EXHIBIT 99.1
[Dreyer's Grand Ice Cream Logo]
DREYER'S GRAND ICE CREAM, INC. ANNOUNCES
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FIRST QUARTER 2003 RESULTS
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(Oakland, CA, April 23, 2003) - Dreyer's Grand Ice Cream, Inc. (Dreyer's, NNM:
DRYR) today announced results for the first quarter ended March 29, 2003.
Dreyer's earned $871,000, or $.02 per diluted common share, in the first quarter
compared with net income of $1,310,000, or $.04 per diluted common share, in the
same period of 2002.
OPERATING RESULTS
Consolidated net sales for the thirteen-week period ended March 29, 2003 were
$298,424,000, an increase of three percent over sales of $290,414,000 in the
same quarter of 2002. Net sales of the company's branded products decreased one
percent for the quarter to $164,861,000 and represented 55 percent of total net
sales, compared with 57 percent in the same quarter of 2002. The slight decrease
was driven by lower sales of Dreyer's and Edy's Grand Ice Cream offset by growth
from Dreyer's and Edy's Whole Fruit Bars and the company's superpremium
portfolio.
Net sales of partner brands, products distributed for other manufacturers,
increased seven percent in the quarter and accounted for 45 percent of total net
sales, compared with 43 percent in the same quarter of 2002. The increase was
driven primarily by increased sales of the novelty products of Silhouette
Brands, Inc.
The company's gross profit increased by $5,662,000 to $33,915,000, representing
an 11 percent gross margin for the first quarter compared with a 10 percent
gross margin in the same quarter of 2002. The improvement in gross profit was
driven primarily by lower dairy costs and the margin improvement associated with
re-sized packaging across the premium portfolio. These improvements were
partially offset by increased distribution expenses. Dairy raw material costs
accounted for a $4.3 million pre-tax benefit in the quarter versus last year.
Selling, general and administrative expenses increased by $1,758,000 to
$27,173,000 for the quarter and represented nine percent of net sales, compared
with $25,415,000, or nine percent of net sales, in the same quarter of 2002. The
increase in SG&A expenses primarily reflects increased marketing and
administration expenses, including a ($908,000) charge for uncollectible
receivables from the bankruptcies of Fleming Companies, Inc. and Eagle Foods,
Inc. The SG&A increase was partially offset by a decrease in payroll-related
administrative expenses.
Income before tax provision was $1,428,000 in the first quarter of 2003, which
included the effect of $4,548,000 of merger transaction expenses. Income before
tax provision for the first quarter of 2002 was $2,047,000.
MERGER AGREEMENT
The company entered into an Agreement and Plan of Merger and Contribution dated
June 16, 2002, as amended (the "Merger Agreement"), with New December, Inc.
("New Dreyer's"), December Merger Sub, Inc., Nestle Holdings, Inc. ("Nestle")
and NICC Holdings, Inc. ("NICC Holdings"), a wholly-owned subsidiary of Nestle,
to combine the company with Nestle's United States frozen dessert business. The
combination (the "Merger") will result in both the company and Nestle Ice Cream
Company, LLC ("NICC"), which holds Nestle's United States frozen dessert
business, becoming wholly-owned subsidiaries of New Dreyer's, a Delaware
corporation formed by the company to effect the transactions contemplated by the
Merger Agreement.
The company held a Special Meeting of Stockholders on March 20, 2003, at which
the company's stockholders voted to approve the Merger and related transactions.
If the Merger is completed, each stockholder (other than Nestle and its
affiliates) who holds shares of the company's Common Stock at the effective date
of the Merger will receive one share of Class A Callable Puttable Common Stock
of New Dreyer's for each share of the company's Common Stock. Subject to the
terms and conditions of the amended and restated certificate of incorporation of
New Dreyer's, the holders of New Dreyer's Class A Callable Puttable Common Stock
will be permitted to sell (put) some or all of their shares to New Dreyer's for
$83.00 per share during two periods, the first beginning on December 1, 2005 and
ending on January 13, 2006, and the second beginning on April 3, 2006 and ending
on May 12, 2006. The New Dreyer's Class A Callable Puttable Common Stock will
also be subject to redemption (call) by New Dreyer's at the request of Nestle at
$88.00 per share during a six-month period beginning on January 1, 2007 and
ending on June 30, 2007. At the effective time of the Merger, NICC Holdings will
contribute all of its ownership interest of NICC to New Dreyer's and will
receive, in exchange for such contribution, 55,001,299 shares of Class B Common
Stock of New Dreyer's. The Class B Common Stock is similar to the Class A
Callable Puttable Common Stock, except that it lacks the call and put features
and has additional voting rights. The shares of the company's Common Stock
currently held by Nestle will be converted into the same number of shares of
Class B Common Stock of New Dreyer's. As of April 7, 2003, Nestle owned
approximately 23 percent of the company's Common Stock on a diluted basis. If
the Merger is completed, Nestle and its affiliates will own approximately 67
percent of New Dreyer's Common Stock on a diluted basis.
The company has been expensing all merger transaction expenses as incurred. The
company incurred $4.5 million of such costs during the first quarter and has
recorded a total of $15.1 million to date. The company currently estimates that
it will incur total merger transaction expenses, including costs to be incurred
to close the transactions, of approximately $34 million.
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Dreyer's manufactures and distributes a full spectrum of ice cream and frozen
dessert products. The company's products are marketed under the Dreyer's brand
name throughout the western states and Texas, and under the Edy's(R) name
throughout the remainder of the United States. Dreyer's (together with Edy's) is
the best selling brand of packaged ice cream in the country. Internationally,
the Dreyer's brand extends to select markets in the Far East and the Edy's brand
to the Caribbean and South America. Brands currently manufactured and
distributed by Dreyer's include Grand, Grand Light(R), Homemade, Dreamery(R),
Whole Fruit(TM) Sorbet, M&M/Mars, Starbucks(R), Godiva(R) and Healthy Choice(R).
For more information on the company, please visit www.dreyersinc.com.
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Edy's, the Dreyer's and Edy's logo design, Dreamery, Grand Light, Homemade,
Whole Fruit, are all trademarks or tradenames of Dreyer's Grand Ice Cream, Inc.
All other trademarks and tradenames are owned by their respective companies.
Conference Call
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Dreyer's Grand Ice Cream, Inc. (NNM: DRYR) will hold a conference call for
investors and analysts today, Wednesday, April 23, 2003, at 10:30 a.m. EDT (7:30
a.m. PDT) to discuss this news release. The call will be webcast in its entirety
from the Investor Relations section of www.dreyersinc.com. A replay of the call
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will be available from the audio archives at the same website location and is
incorporated by reference into this news release.
Forward-Looking Statements
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Certain statements contained in this press release, conference calls,
simultaneous webcasts and audio replays are forward-looking statements made
pursuant to the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks and uncertainties at
the time such statements are made in any SEC filing, press release, conference
call or webcast, or are recorded for later audio replay. Such known and unknown
risks and uncertainties may cause the company's actual actions or results to
differ materially from those contained in the forward-looking statements.
Specific factors that might cause such a difference include, but are not limited
to, the following: the company's ability to achieve efficiencies in its
manufacturing and distribution operations without negatively affecting sales;
the cost of energy used in manufacturing and distribution; the cost of dairy raw
materials and other commodities used in the company's products; competitors'
marketing and promotion responses; market conditions affecting the prices of the
company's products; the company's ability to increase sales of its own branded
products; and responsiveness of both the trade and consumers to the company's
new products and marketing and promotional programs. No assurances can be made
that the Merger will close.
For further information contact:
Media Contact: Dori Sera Bailey at 510/601-4241
Investor Contact: C. Scott Webster at 510/450-4545
DREYER'S GRAND ICE CREAM, INC.
FIRST QUARTER 2003
FINANCIAL RESULTS
Consolidated Statement of Income
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, UNAUDITED)
Thirteen Weeks Ended
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Mar. 29, 2003 Mar. 30, 2002
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Net sales $298,424 $290,414
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Costs and expenses:
Cost of goods sold 264,509 262,161
Selling, general and administrative 27,173 25,415
Interest, net of amounts capitalized 1,226 1,786
Other income, net (460) (995)
Merger transaction expenses 4,548 -
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296,996 288,367
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Income before tax provision 1,428 2,047
Income tax provision 557 737
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Net income $ 871 $1,310
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Weighted-average common
shares outstanding-diluted 38,191 37,153
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Net income per
common share-diluted $ .02 $ .04
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Dividends per common share $ .06 $ .06
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Condensed Consolidated Balance Sheet
(IN THOUSANDS)
Mar. 29, 2003 Dec. 28, 2002
(unaudited)
Assets
CURRENT ASSETS:
Cash and cash equivalents $ 1,490 $ 1,119
Receivables 110,434 104,429
Inventories 100,119 82,831
Prepaid expenses and other 28,998 25,494
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TOTAL CURRENT ASSETS 241,041 213,873
Property, plant and equipment, net 207,043 208,846
Goodwill, distribution rights, and
other intangibles, net 87,855 86,330
Other assets 4,448 3,523
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TOTAL ASSETS $540,387 $512,572
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Liabilities and Stockholders' Equity
CURRENT LIABILITIES:
Accounts payable and accrued $ 122,243 $131,362
liabilities
Current portion of long-term debt 2,143 2,143
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TOTAL CURRENT LIABILITIES 124,386 133,505
Long-term debt, less current 154,929 118,529
portion
Deferred income taxes 16,590 16,550
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TOTAL LIABILITIES 295,905 268,584
STOCKHOLDERS' EQUITY 244,482 243,988
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $540,387 $512,572
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