FRANKLIN PARK, Ill., Dec. 20 /PRNewswire/ — Dean Foods Company
(NYSE: DF) today announced its second quarter and first half fiscal 2001
results.
Second quarter sales increased 3.4% to a record $1,103.5 million, compared
to $1,067.0 million in the second quarter of fiscal 2000. Continued growth of
nationally branded products in the National Refrigerated Products Group and
acquisitions drove the sales increase. Income from continuing operations was
$23.6 million, compared to $27.0 million in the second quarter of fiscal 2000.
Diluted earnings per share from continuing operations were $0.66, compared to
$0.68 last year. Operating earnings were slightly above last year’s second
quarter operating earnings, but net interest expense was approximately
$6.5 million higher as a result of higher debt levels for acquisitions and
share repurchases.
Year-to-date sales were $2,157.8 million, a 4.3% increase over fiscal
2000. Income from continuing operations for the first six months was
$50.0 million compared to $54.8 million last year. Diluted earnings per share
from continuing operations were $1.40 versus $1.38 in fiscal 2000.
The Dairy Group reported record second quarter sales and operating
earnings. Sales increased to $811.9 million in the second quarter compared to
$808.6 million last year, due to acquisitions and volume growth with key
retailers as they continue to expand nationally. Operating earnings increased
40.8% to $43.8 million from $31.1 million in the prior year. Increased sales
and improved margins in branded dairy products, more stable raw milk and
butterfat costs, and ongoing supply chain cost reduction activities generated
the improvement in second quarter earnings.
The Company continued to generate substantial revenue growth in its
National Refrigerated Products Group. Sales increased 38.4% in the second
quarter and 32.4% year-to-date in this business segment as a result of growth
in intermediate and extended shelf life products and new products. New
product introductions, including Dips-for-One and Marie’s pourable salad
dressings, continued to progress well in the second quarter. The Company
supported these introductions by investing approximately $6 million in the
second quarter and a total of $12 million in the first half of the year in
marketing and promotional programs. As previously disclosed, however, costs
associated with the significant ramp-up of complex, state-of-the-art
technology to produce intermediate and extended shelf life products impacted
second quarter earnings by approximately $4 million. The Company is focused
on improving the production processes and continued progress is expected
throughout the second half of the fiscal year, although inefficiencies are
expected to impact the third and fourth quarters.
Second quarter results in the Specialty Foods Group were impacted by a
softening in sales for powdered products, primarily in the international
export business, and for branded pickles. In this business segment, the
Company incurred higher packaging, distribution, and energy costs during the
quarter. Pricing has been adjusted to offset these increased costs in the
second half of the year. As a result of these factors, the Specialty Food
Group’s second quarter earnings were reduced by approximately $4 million
compared to the prior year.
Dean Food’s second quarter results also reflected the following:
- The expansion of Mayfield brand ice cream into new Southeastern markets
continued to exceed expectations. - The Land O’Lakes fluid milk business, acquired in July, exceeded
earnings expectations due to strong operating performance. - Dips-for-One, the first individually packaged, single serve
refrigerated dip, achieved sixty percent penetration of the grocery
channel in the quarter. - Consumer response to Marie’s pourable salad dressings, introduced in
the Northeast earlier this year, has been very favorable, and the
products will be expanded to a number of additional markets in the
third quarter. - The Company’s private label pickle business generated volume growth of
approximately 4% in the second quarter. Dean is the largest private
label pickle producer in the U.S. - The Company recorded an after-tax $6.2 million gain from discontinued
operations, or $.18 per diluted share, on the sale of a note associated
with the fiscal 1999 divestiture of the Company’s vegetables segment.
Howard Dean, Chairman and Chief Executive Officer, commented, “While we
are disappointed with second quarter results, we are comfortable with an
earnings per share estimate in the range of $3.05 for fiscal 2001. We are
pleased with the solid performance of the Dairy Group and the strong sales
growth and successful new product introductions in the National Refrigerated
Products Group. We are focused on resolving the shorter-term technology
issues affecting intermediate and extended shelf life products as quickly as
possible. While these manufacturing inefficiencies will dampen third quarter
results, we expect earnings will improve markedly in the fourth quarter.”
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. More information about Dean Foods can
be found on its Web site at http://www.deanfoods.com .
The Company’s quarterly earnings conference call will be held today at
8:00 a.m. Central Time. The call may be heard live at the Company’s web site,
http://www.deanfoods.com , using Real Player8 Basic Software. The basic version of
Real Player8 may be downloaded at no charge from
http://www.real.com/products/player/index.html prior to the call. Please allow
approximately 15 minutes to download the software. Replays will be available
at the same internet address for a limited time period.
Certain statements in this press release are forward-looking as defined by
the Private 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 and resin costs, interest rate fluctuations, competitive pricing
pressures, the effectiveness of marketing and cost-management programs and
shifts in the market demand.
DEAN FOODS COMPANY
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE PERIODS ENDED
NOVEMBER 26, 2000 AND NOVEMBER 28, 1999
(Unaudited)
(In millions, except for per share amounts)
Second Quarter Ended Six Months Ended
November 26, November 28, November 26, November 28,
2000 1999 2000 1999
Net sales $1,103.5 $1,067.0 $2,157.8 $2,068.4
Costs of products
sold 847.0 828.0 1,648.0 1,590.0
Delivery, selling and
administrative
expenses 199.8 182.6 394.3 365.2
Operating earnings 56.7 56.4 115.5 113.2
Interest expense, net 18.6 12.1 34.7 23.3
Income from continuing
operations before
income taxes 38.1 44.3 80.8 89.9
Provision for income
taxes 14.5 17.3 30.8 35.1
Income from continuing
operations 23.6 27.0 50.0 54.8
Gain from sale of
discontinued operations,
net of taxes * 6.2 - 6.2 -
Net income $29.8 $27.0 $56.2 $54.8
Basic income per share:
Income from continuing
operations $.66 $.69 $1.40 $1.40
Income from discontinued
operations * .18 - .18 -
Net income $.84 $.69 $1.58 $1.40
Diluted income (loss)
per share:
Income before
extraordinary item $.66 $.68 $1.40 $1.38
Income from
discontinued
operations * .18 - .18 -
Net income $.84 $.68 $1.58 $1.38
Weighted average common
shares:
Basic 35.5 39.1 35.5 39.2
Diluted 35.7 39.8 35.7 39.8
* During the second quarter, the Company recorded a pre-tax gain of $10.0
($6.2 after-tax, or $.18 per diluted share)on the sale of a note
associated with the divestiture of the Company's vegetables segment in
fiscal 1999.
DEAN FOODS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
November 26, November 28,
2000 1999
ASSETS
Current Asset:
Cash and temporary cash investments $46.3 $25.0
Accounts and notes receivable, net of
allowance for doubtful accounts 365.0 334.5
Inventories 239.5 217.6
Other current assets 73.4 86.4
Total current assets 724.2 663.5
Property, Plant and Equipment, net 913.2 779.3
Other Assets 714.4 598.3
Total Assets $2,351.8 $2,041.1
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term obligations $5.1 $4.2
Accounts payable and accrued expenses 423.8 422.3
Dividends payable 8.1 8.7
Federal and state income taxes 36.6 39.3
Total current liabilities 473.6 474.5
Long-Term Obligations 1,045.5 708.4
Deferred Liabilities 133.2 125.2
Shareholders' Equity 699.5 733.0
Total Liabilities and Shareholders' Equity $2,351.8 $2,041.1
DEAN FOODS COMPANY
BUSINESS SEGMENT INFORMATION
FOR THE PERIODS ENDED
NOVEMBER 26, 2000 AND NOVEMBER 28, 1999
(Unaudited)
(In Millions)
For the Three Months Ended November 26, 2000 and November 28, 1999
National
Specialty Refrigerated
Dairy Foods Products Corporate
Consolidated
Fiscal 2001
Net sales $811.9 $189.3 $102.3 $ - $1,103.5
Operating
earnings $43.8 $20.4 $0.1 $(7.6) $56.7
Fiscal 2000
Net sales $808.6 $184.5 $73.9 $ - $1,067.0
Operating
earnings $31.1 $25.0 $10.0 $(9.7) $56.4
For the Six Months Ended November 26, 2000 and November 28, 1999
National
Specialty Refrigerated
Dairy Foods Products Corporate
Consolidated
Fiscal 2001
Net sales $1,600.7 $370.5 $186.6 $ - $2,157.8
Operating
earnings $85.5 $43.4 $4.4 $(17.8) $115.5
Fiscal 2000
Net sales $1,572.4 $355.1 $140.9 $ - $2,068.4
Operating
earnings $71.0 $45.2 $18.3 $(21.3) $113.2
SOURCE Dean Foods Company
Web site: http://www.deanfoods.com
Company News On-Call: http://www.prnewswire.com/comp/109161.htmlor fax, 800-758-5804, ext. 109161
CONTACT: Richard Bailey, President and Chief Operating Officer orBarbara Klein, V. P. of Finance and Chief Financial Officer,847-678-1680
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