• Q1 net sales up 36% to $830m
  • Operating in come up 29% to $54m
  • Net income up 35% to $32m
  • FY guidance range raised
WhiteWave upbeat on Q1 gains

WhiteWave upbeat on Q1 gains

WhiteWave Foods has raised its full-year earnings guidance following a jump in first-quarter sales and earnings.

The company said that organic growth in its historical business and the contribution from Earthbound Farm, which was acquired in January, boosted the top line. Sales were up 36% and organic sales grew by 12%.

Operating income increased 29% and the company said that it saw improved margins across its business, with the exception of Earthbound. Net profit increased 35%.

The strength of the first-quarter result prompted WhiteWave to increase its full-year guidance range to $0.95-0.98 per share.

Show the press release
WhiteWave Foods Reports Strong First Quarter 2014 Results
  • Adjusted Diluted Earnings per Share Increases 40% to $0.22, Excluding China Joint Venture Investments
  • Net Sales Increases 36% to $830 Million; 12% Organic Net Sales Growth, Excluding Results of Earthbound Farm Acquired on January 2, 2014
  • Adjusted Operating Income Grows 35% to $64 Million; Operating Margins Expanded in Historical Businesses, Excluding Earthbound Farm
  • Q2 2014 Guidance of $0.21 to $0.22 of Adjusted Diluted Earnings per Share, Excluding Expected Investments in China Joint Venture
  • Full Year 2014 Guidance Range Increased to $0.95 to $0.98 of Adjusted Diluted Earnings per Share, Excluding Expected Investments in China Joint Venture

DENVER--(BUSINESS WIRE)--May 8, 2014-- The WhiteWave Foods Company (the “Company”) (NYSE: WWAV) today reported strong results for the first quarter ended March 31, 2014, driven by continued growth across all of the Company’s platforms.

         
Financial Summary:       Three Months Ended March 31,
In millions, except EPS       2014     2013     % Change*
Net Sales       $830     $608     +36%
Operating Income                    
GAAP       $54     $42     +29%
Adjusted       $64     $47     +35%
Net Income                    
GAAP       $32     $24     +35%
Adjusted       $39     $28     +40%
Diluted Earnings per Share (EPS)                    
GAAP       $0.18     $0.14     +32%
Adjusted       $0.22     $0.16     +38%
Adjusted, excluding China Joint Venture       $0.22     $0.16     +40%
Shares Outstanding                    
Basic       174     173      
Diluted       177     173      
*Certain change percentages may not recalculate using the rounded dollar amounts provided
 

The Company reported first quarter 2014 adjusted diluted earnings per share of $0.22, a 40 percent increase compared to first quarter 2013, excluding investments associated with itsChina joint venture. Including joint venture investments, the Company also reported first quarter 2014 adjusted diluted earnings per share of $0.22.

Net sales for the first quarter of 2014 were $830 million, a 36 percent increase from net sales of $608 million in the first quarter of 2013. This growth reflects the inclusion ofEarthbound Farm, and strong organic growth in both the Company’s North America andEurope segments. Excluding Earthbound Farm, net sales for the first quarter 2014 increased 12 percent due primarily to strong volume growth in both segments.

Adjusted operating income for the first quarter of 2014 totaled $64 million, compared to$47 million in the first quarter of 2013, representing an increase of 35 percent.

“The strength of our results reflects impressive organic growth across our historical businesses, plus the strategic addition of Earthbound Farm to our portfolio,” said Gregg Engles, Chairman and Chief Executive Officer. “All of our brands delivered strong volume growth, which in turn fueled category expansion. Our China joint venture is progressing on-track, and we are excited about the opportunities that entry into this market provides. I am pleased with our strong start to the year, along with the expected continued momentum that has led us to increase our forecasts for 2014.”

BASIS OF PRESENTATION

Certain financial measures in this release are presented on a non-GAAP, adjusted basis.North America segment financial results for the first quarter of 2014 are adjusted to eliminate a gain from the reduction of previous restructuring 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.

NORTH AMERICA SEGMENT

The Company’s North America segment now consists of four platforms: Plant-based Foods and Beverages, Premium Dairy, Organic Greens and Produce, and Coffee Creamers and Beverages. In the first quarter of 2014, net sales for the North America segment were $705 million, an increase of 39 percent over the first quarter 2013. The growth in the North America segment reflects the inclusion of Earthbound Farm’s results, and increased volumes and new product innovations in the Company’s historical businesses. ExcludingEarthbound Farm, net sales for the first quarter 2014 increased 10 percent from the first quarter of 2013. Adjusted operating income for the North America segment increased 32 percent to $74 million for the first quarter, compared to the same period in 2013, driven by the addition of Earthbound Farm and operating margin expansion of more than 60 basis points in the North America segment’s historical businesses.

 
North America Segment Summary
In millions       Three Months Ended March 31,
        2014     2013     % Change
Net Sales       $705     $507     +39%
                     
GAAP Segment Operating Income       $75     $56     +33%
Adj. Segment Operating Income       $74     $56     +32%
                     

Plant-Based Foods & Beverages

In the North America Plant-based Foods and Beverages platform, which includes Silk®soymilk, almondmilk, and coconutmilk, net sales increased 13 percent in the first quarter of 2014 compared to the first quarter of 2013. This growth was driven primarily by the continued strong growth of Silk® almondmilk which increased sales 52 percent in the first quarter 2014 compared to the same period in 2013. The overall plant-based foods and beverages category remained strong with more than 20 percent category growth in the first quarter 2014. Almond’s share of the overall category continues to grow and now represents an estimated 66 percent of the plant-based foods and beverages category. WhiteWave’s Silk® brand has the #1 market position in almond, as well as in all of its other product subcategories.

The Company’s recently-introduced line of flavorful almondmilk and coconutmilk blends and a new variety of almondmilks enhanced with protein and fiber are gaining distribution based on the strength of the Silk® brand and a track record of successful innovation. In addition, the Company has rolled out redesigned packaging across the Silk® product line and launched a national advertising campaign to increase brand and category awareness of the benefits of plant-based foods and beverages.

Premium Dairy

In Premium Dairy, which includes Horizon Organic®, net sales increased 8 percent in the first quarter of 2014 compared to the first quarter of 2013. This growth more than offset a 2 percentage point impact from the Company’s previously communicated exit of certain private label manufacturing arrangements and discontinuation of servicing a national coffee chain. Volume growth continued to be the primary sales driver due to continued growth in value-added offerings, such as Horizon Organic® DHA Omega-3 products, along with some impact from price increases implemented in the fourth quarter of 2013. The organic milk category grew by 7 percent in the first quarter 2014, with Horizon Organic®maintaining its leading market share.

Expanding Horizon Organic® beyond the dairy case is in the introductory stages, but initial consumer and retailer response to Horizon Organic® macaroni & cheese and a new line of Horizon Organic® snacks has been very positive. The Company plans to increase its distribution of these products throughout the year.

Organic Greens & Produce

In Organic Greens and Produce, Earthbound Farm’s net sales were $146 million in its first full quarter as part of WhiteWave Foods. First quarter sales were driven primarily by strong volumes in organic packaged salads -- the majority of Earthbound Farm’s business -- which increased in the high-teens percentage range. Organic packaged salads’ share of the total packaged salad category continued to grow in the first quarter, increasing over 3 percentage points to 24 percent. Earthbound Farm continues to hold the leading share in the branded organic packaged salad segment.

Earthbound Farm’s innovative Power Meal Bowl, which offers consumers a complete salad meal kit, is in the early stages of building distribution and is performing well.

Coffee Creamers & Beverages

In Coffee Creamers and Beverages, which includes coffee creamers under the International Delight® and LAND O LAKES® brands as well as International Delight Iced Coffee®, net sales increased 9 percent in the first quarter 2014 compared to the first quarter 2013. Growth was primarily due to increased volumes behind innovative new products and growth of flavored creamers. The refrigerated flavored creamer category grew 6 percent during the first quarter of 2014, driven by growth in International Delight® flavored creamers.

The Company’s track record of innovation in the flavored creamer category continues, with the launch of International Delight® fat-free and sugar-free products, as well as new International Delight Iced Coffee® flavors. In addition, the national launch of Dunkin’ Donuts® branded creamers in the first quarter of 2014 has been progressing in line with the Company’s expectations.

EUROPE SEGMENT

The Europe segment consists of a Plant-based Foods and Beverages platform that operates primarily under the Alpro® brand name. Net sales in the segment increased 24 percent on a reported basis in the first quarter of 2014 compared to the first quarter of 2013, and increased 19 percent on a constant currency basis. Operating income in the segment increased 55 percent to $10 million for the first quarter of 2014, compared to the same period in 2013, with operating margin expansion of more than 160 basis points.

 
Europe Segment Summary
In millions       Three Months Ended March 31,
       

2014

    2013     % Change
Net Sales       $126     $101     +24%
                     
Segment Operating Income       $10     $7     +55%
                     

Growth in the Europe segment was fueled by continued robust volume growth of almond and other recently-introduced beverages, along with continued expansion in non-dairy yogurt and cream products. Alpro® holds the leading market position across its nine core geographies, with a current share of 41 percent.

The Company is continuing in its role as the innovation leader in the plant-based category in Europe by launching new products including coconut beverages, rice and coconut blends and exciting new macadamia nut-based beverages.

OTHER ITEMS

China Joint Venture

On January 5, 2014, the Company announced it is forming a joint venture with China Mengniu Dairy Company Limited to manufacture and distribute products in China. Since this announcement, the joint venture has been formed and all necessary regulatory approvals in China have been received. The Company owns a 49% stake in the joint venture and Mengniu owns a 51% stake. The Company contributed $47 million in cash to the joint venture in the first quarter.

The joint venture is finalizing the acquisition and will begin modifying a production facility, in which it expects to begin producing products in late 2014. The Company anticipates making additional investments in the joint venture for startup and commercialization costs over the balance of 2014.

Sale of Soy-Based Meat Alternative Business

In the first quarter 2014, the Company completed the sale of its soy-based meat alternative business located in the Netherlands. As previously disclosed, the operation was not strategic to the European Plant-based Foods and Beverages platform.

Original source: WhiteWave Foods