DALLAS, Nov. 2 /PRNewswire/ — Suiza Foods Corporation (NYSE: SZA), the
nation’s leading dairy processor and distributor, today announced record sales
of $1.4 billion for the quarter ended September 30, 2000, an increase of 33.1%
from $1.1 billion in the same period in 1999. Third quarter net income was
$31.2 million, an increase of 2.4% compared with $30.4 million in the prior
year period. Diluted earnings per share before non-recurring items increased
12.1% to $1.02, compared with $0.91 in the third quarter of 1999.
“We are pleased to report our 19th consecutive quarter of record sales and
earnings per share,” said Gregg Engles, Chairman and Chief Executive Officer
of Suiza Foods. “Dairy Group fluid milk volumes were strong in the quarter,
increasing 1.6% over last year. Our Morningstar operations also performed
well, with sales up 11.1% and operating margins improving 300 basis points
over last year. Our core food businesses remain strong and the operating
environment appears stable as we head into the balance of this year and into
2001.”
Third quarter operating income before non-recurring items increased 35.8%
to $95.4 million, compared with $70.3 million in the 1999 third quarter.
Consolidated operating margins before non-recurring items for the quarter were
6.6%, an improvement of 13 basis points from the prior year period. In the
third quarter, the company recorded a charge of $0.4 million related to
corporate restructuring and severance.
Diluted cash earnings per share before non-recurring items for the third
quarter totaled $1.19, an increase of 15.2% over last year. Cash earnings per
share is defined as earnings per share before goodwill amortization, net of
the related income tax effects.
NINE MONTH RESULTS
Sales for the first nine months of 2000 totaled $4.3 billion, an increase
of 27.3% over last year. Operating income before non-recurring items grew
27.1% to $278.0 million. Net income was $90.3 million compared with
$83.5 million in 1999.
Diluted earnings per share excluding non-recurring items for the first
nine months of 2000 totaled $2.78, an increase of 19.8% over last year,
excluding the effects of the U.S. packaging business, which was sold in July
1999, and diluted cash earnings per share grew 22.0% to $3.27.
RECENT DEVELOPMENTS
Most recently, Suiza:
-
Announced that its Morningstar Foods subsidiary formed a strategic
partnership with Hershey Foods Corp. whereby Morningstar will
manufacture, sell and distribute Hershey brand name dairy products
nationally. The agreement couples the significant brand recognition
of the Hershey name with Morningstar’s manufacturing, marketing and
distribution strength. The product launch of the three new flavors —
Hershey(R)’s Fat Free Chocolate Milk, Hershey(R)’s 2% Reduced Fat
Chocolate Milk and Hershey(R)’s 2% Reduced Fat Strawberry Milk —
began regionally in September and is expected to reach nationwide
distribution in January 2001. -
Repurchased 3.3 million common shares in 2000 as of October 16 at a
total investment of $148.4 million. The company also announced today
that it has increased its share repurchase program by $100 million,
resulting in a total authorization of $107.5 million. -
Promoted John Robinson to Senior Vice President of Sales and Marketing
for Suiza Dairy Group and welcomed Bill Tinkelpaugh to the position of
Senior Vice President of Government and Industry Relations. Mr.
Robinson most recently served as President of Robinson Dairy in
Colorado. Mr. Robinson replaces Mike Hogan, Senior Vice President and
Chief Marketing Officer, who announced his resignation effective
November 30, 2000. Mr. Tinkelpaugh, based in Arlington, Va., has more
than 27 years of agricultural and dairy industry experience and most
recently served as president and CEO of Master Dairies, a privately-
held purchasing association that represents milk companies with plants
throughout the United States and Canada.
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 Conference Calls section of the company’s web site at
www.suizafoods.com.
Suiza Foods Corporation, based in Dallas, Texas, 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(TM). Regional brands consist of Adohr Farms(R), Barbe’s(R),
Brown’s Dairy(TM), Broughton(R), Country Fresh(R), Dairymen’s(R), Flav-O-
Rich(R), Lehigh Valley Farms(R), London’s(R), Meadow Gold(R), Model Dairy(TM),
Garelick Farms(TM), Oak Farms(R), Robinson(R), Schepps(R), Shenandoah’s
Pride(R), Suiza(TM), Louis Trauth(TM), Tuscan(R), Velda Farms(R) and West Lynn
Creamery(R), as well as Celta(R) in Spain. Suiza also sells products under
partner or licensed brands in certain regions, including Borden(R),
Lactaid(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.
The company’s historical results of operations may not be indicative of
the company’s future prospects. Therefore, statements of historical fact
contained in this press release should not be construed as indicators of the
company’s future. The statement in this press release regarding the company’s
confidence about its performance for the balance of 2000 and into 2001 is a
“forward-looking” statement and it is made pursuant to the safe harbor
provision of the Securities Litigation Reform Act of 1995. This statement
involves risks and uncertainties that may cause results to differ materially
from the statement set forth in this press release. The company’s ability to
meet targeted financial results depends on a variety of economic, competitive
and governmental factors, many of which are beyond the company’s control and
which are described in Suiza’s filings with the Securities and Exchange
Commission. 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 any such statement is based.
SUIZA FOODS CORPORATION
Condensed Balance Sheet
(in thousands)
September 30, December 31,
ASSETS 2000 1999
Cash and cash equivalents $42,997 $25,155
Other current assets 737,258 614,252
Total current assets 780,255 639,407
Property, plant & equipment 975,627 758,485
Intangibles & other assets 1,927,873 1,261,030
Total Assets $3,683,755 $2,658,922
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $628,754 $479,117
Long term debt 1,282,521 689,397
Other long-term liabilities 115,911 81,181
Mandatorily redeemable TIPES 583,891 683,505
Minority interest in subsidiaries 508,283 141,750
Stockholders' equity:
Common stock 272 293
Additional paid-in capital 163,648 275,527
Retained earnings 404,873 314,590
Other comprehensive income (4,398) (6,438)
Total stockholders' equity 564,395 583,972
Total Liabilities and Stockholders'
Equity $3,683,755 $2,658,922
SUIZA FOODS CORPORATION
(Dollars in thousands, except per share data)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
Net sales $1,439,947 $1,082,060 $4,268,442 $3,354,090
Cost of sales 1,085,627 834,410 3,213,745 2,610,932
Gross profit 354,320 247,650 1,054,697 743,158
Operating costs and
expenses 258,901 177,400 776,685 524,402
Plant and administrative
restructurings 424 3,520 3,388 8,191
Operating income 94,995 66,730 274,624 210,565
Interest expense &
financing charges on
preferred securities 37,382 18,079 108,322 68,551
Equity in earnings of
unconsolidated
affiliates (5,169) (4,692) (10,572) (4,692)
Other (income) expense (594) 384 (1,670) 283
Income before income
taxes and minority
interest 63,376 52,959 178,544 146,423
Income taxes 24,021 20,359 67,901 56,462
Minority interest 8,166 2,151 25,327 6,493
Net income before
extraordinary items 31,189 30,449 85,316 83,468
Extraordinary gain 4,968
Net income $31,189 $30,449 $90,284 $83,468
Net income before
nonrecurring items $31,461 $33,602 $87,087 $89,486
Diluted EPS before
nonrecurring items $1.02 $0.91 $2.78 $2.45
Diluted cash EPS before
nonrecurring items $1.19 $1.03 $3.27 $2.86
Basic earnings per share:
Income before
extraordinary items $1.13 $0.90 $2.99 $2.48
Extraordinary gain --- --- 0.17 ---
Net income $1.13 $0.90 $3.16 $2.48
Basic average common
shares (000's) 27,624 33,666 28,531 33,680
Diluted earnings per share:
Income before
extraordinary items $1.01 $0.83 $2.73 $2.32
Extraordinary gain --- --- 0.14 ---
Net income $1.01 $0.83 $2.87 $2.32
Diluted average common
shares (000's) 36,198 43,642 37,062 43,772
Summary Financial Information:
Depreciation $23,768 $17,243 $71,865 $59,983
Amortization $14,090 $8,926 $42,054 $29,388
SOURCE Suiza Foods Corporation
CONTACT: Cory M. Olson, Vice President and Treasurer of Suiza Foods
Corporation, 214-303-3645/
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