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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 20, 2000
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Dean Foods Company
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(Exact name of registrant as specified in its charter)
Delaware 1-08262 36-0984820
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
3600 N. River Road Franklin Park, IL 60131
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 678-1680
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(Former name or former address, if changed since last report)
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Item 5 - Other Events
DEAN FOODS REPORTS SECOND QUARTER RESULTS
Franklin Park, Illinois - December 20, 2000 -- Dean Foods Company (NYSE: DF)
today announced its second quarter and first half fiscal 2001 results.
Second quarter sales increased 3.4% to a record $1,103.5 million, compared to
$1,067.0 million in the second quarter of fiscal 2000. Continued growth of
nationally branded products in the National Refrigerated Products Group and
acquisitions drove the sales increase. Income from continuing operations was
$23.6 million, compared to $27.0 million in the second quarter of fiscal 2000.
Diluted earnings per share from continuing operations were $0.66, compared to
$0.68 last year. Operating earnings were slightly above last year's second
quarter operating earnings, but net interest expense was approximately $6.5
million higher as a result of higher debt levels for acquisitions and share
repurchases.
Year-to-date sales were $2,157.8 million, a 4.3% increase over fiscal 2000.
Income from continuing operations for the first six months was $50.0 million
compared to $54.8 million last year. Diluted earnings per share from continuing
operations were $1.40 versus $1.38 in fiscal 2000.
The Dairy Group reported record second quarter sales and operating earnings.
Sales increased to $811.9 million in the second quarter compared to $808.6
million last year, due to acquisitions and volume growth with key retailers as
they continue to expand nationally. Operating earnings increased 40.8% to $43.8
million from $31.1 million in the prior year. Increased sales and improved
margins in branded dairy products, more stable raw milk and butterfat costs, and
ongoing supply chain cost reduction activities generated the improvement in
second quarter earnings.
The Company continued to generate substantial revenue growth in its National
Refrigerated Products Group. Sales increased 38.4% in the second quarter and
32.4% year-to-date in this business segment as a result of growth in
intermediate and extended shelf life products and new products. New product
introductions, including Dips-for-One and Marie's pourable salad dressings,
continued to progress well in the second quarter. The Company supported these
introductions by investing approximately $6 million in the second quarter and a
total of $12 million in the first half of the year in marketing and promotional
programs. As previously disclosed, however, costs associated with the
significant ramp-up of complex, state-of-the-art technology to produce
intermediate and extended shelf life products impacted second quarter earnings
by approximately $4 million. The Company is focused on improving the production
processes and continued progress is expected throughout the second half of the
fiscal year, although inefficiencies are expected to impact the third and fourth
quarters.
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Second quarter results in the Specialty Foods Group were impacted by a softening
in sales for powdered products, primarily in the international export business,
and for branded pickles. In this business segment, the Company incurred higher
packaging, distribution, and energy costs during the quarter. Pricing has been
adjusted to offset these increased costs in the second half of the year. As a
result of these factors, the Specialty Food Group's second quarter earnings were
reduced by approximately $4 million compared to the prior year.
Dean Food's second quarter results also reflected the following:
The expansion of Mayfield brand ice cream into new Southeastern markets
continued to exceed expectations.
The Land O'Lakes fluid milk business, acquired in July, exceeded earnings
expectations due to strong operating performance.
Dips-for-One, the first individually packaged, single serve refrigerated dip,
achieved sixty percent penetration of the grocery channel in the quarter.
Consumer response to Marie's pourable salad dressings, introduced in the
Northeast earlier this year, has been very favorable, and the products will be
expanded to a number of additional markets in the third quarter.
The Company's private label pickle business generated volume growth of
approximately 4% in the second quarter. Dean is the largest private label pickle
producer in the U.S.
The Company recorded an after-tax $6.2 million gain from discontinued
operations, or $.18 per diluted share, on the sale of a note associated with the
fiscal 1999 divestiture of the Company's vegetables segment.
Howard Dean, Chairman and Chief Executive Officer, commented, "While we are
disappointed with second quarter results, we are comfortable with an earnings
per share estimate in the range of $3.05 for fiscal 2001. We are pleased with
the solid performance of the Dairy Group and the strong sales growth and
successful new product introductions in the National Refrigerated Products
Group. We are focused on resolving the shorter-term technology issues affecting
intermediate and extended shelf life products as quickly as possible. While
these manufacturing inefficiencies will dampen third quarter results, we expect
earnings will improve markedly in the fourth quarter."
Dean Foods is one of the nation's leading dairy processors and distributors
producing a full line of branded and private label products, including fluid
milk, ice cream and extended shelf life products, which are sold under the
Dean's and other strong regional brand names. Dean Foods is the industry leader
in other food products including pickles, powdered non-dairy coffee creamers,
aseptically packaged foodservice products, and refrigerated dips and salad
dressings. More information about Dean Foods can be found on its Web site at
http://www.deanfoods.com.
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The Company's quarterly earnings conference call will be held today at
8:00 a.m. Central Time. The call may be heard live at the Company's web site,
www.deanfoods.com, using Real Player8 Basic Software. The basic version of Real
Player8 may be downloaded at no charge from
www.real.com/products/player/index.html prior to the call. Please allow
approximately 15 minutes to download the software. Replays will be available at
the same internet address for a limited time period.
Certain statements in this press release are forward-looking as defined by the
Private Securities Litigation Reform Act of 1995. These statements involve
certain risks and uncertainties that may cause actual results to differ
materially from expectations as of the date of this press release. These risks
include, but are not limited to, the ability to integrate acquisitions, adverse
weather conditions resulting in poor harvest conditions, raw milk and resin
costs, interest rate fluctuations, competitive pricing pressures, the
effectiveness of marketing and cost-management programs and shifts in the market
demand.
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DEAN FOODS COMPANY
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
FOR THE PERIODS ENDED
NOVEMBER 26, 2000 AND NOVEMBER 28, 1999
(UNAUDITED)
(In millions, except for per share amounts)
Second Quarter Ended Six Months Ended
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November 26, November 28, November 26, November 28,
2000 1999 2000 1999
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Net sales $ 1,103.5 $ 1,067.0 $ 2,157.8 $ 2,068.4
Costs of products sold 847.0 828.0 1,648.0 1,590.0
Delivery, selling and administrative expenses 199.8 182.6 394.3 365.2
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Operating earnings 56.7 56.4 115.5 113.2
Interest expense, net 18.6 12.1 34.7 23.3
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Income from continuing operations
before income taxes 38.1 44.3 80.8 89.9
Provision for income taxes 14.5 17.3 30.8 35.1
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Income from continuing operations 23.6 27.0 50.0 54.8
Gain from sale of discontinued operations,
net of taxes * 6.2 - 6.2 -
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Net income $ 29.8 $ 27.0 $ 56.2 $ 54.8
=============== ============== ================ ==============
Basic income per share:
Income from continuing operations $ .66 $ .69 $ 1.40 $ 1.40
Income from discontinued operations * .18 - .18 -
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Net income $ .84 $ .69 $ 1.58 $ 1.40
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Diluted income (loss) per share:
Income from continuing operations $ .66 $ .68 $ 1.40 $ 1.38
Income from discontinued operations * .18 - .18 -
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Net income $ .84 $ .68 $ 1.58 $ 1.38
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Weighted average common shares:
Basic 35.5 39.1 35.5 39.2
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Diluted 35.7 39.8 35.7 39.8
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* During the second quarter, the Company recorded a pre-tax gain of $10.0
($6.2 after-tax, or $.18 per diluted share) on the sale of a note
associated with the divestiture of the Company's vegetables segment in
fiscal 1999.
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DEAN FOODS COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In millions)
November 26, November 28,
2000 1999
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ASSETS
Current Assets:
Cash and temporary cash investments $ 46.3 $ 25.0
Accounts and notes receivable, net of
allowance for doubtful accounts 365.0 334.5
Inventories 239.5 217.6
Other current assets 73.4 86.4
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Total current assets 724.2 663.5
Property, Plant and Equipment, net 913.2 779.3
Other Assets 714.4 598.3
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Total Assets $ 2,351.8 $ 2,041.1
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current installments of long-term obligations $ 5.1 $ 4.2
Accounts payable and accrued expenses 423.8 422.3
Dividends payable 8.1 8.7
Federal and state income taxes 36.6 39.3
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Total current liabilities 473.6 474.5
Long-Term Obligations 1,045.5 708.4
Deferred Liabilities 133.2 125.2
Shareholders' Equity 699.5 733.0
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Total Liabilities and Shareholders' Equity $ 2,351.8 $ 2,041.1
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DEAN FOODS COMPANY
BUSINESS SEGMENT INFORMATION
FOR THE PERIODS ENDED
NOVEMBER 26, 2000 AND NOVEMBER 28, 1999
(UNAUDITED)
(In Millions)
FOR THE THREE MONTHS ENDED NOVEMBER 26, 2000 AND NOVEMBER 28, 1999
National
Specialty Refrigerated
Dairy Foods Products Corporate Consolidated
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FISCAL 2001
Net sales $ 811.9 $ 189.3 $ 102.3 $ - $ 1,103.5
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Operating earnings $ 43.8 $ 20.4 $ 0.1 $ (7.6) $ 56.7
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FISCAL 2000
Net sales $ 808.6 $ 184.5 $ 73.9 $ - $ 1,067.0
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Operating earnings $ 31.1 $ 25.0 $ 10.0 $ (9.7) $ 56.4
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FOR THE SIX MONTHS ENDED NOVEMBER 26, 2000 AND NOVEMBER 28, 1999
National
Specialty Refrigerated
Dairy Foods Products Corporate Consolidated
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FISCAL 2001
Net sales $ 1,600.7 $ 370.5 $ 186.6 $ - $ 2,157.8
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Operating earnings $ 85.5 $ 43.4 $ 4.4 $ (17.8) $ 115.5
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FISCAL 2000
Net sales $ 1,572.4 $ 355.1 $ 140.9 $ - $ 2,068.4
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Operating earnings $ 71.0 $ 45.2 $ 18.3 $ (21.3) $ 113.2
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dean Foods Company
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(Registrant)
Date: December 27, 2000 /s/ Barbara A. Klein
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Barbara A. Klein
Vice President Finance and
Chief Financial Officer