Welcome to Post Holdings First Quarter 2015 Earnings Conference Call and Webcast. Hosting the call today from Post are Rob Vitale, President and Chief Financial Officer; and Jeff Zadoks, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 12 p.m. Eastern Time. The dial-in number is 800-585-8367, and the passcode is 75750155. At this time, all participants have been placed in a listen-only mode. It is now my pleasure to turn the floor over to Brad Harper, Investor Relations of Post Holdings, for introduction. Sir, you may begin.

Thank you, and good morning. Welcome to the Post Holdings conference call where we will discuss results for the first quarter of fiscal 2015. With me today are Rob Vitale, our President and CEO; and Jeff Zadoks, our CFO. Rob and Jeff will begin the call with prepared remarks. And afterwards, we will be available for a brief question-and-answer session. The press release that supports these remarks is posted on our website at www.postholdings.com in the investor relations section and in the SEC filing section. In addition, the release is available on our SEC filings on the SEC’s website. Before we continue, I would like to remind you that this call will contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties, which should be carefully considered by investors, as actual results could differ materially from these forward-looking statements. For more information, please visit the SEC Filings page in the Investor Relations section of our website. These statements speak only as of the date of this call, and management undertakes no obligation to update or revise these statements. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. As a reminder, this call is being recorded for audio replay. And finally, this call will discuss certain non-GAAP measures. For a reconciliation of non-GAAP measures to the nearest GAAP measure, see our press release issued yesterday and posted on our website. With that, I will turn the call over to Rob.

Thanks Brad. Good morning and thank you for joining us. We last spoke with you not quite two weeks ago to share with you the details of our acquisition of MOM Brands, and we appreciate your support for the transaction. Our optimism about this transaction is quite high and we will provide more information as it becomes available. While we already previewed the headlines we are pleased to share with you today our first quarter results. First quarter performance came in higher than anticipated as Post Foods and Michael Foods outperformed our EBITDA expectations. Consolidated revenue was approximately $1.1 billion and adjusted EBITDA was $127.6 million. Jeff will go into more detail later in the call. Moving to operational highlights, I will begin with consumer brands. Despite a decline in shipments Post Foods outperformed our expectations in the first quarter as a result of incremental cost management. Our shipment weakness stands in contrast to strong Nielsen data which shows a 2.1% dollar consumption increase over last year. We believe the divergence between shipments and consumptions results from a retail inventory decline. Our retail customers built inventory in our prior year fourth quarter with less immediate consumption. This pressured shipments this quarter, but we believe has now sold through, as shipments strengthened in December. Our cost management initiatives to Post Foods continue to track to plan with additional opportunities being sought and implemented. As we all know the RTE cereal category has declined in volumes and in dollars in recent years. This quarter was no exception, but there are signs that the rate of decline is slowing. Each month show sequential improvement with respect to category dollars and packages. Household were bit more volatile as package size mix fluctuated throughout the quarter. We see improvements in the rate of decline in…

Thanks, Rob. Good morning. I will start with our consolidated results, provide detail around the segments and then turn to our 2015 outlook. For the first quarter consolidated net sales were approximately $1.1 billion and gross profit was $249.1 million. SG&A expense was $166 million or 15.5% of net sales. We incurred one-time SG&A expenses of $3.9 million in the first quarter related to our previously announced business reorganization. Additionally SG&A expenses included $5 million of acquisition related transaction expenses. Adjusted EBITDA was $127.6 million up $71.7 million compared to the prior year. As a result of continuing declines and long-term interest rates we recognize a non-cash mark-to-market loss on our forward starting interest rate swaps of $54.6 million in the quarter. We do not elect hedge accounting and as a result changes in market value are reflected in our results. Recall that we have two series of forward starting swaps. We have $869.5 million notional amount of swaps with a June 2016 forward start which hedge our floating rate term debt incurred in connection with the Michael acquisition. We also have $750 million notional amount of swaps which primarily hedge the debt we anticipate incurring in connection with the MOM Brands transaction. These swaps have a July 2018 forward start. We seek to finance long-term assets with long-term capital; the forward starting swaps allow us to benefit in the near-term from lower short-term interest rates while fixing our interest rates for the long-term. Pre-tax loss was $73.8 million and income tax expense was $23.5 million. Importantly our cash taxes will differ meaningfully from our GAAP income tax expense primarily because of nondeductible depreciation and amortization expense and in t he current year from non-cash mark-to-market losses on interest rate swaps. On a consolidated basis, we currently estimate that nearly…

[Operator Instructions] Your first question comes from the line of Andrew Lazar of Barclays.

Good morning everybody.

Hey, good morning Andrew.

Rob, I wanted to explore your comments a bit more regarding the RTE cereal category rate of decline that you talked about slowing a bit, meaning the rate of decline is slowing a bit. I understand the lapping of the SNAP funding and the spending by some of the leadership brands in the space. I wanted to hear a bit more about your comment on the promotional environment. I think you mentioned the depth and frequency of promotional spend and I just want to make sure I understand that and then I got a follow-up.

Sure. So we saw some reason to be encouraged in the quarter as each month the rate of decline in dollars ebbed, as well as package purchases. The total pound sold were a bit more volatile, so it looks like people were moving around pack sizes. Going into the data a bit deeper, it looks likes between the two leaders there were some divergence in terms of average net pricing movement as it appeared that mills took some deeper promotions less frequently which actually resulted in an increase in their average pricing on the quarter and we think had some positive effect on the overall sales in the quarter.

Okay, and then if you had to estimate where you thought RTE category performance might be for your fiscal year whether that’s growth or more likely some form of decline, where would you peg that and then do you worry about broader industry input cost deflation enabling others to sort of ramp up promotions to drive volume which is historically not worked out very well.

Well, in reverse order, certainly is something that we are weary of and I think as you point out it hasn’t worked well, so perhaps some history will be remembered this time around. Certainly there hasn’t been price movement in quite a while, so maybe we will be in a more benign environment as we go forward, but it’s something that we have to watch quite closely. In terms of your first question about predicting the category. As we said on the last call, our plan for the fiscal year is based on not a internal prediction, but on the most recent 52 week data, which at the time we did the plan was down 4%. Everything that we see now suggest that was a cautious call and that we will be better than down 4%. We are not going to try to predict what that is, but rather than be in the business of predicting the category use the data to extend our planning and build around that. So I think the best thing I can tell you is that versus our expectation built into our plan there is some reasons to be cautiously optimistic.

Thanks very much.

Your next question comes from the line of John Baumgartner of Wells Fargo.

Good morning, thanks for the question. Rob, just in terms of the Nutrition business you mentioned the reinvestment of some those cost benefits into additional marketing and promo over at Premier. Does that include extra funding into the FDM channel? And I guess how much of a push into FDM is in your plan for fiscal 2015?

It’s pretty modest in fiscal 2015, but there is some, it’s a terrific club brand, the product is a great product and it’s just been on fire in the club channel, but some of the investment does anticipate extensions into FDM, very modest impact in FY 2015, more impact in FY 2016.

And then maybe just building on Andrew’s questions, what’s the past history here when you see protein cost come down as they appear to be declining I mean do you tend to see more price competition in the category overall?

With the strength of the category growing as it has been broadly, there has been less history of that and then there has been in the cereals. So we are optimistic that there will be pretty good discipline in the category as MPC comes down. There is a lot of tailwind to the category right now.

Okay, and then just one last follow-up, in terms of the EBITDA contribution from PowerBar in fiscal 2015, do you have a sense for where that may go?

It’s negligible and I am sorry, did you say 2015 or 2016?

2015.

’15, yeah, it’s negligible in 2015, it’s a brand that needs to be revitalized, we have investments to make in product development, we have investments to make in rebranding. So we by design are taking the EBITDA down to negligible amount in FY 2015 in order to put it back on our growth trajectory.

And then the run rate is still about, what, $10 million, $12 million there normalized?

Exactly.

Thanks, Rob.

You are welcome.

Your next question comes from the line of Chris Growe of Stifel.

Hi, good morning guys.

Good morning, Chris.

Hi, just a few questions if I could a bit of a follow-on to Andrew’s question about the pricing in cereal. I am just curious how much is there a larger mix factor due to bags growing for example versus promotional spending for Post, did you say that or could you give us some color on that?

There certainly is for Post. We have continued the trend that we’ve seen of our sales moving more towards larger pack sizes and having a decline in the average price per ounce. There was a bit more variability in the category in the quarter as it looks like there was more mixed performance in terms of movements within pack sizes and pricing movements from company-to-company.

And so of that 3.5% of which pricing was down is half that coming from say a mix factor and half from promotion? Can you say that?

I’m going to answer that less precisely. A significant portion of it comes from pack sizes, but also a meaningful portion comes from - we had [NERF] [ph] in the quarter, we had incremental [slotting] [ph] fees that hit the quarter and resulted in a reduction in average pricing, but the biggest contributor to the decline is an ongoing movement to larger pack sizes.

Okay, and then also just related to that. I just want to make sure I’m clear on the inventory reductions that happened at retail, do you think those are complete and maybe related to that you also have been holding a higher level of cereal inventory, is that worked down, is that at a good level today?

Again in reverse order, yes, it’s at a good level today and we do believe the retail inventory has worked back to a normal level, we have good data for the last eight weeks of shipments and it certainly looks like it’s a return to normalization.

Okay, if I could just squeeze in one more in relation to Dymatize and how the business in Europe is performing, is that’s one where you are hoping to kind of get back into sort of selling in that market, is that – should this [indiscernible] your are expecting.

It has, it’s gone nicely, the sales of Dymatize have held up surprisingly well throughout the whole supply chain issues that we’ve been encountering. So the European sales have come back nicely, we did have some weakness in private label this quarter. There are a couple of common/private label customers that had pulled back some skews, but the business in aggregate had a 2% decline in shipments quarter-over-quarter and again given the supply chain challenges that we’ve had that’s a pretty optimistic position or pretty encouraging position.

Okay great. Thanks for your time.

You are welcome.

Your next question comes from the line of Bill Chappell of SunTrust.

Yes, good morning.

Hi Bill.

First I guess a nice investment two weeks ago. On MOM Brands, if I was looking at the 52-week data, it looks like sales were actually down 3%, 4%, so I just did want to kind of as we are looking forward I thought bags are growing, value is growing. So just trying to understand if there were some offsets as we look forward.

A couple of comments, first of all bags are growing and you really have to look at the Post bags and the Malt-O-Meal bags is interacting with each other quite highly. So if you look at the aggregate, the bag business has growing nicely. With respect to the aggregate sales at MOM, the Neilson data does suggest a decline, but they have done a very nice job of taking some of the capacity that was used for bags until we entered the bag business at Post and moving it into private label, they did a very impressive job of cost reduction. So that both their sales and EBITDA increased in 2014 despite the Neilson data.

Okay that helps. And then on Dymatize, I think I had heard somewhere that maybe you had talk on your remarks that you’ve seen a progressive improvement on fill rates. Am I right in saying fill rates of double for maybe the 40s to the 90s. Is that sound right?

That is correct.

Okay and that’s as we are going into this year were in the 90% fill rates.

Yes.

Okay and the Michaels and Dakota Growers, just trying to look at I mean you are not giving per se guidance on topline, but trying to understand with the comps on eggs and I know you have kind of pricing movements and then also the price increases you are taking in pasta I mean should that business see growth this year on the topline I know that’s not as much of a focus it is on the margin.

Sure, Michael will certainly see growth on the topline. In the quarter we did see some decline in the rate of growth, simply because we took some price action to manage some capacity constrains and move up the margin curve. So that the demand remains very strong for the underlying business, we are dealing with some of the capacity limitations we have right now through capital expenditures and bringing on additional green base supply. With respect to Dymatize we will certainly see modest volume growth and meaningful sales growth as we cycle over the weakness last year, but good portion of the sales growth is commodity price pass-through it will be low single-digit volume growth.

For pasta, I am sorry.

Yes, correct.

And just last one on Dakota, so are you picking up new customers there that was part of the issue when you first bought…

Yes, the volume, the customers that we’ve referred to previously came back online and we have been successful in adding additional new customers.

Great, thanks so much.

You’re welcome.

Your next question comes from the line of Jason English of Goldman Sachs.

Good morning, folks.

Hi, Jason.

Thanks for the question. I guess its encouraging to here that some of the issues in cereal are likely be transitory I would like to a better sense of just how large the magnitude was and whether or not we should be on the watch out for a bit of an ugly decline in the fourth quarter as you comp that retail inventory build in cereal.

So I don’t want to go on record as having said that the challenges or transitory in cereal, I think that the there are some reasons to be cautiously optimistic, but it is that’s a position where we are not calling the end of the decline just yet so I want to caution getting too optimistic on that right now. In terms of the fourth quarter we would have some more challenging comps as we enter the fourth quarter of fiscal 2015 simply because there was some timing pull forward into fiscal 2014 in October of calendar 2014, but that’s baked into our guidance and all of our forecasts.

Any estimate of the magnitude just to make sure we baking into our own models.

It’s very modest I mean it’s…

Really hard to quantify.

Yes, I wouldn’t be comfortable given a precise number, but it’s - when the aggregate is quiet modest.

Okay, and then I want to turn my attention on Michael Foods, you mentioned some volume wins, some contract wins. How much of this would you attribute to your pricing advantage given that you are primarily a fee based pricing model versus some of your competitors are more of a egg based pricing model and the massive disconnect we have between feedstock in the egg markets right now.

Well, I think it’s a more holistic competitive dynamic in that. I think that Michael is a terrific service provider, they have terrific R&D capacity, they have a cost advantage, it’s an impressive competitive set from top to bottom. So I don’t think it’s appropriate to limited to anyone variable. I think you have to look at the start.

And I think last quarter margins were a little bit pressured in Michael because you had to dip into the spot markets to buy eggs at alleviative prices to meet demand. You mentioned efforts to try to normalize and get bounce back in place or have you achieved that, yet?

We were much closer to balance this quarter than last quarter, there is still a imbalance as we bring on additional supply, but it was much closer than last quarter and we accessed the spot market less and the spot market was lower.

Okay that’s encouraging and last question then I’ll pass it on. In this one a little more strategic in nature, reading through our annual report that was interesting how you framed Michael, the combination with Dakota attached to your thesis that Michael’s could be more of a multi line food service provider, than what it is today is primarily an egg provider. Can you elaborate more on your thoughts process there and how that strategic direction may influence your M&A path on a go forward?

Sure. It’s a great question. We talked a lot about this in the road show calls. The business at Michael we look at in two manners from a horizontical and vertical perspective, horizontally across the food service and refrigerator retail distribution opportunities that there are very muscular sales force in management systems provide. So there is an opportunity to expand horizontally into multiple products, but there is also a vertical opportunity to show up each of their product categories. And I would characterize it was not just a very strong egg provider which they certainly are, but they also have a very attractive refrigerator potato business which has its own opportunities ahead of it. So we look at it from both broader food service and deeper product offering in specifically eggs and potatoes.

Got it. Good stuff. Thanks guys.

Thank you.

Your next question comes from the line of Cornell Burnette of Citi.

Good morning.

Good morning.

Thanks for the questions, just a couple here. I know you recently sit down Modesto, California cereal plant and I was wondering did you see the need for further capacity reductions within the RTE cereal category, can you tell maybe how does the recent MOM acquisition plans to that?

Well, we think the capacity that they remains excess capacity within the overall RTE category simply by virtue of the declines that have occurred in the recent years. We are looking at all aspects of the MOM Post combination, we talked in terms of there being four buckets around, capacity rationalization, transportation, warehousing, G&A sales force. So we are looking at capacity in every area as we develop plans around the combination of these two businesses.

Okay and when you talk about the full-year outlook and the expected ramps in EBITDA over the course of the year one of the things that you call out is declining commodities? Can you just talk about what areas of the portfolios should benefit the most from this and in particular which commodity is just spending out?

Well, by virtue of our six months forward purchase cycle declines in corn and spring we have not hit the P&L yet, so we will see some of the benefit of that in the later half of the year, we will start to see some benefit at the energy declines in the later half of the year, we will start to see the benefit of the milk protein concentrates. So all these are commodities that are already purchased in an inventory or committed to be in inventory at prices that have not been reflected in our operating results yet. So those are the primary and dairy within the Michael business or the primary commodities that we see cost reductions in falling through the second half P&L.

So it sounds like just given you know the nature of your so fourth, this is a pretty good line of sight of visibility of just seeing this happen in the back half?

There is and there are commodities that are inflationary as well, so the estimates that we have given include the net effect of those.

Okay, and then the last one which is to be going to PowerBar in your assessment what’s kind of been the biggest driver of some of the weakness that’s occurred at the brand over the past several years and then once this in-house what kind of things do you have install maybe to revitalize the brand over time?

The brand hasn’t had much tension to the actual product form in recent years as the whole category has changed, it has stayed mostly a slab product with limited innovation, we need to around the brand, the brand has terrific equities and we think can be extended beyond the bar into different forms like powders and shakes, so we think it needs to be proliferated, we think the marketing message needs to be refreshed, obviously it was a very small brand within the Nestle ownership and Nestle portfolio and we think it simply needs more attention and more focus.

Okay, thanks a lot for the questions.

You are welcome.

Your next question comes from the line of Brian Hunt of Wells Fargo.

Thanks for your time. I was wondering as your acquisition strategy continues, if you can explore some of the synergies that you have attained so far between Michaels, you talked about originally $10 million for the synergies, it sounds like there were some sales synergies as you put Dunkin - I mean excuse me Dakota and Michaels together. Again I was wondering if you could just touch on some of those so we can get a greater level of confidence in what you are trying to execute on the acquisition strategy.

Sure, but I think you have to frame out acquisition timeline in the context of spending really 18-months to two years developing platforms with a limited focus on synergies. So step one developing access and exposure to growing categories and then step two what you have seen recently which is filling those platforms in with synergistic acquisitions. So the first acquisition that I would characterize as a highly synergistic opportunities was the MOM Brands transaction. Directly to your question about Michael, there are in the context of a $2.5 billion acquisition, $10 million of synergies is obviously very small, but the source of those synergies was things like combining insurance programs, combing benefits, combining payroll. So some very soft non-operating areas that has the chance to benefit from some combined scale across the platform. The revenue synergies were not anticipated in that $10 million, so we think that they are meaningful as we see opportunities for the Michael sales force particularly in food service to impact the Dakota business, but that was not included in the $10 million. So I think to answer your question specifically in terms of credibility around delivering synergies, MOM is the first opportunity to really do that and we feel very optimistic in the ability to deliver what we’ve announced.

And then going forward, you said you all will continue to be opportunistic, it sounds like should we all assume anything that is announced will be tuck-ins to the current silos and be highly synergistic.

We're an organization that is opportunistic kind of at our DNA level, so where those are the acquisitions that we are most interested in pursuing right now, because we think that from a rapidity of deleveraging they make the most sense. I don’t want to absolutely and categorically say that there won’t be a platform opportunities, but the focus is I mentioned is first deleverage reactive to opportunities, but prioritize opportunities nearing on our platforms over opportunities to create new platforms.

Great, and I appreciate framing all that out. And then my last question is more particularly around Michael Foods in egg supply, this California legislation kicked in Jan 1, you’ve seen egg cost and prices in California go materially. And supposedly there is restrictions on the type of eggs how they were laid and what type of cages get into California. I was wondering, one does the elimination of battery cages and increased cage size, have you seen an increase in cost or/and restrictions into sales in California? Thank you.

So the answer to that is that the price increases have been localized to California and the prices outside of California have declined because the supply that would have gone to California is now going elsewhere. The specifics of that law do not impact Michael because it does not include liquid eggs and Michael sells a significant amount of shell eggs.

Got, you. I appreciate you for clarifying that. Best of luck.

Thank you.

Your next question comes from the line of Carla Casella of JP Morgan.

I add on PowerBar question, in that bar space its gotten, you see more bars popping up every week and then I am wondering if you’ve gotten if you’ve had conversations with the retailers to get confidence that you will be able to regain any of the space that PowerBar has last to or if it is going to cost an tick-up in trade spender or other to get the space back?

Well, certainly we talk to our retail partners frequently about this topic, the PowerBar acquisition is not predicated up on gaining distribution or regaining distribution might be a better way to say it. It’s predicated upon holding and making more profitable the existing bar distribution, obviously distribution gains would be nice, but it’s not necessary for this investment to payoff and then extending into additional forms where there are more rapid growth opportunities.

Okay, and the on the MOM brand acquisition are you seeing any as you talk to the your retail partners, our consumers less big brand loyal I mean MOM has to next year down a brands and I am wondering if that’s part of that is defensive move as consumers kind of swap between brands more often now then they used in the past?

So, we think a better way to think about it would be to think about the value segment of the category has being a very loyal consumer. And one of the things that is pretty striking about the MOM data is that while it certainly doesn’t have the recognition of the larger brands that you are referring to. It’s has higher loyalty. So we think that in getting MOM, we have an opportunity to gain additional trails through some of the combined muscle of the two businesses and extend upon the loyalty that the MOM consumer and that value consumer has for its RTE.

Okay, great. Thank you.

Your final question comes from the line of Jason English of Goldman Sachs.

Hi, thanks for the question. This is actually Rima Reddy in for Jason English. Thanks for the guidance on CapEx and EBITDA. I wanted to ask if you had any further guidance on cash flow from operations for this year?

No, we don’t guide. We guide to the specific items that we previously have and wouldn’t provide additional guidance around specific line items.

Perfect. Thank you. End of Q&A

At the time there are no further questions. I will now turn the call to Rob Vitale for any additional or closing remarks.

Thank you very much, we are very excited about the ongoing progress at Post, the portfolio condition and particularly the recent announcement with MOM. So we look forward to speaking with you all soon around the current quarter.

Thank you for participating in the Post Holdings first quarter 2015 earnings conference call and webcast. You may now disconnect.