DALLAS — Boosted by a fourth quarter that the company’s chief executive called "the strongest in our history," fiscal 2008 net income at Dean Foods Co. rose 40% on sales growth of 5%.
Net income in the year ended Dec. 31, 2008, was $183,770,000, equal to $1.23 per share on the common stock, up from $131,353,000, or $1.01 per share, in fiscal 2007. Net sales were $12,454,613,000, up from $11,821,903,000.
For the fourth quarter, net income totaled $66,361,000, or 43c per share, up from $32,635,000, or 25c per share, in the same period a year ago. Net sales were $3,080,425,000, down from $3,231,713,000.
Adjusted net income from continuing operations in the fourth quarter was $71.3 million, up 92% from $37.1 million in the fourth quarter last year.
Dean Foods said the increases in adjusted net income reflected a 31% increase DSD Dairy segment operating profit, a 14% increase in WhiteWave-Morningstar segment operating profit, and lower interest expense as a result of the reduction in total debt outstanding.
"By many measures, the fourth quarter of 2008 was the strongest in our history," said Gregg Engles, chairman and chief executive officer. "Consolidated adjusted operating income was 27% above the fourth quarter of 2007. Both business units turned in solid performances with DSD Dairy operating profit 31% above year-ago levels and WhiteWave-Morningstar operating profit up 14% in the quarter. Consistent with the trends we were seeing as we exited the third quarter, commodities continued to be favorable in the fourth quarter, particularly energy-related commodities, which, combined with operational improvements across the business, bolstered our financial results in the period."
Operating income of DSD Dairy in fiscal 2008 was $591,314,000, up from $537,963,000. Sales rose 4% to $9,804,622,000. For the fourth quarter, operating income totaled $165,708,000, up from $126,616,000. Sales eased 7% to $2,372,550,000 from $2,559,617,000.
WhiteWave-Morningstar operating income in the full year was $205,382,000, up narrowly from $204,951,000, on sales of $2,649,991,000, up from $2,410,800,000. For the fourth quarter, operating income was $69,370,000, up from $60,887,000. Sales rose 5% to $707,875,000.
Operating margins in the segment rose to 9.8% in the quarter from 9.1% in the same period last year.
During the quarter, WhiteWave branded portfolio of products increased sales 8% over the prior year, while net sales of Morningstar’s private label and food service cultured and creamer products rose 1.5% year-over-year behind strong growth in yogurt, egg nog and cottage cheese sales.
Horizon Organic milk net sales were up 15% from the fourth quarter last year because of higher prices. Silk sales posted mid single digit gains, adversely affected in part by the slowing of sales growth within the soymilk category as well as the decision to exit an unprofitable food service business relationship.
Company-wide, Dean is projecting earnings per share of $1.50 per share in 2009, representing growth from $1.23 in fiscal 2008.