10-Q 1 ths-20220930.htm 10-Q ths-20220930
false2022Q30001320695--12-31http://fasb.org/us-gaap/2022#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2022#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2022#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2022#LongTermDebtAndCapitalLeaseObligationsCurrenthttp://fasb.org/us-gaap/2022#LongTermDebtAndCapitalLeaseObligationsCurrenthttp://fasb.org/us-gaap/2022#LongTermDebtAndCapitalLeaseObligationshttp://fasb.org/us-gaap/2022#LongTermDebtAndCapitalLeaseObligationsP3Y0.250.330.330.6700013206952022-01-012022-09-3000013206952022-10-31xbrli:shares00013206952022-09-30iso4217:USD00013206952021-12-31iso4217:USDxbrli:shares00013206952022-07-012022-09-3000013206952021-07-012021-09-3000013206952021-01-012021-09-300001320695us-gaap:CommonStockMember2020-12-310001320695us-gaap:AdditionalPaidInCapitalMember2020-12-310001320695us-gaap:RetainedEarningsMember2020-12-310001320695us-gaap:TreasuryStockCommonMember2020-12-310001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100013206952020-12-310001320695us-gaap:RetainedEarningsMember2021-01-012021-03-3100013206952021-01-012021-03-310001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001320695us-gaap:CommonStockMember2021-01-012021-03-310001320695us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001320695us-gaap:CommonStockMember2021-03-310001320695us-gaap:AdditionalPaidInCapitalMember2021-03-310001320695us-gaap:RetainedEarningsMember2021-03-310001320695us-gaap:TreasuryStockCommonMember2021-03-310001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100013206952021-03-310001320695us-gaap:RetainedEarningsMember2021-04-012021-06-3000013206952021-04-012021-06-300001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001320695us-gaap:TreasuryStockCommonMember2021-04-012021-06-300001320695us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001320695us-gaap:CommonStockMember2021-06-300001320695us-gaap:AdditionalPaidInCapitalMember2021-06-300001320695us-gaap:RetainedEarningsMember2021-06-300001320695us-gaap:TreasuryStockCommonMember2021-06-300001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000013206952021-06-300001320695us-gaap:RetainedEarningsMember2021-07-012021-09-300001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001320695us-gaap:CommonStockMember2021-07-012021-09-300001320695us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001320695us-gaap:CommonStockMember2021-09-300001320695us-gaap:AdditionalPaidInCapitalMember2021-09-300001320695us-gaap:RetainedEarningsMember2021-09-300001320695us-gaap:TreasuryStockCommonMember2021-09-300001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-3000013206952021-09-300001320695us-gaap:CommonStockMember2021-12-310001320695us-gaap:AdditionalPaidInCapitalMember2021-12-310001320695us-gaap:RetainedEarningsMember2021-12-310001320695us-gaap:TreasuryStockCommonMember2021-12-310001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001320695us-gaap:RetainedEarningsMember2022-01-012022-03-3100013206952022-01-012022-03-310001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001320695us-gaap:CommonStockMember2022-01-012022-03-310001320695us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001320695us-gaap:CommonStockMember2022-03-310001320695us-gaap:AdditionalPaidInCapitalMember2022-03-310001320695us-gaap:RetainedEarningsMember2022-03-310001320695us-gaap:TreasuryStockCommonMember2022-03-310001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100013206952022-03-310001320695us-gaap:RetainedEarningsMember2022-04-012022-06-3000013206952022-04-012022-06-300001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001320695us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001320695us-gaap:CommonStockMember2022-06-300001320695us-gaap:AdditionalPaidInCapitalMember2022-06-300001320695us-gaap:RetainedEarningsMember2022-06-300001320695us-gaap:TreasuryStockCommonMember2022-06-300001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-3000013206952022-06-300001320695us-gaap:RetainedEarningsMember2022-07-012022-09-300001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001320695us-gaap:CommonStockMember2022-07-012022-09-300001320695us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001320695us-gaap:CommonStockMember2022-09-300001320695us-gaap:AdditionalPaidInCapitalMember2022-09-300001320695us-gaap:RetainedEarningsMember2022-09-300001320695us-gaap:TreasuryStockCommonMember2022-09-300001320695us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001320695us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberths:MealPreparationMemberus-gaap:SubsequentEventMember2022-10-03ths:segment0001320695ths:StrategicGrowthInitiativesMember2022-09-300001320695ths:RestructuringAndMarginImprovementActivitiesCategoriesMember2022-01-012022-09-300001320695ths:StrategicGrowthInitiativesMemberths:RestructuringAndMarginImprovementActivitiesCategoriesMember2022-07-012022-09-300001320695ths:StrategicGrowthInitiativesMemberths:RestructuringAndMarginImprovementActivitiesCategoriesMember2021-07-012021-09-300001320695ths:StrategicGrowthInitiativesMemberths:RestructuringAndMarginImprovementActivitiesCategoriesMember2022-01-012022-09-300001320695ths:StrategicGrowthInitiativesMemberths:RestructuringAndMarginImprovementActivitiesCategoriesMember2021-01-012021-09-300001320695ths:RestructuringAndMarginImprovementActivitiesCategoriesMemberths:OtherPlanMember2022-07-012022-09-300001320695ths:RestructuringAndMarginImprovementActivitiesCategoriesMemberths:OtherPlanMember2021-07-012021-09-300001320695ths:RestructuringAndMarginImprovementActivitiesCategoriesMemberths:OtherPlanMember2022-01-012022-09-300001320695ths:RestructuringAndMarginImprovementActivitiesCategoriesMemberths:OtherPlanMember2021-01-012021-09-300001320695ths:RestructuringAndMarginImprovementActivitiesCategoriesMember2022-07-012022-09-300001320695ths:RestructuringAndMarginImprovementActivitiesCategoriesMember2021-07-012021-09-300001320695ths:RestructuringAndMarginImprovementActivitiesCategoriesMember2021-01-012021-09-300001320695ths:EmployeeRelatedCostsMember2022-07-012022-09-300001320695ths:EmployeeRelatedCostsMember2021-07-012021-09-300001320695ths:EmployeeRelatedCostsMember2022-01-012022-09-300001320695ths:EmployeeRelatedCostsMember2021-01-012021-09-300001320695us-gaap:OtherRestructuringMember2022-07-012022-09-300001320695us-gaap:OtherRestructuringMember2021-07-012021-09-300001320695us-gaap:OtherRestructuringMember2022-01-012022-09-300001320695us-gaap:OtherRestructuringMember2021-01-012021-09-300001320695us-gaap:EmployeeSeveranceMember2021-12-310001320695us-gaap:EmployeeRelocationMember2021-12-310001320695us-gaap:EmployeeSeveranceMemberus-gaap:OperatingExpenseMember2022-01-012022-09-300001320695us-gaap:EmployeeRelocationMemberus-gaap:OperatingExpenseMember2022-01-012022-09-300001320695us-gaap:OperatingExpenseMember2022-01-012022-09-300001320695us-gaap:EmployeeSeveranceMember2022-01-012022-09-300001320695us-gaap:EmployeeRelocationMember2022-01-012022-09-300001320695us-gaap:EmployeeSeveranceMember2022-09-300001320695us-gaap:EmployeeRelocationMember2022-09-300001320695srt:MinimumMember2022-01-012022-09-300001320695srt:MaximumMember2022-01-012022-09-30xbrli:pure0001320695srt:MaximumMember2022-09-300001320695us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberths:MealPreparationMemberus-gaap:SubsequentEventMember2022-10-032022-10-03ths:facilityths:category0001320695us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2022-01-012022-09-300001320695ths:RTECerealMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-06-010001320695ths:RTECerealMemberus-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-06-012021-06-01ths:manufacturing_plant0001320695us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2022-07-012022-09-300001320695us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-07-012021-09-300001320695us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-01-012021-09-300001320695us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2022-09-300001320695us-gaap:DiscontinuedOperationsDisposedOfBySaleMember2021-12-310001320695us-gaap:LandMember2022-09-300001320695us-gaap:LandMember2021-12-310001320695us-gaap:BuildingAndBuildingImprovementsMember2022-09-300001320695us-gaap:BuildingAndBuildingImprovementsMember2021-12-310001320695us-gaap:MachineryAndEquipmentMember2022-09-300001320695us-gaap:MachineryAndEquipmentMember2021-12-310001320695us-gaap:ConstructionInProgressMember2022-09-300001320695us-gaap:ConstructionInProgressMember2021-12-310001320695us-gaap:CustomerRelatedIntangibleAssetsMember2022-09-300001320695us-gaap:CustomerRelatedIntangibleAssetsMember2021-12-310001320695us-gaap:TrademarksMember2022-09-300001320695us-gaap:TrademarksMember2021-12-310001320695us-gaap:TradeSecretsMember2022-09-300001320695us-gaap:TradeSecretsMember2021-12-310001320695us-gaap:ComputerSoftwareIntangibleAssetMember2022-09-300001320695us-gaap:ComputerSoftwareIntangibleAssetMember2021-12-310001320695us-gaap:TrademarksMember2022-09-300001320695us-gaap:TrademarksMember2021-12-310001320695ths:TermLoanAMember2022-09-300001320695ths:TermLoanAMember2021-12-310001320695ths:TermLoanA1FacilityMember2022-09-300001320695ths:TermLoanA1FacilityMember2021-12-310001320695ths:SeniorNotesDueTwentyTwentyEightMember2022-09-300001320695ths:SeniorNotesDueTwentyTwentyEightMember2021-12-3100013206952022-02-132022-02-130001320695ths:DebtCovenantPeriodOneMember2022-02-142022-02-140001320695ths:DebtCovenantPeriodTwoMember2022-02-142022-02-140001320695ths:DebtCovenantPeriodThreeMember2022-02-142022-02-140001320695us-gaap:RevolvingCreditFacilityMember2022-08-100001320695us-gaap:InterestRateSwapMember2022-07-012022-09-300001320695us-gaap:RevolvingCreditFacilityMember2022-09-300001320695us-gaap:RevolvingCreditFacilityMemberus-gaap:SubsequentEventMember2022-10-310001320695us-gaap:SubsequentEventMember2022-10-012022-10-310001320695ths:TermLoanAMemberus-gaap:SubsequentEventMember2022-10-012022-10-310001320695ths:TermLoanA1FacilityMemberus-gaap:SubsequentEventMember2022-10-012022-10-310001320695ths:SeniorNotesDueTwentyTwentyFourMember2021-01-012021-03-310001320695ths:SeniorNotesDueTwentyTwentyFourMember2021-03-310001320695ths:EquityIncentivePlanMember2022-09-300001320695us-gaap:EmployeeStockOptionMember2022-01-012022-09-3000013206952021-01-012021-12-310001320695us-gaap:EmployeeStockOptionMember2022-09-300001320695ths:ExecutiveMembersMemberus-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-30ths:installment0001320695us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001320695us-gaap:RestrictedStockUnitsRSUMember2022-06-092022-06-090001320695ths:ExecutiveMembersMemberus-gaap:RestrictedStockUnitsRSUMember2021-12-292021-12-290001320695us-gaap:RestrictedStockUnitsRSUMember2021-12-292021-12-290001320695us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2021-12-310001320695us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMember2021-12-310001320695us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2022-01-012022-09-300001320695us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMember2022-01-012022-09-300001320695us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementEmployeeMember2022-09-300001320695us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedPaymentArrangementNonemployeeMember2022-09-300001320695us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001320695us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300001320695us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001320695us-gaap:RestrictedStockUnitsRSUMember2022-09-300001320695us-gaap:PerformanceSharesMember2022-01-012022-09-300001320695us-gaap:PerformanceSharesMemberths:ExecutiveMembersMembersrt:MinimumMember2022-01-012022-09-300001320695us-gaap:PerformanceSharesMemberths:ExecutiveMembersMembersrt:MaximumMember2022-01-012022-09-300001320695us-gaap:PerformanceSharesMembersrt:MinimumMember2022-01-012022-09-300001320695us-gaap:PerformanceSharesMembersrt:MaximumMember2022-01-012022-09-300001320695us-gaap:PerformanceSharesMemberths:ExecutiveMembersMember2022-01-012022-09-300001320695us-gaap:PerformanceSharesMemberths:ExecutiveMembersMember2021-01-012021-09-300001320695srt:ExecutiveOfficerMemberus-gaap:PerformanceSharesMember2022-04-012022-06-300001320695srt:ExecutiveOfficerMemberus-gaap:PerformanceSharesMembersrt:MinimumMember2022-04-012022-06-300001320695srt:ExecutiveOfficerMemberus-gaap:PerformanceSharesMembersrt:MaximumMember2022-04-012022-06-300001320695us-gaap:PerformanceSharesMember2021-01-012021-09-300001320695us-gaap:PerformanceSharesMemberths:TreeHouseFoodsMember2022-01-012022-09-300001320695us-gaap:PerformanceSharesMemberths:TreeHouseFoodsMember2021-01-012021-09-300001320695us-gaap:PerformanceSharesMemberths:PeerGroupMember2022-01-012022-09-300001320695us-gaap:PerformanceSharesMemberths:PeerGroupMember2021-01-012021-09-300001320695us-gaap:PerformanceSharesMemberths:IndexMember2022-01-012022-09-300001320695us-gaap:PerformanceSharesMember2021-12-310001320695us-gaap:PerformanceSharesMember2022-09-300001320695us-gaap:PerformanceSharesMember2022-07-012022-09-300001320695us-gaap:PerformanceSharesMember2021-07-012021-09-300001320695us-gaap:PerformanceSharesMember2019-01-012019-12-310001320695us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:EmployeeStockOptionMember2022-01-012022-09-300001320695us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:EmployeeStockOptionMember2022-01-012022-09-300001320695us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001320695us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001320695us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-09-300001320695us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-09-300001320695us-gaap:AccumulatedTranslationAdjustmentMember2021-09-300001320695us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-09-300001320695us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001320695us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-12-310001320695us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-09-300001320695us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-01-012022-09-300001320695us-gaap:AccumulatedTranslationAdjustmentMember2022-09-300001320695us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-09-300001320695us-gaap:PensionPlansDefinedBenefitMember2022-07-012022-09-300001320695us-gaap:PensionPlansDefinedBenefitMember2021-07-012021-09-300001320695us-gaap:PensionPlansDefinedBenefitMember2022-01-012022-09-300001320695us-gaap:PensionPlansDefinedBenefitMember2021-01-012021-09-300001320695us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2022-07-012022-09-300001320695us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-07-012021-09-300001320695us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2022-01-012022-09-300001320695us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember2021-01-012021-09-300001320695ths:ClassActionsFiledByShareholdersMember2022-09-30ths:complaint0001320695us-gaap:InterestRateSwapMemberus-gaap:LondonInterbankOfferedRateLIBORMember2022-09-300001320695us-gaap:InterestRateSwapMemberus-gaap:LondonInterbankOfferedRateLIBORMember2021-12-310001320695us-gaap:InterestRateSwapMember2022-09-300001320695us-gaap:InterestRateSwapMember2021-12-310001320695ths:DieselFuelContractsMember2022-09-300001320695ths:DieselFuelContractsMember2021-12-310001320695us-gaap:TotalReturnSwapMember2022-09-300001320695us-gaap:TotalReturnSwapMember2021-12-310001320695us-gaap:CommodityContractMember2022-09-300001320695us-gaap:CommodityContractMember2021-12-310001320695ths:OtherIncomeExpenseNetMemberus-gaap:CommodityContractMember2022-07-012022-09-300001320695ths:OtherIncomeExpenseNetMemberus-gaap:CommodityContractMember2021-07-012021-09-300001320695ths:OtherIncomeExpenseNetMemberus-gaap:CommodityContractMember2022-01-012022-09-300001320695ths:OtherIncomeExpenseNetMemberus-gaap:CommodityContractMember2021-01-012021-09-300001320695us-gaap:InterestRateSwapMemberths:OtherIncomeExpenseNetMember2022-07-012022-09-300001320695us-gaap:InterestRateSwapMemberths:OtherIncomeExpenseNetMember2021-07-012021-09-300001320695us-gaap:InterestRateSwapMemberths:OtherIncomeExpenseNetMember2022-01-012022-09-300001320695us-gaap:InterestRateSwapMemberths:OtherIncomeExpenseNetMember2021-01-012021-09-300001320695us-gaap:GeneralAndAdministrativeExpenseMemberus-gaap:TotalReturnSwapMember2022-07-012022-09-300001320695us-gaap:GeneralAndAdministrativeExpenseMemberus-gaap:TotalReturnSwapMember2021-07-012021-09-300001320695us-gaap:GeneralAndAdministrativeExpenseMemberus-gaap:TotalReturnSwapMember2022-01-012022-09-300001320695us-gaap:GeneralAndAdministrativeExpenseMemberus-gaap:TotalReturnSwapMember2021-01-012021-09-300001320695us-gaap:CommodityContractMemberus-gaap:SellingAndMarketingExpenseMember2022-07-012022-09-300001320695us-gaap:CommodityContractMemberus-gaap:SellingAndMarketingExpenseMember2021-07-012021-09-300001320695us-gaap:CommodityContractMemberus-gaap:SellingAndMarketingExpenseMember2022-01-012022-09-300001320695us-gaap:CommodityContractMemberus-gaap:SellingAndMarketingExpenseMember2021-01-012021-09-300001320695us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2022-07-012022-09-300001320695us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2021-07-012021-09-300001320695us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2022-01-012022-09-300001320695us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2021-01-012021-09-300001320695ths:SnackingMember2022-07-012022-09-300001320695ths:SnackingMember2021-07-012021-09-300001320695ths:SnackingMember2022-01-012022-09-300001320695ths:SnackingMember2021-01-012021-09-300001320695ths:BeveragesandDrinkMixesMember2022-07-012022-09-300001320695ths:BeveragesandDrinkMixesMember2021-07-012021-09-300001320695ths:BeveragesandDrinkMixesMember2022-01-012022-09-300001320695ths:BeveragesandDrinkMixesMember2021-01-012021-09-300001320695ths:GroceryMember2022-07-012022-09-300001320695ths:GroceryMember2021-07-012021-09-300001320695ths:GroceryMember2022-01-012022-09-300001320695ths:GroceryMember2021-01-012021-09-300001320695ths:RetailGroceryCustomersMember2022-07-012022-09-300001320695ths:RetailGroceryCustomersMember2021-07-012021-09-300001320695ths:RetailGroceryCustomersMember2022-01-012022-09-300001320695ths:RetailGroceryCustomersMember2021-01-012021-09-300001320695ths:CoManufacturingMember2022-07-012022-09-300001320695ths:CoManufacturingMember2021-07-012021-09-300001320695ths:CoManufacturingMember2022-01-012022-09-300001320695ths:CoManufacturingMember2021-01-012021-09-300001320695ths:FoodAwayFromHomeAndOtherMember2022-07-012022-09-300001320695ths:FoodAwayFromHomeAndOtherMember2021-07-012021-09-300001320695ths:FoodAwayFromHomeAndOtherMember2022-01-012022-09-300001320695ths:FoodAwayFromHomeAndOtherMember2021-01-012021-09-30

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2022.
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from                to
Commission File Number: 001-32504
TreeHouse Foods, Inc.
(Exact name of the registrant as specified in its charter)
 ths-20220930_g1.jpg
Delaware20-2311383
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
2021 Spring Road, Suite 600
Oak Brook, IL 60523
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (708483-1300

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueTHSNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
Accelerated filer
    
Non-accelerated filerSmaller reporting company
    
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     No  
The number of shares of the registrant's common stock outstanding as of October 31, 2022 was 56,082,442.
1


Table of Contents
 

2


Part I — Financial Information
Item 1. Financial Statements
TREEHOUSE FOODS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in millions, except per share data)
September 30, 2022December 31, 2021
Assets  
Current assets:  
Cash and cash equivalents$74.7 $304.5 
Receivables, net155.1 151.3 
Inventories648.9 461.6 
Prepaid expenses and other current assets64.6 57.0 
Assets of discontinued operations1,251.7 1,208.1 
Total current assets2,195.0 2,182.5 
Property, plant, and equipment, net655.8 700.1 
Operating lease right-of-use assets182.9 138.1 
Goodwill1,817.0 1,821.9 
Intangible assets, net305.4 336.6 
Other assets, net32.0 28.6 
Total assets$5,188.1 $5,207.8 
Liabilities and Stockholders' Equity  
Current liabilities:  
Accounts payable$721.9 $625.9 
Accrued expenses186.5 233.9 
Current portion of long-term debt11.3 15.4 
Liabilities of discontinued operations339.4 282.5 
Total current liabilities1,259.1 1,157.7 
Long-term debt1,879.4 1,890.0 
Operating lease liabilities158.6 119.0 
Deferred income taxes106.9 105.1 
Other long-term liabilities69.1 90.6 
Total liabilities3,473.1 3,362.4 
Commitments and contingencies (Note 18)
Stockholders' equity:  
Preferred stock, par value $0.01 per share, 10.0 shares authorized, none issued
  
Common stock, par value $0.01 per share, 90.0 shares authorized, 56.1 and 55.8 shares outstanding as of September 30, 2022 and December 31, 2021, respectively
0.6 0.6 
Treasury stock(133.3)(133.3)
Additional paid-in capital2,200.5 2,187.4 
Accumulated deficit(278.6)(155.7)
Accumulated other comprehensive loss(74.2)(53.6)
Total stockholders' equity1,715.0 1,845.4 
Total liabilities and stockholders' equity$5,188.1 $5,207.8 


See Notes to Condensed Consolidated Financial Statements.
3


TREEHOUSE FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in millions, except per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
Net sales$875.0 $751.7 $2,457.8 $2,129.6 
Cost of sales745.7 625.8 2,118.8 1,784.8 
Gross profit129.3 125.9 339.0 344.8 
Operating expenses:
Selling and distribution52.0 50.1 167.9 143.8 
General and administrative51.5 38.1 160.5 142.0 
Amortization expense11.9 11.8 35.7 35.4 
Other operating expense, net23.4 16.9 66.4 57.8 
Total operating expenses138.8 116.9 430.5 379.0 
Operating (loss) income(9.5)9.0 (91.5)(34.2)
Other expense (income):
Interest expense17.5 16.5 51.2 55.5 
Loss on extinguishment of debt   14.4 
Loss (gain) on foreign currency exchange3.0 0.6 3.0 (0.3)
Other income, net(16.9)(3.6)(84.7)(38.7)
Total other expense (income)3.6 13.5 (30.5)30.9 
Loss before income taxes(13.1)(4.5)(61.0)(65.1)
Income tax expense (benefit)2.0 (0.4)(4.8)(15.0)
Net loss from continuing operations(15.1)(4.1)(56.2)(50.1)
Net (loss) income from discontinued operations(75.4)10.8 (66.7)66.7 
Net (loss) income$(90.5)$6.7 $(122.9)$16.6 
Earnings (loss) per common share - basic:
Continuing operations$(0.27)$(0.07)$(1.00)$(0.90)
Discontinued operations(1.34)0.19 (1.19)1.19 
Earnings (loss) per share basic (1)
$(1.61)$0.12 $(2.19)$0.30 
Earnings (loss) per common share - diluted:
Continuing operations$(0.27)$(0.07)$(1.00)$(0.90)
Discontinued operations(1.34)0.19 (1.19)1.19 
Earnings (loss) per share diluted (1)
$(1.61)$0.12 $(2.19)$0.30 
Weighted average common shares:
Basic56.1 55.8 56.0 55.9 
Diluted56.1 55.8 56.0 55.9 


(1)    The sum of the individual per share amounts may not add due to rounding.





See Notes to Condensed Consolidated Financial Statements.
4


TREEHOUSE FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)  
(Unaudited, in millions) 
Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
Net (loss) income$(90.5)$6.7 $(122.9)$16.6 
Other comprehensive (loss) income:
Foreign currency translation adjustments (14.5)(9.2)(20.8)(2.5)
Pension and postretirement reclassification adjustment 0.1 0.2 0.2 0.5 
Other comprehensive loss(14.4)(9.0)(20.6)(2.0)
Comprehensive (loss) income$(104.9)$(2.3)$(143.5)$14.6 
 






































See Notes to Condensed Consolidated Financial Statements.
5


TREEHOUSE FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited, in millions)
Accumulated
AdditionalOther
Common StockPaid-InAccumulatedTreasury StockComprehensiveTotal
SharesAmountCapitalDeficitSharesAmountLossEquity
Balance, January 1, 202158.3 $0.6 $2,179.9 $(143.2)(2.4)$(108.3)$(64.0)$1,865.0 
Net income— — — 1.5 — — — 1.5 
Other comprehensive income— — — — — — 1.0 1.0 
Issuance of stock awards0.3 — (7.9)— — — — (7.9)
Stock-based compensation— — 4.9 — — — — 4.9 
Balance, March 31, 202158.6 $0.6 $2,176.9 $(141.7)(2.4)$(108.3)$(63.0)$1,864.5 
Net income— — — 8.4 — — — 8.4 
Other comprehensive income— — — — — — 6.0 6.0 
Treasury stock repurchases— — — — (0.5)(25.0)— (25.0)
Issuance of stock awards— — (0.1)— — — — (0.1)
Stock-based compensation— — 4.7 — — — — 4.7 
Balance, June 30, 202158.6 $0.6 $2,181.5 $(133.3)(2.9)$(133.3)$(57.0)$1,858.5 
Net income— — — 6.7 — — — 6.7 
Other comprehensive loss— — — — — — (9.0)(9.0)
Issuance of stock awards0.1 — (0.1)— — — — (0.1)
Stock-based compensation— — 1.7 — — — — 1.7 
Balance, September 30, 202158.7 $0.6 $2,183.1 $(126.6)(2.9)$(133.3)$(66.0)$1,857.8 
Balance, January 1, 202258.7 $0.6 $2,187.4 $(155.7)(2.9)$(133.3)$(53.6)$1,845.4 
Net loss— — — (3.0)— — — (3.0)
Other comprehensive income— — — — — — 4.4 4.4 
Issuance of stock awards0.2 — (3.3)— — — — (3.3)
Stock-based compensation— — 4.3 — — — — 4.3 
Balance, March 31, 202258.9 $0.6 $2,188.4 $(158.7)(2.9)$(133.3)$(49.2)$1,847.8 
Net loss— — — (29.4)— — — (29.4)
Other comprehensive loss— — — — — — (10.6)(10.6)
Stock-based compensation— — 5.8 — — — — 5.8 
Balance, June 30, 202258.9 $0.6 $2,194.2 $(188.1)(2.9)$(133.3)$(59.8)$1,813.6 
Net loss— — — (90.5)— — — (90.5)
Other comprehensive loss— — — — — — (14.4)(14.4)
Issuance of stock awards0.1 — (0.5)— — — — (0.5)
Stock-based compensation— — 6.8 — — — — 6.8 
Balance, September 30, 202259.0 $0.6 $2,200.5 $(278.6)(2.9)$(133.3)$(74.2)$1,715.0 


See Notes to Condensed Consolidated Financial Statements.        
6


TREEHOUSE FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in millions)
Nine Months Ended
September 30,
20222021
Cash flows from operating activities:
Net (loss) income$(122.9)$16.6 
Net (loss) income from discontinued operations(66.7)66.7 
Net loss from continuing operations(56.2)(50.1)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization106.9 112.3 
Stock-based compensation15.2 10.1 
Loss on extinguishment of debt 14.4 
Unrealized gain on derivative contracts(79.3)(33.1)
Deferred income taxes5.7 (1.3)
Other6.8 3.5 
Changes in operating assets and liabilities, net of acquisitions and divestitures:
Receivables(6.1)27.3 
Inventories(199.3)(90.8)
Prepaid expenses and other assets22.0 (5.3)
Accounts payable110.5 12.1 
Accrued expenses and other liabilities(16.6)(56.1)
Net cash used in operating activities - continuing operations(90.4)(57.0)
Net cash (used in) provided by operating activities - discontinued operations(23.7)111.2 
Net cash (used in) provided by operating activities(114.1)54.2 
Cash flows from investing activities:
Additions to property, plant, and equipment(55.1)(58.9)
Additions to intangible assets(6.2)(11.5)
Proceeds from sale of fixed assets4.8 0.1 
Proceeds from sale of investments 17.2 
Net cash used in investing activities - continuing operations(56.5)(53.1)
Net cash (used in) provided by investing activities - discontinued operations(35.9)60.4 
Net cash (used in) provided by investing activities(92.4)7.3 
Cash flows from financing activities:
Borrowings under Revolving Credit Facility326.9 194.4 
Payments under Revolving Credit Facility(326.9)(194.4)
Payments on financing lease obligations(1.0)(1.3)
Payment of deferred financing costs(2.7)(8.5)
Payments on Term Loans(14.3)(1,133.2)
Proceeds from refinanced Term Loans 1,430.0 
Repurchase of Notes (602.9)
Payment of debt premium for extinguishment of debt (9.0)
Repurchases of common stock (25.0)
Payments related to stock-based award activities(3.8)(8.0)
Net cash used in financing activities - continuing operations(21.8)(357.9)
Net cash used in financing activities - discontinued operations(0.3)(0.3)
Net cash used in financing activities(22.1)(358.2)
Effect of exchange rate changes on cash and cash equivalents(2.5)(0.5)
Net decrease in cash and cash equivalents(231.1)(297.2)
Add: Cash and cash equivalents of discontinued operations, beginning of period4.1 11.8 
Less: Cash and cash equivalents of discontinued operations, end of period(2.8)(12.5)
Cash and cash equivalents, beginning of period304.5 352.8 
Cash and cash equivalents, end of period$74.7 $54.9 
7


Nine Months Ended
September 30,
20222021
Supplemental cash flow disclosures:
Interest paid$51.0 $60.3 
Net income taxes (refunded) paid(2.3)0.5 
Non-cash investing activities:
Accrued purchase of property and equipment$21.5 $16.8 
Accrued other intangible assets1.2 2.5 
Right-of-use assets obtained in exchange for lease obligations77.2 17.1 










































See Notes to Condensed Consolidated Financial Statements.
8


TREEHOUSE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of and for the nine months ended September 30, 2022
(Unaudited)
1. BASIS OF PRESENTATION

The unaudited Condensed Consolidated Financial Statements included herein have been prepared by TreeHouse Foods, Inc. and its consolidated subsidiaries (the "Company," "TreeHouse," "we," "us," or "our"), pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") applicable to quarterly reporting on Form 10-Q. In our opinion, these statements include all adjustments necessary for a fair presentation of the results of all interim periods reported herein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted as permitted by such rules and regulations. The Condensed Consolidated Financial Statements and related notes should be read in conjunction with the Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Results of operations for interim periods are not necessarily indicative of annual results.

Use of Estimates

The preparation of our Condensed Consolidated Financial Statements in conformity with GAAP requires management to use judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements, and the reported amounts of net sales and expenses during the reporting period. Actual results could differ from these estimates.

Summary of Significant Accounting Policies

A detailed description of the Company's significant accounting policies can be found in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Discontinued Operations

On October 3, 2022, the Company completed the sale of a significant portion of the Company’s Meal Preparation business, including pasta, pourable and spoonable dressing, preserves, red sauces, syrup, dry blends and baking, dry dinners, pie filling, pita chips and other sauces, for a base purchase price of $950 million (the "Transaction" or the "Business"), subject to certain adjustments pursuant to the terms of the Stock Purchase Agreement, dated as of August 10, 2022. This Transaction is in line with the Company’s strategy to build leadership and depth around a focused group of categories in its higher-growth businesses. Beginning in the third quarter of 2022, the Business met the criteria for discontinued operations presentation, and, as such, has been excluded from continuing operations for all periods presented. Refer to Note 7 for additional information.

Segment Information

As a result of entering into the Transaction, the Company changed the structure of its internal organization and reporting in the third quarter of 2022 and began operating as one segment. The Company manages operations on a company-wide basis, thereby making determinations as to the allocation of resources as one segment. We manufacture and distribute private label food and beverages in North America. Our products are primarily shelf stable and share similar customers and distribution. The Chief Executive Officer, who has been identified as our Chief Operating Decision Maker ("CODM") allocates resources and assesses performance based upon discrete financial information at the consolidated level. We have one segment manager who reports directly to the CODM with incentive compensation based on aggregated consolidated results of the Company. The annual operating plan is prepared and approved by the CODM based on consolidated results of the Company. We operate our business with a centralized financial systems infrastructure, and we share centralized resources for sales, procurement, and general and administrative activities. The majority of our manufacturing plants each produce one food or beverage category. Refer to Note 20 for disaggregation of revenue for additional information of our principal products sold.


9

TREEHOUSE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2. RECENT ACCOUNTING PRONOUNCEMENTS

Adopted

In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform. ASU 2020-04 was further amended in January 2021 by ASU 2021-01, Reference Rate Reform (Topic 848): Scope. This guidance provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and the sale or transfer of debt securities classified as held-to-maturity. This guidance is effective as of March 12, 2020 through December 31, 2022 and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company has identified agreements that reference LIBOR, including interest rate swap agreements, accounts receivable sale agreements, and debt agreements. The new guidance has been or will be applied as these contracts are modified to reference other rates. The Company adopted this guidance during the second quarter of 2022 as a result of a modification to a receivable sale agreement. The adoption did not have a material impact on the Company's financial statements.

3. GROWTH, REINVESTMENT, AND RESTRUCTURING PROGRAMS

The Company’s growth, reinvestment, and restructuring activities are part of an enterprise-wide transformation to build long-term sustainable growth and improve profitability for the Company. These activities are aggregated into the following categories: (1) Strategic Growth Initiatives (expected completion in 2023) – a growth and reinvestment strategy and (2) other (collectively the "Growth, Reinvestment, and Restructuring Programs").

Below is a description of each of the Growth, Reinvestment, and Restructuring Programs:

(1) Strategic Growth Initiatives

In the first quarter of 2021, the Company began executing on its growth and reinvestment initiatives designed to invest in our commercial organization, adapt the supply chain to better support long-term growth opportunities, and further enable the Company to build greater depth in growth categories. These initiatives are intended to better position the Company to accelerate future revenue and earnings growth, and improve the execution of our strategy to be our customers' preferred manufacturing and distribution partner. This reinvestment will occur through 2023, and the cumulative costs incurred to date are $91.1 million. The Company currently expects the total costs will be up to $130.0 million, comprised of consulting and professional fees, employee-related costs, and investment in information technology. Consulting and professional fees are expected to include building digital capabilities and advancing automation and value engineering in our supply chain network. Employee-related costs primarily consist of severance, retention, and dedicated employee costs.

(2) Other
 
Other costs include restructuring costs incurred for retention, severance, organization redesign, information technology system implementation, costs to exit facilities or production, and other administrative costs. Retention includes one-time cash recognition payments that were expensed ratably from the fourth quarter of 2021 to the first quarter of 2022 as well as additional cash bonuses and stock-based compensation to drive retention through 2023.

The costs by activity for the Growth, Reinvestment, and Restructuring Programs are outlined below:
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2022202120222021
 (In millions)
Strategic Growth Initiatives$6.5 $13.4 $31.1 $43.0 
Other15.9 3.5 35.3 14.7 
Total$22.4 $16.9 $66.4 $57.7 
 

10

TREEHOUSE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As part of our growth, reinvestment, and restructuring programs, we generally incur expenses that qualify as exit and disposal costs under U.S. GAAP. These include severance and employee separation costs and other exit costs. Severance and employee separation costs primarily relate to cash severance, non-cash severance, including accelerated equity award compensation expense, pension, and other termination benefits. Other exit costs typically relate to lease and contract terminations. We also incur expenses that are an integral component of, and directly attributable to, our growth, reinvestment, and restructuring activities, which do not qualify as exit and disposal costs under U.S. GAAP. These include asset-related costs and other costs. Asset-related costs primarily relate to accelerated depreciation and certain long-lived asset impairments. Other costs primarily relate to start-up costs of new facilities, consulting and professional fees, information technology implementation, asset relocation costs, and costs to exit facilities.

Below is a summary of costs by type associated with the Growth, Reinvestment, and Restructuring Programs:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
 (In millions)
Employee-related$12.5 $4.3 $31.8 $16.3 
Other costs9.9 12.6 34.6 41.4 
Total$22.4 $16.9 $66.4 $57.7 
 
For the three and nine months ended September 30, 2022 and 2021, employee-related costs primarily consisted of retention, severance, and dedicated project employee cost; and other costs primarily consisted of consulting services. Employee-related and other costs are recognized in Other operating expense, net of the Condensed Consolidated Statements of Operations. 

The table below presents the exit cost liabilities related to severance and retention activity for the Growth, Reinvestment, and Restructuring Programs as of September 30, 2022. All amounts in the table below include continuing and discontinued operations:
 SeveranceRetentionTotal Exit Cost Liabilities
 (In millions)
Balance as of December 31, 2021$3.9 $9.7 $13.6 
Expenses recognized12.3 17.6 29.9 
Cash payments(6.1)(17.8)(23.9)
Balance as of September 30, 2022$10.1 $9.5 $19.6 
 
The severance and retention liabilities are included in Accrued expenses in the Condensed Consolidated Balance Sheets.

11

TREEHOUSE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
4. LEASES

The Company has operating and finance leases for manufacturing facilities, warehouses and distribution centers, office space, and certain equipment. Remaining lease terms for these leases range from 1 year to 11 years. Some of the Company's leases include options to extend the leases for up to 26 years, and some include options to terminate the leases within 1 year.

Supplemental balance sheet information related to leases was as follows:
Balance Sheet ClassificationSeptember 30, 2022December 31, 2021
(In millions)
Assets
OperatingOperating lease right-of-use assets$182.9 $138.1 
FinanceProperty, plant, and equipment, net1.3 2.2 
Total assets$184.2 $140.3 
Liabilities
Current liabilities
OperatingAccrued expenses$38.1 $33.1 
FinanceCurrent portion of long-term debt0.6 1.0 
Total current liabilities38.7 34.1 
Noncurrent liabilities
OperatingOperating lease liabilities158.6 119.0 
FinanceLong-term debt0.7 1.2 
Total noncurrent liabilities159.3 120.2 
Total lease liabilities$198.0 $154.3 

The weighted-average discount rates for the Company's operating and finance leases are as follows:

Weighted-average discount rateSeptember 30, 2022December 31, 2021
Operating leases4.3 %4.3 %
Finance leases2.7 %2.9 %

The weighted-average remaining lease term of the Company's operating and finance leases are as follows:

Weighted-average remaining lease termSeptember 30, 2022December 31, 2021
Operating leases5.9 years6.7 years
Finance leases2.5 years2.8 years


12

TREEHOUSE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The components of lease expense were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
Statement of Operations Classification2022202120222021
(In millions)
Operating lease costCost of sales and General and administrative$12.1 $8.5 $29.0 $25.8 
Finance lease cost:
Amortization of right-of-use assetsCost of sales and General and administrative0.3 0.3 0.9 1.1 
Interest on lease liabilitiesInterest expense   0.1 
Total finance lease cost0.3 0.3 0.9 1.2 
Variable lease cost (1)Cost of sales and General and administrative3.7 4.2 11.9 11.6 
Net lease cost$16.1 $13.0 $41.8 $38.6 

(1)    Includes short-term leases, which are immaterial.

Future maturities of lease liabilities were as follows:
Operating Leases (1)Finance Leases
(In millions)
Three months ended December 31, 2022$11.3 $0.2 
202344.2 0.5 
202438.8 0.4 
202535.6 0.2 
202634.8  
Thereafter59.6  
Total lease payments224.3 1.3 
Less: Interest(27.6) 
Present value of lease liabilities$196.7 $1.3 

(1)     Operating lease payments include $2.8 million related to options to extend lease terms that are reasonably certain of being exercised.

Other information related to leases were as follows:
Nine Months EndedNine Months Ended
September 30, 2022September 30, 2021
(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$27.8 $27.6 
Financing cash flows from finance leases1.0 1.3 

13

TREEHOUSE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
5. RECEIVABLES SALES PROGRAM
 
The Company has entered into agreements to sell certain trade accounts receivable to unrelated, third-party financial institutions at a discount (collectively, "the Receivables Sales Program"). The agreements can be terminated by either party with 60 days' notice. The Receivables Sales Program is used by the Company to manage liquidity in a cost-effective manner. The Company has no retained interest in the receivables sold under the Receivables Sales Program; however, under the agreements, the Company does have collection and administrative responsibilities for the sold receivables. Under the Receivables Sales Program, the maximum amount of outstanding accounts receivables sold at any time is $500.0 million.

The following table includes the outstanding amount of accounts receivable sold under the Receivables Sales Program and the receivables collected from customers and not remitted to the financial institutions. All amounts in the table below include continuing and discontinued operations:
September 30, 2022December 31, 2021
 (In millions)
Outstanding accounts receivable sold$378.0 $357.3 
Receivables collected and not remitted to financial institutions216.4 205.0 
Receivables sold under the Receivables Sales Program are derecognized from the Company's Condensed Consolidated Balance Sheet at the time of the sale and the proceeds from such sales are reflected as a component of the change in receivables in the operating activities section of the Condensed Consolidated Statements of Cash Flows. The receivables collected and not remitted to financial institutions are included in Accounts payable in the Condensed Consolidated Balance Sheets.

The following table summarizes the cash flows of the Company's accounts receivables associated with the Receivables Sales Program. All amounts in the table below include continuing and discontinued operations:
Nine Months Ended September 30,
20222021
 (In millions)
Receivables sold$1,782.3 $1,312.3 
Receivables collected and remitted to financial institutions(1,761.6)(1,316.3)

The loss on sale of receivables from continuing operations represents the discount taken by third-party financial institutions and was $2.0 million and $0.5 million for the three months ended September 30, 2022 and 2021, respectively, and $3.3 million and $1.2 million for the nine months ended September 30, 2022 and 2021, respectively, and is included in Other income, net in the Condensed Consolidated Statements of Operations. The Company has not recognized any servicing assets or liabilities as of September 30, 2022 or December 31, 2021, as the fair value of the servicing arrangement as well as the fees earned were not material to the financial statements.

6. INVENTORIES

September 30, 2022December 31, 2021
 (In millions)
Raw materials and supplies$259.8 $183.0 
Finished goods389.1 278.6 
Total inventories$648.9 $461.6 
 

14

TREEHOUSE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
7. DISCONTINUED OPERATIONS

Sale of a Significant Portion of the Meal Preparation Business

On August 10, 2022, the Company, entered into a Stock Purchase Agreement (the "Purchase Agreement") with two entities affiliated with Investindustrial: Rushmore Investment III LLC, a Delaware limited liability company ("US Buyer") and 1373978 B.C., ULC, a British Columbia unlimited liability company ("CA Buyer" and together with US Buyer, the "Buyer"). On October 3, 2022, the Company completed the sale of a significant portion of the Company’s Meal Preparation business (the "Business") for a base purchase price of $950.0 million, subject to certain adjustments pursuant to the terms of the Purchase Agreement. The purchase price consists of approximately $527.5 million in cash and approximately $422.5 million in a five-year secured seller promissory note issued by Rushmore Investment III LLC in favor of the Company and certain of its subsidiaries. The sale of the Business is in line with the Company’s strategy to build leadership and depth around a focused group of categories in its higher-growth businesses. In October 2022, the Company used the majority of its cash proceeds of the sale to pay down debt.

The Business consists of consumer packaged food manufacturers operating 14 manufacturing facilities in the United States, Canada, and Italy servicing primarily retail grocery customers. The Business includes 11 categories and sells center of the store grocery and main course meal items, such as pasta, pourable dressings, sauces, red sauces (salsas and pasta sauces), spoonables (mayos and dips), syrups, preserves, dry dinners (macaroni and cheese), dry blends and baking goods, and pie filling as well as pita chips, which was previously reported in the Snacking & Beverages segment.

The Company entered into a Transition Services Agreement ("TSA") with the Buyer, which is designed to ensure and facilitate an orderly transfer of business operations. The services provided under the TSA include, but are not limited to, IT systems implementation, IT and financial shared services, procurement and order processing, customer service, distribution network separation, and a supply agreement. These services terminate at various times up to twenty-four months from the date of sale and certain services can be renewed with a maximum of an additional twelve-month period. Additionally, a $35.0 million credit will be provided to the Buyer by TreeHouse to cover initial TSA set-up costs that otherwise would have been incurred by the Buyer ("TSA Credit"). The TSA Credit is included in the fair value of consideration transferred, and it represents deferred income for TreeHouse until the Company incurs the related TSA set-up costs, at which point deferred income will be reduced and TSA income recognized.

The Company has classified the assets and liabilities related to the Business as held for sale in its Condensed Consolidated Balance Sheets as of September 30, 2022. The disposal group of the Business was tested for recoverability as of the balance sheet date, and the Company recognized an expected loss on disposal of $73.8 million during the three and nine months ended September 30, 2022, as the fair value was determined to be less than the carrying value of the associated assets, including the related goodwill. The fair value for the secured seller promissory note was estimated at par value as of September 30, 2022, and the valuation will be completed in the fourth quarter of 2022. The expected loss on disposal is recognized within Net (loss) income from discontinued operations in the Condensed Consolidated Statements of Operations.

Ready-to-eat Cereal

On June 1, 2021, the Company simultaneously entered into a definitive agreement and completed the sale of its Ready-to-eat ("RTE") Cereal business to Post Holdings, Inc. ("Post") for a base purchase price of $85.0 million, subject to customary purchase price adjustments, resulting in cash proceeds at closing of $