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Hostess Brands (TWNK)

Hostess Brands, Inc. is a leading packaged food company focused on developing, manufacturing, marketing, selling and distributing fresh baked sweet goods and cookies in North America. The Hostess® brand's history dates back to 1919, when the Hostess® CupCake was introduced to the public, followed by Twinkies® in 1930. Today, the Company produces a variety of new and classic treats in addition to Twinkies® and CupCakes, including Donettes®, Ding Dongs®, Zingers®, Danishes, Honey Buns and Coffee Cakes. In January 2020, the Company acquired Voortman Cookies Limited which produces a variety of cookies and wafers products, including sugar-free products under the Voortman® brand.

Company profile

Ticker
TWNK
Exchange
CEO
Andrew P. Callahan
Employees
Incorporated
Location
Fiscal year end
Industry (SIC)
Former names
Gores Holdings, Inc.
SEC CIK
Subsidiaries
Hostess Holdings, L.P. • Hostess Holdings • New Hostess Holdco, LLC • Hostess Holdco, LLC • HB Holdings, LLC • Hostess Brands, LLC • Hostess Brands Services, LLC • HB Holdings • New HB Acquisition (RE), LLC • Voortman Cookies Limited ...

TWNK stock data

Calendar

3 Aug 22
28 Sep 22
31 Dec 22
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 206.83M 206.83M 206.83M 206.83M 206.83M 206.83M
Cash burn (monthly) 10.53M 998K (no burn) (no burn) (no burn) (no burn)
Cash used (since last report) 31.11M 2.95M n/a n/a n/a n/a
Cash remaining 175.72M 203.88M n/a n/a n/a n/a
Runway (months of cash) 16.7 204.3 n/a n/a n/a n/a

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
8 Jun 22 Crist Gretchen Renee Class A Common Stock, par value $0.0001 per share Grant Acquire A No No 0 4,900 0 34,397
8 Jun 22 Hugh G. Dineen Class A Common Stock, par value $0.0001 per share Grant Acquire A No No 0 4,900 0 12,568
8 Jun 22 Bodner Larry E Class A Common Stock, par value $0.0001 per share Grant Acquire A No No 0 4,900 0 53,048
8 Jun 22 Skoufalos Ioannis Class A Common Stock, par value $0.0001 per share Grant Acquire A No No 0 4,900 0 21,892
8 Jun 22 Fajemirokun-Beck Olufunlayo Olurinde Class A Common Stock, par value $0.0001 per share Grant Acquire A No No 0 4,900 0 12,568
13F holders Current Prev Q Change
Total holders 250 247 +1.2%
Opened positions 36 68 -47.1%
Closed positions 33 22 +50.0%
Increased positions 83 80 +3.8%
Reduced positions 108 79 +36.7%
13F shares Current Prev Q Change
Total value 3.03B 3.19B -4.9%
Total shares 145.88M 147.62M -1.2%
Total puts 87.1K 37.9K +129.8%
Total calls 120.5K 101.5K +18.7%
Total put/call ratio 0.7 0.4 +93.6%
Largest owners Shares Value Change
BLK Blackrock 24.06M $510.25M -0.1%
Vanguard 15.9M $337.26M +1.1%
Dimensional Fund Advisors 8.81M $186.83M +4.3%
Gores Sponsor 6.53M $79.03M 0.0%
JHG Janus Henderson 6.27M $132.96M -0.1%
Champlain Investment Partners 5.42M $114.99M -13.3%
STT State Street 5M $106.15M +1.1%
GS Goldman Sachs 3.89M $82.45M +9.0%
WHG Westwood 3.2M $67.85M +7.7%
Massachusetts Financial Services 3.1M $65.69M -20.8%
Largest transactions Shares Bought/sold Change
MNGPF Man 0 -2.27M EXIT
Artemis Investment Management 2.02M +2.02M NEW
Allspring Global Investments 194.48K -1.65M -89.4%
First Trust Advisors 1.89M +1.63M +630.7%
MS Morgan Stanley 1.82M +1.07M +142.2%
Loomis Sayles & Co L P 881.94K +881.94K NEW
Champlain Investment Partners 5.42M -830.97K -13.3%
Massachusetts Financial Services 3.1M -813.76K -20.8%
Parametric Portfolio Associates 0 -807.57K EXIT
Driehaus Capital Management 736.53K +736.53K NEW

Financial report summary

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Competition
Flowers Foods
Risks
  • Maintaining, extending and expanding our reputation and brand images are essential to our business success.
  • We may be unable to leverage our brand value to compete against lower-priced alternative brands.
  • We may be unable to correctly predict, identify and interpret changes in consumer preferences and demand and offer new products or methods of distribution to meet those changes.
  • Our intellectual property rights are valuable, and our failure to protect them could reduce the value of our products and brands.
  • We operate in a highly competitive industry.
  • Our success will depend on our continued ability to produce and successfully market products with extended shelf life.
  • We may be limited in our ability to pass cost increases on to our customers in the form of price increases.
  • We may realize a decrease in sales volume in the event price increases are implemented.
  • Our growth may be limited by our inability to maintain or add additional shelf or retail space for our products.
  • We may not successfully identify or complete strategic acquisitions, alliances, divestitures or joint ventures.
  • We may not successfully integrate and manage our acquired businesses or brands.
  • We may be unable to drive revenue growth in our key products or add products that are faster-growing and more profitable.
  • The current COVID-19 pandemic, or the future outbreak of other highly infectious or contagious diseases, could adversely impact or cause disruption to our business, financial condition, results of operations and cash flows. Further, the COVID-19 pandemic, which has caused severe disruptions in the U.S. and global economy, may further disrupt financial markets and could potentially create widespread business continuity issues.
  • The loss of one or more of our current co-manufacturing arrangements could adversely affect our business.
  • The ability to distribute our products is subject to significant changes in the availability and pricing of transportation.
  • Climate change may negatively affect our business and operations.
  • If we lose one or more of our major customers, or if any of our major customers experience significant business interruption, our operating results could be adversely affected.
  • Our results could be adversely impacted as a result of increased labor and employee-related expenses.
  • A portion of our workforce belongs to unions. Failure to successfully negotiate collective bargaining agreements, or strikes or work stoppages could cause our business to suffer.
  • We may be subject to product liability claims should the consumption of any of our products cause injury, illness or death.
  • Product recalls may increase our costs, negatively impact our brands’ reputation, and adversely affect our business.
  • We rely on third parties for services related to sales, marketing and distribution.
  • The COVID-19 pandemic has caused severe disruptions in the U.S. and global economy, may further disrupt financial markets and could potentially create widespread business continuity issues.
  • Our geographic focus makes us particularly vulnerable to economic and other events and trends in North America.
  • The consolidation of retail customers could adversely affect us.
  • Unsuccessful implementation of business strategies to reduce costs may adversely affect our business, financial condition, results of operations and cash flows.
  • Legal claims or other regulatory enforcement actions could subject us to civil and criminal penalties.
  • We are subject to laws and regulations relating to protection of the environment, worker health, and workplace safety. Costs to comply with these laws and regulations, or claims with respect to environmental, health and safety matters, could have a significant negative impact on our business.
  • Our operations are subject to regulation by the FDA, FTC and other governmental entities, and such regulations are subject to change from time to time which could impact how we manage our production and sale of products.
  • Significant additional labeling or warning requirements or limitations on the marketing or sale of our products may reduce demand for such products and could adversely affect our business or operating results.
  • A material impairment in the carrying value of acquired goodwill or other intangible assets could negatively affect our consolidated operating results and net worth.
  • Our business operations could be disrupted if our information technology systems fail to perform adequately.
  • We may be unable to hire or retain and develop key personnel or a highly skilled and diverse workforce or manage changes in our workforce.
  • Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt, and prevent us from meeting our obligations under our indebtedness.
  • Changes in interest rates may adversely affect our earnings and/or cash flows.
  • We may be unable to obtain additional financing to fund our operations and growth.
  • Our only significant asset is our ownership interest in our operating subsidiaries and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our common stock or satisfy our other financial obligations, including our obligations under the tax receivable agreement.
  • Our stock price may be volatile.
  • Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
  • The restatement of certain of our financial statements may subject us to risks and uncertainties, including the increased possibility of legal proceedings.
Management Discussion
  • Net revenue for the three months ended June 30, 2022 increased $49.0 million, or 16.8%, compared to the three months ended June 30, 2021. Contribution from previously taken pricing actions and product mix provided 13.8% of the growth, while higher volumes accounted for 3.0% of the quarterly growth. Compared to the same period last year, SBG net revenue increased $41.0 million or 15.6%, while cookies net revenue increased $8.0 million or 27.6%.
  • Net revenue for the six months ended June 30, 2022 increased $115.6 million, or 20.8%, compared to the six months ended June 30, 2021. Contribution from previously taken pricing actions and favorable product mix provided nearly 12.1% of the growth, while higher volumes accounted for 8.7% of the year-to-date growth. Compared to the same period last year, SBG net revenue increased $99.6 million or 19.9%, while cookies net revenue increased $16.0 million or 28.2%.
  • Gross profit increased 7.2% and was 33.1% of net revenue for the three months ended June 30, 2022, a decrease of 295 basis points from a gross margin of 36.1% for the three months ended June 30, 2021. The decrease in gross margin was due to inflation and inefficiencies caused by supply-chain fragility, partially offset by favorable price/mix and productivity benefits. The increase in gross profit was attributed to pricing actions and higher volume.

Content analysis

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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
H.S. freshman Avg
New words: Absent, acquired, agency, agreed, alleged, asserted, attempted, capacity, commercial, component, construction, coverage, directly, environment, extent, fragility, fuel, hierarchy, hold, identical, immaterial, incorporated, indemnification, indirectly, initiative, insurance, intent, law, Leonard, line, nonrecurring, paper, part, pay, policy, previously, produce, pursue, quoted, recover, representation, Restated, RWI, strongly, theVoortman, volatility, warranty
Removed: computation, counter, decreased, excluded, inflow, input, interim, payable, remeasured, settled, wafer