ST. LOUIS — Post Holdings, Inc. said 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 affect approximately 115 employees, the company said.
|Rob Vitale, president and c.e.o. of Post|
“We have determined that the cost and effort to bring this facility to an acceptable reliability and margin level is better deployed in brand building and sales infrastructure,” said Rob Vitale, president and chief executive officer of Post. “This decision enables us to focus on rapidly changing consumer trends, developing innovative products and building upon the strong Dymatize brand.”
Post acquired Dymatize in late 2013. The company manufactures and markets premium protein powders, bars and nutritional supplements under the Dymatize and Supreme Protein brands. Dymatize’s products are in the sports nutrition supplement and nutrition bar categories.
In closing the Farmers Branch facility, Post cited “plant operational and quality issues.” The company said it will write-off approximately $9.2 million of unsalable inventory.
The facility is expected to be closed by Dec. 1.
In connection with the closing, Post said it 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. The charges include approximately $4 million to $6 million for severance, retention and other plant closing 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. The charges are expected to be incurred primarily in Post’s fourth quarter of fiscal 2015, and approximately $2.5 million to $3.5 million will be incurred in fiscal 2016.In addition to the closing, Post 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 described above.