Dean Foods Co. Chief Executive Officer Gregg L. Engles built the nation’s largest dairy processor. Now he may have to start dismantling his creation.
Dean’s stock was off 59 percent this year through yesterday, making it the worst performer in the Standard & Poor’s 500 Index. The Dallas-based company’s earnings are getting squeezed by big-box stores and supermarket chains looking for price concessions. At the same time, Dean is having to contend with big jumps in prices of commodities such as raw milk, butterfat, soybeans and sugar, Bloomberg Businessweek reports in its Dec. 13 edition.
Combined, these trends are crimping the company’s cash flow and may make it difficult for Dean, which is carrying about $4 billion in debt, to stick to the terms of its loan agreements, says Vicki Bryan, an analyst with Gimme Credit LLC in New York. Dean’s ratio of long-term debt to equity stands at 260 percent, the highest of any food or beverage company in the S&P 500.
To read the rest of this story please go to: Bloomberg
