Dean Foods Company (NYSE: DF) today announced results for its first quarter ending August 26, 2001.
Sales increased 9.2% to a record $1,143.9 million in the first quarter of fiscal 2002. Diluted earnings per share before merger-related costs were $0.53 per share compared to $0.74 per share in the first quarter of fiscal 2001.
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First quarter operating earnings before merger-related costs were $47.2 million compared to $58.8 million last year. The company incurred $9.8 million pre-tax for costs related to the previously announced merger transaction with Suiza Foods Corporation ($6.1 million after-tax, or $0.17 per share).
The Dairy Group’s first quarter sales increased 10.3% to $873.2 million, as a result of higher ice cream sales from the previously announced national alliance with Baskin-Robbins and higher fluid milk sales, primarily from the impact of the fiscal 2001 Land O’Lakes acquisition. Operating earnings were $34.3 million compared to $41.9 million last year due to significantly higher raw milk and butterfat costs. Raw milk costs increased 26% and butterfat costs increased 65% compared to the first 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 first quarter sales were $175.2 million, approximately flat compared to last year’s first quarter sales. Operating earnings were $17.6 million compared to $23.0 million last year. The decline was primarily caused by increased commodity costs for cheese and casein, which are used in aseptic and powdered non-dairy creamer product lines.
The National Refrigerated Product Group’s first quarter sales increased almost 20%, to $95.5 million, reflecting increases in all major products. Operating earnings increased approximately 44%, to $5.9 million, reflecting lower new product launch costs and continued improvement in the production process for intermediate and extended shelf life products.
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By GlobalDataMr. Dean concluded, “We continued to make good progress in a number of areas in the first quarter. We remain committed to continued reductions in our costs and improved profitability throughout fiscal 2002.”
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.
Some of the statements in this press release are “forward-looking” and are made pursuant to the safe harbor provision of the Securities Litigation Reform Act of 1995. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this press release. These risks include, but are not limited to, the ability to integrate acquisitions, adverse weather conditions resulting in poor harvest conditions, raw milk, butterfat, resin, and fuel costs, interest rate fluctuations, the level of promotional spending, competitive pricing pressures, the effectiveness of marketing and cost management programs, and shifts in market demand.
DEAN FOODS COMPANY
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(In Millions, Except for Per Share Amounts)
First Quarter Ended
August 26, August 27,
2001 2000*
Net sales $1,143.9 $1,047.8
Costs of products sold 901.1 801.6
Merger-related costs 9.8 –
Delivery, selling and administrative expenses 195.6 187.4
Operating earnings 37.4 58.8
Interest expense, net of interest income 16.6 16.1
Income before income taxes 20.8 42.7
Provision for income taxes 7.7 16.3
Net income $13.1 $26.4
Earnings per share:
Basic $.37 $.74
Diluted $.36 $.74
Weighted average common shares:
Basic 35.7 35.5
Diluted 36.2 35.8
* Restated for the adoption of EITF 00-14 “Accounting for Certain Sales
Incentives” and EITF 00-25 “Vendor Income Statement Characterization of
Consideration Paid to a Reseller of the Vendor’s Products.” Upon
adoption of the EITFs, during the first quarter of fiscal 2002, trade
items, such as coupons, slotting fees, co-op advertising and other
promotions, classified as Delivery, selling and administrative expenses
were reclassified as a reduction of Net sales. This reclassification
did not affect this Company’s financial position or results of
operations.
DEAN FOODS COMPANY
SUPPLEMENTAL EARNINGS PER SHARE DATA
(Unaudited)
First Quarter Ended
August 26, August 27,
2001 2000
Basic earnings (loss) per share:
Net income before merger-related
costs $.54 $.74
Merger-related costs (.17) –
Net income $.37 $.74
Diluted earnings (loss) per share:
Net income before merger-related
costs $.53 $.74
Merger-related costs (.17) –
Net income $.36 $.74
DEAN FOODS COMPANY
BUSINESS SEGMENT INFORMATION
(Unaudited)
(In Millions)
For the First Quarter Ended August 26, 2001 and August 27, 2000
National
Specialty Refrigerated
Dairy Foods Products Corporate Consolidated
August 26, 2001
Net sales $873.2 $175.2 $95.5 $- $1,143.9
Operating earnings $34.3 $17.6 $5.9 $(20.4)(a) $37.4(a)
August 27, 2000
Net sales (b) $791.6 $176.4 $79.8 $- $1,047.8
Operating earnings $41.9 $23.0 $4.1 $(10.2) $58.8
(a) Includes $9.8 million of merger-related costs. Before the merger-
related costs, Corporate expenses were $10.6 million and consolidated
operating earnings were $47.2 million.
(b) Restated for the adoption of EITF 00-14 “Accounting for Certain
Sales Incentives” and EITF 00-25 “Vendor Income Statement
Characterization of Consideration Paid to a Reseller of the Vendor’s
Products.”
DEAN FOODS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(In Millions)
August 26, May 27,
2001 2001
ASSETS
Current Assets:
Cash and temporary cash investments $27.5 $22.6
Accounts and notes receivable,
net of allowance for doubtful
accounts 348.2 363.1
Inventories 258.7 220.1
Other current assets 78.6 89.2
Total current assets 713.0 695.0
Property, Plant and Equipment, net 912.9 919.3
Other Assets 704.1 703.1
Total Assets $2,330.0 $2,317.4
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current installments of long-term
obligations $18.0 $4.4
Accounts payable and accrued
expenses 472.4 486.4
Dividends payable 8.2 8.2
Federal and state income taxes 32.1 24.6
Total current liabilities 530.7 523.6
Long-Term Obligations 935.4 940.2
Deferred Liabilities 149.2 149.0
Shareholders’ Equity 714.7 704.6
Total Liabilities and
Shareholders’ Equity $2,330.0 $2,317.4
