DALLAS, Nov. 7 /PRNewswire/ — Suiza Foods Corporation (NYSE: SZA), the
nation’s leading dairy processor and distributor, today announced net sales
grew 8.0% over the third quarter of 2000 to $1.6 billion for the quarter ended
September 30, 2001. Diluted earnings per share before non-recurring items for
the quarter totaled $0.98, a decline of 3.9% from $1.02 in the third quarter
of 2000. As previously announced, the decline in earnings per share was
entirely attributable to weaker than expected results at Consolidated
Container Company, the packaging business in which Suiza owns a 43% interest.
Had Consolidated Container’s results been in line with expectations, Suiza
would have reported diluted earnings per share of $1.10, growth of 7.8% over
the prior year and consistent with consensus estimates.
Diluted cash earnings per share before non-recurring items for the third
quarter totaled $1.18 compared with $1.23 in the prior year comparable period.
Excluding Consolidated Container’s shortfall, cash earnings per share would
have been $1.30, an increase of 5.7% over the prior year third quarter. 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
“Our operating units turned in solid performances in spite of continued
high raw material prices and softness in volumes due to September 11th,” said
Gregg Engles, Chairman and Chief Executive Officer of Suiza Foods Corporation.
“Our operating results this quarter once again demonstrate our ability to
manage through a difficult environment.”
Third quarter consolidated operating income before non-recurring items
grew 2.9% to $98.2 million, or 6.3% of sales, compared with $95.4 million
reported in the third quarter of 2000. Consolidated operating margin before
non-recurring items declined 32 basis points due to high raw material costs
during the quarter. Butterfat averaged $2.32 per pound during the quarter, up
82% over the prior year, and raw milk averaged $15.43 per hundred weight, 28%
higher than the third quarter of 2000.
Sales for the first nine months of 2001 totaled $4.6 billion, an increase
of 6.8% over last year. Operating income before non-recurring items for the
nine months grew 2.8% to $285.8 million. Before non-recurring items, diluted
earnings per share totaled $2.90, an increase of 4.3% over last year, and
diluted cash earnings per share totaled $3.50, an increase of 4.2%. Excluding
Consolidated Container’s shortfall in the third quarter, diluted earnings per
share before non-recurring items would have risen 8.6% to $3.02 and diluted
cash earnings per share would have been $3.62, an increase of 7.7%.
During the third quarter, Suiza’s Morningstar subsidiary began bottling
and distributing Hershey(R)’s flavored milks and milkshakes in plastic
bottles, using new European extended-shelf-life technology that was
successfully installed in the company’s Mt. Crawford plant in Virginia.
The flavored milks are available in fat free chocolate, 2% reduced fat
chocolate and 2% reduced fat strawberry; and the new milkshakes are
available in creamy chocolate and cookies-n-cream. The new flavored
milks and shakes will have a longer shelf life of up to 60 days. The
company anticipates installing another line in spring 2002 to meet
In September, both Suiza and Dean Foods (NYSE: DF) independently
announced that their shareholders approved the proposed merger. The
companies continue to await regulatory approval from the Department of
“We believe that we are near completion of the process, and we continue to
expect to close the transaction by year end,” said Engles.
CONFERENCE CALL WEBCAST
A conference call to discuss the company’s third quarter financial
performance and the outlook for the balance of the year, including an update
on the company’s pending merger with Dean Foods, will be held at 10:00 a.m.
eastern today. The call may be heard live by visiting the “Conference Calls
Online” section of the company web site at www.suizafoods.com .
Suiza Foods Corporation, based in Dallas, is the nation’s leading dairy
processor and distributor, producing a full line of company-branded and
customer-branded products. National brands include International Delight(R),
Second Nature(R), Naturally Yours(R), Mocha Mix(R), Sun Soy(TM), kidsmilk(TM)
and fitmilk(R). Regional brands include Adohr Farms(R), Barbe’s(R),
Broughton(R), Brown’s Dairy(TM), Country Delite(R), Country Fresh(R), Dairy
Gold(R), Dairymens(R), Flav-O-Rich(R), Garelick Farms(R), Hygeia(R), Lehigh
Valley Farms(R), London’s(R), Meadow Gold(R), Model Dairy(R), Oak Farms(R),
Poudre Valley(R), Robinson(R), Schenkel’s All Star Dairy, Schepps(R),
Shenandoah’s Pride(R), Suiza Dairy(R), Swiss Dairy(TM), Louis Trauth Dairy(R),
Tuscan(R) and Velda Farms(R), as well as Celta(R) in Spain. Suiza also sells
products under partner or licensed brands in certain regions, including
Borden(R), Foremost(R), Hershey(R)’s and Pet(R). Additionally, the company
owns approximately 43% of Consolidated Container Company, one of the nation’s
largest manufacturers of rigid plastic containers.
The statement in this press release regarding the expected timing for
completion of the proposed merger with Dean Foods is “forward-looking” and is
made pursuant to the safe harbor provision of the Securities Litigation Reform
Act of 1995. This statement involves risks and uncertainties that could cause
results to differ materially from the statements set forth in this press
release. The company’s ability to close the proposed transaction on the terms
and in the timeframe contemplated depends primarily on the company’s ability
to obtain regulatory approval for the transaction on the terms and within the
timeframe contemplated. Other risks relating to the proposed merger with Dean
Foods are identified in the joint press release of the company and Dean Foods
filed by the company with the Securities and Exchange Commission with its
Form 8-K dated April 5, 2001, as amended on April 10, 2001. Risks regarding
the company’s business are set forth in its quarterly report on Form 10-Q for
the quarter ended June 30, 2001. The forward-looking statement in this press
release speaks only as of the date of this release. Suiza expressly disclaims
any obligation or undertaking to release publicly any updates or revisions to
such statement to reflect any change in its expectations with regard thereto
or any changes in the events, conditions or circumstances on which such
statement is based.
(Tables to follow) SUIZA FOODS CORPORATION Condensed Balance Sheet (Dollars in thousands)
September 30, December 31, ASSETS 2001 2000 Cash and cash equivalents $25,761 $31,110 Other current assets 868,693 786,821 Total current assets 894,454 817,931 Property, plant & equipment 1,011,645 1,003,769 Intangibles & other assets 1,926,679 1,958,778 Total Assets $3,832,778 $3,780,478 LIABILITIES AND STOCKHOLDERS' EQUITY Total current liabilities $719,007 $699,908 Long-term debt 1,119,087 1,225,045 Other long-term liabilities 200,281 157,816 Mandatorily redeemable TIPES 584,459 584,032 Minority interest in subsidiaries 515,472 514,845 Stockholders' equity: Common stock 281 273 Additional paid-in capital 199,593 166,361 Retained earnings 519,405 433,309 Other comprehensive income (24,807) (1,111) Total stockholders' equity 694,472 598,832 Total Liabilities and Stockholders' Equity $3,832,778 $3,780,478 Segment Information (Dollars in Thousands)
Three Months Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 Revenue Suiza Dairy Group $1,272,119 $1,176,168 $3,716,980 $3,463,702 Morningstar Foods 184,105 175,473 543,807 504,118 Corporate / Other 99,507 88,306 296,371 300,622 Consolidated $1,555,731 $1,439,947 $4,557,158 $4,268,442 Operating Income before Non-Recurring Items Suiza Dairy Group $76,143 $71,817 $219,298 $216,014 Morningstar Foods 21,825 25,415 68,090 69,205 Corporate / Other 199 (1,813) (1,597) (7,208) Consolidated $98,167 $95,419 $285,791 $278,011 SUIZA FOODS CORPORATION (Dollars in thousands, except per share data)
Three months ended Nine months ended September 30, September 30, 2001 2000 2001 2000 Net sales $1,555,731 $1,439,947 $4,557,158 $4,268,442 Cost of sales 1,195,435 1,085,627 3,477,209 3,213,745 Gross profit 360,296 354,320 1,079,949 1,054,697 Operating costs and expenses 262,129 258,901 794,158 776,685 Plant closing costs --- 424 843 3,388 Operating income 98,167 94,995 284,948 274,624 Interest expense & financing charges on preferred securities 31,653 37,382 101,680 108,322 Equity in (earnings) loss from unconsolidated affiliates 3,700 (5,169) 841 (10,572) Equity in restructuring charges of unconsolidated affiliates 1,724 --- 1,724 --- Other (income) expense 1,097 (594) 1,600 (1,670) Income before income taxes and minority interest 59,993 63,376 179,103 178,544 Income taxes 20,803 24,021 65,452 67,901 Minority interest 9,768 8,166 26,109 25,327 Net income before extraordinary items 29,422 31,189 87,542 85,316 Extraordinary gain --- --- --- 4,968 Cumulative effect of accounting change --- --- (1,446) --- Net income $29,422 $31,189 $86,096 $90,284 Net income before non-recurring items $30,408 $31,461 $88,857 $87,087 Diluted EPS before non-recurring items $0.98 $1.02 $2.90 $2.78 Diluted cash EPS before non-recurring items $1.18 $1.23 $3.50 $3.36 Basic earnings per share: Income before extraordinary items $1.06 $1.13 $3.17 $2.99 Extraordinary gain --- --- --- 0.17 Cumulative effect of accounting change --- --- (0.05) --- Net income $1.06 $1.13 $3.12 $3.16 Basic average common shares (000's) 27,861 27,624 27,595 28,531 Diluted earnings per share: Income before extraordinary items $0.95 $1.01 $2.86 $2.73 Extraordinary gain --- --- --- 0.14 Cumulative effect of accounting change --- --- (0.04) --- Net income $0.95 $1.01 $2.82 $2.87 Diluted average common shares (000's) 36,604 36,198 36,180 37,062 Summary Financial Information: Depreciation $23,748 $23,768 $71,578 $71,865 Amortization of intangibles $13,116 $13,532 $39,914 $39,231 Amortization shown in interest expense $643 $558 $1,975 $2,823 MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X82975322
SOURCE Suiza Foods Corporation
CONTACT: Cory M. Olson, Vice President and Treasurer, +1-214-303-3645,
or P.I. Aquino, Assistant Treasurer, +1-214-303-3437, both of Suiza Foods