Friday, 29 February 2008

Dean Foods Company Announces Sale of Shares

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Friday, 29 February 2008

Proceeds to be Used to Reduce Debt; Fund Potential Strategic Acquisitions

Full Year Guidance for Adjusted Earnings per Share of at Least $1.20

DALLAS, Feb. 29 /PRNewswire-FirstCall/ — Dean Foods Company (NYSE: DF)
today announced that the Company has agreed to sell approximately 18.7 million
shares of common stock in a registered public offering underwritten by Lehman
Brothers, Inc. The offering increases fully diluted shares outstanding by
approximately 13%. The sale is expected to close on March 5, 2008, subject to
customary closing conditions.

The Company intends to use the proceeds from the sale to reduce debt
outstanding under its senior credit facility and for general corporate
purposes, including potential future investments or strategic acquisitions.

“As we’ve noted previously, the operating environment in 2007 was
extremely difficult and operating results were below the expectations we had
when we recapitalized the balance sheet last March. As a result, we entered
2008 approximately a year behind our original debt reduction expectations,”
said Gregg Engles, Chairman and CEO. “Raising capital at this time allows us
to reduce our total outstanding debt to levels more consistent with our
initial expectations and significantly reduce our interest expense in the
years to come.”

“Furthermore, several attractive tuck-in acquisition candidates in our
core milk business have become available. As an example, we have recently
completed the acquisition of Wells’ fluid dairy operations in Le Mars, Iowa
and Rich Foods Dairy in Richmond, Virginia. Both of these operations were
acquired at attractive prices and will provide long-term benefits to the
Company. The increased balance sheet flexibility provided by this transaction
will allow us to selectively consider additional acquisitions as they become


On February 13, 2008, in conjunction with the Company’s fourth quarter
earnings release, the Company provided information about its outlook.
Specifically the Company stated, among other things:

    --  Its results would continue to be driven primarily by swings in the
        dairy commodity markets, including the organic milk market.

      --  Dairy commodity markets have remained meaningfully above year ago
          levels, creating a significant drag on the Company's near term
          earnings.  In the first quarter, the Class I mover increased in
          January, declined in February and is expected to decline in March.
      --  As the Company looked beyond the first quarter, it found it
          difficult to have much confidence in current dairy commodity
          forecasts given unprecedented levels of dairy commodity market
      --  Given the volatility in the markets, it appears likely that the
          April Class I mover may be set above expected March levels.  Beyond
          that, there is a wide disparity of expectations for the balance of
          the year.
      --  Given the volatile trading in dairy commodities, prices may continue
          to materially fluctuate.
      --  Additionally, organic milk supplies have begun to tighten, creating
          upward pressure on the price of raw organic milk.  Therefore, it is
          difficult for the Company to predict WhiteWave Foods' results for
          the balance of the year.

    --  On February 13, 2008, the Company stated that it expected earnings per
        share for the first quarter to be between $0.15 and $0.20 per share.
        For the full year 2008, the Company stated that it expected earnings
        per share to be at least $1.20 per share.


The Company expects application of the proceeds of this offering will
reduce interest expense for the balance of the year by approximately $20
million in 2008. This reduction in interest expense should significantly
offset the dilution from the increase in shares outstanding, resulting in only
a modest impact on 2008 earnings per share. As a result, the Company is
reiterating its previously issued guidance of between $0.15 and $0.20 per
share for the first quarter and at least $1.20 per share for the full year


Some of the statements herein are “forward-looking” and are made pursuant
to the safe harbor provision of the Securities Litigation Reform Act of 1995.
These “forward-looking” statements include statements relating to, among other
things, projected sales, operating income, net income and earnings per share.
These statements involve risks and uncertainties that may cause results to
differ materially from the statements set forth herein. The Company’s ability
to meet targeted financial and operating results, including targeted sales,
operating income, net income and earnings per share depends on a variety of
economic, competitive and governmental factors, including raw material
availability and costs, the demand for the company’s products, and the
Company’s ability to access capital under its credit facilities or otherwise,
many of which are beyond the Company’s control and which are described in the
Company’s filings with the Securities and Exchange Commission. The Company’s
ability to profit from its branding initiatives depends on a number of factors
including consumer acceptance of the Company’s products. The forward-looking
statements herein speak only as of the date hereof. The Company expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to such statements to reflect any change in its expectations with
regard thereto or any changes in the events, conditions or circumstances on
which any such statement is based.

Dean Foods Company has filed a registration statement (including a base
prospectus) with the Securities and Exchange Commission (the “SEC”) for the
offering to which this communication relates. Before you invest, you should
read the prospectus in that registration statement and other documents the
issuer has filed with the SEC for more complete information about the issuer
and this offering. You may get these documents for free by visiting EDGAR on
the SEC website at Alternatively, copies of the
prospectus supplement and the accompanying prospectus may be obtained from
Lehman Brothers Inc., c/o Broadridge, 1155 Long Island Avenue, Edgewood, NY
11717; fax: (631) 254-7140; e-mail:


Dean Foods Company is one of the leading food and beverage companies in
the United States. Its Dairy Group division is the largest processor and
distributor of milk and other dairy products in the country, with products
sold under more than 50 familiar local and regional brands and a wide array of
private labels. The Company’s WhiteWave Foods subsidiary markets and sells a
variety of well-known dairy and dairy-related products, such as Silk(R)
soymilk, Horizon Organic(R) milk and other dairy products, International
Delight(R) coffee creamers, and Land O’Lakes(R) creamers and other fluid dairy
products. WhiteWave Foods’ Rachel’s Organic(R) brand is the largest organic
milk brand and second largest organic yogurt brand in the United Kingdom.

Contact: Investors:
Barry Sievert

Investor Relations

(214) 303-3437


Marguerite Copel

Corporate Communications

(214) 721-1273

SOURCE Dean Foods Company

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