Dean Foods Announces Second Quarter 2017 Results

DALLAS, Aug. 8, 2017

Highlights

• Q2 net income per diluted share was $0.19 and adjusted net income per diluted share was $0.21
• Productivity initiatives across commercial and supply chain expected to continue to ramp up through balance of year
• Retail dynamics and focus on private label impacting volume performance
• Company announces an expansion of its cost productivity program targeting an incremental annual cost reduction of $40 to $50 million
• Lowering full-year 2017 adjusted earnings expectation to $0.80 to $0.95 per diluted share⁽¹⁾

Chief Executive Officer Ralph Scozzafava said, "In the second quarter, we faced a challenging and rapidly evolving retail environment. We experienced volume pressure from both a macro and competitive perspective that impacted our total volume performance within the quarter, and we anticipate this will carry forward for the remainder of 2017. Our financial results came in well below our expectations. We are not satisfied with our performance and are determined to improve our execution. We are accelerating and expanding an aggressive set of commercial and cost productivity initiatives to address volume and mix. We expect these actions will better position our company for the future."

Second Quarter 2017 Operating Results

Chief Financial Officer Chris Bellairs said, "For the second quarter, we continue to generate positive net cash from operating activities. We have used our internally generated cash flow to fund working capital and fixed asset investment and to improve the funded status of our pension plans. Our year-to-date cash flow has also been utilized to pay our dividends, invest in Good Karma Foods and acquire Uncle Matt's Organic. We continue to maintain a sound balance sheet with all cash netted leverage at 2.25 times as of the second quarter of 2017."