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EXHIBIT 99.1
SUIZA FOODS CORPORATION REPORTS FOURTH QUARTER AND
YEAR-END 1997 EARNINGS
BUSINESS WIRE - FEBRUARY 18, 1998 09:29
%SUIZA-FOODS SZA %TEXAS %FOODS %BEVERAGES %EARNINGS V%BW P%BW
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DALLAS--(BUSINESS WIRE)--Feb. 18, 1998--Suiza Foods Corporation (NYSE:SZA) today
announced operating results for its fourth quarter ended December 31, 1997. As
previously reported, the Company completed its mergers with Country Fresh and
Morningstar in the fourth quarter. Since these mergers were accounted for as
poolings of interests, the Company's historical results have been adjusted to
reflect the historical operating results of Country Fresh and Morningstar in
Suiza's consolidated operating results for each period reported. Net sales
increased 50.6% to $562.1 million in the fourth quarter of 1997 versus $373.2
million in comparable quarter of 1996. Operating income for the fourth quarter
was $5.7 million ($42.7 million before the charges for merger costs of $37.0
million related to the Country Fresh and Morningstar mergers), as compared to
fourth quarter of 1996 operating income of $20.1 million. Net income applicable
to common stockholders, before nonrecurring merger costs and extraordinary
losses grew 87.3% to $18.7 million as compared to $10.1 million in the fourth
quarter of 1996. Fourth quarter diluted earnings per common share before these
nonrecurring items grew 54.1% to $0.57 compared with $0.37 in the 1996 fourth
quarter. There were 22.8% more diluted common shares outstanding in the most
recent period primarily due to the January 1997 public equity offering. Full
year net sales of $1.861 billion in 1997 were 47.7% higher than 1996 net sales
of $1.260 billion. Operating income for 1997 was $103.3 million ($140.3 million
before the charges for merger costs of $37.0 million related to the Country
Fresh and Morningstar mergers), as compared to the operating income of $71.6
million in 1996. On a diluted basis, net income, applicable to common
shareholders before nonrecurring items was $65.0 million of $2.07 per share as
compared to $35.3 million or $1.44 per share in 1996. In 1997, there were 28.3%
more average diluted common shares outstanding than in 1996. The Company noted
that strong 1997 fourth quarter and full year results reflect the success of its
strategy of expansion by acquisitions in the dairy, consumer goods plastic
packaging and packaged ice businesses. During 1997, Suiza Foods completed 8
significant dairy acquisitions, 15 ice acquisitions and added Franklin Plastics,
a manufacturer of blow molded plastic bottles in connection with its acquisition
of Garelick Farms in July 1997. In the fourth quarter of 1997, gross margins
were 23.6% compared to 20.9% in 1996, while operating margins before the merger
charges in the fourth quarter of 1997 increased to 7.7% from 5.4% in the fourth
quarter of 1996. For the full year, gross margins of 23.9% increased from 21.5%
in 1996 and operating margins before merger charges in 1997 were 7.5% compared
with 5.7% in 1996. Suiza's margins widened due to operating improvements in the
Company's fluid dairy division and sales increases in Morningstar's portfolio of
higher margin branded and specialty dairy
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products, combined with improved results at operations owned more than one year.
Gregg L. Engles, Chairman and Chief Executive Officer of Suiza Foods, said,
"During 1997, we were further able to implement our strategy of expansion by
acquisition in the dairy, packaged ice, and packaging businesses. Opportunities
for dairy industry consolidation continue to be available on an accretive basis,
as evidenced by our recent agreement to acquire Land-O-Sun Dairies. We will
pursue those opportunities as we have in the past in an effort to establish a
truly national manufacturing and distribution network in fluid milk and secure
our position as America's leading dairy company." Suiza Foods is a Dallas-based
company with leading positions in the dairy, consumer goods plastic packaging
and packaged ice industries. Its principal holdings are in fluid dairy
processing, refrigerated, shelf-stable and frozen food products, packaged ice
and consumer goods plastic packaging.
Statements in this press release other than statements of historical fact may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements, as
well as Suiza's future financial condition and results, are subject to inherent
risks and uncertainties, and actual results may differ materially from the
results discussed in these forward-looking statements. Additional information
concerning these and other risk factors are contained in Suiza's latest Annual
Report on Form 10-K and in each of Suiza's other recent filings with the
Securities and Exchange Commission (SEC), copies of which are available from the
SEC and can be obtained from Suiza upon request.
SUIZA FOODS CORPORATION
(Dollars in thousands, except per share data)
Three months ended Twelve months ended
December 31, December 31,
1997 1996 1997 1996
Net sales $ 562,108 $ 373,246 $ 1,861,202 $ 1,260,349
Cost of sales 429,295 295,312 1,415,967 989,053
Gross profit 132,813 77,934 445,235 271,296
Operating costs
and expenses 89,705 57,874 304,896 199,173
Merger costs 37,011 -- 37,011 571
Income from operations 6,097 20,060 103,328 71,552
Interest expense, net 15,466 6,649 43,832 22,715
Other income, net (4,740) (696) (24,365) (4,734)
Income before income
taxes and
extraordinary items (4,629) 14,107 83,861 53,571
Income taxes 13,351 4,044 43,814 4,393
Income before
extraordinary
loss (17,980) 10,063 40,047 49,178
Extraordinary loss
from early
extinguishment of debt (8,013) -- (11,283) (2,215)
Net income (loss) $ (25,993) $ 10,063 $ 28,764 $ 46,963
Net income (loss)
applicable
to common
stockholders $ (26,068) $ 9,988 $ 28,464 $ 46,663
Net income applicable
to common
stockholders before
nonrecurring items $ 18,709 $ 9,988 $ 65,011 $ 35,282
Basic earnings (loss)
per share:
Income before
extraordinary
loss $ (0.58) $ 0.40 $ 1.32 $ 2.09
Extraordinary loss (0.26) -- (0.37)
Net income $ (0.84) $ 0.40 $ 0.94 $ 1.99
Basic earnings per share
before nonrecurring
items $ 0.60 $ 0.40 $ 2.16 $ 1.51
Basic weighted
average shares
outstanding (000's) 30,962 24,987 30,161 23,424
Diluted earnings (loss)
per
share:
Income before
extraordinary
loss $ (0.55) $ 0.37 $ 1.27 $ 2.00
Extraordinary loss (0.24) -- (0.36) (0.09)
Net income $ (0.79) $ 0.37 $ 0.91 $ 1.91
Diluted earnings per share
before nonrecurring
items $ 0.57 $ 0.37 $ 2.07 $ 1.44
Diluted weighted average
shares outstanding
(000's) 33,089 26,937 31,411 24,492
CONTACT: Suiza Foods Corporation:
J. Michael Lewis
Vice President and Treasurer
or
Morgen-Walke Associates:
June Filingeri, John Blackwell
Media contact: Miriam Adler
(212) 850-5600