Dean Foods Company (DF) swung to a net loss for the quarter ended Mar. 31, 2017. The company has made a net loss of $9.76 million, or $ 0.11 a share in the quarter, against a net profit of $39.20 million, or $0.43 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $11.99 million, or $0.13 a share compared with $41.84 million or $0.45 a share, a year ago. Revenue during the quarter grew 6.22 percent to $1,995.69 million from $1,878.83 million in the previous year period. Gross margin for the quarter contracted 367 basis points over the previous year period to 23.16 percent. Total expenses were 99.85 percent of quarterly revenues, up from 95.82 percent for the same period last year. That has resulted in a contraction of 403 basis points in operating margin to 0.15 percent.
Operating income for the quarter was $2.95 million, compared with $78.54 million in the previous year period.
However, the adjusted operating income for the quarter stood at $34.77 million compared to $83.15 million in the prior year period. At the same time, adjusted operating margin contracted 268 basis points in the quarter to 1.74 percent from 4.43 percent in the last year period.
chief executive officer Ralph Scozzafava said, “Our first quarter results across volume and earnings per share were in line with our expectations. Our commercial and cost productivity initiatives are ramping up, including the recent national launch of our new DairyPure sour cream. We are driving incremental distribution across our core portfolio of fluid products as well as expanding our footprint of our super-regional ice cream brands. In addition, we are enhancing our selling capabilities through a partnership with Acosta, a leading sales agency with extensive capability and expertise in products going through customer warehouses."
For financial year 2017, the company forecasts diluted earnings per share to be in the range of $1.35 to $1.55 on adjusted basis.
Operating cash flow drops significantly
Dean Foods Company has generated cash of $27.56 million from operating activities during the quarter, down 40.39 percent or $ 18.67 million, when compared with the last year period. The company has spent $7.37 million cash to meet investing activities during the quarter as against cash outgo of $13.86 million in the last year period. It has incurred net capital expenditure of $7.37 million on net basis during the quarter, down 46.81 percent or $6.49 million from year ago period.
The company has spent $6.58 million cash to carry out financing activities during the quarter as against cash outgo of $8.58 million in the last year period.
Cash and cash equivalents stood at $31.58 million as on Mar. 31, 2017, down 48 percent or $29.15 million from $60.73 million on Mar. 31, 2016.
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