Shares of Whole Earth Brands Inc. (FREE, Financial) dropped by 12% on Monday morning after executives reported an unexpected quarterly loss.
Management released numbers showing a loss for fourth-quarter 2021 of $393,000, or 1 cent per share, versus a loss of $5.1 million, or 13 cents a share, for 2020’s fourth quarter. The result came as a surprise to analysts polled by FactSet, who said they were predicting earnings of $8.7 million, or 22 cents a share.
In addition, Whole Earth’s management said they were looking forward to $530 million to $545 million in revenue for 2022, while Wall Street is projecting revenue to reach $547.2 million.
The global food company enabling healthier lifestyles through premium plant-based sweeteners, flavor enhancers and other foods on Monday announced its financial results for the fourth quarter and full year ended Dec. 31.
For all of 2021, executives reported consolidated revenue growth of 79%, including strategic acquisitions, according to a release. The Branded CPG segment's proforma organic constant currency revenue growth was approximately 12% on a two-year stacked basis versus 2019 and approximately 1% compared to 2020, while the Flavors & Ingredients segment's revenue growth was approximately 7% compared to 2020. Operating income was $22.8 million and adjusted Ebitda $82.2 million, an increase of about 51%.
For the fourth quarter, the Chicago-based company reported consolidated revenue growth of 75%, including strategic acquisitions. The Branded CPG segment's proforma organic constant currency revenue growth was approximately 9% on a two-year stacked basis versus 2019 and a decrease of approximately 4% compared to 2020. Revenue for the Flavors & Ingredients segment grew approximately 21% compared to 2020. Operating income was $6.4 million and adjusted Ebitda was $20.6 million, an increase of approximately 47%.
Consolidated product revenue was $132.7 million, an increase of 75.3% on a reported basis, as compared to the prior-year quarter. On a proforma basis, organic constant currency product revenue was flat.
The reported gross profit was $38.7 million, compared to $25.2 million in the year-ago quarter. The increase was largely driven by contributions from the Swerve and Wholesome acquisitions and a $5.9 million favorable change in non-cash purchase accounting adjustments related to inventory revaluations, partially offset by $6.2 million of costs associated with the company’s supply chain reinvention project.
“In the 18 months since our business combination, we have significantly grown revenue and adjusted Ebitda, and transformed the business through two successful acquisitions, all while managing through a complex environment," Executive Chairman Irwin D. Simon said. "Looking ahead to 2022, we are well positioned with our diversified and resilient global platform that has a market presence in approximately 100 countries and is focused on driving profitable growth, establishing formal environmental, social and governance practices, and creating value for shareholders.”
CEO Albert Manzone noted in a statement that his company has made “great strides” in the past year to expand its reach and drive distribution gains by leveraging its broad product assortment and innovations across all geographies to service a global base of diverse customers utilizing all sales channels.
“The power of our portfolio of brands, geographies, channels and segments allowed us to deliver revenue and adjusted Ebitda within our guidance, despite headwinds from product supply and rising supply chain costs,” he said..
Heading into 2022, Manzone added, the company expects its recent pricing actions and productivity improvements will offset current inflationary pressures.
