10q10k10q10k.net

What changed in TreeHouse Foods, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of TreeHouse Foods, Inc.'s 2023 and 2024 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 2024 report.

+280 added−306 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-16)

Top changes in TreeHouse Foods, Inc.'s 2024 10-K

280 paragraphs added · 306 removed · 209 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

36 edited+7 added−12 removed38 unchanged
Biggest changeIn 2023, as the industry-wide labor and supply chain disruption eased, we returned service back to target levels across many of our categories. We have several competitors in each of our channels. For sales of private brands products to our customers, the principal competitive factors are product quality, reliability of service, and price.
Biggest changeAs it relates to the sales of private brands products to our customers, the principal competitive factors are product quality, reliability of service, and price. In addition, while we primarily manufacture private brands products, we do manufacture some branded products.
We are not, however, including the information contained on our website, or information that may be accessed through links to our website, as part of, or incorporating such information by reference into, this Form 10-K. Copies of any materials the Company files with the SEC can be obtained free of charge through the SEC’s website at http://www.sec.gov .
We are not, however, including the information contained on our website, or information that may be accessed through links to our website, as part of, or incorporating such information by reference into, this Form 10-K. Copies of any materials the Company files with the SEC can be obtained free of charge through the SEC’s website at http://www.sec.gov . 9
We have not experienced any material interruptions of operations due to disputes with our employees and consider our relations with our employees to be satisfactory. Key areas of focus for the Company include: Health and Safety: The safety of our employees is a top priority.
We have not experienced any material interruptions of operations due to disputes with our employees and consider our relations with our employees to be satisfactory. 8 Key areas of focus for the Company include: Health and Safety: The safety of our employees is a top priority.
We recognize the importance of measurement and accountability, and we will continue to provide transparent disclosure of our progress along our ESG journey. Sales, Distribution, and Customers We sell our products through various distribution channels, including retailers, foodservice distributors, co-manufacturers, and industrial and export channels.
We recognize the importance of measurement and accountability, and we will continue to provide transparent disclosure of our progress along our sustainability journey. Sales, Distribution, and Customers We sell our products through various distribution channels, including retailers, foodservice distributors, co-manufacturers, and industrial and export channels.
Our short-term financing needs are primarily for financing working capital and are generally highest in the first half of the year as inventory levels increase relative to the second half of the year, due to the seasonal nature of our business.
Our short-term financing needs are primarily for financing working capital and are generally highest in the first half of the year as inventory levels increase relative to the second half of the year, due to the cyclical nature of our business.
Our portfolio includes snacking offerings (crackers, pretzels, in-store bakery items, frozen griddle 4 items, cookies, and unique candy offerings), beverages & drink mix offerings (non-dairy creamer, coffee, broths/stocks, powdered beverages and other blends, tea, and ready-to-drink-beverages), as well as other grocery offerings (pickles, refrigerated dough, hot cereal, and cheese & pudding).
Our portfolio includes snacking offerings (crackers, pretzels, in-store bakery items, frozen griddle items, cookies, and unique candy offerings), beverages & drink mix offerings (non-dairy creamer, coffee, broths/stocks, powdered beverages and other blends, and tea), as well as other grocery offerings (pickles, refrigerated dough, hot cereal, and cheese & pudding).
We believe our strategies for competing in private brands, which include providing superior product quality, effective cost control, an efficient supply chain, successful innovation programs, and competitive pricing, allow us to compete effectively. Resources Raw Materials and Supplies: Our raw materials consist of ingredients and packaging materials.
We believe our strategies for competing in private brands, which include providing superior product quality, effective cost control, an efficient supply chain, successful innovation programs, and strategic customer partnerships, allow us to compete effectively. Resources Raw Materials and Supplies: Our raw materials consist of ingredients and packaging materials.
Our ESG Steering Committee drives our activities in this space, and is composed of our Executive Leadership Team, including our Chairman, CEO, and President. This committee is supported by four subcommittees and our ESG team, which is led by our VP, ESG & Deputy General Counsel, who reports to our EVP, Chief Human Resources Officer & General Counsel.
Our ESG Steering Committee drives our activities in this space, and is composed of our Executive Leadership Team, including our Chairman, CEO, and President. This committee is supported by four subcommittees and our ESG team, which is led by our EVP, Chief Human Resources Officer & General Counsel.
In addition, we seek to develop a higher performance culture by aligning our employee incentive plans to our four strategic growth pillars. We continue to focus on advancing our environment, social, and governance ("ESG") initiatives and have integrated those efforts across our strategic growth pillars.
In addition, we seek to develop a higher performance culture by aligning our employee incentive plans to our four strategic growth pillars. We continue to focus on advancing our sustainability initiatives and have integrated those efforts across our strategic growth pillars.
For additional discussion of the risks associated with the raw materials used in our operations, see Part I, Item 1A – Risk Factors and Part II, Item 7 - Known Trends or Uncertainties . Trademarks: We own a number of registered trademarks.
For additional discussion of the risks associated with the raw materials used in our operations, see Part I, Item 1A – Risk Factors and Part II, Item 7 - Macroeconomic Trends and Conditions . Trademarks: We own a number of registered trademarks.
As of December 31, 2023, our work force consisted of approximately 7,400 full-time employees, with 6,000 in the United States and 1,400 in Canada. Approximately 1,900 were salaried, and 5,500 were hourly employees. Approximately 2,100 were unionized, and 5,300 were non-union employees.
As of December 31, 2024, our work force consisted of approximately 7,400 full-time employees, with 6,000 in the United States and 1,400 in Canada. Approximately 1,800 were salaried, and 5,600 were hourly employees. Approximately 2,100 were unionized, and 5,300 were non-union employees.
In addition, we offer employees dental and vision coverage, health savings and flexible spending accounts, paid time off, leave, care benefits (including back-up child/elder care), tuition reimbursement programs, a 401(k) retirement plan with matching company contributions, life insurance, and voluntary short-term and long-term disability insurance.
In addition, we offer employees dental and vision coverage, health savings and flexible spending accounts, paid time off, leave, care benefits, a tuition reimbursement program, a 401(k) retirement plan with matching company contributions, life insurance, and voluntary short-term and long-term disability insurance.
Key factors driving private brands growth include growing consumer adoption, improved quality, unique product offerings, and greater retailer emphasis and strategic focus on building shopper loyalty and experiences through private brands.
Key factors driving longer-term private brands growth include growing consumer adoption, improved quality, broadening of product offerings, and greater retailer emphasis and strategic focus on building shopper loyalty and experiences through private brands.
The Snack Bars Transaction represents a component of the single plan of disposal from the Company’s strategic review process, which also resulted in the divestiture of a significant portion of the Meal Preparation business during the fourth quarter of 2022.
The Snack Bars Transaction represents a component of the single plan of disposal from the Company’s strategic review process, which also resulted in the divestiture of a significant portion of the Meal Preparation business during the fourth quarter of 2022. The Snack Bars Business has been classified as a discontinued operation.
In addition, while we primarily manufacture private brands products, we do manufacture some branded products. The principal competitive factors for sales of our branded products to consumers are brand recognition and loyalty, product quality, promotion, and price. Some of our branded competitors have significantly greater resources and brand recognition than we do.
The principal competitive factors for sales of our branded products to consumers are brand recognition and loyalty, product quality, promotion, and price. Some of our branded competitors have significantly greater resources and brand recognition than we do.
Our business could not operate without our team members, and our plant employees are essential to the success of our company. TreeHouse is committed to creating a culture of Environmental, Health, Safety ("EHS") Excellence through personal responsibility and risk prevention. We have established a common plant structure for our EHS organization at our facilities.
Our business could not operate without our team members, and our plant employees are essential to the success of our company. TreeHouse is committed to creating a culture of Environmental, Health, Safety ("EHS") excellence through personal responsibility and risk prevention.
For the year ended December 31, 2023, our ten largest customers accounted for approximately 56.7% of our consolidated net sales from continuing operations. For the years ended December 31, 2023, 2022 and 2021, our largest customer, Walmart Inc. and its affiliates, accounted for approximately 22.4%, 21.1%, and 20.6%, respectively, of our consolidated net sales from continuing operations.
For the year ended December 31, 2024, our ten largest customers accounted for approximately 57.1% of our consolidated net sales from continuing operations. For the years ended December 31, 2024, 2023 and 2022, our largest customer, Walmart Inc. and its affiliates, accounted for approximately 23.9%, 22.4%, and 21.1%, respectively, of our consolidated net sales from continuing operations.
Canadian employees are also eligible for paid time off, employee assistance, virtual healthcare, and tuition reimbursement programs. 9 Available Information We make available, free of charge, through the "Investors" link then "Financials" then "SEC Filings" on our Internet website at www.treehousefoods.com , our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.
Available Information We make available, free of charge, through the "Investors" link then "Financials" then "SEC Filings" on our Internet website at www.treehousefoods.com , our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.
In 2022, TreeHouse completed the divestiture of a significant portion of its Meal Preparation business to better focus the portfolio on higher-growth, higher-margin snacking and beverage categories. The Company continues to evaluate strategic growth opportunities to invest in its commercial organization.
In 2022, TreeHouse completed the divestiture of a significant portion of its Meal Preparation business to better focus the portfolio on higher-growth, higher-margin snacking and beverage categories.
The most important packaging materials and supplies used in our operations are cartons, composite cans, corrugated containers, glass, metal cans, metal closures, and plastics. Ingredients and most packaging materials are generally purchased under long-term supply contracts.
The most important packaging materials and supplies used in our operations are cartons, composite cans, corrugated containers, glass, metal cans, metal closures, and plastics. Ingredients and most packaging materials are generally purchased under long-term supply contracts. We believe these ingredients and packaging materials are generally available from a number of suppliers.
Over the last several years, consumers have faced significant inflationary pressure, which has strengthened the private brands value proposition and supported private brands unit share gains in our categories across the retail channel.
Over the last several years, consumers have faced significant inflationary pressure, which has strengthened the private brands value proposition and supported private brands unit share gains in our categories across the retail channel. However, recent macroeconomic challenges have softened the overall market and private brands consumption within the food and beverage category.
For Canadian employees, we provide group benefits including health and dental, life, family life, accidental death and dismemberment insurance and disability coverage, and group retirement savings plans with matching company contributions.
For Canadian employees, we provide group benefits including health and dental, life, family life, accidental death and dismemberment insurance and disability coverage, and group retirement savings plans with matching company contributions. Canadian employees are also eligible for paid time off, employee assistance, virtual healthcare, and a tuition reimbursement program.
Beyond DevelopU, we pursue a multifaceted approach to career development and continuous learning that also includes a comprehensive onboarding program, formal training, career development tools and leadership development, with particular attention paid to developing leadership capability. Compensation and Benefits: TreeHouse offers competitive pay and benefit packages, designed to drive our performance-based culture and celebrate our collective organizational success.
Beyond DevelopU, we take a comprehensive approach to career development and continuous learning, offering a well-structured onboarding program, formal training, career development tools, and targeted leadership development, with a strong focus on enhancing leadership capabilities. Compensation and Benefits: TreeHouse offers competitive pay and benefit packages, designed to drive our performance-based culture and celebrate our collective organizational success.
The acquisition is consistent with our strategy and builds depth in our Pickles category by expanding into Canada. On September 29, 2023, the Company completed the sale of its Snack Bars business (the "Snack Bars Transaction" or the "Snack Bars Business"). The Snack Bars Business consists of manufacturing, packaging, and selling snack bars and operated in the Lakeville, Minnesota plant.
On September 29, 2023, the Company completed the sale of its Snack Bars business (the "Snack Bars Transaction" or the "Snack Bars Business"). The Snack Bars Business consists of manufacturing, packaging, and selling snack bars and operated in the Lakeville, Minnesota plant.
The Meal Preparation Business consists of consumer packaged food manufacturers operating 14 manufacturing facilities in the United States, Canada, and Italy servicing primarily retail grocery customers. The Meal Preparation Business had been classified as a discontinued operation. On June 1, 2021, the Company completed the sale of its RTE Cereal business to Post Holdings, Inc. ("Post").
The Meal Preparation Business consisted of consumer packaged food manufacturers operating 14 manufacturing facilities in the United States, Canada, and Italy servicing primarily retail grocery customers. The Meal Preparation Business has been classified as a discontinued operation.
Safety is incorporated into our TreeHouse Management Operating System ("TMOS") and under TMOS, our plants are accountable to EHS Improvement Plans, Environmental Compliance Plans and standardized Incident Investigation and Communication processes. 8 Culture: We are committed to building a diverse team, fostering an inclusive culture, and investing in equity across our organization.
Safety is incorporated into our TreeHouse Management Operating System ("TMOS") and under TMOS, our plants are accountable to EHS Improvement Plans, Environmental Compliance Plans and standardized Incident Investigation and Communication processes.
As a result of our product portfolio and the related seasonality, our financing needs are generally highest in the first half of the year, while cash flow is highest in the second half of the year following the seasonality of our sales.
As a result of our product portfolio and the related seasonality, our financing needs are generally highest in the first half of the year, while cash flow is highest in the second half of the year. In recent years, the impact on profitability from our seasonality was disrupted by commodity inflation, supply chain disruption, and labor shortages.
We believe building a team diverse in ideas, experiences, and backgrounds enables us to be more successful in our jobs and better address the needs of customers and consumers.
Additionally, our focus on engagement and internal successes creates an environment where everyone can thrive. Culture: We are committed to promoting equal opportunity across our organization. We believe building a team diverse in ideas, experiences, and backgrounds enables us to be more successful in our jobs and better address the needs of customers and consumers.
In 2021 and 2022, the impact on profitability from our seasonality was disrupted by commodity inflation, supply chain disruption, and labor shortages. For additional discussion on product consumption patterns due to commodity inflation and supply chain disruption, see Part II, Item 7 - Known Trends or Uncertainties .
For additional discussion on product consumption patterns due to commodity inflation and supply chain disruption, see Part II, Item 7 - Macroeconomic Trends and Conditions .
No other customer accounted for 10% or more of the Company’s consolidated net sales from continuing operations. Markets and Competition The private brands food and beverage market has been growing. Over the last several decades, private brands have had a history of consistently gaining market share, with share gains more prominent during recessionary periods when consumers seek value.
Over the last several decades, private brands have shown a history of consistently gaining market share, with share gains more prominent during recessionary periods when consumers seek value.
TreeHouse believes it is well positioned across attractive snacking and beverage growth categories fueled by strong underlying consumer demand trends.
Going forward, the Company will continuously review its portfolio and filter strategic growth investment opportunities based on evaluating risk adjusted returns. 4 TreeHouse believes it is well positioned across attractive snacking and beverage growth categories fueled by historically positive underlying consumer demand trends.
Knowing that development is important in enhancing our employees' skills, knowledge and capabilities to drive performance, employee engagement and to contribute to continued success, we have designed DevelopU with learning automation, a robust content library of more than 10,000 courses, and flexible learning solutions.
Recognizing the critical role development plays in building skills, knowledge and capabilities that drive performance, engagement and success, DevelopU is designed with advanced learning automation, a robust library of over 10,000 courses, and flexible learning solutions. Additionally, DevelopU enables us to structure production line training in a more contemporary and consistent manner, ensuring alignment and efficiency across operations.
Recent Acquisitions and Divestitures On January 2, 2024, the Company completed the acquisition of pickle branded assets, including Bick’s pickles, Habitant pickled beets, Woodman’s horseradish, and McLarens pickled onions brands, from The J.M. Smucker Co., a North American producer of coffee, consumer foods, dog snacks, and cat food.
Net sales for the RTD business for the years ended December 31, 2024, 2023, and 2022 were $32.6 million, $34.3 million, and $42.0 million, respectively. On January 2, 2024, the Company completed the acquisition of pickle branded assets, including Bick’s pickles, Habitant pickled beets, Woodman’s horseradish, and McLarens pickled onions brands (the "Pickle Branded Assets"), from The J.M.
RTE Cereal operated as two manufacturing plants located in Lancaster, Ohio and Sparks, Nevada. The RTE Cereal business had been classified as a discontinued operation. Refer to Note 7 to our Consolidated Financial Statements for additional information. 5 Our Strategy Our strategic ambition is platform leadership in consumer trending categories.
Refer to Note 3 and Note 7 to our Consolidated Financial Statements for additional information. 5 Our Strategy Our strategic ambition is platform leadership in consumer trending categories, which is anchored on four strategic growth pillars: • World Class Supply Chain.
This allows us to proactively identify improvement opportunities by leveraging best practices and better focus our resources on safety risk identification and mitigation. Paired with the development of frontline employee safety committees, our employees at all levels are able to take ownership over creating a safety-first workplace and culture.
We have established a common plant structure for our EHS organization at our facilities, which allows us to proactively identify improvement opportunities by leveraging best practices and better focus our resources on safety risk identification and mitigation. We continue to focus on empowerment by proactively identifying improvement opportunities through external benchmarking.
Learning and Development: Each year, we conduct an Employee Engagement Survey, leveraging those results to continue to work to improve the employee experience and value proposition. One of our most significant investments, in response to our Employee Engagement Survey and other feedback mechanisms, is in an educational platform we refer to internally as DevelopU.
One of our most significant initiatives, informed by feedback from the survey and other channels, is the creation of an educational platform known internally as DevelopU.
Removed
Beginning in the third quarter of 2023, the Snack Bars Business is presented as a component of discontinued operations and has been excluded from continuing operations for all periods presented.
Added
Recent Acquisitions, Divestitures, and Business Exits On January 2, 2025, the Company completed the acquisition of certain subsidiaries that operate the private brand tea business of Harris Freeman & Co, Inc. ("Harris Tea"), a leading private brand tea manufacturer in the United States. The acquisition aligns with our long-term strategy to build capabilities in our higher-growth, higher-margin categories.
Removed
Our strategic plan is anchored on four strategic growth pillars that build upon the work we have accomplished over the last several years related to commercial excellence, operational excellence, portfolio optimization and people & talent. Our strategic growth pillars include: • World Class Supply Chain.
Added
During the second quarter of 2024, the Company made the decision to exit the Ready-to-drink ("RTD") business as part of the Company's portfolio optimization strategy to focus on higher-growth, higher margin categories. Production for the RTD business ceased during the first quarter of 2025.
Removed
Our retail business has also seen strong demand during this time period; however, labor and materials availability, and industry-wide supply chain disruption had constrained our ability to service all of the customer orders we have received in the last several years.
Added
Smucker Co., a North American producer of coffee, consumer foods, dog snacks, and cat food. The acquisition is consistent with our strategy and builds depth in our Pickles category by expanding into Canada. The purchase of the Pickle Branded Assets was accounted for as an Asset Acquisition.
Removed
We believe these ingredients and packaging materials are generally available from a number of suppliers, although supply chain disruption in 2021 and 2022 challenged and delayed timing of availability from our suppliers.
Added
No other customer accounted for 10% or more of the Company’s consolidated net sales from continuing operations. Markets and Competition The private brands food and beverage market has maintained its longer-term growth trajectory.
Removed
The importance placed on diversity, equity, and inclusion begins at the top of our organization and is exemplified by our Board of Directors (the "Board"), where three of nine directors are women and two of nine directors are racially or ethnically diverse.
Added
We will continue to emphasize collaboration with our customers to drive the private brand value proposition for consumers and enhance end-to-end supply chain efficiency to maximize profitable growth. We have several competitors in each of our channels.
Removed
Our DEI & Culture Council, which is the subcommittee that guides our work in this area, is led by our Director of DEI and is composed of individuals from various levels and functions throughout the organization, including the leaders of each of our four Employee Resource Groups ("ERGs"), working together to shape and advance our DEI commitments.
Added
However, global supply chain disruptions could put sourcing availability at risk, and in the past have challenged and delayed timing of availability from our suppliers.
Removed
To continue to drive our diversity goals and build a culture of inclusion, we have established a multi-year DEI Strategic Roadmap and a governance model that engages leadership at all levels of the organization. Our DEI Strategic Roadmap is an enterprise-wide approach to accelerating our DEI journey.
Added
Learning and Development: We place a strong emphasis on Learning and Development, particularly on leadership development. Each year, we conduct an Employee Engagement Survey and use the insights gained to enhance the employee experience and value proposition.
Removed
Our DEI work is guided by the pillars of this DEI Strategic Roadmap: Representation, Education, and Career Advancement. In furtherance of our DEI Strategic Roadmap, we invest time and resources to create a workforce that is representative of the communities in which they are located, and we utilize best practices to recruit and retain our diverse talent.
Removed
In 2023, we expanded our diversity recruitment strategies focused on strengthening the diversity of candidate slates by attending various career fairs, including the National Black MBA Association Career Expo, Hispanic-Serving Institution Career Fair and Service Academy Career Conference.
Removed
We educate our leaders and employees on how best to contribute to an inclusive culture through continuing education and training to increase DEI awareness and to foster an employee experience where everyone feels a sense of belonging. Additionally, our ERGs help us make progress on our DEI Strategic Roadmap.
Removed
In 2023, we maintained four ERGs: Parents & Caregivers Network, TreeHouse’s Black Employee Resource Group, Women at TreeHouse and Free To Be Me (our LGBTQIA+ resource group). These ERGs play a critical role in attracting diverse talent, providing mentorship and career development opportunities, delivering commercial business insights and connecting people to the Company and the communities where we do business.
Removed
As of December 31, 2023, 42% and 48% of our hourly and salaried workforce, respectively, were women, and 39% and 21% of our hourly and salaried workforce, respectively, were from racially or ethnically underrepresented groups.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+4 added−6 removed69 unchanged
Biggest changeWhile we have seen some commodities move lower relative to recent all-time highs, many of our ingredients and packaging inputs still remain elevated compared to historical levels. The Federal Reserve has previously taken actions to reduce domestic inflation by raising interest rates.
Biggest changeIn recent years, the overall global economy has experienced significant inflation in packaging materials, fuel, energy, and across several agricultural commodities, and future changes in such costs may meaningfully impact our results of operations and cause our operating margins to fluctuate significantly. 13 While we have seen some commodities move lower relative to recent all-time highs, many of our ingredients and packaging inputs still remain elevated compared to historical levels.
Accordingly, if we are unable to increase our prices to offset increasing raw material, packaging, and fuel costs, our operating profits and margins could be materially affected. In conditions of increasing input cost inflation, the ability to produce realistic, relevant and reliable forecast information could be materially affected which may result in misleading guidance leading to reputational damage.
Accordingly, if we are unable to increase our prices to offset increasing raw material, packaging, and fuel costs, our operating profits and margins could be materially affected. Additionally, in conditions of increasing input cost inflation, the ability to produce realistic, relevant and reliable forecast information could be materially affected, which may result in misleading guidance leading to reputational damage.
Competition could cause us to lose talented employees, and unplanned turnover could deplete our institutional knowledge and result in increased costs such as our recent implementation of retention programs due to increased competition for employees. 10 Our results of operations are adversely affected by labor shortages, turnover, and labor cost increases.
Competition could cause us to lose talented employees, and unplanned turnover could deplete our institutional knowledge and result in increased costs such as our recent implementation of retention programs due to increased competition for employees. Our results of operations are adversely affected by labor shortages, turnover, and labor cost increases.
Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, adversely affect our business, financial condition, and results of operations, as well as require additional resources to restore our supply chain.
Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition, and results of operations, as well as require additional resources to restore our supply chain.
Additionally, the increased use and/or prevalence of certain weight loss drugs, which may suppress a person’s appetite and/or impact a person's preferences, may impact the demand or consumption patterns for certain of our products. New laws or regulations or changes in existing laws or regulations could adversely affect our business.
Additionally, the increased use and/or prevalence of certain weight loss drugs, which may suppress a person’s appetite and/or impact a person's preferences, may impact the demand or consumption patterns for certain of our products. 14 New laws or regulations or changes in existing laws or regulations could adversely affect our business.
The Company is exposed to fluctuations in foreign currency exchange rates. The Company’s foreign subsidiaries purchase and sell various inputs that are based in U.S. dollars; accordingly, the profitability of the foreign subsidiaries is subject to foreign currency transaction gains and losses that affect earnings.
The Company is exposed to fluctuations in foreign currency exchange rates. The Company’s Canadian subsidiaries purchase and sell various inputs that are based in U.S. dollars; accordingly, the profitability of the Canadian subsidiaries is subject to foreign currency transaction gains and losses that affect earnings.
The food industry is subject to a variety of federal, state, local, and foreign laws and regulations, including, but not limited to, those related to food safety, food labeling, and environmental matters.
The food industry is subject to a variety of federal, state, local, and foreign laws and regulations, including, but not limited to, those related to food safety, food labeling, food ingredients, and environmental matters.
We could be subject to claims or lawsuits relating to an actual or alleged illness or injury, and we could incur liabilities that are not insured or that exceed our insurance coverage.
We could be subject to claims or lawsuits relating to an actual or alleged contamination, illness, or injury, and we could incur liabilities that are not insured or that exceed our insurance coverage.
Each one percentage point change in SOFR rates would result in an approximate $0.3 million change in the annual cash interest expense, before any principal payment, on our financial instruments with exposure to interest rate risk, including the impact of the interest rate swap agreements that were effective in 2023. Fluctuations in foreign currencies may adversely affect earnings.
Each one percentage point change in SOFR rates would result in an approximate $0.3 million change in the annual cash interest expense, before any principal payment, on our financial instruments with exposure to interest rate risk, including the impact of the interest rate swap agreements that were effective in 2024. Fluctuations in foreign currencies may adversely affect earnings.
We are subject to damage or disruption to raw material supplies or our manufacturing or distribution capabilities (in particular, to the extent that our raw materials are sourced globally) due to weather, including any potential effects of climate change, natural disaster, fire, terrorism, war, adverse geopolitical events such as the Russia-Ukraine war and conflict in the Middle East, pandemics and public health crises, strikes, labor shortages, freight transportation availability and transport capacity constraints, disruption in logistics, import restrictions, or other factors that impair our ability to manufacture, move, or sell our products.
We are subject to damage or disruption to raw material supplies or our manufacturing or distribution capabilities (in particular, to the extent that our raw materials are sourced globally) due to weather, including any potential effects of climate change, natural disaster, fire, terrorism, war, adverse geopolitical events and regional conflicts such as the Russia-Ukraine war and conflicts in the Middle East, pandemics and public health crises, strikes, labor shortages, freight transportation availability and transport capacity constraints, disruption in logistics, import restrictions, or other factors that impair our ability to manufacture, move, or sell our products.
As a result, higher interest rates will increase the cost of servicing our financial instruments with exposure to interest rate risk, and could reduce our profitability and cash flows. As of December 31, 2023, the Company had entered into long-term interest rate swap agreements to mitigate its variable debt exposures.
As a result, higher interest rates will increase the cost of servicing our financial instruments with exposure to interest rate risk, and could reduce our profitability and cash flows. As of December 31, 2024, the Company had entered into long-term interest rate swap agreements to mitigate its variable debt exposures.
Some of our competitors have substantial financial, marketing, technological, and other resources, and competition with them in our various business segments and product lines could cause us to reduce prices, increase capital, marketing or other expenditures, or lose sales, which could have a material adverse effect on our business and financial results.
Some of our competitors have substantial financial, marketing, technological, and other resources, and competition with them in our various categories and product lines could cause us to reduce prices, increase capital, marketing or other expenditures, or lose sales, which could have a material adverse effect on our business and financial results.
Changes in weather conditions or climate changes, natural disasters such as floods, droughts, frosts, earthquakes, hurricanes, tornados, fires, or pestilence, geopolitical events such as the Russia-Ukraine war and conflict in the Middle East, and other catastrophic events may affect the cost and supply of commodities and raw materials.
Changes in weather conditions or climate changes, natural disasters such as floods, droughts, frosts, earthquakes, hurricanes, tornados, fires, or pestilence, geopolitical events such as the Russia-Ukraine war and conflicts in the Middle East, and other catastrophic events may affect the cost and supply of commodities and raw materials.
The Revolving Credit Facility (as defined in Note 13) and the Term Loans are known collectively as the "Credit Agreement." The degree to which we are leveraged could have adverse consequences to us, limiting management's choices in responding to business, economic, regulatory, and other competitive conditions.
The Revolving Credit Facility (as defined in Note 12) and the Term Loans are known collectively as the "Credit Agreement." The degree to which we are leveraged could have adverse consequences to us, limiting management's choices in responding to business, economic, regulatory, and other competitive conditions.
As of December 31, 2023, the aggregate principal amount of our debt instruments with exposure to interest rate risk was approximately $905.0 million, based on the outstanding debt balance of our Credit Agreement.
As of December 31, 2024, the aggregate principal amount of our debt instruments with exposure to interest rate risk was approximately $905.0 million, based on the outstanding debt balance of our Credit Agreement.
Da mage or disruption to our production or distribution capabilities due to weather, natural disaster, fire, terrorism, war, pandemic, strikes, or other reasons could impair our ability to manufacture or sell our products.
Da mage or disruption to our production or distribution capabilities due to weather, natural disaster, fire, terrorism, war, pandemics, strikes, or other reasons could impair our ability to manufacture or sell our products.
Our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any shareholder activism. 17 Strategic Risks Our inability to execute our business strategy could adversely affect our business. We have redesigned our operating model to deliver our growth objectives.
Our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any shareholder activism. 17 Strategic Risks Our inability to execute our business strategy could adversely affect our business. We structured our operating model to deliver our growth objectives.
At the same time, stakeholders and regulators have increasingly expressed or pursued opposing views, legislation, and investment expectations with respect to sustainability initiatives, including the enactment or proposal of “anti-ESG” legislation or policies. In addition, over the years we have made public commitments regarding our intended reduction of carbon emissions and other near- and mid-term environmental sustainability goals.
At the same time, stakeholders and regulators have increasingly expressed or pursued opposing views, legislation, and investment expectations with respect to sustainability initiatives, including the enactment or proposal of "anti-ESG" legislation or policies. In addition, over the years we have made public commitments regarding our intended reduction of carbon emissions and other near- and mid-term environmental sustainability goals.
The increasing concern over climate change and related environmental sustainability matters also has and is likely to continue to result in more federal, state, local and foreign legal requirements, including requirements to reduce or mitigate the effects of greenhouse gases or conserve and replenish water.
The increasing concern over climate change and related environmental sustainability matters also has and may continue to result in more federal, state, local and foreign legal requirements, including requirements to reduce or mitigate the effects of greenhouse gases or conserve and replenish water.
However, input costs could continue to be volatile due to other external events such as the Russia-Ukraine war, conflict in the Middle East, or any other geopolitical conflicts. Although we have no direct exposure to Russia, Ukraine, or the Middle East, our supply chain may be adversely impacted by the Russia-Ukraine war and conflict in the Middle East.
As a result, input costs could continue to be volatile due to external events such as the Russia-Ukraine war, conflicts in the Middle East, or any other geopolitical conflicts. Although we have no direct exposure to Russia, Ukraine, or the Middle East, our supply chain may be adversely impacted by the Russia-Ukraine war and conflicts in the Middle East.
As of December 31, 2023, we had $1,405.6 million of outstanding indebtedness, including a $588.6 million term loan ("Term Loan A-1") maturing on March 26, 2026, a $316.4 million term loan ("Term Loan A" and, together with Term Loan A-1, the "Term Loans") maturing on March 26, 2028, $500.0 million of 4.0% notes due September 1, 2028 (the "2028 Notes"), and $0.6 million of finance lease obligations.
As of December 31, 2024, we had $1,409.1 million of outstanding indebtedness, including a $588.6 million term loan ("Term Loan A-1") maturing on March 26, 2026, a $316.4 million term loan ("Term Loan A" and, together with Term Loan A-1, the "Term Loans") maturing on March 26, 2028, $500.0 million of 4.0% notes due September 1, 2028 (the "2028 Notes"), and $4.1 million of finance lease obligations.
Labor shortages may also negatively impact us from servicing all demand or operating our manufacturing and distribution facilities efficiently. Pandemics or public health crises have caused illness as well as travel and government restrictions that have negatively impacted our operations by causing labor shortages and shutdowns of manufacturing facilities.
Labor shortages may also negatively impact us from servicing all demand or operating our manufacturing and distribution facilities efficiently. Pandemics or public health crises may cause illness as well as travel and government restrictions that can negatively impact our operations by causing labor shortages and shutdowns of manufacturing facilities.
The food industry is highly competitive, and faces increased competition as a result of consolidation, channel proliferation, and the growth of online food retailers and new market participants. We face competition across our product lines from other companies that have varying abilities to withstand changes in market conditions.
The food industry is highly competitive, and faces increased competition as a result of consolidation, channel proliferation, the growth of online food retailers and new market participants, and technological advancements (including advancements in artificial intelligence technologies). We face competition across our product lines from other companies that have varying abilities to withstand changes in market conditions.
We manage the impact of foreign currency fluctuations related to raw material purchases and sales of finished foods using foreign currency contracts. We are also exposed to fluctuations in the value of our foreign currency investment in our Canadian subsidiaries, which includes Canadian dollar denominated intercompany notes.
We may manage the impact of foreign currency fluctuations, including the Canadian dollar and other foreign currencies, related to raw material purchases and sales of finished goods using foreign currency contracts. We are also exposed to fluctuations in the value of our foreign currency investment in our Canadian subsidiaries, which includes Canadian dollar denominated intercompany notes.
As a result of these restrictions, we may be: • limited in how we conduct our business; • unable to raise additional debt or equity financing to operate during general economic or business downturns; or • unable to compete effectively or to take advantage of new business opportunities.
As a result of these restrictions, we may be: • limited in how we conduct our business; • unable to raise additional debt or equity financing to operate during general economic or business downturns; or • unable to compete effectively or to take advantage of new business opportunities. 15 These restrictions may affect our ability to grow in accordance with our strategy.
These climate changes have a negative effect on agricultural productivity, and we may be subject to decreased availability or less favorable pricing for certain raw materials that are necessary for our products, including, but not limited to, coconut oil, coffee, corn and corn syrup, cucumbers, fruit, oats, palm oil, peppers, rice, soybean oil, sugar, tea, and wheat.
Similarly, we may incur substantial costs if such regulations are subsequently reversed or modified. 16 These climate changes have a negative effect on agricultural productivity, and we may be subject to decreased availability or less favorable pricing for certain raw materials that are necessary for our products, including, but not limited to, coconut oil, coffee, corn and corn syrup, cucumbers, fruit, oats, palm oil, peppers, rice, soybean oil, sugar, tea, and wheat.
In addition, increased public awareness and concern regarding global climate change will likely result in more regulations designed to reduce GHG emissions.
In addition, increased public awareness and concern regarding global climate change may result in more regulations designed to reduce greenhouse gas ("GHG") emissions.
Growth, reinvestment, and restructuring programs often require a substantial amount of management and operational resources, which may divert the Company’s attention from existing core businesses, potentially disrupting our operations and adversely affecting our relationships with suppliers and customers.
See Note 3 of the Consolidated Financial Statements for additional information. Growth, reinvestment, and restructuring programs often require a substantial amount of management and operational resources, which may divert the Company’s attention from existing core businesses, potentially disrupting our operations and adversely affecting our relationships with suppliers and customers.
Additionally, an inability to enhance robotic technology to automate processes in our manufacturing and distribution facilities could make us dependent on a labor force in tighter markets. Any substantial increase in these costs negatively impact on our profitability. We operate in the highly competitive and rapidly changing food industry.
Additionally, an inability to enhance robotic technology to automate processes in our manufacturing and distribution facilities could make us dependent on a labor force in tighter markets. Any substantial increase in these costs negatively impact our profitability.
Changes in these laws or regulations, or the introduction of new laws or regulations, could increase the costs of doing business for the Company, our customers, or suppliers, or restrict our actions, causing our results of operations to be adversely affected. Our indebtedness and our ability to service our debt adversely affect our business and financial condition.
Changes in these laws or regulations, or the introduction of new laws or regulations, could increase the costs of doing business for the Company, our customers, or suppliers, or restrict our actions, causing our results of operations to be adversely affected.
Legislation or regulation affecting these inputs could materially affect our profitability. Further, our businesses could be adversely affected if we are unable to effectively address increased concerns from the media, shareholders and other stakeholders on climate change and related environmental sustainability and governance matters.
Further, our businesses could be adversely affected if we are unable to effectively address increased concerns from the media, shareholders and other stakeholders on climate change and related environmental sustainability and governance matters.
These restrictions may affect our ability to grow in accordance with our strategy. In addition, our financial results, substantial indebtedness and credit ratings could materially adversely affect the availability and terms of our financing. Increases in interest rates may negatively affect earnings.
In addition, our financial results, substantial indebtedness and credit ratings could materially adversely affect the availability and terms of our financing. Increases in interest rates may negatively affect earnings.
For the year ended December 31, 2023, our ten largest customers accounted for approximately 56.7% of our consolidated net sales from continuing operations, and our largest customer, Walmart Inc. and its affiliates, accounted for approximately 22.4% of our consolidated net sales from continuing operations. No other customer accounted for 10% or more of the Company’s consolidated net sales.
For the year ended December 31, 2024, our ten largest customers accounted for approximately 57.1% of our consolidated net sales from continuing operations, and our largest customer, Walmart Inc. and its affiliates, accounted for approximately 23.9% of our consolidated net sales from continuing operations. No other customer accounted for 10% or more of the Company’s consolidated net sales.
Failure to take adequate steps to reduce the likelihood or mitigate the potential impact of such events, or to effectively manage such events if they occur, particularly when a product is sourced from a single location, could adversely affect our business and results of operations, as well as require additional resources to restore our supply chain. 16 Climate change, including increasingly stringent legal and market measures to address climate change, presents challenges to our business and could materially adversely affect our businesses, reputation, operations and supply chain.
Failure to take adequate steps to reduce the likelihood or mitigate the potential impact of such events, or to effectively manage such events if they occur, particularly when a product is sourced from a single location, could adversely affect our business and results of operations, as well as require additional resources to restore our supply chain.
However, changes in the prices of our products may lag behind changes in the costs of our materials. Competitive pressures may also limit our ability to quickly raise prices in response to increased raw materials, packaging, and fuel costs.
However, competitive pressures may limit our ability to quickly raise prices in response to increased raw materials, packaging, and fuel costs.
We expect that a significant portion of our net sales will continue to arise from a small number of customers, consisting primarily of traditional grocery retailers, mass merchandisers, and foodservice operators.
The competition to supply products to these high-volume customers is very strong. We expect that a significant portion of our net sales will continue to arise from a small number of customers, consisting primarily of traditional grocery retailers, mass merchandisers, and foodservice operators.
Our business operations could be disrupted if our information technology systems fail to perform adequately or are breached. The efficient operation of our business depends on our information technology systems. We rely on our information technology systems, including the internet, to effectively manage our business data, communications, supply chain, order entry and fulfillment, and other business processes.
The efficient operation of our business depends on our information technology systems. We rely on our information technology systems, including the internet, to effectively manage our business data, communications, supply chain, order entry and fulfillment, and other business processes.
Additionally, the potential for the consolidation of our suppliers increases the risk that adverse changes in their business operations or financial performance will have a corresponding material adverse effect on our operating results.
Additionally, the potential for the consolidation of our suppliers increases the risk that adverse changes in their business operations or financial performance will have a corresponding material adverse effect on our operating results. We are subject to product liability claims for misbranded, adulterated, contaminated, or spoiled food products.
The effects of climate change expose us to both physical and transition risk and create financial and operational risks to our business, both directly and indirectly.
Climate change presents challenges to our business and could materially adversely affect our businesses, reputation, operations and supply chain. The effects of climate change expose us to both physical and transition risk and create financial and operational risks to our business, both directly and indirectly.
Consumer preferences change from time to time, and our failure to timely anticipate, identify, or react to these changes could result in reduced demand for our products, which would adversely affect our operating results and profitability.
These include, but are not limited to, at-home vs. food-away-from home consumption, consumer income and government stimulus, inflation, and unemployment. Consumer preferences change from time to time, and our failure to timely anticipate, identify, or react to these changes could result in reduced demand for our products, which would adversely affect our operating results and profitability.
The notional amount of these agreements is $1,175.0 million as of December 31, 2023 and $875.0 million as of December 31, 2022. Our variable-rate debt is nearly fully hedged through 2025 with our fixed rate interest rate swaps, but rising interest rates can impact other areas of the business, including, but not limited to, our pension plans or our suppliers.
Our variable-rate debt is nearly fully hedged through 2028 with our fixed rate interest rate swaps, but rising interest rates can impact other areas of the business, including, but not limited to, our pension plans or our suppliers.
Such conditions include job actions, labor shortages or strikes by employees of suppliers, weather, crop conditions, transportation shortages and interruptions, natural disasters, sustainability issues, pandemics and public health crises, geopolitical events, or other catastrophic events.
We are also subject to delays caused by interruptions in production of raw materials based on conditions not within our control. Such conditions include job actions, labor shortages or strikes by employees of suppliers, weather, crop conditions, transportation shortages and interruptions, natural disasters, sustainability issues, pandemics and public health crises, geopolitical events, or other catastrophic events.
Depending on the nature of such laws, we may experience significant increases in our compliance costs, capital expenditures, and other financial obligations to adapt our business and operations to meet new regulations and standards. We depend upon natural gas, diesel fuel, and electricity in the manufacturing and distribution of our products.
Depending on the nature of such laws, we may experience significant increases in our compliance costs, capital expenditures, and other financial obligations to adapt our business and operations to meet new regulations and standards, and we may incur substantial costs if such regulations and standards are subsequently reversed or modified.
In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.
In addition, an event of default under the Credit Agreement may permit our lenders to terminate all commitments to extend further credit under those facilities. In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.
We depend on our ability to evolve and grow, and as changes in our business environments occur, we may adjust our business plans by introducing new growth, reinvestment, and restructuring programs, from time to time, to meet these changes, such as our Strategic Growth Initiatives, a growth and reinvestment strategy.
We depend on our ability to evolve and grow, and as changes in our business environments occur, we may adjust our business plans by introducing new growth, reinvestment, and restructuring programs, from time to time, to meet these changes. During 2024, the Company incurred approximately $28.6 million in growth, reinvestment, and restructuring program costs from continuing operations.
If we are unable to attract, hire or retain key employees or a highly skilled and diverse global workforce, it could have an adverse impact on our business, financial condition, and results of operations.
Any of these events, including a significant product liability judgment against us, could result in a loss of confidence in our food products, which could have an adverse effect on our financial condition, results of operations, or cash flows. 10 If we are unable to attract, hire or retain key employees or a highly skilled and diverse global workforce, it could have an adverse impact on our business, financial condition, and results of operations.
In addition, in instances of declining input costs, customers may look for price reductions in situations where we have locked into purchases at higher costs. 14 We may be unable to anticipate changes in consumer preferences, which may result in decreased demand for our products.
In addition, in instances of declining input costs, customers may look for price reductions in situations where we have locked into purchases at higher costs, as changes in the prices of our products may lag behind changes in the costs of our materials.
Factors which could result in an impairment include, but are not limited to, (i) reduced demand for our products, (ii) higher commodity prices, (iii) lower prices for our products or increased marketing as a result of increased competition, and (iv) significant disruptions to our operations as a result of both internal and external events.
Factors which could result in an impairment include, but are not limited to, (i) reduced demand for our products, (ii) higher commodity prices, (iii) lower prices for our products or increased marketing as a result of increased competition, and (iv) significant disruptions to our operations as a result of both internal and external events. 12 For the year ended December 31, 2024, we recognized impairments of $19.3 million of property, plant, and equipment in our Ready-to-drink beverages asset group and $0.9 million of Operating lease right-of-use assets in our Grand Prairie asset group.
Such default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross acceleration or cross default provision applies. In addition, an event of default under the Credit Agreement may permit our lenders to terminate all commitments to extend further credit under those facilities.
A breach of the covenants or restrictions under the agreements governing our indebtedness could result in an event of default under the applicable indebtedness. Such default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross acceleration or cross default provision applies.
If our product sales to one or more of these customers decline, this reduction may have a material adverse effect on our business, results of operations, and financial condition. 11 Further, over the past several years, the retail grocery and foodservice industries have experienced a consolidation trend, which has resulted in mass merchandisers and non-traditional grocers, such as e-commerce grocers with direct-to-consumer channels, gaining market share.
Further, over the past several years, the retail grocery and foodservice industries have experienced a consolidation trend, which has resulted in mass merchandisers and non-traditional grocers, such as e-commerce grocers with direct-to-consumer channels, gaining market share. As our customer base continues to consolidate, we expect competition to intensify as we compete for the business of the remaining consolidated customers.
Our success depends in part on our ability to anticipate the tastes, quality demands, eating habits, and overall purchasing trends of consumers and to offer products that appeal to their preferences. Purchasing trends are influenced by macro environment factors. These include, but are not limited to, at-home vs. food-away-from home consumption, consumer income and government stimulus, inflation, and unemployment.
We may be unable to anticipate changes in consumer preferences, which may result in decreased demand for our products. Our success depends in part on our ability to anticipate the tastes, quality demands, eating habits, and overall purchasing trends of consumers and to offer products that appeal to their preferences. Purchasing trends are influenced by macro environment factors.
Our inability to offer competitive and innovative products to these customer segments could have an adverse impact on our results of operations. As we are dependent upon a limited number of customers, the loss of a significant customer or consolidation of our customer base could adversely affect our operating results.
As we are dependent upon a limited number of customers, the loss of a significant customer or consolidation of our customer base could adversely affect our operating results. A limited number of customers represent a large percentage of our consolidated net sales. Our operating results are contingent on our ability to maintain our sales to these customers.
We make periodic contributions to these plans to allow them to meet their pension benefit obligations to their participants.
We participate in various multiemployer pension plans administered by labor unions representing some of our employees. We make periodic contributions to these plans to allow them to meet their pension benefit obligations to their participants.
If a strike or work stoppage were to occur, our results of operations could be adversely affected. Market and Other External Risks Increases in input costs, such as ingredients, packaging materials, and fuel costs, adversely affect earnings.
If a strike or work stoppage were to occur, our results of operations could be adversely affected. Market and Other External Risks We operate in the highly competitive and rapidly changing food industry.
In addition, our Credit Agreement requires us to maintain a certain consolidated net leverage ratio tested on a quarterly basis.
In addition, our Credit Agreement requires us to maintain a certain consolidated net leverage ratio tested on a quarterly basis. Our ability to meet these financial covenants can be affected by events beyond our control, and we may be unable to meet the required ratio.
As our customer base continues to consolidate, we expect competition to intensify as we compete for the business of the remaining consolidated customers. As this consolidation trend continues and such customers grow larger, they may seek to leverage their growth and position to improve their profitability through improved efficiency, lower pricing, or increased promotional programs.
As this consolidation trend continues and such customers grow larger, they may seek to leverage their growth and position to improve their profitability through improved efficiency, lower pricing, or increased promotional programs. If we are unable to use our scale, product innovation, and category leadership positions to respond to these demands, our profitability or volume growth could be negatively impacted.
During 2022 and 2023, the overall global economy has experienced significant inflation in packaging materials, fuel, energy, and across several agricultural commodities, and there can be no assurance that our hedging activities will result in the optimal price. When feasible, we attempt to offset the effect of such increases by raising prices to our customers.
We manage the impact of increases in the costs of raw materials, wherever possible, by locking in prices on quantities required to meet our production requirements. However, there can be no assurance that our hedging activities will result in the optimal price. When feasible, we attempt to offset the effect of such increases by raising prices to our customers.
Our customers may also consider opportunities for dual sourcing, resulting in additional competition and a potential decline in sales.
Our customers may also consider opportunities for dual sourcing, resulting in additional competition and a potential decline in sales. If our product sales to one or more of these customers decline, this reduction may have a material adverse effect on our business, results of operations, and financial condition.
Consolidation also increases the risk that adverse changes in our customers' business operations or financial performance will have a corresponding material adverse effect on us. For example, if our customers cannot access sufficient funds or financing, then they may delay, decrease, or cancel purchases of our products, or delay or fail to pay us for previous purchases.
For example, if our customers cannot access sufficient funds or financing, then they may delay, decrease, or cancel purchases of our products, or delay or fail to pay us for previous purchases. 11 Our business operations could be disrupted if our information technology systems fail to perform adequately or are breached.
We continue to face other challenges and risks arising from the war including added costs to existing inflationary pressures through increased fuel and raw material prices and labor costs. We manage the impact of increases in the costs of raw materials, wherever possible, by locking in prices on quantities required to meet our production requirements.
We continue to face other challenges and risks arising from the war including added costs to existing inflationary pressures through increased fuel and raw material prices and labor costs. Our private label and regionally branded products may not be able to compete successfully with nationally branded products.
The costs and other effects of potential and pending litigation and administrative actions against us, and new legal requirements, cannot be determined with certainty and may differ from expectations. 12 We are subject to product liability claims for misbranded, adulterated, contaminated, or spoiled food products.
The costs and other effects of potential and pending litigation and administrative actions against us, and new legal requirements, cannot be determined with certainty and may differ from expectations. The recognition of impairment charges on goodwill or long-lived assets could adversely impact our financial reporting and results of operations.
Future impairments on goodwill or long-lived assets could impact our future financial position and results of operations. 13 Multiemployer pension plans could adversely affect our business. We participate in various multiemployer pension plans administered by labor unions representing some of our employees.
For the year ended December 31, 2023, we recognized an impairment of $4.7 million of property, plant, and equipment in our Dallas facility asset group. This impairment and future impairments on goodwill or long-lived assets could impact our future financial position and results of operations. Multiemployer pension plans could adversely affect our business.
The recognition of impairment charges on goodwill or long-lived assets adversely impact our financial reporting and results of operations. As of December 31, 2023, we have $1,824.7 million of goodwill and $257.4 million of other intangible assets. Additionally, we have $737.6 million of property, plant, and equipment and $193.0 million of operating lease right-of-use assets as of December 31, 2023.
As of December 31, 2024, we have $1,819.3 million of goodwill and $212.9 million of other intangible assets. Additionally, we have $748.6 million of property, plant, and equipment and $154.4 million of operating lease right-of-use assets as of December 31, 2024.
We expect that the execution of our strategy, which includes disciplined capital allocation strategy in deploying proceeds to drive long term growth based on our new strategy, will require change management activities to align our operating model for our new portfolio following the divestitures of the Snack Bars business and a significant portion of the Company’s Meal Preparation business and the acquisitions of the Coffee Roasting Capability and the Seasoned Pretzel Capability.
We expect that the execution of our strategy, which includes disciplined capital allocation strategy in deploying proceeds to enhance depth and capabilities in growing categories, as well as supply chain initiatives and margin management opportunities, will require change management activities to align our operating model with our portfolio.
If we are unable to use our scale, product innovation, and category leadership positions to respond to these demands, our profitability or volume growth could be negatively impacted. Additionally, if the surviving entity of a consolidation or similar transaction is not a current customer of the Company, we may lose significant business once held with the acquired retailer.
Additionally, if the surviving entity of a consolidation or similar transaction is not a current customer of the Company, we may lose significant business once held with the acquired retailer. Consolidation also increases the risk that adverse changes in our customers' business operations or financial performance will have a corresponding material adverse effect on us.
Removed
A limited number of customers represent a large percentage of our consolidated net sales. Our operating results are contingent on our ability to maintain our sales to these customers. The competition to supply products to these high-volume customers is very strong.
Added
Our inability to offer competitive and innovative products to these customer segments could have an adverse impact on our results of operations. Increases in input costs, such as ingredients, packaging materials, and fuel costs, could adversely affect earnings.
Removed
Any of these events, including a significant product liability judgment against us, could result in a loss of confidence in our food products, which could have an adverse effect on our financial condition, results of operations, or cash flows. Our private label and regionally branded products may not be able to compete successfully with nationally branded products.
Added
Additionally, the change in administration following the 2024 United States presidential election could further impact trade and tariff policies, and could also result in substantial changes to fiscal, tax, or regulatory policies that may impact our business. Our indebtedness and our ability to service our debt adversely affect our business and financial condition.
Removed
The costs of raw materials, packaging materials, and fuel have varied widely in recent years and future changes in such costs may cause our results of operations and our operating margins to fluctuate significantly. We are also subject to delays caused by interruptions in production of raw materials based on conditions not within our control.
Added
The notional amount of these agreements is $1,750.0 million as of December 31, 2024. Under the terms of the agreements, $875.0 million of interest rate swaps mature on February 28, 2025, and the remaining $875.0 million of interest rate swaps, which are effective February 28, 2025, mature on February 29, 2028.
Removed
Our ability to meet these financial covenants can be affected by events beyond our control, and we may be unable to meet the required ratio. 15 A breach of the covenants or restrictions under the agreements governing our indebtedness could result in an event of default under the applicable indebtedness.
Added
We depend upon natural gas, diesel fuel, and electricity in the manufacturing and distribution of our products. Legislation or regulation affecting these inputs could materially affect our profitability.
Removed
There is a general consensus that carbon dioxide and other greenhouse gas ("GHG") emissions are linked to global climate change, impact global temperatures, weather patterns and the frequency and severity of extreme weather and natural disasters, and that these emissions must be reduced dramatically to avert the worst effects of climate change. Regulation of GHG emissions exposes us to costs.
Removed
During 2023, the Company incurred approximately $46.1 million in growth, reinvestment, and restructuring program costs from continuing operations. See Note 3 of the Consolidated Financial Statements for additional information.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+3 added−3 removed4 unchanged
Biggest changeOur VP, Information Technology leads our cybersecurity program and Information Security team, which is responsible for assessing and managing the Company’s material risks from cybersecurity threats and executing our information security controls. The CIO and VP, Information Technology have extensive cybersecurity knowledge and skills gained from each having over 20 years of relevant experience.
Biggest changeOur Head of Cybersecurity reports to our CIO, and leads our cybersecurity program and team that assesses, manages and monitors cybersecurity risks, associated risks of emerging technologies, and the corresponding controls. The CIO and Head of Cybersecurity have extensive cybersecurity knowledge and expertise, skills gained from each having over 20 years of relevant industry experience. 19
Additional information on cybersecurity risks we face is discussed in Part I, Item A – Risk Factors , which should be read in conjunction with the foregoing information. Governance Board of Directors Our Board of Directors oversees our Enterprise Risk Management program, and cybersecurity risks are monitored as a part of the broader program.
Additional information on cybersecurity risks we face is discussed in Part I, Item 1A – Risk Factors , which should be read in conjunction with the foregoing information. Governance Board of Directors Our Board of Directors oversees our Enterprise Risk Management program, and cybersecurity risks are monitored as a part of the broader program.
We monitor and assess the information gathered by our security tools and services to identify gaps, exposures, or weaknesses in our overall security posture, and engage reputable external specialists to provide independent assessments of our cybersecurity program and response preparedness. Further, the Company’s enterprise level IT general controls are audited annually.
We employ controls to continuously monitor and assess the information gathered by our security tools, services to identify gaps, exposures, or weaknesses in our overall security posture, and engage reputable external specialists to provide independent assessments of our cybersecurity program, and response preparedness. Further, the Company’s enterprise level IT general controls are audited annually.
The Audit Committee regularly briefs the Board on these updates, and the Board also receives periodic briefings on cybersecurity risk as part of the Company’s broader Enterprise Risk Management program. These risks, including current and emerging risks, are regularly evaluated by the Audit Committee and the Board.
The Audit Committee regularly briefs the Board on these updates, and the Board also receives periodic briefings on cybersecurity risk through our broader Enterprise Risk Management program. These risks, including current and emerging risks, are regularly evaluated by the Audit Committee and the Board.
Our Audit Committee receives quarterly updates from the Chief Information Officer ("CIO") on significant risks, cyber incidents, key performance indicators measuring the effectiveness of our cybersecurity risk program, and other relevant matters.
Our Audit Committee receives quarterly updates from the Chief Information Officer ("CIO") on significant risks, cyber incidents, key performance indicators measuring the effectiveness of our cybersecurity risk program, and other relevant matters, and regularly reviews the measures implemented by the Company to identify, treat, mitigate, and transfer cybersecurity risk.
Our Board has delegated the primary responsibility to oversee risks from cybersecurity threats to the Audit Committee. The Audit Committee regularly reviews the measures implemented by the Company to identify and mitigate data protection and cybersecurity risks.
Our Board has delegated the primary responsibility to oversee risks from cybersecurity threats to the Audit Committee.
Cybersecurity risks are incorporated into the Company’s broader Enterprise Risk Management process to evaluate and address cybersecurity risks in alignment with our business objectives and operational needs. As part of the cybersecurity program, our information systems are monitored by automated tools and the Information Security team.
Cybersecurity risk is incorporated into the Company’s broader Enterprise Risk Management program, and is managed in alignment with our business objectives and operational needs.
We also have processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party service providers. Our managed security service provider performs security reviews of select third party service providers that include such provider’s system and organization controls or third party security assessments.
We oversee and identify material risks from cybersecurity threats associated with our use of third-party service providers, perform third party security assessments of select third party service providers, and employ techniques to protect our organization in the event our third parties experience a cybersecurity incident.
Removed
The Company’s Security Incident Management Process outlines the procedures the Company believes are necessary to prepare for, identify, contain, eradicate, and recover from a security incident, and is overseen by the Information Security team.
Added
Our information systems are continuously monitored for security threats and anomalies, and our incident response plan and processes are built to enable us to identify, contain, eradicate, and recover from security incidents in a coordinated fashion, helping maintain the function and security of our IT assets, information resources, and business operations.
Removed
We have also adopted a Cybersecurity Incident Response Plan to provide organizational and operational structure, processes, and procedures to Company personnel, so that team members can properly respond to incidents that may affect the function and security of our IT assets, information resources, and business operations. We conduct regular information security awareness training for employees and provide related educational materials.
Added
We have formed relationships with various third-party experts and advisors to provide support in the event of a cybersecurity incident. Additionally, we have established various elements of risk management to mitigate costs associated with cybersecurity incidents.
Removed
The CIO and VP, Information Technology are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents through reports from the Information Security team and regularly reviewing risk management measures implemented by the Company to identify and mitigate cyber security risks. 19
Added
We strive to maintain a strong culture of cybersecurity awareness across the organization by conducting regular information security awareness training, and simulation exercises, for employees, and providing access to related educational materials.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeThe following chart lists the location and principal products produced at our production facilities as of December 31, 2023: United States: Forest Park, Georgia (Refrigerated dough) Chicago, Illinois (Pickles) Dixon, Illinois (Cheese and pudding) Pecatonica, Illinois (Non-dairy creamer) South Beloit, Illinois (Cookies) Cedar Rapids, Iowa (Hot cereal) New Hampton, Iowa (Non-dairy creamer) Princeton, Kentucky (Crackers) Cambridge, Maryland (Broths/stocks and ready-to-drink beverages) Wayland, Michigan (Non-dairy creamer) Tonawanda, New York (Cookies) Faison, North Carolina (Pickles) Hanover, Pennsylvania (Pretzels) Lancaster, Pennsylvania (Pretzels) Womelsdorf, Pennsylvania (Candy) Sioux Falls, South Dakota* (Pretzels) Carrollton, Texas (Refrigerated dough) Northlake, Texas (Coffee) Ogden, Utah* (In-store bakery and frozen griddle) Green Bay, Wisconsin (Pickles) Manawa, Wisconsin (Powdered beverages and other blends, coffee, and hot cereal) Canada: Delta, British Columbia* (Tea) Brantford, Ontario (Frozen griddle) Georgetown, Ontario (Crackers) Kitchener, Ontario (Crackers) Richmond Hill, Ontario* (Broths/stocks) *The Company leases these facilities.
Biggest changeThe following chart lists the locations of our production facilities as of December 31, 2024: United States: Forest Park, Georgia Chicago, Illinois Dixon, Illinois Pecatonica, Illinois South Beloit, Illinois Cedar Rapids, Iowa New Hampton, Iowa Princeton, Kentucky Cambridge, Maryland Wayland, Michigan Tonawanda, New York Faison, North Carolina Hanover, Pennsylvania Lancaster, Pennsylvania Womelsdorf, Pennsylvania Carrollton, Texas Northlake, Texas Ogden, Utah* Green Bay, Wisconsin Manawa, Wisconsin Canada: Delta, British Columbia* Brantford, Ontario Georgetown, Ontario Kitchener, Ontario Richmond Hill, Ontario* *The Company leases these facilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+2 added−1 removed3 unchanged
Biggest changeThe following table presents the total number of shares of common stock purchased during the quarter ended December 31, 2023, the average price paid per share, the number of shares that were purchased as part of a publicly announced repurchase program, and the approximate dollar value of the maximum number of shares that may yet be purchased under the share repurchase program: Period Weighted Average Price Paid per Share Total Number of Shares Purchased Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Maximum Number of Shares that may not yet be Purchased under the Program (In millions) October 1 through October 31, 2023 $ — — — $ 216.7 November 1 through November 30, 2023 40.07 0.8 0.8 182.5 December 1 through December 31, 2023 41.72 0.4 0.4 166.7 For the Quarter Ended December 31, 2023 $ 40.58 1.2 1.2 $ 166.7 For the quarter ended December 31, 2023, the Company repurchased approximately 1.2 million shares of common stock for a total of $50.0 million, excluding excise tax.
Biggest changeThe following table presents the total number of shares of common stock purchased during the quarter ended December 31, 2024, the average price paid per share, the number of shares that were purchased as part of a publicly announced repurchase program, and the approximate dollar value of the maximum number of shares that may yet be purchased under the share repurchase program: Period Weighted Average Price Paid per Share Total Number of Shares Purchased Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Maximum Number of Shares that may not yet be Purchased under the Programs (In millions) October 1 through October 31, 2024 $ 37.80 0.7 0.7 $ 51.9 November 1 through November 30, 2024 (1) 35.41 1.0 1.0 393.5 December 1 through December 31, 2024 — — — 393.5 For the Quarter Ended December 31, 2024 $ 36.39 1.7 1.7 $ 393.5 (1) For the period from November 1, 2024 through November 12, 2024, the Company repurchased 0.8 million shares under the Prior Authorization for a total of $28.4 million.
Weighted average price per share excludes any excise tax imposed on stock repurchases as part of the Inflation Reduction Act of 2022. Performance Graph The price information reflected for our common stock in the following performance graph and accompanying table represents the closing sales prices of the common stock for the period from December 31, 2018 through December 31, 2023.
Weighted average price per share excludes any excise tax imposed on stock repurchases as part of the Inflation Reduction Act of 2022. Performance Graph The price information reflected for our common stock in the following performance graph and accompanying table represents the closing sales prices of the common stock for the period from December 31, 2019 through December 31, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities The Company’s common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "THS." On January 31, 2024, there were 1,622 shareholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities The Company’s common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "THS." On January 31, 2025, there were 1,530 shareholders of record of our common stock.
The declaration of dividends is at the discretion of our Board of Directors. 20 Purchases of Equity Securities by the Issuer and Affiliated Purchasers On November 2, 2017, the Company announced that the Board of Directors adopted a stock repurchase program.
The declaration of dividends is at the discretion of our Board of Directors. 20 Purchases of Equity Securities by the Issuer and Affiliated Purchasers On November 13, 2024, the Company announced that the Board of Directors (the "Board") authorized a $400 million stock repurchase program.
Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Exchange Act. The size and timing of any repurchases will depend on price, market and business conditions, and other factors.
Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The graph assumes an investment of $100 on December 31, 2018 in each of TreeHouse Foods’ common stock, the stocks comprising the S&P SmallCap 600 Index, and the S&P Food & Beverage Select Index. 21 Comparison of Cumulative Total Return of $100 among TreeHouse Foods, Inc., S&P SmallCap 600 Index, and the S&P Food & Beverage Select Index Base Period INDEXED RETURNS Years Ending Company Name/Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 TreeHouse Foods, Inc. 100 $ 95.64 $ 83.79 $ 79.93 $ 97.38 $ 81.74 S&P SmallCap 600 Index 100 122.78 136.64 173.29 145.39 168.73 S&P Food & Beverage Select Index 100 122.31 146.48 169.56 167.41 171.01 The performance graph and related table above is furnished and not filed for purposes of Section 18 of the Exchange Act and will not be incorporated by reference into any registration statement filed under the 1933 Act unless specifically identified therein as being incorporated therein by reference.
The graph assumes an investment of $100 on December 31, 2019 in each of TreeHouse Foods’ common stock, the stocks comprising the S&P SmallCap 600 Index, and the S&P Food & Beverage Select Index. 21 Comparison of Cumulative Total Return of $100 among TreeHouse Foods, Inc., S&P SmallCap 600 Index, and the S&P Food & Beverage Select Index Base Period INDEXED RETURNS Years Ending Company Name/Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 TreeHouse Foods, Inc. 100 $ 87.61 $ 83.57 $ 101.81 $ 85.46 $ 72.43 S&P SmallCap 600 Index 100 111.29 141.13 118.41 137.42 149.37 S&P Food & Beverage Select Index 100 119.76 138.63 136.87 139.82 147.23 The performance graph and related table above is furnished and not filed for purposes of Section 18 of the Exchange Act and will not be incorporated by reference into any registration statement filed under the 1933 Act unless specifically identified therein as being incorporated therein by reference.
The Company has the ability to make discretionary repurchases up to an annual cap of $150 million under the $400 million total authorization of which $166.7 million remained available under the stock repurchase program. Any shares repurchased will be held as treasury stock.
The size and timing of any repurchases will depend on price, market and business conditions, and other factors. The Company has the ability to make discretionary repurchases up to an annual cap of $150 million under the $400 million total authorization, of which $393.5 million remained available under the stock repurchase program.
There were 2.3 million shares of common stock repurchased for a total of $100.0 million during the year ended December 31, 2023.
Any shares repurchased will be held as treasury stock. There were 4.1 million shares of common stock repurchased for a total of $149.7 million during the year ended December 31, 2024.
Removed
The stock repurchase program authorizes the Company to repurchase up to $400 million of the Company’s common stock at any time, or from time to time.
Added
This authorization is open ended and replaced the Company's previous stock repurchase authorization of $400 million, which was approved by the Board on November 2, 2017 (the "Prior Authorization"). The Company had repurchased approximately $376.5 million of shares of the Company’s common stock under the Prior Authorization.
Added
For the period from November 13, 2024 through November 30, 2024, the Company repurchased 0.2 million shares for a total of $6.5 million under the new authorization, which was effective November 13, 2024. For the quarter ended December 31, 2024, the Company repurchased approximately 1.7 million shares of common stock for a total of $61.0 million, excluding excise tax.

Item 7. Management's Discussion & Analysis

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

79 edited+53 added−71 removed34 unchanged
Biggest changeThe following tables provide a reconciliation of Adjusted gross profit, Adjusted total operating expenses, Adjusted operating income (loss), Adjusted total other expense (income), Adjusted income tax expense (benefit), and Adjusted net income from continuing operations to their most directly comparable GAAP measure, for each of the periods presented: Year Ended December 31, 2023 (Unaudited, in millions, except per share amounts) Gross profit Total operating expenses Operating income Total other expense Income tax expense Net income from continuing operations As reported (GAAP) $ 576.1 $ 429.2 $ 146.9 $ 63.5 $ 24.4 $ 59.0 Adjustments: Growth, reinvestment, and restructuring programs, including accelerated depreciation (1) — (46.1) 46.1 — — 46.1 Product recall and related costs (2) 29.2 — 29.2 — — 29.2 Divestiture, acquisition, integration, and related costs (3) 0.8 (15.9) 16.7 — — 16.7 Mark-to-market adjustments (4) — — — (15.1) — 15.1 Shareholder activism (5) — (0.3) 0.3 — — 0.3 Tax indemnification (6) — — — (0.2) — 0.2 Foreign currency gain on remeasurement of intercompany notes (7) — — — 1.7 — (1.7) Taxes on adjusting items — — — — 25.7 (25.7) As adjusted (Non-GAAP) $ 606.1 $ 366.9 $ 239.2 $ 49.9 $ 50.1 $ 139.2 As reported (% of net sales) 16.8 % 12.5 % 4.3 % 1.9 % 0.7 % 1.7 % As adjusted (% of net sales) 17.7 % 10.7 % 7.0 % 1.5 % 1.5 % 4.1 % Earnings per share from continuing operations: Diluted $ 1.05 Adjusted diluted $ 2.47 Weighted average common shares: Diluted for net income from continuing operations 56.4 Diluted for adjusted net income from continuing operations 56.4 42 Year Ended December 31, 2022 (Unaudited, in millions, except per share amounts) Gross profit Total operating expenses Operating (loss) income Total other (income) expense Income tax expense Net (loss) income from continuing operations As reported (GAAP) $ 522.4 $ 535.0 $ (12.6) $ (13.7) $ 10.3 $ (9.2) Adjustments: Growth, reinvestment, and restructuring programs, including accelerated depreciation (1) 0.5 (84.6) 85.1 — — 85.1 Divestiture, acquisition, integration, and related costs (3) 1.6 (12.2) 13.8 — — 13.8 Mark-to-market adjustments (4) — — — 75.1 — (75.1) Shareholder activism (5) — (2.7) 2.7 — — 2.7 Foreign currency loss on remeasurement of intercompany notes (7) — — — (0.8) — 0.8 Central services and conveyed employee costs (8) 14.9 (50.1) 65.0 — — 65.0 Loss on extinguishment of debt (9) — — — (4.5) — 4.5 Litigation matter (10) — (0.4) 0.4 — — 0.4 Taxes on adjusting items — — — — 15.4 (15.4) As adjusted (Non-GAAP) $ 539.4 $ 385.0 $ 154.4 $ 56.1 $ 25.7 $ 72.6 As reported (% of net sales) 15.8 % 16.2 % (0.4) % (0.4) % 0.3 % (0.3) % As adjusted (% of net sales) 16.4 % 11.7 % 4.7 % 1.7 % 0.8 % 2.2 % Earnings (loss) per share from continuing operations: Diluted $ (0.16) Adjusted diluted $ 1.28 Weighted average common shares: Diluted for net loss from continuing operations 56.0 Diluted for adjusted net income from continuing operations 56.5 43 Year ended December 31, 2021 (Unaudited in millions except per share amounts) Gross profit Total operating expenses Operating (loss) income Total other expense Income tax (benefit) expense Net (loss) income from continuing operations As reported (GAAP) $ 471.6 $ 515.8 $ (44.2) $ 42.0 $ (17.6) $ (68.6) Adjustments: Growth, reinvestment, and restructuring programs, including accelerated depreciation (1) — (83.4) 83.4 — — 83.4 Divestiture, acquisition, integration, and related costs (3) 0.5 (3.5) 4.0 — — 4.0 Mark-to-market adjustments (4) — — — 37.3 — (37.3) Shareholder activism (5) — (4.6) 4.6 — — 4.6 Tax indemnification (6) — — — (1.6) — 1.6 Foreign currency gain on remeasurement of intercompany notes (7) — — — 0.5 — (0.5) Central services and conveyed employee costs (8) 18.1 (63.5) 81.6 — — 81.6 Loss on extinguishment of debt (9) — — — (14.4) — 14.4 COVID-19 (11) 12.4 — 12.4 — (1.9) 14.3 Change in regulatory requirements (12) (0.1) — (0.1) — — (0.1) Taxes on adjusting items — — — — 39.7 (39.7) As adjusted (Non-GAAP) $ 502.5 $ 360.8 $ 141.7 $ 63.8 $ 20.2 $ 57.7 As reported (% of net sales) 16.8 % 18.3 % (1.6) % 1.5 % (0.6) % (2.4) % As adjusted (% of net sales) 17.9 % 12.8 % 5.0 % 2.3 % 0.7 % 2.1 % Earnings (loss) per share from continuing operations: Diluted $ (1.23) Adjusted diluted $ 1.03 Weighted average common shares: Diluted for net loss from continuing operations 55.9 Diluted for adjusted net income from continuing operations 56.2 Free Cash Flow From Continuing Operations In addition to measuring our cash flow generation and usage based upon the operating, investing, and financing classifications included in the Consolidated Statements of Cash Flows, we also measure free cash flow from continuing operations (a Non-GAAP measure) which represents net cash provided by operating activities from continuing operations less capital expenditures.
Biggest changeThese write-offs arose as a result of the related uncertain tax position being released due to the statute of limitation lapse or settlement with taxing authorities. 40 The following tables provide a reconciliation of Adjusted net sales, Adjusted cost of sales, Adjusted gross profit, Adjusted total operating expenses, Adjusted operating income (loss), Adjusted total other expense (income), Adjusted income tax expense (benefit), and Adjusted net income from continuing operations to their most directly comparable GAAP measure, for each of the periods presented: Year Ended December 31, 2024 (Unaudited, in millions, except per share amounts) Net sales Cost of sales Gross profit Total operating expenses Operating income Total other expense Income tax expense Net income from continuing operations As reported (GAAP) $ 3,354.0 $ 2,805.6 $ 548.4 $ 445.3 $ 103.1 $ 70.0 $ 6.2 $ 26.9 Adjustments: Product recalls and related costs (1) 23.3 (17.8) 41.1 — 41.1 — — 41.1 Growth, reinvestment, restructuring programs & other, including accelerated depreciation (2) — (1.9) 1.9 (26.7) 28.6 — — 28.6 Impairment (3) — — — (19.3) 19.3 — — 19.3 Acquisition, integration, divestiture, and related costs (4) — (2.0) 2.0 (6.9) 8.9 — — 8.9 Foreign currency loss on remeasurement of intercompany notes (5) — — — — — (7.0) — 7.0 Mark-to-market adjustments (6) — — — — — 6.7 — (6.7) Taxes on adjusting items — — — — — — 24.6 (24.6) As adjusted (Non-GAAP) $ 3,377.3 $ 2,783.9 $ 593.4 $ 392.4 $ 201.0 $ 69.7 $ 30.8 $ 100.5 As reported (% of net sales) 16.4 % 13.3 % 3.1 % 2.1 % 0.2 % 0.8 % As adjusted (% of adjusted net sales) 17.6 % 11.6 % 6.0 % 2.1 % 0.9 % 3.0 % Earnings per share from continuing operations: Diluted $ 0.51 Adjusted diluted $ 1.91 Weighted average common shares: Diluted for net income from continuing operations 52.6 Diluted for adjusted net income from continuing operations 52.6 41 Year Ended December 31, 2023 (Unaudited, in millions, except per share amounts) Net sales Cost of sales Gross profit Total operating expenses Operating income Total other expense Income tax expense Net income from continuing operations As reported (GAAP) $ 3,431.6 $ 2,855.5 $ 576.1 $ 429.2 $ 146.9 $ 63.5 $ 24.4 $ 59.0 Adjustments: Product recalls and related costs (1) 1.3 (27.9) 29.2 — 29.2 — — 29.2 Growth, reinvestment, restructuring programs & other (2) — — — (46.1) 46.1 — — 46.1 Acquisition, integration, divestiture, and related costs (4) — (0.8) 0.8 (15.9) 16.7 — — 16.7 Foreign currency gain on remeasurement of intercompany notes (5) — — — — — 1.7 — (1.7) Mark-to-market adjustments (6) — — — — — (15.1) — 15.1 Shareholder activism (7) — — — (0.3) 0.3 — — 0.3 Tax indemnification (8) — — — — — (0.2) — 0.2 Taxes on adjusting items — — — — — — 25.7 (25.7) As adjusted (Non-GAAP) $ 3,432.9 $ 2,826.8 $ 606.1 $ 366.9 $ 239.2 $ 49.9 $ 50.1 $ 139.2 As reported (% of net sales) 16.8 % 12.5 % 4.3 % 1.9 % 0.7 % 1.7 % As adjusted (% of adjusted net sales) 17.7 % 10.7 % 7.0 % 1.5 % 1.5 % 4.1 % Earnings per share from continuing operations: Diluted $ 1.05 Adjusted diluted $ 2.47 Weighted average common shares: Diluted for net income from continuing operations 56.4 Diluted for adjusted net income from continuing operations 56.4 Free Cash Flow From Continuing Operations In addition to measuring our cash flow generation and usage based upon the operating, investing, and financing classifications included in the Consolidated Statements of Cash Flows, we also measure free cash flow from continuing operations (a Non-GAAP measure) which represents net cash provided by operating activities from continuing operations less capital expenditures.
This information is provided in order to allow investors to make meaningful comparisons of the Company’s earnings performance between periods and to view the Company’s business from the same perspective as Company management.
This information is provided in order to allow investors to make meaningful comparisons of the Company’s earnings performance between periods and to view the Company’s business from the same perspective as Company management.
The Company has presented each of these adjusted Non-GAAP measures as a percentage of Net Sales compared to its respective reported GAAP presentation line item as a percentage of net sales.
The Company has presented each of these adjusted Non-GAAP measures as a percentage of adjusted net sales compared to its respective reported GAAP presentation line item as a percentage of net sales.
This Non-GAAP financial information is provided as additional information for the financial statement users and is not in accordance with, or an alternative to, GAAP. These Non-GAAP measures may be different from similar measures used by other companies. Organic Net Sales Organic net sales is defined as net sales excluding the impacts of acquisitions, divestitures, and foreign currency.
This Non-GAAP financial information is provided as additional information for the financial statement users and is not in accordance with, or an alternative to, GAAP. These Non-GAAP measures may be different from similar measures used by other companies. Organic Net Sales Organic net sales is defined as net sales excluding the impacts of business acquisitions, divestitures, and foreign currency.
Therefore, we believe that only significant changes in the assumptions would result in an impairment of any trademark. 37 Income Taxes — Deferred taxes are recognized for future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse.
Therefore, we believe that only significant changes in the assumptions would result in an impairment of any trademark. Income Taxes — Deferred taxes are recognized for future tax effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse.
As the Company cannot predict the timing and amount of charges that include, but are not limited to, items such as divestiture, acquisition, integration, and related costs, mark-to-market adjustments on derivative contracts, foreign currency exchange impact on the re-measurement of intercompany notes, growth, reinvestment, and restructuring programs, impairment of assets, and other items that may arise from time to time that would impact comparability, management does not consider these costs when evaluating the Company’s performance, when making decisions regarding the allocation of resources, in determining incentive compensation, or in determining earnings estimates.
As the Company cannot predict the timing and amount of charges that include, but are not limited to, items such as product recalls and related costs, growth, reinvestment, and restructuring programs, acquisition, integration, divestiture, and related costs, impairment of assets, foreign currency exchange impact on the re-measurement of intercompany notes, mark-to-market adjustments on derivative contracts, and other items that may arise from time to time that would impact comparability, management does not consider these costs when evaluating the Company’s performance, when making decisions regarding the allocation of resources, in determining incentive compensation, or in determining earnings estimates.
Future business results may affect deferred tax liabilities or the valuation of deferred tax assets over time. Employee Benefit Plan Costs — We provide a range of benefits to our employees, including pension and postretirement benefits to our eligible employees and retirees.
Future business results may affect deferred tax liabilities or the valuation of deferred tax assets over time. 35 Employee Benefit Plan Costs — We provide a range of benefits to our employees, including pension and postretirement benefits to our eligible employees and retirees.
As a result of the Dallas plant closure in the fourth quarter of 2023, the Company performed a recoverability assessment on the Dallas facility asset group, which indicated that the asset group was not recoverable.
Further, as a result of the Dallas plant closure in the fourth quarter of 2023, the Company performed a recoverability assessment on the Dallas facility asset group, which indicated that the asset group was not recoverable.
We reviewed our indefinite lived intangible assets, which consist of trademarks totaling $6.0 million as of December 31, 2023, using the relief from royalty method. Significant assumptions include the royalty rates, growth, margins, and discount rates. Our assumptions were based on historical performance and management estimates of future performance, as well as available data on licenses of similar products.
We reviewed our indefinite lived intangible assets, which consist of trademarks totaling $6.0 million as of December 31, 2024, using the relief from royalty method. Significant assumptions include the royalty rates, growth, margins, and discount rates. Our assumptions were based on historical performance and management estimates of future performance, as well as available data on licenses of similar products.
The increase in cash provided by discontinued operations is primarily due to the $425.2 million repayment of principal on its Seller Note Credit Agreement on October 19, 2023 and the completion of the sale of the Snack Bars Business on September 29, 2023, which resulted in a non-recurring cash inflow of $58.7 million from the buyer.
The decrease in cash provided by discontinued operations is primarily due to the $425.2 million repayment of principal on its Seller Note Credit Agreement on October 19, 2023 and the completion of the sale of the Snack Bars Business on September 29, 2023, which resulted in a non-recurring cash inflow of $58.7 million from the buyer.
Adjusted diluted earnings (loss) per share from continuing operations ("Adjusted diluted EPS") is determined by dividing adjusted net income from continuing operations by the weighted average diluted common shares outstanding.
Adjusted diluted earnings per share from continuing operations ("Adjusted diluted EPS") is determined by dividing adjusted net income from continuing operations by the weighted average diluted common shares outstanding.
The non-cash unrealized changes in fair value recognized in Other expense (income), net, within the Consolidated Statements of Operations are treated as Non-GAAP adjustments. As the contracts are settled, realized gains and losses are recognized, and only the mark-to-market impacts are treated as Non-GAAP adjustments. Refer to Note 21 to our Consolidated Financial Statements for additional information.
The non-cash unrealized changes in fair value recognized in Other expense (income), net, within the Consolidated Statements of Operations are treated as Non-GAAP adjustments. As the contracts are settled, realized gains and losses are recognized, and only the mark-to-market impacts are treated as Non-GAAP adjustments. Refer to Note 20 to our Consolidated Financial Statements for additional information.
The Company completed its annual goodwill and indefinite lived intangible asset impairment analysis as of December 31, 2023. Our assessment did not result in an impairment. Our analysis employed the use of an income approach, corroborated by the market approach. The Company believes the income approach is the most reliable indicator of the fair value of the reporting unit.
The Company completed its annual goodwill and indefinite lived intangible asset impairment analysis as of December 31, 2024. Our assessment did not result in an impairment. Our analysis employed the use of an income approach, corroborated by the market approach. The Company believes the income approach is the most reliable indicator of the fair value of the reporting unit.
See Note 21 to our Consolidated Financial Statements for information on our interest rate swap agreements and the future obligations. • Operating and finance lease obligations – See Note 4 to our Consolidated Financial Statements for information on our operating and finance lease obligations and the amount and timing of future payments. • Purchase obligations – Purchase obligations primarily represent commitments to purchase minimum quantities of raw materials used in our production processes.
See Note 20 to our Consolidated Financial Statements for information on our interest rate swap agreements and the future obligations. • Operating and finance lease obligations – See Note 4 to our Consolidated Financial Statements for information on our operating and finance lease obligations and the amount and timing of future payments. • Purchase obligations – Purchase obligations primarily represent commitments to purchase minimum quantities of raw materials used in our production processes.
Refer to Note 7 of our Consolidated Financial Statements for additional details. 30 Liquidity and Capital Resources Management assesses the Company's liquidity in terms of its ability to generate cash to fund its operating, investing, and financing activities.
Refer to Note 7 of our Consolidated Financial Statements for additional details. 28 Liquidity and Capital Resources Management assesses the Company's liquidity in terms of its ability to generate cash to fund its operating, investing, and financing activities.
Our cash requirements under our various contractual obligations and commitments include: • Debt obligations and interest payments – See Note 13 to our Consolidated Financial Statements for information on our debt obligations and the timing of future principal.
Our cash requirements under our various contractual obligations and commitments include: • Debt obligations and interest payments – See Note 12 to our Consolidated Financial Statements for information on our debt obligations and the timing of future principal.
See Note 13 to our Consolidated Financial Statements for information on our debt obligations. 33 Guarantor Summarized Financial Information The 2028 Notes issued by TreeHouse Foods, Inc. are fully and unconditionally, as well as jointly and severally, guaranteed by our directly and indirectly owned domestic subsidiaries, which are collectively known as the "Guarantor Subsidiaries." The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances, only upon the occurrence of certain customary conditions.
See Note 12 to our Consolidated Financial Statements for information on our debt obligations. 31 Guarantor Summarized Financial Information The 2028 Notes issued by TreeHouse Foods, Inc. are fully and unconditionally, as well as jointly and severally, guaranteed by our directly and indirectly owned domestic subsidiaries, which are collectively known as the "Guarantor Subsidiaries." The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances, only upon the occurrence of certain customary conditions.
See Note 18 to our Consolidated Financial Statements for information on our pension and postretirement benefit obligations and the amount and timing of future payments. • Exit or disposal cost obligations – See Note 3 to our Consolidated Financial Statements for information on our exit or disposal cost obligations and the amount and timing of future payments.
See Note 17 to our Consolidated Financial Statements for information on our pension and postretirement benefit obligations and the amount and timing of future payments. • Exit or disposal cost obligations – See Note 3 to our Consolidated Financial Statements for information on our exit or disposal cost obligations and the amount and timing of future payments.
See "Non-GAAP Measures" for definitions and reconciliations of our Net income (loss) from continuing operations to EBITDA from continuing operations (Non-GAAP) and Adjusted EBITDA from continuing operations (Non-GAAP), Gross profit to Adjusted gross profit, Total operating expenses to Adjusted total operating expenses, Operating income (loss) to Adjusted operating income (loss), Total other expense (income) to Adjusted total other expense (income), Income tax expense to Adjusted income tax expense (benefit), Net income (loss) from continuing operations to Adjusted net income from continuing operations, and Diluted earnings (loss) per share from continuing operations to Adjusted diluted earnings (loss) per share from continuing operations.
See "Non-GAAP Measures" for definitions and reconciliations of our Net income (loss) from continuing operations to EBITDA from continuing operations and Adjusted EBITDA from continuing operations, Net sales to Adjusted net sales, Cost of sales to Adjusted cost of sales, Gross profit to Adjusted gross profit, Total operating expenses to Adjusted total operating expenses, Operating income to Adjusted operating income, Total other expense (income) to Adjusted total other expense, Income tax expense to Adjusted income tax expense, Net income (loss) from continuing operations to Adjusted net income from continuing operations, and Diluted earnings per share from continuing operations to Adjusted diluted earnings per share from continuing operations.
(5) The Company incurred fees related to shareholder activism which include directly applicable third-party advisory and professional service fees. (6) Tax indemnification represents the non-cash write off of indemnification assets that were recorded in connection with acquisitions from prior years.
(7) The Company incurred fees related to shareholder activism which include directly applicable third-party advisory and professional service fees. (8) Tax indemnification represents the non-cash write off of indemnification assets that were recorded in connection with acquisitions from prior years.
Changes in our estimates or any of our other assumptions used in our analysis could result in a different conclusion. Our testing of our trademarks indicated that the implied fair value was significantly in excess of the carrying values. The fair values of our trademarks exceed book value by a minimum of 84% as of December 31, 2023.
Changes in our estimates or any of our other assumptions used in our analysis could result in a different conclusion. Our testing of our trademarks indicated that the implied fair value was significantly in excess of the carrying values. The fair values of our trademarks exceed book value by a minimum of 82% as of December 31, 2024.
These estimates are made using various techniques including historical data on performance of similar promotional programs. Differences between estimated expense and actual redemptions are immaterial and recognized as a change in management estimate in a subsequent period. This allowance was $20.2 million and $19.5 million at December 31, 2023 and 2022, respectively.
These estimates are made using various techniques including historical data on performance of similar promotional programs. Differences between estimated expense and actual redemptions are immaterial and recognized as a change in management estimate in a subsequent period. This allowance was $17.3 million and $20.2 million at December 31, 2024 and 2023, respectively.
Refer to Note 7 to our Consolidated Financial Statements for additional information.
Refer to Note 19 to our Consolidated Financial Statements for additional information.
(2) Includes an amount due from Non-Guarantor Subsidiaries of $42.3 million as of December 31, 2023. 34 Cash Requirements Our cash requirements within the next twelve months include working capital requirements, interest payments, and capital expenditures.
(2) Includes an amount due from Non-Guarantor Subsidiaries of $20.3 million as of December 31, 2024. 32 Cash Requirements Our cash requirements within the next twelve months include working capital requirements, interest payments, and capital expenditures.
Revolving Credit Facility If additional borrowings are needed, approximately $471.0 million of the aggregate commitment of $500.0 million was available under the Revolving Credit Facility as of December 31, 2023. See Note 13 to our Consolidated Financial Statements for additional information regarding our Revolving Credit Facility.
Revolving Credit Facility If additional borrowings are needed, approximately $467.7 million of the aggregate commitment of $500.0 million was available under the Revolving Credit Facility as of December 31, 2024. See Note 12 to our Consolidated Financial Statements for additional information regarding our Revolving Credit Facility.
Minimum amounts committed to as of December 31, 2023 were $349.1 million (with $349.0 million due in 2024). • Pension and other postretirement benefit obligations – Future payments related to pension and postretirement benefits are estimated by an actuarial valuation.
Minimum amounts committed to as of December 31, 2024 were $462.5 million (with $450.1 million due in 2025). • Pension and other postretirement benefit obligations – Future payments related to pension and postretirement benefits are estimated by an actuarial valuation.
Estimated future interest payments on the Company’s debt are expected to be $272.2 million (with $82.7 million expected in 2024) based on the interest rates at December 31, 2023. Additionally, the Company has entered into interest rate swap agreements to lock into a fixed Term SOFR interest rate base.
Estimated future interest payments on the Company’s debt are expected to be $180.3 million (with $73.8 million expected in 2025) based on the interest rates at December 31, 2024. Additionally, the Company has entered into interest rate swap agreements to lock into a fixed Term SOFR interest rate base.
Goodwill and Indefinite Lived Intangible Assets — Goodwill and indefinite lived intangible assets totaled $1,830.7 million and $1,823.6 million as of December 31, 2023 and 2022, respectively, resulting primarily from acquisitions.
Goodwill and Indefinite Lived Intangible Assets — Goodwill and indefinite lived intangible assets totaled $1,825.3 million and $1,830.7 million as of December 31, 2024 and 2023, respectively, resulting primarily from acquisitions.
We used a discount rate for each plan to determine our estimated future benefit obligations, and our weighted average discount rate was 4.96% at December 31, 2023. If the discount rate of each plan were one percent higher, the pension plan liability would have been approximately 9.1%, or $18.3 million, lower as of December 31, 2023.
We used a discount rate for each plan to determine our estimated future benefit obligations, and our weighted average discount rate was 5.61% at December 31, 2024. If the discount rate of each plan were one percent higher, the pension plan liability would have been approximately 8.0%, or $15.9 million, lower as of December 31, 2024.
The gain on disposal is recognized within Net (loss) income from discontinued operations in the Company's Consolidated Statements of Operations. The gain on disposal was calculated as the difference between the fair value of the disposal group and the carrying value of the associated assets. The fair value was determined based on the consideration transferred less costs to sell.
The gain on disposal is recognized within Net loss from discontinued operations in the Company's Consolidated Statements of Operations. The gain on disposal was calculated as the difference between the fair value of the disposal group and the carrying value of the associated assets.
If the discount rate of each plan were one percent lower, the pension plan liability would have been approximately 10.8%, or $21.7 million, higher as of December 31, 2023. The projected benefit obligation was $216.9 million and $254.8 million at December 31, 2023 and 2022, respectively, for our pension benefit plans.
If the discount rate of each plan were one percent lower, the pension plan liability would have been approximately 9.3%, or $18.6 million, higher as of December 31, 2024. The projected benefit obligation was $199.5 million and $216.9 million at December 31, 2024 and 2023, respectively, for our pension benefit plans.
Non-GAAP Measures We have included in this report measures of financial performance that are not defined by GAAP ("Non-GAAP”). A Non-GAAP financial measure is a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s Consolidated Financial Statements.
A Non-GAAP financial measure is a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s Consolidated Financial Statements.
The projected benefit obligation was $15.1 million and $17.8 million at December 31, 2023 and 2022, respectively, for our postretirement benefit plans. See Note 18 to our Consolidated Financial Statements for more information regarding our employee pension and retirement benefit plans. Recent Accounting Pronouncements Information regarding recent accounting pronouncements is provided in Note 2 to the Consolidated Financial Statements.
The projected benefit obligation was $14.4 million and $15.1 million at December 31, 2024 and 2023, respectively, for our postretirement benefit plans. See Note 17 to our Consolidated Financial Statements for more information regarding our employee pension and retirement benefit plans.
This should be read in conjunction with the Consolidated Financial Statements and the Notes to those Consolidated Financial Statements included elsewhere in this report. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See Cautionary Statement Regarding Forward-Looking Information for a discussion of the uncertainties, risks, and assumptions associated with these statements.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See Cautionary Statement Regarding Forward-Looking Information for a discussion of the uncertainties, risks, and assumptions associated with these statements.
Purchase Price Allocation — We record acquisitions using the acquisition method of accounting. All of the assets acquired and liabilities assumed are recorded at fair value as of the acquisition date.
The fair value was determined based on the consideration transferred less costs to sell. 34 Purchase Price Allocation — We record acquisitions using the acquisition method of accounting. All of the assets acquired and liabilities assumed are recorded at fair value as of the acquisition date.
Our exit or disposal cost obligations primarily consist of severance and retention obligations. • Unrecognized tax benefits – See Note 12 to our Consolidated Financial Statements for information on our unrecognized tax benefits and the amount and timing of future payments. • Other liabilities – Other liabilities include obligations associated with certain employee benefit programs, employee health care, workers' compensation claims, other casualty losses, in addition to contingent liabilities related to the ordinary course of litigation and investigation, 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 December 31, 2023.
("Harris Tea"). • Other liabilities – Other liabilities include obligations associated with certain employee benefit programs, employee health care, workers' compensation claims, other casualty losses, in addition to contingent liabilities related to the ordinary course of litigation and investigation, 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 December 31, 2024.
EBITDA from continuing operations represents net income (loss) from continuing operations before interest expense, interest income, income tax expense, and depreciation and amortization expense. Adjusted EBITDA from continuing operations reflects adjustments to EBITDA from continuing operations to identify items that, in management’s judgment, significantly affect the assessment of earnings results between periods.
Adjusted EBITDA from continuing operations reflects adjustments to EBITDA from continuing operations to identify items that, in management’s judgment, significantly affect the assessment of earnings results between periods.
Cash Flow The following table is derived from our Consolidated Statements of Cash Flows: Year Ended December 31, 2023 2022 2021 (In millions) Net Cash Flows Provided By (Used In): Operating activities of continuing operations $ 157.3 $ (67.7) $ 141.6 Investing activities of continuing operations (241.4) (88.7) (66.6) Financing activities of continuing operations (107.5) (522.4) (361.9) Cash flows from discontinued operations 468.1 417.4 232.7 31 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Operating Activities From Continuing Operations Net cash provided by operating activities from continuing operations was $157.3 million in 2023 compared to net cash used in operating activities from continuing operations of $67.7 million in 2022, an increase of $225.0 million in cash provided.
Cash Flow The following table is derived from our Consolidated Statements of Cash Flows: Year Ended December 31, 2024 2023 (In millions) Net Cash Flows Provided By (Used In): Operating activities of continuing operations $ 265.8 $ 157.3 Investing activities of continuing operations (138.3) (241.4) Financing activities of continuing operations (159.3) (107.5) Cash flows from discontinued operations — 468.1 29 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Operating Activities From Continuing Operations Net cash provided by operating activities from continuing operations was $265.8 million in 2024 compared to $157.3 million in 2023, an increase of $108.5 million in cash provided.
However, our pricing actions often lag commodity cost changes temporarily, or we may not be able to pass along the full effect of increases in raw materials and other input costs as we incur them. 24 Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table presents certain information concerning our financial results, including information presented as a percentage of consolidated net sales: Year Ended December 31, 2023 2022 Increase / (Decrease) (Dollars in millions, except per share amounts) Dollars Percent Dollars Percent $ Change % Change Net sales $ 3,431.6 100.0 % $ 3,297.1 100.0 % $ 134.5 4.1 % Cost of sales 2,855.5 83.2 2,774.7 84.2 80.8 2.9 Gross profit 576.1 16.8 522.4 15.8 53.7 10.3 Operating expenses: Selling and distribution 171.6 5.0 217.8 6.6 (46.2) (21.2) General and administrative 204.1 5.9 206.5 6.3 (2.4) (1.2) Amortization expense 48.2 1.4 47.9 1.5 0.3 0.6 Other operating expense, net 5.3 0.2 62.8 1.9 (57.5) (91.6) Total operating expenses 429.2 12.5 535.0 16.3 (105.8) (19.8) Operating income (loss) 146.9 4.3 (12.6) (0.5) 159.5 1,265.9 Other expense (income): Interest expense 74.8 2.2 69.9 2.1 4.9 7.0 Interest income (40.1) (1.2) (15.5) (0.5) (24.6) (158.7) Loss on extinguishment of debt — — 4.5 0.1 (4.5) (100.0) (Gain) loss on foreign currency exchange (1.4) — 1.7 0.1 (3.1) (182.4) Other expense (income), net 30.2 0.9 (74.3) (2.3) 104.5 140.6 Total other expense (income) 63.5 1.9 (13.7) (0.5) 77.2 563.5 Income before income taxes 83.4 2.4 1.1 — 82.3 7,481.8 Income tax expense 24.4 0.7 10.3 0.3 14.1 136.9 Net income (loss) from continuing operations 59.0 1.7 (9.2) (0.3) 68.2 741.3 Net loss from discontinued operations (5.9) (0.2) (137.1) (4.2) 131.2 95.7 Net income (loss) $ 53.1 1.5 % $ (146.3) (4.5) % $ 199.4 136.3 % Earnings (loss) per common share - diluted: Continuing operations $ 1.05 $ (0.16) $ 1.21 736.8 % Discontinued operations (0.10) (2.45) 2.34 95.7 Net earnings (loss) per share diluted (1) $ 0.94 $ (2.61) $ 3.55 136.0 % (1) The sum of the individual per share amounts may not add due to rounding 25 Year Ended December 31, 2023 2022 Increase / (Decrease) (Dollars in millions, except per share amounts) Dollars Dollars $ Change % Change Other financial data: (1) EBITDA from continuing operations (Non-GAAP) $ 260.0 $ 195.1 $ 64.9 33.3 % Adjusted EBITDA from continuing operations (Non-GAAP) 365.9 291.7 74.2 25.4 Adjusted gross profit 606.1 539.4 66.7 12.4 Adjusted total operating expenses 366.9 385.0 (18.1) (4.7) Adjusted operating income (loss) 239.2 154.4 84.8 54.9 Adjusted total other expense (income) 49.9 56.1 (6.2) (11.1) Adjusted income tax expense (benefit) 50.1 25.7 24.4 94.9 Adjusted net income from continuing operations 139.2 72.6 66.6 91.7 Adjusted diluted earnings (loss) per share from continuing operations $ 2.47 $ 1.28 $ 1.18 92.1 % (1) Other financial data included Non-GAAP financial metrics.
However, our pricing actions often lag commodity cost changes temporarily, or we may not be able to pass along the full effect of increases in raw materials and other input costs as we incur them. 25 Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents certain information concerning our financial results, including information presented as a percentage of consolidated net sales: Year Ended December 31, 2024 2023 Increase / (Decrease) (Dollars in millions, except per share amounts) Dollars Percent Dollars Percent $ Change % Change Net sales $ 3,354.0 100.0 % $ 3,431.6 100.0 % $ (77.6) (2.3) % Cost of sales 2,805.6 83.6 2,855.5 83.2 (49.9) (1.7) Gross profit 548.4 16.4 576.1 16.8 (27.7) (4.8) Operating expenses: Selling and distribution 153.3 4.6 171.6 5.0 (18.3) (10.7) General and administrative 198.0 5.9 204.1 5.9 (6.1) (3.0) Amortization expense 48.6 1.4 48.2 1.4 0.4 0.8 Asset impairment 19.3 0.6 — — 19.3 100.0 Other operating expense, net 26.1 0.8 5.3 0.2 20.8 392.5 Total operating expenses 445.3 13.3 429.2 12.5 16.1 3.8 Operating income 103.1 3.1 146.9 4.3 (43.8) (29.8) Other expense: Interest expense 63.4 1.9 74.8 2.2 (11.4) (15.2) Interest income (4.2) (0.1) (40.1) (1.2) 35.9 89.5 Loss (gain) on foreign currency exchange 9.4 0.3 (1.4) — 10.8 771.4 Other expense, net 1.4 — 30.2 0.9 (28.8) (95.4) Total other expense 70.0 2.1 63.5 1.9 6.5 10.2 Income before income taxes 33.1 1.0 83.4 2.4 (50.3) (60.3) Income tax expense 6.2 0.2 24.4 0.7 (18.2) (74.6) Net income from continuing operations 26.9 0.8 59.0 1.7 (32.1) (54.4) Net loss from discontinued operations — — (5.9) (0.2) 5.9 100.0 Net income $ 26.9 0.8 % $ 53.1 1.5 % $ (26.2) (49.3) % Earnings (loss) per common share - diluted: Continuing operations $ 0.51 $ 1.05 $ (0.53) (51.1) % Discontinued operations — (0.10) 0.10 100.0 Net earnings per share diluted (1) $ 0.51 $ 0.94 $ (0.43) (45.7) % (1) The sum of the individual per share amounts may not add due to rounding. 26 Year Ended December 31, 2024 2023 Increase / (Decrease) (Dollars in millions, except per share amounts) Dollars Dollars $ Change % Change Other financial data: (1) EBITDA from continuing operations $ 239.4 $ 260.0 $ (20.6) (7.9) % Adjusted EBITDA from continuing operations 337.4 365.9 (28.5) (7.8) Adjusted net sales 3,377.3 3,432.9 (55.6) (1.6) Adjusted cost of sales 2,783.9 2,826.8 (42.9) (1.5) Adjusted gross profit 593.4 606.1 (12.7) (2.1) Adjusted total operating expenses 392.4 366.9 25.5 7.0 Adjusted operating income 201.0 239.2 (38.2) (16.0) Adjusted total other expense 69.7 49.9 19.8 39.7 Adjusted income tax expense 30.8 50.1 (19.3) (38.5) Adjusted net income from continuing operations 100.5 139.2 (38.7) (27.8) Adjusted diluted earnings per share from continuing operations $ 1.91 $ 2.47 $ (0.56) (22.6) % (1) Other financial data includes Non-GAAP financial metrics.
The following table reconciles cash flow provided by (used in) operating activities from continuing operations (a GAAP measure) to our free cash flow from continuing operations (a Non-GAAP measure): Year Ended December 31, 2023 2022 2021 (In millions) Cash flow provided by (used in) operating activities from continuing operations $ 157.3 $ (67.7) $ 141.6 Less: Capital expenditures (140.8) (93.5) (84.2) Free cash flow from continuing operations $ 16.5 $ (161.2) $ 57.4 44
The following table reconciles cash flow provided by operating activities from continuing operations (a GAAP measure) to our free cash flow from continuing operations (a Non-GAAP measure): Year Ended December 31, 2024 2023 (In millions) Cash flow provided by operating activities from continuing operations $ 265.8 $ 157.3 Less: Capital expenditures (139.7) (140.8) Free cash flow from continuing operations $ 126.1 $ 16.5 42
These broth products may have the potential for non-pathogenic microbial contamination due to lack of sterility assurance. The Company recognized costs of $27.0 million which include non-cash plant shutdown charges of $12.5 million, non-cash inventory write-offs of $10.4 million, and and other costs, including product returns and logistics, of $4.1 million for the year ended December 31, 2023.
For the year ended December 31, 2023, the Company incurred incremental costs related to the product recall of $27.0 million, which include plant shutdown charges of $12.5 million, non-cash inventory write-offs of $10.4 million, and other costs, including product returns and logistics, of $4.1 million.
Adjusted Gross Profit, Adjusted Total Operating Expenses, Adjusted Operating Income (Loss), Adjusted Total Other Expense (Income), Adjusted Income Tax Expense (Benefit), Adjusted Net Income from Continuing Operations, and Adjusted Diluted Earnings (Loss) Per Share from Continuing Operations, Adjusting for Certain Items Affecting Comparability Adjusted gross profit, adjusted total operating expenses, adjusted operating income (loss), adjusted total other expense (income), adjusted income tax expense (benefit), and adjusted net income from continuing operations represent their respective GAAP presentation line item adjusted for items such as divestiture, acquisition, integration, and related costs, mark-to-market adjustments on derivative contracts, foreign currency exchange impact on the re-measurement of intercompany notes, growth, reinvestment, and restructuring programs, impairment of assets, and other items that may arise from time to time that would impact comparability.
EBITDA from continuing operations, and adjusted EBITDA from continuing operations are performance measures commonly used by management to assess operating performance and incentive compensation, and the Company believes they are commonly reported and widely used by investors and other interested parties as a measure of a company’s operating performance between periods and as a component of our debt covenant calculations. 37 Adjusted Net Sales, Adjusted Cost of Sales, Adjusted Gross Profit, Adjusted Total Operating Expenses, Adjusted Operating Income, Adjusted Total Other Expense, Adjusted Income Tax Expense, Adjusted Net Income from Continuing Operations, and Adjusted Diluted Earnings Per Share from Continuing Operations, Adjusting for Certain Items Affecting Comparability Adjusted net sales, adjusted cost of sales, adjusted gross profit, adjusted total operating expenses, adjusted operating income, adjusted total other expense, adjusted income tax expense, and adjusted net income from continuing operations represent their respective GAAP presentation line item adjusted for items such as product recalls and related costs, growth, reinvestment, and restructuring programs, acquisition, integration, divestiture, and related costs, impairment of assets, foreign currency exchange impact on the re-measurement of intercompany notes, mark-to-market adjustments on derivative contracts, and other items that may arise from time to time that would impact comparability.
Our investments are expected to be approximately $18 million in 2024. 35 Critical Accounting Estimates Critical accounting estimates are defined as those most important to the portrayal of a company’s financial condition and results, and require the most difficult, subjective, or complex judgments.
These climate-related projects are for investments in energy and water efficiency as well as waste reduction initiatives. Our investments are expected to be approximately $7 million in 2025. 33 Critical Accounting Estimates Critical accounting estimates are defined as those most important to the portrayal of a company’s financial condition and results, and require the most difficult, subjective, or complex judgments.
TreeHouse Foods, Inc. and Guarantor Subsidiaries Summarized Statement of Operations Year Ended December 31, 2023 (In millions) Net sales $ 3,324.5 Gross profit (1) 542.4 Net income from continuing operations 57.8 Net loss from discontinued operations (5.9) Net income 51.9 TreeHouse Foods, Inc. and Guarantor Subsidiaries Summarized Balance Sheet December 31, 2023 (In millions) Current assets $ 946.3 Noncurrent assets 2,829.5 Current liabilities 627.2 Noncurrent liabilities (2) 1,642.1 (1) During the year ended December 31, 2023, TreeHouse Foods, Inc. and Guarantor Subsidiaries recorded $32.9 million of net sales to the Non-Guarantor Subsidiaries and $281.5 million of purchases from the Non-Guarantor Subsidiaries.
TreeHouse Foods, Inc. and Guarantor Subsidiaries Summarized Statement of Operations Year Ended December 31, 2024 (In millions) Net sales $ 3,274.7 Gross profit (1) 522.7 Net income 32.5 TreeHouse Foods, Inc. and Guarantor Subsidiaries Summarized Balance Sheet December 31, 2024 (In millions) Current assets $ 926.8 Noncurrent assets 2,782.9 Current liabilities 676.5 Noncurrent liabilities (2) 1,629.9 (1) During the year ended December 31, 2024, TreeHouse Foods, Inc. and Guarantor Subsidiaries recorded $94.1 million of net sales to the Non-Guarantor Subsidiaries and $288.7 million of purchases from the Non-Guarantor Subsidiaries.
Debt Obligations As of December 31, 2023, $471.0 million of the aggregate commitment of $500.0 million of the Revolving Credit Facility was available. Under the Second Amended and Restated Credit Agreement (the "Credit Agreement"), the Revolving Credit Facility matures on March 26, 2026.
Refer to Note 7 to our Consolidated Financial Statements for additional information. 30 Debt Obligations As of December 31, 2024, $467.7 million of the aggregate commitment of $500.0 million of the Revolving Credit Facility was available. Under the Second Amended and Restated Credit Agreement (the "Credit Agreement"), the Revolving Credit Facility matured on March 26, 2026.
See Note 20 to our Consolidated Financial Statements for more information about the Company’s commitments and contingent obligations. Capital Expenditures We continue to make investments in property, plant, and equipment and software for our business offices, manufacturing, and distribution facilities. Our preliminary estimate of capital expenditures for 2024 is approximately $145 million.
See Note 19 to our Consolidated Financial Statements for more information about the Company’s commitments and contingent obligations. Capital Expenditures We continue to make investments in property, plant, and equipment and software for our business offices, manufacturing, and distribution facilities. This includes planned capital expenditure commitments at our Princeton, Kentucky cracker manufacturing facility for capacity expansion and safety advancements.
The Credit Agreement contains various financial and restrictive covenants and requires that the Company maintain a consolidated net leverage ratio of no greater than 4.50 to 1.0, and our debt obligations contain customary representations and events of default. We are in compliance with all applicable debt covenants as of December 31, 2023.
As a result, our variable-rate debt is nearly fully hedged with our fixed rate interest rate swaps through 2028. The Credit Agreement contained various financial and restrictive covenants and required that the Company maintain a consolidated net leverage ratio of no greater than 4.50 to 1.0, and our debt obligations contain customary representations and events of default.
Continuing Operations Net Sales — Net sales for the year ended December 31, 2023 totaled $3,431.6 million compared to $3,297.1 million for the year ended December 31, 2022, an increase of $134.5 million, or 4.1%.
Continuing Operations Net Sales — Net sales for the year ended December 31, 2024 totaled $3,354.0 million compared to $3,431.6 million for the year ended December 31, 2023, a decrease of $77.6 million, or 2.3%.
We manage the impact of cost increases, wherever possible, on commercially reasonable terms, by locking in prices on the quantities we expect are required to meet our production requirements. In addition, as input costs rise, we seek to recover inflation by implementing higher pricing.
We will continue to monitor the inflationary environment to determine if additional pricing actions will be necessary. We manage the impact of cost increases, wherever possible, on commercially reasonable terms, by locking in prices on the quantities we expect are required to meet our production requirements.
Adjusted diluted EPS reflects adjustments to GAAP earnings (loss) per diluted share to identify items that, in management's judgment, significantly affect the assessment of earnings results between periods. 39 The following table reconciles the Company's net income (loss) from continuing operations as presented in the Consolidated Statements of Operations, the relevant GAAP measure, to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 (unaudited, in millions) Net income (loss) from continuing operations (GAAP) $ 59.0 $ (9.2) $ (68.6) Interest expense 74.8 69.9 72.1 Interest income (40.1) (15.5) (4.7) Income tax expense (benefit) 24.4 10.3 (17.6) Depreciation and amortization 141.9 139.6 143.4 EBITDA from continuing operations (Non-GAAP) 260.0 195.1 124.6 Growth, reinvestment, and restructuring programs, excluding accelerated depreciation (1) 46.1 84.5 83.4 Product recall and related costs (2) 29.2 — — Divestiture, acquisition, integration, and related costs (3) 16.7 13.8 4.0 Mark-to-market adjustments (4) 15.1 (75.1) (37.3) Shareholder activism (5) 0.3 2.7 4.6 Tax indemnification (6) 0.2 — 1.6 Foreign currency (gain) loss on remeasurement of intercompany notes (7) (1.7) 0.8 (0.5) Central services and conveyed employee costs (8) — 65.0 81.6 Loss on extinguishment of debt (9) — 4.5 14.4 Litigation matter (10) — 0.4 — COVID-19, excluding income tax adjustments (11) — — 12.4 Change in regulatory requirements (12) — — (0.1) Adjusted EBITDA from continuing operations (Non-GAAP) $ 365.9 $ 291.7 $ 288.7 % of net sales Net income (loss) from continuing operations margin 1.7 % (0.3) % (2.4) % EBITDA from continuing operations margin 7.6 % 5.9 % 4.4 % Adjusted EBITDA from continuing operations margin 10.7 % 8.8 % 10.3 % (1) The Company’s growth, reinvestment, and restructuring activities are part of an enterprise-wide transformation to improve long-term growth and profitability for the Company.
Adjusted diluted EPS reflects adjustments to GAAP earnings (loss) per diluted share to identify items that, in management's judgment, significantly affect the assessment of earnings results between periods. 38 The following table reconciles the Company's net income from continuing operations as presented in the Consolidated Statements of Operations, the relevant GAAP measure, to EBITDA from continuing operations and Adjusted EBITDA from continuing operations for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (unaudited, in millions) Net income from continuing operations (GAAP) $ 26.9 $ 59.0 Interest expense 63.4 74.8 Interest income (4.2) (40.1) Income tax expense 6.2 24.4 Depreciation and amortization 147.1 141.9 EBITDA from continuing operations (Non-GAAP) 239.4 260.0 Product recalls and related costs (1) 41.1 29.2 Growth, reinvestment, restructuring programs & other, excluding accelerated depreciation (2) 28.4 46.1 Impairment (3) 19.3 — Acquisition, integration, divestiture, and related costs (4) 8.9 16.7 Foreign currency loss (gain) on remeasurement of intercompany notes (5) 7.0 (1.7) Mark-to-market adjustments (6) (6.7) 15.1 Shareholder activism (7) — 0.3 Tax indemnification (8) — 0.2 Adjusted EBITDA from continuing operations (Non-GAAP) $ 337.4 $ 365.9 % of net sales Net income from continuing operations margin 0.8 % 1.7 % EBITDA from continuing operations margin 7.1 % 7.6 % % of adjusted net sales Adjusted EBITDA from continuing operations margin 10.0 % 10.7 % (1) Griddle Recall and Related Costs On October 18, 2024, the Company initiated a voluntary recall of certain frozen waffle products produced at its Brantford, Ontario, Canada facility, and on October 22, 2024, the Company expanded its voluntary recall to include all products manufactured at the Brantford facility that are still within their shelf-life.
In addition, as of December 31, 2023, there were $29.0 million in letters of credit under the Revolving Credit Facility that were issued but undrawn, which have been included as a reduction to the calculation of available credit.
In addition, as of December 31, 2024, there were $32.3 million in letters of credit under the Revolving Credit Facility that were issued but undrawn.
Total Operating Expenses — Total operating expenses were $429.2 million for the year ended December 31, 2023 compared to $535.0 million for the year ended December 31, 2022, a decrease of $105.8 million.
Total Operating Expenses — Total operating expenses were $445.3 million for the year ended December 31, 2024 compared to $429.2 million for the year ended December 31, 2023, an increase of $16.1 million.
This information is provided in order to allow investors to make meaningful comparisons of the Company's sales between periods and to view the Company's business from the same perspective as Company management. 38 Net Income (Loss) from Continuing Operations Margin, EBITDA from Continuing Operations, EBITDA from Continuing Operations Margin, Adjusted EBITDA from Continuing Operations, and Adjusted EBITDA from Continuing Operations Margin, Adjusting for Certain Items Affecting Comparability Net income (loss) from continuing operations margin, EBITDA from continuing operations margin, and adjusted EBITDA from continuing operations margin are defined as net income (loss) from continuing operations, EBITDA from continuing operations, and adjusted EBITDA from continuing operations as a percentage of net sales.
This information is provided in order to allow investors to make meaningful comparisons of the Company's sales between periods and to view the Company's business from the same perspective as Company management. The following table reconciles the Company's 2024 net sales as presented in the Consolidated Statements of Operations to organic net sales.
The Company remains in a strong financial position, with resources available for reinvesting in existing businesses, including our strategic growth initiatives, and managing its capital structure on a short and long-term basis.
The Company remains in a strong financial position, with resources available for reinvesting in existing businesses, conducting acquisitions, and managing its capital structure on a short and long-term basis. Receivables Sales Program The Company achieves a more efficient cash conversion cycle while strategically managing customer payment terms and counterparty risk through its Receivables Sales Program.
At December 31, 2023, we had $316.4 million outstanding under Term Loan A, $588.6 million outstanding under Term Loan A-1, $500.0 million of the 2028 Notes outstanding, and $0.6 million of finance lease obligations. The Company has long-term interest rate swap agreements to fix the interest rate base in order to mitigate the Company's exposure to interest rate risk.
The Company has long-term interest rate swap agreements to fix the interest rate base in order to mitigate the Company's exposure to interest rate risk. As of December 31, 2024, we have an outstanding variable-rate debt balance of $905.0 million, and our interest rate swap agreements have a notional value of $1,750.0 million.
The change in net sales from 2022 to 2023 was due to the following: Dollars Percent (In millions) 2022 Net sales $ 3,297.1 Pricing 241.2 7.3 % Volume/mix (111.5) (3.4) Volume/mix related to acquisitions 69.1 2.1 Volume/mix impacted by supply chain disruption (59.1) (1.7) Foreign currency (5.2) (0.2) 2023 Net sales $ 3,431.6 4.1 % Volume/mix related to acquisitions (2.1) Foreign currency 0.2 Percent change in organic net sales (1) 2.2 % (1) Organic net sales is a Non-GAAP financial measure.
The change in net sales from 2023 to 2024 was due to the following: Dollars Percent Volume/mix $ (5.0) (0.1) % Facilities restoration impact (50.3) (1.5) Product recall returns (22.0) (0.6) Pricing (56.8) (1.7) Foreign currency (1.4) (0.1) Business acquisitions 57.9 1.7 Total change in net sales $ (77.6) (2.3) % Product recall returns 22.0 0.6 Total change in adjusted net sales (1) $ (55.6) (1.7) % (1) Adjusted net sales is a Non-GAAP financial measure.
The decrease is primarily due to a greater loss on sale of business of $127.4 million recognized during the year ended December 31, 2022 as a result of the divestiture of a significant portion of the Meal Preparation business.
Additionally, during the year ended December 31, 2023, the Company recognized an expected loss on disposal adjustment of $2.2 million related to the divestiture of a significant portion of the Meal Preparation business on October 3, 2022.
Our long-term debt outstanding, including the current portion, was $1,405.6 million at December 31, 2023 and $1,406.2 million at December 31, 2022, a decrease of $0.6 million. This decrease was primarily due to a decrease of finance lease obligations by $0.6 million during the year ended December 31, 2023.
This increase was primarily due to an increase of finance lease obligations by $3.5 million during the year ended December 31, 2024. At December 31, 2024, we had $316.4 million outstanding under Term Loan A, $588.6 million outstanding under Term Loan A-1, $500.0 million of the 2028 Notes outstanding, and $4.1 million of finance lease obligations.
During 2022, the Company recognized $0.6 million of accelerated depreciation within the Company's growth, reinvestment, and restructuring activities as depreciation expense. Refer to Note 3 of the Consolidated Financial Statements for additional information. (2) On September 22, 2023, the Company initiated a voluntary recall of certain broth products produced at its Cambridge, Maryland facility.
During 2024, the Company recognized $0.2 million of accelerated depreciation within the Company's growth, reinvestment, and restructuring activities as depreciation expense. Refer to Note 3 of the Consolidated Financial Statements for additional information. (3) During the second quarter of 2024, the Company incurred $19.3 million of non-cash impairment charges related to property, plant, and equipment.
Refer to Note 20 to our Consolidated Financial Statements for additional information. Acquisition of Pickle Branded Assets On January 2, 2024, the Company completed the acquisition of pickle branded assets, including Bick’s pickles, Habitant pickled beets, Woodman’s horseradish, and McLarens pickled onions brands, from The J.M.
Acquisition of Pickle Branded Assets On January 2, 2024, the Company completed the acquisition of pickle branded assets, including Bick’s pickles, Habitant pickled beets, Woodman’s horseradish, and McLarens pickled onions brands, from The J.M. Smucker Co., a North American producer of coffee, consumer foods, dog snacks, and cat food, for a total purchase price of $25.9 million in cash.
Smucker Co., a North American producer of coffee, consumer foods, dog snacks, and cat food, for approximately $20.0 million in cash, subject to customary purchase price adjustments. The allocation of the purchase price is expected to consist primarily of inventory. The acquisition is consistent with our strategy and builds depth in our Pickles category by expanding into Canada.
The allocation of the purchase price consists primarily of inventory. The acquisition is consistent with our strategy and builds depth in our Pickles category by expanding into Canada.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Executive Overview The following discussion and analysis presents the factors that had a material effect on our financial condition, changes in financial condition, and results of operations for the years ended December 31, 2023, 2022, and 2021.
See Item 7, Management’s Discussions and Analysis of Financial Condition and Results of Operations , in our Annual Report on Form 10-K for the year ended December 31, 2023 for a detailed discussion of our financial condition, results of operations, and cash flows for 2023 compared to 2022.
This was primarily driven by $100.6 million of cash used for the acquisitions of the seasoned pretzel and coffee roasting capabilities, which were completed on April 1, 2023 and June 30, 2023, respectively.
The decrease in net cash used was primarily driven by $100.6 million of cash used in the second quarter of 2023 for the acquisitions of the seasoned pretzel and coffee roasting capabilities and the exercise of a purchase option on the lease of our Cambridge, Maryland facility for $8.1 million during the first quarter of 2023.
Discontinued Operations Discontinued Operations — Net loss from discontinued operations was $5.9 million for the year ended December 31, 2023 compared to $137.1 million for the year ended December 31, 2022, a decrease of $131.2 million.
Discontinued Operations Discontinued Operations — Net loss from discontinued operations decreased by $5.9 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease is primarily a result of a non-recurring net loss from the Snack Bars Business due to its divestiture on September 29, 2023.
Additionally, the Company recognized a non-cash inventory write-off of $2.2 million for a packaging quality matter for the year ended December 31, 2023.
Additionally, the Company recognized a non-cash inventory write-off of $2.2 million for a packaging quality matter for the year ended December 31, 2023. Refer to Note 19 of the Consolidated Financial Statements for additional information. 39 (2) The Company’s growth, reinvestment, and restructuring activities are part of an enterprise-wide transformation to improve long-term growth and profitability for the Company.
Total Other Expense (Income) — Total other expense was $63.5 million for the year ended December 31, 2023, compared to total other income of $13.7 million for the year ended December 31, 2022, an increase in expense of $77.2 million.
This was partially offset by lower employee incentive compensation expense, lower freight costs, and TSA-related expense reductions. Total Other Expense — Total other expense was $70.0 million for the year ended December 31, 2024 compared to $63.5 million for the year ended December 31, 2023, an increase in expense of $6.5 million.
The decrease was primarily due to higher favorable non-cash mark-to-market impacts from hedging activities of $37.8 million, largely driven by interest rate swaps due to rising interest rates, interest income of $10.6 million from our Note Receivable, and a lower loss on extinguishment of debt in 2022 compared to 2021.
This was partially offset by a favorable change of $21.8 million in non-cash mark-to-market impacts from hedging activities, largely driven by interest rate swaps, a decrease of $11.4 million in interest expense, primarily due to a decrease in borrowings on our Revolving Credit Facility, and a decrease of $4.4 million in costs related to the Receivables Sales Program due to decreased usage.
These write-offs arose as a result of the related uncertain tax position being released due to the statute of limitation lapse or settlement with taxing authorities. (7) The Company has foreign currency denominated intercompany loans and incurred foreign currency gains/losses to re-measure the loans at quarter end. These amounts are non-cash and the loans are eliminated in consolidation.
(5) The Company has foreign currency denominated intercompany loans and incurred foreign currency gains/losses to re-measure the loans at quarter end. These amounts are non-cash and the loans are eliminated in consolidation. (6) The Company's derivative contracts are marked-to-market each period.
Refer to Note 20 of the Consolidated Financial Statements for additional information. 40 (3) Divestiture, acquisition, integration, and related costs represent costs associated with completed and potential divestitures, completed and potential acquisitions, and the related integration of the acquisitions.
(4) Acquisition, integration, divestiture, and related costs represent costs associated with completed and potential acquisitions, the related integration of the acquisitions, completed and potential divestitures, and gains or losses on the divestiture of a business.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Operating Activities From Continuing Operations Net cash used by operating activities from continuing operations was $67.7 million in 2022 compared to net cash provided by operating activities from continuing operations of $141.6 million in 2021, a decrease in cash provided of $209.3 million.
Investing Activities From Continuing Operations Net cash used in investing activities from continuing operations was $138.3 million in 2024 compared to $241.4 million in 2023, a decrease in cash used of $103.1 million.
Recent Developments Impact of Supply Chain Disruptions In the third quarter of 2023, our results of operations were impacted by supply chain disruptions related to a voluntary recall of certain broth products produced at our Cambridge, Maryland facility and a packaging quality matter within our cookies and pretzels categories.
Restoration of One of our Broth Facilities Since the end of 2023, our results of operations have been impacted by a voluntary recall of certain broth products produced at our Cambridge, Maryland broth facility and the subsequent restoration of this facility.
Refer to Note 13 and Note 14 to our Consolidated Financial Statements for additional information. Cash Flows From Discontinued Operations Net cash provided by discontinued operations was $468.1 million in 2023 compared to $417.4 million in 2022, an increase in cash provided of $50.7 million.
The increase in cash used is primarily due to incremental common stock repurchases of $49.7 million in 2024 compared to 2023. Refer to Note 13 to our Consolidated Financial Statements for additional information.
See Note 5 to our Consolidated Financial Statements for additional information regarding our Receivables Sales Program. Our Receivables Sales Program provides us lower cost access to liquidity when compared to the Revolving Credit Facility.
Approximately $22.5 million was available under the Receivables Sales Program operating limit as of December 31, 2024. See Note 5 to our Consolidated Financial Statements for additional information regarding our Receivables Sales Program.
Capital expenditures in 2023 included growth initiatives for building depth through capacity and capability expansion. Financing Activities From Continuing Operations Net cash used in financing activities from continuing operations was $107.5 million in 2023 compared to $522.4 million in 2022, a decrease in cash used of $414.9 million.
This activity was partially offset by an increase in remaining capital expenditures during 2024 related to growth initiatives and integration activities from recent acquisitions. Financing Activities From Continuing Operations Net cash used in financing activities from continuing operations was $159.3 million in 2024 compared to $107.5 million in 2023, an increase in cash used of $51.8 million.
We continue to monitor consumer consumption trends including the increased use and/or prevalence of certain weight loss drugs, which may or may not impact consumer preferences and consumption patterns. Additionally, industry-wide supply chain disruption, which had previously constrained our ability to service all of the customer orders received and depressed service levels, meaningfully improved throughout 2023.
Industry-wide supply chain disruption over the last several years, which had previously constrained our ability to service all of the customer orders received and depressed service levels, has meaningfully improved. Additionally, TreeHouse has made considerable progress toward its long-term supply chain cost savings initiative goals throughout its business, resulting in margin improvement.
While there is still some disruption across the industry, it is more episodic in nature. TreeHouse continues to make strong progress in enhancing our service levels and capturing demand for private brand food and beverage.
TreeHouse continues to make strong progress in enhancing our service levels and capturing demand for private brand food and beverage. Many of our ingredients and packaging input costs still remain elevated compared to historical levels, such as the prices of coffee and cocoa. In response, we from time to time will implement pricing actions to recover inflationary costs.
These impacts extended into our fourth quarter results, as we incurred costs to restore our broth facility. We expect the restart of the Cambridge, Maryland broth facility to continue to impact our results of operations in the first half of 2024, as we restore the facility to full production capacity. The packaging quality matter has been remediated in 2023.
During the fourth quarter of 2024, we incurred plant restoration costs. As of the first quarter of 2025, we have resumed production of frozen griddle products at the Brantford facility. As we continue to restore the facility to its full production capacity and capability, we expect to have impacts to our sales volumes.
Gross Profit — Gross profit as a percentage of net sales was 15.8% for the year ended December 31, 2022 compared to 16.8% for the year ended December 31, 2021, a decrease of 1.0 percentage points. The decrease is primarily due to incremental costs related to labor and supply chain disruption as a result of the macro environment.
These items were partially offset by volume/mix from the acquisition of the Coffee Roasting Capability, as well as new business wins. 27 Gross Profit — Gross profit as a percentage of net sales was 16.4% for the year ended December 31, 2024 compared to 16.8% for the year ended December 31, 2023, a decrease of 0.4 percentage points.
Income Taxes — Income taxes were recognized at an effective rate of 29.3% in 2023 compared to 936.4% in 2022. The change in the Company's effective tax rate is primarily driven by a change in the valuation allowance recorded against certain deferred tax assets and a change in the tax deductible stock-based compensation.
Income Taxes — Income taxes were recognized at an effective rate of 18.7% in 2024 compared to 29.3% in 2023.
Removed
Refer to Note 7 to our Consolidated Financial Statements for additional information. Repayment of Seller Note Credit Agreement On October 19, 2023, the Company received the $427.5 million repayment of its Seller Note Credit Agreement, which included the outstanding principal balance and accrued interest. The Company will follow its disciplined capital allocation strategy in deploying the proceeds.

… 123 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+2 added−4 removed6 unchanged
Biggest changeAccordingly, if we are unable to increase our prices to offset increasing costs, our operating profits and margins could be materially affected. In addition, in instances of declining input costs, customers may seek price reductions in situations where we are locked into pricing at higher costs.
Biggest changeCompetitive pressures also may limit our ability to quickly raise prices in response to increased raw materials, packaging, fuel, and energy costs. Accordingly, if we are unable to increase our prices to offset increasing costs, our operating profits and margins could be materially affected.
Based on our outstanding variable-rate debt balance of $905.0 million under the Credit Agreement at December 31, 2023, and by including the impact of $875.0 million in effective interest rate swap agreements, each 1% rise in interest rates would increase our annual interest expense by approximately $0.3 million ($9.1 million excluding the $875.0 million in interest rate swap agreements).
Based on our outstanding variable-rate debt balance of $905.0 million under the Credit Agreement at December 31, 2024, and by including the impact of $875.0 million in effective interest rate swap agreements, each 1% rise in interest rates would increase our annual interest expense by approximately $0.3 million ($9.1 million excluding the $875.0 million in interest rate swap agreements).
Under the terms of the agreements, the weighted average fixed interest rate base for the $875.0 million of interest rate swaps maturing on February 28, 2025 is approximately 2.91%, and for the $300.0 million of interest rate swaps effective February 28, 2025 through February 29, 2028, is approximately 3.99%.
Under the terms of the agreements, the weighted average fixed interest rate base for the $875.0 million of interest rate swaps maturing on February 28, 2025 is approximately 2.91%, and for the $875.0 million of interest rate swaps effective February 28, 2025 through February 29, 2028, is approximately 3.69%.
The Company has entered into long-term interest rate swap agreements to mitigate its variable rate debt exposures that have a notional amount of $1,175.0 million as of December 31, 2023 and $875.0 million as of December 31, 2022.
The Company has entered into long-term interest rate swap agreements to mitigate its variable rate debt exposures that have a notional amount of $1,750.0 million as of December 31, 2024 and $1,175.0 million as of December 31, 2023.
We believe these ingredients and packaging materials are generally available from a number of suppliers, although supply chain disruption in 2021 and 2022 challenged and delayed timing of availability from our suppliers. However, in 2023, our service has improved in part as a result of supply chains stabilizing.
We believe these ingredients and packaging materials are generally available from a number of suppliers, although supply chain disruptions experienced in recent years challenged and delayed timing of availability from our suppliers. However, our service has improved in part as a result of supply chains stabilizing.
Based on the weighted average rates, when using the one month SOFR rate as of December 31, 2023 and potential changes to credit spreads due to changes in our covenant leverage ratio, the borrowing cost on the principal and revolver with the interest rate swaps would range from 4.35% to 4.85% during the life of the swap agreements.
Based on the weighted average rates, when using the one month SOFR rate as of December 31, 2024 and potential changes to credit spreads due to changes in our covenant leverage ratio, the cost of borrowings under the credit facility with the interest rate swaps would range from 4.32% to 4.82% during the life of the swap agreements.
Volatility in the cost of our raw materials and packaging supplies can adversely affect our performance, as price changes often lag behind changes in costs, and we are not always able to adjust our pricing to reflect changes in raw material and supply costs. 45 Competitive pressures also may limit our ability to quickly raise prices in response to increased raw materials, packaging, fuel, and energy costs.
Volatility in the cost of our raw materials and packaging supplies can adversely affect our performance, as price changes often lag behind changes in costs, and we are not always able to adjust our pricing to reflect changes in raw material and supply costs.
This includes, but is not limited to, using foreign currency contracts to establish a fixed foreign currency exchange rate for the net cash flow requirements for purchases of inventory, sales of finished goods, and future settlement of foreign-denominated assets and liabilities. As of December 31, 2023, the Company had no foreign currency contracts outstanding.
The Company periodically enters into foreign currency contracts to manage the risk associated with foreign currency cash flows. This includes, but is not limited to, using foreign currency contracts to establish a fixed foreign currency exchange rate for the net cash flow requirements for purchases of inventory, sales of finished goods, and future settlement of foreign-denominated assets and liabilities.
At December 31, 2023, the impact of a 10% movement in foreign exchange rates would not have a material impact on the Company's consolidated results of operations. 46
As of December 31, 2024, the Company had no foreign currency contracts outstanding. At December 31, 2024, the impact of a 10% movement in foreign exchange rates would not have a material impact on the Company's consolidated results of operations. 44
Based on our analysis, a 10% change in commodity prices would impact the fair value of the portfolio by $28.0 million. We do not utilize financial instruments for trading purposes. During 2021 and 2022, the overall global economy experienced inflation in the costs of raw materials, packaging materials, fuel, and energy.
Based on our analysis, a 10% change in commodity prices would impact the fair value of the portfolio by $40.7 million. We do not utilize financial instruments for trading purposes.
Under the terms of the agreements entered in January 2024, the weighted average fixed interest rate base for the $300.0 million of interest rate swaps is approximately 3.38%. Our variable-rate debt is nearly fully hedged by our fixed rate interest rate swaps as of December 31, 2023.
Our variable-rate debt is nearly fully hedged by our fixed rate interest rate swaps as of December 31, 2024.
Foreign Currency Exchange Rate Risk The Company is exposed to foreign currency exchange rate risk as a result of our Canadian subsidiaries, where the functional currency is the Canadian dollar. The Company periodically enters into foreign currency contracts to manage the risk associated with foreign currency cash flows.
In addition, in instances of declining input costs, customers may seek price reductions in situations where we are locked into pricing at higher costs. 43 Foreign Currency Exchange Rate Risk The Company is exposed to foreign currency exchange rate risk as a result of our Canadian subsidiaries, where the functional currency is the Canadian dollar.
Removed
In January 2024, the Company entered into additional interest rate swap agreements to lock into a fixed interest rate base. The agreements have a notional value of $300.0 million, effective February 28, 2025 through February 29, 2028.
Added
The costs of raw materials, packaging materials, fuel, and energy have varied widely in recent years, and future changes in such costs may cause our results of operations and our operating margins to fluctuate significantly. When comparing 2024 to 2023, raw materials prices were mixed in terms of inflation and deflation.
Removed
While the Company continued to experience inflationary costs throughout 2023, the Company saw a general decline in the costs of some of our key commodities, including oats, wheat, coconut oil, and green coffee.
Added
Raw materials with price decreases included, but were but not limited to, wheat, soybean oil, palm oil, and corn. However, raw materials with price increases included, but were not limited to, sugar, cocoa, and cucumbers. Our raw materials consist of ingredients and packaging materials.
Removed
When comparing fiscal year 2023 to 2022, some raw material input costs had price increases, primarily including, but not limited to, sugar, cucumbers, cocoa, and peanut butter; however, most of our raw material input costs decreased during 2023.
Removed
Additionally, other input costs had price increases when comparing 2023 to 2022, primarily including, but not limited to, diesel, natural gas, and coated recycled board. However, the costs of resin and linerboard both decreased during 2023. Our raw materials consist of ingredients and packaging materials.

Other THS 10-K year-over-year comparisons