DALLAS — Dean Foods Co. has initiated a strategic review to explore such options as a merger, joint venture or sale. The company said on Feb. 26 it has not set a timetable for the conclusion of the review, nor has it made any decisions related to any outcome.
“As one of America's largest dairy providers, Dean Foods is committed to delivering significant value to all our stakeholders, including our customers, consumers, shareholders, communities and employees," said Ralph P. Scozzafava, chief executive officer of Dean Foods. "We are taking vital, transformative actions to maximize the benefits of our scale and position the company for the long term, including implementing an enterprise-wide cost productivity plan and investing in core capabilities, technology, infrastructure, people and systems.
“As we seek to accelerate our business transformation and enhance shareholder value, the board has initiated a review of a range of potential strategic alternatives to best position the company for the future.”
Other options may include the disposition of certain assets,
Dean Foods announced the review a day before releasing fourth-quarter and full-year 2018 earnings results. For the year ended Dec. 31, 2018, the company recorded a loss of $260,117,000, which compared unfavorably to fiscal 2017 when the company earned $52,318,000, equal to 57c per share on the common stock.
Sales for the year were flat at $7,755,283,000 compared to sales of $7,795,025,000 the year prior.
Challenged by rising freight costs and lower fluid milk consumption, the company last year launched an aggressive productivity plan to reduce costs. Actions included the closing and consolidation of seven manufacturing plants in a six-week period.
Dean Foods is the largest processor and direct-to-store distributor of fluid milk and other dairy and dairy case products in the United States. National brands include DairyPure, TruMoo, Organic Valley and Land O’Lakes.
Following the news of a strategic review, shares of Dean Foods on the New York Stock Exchange were up as much as 10% in after-hours trading.