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WhiteWave Foods Reports Strong Second Quarter 2013 Results

Stocks in this article: WWAV

The pro forma adjustments to our historical financial information reflect the following:

  • our separation from Dean Foods;
  • the incurrence of approximately $885 million in new indebtedness under our senior secured credit facilities;
  • the settlement of our historical indebtedness, including the $440.3 million allocated portion of the Dean Foods senior secured credit facility which was reflected as a contribution to our capital from Dean Foods;
  • the agreements that formalized and, in certain cases, modified ongoing commercial arrangements we have with certain current and former wholly-owned Dean Foods subsidiaries; and
  • the termination of the intellectual property license agreement with Morningstar Foods, LLC (“Morningstar”).

The additional adjustments to our historical financial information for all the periods presented reflect the incremental impact of the transitional sales agreements, stand-alone public company costs, and non-recurring transition costs, all of which are described in the notes to the tables presented.

On January 3, 2013, Dean Foods sold Morningstar to an unaffiliated third party. In connection with this sale, we modified certain of the commercial agreements entered into in connection with the initial public offering between us and Morningstar. These modifications are primarily timing modifications and are not expected to have a material impact on our results of operations.

   
The WhiteWave Foods Company Reconciliation of GAAP to Non-GAAP Information (Unaudited)
 

GAAP QTDQ2 2013

Adjustments

Adjusted QTDQ2 2013

(In thousands, except share and per share data)
Total net sales $ 615,990 $ - $ 615,990
Cost of sales   391,777     -     391,777  
Gross profit 224,213 - 224,213
Related party license income - - -
Operating costs and expenses:
Selling and distribution 138,346 - 138,346
General and administrative   43,913     (4,160 ) (a)   39,753  

Total operating costs and expenses

  182,259     (4,160 )   178,099  
Operating income 41,954 4,160 46,114
Other (income) expense:
Interest expense 4,737 - 4,737
Other (income) expense, net   (8,173 )   8,173   (b)   -  
Total other (income) expense   (3,436 )   8,173     4,737  
Income before income taxes 45,390 (4,013 ) 41,377
Income tax expense   14,181     (1,300 ) (c)   12,881  
Net income $ 31,209   $ (2,713 ) $ 28,496  
Earnings per Share, Basic and Diluted:
Basic $ 0.16 (i)
Diluted $ 0.16 (i)
Weighted Average Shares Outstanding, Basic and Diluted:
Basic 173,005,352
Diluted 173,909,653
 
 

GAAP QTDQ2 2013

Adjustments

Adjusted QTDQ2 2013

(In thousands)
Income statement amounts by segment:
Total net sales
North America $ 513,829 $ - $ 513,829
Europe   102,161     -     102,161  
Total $ 615,990   $ -   $ 615,990  
 
Operating income
North America $ 49,688 $ - $ 49,688
Europe   7,847     -     7,847  
Total consolidated segment operating income   57,535     -     57,535  
Related party license income - - -
Corporate and other   (15,581 )   4,160   (a)   (11,421 )
Total operating income $ 41,954   $ 4,160   $ 46,114  
 
 
The WhiteWave Foods Company Reconciliation of GAAP to Non-GAAP Information (Unaudited)
   

GAAP YTDQ2 2013

Adjustments

Adjusted YTDQ2 2013

(In thousands, except share and per share data)
Total net sales $ 1,224,234 $ - $ 1,224,234
Cost of sales   781,478     -     781,478  
Gross profit 442,756 - 442,756
Related party license income - - -
Operating costs and expenses:
Selling and distribution 264,284 - 264,284
General and administrative   94,525     (9,639 ) (a)   84,886  
Total operating costs and expenses   358,809     (9,639 )   349,170  
Operating income 83,947 9,639 93,586
Other expense:
Interest expense 9,461 - 9,461
Other (income) expense, net   (8,393 )   8,150   (b)   (243 )
Total other expense   1,068     8,150     9,218  
Income before income taxes 82,879 1,489 84,368
Income tax expense   27,672     596   (c)   28,268  
Net income $ 55,207   $ 893   $ 56,100  
Earnings per Share, Basic and Diluted:
Basic $ 0.32 (i)
Diluted $ 0.32 (i)
Weighted Average Shares Outstanding, Basic and Diluted:
Basic 173,002,691
Diluted 173,567,934
 
 

GAAP YTDQ2 2013

Adjustments

Adjusted YTDQ2 2013

(In thousands)
Income statement amounts by segment:
Total net sales
North America $ 1,020,846 $ - $ 1,020,846
Europe   203,388     -     203,388  

Total

$ 1,224,234   $ -   $ 1,224,234  
 
Operating income
North America $ 105,899 $ - $ 105,899
Europe   14,550     -     14,550  
Total consolidated segment operating income   120,449     -     120,449  
Related party license income - - -
Corporate and other   (36,502 )   9,639   (a)   (26,863 )
Total operating income $ 83,947   $ 9,639   $ 93,586  
 
The WhiteWave Foods Company Reconciliation of GAAP to Non-GAAP Information (Unaudited)
         

GAAP QTDQ2 2012

Pro formaadjustments

Pro forma

Additionaladjustments

Pro FormaAdjusted QTDQ2 2012

(In thousands, except share and per share data)
 
Total net sales $ 554,446 $ 5,618 (d) $ 560,064 $ (1,925 ) (h) $ 558,139
Cost of sales   359,295     2,707   (d)   362,002     (5,289 ) (h)   356,713  
Gross profit 195,151 2,911 198,062 3,364 201,426
Related party license income 10,843 (10,843 ) (e) - - -
Operating costs and expenses:
Selling and distribution 123,870 - 123,870 (481 ) (h) 123,389
General and administrative   39,917     (1,544 ) (f)   38,373     (58 ) (a)   38,315  
Total operating costs and expenses   163,787     (1,544 )   162,243     (539 )   161,704  
Operating income 42,207 (6,388 ) 35,819 3,903 39,722
Other expense:
Interest expense 961 5,039 (g) 6,000 - 6,000
Other expense, net   562     -     562     -     562  
Total other expense   1,523     5,039     6,562     -     6,562  
Income before income taxes 40,684 (11,427 ) 29,257 3,903 33,160
Income tax expense   14,301     (4,000 ) (c)   10,301     680   (c)   10,981  
Net income $ 26,383   $ (7,427 ) $ 18,956   $ 3,223   $ 22,179  
Earnings per Share, Basic and Diluted:
Basic $ 0.13 (i)
Diluted $ 0.13 (i)
Weighted Average Shares Outstanding, Basic and Diluted:
Basic 173,000,000
Diluted 173,000,109
 
 
 
 

GAAP QTDQ2 2012

Pro formaadjustments

Pro forma

Additionaladjustments

Pro FormaAdjusted QTDQ2 2012

Income statement amounts by segment: (In thousands)
Total net sales
North America $ 464,105 $ 5,618 (d) $ 469,723 $ (1,925 ) (h) $ 467,798
Europe   90,341     -     90,341     -     90,341  
Total $ 554,446   $ 5,618   $ 560,064   $ (1,925 ) $ 558,139  
 
Operating income
North America $ 38,776 $ 2,911 (d) $ 41,687 $ 3,845 (h) $ 45,532
Europe   7,022     -     7,022     -     7,022  
Total consolidated segment operating income   45,798     2,911     48,709     3,845     52,554  
Related party license income 10,843 (10,843 ) (e) - - -
Corporate and other   (14,434 )   1,544   (f)   (12,890 )   58   (a)   (12,832 )
Total operating income $ 42,207   $ (6,388 ) $ 35,819   $ 3,903   $ 39,722  
 
The WhiteWave Foods Company Reconciliation of GAAP to Non-GAAP Information (Unaudited)
     

GAAP YTDQ2 2012

Pro formaadjustments

Pro forma

Additionaladjustments

Pro FormaAdjusted YTDQ2 2012

(In thousands, except share and per share data)
 
Total net sales $ 1,106,474 $ 10,927 (d) $ 1,117,401 $ (2,105 ) (h) $ 1,115,296
Cost of sales   718,883     4,440   (d)   723,323     (9,569 ) (h)   713,754  
Gross profit 387,591 6,487 394,078 7,464 401,542
Related party license income 21,316 (21,316 ) (e) - - -
Operating costs and expenses:
Selling and distribution 242,857 - 242,857 (1,040 ) (h) 241,817
General and administrative   74,979     912   (f)   75,891     4,666   (a)   80,557  
Total operating costs and expenses   317,836     912     318,748     3,626     322,374  
Operating income 91,071 (15,741 ) 75,330 3,838 79,168
Other expense:
Interest expense 2,610 9,390 (g) 12,000 - 12,000
Other expense, net   683     -     683     -     683  
Total other expense   3,293     9,390     12,683     -     12,683  
Income before income taxes 87,778 (25,131 ) 62,647 3,838 66,485
Income tax expense   30,087     (8,795 ) (c)   21,292     23   (c)   21,315  
Net income $ 57,691   $ (16,336 ) $ 41,355   $ 3,815   $ 45,170  
Earnings per Share, Basic and Diluted:
Basic $ 0.26 (i)
Diluted $ 0.26 (i)
Weighted Average Shares Outstanding, Basic and Diluted:
Basic 173,000,000
Diluted 173,000,109
 
 
 
 

GAAP YTDQ2 2012

Pro formaadjustments

Pro forma

Additionaladjustments

Pro FormaAdjusted YTDQ2 2012

Income statement amounts by segment: (In thousands)
Total net sales
North America $ 921,471 $ 10,927 (d) $ 932,398 $ (2,105 ) (h) $ 930,293
Europe   185,003     -     185,003     -     185,003  

Total

$ 1,106,474   $ 10,927   $ 1,117,401   $ (2,105 ) $ 1,115,296  
 
Operating income
North America $ 82,819 $ 6,487 (d) $ 89,306 $ 8,504 (h) $ 97,810
Europe   10,690     -     10,690     -     10,690  
Total consolidated segment operating income   93,509     6,487     99,996     8,504     108,500  
Related party license income 21,316 (21,316 ) (e) - - -
Corporate and other   (23,754 )   (912 ) (f)   (24,666 )   (4,666 ) (a)   (29,332 )
Total operating income $ 91,071   $ (15,741 ) $ 75,330   $ 3,838   $ 79,168  
 

The adjusted results differ from the Company’s results under GAAP due to the following:

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