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Dean gains big on Morningstar sale

Dean gains big on Morningstar sale
- Dean credits focus on "key drivers." - Company starting to close two additional milk plants. - Company distributes additional intere

DEAN Foods Co. has reported results for its first quarter, which include net profits that were disproportionately greater than earnings in the first quarter last year.

However, Dean said this was due primarily to the gain on the sale of its Morningstar Foods division in January to Saputo Inc. for $1.45 billion (Feedstuffs, Jan. 14), as well as the company's majority ownership in The WhiteWave Foods Co.

At the time, Morningstar was a leading manufacturer of dairy and non-dairy cultured and extended-shelf life products, including cream and creamers, cottage cheese, sour cream, ice cream mixes, whipping cream, aerosol whipped toppings and iced coffees, that were sold under a broad line of private labels to foodservice and retail customers across the U.S.

WhiteWave is a leading processor of plant-based beverages and foods, organic and premium milk — including the Horizon and Silk brands — and coffee creamers and coffee drinks. Dean spun off a minority stake in the business in an initial public offering last year (Feedstuffs, Oct. 29, 2012).

Dean said its first-quarter results also reflected a continued focus on cost savings, pricing and volume — "the key drivers of our business."

Dean said its fluid milk volume declined 4.1% in the quarter versus an industry-wide average decline of 3.6%, based on U.S. Department of Agriculture data and company estimates.

The company said more than half of its loss of volume was due to the overlap of Leap Year in 2012.

The company said the first-quarter average Class I Mover, a measure of raw milk costs, was $18.33/cwt., 6% more than in the first quarter last year.

Dean also announced that, after closing three milk plants last year, it is now starting to close milk plants in Buena Park, Cal., and Shreveport, La.

However, chief executive officer Gregg Tanner said the company expects to offset the financial impact of the lost volume through "accelerated cost-reduction activities."

Dean's financial results are shown in the Table.


WhiteWave distribution

Subsequent to issuing its financial results, Dean distributed most of its remaining interest in WhiteWave to the company's stockholders, handing out 47.686 million WhiteWave Class A shares and 67.914 million Class B shares, according to an announcement.

Stockholders received 0.25544448 share of Class A stock and 0.36380189 share of Class B stock for each share of Dean they held, the announcement said.

The distribution was completed May 23.

Dean said it continues to retain a 19.9% interest in WhiteWave, which it plans to dispose of within 18 months in one or more dispositions.

WhiteWave is based in Broomfield, Colo.

Dean, headquartered in Dallas, Texas, is the largest processor and distributor of fluid milk in the U.S. and markets under more than 50 local and regional brands and private labels. The company had 2012 sales that totaled $11.462 billion.


Dean Foods earnings and sales*


-First quarter-




Sales (billion $)



Earnings (million $)



Earnings per share (cents)



*For the quarters ended March 31, 2013, and March 31, 2012.


Volume:85 Issue:22

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