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05:56 Uhr
ROUNDUP/Brexit-​Rede in Florenz: May will Verhandlungen mit Brüssel beleben

Dean Foods Announces Strong Fourth Quarter And Full Year 2016 Results

Donnerstag, 16.02.2017 14:00 von

PR Newswire

DALLAS, Feb. 16, 2017 /PRNewswire/ -- Dean Foods Company (NYSE: DF) today reported fourth quarter and full year 2016 results.

Highlights

  • Q4 net income per diluted share was $0.36 and adjusted net income per diluted share was $0.38
  • Full year net income per diluted share was $1.31 and adjusted net income per diluted share was $1.57
  • Continued year-over-year improvement in total volume performance, operating income, and earnings per share
  • Significant cost productivity throughout the entire supply chain, delivering over $80 million of gross savings
  • Growing strong brands through line extensions in DairyPure, Friendly's acquisition, and Organic Valley partnership
  • Full year 2017 adjusted diluted earnings are expected to be $1.35 to $1.55 per diluted share; Q1 2017 adjusted diluted earnings are expected to be $0.12 to $0.20 per diluted share (1)

Chief Executive Officer Ralph Scozzafava said, "2016 was a strong year for Dean Foods. In the fourth quarter, we delivered 6% growth in both adjusted operating income per gallon and adjusted earnings per share. For the full year, our operating income per gallon grew nearly 21% versus prior year. Our adjusted earnings per share of $1.57 represents a nearly 28% increase over 2015. I am very pleased with the hard work this organization has dedicated to driving improved results in support of our long-term strategic agenda."

Business Updates             

In November 2016, the company announced a strategic joint venture with CROPP, the largest independent organic farmer cooperative in the U.S., to bring the Organic Valley brand and its organic milk to retailers and consumers by leveraging Dean Foods' selling organization, processing plants and refrigerated direct-to-store delivery ("DSD") distribution system. The joint venture, called Organic Valley Fresh, will operate on a 50/50 basis of ownership, governance and profit, with a dedicated management team working in the interest of the joint venture and its objectives. For Dean Foods, this brings a strong organic brand to our existing portfolio of category-leading brands, a reliable supply of organic milk, and a new channel for profitable growth. Adding the Organic Valley® brand to the current portfolio of Dean Foods' branded dairy products such as DairyPure® and TruMoo® enables Dean Foods to offer retail customers the largest and most comprehensive lineup of dairy offerings across multiple segments with national brands that consumers know and trust. The joint venture, which we expect to begin shipping product in mid-to-late 2017, brings the best capabilities of both organizations together for a common goal of profitable brand growth, driving awareness through increased reach and availability of great tasting organic products. Due to ramp-up, earnings accretion in 2017 is expected to be minimal, but the company is excited about the potential for growth starting in 2018.

Fourth Quarter and Full Year 2016 Operating Results

Chief Financial Officer Chris Bellairs said, "We delivered a fourth quarter and full year of exceptional financial performance. For the full year 2016, we delivered $257 million of net cash from operating activities and $113 million of free cash flow. On an all-cash netted basis, our total leverage improved to 1.89 times net debt to bank EBITDA. Importantly, we returned nearly half of our 2016 free cash flow to shareholders through dividends and opportunistic share repurchases."

  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.

 

Financial Summary *


Three Months Ended December 31


Twelve Months Ended December 31

(In millions, except per share amounts)


2016


2015


2016


2015










Gross Profit









GAAP


$  501


$  508


$ 1,988


$ 1,974

Adjusted


$  497


$  509


$ 1,985


$ 1,973










Operating Income









GAAP


$    70


$    45


$    264


$      93

Adjusted


$    70


$    67


$    293


$    248










Interest Expense









GAAP


$    17


$    16


$      67


$      67

Adjusted


$    17


$    16


$      66


$      66










Net Income (Loss) 









GAAP


$    33


$    18


$    120


$      (9)

Adjusted


$    34


$    33


$    144


$    115










Diluted Earnings (Loss) Per Share (EPS)









GAAP


$ 0.36


$ 0.20


$   1.31


$ (0.09)

Adjusted


$ 0.38


$ 0.36


$   1.57


$   1.23


*

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.

 

Total volume across all products was 653 million gallons for the fourth quarter of 2016, a 0.8% decline compared to total volume of 658 million gallons in the fourth quarter of 2015. Full year 2016 volumes totaled 2.6 billion gallons, a 2.1% decline versus full year 2015.

Based on fluid milk sales data published by the USDA through December, fluid milk volume decreased 1.2% year-over-year in the fourth quarter of 2016 on an unadjusted basis. 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 fourth quarter of 2016 increased roughly 6% from the third quarter of 2016 and decreased 2% from the fourth quarter of 2015. On a full year basis, the average Class I Mover was $14.80 per hundred-weight, a 9% decrease over full year 2015. For 2017, dairy commodity inflation is expected to be in the range of 15-20%, with the highest inflationary levels expected in the first half of 2017.

Cash Flow

Net cash provided by continuing operations for the twelve months ended December 31, 2016, totaled $257 million. Free cash flow provided by continuing operations, which is defined as net cash provided by continuing operations less capital expenditures, was $113 million for the twelve months ended December 31, 2016, a $133 million decrease as compared to the prior year period. Year-to-date free cash flow is comparable to the prior year period after reconciling for higher incentive compensation payouts in the first quarter of 2016 and the $56 million associated with the Company's 2014 federal tax refund received in the first quarter of 2015. Capital expenditures totaled $63 million for the quarter and $145 million for the full year 2016. For the full year 2017, we expect capital expenditures of $120 million to $130 million, and free cash flow of $125 million to $150 million.

Debt

Total outstanding debt at December 31, 2016, net of $18.0 million cash on hand, was approximately $877.1 million. The Company's net debt to bank EBITDA total leverage ratio, on an all-cash netted basis, decreased sequentially to 1.89 times at the end of the fourth quarter of 2016 due to strong free cash flow and increased bank EBITDA.

Forward Outlook

Going forward, we will transition to providing guidance on an annual basis only.  We are driving our strategy with a long-term perspective and feel it's appropriate to give a better view that emphasizes sustainable value creation for our shareholders.

"Our 2017 growth and productivity agendas are robust and will ramp up through the year, driving a larger portion of our earnings into the back half. We expect to deliver full-year adjusted earnings per share of $1.35 to $1.55. In the first quarter, we expect dairy commodity inflation of nearly 20% and a roughly 1% decline in total volume performance versus prior year. As we continue to invest in our strategic initiatives and brand building for future growth, we expect first quarter adjusted earnings per share in the range of $0.12 to $0.20," 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 and twelve months ended December 31, 2016 and 2015 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;
  • 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 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 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
 December 31


Twelve Months Ended
 December 31


2016


2015


2016


2015

Net sales

$

2,018,009



$

2,022,500



$

7,710,226



$

8,121,661


Cost of sales

1,516,589



1,514,029



5,722,710



6,147,252


Gross profit

501,420



508,471



1,987,516



1,974,409


Operating costs and expenses:








Selling and distribution

342,835



355,548



1,348,349



1,379,317


General and administrative

83,423



90,689



346,028



350,324


Amortization of intangibles

5,156



6,340



20,752



21,653


Facility closing and reorganization costs, net

(344)



10,482



8,719



19,844


Impairment of intangible assets







109,910


Total operating costs and expenses

431,070



463,059



1,723,848



1,881,048


Operating income

70,350



45,412



263,668



93,361


Other (income) expense:








Interest expense

16,525



16,308



66,795



66,813


Loss on early retirement of long-term debt







43,609


Other income, net

(1,393)



(2,047)



(5,778)



(3,751)


Total other expense

15,132



14,261



61,017



106,671


Income (loss) from continuing operations before income taxes

55,218



31,151



202,651



(13,310)


Income tax expense (benefit)

21,699



12,333



82,034



(5,229)


Income (loss) from continuing operations

33,519



18,818



120,617



(8,081)


Loss from discontinued operations, net of tax

(312)



(1,095)



(312)



(1,095)


Gain (loss) on sale of discontinued operations, net of tax

(376)



757



(376)



668


Net income (loss)

$

32,831



$

18,480



$

119,929



$

(8,508)


Average common shares:








Basic

90,508



91,363



90,934



93,298


Diluted

91,131



92,028



91,510



93,298


Basic income (loss) per common share:








Income (loss) from continuing operations

$

0.37



$

0.20



$

1.33



$

(0.09)


Loss from discontinued operations

(0.01)





(0.01)




Net income (loss)

$

0.36



$

0.20



$

1.32



$

(0.09)


Diluted income (loss) per common share:








Income (loss) from continuing operations

$

0.37



$

0.20



$

1.32



$

(0.09)


Loss from discontinued operations

(0.01)





(0.01)




Net income (loss)

$

0.36



$

0.20



$

1.31



$

(0.09)


 

DEAN FOODS COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)




December 31, 2016


December 31, 2015

ASSETS





 Cash and cash equivalents


$

17,980



$

60,734


 Other current assets


1,040,650



1,016,829


 Total current assets


1,058,630



1,077,563


 Property, plant and equipment, net


1,163,851



1,174,137


 Intangibles and other assets, net


383,746



268,463


Total


$

2,606,227



$

2,520,163


LIABILITIES AND STOCKHOLDERS' EQUITY





 Total current liabilities, excluding debt


$

706,981



$

760,402


 Total long-term debt, including current portion


886,051



834,573


 Other long-term liabilities


402,639



379,684


 Total stockholders' equity


610,556



545,504


Total


$

2,606,227



$

2,520,163


 



DEAN FOODS COMPANY 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

(Unaudited)

(In thousands)




Twelve Months Ended December 31



2016


2015

Operating Activities 





Net cash provided by operating activities


$ 257,413


$ 408,153






Investing Activities 





Payments for property, plant and equipment


(144,642)


(162,542)

Payments for acquisitions, net of cash acquired


(158,203)


Proceeds from sale of fixed assets


14,705


18,495

Other



(2,200)

Net cash used in investing activities


(288,140)


(146,247)






 Financing Activities





Net proceeds from debt


47,868


393,283

Early retirement of long-term debt



(476,188)

Premiums paid on early retirement of long-term debt



(37,309)

Payments of financing costs



(16,816)

Repurchase of common stock


(25,000)


(53,010)

Cash dividends paid


(32,828)


(26,182)

Issuance of common stock, net of share repurchases for withholding taxes


(720)


(16)

Other


746


342

Net cash used in financing activities


(9,934)


(215,896)

Effect of exchange rate changes on cash and cash equivalents


(2,093)


(1,638)

Change in cash and cash equivalents


(42,754)


44,372

Cash and cash equivalents, beginning of period


60,734


16,362

Cash and cash equivalents, end of period


$   17,980


$   60,734

 

DEAN FOODS COMPANY

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited)

(In thousands, except per share data)



Three Months Ended December 31, 2016




Asset write-
downs
and (gain) loss on
 sale of assets


Closed deal
costs


Facility closing
and
reorganization
costs, net 


Mark-to-market
on derivative
contracts


Other
adjustments


Income
 tax




GAAP


(a)


(b)


(c)


(e)


(f)


(g)


Adjusted*

Gross profit

$ 501,420


$                        —


$                      —


$                          —


$              (3,938)


$             —


$     —


$ 497,482

















Selling and distribution  

342,835





1,620




344,455

















General and administrative

83,423



(493)




(1,436)



81,494

Amortization of intangibles

5,156


(3,935)







1,221

General and administrative, including Amortization of intangibles

88,579


(3,935)


(493)




(1,436)



82,715

















Total operating costs and expenses 

431,070


(3,935)


(493)


344


1,620


(1,436)



427,170

















Operating income

70,350


3,935


493


(344)


(5,558)


1,436



70,312

















Interest expense

16,525








16,525

















Income from continuing operations

33,519


3,935


493


(344)


(5,558)


1,436


731


34,212

















Loss from discontinued operations, net of tax

(688)






688



















Net income

32,831


3,935


493


(344)


(5,558)


2,124


731


34,212

















Diluted earnings per share

$       0.36


$                     0.04


$                   0.01


$                          —


$                (0.06)


$           0.02


$  0.01


$       0.38


Three Months Ended December 31, 2015




Asset write-
downs
and (gain) loss on
 sale of assets


Closed deal
costs


Facility closing
and
reorganization
costs, net 


Mark-to-market
on derivative
contracts


Other
adjustments


Income
 tax




GAAP


(a)


(b)


(c)


(e)


(f)


(g)


Adjusted*

Gross profit

$ 508,471


$                        —


$                      —


$                          —


$                   217


$             —


$     —


$ 508,688

















Selling and distribution  

355,548





(5,236)




350,312

















General and administrative

90,689






(12)



90,677

Amortization of intangibles

6,340


(5,589)







751

General and administrative, including Amortization of intangibles

97,029


(5,589)





(12)



91,428

















Total operating costs and expenses 

463,059


(5,589)



(10,482)


(5,236)


(12)



441,740

















Operating income

45,412


5,589



10,482


5,453


12



66,948

















Interest expense

16,308






(218)



16,090

















Income from continuing operations

18,818


5,589



10,482


5,453


230


(7,772)


32,800

















Loss from discontinued operations, net of tax

(338)






338



















Net income

18,480


5,589



10,482


5,453


568


(7,772)


32,800

















Diluted earnings per share

$       0.20


$                     0.06


$                      —


$                       0.11


$                  0.06


$           0.01


$ (0.08)


$       0.36


*

 See notes to Earnings Release Tables

 


DEAN FOODS COMPANY

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited)

(In thousands, except per share data)



Twelve Months Ended December 31, 2016




Asset write-downs
and (gain) loss on
 sale of assets


Closed deal
costs


Facility closing
and
reorganization costs, net


Loss on early
 retirement of
debt


Mark-to-
market
on derivative
contracts


Other
adjustments


Income
 tax




GAAP


(a)


(b)


(c)


(d)


(e)


(f)


(g)


Adjusted*

Gross profit

$

1,987,516



$



$



$



$



$

(2,143)



$



$



$

1,985,373




















Selling and distribution

1,348,349











10,655







1,359,004




















General and administrative

346,028





(4,926)









(11,561)





329,541


Amortization of intangibles

20,752



(16,843)















3,909


General and administrative, including Amortization of intangibles

366,780



(16,843)



(4,926)









(11,561)





333,450




















Total operating costs and expense

1,723,848



(16,843)



(4,926)



(8,719)





10,655



(11,561)





1,692,454




















Operating income

263,668



16,843



4,926



8,719





(12,798)



11,561





292,919




















Interest expense

66,795













(436)





66,359




















Income from continuing operations

120,617



16,843



4,926



8,719





(12,798)



11,997



(6,256)



144,048




















Loss from discontinued operations, net of tax

(688)













688
























Net income

119,929



16,843



4,926



8,719





(12,798)



12,685



(6,256)



144,048




















Diluted earnings per share

$

1.31



$

0.18



$

0.05



$

0.10



$



$

(0.14)



$

0.14



$

(0.07)



$

1.57



Twelve Months Ended December 31, 2015




Asset write-
downs
and (gain) loss
on
 sale of assets


Closed deal
costs


Facility closing
and reorganization
costs, net


Loss on early
 retirement of
debt


Mark-to-
market
on derivative
contracts


Other
adjustments


Income
 tax




GAAP


(a)


(b)


(c)


(d)


(e)


(f)


(g)


Adjusted*

Gross profit

$

1,974,409



$



$



$



$



$

(970)



$



$



$

1,973,439




















Selling and distribution

1,379,317











(6,939)







1,372,378




















General and administrative

350,324













6





350,330


Amortization of intangibles

21,653



(18,629)















3,024


General and administrative, including Amortization of intangibles

371,977



(18,629)











6





353,354




















Total operating costs and expenses

1,881,048



(128,539)





(19,844)





(6,939)



6





1,725,732




















Operating income

93,361



128,539





19,844





5,969



(6)





247,707




















Interest expense

66,813













(1,288)





65,525




















Income (loss) from continuing operations

(8,081)



128,539





19,844



43,609



5,969



1,282



(75,885)



115,277




















Loss from discontinued operations, net of tax

(427)













427
























Net income (loss)

(8,508)



128,539





19,844



43,609



5,969



1,709



(75,885)



115,277




















Diluted earnings (loss) per share (h)

$

(0.09)



$

1.38



$



$

0.21



$

0.46



$

0.06



$

0.02



$

(0.81)



$

1.23




*

 See notes to Earnings Release Tables

 

DEAN FOODS COMPANY

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES*

(Unaudited)

(In thousands, except per ratio data)




Three Months Ended December 31


Twelve Months Ended December 31


Trailing Twelve
Months
Ended 
 December 31,



2016


2015


2016


2015


2016

Reconciliation of Net Income to Adjusted EBITDA and Bank EBITDA

Net income (loss)


$   32,831


$   18,480


$ 119,929


$   (8,508)


$                119,929

Interest expense


16,525


16,308


66,795


66,813


66,795

Income tax expense (benefit)


21,699


12,333


82,034


(5,229)


82,034

Depreciation and amortization


44,182


43,506


172,617


171,328


172,617

Asset write-downs and (gain) loss on sale of assets (a)





109,910


Closed deal costs (b)


493



4,926



4,926

Facility closing and reorganization costs, net (c)


(344)


10,482


8,719


19,844


8,719

Loss on early retirement of debt (d)





43,609


Mark-to-market on derivative contracts (e)


(5,558)


5,453


(12,798)


5,969


(12,798)

Other adjustments (f)


2,124


350


12,249


421


12,249

 Adjusted EBITDA


$ 111,952


$ 106,912


$ 454,471


$ 404,157


454,471












Non-cash share-based compensation expense










9,116

 Bank EBITDA










$                463,587

 

Reconciliation of net debt and total leverage ratio

December 31,
2016

Total long-term debt, including current portion

$                886,051

Unamortized discounts and debt issuance costs

9,029

Cash and cash equivalents

(17,980)

Net debt

$                877,100

Bank EBITDA

463,587

 Total leverage ratio

1.89

 




Twelve Months Ended December 31

2016


2015

Reconciliation of Free Cash Flow provided by continuing operations




Net cash provided by operating activities

$         257,413


$                408,153

Payments for property, plant and equipment

(144,642)


(162,542)

  Free Cash Flow provided by continuing operations

$         112,771


$                245,611


*

 See Notes to Earnings Release Tables

 


 

Notes to Earnings Release Tables




For the three and twelve months ended December 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 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)   

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) in the first quarter of 2015 related to the




impairment of certain intangible assets, and related amortization expense of $5.6 million and $18.6




million for the three and twelve months ended December 31, 2015, respectively; and



ii.

Amortization expense recorded on these finite-lived trademarks of $3.9 million and $16.8 million for




the three and twelve months ended December 31, 2016, respectively.


(b)   

The adjustment reflects the elimination of expenses related to the acquisition of Friendly's Ice Cream



Holdings Corp. completed on June 20, 2016, and an immaterial amount of expenses related to other



transactional activities, of $0.5 million and $4.9 million for the three and twelve months ended December 31,



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)   

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, the write-off of unamortized debt issue costs




related to our previous credit facility of $5.3 million. 


(e)    

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.


(f)    

The adjustment reflects the elimination of the following:



 i.

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;



ii.

Interest expense on uncertain tax positions that we retained in connection with prior




discontinued operations;



iii.

Separation charge of $1.4 million and $11.6 million for the three and twelve months ended




December 31, 2016, respectively, in connection with the Company's CEO succession plan; and



iv.

Loss on sale of discontinued operations, net of tax.


(g)    

The adjustment reflects the income tax impact of adjustments (a) through (f) 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.


(h)   

Includes an adjustment to diluted shares outstanding to reflect an add-back of approximately 540


thousand dilutive shares, which were anti-dilutive for GAAP purposes.

 


 

 

 

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SOURCE Dean Foods Company