Dean Foods Company Reports Continued Strong Growth
- Diluted Earnings Increase 23% to
$0.38 per Share - Adjusted Diluted Earnings Increase 30% to
$0.43 per Share - Increases Full Year Guidance for Adjusted Diluted Earnings to at Least
$1.60 per Share
"The second quarter marks another solid step forward. Again, we posted
strong financial results across the business, made continued progress against
our strategic initiatives, and further deleveraged the balance sheet,"
commented
Net income for the second quarter totaled
DEAN FOODS CONSOLIDATED
Net sales for the second quarter totaled
Summary of Dean Foods Second Quarter 2009 Operating Results
-----------------------------------------------------------
$ millions % change
(except EPS) from prior year
------------ ---------------
Consolidated Adjusted Operating Income: $179.6 +11%
Interest Expense: $60.0 -22%
Consolidated Adjusted Net Income $73.5 +41%
Adjusted Diluted Earnings per Share: $0.43 +30%
Consolidated operating income in the second quarter totaled
FRESH DAIRY DIRECT
Second Quarter 2009 Fresh Dairy Direct Detail
---------------------------------------------
$ millions % change
(except volume) from prior year
--------------- ---------------
Fluid Milk Volume N/A +2.4%
Operating Income $168.6 +9%
Recent acquisitions and strong field execution drove the continued
outperformance of Fresh Dairy Direct with fluid milk volume growth of 2.4%
versus the balance of the industry, which saw a volume decline of roughly half
a percent, based on Company estimates. Fresh Dairy Direct net sales declined
due to the pass-through of lower average dairy commodity costs to its
customers, consistent with industry practice. As a result, in spite of strong
volume growth in the quarter, net sales declined 16% to
Historically low dairy commodity prices, combined with other commodity
favorability, benefits from cost control efforts, and continued volume growth
led to Fresh Dairy Direct operating income of
"In the second quarter, the combination of strong volume growth, a favorable commodity environment, solid execution from our field teams, and early benefits from our strategic initiatives across the manufacturing and distribution network led to strong operating results," said Harrald Kroeker, President of Dean's Fresh Dairy Direct segment. "Competitive pressures continue, but the commodity environment remains favorable and our business has solid momentum entering the back half of the year."
The second quarter average Class I mover, which is an indicator of the
Company's raw milk costs, remained at historically low levels during the
second quarter, averaging
WHITEWAVE - MORNINGSTAR
Second Quarter 2009 WhiteWave-Morningstar Detail
------------------------------------------------
% change
Net Sales $ millions from prior year
--------- ---------- ---------------
WhiteWave-Morningstar $622.2 -5%
Morningstar $263.4 -7%
WhiteWave $358.9 -3%
Operating Income
----------------
WhiteWave-Morningstar $72.0 +46%
Operating income in the second quarter for WhiteWave-Morningstar was
"While we continue to see growth slowing in our core categories due to the
current economic situation, we believe that we have made the necessary
investments to maintain our share position while attacking our cost structure.
Consequently, we had a strong operating profit performance driven by tight
SG&A expense control and aggressive cost initiatives combined with generally
more favorable commodities," said
WhiteWave-Morningstar reported second quarter net sales of
Within the branded portfolio, net sales of the WhiteWave creamer
portfolio, which includes International Delight and
ALPRO
During the second quarter, the Company announced its intention to purchase
the Alpro division of
Alpro is the European leader in branded soy-based beverage and food
products with net sales of approximately
"We are excited to have successfully completed the acquisition of Alpro,"
commented Engles. "The acquisition of Alpro brings a wealth of opportunity as
we work with their strong management team to drive soy consumption in their
established markets, as well as expand the brand's reach into new markets
across the
Dean's acquisition of Alpro establishes Dean as a clear global leader in
soy-based beverages and food products, with leading brands Silk in
CORPORATE AND OTHER EXPENSE
Corporate and Other expense totaled
The Company recognized approximately
CASH FLOW
Net cash provided by continuing operations for the first half of 2009
totaled
Capital expenditures for the first half of 2009 totaled
"Free cash flow and debt paydown were again especially strong in the
quarter," said
In the second quarter, the Company's equity offering and strong cash flow
combined to drive total net debt outstanding
FORWARD OUTLOOK
"Commodities continue to be favorable, and our efforts to drive costs out
of the business are getting traction and increasingly impacting results,"
stated Engles. "While we see continued competitive activity in our fluid milk
operations and are cautious about diminished commodity favorability in the
future, our businesses carry significant momentum into the second half of the
year. As a result, we are expecting adjusted diluted earnings per share of at
least
RESULTS FOR THE SIX MONTHS ENDED
Net sales for the six months ended
On an adjusted basis (as defined below), net income for the six months
ending
COMPARISON OF ADJUSTED INFORMATION TO GAAP INFORMATION
The adjusted financial results contained in this press release are from
continuing operations and are adjusted to eliminate the net expense or net
gain related to the items identified below. 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
For the quarter ended
GAAP operating income is adjusted by:
$11.4 million charge related to announced facility closings;$8.8 million charge for transaction-related fees on acquisitions that have closed or are anticipated to close; and$3.0 million operating loss reflecting the non-controlling interest in the Hero/WhiteWave joint venture
GAAP net income attributable to
$7.1 million charge (net of income tax) related to announced facility closings;$5.4 million charge (net of income tax) for transaction-related fees for closed or anticipated to close acquisitions; and-
$3.1 million gain (net of income tax) related to a foreign currency forward contract entered into in conjunction with our acquisition of the Alpro Division ofVandemoortele, N.V.
For the quarter ended
$5.2 million charge ($3.2 million net of income tax) related to previously announced facility closings.
For the six months ended
GAAP operating income is adjusted by the following:
$19.7 million charge related to announced facility closings;$10.7 million charge for transaction-related fees on acquisitions that have closed or are anticipated to close; and$4.7 million operating loss reflecting the non-controlling interest in the Hero/WhiteWave joint venture
GAAP net income attributable to
$12.2 million charge (net of income tax) related to announced facility closings;$6.5 million charge (net of income tax) for transaction-related fees on acquisitions that have closed or are anticipated to close; and$3.1 million gain (net of income tax) related to a foreign currency forward contract entered into in conjunction with our acquisition of the Alpro Division ofVandemoortele, N.V.
For the six months ended
$7.4 million charge ($4.5 million net of income tax) related to previously announced facility closings; and$0.6 million charge ($0.3 million net of income tax) related to non-recurring debt refinancing and special dividend costs.
CONFERENCE CALL WEBCAST
A webcast to discuss the Company's financial results and outlook will be
held at
ABOUT
FORWARD-LOOKING STATEMENTS
Some of the statements 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. These "forward-looking" statements include
statements relating to, among other things, projected sales, operating income,
net income, adjusted diluted earnings per share, debt covenant compliance,
expected financial performance and capital structure. These statements involve
risks and uncertainties that may cause results to differ materially from the
statements set forth in this press release. The Company's ability to meet
targeted financial and operating results, including targeted sales, operating
income, net income and earnings per share depends on a variety of economic,
competitive and governmental factors, including raw material availability and
costs, the demand for the Company's products, the Company's ability to
integrate its acquisitions and the Company's ability to access capital under
its credit facilities or otherwise, many of which are beyond the Company's
control and which are described in the Company's filings with the
CONTACT: Corporate Communications, Marguerite Copel, +1-214-721-1273; or
Investor Relations,
(Tables to follow)
DEAN FOODS COMPANY
Condensed Consolidated Income Statements
(Unaudited)
(In thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Net sales $2,681,286 $3,102,559 $5,384,224 $6,179,519
Cost of sales 1,917,013 2,363,239 3,861,264 4,751,625
--------- --------- --------- ---------
Gross profit 764,273 739,320 1,522,960 1,427,894
Operating costs and
expenses 596,388 576,947 1,154,001 1,127,202
Facility closings,
reorganizations
and other costs 11,414 5,195 19,662 7,410
------ ----- ------ -----
Operating income 156,471 157,178 349,297 293,282
Interest expense 59,966 76,485 128,265 160,317
Other (income) expense, net (5,042) 138 (4,847) 757
------ ---- ------ ----
Income from continuing
operations before
income taxes 101,547 80,555 225,879 132,208
Income taxes 39,135 31,670 88,125 52,551
------ ------ ------ ------
Income from continuing
operations 62,412 48,885 137,754 79,657
Loss from discontinued
operations, net of tax (96) - (238) -
---- ---- ---- ----
Net income 62,316 48,885 137,516 79,657
Net loss attributable
to noncontrolling
interest 1,827 - 2,873 -
----- ---- ----- ----
Net income attributable
to Dean Foods Company $64,143 $48,885 $140,389 $79,657
======= ======= ======== =======
Average common shares:
Basic 168,332 151,984 161,355 144,934
Diluted 170,991 156,352 164,260 149,922
Net Income attributable to
Dean Foods Company per share:
Basic $0.38 $0.32 $0.87 $0.55
Diluted $0.38 $0.31 $0.85 $0.53
DEAN FOODS COMPANY
Segment Information
(Unaudited)
(In thousands)
Three months ended Six months ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Net sales:
Fresh Dairy Direct $2,057,418 $2,450,239 $4,155,952 $4,908,715
WhiteWave-Morningstar 622,233 652,320 1,226,577 1,270,804
Corporate and other 1,635 - 1,695 -
----- ----- ----- -----
Total $2,681,286 $3,102,559 $5,384,224 $6,179,519
========== ========== ========== ==========
Segment operating
income (loss):
Fresh Dairy Direct $168,616 $154,254 $350,284 $285,162
WhiteWave-Morningstar 72,008 49,299 135,481 94,691
Corporate and Other (72,739) (41,180) (116,806) (79,161)
------- ------- -------- -------
Subtotal 167,885 162,373 368,959 300,692
Facility closings,
reorganizations and
other costs (11,414) (5,195) (19,662) (7,410)
------- ------ ------- ------
Total operating
income $156,471 $157,178 $349,297 $293,282
======== ======== ======== ========
DEAN FOODS COMPANY
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
June 30, December 31,
ASSETS 2009 2008
-------- ---- ----
Cash and cash equivalents $53,144 $35,979
Other current assets 1,310,654 1,445,214
--------- ---------
Total current assets 1,363,798 1,481,193
Property, plant and equipment, net 1,826,735 1,821,892
Intangibles and other assets 3,732,702 3,737,107
--------- ---------
Total Assets $6,923,235 $7,040,192
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
--------------------------------------
Total current liabilities, excluding debt $1,004,407 $1,111,741
Total long-term debt, including current portion 3,848,369 4,489,251
Other long-term liabilities 860,544 880,966
Total Dean Foods stockholders' equity 1,191,856 558,234
Noncontrolling interest 18,059 -
------ -------
Total Stockholders' equity 1,209,915 558,234
--------- -------
Total Liabilities and Stockholders' Equity $6,923,235 $7,040,192
========== ==========
DEAN FOODS COMPANY
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Six months ended
June 30,
Operating Activities 2009 2008
---------------------- ---- ----
Net cash provided by continuing operations $349,784 $315,304
Net cash used in discontinued operations (238) -
---- ----
Net cash provided by operating activities $349,546 $315,304
Investing Activities
----------------------
Additions to property, plant and equipment (101,096) (105,762)
Payments for acquisitions, net of cash received (34,963) (60,889)
Proceeds from sale of fixed assets 4,789 5,594
----- -----
Net cash used in investing activities (131,270) (161,057)
Financing Activities
----------------------
Net repayment of debt (654,304) (562,891)
Issuance of common stock 446,760 413,892
Capital contribution from noncontrolling interest 6,433 -
Other - 1,045
----- -----
Net cash used in financing activities (201,111) (147,954)
-------- --------
Increase in cash and cash equivalents 17,165 6,293
Beginning cash balance 35,979 32,555
------ ------
Ending cash balance $53,144 $38,848
======= =======
DEAN FOODS COMPANY
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
(In thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
2009 2008 2009 2008
---- ---- ---- ----
Reconciliation of GAAP to adjusted operating income
GAAP operating income $156,471 $157,178 $349,297 $293,282
Adjustments:
Facility closings,
reorganizations
and other costs 11,414 5,195 19,662 7,410
Closed deal costs 8,760 - 10,658 -
Operating loss from
noncontrolling
interest
in joint venture 2,977 - 4,690 -
----- ---- ----- ----
Adjusted operating income $179,622 $162,373 $384,307 $300,692
======== ======== ======== ========
Reconciliation of GAAP to adjusted net income attributable
to Dean Foods Company
GAAP net income
attributable to
Dean Foods Company $64,143 $48,885 $140,389 $79,657
Adjustments, net of tax:
Facility closings,
reorganizations
and other costs 7,084 3,149 12,216 4,469
Closed deal costs 5,350 - 6,500 -
Gain on foreign
currency hedge (3,115) - (3,115) -
Debt refinancing
and special
dividend costs - - - 340
---- ---- ---- ----
Adjusted net income
attributable to
Dean Foods Company $73,462 $52,034 $155,990 $84,466
======= ======= ======== =======
Reconciliation of GAAP to adjusted diluted earnings per share
GAAP diluted
earnings per share $0.38 $0.31 $0.85 $0.53
Adjustments, net of tax
Facility closings,
reorganizations
and other costs 0.04 0.02 0.08 0.03
Closed deal costs 0.03 - 0.04 -
Gain on foreign
currency hedge (0.02) - (0.02) -
----- ---- ----- ----
Adjusted diluted
earnings per share $0.43 $0.33 $0.95 $0.56
===== ===== ===== =====
Computation of Free Cash Flow provided by continuing operations
Net cash provided by
continuing operations $165,048 $157,043 $349,784 $315,304
Additions to property,
plant and equipment (59,004) (61,003) (101,096) (105,762)
------- ------- -------- --------
Free cash flow provided
by continuing operations $106,044 $96,040 $248,688 $209,542
======== ======= ======== ========
SOURCE:
CONTACT:
Corporate Communications
Marguerite Copel
+1-214-721-1273
or
Investor Relations
+1-214-303-3438
both of
Web Site:
http://www.deanfoods.com
Contact:
Investors:
Barry Sievert
Investor Relations
(214) 303-3437
Media:
Marguerite Copel
Corporate Communications
(214) 721-1273
SOURCE Dean Foods Company