On October 1, 2024, the company announced a restructuring plan designed to drive operational and cost efficiencies and improve cash flows. The plan includes the permanent closure of a manufacturing facility, temporary curtailment of production lines, reduction in operating expenses, and a reduction in fiscal 2025 capital expenditures.

As part of the restructuring plan, the company reduced its estimate of fiscal 2025 capital expenditures by $100 million to $750 million, excluding acquisitions. This reduction includes pausing the next phase of the ERP build and implementation.

While overall volume declined by 3%, there was volume growth in key international markets, partially offsetting the negative impact of customer share losses and soft restaurant traffic trends. International segment net sales increased $20.5 million, or 4%, to $550.4 million.

Adjusted SG&A increased $5.5 million versus the prior year quarter to $165.9 million, primarily due to incremental non-cash amortization and expense related to the new ERP system. The benefit of cost savings initiatives essentially offset inflation and information technology investments.

Management believes that the proactive restructuring actions will improve operating efficiency, profitability, and cash flows, while also helping to position the company to continue to make strategic investments to support customers and create value for stakeholders over the long-term.

The restructuring plan includes the permanent closure of an older, higher-cost processing facility and the temporary curtailment of certain production lines and schedules in the manufacturing network in North America. Together, management expects these actions will help better manage factory utilization rates and ease some of the industry's current supply-demand imbalance in North America.

Restaurant traffic and frozen potato demand, relative to supply, continue to be soft, and management believes it will remain soft through the remainder of fiscal 2025. This indicates a potential risk to sales volume and overall financial performance.

In June 2024, an alleged purchaser of the Company's common stock filed a lawsuit against the Company and certain of our executive officers in the U.S. District Court for the District of Idaho on behalf of a putative class of stock purchasers for alleged violations of the federal securities laws. A similar lawsuit was filed in the same court in August 2024.

We expect volume will decline during the first half of fiscal 2025 due to the impact of market share losses and menu price inflation, which we believe will continue to affect global restaurant traffic and demand for frozen potato products.

Volume declined 3%, largely reflecting the impact of customer share losses, soft restaurant traffic trends, the carryover effect of our decision in the prior year to exit certain lower-priced and lower-margin business in Europe to strategically manage customer and product mix, and the impact of a previously announced voluntary product withdrawal initiated in late fiscal 2024.

International segment net sales increased $20.5 million, or 4%, to $550.4 million. Volume declined 1%, due to the carryover effect of our decision in the prior year to exit certain lower-priced and lower-margin business in Europe, as well as the impact of the voluntary product withdrawal. The decline was partially offset by volume growth in key international markets outside of Europe. Price/mix increased 5% reflecting pricing actions announced this fiscal year to counter input cost inflation.

Volume declined 3%, largely reflecting the impact of customer share losses, soft restaurant traffic trends, the carryover effect of our decision in the prior year to exit certain lower-priced and lower-margin business in Europe to strategically manage customer and product mix, and the impact of a previously announced voluntary product withdrawal initiated in late fiscal 2024. The volume decline was partially offset by growth in key international markets. Price/mix increased 2%, reflecting the benefit of inflation-driven pricing actions in Europe and North America, and was partially offset by unfavorable channel and product mix, as well as targeted investments in price and trade support to attract and retain volume.

In fiscal 2025, the company expects the restructuring actions to deliver approximately $55 million of pre-tax savings (approximately $85 million on an annualized basis) and reduce working capital.

Adjusted Gross Profit declined $137.2 million versus the prior year quarter to $353.1 million. Higher manufacturing costs per pound, an approximately $39 million loss associated with the voluntary product withdrawal, lower sales volumes, and higher warehouse costs drove the decline, and was partially offset by a net benefit from pricing actions.

The company also announced actions to reduce operating expenses, including reducing global headcount and eliminating certain unfilled job positions, as well as reducing estimated fiscal 2025 capital expenditures by $100 million.

Forward-looking statements include risks and uncertainties including difficulties, disruptions or delays in implementing new technology, such as our new enterprise resource planning (“ERP”) system.

We anticipate that an increase in SG&A will reflect charges associated with the Restructuring Plan, higher performance-based compensation expense, incremental non-cash amortization of prior investments in our ERP infrastructure, inflation, and investments in our information technology infrastructure, and will largely be offset by cost savings from our Restructuring Plan and other cost saving initiatives.

In connection with the Restructuring Plan, we decreased our estimate of capital expenditures in fiscal 2025 by $100 million to $750 million excluding acquisitions, which included pausing the next phase of our ERP build and implementation.

As of August 25, 2024, approximately $308 million remained authorized and available for repurchase under the share repurchase program.

We used $92.2 million of cash to repurchase 1,412,852 shares of our common stock at an average price of $58.04 per share, and we withheld 178,941 shares from employees to cover income and payroll taxes on equity awards that vested during the period. In addition, we paid $51.7 million in cash dividends to common stockholders.

On September 27, 2024, we entered into a new $500 million term loan facility, the proceeds of which were used to repay the remaining $225 million balance of our Term A-1 loan facility and $275 million of outstanding borrowings under our global revolving credit facility.

The filing does not contain any specific details regarding environmental, social, or governance initiatives. Therefore, it's not possible to provide headlines or analysis on this theme.

These risks and uncertainties include, among other things: consumer preferences, including restaurant traffic in North America and our international markets, and an uncertain general economic environment, including inflationary pressures and recessionary concerns, any of which could adversely impact our business, financial condition or results of operations, including the demand and prices for our products.

Political and economic conditions of the countries in which we conduct business and other factors related to our international operations

Disruptions in the global economy caused by conflicts such as the war in Ukraine and conflicts in the Middle East and the possible related heightening of our other known risks