FRANKLIN PARK, Ill./PRNewswire/ — Dean Foods Company (NYSE: DF – news) today announced record results for its second quarter.
Sales increased 4.3% to a record $1,144.6 million in the second quarter of fiscal 2002. Diluted earnings per share before merger-related costs were a record $0.80 per share compared to $0.66 per share in the second quarter of fiscal 2001. Driven by a significant improvement in National Refrigerated Products Group results, second quarter operating earnings before merger- related costs were $62.7 million compared to $56.7 million last year. The company incurred $3.7 million pre-tax for costs related to the previously announced merger transaction with Suiza Foods Corporation ($2.3 million after- tax, or $0.06 per share).
“We are extremely pleased with our second quarter results given the difficult economic environment,” said Mr. Howard Dean, Chairman and Chief Executive Officer. “Our focus on improving profitability and our technology investments over the past two years are paying off.”
The Dairy Group’s second quarter sales increased 6.1% to $864 million, as a result of higher ice cream sales from the previously announced national alliance with Baskin-Robbins and higher fluid milk sales resulting from the pass-through of higher raw milk costs. Operating earnings were $41.3 million compared to $43.6 million last year. Raw milk costs increased 33% and butterfat costs increased 35% compared to the second quarter of fiscal 2001. While price increases were taken on milk and ice cream products, all of the cost increases could not be recovered through price increases.
The Specialty Food Group’s second quarter sales were $179.2 million, compared to $185.3 million last year. Operating earnings were $21.6 million compared to $20.4 million last year, as lower foodservice sales were offset by price increases as well as ongoing cost control initiatives.
The National Refrigerated Product Group’s second quarter sales increased approximately 4% to $101.4 million, reflecting increases in all major product lines. Operating earnings increased $10.7 million, to $11 million, reflecting lower new product launch costs, continued efficiency improvements in the plants processing extended shelf life products, and higher sales.
Corporate expenses were $11.2 million in the second quarter of fiscal 2002 compared to $7.6 million in the second quarter of fiscal 2001. The increase was due to additional expense for incentive compensation plans corresponding to improved earnings in fiscal 2002.
Mr. Howard Dean concluded, “We continue to expect the merger with Suiza Foods will close prior to the end of calendar 2001. The combined company will have the national scope and scale to better serve our customers and, as a result, create long-term value for the shareholders of the new Dean Foods Company.”
Due to the pending merger with Suiza Foods, the Company will not hold a quarterly earnings conference call.
About Dean Foods:
Dean Foods is one of the nation’s leading dairy processors and distributors producing a full line of branded and private label products, including fluid milk, ice cream and extended shelf life products, which are sold under the Dean’s and other strong regional brand names. Dean Foods is the industry leader in other food products including pickles, powdered non- dairy coffee creamers, aseptically packaged foodservice products, and refrigerated dips and salad dressings.