DALLAS — Dean Foods Co. returned to profitability during fiscal 2012 as the result of the initial public offering of The WhiteWave Foods Co. in October 2012 and the recent sale of the Morningstar business to Saputo Inc.
For the year ended Dec. 31, 2012, the company had income of $167,498,000, equal to 91c per share on the common stock, which compared with a loss of $1,575,621,000 during the previous year. Sales for the year were $11,462,277,000, down 2% from $11,641,191,000 during the previous year.
“The fourth quarter marked the successful conclusion of a very strong year,” said Gregg Tanner, chief executive officer. “At Fresh Dairy Direct, our employees are to be commended for the results they delivered through continued focus on the fundamentals of the business, including volume performance, cost control and effective pricing. In particular, the strong pricing disciple demonstrated for our FDD field organization in the face of a highly inflationary commodity environment resulted in a significant outperformance compared to our expectations.”
The Fresh Dairy Direct segment posted operating income of $446,451,000 during the year, up 18% from $378,493,000 during the previous year.
During the fourth quarter the company as a whole had income of $37,009,000, or 20c per share, which compared with a loss of $9,874,000 during the same quarter of the previous year. Sales for the quarter were $3,041,354,000, up 4% from $2,928,967,000.
“Building on our successful cost reduction actions in 2012, we expect to dramatically accelerate our efforts to offset the financial impact of the recently lost volumes,” Mr. Tanner said. “Our primary focus for the balance of 2013 is on the elimination of costs, particularly fixed costs. With our significantly improved balance sheet, we anticipate expediting our ongoing cost reduction efforts, including the closing of 10% to 15% of our plants to remove fixed costs and eliminating a significant number of distribution routes, as well as associated SG&A. As these initiatives gain traction, we expect the impact of the lost volumes on our operating income to be relatively modest.”The company plans to initiate a tax-free spin-off of shares of The WhiteWave Foods Co. in May, following the April 23, 2013, expiration of the initial public offering lock-up period.