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Monday, February 26, 2018

=Dean Foods (DF) reported earnings on Mon 26 Feb 2018 (b/o)

Dean Foods misses by $0.01, misses on revs; guides FY18 EPS below consensus 
  • Reports Q4 (Dec) earnings of $0.25 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus of $0.26; revenues fell 4.1% year/year to $1.93 bln vs the $1.96 bln Capital IQ Consensus.
  • Co issues downside guidance for FY18, sees EPS of $0.55-$0.80, excluding non-recurring items, vs. $0.85 Capital IQ Consensus Estimate.
  • Business Updates
    • The Company completed the assessment phase and is in the advanced stages of designing, and in some cases implementing, the planned savings initiatives. The productivity plan focuses on three key areas:
      • Rescaling the supply chain involves consolidating and right-sizing its manufacturing capacity to better match volume as well as adjust for expected changes in 2018. The Company is taking a holistic approach to its supply chain network, evaluating opportunities across the country in both operations and logistics. The Company plans to consolidate its plant network while maintaining quality, value and service and expects to implement the changes in phases beginning in 2018 and with targeted completion in 2019.      
      • Optimizing spend management utilizing coordinated procurement efforts across the entire enterprise in all key categories. The Company plans to better leverage its size and scale for efficiencies across all facets of spend in addition to expanding its cost control efforts across all product and indirect spend categories.      
      • The Company is taking further steps to integrate its operating model to drive organizational effectiveness while also reducing its general and administrative costs across the enterprise. The Company plans to implement a flatter, leaner and more agile organizational structure to enhance decision making and help build functional competencies that will increase effectiveness with customers and suppliers. The Company completed the first phase of this general and administrative focused reduction in the fourth quarter of 2017 and first quarter of 2018 with further actions planned over the coming months.    
  • Chief Executive Officer Ralph Scozzafava said, "In 2017, we navigated a rapidly-changing industry landscape and a dynamic retail environment. As we saw the marketplace challenges on volume and mix building, we directed our focus on improving our execution in securing branded and private label volume and immediately began taking steps to lower our overall cost base. Some of these actions are already gaining momentum and contributed to our fourth quarter 2017 financial results. These actions become a critical path in our go-forward commercial agenda as well as an aggressive enterprise-wide cost productivity program in 2018 and beyond."

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