Dean Foods Co. announced fourth quarter financial results highlighted by a return to growth in its fluid milk business, and continued strong performance from its branded businesses.
"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 CEO in a prepared statement. "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. 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 of 2011, the company recorded a loss of $0.05 per diluted share, compared to a fourth quarter 2010 loss of $0.11 per diluted share. On an adjusted basis, fourth quarter 2011 diluted earnings per share were $0.27, an 80 percent increase from the $0.15 per diluted share earned in the prior year's fourth quarter.
For the fourth quarter of 2011, the net loss attributable to Dean Foods totaled $10 million, compared to a net loss of $21 million in the prior year's fourth quarter. Adjusted net income for the fourth quarter was $51 million, an 89 percent increase from $27 million in the fourth quarter of 2010.
Net sales for the fourth quarter totaled $3.3 billion, compared to $3.2 billion of net sales in the fourth quarter of 2010.
Consolidated operating loss in the fourth quarter totaled $19 million, compared to consolidated operating income of $63 million in the fourth quarter of 2010. Adjusted fourth quarter consolidated operating income totaled $135 million, compared to $112 million in the fourth quarter of 2010.
Significant changes in the fluid milk business and diverging market conditions, go-to-market models and customer bases have increasingly led management to view the Fresh Dairy Direct and Morningstar businesses differently. In the fourth quarter of 2011, management began managing, investing in, and developing strategy for these businesses separately. Therefore, the company will now report the business in three segments: Fresh Dairy Direct, WhiteWave-Alpro, and Morningstar. The company will post supplemental financial information regarding the segments on its website today at http://www.deanfoods.com/media/55543/DF_SupplementalFinancialInformation.pdf .
WhiteWave-Alpro is a world-class globally branded platform with a history of strong top and bottom-line growth driven by innovation and market leading brands in growth categories. In 2011, WhiteWave-Alpro net sales and adjusted operating income, which excludes the non-controlling interest in the Hero/WhiteWave joint venture, totaled $2.1 billion and $206 million, respectively.
Fresh Dairy Direct is focused on winning in fluid milk by driving to the lowest cost and providing superior customer service through one of the country's largest refrigerated direct store delivery networks. In 2011, Fresh Dairy Direct net sales and operating income totaled $9.6 billion and $349 million, respectively. Market dynamics remain challenging, and the company continues to reduce costs, particularly in SG&A, to increase the competitiveness and profitability of the business.
Morningstar is a leading provider of value-added extended shelf life fluid and cultured dairy products with an emphasis on foodservice customers and private label retail. In 2011, Morningstar net sales and operating income totaled $1.3 billion and $95 million, respectively. Long-term success is expected to be driven by continued innovation and strong customer relationships.