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WhiteWave Foods Reports Strong Second Quarter 2013 Results

In addition to the results prepared in accordance with GAAP, we have presented certain non-GAAP financial measures, including pro forma adjusted financial information for periods prior to 2013 and adjusted financial information for 2013, such as net sales, net income and diluted earnings per share. We show non-GAAP measures presented on a pro forma adjusted basis as if the Company had operated on an independent and stand-alone basis in all periods presented prior to 2013 in order to facilitate meaningful evaluation of our operating performance between periods. These pro forma and other adjustments in 2012 primarily relate to various commercial arrangements with Dean Foods, and its former subsidiary Morningstar, that were entered into in connection with the separation of the Company’s business from the rest of Dean Foods’ businesses; increased corporate costs to operate as a stand-alone public company; interest expense; completion of the IPO and the use of proceeds therefrom; non-recurring transaction costs related to the Company’s IPO; and equity awards to certain of our executive officers, employees and directors made in connection with the IPO. Adjustments in 2013 include certain corporate costs associated with equity awards in conjunction with our IPO, non-recurring transaction costs related to the current offering by Dean Foods for its shares of the Company, and non-recurring transition costs related to our separation from Dean Foods. These adjustments are intended to allow investors to evaluate our business on the same basis as our management. These pro forma adjustments and other adjustments are not necessarily indicative of our future performance and the 2012 adjustments do not reflect what our actual financial performance would have been had we been a stand-alone public company during the applicable periods presented. Further detail regarding these pro forma and other adjustments is included in the tables below.

ABOUT THE WHITEWAVE FOODS COMPANY

The WhiteWave Foods Company is a leading consumer packaged food and beverage company that manufactures, markets, distributes, and sells branded Plant-based Foods and Beverages, Coffee Creamers and Beverages, and Premium Dairy products throughout North America and Europe. The Company is focused on providing consumers with innovative, great-tasting food and beverage choices that meet their increasing desires for nutritious, flavorful, convenient, and responsibly produced products. The Company’s widely-recognized, leading brands distributed in North America include Silk® Plant-based Foods and Beverages, International Delight® and LAND O LAKES® Coffee Creamers and Beverages, and Horizon Organic® Premium Dairy products. Its popular European brands of Plant-based Foods and Beverages include Alpro® and Provamel®.

FORWARD-LOOKING STATEMENTS

Some of the statements in this press release are “forward-looking” and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These “forward-looking” statements include statements relating to, among other things, projections of net sales growth, operating income, net income and earnings per share, on an adjusted and GAAP basis, our innovation plans, our ability to expand capacity, anticipated profit growth, margin expansion, capital expenditures, tax rate and corporate costs, and other statements that begin with words such as “believe,” “expect” or “anticipate.” These statements involve risks and uncertainties that may cause results to differ materially from the statements set forth in this press release. Financial projections are based on a number of assumptions, and actual results could be materially different than projected if those assumptions are erroneous. The Company’s ability to meet targeted financial and operating results depend on a variety of economic, competitive, and governmental factors, including raw material availability and costs, the demand for the Company’s products, and the Company’s ability to access capital under its credit facilities or otherwise, many of which are beyond the Company’s control and which are described in the Company’s 2012 Annual Report on Form 10-K, as supplemented and updated in our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 14, 2013. The Company’s ability to profit from its branding initiatives depends on a number of factors, including consumer acceptance of the Company’s products. Our growth plans depend, in part, on our ability to innovate successfully and on a cost-effective basis. The Company’s expected operating income growth will depend in part on its ability to cost effectively expand capacity. The forward-looking statements in this press release speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based.

     

The WhiteWave Foods Company Condensed Consolidated Statements of Operations (Unaudited)

 
GAAP
Three months ended June 30, Six months ended June 30,
2013 2012 2013 2012
(In thousands, except share and per share data)
Net sales $ 600,827 $ 528,154 $ 1,185,335 $ 1,050,884
Net sales to related parties 15,163 26,292 37,062 55,590
Transitional sales fees   -     -   1,837     -
Total net sales 615,990 554,446 1,224,234 1,106,474
Cost of sales   391,777     359,295   781,478     718,883
Gross profit 224,213 195,151 442,756 387,591
Related party license income - 10,843 - 21,316
Operating costs and expenses:
Selling and distribution 138,346 123,870 264,284 242,857
General and administrative   43,913     39,917   94,525     74,979

Total operating costs and expenses

  182,259     163,787   358,809     317,836
Operating income 41,954 42,207 83,947 91,071
Other (income) expense:
Interest expense 4,737 961 9,461 2,610
Other (income) expense, net   (8,173 )   562   (8,393 )   683
Total other (income) expense   (3,436 )   1,523   1,068     3,293
Income before income taxes 45,390 40,684 82,879 87,778
Income tax expense   14,181     14,301   27,672     30,087
Net income $ 31,209   $ 26,383 $ 55,207   $ 57,691
Average common shares:
Basic 173,005,352 150,000,000 173,002,691 150,000,000
Diluted 173,909,653 150,000,000 173,567,934 150,000,000
Basic earnings per common share:
Net income $ 0.18 $ 0.18 $ 0.32 $ 0.39
Diluted earnings per common share:
Net income $ 0.18 $ 0.18 $ 0.32 $ 0.39
 
 
The WhiteWave Foods Company
Condensed Consolidated Balance Sheets
(Unaudited)
 
    GAAP

  June 30, 2013  

  December 31, 2012
(In thousands)
ASSETS
Cash and cash equivalents $ 72,113 $ 69,373
Other current assets   370,658   313,448
Total current assets 442,771 382,821
Property, plant, and equipment, net 633,177 624,642
Identifiable intangible and other assets, net   1,155,423   1,160,548
Total Assets $ 2,231,371 $ 2,168,011
 
LIABILITIES AND EQUITY
Total current liabilities, excluding debt $ 319,365 $ 307,542
Total long-term debt, including current portion 721,600 780,550
Other long-term liabilities 306,442 294,963
Total Liabilities 1,347,407 1,383,055
 
Total equity   883,964   784,956
Total Liabilities and Equity $ 2,231,371 $ 2,168,011
 

Pro Forma Adjusted Condensed Consolidated Financial Information

The WhiteWave Foods Company (“WhiteWave”, “our”, “we”, “us”, or the “Company”) was incorporated on July 17, 2012 as a wholly-owned subsidiary of Dean Foods to acquire the capital stock of WWF Operating Company (“WWF Opco”), a wholly-owned subsidiary of Dean Foods. Prior to our initial public offering, WWF Opco held substantially all of the historical assets and liabilities related to our business that we acquired pursuant to the contribution described below. We had nominal assets and no liabilities, and conducted no operations prior to the completion of our initial public offering.

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