klg-20240928

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 28, 2024


☐			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 001-41755

WK Kellogg Co

Delaware

92-1243173

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification No.)

One Kellogg Square,

Battle Creek

Michigan

49016-3599

(Address of principal executive offices)

(Zip Code)

269 - 401-3000

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $.0001 par value per share	KLG	New 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, 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 filer

☒

Smaller 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 ☒

As of November 1, 2024 — 86,125,244 shares of the registrant's common stock were outstanding

Table of Content s

WK KELLOGG CO

INDEX


			Page
PART I — Financial Information
Item 1:
Financial Statements
Unaudited Consolidated Balance Sheet — September 28, 2024 and December 30, 2023			3
Unaudited Consolidated Statement of Income — quarter and year-to-date periods ended September 28, 2024 and September 30, 2023			4
Unaudited Consolidated Statement of Comprehensive Income – quarter and year-to-date periods ended September 28, 2024 and September 30, 2023			5
Unaudited Consolidated Statement of Equity — quarter and year-to-date periods ended September 28, 2024 and September 30, 2023			6
Unaudited Consolidated Statement of Cash Flows — quarter and year-to-date periods ended September 28, 2024 and September 30, 2023			8
Notes to Unaudited Consolidated Financial Statements			9
Item 2:
Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3:
Quantitative and Qualitative Disclosures about Market Risk			31
Item 4:
Controls and Procedures			32
PART II — Other Information
Item 1:
Legal Proceedings			33
Item 1A:
Risk Factors			33


Item 5:
Other Information			33
Item 6:
Exhibits			34
Signatures			35

Table of Content s

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements.

WK KELLOGG CO

CONSOLIDATED BALANCE SHEET (Unaudited)

(millions, except per share data)


	September 28, 2024		December 30, 2023
Current assets
Cash and cash equivalents	$	47	$	89
Accounts receivable, net	199		244
Inventories	339		345
Other current assets	17		28
Total current assets	602		706
Property, net	764		739
Operating lease right-of-use assets	99		18
Goodwill	53		53
Other intangibles	57		57
Postretirement plan assets	300		283
Other assets	25		33
Total assets	$	1,900	$	1,889
Current liabilities
Notes payable	$	2	$	4
Current maturities of long-term debt	15		8
Accounts payable	508		541
Accrued advertising and promotion	92		121
Accrued salaries and wages	52		57
Other current liabilities	101		105
Total current liabilities	770		836
Long-term debt	472		487
Long-term operating lease obligations	83		12
Deferred income taxes	96		106
Pension liability	122		135

Other liabilities	41		13
Commitments and contingencies (Note 9)
Equity
Common stock, $0.0001 par value, 1,000,000,000 shares authorized Issued: 85,977,995 shares as of September 28, 2024 and 85,812,883 shares as of December 30, 2023	—		—
Capital in excess of par value	341		327
Retained earnings	11		1

Accumulated other comprehensive loss	(36)		(28)


Total equity	316		300
Total liabilities and equity	$	1,900	$	1,889

See accompanying Notes to Unaudited Consolidated Financial Statements.

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WK KELLOGG CO

CONSOLIDATED STATEMENT OF INCOME (Unaudited)

(millions, except per share data)


	Quarter ended				Year-to-date period ended
	September 28, 2024		September 30, 2023		September 28, 2024		September 30, 2023
Net sales	$	689	$	692	$	2,068	$	2,112
Cost of goods sold	495		496		1,475		1,544
Selling, general and administrative expense	162		179		468		497
Restructuring Costs	38		—		38		—
Operating profit (loss)	(6)		17		87		71
Interest expense	7		—		23		—
Other income (expense), net	(2)		38		8		53
Income (loss) before income taxes	(15)		55		72		124
Income taxes (benefit)	(4)		13		19		29
Net income (loss)	$	(11)	$	42	$	53	$	95


Per share amounts (a):
Basic earnings (loss)	$	(0.13)	$	0.49	$	0.62	$	1.10
Diluted earnings (loss)	(0.13)		0.49		0.60		1.10

Average shares outstanding:
Basic	86		86		86		86
Diluted	86		86		88		86
Actual shares outstanding at period end	86		86		86		86

(a)On October 2, 2023, Kellanova, the former parent company of WK Kellogg Co, distributed 85,631,304 shares of WK Kellogg Co common stock to Kellanova's shareowners in connection with its Spin-Off of WK Kellogg Co (the "Spin-Off"). See Note 1 "Accounting Policies" to the Unaudited Consolidated Financial Statements for more information. Basic and diluted earnings per share were retrospectively recast for the number of shares of WK Kellogg Co common stock outstanding immediately following the Spin-Off for the quarter and year-to-date period ended September 30, 2023.

See accompanying Notes to Unaudited Consolidated Financial Statements.

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WK KELLOGG CO

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)

(millions)


	Quarter ended						Year-to-date period ended
	September 28, 2024						September 28, 2024
	Pre-tax amount		Tax (expense) benefit		After-tax amount		Pre-tax amount		Tax (expense) benefit		After-tax amount
Net income (loss)	$	(15)	$	4	$	(11)	$	72	$	(19)	$	53
Other comprehensive income (loss):
Foreign currency translation adjustments:
Foreign currency translation adjustments during period	—		—		—		(6)		2		(4)


Cash flow hedges:
Net deferred gain (loss) on cash flow hedges	(2)		—		(2)		(2)		—		(2)

Postretirement and postemployment benefits:
Amount arising during the period:
Prior service cost	3		(1)		2		3		(1)		2
Reclassification to net income:

Prior service cost	(1)		1		—		(3)		1		(2)




Comprehensive income (loss)	$	(15)	$	4	$	(11)	$	64	$	(17)	$	47




	Quarter ended						Year-to-date period ended
	September 30, 2023						September 30, 2023
	Pre-tax amount		Tax (expense) benefit		After-tax amount		Pre-tax amount		Tax (expense) benefit		After-tax amount
Net income	$	55	$	(13)	$	42	$	124	$	(29)	$	95
Other comprehensive income (loss):
Foreign currency translation adjustments:
Foreign currency translation adjustments during period	(1)		—		(1)		3		—		3















Comprehensive income	$	54	$	(13)	$	41	$	127	$	(29)	$	98

See accompanying Notes to Unaudited Consolidated Financial Statements.

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WK KELLOGG CO

CONSOLIDATED STATEMENT OF EQUITY (Unaudited)

(millions)


	Quarter ended September 28, 2024
	Common stock			Capital in excess of par value		Retained earnings		Accumulated other comprehensive income (loss)			Total equity
(unaudited)	shares	amount
Balance, June 29, 2024	86	$	—	$	335	$	37		$	(36)		$	336

Net income (loss)	—	—		—		(11)			—			(11)


Dividends declared ($0.16 per share)	—	—		—		(14)			—			(14)

Other comprehensive income (loss)	—	—		—		—			—			—
Stock compensation	—	—		5		(1)			—			4

Share issuance	—	—		1		—			—			1

Balance, September 28, 2024	86	$	—	$	341	$	11		$	(36)		$	316

SEC Form 10-Q filed by WK Kellogg Co