DALLAS — Dean Foods Company (NYSE: DF) (“Dean Foods” or the “Company”) today announced that its Board of Directors has concluded its previously announced review of strategic alternatives.
Since February 2019, the Board, in consultation with its financial and legal advisors, has been engaged in a comprehensive review of strategic alternatives, including a possible sale of the Company. The Board has determined that the execution of its standalone operating plan under the leadership of Eric Beringause, who was appointed as President and CEO on July 29, 2019, will provide the best opportunity to enhance long-term shareholder value.
“The Board conducted a wide-ranging review of alternatives for our business and determined that the continued transformation of Dean Foods under Eric’s leadership provides the best means for creating value for the Company, our shareholders and other stakeholders,” said Jim L. Turner, Non-Executive Chairman of the Board. “Eric is an industry veteran with more than three decades of transformational leadership and operational experience in the food, beverage and consumer products industries, and we are confident that his oversight of and adjustments to our operating plan will build on the current momentum and drive improved performance in the business.”
“Dean Foods is the largest processor and direct-to-store distributor of fresh fluid milk and other dairy case products in the United States, with an operational footprint that includes 60 manufacturing facilities strategically located across the country and a fleet of more than 5,000 trucks that distribute products in nearly all 50 states,” said Mr. Beringause. “With this strong foundation in place, we will move forward with an increased focus on our customers and leverage our many competitive advantages – including our portfolio of strong national brands, extensive private label capabilities, category leading position and our uncompromising commitment to quality, safety and service – to drive profitable volume. We are also continuing to execute on our cost-savings and supply chain productivity programs, designed to enable Dean Foods to be more agile and cost-efficient in the marketplace. As we implement these initiatives, we remain focused on maintaining the highest levels of quality, service and value that our customers have come to expect and that are paramount to our success.”
The Company recently enhanced its liquidity by securing additional commitments to increase its senior secured revolving credit facility to $350 million. Together with its existing $450 million accounts receivable securitization facility, Dean Foods has flexible, low-cost access to capital that will allow it to pursue its operating plan.
The Company intends to provide details on its go-forward strategy when it reports third quarter 2019 earnings in early November.
About Dean Foods
Dean Foods is a leading food and beverage company and the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States. Headquartered in Dallas, Texas, the Dean Foods portfolio includes DairyPure®, the country’s first and largest fresh, national white milk brand, and TruMoo®, the leading national flavored milk brand, along with well-known regional dairy brands such as Alta Dena®, Berkeley Farms®, Country Fresh®, Dean’s®, Friendly’s®, Garelick Farms®, LAND O LAKES®* milk and cultured products, Lehigh Valley Dairy Farms®, Mayfield®, McArthur®, Meadow Gold®, Oak Farms®, PET®**, T.G. Lee®, Tuscan® and more. Dean Foods also has a joint venture with Organic Valley®, distributing fresh organic products to local retailers. In all, Dean Foods has more than 50 national, regional and local dairy brands as well as private labels. Dean Foods also makes and distributes ice cream, cultured products, juices, teas, and bottled water. Approximately 15,000 employees across the country work every day to make Dean Foods the most admired and trusted provider of wholesome, great-tasting dairy products at every occasion. For more information about Dean Foods and its brands, visit www.deanfoods.com.
*The LAND O LAKES brand is owned by Land O’Lakes, Inc. and is used by license.
**PET is a trademark of Eagle Family Foods Group LLC, under license.
Some of the statements made in this press release are “forward-looking” and are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements relating to: (1) our financial forecast, including projected sales (including specific product lines and the Company as a whole), total volume, price realization, profit margins, net income, earnings per share and free cash flow, (2) the Company’s regional and national branding and marketing initiatives, (3) the Company’s innovation, research and development plans and its ability to successfully launch new products or brands, (4) commodity prices and other inputs and the Company’s ability to forecast or predict commodity prices, milk production and milk exports, (5) the Company’s enterprise-wide cost productivity plan and other cost-savings initiatives, including plant closures and route reductions, and its ability to achieve expected savings, (6) planned capital expenditures, (7) the status of the Company’s litigation matters, (8) the Company’s plans related to its capital structure, (9) the Company’s dividend policy, (10) possible repurchases of shares of the Company’s common stock, and (11) potential acquisitions or dispositions. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in this press release, including the risks disclosed by the Company in its filings with the Securities and Exchange Commission. Financial projections are based on a number of assumptions. Actual results could be materially different than projected if those assumptions are erroneous. The cost and supply of commodities and other raw materials are determined by market forces over which the Company has limited or no control. Sales, operating income, net income, debt covenant compliance, financial performance and earnings per share can vary based on a variety of economic, governmental and competitive factors, which are identified in the Company’s filings with the Securities and Exchange Commission, including the Company’s most recent Forms 10-K and 10-Q. The Company’s ability to profit from its branding and marketing initiatives depends on a number of factors including consumer acceptance of its products. The declaration and payment of cash dividends under the Company’s dividend policy remains at the sole discretion of the Board of Directors and will depend upon its financial results, cash requirements, future prospects, restrictions in its credit agreements and debt covenant compliance, applicable law and other factors that may be deemed relevant by the Board. All forward-looking statements in this press release speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in its expectations with regard thereto or any changes in the events, conditions or circumstances on which any such statement is based except as required by law.