Thursday, 14 February 2002

Dean Foods Delivers Fourth Quarter Diluted Earnings Per Share Before Non-Recurring Items of $1.09

Back to all newsroom
Thursday, 14 February 2002

DALLAS, Feb 14, 2002 /PRNewswire-FirstCall via COMTEX/ — Dean Foods Company
(NYSE: DF) today announced net sales totaled $1.7 billion for the quarter ended
December 31, 2001, an increase of 12.4% over the fourth quarter of 2000. Sales
growth was driven primarily by increased raw milk costs and the additional
contribution of the legacy Dean Foods businesses acquired on December 21, 2001.
Before non-recurring items, net income in the fourth quarter increased 11.5% to
$36.8 million, compared with $33.0 million in the 2000 fourth quarter. After
non-recurring items, fourth quarter net income totaled $23.7 million, compared
with $28.4 million in the fourth quarter of 2000.

“2001 was an important year for our company,” said Gregg Engles, Chief Executive
Officer of Dean Foods Company. “Our operating units performed very well in spite
of an exceptionally difficult operating environment. Throughout the year, we
successfully demonstrated our commitment to delivering consistent results
through superior customer service and proactive management of costs and
pricing.”

“Moreover, as a result of our merger with Dean Foods, we are now one of the
nation’s leading food and beverage companies. We have created a company with a
manufacturing and distribution network that is extremely valuable in this
industry, and we are very optimistic about our future,” Engles continued.

Diluted earnings per share before non-recurring items for the quarter totaled
$1.09, an increase of 0.9% over last year. After non-recurring items, reported
diluted earnings per share was $0.75 in the fourth quarter.

Diluted cash earnings per share before non-recurring items declined 0.8% to
$1.26. The calculation of cash earnings per share excludes amortization of
goodwill and certain intangibles as if the recently issued Financial Accounting
Standard No. 142, “Goodwill and Other Intangible Assets” had been effective for
the periods reported.

Fourth quarter operating income before non-recurring items totaled $100.9
million, flat in comparison to the 2000 fourth quarter. Consolidated operating
margins before non-recurring items for the quarter were 6.0%, a decline of 75
basis points from the comparable prior year period. The decline in operating
margin was due primarily to higher raw milk prices in the quarter. During the
fourth quarter, raw milk costs averaged 22% higher than the prior year
comparable quarter.


    Non-recurring items in the fourth quarter include the following:
— $8.7 million in plant closing costs related to closing the Hygeia
facility in Corpus Christi, Tex. and the Country Fresh facility in Port
Huron, Mich.
— $17.3 million in other operating income comprised of:
— a $47.5 million gain on the divestiture of 11 plants as part of the
Dean Foods merger;
— a $28.5 million expense resulting from a previously disclosed
payment to Dairy Farmers of America as consideration for certain
changes to the combined company’s milk supply arrangements; and
— a charge of $1.7 million resulting from the impairment in the value
of the Northern Falls water plant in Grand Rapids, Mich.
— A $21.1 million charge resulting from the write-off of the company’s
existing investment in Consolidated Container, its minority-owned
packaging business. Based on losses generated by Consolidated
Container over the past year, the company concluded that the value of
the investment was impaired, requiring it to be written off.
— $4.4 million in other non-recurring costs consisting of:
— A $3.6 million charge resulting from the write-down of the company’s
investment in Dairy.com, an online commodities exchange and
Internet-based service provider focused on serving the dairy
industry, and
— A charge of $0.8 million to write-off an investment in Smilk, a
company focused on creating single-serve plastic packaging for the
dairy industry.
— A $4.3 million extraordinary loss, net of a tax benefit of
$3.0 million, for the write-off of deferred financing costs related to
the early retirement of the company’s former credit facilities.

FULL YEAR RESULTS

The company recorded net sales growth of 8.2% to $6.2 billion for the year ended
December 31, 2001, compared with $5.8 billion in 2000. Net income in 2001
totaled $109.8 million, compared with $118.7 million in 2000. Net income in 2001
before non-recurring items totaled $125.6 million, an increase of 4.6% over
2000.

Diluted earnings per share before non-recurring items increased 3.1% to $3.98 in
2001, compared with $3.86 in 2000. After non-recurring items, diluted earnings
per share totaled $3.56. Diluted cash earnings per share before non-recurring
items totaled $4.76 in 2001, an increase of 2.8% over the prior year.


    HIGHLIGHTS OF THE YEAR
In 2001, the company accomplished the following:

— On December 21, completed the merger with Dean Foods Company, creating
one of the nation’s leading food and beverage companies with over
$10 billion in annual revenue. The combined company has 127 plants in
39 states, servicing more than 150,000 customers coast-to-coast via a
refrigerated direct-store-delivery system of more than 6,000 routes.
In connection with the merger, the company repurchased its 33.8% stake
in Suiza Dairy Group that was owned by Dairy Farmers of America, Inc.
for approximately $145 million in cash, the ownership of 11 plants and
a $40 million contingent note. As a result of this transaction, all of
Dean Foods’ dairy operations are now 100% owned by the company’s
shareholders.

— Also in December, the company was awarded the International Financing
Review’s U.S. Leveraged Loan of the Year award for the successful
completion of its $2.7 billion bank credit facility.

— During the fourth quarter, Morningstar Foods launched its new
Hershey(R)’s Cookies-n-Creme and Creamy Chocolate milkshakes in plastic
bottles. The product introduction is part of the company’s
collaborative effort with Hershey Foods Corp. whereby Morningstar
manufactures, markets, sells and distributes Hershey brand name dairy
products nationally.

— In October, Dean Foods was awarded the 2001 Consumer Goods
Collaborative CG Company of the Year Award by Sterling Commerce,
recognizing manufacturers that have set world-class standards for
supply chain management through trust, cooperation and collaboration.
Dean Foods received an award for its customized e-business
relationships tailored to match its customers’ individual business
requirements.

— In May, the company announced an agreement with Procter & Gamble to
launch and market Folgers(R) Jakada(TM), a chilled coffee drink made
from Folgers coffee and lowfat milk. Under this new licensing
agreement Morningstar Foods will produce, promote and distribute
Folgers Jakada, and P&G will receive a licensing fee generated from all
Folgers Jakada sales while retaining ownership of the Folgers
trademark. The company began the product rollout of Folgers Jakada in
January 2002.

— In January 2001, Dean Foods entered into a strategic alliance with
Baskin-Robbins to manufacture and distribute ice cream to
Baskin-Robbins’ franchised retail outlets throughout most of the
nation. The alliance expanded the company’s business and more
effectively utilizes existing production capacity while extending its
ice cream distribution reach from coast to coast.


CONFERENCE CALL WEBCAST

A conference call to discuss the company’s financial results and outlook will be
held at 10:00 a.m. eastern today. The call may be heard live by visiting the
“Webcasts” section of the company web site at www.deanfoods.com .

Dean Foods Company is one of the nation’s leading food and beverage companies.
The company produces a full line of company-branded and private label dairy
products such as milk and milk-based beverages, ice cream, coffee creamers, half
and half, whipping cream, whipped toppings, sour cream, cottage cheese, yogurt,
dips, dressings and soy milk. The company is also a leading supplier of pickles
and other specialty food products, juice, juice drinks and water. The company
operates 127 plants in 39 U.S. states and 3 countries, and employs more than
30,000 people.

The statements made in this press release relating to the company’s expected
performance in 2002 and beyond are “forward-looking” and are made pursuant to
the safe harbor provision of the Securities Litigation Reform Act of 1995. These
statements involve risks and uncertainties which may cause results to differ
materially from the statements set forth in this press release. The company’s
ability to meet targeted financial and operating results, including targeted
sales, operating margins and earnings per share, depends on a variety of
economic, competitive and governmental factors, many of which are beyond the
company’s control and which are described in the company’s filings with the
Securities and Exchange Commission. The forward- looking statements in this
press release speak only as of the date of this release. The company expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to such statements to reflect any change in its expectations with
regard thereto or any changes in the events, conditions or circumstances on
which any such statement is based.


     Contacts:  Cory M. Olson
Vice President and Treasurer
(214) 303-3645

P.I. Aquino
Assistant Treasurer
(214) 303-3437

(Tables to follow)

DEAN FOODS COMPANY
(Dollars in thousands, except per share data)

Three months ended Twelve months ended
December 31, December 31,
2001 2000 2001 2000

Net sales $1,672,957 $1,487,861 $6,230,116 $5,756,303
Cost of sales 1,272,890 1,116,321 4,750,100 4,330,067

Gross profit 400,067 371,540 1,480,016 1,426,236

Operating costs and
expenses 299,174 270,600 1,093,331 1,047,285
Plant closing costs 8,707 9,550 3,388
Other operating (income)
expense (17,306) 7,500 (17,306) 7,500

Operating income 109,492 93,440 394,441 368,063

Interest expense &
financing charges on
preferred securities 33,687 37,859 135,368 146,181
Equity in (earnings) loss
from unconsolidated
affiliates 21,055 (881) 23,620 (11,453)
Other nonrecurring costs 4,439 4,439
Other (income) expense (1,349) 1,039 251 (630)

Income before income
taxes and minority
interest 51,660 55,423 230,763 233,965

Income taxes 18,287 22,403 83,739 90,303
Minority interest 5,322 4,585 31,431 29,911

Net income before
extraordinary items and
cumulative effect of
accounting change 28,051 28,435 115,593 113,751

Extraordinary gain (loss) (4,317) — (4,317) 4,968
Cumulative effect of
accounting change — — (1,446) —

Net income $23,734 $28,435 $109,830 $118,719

Net income before
non-recurring items $36,774 $32,970 $125,631 $120,057

Basic earnings per share:
Income before
extraordinary items $0.94 $1.05 $4.10 $4.03
Extraordinary gain (loss) (0.14) — (0.15) 0.18
Cumulative effect of
accounting change — — (0.05) —
Net income $0.80 $1.05 $3.90 $4.21

Basic average common
shares (000’s) 29,804 27,199 28,151 28,195

Diluted earnings per share:
Income before
extraordinary items $0.86 $0.95 $3.71 $3.68
Extraordinary gain (loss) (0.11) — (0.11) 0.14
Cumulative effect of
accounting change — — (0.04) —
Net income $0.75 $0.95 $3.56 $3.82

Diluted average common
shares (000’s) 38,771 35,556 36,892 36,671

Diluted EPS before
non-recurring items $1.09 $1.08 $3.98 $3.86

Diluted cash EPS before
non-recurring items $1.26 $1.27 $4.76 $4.63

DEAN FOODS COMPANY
(Dollars in thousands)

Earnings Summary and Reconciliation

Three Months Twelve Months
Ended Ended
December 31, December 31,
2001 2000 2001 2000
Diluted earnings per share before
extraordinary items $0.86 $0.95 $3.71 $3.68

Nonrecurring (gains) losses:
Plant closing costs 0.12 0.13 0.05

Other operating (income) expense:
Gain on divestiture of plants (0.76) (0.80)
Payment to DFA for milk supply
agreements 0.45 0.47
Impairment on Northern Falls Water 0.02 0.02
West Lynn litigation settlement 0.14 0.14

Equity in (earnings) loss from
unconsolidated affiliates:
Impairment of investment 0.33 0.35
Restructuring charges (0.01) 0.03 (0.01)

Other nonrecurring costs:
Write down investment in Dairy.com 0.06 0.06
Write off investment in Smilk 0.01 0.01

Diluted earnings per share before
nonrecurring items $1.09 $1.08 $3.98 $3.86

Segment Information

Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
Revenue
Dairy Group $1,334,692 $1,196,627 $5,051,672 $4,660,329
Morningstar Foods 223,115 200,128 766,922 704,246
Corporate / Other 115,150 91,106 411,522 391,728
Consolidated $1,672,957 $1,487,861 $6,230,116 $5,756,303

Operating Income before
Non-Recurring Items
Dairy Group $68,351 $71,640 $287,649 $287,654
Morningstar Foods 36,204 31,740 104,294 100,944
Corporate / Other (3,662) (2,440) (5,259) (9,647)
Consolidated $100,893 $100,940 $386,684 $378,951

Summary Financial Information

Three Months Twelve Months
Ended Ended
December 31, December 31,
2001 2000 2001 2000

Depreciation $27,351 $16,050 $98,929 $87,915
Amortization of intangibles $13,435 $13,288 $53,349 $52,441
Amortization shown in interest
expense $633 $1,188 $2,609 $4,627

MAKE YOUR OPINION COUNT – Click Here
http://tbutton.prnewswire.com/prn/11690X45672866


SOURCE Dean Foods Company

CONTACT: Cory M. Olson, Vice President and Treasurer, +1-214-303-3645,
or P.I. Aquino, Assistant Treasurer, +1-214-303-3437, both of Dean Foods
Company

URL: http://www.deanfoods.com
http://www.prnewswire.com


Copyright (C) 2002 PR Newswire. All rights reserved.

All the latest from Dean Foods

familyofproducts

Latest news

Find out how we’re fueling lives from the farm to the table.

6 May, 2020
Dean Foods Completes Sale of its Miami, Florida Facility to Mana Saves McArthur, LLC
DALLAS--(BUSINESS WIRE)--Dean Foods today announced that it has completed the previously announced s...
learn-more
1 May, 2020
Dean Foods Completes Sale of Assets to Dairy Farmers of America
DALLAS--( BUSINESS WIRE )--Dean Foods Company ("Dean Foods" or the "Company") today announced that i...
learn-more
30 April, 2020
Dean Foods Completes Sales of its Uncle Matt’s Business and the Majority of the Meadow Gold Hawaii...
DALLAS--(BUSINESS WIRE)--Dean Foods ("Dean Foods" or the "Company") today announced that it has comp...
learn-more
22 April, 2020
Dean Foods Announces Asset Purchase Agreement with MGD Acquisition, LLC for the Sale of the Majority...
MGD Acquisition to Operate Meadow Gold Hawaii as an Ongoing Business to Continue Serving the Hawaiia...
learn-more
13 April, 2020
Dean Foods Announces Termination of Agreement in Principle with Industrial Realty Group, LLC for the...
Reached Agreement in Principle with an Interested Party for the Sale of Dean Foods’ Hilo Facility ...
learn-more
4 April, 2020
Dean Foods Receives Court Approval for the Sale of Substantially All of Its Assets
DALLAS--(BUSINESS WIRE)--Dean Foods Company ("Dean Foods" or the "Company") today announced that the...
learn-more
1 April, 2020
Dean Foods Reaches Agreement in Principle With Industrial Realty Group, LLC for the Sale of Dean Foo...
DALLAS--(BUSINESS WIRE)--Dean Foods Company ("Dean Foods" or the "Company") today announced that it ...
learn-more
31 March, 2020
Dean Foods Announces Dairy Farmers of America as Winning Bidder for Substantially All of Its Assets
Prairie Farms Dairy, Mana Saves McArthur, LLC, Producers Dairy Foods and Harmoni, Inc. to Purchase A...
learn-more
17 February, 2020
Dean Foods Enters Into Asset Purchase Agreement with Dairy Farmers of America
Dairy Farmers of America to Serve as Proposed “Stalking Horse Bidder” in a Court-Supervised Sale...
learn-more
20 December, 2019
Dean Foods Receives Final Court Approval for $850 Million in Debtor-In-Possession Financing
DALLAS --(BUSINESS WIRE)--Dec. 20, 2019-- Dean Foods Company (NYSE: DF) (“Dean Foods” or the “...
learn-more
14 November, 2019
Dean Foods Company Receives Court Approval of “First Day” Motions to Support Normal Busi...
Obtains Interim Approval to Access DIP Financing Customers Receiving Uninterrupted Supply of Dairy P...
learn-more
12 November, 2019
Dean Foods Company Initiates Voluntary Reorganization with New Financial Support from Existing Lende...
Company Secures Commitments for $850 Million in DIP Financing to Support Operations In Advanced Disc...
learn-more
25 October, 2019
Dean Foods Company Announces Date for Third Quarter 2019 Earnings Release and Conference Call
DALLAS , Oct. 25, 2019 /PRNewswire/ --  Dean Foods Company (NYSE: DF) today announced that it will ...
learn-more
6 September, 2019
Dean Foods Concludes Strategic Alternatives Review; Focuses on Go-Forward Strategy Under New Leaders...
DALLAS , Sept. 6, 2019 /PRNewswire/ --  Dean Foods Company (NYSE: DF) (" Dean Foods " or the "Compa...
learn-more
6 August, 2019
Dean Foods Announces Second Quarter 2019 Results
DALLAS , Aug. 6, 2019 /PRNewswire/ -- Dean Foods Company (NYSE: DF) today reported second quarter 20...
learn-more
26 July, 2019
Dean Foods Appoints Eric Beringause as President and CEO
Industry Veteran Brings More Than Three Decades of Experience in Food, Beverage and Consumer Product...
learn-more
View the newsroom

We’re proud to support national organizations that are nourishing children, promoting animal welfare, and helping in times of disaster.

White papers
farm