Member access

4-Traders Homepage  >  Shares  >  Nyse  >  Dean Foods Co       US2423701042

SummaryNewsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll news 

DEAN FOODS : Company Reports Third Quarter Results

11/09/2010 | 08:05am US/Eastern

DALLAS, Nov. 9, 2010 /PRNewswire-FirstCall/ -- Dean Foods Company (NYSE: DF) today announced third quarter diluted earnings per share of $0.13 for the quarter ended September 30, 2010, compared to diluted earnings of $0.27 per share in the third quarter of 2009. Adjusted (as defined below) diluted earnings per share in the third quarter were $0.13, compared to $0.33 per share in the year ago period.

"These results are clearly disappointing for us and reflect continued significant challenges in our largest business, Fresh Dairy Direct-Morningstar," said Gregg Engles, Chairman and Chief Executive Officer. "Despite our poor consolidated performance, WhiteWave-Alpro continued to perform exceptionally well and delivered significant top and bottom line growth. However, given the relative size of the business, it was not enough to offset substantially weaker results in our Fresh Dairy Direct-Morningstar segment. In addition to ongoing adverse conditions in the conventional milk business, weak consumer spending led to soft volumes in conventional fluid milk and other beverage and cultured products within our Fresh Dairy Direct-Morningstar business. Our results were also impacted by much higher than anticipated butterfat costs. In response to a weak trading environment and our on-going poor performance, we continue to take aggressive steps to improve our results, including accelerated cost reductions and the recent realignment of our management and organizational structure."

Net income attributable to Dean Foods for the third quarter of 2010 totaled $24.3 million, compared with $49.7 million in the prior year's third quarter. Lower operating income at Fresh Dairy Direct-Morningstar and increased interest expense offset improved WhiteWave-Alpro results. Adjusted net income for the quarter was $23.3 million, a decrease of 62% from $61.2 million in the third quarter of 2009.

DEAN FOODS CONSOLIDATED

Net sales for the third quarter totaled $3.1 billion, an increase of 11% from net sales of $2.8 billion in the third quarter of 2009. The net sales increase in the quarter was primarily due to the pass-through of higher dairy commodity costs at Fresh Dairy Direct-Morningstar somewhat offset by strong sales growth at WhiteWave-Alpro.

    Summary of Dean Foods Third Quarter 2010 Operating Results
    ----------------------------------------------------------

                                        Q3 2010
                                       $millions       Y/Y
                                        (except
                                          EPS)       Change
    Consolidated Adjusted
     Operating Income:                      $103         -35%
    Interest Expense:                        $64          +8%
    Consolidated Adjusted Net
     Income                                  $23         -62%
    Adjusted Diluted Earnings per
     Share:                                $0.13         -61%

Consolidated operating income in the third quarter totaled $92.5 million, compared to $137.5 million in the third quarter of 2009. Continued pressures in the market for conventional fluid milk driven by retailer pricing pressure, weak volumes, and rapid butterfat inflation drove a 33% decline in Fresh Dairy Direct-Morningstar operating income. This decline was partially offset by a 10% increase in WhiteWave-Alpro operating income resulting from continued strong top-line growth. As a result, third quarter consolidated adjusted operating income was $103.1 million, a decrease of 35% from $158.4 million in the third quarter of 2009.

FRESH DAIRY DIRECT-MORNINGSTAR

    Third Quarter 2010 Fresh Dairy Direct-Morningstar Detail
    --------------------------------------------------------

                        Q3 2010           Y/Y
                        $millions        Change
    Fluid Milk
     Volume                    --            -0.1%
    Operating
     Income                  $116             -33%
    Class I Mover     $15.64/cwt.             +50%
    Class II
     Butterfat          $2.12/lb.             +70%

Fresh Dairy Direct-Morningstar fluid milk volume was essentially flat in the third quarter, including acquisitions, versus the balance of the industry that experienced volume decline of roughly two and a half a percent, based on Company estimates. Across the balance of the Fresh Dairy Direct-Morningstar portfolio, the ice cream, cultured products and creamer product lines experienced modest volume declines in the quarter, while strong demand from quick service restaurants drove a solid increase in ice cream mix and aerosol product sales volumes. Total volumes for all products at Fresh Dairy Direct-Morningstar declined two percent in the quarter. Fresh Dairy Direct-Morningstar net sales increased due to the pass-through of higher average dairy commodity costs to its customers. As a result, segment net sales increased 11% to $2.6 billion from $2.3 billion in the third quarter of 2009. The third quarter average Class I Mover was $15.64 per hundredweight, 11% above the previous quarter and 50% higher than the third quarter of 2009. Class II butterfat, a key component of the Company's creamer, cultured and ice cream products, increased 26% from the previous quarter and was 70% higher than in the third quarter of 2009.

Consistent with previous quarters, retail pricing for private label milk remained well below historical levels and fluid milk industry pricing remains highly competitive. Widened price gaps between branded and private label offerings drove continued consumer trade-down to lower-margin private label products. This, combined with overall volume weakness and rapid butterfat inflation drove Fresh Dairy Direct-Morningstar operating income in the third quarter of $116.5 million, a 33% decline from $174.9 million in the third quarter of 2009.

WHITEWAVE-ALPRO

    Third Quarter 2010 WhiteWave-Alpro  Detail
    ------------------------------------------

                                Q3 2010         Y/Y
    Net Sales                   $millions     Change
    ---------                   ---------     ------
    WhiteWave-Alpro                  $478          +8%
      WhiteWave                      $392          +9%
      Alpro                           $83        +0.2%

    Operating Income
    ----------------
    WhiteWave-Alpro                   $37         +16%
    WhiteWave-Alpro,
     adjusted to
    exclude non-
     controlling Hero JV
     interest                         $39         +10%

Continued strong volume growth drove WhiteWave-Alpro net sales of $478.3 million, 8% higher than third quarter 2009 net sales of $443.5 million.

Among the key brands at WhiteWave-Alpro, Horizon Organic® milk sales again outpaced the organic milk category to post high-teens net sales growth. The Company's plant-based beverage products, which include both Silk® and Alpro®, continued to post strong results. Silk sales increased mid-single digits in the quarter as a result of the strong performance of Silk PureAlmond®. Alpro sales were up high single digits in the quarter on a constant currency basis. International Delight® Coffee Creamer net sales grew in the low-double digits on continued strength behind product and packaging innovation. LAND O LAKES® brand creamer sales increased mid-single digits.

WhiteWave-Alpro operating income increased 10% in the third quarter to $39.4 million, from $35.8 million in the third quarter of 2009. Profit growth was somewhat limited by increased manufacturing and distribution costs driven by capacity constraints. The WhiteWave-Alpro segment operating income includes a $2.3 million loss related to the Company's interest in the Hero/WhiteWave joint venture, but excludes a $2.3 million loss from the joint venture attributable to the non-controlling interest.

CORPORATE AND OTHER EXPENSE

Corporate and Other expense totaled $52.8 million for the third quarter of 2010, as compared to $52.4 million in the third quarter of 2009.

CASH FLOW

Net cash provided by continuing operations for the nine months ended September 30, 2010 totaled $379.3 million, compared to $500.9 million for the comparable period in 2009. Free cash flow provided by operations, which is defined as net cash provided by continuing operations less net capital expenditures, totaled $198.7 million for the nine months ended September 30, 2010, compared to $330.1 million in the first three quarters of 2009. A reconciliation between net cash provided by continuing operations and free cash flow provided by continuing operations is provided below.

Net capital expenditures for the first nine months of 2010 totaled $180.6 million, compared to $170.8 million in the same period of 2009. The Company expects full year capital expenditures to be approximately $300 million for 2010.

Total debt at September 30, 2010, net of $102.1 million in cash on hand, was approximately $4.0 billion. The Company's funded debt to EBITDA ratio, as defined by its credit agreements, was 4.9x as of the end of the third quarter, compared to a current covenant of 5.5x.

FORWARD OUTLOOK

"In the near term we expect our Fresh Dairy Direct-Morningstar business to remain challenged as the retail environment continues to be very competitive and volumes across much of the portfolio are soft," stated Engles. "We believe these pressures will continue in the fourth quarter and at least through the first half of next year.

"Price concessions that have been given will continue to impact year-over-year comparisons into 2011, regardless of whether we see a return to historical retail pricing levels or not. We clearly are not satisfied with our results, and in order to offset these pressures and improve our financial performance, we remain intensely focused on cost reduction. I'm confident that in time we will get in front of this cost-price squeeze in a way that will be difficult for our competitors to match.

"At WhiteWave-Alpro, we expect the strong performance we've seen all year to continue through the fourth quarter, where our creamers business typically does seasonally well.

"Given our run-rate as we exited the third quarter, but keeping in mind the typical strong seasonality of the fourth quarter, we are expecting fourth quarter earnings of between $0.13 to $0.18 per share."

RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

Net sales for the nine months ended September 30, 2010 totaled $9.0 billion, an increase of 10% from net sales for the same period of last year, due to the pass-through of higher dairy commodity costs, the impact of acquisitions, and strong growth in net sales at WhiteWave-Alpro. Net income for the first nine months of the year totaled $112.2 million, compared with $190.0 million in the nine months ended September 30, 2009. Diluted earnings per share for the nine months ended September 30, 2010 totaled $0.61, compared to $1.11 for the first nine months of 2009.

On an adjusted basis, net income for the nine months ending September 30, 2010 totaled $119.7 million, compared to $217.9 million in the same period of 2009. Adjusted diluted earnings per share for the first nine months of 2010 totaled $0.65 compared to $1.28 in the nine months ended September 30, 2009.

INDUCEMENT GRANTS

The Company also announced today that it granted stock options ("Options") to purchase an aggregate of 99,929 shares of common stock and 34,216 restricted stock units ("RSUs") in May 2010 to a newly hired, non-executive officer employee in connection with his employment with the Company. The Company also announced that it granted 36,110 Options and 12,364 RSUs in August 2010, and agreed to grant additional Options and RSUs in February 2011 in amounts to be determined in accordance with the Company's standard valuation practices for annual long-term incentive grants, to a newly hired, non-executive officer employee in connection with his employment with the Company. The Options described above have an exercise price equal to the fair market value of Dean Foods stock at the close of business on the grant date, and vest in three equal annual installments, beginning on the first anniversary of the date of grant, expiring on the tenth anniversary of the date of grant. The RSUs described above vest in three equal annual installments, beginning on the first anniversary of the date of grant. All awards described above were approved by the Compensation Committee of the Company's Board of Directors without stockholder approval as "inducement grants," as such term is defined by the New York Stock Exchange.

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 as Company management. Because the Company cannot predict the timing and amount of charges associated with non-recurring items, write off of financing costs, closed or anticipated to close deal costs, gains or losses on foreign exchange forward contracts 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 presented in any of the Company's operating segments. 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 than similar measures used by other companies. A full reconciliation for the three and nine month periods ended September 30, 2010, and 2009 calculated according to GAAP on an adjusted basis is attached.

CONFERENCE CALL WEBCAST

A webcast to discuss the Company's financial results and outlook will be held at 9:30 a.m. ET today and may be heard live by visiting the "Webcast" section of the Company's site at www.deanfoods.com/investors. A slide presentation will accompany the webcast.

ABOUT DEAN FOODS

Dean Foods is one of the leading food and beverage companies in the United States. The Company's Fresh Dairy Direct-Morningstar business is the largest processor and distributor of milk and other dairy products in the country. The WhiteWave-Alpro business produces and sells a variety of nationally branded soy, dairy and dairy-related products. Popular brands include: Silk® and Alpro® dairy milk alternatives, Horizon Organic® milk and dairy products, International Delight® coffee creamers, and LAND O LAKES® creamers.

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, earnings per share, cost cutting initiatives, and to maintain compliance with financial covenants 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 Securities and Exchange Commission. The Company's ability to profit from its branding initiatives depends on a number of factors including consumer acceptance of the Company's products. The forward-looking statements in this press release speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to 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.

CONTACT: Corporate Communications, Marguerite Copel, +1-214-721-1273; or Investor Relations, Barry Sievert, +1-214-303-3438

                                        (Tables to follow)


                                        DEAN FOODS COMPANY
                              Condensed Consolidated Income Statements
                                            (Unaudited)
                               (In thousands, except per share data)

                                                           GAAP
                                                           ----
                                                    Three months ended
                                                      September 30,
                                                       2010         2009
                                                       ----         ----

     Net sales                                   $3,054,130   $2,762,709
     Cost of sales                                2,304,501    1,977,176
                                                  ---------    ---------

       Gross profit                                 749,629      785,533

     Operating costs and expenses:
       Selling and distribution                     491,154      472,461
       General and administrative                   154,895      166,771
       Amortization of intangibles                    2,810        2,480
       Facility closing and reorganization
        costs                                         8,253        6,303
       Loss attributable to non-controlling
        interest in Hero JV                               -            -
                                                        ---          ---
         Total operating costs and expenses         657,112      648,015
                                                                 -------

       Operating income                              92,517      137,518

     Interest expense                                64,304       59,508
     Other (income) expense, net                        383          516
                                                        ---          ---

       Income from continuing operations
        before
         income taxes                                27,830       77,494

     Income taxes                                    10,653       31,368
                                                     ------       ------

     Income from continuing operations               17,177       46,126
     Gain on sale of discontinued
      operations, net of tax                          6,357            -
     Income (loss) from discontinued
      operations, net of tax                         (1,577)         978
                                                     ------          ---

       Net income                                    21,957       47,104
         Net loss attributable to non-
          controlling interest                        2,339        2,549
                                                                   -----
       Net income attributable to Dean Foods
        Company                                     $24,296      $49,653
                                                    =======      =======

     Average common shares:
       Basic                                        182,119      180,352
       Diluted                                      182,323      183,066

    Basic earnings per common share:
      Income from continuing operations
       attributable to
         Dean Foods Company                           $0.11        $0.27
      Income from discontinued operations              0.02         0.01
                                                       ----         ----
    Net income attributable to Dean Foods
     Company                                          $0.13        $0.28
                                                      =====        =====
                                                          -            -
    Diluted earnings per common share:
      Income from continuing operations
       attributable to
         Dean Foods Company                           $0.11        $0.27
      Income from discontinued operations              0.02            -
                                                       ----          ---
    Net income attributable to Dean Foods
     Company                                          $0.13        $0.27
                                                      =====        =====




                                                  ADJUSTED
                                                  --------
                                             Three months ended
                                               September 30,
                                             2010                2009
                                             ----                ----

     Net sales                         $3,054,130          $2,762,709
     Cost of sales                      2,304,501           1,977,176
                                        ---------           ---------

       Gross profit                       749,629             785,533

     Operating costs and expenses:
       Selling and distribution           491,154             472,461
       General and administrative         154,895             156,125  (a)
       Amortization of intangibles          2,810               2,480
       Facility closing and
        reorganization costs                    -   (b)             -  (b)
       Loss attributable to non-
        controlling interest in Hero
        JV                                 (2,310)  (c )       (3,895) (c )
                                           ------              ------
         Total operating costs and
          expenses                        646,549             627,171
                                          -------             -------

       Operating income                   103,080             158,362

     Interest expense                      64,304              59,508
     Other (income) expense, net              383                (424) (e)
                                              ---                ----

       Income from continuing
        operations before
         income taxes                      38,393              99,278

     Income taxes                          15,140   (f)        38,040  (f)
                                           ------              ------

     Income from continuing
      operations                           23,253              61,238
     Gain on sale of discontinued
      operations, net of tax                    -   (g)             -
     Income (loss) from
      discontinued operations, net
      of tax                                    -   (g)             -  (g)
                                              ---                 ---

       Net income                          23,253              61,238
         Net loss attributable to non-
          controlling interest                  -   (c )            -  (c )
                                              ---                 ---
       Net income attributable to
        Dean Foods Company                $23,253             $61,238
                                          =======             =======

     Average common shares:
       Basic                              182,119             180,352
       Diluted                            182,323             183,066

    Basic earnings per common
     share:
      Income from continuing
       operations attributable to
         Dean Foods Company                 $0.13               $0.34
      Income from discontinued
       operations                               -                   -
                                              ---                 ---
    Net income attributable to
     Dean Foods Company                     $0.13               $0.34
                                            =====               =====
                                                -                   -
    Diluted earnings per common
     share:
      Income from continuing
       operations attributable to
         Dean Foods Company                 $0.13               $0.33
      Income from discontinued
       operations                               -                   -
                                              ---                 ---
    Net income attributable to
     Dean Foods Company                     $0.13               $0.33
                                            =====               =====


    * See notes to Earnings Release Tables

                                               DEAN FOODS COMPANY
                                    Condensed Consolidated Income Statements
                                                   (Unaudited)
                                      (In thousands, except per share data)

                                                      GAAP
                                                      ----
                                                Nine months ended
                                                 September 30,
                                                  2010             2009
                                                  ----             ----

     Net sales                              $8,969,926       $8,124,035
     Cost of sales                           6,721,080        5,821,325
                                             ---------        ---------

       Gross profit                          2,248,846        2,302,710

     Operating costs and expenses:
       Selling and distribution              1,421,586        1,332,631
       General and administrative              465,283          450,746
       Amortization of intangibles               8,480            6,394
       Facility closing and reorganization
        costs                                   16,313           25,965
       Loss attributable to non-
        controlling interest in Hero JV              -                -
                                                   ---              ---
         Total operating costs and expenses  1,911,662        1,815,736
                                                              ---------

       Operating income                        337,184          486,974

     Interest expense                          177,742          187,762
     Other (income) expense, net                  (102)          (4,386)
                                                  ----           ------

       Income from continuing operations
        before
         income taxes                          159,544          303,598

     Income taxes                               59,095          119,056
                                                ------          -------

     Income from continuing operations         100,449          184,542
     Gain (loss) on sale of discontinued
      operations, net of tax                     8,194             (238)
     Income (loss) from discontinued
      operations, net of tax                    (2,919)             316
                                                ------              ---

       Net income                              105,724          184,620
         Net loss attributable to non-
          controlling interest                   6,511            5,422
                                                                  -----
       Net income attributable to Dean
        Foods Company                         $112,235         $190,042
                                              ========         ========

     Average common shares:
       Basic                                   181,666          167,757
       Diluted                                 182,839          170,693

    Basic earnings per common share:
      Income from continuing operations
       attributable to
         Dean Foods Company                      $0.59            $1.13
      Income from discontinued operations         0.03                -
                                                  ----              ---
    Net income attributable to Dean
     Foods Company                               $0.62            $1.13
                                                 =====            =====
                                                     -                -
    Diluted earnings per common share:
      Income from continuing operations
       attributable to
         Dean Foods Company                      $0.58            $1.11
      Income from discontinued operations         0.03                -
                                                  ----              ---
    Net income attributable to Dean
     Foods Company                               $0.61            $1.11
                                                 =====            =====





                                              ADJUSTED
                                              --------
                                          Nine months ended
                                           September 30,
                                         2010                    2009
                                         ----                    ----

     Net sales                     $8,969,926              $8,124,035
     Cost of sales                  6,721,080               5,821,325
                                    ---------               ---------

       Gross profit                 2,248,846               2,302,710

     Operating costs and
      expenses:
       Selling and distribution     1,421,586               1,332,631
       General and
        administrative                465,283                 429,442  (a)
       Amortization of
        intangibles                     8,480                   6,394
       Facility closing and
        reorganization costs                -   (b)                 -  (b)
       Loss attributable to non-
        controlling interest in
        Hero JV                        (6,421)  (c)            (8,585) (c)
                                       ------                  ------
         Total operating costs and
          expenses                  1,888,928               1,759,882
                                    ---------               ---------

       Operating income               359,918                 542,828

     Interest expense                 171,041   (d)           187,762
     Other (income) expense,
      net                                (102)                   (219) (e)
                                         ----                    ----

       Income from continuing
        operations before
         income taxes                 188,979                 355,285

     Income taxes                      69,262   (f)           137,394  (f)
                                       ------                 -------

     Income from continuing
      operations                      119,717                 217,891
     Gain (loss) on sale of
      discontinued operations,
      net of tax                            -   (g)                 -  (g)
     Income (loss) from
      discontinued operations,
      net of tax                            -   (g)                 -  (g)
                                          ---                     ---

       Net income                     119,717                 217,891
         Net loss attributable to
          non-controlling
          interest                          -   (c )                -  (c)
                                          ---                     ---
       Net income attributable
        to Dean Foods Company        $119,717                $217,891
                                     ========                ========

     Average common shares:
       Basic                          181,666                 167,757
       Diluted                        182,839                 170,693

    Basic earnings per common
     share:
      Income from continuing
       operations attributable
       to
         Dean Foods Company             $0.66                   $1.30
      Income from discontinued
       operations                           -                       -
                                          ---                     ---
    Net income attributable
     to Dean Foods Company              $0.66                   $1.30
                                        =====                   =====
                                            -                       -
    Diluted earnings per
     common share:
      Income from continuing
       operations attributable
       to
         Dean Foods Company             $0.65                   $1.28
      Income from discontinued
       operations                           -                       -
                                          ---                     ---
    Net income attributable
     to Dean Foods Company              $0.65                   $1.28
                                        =====                   =====



    * See notes to Earnings Release Tables

                            DEAN FOODS COMPANY
                   Condensed Consolidated Balance Sheets
                                (Unaudited)
                               (In thousands)

                                                September 30,   December 31,
     ASSETS                                              2010            2009
     ------                                              ----            ----

     Cash and cash equivalents                       $102,100         $45,190
     Other current assets                           1,628,648       1,602,404
                                                    ---------       ---------
                  Total current assets            1,730,748       1,647,594

     Property, plant and equipment, net             2,083,699       2,102,253

     Intangibles and other assets                 4,101,572       4,094,094
                                                  ---------       ---------

     Total Assets                                $7,916,019      $7,843,941
                                                 ==========      ==========


     LIABILITIES AND STOCKHOLDERS'
      EQUITY
     -----------------------------

     Total current liabilities,
      excluding debt                             $1,220,410      $1,234,062

     Total long-term debt, including
      current portion                             4,085,614       4,228,979

     Other long-term liabilities                  1,087,173       1,013,668

     Dean Foods stockholders' equity              1,507,131       1,351,946
     Non-controlling interest                        15,691          15,286
                                                     ------          ------
                  Total stockholders'
                   equity                         1,522,822       1,367,232
                                                                  ---------

     Total Liabilities and Stockholders'
      Equity                                     $7,916,019      $7,843,941
                                                 ==========      ==========

                           DEAN FOODS COMPANY
             Condensed Consolidated Statements of Cash Flows
                               (Unaudited)
                             (In thousands)

                                                       Nine months ended
                                                          September 30,
     Operating Activities                                2010         2009
     --------------------                                ----         ----
       Net cash provided by continuing
        operations                                   $379,293     $500,937
       Net cash provided by discontinued
        operations                                      8,890        1,760
                                                        -----        -----
       Net cash provided by operating activities     $388,183     $502,697

     Investing Activities
     --------------------
     Additions to property, plant and
      equipment                                      (180,557)    (170,867)
     Payments for acquisitions, net of cash
      received                                              -     (491,700)
     Proceeds from sale of fixed assets                 3,807        5,791
                                                        -----        -----
       Net cash used in continuing operations        (176,750)    (656,776)
       Net cash provided by (used in)
        discontinued operations                        24,795         (409)
                                                       ------         ----
       Net cash used in investing activities        $(151,955)   $(657,185)

     Financing Activities
     --------------------
     Net repayment of debt                           (156,921)    (301,876)
     Payment of deferred financing costs              (34,233)           -
     Issuance of common stock, net                      3,298      450,385
     Capital contribution from non-
      controlling interest                              6,916        8,788
     Other                                                275            -
                                                          ---          ---
       Net cash provided by (used in) financing
        activities                                   (180,665)     157,297

       Effect of exchange rate changes on cash
        and cash equivalents                            1,347           10
                                                        -----          ---

     Increase in cash and cash equivalents             56,910        2,819
     Beginning cash balance                            45,190       31,657
                                                       ------       ------

     Ending cash balance                             $102,100      $34,476
                                                     ========      =======

      Computation of Free Cash Flow provided by
       continuing operations

      Net cash provided by continuing
       operations                                    $379,293     $500,937
      Net additions to property, plant and
       equipment                                     (180,557)    (170,867)
                                                     --------     --------

        Free cash flow provided by continuing
         operations                                  $198,736     $330,070

                             DEAN FOODS COMPANY
     Segment Information and Reconciliation of GAAP to Adjusted Earnings
                                 (Unaudited)
                               (In thousands)

                                    Three months ended
                                   September 30, 2010
                                   ------------------
                                                           Facility
                                               Closed      Closing &
                                                Deal    Reorganization
                                               Costs
                                      GAAP       (a)      Costs (b)
                                      ----    ------      ---------

     Segment operating income
      (loss):

       Fresh Dairy Direct -
        Morningstar                 $116,465       $-               $-
       Whitewave - Alpro              37,073        -                -
       Corporate                     (52,768)       -                -
       Facility closing and
        reorganization costs          (8,253)       -            8,253
                                      ------      ---            -----
         Total operating income      $92,517       $-           $8,253
                                     =======      ===           ======

     Net income attributable to
      Dean Foods Company             $24,296       $-           $3,738
                                     =======      ===           ======

     Diluted earnings per share        $0.13       $-            $0.02




                                       Three months ended
                                      September 30, 2010
                                      ------------------
                                        Non-
                                    Controlling     Other
                                      Interest
                                         in      Adjustments
                                      Hero JV
                                         (c)       (f) (g)     Adjusted
                                     --------      -------     --------

     Segment operating income
      (loss):

       Fresh Dairy Direct -
        Morningstar                          $-           $-   $116,465
       Whitewave - Alpro                  2,310            -     39,383
       Corporate                              -            -    (52,768)
       Facility closing and
        reorganization costs                  -            -          -
                                            ---          ---        ---
         Total operating income          $2,310           $-   $103,080
                                         ======          ===   ========

     Net income attributable to
      Dean Foods Company                     $-      $(4,781)   $23,253
                                            ===      =======    =======

     Diluted earnings per share              $-       $(0.02)     $0.13



                                    Three months ended
                                   September 30, 2009
                                   ------------------
                                                           Facility
                                               Closed      Closing &
                                                Deal    Reorganization
                                               Costs
                                      GAAP       (a)      Costs (b)
                                      ----    ------      ---------

     Segment operating income
      (loss):

       Fresh Dairy Direct -
        Morningstar                 $174,935       $-               $-
       Whitewave - Alpro              31,951        -                -
       Corporate                     (63,065)  10,646                -
       Facility closing and
        reorganization costs          (6,303)       -            6,303
                                      ------      ---            -----
         Total operating income     $137,518  $10,646           $6,303
                                    ========  =======           ======

     Net income attributable to
      Dean Foods Company             $49,653   $8,178           $3,833
                                     =======   ======           ======

     Diluted earnings per share        $0.27    $0.04            $0.02
                                       =====    =====            =====



                                       Three months ended
                                      September 30, 2009
                                      ------------------
                                        Non-
                                    Controlling     Other
                                      Interest
                                         in      Adjustments
                                      Hero JV
                                         (c)     (e) (f) (g)   Adjusted
                                     --------    -----------   --------

     Segment operating income
      (loss):

       Fresh Dairy Direct -
        Morningstar                          $-           $-   $174,935
       Whitewave - Alpro                  3,895            -     35,846
       Corporate                              -            -    (52,419)
       Facility closing and
        reorganization costs                  -            -          -
                                            ---          ---        ---
         Total operating income          $3,895           $-   $158,362
                                         ======          ===   ========

     Net income attributable to
      Dean Foods Company                     $-        $(426)   $61,238
                                            ===        =====    =======

     Diluted earnings per share              $-           $-      $0.33
                                            ===          ===      =====


    * See notes to Earnings Release Tables

                             DEAN FOODS COMPANY
     Segment Information and Reconciliation of GAAP to Adjusted Earnings
                                 (Unaudited)
                                (In thousands)

                                         Nine months ended
                                        September 30, 2010
                                        ------------------
                                                                 Facility
                                                     Closed     Closing &
                                                      Deal   Reorganization
                                                     Costs
                                           GAAP        (a)      Costs (b)
                                           ----     ------      ---------

     Segment operating income (loss):

       Fresh Dairy Direct -Morningstar    $390,035       $-              $-
       Whitewave - Alpro                   118,455        -               -
       Corporate                          (154,993)       -               -
       Facility closing and
        reorganization costs               (16,313)       -          16,313
                                           -------      ---          ------
         Total operating income           $337,184       $-         $16,313
                                          ========      ===         =======

     Net income attributable to Dean
      Foods Company                       $112,235       $-          $8,640
                                          ========      ===          ======

     Diluted earnings per share              $0.61       $-           $0.05
                                             =====      ===           =====



                                        Nine months ended
                                       September 30, 2010
                                       ------------------
                                     Non-
                                 Controlling       Other
                                Interest in     Adjustments
                                Hero JV (c)     (d) (f) (g)    Adjusted
                                -----------     -----------    --------

     Segment operating income
      (loss):

       Fresh Dairy Direct -
        Morningstar                       $-               $-   $390,035
       Whitewave - Alpro               6,421                -    124,876
       Corporate                           -                -   (154,993)
       Facility closing and
        reorganization costs               -                -          -
                                         ---              ---        ---
         Total operating income       $6,421               $-   $359,918
                                      ======              ===   ========

     Net income attributable
      to Dean Foods Company               $-          $(1,158)  $119,717
                                         ===          =======   ========

     Diluted earnings per
      share                               $-           $(0.01)     $0.65
                                         ===           ======      =====


                                            Nine months ended
                                           September 30, 2009
                                           ------------------
                                                                   Facility
                                                        Closed    Closing &
                                                         Deal  Reorganization
                                                        Costs
                                               GAAP       (a)     Costs (b)
                                               ----    ------     ---------

     Segment operating income (loss):

       Fresh Dairy Direct - Morningstar      $593,022       $-             $-
       Whitewave - Alpro                       90,404        -              -
       Corporate                             (170,487)  21,304              -
       Facility closing and reorganization
        costs                                 (25,965)       -         25,965
                                              -------      ---         ------
         Total operating income              $486,974  $21,304        $25,965
                                             ========  =======        =======

     Net income attributable to Dean Foods
      Company                                $190,042  $14,678        $15,811
                                             ========  =======        =======

     Diluted earnings per share                 $1.11    $0.09          $0.09
                                                =====    =====          =====



                                             Nine months ended
                                            September 30, 2009
                                            ------------------
                                           Non-
                                        Controlling      Other
                                       Interest in   Adjustments
                                       Hero JV (c)   (e) (f) (g)   Adjusted
                                       -----------   -----------   --------

     Segment operating income (loss):

       Fresh Dairy Direct -Morningstar           $-            $-   $593,022
       Whitewave - Alpro                      8,585             -     98,989
       Corporate                                  -             -   (149,183)
       Facility closing and
        reorganization costs                      -             -          -
                                                ---           ---        ---
         Total operating income              $8,585            $-   $542,828
                                             ======           ===   ========

     Net income attributable to Dean
      Foods Company                              $-       $(2,640)  $217,891
                                                ===       =======   ========

     Diluted earnings per share                  $-        $(0.01)     $1.28
                                                ===        ======      =====



    For the three and nine months ended September 30, 2010 and 2009,
     the adjusted results and certain other non-GAAP financial
     measures differ from the Company's results under GAAP by excluding
     the following:

          In accordance with the change in generally accepted accounting
          principles, effective January 1, 2009 all transaction-related
          fees on acquisitions are expensed as incurred. The adjustment
          reflects the elimination of transaction-related fees on
    (a)   acquisitions that have closed or are expected to close.

          The adjustment reflects the elimination of charges related to
    (b)   announced facility closings and reorganization costs.

          Effective January 1, 2009 the results of operations for the
          Hero/WhiteWave joint venture have been consolidated for
          financial reporting purposes. The adjustment reflects the
          operating loss attributable to the 50% interest in the Hero/
    (c)   WhiteWave joint venture that we do not own.

          The adjustment reflects the write-off of financing costs
          associated with the amendment of our senior secured credit
    (d)   facility.

          The adjustment reflects the elimination of a foreign currency
          forward contract entered into in conjunction with our
    (e)   acquisition of the Alpro Division of Vandemoortele, N.V.

          The adjustment reflects the income tax impact for income from
          continuing operations before income taxes adjustments (a)
    (f)   through (e).

          The adjustment reflects the elimination of discontinued
    (g)   operations, net of tax.

SOURCE Dean Foods Company

React to this article
Latest news on DEAN FOODS CO
3d ago DEAN FOODS CO : ex-dividend day
5d ago DEAN FOODS : Change in Directors or Principal Officers, Financial Statements and..
11/14 DEAN FOODS : To Webcast Presentation At The Morgan Stanley Global Consumer Confe..
11/14 DEAN FOODS : Announces Redemption Of 9.750% Senior Notes Due 2018
11/12 DEAN FOODS : Declares Quarterly Dividend
11/12 DEAN FOODS : Reports Third Quarter 2014 Results
11/11 DEAN FOODS : milks cost-cutting measures with profit forecast
11/10 DEAN FOODS : US indexes little changed in early trading
11/10 DEAN FOODS : shares soar on 3Q results, outlook
11/10 DEAN FOODS : Reports Third Quarter 2014 Results
Dynamic quotes  
ON
| OFF