Dean Foods Co. announced that the company earned $0.50 per diluted share for the full year 2010, as compared to $1.38 per diluted share for the full year 2009. On an adjusted basis (as defined below), the company earned $0.80 per diluted share for the full year 2010, compared to $1.59 for the full year 2009.
For the fourth quarter 2010, the company recorded a loss of $0.11 per diluted share, as compared to fourth quarter 2009 earnings of $0.27 per diluted share. The loss for the fourth quarter of 2010 includes a $20 million charge (net of tax) associated with an agreement in a previously disclosed legal matter, a $10.8 million write down of deferred tax assets, as well as $17 million (net of tax) of restructuring charges, and other one time or non-recurring items, as more fully described in the attached tables. On an adjusted basis, fourth quarter 2010 diluted earnings per share were $0.15, compared to $0.32 per diluted share earned in the prior year's fourth quarter.
"2010 was an exceptionally difficult year for Dean Foods, and our fourth quarter results reflect many of the same trends that have impacted the business all year," said Gregg Engles, chairman and CEO in a prepared statement. "At Fresh Dairy Direct-Morningstar, wholesale pricing for private label milk remained pressured during the quarter, and volume softened. As a consequence, fresh dairy direct-Morningstar operating profit was little changed from the third quarter.
"We have, however, begun to see signs that the fluid milk category is stabilizing, albeit at historically low levels of profitability. Some retailers have taken early steps to reduce heavy private label promotions and our regional brand volume mix has begun to stabilize. Regional branded milk volumes outperformed private label on a year-over-year basis in the fourth quarter. Moreover, private label wholesale prices appear to have stopped declining, although we have not yet seen them rise. Volume, however, remains weak, which we believe will limit upward price mobility. The net result is an industry that appears to be stabilizing at a price and profit level meaningfully below historical norms. To move forward in such an environment means that we must continue to optimize our network to offset volume weakness and drive efficiency to rebuild profits, which is the path that we are on.
"In contrast to the continued challenges at fresh dairy direct-Morningstar, WhiteWave-Alpro continued to build on its record of strong top and bottom line performance, with the segment achieving fourth quarter net sales growth of 7 percent and operating income growth of 14 percent. All of our core brands posted strong growth."
Net income attributable to Dean Foods totaled $91 million for the full year 2010, compared with $240 million in the previous year. On an adjusted basis, net income for the full year 2010 totaled $147 million, compared to $277 million in 2009.
For the fourth quarter of 2010, the net loss attributable to Dean Foods totaled $21 million, compared to net income of $50 million in the prior year's fourth quarter. Adjusted net income for the fourth quarter was $27 million, compared to adjusted net income of $59 million in the fourth quarter of 2009.
Net sales for the 12 months ended Dec. 31, 2010 totaled $12.1 billion, compared to $11.1 billion for the same period last year. Net sales for the fourth quarter totaled $3.2 billion, compared to $3.0 billion of net sales in the fourth quarter of 2009. Net sales for both the full year and fourth quarter increased due to strong sales growth at WhiteWave-Alpro and the pass-through of higher overall dairy commodity costs that were partially offset by soft volumes at fresh dairy direct-Morningstar.
For the full year 2010, consolidated operating income totaled $400 million, compared to $623 million for 2009. On an adjusted basis, full year 2010 consolidated operating income totaled $472 million, compared to $694 million for the full year 2009. The decrease in consolidated adjusted operating income in the year was driven by a full year operating profit decline at fresh dairy direct-Morningstar of $252 million.