 Branded CPG product revenues increased 4.3 6.6 constant currency in the second quarter Business combination between Act II and Merisant Company and MAFCO Worldwide LLC completed on June 25, 2020Cash balance of 61.6 million and total liquidity of 110.9 million as of June 30, 2020CHICAGO, Aug. 14, 2020 GLOBE NEWSWIRE -- Whole Earth Brands, Inc. the Company Nasdaq: FREE, today announced its financial results for its second quarter ended June 30, 2020.SECOND QUARTER 2020 HIGHLIGHTS Business combination completed on June 25, 2020 with Flavors Holdings Inc. subsidiaries Merisant Company Merisant, one of the worlds leading manufacturers of calorie-FREE and low-calorie sugar substitutes, and MAFCO Worldwide LLC MAFCO, the worlds leading manufacturer of natural licorice products. Consolidated product revenues of 66.8 million. Branded CPG segment product revenues of 43.1 million, an increase of 4.3; an increase of 6.6 on a constant currency basis. In the Branded CPG segment, North America e-commerce product revenues grew 2.0 million or 249 within the quarter. This growth, together with retail growth, more than offset the decline in the North America food service product revenues within the quarter. Flavors Ingredients segment product revenues of 23.8 million, a decrease of 14.2, driven by a 3.8 million decline in the international tobacco market, as previously disclosed. Consolidated operating income decreased by 11.1 million to a loss of 5.2 million primarily attributable to transaction bonuses related to the business combination. Consolidated net loss of 6.0 million. Consolidated Adjusted EBITDA decreased 8.8 to 11.3 million primarily driven by the international tobacco product decline as previously disclosed. Cash balance of 61.6 million and total liquidity of 110.9 million as of June 30, 2020.Albert Manzone, Chief Executive Officer of Whole Earth Brands, commented, I am extremely proud of the perseverance of our global organization as we met the COVID-19 related challenges head-on while delivering excellent customer service during these exceptional times. With the completion of the business combination on June 25, 2020, this transaction marks an exciting milestone in our combined corporate history as we take an important step forward in growing our platform of branded products and ingredients focused on the consumer transition towards natural alternatives and clean label products. The impact of COVID-19 on our business is a tale of two halves. While our Branded CPG business is experiencing tailwinds due to shifting consumer demand and consumption, our Flavors Ingredients business is experiencing some headwinds in international tobacco, as well as manufacturing inefficiencies at our customers facilities. Importantly, I reiterate the strong and stable financial foundation that we have in place to execute our growth strategy for Whole Earth Brands. Our leadership position in the markets we serve enables our high-margin, structurally advantaged profile and our asset-light infrastructure requires minimal capital requirements to support the growth of the existing businesses. The cash flow generation this combination creates, coupled with our low leverage and high liquidity levels, is expected to immediately help us drive organic growth and pursue acquisitions to achieve our mission. Mr. Manzone continued, I believe we have the foundations to build a major force in what we like to call the free-from marketplace. This is a rapidly growing, not to mention massive, segment of the marketplace that is on-trend and has extremely powerful secular forces supporting it.Irwin Simon, Executive Chairman, concluded, Bringing Whole Earth Brands to the public market has been an exciting journey. In the past month and a half since closing the transaction, we have been meeting with the leadership team and refining our strategies. We are thrilled by the opportunities that our team is driving to support our growth initiatives.SECOND QUARTER 2020 REVIEW SEGMENT RESULTS Our consolidated financials reflect both predecessor and successor periods indicative of the June 25 business combination date. The second quarter results disclosed in this release combine the successor period from June 26, 2020 through June 30, 2020 with the predecessor period from April 1, 2020 through June 25, 2020. The combined second quarter results are compared to the predecessors second quarter 2019.Consolidated product revenues decreased 3.1 to 66.8 million for the second quarter of 2020, compared to 69.0 million for the same period in the prior year. On a constant currency basis, product revenues decreased 1.7. Growth in the Companys Branded CPG segment was offset by headwinds in international tobacco from the Flavors Ingredients segment, as previously disclosed. The decline in international tobacco revenues in the second quarter of 2020 was 3.8 million. Gross profit was 26.6 million, a decrease of 1.1 million compared to the same period in 2019. Gross profit margin was 39.8 in the second quarter 2020, down 30 basis points from the prior year period, driven primarily by transaction bonuses related to the business combination.Operating loss was 5.2 million, compared to operating income of 5.9 million in the prior year period. The decrease was driven primarily by the transaction bonuses. Net loss was 6.0 million, compared to net income of 3.5 million in the prior year period. The decrease was also driven primarily by the transaction bonuses.Adjusted EBITDA decreased by 1.1 million to 11.3 million, compared to 12.4 million for the same period in the prior year. The decrease was driven primarily by the decline in product revenues from international tobacco in the Flavors Ingredients segment.Branded CPG Segment Branded CPG segment product revenues increased 4.3 to 43.1 million for the second quarter of 2020, compared to 41.3 million for the same period in the prior year. On a constant currency basis, product revenues increased 6.6 driven by Whole Earth Sweetener gains in North America, improved overall category performance of sugar-free substitutes, share gains in Western Europe, and double-digit growth in the Asia Pacific region.Operating loss was 5.3 million in the second quarter of 2020, compared to operating income of 0.7 million in the prior year. The decrease was driven primarily by transaction bonuses related to the business combination.Flavors Ingredients Segment Flavors Ingredients segment product revenues decreased 14.2 to 23.8 million for the second quarter of 2020, compared to 27.7 million for the same period in the prior year. The quarterly decrease was primarily driven by headwinds in international tobacco. The decline in international tobacco product revenues was 3.8 million. Furthermore, the team is working closely with its diversified customer base to navigate COVID-19 related manufacturing challenges and production constraints. As a result, the segment was negatively impacted given its position as a supplier. Operating income was 0.1 million in the second quarter of 2020, compared to operating income of 5.2 million in the prior year. The decrease was primarily driven by the transaction bonuses and the product revenue decline mentioned above.YEAR-TO-DATE HIGHLIGHTS Our consolidated financials reflect both predecessor and successor periods indicative of the June 25 business combination date. The year-to-date results disclosed below combine the successor period from June 26, 2020 through June 30, 2020 with the predecessor period from January 1, 2020 through June 25, 2020. The combined year-to-date results are compared to the predecessors 2019 year-to-date results.As compared to the first six months in 2019: Consolidated product revenues decreased 4.7, or 6.5 million, to 132.8 million. Branded CPG segment product revenues increased 0.6, or 2.6 on a constant currency basis, to 83.3 million. Flavors Ingredients segment product revenues declined 12.4, to 49.5 million driven by international tobacco. Consolidated gross profit margin of 39.5, represents a decrease of 100 basis points, driven primarily by transaction bonuses related to the business combination and lower volume absorption at the Companys Flavors Ingredient factories. Consolidated operating income decreased 54.8 million, to a 38.5 million loss. The decrease was driven primarily by non-cash asset impairment charges of 40.6 million recorded in the first quarter of 2020 and transaction bonuses related to the business combination. Consolidated Adjusted EBITDA decreased 15.2, to 23.9 million.YEAR-TO-DATE 2020 SEGMENT RESULTS Branded CPG Product revenues increased 0.6 to 83.3 million for the six months ended June 30, 2020, compared to 82.8 million for the same period in the prior year. On a constant currency basis, the increase was 2.6 driven primarily by Whole Earth Sweetener gains in North America and share gains in Western Europe.Operating loss was 14.6 million for the six months ended June 30, 2020, compared to operating income of 4.5 million in the prior year. The decrease was driven by non-cash asset impairment charges of 11.1 million recorded in the first quarter of 2020 and the transaction bonuses related to the business combination.Flavors Ingredients Product revenues decreased 12.4 to 49.5 million for the six months ended June 30, 2020, compared to 56.5 million for the same period in the prior year. The decrease was primarily driven by the decline in international tobacco, as previously disclosed, and COVID-19 related manufacturing challenges and production constraints at customers. 