Sales for the last three months of FY 2015 fell from $2.4bn in 2014 to $2.02bn in 2015, however, profit over the period rose to $508m, compared to $441m in 2014.
Similarly, sales for 2015 dropped from $9.5bn in 2014, to $8.1bn in 2015, but overall, annual profit was $1.97bn, up from $1.67bn the year prior.
A bright spot for the company was the flavored milk category, with retail category volumes increasing by 10% in Q4 and 7% in 2015, compared to the previous year.
CEO pleased with results
The adjusted EBITDA rose from $196m in 2014 to $404m in 2015.
Chief executive officer Gregg Tanner said, "The fourth quarter marked the successful completion of a very strong year. I'm very pleased with the sequential improvement we saw in our operational and financial performance from Q3 to Q4.
“I believe the 2015 financial results demonstrate that we're driving the right initiatives and agenda. As I look to the future, I believe our financial position and the momentum of our strong operating performance will allow us to continue to grow our business and create shareholder value."
Milk volumes decline
Total volume across all products was 658m gallons for the fourth quarter of 2015, a 3.6% decline compared to total volume of 683m gallons in the fourth quarter of 2014. Full year 2015 volumes totaled 2.6bn gallons, a 3.1% decline versus full year 2014.
Tanner said that in the fourth quarter, the average was $16.34 per hundredweight, a decline of $725 or 31% year-on-year. He added that raw milk cost for the first quarter of 2016 would be $14.49 per hundredweight.
On a per-gallon basis, he said, this equates to a sequential decline of $0.16 and year-over-year decline of $0.20.
Outlook for 2016
For the first quarter 2016, as compared to the prior year period, Dean Foods said it expects total volumes to decline in the low single digits.
"Turning to the forward outlook for the first quarter, with the continuation of commercial and brand initiatives, diligent cost focus, and an overall favorable commodity environment, we expect our operating and financial momentum to continue with first quarter adjusted diluted earnings of between $0.32 and $0.42 per diluted share,” Tanner added.
“For the full year we expect our capital expenditures to be approximately $160m, consistent with our capital spend in 2015.”