Vending

Hostess Brands posts Q4 2020 revenue and earnings gain

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February 24, 2021

Hostess Brands Inc. net revenue increased 18.1% ($39.3 million) from $216.7 million in Q4 2019 to $256 million for the fourth quarter ending Dec. 31, 2020, driven mainly by acquisition of Voortman Cookies Ltd. which contributed $28.7 million, according to an earnings release.

Net income rose from $23.6 million in Q4 2019 to $24.4 million in Q4 2020.

Adjusted net income rose 25.9%, $5.9 million, to $28.7 million, rising from 16 cents EPS in 2019 to 21 cents in 2020, mainly due to accretion from Hostess and Voortman sales.

The $256 million in Q4 2020 revenue surpassed analyst expectations of $251.83 million and the 21 cents EPS surpassed analyst estimates by one cent, according to StreetInsider.com.

Shares traded at $15.14 Wednesday against a 52-week range of $9.32 to $16.18.

Sweet baked goods sales during the fourth quarter increased 4.9% ($10.6 million) driven by higher volume of core products partially offset by lower sales of private label and non-Hostess branded products.

For fiscal 2020, net revenue increased 15.7% from $907.6 million in 2019 to $1.01 billion, and adjusted net revenue increased 16.4%, while net income fell from $77.5 million to $68.4 million.

Basic earnings per Class A share fell from 57 cents in 2019 to 52 cents in 2020 while diluted earnings per share fell from 55 cents in 2019 to 51 cents in 2020.

Assuming there are no significant COVID-19 disruptions, the company expects revenue for 2021 to rise 3% to 4.5%, adjusted EBITDA to rise 6.3% to 10.4% ($255 million to $265 million) and adjusted EPS to rise 6.7% to 13.3% (80 cents to 85 cents).

"Hostess achieved our 12th consecutive quarter of net revenue growth with double-digit revenue and EBITDA growth in the fourth quarter," Andy Callahan, Hostess Brands Inc. president and CEO, said in the press release. "As we turn to fiscal year 2021, we are confident we will continue our profitable growth momentum and shareholder value creation over the long term behind our strong execution, high penetration in growing consumer segments, expansion of Voortman and ability to deleverage with our strong cash flow."