Lamb Weston sees FY18 net sales up MSD vs. previous view of LSD to MSD
The company expects: Net sales to grow mid-single digits, with price/mix and volume growth improving in the second half of fiscal 2018 as new pricing structures for an increasing number of customer contracts become effective and as the Company's new production capacity in Richland, Washington becomes available. The Company's previous estimate was for net sales to grow low-to-mid single digits. Adjusted EBITDA including unconsolidated joint ventures to be in the range of $780 million to $790 million, including higher selling, general and administrative expenses as a percentage of sales for fiscal 2018 due to the full-year impact of incremental costs associated with being a stand-alone public company, as well as higher advertising and promotional expense in support of the introduction of the Company's Grown in Idaho product line in retail. Using the mid-point of the range, this represents an increase of approximately 13% percent versus a fiscal 2017 pro forma Adjusted EBITDA including unconsolidated joint ventures of $692 million. The Company's previous estimate was for Adjusted EBITDA including unconsolidated joint ventures to be in the range of $740 million to $760 million. Total interest expense for fiscal 2018 to continue to be in the range of $105 million to $110 million, which is an increase of approximately $45 million to $50 million from fiscal 2017 due to the full-year impact of the Company's capital structure after the spinoff from Conagra. Cash used for capital expenditures to be approximately $250 million for fiscal 2018, an increase of $25 million versus the previous estimate of $225 million. This increase primarily relates to costs associated with the initial phase of construction of a new production line at our Hermiston, Oregon facility. The Company is continuing to evaluate the effect on its effective tax rate of the tax reform legislation (the "Act") that was signed into law on December 22, 2017. The Act lowers the U.S. corporate tax rate from 35 percent to 21 percent, and sets forth other provisions that may affect the Company's effective tax rate for fiscal 2018. As a result, the Act will result in a blended effective tax rate for the Company for fiscal 2018 that is lower than the Company's original estimated range of 33 to 34 percent.