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Dean Foods Reported Mixed Quarterly Results for Fiscal 4Q15

Gabriel Kane

News Flash: Top Events in the Consumer Sector Last Week

(Continued from Prior Part)

Price movement 

Dean Foods (DF) has a market cap of $1.8 billion. It fell by 5.8%. It closed at $19.29 per share at the end of the last week of February 2016. The price movement on a weekly, monthly, and YTD (year-to-date) basis is -5.8%, -1.7%, and 12.5%, respectively.

Currently, Dean Foods is trading 2.2% below its 20-day moving average, 3.8% above its 50-day moving average, and 8.4% above its 200-day moving average.

The iShares Russell 2000 Value ETF (IWN) invests 0.21% of its holdings in Dean Foods. IWN tracks an index of US small-cap value stocks. The index selects value stocks from a universe of stocks ranked from 1,001 to 3,000 by market cap. IWN’s YTD price movement was -7.3% as of February 25, 2016.

The iShares Russell 2000 ETF (IWM) invests 0.10% of its holdings in Dean Foods. IWM tracks a market-cap-weighted index of US small-cap stocks. The index selects stocks ranked from 1,001 to 3,000 by market cap.

The market caps of Dean Foods’ competitors are as follows:

  • J.M. Smucker (SJM) – $15.3 billion
  • TreeHouse Foods (THS) – $4.8 billion

Performance in 4Q15 and 2015

Dean Foods reported fiscal 4Q15 net sales of $2,022.5 million—a fall of 15.6% compared to net sales of $2395.0 million in fiscal 4Q14. It reported amortization of intangibles and facility closing and reorganization costs of $6.3 million and $10.5 million, respectively, in fiscal 4Q15—compared to $0.71 million and -$0.05 million in fiscal 4Q14.

Its net income and EPS (earnings per share) rose to $18.5 million and $0.20, respectively, in fiscal 4Q15—compared to $5.3 million and $0.06, respectively, in fiscal 4Q14. It reported adjusted earnings before interest, tax, depreciation, and amortization of $106.9 million in fiscal 4Q15—a rise of 60.0% compared to fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, Dean Foods reported net sales of $8,121.7 million—a fall of 14.5% YoY (year-over-year). It reported facility closing and reorganization costs and impairment of long-lived assets of $19.8 million and $109.9 million, respectively, in fiscal 2015—compared to $4.5 million and $20.8 million, respectively, in fiscal 2014. Its net income and EPS rose to -$8.5 million and -$0.09, respectively, in fiscal 2015—compared to -$20.3 million and -$0.22, respectively, in fiscal 2014.

It reported cash and cash equivalents of $60.7 million in fiscal 2015—compared to $16.4 million in fiscal 2014. Its current ratio fell to 1.4x compared to 1.5x in fiscal 2014. Its long-term debt, including the current portion, rose to 1.54x in fiscal 2015—compared to 1.46x, respectively, in fiscal 2014.

The price-to-sales and PBV (price-to-book value) ratios of Dean Foods are 0.22x and 3.2x, respectively, as of February 26, 2016.

Projections

The company made the following projections:

  • Adjusted diluted EPS of $0.32–$0.42 for fiscal 1Q16
  • Capital expenditures of ~$160 million for fiscal 2016

Ratings

BB&T Capital Markets downgraded Dean Foods’ rating to a “hold” from a “buy.”

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