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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended May 28, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the transition period from ______________ to _____________
COMMISSION FILE NO.: 0-1118
DEAN FOODS COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 36-0984820
(STATE OF OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3600 N. RIVER ROAD, 60131
FRANKLIN PARK, ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (708) 678-1680
SECURITIES REGISTERED PURSUANT TO SECTIONS 12(B) AND 12(G) OF THE ACT:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
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Common Stock, Par Value $1 Per Share New York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (sec.229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. X
The number of shares of Common Stock, Par Value $1 Per Share, of the
Registrant outstanding as of August 11, 1995 was 40,125,448. The aggregate
market value of such outstanding shares on August 11, 1995 was $1.15 billion,
based upon the closing price for the Common Stock on the New York Stock Exchange
on such date.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference in the
respective Parts hereof indicated:
1. Registrant's Annual Report to Shareholders for Fiscal Year Ended May
28, 1995 (referred to herein as the "Company's Fiscal 1995 Annual
Report"): Part I and Part II
2. Registrant's Proxy Statement for its Annual Meeting of Stockholders
to be held on October 3, 1995 (referred to herein as the "Company's
1995 Proxy Statement"): Part III
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PART I
ITEM 1. BUSINESS.
Dean Foods Company and its subsidiaries ("the Company") is engaged in the
processing, purchase and distribution of dairy and specialty food products.
The Company's principal products are Dairy Products (fluid milk, specialty
dairy products and ice cream) and Specialty Food Products (frozen and canned
vegetables; pickles, relishes and specialty items; powdered products; and
sauces, puddings and dips). A significant portion of the Company's products are
sold under private labels. The Company also operates a trucking business hauling
less-than-truckload freight, concentrating primarily on refrigerated and frozen
cartage.
The predecessor to Dean Foods Company was incorporated in Illinois in 1925.
Acquisitions have been an important factor in the Company's strategy. The
Company does not have specific acquisition criteria, but generally focuses on
food companies having a well-established reputation for quality products and
service.
The Company has made 12 acquisitions in the last five years. During fiscal
1995, the Company acquired the business and assets of a dairy processor located
in Clovis, New Mexico and Rio Grande Foods, Inc., a frozen vegetable processor
located in McAllen, Texas. During fiscal 1994, the Company acquired Longlife
Dairy Products of Jacksonville, Florida, an ultra-high temperature (UHT)
processor of specialty dairy products, the Birds Eye frozen vegetable business
and the Bennett's premium sauce line. During fiscal year 1993, the Company
acquired W. B. Roddenbery Co., Inc. of Cairo, Georgia, a processor of pickles,
peanut butter, boiled peanuts and syrups and acquired an East Coast replacement
sour cream product line. In fiscal year 1992, the Company acquired Meadow Brook
Dairy Company, a dairy processor with plants in Pennsylvania and New York; and
Frio Foods, Inc., a Texas frozen vegetable processor. In fiscal year 1991, the
Company acquired a fluid milk and ice cream business located in Utah and Nevada
operating as Cream o'Weber; Ready Food Products, Inc., a UHT processor of
specialty dairy products; and Pilgrim Farms, Inc., an Indiana pickle processor.
The results of operations of these acquisitions, from their respective dates of
acquisition, have been included in the Company's results of operations.
With one exception, these companies, businesses and assets were acquired
for cash, installment notes or a combination thereof. In fiscal 1993, the
Company exchanged 535,000 shares of its common stock for all the outstanding
shares of W. B. Roddenbery Co., Inc.
Information regarding the Company's Dairy Products and Specialty Food
Products business segments for the last three fiscal years is set forth in the
Company's Fiscal 1995 Annual Report (Exhibit 13a hereto) at page 33 in the note
to consolidated financial statements captioned "Business Segment Information".
Such information, excluding the first sentence of such note, is hereby
incorporated herein by reference.
DAIRY PRODUCTS BUSINESS SEGMENT
Fluid Milk and Specialty Dairy Products
The Company processes raw milk and other raw materials into fluid milk and
specialty dairy products. The Company believes that it is the largest fluid milk
processor in the United States. Although industry data is not available, the
Company estimates that it has a 5% market share in domestic fluid milk. Included
in the fluid products category is homogenized, low-fat and skim milk plus
buttermilk, chocolate milk and juice products. Specialty dairy products include
cottage cheese, yogurt, portion control cream cheese and sour cream, all
cultured fresh dairy products, and an assortment of UHT processed and aseptic
packaged products. The specialty dairy UHT products include whipping creams,
half and half, aerosol toppings, coffee creamers, flavored milks and
lactose-reduced milks.
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Fluid milk and fresh cultured specialty products are sold to grocery store
chains, convenience stores, smaller retail grocery outlets, warehouse club
stores, grocery warehouses and institutional customers in the Midwest and
mid-Southern states, in parts of the Southwestern, Southeastern and Rocky
Mountain states, parts of Pennsylvania and New York, and the Caribbean and
Mexico.
In addition to the strong Dean brand in the Midwest and Mid-South, fluid
milk and fresh cultured specialty dairy products are sold in various areas under
well-established labels such as Bell, Bowman, Creamland, Cream o'Weber,
Fairmont, Fieldcrest, Gandy's, T. G. Lee, Mayfield, McArthur, Meadow Brook,
Price's, Reiter, St. Thomas Dairies and Verifine. A substantial portion of the
Company's fluid milk and specialty dairy products volume is sold under private
labels.
Specialty UHT processed products produced and marketed by Ryan Milk
Company, Ready Food Products, Inc. and Longlife Dairy Products are distributed
nationwide under various branded and private labels.
The fluid milk and specialty dairy products business is extremely
competitive and productivity is therefore very important. The Company continues
to reinvest a substantial portion of its total capital budget in its dairy
plants and distribution systems to maintain and improve efficiencies. Major
capital projects during fiscal 1995 included additional processing equipment and
costs related to plant consolidation of the Lubbock and San Angelo, Texas dairy
processing plants, a cooler expansion at the Rochester, Indiana dairy plant, a
waste water treatment system at the Belleville, Pennsylvania dairy plant and
computer equipment at the Florida dairy operations. Capital expenditure projects
for 1994 included cooler expansions at its Evart, Michigan; Chemung, Illinois;
and Louisville, Kentucky dairy plants; corrugated caser and palletizer at its El
Paso, Texas dairy plant; blowmold packaging equipment at its Rochester, Indiana
dairy plant and construction of a dairy distribution and cooler facility in
Greenville, South Carolina. Major capital projects during fiscal 1993 included
completion of a cooler expansion at its Orlando, Florida dairy operations;
additional processing capacity at its Sharpsville, Pennsylvania dairy plant; and
additional processing equipment at the Company's Philadelphia, Pennsylvania UHT
operation and at its Albuquerque, New Mexico dairy plant.
Capital expenditure projects for fiscal 1992 included the expansion of cold
room capacity at the Company's Lubbock, Texas dairy operation; blowmold
packaging equipment at the Company's Huntley, Illinois location; expansion of
the cooler at its Orlando, Florida dairy operation; construction of a dairy
distribution and cooler facility at Atlanta, Georgia; and addition of processing
capacity at Murray, Kentucky and Philadelphia, Pennsylvania UHT operations.
Sales of fluid milk to unaffiliated customers for the fiscal years 1995,
1994 and 1993 were $1,081 million, $1,077 million and $1,070 million,
respectively. Sales of specialty dairy products to unaffiliated customers for
fiscal 1995, 1994 and 1993 were $213 million, $184 million and $168 million,
respectively.
Ice Cream
The Company produces packaged and bulk ice cream products which are sold
through supermarkets, convenience stores, smaller retail grocery outlets,
restaurants and other foodservice users. The product line includes ice cream
(regular, light, reduced fat, lowfat and non-fat), fruit sherbets, frozen
yogurts, and novelties made with ice cream, sherbet and ices. These products are
sold under a variety of regional brands and numerous private labels in the
Midwest, Mid-South, Southeast, Southwest, the Caribbean and parts of the Rocky
Mountain states under numerous well-established brands. Such brands include
Dean, Country Charm, Gandy's, Creamland, Cream o'Weber, Bell, Price's,
Fitzgerald, Mayfield, Fieldcrest, McArthur/T. G. Lee, Reiter, Verifine, Carnival
and Calypso. During 1995, the Company introduced the Guilt Free brand of non-fat
and no sugar added ice cream products. Sales of ice cream products are
substantially greater during the summer months than during the rest of the year.
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Additionally, the Company produces and supplies Baskin-Robbins ice cream
products in the Midwest and Southwest.
Capital expenditures during fiscal 1995 included plant expansion and
replacement of refrigeration equipment at the Belvidere, Illinois ice cream
plant. Major projects in 1994 included a stick novelty line, freezer expansion
and new distribution facilities in Athens, Tennessee and new processing
equipment in Akron, Ohio. Capital expenditure projects in fiscal 1992 included
expansion of ice cream production capacity at the Company's Akron, Ohio
operation.
Sales to unaffiliated customers for the fiscal years 1995, 1994 and 1993
were $220 million, $208 million and $199 million, respectively.
SPECIALTY FOOD PRODUCTS BUSINESS SEGMENT
Frozen and Canned Vegetables
The Company processes and markets frozen and canned vegetables consisting
of corn, peas, green beans, carrots, beets, spinach, peas and carrots, green
lima beans and various mixed vegetable blends. Additional products in the frozen
vegetable line include asparagus, broccoli, Brussels sprouts, cauliflower,
fordhook lima beans, southern greens, okra, crowder and black-eyed peas, celery
and vegetable blends with pasta and with rice. The processing and canning of
fresh vegetables is seasonal in nature, with most of the canning activity in the
Midwest occurring during and shortly after harvesting periods. The Company
believes the geographic diversity of its plants and growing areas provides the
ability to balance production. The packaging of processed frozen vegetables
occurs year-round. As a result of the seasonal nature of the vegetable business,
inventory levels vary significantly during the year.
Frozen vegetables account for approximately 76% of the total vegetable
sales. The Company is the largest frozen vegetable processor in the United
States and the third largest vegetable processor overall. Products are marketed
under several brand names including Birds Eye, Veg-All, Freshlike, Larsen,
Rancho Fiesta and Shaw, as well as under customer brand names or in-house
brands. The Company's Birds Eye vegetable brand is marketed throughout the
United States. The Company's canned mixed vegetable, Veg-All, is marketed in all
major and secondary markets throughout the United States, while Veg-All frozen
and canned single vegetable items are marketed in the Southeast and the South.
The Freshlike canned and frozen vegetable line is marketed primarily in the
Midwest, Pennsylvania, West Virginia and Texas. Other vegetable products are
marketed under private labels or in-house brands throughout the United States
and exported to the Far East, Mid-East, Europe, Mexico, Canada and the
Caribbean. Retail or consumer sizes are distributed for ultimate sales to
consumers through chain and independent retail stores and include Company brands
and buyers' brands of all products. Institutional customers, including hotels,
restaurants, in-plant feeding programs, and schools are serviced through
foodservice distributors with products packaged in larger containers.
During fiscal 1995, major capital expenditures included the completion of
the new carrot line in Uvalde, Texas and a waste water treatment plant in
Celaya, Mexico. Major capital projects in 1994 included the installation of a
carrot processing line at Uvalde, Texas and an expansion of the office
facilities in Green Bay, Wisconsin. Fiscal 1993 and 1992 capital expenditures
included the construction of a waste water treatment facility at the Company's
Bellingham, Washington location.
Sales to unaffiliated customers for fiscal years 1995, 1994 and 1993 were
$534 million, $415 million and $347 million, respectively.
Pickles, Relishes and Specialty Items
The Company is one of the largest pickle processors and marketers in the
United States with sales nationwide. Pickles, relishes, pickled peppers and
other assorted specialty items are sold
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under several brand names, including Roddenbery, Peter Piper, Heifetz, Pesta,
Atkins, Whitfield, Aunt Jane's, Ma Brown, Tree, Rainbo, Cates and Dailey.
Products are also sold for private label distribution to retail grocery store
chains, wholesalers and the foodservice industry and in bulk to other food
processors. Late in fiscal 1993 the Company acquired W. B. Roddenbery Co., Inc.,
located in Cairo, Georgia, a processor of pickles, boiled peanuts and syrups.
During fiscal 1992 the Company's Green Bay Food Company became the exclusive
U.S. marketer of green olives for a leading Spanish olive packer.
Major capital expenditure projects during fiscal 1995 included the
installation of processing equipment at the Company's Cairo, Georgia plant.
Fiscal 1994 capital expenditures included the construction of a new processing
room at the Company's LaJunta, Colorado plant. Major capital expenditures in
fiscal 1993 included installation of processing equipment at the Company's
Plymouth, Indiana plant and construction of administrative office facilities at
its Atkins, Arkansas location. In fiscal 1992, additional warehouse capacity was
added at its Atkins, Arkansas location.
The processing of pickle products is seasonal, dependent to a large extent
upon the growing season of cucumbers in the summer months. Inventories are
therefore higher in the fall and winter months than in the spring and early
summer.
The Company markets a number of specialty sauces, including shrimp,
seafood, tartar, horseradish, chili and sweet and sour sauces, in the Eastern,
Midwestern and Southern United States to retail grocers. Products are sold under
the Bennett's and Hoffman House brand names.
Sales to unaffiliated customers for the fiscal years 1995, 1994 and 1993
were $367 million, $353 million and $304 million, respectively.
Powdered Products
Non-dairy coffee creamers are the Company's principal powdered products.
Powdered premium and low-fat products are sold primarily under private labels to
vending operators, office beverage service companies and institutional
foodservice distributors with national distribution which supply restaurants,
schools, health care institutions, hotels and vending and fast-food operations.
Non-dairy creamers are also sold for private label distribution to all classes
of the retail trade and sold in bulk to a number of other food companies for use
as an ingredient in their food products. During fiscal 1995, the Company
developed and commenced marketing a full line of flavored non-dairy coffee
creamers. Powdered products are also sold to international customers in
Australia, Canada, the Far East, Mexico, South America, Europe and the Middle
East. The Company believes that it is the largest manufacturer of non-dairy
coffee creamers in the United States. The Company's non-dairy coffee creamers
are an economical and convenient substitute for milk and cream. They require no
refrigeration and have long shelf lives.
The Company provides stabilizers for low-fat shake and frozen yogurt mixes
supplied to McDonald's restaurants throughout the United States and, through an
affiliate, the Company supplies the United Kingdom, Continental Europe and other
foreign markets with stabilizers and other dry ingredients.
The Company's powdered products are sold in a broad variety of product
formulations and package sizes. No major capital expenditures were required
during the past five years.
Sales to unaffiliated customers for the fiscal years 1995, 1994 and 1993
were $110 million, $100 million and $88 million, respectively.
Sauces, Puddings and Dips
The Company's aseptic products primarily include ready-to-serve natural
cheese sauces, puddings and other specialty sauces which are sterilized under a
process which allows storage for prolonged periods without refrigeration.
Aseptic products are sold nationwide, primarily under
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private labels to distributors which supply restaurants, schools, hotels and
other segments of the foodservice industry. Major capital expenditures in fiscal
1995 and 1994 include a multi-phase project to significantly upgrade the Dixon,
Illinois facility with the completion of a new batch make-up room.
The Company manufactures vegetable-fat-based party dips, low-fat sour cream
and sour cream replacements at its Rockford, Illinois facility. These products
are sold nationally, but primarily east of the Rockies, under the Dean's, King
and private label brands in supermarkets and other retail outlets through
distributor or direct warehouse delivery. Dean brand vegetable-fat-based dips,
available in regular, lowfat and non-fat varieties, have the leading market
position nationwide. In fiscal 1995, the Company introduced Birds Eye Veggie
Dip, sold in the produce section of grocery stores.
Sales to unaffiliated customers for the fiscal years 1995, 1994 and 1993
were $74 million, $69 million and $67 million, respectively.
Corporate and Other
DFC Transportation Company, a trucking subsidiary of the Company, operates
nationwide with a fleet of approximately 110 tractors and 214 trailers,
providing less-than-truckload refrigerated and frozen cartage service. Its
customers include food and industrial companies. A significant portion of its
revenues are derived from the brokerage of various types of freight. During the
fourth quarter of 1992, the Company decided to terminate operation of the
refrigerated truckload transportation portion of its trucking business and a
charge to earnings was provided for the costs associated with such termination.
Revenues for the trucking division from unaffiliated customers in fiscal
years 1995, 1994 and 1993 were $22 million, $20 million and $21 million,
respectively. Revenues relating to hauling products for other divisions and
subsidiaries of the Company have been eliminated.
Also included in Corporate and Other are sales of canned meats processed
under bid contracts with the federal government. Such sales vary greatly from
year to year because of the nature of the federal government's procurement
practices. Margins are small since these contracts are taken primarily to absorb
overhead of the Company's canning operation during seasonally idle periods of
production. Sales in fiscal years 1995, 1994 and 1993 were $9 million, $5
million and $10 million, respectively.
RAW MATERIALS AND SUPPLIES
The Company's business is dependent upon obtaining adequate supplies of raw
and processed agricultural products. Historically, the Company has been able to
obtain adequate supplies of agricultural products.
Raw milk and other agricultural products are generally purchased directly
from farmers and farm cooperatives. The Company does not have long-term purchase
contracts for agricultural products. The price of raw milk is extensively
regulated. Raw milk costs fell substantially in the first quarter of fiscal 1995
remaining stable throughout the balance of the year. In fiscal 1994, raw milk
costs exceeded fiscal 1993 levels during the first quarter, fell in the second
quarter and then increased significantly during the last half of the year,
remaining higher than fiscal 1993 levels. Raw milk costs rose slightly during
the first part of fiscal 1993, declining somewhat during the latter part of the
year as costs were moderately higher than fiscal 1992 cost levels.
The Company produces most of its plastic gallon and half-gallon container
requirements for its fluid milk business. Can requirements for canned vegetables
are primarily furnished by three can manufacturers, and glass containers for
pickles and related products are purchased from one main supplier, as required,
at competitive prices.
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Certain commodities, such as corn syrups, vegetable oils, sugar and casein,
and various packaging supplies are purchased from numerous sources on a normal
purchase order basis, with vegetables and cucumbers purchased under seasonal
grower contracts. The Company is not dependent upon any single supplier and is
confident that any lost supplier requirements could be replaced in the ordinary
course of business.
In its vegetable and pickle operations, the Company supplies seed to and
advises growers regarding planting techniques, monitors and arranges for the
control of insects, directs the harvest, and, for some crops, provides automated
harvesting service. Vegetable supplies are largely dependent on regional weather
and growing conditions. Although weather-related delays and crop conditions have
been encountered this year in certain growing areas, early indications are that
supplies will be adequate and fiscal 1996 raw crop costs should approximate
fiscal 1995 raw crop cost levels. Weather-related crop shortages and harvest
delays in the Midwest growing region resulted in higher fiscal 1994 profit
margins in the Company's vegetable business. Industry-wide inventories of
certain vegetables were high during fiscal years 1993 and 1992 which resulted in
decreased profit margins. The prices of raw cucumbers increased in fiscal 1995
as a result of weather-related costs after being relatively stable during the
two previous fiscal years.
DISTRIBUTION
Dairy Products are principally delivered to grocery chain stores or
warehouses directly from the Company's processing plants by the Company, in
trucks which it owns or leases, and by independent distributors. In certain
states, products are also delivered to the Company's distribution branches from
which distribution is then made to customers. The Company has continued its
efforts to streamline its distribution system for Dairy Products. Major
economies have been effected in recent years through consolidation of
distribution branches and routes, with emphasis on direct truck delivery to
retail stores and warehouses of grocery chains. The Company's Specialty Food
Products are delivered to warehouses and food distributors by the Company's
fleet of trucks and outside freight carriers. Inventories of frozen and canned
vegetables are maintained by the Company in warehouses throughout the country in
order to maintain a ready supply for rapid delivery to local retailers.
COMPETITION
The Company's business is highly price competitive with relatively low
operating margins. Quality and customer service are important factors in
securing and maintaining business. An important aspect of the Company's service
to customers is computer ordering, shipping and billing systems. Referred to in
the food industry as "Efficient Consumer Response", the Company has over the
last few years made a substantial commitment to these areas. The Company's Dairy
Products business operates in a number of different geographical markets,
competing in some against national companies and in others against regional or
local companies. In certain markets, some supermarket chain stores have their
own dairy products processing plants. Generally, in each major market and
product class there are a number of competitors, some of which have greater
sales and assets than the Company's operations in that market. The Company's
Specialty Food Products are marketed nationwide and internationally. The degree
of penetration and competitive conditions in each market varies, but the Company
does not consider that it has any material competitive advantage in any of its
major markets or product classes.
EMPLOYEES
The Company has approximately 11,800 full-time employees, of whom
approximately 4,200 are represented by the International Brotherhood of
Teamsters and other unions under thirty-nine collective bargaining agreements.
Thirteen of these agreements expire during fiscal 1996. These
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include agreements with employees at Central Illinois; Rochester, Indiana; Salt
Lake City, Utah; Albuquerque, New Mexico; Akron, Ohio; Las Vegas, Nevada; Erie,
Pennsylvania and Murray, Kentucky dairy plants; Atkins, Arkansas and Plymouth,
Indiana pickle product plants; Waseca, Minnesota; Fulton, New York and
Bellingham, Washington vegetable products plants. Generally, the Company
considers its employee relations to be good.
The Company has approximately 7,200 seasonal positions at its vegetable
operations and its pickle processing plants, principally during the summer
months. In recent years, the Company has experienced difficulties in meeting
seasonal employee needs. The Company estimates that three individuals are hired
for each seasonal position. A number of strategies have been employed to retain
seasonal employees including incentive programs and employee sharing programs.
ENVIRONMENT
The Company's compliance with Federal, State and local regulations relating
to the discharge of material into the environment or otherwise relating to the
protection of the environment has not had a material effect on the Company's
capital expenditures, earnings or competitive position. The Company continues to
give considerable attention to the impact or potential impact of its operations
on the environment.
ITEM 2. PROPERTIES.
The Company owns fifty-six of its processing plants (four of which are
subject to mortgage) and leases the other three under leases expiring from
fiscal 1997 through fiscal 2011. The Company has various distribution branches
and storage warehouses located throughout the country, some of which are owned
and some leased. The Company considers its properties suitable and adequate for
the conduct of its business. A number of the vegetable canning production
facilities are operated only during the vegetable intake season. All other
production facilities are principally operated at or near capacity levels, but
generally on the basis of fewer than three shifts per day.
Further information relating to the Company's leases is contained in the
note to consolidated financial statements captioned "Leases" appearing in the
Company's Fiscal 1995 Annual Report (Exhibit 13a hereto) on page 32. Such
information is hereby incorporated herein by reference.
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The locations of the Company's processing facilities, by product category
within business segments, are set forth below:
DAIRY PRODUCTS
Fluid Milk and Specialty Dairy
Jacksonville, Florida Barberton, Ohio
Miami, Florida Springfield, Ohio
Orange City, Florida Belleville, Pennsylvania
Orlando, Florida Erie, Pennsylvania
Chemung, Illinois Philadelphia, Pennsylvania
Huntley, Illinois Sharpsville, Pennsylvania
Rockford, Illinois Athens, Tennessee
Rochester, Indiana El Paso, Texas
Louisville, Kentucky Lubbock, Texas
Murray, Kentucky Salt Lake City, Utah
Evart, Michigan St. Thomas, Virgin Islands
Albuquerque, New Mexico Sheboygan, Wisconsin
Clovis, New Mexico
Ice Cream
Ft. Lauderdale, Florida Athens, Tennessee
Belvidere, Illinois Lubbock, Texas
Albuquerque, New Mexico St. Thomas, Virgin Islands
Barberton, Ohio
SPECIALTY FOOD PRODUCTS
Frozen and Canned Vegetables
Oxnard, California Brillion, Wisconsin
Watsonville, California Cambria, Wisconsin
Hartford, Michigan Cedar Grove, Wisconsin
Arlington, Minnesota Darien, Wisconsin
Waseca, Minnesota Fairwater, Wisconsin
Fulton, New York Fort Atkinson, Wisconsin
McAllen, Texas Green Bay, Wisconsin
Uvalde, Texas Hortonville, Wisconsin
Bellingham, Washington Celaya, Mexico
Bloomer, Wisconsin
Pickles, Relishes and Specialty Items
Atkins, Arkansas Plymouth, Indiana
LaJunta, Colorado Croswell, Michigan
Sanford, Florida Faison, North Carolina
Cairo, Georgia Green Bay, Wisconsin
Powdered Products
Pecatonica, Illinois Wayland, Michigan
Rockford, Illinois
Sauces, Puddings and Dips
Dixon, Illinois Rockford, Illinois
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Distribution branches for Dairy Products are located in Alabama, Florida,
Georgia, Idaho, Illinois, Nevada, New Mexico, New York, Ohio, Pennsylvania,
South Carolina, Tennessee, Texas, and Virginia.
Specialty Food Products distribution warehouses are maintained adjacent to
many processing plants with public warehouses utilized throughout the United
States for further distribution of vegetable and pickle products. The Company
maintains powdered product distribution branches in Arkansas, Illinois,
Kentucky, Michigan, Texas and Utah. A Company-owned transportation terminal and
maintenance facility is located in Illinois.
ITEM 3. LEGAL PROCEEDINGS.
Information on legal proceedings is contained in the Company's Fiscal 1995
Annual Report (Exhibit 13a hereto) on page 32 in the note to consolidated
financial statements captioned "Commitments and Contingent Liabilities". Such
information is hereby incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended May 28, 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Company's executive officers is set forth in Item
10 of Part III of this Report.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is traded on the New York Stock Exchange under
the ticker symbol DF. The range of Common Stock sales prices for each of the
quarters during the past two fiscal years (as reported by the New York Stock
Exchange) and the frequency and amount of Common Stock dividends declared the
past two fiscal years are set forth under the caption "Quarterly Financial Data"
at page 34 of the Company's Fiscal 1995 Annual Report (Exhibit 13a hereto) in
the rows captioned "Stock Price Range" and "Dividend Rate". Such rows and the
column and row captions related thereto are hereby incorporated herein by
reference.
The approximate number of holders of record of the Company's Common Stock
on August 11, 1995, was 9,921.
Restrictions on the Company's ability to pay dividends on its Common Stock
are described in the first paragraph of the "Borrowing Arrangements" note to the
consolidated financial statements at page 28 of the Company's Fiscal 1995 Annual
Report (Exhibit 13a hereto), which paragraph is hereby incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for each of the Company's last five fiscal years is
set forth at page 35 of the Company's Fiscal 1995 Annual Report (Exhibit 13a
hereto) under the caption "Summary of Operations". Such selected financial data
is hereby incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
A discussion of the Company's financial condition, cash flows and results
of operations, including information with respect to liquidity and capital
resources, is set forth at pages 18 through 21 of the Company's Fiscal 1995
Annual Report (Exhibit 13a hereto) under the caption "Financial Review", which
discussion is hereby incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Company's consolidated balance sheets as of May 28, 1995 and May 29,
1994 and related consolidated statements of income, of shareholders' equity and
of cash flows for each of the three fiscal years in the period ended May 28,
1995, and the notes thereto, together with the report thereon of independent
accountants, are set forth on pages 22 through 34 of the Company's Fiscal 1995
Annual Report (Exhibit 13a hereto). Such financial statements, notes thereto,
and the report thereon of independent accountants are hereby incorporated herein
by reference.
Five-year summary of selected financial data is set forth on page 35 of the
Company's Fiscal 1995 Annual Report (Exhibit 13a hereto) and is hereby
incorporated herein by reference.
Financial data for each quarter within the two most recent fiscal years is
set forth under the caption "Quarterly Financial Data" at page 34 of the
Company's Fiscal 1995 Annual Report (Exhibit 13a hereto) in the rows captioned
"Net Sales", "Gross Profit", "Net Income" and "Per Common Share Data: Net
Income". Such rows and row captions related thereto are hereby incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
11
12
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Company's directors (including nominees for
election at the Company's Annual Meeting of Stockholders to be held October 3,
1995) is set forth at pages 1 through 6 of the Company's 1995 Proxy Statement
under the captions "ELECTION OF DIRECTORS" and "CERTAIN INFORMATION REGARDING
THE BOARD OF DIRECTORS". Such information is hereby incorporated herein by
reference.
Information supplied by the Company's executive officers who are not also
directors of the Company concerning their ages, business experiences, and
periods of service as executive officers is as follows:
SERVED IN
POSITION WITH SUCH POSITION
THE COMPANY AGE SINCE
--------------------------- ---- -------------
Eric A. Blanchard.............................. Vice President, 39 1993
Secretary and
General Counsel
Jenny L. Carpenter............................. Vice President, 49 1995
Sales and Marketing
Specialty Food Products
Gary A. Corbett................................ Vice President 47 1993
Governmental and
Dairy Industry Relations
Gary D. Flickinger............................. Vice President 53 1993
Production
Daniel E. Green................................ Group Vice President 50 1992
Specialty Dairy Division
James R. Greisinger............................ Group Vice President 54 1992
and President of Dean
Pickle and Specialty
Products Company
Dale I. Hecox.................................. Treasurer 63 1985
Charles D. Kinser.............................. Vice President 63 1995
Engineering
George A. Muck................................. Vice President 57 1970
Research & Development
Douglas A. Parr................................ Vice President 53 1993
Sales & Marketing--
Milk and Ice Cream
Dennis J. Purcell.............................. Vice President 52 1993
Sales--National Accounts
Roger A. Ragland............................... Group Vice President 61 1995
International Sales
Jeffrey P. Shaw................................ Group Vice President 38 1992
and President of Dean Foods
Vegetable Company
12
13
Each of the executive officers, including executive officers who are also
directors, was elected to serve as an executive officer until the next annual
meeting of directors, scheduled for October 3, 1995.
All of the Company's executive officers listed in Part III, Item 10 have
been employees of the Company for more than five years, with the exception of
Mr. Parr. Prior to assuming their current positions, Mr. Blanchard was the
Company's secretary and general counsel; Ms. Carpenter was the Company's
Director of Marketing and Sales--Specialty Foods Division; Mr. Corbett was in
the Company's sales administration management; Mr. Flickinger was the Director
of Production--Dairy and a divisional general manager; Mr. Green was the
Company's Vice President, Corporate Planning and Development and previously held
positions of a marketing executive, divisional general manager and the Company's
Director of Research; Mr. Greisinger was a Company Vice President and President
of Dean Pickle and Specialty Products Company; Mr. Kinser was the Company's
Director of Engineering; Mr. Purcell was Senior Vice President of Sales and
Marketing of Dean Pickle and Specialty Products Company; Mr. Ragland was a
divisional sales vice president; Mr. Shaw was President of the Company's Richard
A. Shaw, Inc. subsidiary, which was subsequently merged into Dean Foods
Vegetable Company.
Mr. Parr has been employed by the Company since 1992. Prior to assuming his
present duties he was a Company regional sales manager. Mr. Parr, prior to his
employment by the Company, was the Vice President--Western Zone Dairy Group of
Borden, Inc., a diversified food and dairy company.
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding the cash compensation of the Company's executive
officers, compensation pursuant to plans and compensation of the Company's
directors (including nominees for election at the Company's Annual Meeting of
stockholders to be held October 3, 1995) is set forth in the Company's 1995
Proxy Statement at pages 5 through 6 under the caption "CERTAIN INFORMATION
REGARDING THE BOARD OF DIRECTORS" and at pages 6 through 13 under the caption
"EXECUTIVE COMPENSATION." Such information is hereby incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information regarding security ownership of certain beneficial owners and
management is set forth in the Company's 1995 Proxy Statement at pages 18 and 19
under the caption "PRINCIPAL HOLDERS OF VOTING SECURITIES". Such information is
hereby incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information regarding certain transactions is set forth in the Company's
1995 Proxy Statement at page 17 under the caption "CERTAIN TRANSACTIONS." Such
information is hereby incorporated herein by reference.
13
14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this Report. The page
number, if any, listed opposite a document indicates the page number in the
sequential numbering system in the manually signed original of this Report where
such document can be found.
PAGE
NO.
-----
(1) Financial Statements
The consolidated balance sheets at May 28, 1995 and May 29, 1994, the
related consolidated statements of income, of shareholders' equity and
of cash flows for each of the three fiscal years in the period ended
May 28, 1995, and the notes thereto, together with the report thereon
of Price Waterhouse dated June 26, 1995, as incorporated by reference
in Part II, Item 8 of this Report.
(2) Financial Statement Schedules
Report of independent accountants on financial statement 15
Schedule VIII--Valuation and qualifying accounts 16
All other schedules have been omitted because they are not applicable,
or not required, or because the required information is shown in the
consolidated financial statements or notes thereto.
Separate financial statements of the Registrant have been omitted
since the Registrant is primarily an operating company and all
subsidiaries included in the consolidated financial statements, in the
aggregate, do not have minority equity interest and/or indebtedness to
any person other than the
Registrant or its consolidated subsidiaries in amounts which together
exceed 5% of total consolidated assets at May 28, 1995, except for
indebtedness incurred in the ordinary course of business which is not
overdue and which matures within one year from the date of its
creation.
(3) Exhibits
See Exhibit Index 17-18
(b) Reports on Form 8-K.
(1) Registrant filed a Current Report on Form 8-K, dated April 20, 1995,
with respect to the Registrant's filing of a Prospectus Supplement to
Prospectus dated April 13, 1995, filed with the Securities and
Exchange Commission relating to the issuance of $200 Million Senior
Medium-Term Notes, Series A.
(2) Registrant filed a Current Report on Form 8-K, dated June 14, 1995.
Form 8-K, Item 7 exhibits (filed in connection with the Company's
Registration Statement on Form S-3, Reg. No. 33-57353, as amended,
originally filed with the Commission on January 19, 1995) included the
Underwriting Agreement dated June 14, 1995, between Dean Foods Company
and Morgan Stanley & Co., Incorporated and J.P. Morgan Securities,
Inc. relating to issuance of $100 Million aggregate principal amount
of 6 3/4% Senior Notes Due June 15, 2005 and the Form of 6 3/4% Senior
Notes Due June 15, 2005.
14
15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
DEAN FOODS COMPANY
By: THOMAS L. ROSE
------------------------------------
Thomas L. Rose
(President and Chief Operating
Officer)
Date: August 25, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
---------------------------------------- ----------------------------- ----------------
HOWARD M. DEAN Chairman of the Board and August 25, 1995
---------------------------------------- Director
Howard M. Dean
LEWIS M. COLLENS Director August 25, 1995
----------------------------------------
Lewis M. Collens
PAULA H. CROWN Director August 25, 1995
----------------------------------------
Paula H. Crown
WILLIAM D. FISCHER Director August 25, 1995
----------------------------------------
William D. Fischer
JOHN P. FRAZEE, JR. Director August 25, 1995
----------------------------------------
John P. Frazee, Jr.
BERT A. GETZ Director August 25, 1995
----------------------------------------
Bert A. Getz
ANDREW J. MCKENNA Director August 25, 1995
----------------------------------------
Andrew J. McKenna
THOMAS A. RAVENCROFT Senior Vice President and August 25, 1995
---------------------------------------- Director
Thomas A. Ravencroft
THOMAS L. ROSE President and Director August 25, 1995
----------------------------------------
Thomas L. Rose
JOHN S. LLEWELLYN, JR. Director August 25, 1995
----------------------------------------
John S. Llewellyn, Jr.
ALEXANDER J. VOGL Director August 25, 1995
----------------------------------------
Alexander J. Vogl
DALE I. HECOX Treasurer--Principal August 25, 1995
---------------------------------------- Accounting Officer
Dale I. Hecox
15
16
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors
Dean Foods Company
Our audits of the consolidated financial statements referred to in our
report dated June 26, 1995 appearing on page 34 of the Dean Foods Company Annual
Report to Shareholders for Fiscal Year Ended May 28, 1995 (which report and
consolidated financial statements are incorporated by reference in this Annual
Report on Form 10-K) also included an audit of the Financial Statement Schedule
listed in Item 14(a) of this Form 10-K. In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
PRICE WATERHOUSE LLP
Chicago, Illinois
June 26, 1995
16
17
DEAN FOODS COMPANY AND SUBSIDIARIES
------------------------
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
AMOUNT
CHARGED
BALANCE AT (CREDITED) ACCOUNTS BALANCE
BEGINNING TO COSTS WRITTEN AT END
CLASSIFICATION OF PERIOD AND EXPENSES OFF OF PERIOD
------------------------------------------------- ---------- ------------ -------- ---------
(IN THOUSANDS)
FISCAL YEAR ENDED MAY 28, 1995
Allowance for doubtful accounts and notes
receivable..................................... $3,918 $666 $ 327 $ 4,257
Allowance for doubtful long-term receivables..... -- -- -- --
------ ---- ------ -------
Total reserves deducted in balance sheet from
assets to which they apply..................... $3,918 $666 $ 327 $ 4,257
====== ==== ====== =======
FISCAL YEAR ENDED MAY 29, 1994
Allowance for doubtful accounts and notes
receivable..................................... $4,470 $326 $ 878 $ 3,918
Allowance for doubtful long-term receivables..... 4 (4) -- --
------ ---- ------ -------
Total reserves deducted in balance sheet from
assets to which they apply..................... $4,474 $322 $ 878 $ 3,918
====== ==== ====== =======
FISCAL YEAR ENDED MAY 30, 1993
Allowance for doubtful accounts and notes
receivable..................................... $5,331 $833 $1,694 $ 4,470
Allowance for doubtful long-term receivables..... 26 (22) -- 4
------ ---- ------ -------
Total reserves deducted in balance sheet from
assets to which they apply..................... $5,357 $811 $1,694 $ 4,474
====== ==== ====== =======
17
18
EXHIBIT INDEX
The following documents are the exhibits to this Report. For convenient
reference, each exhibit is listed according to the number assigned to it in the
Exhibit Table of Item 601 of Regulation S-K. The page number, if any, listed
opposite an exhibit indicates the page number in the sequential numbering system
in the manually signed original of this Report where such exhibit can be found.
PAGE NO.
--------
(3) Articles of Incorporation and By-Laws
a. Dean Foods Company Restated Certificate of Incorporation dated February
8, 1988 (filed as Exhibit 3(a) to Registrant's Form 10-K Annual Report for
Fiscal Year Ended May 29, 1988 and incorporated herein by reference)
b. By-Laws of Registrant, as amended December 2, 1988 (filed as Exhibit
3(b) to the Registrant's Form 10-K Annual Report for Fiscal Year Ended May
28, 1989 and incorporated herein by reference)
(4) Instruments defining the rights of security holders, including indentures
a. Rights Agreement dated July 28, 1988 (filed as Exhibit 4(a) to the
Registrant's Form 10-K Annual Report for Fiscal Year Ended May 28, 1989 and
incorporated herein by reference)
b. Amendment dated December 1, 1989, to Rights Agreement dated July 28,
1988 (filed as exhibit 4(b) to Registrant's Form 10-K Annual Report for
Fiscal Year Ended May 27, 1990 and incorporated herein by reference)
(10) Material contracts
a. Amended and Restated Dean Foods Company Management Deferred Compensation
Plan, dated as of June 1, 1994 (filed as Exhibit 10(a) to Registrant's
Form 10-K Annual Report for Fiscal Ended May 29, 1994 and incorporated
herein by reference)
b. Dean Foods Company Retirement Plan for Certain Directors (filed as
Exhibit 10(a) to Registrant's Form 10-K Annual Report for Fiscal Year
Ended December 28, 1985 and incorporated herein by reference)
c. Form of Agreement dated March 17, 1986, between Registrant and each of
its current executive officers (filed as Exhibit 10(b) to Registrant's Form
10-K Annual Report for Fiscal Year Ended December 28, 1985 and
incorporated herein by reference)
d. Form of Indemnification Agreement between Registrant and each of its
directors and officers serving at any time after October 5, 1987 (filed
as Exhibit 10(m) to Registrant's Form 10-K Annual Report for Fiscal Year
Ended May 29, 1988, and incorporated herein by reference)
e. Amended and Restated Dean Foods Company Directors Deferred Compensation
Plan, dated March 25, 1988 (filed as Exhibit 10(j) to Registrant's Form
10-K Annual Report for Fiscal Year Ended May 28, 1989 and incorporated
herein by reference)
f. Dean Foods Company Supplemental Benefit Plan for eligible officers, as
amended and restated on May 24, 1991 (filed as Exhibit 10(k) to
Registrant's Form 10-K Annual Report for Fiscal Year ended May 26, 1991
and incorporated herein by reference)
g. Dean Foods Company Supplemental Incentive Compensation Plan for certain
officers, as amended March 31, 1989 (filed as Exhibit 10(l) to
Registrant's Form 10-K Annual Report for Fiscal Year Ended May 28, 1989
and incorporated herein by reference)
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19
PAGE NO.
--------
h. Dean Foods Company Director Stock Option Plan, dated September 30, 1992
(filed as Exhibit 10(i) to Registrant's Form 10-K Annual Report for
Fiscal Year ended May 30, 1993 and incorporated herein by reference)
i. $100 Million Credit Agreement dated February 16, 1995 (filed as Exhibit
10(1) to Registrant's Form 10-Q Quarterly Report for Quarterly Period Ended
February 26, 1995 and incorporated herein by reference)
j. $200 Million Credit Agreement dated February 16, 1995 (filed as Exhibit
10(2) to Registrant's Form 10-Q Quarterly Report for Quarterly Period Ended
February 26, 1995 and incorporated herein by reference)
(11) Statement re computation of per share earnings 19
(12) Computation of Ratio of Earnings to Fixed Charges 20
(13) Annual report to security holders, Form 10-Q or quarterly report to
security holders
a. Dean Foods Company Annual Report to Shareholders for Fiscal Year Ended 21-41
May 28, 1995
With the exception of the financial statements, report of independent
accountants thereon and certain other information expressly incorporated
herein by reference, the Registrant's Annual Report to Shareholders for
Fiscal Year Ended May 28, 1995 is not to be deemed filed as part of this
Report.
(21) Subsidiaries of the Registrant
a. Subsidiaries of the Registrant as of May 28, 1995 42
(23) Consents of Experts and Counsel
a. Consent of Independent Accountants dated August 25, 1995 43
(27) Financial Data Schedules 44
19