DALLAS, May 9, 2017
/PRNewswire/ -- Dean Foods Company (NYSE: DF) today reported
first quarter 2017 results.
Highlights
- Q1 net loss per diluted share was ($0.11) and adjusted net income per diluted share
was $0.13
- National launch of DairyPure sour cream driving product and
package innovation into the category
- Cultivating strong brands through Organic Valley joint venture
and investment in Good Karma Foods Inc. ("Good Karma"), the leading
producer of flax-based milk and yogurt
- Robust commercial and cost productivity agenda ramping up
through remainder of 2017
- Reaffirm full-year 2017 adjusted earnings expectation of
$1.35 to $1.55 per diluted
share(1)
Chief Executive Officer Ralph
Scozzafava said, "Our first quarter results across volume
and earnings per share were in line with our expectations. Our
commercial and cost productivity initiatives are ramping up,
including the recent national launch of our new DairyPure sour
cream. We are driving incremental distribution across our core
portfolio of fluid products as well as expanding our footprint of
our super-regional ice cream brands. In addition, we are enhancing
our selling capabilities through a partnership with Acosta, a
leading sales agency with extensive capability and expertise in
products going through customer warehouses."
Business Updates
The company launched DairyPure sour cream in March as the
national brand's most recent line extension. The $1.2 billion category presents a compelling
growth opportunity for Dean Foods. Backed by DairyPure's Five-Point
Purity Promise, DairyPure sour cream has a clean label,
consumer-preferred product and packaging and is made with fresh
cream from the company's local dairies. The product line includes
three sizes with both regular fat and lighter versions.
Last week, the company announced an investment in and
distribution deal with Good Karma, the leading producer of
flax-based milk and yogurt products. The investment allows Dean
Foods to diversify into plant-based dairy alternatives, and
provides Good Karma the ability to more rapidly expand distribution
and investment to build the brand along with subsequent product
innovation. The non-dairy beverage category has experienced
meaningful growth and increased household penetration with a
growing number of consumers who prefer plant-based options. Good
Karma is solidly positioned as a key brand across the core natural
channel and is the second-fastest growing brand across its peer set
in the plant-based milk category.
First Quarter 2017 Operating Results
Chief Financial Officer Chris
Bellairs said, "For the first quarter, we delivered
$28 million of net cash from
operating activities and $19 million
of free cash flow, representing ten consecutive quarters of
positive free cash flow. We reduced our total net debt to
$868 million, representing the third
consecutive quarter of net debt reduction since our Friendly's
acquisition."
Financial Summary
*
|
|
Three Months Ended
March 31
|
(In millions,
except per share amounts)
|
|
2017
|
|
2016
|
|
|
|
|
|
Gross
Profit
|
|
|
|
|
GAAP
|
|
$
|
462
|
|
|
$
|
504
|
|
Adjusted
|
|
$
|
465
|
|
|
$
|
505
|
|
|
|
|
|
|
Operating
Income
|
|
|
|
|
GAAP
|
|
$
|
3
|
|
|
$
|
79
|
|
Adjusted
|
|
$
|
35
|
|
|
$
|
83
|
|
|
|
|
|
|
Interest
Expense
|
|
|
|
|
GAAP
|
|
$
|
17
|
|
|
$
|
17
|
|
Adjusted
|
|
$
|
16
|
|
|
$
|
17
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
|
|
|
GAAP
|
|
$
|
(10)
|
|
|
$
|
39
|
|
Adjusted
|
|
$
|
12
|
|
|
$
|
42
|
|
|
|
|
|
|
Diluted Earnings
(Loss) Per Share (EPS)
|
|
|
|
|
GAAP
|
|
$
|
(0.11)
|
|
|
$
|
0.43
|
|
Adjusted
|
|
$
|
0.13
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
* Adjustments to GAAP
due to the exclusion of expenses, gains or losses associated with
certain transactions and other non-recurring items are described
and reconciled to the comparable GAAP amounts in the attached
tables.
|
|
|
(1)
|
Please refer to
"Forward Outlook" and "Non-GAAP Financial Measures" for additional
information. We provide guidance on a non-GAAP basis and are unable
to provide a full reconciliation to GAAP without unreasonable
efforts as we cannot predict the amount or timing of certain
elements which are included in reported GAAP results, including
mark-to-market adjustments of hedging activities, asset impairment
charges, and other non-recurring events or transactions that may
have a significant impact to reported GAAP results.
|
Total volume across all products was 633 million gallons for the
first quarter of 2017, a 1.3% decline compared to total volume of
641 million gallons in the first quarter of 2016.
Based on fluid milk sales data published by the USDA through
February, fluid milk volume decreased 3.4% year-over-year quarter
to date in the first quarter of 2017 on an unadjusted basis.
However, when adjusting for the extra selling day in 2016 due to
Leap Year, the category decline was
1.8%. On this same basis, Dean Foods' share of U.S. fluid milk
volumes increased by 10 basis points year-over-year.
Raw milk costs in the first quarter of 2017 of $17.03 per hundred weight increased roughly 6%
from the fourth quarter of 2016 and increased 18% from the first
quarter of 2016.
Cash Flow
Net cash provided by continuing operations for the three months
ended March 31, 2017 totaled $28
million. Free cash flow provided by continuing operations,
which is defined as net cash provided by continuing operations less
capital expenditures, was $19 million
for the three months ended March 31, 2017, a $10 million decrease as compared to the prior
year period. Capital expenditures totaled $8
million for the quarter.
Debt
Total outstanding debt at March 31, 2017, net of
$32 million cash on hand, was
approximately $868 million. The
Company's net debt to bank EBITDA total leverage ratio, on an
all-cash netted basis, increased slightly on a sequential basis to
2.09 times at the end of the first quarter 2017.
Forward Outlook
"As we look to the second quarter and the balance of 2017, we
remain focused on executing our commercial and cost productivity
initiatives. We believe our new product innovation, strategic
partnerships, and focus on eliminating waste in our supply chain
are key enablers to deliver sustainable long-term growth and
financial results. I am confident in our organization's ability to
deliver our plan, and I therefore want to reaffirm full-year
adjusted diluted earnings per share guidance expectations of
$1.35 to $1.55," concluded
Scozzafava.
We provide guidance on a non-GAAP basis and are unable to
provide a full reconciliation to GAAP without unreasonable efforts
as we cannot predict the amount or timing of certain elements which
are included in reported GAAP results, including mark-to-market
adjustments of hedging activities, asset impairment charges, and
other non-recurring events or transactions that may have a
significant impact to reported GAAP results.
Non-GAAP Financial Measures
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 Adjusted
gross profit, Adjusted selling and distribution expenses, Adjusted
general and administrative expenses, Adjusted total operating costs
and expenses, Adjusted operating income, Adjusted interest expense,
Adjusted net income (loss), Adjusted earnings (loss) per diluted
share, Adjusted EBITDA, Free Cash Flow and total leverage ratio,
each as described below.
This non-GAAP financial information is provided as supplemental
information for investors and is not in accordance with, or an
alternative to, GAAP. Additionally, these non-GAAP measures may be
different than similar measures used by other companies.
We believe that the presentation of these non-GAAP financial
measures, when considered together with our GAAP financial measures
and the reconciliations to the corresponding GAAP financial
measures, provides investors with a more complete understanding of
the factors and trends affecting our business than could be
obtained absent these disclosures. Our management uses these
non-GAAP financial measures when evaluating our performance, when
making decisions regarding the allocation of resources, in
determining incentive compensation for management, and in
determining earnings estimates.
A full reconciliation of these non-GAAP financial measures to
the most directly comparable GAAP measures for the three months
ended March 31, 2017 and 2016, is set forth in the tables
herein.
Adjusted Operating Results
We have supplemented the presentation of our reported GAAP gross
profit, selling and distribution expenses, general and
administrative expenses, total operating costs and expenses,
operating income, interest expense, net income (loss) and earnings
(loss) per diluted share, with non-GAAP measures that adjust the
GAAP measures to exclude the impact of the following (as
applicable):
- asset impairment charges;
- incremental non-cash trademark amortization triggered by the
launch of a national fresh white milk brand;
- closed deal costs;
- facility closing, reorganization and realignment costs;
- debt issuance costs;
- costs associated with the early retirement of long-term
debt;
- gains (losses) on the mark-to-market of our derivative
contracts;
- separation costs;
- gains or losses related to discontinued operations and
divestitures;
- litigation settlements;
- income tax impacts of the foregoing adjustments; and
- adjustments to normalize our income tax expense at a rate of
38%.
We believe these non-GAAP measures provide useful information to
investors by excluding expenses, gains or losses that are not
indicative of the company's core operating performance. In
addition, we cannot predict the timing and amount of gains or
losses associated with such items. We believe these non-GAAP
measures provide more accurate comparisons of our ongoing business
operations and are better indicators of trends in our underlying
business. In addition, these adjustments are consistent with how
management views our business. Management uses these non-GAAP
financial measures in making financial, operating and planning
decisions and evaluating the Company's ongoing performance.
Further, adjusted gross profit and adjusted operating income are
used by management to evaluate key performance indicators of brand
mix and low cost, respectively.
Adjusted EBITDA
Adjusted EBITDA is defined as net income before interest
expense, income tax expense, depreciation and amortization, as
further adjusted to exclude the impact of the adjustments discussed
under "Adjusted Operating Results" above (other than the normalized
income tax rate, as Adjusted EBITDA excludes the full amount of
income tax expense). This information is provided to assist
investors in making meaningful comparisons of our operating
performance between periods and to view our business from the same
perspective as our management. We believe Adjusted EBITDA is a
useful measure for analyzing the performance of our business and is
a widely-accepted indicator of our ability to incur and service
indebtedness and generate free cash flow. We also believe that
EBITDA measures are commonly reported and widely used by investors
and other interested parties as measures of a company's operating
performance and debt servicing ability because such measures assist
in comparing performance on a consistent basis without regard to
capital structure, depreciation or amortization (which can vary
significantly) and non-operating factors (such as historical
cost).
Total Leverage Ratio
Our total leverage ratio is calculated as net debt divided by
Bank EBITDA for the trailing four quarters. Net debt is calculated
as consolidated funded indebtedness in accordance with our credit
agreement, except on an all cash netted basis. Bank EBITDA is
calculated as Adjusted EBITDA, as further adjusted to exclude
certain non-cash and non-recurring or extraordinary expenses as
permitted in calculating covenant compliance under our credit
agreement. Management believes analysts and investors commonly use
our total leverage ratio as an indicator of our ability to service
existing debt and our liquidity.
Free Cash Flow
We define Free Cash Flow as net cash provided by operating
activities from continuing operations less cash payments for
capital expenditures. We believe Free Cash Flow is a meaningful
non-GAAP measure that offers supplemental information and insight
regarding the liquidity of our operations and our ability to
generate sufficient cash flow to, among other things, repay debt,
invest in our business and repurchase shares of our common stock. A
limitation of Free Cash Flow is that it does not represent the
total increase or decrease in the cash balance for the period.
Conference Call/Webcast
A webcast to discuss the Company's financial results and outlook
will be held at 9:00 a.m. ET today
and may be heard live by clicking the earnings button on the
Company's website at http://www.deanfoods.com. A slide presentation
will accompany the webcast.
About Dean Foods
Dean Foods is a leading food and beverage company and the
largest processor and direct-to-store distributor of fresh fluid
milk and other dairy and dairy case products in the United States. Headquartered in
Dallas, Texas, the Dean Foods
portfolio includes DairyPure®, the country's
first and largest fresh, white milk national brand, and
TruMoo®, the leading national flavored milk brand, along
with well-known regional dairy brands such as Alta Dena®, Berkeley
Farms®, Country Fresh®,
Dean's®, Friendly's®,
Garelick Farms®, LAND O LAKES®*
milk and cultured products*, Lehigh Valley Dairy
Farms®, Mayfield®,
McArthur®, Meadow Gold®, Oak
Farms®, PET®**, T.G. Lee®,
Tuscan® and more. In all, Dean Foods has more
than 50 national, regional and local dairy brands as well as
private labels. Dean Foods also makes and distributes ice cream,
cultured products, juices, teas, and bottled water. Almost 17,000
employees across the country work every day to make Dean Foods the
most admired and trusted provider of wholesome, great-tasting dairy
products at every occasion. For more information about Dean Foods
and its brands, visit www.deanfoods.com.
*The LAND O LAKES brand is owned by Land O'Lakes, Inc. and is
used by license.
**PET is a trademark of Eagle Family Foods Group LLC, under
license.
Some of the statements made 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,
including statements relating to: (1) our financial forecast,
including projected sales (including specific product lines and the
Company as a whole), total volume, price realization, profit
margins, net income, earnings per share, free cash flow, our
leverage ratio, and debt covenant compliance, (2) the Company's
regional and national branding and marketing initiatives, (3) the
Company's innovation, research and development plans and its
ability to successfully launch new products or brands, (4)
commodity prices and other inputs and the Company's ability to
forecast or predict commodity prices, milk production and milk
exports, (5) the Company's commercial and cost productivity
initiatives, including plant closures and route reductions, and its
ability to achieve expected savings, (6) planned capital
expenditures, (7) the status of the Company's litigation
matters, (8) the Company's plans related to its capital
structure, (9) the Company's dividend policy, (10) possible
repurchases of shares of the Company's common stock, and (11)
potential acquisitions. These statements involve risks and
uncertainties that may cause results to differ materially from
those set forth in this press release, including the risks
disclosed by the Company in its filings with the Securities and
Exchange Commission. Financial projections are based on a number of
assumptions. Actual results could be materially different
than projected if those assumptions are erroneous. The cost
and supply of commodities and other raw materials are determined by
market forces over which the Company has limited or no control.
Sales, operating income, net income, debt covenant compliance,
financial performance and earnings per share can vary based on a
variety of economic, governmental and competitive factors, which
are identified in the Company's filings with the Securities and
Exchange Commission. The Company's ability to profit from its
branding and marketing initiatives depends on a number of factors
including consumer acceptance of its products. The
declaration and payment of cash dividends under the Company's
dividend policy remains at the sole discretion of the Board of
Directors and will depend upon its financial results, cash
requirements, future prospects, restrictions in its credit
agreement and debt covenant compliance, applicable law and other
factors that may be deemed relevant by the Board. All
forward-looking statements in this press release speak only as of
the date of this press release. The Company expressly
disclaims any obligation or undertaking to release publicly any
updates or revisions to any 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 except as required by law.
CONTACT: Corporate Communications, Jamaison Schuler, +1-214-721-7766; or Investor
Relations, Sherri Baker,
+1-214-303-3438
DEAN FOODS
COMPANY CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) (In thousands, except
per share data)
|
|
|
Three
Months Ended March 31
|
|
2017
|
|
2016
|
Net sales
|
$
|
1,995,686
|
|
|
$
|
1,878,828
|
|
Cost of
sales
|
1,533,561
|
|
|
1,374,760
|
|
Gross
profit
|
462,125
|
|
|
504,068
|
|
Operating costs and
expenses:
|
|
|
|
Selling and
distribution
|
345,196
|
|
|
332,887
|
|
General and
administrative
|
99,536
|
|
|
85,151
|
|
Amortization of
intangibles
|
5,155
|
|
|
6,325
|
|
Facility closing and
reorganization costs, net
|
9,286
|
|
|
1,166
|
|
Total operating costs
and expenses
|
459,173
|
|
|
425,529
|
|
Operating
income
|
2,952
|
|
|
78,539
|
|
Other (income)
expense:
|
|
|
|
Interest
expense
|
17,464
|
|
|
16,876
|
|
Other income,
net
|
(956)
|
|
|
(997)
|
|
Total other
expense
|
16,508
|
|
|
15,879
|
|
Income (loss) before
income taxes
|
(13,556)
|
|
|
62,660
|
|
Income tax expense
(benefit)
|
(3,797)
|
|
|
23,459
|
|
Net income
(loss)
|
$
|
(9,759)
|
|
|
$
|
39,201
|
|
Average common
shares:
|
|
|
|
Basic
|
90,710
|
|
|
91,567
|
|
Diluted
|
90,710
|
|
|
92,168
|
|
Basic income (loss)
per common share:
|
|
|
|
Net income
(loss)
|
$
|
(0.11)
|
|
|
$
|
0.43
|
|
Diluted income (loss)
per common share:
|
|
|
|
Net income
(loss)
|
$
|
(0.11)
|
|
|
$
|
0.43
|
|
DEAN FOODS
COMPANY CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited) (In
thousands)
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
31,582
|
|
|
$
|
17,980
|
|
Other current
assets
|
|
979,791
|
|
|
1,040,650
|
|
Total current
assets
|
|
1,011,373
|
|
|
1,058,630
|
|
Property, plant
and equipment, net
|
|
1,135,724
|
|
|
1,163,851
|
|
Intangibles and
other assets, net
|
|
378,643
|
|
|
383,746
|
|
Total
|
|
$
|
2,525,740
|
|
|
$
|
2,606,227
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Total current
liabilities, excluding debt
|
|
$
|
684,471
|
|
|
$
|
706,981
|
|
Total long-term
debt, including current portion
|
|
891,677
|
|
|
886,051
|
|
Other long-term
liabilities
|
|
354,565
|
|
|
402,639
|
|
Total
stockholders' equity
|
|
595,027
|
|
|
610,556
|
|
Total
|
|
$
|
2,525,740
|
|
|
$
|
2,606,227
|
|
DEAN FOODS
COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) (In thousands)
|
|
|
|
Three Months Ended
March 31
|
|
|
2017
|
|
2016
|
Operating
Activities
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
27,556
|
|
|
$
|
46,230
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Payments for
property, plant and equipment
|
|
(8,372)
|
|
|
(17,067)
|
|
Proceeds from sale of
fixed assets
|
|
1,001
|
|
|
3,209
|
|
Net cash used in
investing activities
|
|
(7,371)
|
|
|
(13,858)
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Net proceeds
(payments) from debt
|
|
4,700
|
|
|
(413)
|
|
Payments of
financing costs
|
|
(1,709)
|
|
|
—
|
|
Cash dividends
paid
|
|
(8,178)
|
|
|
(8,259)
|
|
Issuance of
common stock, net of share repurchases for withholding
taxes
|
|
(1,396)
|
|
|
(663)
|
|
Other
|
|
—
|
|
|
758
|
|
Net cash used
in financing activities
|
|
(6,583)
|
|
|
(8,577)
|
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
66
|
|
Increase in
cash and cash equivalents
|
|
13,602
|
|
|
23,861
|
|
Cash and cash
equivalents, beginning of period
|
|
17,980
|
|
|
60,734
|
|
Cash and cash
equivalents, end of period
|
|
$
|
31,582
|
|
|
$
|
84,595
|
|
DEAN FOODS
COMPANY RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (Unaudited) (In thousands, except per
share data)
|
|
|
Three Months Ended
March 31, 2017
|
|
|
|
Asset write-
downs
and (gain) loss
on
sale of assets
|
|
Facility
closing
and
reorganization
costs, net
|
|
Mark-to-
market
on derivative
contracts
|
|
Other
adjustments
|
|
Income
tax
|
|
|
|
GAAP
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
Adjusted*
|
Gross
profit
|
$
|
462,125
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,209
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
465,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
distribution
|
345,196
|
|
|
—
|
|
|
—
|
|
|
(1,142)
|
|
|
—
|
|
|
—
|
|
|
344,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
99,536
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,250)
|
|
|
—
|
|
|
85,286
|
|
Amortization of
intangibles
|
5,155
|
|
|
(3,935)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,220
|
|
General and
administrative, including Amortization of intangibles
|
104,691
|
|
|
(3,935)
|
|
|
—
|
|
|
—
|
|
|
(14,250)
|
|
|
—
|
|
|
86,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
459,173
|
|
|
(3,935)
|
|
|
(9,286)
|
|
|
(1,142)
|
|
|
(14,250)
|
|
|
—
|
|
|
430,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
2,952
|
|
|
3,935
|
|
|
9,286
|
|
|
4,351
|
|
|
14,250
|
|
|
—
|
|
|
34,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
17,464
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,080)
|
|
|
—
|
|
|
16,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(9,759)
|
|
|
3,935
|
|
|
9,286
|
|
|
4,351
|
|
|
15,330
|
|
|
(11,149)
|
|
|
11,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share (g)
|
$
|
(0.11)
|
|
|
$
|
0.04
|
|
|
$
|
0.10
|
|
|
$
|
0.05
|
|
|
$
|
0.17
|
|
|
$
|
(0.12)
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2016
|
|
|
|
Asset write-
downs
and (gain) loss on
sale of assets
|
|
Facility
closing
and
reorganization
costs, net
|
|
Mark-to-
market
on derivative
contracts
|
|
Other
adjustments
|
|
Income
tax
|
|
|
|
GAAP
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
Adjusted*
|
Gross
profit
|
$
|
504,068
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
533
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
504,601
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
distribution
|
332,887
|
|
|
—
|
|
|
—
|
|
|
2,678
|
|
|
—
|
|
|
—
|
|
|
335,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
85,151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85,151
|
|
Amortization of
intangibles
|
6,325
|
|
|
(5,589)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
736
|
|
General and
administrative, including Amortization of intangibles
|
91,476
|
|
|
(5,589)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85,887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
425,529
|
|
|
(5,589)
|
|
|
(1,166)
|
|
|
2,678
|
|
|
—
|
|
|
—
|
|
|
421,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
78,539
|
|
|
5,589
|
|
|
1,166
|
|
|
(2,145)
|
|
|
—
|
|
|
—
|
|
|
83,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
16,876
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(218)
|
|
|
—
|
|
|
16,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
39,201
|
|
|
5,589
|
|
|
1,166
|
|
|
(2,145)
|
|
|
218
|
|
|
(2,187)
|
|
|
41,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
|
0.43
|
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
|
$
|
(0.02)
|
|
|
$
|
—
|
|
|
$
|
(0.03)
|
|
|
$
|
0.45
|
|
|
|
*
|
See Notes to Earnings
Release Tables
|
DEAN FOODS
COMPANY RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES* (Unaudited) (In thousands, except
ratio data)
|
|
|
|
Three Months Ended
March 31
|
|
Trailing
Twelve
Months Ended
March 31,
|
|
|
2017
|
|
2016
|
|
2017
|
Reconciliation of
Net Income (Loss) to Adjusted EBITDA and Bank EBITDA
|
Net income
(loss)
|
|
$
|
(9,759)
|
|
|
$
|
39,201
|
|
|
$
|
70,969
|
|
Interest
expense
|
|
17,464
|
|
|
16,876
|
|
|
67,383
|
|
Income tax expense
(benefit)
|
|
(3,797)
|
|
|
23,459
|
|
|
54,778
|
|
Depreciation and
amortization
|
|
41,881
|
|
|
43,626
|
|
|
170,872
|
|
Closed deal costs
(a)
|
|
—
|
|
|
—
|
|
|
4,926
|
|
Facility closing and
reorganization costs, net (c)
|
|
9,286
|
|
|
1,166
|
|
|
16,839
|
|
Mark-to-market on
derivative contracts (d)
|
|
4,351
|
|
|
(2,145)
|
|
|
(6,302)
|
|
Other adjustments
(e)
|
|
14,250
|
|
|
—
|
|
|
26,499
|
|
Adjusted
EBITDA
|
|
$
|
73,676
|
|
|
$
|
122,183
|
|
|
405,964
|
|
|
|
|
|
|
|
|
Non-cash
share-based compensation expense
|
|
|
|
|
|
9,468
|
|
Bank
EBITDA
|
|
|
|
|
|
$
|
415,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
Reconciliation of
net debt and total leverage ratio
|
Total long-term debt,
including current portion
|
$
|
891,677
|
|
Unamortized discounts
and debt issuance costs
|
8,103
|
|
Cash and cash
equivalents
|
(31,582)
|
|
Net debt
|
$
|
868,198
|
|
Bank
EBITDA
|
415,432
|
|
Total
leverage ratio
|
2.09
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31
|
|
|
|
|
2017
|
|
2016
|
Reconciliation of
Free Cash Flow provided by continuing operations
|
Net cash provided by
operating activities
|
$
|
27,556
|
|
|
$
|
46,230
|
|
Payments for
property, plant and equipment
|
(8,372)
|
|
|
(17,067)
|
|
Free Cash
Flow provided by continuing operations
|
$
|
19,184
|
|
|
$
|
29,163
|
|
|
|
*
|
See Notes to Earnings
Release Tables
|
Notes to
Earnings Release Tables
|
|
For the three months
ended March 31, 2017 and 2016, the adjusted results and
certain other non-GAAP financial measures differ from the Company's
results under GAAP due to the exclusion of expenses, gains or
losses associated with certain transactions and other non-recurring
items that we believe are not indicative of our core operating
results. For additional information on our non-GAAP financial
measures, see the section entitled "Non-GAAP Financial Measures" in
this release.
|
|
|
(a)
|
The adjustment
reflects the elimination of expenses related to the acquisition of
Friendly's Ice Cream Holdings Corp. completed on June 20, 2016 of
$4.9 million for the trailing twelve months ended March 31,
2017.
|
|
|
(b)
|
In conjunction with
our decision to launch DairyPure in the first quarter of 2015, we
reclassified certain of our indefinite-lived trademarks to
finite-lived, resulting in a triggering event for impairment
testing purposes. The related adjustment reflects the elimination
of amortization expense recorded on these finite-lived trademarks
of $3.9 million and $5.6 million for the three months ended
March 31, 2017 and 2016, respectively.
|
|
|
(c)
|
The adjustment
reflects the elimination of severance charges and non-cash asset
impairments, net of (gains) losses on related asset sales, for
approved facility closings and restructuring plans.
|
|
|
(d)
|
The adjustment
reflects the elimination of the (gain) loss on the mark-to-market
of our commodity derivative contracts. All of our commodity
derivative contracts are marked to market in our statement of
operations during each reporting period with a corresponding
derivative asset or liability on our balance sheet.
|
|
|
(e)
|
The adjustment
reflects the elimination of the following:
|
|
i.
|
A charge related to
litigation settlements reached in the three months ended
March 31, 2017;
|
|
ii.
|
The write off of
unamortized deferred financing costs of $1.1 million in connection
with the January 4, 2017 amendments to our senior secured revolving
credit facility and receivables securitization facility in the
three months ended March 31, 2017; and
|
|
iii.
|
Interest accretion in
connection with the settlement of a previously disclosed dairy
farmer class action lawsuit filed in the United States District
Court for the Eastern District of Tennessee. The Court
granted final approval of the settlement agreement on June 15, 2012
and the final installment payment was made in June of
2016.
|
|
|
(f)
|
The adjustment
reflects the income tax impact of adjustments (b) through (e) and
an adjustment to our income tax expense (benefit) to reflect income
tax at a tax rate of 38%, which we believe represents our
normalized long-term effective tax rate as a U.S. domiciled
business.
|
|
|
(g)
|
Includes an
adjustment to diluted shares outstanding to reflect an add-back of
approximately 566 thousand dilutive shares, which were
anti-dilutive for GAAP purposes.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dean-foods-announces-first-quarter-2017-results-300453676.html
SOURCE Dean Foods Company