Dean Foods Announces Fourth Quarter And Full Year 2018 Results

DALLAS, Feb. 27, 2019

Highlights

• Full year free cash flow from operations and capex in-line with expectations
• Non-cash goodwill impairment charge resulted in Q4 net loss from continuing operations of $2.88 per share; Adjusted net loss from continuing operations of $0.50 per share
• Full year net loss from continuing operations of $3.63 per share and adjusted net loss from continuing operations of $0.47 per share
• Reviewing strategic alternatives to accelerate business transformation
• Successfully refinanced credit facilities and suspended dividend to enhance financial flexibility

Chief Executive Officer Ralph Scozzafava said, "Our 2018 financial results reflect volume deleverage from certain customers exiting our business coupled with significant inflation in fuel, freight and resin costs.  While we made significant progress executing our enterprise-wide cost productivity plan, the cost savings were mitigated by incremental transitory costs associated with a recent comprehensive plant consolidation.  Despite these challenges, we continued to generate positive free cash flow from operations in 2018."

"Dean Foods is one of the nation's largest dairy providers and we have an opportunity to leverage our scale and substantial assets to deliver value for our shareholders. With our large domestic footprint and direct-to-store delivery network, along with our national brands and strong private label capability, we have a solid foundation to drive improved financial and operational results.  We are taking important actions to reshape the company to be more agile and more competitive in the marketplace. In tandem, to enhance shareholder value and accelerate our business transformation, we have initiated a review of strategic alternatives. We have also successfully refinanced our credit facilities to provide enhanced financial flexibility. We are working diligently to transform our company and are confident we are taking the right steps to more effectively compete and win in 2019 and beyond," concluded Scozzafava.

Business Updates
Review of Strategic Alternatives
On February 26, 2019, the Company announced that it has commenced a review of strategic alternatives to enhance shareholder value. These alternatives could include, among others, the continued execution of the Company's business plan including an increased focus on certain standalone strategic initiatives, the disposition of certain assets, the formation of a joint venture, a strategic business combination, a transaction that results in private ownership or a sale of the Company, or some combination of these. As Dean Foods continues to focus on ways to accelerate its business transformation and simultaneously evaluate other strategic alternatives, the Company is suspending financial guidance.

Enhancing Financial Flexibility
Dean Foods is implementing important measures to enhance the Company's balance sheet and provide further flexibility.  These steps include:

• Successfully refinancing the Company's debt capital structure to include a multi-year revolving facility, secured by the Company's real estate and other assets, and an amended receivables securitization facility, each of which will allow for covenant flexibility and extended maturities.
• The suspension of the Company's quarterly dividend. 

Fourth Quarter and Full Year 2018 Operating Results