WhiteWave Foods has booked a drop in third-quarter earnings as an increase in expenses hit earnings.
In the three months to the end of September, WhiteWave, which was spun off from Dean Foods last year, posted a profit of US$26.3m, down from $29.8m a year earlier. Excluding stock-based compensation and other items, earnings rose to 16 cents per share, it said.
Operating profit in the period dropped to $43.3m from $48m last year, while sales rose 13% to $574.9m. The increase in sales reflected "strong" volume growth across its North American segment, particularly in its plant-based foods and beverages and its coffee creamers and beverages platforms.
WhiteWave Foods Reports Strong Third Quarter 2012 Results
The 13% percent increase in pro forma adjusted net sales reflects strong volume growth across the Company's North American segment, particularly in its Plant-based Foods and Beverages and Coffee Creamers and Beverages platforms, each of which delivered over 20% in pro forma adjusted net sales growth. This strong growth, coupled with continued disciplined cost management, resulted in 31% pro forma adjusted diluted earnings per share growth in the third quarter of 2012. At the same time, the Company continued to make significant investments in production capacity, innovation and brand building to drive future growth.
Gregg Engles, Chairman and CEO, said, "Consistent with WhiteWave-Alpro segment results reported by Dean Foods on November 8th as part of its consolidated third quarter financial results, WhiteWave Foods continued to build on its momentum in the third quarter, delivering strong growth across the business. We successfully completed the initial public offering of WhiteWave Foods Class A common stock and have hit the ground running. We are sharply focused on executing our business plans to continue to drive growth and are excited by the prospects ahead."
Product Category Sales
Pro forma adjusted net sales in North American Plant-based Foods and Beverages, which includes Silk® Soymilk, PureAlmond® and PureCoconut®, increased more than 20 percent in the third quarter of 2012 compared to the third quarter of 2011, driven primarily by continued strong growth of Silk PureAlmond®.
Alpro's European Plant-based Foods and Beverages net sales increased high-single digits on a constant currency basis and declined low-single digits on a percentage basis after currency conversion.
Pro forma adjusted net sales in Premium Dairy, which includes Horizon Organic® branded milk and other products, increased mid-single digits on a percentage basis in the third quarter.
Pro forma adjusted net sales in Coffee Creamers and Beverages, which includes coffee creamers under the International Delight®, Land O'Lakes®, Silk® and Horizon Organic® brands, as well as International Delight Iced Coffee®, increased by more than 20 percent in the third quarter.
FOURTH QUARTER 2012 OUTLOOK
Building on its strong third quarter results, the Company expects continued momentum in the fourth quarter of 2012. On a percentage basis, management anticipates pro forma adjusted net sales growth in the low-double digits, pro forma adjusted segment operating income growth in the mid-teens and pro forma adjusted total operating income growth of around twenty percent, resulting in pro forma adjusted diluted EPS of between $0.16 and $0.18 or $0.58 to $0.60 for full year 2012.
CONFERENCE CALL WEBCAST
A webcast to discuss the Company's financial results and outlook will be held on November 30 at 9:30AM ET and may be heard live by visiting the "Webcast" section of the Company's website at http://www.thewhitewavefoodscompany.com/investor_relations/. A slide presentation will accompany the webcast. A webcast replay will be available for approximately 45 days following the event within the Investor Relations section of the Company's website.
INITIAL PUBLIC OFFERING, BASIS OF PRESENTATION AND NON-GAAP FINANCIAL MEASURES
The financial information in this release relates to periods that ended prior to the initial public offering representing 13.3% of the economic interest in the Company in October 2012 (the "IPO") and the separation of our business from Dean Foods' other businesses. As of September 30, 2012, the Company had nominal assets and no liabilities, and had conducted no operations. In October 2012, in connection with the IPO, Dean Foods contributed the capital stock of its wholly owned subsidiary WWF Operating Company ("WWF Opco") to the Company. WWF Opco, which is now a wholly owned subsidiary of the Company, held substantially all of the assets and liabilities related to the Company's current business. Because a discussion of the Company's historical results would not be meaningful, except as otherwise indicated, historical financial information in this release relates to WWF Opco.
The historical financial results in this release differ from the results of the WhiteWave-Alpro segment for the same periods previously reported by Dean Foods. A reconciliation between the results reported in this release and the WhiteWave-Alpro segment results reported by Dean Foods is included in the tables below.
In addition to the results prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), we have presented certain non-GAAP financial measures, including pro forma adjusted net sales, pro forma adjusted income from continuing operations and pro forma adjusted diluted net income per share. These non-GAAP measures have been presented on a pro forma adjusted basis as if the Company had operated on an independent and stand-alone basis in all periods presented in order to facilitate meaningful evaluation of our operating performance between periods. These adjustments primarily relate to various commercial arrangements with Dean Foods 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. These adjustments are not necessarily indicative of our future performance and do not reflect what our actual financial performance would have been had we been a stand-alone public company during the periods presented. Further detail regarding these 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, pro forma adjusted projected sales, pro forma adjusted operating income, pro forma adjusted net income, pro forma adjusted diluted earnings per share, growth of our business and expected financial performance. These statements involve risks and uncertainties that may cause results to differ materially from the statements set forth in this press release. The Company's ability to meet targeted financial and operating results, including targeted sales, operating income, net income and earnings per share depends 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 filings with the Securities and Exchange Commission. The Company's ability to profit from its branding initiatives depends on a number of factors, including consumer acceptance of the Company's products. 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.
