Net income more than doubles, but DFA reports loss for the year
CEO Rick Smith says, "We are in a position to manage the short-term impact of these non-recurring items on our overall balance sheet.”
Dairy Farmers of America reported today its net income increased more than 100% in 2012 — $83 million for 2012, compared to $40 million for 2011 — but after non-recurring items, DFA reported a net loss of $133 million for the year. Non-recurring items include a $216 million, net of tax, litigation charge in 2012 and a $77 million, net of tax, impairment/loss on exchange of affiliate interest in 2011.
“We have worked for a number of years to improve DFA’s financial strength,” said Rick Smith, president and chief executive officer of the Kansas City, Mo.-based dairy cooperative. “In 2012, we had a profitable year. This, combined with the support of the financial community, means we are in a position to manage the short-term impact of these non-recurring items on our overall balance sheet.”
Reflecting a lower U.S. average all milk price, net sales totaled $12.1 billion in 2012.
In 2012, DFA directed the marketing of 61.4 billion pounds of milk for both members and others through its consolidated businesses and related affiliates. This represents nearly 30% of the total milk production in the United States. Payments to members for milk marketed were $7.3 billion in 2012, which equated to an average of $18.49 per hundredweight. Cash returned to members in 2012 through DFA’s various equity retirement programs was $32 million.
DFA continued to grow its commercial investments in 2012. The Cooperative’s Fluid Milk and Ice Cream Division acquired Guida’s Dairy, based in New Britain, Conn., and Cass-Clay Creamery in Fargo, N.D. In addition, more than 20 new products were launched in the Consumer Brands division under the Borden, Cache Valley, Plugrá and La Vaquita brands.
The Ingredients Division also continued to expand, with a focus on export opportunities with global customers in strategic markets. DFA exported 203 million pounds of product in 2012, for a third consecutive year of record export sales. In 2012, DFA also broke ground on a state-of-the-art dairy ingredients facility in Fallon, Nev., which will serve as a consistent supplier of quality dried dairy ingredients for export to customers around the world.
Earnings of affiliates were $58 million in 2012, and cash distributions from DFA affiliates totaled $36 million. Two affiliates, Stremicks Heritage Foods and Southwest Cheese, commenced or completed major capital projects in 2012 to increase production capacity and improve operational efficiencies.