Post Holdings To Close Dymatize Manufacturing Facility

(RTTNews) - Post Holdings, Inc. (POST), a consumer packaged goods holding company, announced it will close its Dymatize manufacturing facility in Farmers Branch, Texas and permanently transfer production to third party facilities under co-manufacturing agreements. The decision will impact approximately 115 employees. Post has committed to providing severance and transition assistance to all affected employees.

As a result of plant operational and quality issues, the manufacturing facility has ceased production, resulting in a write-off of approximately $9.2 million of unsalable inventory. Final closure of the facility is expected to be completed by December 1, 2015, and through Dymatize's strong relationships with certain co-manufacturers, production of the Dymatize products by third parties has begun.

In connection with the closure, Post expects to incur pretax charges of approximately $11 million to $16 million, which will be treated as adjustments for purposes of calculating Adjusted EBITDA and other non-GAAP measures. These charges include approximately $4 million to $6 million for severance, retention and other plant closure costs and a reserve of approximately $7 million to $10 million for usable inventory rendered less than fully recoverable by the decision to close the manufacturing facility. These charges are expected to be incurred primarily in Post's fourth quarter of fiscal 2015, of which approximately $2.5 million to $3.5 million will be incurred in fiscal 2016.

The company also affirmed its fiscal 2015 Adjusted EBITDA guidance to be between $635 million and $650 million, which includes the impact of the write-off of approximately $9.2 million of unsalable inventory, which will not be treated as an adjustment for the purpose of calculating Adjusted EBITDA and other non-GAAP measures.