Dean Foods Company (NYSE: DF) Tuesday filed for bankruptcy. The company has initiated a reorganization of the business and is in talks with dairy farmers for the sale of its assets. Due to the latest developments, the release of Dean Foods’ third-quarter results, which was due Tuesday before the opening bell, has been delayed. The management is unlikely to hold the earnings conference call as per the schedule.
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The country’s largest milk producer has been facing a slump in demand due to customers’ changing tastes, with more and more people shifting to new brands and non-dairy milk. Statistics show that consumption of natural milk declined significantly in the US in recent years. Meanwhile, a statement from the company said it would ensure an uninterrupted supply of dairy products during the bankruptcy process.
The finances of Dean Foods have been under severe stress due to mounting debt and unfunded pension obligations. For the planned restructuring, the management has secured $850 million in financing from existing lenders. The fund will be used for continuing the operations, paying wages and settling the dues of suppliers and vendors.
Earlier, the management had conducted a review of the business under the new CEO Eric Beringause and decided not to sell the company.
Commenting on the Chapter-11 filing, Beringause said, “Since joining the company just over three months ago, I’ve taken a hard look at our challenges, as well as our opportunities, and truly believe we are taking the best path forward. In recent months, we have put in place a new senior management team that not only has considerable experience in the dairy and consumer product industries but also in executing major turnarounds. I am confident we have the right people in place to lead us through this process.”
— CBS Corporation (NYSE: CBS) reported its third-quarter 2019 adjusted earnings of $0.95 per share versus $0.91 per share expected.
— The results were hurt by the costs related to the pending merger with Viacom Inc. (NYSE: VIAB), increased investment in content, including a higher number of series produced for multiple platforms, as well as direct-to-consumer streaming services.
— Revenues rose by 1% to $3.3 billion versus $3.36 billion expected. The growth in affiliate and subscription fees, as well as content licensing and distribution, offset the decline in advertising revenue.
— Entertainment revenues rose by 4% on increases in station affiliation fees and revenues from virtual MVPDs, as well as subscriber growth at CBS All Access.
— Cable Networks revenues grew by 6% on growth from the Showtime digital streaming subscription offering and the inclusion of the results of Pop.
— Publishing revenues fell by 9% due to lower print book sales. Local Media revenues declined by 6% on lower political adverting sales.
— On October 28, 2019, the merger and the related proposals were approved by National Amusements and its affiliate, which satisfies the closing conditions. The merger is expected to close by early December 2019.
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