BUSINESS NEWS: Dean Foods Reports Fourth Quarter and Full Year 2009 Results

Dean Foods is reporting the Company's fourth quarter and full year 2009 results. Jack Callahan, Dean Foods CFO, said, "Looking ahead at our expectations for 2010, the first quarter presents a challenging overlap. The first quarter of 2009 was the strongest overall performance in our Company's history and benefitted from a lower share count before the equity offering in the second quarter of 2009. With this in mind, and reflecting the current market-driven challenges we face, we are forecasting first quarter adjusted diluted earnings to be between $0.25 and $0.30 per share. As we look at the balance of the year, however, the overlaps and commodity forecasts become much less daunting and we expect to be back to posting strong quarterly year over year growth by the back half of the year." For more on this story, check out the next issue of ihr magazine.
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Dean Foods Reports Fourth Quarter and Full Year 2009 Results
--2009 Full Year Diluted Earnings per Share Up 15%, Adjusted Diluted Earnings per Share Up 22% --2009 Cash from Continuing Operations Reaches $659 million, Free Cash Flow Reaches $391 million --Fourth Quarter Diluted Earnings per Share of $0.27, Adjusted Diluted Earnings per Share of $0.31 --Retailer and Competitive Pressures and Rising Commodities Impact Fourth Quarter Results --Company Expects 2010 Adjusted Diluted Earnings of Between $1.54 and $1.64 per Share
DALLAS, Feb 10, 2010 /PRNewswire via COMTEX/ -- Dean Foods Company (NYSE: DF) today announced that the Company earned $1.38 per diluted share for the full year 2009, as compared to $1.20 per diluted share for the full year 2008. On an adjusted basis (as defined below), the Company earned $1.59 per diluted share for the full year 2009, an increase of 22% over $1.30 for the full year 2008.

For the fourth quarter 2009, the Company earned $0.27 per diluted share, as compared to fourth quarter 2008 earnings of $0.42 per diluted share. On an adjusted basis, fourth quarter diluted earnings per share were $0.31, compared to the $0.46 per diluted share earned in the prior year's fourth quarter.

"The fourth quarter was a challenging finish to an otherwise highly successful year for Dean Foods," said Gregg Engles, Chairman and CEO. "2009 operating profits, in total, and for each of our business segments, were the highest in our history. Full year adjusted operating income grew 10% in 2009, on top of the 7% growth we reported in 2008. Moreover, we built the necessary capability to transform our business, and our initiatives to reduce cost took hold. We delivered over $75 million in cost savings in the first year of our $300 million cost reduction program. Additionally, we strategically built our portfolio, adding Alpro to become the clear global soy leader, and Heartland and Foremost Farms to strengthen our core fluid milk franchise.

"However, while our 2009 results demonstrate a strong step forward for the business, our fourth quarter performance was below our expectations. As the year came to a close, several of our businesses fell short of expectations. At Fresh Dairy Direct, retailer and competitive pressures that had been apparent through much of the year became significantly more pronounced in the second half of the fourth quarter, and were exacerbated by sharply rising commodities. Morningstar profits were challenged by volume softness, steep commodity inflation and a charge incurred to renegotiate a distributor contract. At WhiteWave, we significantly stepped up advertising and marketing to support our brands and invest behind very strong performance from new innovation in our creamer business."

Net income attributable to Dean Foods totaled $240 million for the full year 2009, compared with $184 million in the previous year. On an adjusted basis, net income for the full year 2009 totaled $276 million, compared to $199 million in 2008.

For the fourth quarter of 2009, net income attributable to Dean Foods totaled $50 million, compared with $66 million in the prior year's fourth quarter. Adjusted net income for the fourth quarter was $58 million, compared to adjusted net income of $71 million in the fourth quarter of 2008.

CONSOLIDATED NET SALES

Net sales for the twelve months ended December 31, 2009 totaled $11.2 billion, compared to $12.5 billion for the same period last year, due to the pass-through of lower overall dairy commodity costs, offset by higher volumes at Fresh Dairy Direct and increased sales at WhiteWave-Morningstar.

Net sales for the fourth quarter totaled $3.0 billion, compared to $3.1 billion of net sales in the fourth quarter of 2008. Net sales decreased in the quarter due to the pass-through of lower overall dairy commodity costs that were partially offset by acquisition-aided growth at Fresh Dairy Direct and WhiteWave-Morningstar.

CONSOLIDATED OPERATING INCOME

For the full year 2009, consolidated operating income totaled $622 million, compared to $609 million for 2008. On an adjusted basis, full year 2009 consolidated operating income totaled $693 million, compared to $631 million for the 2008 reporting period. The increase in adjusted consolidated operating income in the year was driven by strong full year operating profit growth at Fresh Dairy Direct and WhiteWave-Morningstar, offset by growth in corporate expense related to the development of foundational capabilities to support the Company's transformation initiatives, as well as higher legal, incentive compensation, and pension expense.

Consolidated operating income in the fourth quarter totaled $136 million, compared to $184 million in the fourth quarter of 2008. Adjusted fourth quarter consolidated operating income totaled $151 million, compared to $190 million in the fourth quarter of 2008. The decline in fourth quarter consolidated operating income is due to lower operating income at Fresh Dairy Direct and WhiteWave-Morningstar and higher corporate expense.

FORWARD OUTLOOK

"Looking ahead at our expectations for 2010, the first quarter presents a challenging overlap," said Jack Callahan, Chief Financial Officer. "The first quarter of 2009 was the strongest overall performance in our Company's history and benefitted from a lower share count before the equity offering in the second quarter of 2009. With this in mind, and reflecting the current market-driven challenges we face, we are forecasting first quarter adjusted diluted earnings to be between $0.25 and $0.30 per share. As we look at the balance of the year, however, the overlaps and commodity forecasts become much less daunting and we expect to be back to posting strong quarterly year over year growth by the back half of the year.

"For the full year, we are expecting adjusted diluted earnings per share to be between $1.54 and $1.64 inclusive of the effects of the higher number of shares outstanding related to the equity offering we completed in the second quarter of 2009."

Source: Dean Foods Press Release