Dean Foods Company (DF) has reported a 28.21 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $14.53 million, or $0.16 a share in the quarter, compared with $20.23 million, or $0.22 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $33.43 million, or $0.37 a share compared with $28.42 million or $0.30 a share, a year ago.
Revenue during the quarter dropped 3.40 percent to $1,964.60 million from $2,033.69 million in the previous year period. Gross margin for the quarter expanded 69 basis points over the previous year period to 24.88 percent. Total expenses were 97.86 percent of quarterly revenues, up from 97.52 percent for the same period last year. That has resulted in a contraction of 34 basis points in operating margin to 2.14 percent.
Operating income for the quarter was $42.01 million, compared with $50.47 million in the previous year period.
However, the adjusted operating income for the quarter stood at $69.31 million compared to $61.65 million in the prior year period. At the same time, adjusted operating margin improved 50 basis points in the quarter to 3.53 percent from 3.03 percent in the last year period.
Chief Executive Officer Gregg Tanner said, "I am extremely pleased with our third quarter results, which reflect the strongest volume performance we've seen in years, a disciplined go-to-market strategy and continued focus on reducing costs. Our entire organization is focused on executing our strategic plan, and you see that in our results."
Operating cash flow drops significantly
Dean Foods Company has generated cash of $184.62 million from operating activities during the nine month period, down 42.67 percent or $137.41 million, when compared with the last year period.
The company has spent $224.88 million cash to meet investing activities during the nine month period as against cash outgo of $64.81 million in the last year period.
Cash flow from financing activities was $9.04 million for the nine month period as against cash outgo of $208.38 million in the last year period.
Cash and cash equivalents stood at $28.16 million as on Sep. 30, 2016, down 55.84 percent or $35.61 million from $63.77 million on Sep. 30, 2015.
Debt moves up
Dean Foods Company has witnessed an increase in total debt over the last one year. It stood at $896.08 million as on Sep. 30, 2016, up 6.58 percent or $55.32 million from $840.77 million on Sep. 30, 2015. Total debt was 34.90 percent of total assets as on Sep. 30, 2016, compared with 33.67 percent on Sep. 30, 2015. Debt to equity ratio was at 1.52 as on Sep. 30, 2016, down from 1.57 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 2.54 for the quarter from 2.97 for the same period last year.
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