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Environmental Assessment
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Below is a list of NCEA publications that contains information specific to Montana and/or Region 8. To view a complete abstract and other detailed information, simply select the title which will allow you to drill-down to the metadata. Your search has returned 2 matching records
CHRISTENSEN, K. L. AND L. KOPYLEV. Journal Article: Localized Pleural Thickening: Smoking and Exposure to Libby Vermiculite. Journal of Exposure Science and Environmental Epidemiology . Nature Publishing Group, London, UK, 22:320-323, (2012).
CHRISTENSEN, K. L., T. F. BATESON, AND L. KOPYLEV. Journal Article: Low Levels of Exposure to Libby Amphibole Asbestos and Localized Pleural Thickening. , JOURNAL OF OCCUPATIONAL AND ENVIRONMENTAL MEDICINE. Lippincott Williams & Wilkins, Philadelphia, PA, 55(11):1350-1355, (2013).

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Dean Foods Company (NYSE:DF)
Q3 2008 Earnings Call
November 4, 2008 9:30 am ET
Barry Sievert – Vice President, Investor Relations
Jack F. Callahan – Chief Financial Officer
Gregg L. Engles – Chairman and Chief Executive Officer
Terry Bivens – J.P. Morgan
Eric Serotta – Merrill Lynch
Farha Aslam – Stephens Inc.
Alexia Howard – Sanford Bernstein
Jonathan Feeney – Wachovia Capital Markets, LLC
[Unidentified Analyst] – UBS
Pi Aquino – Credit Suisse
Eric Katzman – Deutsche Bank Securities
Chris Growe – Stifel Nicolaus
Good morning and welcome to the Dean Foods Company third quarter earnings release conference call. Please note that today's call is being recorded and is also being broadcast live over the Internet on the Dean Foods corporate website. This broadcast is property of Dean Foods. Any redistribution, retransmission or rebroadcast of this call in any form without the express written consent of the company is strictly prohibited. At this time, I would like to turn the call over for opening remarks to the Vice President of Investor Relations, Mr. Barry Sievert.
Barry Sievert
Thank you Dave and good morning everyone. Thanks for joining us for our third quarter 2008 conference call. We issued a press release this morning which is available on our website at DeanFoods.com. The release is also available on the SEC's website at SEC.gov. Also available at the Dean Foods website is a slide presentation which accompanies today's prepared remarks. A reply of today's call will be available on our website beginning this afternoon.
The consolidated earnings, operating income and operating margin information that will be provided today are from continuing operations and have been adjusted to exclude impact of discontinued operations, costs related to the recapitalization of the balance sheet, the expenses related to facility closings and reorganizations, and non-recurring items in order for you to make meaningful evaluation of our operating performance between periods.
The earnings release contains a more detailed discussion of the reasons why these items are excluded from the consolidated results, along with the reconciliation between GAAP and adjusted earnings as well as between net cash flow from continuing operations and free cash flow from continuing operations. We also would like to advise you that all forward-looking statements made on today's call are intended to fall within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These statements will include among others disclosure of earnings targets as well as expectations regarding our branding initiatives, expected cost savings, leverage ratios and various other aspects of our business. These statements involve risks and uncertainties that may cause actual results to differ materially from the statements made on today's call. Information concerning those risks is contained in the company's periodic reports on Forms 10-K and 10-Q and in today's press release.
With those formalities out of the way, I will now turn the call over to Jack Callahan, our Chief Financial Officer who will review our third quarter financial results. Following Mr. Callahan, Gregg Engles our Chairman and CEO will provide additional commentary on the third quarter and provide an update on our forward outlook. Following Mr. Engles remarks we will open the call for your questions. Jack.
Jack F. Callahan
Thank you Barry and good morning everyone. The third quarter demonstrates the continued clear improvement in the business over the course of the last 12 months. Significant highlights from the quarter include consolidated adjusted operating income that was 14% better than the third quarter of 2007, building on the return to profit growth that started in the second quarter of this year. Diluted adjusted earnings per share was $0.28 for the quarter, double the third quarter a year ago driven by both higher operating profit and a significant reduction in interest expense.
Cash flow from operations was again strong in the quarter, which is especially important as we weather these unusually difficult times. Through the first three quarters of this year, we have generated $288 million in free cash flow before acquisitions. This strong cash flow combined with the $400 million in proceeds from our equity offering in March has reduced our total debt to $4.6 billion. Overall, the third quarter marks another important step forward and highlights the progress we have made over the past year.
Now let me summarize the results by business segment. In DSD Dairy fluid milk volumes increased 3% versus the year ago period, significantly outpacing the market. Our strong volume growth, combined with our continuing efforts to control costs, resulted in DSD Dairy operating income of $140 million, 21% above year ago levels despite sharply higher fuel and packaging costs in the quarter.
Net sales for the WhiteWave Morningstar segment increased 9% to $671 million, led by strong sales growth across all of our key brands at WhiteWave. However, operating profit of
$41 million was 4% below year ago as Morningstar was challenged to pass through rapidly increasing commodity costs and the Horizon organic brand at WhiteWave continued to face higher raw organic milk costs.
Now let me review each segment in more detail and then discuss several corporate items. Let me begin with the review of DSD Dairy. As I mentioned, DSD Dairy fluid milk volumes outpaced the overall market, increasing 3.2% over year ago levels, including a significant contribution from our acquisitions this year. This compares favorably to a fluid milk category that we estimated increased volumes slightly more than 1% in the quarter, based on USDA and federal milk marketing order data.
Consistent with the last 18 months, commodities for the DSD Dairy business in the third quarter continued to be volatile with sharp month-to-month swings in dairy commodity prices. July was perhaps the most challenging month of 2008 with Class 1 milk back near $21 per hundred weight and diesel, electricity, natural gas and resin prices at or near all time highs. Our costs for these four energy related inputs alone moved up over $13 million from Q2 to Q3.
Conditions did begin to improve month by month as we moved through the quarter, with the Class 1 mover declining in August and September to average $18.97 for the quarter. Similarly, other commodity costs like diesel, natural gas and resin also began to recede from their highs in August and September. As a result, DSD Dairy's results improved sequentially each month in the quarter, including a particularly strong September.
Keep in mind that with the exception of Class 1 milk prices, we have no forward visibility into these input prices and therefore experience them in our P&L as they occur. We price for them in arrears and our price mechanism to recover non-milk commodity cost increases is less robust than for Class 1 milk.
The net result for Dean Foods financial trends for Q2 and Q3 thus become obvious from the chart on Slide 7. April, May and September were by far the strongest months during Q2 and Q3 with results during June, July and August being closely and negatively correlated, with a tremendous commodity surge during that period. Encouragingly, the trends in October and early November suggest solid fundamentals going into Q4.
Overall, DSD Dairy's operating income increased 21% over last year to $140 million due to a tight focus on costs, higher sales volumes, our return to profitability from cream sales, and a modestly positive year-over-year comparison in the cost of shrink.
For the WhiteWave Morningstar segment, total net sales increased 9% to $671 million in the quarter. WhiteWave posted net sales that were 13% higher than the year ago period at
$379 million. Morningstar also experienced solid top line growth in the quarter with strong yogurt, ice cream mix and creamer sales driving a net sales increase of 4% to $293 million. Let me give you some additional detail on the WhiteWave business.
All of the key brands in the WhiteWave branded portfolio posted strong sales growth in the third quarter. Growth was driven by a mix of both stronger volumes and increased pricing. Silk sales increased in the low teens, driven by continued distribution expansion and integrated marketing that features both print and television advertising, highlighting the heart health benefits of our soy milk products.
Improved price realization drove International Delight net sales growth in the high single digits. Land o' Lakes creamer products also grew net sales in the high single digits as a result of both higher volumes and commodity related price increases. Horizon organic milk net sales grew nearly 20% during the quarter, driven by higher realized pricing, distribution expansion and differentiated innovations like our DHA enhanced and single serve products.
As we mentioned on the second quarter call, most organic milk brands have increased prices in an effort to offset rising milk costs that are significantly higher on a year-over-year basis. Horizon organic retail prices were up double digits, a big step up, but private label organic milk prices have increased about half as much. As a result, Horizon resale price gaps versus private label prices have expanded a bit to almost 20%, which is at the high end of the acceptable range. We continue to monitor our position in this category.
Looking forward, with unfavorable organic dairy economics for farmers driven predominantly by high input costs, we expect industry supply growth to decline significantly over the next six months. Consequently, we expect increasing retail pricing to balance demand with slowing supply growth. However, it remains unclear when our pricing actions and the rest of the competition will catch up with the cost of organic milk. For now, Horizon organic remains unprofitable.
Now let me turn to Morningstar. Morningstar is primarily a longer shelf life, value added dairy products business selling dairy ingredients to food service customers and private label products to retail customers. Morningstar buys cream, either from our own DSD Dairy business or from third parties to make their products. During the third quarter, Morningstar was challenged by increasing butterfat prices, pressuring margins for the business in the period.
CME Butter prices increased from $1.22 per pound in January to $1.70 per pound in September. The third quarter was a particular challenge for Morningstar as prices increased $0.20 per pound within the quarter. Similar to our DSD business, Morningstar's pricing pass through mechanisms with a majority of their customers are typically efficient and accomplished through monthly price changes tied to commodity changes.
However, sustained month over month commodity increases as we experienced in the quarter can create a pricing lag effect that makes it difficult to effectively pass through these rising costs fast enough to mitigate sustained inflation. This year Morningstar is in effect experiencing the same type of dairy commodity inflation that occurred in the DSD Dairy business in 2007, albeit on a much smaller scale.
As a whole, the combined WhiteWave Morningstar segment is reporting operating income of
$41 million for the quarter, 4% below a year ago. Notwithstanding our challenges year-to-date in this segment, Morningstar and WhiteWave are both entering their seasonally strongest period with strong volumes, increased fixed cost leverage and a favorable product mix. We therefore expect WhiteWave Morningstar to return to profit growth in the fourth quarter as Morningstar pricing catches up with commodity increases and we begin overlapping our pricing actions from last year's over supply in the marketplace.
Now let me turn to a couple corporate items. Corporate expense in the third quarter totaled
$41 million, up from year ago results. As we worked to take costs out from the field, some of the savings are being invested in building enhanced capability in supply chain, R&D, innovation and other strategic capabilities at the corporate level. For the company as a whole, consolidated adjusted operating income was $141 million, a 14% increase over the third quarter of 2007.
Interest expense was approximately $75 million, down nearly $15 million from the year ago period as we continued to realize the benefits of our efforts to de-leverage the balance sheet. In spite of the recent volatility in LIBOR, our average interest rates have experienced only minimal variability. Our current $3.25 billion dollar portfolio fixed rate hedges continues to effectively insulate us from the volatility experienced in the market as a result of the credit crisis.
At the end of the third quarter, approximately 88% of our debt was effectively fixed. The weighted average effective interest rate on our fixed rate debt in the fourth quarter was approximately 6.3%. For the year, we now expect total interest rates to be approximately
$310 million. We also benefited from a lower effective tax rate in the quarter, due to an income tax benefit resulting principally from the resolution of an IRS examination and an adjustment to foreign tax credit carry forwards. With this benefit, we now expect our full year effective tax rate to be approximately 38.5%.
Overall, adjusted diluted EPS for the quarter was $0.28, twice the year ago result as higher operating income amid lower interest expense and tax rate combined to drive strong growth in earnings per share, despite the increase in share count related to our equity offering earlier in the year.
Now let me turn to cash flow. Overall cash flow remains strong for the quarter. Capital spending through the first nine months of this year was $171 million. We expect CapEx spending to step up a bit in the fourth quarter and to finish the year with approximately $260 million in net capital expenditures which is capital spending less any asset disposals.
Free cash flow from operations continued to be strong in the quarter and totaled $228 million year-to-date. Over the past 12 months, we have generated over $340 million in free cash flow. As of September 30, total outstanding debt was $4.6 billion, over $730 million lower than at its peak level last year.
Our leverage ratio, which is funded debt to EBITDA as defined by our credit agreement, declined to 5.35 times at quarter end. This is significantly below the 6.25 times maximum allowed under our covenant currently and notably well below the year end covenant step down to 5.75 times. We continue to expect our leverage ratio to be below 5.25 times by year end. We remain comfortable with regard to our financial covenants as we continue to focus on de-leveraging the balance sheet.
We plan to use free cash flow, combined with our borrowings under our $1.5 billion revolving credit facility to meet our scheduled maturities over the coming year. I should note that at quarter end, there were no outstanding borrowings under our revolving credit facility and we had an incremental $75 million of availability under our AR Securitization facility.
Before I move on, I'd also like to give a bit more color on our bank group supporting our capital structure. The bank group that provides our $1.5 billion revolving credit facility is comprised of over 55 different institutions. We have not experienced any adverse issues with the institutions that comprise our lending group and to date the credit price has not had any impact on our liquidity or availability of funds.
In summary, we feel very good about our overall performance in the third quarter and our continued momentum as we finish up the year. The DSD Dairy segments results continue to improve as we move through the quarter with both milk and other commodities moving down from overheated levels and into the fourth quarter with sound fundamentals.
At WhiteWave Morningstar, top line growth continues to be strong with all of the key brands posting solid growth and the Morningstar continuing to have particular success in its yogurt, half and half and ice cream business. With pricing coming better into line with commodity costs, we expect WhiteWave Morningstar to return to profit growth in the fourth quarter.
All told, we expect to finish the year very much on track and continue to expect to deliver on our original guidance for adjusted earnings per share of at least $1.20. Greg will provide a bit more color on our outlook for 2009 in just a moment, including the impact of our exciting new joint venture with Hero that was announced via a separate press release today.
With that, I'd like to thank you for joining us today and turn the call over to Greg. Greg.
Gregg L. Engles
Thank you Jack and thank all of you for joining us on this morning's call. Overall the business continues to make solid progress. In the DSD Dairy segment third quarter results were materially higher than the very difficult third quarter of last year. Fluid milk volumes were strong and well above the rest of the industry. Excess cream sales have improved back to their historical normal level of contribution and shrink costs were a bit lower year on year, due primarily to lower average milk prices.
Looking forward, we should benefit from significant commodity deflation in the DSD Dairy segment. At WhiteWave Morningstar sales continue to grow at a strong pace, and the WhiteWave branded portfolio, excluding Horizon organic, is performing at or near our profitability targets. Morningstar fell a bit behind in the quarter and passing through rising commodity costs which compressed segment profits.
However, with expectations for solid volume growth and improving year-over-year impact from Horizon, combined with a more stable outlook for butter for the balance of the year, we expect stronger results for WhiteWave Morningstar as we move forward beginning with a return to profit growth in the fourth quarter.
At the same time, both ongoing and emerging challenges keep us somewhat cautious about the intermediate term. The U.S. Dairy processing industry has been through a very difficult past two years. Beginning in early 2007, dairy commodity inflation pressured the entire industry as raw milk costs nearly doubled over the course of a few months. In the first half of 2008, energy and other commodity inflation continued to challenge the industry.
To date, inflationary pressures on the industry have begun to subside but are being somewhat replaced with new challenges from recessionary headwinds, a worldwide credit crisis, and shifting consumer behavior. As a result of this prolonged difficult period, we're seeing increased signs of stress in the industry. The first manifestation of that stress is at our pipeline of potential acquisitions remains robust despite having completed four acquisitions so far this year.
Perhaps more importantly, as we continue to increase volumes above the industry rate, we are experiencing an increase in aggressive and we believe ultimately un-economic competitive behavior. The chart on Slide 20 shows the relative difference between our volume performance and the rest of the industry by removing the impact of our volume growth from the USDA data. It covers the period from Q1 2005 until Q3 2008. This volume performance demonstrates our focus on continuing to gain share even in tough times.
It also reflects our strong business base in the value oriented retail channels that are winning share in the marketplace in this tough, economic environment. To offset their volume losses, some competitors are aggressively price discounting in an effort to take incremental business from Dean and other industry players, driving down marketplace profitability. We are actively working to defend our business during this unsettled period in the market and believe some of the recent marketplace activity is not sustainable.
Thus far, our DSD Dairy team has done an excellent job handling these situations that have arisen. This, combined with commodity costs that are continuing to decline in the fourth quarter, gives us confidence about the DSD Dairy business as we finish 2008 and look ahead into next year. Overall, I'm pleased with the progress of the business in the third quarter and feel more confident about our ability to navigate the challenges before us as we close out the year and look forward into 2009.
As I look out beyond the intermediate term, I have never been more optimistic about our business. The work being accomplished this year in building out our strategic growth plan had convinced me that the next three to five years offer tremendous opportunity for value creation at Dean. The first phase of our transformation will be focused on achieving clear cost leadership in the fluid milk industry. Our leadership position in the industry enables us to do this by driving economies of scale and making investments in technology and expertise that our competitors cannot match.
To accomplish this, we will initially focus our efforts on four key areas. The first area we are attacking is product standardization and sourcing. Our nationwide system, built primarily through acquisitions, gives us significant opportunities to aggregate manufacturing volumes where we can invest for efficiency, optimize and standardize our product formulations and packaging, and source with scale and lower costs.
We've made great progress here already, which has helped us to mitigate some of the inflationary pressures we've faced and to fund continued investment in other initiatives across the business. We believe we can continue to improve our product standardization and sourcing capabilities and reduce costs for years to come.
Our second area of focus is network optimization. We've embarked on the first phase of an ambitious project to insure that we have the most efficient facility network possible, with facilities located in the proper location to service our customers, each manufacturing the right mix of products. Gregg Tanner, our supply chain leader and his new team have identified opportunities to drive significant value over the coming years by producing the right products in the right places to deliver the lowest, total landed cost for our customers.
We have already begun to realize incremental benefit from this effort, including four facility closures announced this year. Third, we're building the capability to drive continuous improvement within our operations with the propagation of best practices.
Our operations, built through scores of acquisitions, continue to operate through multiple different structures with different processes, standards, capabilities, and efficiencies largely unsupported from the center. Through our investment in continuous improvement, we'll begin to systematically identify and codify best practices and remove obstacles and bottlenecks that limit productivity and increase costs while maintaining or improving our quality.
Fourth, our early efforts will also focus on lowering our distribution costs. We're in the process of rolling out a GPS enabled tool across our DSD system that allows us to monitor driver and truck efficiency, quickly identifying areas of improvement that can be addressed. At the same time, we're implementing tools to manage minimum drop sizes and drop frequency. The early rollout of these tools has already begun to deliver increased fleet efficiency.
In the near term, our transformational efforts will require an increased level of investment in areas like supply chain, distribution technology, and research and development. We expect a strong return from these investments in the years to come. Through these efforts, and others like them, we expect to further differentiate ourselves from the competition by becoming the clear low cost producer in the market, providing customers with unsurpassed quality and service at the lowest possible cost.
Another important initiative that you will hear more about in 2009 is the joint venture between WhiteWave and the Hero Group that was announced by a press release earlier today. We're very excited about this collaboration with Hero, a company known for innovative products in its international fruit and childhood nutrition businesses. This joint venture adds a unique, value added refrigerated platform to WhiteWave that is fruit based and builds on the dairy and soy platforms already in place.
Four years ago we undertook to build WhiteWave as an engine to drive the growth of Dean's existing brands and as a platform to expand our branded business in chilled, value added categories. I'm really excited to move beyond our original portfolio of brands for the first time and add another great platform for healthy and nutritious products to the WhiteWave portfolio.
The joint venture, which is based in Broomfield, Colorado, will serve as a strategic growth platform for both companies in North America. The partnership brings together Hero's expertise in fruit, innovation and process engineering with WhiteWave's deep understanding of the American consumer and the manufacturing network and the go to market systems of Dean Foods.
We will be launching the initial Fruit Today products which you can see on Slide 23 in the middle of next year. These products expand the WhiteWave product footprint beyond the dairy case to capitalize on an opportunity in the adjacent chilled fruit beverage category. The initial products will be launched under the Fruit Today brand, which has had terrific success for Hero in Europe. We have been investing behind this initiative throughout 2008 and that investment will step up in 2009 when we formally launch these products.
We expect our portion of the investment for the plant start up and introductory marketing to decrease our adjusted earnings per share by approximately $0.06 in 2009. While the investment is significant in 2009, we're excited to have a new differentiated growth platform in refrigerated, healthy and nutritious fruit products and a strong business partner in Hero. This is another exciting step forward in building on WhiteWave's leadership position in the value added, refrigerated beverage space.
In closing, the third quarter highlights how far the business has moved in the past year. We look forward to successfully closing out 2008 with what we expect to be a solid fourth quarter. Looking ahead to next year, we're very excited about the impact we expect our cost saving initiatives to have on the DSD Dairy business. As you consider 2009, however, there are a few key factors I'd like you to keep in mind.
First, as I mentioned, our investment in plant start up and initial marketing to support the Fruit Today platform will be diluted to earnings by approximately $0.06 per share. Second, a portion of our profit growth will be reinvested in selective incremental investments behind areas like supply chain, R&D, and distribution technology. Third, competitive pressures have clearly increased in certain geographies as volumes shifts throughout the industry.
Fourth, given the recent turmoil in the markets, we expect incremental pension expense to be approximately $0.03 to dilutive to 2009 earnings per share. Additionally, keep in mind that we're operating against the backdrop of a very tough economy and consumers that are under considerable financial stress. Despite these challenges, the momentum in the business combined with our ongoing efforts to drive our costs out, give us confidence that we will be able to deliver earnings per share growth in the mid-teens for 2009.
Assuming we finish 2008 at or around $1.20 per share, this would translate into 2009 EPS of approximately $1.40 per share. In delivering this preliminary view, we have given only limited effect to the recent declines in commodity costs. Our planning process is still underway and we will update these expectations on our February earnings call once we finish out the year of 2008 and complete our plan and more fully assess expectations for 2009's commodity costs and competitive situation.
We're also finalizing work on our longer range, strategic growth plan that details much of the transformation work getting underway now. We look forward to a fairly detailed review of them with our analyst event in the first quarter of next year. We should have a date and a location to you shortly.
As I mentioned, our near term focus is all about taking as much cost out of the DSD business as possible to become the clear, low cost producer in the marketplace. As you'll see, the opportunity for value creation at Dean Foods over the coming three to five years is as large as ever. With that, I'd like to thank you for joining us on this morning's call and for your interest in Dean Foods. We'll now open the call up for your questions. Operator.
Question-and-Answer Session
Thank you. (Operator Instructions) Your first question comes from Terry Bivens – J.P. Morgan.
Terry Bivens – J.P. Morgan
A couple of questions, Gregg, on the earnings. You were mentioning about your [40]. Does that include the cautionary items you listed, the plant start up, the pensions, etc.?
Gregg L. Engles
Yes, it includes all of that.
Terry Bivens – J.P. Morgan
What base is that off of? Are you able to give us any better guidance on what the fourth quarter is going to look like given we're in November?
Gregg L. Engles
You know, we've given the guidance of at least $1.20. Let me go back to our guidance for Q3 on the last call. We gave you a fairly wide range for the quarter, a $0.05 range for the quarter and we did so because the impact of these non-milk commodities on our P&L is significant and those commodity values have been quite volatile. So as Jack mentioned in his prepared remarks, just the energy complex and the hydrocarbon complex from Q2 to Q3 increased by over $13 million of input costs on lower volumes, because we have lower volumes in Q3 than we do in Q2.
So given the volatility in our non-milk commodities, we're a little hesitant to make a firm or really tight prediction around what our earnings ought to be in the fourth quarter. What I can say is that so far so good in terms of the direction of all of those commodities and the pace of change. Those commodity inputs should be significantly accretive to our earnings in Q4.
But it's hard to call where they're going to be at this point in time and I don't know about you, but at least here at Dean Foods, we're pretty chastened by the amount of volatility in the commodity environment and the market's inability to predict where it's going to go. So at this point in time you can back into an at least number from our $1.20 per share guidance. And we believe that the trends in both volumes and our input costs going into Q4 are as we said in our prepared remarks favorable.
Terry Bivens – J.P. Morgan
The I guess implicit $15 million investment that you're going to make in this JV. That comes on top of I believe you said some spending this year?
Gregg L. Engles
Yes, we kicked this off in terms of discussions really at the end of 2007. We formalized our arrangements with Hero earlier in the year and began making investments where we virtually completed constructing a factory in Mt. Crawford, Virginia as part of our existing facility there. We've added bricks and mortar and processing lines. And so we've been working hard at this for a while.
Terry Bivens – J.P. Morgan
So this involves totally new bricks and mortar it sounds like.
Gregg L. Engles
Yes, it's an add on to an existing facility so it's not starting from scratch but yes we did expand the facility in order to accommodate this production capability.
Your next question comes from Eric Serotta – Merrill Lynch.
Eric Serotta – Merrill Lynch
What were your organic volume – what was the organic volume growth excluding the acquisitions in the DSD Dairy group?
Gregg L. Engles
The acquisitions provided about 200 basis points of growth.
Eric Serotta – Merrill Lynch
In terms of the competitive activity that you're seeing in the DSD Dairy group would you say that that has intensified from what you talked about on the second quarter call?
Gregg L. Engles
Well, what I'd say about that is we I think foreshadowed this on the second quarter call. It was in the early stages of developing, but I would say that it's our foreshadowing has been accurate. We have gone into a more competitively intense environment and I think that's driven by the one chart that we put up showing our relative market share gain. So the rest of the industry de-levering in terms of volumes and also coming into a commodity environment that perhaps gives one the impression that there's more margin to deal back in competitive price activities than there has been in the past.
Eric Serotta – Merrill Lynch
As we look at the – some of the major changes in the world over the past just month or two, the massive strengthening in the dollar, the weakening in global economic growth and the like, what's your take on what that – what the net impact is going to be on both global demand for dairy protein and then dairy protein coming from the U.S.?
Gregg L. Engles
Well, there's no question that the forces that were driving prices. domestic U.S. prices materially higher throughout 2007 have in many, many dimensions reversed in 2008. So I think income growth in the emerging markets is slowing materially and I expect it will continue to slow. That will certainly curtail demand growth in those marketplaces. The dollar strengthened very meaningfully making a U.S. dairy protein more expensive relative to other global suppliers of dairy protein.
The feed complex has reversed its upward trajectory and begun to move down meaningfully. That's lowering input prices for domestic farmers. And so if you look at, for example, the most recent [Blemling] report which came out within the last week, you see Blemling which is a widely recognized dairy industry forecasting firm, moving prices for the dairy complex in 2009 down sharply.
As I mentioned in my remarks, we really haven't baked that sharp move downward in dairy prices into our forward view, because it's such a recent development. Although prices have been trending down, this is I think a bit of a step function change down in prices. I think it's also too early to have a high degree of confidence that it's going to be accurate. But again as I mentioned in response to Terry's question, I think you'll see commodity trends moving significantly in our direction right now. The question is will those trends hold?
Eric Serotta – Merrill Lynch
Has your reluctance to bake in some of this potential commodity windfall, is that more driven by the volatility that you're seeing in commodity markets or are you questioning your – the stickiness of pricing on the way down, given what could be a significant reversal in the increased competition?
Gregg L. Engles
I think it's both of those things. Again I don't know what the overall sentiment is in the marketplace but I think from our perspective it's very hard to have a lot of confidence around any sort of longer term view of commodities. So we're going to opt for a more conservative view of commodities, but we're pleased with the recent trends. I think there is an issue around how much of the potential margin pool for expansion will be competed away by an industry that's outside of ourselves being largely de-levered in terms of volume.
And I do think that's a risk to the business going forward. I mentioned in my call or in my prepared remarks that I think the – some of the behavior that we've witnessed is not economically sustainable. So in a longer term view, I think the volatility that we've seen and the eroding of profit margin over the last 24 months portends more consolidation in this industry going forward. And I think we'll be the beneficiary of that.
Your next question comes from Farha Aslam – Stephens Inc.
Farha Aslam – Stephens Inc.
Starting with International Delights, you're going through a packaging change. I was wondering how that's going?
Gregg L. Engles
Well, it's so far pretty much on track with our expectations. We think that the new bottle and bottle design, which is a completely re-do of the ID package, is a vast improvement from a functionality perspective, from a cost perspective and from a consumer perspective. So we're very pleased with the new bottle. We are retooling two lines in order to produce the new bottle. We started in California and that line is coming up to speed. We're tweaking the package as we begin to commercialize it.
But so far it's on track with our expectation and we should be fully rolled out sometime in the first and second quarter of 2009. So so far so good.
Farha Aslam – Stephens Inc.
So the cost of it is going to be in this period or in next year?
Gregg L. Engles
We've been amortizing the cost of changing molds and expensing the additional capital for the last five quarters, so we've been writing down the old molds that were on our balance sheet and we've capitalized of course the new molds for the bottle. And we'll begin depreciating them when the product is in the marketplace. We don't expect a lot of packaging obsolescence in those sorts of things as we roll from one to the other.
Farha Aslam – Stephens Inc.
I was talking a big hit to inventory.
Gregg L. Engles
No, it won't be a big hit to inventory. It's a phased rolling.
Farha Aslam – Stephens Inc.
In terms of International Delights it has a significant away from home business. How are those volumes trending and how's the volumes overall in the business?
Gregg L. Engles
Volumes overall in the business are okay. They're sort of low single digits volumes to flat volumes in the category. There's been a lot of pricing in the category because of input inflation and that slowed volume overall in the category. The PC business in the away from home business is similar to the at home business. It's flattish volumes. So no huge change there out of expectations.
Farha Aslam – Stephens Inc.
For the soy oil for International Delight are you significantly hedged beyond '08 on your soy oil costs?
Gregg L. Engles
We are in the process of putting on our positions for 2009.
Jack F. Callahan
We've taken some forward positions that we've not – we've taken a forward position in terms of forward delivery not necessarily an economic hedge.
Farha Aslam – Stephens Inc.
Butterfat pricing continues to rise and generally your Morningstar business is backward looking in terms of butterfat. What gives you confidence that you'll have earnings growth in the fourth quarter in the face of those adverse commodity costs?
Jack F. Callahan
Well, two things. First of all, if you go back and look at the butterfat chart you can see that I think with the exception of February butterfat has marched steadily up all year long. The forecast and our expectation is that trend is going to rollover in November and December with a flattening and then a decline in the cost of fat. So really the confidence comes from the fact that we're finally catching up with a trend that's coming to an end.
So classic Class 2 butterfat pricing dynamic, typically you don't see a march up of 10 consecutive months like we've had this year. But the trend is ending and we've been pricing against the trend and doing our best to anticipate the trend so we believe that you'll see Morningstar move back into a more profitable posture as the trend ends.
Gregg L. Engles
It's not just been butterfat. Most of our business had a fair amount of inflation in some other direct materials and the pace of those commodity increases have clearly moderated over the last month.
Jack F. Callahan
Plus you have fuel surcharges and the cost of distribution like in the DSD business all of those trends are rolling over as well.
Your next question comes from Alexia Howard – Sanford Bernstein.
Alexia Howard – Sanford Bernstein
SG&A spending or operating expenses, it seems as though over the last couple of quarters the year on year increases have stepped up. I think they were up about $55 million year on year this time. Could you maybe just give us a little bit more color on what caused that and what the outlook is for the operating expense in terms of the step up year on year?
Jack F. Callahan
The single biggest increase is we're picking up the increased distribution expense, largely within the DSD Dairy business. So within DSD the big increase has been distribution expense that's been driven by fuel and freight. There has been a modest step up in some marketing expense, primarily within the WhiteWave business. And there is some increase in selective costs in terms of straight G&A. Some of that has been some of the investments we've made at corporate, new capability and supply chain.
And also this year the businesses in general are doing a better job relative to plan. Obviously a different situation than last year so where in the third quarter of 2007 we were taking bonus accruals down, this year actually we – people are on plan in most cases and so we are fully accrued in bonus across a couple divisions right now. So there's a number of puts and takes.
Alexia Howard – Sanford Bernstein
So the biggest move there with distribution costs given what you said about moderating diesel costs, inflation and so on, would you expect that to start to come down in terms of the year on year step ups going forward?
Jack F. Callahan
Certainly I would expect it to moderate relative to the rate of growth we've seen, absolutely.
Alexia Howard – Sanford Bernstein
On free cash flow for the full year, obviously there was a little bit of a slowdown in free cash flow this quarter and we've got a bit of a step up in capital expenditures next quarter. Can you give us any guidance on where you expect full year free cash flow to come out?
Jack F. Callahan
You know, we've been sort of somewhere between in the range of $75 million to $100 million of free cash flow for the last few quarters. The capital spending will step up a bit and we're going to watch that. On the other hand, we're also have kicked off an initiative and now that we have centralized bigger elements of our accounts payable to better manage our working capital situation, so we've got a little bit of benefit there in the third quarter. We anticipate in the coming quarters we're going to gain increased benefit there. So I'd keep you in that range of $75 million plus.
Your next question comes from Jonathan Feeney – Wachovia Capital Markets, LLC.
Jonathan Feeney – Wachovia Capital Markets, LLC
Gregg, could you give me a sense maybe what gross profit per gallon for you has done just in the DSD Dairy business or even operating profit per gallon? Where that is versus five year averages for you in the industry right now? Are you below, above, where do we stand?
Gregg L. Engles
Yes, I think we can give you a view of that. Give me a minute to try and give you an accurate –
Jack F. Callahan
It's been immensely volatile certainly over the last two years once the dairy commodity inflation started off. Going into '07 sort of operating profits per pound – per gallon, excuse me. You know in '06 started to get above $0.20 per gallon and started then to move down notably in 2007. And this year's been sort of going back to the months that we highlighted that were pretty good, April, May, September you know we started getting back to operating profit per gallon of around $0.20 or that range.
And in the more challenging months when inflation particularly non-dairy inflation ran against this, we were back in sort of that high teens area. So it has been a bit more volatile than we've seen, but again I think that's just the reflection of the commodity environment which we've lived in for the last two years.
Jonathan Feeney – Wachovia Capital Markets, LLC
Sure, but I guess – those seem relatively low for the past five years. Is that not correct?
Jack F. Callahan
No, because then we're talking about just the DSD business here. I think 2006 was kind of a high water mark of operating profit per gallon. Remember you're talking about 3 plus billion gallons here.
Jonathan Feeney – Wachovia Capital Markets, LLC
What I'm getting at is that – how much pressure financially are your competitors really under considering I know it's been a volatile commodity environment, I know it seems like an environment where your scale advantage should be an enormous advantage and others should be forced to take capacity out. Yet I don't know that we're seeing operating profits per gallon enough below trend to drive that. Are there people who are going to have to exit the business in the next year or is this just sort of competitive environment going to maybe stay where it is ex any acquisitions that you do?
Gregg L. Engles
There are people clearly exiting. They're exiting by selling to us and some of them have folded. So the capacity on the margin is going out of the business. The more we play for profit, the longer they live. So the question is are we going to lead or follow on pricing at this point in time? I mean, we're trying to find the right balance right of delivering profit growth for our shareholders and also improving our strategic position in the industry.
I think we're getting it about right here. So you can see from the volume charts and trends that we put up we're clearly taking share both in our organic operations and also through acquisition, much of which is driven by the decline in profitability these businesses. And you can milk these assets for a long time if you decide that's what you have to do. And if you've got only one or two plants, taking capacity out means capitulation, so it's not like another big player who's got 30 plants and says I'm going to take 3 or 4 of them out. There's just not that many – there's not that much industry capacity held by folks like that in the industry.
So it's going to be a long term process of grinding our way to a more strategic position here. And in our view is it the best way to accomplish it is to hold our share, be positioned correctly with the growing segments of the industry and then relentlessly drive down our costs so we can hold our profit margins and build our margins per gallon, while continuing to put pressure on the rest of the industry, right? It's all about efficiency over time and that's a long term project we'll talk to you much more about in February.
Jonathan Feeney – Wachovia Capital Markets, LLC
Jack, I don't know if you can disclose this but can you give us a sense what sort of milk prices and oil prices going to $1.40 estimate for 2009? Can we drive into some base assumptions for that?
Jack F. Callahan
Relative for Class 1 milk, going back to the discussion we were having a little bit earlier on the call, we do expect 2009 to perhaps be the most favorable from a Class 1 input than versus 2007 and 2008, which were above $18 per hundredweight. So in our financial planning, we've been in the $16 to $17 range. Obviously there's a couple of forecasts that have come out lately that may even be a bit more favorable to that.
So I in general I do think 2009 is shaping up, if you were to take a look at what it looks like today, perhaps the most favorable environment we've seen in since 2006.
Jonathan Feeney – Wachovia Capital Markets, LLC
Any kind of favorability like that on the diesel side? It certainly looks like oil prices have taken coming into '09 it's a nice tailwind.
Jack F. Callahan
Absolutely. And it feels a heck of a lot better now than when we kicked off our planning process mid-summer. So that is one that obviously we're going to go back and take a good look at. But that whole market has moved, has been so volatile – where we want it obviously in our financial planning exercise to have to get us through to the end of 2009, we're going to be fairly conservative about those space planning assumptions.
Your next question comes from [Unidentified Analyst] – UBS.
Unidentified Analyst – UBS
Is it fair to say that after a rough 2007, you took a stance in 2008 where you said at least $1.20 it was something that you could achieve despite very difficulties at least in the beginning of the year, dairy and energy working against you. And is that kind of how you're thinking about 2009, kind of a conservative or worst case assumption given what you said about how you haven't really factored in commodity prices, the recent drops in it so much?
Gregg L. Engles
I'll just ask you rhetorically, would you do it any differently?
Jack F. Callahan
The only thing I'd add to it, and this is something we'll talk more about when we have our Investor Day in the first quarter next year, I think that – that belays out exactly how we would think about it from a commodity point of view. However, as it relates to the longer term transformation, we are selectively investing too. We have in '08, we will continue in '09 in selective functional capability that we think will have huge paybacks in our ability to accelerate and deliver on our strategies.
So that is one of the considerations that I'd ask you to consistently think about as Gregg mentioned in his '09 outlook.
Gregg L. Engles
And I think it's a very good question and it really goes to the heart of valuation. How do you – what level of confidence do you ascribe to the future of earnings and cash flow in the business? I go back to the approach that we took on our 2008 guidance. We started at at least $1.20 a share and we're still at at least $1.20 a share and man, has the world gone through a lot of ups and downs and dramatic shifts and changes from the time we gave our original guidance until now.
And we think that's the right approach to planning. We think that's the right approach to guidance. I know that there are – there's the never ending temptation when you have any kind of out performance to raise your outlook immediately and sort of bake a higher run rate into the future outlook, but if you look at what's happened just Q2 to Q3 a $13 plus million dollar step up just in our energy inputs which we experience in arrears, and you can't price for in the current quarter, I think in these times with this level of volatility having a set of assumptions that you can really believe in and count on is the most important thing that you can expect from us.
Your next question comes from Pi Aquino – Credit Suisse.
Pi Aquino – Credit Suisse
Just looking back on the quarter, in terms of the 4% operating profit decline at Morningstar WhiteWave can you give us a sense for how much of that was Horizon related versus how much was butterfat and Morningstar related?
Jack F. Callahan
From a segment point of view, Morningstar was actually down – actually drove the decline, overall WhiteWave was largely flat. But within WhiteWave we actually had very good profit performance on the portfolio excluding Horizon organic.
Pi Aquino – Credit Suisse
Did I hear you say earlier that your free cash flow expectation is for about $75 million plus for quarter?
Gregg L. Engles
That's what we've been doing.
Jack F. Callahan
That's what we've been doing largely.
Pi Aquino – Credit Suisse
So looking out kind of to 2009 and 2010, can you give us an update for your debt reduction targets when you expect to get back down below 4 times? Maybe are we looking at the end of 2010 now?
Jack F. Callahan
We haven't talked too much about 2010 yet. But in terms of what we have said, by the end of 2008 we expect to be below 5.25 times. So just kind of carrying that forward, we would then look to be approaching 4.5 times by the end of '09, consistent with the covenant step down to 5 times at the end of '09 and you could expect that progression to continue as you go into 2010. We want to stay about a half a turn at least ahead of the covenant step down.
Pi Aquino – Credit Suisse
For the dairy group, Class 1 prices are down 24% already for October and November. Is there any reason that we shouldn't see similar kind of operating profit growth if not better, frankly, for the fourth quarter of the dairy group?
Gregg L. Engles
Obviously it's a good start for the fourth quarter. Let's see how the quarter finishes out. Right now we're starting the fourth quarter in a much more favorable position than we did the third.
Your next question comes from Eric Katzman – Deutsche Bank Securities.
Eric Katzman – Deutsche Bank Securities
The pension expense that you're talking about for next year is there any impact on cash? Do you have to make a cash contribution?
Jack F. Callahan
This year we made a contribution of close to $23 million. You should expect a contribution in '09 of at least that amount. And depending on targeted funding levels, there could be some upward buys to that but we'll come back and give more detail on that as we finish out the year in the next call.
Eric Katzman – Deutsche Bank Securities
Gregg, at times you've talked about Horizon organic may be losing roughly $0.20 a share in '08 and the hope of bringing that to more of a breakeven level, given the supply demand dynamics into '09. Do you still feel comfortable with that outlook or is it going to probably be another year losses?
Gregg L. Engles
Well we haven't planned for a meaningful rebound in Horizon's performance in 2009. We will have baked into our history a full year of poor performance in Horizon 2008 so WhiteWave should step up meaningfully as a whole as the rest of the portfolio progresses. I continue to be a fundamental believer in the notion that macroeconomics will hold and this industry has got to ultimately reach a level of profitability that gives people a return on their investment.
I think we have a better set of circumstances in '09 for that happening than we have in '08 so I think you're going to see supply growth stall in the industry, which should encourage people to take price. But I guess where we are on Horizon is that we'll be back here when that happens. We'll believe it when we see it. It hasn't happened yet and today the inhibitor on pricing in the category seems to be the private label price and we're seeing the private label price move up only about half as fast as the branded price has moved up.
So I think the branded players are moving to establish a P&L that makes more sense in the organic category, once the private label players move that direction I think you'll see the whole category move up in terms of profitability.
Eric Katzman – Deutsche Bank Securities
Going into on a more longer term basis, but as you kind of make these investments and shut down plants, etc., etc. how are you treating these "restructuring items"? Are you doing like other companies or some other companies and building it into the P&L $1.40? Is that a GAAP number or is it an operating number? And how do we think about the treatment of these items?
Jack F. Callahan
Eric, it's consistent with our past practice. The guidance that we speak to is our adjusted EPS number which would exclude the impact of restructurings as we have this year. As we have done as a company, given the amount of rationalization that needs to occur given the number of acquisitions here, restructuring is sort of an ongoing reality here as we work to move to a more low cost business base over time.
Gregg L. Engles
Just let me be clear, though. All the investments that we're making to drive productivity growth in the business are indeed supply chain capabilities. All of that stuff goes flowing through the P&L.
Eric Katzman – Deutsche Bank Securities
What I'm really concerned about is how much of the industry is "acting irrationally" in the market and just the evidence of how long it takes for businesses in the food industry to die? I mean, you take a look at for example bakery, which is not that dissimilar I suppose to dairy in some respects and Interstate Bakeries has been in Chapter 11 for four-and-a-half years. And retrenching but still kind of refusing to die.
And so I wonder how much of a – what evidence do you have of individual companies, like how long has it taken a family to basically capitulate or for a dairy to die? And how long is that pressure likely to be realized looking forward?
Jack F. Callahan
Eric, I'll let Gregg comment on his 15 years of experience here, but just from my vantage point up until this year I think while I've been with the company we did one small fluid milk acquisition that was very, very small. So far this year we've done three meaningful fluid milk acquisitions and another ice cream acquisition. So the pace of what we've accomplished in just the first part of this year is a real step up.
And I can also tell you that at least the pipeline of possibilities, the calls we're getting has noticeably stepped up over the last six months. So that is one specific piece of evidence that I think there certainly appears to be some change versus what we saw in the 2006 timeframe when obviously things were far more favorable across the industry.
Gregg L. Engles
You know your point about long lived assets is one I make all the time. These are long lived assets and they can survive a long time during periods of stress. But this industry's structured a lot different than the baker industry. So it's much less consolidated. People still have the ability to opt out by selling their business and taking some money as opposed to just capitulating and as Jack mentioned we're seeing a step up in that level of activity.
And I've been doing this a long time and it comes and goes, right? So we're in a period of heightened competitive activity that is driven by a couple of things. It's driven by these great fluctuations in commodity costs, both dairy and non-dairy costs, so people are trying to anticipate the drop in commodities, grab a little market share and then rebuild their margins. But at least in the 15 years that I've been doing it, this industry pretty consistently comes back to try and rebuild margin at some point in time. And that's going to happen here. It has to happen.
Eric Katzman – Deutsche Bank Securities
Well I guess because they barely earn their cost to capital, that's why you're saying that it's just a limited period of time that they can do it.
Gregg L. Engles
Yes. I mean, they're not earning their cost to capital. They're not earning their cost to capital. And getting financing is that much harder today than ever. So these things go in waves. This was pretty predictable, right? You've got spike in milk costs that have depressed volumes industry wide. You've got a shift to value channels where we predominate. So you've got real de-leveraging going on in these other businesses.
As that begins to abate, the pressure to grab volume will abate. As commodities bottom out in this marketplace, people have to try and rebuild volume to make their businesses solvent. So it's just a period that we're in and at the end of the day we'll come out of this period as a more consolidated industry and Dean Foods will come out of it with more share.
Your next question comes from Chris Growe – Stifel Nicolaus.
Chris Growe – Stifel Nicolaus
I guess to follow onto that, Gregg, I have one point that I would just make though that you also have had a consistently higher market share of late and now you probably stand at your highest point that I can tell on your market share. So is this a new or maybe longer lasting period because at times we've had these historically it has been a pretty short lived environment?
Gregg L. Engles
I'm not prepared to call the bottom of this because I can't call any of the inputs. Like what the commodity environment's really going to look like and what's going to happen to volumes with the consumer going into a more difficult period. But Jack mentioned we're seeing a number of opportunities out there on the acquisition side and when you do that, you get the chance to take a look at people's books. And the industry by and large is struggling in terms of profitability.
And I don't think that's a long term sustainable position as I said in my prepared remarks. So my instinct tells me that as this commodity environment comes down and stabilizes, we'll see people start to try and gain profitability.
Chris Growe – Stifel Nicolaus
Is the pricing or the competitive activity occurring in any certain geographic region or is it pretty widespread across the U.S.?
Gregg L. Engles
It's pretty widespread.
Chris Growe – Stifel Nicolaus
I just was curious if you – you mentioned that private label prices for organic milk are going higher. Do they go higher in this fourth quarter? I mean, perhaps for this upcoming quarter is it going to be a better environment for Horizon organic?
Gregg L. Engles
Things move kind of slowly on the pricing of milk side so I think we're kind of lagging the market in terms of what we're pricing to farmers. I think you will see them go up here in this fourth quarter at least based on what we're kind of hearing out in the country. But I think there's a decent chance that this is the peak. So you're seeing conventional commodity inputs rollover, you should begin to see organic inputs rollover as demand for all of these organic products slows.
So the feed that goes to cows also goes to feed beef also goes to feed organic poultry. As all that slows down, which it is slowing down, you're going to see the pressure on the feed complex abate. That's going to lower input costs to our farmers. So this feels kind of like the top.
Chris Growe – Stifel Nicolaus
I thought you were at a point and maybe this is where you are but for 2009, for example, where the cost savings coming through from some of the programs you're working on right now are being reinvested, but net net that's not a big hit to your profitability. Is that the case for '09 or are you stepping up your investments? You're actually going to have this drag on profits, relative to your cost savings coming through?
Gregg L. Engles
Well, we're stepping up our investment. There's no question about that. We have to to get at these savings. The savings are building but they're getting baked into our operating profit run rate as we go. So you see big step ups in profitability in the dairy group operating profit, even in a tough commodity environment and a tough competitive environment. That's the result of costs we're taking out across the system, primarily the result of the early activities that we've undertaken.
So the investment clearly pays out. But it's not just a linear correlation –
Jack F. Callahan
And Chris we've learned a few things and gone deeper into this. Going back even in late '06, early '07 we started building some real capability and strategic sourcing to go get lower costs there. And we've gotten some real mileage out of that. But now we realize to really, really get the benefit of that we need to take complexity out of our product line. You know, fewer packages, fewer formulas and to have fewer formulas and better packages, that's why we have to go build up our R&D function to kind of go and leave that simplification of what we offer as a company.
And as we do that, then we can go to the next level of strategic sourcing benefits. So you know we've gotten some benefits but we've also learned that selectively we need to add to new capability to take it on to the next level.
Gregg L. Engles
Chris's call was the last call. We'd like to thank you all for joining us on the call this morning. We're pleased with our progress in the third quarter. We look forward to continued growth to finish out the year. And we thank you again for your interest in Dean Foods and for joining us on today's call. Look forward to speaking to you again in February and to our Investor Day in the first quarter. Thank you all very much.
And that does conclude today's presentation. Thank you for your participation and have a great day.
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Life of the Turner Dog
(Page 7 of 26: Viewing Diary Entry 61 to 70)
[First 10 Diary Entries] Page Links: 2 3 4 5 6 7 8 9 10 11 12 [Last 10 Diary Entries]
New VetMarch 22nd 2011 8:13 pm
[ Leave A Comment | 3 people already have ]
Mom took me to a new vet. She asked around and found out who the top vet group was and got me in today. Well, let's just say, we're not really sure what's up - yet. My lump is around 4-5 cm's long and hurts. I can pee and poop just fine and I've got an appetite, temperature is normal. So we'll see. The vet violated me several ways and I'm not too happy about that. I put my head down moms coat front - I was soooo embarrassed when the thermometer came out! :( The vet is really nice - both me and mom really liked her. She decided to try the least aggressive route first. I'm on Rimadyl and Baytril for 14 days. If there is no improvement in 2 days mom will be bringing me back and they may do surgery... :(
It's too early mom!March 20th 2011 4:07 am
[ Leave A Comment | 3 people already have ]
Mom came home last night around 11pm like she always does. Only this time we went right to bed! Hmmmmm. She said it's quarter change. Uh oh, that means I mom is changing shifts.
Is this a tease??March 13th 2011 1:25 pm
[ Leave A Comment | 2 people already have ]
There was more grass exposed today than there has been in since November. Is this a tease?? Mom and Dad took me and Darcy in the woods for a hike. Mom showed dad the dead deer - or what was left of it. I wanted to gnaw on the bones but mom wasn't having any of it!! Hmmpf!! We walked all over, some of it wasn't to easy to walk on - there was snow in some spots, but I took my time. When mom left for work me, Darcy and Dad were napping...
Aw mom!!March 11th 2011 3:12 pm
[ Leave A Comment | 2 people already have ]
So mom took me and Darcy to the food store. Darcy wasn't in her crate and shook for a few minutes. She did really well, considering!! :) After the food store mom drove around the lake!! No fair!! I wanted to walk, but mom said everything was soupy (sounds yummy!). We drove back to the house and I was sad - for a minute... Then the meter reader came and I got to bark my alert to mom. Mom told me I was a good boy and I pranced around with a toy in my mouth!! :) Now it's snowing - again! Will this madness ever end??
Today...March 10th 2011 1:30 pm
[ Leave A Comment | 1 person already has ]
I barfed... Really - I didn't want my morning cookie and went outside with my head down. Mom came out and I barfed. Turns out I swallowed my bullystick and it didn't sit right....
Finally!!March 7th 2011 2:12 pm
[ Leave A Comment | 3 people already have ]
The sun was out ALL day today!! It was WONDERFUL!! Mom let me and Darcy run out in the woods while she was breaking up ice around the house. It was great!! We came back about an hour later - smiling as we do!! I got into the house and told mom I wasn't done playing and kept doing playbows in front of her!! She just giggled and chased me!!
Will it ever end....?February 25th 2011 2:52 pm
[ Leave A Comment | 3 people already have ]
Yes, it's doing it again. Snowing!! I took 3 steps outside, lifted my leg and went right back in to bed!! Mom had to shovel out our pathways again. The snow along the paths is over 3 feet deep!! Luckily, once in a while mom will let me out of the yard and I can sniff around someplace new and leave a p-mail....
Hi everyone!!February 15th 2011 12:01 pm
[ Leave A Comment | 2 people already have ]
Seems to be crazier and crazier around here!! Mom got a temporary job in another department. By day 4 she was done and removed from the job. Definately not a bad thing! We're happy to have her home with us and happy to see us!
Beat the Storm Tonight!January 31st 2011 5:27 pm
[ Leave A Comment | 3 people already have ]
Mom took Darcy to the kennel today. We're gonna pick her up from her vacation on Friday. She was actually happy to get there!! There was an older GSP being dropped of at the same time, hopefully they will have plenty of playtime together! :)
Weather here ....January 24th 2011 1:47 pm
[ Leave A Comment | 2 people already have ]
Is unbelievable! Mom came home from work last night it was -14 degrees!! Brrrrrrr.... We heard sounds outside like pop, crash, pop, crash... Went outside to see what it was, nothing, realized that it was trees popping and breaking. Woke up at 7 am looked outside - it was -22 degrees on the thermometer! I have never felt this cold before!! When you walk out the door your nose freezes. If you walk to the truck the corner of your eyes start to stick... Amazing....
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Turner - Gone Too Soon
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A millionaire, rich Aunt is on her deathbed. She must choose from the closest people in her life to give all her money to. Who will she choose???
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Victoria Gruta
Catherine Divincenzo
Vianka Lemus
The All-Nighter Bloopers
The All-Nighter
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