WhiteWave Foods Reports Record Third Quarter 2015 Results


Reports First $1 Billion Net Sales Quarter

Increases Growth & Earnings Expectations for 2015

  • Total Net Sales Increased 17%; Adjusted Constant Currency Net Sales Increased 20%
  • Adjusted Organic Constant Currency Net Sales Increased 11%
  • Adjusted Total Operating Income Increased 25%, Reflecting Continued Operating Margin Expansion
  • Adjusted Diluted Earnings per Share of $0.33, Excluding China Joint Venture Investments
  • Increasing FY 2015 Adjusted Diluted Earnings Per Share Guidance to $1.17 to $1.18 and Constant Currency Guidance to $1.22 to $1.23, Excluding China Joint Venture Investments
  • Reiterating expectation of approximately 10% Organic Constant Currency Growth for FY 2015

DENVER, Nov. 09, 2015 (GLOBE NEWSWIRE) -- The WhiteWave Foods Company (NYSE:WWAV) today reported record results for the third quarter ended September 30, 2015.

Financial Summary:Three Months Ended September 30,
$ In millions, except EPS 2015   2014  % Change*
      
Total Net Sales     
Reported$1,004  $  857   +17%
Adjusted$1,005  $  857   +17%
Adjusted Constant Currency$1,029  $  857   +20%
Adjusted Organic Constant Currency$  954  $  857   +11%
      
Total Operating Income     
Reported$  93  $  73   +27%
Adjusted$  102  $  82   +25%
Adjusted Constant Currency$  107  $  82   +31%
      
Net Income     
Reported$  50  $  41   +22%
Adjusted$  57  $  47   +22%
Adjusted, excluding China J.V.$  60  $  49   +23%
      
Diluted Earnings per Share (EPS)     
Reported$  0.29  $  0.23   +27%
Adjusted$  0.31  $  0.26   +20%
Adjusted, excluding China J.V.$  0.33  $  0.27   +21%
Adjusted Constant Currency, excluding China J.V.$  0.35  $  0.27   +28%
      
EBITDA     
Adjusted$  135  $  111   +22%
Adjusted, excluding China J.V.$  139  $  114   +22%
Adjusted Constant Currency, excluding China J.V.$  145  $  114   +27%
 
*Certain change percentages may not recalculate using the rounded dollar amounts provided
 

WhiteWave reported third quarter 2015 adjusted diluted earnings per share of $0.33, excluding operating costs associated with its China joint venture. Including joint venture costs, WhiteWave reported third quarter 2015 adjusted diluted earnings per share of $0.31.

Adjusted net sales for third quarter 2015 were $1.0 billion, a 17 percent increase from net sales of $857 million in third quarter 2014. These strong results were driven by growth across all segments, as well as contributions from acquisitions. On a constant currency basis, adjusted net sales increased 20 percent in third quarter 2015 over the same period in 2014. Excluding acquisitions, adjusted organic constant currency net sales increased 11 percent in third quarter 2015 over the same period in 2014.

Adjusted operating income for third quarter 2015 increased 25 percent to $102 million, compared to $82 million in third quarter 2014. On a constant currency basis, adjusted operating income increased 31 percent in third quarter 2015 over the same period in 2014.

“Our strong growth momentum in the first half of the year accelerated in the third quarter, with 17 percent sales growth resulting in our first ever quarter of sales over a billion dollars,” said Gregg Engles, chairman and chief executive officer.  “Our market leading brands and industry leading innovation continue to drive strong organic growth across our businesses resulting in 11 percent adjusted organic constant currency net sales growth in the quarter. We also continued to execute on our strategic initiatives by closing on our Vega and Wallaby acquisitions, and strategically modified our credit facility to support our continued growth plans. Our focus remains on changing the way the world eats for the better, while delivering outstanding growth in sales and profits to our investors.”

AMERICAS FOODS & BEVERAGES SEGMENT
WhiteWave’s Americas Foods & Beverages segment consists of three platforms: Plant-based Foods and Beverages, Coffee Creamers and Beverages, and Premium Dairy. In third quarter 2015, net sales for Americas Foods & Beverages were $723 million, an increase of 23 percent over third quarter 2014. Excluding acquisitions and the impact of currency translations, organic constant currency net sales in the segment increased 11 percent in third quarter 2015 driven by growth across these platforms. Growth in the segment continues to be driven largely by volumes, aided by some pricing benefits primarily within the Premium Dairy platform, and contributions from acquisitions. Adjusted operating income for Americas Foods & Beverages increased 31 percent to $89 million for third quarter 2015, compared to the same period in 2014. On a constant currency basis, adjusted operating income increased 37 percent in third quarter 2015 over third quarter 2014.

Americas Foods & Beverages Segment Summary
$ In millionsThree Months Ended September 30,
  2015   2014  % Change*
Reported Net Sales$723  $588     +23%
Constant Currency Net Sales$727  $588     +24%
Organic Constant Currency Net Sales$652  $588     +11%
      
Reported Segment Operating Income$83  $  65     +26%
Adj. Segment Operating Income$89  $  68     +31%
Adj. Constant Currency Segment Op. Income$93  $  68     +37%
 
*Certain change percentages may not recalculate using the rounded dollar amounts provided
 

Plant-based Foods and Beverages
The Americas Plant-based Foods and Beverages platform includes Silk® dairy-free beverages and yogurts, So Delicious® dairy-free beverages, frozen desserts, and yogurts, and Vega® nutritional dairy-free powders and bars. Net sales for this platform increased 41 percent in third quarter 2015 compared to third quarter 2014. This growth was driven by the inclusion of So Delicious and two months of Vega’s results, along with strong organic volume growth across the platform. Excluding acquisitions, organic sales increased low double-digits on a constant currency basis. The plant-based categories in which WhiteWave participates continued to grow in third quarter 2015, as refrigerated nut-based beverages increased 11 percent, frozen desserts and novelties grew 23 percent, and yogurts increased 34 percent, driven by WhiteWave’s market leading positions in each of these categories.

Coffee Creamers and Beverages
The Coffee Creamers and Beverages platform includes coffee creamers and ready-to-drink beverages under the International Delight®, Dunkin Donuts®, Silk and So Delicious brands, as well as half and half dairy creamers under the LAND O LAKES® and Horizon Organic® brands. Net sales for this platform increased 13 percent in third quarter 2015 compared to the prior year driven by strong organic volume growth. Excluding acquisitions, organic sales grew high single-digits, driven by strong growth in flavored and plant-based creamers and organic half and half. The refrigerated creamer category increased 5 percent in third quarter 2015, behind strong growth in WhiteWave’s diversified creamer portfolio.

Premium Dairy
The Premium Dairy platform includes Horizon Organic milk and dairy products, macaroni and cheese, and snacks, along with Wallaby® organic yogurts and organic kefir beverages. Net sales for this platform increased 18 percent in third quarter 2015 compared to third quarter 2014 driven by mid-teens organic growth and the inclusion of one month of Wallaby’s results. Organic sales were driven primarily by prior price increases in organic milk, as well as growth in other dairy products and center store products. Growth in the organic milk category increased 6 percent in third quarter 2015, driven by increased pricing. Horizon Organic continues to hold a leading market share position in the organic milk category.

AMERICAS FRESH FOODS SEGMENT
The Americas Fresh Foods segment consists of the Earthbound Farm® brand, which includes organic salads, fruits and vegetables. Adjusted net sales for the segment returned to growth, increasing 5 percent in third quarter 2015, after weather impacted supply availability in early 2015. Sales were driven by high single-digit growth in organic packaged salads and strong growth in frozen products, offset by a decline in fresh fruits.  Adjusted operating income for the segment decreased 12 percent in third quarter 2015 as a result of lower cost absorption due to higher farming and other input costs related to short-term increases in crop inventories to ensure high customer service levels. Earthbound Farm continues to hold a leading market share position in the organic packaged salad category.

Americas Fresh Foods Segment Summary
$ In millionsThree Months Ended September 30,
  2015   2014  % Change*
Reported Net Sales$  147  $  140   +4%
Adj. Net Sales$  147  $  140   +5%
      
Reported Segment Operating Income$  12  $  16   -24%
Adj. Segment Operating Income$  14  $  16   -12%
 
*Certain change percentages may not recalculate using the rounded dollar amounts provided
 

EUROPE FOODS & BEVERAGES SEGMENT
The Europe Foods & Beverages segment consists of our Plant-based Foods and Beverages that are sold primarily under the Alpro® brand. Net sales in the segment increased 20 percent on a constant currency basis and 4 percent on a reported basis in third quarter 2015 compared to third quarter 2014. Sales growth continued to be driven by volume growth across the segment’s main European geographies, as well as robust growth across major product lines. Operating income increased 39 percent on a constant currency and reported basis for third quarter 2015.

Europe Foods & Beverages Segment Summary
$ In millionsThree Months Ended September 30,
  2015   2014  % Change*
Reported Net Sales$  135  $  129     +4%
Constant Currency Net Sales$  155  $  129   +20%
      
Reported Segment Operating Income$  19  $  14   +39%
Constant Currency Segment Op. Income$  19  $  14   +39%
 
*Certain change percentages may not recalculate using the rounded dollar amounts provided
 

“We delivered another quarter of double-digit top and bottom line growth resulting from strong sales across our platforms. On an adjusted constant currency basis, we increased operating income by 31 percent driven by the benefit of our increased scale and 20 percent sales growth. This topline performance, coupled with continued margin expansion and a lower tax rate, drove third quarter adjusted earnings per share, before our China Joint Venture investments, of $0.33. This exceeded the high end of our guidance by 2 cents, with the lower tax rate contributing a penny,” said Kelly Haecker, executive vice president and chief financial officer. “We have also strengthened our balance sheet by increasing and extending our senior credit facilities. We enter the fourth quarter well positioned for continued strong sales and earnings growth.”

OTHER ITEMS

Senior Secured Credit Facilities Modification
On November 6, 2015, WhiteWave entered into a fourth amendment of its senior secured credit facilities to increase term loan borrowings by $520 million, extend maturity dates, reset amortization requirements, lower applicable interest rates and fees, and gain additional operational flexibility.  WhiteWave utilized the incremental term loan proceeds to pay down outstanding borrowings under the revolving credit facility, net of transaction related expenses, which increased availability under the revolving credit facility by the same amount.

Wallaby Acquisition
WhiteWave completed the acquisition of Wallaby Yogurt Company, Inc. on August 31, 2015, for a purchase price of approximately $125 million in cash. Founded in 1994 and based in American Canyon, California, Wallaby is a leading manufacturer and distributor of organic dairy yogurt products that include Greek and Australian yogurts and Kefir beverages.

Vega Acquisition
WhiteWave completed the acquisition of Vega™ on August 1, 2015, for a purchase price of approximately US$550 million in cash. Based in Vancouver, British Columbia, Vega is a pioneer and leader in plant-based nutritional products.

FORWARD OUTLOOK
The company expects continued strong topline performance, including contributions from recent strategic acquisitions. For fourth quarter 2015, management expects net sales growth to be 15 percent to 16 percent on a constant currency basis, translating into 13 percent to 14 percent growth on a U.S. dollar reported basis reflecting further weakening of the euro.  For the full year 2015, management expects approximately 16 percent growth on a constant currency basis and approximately 13 percent growth on a reported basis. Management continues to expect organic constant currency growth of 10 percent for full year 2015.

WhiteWave expects the highest level of quarterly operating income growth in 2015 to occur in the fourth quarter, as a result of continued cost leverage, higher productivity levels, improved commodity and other cost overlaps, as well as increased levels of contributions from completed acquisitions. Management forecasts adjusted operating income percentage growth for fourth quarter 2015 to be in the low- to mid-thirties on a constant currency basis, translating into percentage growth in the high-twenties to low-thirties on a reported basis, based on current foreign exchange rates.  For full year 2015, management now expects adjusted operating income percentage growth in the mid- to high-twenties on a constant currency basis, converting into low- to mid-twenties percentage growth on a reported basis, based on current foreign exchange rates.

Interest expense is estimated to be approximately $58 million to $59 million in full year 2015, and approximately $19 million to $20 million in fourth quarter 2015, due to the financing of completed acquisitions. Management forecasts its fourth quarter 2015 tax rate to be around 34 percent, due to an increased mix of international earnings lowering its overall effective tax rate, and result in a rate of approximately 34 percent for full year 2015.

Management expects continued operating investments in its China joint venture to support the ongoing development of its plant-based beverages business in that region. The annual amount of such operating investments is expected to be approximately $0.07 dilutive to the company’s full year 2015 adjusted diluted earnings per share, with a dilutive impact of approximately $0.02 in fourth quarter 2015. The timing and amount of investments in 2015 may vary.

Based on these expectations and current foreign exchange rates, management is increasing its full year 2015 adjusted diluted earnings per share outlook to $1.22 to $1.23 on a constant currency basis, excluding the expected $0.07 per share operating investment in the China joint venture. On a U.S. dollar reported basis, excluding investments in the China joint venture, management is increasing its expectation for full year 2015 adjusted diluted earnings per share to $1.17 to $1.18.

For fourth quarter 2015, management expects constant currency adjusted diluted earnings per share of $0.35 to $0.36, excluding an approximately $0.02 per share investment in the China joint venture. On a U.S. dollar reported basis, management expects adjusted diluted earnings per share of $0.34 to $0.35 for fourth quarter 2015, based on current foreign exchange rates and excluding China joint venture investments.


2015 Updated Guidance Summary
 Fourth Quarter Full Year
 
Reported
 Constant
Currency
 
Reported
 Constant
Currency
Net Sales Growth+ 13 - 14% + 15 - 16% + 13% + 16%
        
        
Adjusted Total Operating Income Growth+ High Twenties
to Low Thirties %
 + Low to Mid
Thirties %
 + Low to Mid
Twenties %
 + Mid to High
Twenties %
        
        
Adjusted Diluted EPS$0.32 - $0.33 $0.33 - $0.34 $1.10 - $1.11 $1.15 - $1.16
China Joint Venture Impact≈$0.02 ≈$0.02 ≈$0.07 ≈$0.07
        
        
Adjusted Diluted EPS – Excluding China J.V.$0.34 - $0.35 $0.35 - $0.36 $1.17 - $1.18 $1.22 - $1.23
        
        
Senior Notes Interest Impact- -  - - $0.06  $0.06 
Interest Neutral Adj. Diluted EPS – Excl. China J.V.$0.34 - $0.35 $0.35 - $0.36 $1.23 - $1.24 $1.28 - $1.29
        

Management now expects capital expenditures will be approximately $300 million for full year 2015, a decrease from the company’s previous guidance of approximately $325 million to $350 million, as a result of certain growth initiative projects now phased into 2016 due to limited time remaining in calendar year 2015. Timing of capital projects may continue to vary and affect the amount of investments made in 2015.

CONFERENCE CALL WEBCAST
A live presentation webcast of WhiteWave’s financial results and outlook will be held at 11:00 am Eastern time today, November 9, 2015, and may be heard by visiting the “events and presentation” section of WhiteWave’s investor relations website at www.whitewave.com/investors. The webcast replay will be available for approximately 45 days. A slide presentation and schedule reconciling GAAP to non-GAAP financial information will be available on our website and will accompany the webcast.

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, premium dairy products and organic produce throughout North America and Europe. The Company also holds a 49% ownership interest in a joint venture that manufactures markets, distributes, and sells branded plant-based beverages in China. WhiteWave 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®, So Delicious® and Vega™ plant-based foods and beverages, International Delight® and LAND O LAKES®* coffee creamers and beverages, Horizon Organic® and Wallaby® premium dairy products, and Earthbound Farm® organic salads, fruits and vegetables. Its popular plant-based foods and beverages brands in Europe include Alpro® and Provamel®, and its plant-based beverages in China are sold under the Silk® ZhiPuMoFang® brand. To learn more about WhiteWave, visit www.whitewave.com.

*The LAND O LAKES brand is owned by Land O’Lakes, Inc. and is used by license.

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 under the heading “Forward Outlook” and in the “2015 updated guidance summary” table, and statements relating to, among other things, projections of net sales, operating income, and earnings per share, on a GAAP, adjusted and constant currency basis during fourth quarter and full year 2015, our future tax rate, the financial impact of recent amendments to our senior credit facilities, our innovation and marketing plans, the success of our cost improvement and margin expansion initiatives, anticipated profit growth and margin expansion, the expected growth and financial impact of Vega and other business acquisitions, the expected financial impact of our investments in our joint venture in China, and other statements that begin with words such as “believe,” “expect,” “estimates,” “intend,” “forecasts,” “projects” 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 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2015 and in our quarterly reports on Form 10-Q. 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. Our financial outlook for the fourth quarter and full year 2015 may be impacted by our ability or inability to effectively integrate and operate acquired businesses, including Vega and Wallaby, and the amount of our future additional investments in our joint venture in China and expectations for sales and profits or losses in the joint venture. 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.

EXPLANATION OF NON-GAAP FINANCIAL MEASURES
In addition to the results prepared in accordance with GAAP, we have presented certain non-GAAP financial measures, including adjusted financial information for the periods presented, such as operating income, EBITDA, net income and diluted earnings per share. We present these non-GAAP measures in order to facilitate meaningful evaluation of our operating performance across periods. These adjustments eliminate certain costs and benefits, including corporate costs associated with equity awards granted to certain of our executive officers, employees and directors in conjunction with the company’s initial public offering in October 2012 (the “IPO Grants”) and other non-cash related to stock-based compensation expense, non-recurring transaction and integration costs related to acquisitions and other investments, non-recurring transition costs related to our separation from Dean Foods Company, asset disposal and exit costs, and subsequent adjustments, in connection with the 2013 sale of a dairy farm, non-cash income or expense related to mark-to-market adjustments on interest rate and commodity hedges, and costs incurred to manage, and losses incurred on our investment in the China joint venture. These adjustments are intended to provide greater transparency of underlying profit trends and to allow investors to evaluate our business on the same basis as our management, which uses these non-GAAP measures in making financial and operating decisions and evaluating the company’s performance. These adjustments are not necessarily indicative of what our actual financial performance would have been during the periods presented and should be viewed in addition to, and not as an alternative to, the company’s results prepared in accordance with GAAP. Further details regarding these adjustments are included in the tables below and may be found in a reconciliation schedule posted on the Investor Relations section of the company’s website.

Basis of Presentation
Certain financial measures in this release are presented on a non-GAAP basis that includes an organic basis, a constant currency basis and on an adjusted basis.

Organic Results
Results presented on an organic basis exclude the operations of the Wallaby business acquired on August 31, 2015, Vega business acquired on August 1, 2015 and So Delicious business that was acquired on October 31, 2014.

Constant Currency Results
The company determines its constant currency results by dividing or multiplying, as appropriate, the current period local currency results by the currency exchange rates used to translate the company’s financial results in the prior period to determine what the current period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior period.

Adjusted Results
Segment financial results for the three months and nine months ended September 30, 2014 and 2015 in the Americas Foods & Beverages segment are adjusted to exclude the expense related to the mark-to-market adjustment on commodity hedges, acquisition related non-recurring transaction and integration costs and elimination of a gain related to an asset disposal. Segment financial results for the three months and nine months ended September 30, 2015 in the Americas Fresh Foods segment are adjusted to exclude the acquisition related non-recurring purchase accounting adjustments and transaction and integration costs. Segment financial results for the three months and nine months ended September 30, 2015 in the Europe Foods & Beverages segment are adjusted to exclude non-recurring acquisition transaction costs. All other adjustments relate to corporate and other items. See reconciliations at the end of this release for further details and for reconciliations of the non-GAAP measures to GAAP.

The WhiteWave Foods Company
Condensed Consolidated Statements of Income
(Unaudited, GAAP Basis)
       
   Three months ended September 30, 
    2015   2014  
    (In thousands, except share and per share data)
       
 Net sales $  1,003,888  $  857,467  
 Cost of goods sold    652,757     564,711  
 Gross profit    351,131     292,756  
 Operating expenses:     
 Selling, distribution, and marketing    187,784     157,756  
 General and administrative    70,235     61,653  
 Total operating expenses    258,019     219,409  
 Operating income    93,112     73,347  
 Other expense:     
 Interest expense    15,979     9,713  
 Other (income) expense, net    2,549     (1,670) 
 Total other expense    18,528     8,043  
 Income before income taxes    74,584     65,304  
 Income tax expense    21,831     22,999  
 Income before loss in equity method investments    52,753     42,305  
 Loss in equity method investments    2,731     1,448  
 Net income $  50,022  $  40,857  
       
       
 Weighted average common shares:     
 Basic    175,846,533     174,136,880  
 Diluted    180,444,521     178,291,434  
       
 Net income per share:     
 Basic $  0.28  $  0.23  
 Diluted $  0.28  $  0.23  


The WhiteWave Foods Company
Condensed Consolidated Statements of Income
(Unaudited, GAAP Basis)
       
   Nine months ended September 30, 
    2015   2014  
    (In thousands, except share and per share data)
       
 Net sales $  2,838,661  $  2,525,617  
 Cost of goods sold    1,852,797     1,674,387  
 Gross profit    985,864     851,230  
 Operating expenses:     
 Selling, distribution, and marketing    529,856     462,057  
 General and administrative    215,824     195,569  
 Asset disposal and exit costs    -      (704) 
 Total operating expenses    745,680     656,922  
 Operating income    240,184     194,308  
 Other expense:     
 Interest expense    38,580     22,947  
 Other expense, net    7,337     2,687  
 Total other expense    45,917     25,634  
 Income before income taxes    194,267     168,674  
 Income tax expense    64,227     59,059  
 Income before loss in equity method investments    130,040     109,615  
 Loss in equity method investments    9,227     1,991  
 Net income $  120,813  $  107,624  
       
       
 Weighted average common shares:     
 Basic    175,290,113     173,911,304  
 Diluted    180,006,702     177,620,641  
       
 Net income per share:     
 Basic $  0.69  $  0.62  
 Diluted $  0.67  $  0.61  


The WhiteWave Foods Company
Consolidated Balance Sheets
(Unaudited, GAAP Basis)
        
    September 30, 2015 December 31, 2014 
     (In thousands) 
 ASSETS     
  Current assets:     
  Cash and cash equivalents $  29,021  $  50,240  
  Trade receivables, net of allowance of $3,052 and $2,343    247,819     192,692  
  Inventories    282,037     215,669  
  Deferred income taxes    40,795     30,263  
  Income tax receivable    13,814     14,455  
  Prepaid expenses and other current assets    29,524     35,868  
  Total current assets    643,010     539,187  
  Investment in equity method investments    33,601     43,160  
  Property, plant, and equipment, net    1,092,360     993,207  
  Identifiable intangible and other assets, net    1,083,061     729,011  
  Goodwill    1,423,447     1,068,276  
 Total Assets $  4,275,479  $  3,372,841  
        
 LIABILITIES AND SHAREHOLDERS' EQUITY     
  Accounts payable and accrued expenses $  491,646  $  469,764  
  Current portion of debt and capital lease obligations    23,698     21,158  
  Income tax payable    2,957     496  
  Total current liabilities    518,301     491,418  
  Long-term debt and capital lease obligations    2,184,237     1,495,822  
  Deferred income taxes    340,802     267,010  
  Other long-term liabilities    42,707     42,104  
 Total liabilities    3,086,047     2,296,354  
        
  Common stock    1,760     1,744  
  Additional paid-in capital    912,509     878,549  
  Retained earnings    378,125     257,312  
  Accumulated other comprehensive loss    (102,962)    (61,118) 
 Total shareholders' equity    1,189,432     1,076,487  
 Total Liabilities and Shareholders' Equity $  4,275,479  $  3,372,841  


The WhiteWave Foods Company
Condensed Consolidated Statements of Cash Flows
(Unaudited, GAAP Basis)
       
   Nine months ended September 30, 
    2015   2014  
    (In thousands)
Operating Activities     
 Net income $  120,813  $  107,624  
 Adjustments to reconcile net income to net cash provided by operating activities:     
 Depreciation and amortization    86,675     82,152  
 Share-based compensation expense    27,537     21,045  
 Amortization of debt issuance costs    3,067     2,173  
 Loss in equity method investments    9,227     1,991  
 Deferred income taxes    (11,752)    (6,360) 
 Other adjustments    (1,360)    5,705  
 Net change in operating assets and liabilities, net of acquisitions/divestitures    (65,162)    (46,214) 
 Net cash provided by operating activities    169,045     168,116  
       
Investing Activities     
 Investment in equity method investments    (701)    (47,285) 
 Payments for acquisitions, net of cash acquired $8,521 and $5,638    (707,605)    (603,134) 
 Payments for property, plant, and equipment    (196,896)    (209,337) 
 Proceeds from acquisition adjustments    346     -   
 Proceeds from sale of fixed assets    8,931     400  
 Net cash used in investing activities    (895,925)    (859,356) 
       
Financing Activities     
 Proceeds from the issuance of debt    -      1,025,000  
 Other debt related activity    690,974     (188,416) 
 Other financing activities    5,961     (16,101) 
 Net cash provided by financing activities    696,935     820,483  
 Effect of exchange rate changes on cash and cash equivalents    8,726     (4,170) 
(Decrease) increase in cash and cash equivalents    (21,219)    125,073  
Cash and cash equivalents, beginning of period    50,240     101,105  
Cash and cash equivalents, end of period $  29,021  $  226,178  


The WhiteWave Foods Company
GAAP to Non-GAAP Reconciliation
(Unaudited)
              
  Three months ended September 30, 2015 Three months ended September 30, 2014 
  GAAP Adjustments Adjusted GAAP Adjustments Adjusted 
   (In thousands, except share and per share data)  
              
 Total net sales$  1,003,888  $  750  (a)$  1,004,638  $  857,467  $  -   $  857,467  
 Cost of goods sold   652,757     (2,383) (a)(b)   650,374     564,711     (718) (b)   563,993  
 Gross profit   351,131     3,133     354,264     292,756     718     293,474  
 Operating expenses:            
 Selling, distribution, and marketing   187,784     (2,882) (b)   184,902     157,756     (1,795) (b)   155,961  
 General and administrative   70,235     (3,241) (a)   66,994     61,653     (5,885) (a)   55,768  
 Total operating expenses   258,019     (6,123)    251,896     219,409     (7,680)    211,729  
 Operating income   93,112     9,256     102,368     73,347     8,398     81,745  
 Other expense:            
 Interest expense   15,979     -      15,979     9,713     (831) (h)   8,882  
 Other (income) expense, net   2,549     (2,550) (c)   (1)    (1,670)    1,670  (c)   -   
 Total other expense   18,528     (2,550)    15,978     8,043     839     8,882  
 Income before income taxes   74,584     11,806     86,390     65,304     7,559     72,863  
 Income tax expense   21,831     5,122  (d)   26,953     22,999     1,777  (d)   24,776  
 Income before loss in equity method investments   52,753     6,684     59,437     42,305     5,782     48,087  
 Loss in equity method investments   2,731     -      2,731     1,448     -      1,448  
 Net income$  50,022  $  6,684  $  56,706  $  40,857  $  5,782  $  46,639  
 Earnings per Share:            
 Basic    $  0.32      $  0.27  
 Diluted    $  0.31      $  0.26  
 Weighted Average Common Shares:             
 Basic       175,846,533         174,136,880  
 Diluted       180,444,521         178,291,434  
              
 Adjusted net income excluding China joint venture activities:           
 Adjusted net income       56,706         46,639  
 Corporate related joint venture expenses, net of tax       738  (e)       780  (e)
 Loss in China joint venture equity method investment       2,495  (f)       1,448  (f)
 Adjusted net income excluding China joint venture activities   $  59,939      $  48,867  
              
 Adjusted earnings per share excluding China joint venture activities:           
 Basic    $  0.34      $  0.28  
 Diluted    $  0.33      $  0.27  


The WhiteWave Foods Company
GAAP to Non-GAAP Reconciliation
(Unaudited)
              
  Three months ended September 30, 2015 Three months ended September 30, 2014 
  GAAP Adjustments Adjusted GAAP Adjustments Adjusted 
   (In thousands) 
 Income statement amounts by segment:            
 Total net sales            
 Americas Foods & Beverages$  722,522  $  -   $  722,522  $  587,818  $  -   $  587,818  
 Americas Fresh Foods   146,552     750  (a)   147,302     140,461     -      140,461  
 Europe Foods & Beverages   134,814     -      134,814     129,188     -      129,188  
 Total$  1,003,888  $  750  $  1,004,638  $  857,467  $  -   $  857,467  
              
 Operating income            
 Americas Foods & Beverages   82,616     6,146  (a)(b)   88,762     65,432     2,513  (b)   67,945  
 Americas Fresh Foods   12,046     1,851  (a)   13,897     15,873     -      15,873  
 Europe Foods & Beverages   18,959     80  (a)   19,039     13,730     -      13,730  
 Total consolidated segment operating income   113,621     8,077     121,698     95,035     2,513     97,548  
 Corporate and other    (20,509)    1,179  (a)   (19,330)    (21,688)    5,885  (a)   (15,803) 
 Total operating income$  93,112  $  9,256  $  102,368  $  73,347  $  8,398  $  81,745  
              
              
The WhiteWave Foods Company
Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA
(Unaudited)
          Three months ended September 30, 
           2015   2014  
           (In thousands) 
 Net income        $  50,022  $  40,857  
 Interest expense, net           15,979     9,713  
 Income tax expense           21,831     22,999  
 Depreciation and amortization           31,338     27,284  
 EBITDA        $  119,170  $  100,853  
 Transaction, integration & transition costs            2,423 (a)   3,260 (a)
 Mark to market adjustments on hedging transactions           6,570 (b)(c)   843 (b)(c)
 IPO grants & non-cash stock-based compensation           6,813 (a)(i)   6,066 (a)(i)
 Adjusted EBITDA        $  134,976  $  111,022  
              
 Corporate related joint venture expenses         $  1,073 (e)$  1,182 (e)
 Loss in China joint venture equity method investment          2,495 (f)   1,448 (f)
 Adjusted EBITDA excluding China joint venture activities       $  138,544  $  113,652  

 

 

The WhiteWave Foods Company
GAAP to Non-GAAP Reconciliation
(Unaudited)
             
 Nine months ended September 30, 2015 Nine months ended September 30, 2014 
 GAAP Adjustments Adjusted GAAP Adjustments Adjusted 
  (In thousands, except share and per share data) 
             
Total net sales$  2,838,661  $  750  (a)$  2,839,411  $  2,525,617  $  -   $  2,525,617  
Cost of goods sold   1,852,797     (939) (a)(b)   1,851,858     1,674,387     (718) (b)   1,673,669  
Gross profit    985,864     1,689     987,553     851,230     718     851,948  
Operating expenses:            
Selling, distribution, and marketing   529,856     726  (b)   530,582     462,057     (1,795) (b)   460,262  
General and administrative   215,824     (20,748) (a)   195,076     195,569     (20,335) (a)   175,234  
Asset disposal and exit costs   -      -      -      (704)    704  (g)   -   
Total operating expenses   745,680     (20,022)    725,658     656,922     (21,426)    635,496  
Operating income   240,184     21,711     261,895     194,308     22,144     216,452  
Other expense:            
Interest expense   38,580     -      38,580     22,947     (831) (h)   22,116  
Other expense, net   7,337     (7,342) (c)   (5)    2,687     (2,687) (c)   -   
Total other expense   45,917     (7,342)    38,575     25,634     (3,518)    22,116  
Income before income taxes   194,267     29,053     223,320     168,674     25,662     194,336  
Income tax expense   64,227     10,585  (d)   74,812     59,059     8,171  (d)   67,230  
Income before loss in equity method investments   130,040     18,468     148,508     109,615     17,491     127,106  
Loss in equity method investments   9,227     -      9,227     1,991     -      1,991  
Net income$  120,813  $  18,468  $  139,281  $  107,624  $  17,491  $  125,115  
Earnings per Share:            
Basic    $  0.79      $  0.72  
Diluted    $  0.77      $  0.70  
Weighted Average Common Shares:             
Basic       175,290,113         173,911,304  
Diluted       180,006,702         177,620,641  
             
Adjusted net income excluding China joint venture activities:            
Adjusted net income       139,281         125,115  
Corporate related joint venture expenses, net of tax       1,778  (e)       2,722  (e)
Loss in China joint venture equity method investment       8,652  (f)       1,991  (f)
Adjusted net income excluding China joint venture activities    $  149,711      $  129,828  
                 
Adjusted earnings per share excluding China joint venture activities:                
Basic    $0.85      $0.75  
Diluted    $0.83      $0.73  


The WhiteWave Foods Company
GAAP to Non-GAAP Reconciliation
(Unaudited)
              
  Nine months ended September 30, 2015 Nine months ended September 30, 2014 
  GAAP Adjustments Adjusted GAAP Adjustments Adjusted 
   (In thousands) 
 Income statement amounts by segment:            
 Total net sales            
 Americas Foods & Beverages$  2,003,032  $  -   $  2,003,032  $  1,702,791  $  -   $  1,702,791  
 Americas Fresh Foods   437,431     750  (a)   438,181     439,611     -      439,611  
 Europe Foods & Beverages   398,198     -      398,198     383,215     -      383,215  
 Total$  2,838,661  $  750  $  2,839,411  $  2,525,617  $  -   $  2,525,617  
              
 Operating income            
 Americas Foods & Beverages   230,898     4,432  (a)(b)   235,330     191,470     1,810  (b)(g)   193,280  
 Americas Fresh Foods   34,614     3,356  (a)   37,970     38,461     -      38,461  
 Europe Foods & Beverages   50,066     80  (a)   50,146     38,140     -      38,140  
 Total consolidated segment operating income   315,578     7,868     323,446     268,071     1,810     269,881  
 Corporate and other   (75,394)    13,843  (a)   (61,551)    (73,763)    20,335  (a)   (53,428) 
 Total operating income$  240,184  $  21,711  $  261,895  $  194,308  $  22,145  $  216,453  
              
              
The WhiteWave Foods Company
Reconciliation of GAAP Net Income to EBITDA and Adjusted EBITDA
(Unaudited)
          Nine months ended September 30, 
           2015   2014  
           (In thousands) 
 Net income        $  120,813  $  107,624  
 Interest expense, net           38,580     22,947  
 Income tax expense           64,227     59,059  
 Depreciation and amortization           86,675     82,152  
 EBITDA        $  310,295  $  271,782  
 Transaction, integration, asset disposal & transition costs           10,128  (a)   10,850 (a)(g)
 Mark to market adjustments on hedging transactions           6,309 (b)(c)   5,199 (b)(c)
 IPO grants & non-cash stock-based compensation           32,468 (a)(i)   24,935 (a)(i)
 Adjusted EBITDA        $  359,200  $  312,766  
              
 Corporate related joint venture expenses         $  2,674 (e)$  4,161 (e)
 Loss in China joint venture equity method investment          8,652 (f)   1,991 (f)
 Adjusted EBITDA excluding China joint venture activities       $  370,526  $  318,918  


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

(a) The adjustment reflects:

i. Elimination of stock compensation expense for the IPO grants.

  • $2.1 million for the three months ended September 30, 2015.
  • $2.6 million for the three months ended September 30, 2014.
  • $11.9 million for the nine months ended September 30, 2015.
  • $8.8 million for the nine months ended September 30, 2014.

ii. Elimination of non-recurring purchase accounting adjustments, transaction and integration costs related to acquisitions and other investments.

  • $3.2 million ($2.1 million for Americas Foods & Beverages, $1.9 million for Americas Fresh Foods, $0.1 million for Europe Foods & Beverages, ($0.9) million for Corporate) for the three months ended September 30, 2015.
  • $2.9 million (for Corporate) for the three months ended September 30, 2014.
  • $10.9 million ($5.5 million for Americas Foods & Beverages, $3.4 million for Americas Fresh Foods, $0.1 million for Europe Foods & Beverages, $2.0 million for Corporate) for the nine months ended September 30, 2015.
  • $10.3 million (for Corporate) for the nine months ended September 30, 2014.

iii. Elimination of non-recurring transition costs related to the separation from Dean Foods Company.

  • $0.3 million for the three months ended September 30, 2014.
  • $1.2 million for the nine months ended September 30, 2014.

(b) The adjustment reflects elimination of the (income)/expense related to the mark-to-market adjustment on commodity hedges.

  • $4.0 million for the three months ended September 30, 2015.
  • $2.5 million for the three months ended September 30, 2014.
  • ($1.0) million for the nine months ended September 30, 2015.
  • $2.5 million for the nine months ended September 30, 2014.

(c) The adjustment reflects elimination of the expense/(income) related to the mark-to-market adjustment on interest rate hedges.

  • $2.6 million for the three months ended September 30, 2015.
  • ($1.7) million for the three months ended September 30, 2014.
  • $7.3 million for the nine months ended September 30, 2015.
  • $2.7 million for the nine months ended September 30, 2014.

(d) Income tax in the adjustments columns represent the adjustment to income tax expense required to arrive at an adjusted effective tax rate on adjusted income before taxes.

(e) The adjustment reflects the elimination of costs incurred to manage our China Joint Venture investment.

  • $1.1 million ($0.7 million, net of tax) for the three months ended September 30, 2015.
  • $1.2 million ($0.8 million, net of tax) for the three months ended September 30, 2014.
  • $2.7 million ($1.8 million, net of tax) for the nine months ended September 30, 2015.
  • $4.2 million ($2.7 million, net of tax) for the nine months ended September 30, 2014.

(f) The adjustment reflects the elimination of the loss incurred on the investment in the China Joint Venture.

  • $2.5 million for the three months ended September 30, 2015.
  • $1.4 million for the three months ended September 30, 2014.
  • $8.7 million for the nine months ended September 30, 2015.
  • $2.0 million for the nine months ended September 30, 2014.

(g) The adjustment reflects elimination of a gain recognized from the reversal of restructuring costs incurred in connection with the sale of a dairy farm.

  • $nil million for the three months ended September 30, 2014.
  • $0.7 million for the nine months ended September 30, 2014.

(h) The adjustment reflects elimination of expense related to debt issuance costs written off as a result of the debt modification.

  • $0.8 million for the three months ended September 30, 2014.
  • $0.8 million for the nine months ended September 30, 2014.

(i) The adjustment reflects non-cash related stock-based compensation expense, excluding amounts already included in IPO grants.

  • $4.9 million for the three months ended September 30, 2015.
  • $3.4 million for the three months ended September 30, 2014.
  • $20.9 million for the nine months ended September 30, 2015.
  • $16.2 million for the nine months ended September 30, 2014.

 


            

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