Slides
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Statements contained in this presentation and certain other written or oral statements made from time to time by Flowers Foods, Inc. (the “company”, “Flowers Foods”, “Flowers”, “us”, “we”, or “our”) and its representatives that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to current expectations regarding our business and our future financial condition and results of operations and are often identified by the use of words and phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “will,” “would,” “is likely to,” “is expected to” or “will continue,” or the negative of these terms or other comparable terminology. These forward-looking statements are based upon assumptions we believe are reasonable. Forward-looking statements are based on current information and are subject to risks and uncertainties that could cause our actual results to differ materially from those projected. Certain factors that may cause actual results, performance, liquidity, and achievements to differ materially from those projected are discussed in our Annual Report on Form 10-K for the year ended December 28, 2024 (the “Form 10-K”) and may include, but are not limited to, (a) unexpected changes in any of the following: (1) general economic and business conditions; (2) the competitive setting in which we operate, including advertising or promotional strategies by us or our competitors, as well as changes in consumer demand; (3) interest rates and other terms available to us on our borrowings; (4) supply chain conditions and any related impact on energy and raw materials costs and availability and hedging counter-party risks; (5) relationships with or increased costs related to our employees and third-party service providers; (6) laws and regulations (including environmental and health-related issues and the impacts of tariffs); and (7) accounting standards or tax rates in the markets in which we operate, (b) the loss or financial instability of any significant customer(s), including as a result of product recalls or safety concerns related to our products, (c) changes in consumer behavior, trends and preferences, including health and whole grain trends, and the movement toward less expensive store branded products, (d) the level of success we achieve in developing and introducing new products and entering new markets, (e) our ability to implement new technology and customer requirements as required, (f) our ability to operate existing, and any new, manufacturing lines according to schedule, (g) our ability to implement and achieve our corporate responsibility goals in accordance with regulatory requirements and expectations of stakeholders, suppliers, and customers; (h) our ability to execute our business strategies which may involve, among other things, (1) the ability to realize the intended benefits of completed, planned or contemplated acquisitions, dispositions or joint ventures, such as the acquisition of Simple Mills, (2) the deployment of new systems (e.g., our enterprise resource planning ("ERP") system), distribution channels and technology, and (3) an enhanced organizational structure (e.g., our sales and supply chain reorganization), (i) consolidation within the baking industry and related industries, (j) changes in pricing, customer and consumer reaction to pricing actions (including decreased volumes), and the pricing environment among competitors within the industry, (k) our ability to adjust pricing to offset, or partially offset, inflationary pressure on the cost of our products, including ingredient and packaging costs; (l) disruptions in our direct- store-delivery distribution model, including litigation or an adverse ruling by a court or regulatory or governmental body that could affect the independent contractor classifications of the independent distributor partners, and changes to our direct-store-delivery distribution model in California, (m) increasing legal complexity and legal proceedings that we are or may become subject to, (n) labor shortages and turnover or increases in employee and employee-related costs, (o) the credit, business, and legal risks associated with independent distributor partners and customers, which operate in the highly competitive retail food and foodservice industries, (p) any business disruptions due to political instability, pandemics, armed hostilities, incidents of terrorism, natural disasters, labor strikes or work stoppages, technological breakdowns, product contamination, product recalls or safety concerns related to our products, or the responses to or repercussions from any of these or similar events or conditions and our ability to insure against such events, (q) the failure of our information technology systems to perform adequately, including any interruptions, intrusions, cyber-attacks or security breaches of such systems or risks associated with the implementation of the upgrade of our ERP system; and (r) the potential impact of climate change on the company, including physical and transition risks, availability or restriction of resources, higher regulatory and compliance costs, reputational risks, and availability of capital on attractive terms. The foregoing list of important factors does not include all such factors, nor does it necessarily present them in order of importance. In addition, you should consult other disclosures made by the company (such as in our other filings with the Securities and Exchange Commission (“SEC”) or in company press releases) for other factors that may cause actual results to differ materially from those projected by the company. Refer to Part I, Item 1A., Risk Factors, of the Form 10-K and our subsequent filings with the SEC for additional information regarding factors that could affect the company’s results of operations, financial condition and liquidity. We caution you not to place undue reliance on forward-looking statements, as they speak only as of the date made and are inherently uncertain. The company undertakes no obligation to publicly revise or update such statements, except as required by law. You are advised, however, to consult any further public disclosures by the company (such as in our filings with the SEC or in company press releases) on related subjects.
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• • • •
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• • •
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− − 15% 18% 67% Base Salary % of Total Target Annual Cash Incentive Awards % of Total Target Long-Term Incentive Compensation % of Total 30% 22% 48% Base Salary % of Total Target Annual Cash Incentive Awards % of Total Target Long-Term Incentive Compensation % of Total At Risk At Risk Other Named Executives Chief Executive Officer (Average) 2023 Executive Total Compensation Mix 1
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• • • Away-From-Home • • • • • • • • • •
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$ 2.5 B $ 1.6 B $ 3.3 B $ 1.8 B Branded Retail Sales Other Sales CAGR 5.6% CAGR 2.3%
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(1) Circana Scan Data – Total US Multi Outlet+ w Conv Flowers Custom Database December 29, 2024 (2) 2019-2024
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Source: Flowers Custom Database – Circana Total US Multi Outlet+ w Conv, TTM ended December 29, 2024 • • •
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− − − (1) Circana Scan Data – Total US Multi Outlet+ w Conv Flowers Custom Database December 29, 2024
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− − − (1) Circana Scan Data – Total US Multi Outlet+ w Conv Flowers Custom Database Calendar Year Ending December 29, 2024 (2) Flowers Custom Database – Circana Total US Mulo+ with Conv
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− − − (1) Circana Scan Data – Total US Multi Outlet+ w Conv Flowers Custom Database Calendar Year Ending December 29, 2024 (2) Flowers Custom Database – Circana Total US Mulo+ with Conv
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− − − (1) Circana Scan Data – Total US Multi Outlet+ w Conv Flowers Custom Database Calendar Year Ending December 29, 2024
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− − − − FOR OVER 100 YEARS…NOW MADE SWEETER! (1) Circana Scan Data – Total US Multi Outlet+ w Conv Flowers Custom Database Calendar Year Ending December 29, 2024
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− −
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(1) Earnings before interest, taxes, depreciation & amortization, adjusted for matters affecting comparability. See non-GAAP reconciliations at the end of this slide presentation. • • •
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• Backhaul utilization • Cube optimization • Depot consolidation • Optimize number of bakeries • Limit overtime expense • Transition some routes to four-day delivery • Bakery of the future • Autonomous planning • SKU rationalization • Increase production run times • Quality improvement; site line machines • Stale & scrap reduction • Optimize days of availability • Optimize strategic sourcing strategies • Leverage scale with centralized buying • Direct materials efficiencies to minimize total cost of ownership • Policy and systems enhancements to control spend • Sourcing leadership to manage indirect spend • Staffing optimization • Testing and implementing maintenance and measurement processes • Enhanced hiring procedures
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Source: Flowers Custom Database – Circana Total US Multi Outlet+ w Conv 1. Acquired 2015 2. Acquired 2018
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• • • • Crackers Snack Bars Baking Mixes Cookies Net Sales by Category2024E (1) SPINS, Circana, Nielsens; Total US – Natural Expanded, MULO, Whole Foods Market; Natural Crackers; L52W ending 08/11/2024 (sum of channels) (2) SPINS, Circana, Nielsens; Total US – Natural Expanded, MULO, Whole Foods Market; Natural Cookies; L52W ending 08/11/2024 (sum of channels) (3) SPINS; Total US – Natural Expanded, Snack Bars / Granola Bars/ Clusters; L52W ending 08/11/2024 (4) SPINS; Total US – Natural Expanded, Baking Mixes; L52W ending 08/11/2024 (5) Any reference to sales refers to net sales inclusive of allowances and deductions against gross sales.
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(1) Any reference to sales refers to net sales inclusive of allowances and deductions against gross sales. (2) Earnings before interest, taxes, depreciation & amortization, adjusted for matters affecting comparability. (3) Earnings before interest, taxes, depreciation & amortization, adjusted for matters affecting comparability, as a percentage of net sales. (4) No reconciliation of expected adjusted EBITDA to net income or the expected adjusted EBITDA margin to net income margin is included in this presentation because the company is unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliation would imply a degree of precision that would be confusing or misleading to investors.
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(1) ACV: all commodity volume (2) AIC: average items carried
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• • • • • • • (1) Calculated as (current year period units X change in price per unit) / prior year period net sales $ (2) Calculated as (prior year period price per unit X change in units) / prior year period net sales $ (3) Earnings before interest, taxes, depreciation & amortization (EBITDA), adjusted for matters affecting comparability. See non-GAAP reconciliations at the end of this slide presentation. Earnings are net income. EBITDA and Adjusted EBITDA are reconciled to net income (4) Earnings per share (EPS), adjusted for matters affecting comparability. See non-GAAP reconciliations at the end of this slide presentation. (5) Adjusted for matters affecting comparability.
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(1) Assumes full-year proforma contribution of $258-266M net sales, $39-42M adj. EBITDA, and $(0.09)-(0.05) adj. EPS (2) No reconciliation of the forecasted range for (i) adjusted EBITDA to net income or (ii) adjusted diluted EPS to diluted EPS for the 53-week Fiscal 2025 is included in this presentation because the company is unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliation would imply a degree of precision that would be confusing or misleading to investors. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results. (3) $4-6 million related to ERP upgrade • • • • • • • •
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• • • (1) Cash provided by operating activities minus Capital Expenditures. See non-GAAP reconciliations at the end of this slide presentation. (2) Free cash flow impacted by $23.0 million, $61.3 million, $27.8 million, and $6.0 million of ERP-related capital expenditures in FY’21-24, respectively. $413 $367 $454 $345 $361 $349
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• • • • • $160 $167 $176 $187 $195 $203 $7 $1 $10 $35 $46 $23 $275 FY'19 FY'20 FY'21 FY'22 FY'23 FY'24
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(1) 2020 was a 53-week year (2) Earnings before interest, taxes, depreciation & amortization, adjusted for matters affecting comparability. See non-GAAP reconciliations at the end of this slide presentation. (3) Net debt excludes lease liabilities; net debt equals Total Debt, less cash and cash equivalents. See non-GAAP reconciliations at the end of this slide presentation
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(1) Year-end figures. Debt excludes lease liabilities. Net Debt equals Total Debt, less cash and cash equivalents. See reconciliation of non-GAAP measures at the end of this slide presentation. • • • • • • • •
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Source: Flowers Custom Database – Circana Total US Mulo+ with Conv Due to a change in methodology and sources, data provided previously by Circana may not be comparable to current data
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Source: Flowers internal data Volume data excludes impact of acquisitions during first year after acquisition date • •
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73.7 76.3 77.3 76.8 75.3 74.8 26.2 23.6 22.7 23.1 24.6 25.1 15.0 17.0 19.0 21.0 23.0 25.0 27.0 70.0 71.0 72.0 73.0 74.0 75.0 76.0 77.0 78.0 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Branded Dollar Share Store Branded Dollar Share Source: Flowers Custom Database – Circana Total US Mulo+ with Conv Due to a change in methodology and sources, data provided previously by Circana may not be comparable to current data
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Source: Flowers Custom Database – Circana Total US Mulo+ with Conv Due to a change in methodology and sources, data provided previously by Circana may not be comparable to current data
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Source: Flowers Custom Database – Circana Total US Mulo+ with Conv Due to a change in methodology and sources, data provided previously by Circana may not be comparable to current data
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Source: Flowers Custom Database – Circana Total US Mulo+ with Conv Due to a change in methodology and sources, data provided previously by Circana may not be comparable to current data
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Source: Flowers Custom Database – Circana Total US Mulo+ with Conv Due to a change in methodology and sources, data provided previously by Circana may not be comparable to current data
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Source: Flowers Custom Database – Circana Total US Mulo+ with Conv Due to a change in methodology and sources, data provided previously by Circana may not be comparable to current data
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NM – Not meaningful. Certain amounts may not add due to rounding. For the 52-Week Period Ended For the 52-Week Period Ended December 28, 2024 December 30, 2023 Net income per diluted common share 1.17$ 0.58$ Business process improvement costs 0.02 0.08 Plant closure costs and impairment of assets 0.04 0.03 Restructuring charges 0.03 0.02 Restructuring-related implementation costs 0.01 — Acquisition-related costs 0.01 0.01 Legal settlements and related costs 0.01 0.48 Pension plan settlement loss NM — Adjusted net income per diluted common share 1.28$ 1.20$
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For the 52-Week Period Ended For the 52-Week Period Ended December 28, 2024 December 30, 2023 Net income 248,116$ 123,416$ Income tax expense 80,826 33,691 Interest expense, net 19,623 16,032 Depreciation and amortization 159,210 151,709 EBITDA 507,775 324,848 Other pension benefit (273) (269) Business process improvement costs (recoveries) 4,529 21,521 Plant closure costs and impairment of assets 10,310 7,298 Restructuring charges 7,403 7,099 Restructuring-related implementation costs 2,979 — Acquisition-related costs 2,008 3,712 Legal settlements and related costs 3,800 137,529 Adjusted EBITDA 538,531$ 501,738$ Net sales 5,103,487$ 5,090,830$ Adjusted EBITDA margin 10.6% 9.9%
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For the 52-Week Period Ended For the 52-Week Period Ended December 28, 2024 December 30, 2023 Net income 248,116$ 123,416$ Business process improvement costs (recoveries) 3,397 16,141 Plant closure costs and impairment of assets 7,732 5,473 Restructuring charges 5,552 5,324 Restructuring-related implementation costs 2,234 — Acquisition-related costs 1,506 2,784 Legal settlements and related costs 2,850 103,147 Pension plan settlement loss 181 — Adjusted net income 271,568$ 256,285$
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Fiscal 2016-2018 were restated to include other pension cost/benefit in the reconciliation. For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended December 30, 2023 December 31, 2022 January 1, 2022 January 2, 2021 December 28, 2019 December 29, 2018 December 30, 2017 December 31, 2016 Net Income $ 123,416 $ 228,394 $ 206,187 $ 152,318 $ 164,538 $ 157,160 $ 150,120 $ 163,776 Income tax expense (benefit) 33,691 70,317 64,585 48,393 47,545 40,001 (827) 85,761 Interest expense, net 16,032 5,277 8,001 12,094 11,097 7,931 13,619 14,353 Loss on extinguishment of debt - - 16,149 - - - - - Depreciation and amortization 151,709 141,957 136,559 141,384 144,228 144,124 146,719 140,869 EBITDA 324,848 445,945 431,481 354,189 367,408 349,216 309,631 404,759 Other pension (benefit) cost (269) (773) (405) (74) 2,248 (529) (6,558) (5,638) Pension plan settlement and curtailment loss - - 403 108,757 - 7,781 4,649 6,646 Gain on divestiture - - - - - - (28,875) - Gain on sale, severance costs, and lease termination (gain) loss - (4,390) (2,644) (4,066) - - (1,279) - Acquisition-related costs 3,712 12,518 - - 22 4,476 - - FASTER Act and loss (recovery) on inferior ingredients - 236 944 107 (37) 3,212 - - Project Centennial consulting costs - - - 15,548 784 9,723 37,306 6,324 ERP road mapping consulting costs - - - 4,363 - - - - Restructuring and related impairment charges 7,099 - - 35,483 23,524 9,767 104,130 - Multi-employer pension plan withdrawal costs - - 3,300 - - 2,322 18,268 - Plant closure costs and impairment of assets 7,298 7,825 - - - 3,516 - 24,877 Legal settlements and related costs 137,529 7,500 23,089 7,250 28,014 21,452 5,978 10,500 Other pension plan termination costs - - - 133 - - - - Executive retirement agreement - - - - 763 - - - Business process improvement consulting costs 21,521 33,169 31,293 - - - - - Acquisition consideration agreement - - 3,400 - - - - - Manufacturing facility closure costs and acquisition costs - - - - - - - - Adjusted EBITDA $ 501,738 $ 502,030 $ 490,861 $ 521,690 $ 422,726 $ 410,936 $ 443,250 $ 447,468
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Fiscal years prior to FY16 do not present restated amounts for other pension costs. For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended January 2, 2016 January 3, 2015 December 28, 2013 December 29, 2012 December 31, 2011 Net Income 189,191$ 175,739$ 230,894$ 136,121$ 123,428$ Income tax expense 103,840 92,315 91,479 72,651 68,538 Interest expense (income), net 4,848 7,341 12,860 9,739 (2,940) Depreciation and amortization 132,175 128,961 118,491 102,690 94,638 EBITDA 430,054 404,356 453,724 321,201 283,664 Other pension (benefit) (7,151) Asset impairment 3,771 10,308 - - - Pension settlement loss 15,387 - - - Manufacturing facility closure costs and acquisition costs 6,923 - - 9,560 10,654 Tortilla facility divestiture gain, net of closure costs (1,007) - - - Bargain purchase gain - (50,071) - - Acquisition costs, net of Beefsteak break-up fee - 17,776 - - Adjusted EBITDA 433,597$ 429,044$ 421,429$ 330,761$ 294,318$
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Fiscal years prior to FY16 do not present restated amounts for other pension costs. For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended January 1, 2011 January 2, 2010 January 3, 2009 December 29, 2007 December 30, 2006 Net Income attributable to Flowers Foods, Inc. 137,047$ 130,297$ 119,233$ 94,615$ 81,043$ (Income)/loss from discontinued operations, net of tax - - - - (6,731) Cumulative effect of a change in accounting principle - - - - 568 Net income attributable to noncontrolling interest - 3,415 3,074 3,500 3,255 Income tax expense 73,333 74,047 67,744 54,970 45,304 Interest income, net (4,518) (1,426) (7,349) (8,404) (4,946) Depreciation and amortization 85,118 80,928 73,312 66,094 64,250 Adjusted EBITDA 290,980 287,261 256,014 210,775 182,743
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Adj EBITDA Sales Adj EBITDA Margin FY'24 5,103,487 538,531 10.6% FY'23 5,090,830 501,738 9.9% FY'22 4,805,822 502,030 10.4% FY'21 4,330,767 490,861 11.3% FY'20 4,387,991 521,690 11.9% FY'19 4,123,974 422,726 10.3% FY'18 3,951,852 410,936 10.4% FY'17 3,920,733 443,250 11.3% FY'16 3,926,885 447,468 11.4% FY'15 3,778,505 433,597 11.5% FY'14 3,748,973 429,044 11.4% FY'13 3,732,616 421,429 11.3% FY'12 3,031,125 330,761 10.9% FY'11 2,759,367 294,318 10.7% FY'10 2,573,769 290,980 11.3% FY'09 2,600,849 287,261 11.0% FY'08 2,414,892 256,014 10.6% FY'07 2,036,674 210,775 10.3% FY'06 1,888,654 182,743 9.7%
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As of December 28, 2024 Current maturities of long-term debt -$ Long-term debt 1,021,644 Total debt 1,021,644 Less: Cash and cash equivalents 5,005 Net Debt 1,016,639$ Adjusted EBITDA for the Trailing Twelve Months Ended December 28, 2024 538,531$ Ratio of Net Debt to Trailing Twelve Month Adjusted EBITDA 1.9
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December 30, 2023 December 31, 2022 January 1, 2022 January 2, 2021 December 28, 2019 December 29, 2018 December 30, 2017 December 31, 2016 January 2, 2016 Total debt* 1,048,144$ 891,842$ 890,609$ 960,103$ 866,508$ 979,594$ 805,086$ 927,730$ 988,389$ Less: Cash and cash equivalents 22,527 165,134 185,871 307,476 11,044 25,306 5,129 6,410 14,378 Net debt 1,025,617 726,708 704,738 652,627 855,464 954,288 799,957 921,320 974,011 Adjusted EBITDA 501,738 502,030 490,861 521,690 422,726 410,936 443,250 447,468 433,597 Ratio of Net Debt to Adjusted EBITDA 2.0 1.4 1.4 1.3 2.0 2.3 1.8 2.1 2.2 * Excludes lease liabilities
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* Operating cash flow minus capital expenditures. Time Period Cash Provided by Operating Activities Purchase of Plant, Property and Equipment Free Cash Flow FY'24 412,664 132,088 280,576 FY'23 349,353 129,078 220,275 FY'22 360,889 169,071 191,818 FY'21 344,610 135,964 208,646 FY'20 454,464 97,929 356,535 FY'19 366,952 103,685 263,267
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NM – Not meaningful. Certain amounts may not add due to rounding. For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended For the Fiscal Year Ended December 28, 2024 December 30, 2023 December 31, 2022 January 1, 2022 January 2, 2021 December 28, 2019 Net income per diluted common share 1.17$ 0.58$ 1.07$ 0.97$ 0.72$ 0.78$ Restructuring and related impairment charges 0.03 0.02 - - 0.13 0.08 FASTER Act, net of (recovery) loss on inferior ingredients - - - - - - Project Centennial consulting costs - - - - 0.05 - ERP road mapping consulting costs - - - - 0.02 - Multi-employer pension plan withdrawal costs - - - 0.01 - - Plant closure costs and impairment of assets 0.04 0.03 0.03 - - - Pension plan settlement and curtailment loss NM - - - 0.38 - Legal settlements and related costs 0.01 - 0.03 0.08 0.03 0.10 Gain on sale, severance costs, and lease termination (gain) loss - 0.48 (0.02) (0.01) (0.01) - Loss on extinguishment of debt - - - 0.06 - - Acquisition-related costs 0.01 0.01 0.04 - - - Business process improvement costs 0.02 0.08 0.12 0.11 - - Acquisition consideration adjustment - - - 0.01 - - Restructuring-related implementation costs 0.01 - - - - - Adjusted net income per diluted common share 1.28$ 1.20$ 1.27$ 1.24$ 1.31$ 0.96$