BellRing Brands, Inc. (NYSE:BRBR) Q1 2023 Earnings Call Transcript

Rob Dickerson: Okay, fair enough. And then just quickly on cash flow. Look, obviously with more production way coming down, everything you talked about, there’s margin moving up and the sales moving up, EBITDA is moving up, leverage is in a good spot, should be generating more free cash flow and your command. So not a lot of CAPEX needs, at least for now. So just kind of generally speaking, again, cash flow starts to pick up later this year, definitely in the next fiscal year, where would you kind of view priorities for cash allocation? That’s it, thanks.

Paul Rode: Sure. Yes. So you’re completely correct. We — our business generates really strong cash flow, which obviously gives us a lot of optionality on the capital allocation side. Where we are today with — our focus is on organic growth. We have a high bar for M&A and so really, the capital allocation decisions are really between share buybacks and deleveraging and the deleveraging is really primarily around paying down our revolver as the remainder of our debt is fixed. So we still look at share buybacks as a prudent capital allocation option for us and we’ll continue to assess that versus delevering as we go through the year. And keep in mind, we delever just through EBITDA growth. So we’ll get below 3 times just with growing EBITDA. So it just gives us the optionality to look at share buybacks versus bringing down our revolver.

Rob Dickerson: Great to hear, thank you so much.

Darcy H. Davenport: Thanks.

Operator: Thank you. Ladies and gentlemen, we have reached our allotted time for questions, and this does conclude today’s program. We appreciate your participation, and you may disconnect at any time.