Whitewave Foods Company (The) (WWAV)

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WhiteWave Foods Company (WWAV)

Q1 2013 Earnings Call

May 9, 2013 09:00 AM ET


Dave Oldani - VP, IR

Gregg Engles - CEO

Kelly Haecker - CFO

Blaine McPeak - President


Marcella - Credit Suisse

Amit Sharma - BMO Capital Markets

Farah Aslam - Stephens Inc.

Diane Ghastlier - CLSA

Judy Hong - Goldman Sachs

Erik Katzman - Deutsche Bank

Dennis - Wells Fargo

Ryan Oksenhendler - Bank of America Merrill Lynch

Bill Chappell - SunTrust



Good morning. And welcome to The WhiteWave Foods Company First Quarter 2013 Earnings Conference Call. Please note that today’s call is being recorded and is being broadcast live over the Internet on The WhiteWave Foods’ corporate website.

This broadcast is the property of The WhiteWave Foods Company. Any redistribution, retransmission or rebroadcast of this call in any shape or form without the express written consent of the company is strictly prohibited.

I would now like to turn the conference over to your host for today, Mr. Dave Oldani, Vice President, Treasurer and Investor Relations for The WhiteWave Foods Company. Go ahead Mr. Oldani.

Dave Oldani

Thank you Tehisha (ph), and good morning, everyone. Thanks for joining us on our first quarter 2013 earnings conference call. This morning we issued our earnings Press Release, which is available on our website at whitewave.com. The release is also furnished as an exhibit to our Form 8-K, which is available on the SEC website at sec.gov.

Also available during this call, on The WhiteWave website is a slide presentation that accompanies today’s prepared remarks. A replay of today’s call, along with the slide presentation, will be available on our website beginning this afternoon.

We would also like to advise you that our forward looking statements made on today’s call are intended to fall within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

These statements will include, among others, disclosure of our earnings targets, expectations regarding branding initiatives, innovation and research and development plans, growth plans, the penny spin-off and other potential dispositions by Dean Foods’ Company of its remaining interest in us and various other aspects of our business.

These statements involve risks and uncertainties that may cause actual results to differ materially from the statements made on today’s conference call. Information concerning those risks is contained in the Company’s most recent annual report on Form 10-Q filed with the SEC on February 19, 2013.

We also want to remind you that the financial results and related references to periods prior to 2013 discussed on today’s call and in the accompanying slide presentation are presented on a pro forma adjusted basis as if the company had operated independently as a standalone entity which is the same basis that we have presented in our past earning presentations and financial results and related references to 2013 period on a risk adjusted basis.

The adjustments related to commercial arrangements we entered into in connation with the separation of our business from Dean Foods’ business, the termination of an intellectual property license with the former Dean Foods' subsidiary, estimated cost associated with operating as a standalone public company and other one time or non-recurring costs associated with our initial public offering and separation from Dean Foods.

Our earnings release and the reconciliation posted on our website contains further details of these adjustments. Along with reconciliations between our GAAP results and the results we present on a pro forma adjusted and adjusted basis.

Additionally, the release provides the reconciliation between the first quarter WhiteWave segments result as reported by Dean Foods' today and The WhiteWave Foods Company results prepared on a standalone basis.

Participating with me in the prepared section of today’s call are Gregg Engles, our Chairman and CEO; and Kelly Haecker, our Chief Financial Officer. Also available to participate in the Q&A portion of the call is Blaine McPeak, President of WhiteWave’s North America Segment.

Gregg will first provide a review of our results and overall business performance. Kelly will then offer additional perspective on our operating results and comment on our forward outlook before turning the call back to Gregg for closing remarks. We will then open the call for your questions.

With that, I will turn the call over to Gregg. Gregg?

Gregg Engles

Thanks, Dave, and good morning, everyone. Thank you for joining us on the call today. WhiteWave was off to a good start in 2013, delivering earnings per share of $0.16 in Q1, a 20% increase over the prior year. EPS came in at the top end of our guidance for the quarter despite a higher than anticipated tax rate. Consolidated sales were up more than 9% in Q1 driven by volume growth across all of our brands.

Consolidated operating income exceeded our expectations, increasing 20% from a year ago, despite the higher distribution in supply chain costs we discussed last quarter. We are pleased with our Q1 results and the fundamental health of our categories and brands, but we acknowledge the ongoing need to reduce our supply chain costs from their current elevated levels.

We have begun to make progress this quarter as evidenced by the Q1 startup of Almond milk production at two additional WhiteWave plants. We are now producing a 100% of this rapidly growing product line internally under remote favorable cost structure. We remain focused on further reducing cost through other projects and initiatives already underway which Kelly will discuss later on the call.

A marker of our success in building our business is recognition from our customers and from industry experts. Nothing validates our approach more than complements from our customers, which is why I am especially pleased to hear that Wal-Mart has recognized WhiteWave as its supplier of the year in the dairy category for 2012, one of its highest forms of recognition.

Read the rest of this transcript for free on seekingalpha.com