BELLRING BRANDS INC

Previous wording

We are a consumer products holding company operating in the global convenient nutrition category and are a provider of ready-to-drink (“RTD”) protein shakes, other RTD beverages and powders. We have a single operating and reportable segment, with our principal products being protein-based consumer goods. Our primary brands are Premier Protein and Dymatize.

Current wording

We are a consumer products holding company operating in the global convenient nutrition category and are a provider of ready-to-drink (“RTD”) protein shakes and powders. We have a single operating and reportable segment, with our principal products being protein-based consumer goods. Our primary brands are Premier Protein and Dymatize.

Previous wording

During fiscal 2023, input cost inflation, including raw material, packaging and manufacturing costs, impacted our supply chain and put downward pressure on profit margins. As a result, we took pricing actions on certain products in the prior fiscal year. During fiscal 2024, inflationary pressures on protein costs eased while other costs, such as packaging and manufacturing, continued to face inflationary pressures. We expect inflationary pressures on most input costs to increase during the remainder of fiscal 2024, and inflation could have a materially adverse impact on our business in the future if inflation rates were to significantly exceed our ability to achieve price increases or cost savings or if such price increases impact demand for our products.

Current wording

During fiscal 2024, inflationary pressures on protein costs eased while other costs, such as packaging and manufacturing, faced inflationary pressures. During fiscal 2025, input costs, including raw material, packaging and manufacturing costs, are expected to face inflationary pressures. Inflation could have a materially adverse impact on our business in the future if inflation rates were to significantly exceed our ability to achieve price increases or cost savings or if such price increases impact demand for our products.

Previous wording

Net sales increased $69.5 million, or 16%, during the three months ended June 30, 2024 compared to the prior year period. Sales of Premier Protein products were up $72.3 million, or 20%, driven by 19% higher volumes primarily due to higher RTD shake production and distribution gains. Sales of Dymatize products were down $1.7 million, or 3%, driven by a decrease in average net selling prices primarily due to increased promotional spending and unfavorable mix. This decrease was partially offset by 4% higher volumes primarily due to increases in international channel volumes. Sales ofall other products were down $1.1 million.

Current wording

Net sales increased $102.5 million, or 24%, during the three months ended December 31, 2024 compared to the prior year period. Sales of Premier Protein products were up $96.0 million, or 26%, driven by 21% higher volumes. Volumes increased primarily due to distribution gains and incremental promotional activity. Average net selling prices increased due to targeted price increases, partially offset by increased promotional activity. Sales of Dymatize products were up $7.0 million, or 13%, driven by 12% higher volumes. Dymatize volumes increased primarily due to higher international volumes. Sales ofall other products were down $0.5 million.

Previous wording

Operating profit increased $66.4 million, or 32%, during the nine months ended June 30, 2024 compared to the prior year period. This increase was primarily drivenby higher net sales (net of increased promotional activity), as previously discussed, and lower net product costs of $78.2 million (driven by lower raw material costs, partially offset by higher manufacturing costs). These positive impacts were partially offset by higher accelerated amortization of $17.4 million related to the discontinuance of the PowerBar business in North America, higher employee-related expenses of $22.0 million and higher advertising expense of $7.6 million.

Current wording

Operating profit increased $42.3 million, or 58%, during the three months ended December 31, 2024 compared to the prior year period. This increase was primarily drivenby higher net sales, as previously discussed, accelerated amortization of $17.4 million recorded in the prior year period related to the discontinuance of the PowerBar business in North America and lower net product costs of $2.5 million (driven by lower manufacturing and freight costs, partially offset by higher raw material costs). These positive impacts were partially offset by increased advertising expense of $8.9 million, higher employee-related expenses of $4.2 million and higher warehousing and distribution costs of $3.8 million.

Previous wording

Interest expense, net decreased $2.9 million during the three months ended June 30, 2024 compared to the prior year period primarily due to lower borrowings outstanding under our Revolving Credit Facility (as defined in “Liquidity and Capital Resources” within this section). As a result, the weighted-average interest rate on our total outstanding debt decreased to 7.0% for the three months ended June 30, 2024 from 7.2% for the three months ended June 30, 2023.

Current wording

Interest expense, net decreased $0.5 million during the three months ended December 31, 2024 compared to the prior year period. The weighted-average interest rate on our total outstanding debt was 7.0% for both the three months ended December 31, 2024 and 2023. See Note 11 within “Notes to Condensed Consolidated Financial Statements” for additional information on our debt.

Previous wording

Our effective income tax rate was 24.2% and 24.5% for the three months ended June 30, 2024 and 2023, respectively, and 24.6% for both the nine months ended June 30, 2024 and 2023.

Current wording

Our effective income tax rate was 23.8% and 24.4% for the three months ended December 31, 2024 and 2023, respectively.

Previous wording

During thenine months ended June 30, 2024, we repaid$25.0 million under our revolving credit facility, which is provided under our credit agreement entered into on March 10, 2022 (as amended, the “Credit Agreement”) in an aggregate principal amount of $250.0 million (the “Revolving Credit Facility”). As of June 30, 2024, there were no outstanding borrowings or letters of credit under the Revolving Credit Facility, providing us available borrowing capacity of$250.0 million. Letters of credit are available under the Revolving Credit Facility in an aggregate amount of up to $20.0 million. Our Credit Agreement provides for potential incremental revolving and term facilities at the Company’s request and at the discretion of the lenders or other persons providing such incremental facilities, in each case on terms to be determined, and also permits the Company to incur other secured or unsecured debt, in all cases subject to conditions and limitations as specified in the Credit Agreement.

Current wording

During the three months ended December 31, 2024, we borrowed and repaid$35.0 million, respectively, under our revolving credit facility, which is provided under our credit agreement entered into on March 10, 2022 (as amended, the “Credit Agreement”) in an aggregate principal amount of $250.0 million (the “Revolving Credit Facility”). As of December 31, 2024, there were no outstanding borrowings or letters of credit under the Revolving Credit Facility, providing us available borrowing capacity of$250.0 million. Letters of credit are available under the Revolving Credit Facility in an aggregate amount of up to $20.0 million. Our Credit Agreement provides for potential incremental revolving and term facilities at the Company’s request and at the discretion of the lenders or other persons providing such incremental facilities, in each case on terms to be determined, and also permits the Company to incur other secured or unsecured debt, in all cases subject to conditions and limitations as specified in the Credit Agreement.

Previous wording

During the nine months ended June 30, 2024, we repurchased 1.9 million shares of our common stock at an average share price of $56.18 per share and at a total cost, including accrued excise tax and broker’s commissions, of $107.1 million.

Current wording

During the three months ended December 31, 2024, we repurchased 0.1 million shares of our common stock at an average share price of $77.12 per share and at a total cost, including any accrued excise tax and broker’s commissions, of $11.0 million. In addition, during the three months ended December 31, 2024, we paid$0.8 million of excise tax that related to fiscal 2023 share repurchases.

Previous wording

Cash provided by operating activities for the nine months ended June 30, 2024 increased $28.8 million compared to the prior year period. This increase was primarily due to fluctuations in the timing of payments of trade payables and decreased interest payments of $5.7 million due to lower borrowings outstanding under our Revolving Credit Facility. These positive impacts were partially offset by increased trade receivable levels in the current year period, driven by higher net sales, and increased tax payments (net of refunds) of $16.4 million.

Current wording

Cash provided by operating activities for the three months ended December 31, 2024 decreased $71.2 million compared to the prior year period. This decrease was primarily due to increased inventory levels in the current year period (driven by higher production), fluctuations in the timing of payments of trade payablesand increased tax payments (net of refunds) of $5.3 million.

Previous wording

Cash used in investing activities for thenine months ended June 30, 2024 decreased $0.4 million compared to the prior year period resulting from a decrease in capital expenditures.

Current wording

Cash used in investing activities for thethree months ended December 31, 2024 increased $1.1 million compared to the prior year period resulting from a increase in capital expenditures.

Previous wording

•our dependence on a limited number of third-party contract manufacturers for the manufacturing of most of our products, including one manufacturer for the majority of our RTD protein shakes;

Current wording

•our dependence on a limited number of third-party contract manufacturers for the manufacturing of most of our products, including one manufacturer for nearly half of our RTD protein shakes;

Previous wording

•risks related to our ongoing relationship with Post following the Spin-off, including our obligations under various agreements with Post;

Current wording

•risks related to our ongoing relationship with Post Holdings, Inc. (“Post”) following our separation from Post and Post’s distribution of our stock to its shareholders (the “Spin-off”), including our obligations under various agreements with Post;

Previous wording

•conflicting interests or the appearance of conflicting interests resulting from certain of our directors also serving as officers or directors of Post;

Current wording

•conflicting interests or the appearance of conflicting interests resulting from certain of our directors also serving as officers and/or directors of Post;