Suiza Announces $1.31 in Diluted Cash Earnings Per Share
DALLAS, Aug. 7 /PRNewswire/ — Suiza Foods Corporation (NYSE: SZA), the
nation’s leading dairy processor and distributor, today announced net sales
totaled $1.5 billion for the quarter ended June 30, 2001, an increase of
6.5% over the second quarter of 2000. Diluted earnings per share before
non-recurring items for the quarter totaled $1.11, an increase of 4.7% from
$1.06 in the second quarter of 2000.
Diluted cash earnings per share for the second quarter increased 4.8% to
$1.31. 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.
“Our operating units delivered another quarter of strong results despite a
very challenging raw material environment,” said Gregg Engles, Chairman and
Chief Executive Officer of Suiza Foods. “Butterfat averaged $2.10 per pound,
up 63% over last year, and raw milk costs increased 25% to $14.21 per hundred
weight. This is clearly one of the most difficult operating environments we
have experienced, and in light of these conditions, our performance is a real
tribute to the strength of our management team.”
During the second quarter of 2000, the company recorded a one-time pretax
gain of $3.6 million related to the curtailment of certain benefit plans.
This gain had a $1.4 million impact net of taxes and minority interest, equal
to $0.03 per diluted share. Excluding this gain, diluted earnings per share
and diluted cash earnings per share would have increased 7.8% and 7.6%
respectively in the second quarter period.
Second quarter consolidated operating income before non-recurring items
totaled $102.9 million, or 6.7% of sales, compared with $104.5 million
reported in the second quarter of 2000. Excluding the curtailment gain,
operating income would have increased 1.9%, and operating margins would have
declined 30 basis points. The margin decline is due primarily to
significantly higher raw material costs in the current period.
Sales for the first six months of 2001 totaled $3.0 billion, an increase
of 6.1% over last year. Operating income before non-recurring items grew
2.8% to $187.6 million. Before non-recurring items, diluted earnings per
share totaled $1.92, an increase of 8.5% over last year, and diluted cash
earnings per share totaled $2.33, an increase of 8.9%.
In May, the company announced an agreement with Procter & Gamble to
launch and market Folgers 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 expects to launch Folgers Jakada in the
fourth quarter of this year.
In July, Suiza filed a preliminary joint proxy statement/prospectus
with the Securities and Exchange Commission in connection with its
proposed merger with Dean Foods (NYSE: DF). The company intends to
finalize and mail the proxy statement/prospectus to its shareholders
in mid August. A separate press release was issued today to provide
additional information regarding the company’s merger with Dean
On July 31, the company completed the syndication of its
$2.7 billion bank financing. The proceeds will be used to provide
funding for the Dean Foods transaction and to provide funds for
general corporate purposes.
CONFERENCE CALL WEBCAST
A conference call to discuss the company’s second 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
and Webcasts” 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), Dairymen’s(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) and Pet(R). Additionally, the company owns
approximately 43% of Consolidated Container Company, one of the nation’s
largest manufacturers of rigid plastic containers.
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 “forward-looking” statements include statements relating
to the company’s expectations regarding its proposed merger with Dean Foods.
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 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. The forward-looking
statements in this press release speak only as of the date of this release.
Suiza 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.
Other Legal Information
Suiza Foods and Dean Foods have filed with the SEC a preliminary joint
proxy statement/prospectus and other relevant documents concerning the
proposed merger. In addition, Suiza Foods and Dean Foods will prepare and
file a definitive joint proxy statement/prospectus and other relevant
documents concerning the proposed merger. Investors are urged to read the
definitive joint proxy statement/prospectus, when it becomes available, and
any amendments or supplements to the definitive joint proxy
statement/prospectus as well as any other documents filed with the SEC,
because they will contain important information concerning the proposed
merger. Investors will be able to obtain the definitive joint proxy
statement/prospectus and other documents filed with the SEC free of charge at
the SEC’s website (http://www.sec.gov ). In addition, the definitive joint
proxy statement/prospectus and other documents filed by Dean Foods and Suiza
Foods with the SEC may be obtained free of charge by contacting Dean Foods,
3600 North River Road, Franklin Park, Illinois 60131, Attention: Investor
Relations (Tel: 847-678-1680) or Suiza Foods, 2515 McKinney Avenue, Suite
1200, Dallas, Texas 75201, Attention: Investor Relations (Tel: 800-431-9214).
Suiza Foods, Dean Foods and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Suiza Foods and Dean Foods in favor of the transaction.
The directors and executive officers of Suiza Foods and their beneficial
ownership of Suiza Foods common stock are set forth in the proxy statement for
the 2000 annual meeting of Suiza Foods. The directors and executive officers
of Dean Foods and their beneficial ownership of Dean Foods common stock are
set forth in the proxy statement for the 2000 annual meeting of Dean Foods.
You may obtain the proxy statements of Suiza Foods and Dean Foods free of
charge at the SEC’s website (http://www.sec.gov ). Stockholders of Suiza
Foods and Dean Foods may obtain additional information regarding the interest
of such participants by reading the joint proxy statement/prospectus.
(Tables to follow) SUIZA FOODS CORPORATION (Dollars in thousands, except per share data)
Three months ended Six months ended June 30, June 30, 2001 2000 2001 2000 Net sales $1,527,074 $1,434,354 $3,001,427 $2,828,495 Cost of sales 1,163,947 1,074,136 2,281,774 2,128,118 Gross profit 363,127 360,218 719,653 700,377 Operating costs and expenses 260,225 255,712 532,030 517,785 Plant closing costs --- 1,190 843 2,964 Operating income 102,902 103,316 186,780 179,628 Interest expense & financing charges on preferred securities 34,329 35,309 70,027 70,940 Equity in earnings of unconsolidated affiliates (1,186) (3,535) (2,859) (5,404) Other (income) expense (189) (528) 502 (1,075) Income before income taxes and minority interest 69,948 72,070 119,110 115,167 Income taxes 25,982 27,700 44,649 43,879 Minority interest 9,363 10,837 16,341 17,161 Net income before extraordinary items 34,603 33,533 58,120 54,127 Extraordinary gain --- --- --- 4,968 Cumulative effect of accounting change --- --- (1,446) --- Net income $34,603 $33,533 $56,674 $59,095 Net income before non- recurring items $34,603 $34,352 $58,449 $55,626 Diluted EPS before non- recurring items $1.11 $1.06 $1.92 $1.77 Diluted cash EPS before non-recurring items $1.31 $1.25 $2.33 $2.14 Basic earnings per share: Income before extraordinary items $1.26 $1.16 $2.11 $1.87 Extraordinary gain --- --- --- 0.17 Cumulative effect of accounting change --- --- (0.05) --- Net income $1.26 $1.16 $2.06 $2.04 Basic average common shares (000's) 27,560 28,897 27,458 28,984 Diluted earnings per share: Income before extraordinary items $1.11 $1.04 $1.91 $1.73 Extraordinary gain --- --- --- 0.13 Cumulative effect of accounting change --- --- (0.04) --- Net income $1.11 $1.04 $1.87 $1.86 Diluted average common shares (000's) 36,114 37,322 35,948 37,470 Summary Financial Information: Depreciation $24,008 $24,052 $47,830 $48,097 Amortization of intangibles $13,457 $12,994 $26,798 $25,699 Amortization shown in interest expense $666 $1,141 $1,332 $2,265 SUIZA FOODS CORPORATION Condensed Balance Sheet (in thousands)
June 30, December 31, ASSETS 2001 2000 Cash and cash equivalents $22,938 $31,110 Other current assets 795,980 786,821 Total current assets 818,918 817,931 Property, plant & equipment 1,006,372 1,003,769 Intangibles & other assets 1,935,678 1,958,778 Total Assets $3,760,968 $3,780,478 LIABILITIES AND STOCKHOLDERS' EQUITY Total current liabilities $689,071 $699,908 Long-term debt 1,135,563 1,225,045 Other long-term liabilities 171,553 157,816 Mandatorily redeemable TIPES 584,323 584,032 Minority interest in subsidiaries 524,271 514,845 Stockholders' equity: Common stock 277 273 Additional paid-in capital 182,151 166,361 Retained earnings 489,983 433,309 Other comprehensive income (16,224) (1,111) Total stockholders' equity 656,187 598,832 Total Liabilities and Stockholders' Equity $3,760,968 $3,780,478 Segment Information (Dollars in Thousands)
Three Months Ended Six Months Ended June 30, June 30, 2001 2000 2001 2000 Revenue Suiza Dairy Group $1,242,045 $1,165,529 $2,444,862 $2,287,534 Morningstar Foods 186,203 169,440 359,702 328,644 Corporate / Other 98,826 99,385 196,863 212,317 Consolidated $1,527,074 $1,434,354 $3,001,427 $2,828,495 Operating Income before Non-Recurring Items Suiza Dairy Group $75,930 $82,299 $143,655 $144,697 Morningstar Foods 24,748 23,337 46,265 43,790 Corporate / Other 2,224 (1,130) (2,297) (5,895) Consolidated $102,902 $104,506 $187,623 $182,592 MAKE YOUR OPINION COUNT - Click Here http://tbutton.prnewswire.com/prn/11690X97811875
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