Dean Foods (DF, Financial) is a leading food and beverage company in the U.S. The company is one of the nation's largest processors and direct-to-store distributors of fluid milk marketed under more than 50 local and regional dairy brands and private labels. It distributes ice cream, cultured products, juices, teas, bottled water and other products. It employs around 17,000 people working in approximately 70 plants across the U.S.
The company recently reported strong first quarter results that mark a strong start to 2016. The company witnessed solid execution across all functions leading to continued improvement in the financial and operational performance since the fourth quarter.
First quarter results
Net income per diluted share during the quarter was 43 cents, which was a loss of 78 cents during the prior year quarter.
Adjusted net income per diluted share was 45 cents, up from 24 cents during the prior year quarter.
GAAP gross profit during the quarter was $504 million, while adjusted gross profit was $505 million.
GAAP operating income during the quarter was $79 million. GAAP net income was $39 million, up from a loss of $74 million during the prior year quarter.
Adjusted net income during the quarter was $42 million. Net cash provided by continuing operations for the three months ended March 31 totalled at $46 million.
Dividends
In the first quarter, the company's board of directors approved an increase in its quarterly dividend to 9 cents, which marked a 29% increase.
The company declared a quarterly dividend of 9 cents per share. The dividend is payable on June 2 to stockholders of record at the close of business on May 23.
Expectations for second quarter
The second quarter adjusted diluted earnings are expected to be 32 cents to 40 cents per diluted share.
Focus
- Enhance future capabilities
- Drive operational excellence
- Strengthen private label business
- Build and buy strong brands
- Increasing productivity
- Improved operational efficiencies by eliminating waste in the system
- Acting on opportunities to leverage scale and purchasing power
On a concluding note
The company expects 2016 to be a year where operating and financial momentum is expected to continue. Dean Foods continues to provide one-third of the national fluid milk volume and its top brands hold the No. 1 and No. 2 spots in their categories in 80% of the markets where it competes. The company is taking the right initiatives. The company believes in the strong health and wellness credentials in dairy products, and especially in fresh milk, resonate with consumers. I feel Dean Foods is well-positioned to take advantage of changing trends in the market. I would recommend this company as a buy.
Disclosue: I do not hold any position in the company.
