Exhibit 99.1
Flowers Foods' First Quarter Fiscal 2004 Results
Baking company's sales increase 5.4% in first quarter
THOMASVILLE, Ga., May 27 /PRNewswire-FirstCall/ -- Flowers Foods
(NYSE: FLO) today reported net income of $13.7 million, or $.30 per share, for
the 16-week first quarter ended April 24, 2004, compared to a loss of
$5.7 million, or $.12 per share for the first quarter of 2003. The results for
the first quarter of 2004 include charges of $3.5 million, or $.08 per share,
related to retained liabilities associated with the Mrs. Smith's frozen
dessert business sold in April 2003, compared to first quarter 2003 charges
related to those discontinued operations of $19.3 million, or $.41 per share.
Income from continuing operations for the first quarter increased 25.6% to
$17.2 million, or $.38 per share, compared to $13.7 million, or $.29 per
share.
Sales for the 16-week first quarter of fiscal 2004 increased 5.4% to
$457.8 million compared to $434.6 million for last year's 16-week first
quarter. The sales increase for the quarter was due primarily to increased
volume as the company further penetrated existing markets and expanded its
geographic coverage with direct-store-delivery routes. Sales of Nature's Own
breads contributed the majority of the sales increase. Foodservice sales also
increased on higher volume. The increases in branded retail and foodservice
sales were partially offset by a slight decline in sales of non-branded retail
products.
During the first quarter, gross margin declined slightly compared to the
prior year quarter due to higher ingredient, packaging, labor and utility
costs, as well as start-up costs for a new bakery. Selling, marketing and
administrative expenses declined as a percentage of sales compared to the same
quarter a year ago due primarily to increased sales. Depreciation and
amortization expense declined slightly to $16.9 million from $17.2 million as
compared to last year. Interest income, net of interest expense, of
$2.7 million increased 25.0% over last year's first quarter due to lower debt
outstanding.
Management's Discussion
George E. Deese, president and chief executive officer of Flowers Foods,
commented that the quarter's results reflect the strength of Flowers Foods.
"We continue to execute well in the marketplace, to increase the efficiencies
of our manufacturing and distribution systems, and to offer products that
appeal to consumers' changing needs," Deese said. "Our strategies, developed
over the long term, have created competitive advantages for our company.
"In the fall of 2003, we announced that over the next three to five years,
we plan to extend our geographic reach for the fresh baked foods sold through
our direct-store-delivery routes. The new markets we have entered are
developing as planned. We expect these new territories to increase sales of
our Bakeries Group by about one percent this fiscal year," Deese said.
"In addition to the added sales from new territories, our products
continue to perform well. Nature's Own is experiencing strong growth as
consumers seek breads with health-related attributes," Deese continued. "This
week, we introduced six new Nature's Own products, including a double fiber
bread and buns and rolls for carbohydrate-conscious consumers. Our efforts to
extend our product line to address specific health needs of consumers will
continue as we go forward."
Guidance for 2004
Fiscal 2004 will be a 52-week year (fiscal 2003 was a 53-week year) and
sales are expected to be $1.475 to $1.5 billion with net income of
approximately 3.75% to 4.0% of sales. The company's guidance represents
management's estimates and targets only and is subject to risks and
uncertainties as referenced below.
Stock Repurchases
During the first quarter, the company acquired 304,700 shares of its
common stock for $7.8 million, an average of $25.52 per share. Through
April 24, 2004, the company has acquired 1,179,453 shares of its common stock
for $29.9 million, an average of $25.36 per share. These shares were purchased
in accordance with the share repurchase plan approved by the board of
directors in 2002, which authorized the company to repurchase up to
7.5 million shares of stock.
Dividend
The board of directors will consider the dividend at its regularly
scheduled meeting. Any action taken will be announced following that meeting.
Conference Call
Flowers Foods will broadcast its quarterly conference call over the
Internet at 10:30 a.m. (Eastern) on May 27, 2004. The call will be webcast
at http://www.flowersfoods.com , and can be accessed by clicking on "Investor
Center." An archived version of the call will be available on Flowers' website
Thursday afternoon.
Annual Meeting of Shareholders
The company's annual meeting of shareholders on Friday, June 4, 2004 at
11 a.m. (Eastern) will include a live video broadcast, available
at http://www.flowersfoods.com . The broadcast will be archived following the
meeting.
Company Information
Headquartered in Thomasville, Ga., Flowers Foods is one of the nation's
leading producers and marketers of packaged bakery foods for retail and
foodservice customers. Flowers operates 33 bakeries that produce a wide range
of bakery products marketed throughout the Southeastern, Southwestern, and
mid-Atlantic states via an extensive direct-store-delivery network and
nationwide through other delivery systems. Among the company's top brands are
Nature's Own, Cobblestone Mill, BlueBird, Mrs. Freshley's, and European
Bakers. For more information, visit http://www.flowersfoods.com .
Statements contained in this press release that are not historical facts
are forward-looking statements. All forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ from those
projected. Other factors that may cause actual results to differ from the
forward-looking statements contained in this release and that may affect the
company's prospects in general include, but are not limited to, (a)
competitive conditions in the baked foods industry, including promotional and
price competition, (b) changes in consumer demand for our products, (c) the
success of productivity improvements and new product introductions, (d) a
significant reduction in business with any of our major customers including a
reduction from adverse developments in any of our customer's business, (e)
fluctuations in commodity pricing and (f) our ability to achieve cash flow
from capital expenditures and acquisitions and the availability of new
acquisitions that build shareholder value. In addition, our results may also
be affected by general factors such as economic and business conditions
(including the baked foods markets), interest and inflation rates and such
other factors as are described in the company's filings with the Securities
and Exchange Commission.
Flowers Foods
Consolidated Statement of Income
(000's omitted, except per share data)
For the 16 - Week For the 16 - Week
Period Ended Period Ended
April 24, 2004 April 19, 2003
Sales $457,839 $434,552
Materials, supplies, labor and other
production costs 228,054 213,637
Selling, marketing and
administrative expenses 186,434 183,702
Depreciation and amortization 16,902 17,162
Income from continuing operations
before interest, income taxes and
minority interest (EBIT) 26,449 20,051
Interest income, net 2,677 2,149
Income from continuing operations
before income taxes and minority
interest (EBT) 29,126 22,200
Income tax expense 10,774 8,547
Income from continuing operations
before minority interest 18,352 13,653
Minority interest in variable
interest entity (1,142) 0
Income from continuing operations 17,210 13,653
Discontinued operations, net of tax (3,486) (19,313)
Net income (loss) $13,724 $(5,660)
Per share amounts:
Income from continuing operations $0.38 $0.29
Discontinued operations (0.08) (0.41)
Net income (loss) $0.30 $(0.12)
Diluted weighted average shares
outstanding 45,473 46,686
Flowers Foods
Segment Reporting
(000's omitted)
For the 16 - Week For the 16 - Week
Period Ended Period Ended
April 24, 2004 April 19, 2003
Sales:
Flowers Bakeries Group $351,155 $338,015
Flowers Specialty Group 106,684 96,537
$457,839 $434,552
EBITDA from Continuing Operations:
Flowers Bakeries Group $42,812 $38,573
Flowers Specialty Group 10,645 6,948
Flowers Foods (10,106) (8,308)
$43,351 $37,213
Depreciation and Amortization:
Flowers Bakeries Group $12,991 $13,549
Flowers Specialty Group 3,939 3,488
Flowers Foods (28) 125
$16,902 $17,162
EBIT from Continuing Operations:
Flowers Bakeries Group $29,821 $25,024
Flowers Specialty Group 6,706 3,460
Flowers Foods (10,078) (8,433)
$26,449 $20,051
Flowers Foods
Condensed Consolidated Balance Sheet
(000's omitted)
April 24, 2004
Assets
Cash and Cash Equivalents $29,403
Other Current Assets 221,558
Property, Plant & Equipment, net 434,620
Distributor Notes Receivable (includes
$7,911 current portion) 80,479
Other Assets 3,628
Cost in Excess of Net Tangible Assets, net 72,270
Total Assets $841,958
Liabilities and Stockholders' Equity
Current Liabilities $143,438
Bank Debt 0
Other Debt (includes $4,777 current portion) 20,429
Other Liabilities 96,310
Minority Interest in Variable Interest Entity 2,825
Common Stockholders' Equity 578,956
Total Liabilities and Stockholders' Equity $841,958
Flowers Foods
Condensed Consolidated Statement of Cash Flows
(000's omitted)
For the 16 - Week
Period Ended
April 24, 2004
Cash flows from operating activities:
Net income $13,724
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 16,902
Discontinued operations 5,099
Minority interest in variable interest entity 1,142
Other 10,537
Changes in assets and liabilities (37,488)
Net cash provided by operating activities 9,916
Cash flows from investing activities:
Purchase of property, plant and equipment (15,380)
Consolidation of variable interest entity 1,527
Other 340
Net cash disbursed for investing activities (13,513)
Cash flows from financing activities:
Dividends paid (4,436)
Stock options exercised 471
Stock repurchases (7,774)
Increase in book overdraft 2,440
Other debt and capital lease obligation payments (117)
Net cash disbursed for financing activities (9,416)
Net decrease in cash and cash equivalents (13,013)
Cash and cash equivalents at beginning of period 42,416
Cash and cash equivalents at end of period $29,403
SOURCE Flowers Foods
-0- 05/27/2004
/CONTACT: Jimmy M. Woodward, Senior VP and Chief Financial Officer,
+1-229-227-2266, or Marta J. Turner, VP Communications and Investor Relations,
+1-229-227-2348, both of Flowers Foods/
/Web site: http://www.flowersfoods.com /
(FLO)
CO: Flowers Foods
ST: Georgia
IN: FOD REA
SU: ERN ERP DIV CCA MAV