TreeHouse Foods, Inc. Reports First Quarter 2014 Results and Enters Into New $1.2 Billion Financing Structure

 TreeHouse Foods, Inc. Reports First Quarter 2014 Results and Enters Into New
                       $1.2 Billion Financing Structure

HIGHLIGHTS

-First quarter adjusted EPS increased 8.1% from prior year to $0.80 in 2014

-Total net sales grew 14.6%, driven by acquisitions; All segments posted
improvement

-North American Retail Grocery volume/mix grew 5.9% in the first quarter

-Company reaffirmed full year guidance of adjusted earnings per share of
$3.50-$3.60

-TreeHouse entered into new $1.2 billion credit facility consisting of $900
million revolving credit facility and $300 million term loan

PR Newswire

OAK BROOK, Ill., May 8, 2014

OAK BROOK, Ill., May 8, 2014 /PRNewswire/ --TreeHouse Foods, Inc. (NYSE: THS)
today reported first quarter earnings of $0.38 per fully diluted share
compared to $0.62 per fully diluted share reported for the first quarter of
last year. The Company reported that adjusted earnings per share increased
8.1% in the first quarter to $0.80 compared to $0.74 in the prior year,
excluding the items described below.

The Company's 2014 first quarter results included four items noted below that
affected the year-over-year quarterly comparison. The first item is a $0.32
per share expense related to the refinancing of the Company's high yield
notes. The second item is a $0.05 per share expense for acquisition,
integration and related costs. The third item is a $0.03 per share loss on
the foreign currency translation of an intercompany note. The last item is a
$0.02 per share expense related to the previously announced restructuring of
the Company's soup operations.

ITEMS AFFECTING DILUTED EPS COMPARABILITY:
                                                          Three Months Ended
                                                          March 31
                                                          2014       2013
                                                          (unaudited)
Diluted EPS as reported                                   $ 0.38    $ 0.62
Debt refinancing costs                                    0.32       -
Acquisition, integration and related costs                0.05       -
Foreign currency loss on translation of intercompany note 0.03       -
Restructuring/facility consolidation costs                0.02       0.14
Mark-to-market adjustments                                -          (0.02)
Adjusted EPS                                              $ 0.80    $ 0.74

"We are off to an excellent start in 2014," said Sam K. Reed, Chairman,
President and Chief Executive Officer. "Our first quarter double-digit sales
growth exceeded our expectations and reflects strong private label
performance, particularly in the traditional supermarket channel; continued
expansion of our single serve beverage platform; as well as the contributions
from the Cains Foods and Associated Brands acquisitions. Despite the negative
impact of both the Canadian exchange rate and the carryover of unfavorable
manufacturing variances in the quarter, I am very proud of the progress we
have made and the focus our operating team has demonstrated in simplifying our
operations, generating distribution system savings and delivering value for
our customers."

Adjusted operating earnings before interest, taxes, depreciation,
amortization, and non-cash stock based compensation, or Adjusted EBITDA
(reconciliation to net income, the most directly comparable GAAP (generally
accepted accounting principles in the United States) measure, appears on the
attached schedule), was $80.6 million in the first quarter, a 4.9% increase
compared to the prior year. Adjusted EBITDA was higher due to the
acquisitions of Cains Foods and Associated Brands.

Net sales for the first quarter totaled $618.9 million compared to $540.1
million last year, an increase of 14.6% largely due to sales from acquisitions
(Cains Foods and Associated Brands) and improved volume/mix, partially offset
by unfavorable foreign exchange. Compared to last year, sales in the first
quarter for the North American Retail Grocery segment increased 17.2%, sales
for the Food Away From Home segment increased 8.4%, and sales for the
Industrial and Export segment increased 7.8%.

Total reported gross margins increased to 21.5% in the first quarter this year
from 21.1% last year. The increase was mainly due to favorable sales mix,
partly offset by lower margins from Cains Foods and Associated Brands, and the
impact of unfavorable foreign exchange.

Selling, distribution, general and administrative expenses were $71.8 million
for the first quarter, an increase of 19.9% from $59.9 million last year. The
increase was in line with management's expectations, and was due primarily to
additional expenses associated with the Cains Foods and Associated Brands
acquisitions and higher staffing levels.

Other expense was $30.3 million for the first quarter, an increase of $19.2
million from $11.0 million last year. The increase was driven by the
redemption of the Company's $400 million 7.75% high yield notes due 2018 (the
"2018 Notes") by issuing new $400 million 4.875% high yield notes due 2022.
In connection with the extinguishment of the 2018 Notes, the Company incurred
a loss of $16.7 million. The remainder of the increase was due to the impact
of foreign exchange rates.

Income tax expense decreased in the first quarter to $5.7 million. The
Company's first quarter effective income tax rate decreased to 28.5% from the
2013 first quarter rate of 31.1% due to the settlement of unrecognized tax
benefits associated with the Company's 2011 examination by the United States
Internal Revenue Service.

Net income for the first quarter totaled $14.3 million compared to $23.0
million last year.

SEGMENT RESULTS

The Company has three reportable segments:

1.North American Retail Grocery – This segment sells branded and private
    label products to customers within the United States and Canada. These
    products include non-dairy powdered creamers; sweeteners; condensed, ready
    to serve and powdered soups, broths and gravies; refrigerated and shelf
    stable salad dressings and sauces; pickles and related products; salsa and
    Mexican sauces; jams and pie fillings; aseptic products; liquid non-dairy
    creamer; powdered drinks; single serve hot beverages; specialty teas; hot
    and cold cereals; baking and mix powders; macaroni and cheese; and skillet
    dinners.
2.Food Away From Home – This segment sells non-dairy powdered creamers;
    sweeteners; pickles and related products; Mexican sauces; refrigerated and
    shelf stable salad dressings; aseptic products; hot cereals; powdered
    drinks; and single serve hot beverages to foodservice customers, including
    restaurant chains and food distribution companies, within the United
    States and Canada.
3.Industrial and Export – This segment includes the Company's co-pack
    business and non-dairy powdered creamer sales to industrial customers for
    use in industrial applications, including products for repackaging in
    portion control packages and for use as ingredients by other food
    manufacturers; baking and mix powders; pickles and related products;
    refrigerated and shelf stable salad dressings; Mexican sauces; soup and
    infant feeding products; hot cereals; powdered drinks; single serve hot
    beverages; and specialty teas. Export sales are primarily to industrial
    customers outside of North America.

The direct operating income for the Company's segments is determined by
deducting manufacturing costs from net sales and deducting direct operating
costs, such as freight to customers, commissions, and direct selling and
marketing expenses. Indirect sales and administrative expenses, including
restructuring charges and other corporate costs, are not allocated to the
business segments as these costs are managed at the corporate level.

North American Retail Grocery net sales for the first quarter increased 17.2%
to $452.4 million from $386.1 million during the same quarter last year,
driven by a 12.2% increase from acquisitions and a 5.9% increase in
volume/mix, partially offset by the unfavorable impact from foreign exchange.
The Company posted volume gains in the beverages (predominantly single serve
hot beverages) and Mexican sauces categories that were offset by volume
decreases in cereals, pickles, soup and salad dressings. The volume/mix
increase was driven in large part by the continued success of the single serve
hot beverages program. Direct operating income margin in the first quarter
decreased from 17.0% in 2013 to 16.6% in 2014 due to the inclusion of higher
cost of sales from the Cains Foods and Associated Brands businesses and an
unfavorable impact of foreign exchange.

Food Away From Home segment net sales for the first quarter increased 8.4% to
$88.7 million from $81.8 million during the same quarter last year, due to an
11.3% increase from acquisitions, partly offset by a 2.3% decrease in
volume/mix and unfavorable foreign exchange. The volume/mix decline was
primarily in the aseptic and pickles categories, and was partially offset by
growth in the beverages category (primarily single serve hot beverages).
Direct operating income margin in the first quarter decreased from 13.4% in
2013 to 10.7% in 2014 due to the impact of lower margin sales from the Cains
Foods and Associated Brands acquisitions, operational inefficiencies at
several legacy plants and the unfavorable impact of foreign exchange.

Industrial and Export segment net sales for the first quarter increased 7.8%
to $77.8 million from $72.2 million during the same quarter last year, largely
driven by a 12.9% increase from acquisitions, offset in part by a 4.0%
decrease in volume/mix and slightly negative pricing. Direct operating income
margin in the first quarter also increased from 17.3% in 2013 to 19.3% in 2014
primarily due to favorable sales mix, partially offset by the inclusion of
higher cost of sales from the Cains Foods and Associated Brands businesses.

REFINANCING ACTIVITIES

On May 6, 2014, TreeHouse Foods entered into a new $1.2 billion financing
structure, consisting of (i) a new $900 million unsecured revolving credit
facility that replaces the Company's $750 million revolving credit facility
under its prior credit agreement and (ii) a new $300 million, seven year term
loan, the proceeds of which, together with a draw on the new revolving credit
facility at closing, were used to repay in full amounts outstanding under the
Company's prior credit agreement. The covenants and other material terms and
conditions of the new term loan and the new revolving credit facility are
substantially similar to those under the Company's prior credit agreement.

OUTLOOK FOR 2014

The Company reiterated its expectation of adjusted earnings per share growth
of 10%-13% to $3.50 to $3.60 in 2014, before considering accretion from the
recently announced Protenergy Natural Foods acquisition. The Company
previously announced that the Protenergy acquisition is expected to add $0.05
to $0.07 to 2014 earnings, and $0.11 to $0.14 to calendar year 2015 earnings.
The 2014 earnings are the Company's best estimates at this time, subject to
the timing of the transaction close and finalization of asset valuation work
on goodwill and amortization of intangibles. The Company will confirm a final
range of 2014 earnings accretion during its second quarter earnings call in
early August.

With regard to the outlook for the year, Mr. Reed said, "2014 holds a great
deal of promise for us. Our operating teams remain focused on the business,
while our corporate development team is energized and continues to evaluate
opportunities, given the strength of the acquisition environment. Our
appetite for deals remains robust. Most recently, we increased our
acquisition capacity through the combination of a new term loan and a larger
revolving credit facility, and as a result, we have improved our financial
wherewithal to continue expanding our private label portfolio."

COMPARISON OF ADJUSTED INFORMATION TO GAAP INFORMATION

The adjusted earnings per share data contained in this press release reflects
adjustments to reported earnings per share data to eliminate the net expense
or net gain related to items identified in the above chart. This information
is provided in order to allow investors to make meaningful comparisons of the
Company's operating performance between periods and to view the Company's
business from the same perspective as Company management. Because the Company
cannot predict the timing and amount of charges associated with items such as
acquisition, integration and related costs, or facility closings and
reorganizations, management does not consider these costs when evaluating the
Company's performance, when making decisions regarding the allocation of
resources, in determining incentive compensation for management, or in
determining earnings estimates. These costs are not recorded in any of the
Company's operating segments. Adjusted EBITDA represents adjusted net income
before interest expense, income tax expense, depreciation and amortization
expense, and non-cash stock based compensation expense. Adjusted EBITDA is a
performance measure used by management, and the Company believes it is
commonly reported and widely used by investors and other interested parties,
as a measure of a company's operating performance. This non-GAAP financial
information is provided as additional information for investors and is not in
accordance with or an alternative to GAAP. These non-GAAP measures may be
different from similar measures used by other companies. A full
reconciliation table between reported net income for the three month periods
ended March 31, 2014 and 2013 calculated according to GAAP and Adjusted EBITDA
is attached. Given the inherent uncertainty regarding adjusted items in any
future period, a reconciliation of forward-looking financial measures to the
most directly comparable GAAP measure is not feasible.

CONFERENCE CALL WEBCAST

A webcast to discuss the Company's first quarter earnings will be held at 9:00
a.m. (Eastern Time) today and may be accessed by visiting the "Investor
Overview" page through the "Investor Relations" menu of the Company's website
at http://www.treehousefoods.com.

ABOUT TREEHOUSE FOODS

TreeHouse is a food manufacturer servicing primarily the retail grocery and
foodservice distribution channels. Its major product lines include non-dairy
powdered creamer and sweeteners; condensed, ready to serve and powdered soups;
refrigerated and shelf stable salad dressings and sauces; powdered drink
mixes; single serve hot beverages; specialty teas; hot and cold cereals;
macaroni and cheese, skillet dinners and other value-added side dishes and
salads; salsa and Mexican sauces; jams and pie fillings under the E.D. Smith
brand name; pickles and related products; and other food products including
aseptic sauces and liquid non-dairy creamer. TreeHouse believes it is the
largest manufacturer of pickles and non-dairy powdered creamer in the United
States and the largest manufacturer of private label salad dressings, powdered
drink mixes and instant hot cereals in the United States and Canada based on
sales volume.

FORWARD LOOKING STATEMENTS

This press release contains "forward-looking statements." Forward-looking
statements include all statements that do not relate solely to historical or
current facts, and can generally be identified by the use of words such as
"may," "should," "could," "expects," "seek to," "anticipates," "plans,"
"believes," "estimates," "intends," "predicts," "projects," "potential" or
"continue" or the negative of such terms and other comparable terminology.
These statements are only predictions. The outcome of the events described in
these forward-looking statements is subject to known and unknown risks,
uncertainties and other factors that may cause the Company or its industry's
actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance
or achievement expressed or implied by these forward-looking statements.
TreeHouse's Form 10-K for the year ended December 31, 2013 and other filings
with the SEC, discuss some of the factors that could contribute to these
differences. You are cautioned not to unduly rely on such forward-looking
statements, which speak only as of the date made, when evaluating the
information presented in this presentation. The Company expressly disclaims
any obligation or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein, to reflect any change in its
expectations with regard thereto, or any other change in events, conditions or
circumstances on which any statement is based.

FINANCIAL INFORMATION

TREEHOUSE FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
                                             Three Months Ended
                                             March 31
                                             2014          2013
                                             (unaudited)
Net sales                                   $ 618,903    $ 540,110
Cost of sales                               485,912       425,938
Gross profit                                132,991       114,172
Operating expenses:
 Selling and distribution                  38,017        32,402
 General and administrative                33,768        27,473
 Amortization expense                       10,034        8,499
 Other operating expense, net               873           1,418
 Total operating expenses             82,692        69,792
Operating income                            50,299        44,380
Other expense (income):
 Interest expense                           10,873        12,778
 Interest income                            (168)         (678)
 Loss (gain) on foreign currency exchange   2,951         (361)
 Loss on extinguishment of debt             16,685        -
 Other income, net                         (85)          (713)
 Total other expense                  30,256        11,026
Income before income taxes                  20,043        33,354
Income taxes                                5,721         10,380
Net income                                   $ 14,322     $ 22,974
Weighted average common shares:
 Basic                                     36,682        36,301
 Diluted                                   37,665        37,234
Net earnings per common share:
 Basic                                      $    0.39  $   0.63
 Diluted                                    $    0.38  $   0.62
Supplemental Information:
Depreciation and Amortization                $  27,006    $ 26,884
Stock-based compensation expense, before tax $   4,180   $  3,418
Segment Information:
North American Retail Grocery
Net Sales                                    $ 452,403     $ 386,081
Direct Operating Income                      $  75,090    $  65,588
Direct Operating Income Percent              16.6%         17.0%
Food Away From Home
Net Sales                                    $  88,673    $ 81,813
Direct Operating Income                      $   9,488   $ 10,982
Direct Operating Income Percent              10.7%         13.4%
Industrial and Export
Net Sales                                    $  77,827    $ 72,216
Direct Operating Income                      $  15,046    $ 12,460
Direct Operating Income Percent              19.3%         17.3%

The following table reconciles the Company's net income to adjusted EBITDA for
the three months ended March 31, 2014 and 2013:

TREEHOUSE FOODS, INC.
RECONCILIATION OF REPORTED EARNINGS TO ADJUSTED EBITDA
(In thousands)
                                                        Three Months Ended
                                                        March 31
                                                        2014        2013
                                                        (unaudited)
Net income as reported                                  $  14,322  $  22,974
Interest expense                                        10,873      12,778
Interest income                                         (168)       (678)
Income taxes                                            5,721       10,380
Depreciation and amortization ^(1)                      23,779      21,377
Stock-based compensation expense                        4,180       3,418
Foreign currency loss on translation of intercompany    1,812       -
note^(2)
Mark-to-market adjustments ^(3)                         (117)       (773)
Acquisition, integration and related costs ^(4)         2,562       -
Debt refinancing costs ^(5)                             16,759      -
Restructuring/facility consolidation costs ^(6)         867         7,348
Adjusted EBITDA                                         $  80,590  $  76,824



    Depreciation and amortization excludes $3.2 million of accelerated
    depreciation charges included in the acquisition, integration and related
    costs line of the Adjusted EBITDA reconciliation for the three months
(1) ended March 31, 2014. Depreciation and amortization excludes $5.5 million
    of accelerated depreciation charges included in the restructuring/facility
    consolidation costs line of the Adjusted EBITDA reconciliation for the
    three months ended March 31, 2013.
    Foreign currency loss on translation of cash and notes included in Loss
(2) (gain) on foreign currency echange totaled $1.8 million for the three
    months ended March 31, 2014.
    Mark-to-market adjustments included in Other income, net totaled ($0.1)
(3) million and ($0.8) million for the three months ended March 31, 2014 and
    2013, respectively.
    Acquisition, integration and related costs included in General and
    administrative expense and Other income, net totaled $1.0 million for the
(4) three months ended March 31, 2014. Acquisition, integration and related
    costs included in cost of sales totaled $1.6 million for the three months
    ended March 31, 2014.
    Debt refinancing costs included in Loss on extinguishment of debt totaled
(5) $16.7 million for the three months ended March 31, 2014. Debt refinancing
    costs included in General and administrative expense totaled $0.1 million
    for the three months ended March 31, 2014.
    Restructuring/facility consolidation costs included in Other operating
    expense, net totaled $0.9 million for the three months ended March 31,
    2014. Restructuring/facility consolidation costs included in Cost of
(6) sales totaled $5.9 million for the three months ended March 31, 2013.
    Restructuring/facility consolidation costs included in Other operating
    expense, net totaled $1.4 million for the three months ended March 31,
    2013.

The following table presents the Company's change in net sales by segment for
the three months ended March 31, 2014 vs. 2013:

Three months ended March 31, 2014:
                          North American    Food Away      Industrial
                          Retail Grocery    From Home      and Export
                          (unaudited)       (unaudited)    (unaudited)
Volume/mix                5.9            %  (2.3)       %  (4.0)       %
Pricing                   0.3               0.4            (0.9)
Acquisition               12.2              11.3           12.9
Foreign currency          (1.2)             (1.0)          (0.2)
Total change in net sales 17.2           %  8.4         %  7.8         %



SOURCE TreeHouse Foods, Inc.

Website: http://www.treehousefoods.com
Contact: Investor Relations, 708.483.1300 Ext 1331
 
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