Dreyer’s Net Income Falls 33% on Costs of Pending Merger

First-quarter profit fell 33% at Dreyer’s Grand Ice Cream Inc., the nation’s largest ice cream maker, as the company racked up pending merger-related costs and was unable to collect from two bankrupt customers.

The Oakland-based firm said Wednesday that net income dropped to $871,000, or 2 cents a share, from $1.3 million, or 4 cents, in the same period last year.

The company is owed $908,000 in uncollected receivables from Fleming Cos., the largest U.S. grocery distributor, and Eagle Food Centers Inc. Both companies sought Chapter 11 Bankruptcy Court protection this month.

Dreyer’s also accumulated $4.55 million in costs related to its proposed acquisition by Swiss food giant Nestle. The $2.8-billion merger has been challenged by the Federal Trade Commission on concerns that the combined company would control too much of the gourmet ice cream market.

Chief Financial Officer Tim Kahn said Dreyer’s “remains firmly committed to this transaction and we are confident we will be able to consummate it.”

The company’s shareholders voted to approve the deal March 20 and Kahn said it should close by mid-June as announced.

Gross profit at Dreyer’s rose 20% to $33.9 million, fueled by lower dairy costs and its new ice cream packaging, which is smaller than the previous half-gallon tub but sells for the same price. Sales for the quarter ended March 29 rose 3% to $298 million from $290.4 million.

Shares of Dreyer’s rose $1.09 to $62.30 in Nasdaq trading.