DALLAS — Dean Foods Co. will remain a standalone business. The company has been considering strategic alternatives, including a merger, joint venture or sale, since February.
Eric Beringause, who was named chief executive officer in July, will continue to lead the company’s turnaround efforts.
“The board conducted a wide-ranging review of alternatives for our business and determined that the continued transformation of Dean Foods under Eric’s leadership provides the best means for creating value for the company, our shareholders and other stakeholders,” said Jim L. Turner, non-executive chairman of the board. “Eric is an industry veteran with more than three decades of transformational leadership and operational experience in the food, beverage and consumer products industries, and we are confident that his oversight of and adjustments to our operating plan will build on the current momentum and drive improved performance in the business.”
Dean Foods has continued to sustain losses as it struggles to overcome negative trends in the dairy category. The company reported a second-quarter loss of $64.5 million in August, compared with a loss of $40.1 million in the same period last year.
The Dean Foods share price has declined by nearly 70% in the past year. In the days following the announcement of the standalone plan, shares of the milk processor rallied sharply.
The company already has cut costs, closed several facilities, ended more than 100 dairy contracts, replaced its c.e.o. and increased its borrowing base in attempts to drive profitable volume. Efforts to diversify non-dairy investments, including flax-based beverage maker Good Karma and juice maker Uncle Matt’s Organic, have so far been unable to offset declines in the milk category.
Mr. Beringause said he plans to continue leveraging the company’s advantages, including its national brands and private label capabilities, to drive growth. He will continue to implement the cost savings and supply chain productivity programs currently in place. In addition, Dean Foods has increased its borrowing base availability to $350 million.
Further details on the new go-forward strategy will be revealed in November, according to the company.