Dean Foods swings to loss in 2011
Feb. 15, 2012
DALLAS — Continued high costs contributed to a loss during fiscal 2011 for Dean Foods Co.
For the year ended Dec. 31, 2011, the company sustained a loss of $1,575,621,000, which compared with net income of $91,491,000, equal to 50c per share on the common stock, during fiscal 2010. Sales for the year were $13,055,493,000, up 8% from $12,122,887,000 during fiscal 2010.
“2011 was a year of transition for Dean Foods, and we exited the year much stronger than we entered it,” said Gregg Engles, chairman and chief executive officer. “After two years of significant pressure on the fluid milk business, our continued efforts to reduce costs and the stabilization of milk costs led to a return to year-over-year profit growth in the fourth quarter at Fresh Dairy Direct (F.D.D.). WhiteWave-Alpro posted another quarter and year of solid top- and bottom-line growth, driven by strong brands, marketing and innovation in growing categories. Excluding the estimated impact of our divestiture of our private label yogurt business, our Morningstar segment delivered fourth-quarter results on par with a year ago, closing out a solid year of growth. On a consolidated basis, results improved as the year progressed, and we finished the year with strong fourth-quarter consolidated adjusted operating income growth.”
For the fourth quarter ended Dec. 31, the company had a loss of $9,874,000, which compared with a loss of $20,744,000 during the same quarter of the previous year. Sales for the quarter were $3,296,034,000, up 4% from $3,152,961,000.
“Looking ahead, we are cautiously optimistic as we enter 2012,” Mr. Engles said. “Our biggest concerns are continued fluid milk category weakness and industry pricing pressures. Our 2012 plans assume flat F.D.D. volume, excluding the impact of divestitures. Additional category weakness would introduce incremental risk to our plan. However, we believe our actions to significantly reduce supply chain and overhead costs and simplify the F.D.D. organization have positioned the business to stabilize and compete effectively in a challenging marketplace. Our current 2012 forecasts for raw milk costs suggest a more stable commodity environment than in recent periods. Following a decline in the first quarter, we expect relatively flat raw milk costs for the balance of the year. Any significant raw milk cost inflation from current forecasts would present a challenge for our outlook. Based on our current assumptions and visibility, we expect 2012 operating income growth for Fresh Dairy Direct to be in the low-to-mid single digits.”