencies relative to the U.S. dollar may negatively affect the value of these items in our consolidated financial statements. Our principal currency exposures are to the Canadian dollar and the Euro.
Consequently, our stockholders must rely on sales of their shares of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
Consequently, our stockholders must rely on sales of their shares of our common stock after price appreciation, which may never occur, as the 27 Table of Contents only way to realize any future gains on their investment.
Although 31 Table of Contents our certificate of incorporation contains the exclusive forum provision described above, it is possible that a court could find that such a provision is inapplicable for a particular claim or action or that such provision is unenforceable.
Although our certificate of incorporation contains the exclusive forum provision described above, it is possible that a court could find that such a provision is inapplicable for a particular claim or action or that such provision is unenforceable.
Various risks, uncertainties and events beyond our control, including the impact of pandemics (including the COVID-19 pandemic) and other outbreaks of contagious diseases, could affect our ability to comply with these restrictions and covenants.
Various risks, uncertainties and events beyond our control, including the impact of pandemics and other outbreaks of contagious diseases, could affect our ability to comply with these restrictions and covenants.
The willingness of consumers to purchase our products depends in part on general or local economic conditions and consumers’ discretionary spending habits. For instance in fiscal 2022, the U.S. experienced significantly heightened inflationary pressures which have continued into fiscal 2023.
The willingness of consumers to purchase our products depends in part on general or local economic conditions and consumers’ discretionary spending habits. For instance in fiscal 2022 and fiscal 2023, the U.S. experienced significantly heightened inflationary pressures.
The supply and price of these ingredients are subject to market conditions and are influenced by many factors beyond our control, including labor shortages, pandemics (such as the COVID-19 pandemic) or other outbreaks of contagious diseases, animal feed costs, weather patterns affecting ingredient production, governmental programs and regulations, insects, plant diseases and inflation.
The supply and price of these ingredients are subject to market conditions and are influenced by many factors beyond our control, including labor shortages, pandemics or other outbreaks of contagious diseases, animal feed costs, weather patterns affecting ingredient production, governmental programs and regulations, insects, plant diseases and inflation.
Further, the supply and price of these inputs are subject to market conditions and are impacted by many factors beyond our control, including labor shortages, pandemics (such as the COVID-19 pandemic) and other outbreaks of contagious diseases weather conditions, natural disasters, governmental programs, regulations and trade and tariff policies, insects, plant diseases, inflation and increased demand.
Further, the supply and price of these inputs are subject to market conditions and are impacted by many factors beyond our control, including labor shortages, pandemics and other outbreaks of contagious diseases weather conditions, natural disasters, governmental programs, regulations and trade and tariff policies, insects, plant diseases, inflation and increased demand.
The expansion of our business depends on our ability to obtain new, or expand our business with existing, customers, such as club, FDM, eCommerce, convenience and specialty customers.
The expansion of our business depends on our ability to obtain new, or expand our business with existing, customers, such as club, FDM, eCommerce, convenience and specialty 16 Table of Contents customers.
These factors, along with other internal and external factors, could have a significant negative impact on our fair value determination, which could then result in a material impairment charge in our results of operations. No impairments were recorded in the years ended September 30, 2022, 2021 and 2020.
These factors, along with other internal and external factors, could have a significant negative impact on our fair value determination, which could then result in a material impairment charge recorded in our results of operations. No impairments were recorded in the years ended September 30, 2023, 2022 and 2021. However, we could have impairments in the future.
Our credit agreement contains customary financial covenants, including a covenant that requires us to maintain a total net leverage ratio (as defined in our credit agreement) not to exceed 6.00:1.00, as measured as of the last day of each fiscal quarter.
Our credit agreement contains a covenant that requires us to maintain a total net leverage ratio (as defined in our credit agreement) not to exceed 6.00:1.00, as measured as of the last day of each fiscal quarter.
Also, if we experience significant increases in demand for our products, as we did beginning in the second quarter of fiscal 2021, which continued into fiscal 2022 and which we expect to continue into fiscal 2023, we and these third party contract manufacturers may not be able to obtain in a timely manner the equipment, ingredients or packaging materials required to manufacture our products and allocate sufficient capacity to us in order to meet our requirements, fill our orders in a timely manner or meet our quality standards.
Also, if we experience significant increases in demand for our products, as we did beginning in the second quarter of fiscal 2021 through fiscal 2023, we and these third-party contract manufacturers may not be able to obtain in a timely manner the equipment, ingredients or packaging materials required to manufacture our products and allocate sufficient capacity to us in order to meet our requirements, fill our orders in a timely manner or meet our quality standards.
We have had to, and expect into fiscal 2023 to have to, limit our stock-keeping units (“SKUs”) and place one or more of our products on allocation. In addition, we rely in part on our third party contract manufacturers to maintain the quality of our products.
We have had to limit our stock-keeping units (“SKUs”) and place one or more of our products on allocation. In addition, we rely in part on our third-party contract manufacturers to maintain the quality of our products.
Sales of our RTD protein shakes represented approximately 79.0% of our net sales in our year ended September 30, 2022. We believe that sales of our RTD protein shakes will continue to constitute a substantial amount of our net sales for the foreseeable future.
Sales of our RTD protein shakes represented approximately 79.6% of our net sales in our year ended September 30, 2023. We believe that sales of our RTD protein shakes will continue to constitute a substantial amount of our net sales for the foreseeable future.
A decision by our major customers to decrease the amount of product purchased from us, including in response to shifts in consumer purchasing or traffic trends attributable to the COVID-19 pandemic or otherwise, sell another brand on an exclusive or priority basis or change the manner of doing business with us could reduce our 19 Table of Contents revenues and materially adversely affect our business, financial condition, results of operations and cash flows.
A decision by our major customers to decrease the amount of product purchased from us, including in response to shifts in consumer purchasing or traffic trends, sell another brand on an exclusive or priority basis or change the manner of doing business with us could reduce our revenues and materially adversely affect our business, financial condition, results of operations and cash flows.
Such invasions, interruptions or malfunctions could negatively impact our business. 21 Table of Contents If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure and to maintain and protect the related automated and manual control processes, or if one of our third party service providers fails to provide the services we require, we could be subject to billing and collection errors, business disruptions or damage resulting from such events, particularly material security breaches and cybersecurity incidents.
If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure and to maintain and protect the related automated and manual control processes, or if one of our third-party service providers fails to provide the services we require, we could be subject to billing and collection errors, business disruptions or damage resulting from such events, particularly material security breaches and cybersecurity incidents.
Financing arrangements which we enter into in the future could contain similar restrictions and additionally could require us to comply with similar, new or additional financial tests or to maintain similar, new or 23 Table of Contents additional financial ratios.
Financing arrangements which we enter into in the future could contain similar restrictions and additionally could require us to comply with similar, new or additional financial tests or to maintain similar, new or additional financial ratios.
Further, as we have in fiscal 2022 and we expect to continue to in fiscal 2023, we may experience operational difficulties with any of these third party contract manufacturers, such as limitations on production capacity, failure to meet our quantity requirements, including as a result of pandemics (such as the COVID-19 pandemic) or other outbreaks of contagious diseases, increases in manufacturing costs, errors in complying with product specifications, insufficient quality control and failure to meet production deadlines.
Further, as we did in fiscal 2022 and 2023, we may experience operational difficulties with any of these third-party contract manufacturers, such as limitations on production capacity, failure to meet our quantity requirements, including as a result of pandemics or other outbreaks of contagious diseases, increases in manufacturing costs, errors in complying with product specifications, insufficient quality control and failure to meet production deadlines.
We may not be able to refinance any of our debt on commercially reasonable terms, or at all. Uncertain or unfavorable economic conditions, including during periods of high inflation, recessions or other economic disruption and as a result of the COVID-19 pandemic, could limit consumer and customer demand for our products, increase our costs or otherwise adversely affect us.
We may not be able to refinance any of our debt on commercially reasonable terms, or at all. Uncertain or unfavorable economic conditions, including during periods of high inflation, recessions or other economic disruption, could limit consumer and customer demand for our products, increase our costs or otherwise adversely affect us.
Following our IPO, we continued to receive some of these services pursuant to a master services agreement with Post, and in connection with the Spin-off, we, Post, Old BellRing and BellRing LLC entered into an amended and restated master services agreement.
Following our IPO, we continued to receive some of these services pursuant to a master services agreement with Post, and in connection with the Spin-off, we, Post, Old BellRing and BellRing LLC entered into an amended and restated master services agreement, which was further amended in fiscal 2023.
Our largest customers, Costco and Walmart and its affiliates (which includes Sam’s Club), accounted for approximately 63.5% of our net sales in our year ended September 30, 2022. The success of our business depends, in part, on our ability to maintain our level of sales and product distribution through the club, FDM, eCommerce, specialty and convenience channels.
Our largest customers, Costco, Walmart and its affiliates (which includes Sam’s Club) and Amazon, accounted for approximately 75.3% of our net sales in our year ended September 30, 2023. The success of our business depends, in part, on our ability to maintain our level of sales and product distribution through the club, FDM, eCommerce, specialty and convenience channels.
Financial and Economic Risks We have substantial debt and high leverage, which could have a negative impact on our financing options and liquidity position and which could adversely affect our business. We have a significant amount of debt. As of September 30, 2022, we had $939.0 million in aggregate principal amount of total debt.
Financial and Economic Risks We have substantial debt, which could have a negative impact on our financing options and liquidity position and which could adversely affect our business. We have a significant amount of debt. As of September 30, 2023, we had $865.0 million in aggregate principal amount of total debt.
We are subject to extensive federal, state, local and foreign laws and regulations relating to the protection of human health and the environment, including those limiting the discharge and release of pollutants into the environment and those regulating the transport, storage, disposal and remediation of, and exposure to, solid and hazardous wastes.
We and our contract manufacturers and other vendors and suppliers are subject to extensive federal, state, local and foreign laws and regulations relating to the protection of human health and the environment, including those limiting the discharge and release of pollutants into the environment and those regulating the transport, storage, disposal and remediation of, and exposure to, solid and hazardous wastes.
Consumer preference and behavior changes include dietary trends, attention to different nutritional aspects of foods and beverages, consumer in-home and on-the-go consumption patterns, preferences for certain sales channels, concerns regarding the health effects of certain foods and beverages, attention to sourcing practices relating to ingredients, animal welfare concerns, environmental concerns regarding packaging and attention to other 17 Table of Contents social and governance aspects of our Company and operations.
Consumer preference and behavior changes include dietary trends, attention to different nutritional aspects of foods and beverages, acceptance and the use of weight management medication, consumer in-home and on-the-go consumption patterns, preferences for certain sales channels, concerns regarding the health effects of certain foods and beverages, attention to sourcing practices relating to ingredients, animal welfare concerns, environmental concerns regarding packaging and attention to other social and governance aspects of our Company and operations.
With approximately 380 employees as of November 1, 2022, our profitability may be substantially affected by costs of medical and other health and welfare benefits for these employees.
With approximately 420 employees as of November 1, 2023, our profitability may be substantially affected by costs of medical and other health and welfare benefits for these employees.
Our ability to pay principal and interest on our debt obligations and to fund any planned capital expenditures and other cash needs will depend in part upon the future financial and operating performance of our subsidiaries and upon our ability to renew or refinance borrowings.
Our ability to generate cash depends on many factors beyond our control. Our ability to pay principal and interest on our debt obligations and to fund any planned capital expenditures and other cash needs will depend in part upon the future financial and operating performance of our subsidiaries and upon our ability to renew or refinance borrowings.
Although we have added additional third party contract manufacturers of our Premier Protein RTD shakes to our third party contract manufacturing network, our number of third party contract manufacturers is still limited and if we do not successfully renegotiate our agreement with our largest contract manufacturer or if one or more of our third party contract manufacturers is unable to meet our supply requirements, it could have a material adverse impact on our business, financial condition, results of operations and cash flows.
Although we have added additional third-party contract manufacturers of our Premier Protein RTD shakes to our third-party contract manufacturing network, our number of third-party contract manufacturers is still limited and if one or more of our third-party contract manufacturers is unable to meet our supply requirements, it could have a material adverse impact on our business, financial condition, results of operations and cash flows.
For example, in fiscal 2022, a third party manufacturer that we expected to produce less than 2% of our Premier Protein RTD protein shakes for fiscal 2022 initiated a recall of all products manufactured in one of its facilities, including our Premier Protein RTD protein shakes.
For example, in fiscal 2022, a third-party manufacturer that produced less than 2% of our Premier Protein RTD protein shakes initiated a recall of all products manufactured in one of its facilities, including our Premier Protein RTD protein shakes.
For example, in fiscal 2022, a third party manufacturer that we expected to produce less than 2% of our Premier Protein RTD protein shakes for fiscal 2022 initiated a recall of all products manufactured in one of its facilities, including our Premier Protein RTD protein shakes.
For example, in fiscal 2022, a third-party manufacturer that produced less than 2% of our Premier Protein RTD protein shakes initiated a recall of all products manufactured in one of its facilities, including our Premier Protein RTD protein shakes.
The market price of our common stock could fluctuate significantly for many reasons, including in response to the risk factors listed in this report or for reasons unrelated to our specific performance, such as reports by industry analysts, our failure to meet analysts’ earnings estimates, investor perceptions, or negative developments relating to our customers, competitors or 30 Table of Contents suppliers, as well as general economic and industry conditions including those resulting from the COVID-19 pandemic.
The market price of our common stock could fluctuate significantly for many reasons, including in response to the risk factors listed in this report or for reasons unrelated to our specific performance, such as reports by industry analysts, our failure to meet analysts’ earnings estimates, investor perceptions, or negative developments relating to our customers, competitors or suppliers, as well as general economic and industry conditions.
Our milk-based protein costs have increased and may continue to increase due to factors such as labor shortages, pandemics (such as the COVID-19 pandemic) or other outbreaks of contagious diseases, animal feed costs, weather patterns affecting ingredient production, governmental programs and regulations, insects, plant diseases and inflation.
Our milk-based protein costs have increased and may continue to increase due to factors such as labor shortages, pandemics or other outbreaks 14 Table of Contents of contagious diseases, animal feed costs, weather patterns affecting ingredient production, governmental programs and regulations, insects, plant diseases and inflation.
Disruption of our supply chain, including as a result of the COVID-19 pandemic, and changes in weather conditions could have an adverse effect on our business, financial condition, results of operations and cash flows. Our ability to make, move and sell products in coordination with our suppliers, third party contract manufacturers and distributors is critical to our success.
Disruption of our supply chain and changes in weather conditions could have an adverse effect on our business, financial condition, results of operations and cash flows. Our ability to make, move and sell products in coordination with our suppliers, third-party contract manufacturers and distributors is critical to our success.
If all or a portion of the Spin-off does not qualify as a tax-free transaction for any reason, including because any of the factual statements or representations in the legal opinions are incomplete or untrue, Post may recognize a substantial gain for U.S. federal income tax purposes.
If all or a portion of the Spin-off does not qualify as a tax-free transaction for any reason, including because any of the factual statements or representations in the legal opinions are incomplete or untrue, Post may recognize a substantial gain for U.S. federal income tax purposes, and we may incur indemnification or other liabilities to Post as a result.
Our overall leverage and the terms of our financing arrangements could: • limit our ability to obtain additional financing in the future for working capital, capital expenditures or acquisitions, to fund growth or for general corporate purposes, even when necessary to maintain adequate liquidity, particularly if any ratings assigned to our debt securities by ratings organizations were revised downward; • make it more difficult for us to satisfy the terms of our obligations under the terms of our financing arrangements; • limit our ability to refinance our indebtedness on terms acceptable to us, or at all; • limit our flexibility to plan for and to adjust to changing business and market conditions in the industries in which we operate and increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt, thereby limiting the availability of our cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements; • increase our vulnerability to adverse economic or industry conditions; and • subject us to higher levels of indebtedness than our competitors, which may cause a competitive disadvantage and may reduce our flexibility in responding to increased competition.
Additionally, our secured revolving credit facility has a remaining borrowing capacity of $225.0 million as of September 30, 2023 (all of which would be secured when drawn). 20 Table of Contents Our overall leverage and the terms of our financing arrangements could: • limit our ability to obtain additional financing in the future for working capital, capital expenditures or acquisitions, to fund growth or for general corporate purposes, even when necessary to maintain adequate liquidity, particularly if any ratings assigned to our debt securities by ratings organizations were revised downward; • make it more difficult for us to satisfy the terms of our obligations under the terms of our financing arrangements; • limit our ability to refinance our indebtedness on terms acceptable to us, or at all; • limit our flexibility to plan for and to adjust to changing business and market conditions in the industries in which we operate and increase our vulnerability to general adverse economic and industry conditions; • require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt, thereby limiting the availability of our cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements; • increase our vulnerability to adverse economic or industry conditions; and • subject us to higher levels of indebtedness than our competitors, which may cause a competitive disadvantage and may reduce our flexibility in responding to increased competition.
All of our RTD protein shakes and most of our other products are manufactured by a limited number of independent third party contract manufacturers. For our year ended September 30, 2022, approximately 64.7% of our Premier Protein RTD shake supply came from a single manufacturer and approximately 38.9% from a single facility of that manufacturer.
All of our RTD protein shakes and most of our other products are manufactured by a limited number of independent third-party contract manufacturers. For our year ended September 30, 2023, approximately 53.8% of our Premier Protein RTD shake supply came from a single manufacturer and approximately 31.9% from a single facility of that manufacturer.
For example, due to (i) better than expected volume growth for our Premier Protein RTD shakes and Dymatize powders in the second half of fiscal 2021, which continued into fiscal 2022 and, as to Premier Protein RTD shakes which we expect to continue into fiscal 2023, (ii) delays in production and planned incremental production capacity by our third party contract manufacturer network and (iii) in the case of Dymatize powders, whey protein availability, our customer demand exceeded our available capacity and resulted in Premier Protein RTD shakes and Dymatize powders inventories below acceptable levels at September 30, 2021 and Premier Protein RTD shakes inventories below 15 Table of Contents acceptable levels at September 30, 2022.
For example, due to (i) better than expected volume growth for our Premier Protein RTD shakes and Dymatize powders in the second half of fiscal 2021 and in fiscal 2022 and, as to Premier Protein RTD shakes in fiscal 2023, (ii) delays in production and planned incremental production capacity by our third-party contract manufacturer network and (iii) in the case of Dymatize powders, whey protein availability, our customer demand exceeded our available capacity and resulted in Premier Protein RTD shakes and Dymatize powders inventories below acceptable levels during fiscal 2021 and Premier Protein RTD shakes inventories below acceptable levels in fiscal 2022 and into fiscal 2023.
In fiscal 2022, the U.S. experienced significantly heightened inflationary pressures and we expect that to continue into fiscal 2023.
In fiscal 2023, the U.S. experienced significantly heightened inflationary pressures and we expect certain inflationary pressures to continue into fiscal 2024.
Under the amended and restated master services agreement, Post continues to provide some or all of the above described services, and, in general, the services to be provided by Post will continue for the periods specified in the amended and restated master services agreement, but not to exceed three years, subject to any subsequent extension or earlier termination as agreed to by the parties.
Under the amended and restated master services agreement, Post continues to provide certain of the above described services, and, in general, the services to be provided by Post will continue for the periods specified in the amended and restated master services agreement, but not past March 2026, subject to any subsequent extension or earlier termination as agreed to by the parties.
Although we try to control these costs, they can vary because of changes in healthcare laws and claims experience, which have the potential to increase the cost of providing medical and other employee health and welfare benefits. Any substantial increase could negatively affect our profitability. In addition, we continue to monitor the impact of the COVID-19 pandemic on labor-related costs.
Although we try to control these costs, they can vary because of changes in healthcare laws and claims experience, which have the potential to increase the cost of providing medical and other employee health and welfare benefits. Any substantial increase could negatively affect our profitability.
In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing. To service indebtedness and fund other cash needs, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control.
In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing. 21 Table of Contents To service indebtedness and fund other cash needs, we will require a significant amount of cash.
Any product liability claims resulting from the failure to comply with applicable laws and regulations would be expensive to defend and could result in substantial damage awards against us or harm our reputation.
Any product liability claims resulting from the failure to comply with applicable laws and regulations would be expensive to defend and could result in substantial damage awards against us or harm our reputation. Any of these events would negatively impact our revenues and costs of operations.
For example, for our year ended September 30, 2022, approximately 64.7% of our Premier Protein RTD shake supply came from our largest third party contract manufacturer, with approximately 38.9% of our Premier Protein RTD shake supply manufactured at its Joplin, Missouri facility.
For example, for our year ended September 30, 2023, approximately 53.8% of our Premier Protein RTD shake supply came from our largest third-party contract manufacturer, with approximately 31.9% of our Premier Protein RTD shake supply manufactured at its Joplin, Missouri facility.
Successful growth depends on our ability to add new customers, enter into new markets, expand the number of products sold through existing customers and enhance our product portfolio .
Our sales and profit growth are dependent upon our ability to expand existing market penetration and enter into new markets. Successful growth depends on our ability to add new customers, enter into new markets, expand the number of products sold through existing customers and enhance our product portfolio.
Several states as well as foreign governments have laws and regulations dealing with the collection and use of personal information obtained from their data subjects, including the General Data Protection Regulation, the E.U.’s retained version of General Data Protection Regulation and the California Privacy Rights Act, and we could incur substantial penalties or litigation related to violations of such laws and regulations.
Several states as well as foreign governments have laws and regulations regulating how businesses collect, use and protect personal information obtained from their data subjects, including the General Data Protection Regulation, the E.U.’s retained version of General Data Protection Regulation, and the California Consumer Privacy Act, as amended by the California Privacy Rights Act, and we could incur substantial fines, other penalties or litigation related to violations of such laws and regulations.
In addition, increases in the frequency and severity of extreme weather and natural disasters may result in damage and disruptions to our manufacturing operations and distribution channels or our third party contract manufacturers’ operations, particularly where a product is primarily sourced from a single location.
In addition, increases in the frequency and severity of extreme weather and natural disasters may result in damage and disruptions to our manufacturing operations and distribution channels or our third-party contract manufacturers’ operations, particularly where a product is primarily sourced from a single location. Also, the impacts of these climate changes may cause unpredictable water availability or exacerbate water scarcity.
However, we could have impairments in the future. 25 Table of Contents Unsuccessful implementation of business strategies to reduce costs, or unintended consequences of the implementation of such strategies, may adversely affect our business, financial condition, results of operations and cash flows. Many of our costs, such as freight, raw materials and energy, are outside of our control.
Unsuccessful implementation of business strategies to reduce costs, or unintended consequences of the implementation of such strategies, may adversely affect our business, financial condition, results of operations and cash flows. Many of our costs, such as freight, raw materials and energy, are outside of our control.
A recall or withdrawal could result in destruction of product ingredients and inventory, negative publicity, temporary plant closings for us or our third party contract manufacturers, supply chain interruption, substantial costs of compliance or remediation, fines and increased scrutiny by federal, state and foreign regulatory agencies.
A recall or withdrawal could result in destruction of product ingredients and inventory, negative publicity, temporary plant closings for us or our third-party contract manufacturers, supply chain interruption, substantial costs of compliance or remediation, fines and increased scrutiny by federal, state and foreign regulatory agencies. New scientific discoveries regarding microbes and food manufacturing may bring additional risks and latent liability.
For instance, one of our operating subsidiaries, Premier Nutrition, LLC, is a defendant in several class action lawsuits related to it Joint Juice product. At September 30, 2022, we had accrued $16.0 million related to these matters.
For instance, one of our operating subsidiaries, Premier Nutrition, LLC, is a defendant in several class action lawsuits related to its Joint Juice product, which it discontinued in the first quarter of fiscal 2023. At September 30, 2023, we had accrued $21.0 million related to these matters.
Certain of our products are regulated by the FDA as dietary supplements, which are subject to FDA regulations and levels of regulatory scrutiny different from those applicable to conventional food. Internationally, the convenient nutrition category is regulated as food and dietary supplements. Such heightened regulatory scrutiny results in increased costs of operations and the potential for delays in product sales.
Certain of our products are subject to a higher level of regulatory scrutiny, resulting in increased costs of operations and the potential for delays in product sales. Certain of our products are regulated by the FDA as dietary supplements, which are subject to FDA regulations and levels of regulatory scrutiny different from those applicable to conventional food.
Any failure to successfully implement our operating strategy or the occurrence of any of the risks or uncertainties set forth in this report could result in actual operating results being different than the guidance, and such differences may be adverse and material. 26 Table of Contents Risks Related to Our Relationship with Post Post’s interests may conflict with our interests and the interests of our other stockholders.
Any failure to successfully implement our operating strategy or the occurrence of any of the risks or uncertainties set forth in this report could result in actual operating results being different than the guidance, and such differences may be adverse and material.
Pursuant to a tax matters agreement with Post, we have also agreed to indemnify Post for any tax liabilities resulting from such transactions or other actions we take, and Post has agreed to indemnify us for any tax liabilities resulting from transactions entered into by Post. These obligations may discourage, delay or prevent a change of control of us.
Pursuant to a tax matters agreement with Post, we have also agreed to indemnify 25 Table of Contents Post for any tax liabilities resulting from such transactions or other actions we take, and Post has agreed to indemnify us for any tax liabilities resulting from transactions entered into by Post.
Any substantial increase in these costs could have a materially negative impact on our profitability. If we are unable to continue to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned, and the price of our common stock could suffer.
If we are unable to continue to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned, and the price of our common stock could suffer.
These provisions in our certificate of incorporation will cease to apply at such time as (i) we and Post and its affiliates are no longer affiliates of one another and (ii) none of the directors, officers, employees, agents or affiliates of Post serve as our directors, officers, managers, employees or agents.
These provisions in our certificate of incorporation will cease to apply at such time as none of the directors, officers, employees, agents or affiliates of Post serve as our directors, officers, managers, employees or agents.
Any of these events would negatively impact our revenues and costs of operations. 29 Table of Contents We also may be impacted by changes to administrative policies, such as business restrictions, tariffs and trade agreements, in markets in which we or our third party contract manufacturers manufacture, sell or distribute our products.
We also may be impacted by changes to administrative policies, such as business restrictions, tariffs and trade agreements, in markets in which we or our third-party contract manufacturers manufacture, sell or distribute our products.
In addition, in the event we do not maintain effective internal control over financial reporting, we might fail to timely prevent or detect potential financial misstatements. As of September 30, 2022, management determined that our internal control over financial reporting was effective.
In addition, in the event we do not maintain effective internal control over financial reporting, we might fail to timely prevent or detect potential financial misstatements.
Accordingly, changes in input costs may limit our ability to maintain existing margins and may have a material adverse effect on our business, financial condition, results of operations and cash flows.
The prices charged for our products may not reflect changes in our input costs at the time they occur, or at all. Accordingly, changes in input costs may limit our ability to maintain existing margins and may have a material adverse effect on our business, financial condition, results of operations and cash flows.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn conjunction with our arrangements with third party contract manufacturers and our planned expansion of the same in response to demand for certain of our products exceeding our production capacity in both fiscal 2022 and 2021, management believes, taken as a whole, our facilities generally are suitable, adequate and of sufficient capacity for our current operations.
Biggest changeManagement believes our facilities generally are in good operating condition. In conjunction with our arrangements with third-party contract manufacturers, management believes, taken as a whole, our facilities generally are suitable, adequate and of sufficient capacity for our current operations. See “Risk Factors” included in Item 1A of this report for more information about our supply chain.
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Management believes our facilities generally are in good operating condition.
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See “Risk Factors” included in Item 1A of this report for more information about our supply chain.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeApplying this threshold, there are no such environmental proceedings pending as of the filing date of this report or that were resolved during the three months ended September 30, 2022. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 33 Table of Contents PART II
Biggest changeApplying this threshold, there are no such environmental proceedings pending as of the filing date of this report or that were resolved during the three months ended September 30, 2023. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 30 Table of Contents PART II
ITEM 3. LEGAL PROCEEDINGS The information required under this Item 3 is set forth in Note 15 within “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this report and is incorporated herein by this reference.
ITEM 3. LEGAL PROCEEDINGS The information required under this Item 3 is set forth in Note 14 within “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this report and is incorporated herein by this reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share (a) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (b) July 1, 2022 - July 31, 2022 35,674 $ 22.90 35,674 $46,823,871 August 1, 2022 - August 31, 2022 840,000 $ 23.16 840,000 $27,367,808 September 1, 2022 - September 30, 2022 88,823 $ 23.63 88,823 $25,268,721 Total 964,497 $ 23.20 964,497 $25,268,721 (a) Does not include broker’s commissions.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid per Share (a) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (b) July 1, 2023 - July 31, 2023 — $ — — $31,000,428 August 1, 2023 - August 31, 2023 133,487 $ 38.58 133,487 $25,850,718 September 1, 2023 - September 30, 2023 67,543 $ 40.42 67,543 $23,120,318 Total 201,030 $ 39.20 201,030 $23,120,318 (a) Does not include broker’s commissions or accrued excise tax.
Repurchases may be made from time to time in the open market, private purchases, through forward, derivative, alternative, accelerated repurchase or automatic purchase transactions, or otherwise. 34 Table of Contents Performance Graph The following performance graph compares the changes for the period beginning October 17, 2019, the first day our common stock began trading on the NYSE, through September 30, 2022 in the cumulative total value of $100 hypothetically invested in each of (i) our publically traded common stock (which included Old BellRing Class A Common Stock prior to March 10, 2022 and BellRing Common Stock subsequent to March 10, 2022); (ii) the Russell 2000 index; and (iii) the S&P 1500 Packaged Foods & Meats Index. * $100 invested on October 17, 2019 in stock or index.
Repurchases may be made from time to time in the open market, private purchases, through forward, derivative, alternative, accelerated repurchase or automatic purchase transactions, or otherwise. 31 Table of Contents Performance Graph The following performance graph compares the changes for the period beginning October 17, 2019, the first day our common stock began trading on the NYSE, through September 29, 2023 in the cumulative total value of $100 hypothetically invested in each of (i) our publically traded common stock (which included Old BellRing Class A Common Stock prior to March 10, 2022 and BellRing Common Stock subsequent to March 10, 2022); (ii) the Russell 2000 index; and (iii) the S&P 1500 Packaged Foods & Meats Index. * $100 invested on October 17, 2019 in stock or index.
Issuer Purchases of Equity Securities The following table sets forth information with respect to repurchases of shares of our BellRing Common Stock during the three months ended September 30, 2022 and our BellRing Common Stock repurchase authorization.
Issuer Purchases of Equity Securities The following table sets forth information with respect to repurchases of shares of our BellRing Common Stock during the three months ended September 30, 2023 and our BellRing Common Stock repurchase authorization.
For additional information, refer to Note 1 within “Notes to Consolidated Financial Statements” in Item 8 of this report. There were approximately 4,259 stockholders of record of our BellRing Common Stock as of November 14, 2022. Dividends We may not pay cash dividends on our BellRing Common Stock for the foreseeable future.
For additional information, refer to Note 1 within “Notes to Consolidated Financial Statements” in Item 8 of this report. There were approximately 4,131 stockholders of record of our BellRing Common Stock as of November 14, 2023. Dividends We may not pay cash dividends on our BellRing Common Stock for the foreseeable future.
($) Russell 2000 Index ($) S&P 1500 Packaged Foods & Meats Index ($) 10/17/2019 100.00 100.00 100.00 3/31/2020 103.33 75.32 92.23 9/30/2020 125.70 99.13 106.21 3/31/2021 143.09 146.74 114.69 9/30/2021 186.36 146.36 112.18 3/31/2022 155.97 138.20 124.90 9/30/2022 139.27 111.93 118.20 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
($) Russell 2000 Index ($) S&P 1500 Packaged Foods & Meats Index ($) 10/17/2019 100.00 100.00 100.00 9/30/2020 125.70 99.13 106.21 9/30/2021 186.36 146.36 112.18 9/30/2022 139.27 111.93 118.20 9/29/2023 278.62 121.86 121.02 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
(b) On May 23, 2022, the Company’s board of directors approved a $50,000,000 repurchase authorization with respect to shares of BellRing Common Stock (the “Authorization”). The Authorization was effective May 23, 2022 and expires on May 23, 2024.
(b) On May 3, 2023, the Company’s Board of Directors approved an $80,000,000 repurchase authorization (the “Authorization”) with respect to shares of BellRing Common Stock effective May 3, 2023. The Authorization expires on May 3, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRESULTS OF OPERATIONS Fiscal 2022 compared to 2021 Fiscal 2021 compared to 2020 favorable/(unfavorable) favorable/(unfavorable) dollars in millions 2022 2021 $ Change % Change 2021 2020 $ Change % Change Net Sales $ 1,371.5 $ 1,247.1 $ 124.4 10 % $ 1,247.1 $ 988.3 $ 258.8 26 % Operating Profit $ 212.4 $ 168.0 $ 44.4 26 % $ 168.0 $ 164.0 $ 4.0 2 % Interest expense, net 49.2 43.2 (6.0) (14) % 43.2 54.7 11.5 21 % Loss on extinguishment and refinancing of debt, net 17.6 1.6 (16.0) (1,000) % 1.6 — (1.6) (100) % Income tax expense 29.6 8.8 (20.8) (236) % 8.8 9.2 0.4 4 % Less: Net earnings attributable to redeemable noncontrolling interest 33.7 86.8 53.1 61 % 86.8 76.6 (10.2) (13) % Net Earnings Available to Common Stockholders $ 82.3 $ 27.6 $ 54.7 198 % $ 27.6 $ 23.5 $ 4.1 17 % Net Sales Fiscal 2022 compared to 2021 Net sales increased $124.4 million, or 10%, during the year ended September 30, 2022 compared to the prior year.
Biggest changeRESULTS OF OPERATIONS Year Ended September 30, Change in dollars in millions 2023 2022 Dollars Percentage Net Sales $ 1,666.8 $ 1,371.5 $ 295.3 22 % Operating Profit $ 287.3 $ 212.4 $ 74.9 35 % Interest expense, net 66.9 49.2 17.7 36 % Loss on extinguishment and refinancing of debt, net — 17.6 (17.6) (100) % Income tax expense 54.9 29.6 25.3 85 % Less: Net earnings attributable to redeemable noncontrolling interest — 33.7 (33.7) (100) % Net Earnings Available to Common Stockholders $ 165.5 $ 82.3 $ 83.2 101 % Net Sales Net sales increased $295.3 million, or 22%, during the year ended September 30, 2023 compared to the prior year.
(formerly known as BellRing Brands, Inc.) (“Old BellRing”) closed its initial public offering (the “IPO”) of 39.4 million shares of its Class A common stock, $0.01 par value per share (the “Old BellRing Class A Common Stock”) and contributed the net proceeds from the IPO to BellRing Brands, LLC, a Delaware limited liability company and subsidiary of Old BellRing (“BellRing LLC”), in exchange for 39.4 million BellRing LLC non-voting membership units (the “BellRing LLC units”).
(formerly known as BellRing Brands, Inc.) (“Old BellRing”) closed its initial public offering (the “IPO”) of 39.4 million shares of its Class A common stock, $0.01 par value per share (“Old BellRing Class A Common Stock”) and contributed the net proceeds from the IPO to BellRing Brands, LLC, a Delaware limited liability company and subsidiary of Old BellRing (“BellRing LLC”), in exchange for 39.4 million BellRing LLC non-voting membership units (the “BellRing LLC units”).
Debt Covenants The Credit Agreement contains customary affirmative and negative covenants applicable to us and our restricted subsidiaries for agreements of this type, including delivery of financial and other information; compliance with laws; maintenance of property, existence, insurance and books and records; inspection rights; obligation to provide collateral and guarantees by certain new subsidiaries; delivery of environmental reports; participation in an annual meeting with the agent and the lenders; further assurances; and limitations with respect to indebtedness, liens, fundamental changes, restrictive agreements, use of proceeds, amendments of organization documents, prepayments and amendments of certain indebtedness, dispositions of assets, acquisitions and other investments, sale leaseback transactions, changes in the nature of business, transactions with affiliates and dividends and redemptions or repurchases of stock.
Debt Covenants The Credit Agreement contains affirmative and negative covenants applicable to us and our restricted subsidiaries customary for agreements of this type, including delivery of financial and other information; compliance with laws; maintenance of property; existence; insurance; books and records; inspection rights; obligation to provide collateral and guarantees by certain new subsidiaries; delivery of environmental reports; participation in an annual meeting with the agent and the lenders; further assurances; and limitations with respect to indebtedness, liens, fundamental changes, restrictive agreements, use of proceeds, amendments of organization documents, prepayments and amendments of certain indebtedness, dispositions of assets, acquisitions and other investments, sale leaseback transactions, changes in the nature of business, transactions with affiliates and dividends and redemptions or repurchases of stock.
We are a consumer products holding company operating in the global convenient nutrition category and are a provider of ready-to-drink (“RTD”) protein shakes, other RTD beverages, powders and nutrition bars. We have a single operating and reportable segment, with our principal products being protein-based consumer goods. Our primary brands are Premier Protein and Dymatize.
We are a consumer products holding company operating in the global convenient nutrition category and are a provider of ready-to-drink (“RTD”) protein shakes, other RTD beverages and powders. We have a single operating and reportable segment, with our principal products being protein-based consumer goods. Our primary brands are Premier Protein and Dymatize.
Our cash requirements under our various contractual obligations and commitments include: • Debt Obligations and Interest Payments — See Note 14 within “Notes to Consolidated Financial Statements” for additional information on our debt and the timing of expected future principal and interest payments. • Operating Leases — See Note 11 within “Notes to Consolidated Financial Statements” for additional information on our operating leases and the timing of expected future payments. • Purchase Obligations — Purchase obligations are legally binding agreements to purchase goods, services or equipment that specify all significant terms, including: fixed or minimum quantities to be purchased and/or penalties imposed for failing to meet contracted minimum purchase quantities (such as “take-or-pay” contracts); fixed, minimum or variable price provisions; and the approximate timing of the transaction.
Cash Requirements Our cash requirements under our various contractual obligations and commitments include: • Debt Obligations and Interest Payments — See Note 13 within “Notes to Consolidated Financial Statements” for additional information on our debt and the timing of expected future principal and interest payments. • Operating Leases — See Note 11 within “Notes to Consolidated Financial Statements” for additional information on our operating leases and the timing of expected future payments. • Purchase Obligations — Purchase obligations are legally binding agreements to purchase goods, services or equipment that specify all significant terms, including: fixed or minimum quantities to be purchased and/or penalties imposed for failing to meet contracted minimum purchase quantities (such as “take-or-pay” contracts); fixed, minimum or variable price provisions; and the approximate timing of the transaction.
On August 11, 2022, Post transferred 14.8 million of its remaining shares of BellRing Common Stock to certain financial institutions in satisfaction of term loan obligations of Post, which reduced Post’s ownership of BellRing Common Stock to 3.4% as of September 30, 2022.
On August 11, 2022, Post transferred 14.8 million shares of its BellRing Common Stock to certain financial institutions in satisfaction of term loan obligations of Post, which reduced Post’s ownership of BellRing Common Stock to 3.4% as of September 30, 2022.
We received $550.4 million of cash from Post in connection with the Spin-off, which was partially offset by cash distributions to Post prior to the Spin-off of $3.2 million related to quarterly tax distributions pursuant to BellRing LLC’s amended and restated limited liability company agreement (the “BellRing LLC Agreement”) . Additionally, we borrowed $164.0 million under the Revolving Credit Facility.
We received $550.4 million of cash from Post in connection with the Spin-off, which was partially offset by cash distributions to Post of $3.2 million related to quarterly tax distributions pursuant to BellRing LLC’s amended and restated limited liability company agreement prior to the Spin-off. Additionally, we borrowed $164.0 million under the Revolving Credit Facility.
Certain of these covenants are subject to suspension when and if the 7.00% Senior Notes receive investment grade ratings. COMMODITY TRENDS We are exposed to price fluctuations primarily from purchases of ingredients and packaging materials, transportation costs and energy. Our principal ingredients are milk-based, whey-based and soy-based proteins, protein blends, sweeteners and vitamin and mineral blends.
Certain of these covenants are subject to suspension when and if the 7.00% Senior Notes receive investment grade ratings. COMMODITY TRENDS We are exposed to price fluctuations primarily from purchases of ingredients and packaging materials, energy and other inputs. Our principal ingredients are milk-based, whey-based and soy-based proteins, protein blends, sweeteners and vitamin and mineral blends.
For additional information, refer to Note 15 within “Notes to Consolidated Financial Statements” in Item 8 of this report. For further discussion, refer to “Results of Operations” within this section.
For additional information, refer to Note 14 within “Notes to Consolidated Financial Statements” in Item 8 of this report. For further discussion, refer to “Results of Operations” within this section.
We were in compliance with the financial covenant as of September 30, 2022 , and we do not believe non-compliance is reasonably likely in the foreseeable future.
We were in compliance with the financial covenant as of September 30, 2023 , and we do not believe non-compliance is reasonably likely in the foreseeable future.
During the second quarter of fiscal 2022, Post completed its previously announced distribution of 80.1% of its ownership interest in BellRing to Post’s shareholders.
During the second quarter of fiscal 2022, Post completed its distribution of 80.1% of its ownership interest in BellRing to Post’s shareholders.
This loss included (i) a $6.9 million write-off of unamortized discounts and debt extinguishment fees, (ii) a $6.1 million write-off of unamortized net hedging losses recorded within accumulated other comprehensive income or loss related to the Term B Facility and (iii) a $4.6 million write-off of debt issuance costs and deferred financing fees.
This loss included (i) a $6.9 million write-off of unamortized discounts and debt extinguishment fees, (ii) a $6.1 million write-off of unamortized net hedging losses recorded within accumulated other comprehensive income or loss related to the Term B Facility (as defined in “Liquidity and Capital Resources”) and (iii) a $4.6 million write-off of debt issuance costs and deferred financing fees.
The weighted-average interest rate on our total outstanding debt increased to 6.2% for the year ended September 30, 2022 from 5.3% for the year ended September 30, 2021, driven by the issuance of our 7.00% Senior Notes during the second quarter of fiscal 2022.
The weighted-average interest rate on our total outstanding debt increased to 7.2% for the year ended September 30, 2023 from 6.2% for the year ended September 30, 2022, primarily driven by the issuance of our 7.00% Senior Notes during the second quarter of fiscal 2022.
On March 10, 2022, BellRing converted into a Delaware corporation and changed its name to “BellRing Brands, Inc.”, and Post distributed an aggregate of 78.1 million, or 80.1%, of its shares of BellRing common stock, $0.01 par value per share (“BellRing Common Stock”) to Post shareholders of record as of the close of business, Central Time, on February 25, 2022 (the “Record Date”) in a pro-rata distribution (the “Distribution”).
On March 10, 2022, BellRing converted into a Delaware corporation and changed its name to “BellRing Brands, Inc.”, and Post distributed an aggregate of 78.1 million, or 80.1%, of its shares of BellRing common stock, $0.01 par value per share (“BellRing Common Stock”) to Post shareholders in a pro-rata distribution (the “Distribution”).
Nonetheless, the consumer food and beverage industry faces a number of challenges and uncertainties, including: • the highly competitive nature of the industry, which involves competition from a host of nutritional food and beverage companies, including manufacturers of other branded food and beverage products as well as manufacturers of private label and store brand products; • changing consumer preferences which require food manufacturers to identify changing preferences and to offer products that appeal to consumers; • supply chain challenges, including labor shortages and equipment delays, which have delayed capacity expansion across the broader third party aseptic processing contract manufacturer network and are expected to continue into fiscal 2023; and • increasing inflationary pressures, which are expected to continue into fiscal 2023, on the costs of ingredients and packaging materials and transportation.
Nonetheless, the consumer food and beverage industry faces a number of challenges and uncertainties, including: • the highly competitive nature of the industry, which involves competition from a host of nutritional food and beverage companies, including manufacturers of other branded food and beverage products as well as manufacturers of private label and store brand products; • changing consumer preferences which require food manufacturers to identify changing preferences and to offer products that appeal to consumers; • supply chain challenges, including labor shortages and equipment delays, which have delayed capacity expansion across the broader third-party aseptic processing contract manufacturer network and are expected to continue into fiscal 2024; and • inflationary pressures (see “Market Trends” below for information).
Dollars negatively affected net sales by less than 1% during the year ended September 30, 2022, and did not have a material impact to our operating profit or net earnings during the year ended September 30, 2022.
Dollars positively affected net sales by less than 1% during the year ended September 30, 2023, and did not have a material impact on our operating profit or net earnings during the year ended September 30, 2023.
Under the terms of the Credit Agreement, we are also required 42 Table of Contents to comply with a financial covenant requiring us to maintain a total net leverage ratio (as defined in the Credit Agreement) not to exceed 6.00:1.00, measured as of the last day of each fiscal quarter, which began with the fiscal quarter ending June 30, 2022.
Under the terms of the Credit Agreement, we are also required to comply with a financial covenant requiring us to maintain a total net leverage ratio (as defined in the Credit Agreement) not to exceed 6.00:1.00, measured as of the last day of each fiscal quarter.
For additional information on the Spin-off, Credit Agreement and share repurchases, see Notes 1, 14 and 17 within “Notes to Consolidated Financial Statements.” 40 Table of Contents We expect to generate positive cash flows from operations and believe our cash on hand, cash flows from operations and possible future credit facilities will be sufficient to satisfy our future working capital requirements, research and development activities, debt repayments, share repurchases and other financing requirements for the foreseeable future.
For additional information on the Spin-off, Credit Agreement and share repurchases, see Notes 1, 13 and 16 within “Notes to Consolidated Financial Statements.” Sources and Uses of Cash We expect to generate positive cash flows from operations and believe our cash on hand, cash flows from operations and possible future credit facilities will be sufficient to satisfy our future working capital requirements, purchase commitments, research and development activities, debt repayments (including interest payments), share repurchases and other financing requirements for the foreseeable future.
This discussion should be read in conjunction with the financial statements under Item 8 of this report and the “Cautionary Statement on Forward-Looking Statements” on page 1. OVERVIEW On October 21, 2019, BellRing Intermediate Holdings, Inc.
This discussion should be read in conjunction with the financial statements under Item 8 of this report and the “Cautionary Statement on Forward-Looking Statements” on page 1.
Approximately 1% of our annual net sales represent variable consideration that will be resolved in the subsequent period. We do not believe that there will be significant changes to our estimates of variable consideration when any uncertainties are resolved with customers. However, significant changes in our estimates could have a material impact on our results of operations.
Based on historical experience, we do not believe that there will be significant changes to our estimates of variable consideration when any uncertainties are resolved with customers. However, significant changes in our estimates could have a material impact on our results of operations.
Our prior share repurchase authorization for Old BellRing Class A Common Stock was no longer applicable subsequent to the Spin-off. During the year ended September 30, 2022, subsequent to the Spin-off, we repurchas ed 1.1 million shares of BellRing Common Stock at an average share price of $23.18 per share for a total cost of $24.7 million, including broker’s commissions.
During the year ended September 30, 2022, subsequent to the Spin-off, we repurchas ed 1.1 million shares of BellRing Common Stock at an average share price of $23.17 per share and at a total cost, including broker’s commissions, of $24.7 million.
Unless otherwise indicated or the context otherwise requires, all references in this report to “BellRing,” “we,” “our,” “us,” “the Company” and “our Company” refer to Old BellRing and its consolidated subsidiaries during the periods prior to the Spin-off and us and our consolidated subsidiaries during the periods subsequent to the Spin-off.
The terms “BellRing,” “we,” “our,” “us,” “the Company” or “our Company” generally refer to Old BellRing and its consolidated subsidiaries during the periods prior to the Spin-off and to us and our consolidated subsidiaries during the periods subsequent to the Spin-off unless otherwise stated or context otherwise indicates.
During the year ended September 30, 2022 , prior to the Spin-Off, we repurchas ed 0.8 million shares of Old BellRing Class A Common Stock at an average share price of $23.36 per share for a total cost of $18.1 million, including broker’s commissions.
During the year ended September 30, 2023, we repurchased 4.2 million shares of BellRing Common Stock at an average share price of $29.56 per share and at a total cost, including accrued excise tax and broker’s commissions, of $126.3 million. 36 Table of Contents During the year ended September 30, 2022 , prior to the Spin-Off, we repurchas ed 0.8 million shares of Old BellRing Class A Common Stock at an average share price of $23.34 per share and at a total cost, including broker’s commissions, of $18.1 million.
During the year ended September 30, 2022, we borrowed $164.0 million under the Revolving Credit Facility and repaid $65.0 million under the Revolving Credit Facility. We had $151.0 million of borrowing capacity and no outstanding letters of credit under the Revolving Credit Facility as of September 30, 2022.
During the years ended September 30, 2023 and 2022, we borrowed $115.0 million and $164.0 million, respectively, under the Revolving Credit Facility and repaid $189.0 million and $65.0 million, respectively, under the Revolving Credit Facility. We had $225.0 million and $151.0 million of borrowing capacity as of September 30, 2023 and 2022, respectively.
Loss on Extinguishment and Refinancing of Debt, Net During the year ended September 30, 2022, we recognized a $17.6 million loss related t o the termination of our Old Credit Agreement (as defined in “Liquidity and Capital Resources”) .
See Note 13 within “Notes to Consolidated Financial Statements” for additional information on our debt. 35 Table of Contents Loss on Extinguishment and Refinancing of Debt, Net During the year ended September 30, 2022, we recognized a $17.6 million loss related t o the termination of our Old Credit Agreement (as defined in “Liquidity and Capital Resources”) .
In connection with the Spin-off, 0.8 million shares of Old BellRing Class A Common Stock held in treasury stock immediately prior to the Merger effective time were cancelled pursuant to the Transaction Agreement. On May 23, 2022, our Board of Directors approved a $50.0 million share repurchase authorization with respect to the shares of BellRing Common Stock.
In connection with the Spin-off, 0.8 million shares of Old BellRing Class A Common Stock held in treasury stock immediately prior to the Merger effective time were cancelled pursuant to the Transaction Agreement.
We repaid the outstanding principal balance of the Term B Facility of $609.9 million, repaid $65.0 million under the Revolving Credit Facility, and paid $115.5 million to Old BellRing Class A common stockholders pursuant to the Merger.
Fiscal 2022 Cash used in financing activities for the year ended September 30, 2022 was $135.0 million. We repaid the outstanding principal balance of the Term B Facility of $609.9 million, repaid $65.0 million under the Revolving Credit Facility and paid $115.5 million to Old BellRing Class A common stockholders pursuant to the Merger.
Year Ended September 30, dollars in millions 2022 2021 2020 Cash provided by (used in): Operating activities $ 21.0 $ 226.1 $ 97.2 Investing activities (1.8) (1.6) (2.1) Financing activities (135.0) (120.9) (52.6) Effect of exchange rate changes on cash and cash equivalents (1.0) 0.3 0.7 Net (decrease) increase in cash and cash equivalents $ (116.8) $ 103.9 $ 43.2 Operating Activities Fiscal 2022 compared to 2021 Cash provided by operating activities for the year ended September 30, 2022 decreased $205.1 million compared to the prior year.
Year Ended September 30, dollars in millions 2023 2022 Cash provided by (used in): Operating activities $ 215.6 $ 21.0 Investing activities (1.8) (1.8) Financing activities (201.7) (135.0) Effect of exchange rate changes on cash and cash equivalents 0.5 (1.0) Net increase (decrease) in cash and cash equivalents $ 12.6 $ (116.8) Operating Activities Cash provided by operating activities for the year ended September 30, 2023 increased $194.6 million compared to the prior year.
Fiscal 2021 compared to 2020 Operating profit increased $4.0 million, or 2%, during the year ended September 30, 2021 compared to the prior year. This increase was primarily driven by higher net sales, as previously discussed, and lower costs related to the separation from Post of $1.7 million.
Sales of all other products were down $3.2 million. Operating Profit Operating profit increased $74.9 million, or 35%, during the year ended September 30, 2023 compared to the prior year. This increase was primarily driven by higher net sales, as previously discussed, and $13.8 million of lower costs related to the separation from Post.
As of September 30, 2022, the Company had total purchase commitments of $679.0 million (with $406.5 million due in fiscal 2023) which extend through fiscal 2027. • Other liabilities – Other liabilities include obligations associated with certain employee benefit programs, general liability claim losses and provisions for legal matters, unrecognized tax benefits and various other long-term liabilities, all of which have some inherent uncertainty as to the amount and timing of payments and were reflected on our Consolidated Balance Sheet as of September 30, 2022.
As of September 30, 2023, the Company had total purchase commitments of $1,487.7 million (with $459.6 million due in fiscal 2024) which extend through fiscal 2033. • Other liabilities – Other liabilities include obligations associated with certain employee benefit programs, provisions for legal matters, unrecognized tax benefits and various other long-term liabilities, all of which have some inherent uncertainty as to the amount and timing of payments and were reflected on our Consolidated Balance Sheets as of September 30, 2023. 37 Table of Contents The following table presents select cash flow data, which is discussed below.
Additionally, we may seek to repurchase shares of our common stock. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. The following table shows select cash flow data, which is discussed below.
No significant capital expenditures are planned for fiscal 2024. Additionally, we may seek to repurchase shares of our Common Stock. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Items Affecting Comparability During the years ended September 30, 2022, 2021 and 2020, net sales and/or operating profit were impacted by the following items: • accelerated amortization expense of $29.9 million for the year ended September 30, 2021 related to the discontinuance of the Supreme Protein brand; • restructuring and facility closure costs, including accelerated depreciation, of $0.3 million and $5.6 million related to the closing of our Dallas, Texas office and the downsizing of our Munich, Germany location during the years ended September 30, 2022 and 2021, respectively; • separation-related expenses of $14.5 million, $0.2 million and $1.9 million for the years ended September 30, 2022, 2021 and 2020, respectively, in connection with our separation from Post; and • $8.0 million of expense for the year ended September 30, 2022 related to provisions for legal matters.
Items Affecting Comparability During the years ended September 30, 2023 and 2022, net sales and/or operating profit were impacted by the following items: • accelerated amortization expense of $7.1 million for the year ended September 30, 2023 related to the discontinuance of the PowerBar business in North America; • separation-related expenses in connection with our separation from Post of $0.7 million and $14.5 million for the years ended September 30, 2023 and 2022, respectively; and • $5.0 million and $8.0 million of expense for the years ended September 30, 2023 and 2022, respectively, related to provisions for legal matters.
In addition, the indenture governing the 7.00% Senior Notes contains customary negative covenants that limit our ability and the ability of our restricted subsidiaries to, among other things: borrow money or guarantee debt; create liens; pay dividends on, or redeem or repurchase, stock; make specified types of investments and acquisitions; enter into or permit to exist contractual limits on the ability of our subsidiaries to pay dividends to us; enter into new lines of business; enter into transactions with affiliates; and sell assets or merge with other companies.
The Credit Agreement provides for potential incremental revolving and term facilities at our request and at the discretion of the lenders or other persons providing such incremental facilities, in each case on terms to be determined, and also permits us to incur other secured or unsecured debt, in all cases subject to conditions and limitations on the amount as specified in the Credit Agreement. 38 Table of Contents In addition, the indenture governing the 7.00% Senior Notes contains negative covenants customary for this type of agreement that limit our ability and the ability of our restricted subsidiaries to, among other things: borrow money or guarantee debt; create liens; pay dividends on, or redeem or repurchase, stock; make specified types of investments and acquisitions; enter into or permit to exist contractual limits on the ability of our subsidiaries to pay dividends to us; enter into transactions with affiliates; and sell assets or merge with other companies.
Sales of Premier Protein products were up $75.2 million, or 7%, driven by higher average net selling prices. Average net selling prices increased in the year ended September 30, 2022 due to targeted price increases and decreased promotional spending.
Sales of Dymatize products were up $22.8 million, or 11%, primarily driven by higher average net selling prices. Average net selling prices increased in the year ended September 30, 2023 due to targeted price increases, partially offset by increased promotional spending. In addition, Dymatize volumes increased 4% primarily driven by distribution gains.
Year Ended September 30, dollars in millions 2022 2021 2020 Computed tax (21%) $ 30.6 $ 25.9 $ 23.0 Income tax expense attributable to redeemable noncontrolling interest (7.6) (19.5) (16.2) State income taxes, net of effect on federal tax 4.7 4.0 3.0 Transaction costs 2.0 — (1.2) Uncertain tax position — — 1.5 Other, net (none in excess of 5% of computed tax) (0.1) (1.6) (0.9) Income tax expense $ 29.6 $ 8.8 $ 9.2 The increase in our effective income tax rate for fiscal 2022 compared to each of the prior years was primarily due to the change in tax expense allocation related to the Spin-off.
Year Ended September 30, dollars in millions 2023 2022 Computed tax at federal statutory rate (21%) $ 46.3 $ 30.6 Income tax expense attributable to redeemable noncontrolling interest — (7.6) State income taxes, net of effect on federal tax 8.4 4.7 Transaction costs — 2.0 Other, net (none in excess of 5% of computed tax) 0.2 (0.1) Income tax expense $ 54.9 $ 29.6 The increase in our effective income tax rate for fiscal 2023 compared to the prior year was primarily due to us reporting 100% of the income, gain, loss and deduction of BellRing LLC in the periods subsequent to the Spin-off, partially offset by higher separation-related expenses incurred in connection with the Spin-off in the prior year that were treated as non-deductible.
In connection with this transaction, BellRing repurchased 0.8 million of the transferred shares from certain of the financial institutions. 36 Table of Contents BellRing incurred separation-related expenses of $14.5 million for the year ended September 30, 2022, in connection with the Spin-off.
In connection with this transaction, BellRing repurchased 0.9 million of the transferred shares from certain of the financial institutions. Post had no ownership of BellRing Common Stock as of September 30, 2023. BellRing incurred separation-related expenses in connection with its separation from Post of $0.7 million and $14.5 million during the years ended September 30, 2023 and 2022, respectively.
As a result of the Spin-off, the dual class voting structure in the BellRing business was eliminated, and Post’s remaining ownership did not represent a controlling interest in BellRing.
Immediately following the Spin-off, Post owned 19.4 million shares, or 14.2%, of BellRing Common Stock, which did not represent a controlling interest in BellRing. As a result of the Spin-off, the dual class voting structure in the BellRing business was eliminated.
Our ability to generate positive cash flows from operations is dependent on general economic conditions, competitive pressures and other business risk factors. If we are unable to generate sufficient cash flows from operations, or otherwise to comply with the terms of our credit facilities, we may be required to seek additional financing alternatives.
If we are unable to generate sufficient cash flows from operations, or otherwise to comply with the terms of our credit facilities, we may be required to seek additional financing alternatives. Short-term financing needs primarily consist of working capital requirements and interest payments on our 7.00% Senior Notes and Revolving Credit Facility.
However, for competitive reasons, we may not be able to pass along the full effect of increases in raw materials and other input costs as we incur them. Inflationary pressures can also have an adverse effect on us through higher raw material and energy costs.
However, for competitive reasons, we may not be able to pass along the full effect of increases in raw materials and other input costs as we incur them. See “Market Trends” section above for additional information regarding inflationary pressures on our commodity purchases. CURRENCY Certain sales and costs of our foreign operations are denominated in Euros.
This increase was primarily due to higher outstanding principal amounts of debt and a higher weighted-average interest rate compared to the prior year, partially offset by increased net hedging gains (compared to losses in the prior year period) of $3.8 million recognized on interest rate swaps.
Interest Expense, Net Interest expense, net increased $17.7 million during the year ended September 30, 2023 compared to the prior year. This increase was primarily due to higher average outstanding principal amounts of debt, primarily resulting from the Spin-off, and a higher weighted-average interest rate compared to the prior year.
As a result, we have taken pricing actions on nearly all products. For additional discussion, refer to “Liquidity and Capital Resources” within this section, as well as “Cautionary Statement on Forward-Looking Statements”on page 1 of this report and “Risk Factors” in Part I of this report.
Inflation could have a materially adverse impact on our business in the future if inflation rates were to significantly exceed our ability to achieve price increases or cost savings or if such price increases impact demand for our products. 34 Table of Contents For additional discussion, refer to “Liquidity and Capital Resources” within this section, as well as “Cautionary Statement on Forward-Looking Statements”on page 1 of this report and “Risk Factors” in Part I of this report.
These positive impacts were partially offset by higher net product costs of $140.5 million due to unfavorable raw material, freight and manufacturing costs, higher costs related to the separation from Post of $14.3 million and higher expenses for legal matters of $8.0 million.
These positive impacts were partially offset by higher net product costs of $87.3 million primarily driven by unfavorable raw material and manufacturing costs, slightly offset by lower freight costs.
See Note 14 within “Notes to Consolidated Financial Statements” for additional information on our debt. 39 Table of Contents Income Tax Expense Our effective income tax rate for fiscal 2022 was 20.3% compared to 7.1% for fiscal 2021 and 8.4% for fiscal 2020.
See Note 13 within “Notes to Consolidated Financial Statements” for additional information on our debt. Income Tax Expense Our effective income tax rate for fiscal 2023 was 24.9% compared to 20.3% for fiscal 2022. The following table presents the reconciliation of income tax expense with amounts computed at the United States (“U.S.”) federal statutory tax rate.
However, the recognition of certain trade promotions requires significant management judgement regarding estimated purchase volumes and program participation. We review and update estimates of variable consideration quarterly. Uncertainties related to the estimates of variable consideration are resolved in a short time frame and do not require any additional constraint on variable consideration.
Uncertainties related to the estimates of variable consideration are resolved in a short time frame and do not require any additional constraint on variable consideration. Less than 1% of our annual net sales represent variable consideration that will be resolved in the subsequent period.
Sales are typically higher throughout the remainder of the fiscal year as a result of promotional activity at key retailers as well as organic growth of the business. COVID-19 Pandemic The COVID-19 pandemic has caused and continues to cause global economic disruption and uncertainty, including in our business.
Sales are typically higher throughout the remainder of the fiscal year as a result of promotional activity at key retailers as well as organic growth of the business. Market Trends During fiscal 2023 and 2022, input cost inflation, including raw material, packaging and manufacturing costs, impacted our supply chain and put downward pressure on profit margins.
The increase was primarily driven by favorable changes related to fluctuations in the timing of purchases and payments of trade payables and the decrease in the current year inventory balance due to higher net sales outpacing production levels.
The increase was primarily due to lapping larger cash outflows in the prior year related to the rebuild of powder finished goods from previous supply-constrained levels, partially offset by input cost inflation. The increase was incrementally driven by higher net earnings and favorable changes related to fluctuations in the timing of sales and collections of trade receivables.
Our asset-light business model requires modest capital expenditures, with annual capital expenditures over the last three fiscal years averaging less than 1% of net sales. No significant capital expenditures are planned for fiscal 2023.
Long-term financing needs include the repayment of our 7.00% Senior Notes and Revolving Credit Facility. Additional long-term financing needs will depend largely on potential growth opportunities, including acquisition activity and other strategic transactions. Our asset-light business model requires modest capital expenditures, with annual capital expenditures over the last three fiscal years averaging less than 1% of net sales.
Fiscal 2021 Cash used in financing activities for the year ended September 30, 2021 was $120.9 million. BellRing LLC drew an aggregate of $20.0 million under the Old Revolving Credit Facility, repaid $63.8 million on the principal balance of the Term B Facility and repaid $50.0 million on the Old Revolving Credit Facility during the year.
Financing Activities Fiscal 2023 Cash used in financing activities for the year ended September 30, 2023 was $201.7 million. We paid $125.5 million, including broker’s commissions, for the repurchase of Common Stock and borrowed and repaid $115.0 million and $189.0 million, respectively, under the Revolving Credit Facility.
Removed
Post shareholders received 1.267788 shares of BellRing Common Stock for every one share of Post common stock held as of the Record Date. No fractional shares of BellRing Common Stock were issued, and instead, cash in lieu of any fractional shares was paid to Post shareholders.
Added
The following should be read in conjunction with the discussion and analysis of our fiscal 2022 results compared to our fiscal 2021 results, including any related discussion of fiscal 2021 results and activity, which can be found in Item 7 of Part II under the title “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended September 30, 2022, and such discussion and analysis is incorporated by reference herein.
Removed
Immediately following the Spin-off, Post owned 19.4 million shares, or 14.2%, of the BellRing Common Stock and Post shareholders owned approximately 57.3% of the BellRing Common Stock. The former Old BellRing stockholders owned approximately 28.5% of the BellRing Common Stock, maintaining their effective ownership in the Old BellRing business prior to the Spin-off.
Added
OVERVIEW On October 21, 2019, BellRing Intermediate Holdings, Inc.
Removed
We continue to closely monitor the impact of the COVID-19 pandemic and remain focused on ensuring the health and safety of our employees and serving customers and consumers. Our primary categories returned to growth rates in line with their pre-pandemic levels during the fourth quarter of fiscal 2020 and have remained strong in subsequent periods.
Added
In connection with this transaction, BellRing repurchased 0.8 million of the transferred shares from certain of the financial institutions. 33 Table of Contents On November 25, 2022, Post transferred its remaining 4.6 million shares of BellRing Common Stock to certain financial institutions in satisfaction of term loan obligations of Post.
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As the overall economy continues to recover from the impact of the COVID-19 pandemic, input and freight inflation and input and labor availability are pressuring our supply chain.
Added
As a result, we have taken pricing actions on nearly all products. We expect inflationary pressures on protein costs to ease in fiscal 2024, while other costs, such as packaging and manufacturing, to continue to face inflationary pressures in fiscal 2024.
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Lower than anticipated production and delays in capacity expansion across the broader third party contract manufacturer network have resulted in low shake inventory volumes and missed sales. 37 Table of Contents Service levels and fill rates remain below normal levels, and certain products have been placed on allocation.
Added
Sales of Premier Protein products were up $275.7 million, or 25%, on 11% higher volumes. Average net selling prices increased in the year ended September 30, 2023 due to targeted price increases taken to mitigate inflation. Volumes increased due to higher production, distribution gains and the reintroduction of certain RTD shake flavors.
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These factors are expected to improve but persist throughout fiscal 2023 and are dependent upon our contract manufacturer partners’ ability to deliver committed volumes, add capacity on expected timelines, retain manufacturing staff and rebuild inventory levels. Raw material, packaging and freight inflation has been widespread, rapid and significant, and has put downward pressure on profit margins.
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In addition, we incurred the following higher expenses; (i) advertising expenses of $18.3 million, (ii) employee-related expenses of $9.2 million, (iii) professional fees of $8.3 million, and (iv) accelerated amortization expense of $7.1 million related to the discontinuance of the PowerBar business in North America.
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These positive impacts were partially offset by volume decreases of 8%, which were primarily the result of supply constraints and reduced demand-driving activity. Sales of Dymatize products were up $54.3 million, or 35%, driven by higher average net selling prices.
Added
There were no outstanding letters of credit under the Revolving Credit Facility as of September 30, 2023 or 2022. Subsequent to September 30, 2023, we repaid an additional $25.0 million under the Revolving Credit Facility, which reduced the outstanding borrowings under the Revolving Credit Facility to zero.
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Average net selling prices increased in the year ended September 30, 2022 due to targeted price increases and decreased promotional spending. These positive impacts were partially offset by volume decreases of 5%, which were driven by elasticities due to inflation-driven price increases and product discontinuations.
Added
We are currently not aware of any trends or demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, our liquidity increasing or decreasing in any material way that will impact meeting our capital needs during or beyond the next twelve months.
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Sales of all other products were down $5.1 million. 38 Table of Contents Fiscal 2021 compared to 2020 Net sales increased $258.8 million, or 26%, during the year ended September 30, 2021 compared to the prior year. Sales of Premier Protein products were up $207.8 million, or 25%, with volume up 24%.
Added
Our ability to generate positive cash flows from operations is dependent on general economic conditions, competitive pressures and other business risk factors. We believe that we have sufficient liquidity and cash on hand to satisfy our cash needs.
Removed
Volume increases were driven by higher RTD protein shake product volumes which primarily related to distribution gains for both existing and new products and strong velocities driven by promotional activity and category momentum. Sales of Dymatize products were up $47.4 million, or 43%, with volume up 29%.
Added
These positive impacts were partially offset by increased tax payments (net of refunds) of $26.3 million and increased interest payments of $21.6 million. Investing Activities Cash used in investing activities for both the years ended September 30, 2023 and 2022 was $1.8 million and related to capital expenditures in each year.
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Volume increases were primarily driven by distribution gains for both existing and new products and strong velocities driven by category momentum and lower international and specialty channel volumes in the prior year, largely resulting from consumer reaction to the COVID-19 pandemic. Average net selling prices increased during the year ended September 30, 2021 due to a favorable product mix.
Added
Revenue Recognition, Allowance for Trade Promotions — The recognition of certain variable trade promotions, which are treated as a reduction of revenue, requires significant management judgment regarding estimated purchase volumes and program participation. Estimates are based on contractual provisions, redemption rate assumptions and our assessment of current market provisions.
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Sales of all other products were up $3.6 million. Operating Profit Fiscal 2022 compared to 2021 Operating profit increased $44.4 million, or 26%, during the year ended September 30, 2022 compared to the prior year.
Added
Redemption rate assumptions are based on historical results of similar promotions on a deal-by-deal basis, adjusted for current expectations of promotion performance based on the current market. We review and update estimates of variable consideration quarterly.
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This increase was primarily driven by higher net sales, due to higher average selling prices as previously discussed, reduced advertising costs of $16.5 million and lower restructuring and facility closure costs. In addition, prior year operating profit was negatively impacted by $29.9 million of accelerated amortization related to the discontinuance of the Supreme Protein brand.
Added
RECENTLY ISSUED AND ADOPTED ACCOUNTING STANDARDS We considered all new accounting pronouncements and have concluded there are no new pronouncements that had or will have a material impact on our results of operations, comprehensive income, financial condition, cash flows, shareholders’ equity or related disclosures based on current information. 39 Table of Contents
Removed
These positive impacts were partially offset by higher net product costs of $38.9 million due to unfavorable raw material, freight and manufacturing costs, accelerated amortization expense of $29.9 million related to the discontinuance of the Supreme Protein brand, restructuring and facility closure costs, including accelerated depreciation of $5.6 million, increased advertising costs of $6.1 million and higher employee-related costs.
Removed
Interest Expense, Net Fiscal 2022 compared to 2021 Interest expense, net increased $6.0 million during the year ended September 30, 2022 compared to the prior year.
Removed
Fiscal 2021 compared to 2020 Interest expense, net decreased $11.5 million during the year ended September 30, 2021 compared to the prior year primarily due to lower principal amounts of debt outstanding.
Removed
In addition, the weighted-average interest rate on our total outstanding debt decreased to 5.3% for the year ended September 30, 2021 from 6.3% for the year ended September 30, 2020, driven by lower variable interest rates and the refinancing of our Term B Facility (as defined in “Liquidity and Capital Resources”) during the second quarter of fiscal 2021.
Removed
See Notes 14 and 12 within “Notes to Consolidated Financial Statements” for additional information on our debt and interest rate swaps, respectively.
Removed
During the year ended September 30, 2021, we recognized $1.6 million of losses related to refinancing fees incurred in conjunction with the refinancing of our Term B Facility.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFor additional discussion, refer to “Liquidity and Capital Resources” in Item 7, as well as “Cautionary Statement on Forward-Looking Statements” and “Risk Factors” in Part I of this report. Commodity Price Risk In the ordinary course of business, the Company is exposed to commodity price risks relating to the purchases of raw materials.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk from commodity prices, foreign currency exchange rates and interest rates, among others. For additional discussion of these risks, refer to “Cautionary Statement on Forward-Looking Statements” on page 1 and “Risk Factors” in Item 1A of Part I of this report.
Changes in interest rates impact fixed and variable rate debt differently. For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas a change in the interest rates on variable rate debt will impact interest expense and cash flows.
For fixed rate debt, a change in interest rates will only impact the fair value of the debt, whereas a change in the interest rates on variable rate debt will impact interest expense and cash flows.
Interest Rate Risk Long-term debt As of September 30, 2022, the Company had outstanding principal value indebtedness of $840.0 million related to its 7.00% Senior Notes and an aggregate principal amount of $99.0 million outstanding under its Revolving Credit Facility.
Interest Rate Risk As of both September 30, 2023 and 2022, the Company had outstanding principal value indebtedness of $840.0 million related to its 7.00% Senior Notes. Additionally, the Company had an aggregate principal amount of $25.0 million and $99.0 million outstanding under its Revolving Credit Facility as of September 30, 2023 and 2022, respectively.
However, for competitive reasons, the Company may not be able to pass along the full effect of increases in raw materials and other input costs as they are incurred.
In addition, the Company may attempt to offset the effect of increased costs by raising prices to customers. However, for competitive reasons, the Company may not be able to pass along the full effect of increases in raw materials and other input costs as they are incurred.
A hypothetical 10% decrease in interest rates would have increased the fair value of the fixed rate debt by approximately $17 million as of September 30, 2022. The Company did not have fixed rate debt as of September 30, 2021.
A hypothetical 10% decrease in interest rates would have increased the fair value of the fixed rate debt by approximately $19 million and $17 million as of September 30, 2023 and 2022, respectively.
Borrowings under the 44 Table of Contents Revolving Credit Facility bear, and borrowings under the Term B Facility and the Old Revolving Credit Facility bore, interest at variable rates. As of September 30, 2022 and 2021, the fair value of the Company’s debt, excluding any borrowings under its revolving credit facilities, was $767.4 million and $613.8 million, respectively.
Borrowings under the Revolving Credit Facility bear interest at variable rates. As of September 30, 2023 and 2022, the fair value of the Company’s debt, excluding any borrowings under its Revolving Credit Facility, was $830.0 million and $767.4 million, respectively. Changes in interest rates impact fixed and variable rate debt differently.
The Company manages the impact of cost increases, wherever possible, on commercially reasonable terms, by locking in prices on the quantities through purchase commitments required to meet production requirements. In addition, the Company may attempt to offset the effect of increased costs by raising prices to customers.
Commodity Price Risk In the ordinary course of business, the Company is exposed to commodity price risks relating to the purchases of raw materials. The Company manages the impact of cost increases, wherever possible, on commercially reasonable terms, by locking in prices on the quantities through purchase commitments required to meet production requirements.
Including the impact of interest rate swaps, a hypothetical 10% increase in interest rates would have had an immaterial impact on both interest expense and interest paid during both the years ended September 30, 2022 and 2021.
A hypothetical 10% increase in interest rates would have had an immaterial impact on both interest expense and interest paid during both the years ended September 30, 2023 and 2022. For additional information regarding the Company’s debt, see Note 13 within “Notes to Consolidated Financial Statements.” 40 Table of Contents
Removed
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The COVID-19 pandemic has resulted in significant volatility and uncertainty in the markets in which the Company operates.
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At the time of this report, the COVID-19 pandemic has not had, and the Company does not currently expect to have, a significant impact on its exposure to market risk from commodity prices, foreign currency exchange rates and interest rates, among others.
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As of September 30, 2021, BellRing LLC had an aggregate principal amount of $609.9 million outstanding on its Term B Facility. There were no amounts drawn under the Old Revolving Credit Facility as of September 30, 2021.
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For additional information regarding the Company’s debt, see Note 14 within “Notes to Consolidated Financial Statements.” Interest rate swaps As of September 30, 2021, the Company had interest rate swaps with a notional value of $350.0 million.
Removed
A hypothetical 10% adverse change in interest rates would have had an immaterial impact on the fair value of the interest rate swaps as of September 30, 2021. As of September 30, 2022, the Company did not hold any interest rate swaps.
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For additional information regarding the Company’s interest rate swap contracts, see Note 12 within “Notes to Consolidated Financial Statements.” 45 Table of Contents

Other BRBR 10-K year-over-year comparisons