EXHIBIT 99.1
JANUARY 10, 2005 COMPANY PRESS RELEASE FLOWERS FOODS (NYSE: FLO)
FLOWERS FOODS UPDATES FY 2004 SALES AND EARNINGS EXPECTATIONS;
REAFFIRMS FY 2005 GUIDANCE
THOMASVILLE, GA--Flowers Foods (NYSE: FLO) said today it expects FY 2004 sales
to exceed prior guidance. However, due to a more than 20% increase in its stock
price over the final two months of its fiscal year, the company will record
higher-than-expected compensation expense associated with its stock appreciation
rights plan for FY 2004. The company also experienced higher-than-planned
compliance and commodity costs, and, therefore, is reducing its prior guidance
for income from continuing operations.
Sales for FY 2004 are expected to be $1.552 billion to $1.554 billion, which is
higher than prior guidance of $1.539 billion to $1.547 billion. The company is
reducing its FY 2004 guidance for income from continuing operations to 3.5% to
3.6% of sales, or $1.21 to $1.24 per share, from prior guidance of 3.8% to 3.9%
of sales, or $1.30 to $1.34. For FY 2005, the company reaffirms its prior
guidance of $1.60 billion to $1.625 billion in sales and net income of
approximately 3.75% to 4.0% of sales.
"Our operating fundamentals remain sound, as indicated by our sales
performance," said George E. Deese, president and chief executive officer. "In
the marketplace, our brands and our people continue to perform well. We are
gratified that investors have shown continued confidence in Flowers Foods as
reflected not only by the recent appreciation in our stock price, but also the
growth of our stock price from $9.12 on a split-adjusted basis at the time of
our spin-off in 2001 to its current level. Our market capitalization has grown
from about $410 million at the time of our spin-off to $1.36 billion at the end
of 2004.
"As evidenced by the reaffirmation of our FY 2005 guidance and our ongoing share
repurchase program, we expect to sustain our performance in operations and we
believe the market price of our stock presents an attractive use of our free
cash flow," Deese continued.
Reported results will reflect that the fourth quarter of FY 2003 was a 13-week
period and FY 2003 was a 53-week year. The fourth quarter of FY 2004 was a
12-week period and FY 2004 was a 52-week year. FY 2005 will also be a 52-week
year.
The company periodically awards stock appreciation rights to key employees
throughout the company. Generally accepted accounting principles require the
company to record compensation expense for these rights based on changes in the
company's stock price between the grant date and the balance sheet date that is
presented. The schedule provided at the end of this release reflects the expense
incurred for the rights since inception in FY 2001. More information can be
found in the company's filings with the Securities and Exchange Commission.
During the fourth quarter of FY 2004, the company acquired 153,113 shares of its
common stock for $4.4 million, an average of $28.58 per share. Since the
inception of the stock repurchase plan, the company has acquired approximately
2.3 million shares of its common stock for $57.5 million, an average of $25.48
per share. These shares were purchased in accordance with the share repurchase
plan approved by the board of directors in 2002, which authorizes the company to
repurchase up to 7.5 million shares of common stock.
At the end of FY 2004, the company's cash position was approximately $44
million, and the company had no bank debt. Deese said the generation of free
cash is expected to continue, allowing the company to repurchase shares when
appropriate, to pay dividends, to make acquisitions, and to fund internal growth
that will build long-term value for our shareholders.
The company is unaware of other factors that could cause FY 2004 results to
differ materially from the revised guidance provided today. However, the
customary year-end review by management and the company's auditors of the FY
2004 results is still in progress.
Guidance provided for FY 2005, as noted in the company's November 10, 2004 press
release, reflects the benefits and costs of a required relocation of two frozen
bread production lines, an expected contribution of $25 million to the company's
pension plan, the outstanding equity-based compensation under recent accounting
rules, and a lower effective tax rate due to the American Jobs Creation Act of
2004. The company's guidance represents management's estimates and targets only
and is subject to risks and uncertainties as referenced below.
Flowers Foods will release complete fourth quarter and FY 2004 results on
February 3, 2005 and will broadcast its analysts' conference call over the
Internet at 10:30 a.m. (Eastern) at http://www.flowersfoods.com/webcasts.asp.
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 34 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 systems. Among the company's top brands are Nature's Own, Cobblestone
Mill, Sunbeam, BlueBird, and Mrs. Freshley's. For more information, visit
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.
CONTACT:
Jimmy M. Woodward, Senior VP and Chief Financial Officer, (229) 227-2266
Marta J. Turner, Senior VP/Corporate Relations, (229) 227-2348
FLOWERS FOODS, INC
STOCK APPRECIATION RIGHTS
SUPPLEMENTAL DISCLOSURE
<Table>
<Caption>
CUMULATIVE
EXPENSE AND
LIABILITY
FY 2001 FY 2002 FY 2003 FY 2004 AT
------- ------- ---------------------------------------- ------------------------------------------ -----------
TOTAL TOTAL Q1 Q2 Q3 Q4 TOTAL Q1 Q2 Q3 Q4 TOTAL 1/1/2005
------- ------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ -----------
NUMBER WEEKS 52 WKS 52 WKS 16 WKS 12 WKS 12 WKS 13 WKS 53 WKS 16 WKS 12 WKS 12 WKS 12 WKS 52 WKS
EXPENSE(INCOME)
2001 AWARD $ 1.4 -$ 0.2 $ 2.4 $ 0.4 $ 1.7 $ 2.2 $ 6.7 $ 1.0 $ 1.0 $ 0.2 $ 4.4 $ 6.6 $ 14.5
2003 AWARD $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.1 $ 0.1 $ 0.2 $ 0.0 $ 0.1 $ 0.0 $ 1.1 $ 1.2 $ 1.4
DIRECTORS $ 0.0 $ 0.0 $ 0.2 $ 0.2 $ 0.1 $ 0.1 $ 0.6 $ 0.1 $ 0.0 -$ 0.1 $ 0.4 $ 0.4 $ 1.0
TOTAL $ 1.4 -$ 0.2 $ 2.6 $ 0.6 $ 1.9 $ 2.4 $ 7.5 $ 1.1 $ 1.1 $ 0.1 $ 5.9 $ 8.2 $ 16.9
</Table>
($ amounts in millions)
The 2001 stock appreciation rights vest on April 6, 2005. The rights will be
settled with cash based on the average price of the company's common stock on
that date. Results for Q1 of FY 2005 will reflect a final adjustment to the
amount paid over or under the $14.5 million shown above.
The 2003 stock appreciation rights vest on July 16, 2007. The rights will be
settled with cash based on the average price of the company's common stock on
that date. Results for FY 2005, 2006 and 2007 will reflect the expense based
upon vesting and the measurement dates stock prices.
The Directors stock appreciation rights vest one year from grant date. The
rights will be settled with cash based on the average price of the company's
common stock on the exercise date. Results will reflect the expense based upon
vesting dates, exercise dates and the measurement dates stock prices.
# # #