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WhiteWave Foods Reports Strong Third Quarter 2013 Results

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 QTD Q32013

Adjustments

Adjusted QTDQ3 2013

(In thousands, except share and per share data)
 
Total net sales $ 638,518 $ - $ 638,518
Cost of sales   412,066     -     412,066  
Gross profit 226,452 - 226,452
Related party license income - - -
Operating expenses:
Selling and distribution 131,548 - 131,548
General and administrative 45,364 (4,786 ) (a) 40,578
Write-down of assets held for sale   7,400     (7,400 ) (b)   -  
Total operating expenses   184,312     (12,186 )   172,126  
Operating income 42,140 12,186 54,326
Other (income) expense:
Interest expense 4,459 - 4,459
Other (income) expense, net   4,129     (4,157 ) (c)   (28 )
Total other (income) expense   8,588     (4,157 )   4,431  
Income before income taxes 33,552 16,343 49,895
Income tax expense   9,259     6,797   (d)   16,056  
Net income $ 24,293   $ 9,546   $ 33,839  
Earnings per Share, Basic and Diluted:
Basic $ 0.20

(j)

Diluted $ 0.19

(j)

Weighted Average Shares Outstanding, Basic and Diluted:
Basic 173,097,361
Diluted 175,203,342
 
 

GAAP QTD Q32013

Adjustments

Adjusted QTDQ3 2013

(In thousands)
Income statement amounts by segment:
Total net sales
North America $ 534,176 $ - $ 534,176
Europe   104,342     -     104,342  
Total $ 638,518   $ -   $ 638,518  
 
Operating income
North America $ 51,366 $ 7,400 (b) $ 58,766
Europe   7,558     -     7,558  
Total consolidated segment operating income   58,924     7,400     66,324  
Related party license income - - -
Corporate and other   (16,784 )   4,786   (a)   (11,998 )
Total operating income $ 42,140   $ 12,186   $ 54,326  
 
               
The WhiteWave Foods Company
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
 

GAAP YTD Q32013

Adjustments

Adjusted YTDQ3 2013

(In thousands, except share and per share data)
 
Total net sales $ 1,862,753 $ - $ 1,862,753
Cost of sales   1,193,544     -     1,193,544  
Gross profit 669,209 - 669,209
Related party license income - - -
Operating expenses:
Selling and distribution 395,833 - 395,833
General and administrative 139,888 (14,425 ) (a) 125,463
Write-down of assets held for sale   7,400     (7,400 ) (b)   -  
Total operating expenses   543,121     (21,825 )   521,296  
Operating income 126,088 21,825 147,913
Other (income) expense:
Interest expense 13,920 - 13,920
Other (income) expense, net   (4,265 )   3,993   (c)   (272 )
Total other (income) expense   9,655     3,993     13,648  
Income before income taxes 116,433 17,832 134,265
Income tax expense   36,932     7,393   (d)   44,325  
Net income $ 79,501   $ 10,439   $ 89,940  
Earnings per Share, Basic and Diluted:
Basic $ 0.52 (j)
Diluted $ 0.52 (j)
Weighted Average Shares Outstanding, Basic and Diluted:
Basic 173,035,973
Diluted 174,149,095
 
 

GAAP YTD Q32013

Adjustments

Adjusted YTDQ3 2013

(In thousands)
Income statement amounts by segment:
Total net sales
North America $ 1,555,023 $ - $ 1,555,023
Europe   307,730     -     307,730  
Total $ 1,862,753   $ -   $ 1,862,753  
 
Operating income
North America $ 157,266 $ 7,400 (b) $ 164,666
Europe   22,109     -     22,109  
Total consolidated segment operating income   179,375     7,400     186,775  
Related party license income - - -
Corporate and other   (53,287 )   14,425   (a)   (38,862 )
Total operating income $ 126,088   $ 21,825   $ 147,913  
 
               
The WhiteWave Foods Company
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
 

GAAP QTDQ3 2012

Pro formaadjustments

Pro forma

Additionaladjustments

Pro FormaAdjusted QTDQ3 2012

(In thousands, except share and per share data)
 
Total net sales $ 574,853 $ 6,561 (e) $ 581,414 $ (644 ) (i) $ 580,770
Cost of sales   370,215     3,421   (e)   373,636     (4,533 ) (i)   369,103  
Gross profit 204,638 3,140 207,778 3,889 211,667
Related party license income 10,727 (10,727 ) (f) - - -
Operating expenses:
Selling and distribution 125,551 - 125,551 (434 ) (i) 125,117
General and administrative   46,456     (5,545 ) (g)   40,911     (144 ) (a)   40,767  

Total operating expenses

  172,007     (5,545 )   166,462     (578 )   165,884  
Operating income 43,358 (2,042 ) 41,316 4,467 45,783
Other expense:
Interest expense 990 5,010 (h) 6,000 - 6,000
Other expense, net   97     -     97     -     97  
Total other expense   1,087     5,010     6,097     -     6,097  
Income before income taxes 42,271 (7,052 ) 35,219 4,467 39,686
Income tax expense   15,979     (2,469 ) (d)   13,510     (1,417 ) (d)   12,093  
Net income $ 26,292   $ (4,583 ) $ 21,709   $ 5,884   $ 27,593  
Earnings per Share, Basic and Diluted:
Basic $ 0.16 (j)
Diluted $ 0.16 (j)
Weighted Average Shares Outstanding, Basic and Diluted:
Basic 173,000,000
Diluted 173,000,109
 
 

GAAP QTDQ3 2012

Pro formaadjustments

Pro forma

Additionaladjustments

Pro FormaAdjustedQTD Q3 2012

Segment information (In thousands)
Total net sales
North America $ 486,899 $ 6,561 (e) $ 493,460 $ (644 ) (i) $ 492,816
Europe   87,954     -     87,954     -     87,954  
Total $ 574,853   $ 6,561   $ 581,414   $ (644 ) $ 580,770  
 
Operating income
North America $ 44,986 $ 3,140 (e) $ 48,126 $ 4,323 (i) $ 52,449
Europe   6,166     -     6,166     -     6,166  
Total consolidated segment operating income   51,152     3,140     54,292     4,323     58,615  
Related party license income 10,727 (10,727 ) (f) - - -
Corporate and other   (18,521 )   5,545   (g)   (12,976 )   144   (a)   (12,832 )
Total operating income $ 43,358   $ (2,042 ) $ 41,316   $ 4,467   $ 45,783  
 
               
The WhiteWave Foods Company
Reconciliation of GAAP to Non-GAAP Information
(Unaudited)
 

GAAP YTD Q32012

Pro formaadjustments

Pro forma

Additionaladjustments

Pro FormaAdjustedYTD Q3 2012

(In thousands, except share and per share data)
 
Total net sales $ 1,681,327 $ 17,488 (e) $ 1,698,815 $ (2,749 ) (i) $ 1,696,066
Cost of sales   1,089,098     7,861   (e)   1,096,959     (14,102 ) (i)   1,082,857  
Gross profit 592,229 9,627 601,856 11,353 613,209
Related party license income 32,043 (32,043 ) (f) - - -
Operating expenses:
Selling and distribution 368,408 - 368,408 (1,474 ) (i) 366,934
General and administrative   121,435     (4,633 ) (g)   116,802     4,522   (a)   121,324  
Total operating expenses   489,843     (4,633 )   485,210     3,048     488,258  
Operating income 134,429 (17,783 ) 116,646 8,305 124,951
Other expense:
Interest expense 3,600 14,400 (h) 18,000 - 18,000
Other expense, net   780     -     780     -     780  
Total other expense   4,380     14,400     18,780     -     18,780  
Income before income taxes 130,049 (32,183 ) 97,866 8,305 106,171
Income tax expense   46,066     (11,264 ) (d)   34,802     (1,394 ) (d)   33,408  
Net income $ 83,983   $ (20,919 ) $ 63,064   $ 9,699   $ 72,763  
Earnings per Share, Basic and Diluted:
Basic $ 0.42 (j)
Diluted $ 0.42 (j)
Weighted Average Shares Outstanding, Basic and Diluted:
Basic 173,000,000
Diluted 173,000,109
 
 
 
 

GAAP YTD Q32012

Pro formaadjustments

Pro forma

Additionaladjustments

Pro FormaAdjustedYTD Q3 2012

Income statement amounts by segment: (In thousands)
Total net sales
North America $ 1,408,370 $ 17,488 (e) $ 1,425,858 $ (2,749 ) (i) $ 1,423,109
Europe   272,957     -     272,957     -     272,957  
Total $ 1,681,327   $ 17,488   $ 1,698,815   $ (2,749 ) $ 1,696,066  
 
Operating income
North America $ 127,805 $ 9,627 (e) $ 137,432 $ 12,827 (i) $ 150,259
Europe   16,856     -     16,856     -     16,856  
Total consolidated segment operating income   144,661     9,627     154,288     12,827     167,115  
Related party license income 32,043 (32,043 ) (f) - - -
Corporate and other   (42,275 )   4,633   (g)   (37,642 )   (4,522 ) (a)   (42,164 )
Total operating income $ 134,429   $ (17,783 ) $ 116,646   $ 8,305   $ 124,951  
 

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

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