TreeHouse has strong Q2 revenue growth; leverage below covenant ratio

By Devika Patel

Knoxville, Tenn., Aug. 8 – TreeHouse Foods, Inc. has plenty of liquidity and leverage a full turn below its covenant ratio after strong revenue growth last quarter.

“On the balance sheet, our revolver remains largely undrawn and we have liquidity of close to $1 billion,” interim chief financial officer Patrick M. O’Donnell said on the company’s second quarter ended June 30 earnings conference call on Monday.

“We finished the second quarter with debt covenant leverage of 4.5x, below the amended higher covenant ratio of 5.5x,” he said.

Revenues were up significantly, largely due to pricing. The company plans to take further pricing actions to offset inflation later this quarter.

“We posted strong revenue growth, up 19.4% to $1.2 billion,” O’Donnell said.

“Pricing drove 17.7% of the growth.

“We are taking further pricing actions.

“That pricing will be reflected late in the third quarter, so as we get into the fourth quarter and our seasonal peak, we anticipate pricing to more fully offset inflation.

“Importantly, over the full cycle, we expect to be able to recover the entirety of the inflationary headwinds,” he said.

Cash and cash equivalents were $199.1 million as of June 30, 2022, compared to $308.6 million as of Dec. 31, 2021.

Long-term debt was $1,883,500,000 as of June 30, 2022, compared to $1,890,700,000 as of Dec. 31, 2021.

TreeHouse is an Oak Brook, Ill.-based manufacturer and distributor of private label packaged foods and beverages.

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