DALLAS, May 10, 2016 /PRNewswire/ -- Dean Foods
Company (NYSE: DF) today reported first quarter 2016 results.
Highlights
- Q1 net income per diluted share was $0.43 and adjusted net income per diluted share
was $0.45, exceeding
expectations
- Q1 adjusted results reflect the fifth consecutive quarter of
year-over-year improved results behind strong execution across all
functions
- Quarterly dividend increased to $0.09 per share, a 29% increase
- Q2 2016 adjusted diluted earnings are expected to be
$0.32 to $0.40 per diluted share
Chief Executive Officer Gregg
Tanner said, "Our Q1 performance marks a strong start to
2016. Solid execution across all functions led to continued
improvement in our financial and operational performance from Q4 to
Q1. We continue to execute our agenda at high levels across the
entire team."
First Quarter 2016 Operating Results
Chief Financial Officer Chris
Bellairs said, "We delivered a solid start to 2016 across
our key financial measures. We delivered $29
million of free cash flow and $122
million of adjusted EBITDA for the quarter. On an all cash
netted basis, our total leverage improved to 1.72 times net debt to
bank EBITDA, representing our fifth sequential quarterly
improvement."
Financial Summary
*
|
|
Three Months Ended
March 31
|
(In millions,
except per share amounts)
|
|
2016
|
2015
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
|
GAAP
|
|
$ 504
|
$ 478
|
Adjusted
|
|
$ 505
|
$ 477
|
|
|
|
|
Operating
Income
|
|
|
|
GAAP
|
|
$ 79
|
$ (59)
|
Adjusted
|
|
$ 83
|
$ 52
|
|
|
|
|
Interest
Expense
|
|
|
|
GAAP
|
|
$ 17
|
$ 17
|
Adjusted
|
|
$ 17
|
$ 16
|
|
|
|
|
Net Income
(Loss)
|
|
|
|
GAAP
|
|
$ 39
|
$ (74)
|
Adjusted
|
|
$ 42
|
$ 22
|
|
|
|
|
Diluted Earnings
(Loss) Per Share (EPS)
|
|
|
|
GAAP
|
|
$0.43
|
$(0.78)
|
Adjusted
|
|
$0.45
|
$ 0.24
|
|
* Adjustments to GAAP
for the impacts of specific transactions and other one-time or
non-recurring items are fully described in the attached
tables.
|
The first quarter 2016 average Class I Mover, a measure of raw
milk costs, was $14.49 per
hundred-weight, an approximately 11% sequential decrease from the
fourth quarter of 2015 and a decrease of nearly 14% from the first
quarter of 2015. The second quarter 2016 average Class I Mover
forecast of $13.49 per hundred-weight
represents an approximately 7% decline sequentially and an
approximately 15% decline year-over-year.
Total volume across all products was 641 million gallons for the
first quarter of 2016, a 3.2% decline compared to total volume of
662 million gallons in the first quarter of 2015. For the second
quarter 2016, as compared to the prior year period, the Company
expects total volumes to decline in the low single digits.
Based on fluid milk sales data published by the USDA through
February, fluid milk volumes improved sequentially from a 1.1%
decline in the fourth quarter 2015 to a 0.6% decline in the first
quarter 2016 on an unadjusted basis. On this same basis, Dean
Foods' share of U.S. fluid milk volumes decreased by 10 basis
points sequentially and 70 basis points year-over-year to 34.6% in
the first quarter 2016.
Cash Flow
Net cash provided by continuing operations for the three months
ended March 31, 2016, totaled
$46 million. Free cash flow provided
by continuing operations, which is defined as net cash provided by
continuing operations less capital expenditures, was $29 million for the three months ended
March 31, 2016, a $109 million decrease as compared to the prior
year period. On a comparable period basis, Q1 2016 free cash flow
is positive after adjusting for higher incentive compensation
payouts in the first quarter 2016 and the $56 million associated with the Company's 2014
Federal Tax refund received in the first quarter 2015. Capital
expenditures totaled $17 million for
the quarter. In the first quarter, the Company's Board of Directors
approved an increase in its quarterly dividend to $0.09, a 29% increase versus the $0.07 dividend paid since the institution of the
Company's dividend in the first quarter 2014.
Debt
Total debt at March 31, 2016, net
of $85 million cash on hand, was
approximately $762 million. The
Company's net debt to bank EBITDA ratio, on an all cash netted
basis, improved sequentially to 1.72 times at the end of the first
quarter of 2016 with strong free cash flow and increased bank
EBITDA.
Forward Outlook
"For the second quarter, with expected volume declines in the
low single digits, slightly decreasing raw milk costs, and taking
normal seasonality into account, we expect adjusted diluted
earnings of between $0.32 and $0.40
per share," concluded Tanner.
Non-GAAP Financial Measures
In addition to the results prepared in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP"), we have
presented certain adjusted financial results and certain other
non-GAAP financial measures, including Adjusted EBITDA, Free Cash
Flow, Net Debt and Bank EBITDA, each as defined below.
Adjusted EBITDA and Bank EBITDA are from continuing operations and
are adjusted to eliminate the net expenses and net gains related to
the items identified in the reconciliation tables below. 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. Because we cannot predict the timing and amount
of expenses or gains associated with certain non-recurring items;
asset impairment charges; gains or losses related to discontinued
operations and divestitures; facility closing and reorganization
costs; costs associated with the early retirement of long-term
debt; gains (losses) on the mark-to-market of our derivative
contracts; litigation settlements; incremental non-cash trademark
amortization triggered by the launch of a national fresh white milk
brand; and certain other charges, our management does not consider
these items when evaluating our performance, when making decisions
regarding the allocation of resources, in determining incentive
compensation for management, or in determining earnings
estimates.
We have defined Adjusted EBITDA as net income (loss), which is
the most comparable GAAP financial measure, adjusted for the items
above as well as interest, taxes, depreciation and amortization. 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). Our total leverage ratio is
calculated as net debt to Bank EBITDA. 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, plus certain non-cash and
non-recurring or extraordinary expense as permitted under our
credit agreement, for the trailing four quarters. The
reconciliations from net income to Adjusted EBITDA and bank EBITDA
for the three months ended March 31,
2016 and 2015 is included in the tables below.
Additionally, we believe free cash flow provided by continuing
operations ("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
above what is required in our business to sustain our operations.
We define Free Cash Flow as net cash provided by operating
activities less cash payments for capital expenditures. A
reconciliation of net cash provided by operating activities, which
is the most comparable GAAP financial measure to Free Cash Flow, is
included in the tables below.
This non-GAAP financial information is provided as additional
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. A full reconciliation of our
results and financial measures reported in accordance with GAAP for
the three months ended March 31, 2016
and 2015 to the non-GAAP financial measures described above is set
forth herein.
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 visiting the "Webcast" section of 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®, 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 The J.M. Smucker Company and is used by
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), price realization, profit margins, net income,
earnings per share, free cash flow 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 cost-savings 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 adjusted 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 or a committee thereof 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 or such
committee. 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
|
|
Three months
ended
|
|
|
|
March 31,
|
|
March 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
GAAP
|
|
Adjusted*
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$ 1,878,828
|
|
$ 2,050,762
|
|
$ 1,878,828
|
|
$ 2,050,762
|
|
Cost of
sales
|
|
1,374,760
|
|
1,572,453
|
|
1,374,227
|
(d)
|
1,573,734
|
(d)
|
Gross
profit
|
|
504,068
|
|
478,309
|
|
504,601
|
|
477,028
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs
and expenses:
|
|
|
|
|
|
|
|
|
|
Selling and
distribution
|
|
332,887
|
|
338,184
|
|
335,565
|
(d)
|
337,194
|
(d)
|
General and
administrative
|
|
85,151
|
|
87,476
|
|
85,151
|
|
87,494
|
(d)
|
Amortization of
intangibles
|
|
6,325
|
|
706
|
|
736
|
(a)
|
706
|
|
Facility
closing and reorganization costs, net
|
|
1,166
|
|
1,245
|
|
-
|
(b)
|
-
|
(b)
|
Impairment of
long-lived assets
|
|
-
|
|
109,910
|
|
-
|
|
-
|
(a)
|
Total operating
costs and expenses
|
|
425,529
|
|
537,521
|
|
421,452
|
|
425,394
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
78,539
|
|
(59,212)
|
|
83,149
|
|
51,634
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
16,876
|
|
16,528
|
|
16,658
|
(d)
|
16,102
|
(d)
|
Loss on early
retirement of long-term debt
|
|
-
|
|
43,609
|
|
-
|
|
-
|
(c)
|
Other income,
net
|
(997)
|
|
(446)
|
|
(997)
|
|
(446)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations before income taxes
|
62,660
|
|
(118,903)
|
|
67,488
|
|
35,978
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense (benefit)
|
|
23,459
|
|
(45,252)
|
|
25,646
|
(e)
|
13,672
|
(e)
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
39,201
|
|
(73,651)
|
|
41,842
|
|
22,306
|
|
Loss on sale of
discontinued operations, net of tax
|
-
|
|
(89)
|
|
-
|
|
-
|
(d)
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$ 39,201
|
|
$ (73,740)
|
|
$ 41,842
|
|
$ 22,306
|
|
|
|
|
|
|
|
|
|
|
|
Average common
shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
91,567
|
|
94,222
|
|
91,567
|
|
94,222
|
|
Diluted
|
|
92,168
|
|
94,222
|
|
92,168
|
|
94,593
|
(f)
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per common share:
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
|
$
0.43
|
|
$
(0.78)
|
|
$
0.46
|
|
$
0.24
|
|
Income from
discontinued operations
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Net income
(loss)
|
|
$
0.43
|
|
$
(0.78)
|
|
$
0.46
|
|
$
0.24
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per common share:
|
|
|
|
|
|
|
|
|
Income (loss)
from continuing operations
|
|
$
0.43
|
|
$
(0.78)
|
|
$
0.45
|
|
$
0.24
|
|
Income from
discontinued operations
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Net income
(loss)
|
|
$
0.43
|
|
$
(0.78)
|
|
$
0.45
|
|
$
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See Notes to
Earnings Release Tables
|
|
|
|
|
DEAN FOODS
COMPANY
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
March 31,
|
|
December
31,
|
ASSETS
|
2016
|
|
2015
|
|
|
|
|
|
Cash and cash
equivalents
|
$ 84,595
|
|
$
60,734
|
|
|
|
|
|
Other current
assets
|
961,694
|
|
1,016,829
|
|
|
|
|
|
Total current
assets
|
|
1,046,289
|
|
1,077,563
|
|
|
|
|
|
Property, plant
and equipment, net
|
1,149,254
|
|
1,174,137
|
|
|
|
|
|
Intangibles and
other assets, net
|
256,811
|
|
268,463
|
|
|
|
|
|
Total
Assets
|
|
$ 2,452,354
|
|
$ 2,520,163
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Total current
liabilities, excluding debt
|
|
$ 666,667
|
|
$
760,402
|
|
|
|
|
|
Total long-term
debt, including current portion
|
835,042
|
|
834,573
|
|
|
|
|
|
Other long-term
liabilities
|
372,697
|
|
379,684
|
|
|
|
|
|
Total
stockholders' equity
|
|
577,948
|
|
545,504
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
|
$ 2,452,354
|
|
$ 2,520,163
|
DEAN FOODS
COMPANY
|
Condensed
Consolidated Statements of Cash Flows (GAAP Basis)
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
March
31,
|
Operating
Activities
|
2016
|
|
2015
|
Net cash
provided by operating activities
|
$ 46,230
|
|
$ 157,579
|
|
|
|
|
|
Investing
Activities
|
|
|
|
Payments for
property, plant and equipment
|
(17,067)
|
|
(19,304)
|
Proceeds from
sale of fixed assets
|
3,209
|
|
1,638
|
|
Net cash used
in investing activities
|
(13,858)
|
|
(17,666)
|
|
|
|
|
|
Financing
Activities
|
|
|
|
Net proceeds
(payments) from debt
|
(413)
|
|
408,852
|
Early
retirement of long-term debt
|
-
|
|
(476,188)
|
Premiums paid
on early retirement of long-term debt
|
-
|
|
(37,309)
|
Payments of
financing costs
|
-
|
|
(14,796)
|
Cash dividends
paid
|
(8,259)
|
|
(6,604)
|
Issuance of
common stock, net of share repurchases for withholding
taxes
|
(663)
|
|
17
|
Other
|
758
|
|
217
|
|
Net cash used
in financing activities
|
(8,577)
|
|
(125,811)
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents
|
66
|
|
(408)
|
|
|
|
|
|
Increase in
cash and cash equivalents
|
23,861
|
|
13,694
|
Cash and cash
equivalents, beginning of period
|
60,734
|
|
16,362
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$ 84,595
|
|
$ 30,056
|
|
|
|
|
|
|
|
|
|
|
Computation
of Free Cash Flow provided by (used in) continuing
operations:
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities
|
$ 46,230
|
|
$ 157,579
|
Payments for
property, plant and equipment
|
(17,067)
|
|
(19,304)
|
|
|
|
|
|
|
Free cash flow
provided by continuing operations
|
$ 29,163
|
|
$ 138,275
|
DEAN FOODS
COMPANY
|
Computation of
Adjusted EBITDA, Bank EBITDA and Net Debt
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
March 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
Adjusted net
income
|
$ 41,842
|
|
$
22,306
|
Adjusted
interest expense
|
16,658
|
|
16,102
|
Adjusted income
tax expense
|
25,646
|
|
13,672
|
Adjusted
depreciation and amortization
|
38,037
|
|
37,897
|
Adjusted
EBITDA
|
|
122,183
|
|
89,977
|
|
|
|
|
|
Non-cash
share-based compensation expense
|
1,756
|
|
2,221
|
|
|
|
|
|
Bank
EBITDA
|
|
$ 123,939
|
(g)
|
$
92,198
|
|
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
Total long-term
debt, including current portion
|
$ 835,042
|
|
$
834,573
|
Unamortized
discounts and debt issuance costs
|
|
11,757
|
|
12,639
|
Cash and cash
equivalents
|
|
(84,595)
|
|
(60,734)
|
Net
debt
|
$ 762,204
|
|
$
786,478
|
|
|
|
|
|
|
|
|
|
|
* See Notes to
Earnings Release Tables
|
|
DEAN FOODS
COMPANY
|
Reconciliation
of GAAP to Adjusted Earnings
|
(Unaudited)
|
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
March 31,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
write-downs
|
|
Facility
closing
|
|
Loss on
early
|
|
|
|
|
|
|
|
|
|
and (gain) loss
on
|
|
and
reorganization
|
|
retirement
of
|
|
Other
|
|
Income
|
|
|
|
|
|
sale of
assets
|
|
costs, net
|
|
debt
|
|
adjustments
|
|
tax
|
|
|
|
GAAP
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
Adjusted*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dean
Foods
|
$ 86,030
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
(2,145)
|
|
$
-
|
|
$ 83,885
|
Amortization of
intangibles
|
(6,325)
|
|
5,589
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(736)
|
Facility
closing and reorganization costs, net
|
(1,166)
|
|
-
|
|
1,166
|
|
-
|
|
-
|
|
-
|
|
-
|
Total operating
income
|
78,539
|
|
5,589
|
|
1,166
|
|
-
|
|
(2,145)
|
|
-
|
|
83,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
16,876
|
|
-
|
|
-
|
|
-
|
|
(218)
|
|
-
|
|
16,658
|
Other income,
net
|
(997)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(997)
|
Income tax
expense
|
23,459
|
|
-
|
|
-
|
|
-
|
|
-
|
|
2,187
|
|
25,646
|
Income from
continuing operations
|
39,201
|
|
5,589
|
|
1,166
|
|
-
|
|
(1,927)
|
|
(2,187)
|
|
41,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
discontinued operations, net of tax
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Net
income
|
$ 39,201
|
|
$
5,589
|
|
$
1,166
|
|
$
-
|
|
$
(1,927)
|
|
$ (2,187)
|
|
$ 41,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
$
0.43
|
|
$
0.06
|
|
$
0.01
|
|
$
-
|
|
$
(0.02)
|
|
$
(0.03)
|
|
$ 0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
March 31,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
write-downs
|
|
Facility
closing
|
|
Loss on
early
|
|
|
|
|
|
|
|
|
|
and (gain) loss
on
|
|
and
reorganization
|
|
retirement
of
|
|
Other
|
|
Income
|
|
|
|
|
|
sale of
assets
|
|
costs, net
|
|
debt
|
|
adjustments
|
|
tax
|
|
|
|
GAAP
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
Adjusted*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dean
Foods
|
$ 51,943
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
(309)
|
|
$
-
|
|
$ 51,634
|
Facility
closing and reorganization costs, net
|
(1,245)
|
|
-
|
|
1,245
|
|
-
|
|
-
|
|
-
|
|
-
|
Impairment of
long-lived assets
|
(109,910)
|
|
109,910
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Total operating
income (loss)
|
(59,212)
|
|
109,910
|
|
1,245
|
|
-
|
|
(309)
|
|
-
|
|
51,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
16,528
|
|
-
|
|
-
|
|
-
|
|
(426)
|
|
-
|
|
16,102
|
Loss on early
retirement of long-term debt
|
43,609
|
|
-
|
|
-
|
|
(43,609)
|
|
-
|
|
-
|
|
-
|
Other income,
net
|
(446)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(446)
|
Income tax
expense (benefit)
|
(45,252)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
58,924
|
|
13,672
|
Income (loss)
from continuing operations
|
(73,651)
|
|
109,910
|
|
1,245
|
|
43,609
|
|
117
|
|
(58,924)
|
|
22,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
discontinued operations, net of tax
|
(89)
|
|
-
|
|
-
|
|
-
|
|
89
|
|
-
|
|
-
|
Net income
(loss)
|
$ (73,740)
|
|
$
109,910
|
|
$
1,245
|
|
$
43,609
|
|
$
206
|
|
$ (58,924)
|
|
$ 22,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings (loss) per share (f)
|
$
(0.78)
|
|
$
1.17
|
|
$
0.01
|
|
$
0.46
|
|
$
0.01
|
|
$
(0.63)
|
|
$ 0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See Notes to
Earnings Release Tables
|
|
|
|
|
|
|
|
|
|
Notes to Earnings
Release Tables
|
|
|
|
|
For the three months
ended March 31, 2016 and 2015, the adjusted results and certain
other non-GAAP financial measures differ from the Company's results
under GAAP due to the exclusion of net gains or net losses
associated with certain non-recurring items, including facility
closing and reorganization costs; costs associated with the early
retirement of long-term debt; (gains) losses on the mark-to-market
of our derivative contracts; litigation settlement s, and
discontinued operations, as well as certain asset impairment and
amortization charges. These adjustments are made to facilitate
meaningful comparisons of our operating performance between periods
as the Company cannot predict the timing and amount of charges
associated with such items.
|
|
|
|
|
|
(a)
|
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 the
following:
|
|
|
|
|
|
i.
|
A non-cash charge of
$109.9 million ($68.7 million net of tax) related to the impairment
of certain intangible assets during the first quarter of 2015;
and
|
|
|
|
|
|
|
ii.
|
Amortization expense
recorded on these finite-lived trademarks of $5.6 million for the
three months ended March 31, 2016.
|
|
|
|
|
|
(b)
|
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.
|
|
|
|
|
(c)
|
During the first
quarter of 2015, we redeemed the remaining outstanding principal
amount of $476.2 million of our 2016 senior notes. The
adjustment reflects the related elimination of the
following:
|
|
|
|
|
|
i.
|
A $38.3 million
pre-tax loss on the early extinguishment of debt in the first
quarter of 2015, which consisted of debt redemption premiums of
$37.3 million, a write-off of unamortized debt issue costs of $0.8
million, and a write-off of the remaining bond discount and
interest rate swaps of $0.2 million; and
|
|
|
|
|
|
|
ii.
|
In conjunction with
the execution of our current credit agreement and the amendment of
our receivables-backed facility in the first quarter of 2015, we
wrote off unamortized debt issue costs related to our previous
credit facility of $5.3 million.
|
|
|
|
|
|
(d)
|
The adjustment
reflects the elimination of the following:
|
|
|
|
|
|
i.
|
The (gain) loss on
the mark-to-market of our commodity derivative contracts. Effective
January 1, 2014, we de-designated all open commodity derivative
positions that were previously designated as hedges. As of the
de-designation date, all commodities contracts are now marked to
market in our statement of operations during each reporting period
and a derivative asset or liability is recorded on our balance
sheet;
|
|
|
|
|
|
|
ii.
|
Interest accretion in
connection with our 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
|
|
|
|
|
|
|
iii.
|
A taxing authority
settlement of certain contingent obligations that we retained in
connection with prior discontinued operations.
|
|
|
|
|
|
(e)
|
The adjustment
reflects the income tax impact of adjustments (a) through (d) and
our adjusted tax rate at 38%, which we believe represents our
normalized long-term effective tax rate as a U.S. domiciled
business.
|
|
|
|
|
(f)
|
The adjustment
reflects an add-back of the dilutive shares, which were
anti-dilutive for GAAP purposes.
|
|
|
|
|
(g)
|
Our total leverage is
calculated using Bank EBITDA for the trailing four quarters in
accordance with our credit agreement. Bank EBITDA for the trailing
four quarters ended March 31, 2016 was $444 million.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dean-foods-announces-first-quarter-2016-results-300265440.html
SOURCE Dean Foods Company