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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 25, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________ .
COMMISSION FILE NUMBER: 0-14190
DREYER'S GRAND ICE CREAM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE NO. 94-2967523
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
5929 COLLEGE AVENUE, OAKLAND, CALIFORNIA 94618
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (510) 652-8187
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Not applicable Not applicable
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $1.00 PAR VALUE
PREFERRED STOCK PURCHASE RIGHTS
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 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 aggregate market value (based on the average of the high and low prices
on March 17, 2000, as reported by NASDAQ) of the Common Stock held by
non-affiliates was approximately $500,049,775. (Such amount excludes the
aggregate market value of shares beneficially owned by the executive officers
and members of the Board of Directors of the registrant.)
As of March 17, 2000, the latest practicable date, 28,008,003 shares of
Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Dreyer's Grand Ice Cream, Inc. Annual Report to
Stockholders for the fiscal year ended December 25, 1999, filed as Exhibit 13 to
this Annual Report on Form 10-K, are incorporated by reference in Part II and
Part IV of this Annual Report on Form 10-K. With the exception of those portions
which are specifically incorporated by reference in this Annual Report on Form
10-K, the Dreyer's Grand Ice Cream, Inc. Annual Report to Stockholders for the
fiscal year ended December 25, 1999 is not to be deemed filed as part of this
Annual Report.
Portions of the Dreyer's Grand Ice Cream, Inc. Proxy Statement for the 2000
Annual Meeting of Stockholders to be filed with the Commission on or before
April 23, 2000 are incorporated by reference in Part III of this Annual Report
on Form 10-K. With the exception of those portions which are specifically
incorporated by reference in this Annual Report on Form 10-K, the Dreyer's Grand
Ice Cream, Inc. Proxy Statement for the 2000 Annual Meeting of Stockholders is
not to be deemed filed as part of this Annual Report.
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PART I
ITEM 1. BUSINESS.
GENERAL
Dreyer's Grand Ice Cream, Inc. and its consolidated subsidiaries are,
unless the context otherwise requires, sometimes referred to herein as
"Dreyer's" or the "Company." The Company, successor to the original Dreyer's
Grand Ice Cream business, was originally incorporated in California on February
23, 1977 and reincorporated in Delaware on December 28, 1985.
Dreyer's manufactures and distributes premium and superpremium ice cream
and other frozen dessert products. Since 1977, Dreyer's has developed from a
specialty ice cream sold principally in selected San Francisco Bay Area grocery
and ice cream stores to a broad line of ice cream and other frozen dessert
products sold under the Dreyer's and Edy's brand names in retail outlets serving
more than 88 percent of the households in the United States. The Dreyer's line
of products are available in the thirteen western states, Texas and certain
markets in the Far East and South America. The Company's products are sold under
the Edy's brand name generally throughout the remaining regions of the United
States and certain markets in the Caribbean and Europe. The Dreyer's and Edy's
line of products are distributed through a direct-store-delivery system further
described below under the caption "Marketing, Sales and Distribution." The
Company also manufactures and distributes branded ice cream and frozen dessert
products of other companies. The Dreyer's and Edy's line of ice cream and
related products is relatively expensive and is sold by the Company and its
independent distributors to grocery stores, convenience stores, club stores, ice
cream parlors, restaurants, hotels and certain other accounts. The Dreyer's and
Edy's brands enjoy strong consumer recognition and loyalty.
MARKETS
Ice cream was traditionally supplied by dairies as an adjunct to their
basic milk business. Accordingly, ice cream was marketed like milk, as a
fungible commodity, and manufacturers competed primarily on the basis of price.
This price competition motivated ice cream producers to seek economies in their
formulations. The resulting trend to lower quality ice cream created an
opportunity for the Company and other producers of premium ice creams, whose
products can be differentiated on the basis of quality, technological
sophistication and brand image, rather than price. Moreover, the market for all
packaged ice creams was influenced by the steady increase in market share of
"private label" ice cream products owned by the major grocery chains and the
purchase or construction by the chains of their own milk and ice cream plants.
The resulting reduction in the demand for milk and the "regular" ice cream
brands produced by the independent dairies has caused many such dairies to
withdraw from the market. Manufacturing and formulation complexities, broader
flavor requirements, consumer preference and brand identity, however, make it
more difficult for the chains' private label brands to compete effectively in
the premium market segment. As a result, independent premium brands such as the
Company's are normally stocked by major grocery chains.
While many foodservice operators, including hotels, schools, hospitals and
other institutions, buy ice cream primarily on the basis of price, there are
also those in the foodservice industry who purchase ice cream based on its
quality. Operators of ice cream shops wanting to feature a quality brand,
restaurants that include an ice cream brand on their menu and clubs or chefs
concerned with the quality of their fare are often willing to pay for Dreyer's
quality, image and brand identity.
PRODUCTS
The Company and its predecessors have always been innovators of flavors,
package development and formulation. William A. Dreyer, the founder of Dreyer's
and the creator of Dreyer's Grand Ice Cream, is credited with inventing many
popular flavors including Rocky Road. Dreyer's was the first manufacturer to
produce an ice cream lower in calories. The Company's Grand Light(R) formulation
was a precursor to the reduced fat and reduced sugar products in the Company's
current product line.
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The Company uses only the highest quality ingredients in its products. The
Company's philosophy is to make changes in its formulations or production
processes only to the extent that such changes do not compromise quality for
cost even when the industry in general may adopt such new formulation or process
compromises.
Dreyer's and Edy's Grand Ice Cream(R) is the Company's flagship product
which utilizes traditional formulations with all natural flavorings and is
characterized by premium quality, taste and texture, and diverse flavor
selection. The flagship product is complemented by Dreyer's and Edy's Homemade
Ice Cream(R), a heavier and sweeter line of ice cream and the Company's Frozen
Yogurt; Grand Light(R); No Sugar Added and Fat Free ice creams. The Company
believes these "better for you" products are well-positioned in the market where
products are characterized by lower levels of fat, sugar and cholesterol than
those of regular ice cream. The Company distributes Starbucks(R) Ice Cream
products as part of its joint venture with Starbucks Coffee Company and M&M/Mars
ice cream products as part of its joint venture with M&M/Mars. The Company has
also launched Godiva(R) Ice Cream, a superpremium product produced by the
Company under a long-term license with Godiva(R) Chocolatier. The Company also
produces and markets Grand Soft(R) a premium soft serve product. The Company's
novelty line features Dreyer's and Edy's Ice Cream Bars, Fruit Bars, and Sundae
Cones. In 1999, the Company introduced the Dreamery(TM) line, a superpremium ice
cream product. The Company also distributes and, in some instances, manufactures
selected branded frozen dessert products of other companies.
The Company's product lines now include approximately 125 flavors. Some
flavors are seasonal and are produced only as a featured flavor during
particular months. The Company operates a continuous flavor development and
evaluation program and adjusts its product line based on general popularity and
on intensity of consumer response.
The Company holds registered trademarks on many of its products. Dreyer's
believes that consumers associate the Company's trademarks, distinctive
packaging and trade dress with its high-quality products. The Company does not
own any patents that are material to its business. Research and development
expenses are not significant, nor have they been significant in the past.
MARKETING, SALES AND DISTRIBUTION
The Company's marketing strategy is based upon management's belief that a
significant number of people prefer a quality product and quality image in ice
cream just as they do in other product categories. A quality image is
communicated in many ways -- taste, packaging, flavor selection, price and often
through advertising and promotion. If consistency in the product's quality and
image are strictly maintained, a brand can develop a clearly defined and loyal
consumer following. It is the Company's goal to develop such a consumer
following in each major market in which it does business.
In 1994, the Company adopted a strategic plan to accelerate the sales of
its brand throughout the country (the Grand Plan or the Strategic Plan). The key
elements of this plan are: 1) to build high-margin brands with leading market
shares through effective consumer marketing activities, 2) to expand the
Company's direct-store-delivery distribution network to national scale and
enhance this capability with sophisticated information and logistics systems and
3) to introduce innovative new products. The potential benefits of the Strategic
Plan are increased market share and future earnings above those levels that
would be attained in the absence of the Strategic Plan.
In accordance with the Strategic Plan, the Company embarked on an
aggressive national expansion. This expansion involved the entry into 34 new
markets, which included the opening of a major manufacturing and distribution
center in Texas, a significant increase in marketing spending and the
introduction of several new products. At the same time, the Company invested in
its soft-serve equipment manufacturing business, Grand Soft. The investments
which were required to fund the brand-building actions and national expansion
and to support the Grand Soft business substantially increased the Company's
cost structure.
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Beginning in late 1997 and continuing into 1998, the cost of dairy raw
materials, the primary ingredient in ice cream, increased significantly. These
costs peaked in 1998 at a rate more than double of that experienced in 1997.
This increase reduced the Company's 1998 gross profit by approximately
$22,000,000 when compared with 1997. Aggressive discounting by the Company's
competitors made it difficult to raise prices by an amount sufficient to
compensate for these higher dairy raw material costs. During this same period,
sales volumes of the Company's "better for you" products continued the
significant decline that began in 1997, consistent with an industry-wide trend.
Since these "better for you" products enjoy higher margins than the Company's
classic ice cream, the volume decline had a significant impact on the Company's
profitability in 1998. Finally, in August 1998, Ben & Jerry's Homemade, Inc.
(Ben & Jerry's) informed the Company of its intention to terminate its
distribution contract. Subsequent negotiations with Ben & Jerry's revised the
original contract terms to allow the Company to distribute Ben & Jerry's
products in a smaller geographic area. Starting September 1, 1999, this was
estimated to reduce the Company's distribution gross profit of Ben & Jerry's
products by approximately 54 percent. The Company estimates that the
distribution gross profit in the markets where it stopped distributing Ben &
Jerry's products represented approximately six percent, or $13,000,000, of its
gross profit in 1998.
The above factors: the higher dairy raw material costs; the decline in
"better for you" volumes; and the reduction in future Ben & Jerry's sales had in
the past, and may continue to have in the future, a negative effect on the
Company's gross profit and its ability to successfully implement the Strategic
Plan. The Company, therefore, concluded that a thorough reassessment of its cost
structure and strategy was necessary. This reassessment yielded restructuring
actions designed to improve profitability and accelerate cost reductions by
increasing focus on the core elements of the Strategic Plan. On October 16,
1998, the board of directors approved the restructuring actions.
The Company continues to make progress towards the key elements of the
Strategic Plan. This progress has yielded an increased market share in a
consolidating industry. For example, the Company has had significant success in
the superpremium segment in recent years with the introductions of Whole Fruit
Sorbet, Starbucks(R) Ice Cream, and Godiva(R) Ice Cream. In order to build on
this success in the high-margin superpremium segment, the Company introduced a
new line of superpremium ice cream under the brand name Dreyer's and Edy's
Dreamery(TM) Ice Cream in September 1999. While the Company continues to
distribute Ben & Jerry's products in a smaller geographic area, it has no
further restrictions on competing in the superpremium segment with its own pint
products. In the premium segment, the Company announced during the third quarter
of 1999 the formation of a long-term partnership with M&M/Mars to market a new
line of ice cream products featuring M&M/Mars leading candy brands. These
products are being manufactured and distributed by the Company under the terms
of the joint venture agreement. This relationship is consistent with the
Company's strategy to expand its portfolio of brands and products to reach
consumers across the entire ice cream category.
The Company intends to continue to pursue the benefits of the Grand Plan
through four long-term initiatives. These initiatives are as follows: 1) growth
in share and sales in the premium ice cream business; 2) expansion of the
Company's new, higher-margin superpremium ice cream brands; 3) accelerated
development of the Company's business in a wider number of retail channels,
especially mass-merchandisers, convenience stores, and foodservice outlets; and
4) a focus on improved productivity through a reduction in Total Delivered
Costs, meaning the per-unit costs of manufacturing, selling and distribution,
and support activities.
For additional information see the discussions set forth under the captions
"Revision of Ben & Jerry's Distribution Agreement" and "Restructuring Program
and Other Actions" in "Management's Discussion and Analysis" of the Company's
1999 Annual Report to Stockholders and which are incorporated herein by
reference.
Unlike most other ice cream manufacturers, the Company uses a
direct-store-delivery system to distribute the Company's products directly to
the retail ice cream cabinet by either the Company's own personnel or
independent distributors who primarily distribute the Company's products. This
store level distribution allows service to be tailored to the needs of each
store. Dreyer's believes this service ensures
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proper product handling, quality control, flavor selection and retail display.
The implementation of this system has resulted in an ice cream distribution
network capable of providing frequent direct service to grocery stores in every
market where the Company's products are sold. Under the Strategic Plan, the
Company's distribution network has been significantly expanded to where the
Company's products are available to retail outlets serving approximately 88
percent of the households in the United States. This distribution system is
considerably larger than any other direct-store-delivery system for ice cream
products currently operating in the United States.
The distribution network in the West now includes 12 distribution centers
operated by the Company in large metropolitan areas such as Los Angeles, the San
Francisco Bay Area, Phoenix, San Diego, Seattle and Denver. On February 9, 2000,
the Company purchased the remaining 84 percent of the outstanding common stock
of Cherokee Cream Company, Inc., the parent of Sunbelt Distributors, Inc., the
Company's independent distributor in Texas. The Company also has independent
distributors handling the Company's products in various areas of the thirteen
western states, the Far East and South America.
Distribution in the remainder of the United States is under the Edy's brand
name with most of the distribution handled through 18 Company-owned distribution
centers, including centers in the New York/ New Jersey metropolitan area,
Chicago, the Washington/Baltimore metropolitan area, Atlanta, Tampa and Kansas
City. The Company also has independent distributors handling the Company's
products in certain market areas east of the Rocky Mountains.
Taken together, independent distributors accounted for approximately 19
percent of the Company's consolidated sales in 1999. The Company's agreements
with its independent distributors are generally terminable upon 30 days notice
by either party.
Each distributor, whether Company-owned or independent, is primarily
responsible for sales of all products within its respective market area.
However, the Company provides sales and marketing support to its independent
distributors, including training seminars, sales aids of many kinds, point of
purchase materials, assistance with promotions and other sales support.
Three customers, Albertson's, Inc., Kroger Co., and Safeway, Inc., each
accounted for ten percent or more of 1999 sales. The Company's export sales were
about one percent of 1999 sales.
The Company experiences a seasonal fluctuation in sales, with more demand
for its products during the spring and summer than during the fall and winter.
MANUFACTURING
The Company manufactures its products at its plants in Union City,
California; City of Commerce, California; Fort Wayne, Indiana; Houston, Texas;
and Salt Lake City, Utah. The Company also has manufacturing agreements with
four different companies to produce a portion of its novelty products. During
1999, approximately 3,000,000 cases (55 percent of total novelty production) of
Dreyer's and Edy's Ice Cream Bars and Fruit Bars were produced under these
agreements. In addition, the Company has agreements to produce products for
other manufacturers. In 1999, the Company manufactured approximately 13,000,000
gallons of product under these agreements. Total production, including both
company brands and other manufacturers' brands was approximately 113,000,000
gallons during 1999.
The largest component of the Company's cost of production is raw materials,
principally dairy products and sugar. Historically, the Company has been able to
compensate for increases in the price level of these commodities through
manufacturing and distribution operating efficiencies. However, during 1998,
unusually high dairy raw materials costs negatively impacted gross profit by
$22,000,000 as compared to 1997. During 1999, dairy raw material costs declined
which favorably impacted gross profit by approximately $15,000,000 as compared
to 1998.
Other cost increases such as labor and general administrative costs have
been offset by productivity gains and other operating efficiencies.
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In order to ensure consistency of flavor, each of the Company's
manufacturing plants purchases, to the extent practicable, all of its required
dairy ingredients from a limited number of suppliers. These dairy products and
most other ingredients or their equivalents are available from multiple sources.
The Company maintains a rigorous process for evaluating qualified alternative
suppliers of its key ingredients.
COMPETITION
The Company's manufactured products compete on the basis of brand image,
quality, breadth of flavor selection and price. The ice cream industry is highly
competitive and most ice cream manufacturers, including full line dairies, the
major grocery chains and the other independent ice cream processors, are capable
of manufacturing and marketing high quality ice creams. Furthermore, there are
relatively few barriers to new entrants in the ice cream business. However,
reduced fat and reduced sugar ice cream products generally require
technologically-sophisticated formulations and production in comparison to
standard or "regular" ice cream products.
Much of the Company's competition comes from the "private label" brands
produced by or for the major supermarket chains. These brands generally sell at
prices below those charged by the Company for its products. Because these brands
are owned by the retailer, they often receive preferential treatment when the
retailers allocate available freezer space. The Company's competition also
includes premium and superpremium ice creams produced by other ice cream
manufacturers, some of whom are owned by parent companies much larger than
Dreyer's.
EMPLOYEES
On December 25, 1999, the Company had approximately 3,700 employees. The
Company's Union City manufacturing and distribution employees are represented by
the Teamsters Local 853, whose contract with the Company expires between
December 2000 and September 2003 for different types of employees, and by the
International Union of Operating Engineers, Stationary Local No. 39, whose
contract with the Company expires in August 2001. The Sacramento distribution
employees are represented by the Chauffeurs, Teamsters and Helpers Union, Local
150, whose contract with the Company expires in August 2000. The St. Louis
distribution employees are represented by the United Food & Commercial Workers
Union, Local 655, whose contract with the Company expires in December 2000. The
Company has never experienced a strike by any of its employees.
ITEM 2. PROPERTIES.
The Company owns its headquarters located at 5929 College Avenue in
Oakland, California. The headquarters buildings include 83,000 square feet of
office space utilized by the Company and 10,000 square feet of retail space
leased to third parties.
The Company owns a manufacturing and distribution facility in Union City,
California. This facility has approximately 60,000 square feet of manufacturing
and dry storage space, 40,000 square feet of cold storage warehouse space and
15,000 square feet of office space. The plant has estimated capacity of
51,000,000 gallons per year. During 1999, the facility produced approximately
19,000,000 gallons of ice cream and related products.
The Company leases an ice cream manufacturing plant with an adjoining cold
storage warehouse located in the City of Commerce, California. This facility has
approximately 76,000 square feet of manufacturing and dry storage space, 25,000
square feet of cold storage space and 19,000 square feet of office space. The
lease on this property, including renewal options, expires in 2022. The plant
has estimated capacity of 32,000,000 gallons per year. During 1999, the facility
produced approximately 18,000,000 gallons of ice cream and related products.
The Company owns a cold storage warehouse facility located in the City of
Industry, California. This facility has approximately 52,000 square feet of cold
and dry storage warehouse space and 13,000 square feet
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of office space. This facility supplements the cold storage warehouse and office
space leased in the City of Commerce.
The Company owns a manufacturing plant with an adjoining cold storage
warehouse in Fort Wayne, Indiana. This facility has approximately 74,000 square
feet of manufacturing and storage space and 16,000 square feet of office space.
An additional warehouse on land adjacent to the Fort Wayne manufacturing
facility has cold storage space of 109,000 square feet. The plant has estimated
capacity of 64,000,000 gallons per year. During 1999, the facility produced
approximately 53,000,000 gallons of ice cream and related products. The
Company's original purchase and development of the Fort Wayne facility was
financed by industrial development bonds and the property is pledged as
collateral to secure payment of the Company's obligations to the issuer of the
irrevocable letter of credit established for the benefit of the bondholders.
The Company owns a manufacturing and distribution facility in Houston,
Texas. This facility has approximately 68,000 square feet of manufacturing and
dry storage space, 46,000 square feet of cold storage warehouse space and 20,000
square feet of office space. The plant has estimated capacity of 36,000,000
gallons per year. During 1999, this facility produced approximately 17,000,000
gallons of ice cream and related products. As a result of the restructuring
program, the Company will realize substantially lower production volumes over
the remaining useful life of its Houston, Texas manufacturing plant than
originally contemplated. However, the Company anticipates that the production
levels at the Texas manufacturing plant may increase for the next two or three
years to 21,000,000 gallons pending the addition of more manufacturing capacity
in the eastern half of the United States. Despite these short-term increases,
the Company projects that production at the Texas manufacturing plant will
remain below the volume originally contemplated. For additional information see
the discussion set forth under the caption "Restructuring Program and Other
Actions" in "Management's Discussion and Analysis" of the Company's 1999 Annual
Report to Stockholders which is incorporated herein by reference.
The Company owns a manufacturing and distribution facility in Salt Lake
City, Utah. This facility has approximately 12,000 square feet of manufacturing
and dry storage space, 13,000 square feet of cold storage space and 1,000 square
feet of office space. Another 11,000 square feet of cold storage space and 4,000
square feet of office space is leased. The plant has estimated capacity of
12,000,000 gallons per year. During 1999, the facility produced approximately
6,000,000 gallons of ice cream and related products.
The estimated plant productive capacities discussed above will be heavily
influenced by seasonal demand fluctuations, internal or external inventory
storage availability and costs, and the type of product or package produced.
The Company intentionally acquires, designs and constructs its
manufacturing and distribution facilities with a capacity greater than current
needs require. This is done to facilitate growth and expansion and minimize
future capital outlays. The cost of carrying this excess capacity is not
significant.
The Company leases or rents various local distribution and office
facilities with leases expiring through the year 2022, including options to
renew, except for one that has 88 years remaining under the lease.
ITEM 3. LEGAL PROCEEDINGS.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The Company's executive officers and their ages are as follows:
NAME POSITION AGE
---- -------- ---
T. Gary Rogers............................ Chairman of the Board and Chief Executive 57
Officer
William F. Cronk, III..................... President 57
Edmund R. Manwell......................... Secretary 57
Thomas M. Delaplane....................... Vice President -- Sales 55
J. Tyler Johnston......................... Vice President -- Marketing 46
Timothy F. Kahn........................... Vice President -- Finance and 46
Administration and Chief Financial Officer
William R. Oldenburg...................... Vice President -- Operations 53
All officers hold office at the pleasure of the Board of Directors. There
is no family relationship among the above officers.
Mr. Rogers has served as Dreyer's Chairman of the Board and Chief Executive
Officer since its incorporation in February 1977.
Mr. Cronk has served as a director of the Company since its incorporation
in February 1977 and has been the Company's President since April 1981.
Mr. Manwell has served as Secretary of the Company since its incorporation
and as a director of the Company since April 1981. Since March 1982, Mr. Manwell
has been a partner in the law firm of Manwell & Milton, counsel to the Company.
Mr. Delaplane has served as Vice President -- Sales of the Company since
May 1987.
Mr. Johnston has served as Vice President -- Marketing of the Company since
March 1996. From September 1995 to March 1996, he served as Vice
President -- New Business of the Company. From May 1988 to August 1995, he
served as the Company's Director of Marketing.
Mr. Kahn has served as Vice President -- Finance and Administration and
Chief Financial Officer of the Company since March 1998. In 1994 through October
1997, Mr. Kahn served in the positions of Senior Vice President, Chief Financial
Officer and Vice President for several divisions of PepsiCo, Inc., which
included Pizza Hut Restaurants.
Mr. Oldenburg has served as Vice President -- Operations of the Company
since September 1986.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The information set forth in Note 16 under the caption "Price Range Per
Common Share (NASDAQ)" of the Company's 1999 Annual Report to Stockholders is
incorporated herein by reference. The bid and asked quotations for the Company's
Common Stock are as reported by NASDAQ.
On March 17, 2000, the number of holders of record of the Company's common
stock was approximately 5,680.
On November 18, 1997, the Company issued shares of common stock to holders
of record on October 30, 1997 to effect a two-for-one common stock split. Unless
otherwise indicated, all share information appearing in this report has been
restated to reflect this stock split on a retroactive basis.
The Company paid a regular quarterly dividend of $.03 per share of common
stock for each quarter of 1999 and 1998. On February 23, 2000, the Board of
Directors, subject to compliance with law, contractual restrictions and future
review of the condition of the Company, declared its intention to issue regular
quarterly dividends of $.03 per share of common stock for each quarter of 2000.
Also on February 23, 2000, the Board of Directors declared a dividend of $.03
per share of common stock for the first quarter of 2000 for stockholders of
record on March 24, 2000.
ITEM 6. SELECTED FINANCIAL DATA.
The information set forth under the caption "Five-Year Summary of
Significant Financial Data" of the Company's 1999 Annual Report to Stockholders
is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information set forth under the caption "Management's Discussion and
Analysis" of the Company's 1999 Annual Report to Stockholders is incorporated
herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information set forth under the caption "Market Risk" in "Management's
Discussion and Analysis" of the Company's 1999 Annual Report to Stockholders is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated February 15, 2000 of the Company's 1999 Annual
Report to Stockholders, are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information set forth under the captions "Board of
Directors -- Nominees for Director," "Board of Directors -- Continuing
Directors," "Security Ownership of Certain Beneficial Owners and Management --
Section 16(a) Beneficial Ownership Reporting Compliance," "Executive
Compensation -- Compensation Committee Interlocks and Insider Participation" and
"Matters Submitted to a Vote of Stockholders -- Election of Directors" in the
Company's Proxy Statement for the 2000 Annual Meeting of Stockholders to be
filed with the Commission on or before April 23, 2000, and the information
contained in Part I of this Annual Report on Form 10-K under the caption
"Executive Officers of the Registrant," is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information set forth under the captions "Executive Compensation" and
"Board of Directors -- Remuneration of Directors" in the Company's Proxy
Statement for the 2000 Annual Meeting of Stockholders to be filed with the
Commission on or before April 23, 2000 is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information set forth under the caption "Security Ownership of Certain
Beneficial Owners and Management" in the Company's Proxy Statement for the 2000
Annual Meeting of Stockholders to be filed with the Commission on or before
April 23, 2000 is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information set forth under the captions "Executive
Compensation -- Compensation Committee Interlocks and Insider Participation" and
"Executive Compensation -- Other Relationships" in the Company's Proxy Statement
for the 2000 Annual Meeting of Stockholders to be filed with the Commission on
or before April 23, 2000 is incorporated herein by reference.
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11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE:
The following documents are filed as part of this report:
1. Financial Statements:
PAGE(S) IN
ANNUAL REPORT*
--------------
Consolidated Statement of Operations for each of the three
years in the period ended December 25, 1999.............. 18
Consolidated Balance Sheet at December 25, 1999 and
December 26, 1998........................................ 19
Consolidated Statement of Changes in Stockholders' Equity
for each of the three years in the period ended December
25, 1999................................................. 20
Consolidated Statement of Cash Flows for each of the three
years in the period ended December 25, 1999.............. 21
Notes to Consolidated Financial Statements................. 22-35
Report of Independent Accountants.......................... 36
2. Financial Statement Schedule:
PAGE(S)
-------
Report of Independent Accountants on Financial Statement
Schedule for each of the three years in the period ended
December 25, 1999........................................ 20
Schedule II. Valuation and Qualifying Accounts............. 21
- ---------------
* Incorporated by reference to the indicated pages of the Company's 1999 Annual
Report to Stockholders.
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
Financial statements of any other 50 percent or less owned company have
been omitted because the Company's proportionate share of income (loss) from
continuing operations before income tax provision (benefit) and cumulative
effect of change in accounting principle is less than 20 percent of the
respective consolidated amounts, and the investment in and advances to any such
company are less than 20 percent of consolidated total assets.
3. List of Management Compensation Agreements required to be filed as
an exhibit to this form pursuant to Item 14 (c):
(i) Dreyer's Grand Ice Cream, Inc. Incentive Stock Option Plan (1982)
referenced in Exhibit 10.3 herein.
(ii) Indemnification Agreements by and between Dreyer's Grand Ice
Cream, Inc. and each of its directors, executive officers and
certain other officers referenced in Exhibit 10.10 herein.
(iii) Dreyer's Grand Ice Cream, Inc. Stock Option Plan (1992)
referenced in Exhibit 10.16 herein.
(iv) Dreyer's Grand Ice Cream, Inc. Incentive Bonus Plan referenced in
Exhibit 10.19 herein.
(v) Dreyer's Grand Ice Cream, Inc. Stock Option Plan (1993) referenced
in Exhibit 10.20 herein.
(vi) Dreyer's Grand Ice Cream, Inc. Income Swap Plan referenced in
Exhibit 10.21 herein.
11
12
(b) REPORTS ON FORM 8-K:
Not applicable.
(c) EXHIBITS:
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
2.1 Securities Purchase Agreement dated June 24, 1993 by and
among Dreyer's Grand Ice Cream, Inc., Trustees of General
Electric Pension Trust, GE Investment Private Placement
Partners, I and General Electric Capital Corporation
(Exhibit 2.1(11)).
2.2 Amendment to Securities Purchase Agreement dated May 6, 1994
by and among Dreyer's Grand Ice Cream, Inc., Trustees of
General Electric Pension Trust, GE Investment Private
Placement Partners, I and General Electric Capital
Corporation, amending Exhibit 2.1 (Exhibit 2.1(14)).
2.3 Stock and Warrant Purchase Agreement dated as of May 6, 1994
by and between Dreyer's Grand Ice Cream, Inc. and Nestle
Holdings, Inc. (Exhibit 2.1(15)).
2.4 First Amendment to Stock and Warrant Purchase Agreement
dated as of June 14, 1994 by and between Dreyer's Grand Ice
Cream, Inc. and Nestle Holdings, Inc., amending Exhibit 2.3
(Exhibit 2.1(16)).
2.5 Second Amendment to Securities Purchase Agreement dated July
28, 1995 and effective as of June 1, 1995 by and among
Dreyer's Grand Ice Cream, Inc., Trustees of General Electric
Pension Trust, GE Investment Private Placement Partners, I
and General Electric Capital Corporation, amending Exhibit
2.1 (Exhibit 10.2(18)).
2.6 Third Amendment to Securities Purchase Agreement dated
October 30, 1995 and effective as of September 30, 1995 by
and among Dreyer's Grand Ice Cream, Inc., Trustees of
General Electric Pension Trust, GE Investment Private
Placement Partners, I and General Electric Capital
Corporation, amending Exhibit 2.1 (Exhibit 10.1(19)).
2.7 Amended and Restated Fourth Amendment to Securities Purchase
Agreement dated March 12, 1996 and effective as of October
1, 1995 by and among Dreyer's Grand Ice Cream, Inc.,
Trustees of General Electric Pension Trust, GE Investment
Private Placement Partners, I and General Electric Capital
Corporation, amending Exhibit 2.1 (Exhibit 2.8(20)).
3.1 Certificate of Incorporation of Dreyer's Grand Ice Cream,
Inc., as amended, including the Certificate of Designation
of Series A Convertible Preferred Stock, as amended, setting
forth the Powers, Preferences, Rights, Qualifications,
Limitations and Restrictions of such series of Preferred
Stock and the Certificate of Designation of Series B
Convertible Preferred Stock, as amended, setting forth the
Powers, Preferences, Rights, Qualifications, Limitations and
Restrictions of such series of Preferred Stock (Exhibit
3.1(16)).
3.2 Certificate of Designation, Preferences and Rights of Series
A Participating Preference Stock (Exhibit 3.2(17)).
3.3 By-laws of Dreyer's Grand Ice Cream, Inc., as last amended
May 2, 1994 (Exhibit 3.2(16)).
4.1 Amended and Restated Rights Agreement dated March 4, 1991
between Dreyer's Grand Ice Cream, Inc. and Bank of America,
NT & SA (Exhibit 10.1(6)).
4.2 Registration Rights Agreement dated as of June 30, 1993
among Dreyer's Grand Ice Cream, Inc., Trustees of General
Electric Pension Trust, and GE Investment Private Placement
Partners, I and General Electric Capital Corporation
(Exhibit 4.1(12)).
4.3 Amendment to Registration Rights Agreement dated May 6, 1994
by and among Dreyer's Grand Ice Cream, Inc., Trustees of
General Electric Pension Trust, GE Investment Private
Placement Partners, I and General Electric Capital
Corporation, amending Exhibit 4.2 (Exhibit 4.1(14)).
4.4 First Amendment to Amended and Restated Rights Agreement
dated as of June 14, 1994 between Dreyer's Grand Ice Cream,
Inc. and First Interstate Bank of California (as successor
Rights Agent to Bank of America NT & SA), amending Exhibit
4.1 (Exhibit 4.1(16)).
12
13
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.5 Registration Rights Agreement dated as of June 14, 1994
between Dreyer's Grand Ice Cream, Inc. and Nestle Holdings,
Inc. (Exhibit 4.2(16)).
4.6 Warrant Agreement dated as of June 14, 1994 between Dreyer's
Grand Ice Cream, Inc. and Nestle Holdings, Inc. (Exhibit
4.3(16)).
4.7 Second Amendment to Amended and Restated Rights Agreement
dated March 17, 1997 between Dreyer's Grand Ice Cream, Inc.
and ChaseMellon Shareholder Services, LLC, as Rights Agent,
amending Exhibit 4.1 (Exhibit 10.1 (24)).
4.8 Third Amendment to Amended and Restated Rights Agreement
dated May 15, 1997 between Dreyer's Grand Ice Cream, Inc.
and ChaseMellon Shareholder Services, LLC, as Rights Agent,
amending Exhibit 4.1 (Exhibit 10.1 (25)).
10.1 Agreement dated September 18, 1978 between Dreyer's Grand
Ice Cream, Inc. and Kraft, Inc. (Exhibit 10.8(1)).
10.2 Agreement and Lease dated as of January 1, 1982 and
Amendment to Agreement and Lease dated as of January 27,
1982 between Jack and Tillie Marantz and Dreyer's Grand Ice
Cream, Inc., as amended (Exhibit 10.2(17)).
10.3 Dreyer's Grand Ice Cream, Inc. Incentive Stock Option Plan
(1982), as amended. (Exhibit 10.6(13)).
10.4 Loan Agreement between Edy's and City of Fort Wayne, Indiana
dated September 1, 1985 and related Letter of Credit, Letter
of Credit Agreement, Mortgage, Security Agreement, Pledge
and Security Agreement and General Continuing Guaranty of
Dreyer's Grand Ice Cream, Inc. (Exhibit 10.33(2)).
10.5 Distribution Agreement between Dreyer's Grand Ice Cream,
Inc. and Ben & Jerry's Homemade, Inc. dated January 6, 1987
(Exhibit 10.1(3)).
10.6 Amendment and Waiver dated July 17, 1987 between Dreyer's
Grand Ice Cream, Inc. and Security Pacific National Bank,
amending the General Continuing Guaranty referenced in
Exhibit 10.4 (Exhibit 10.44(7)).
10.7 Amendment and Waiver dated December 24, 1987 between
Dreyer's Grand Ice Cream, Inc. and Security Pacific National
Bank, amending the General Continuing Guaranty referenced in
Exhibit 10.4 (Exhibit 10.45(7)).
10.8 Agreement for Amendments to Distribution Agreement dated as
of January 20, 1989 among Dreyer's Grand Ice Cream, Inc.,
Edy's Grand Ice Cream, Edy's of New York, Inc., and Ben &
Jerry's Homemade, Inc., amending Exhibit 10.5 (Exhibit 10.46
(4)).
10.9 Amendment to the Distribution Agreement dated as of April
11, 1989 by and among Dreyer's Grand Ice Cream, Inc., Edy's
Grand Ice Cream, Edy's of New York, Inc., and Ben & Jerry's
Homemade, Inc., amending Exhibit 10.5 (Exhibit 10.46(5)).
10.10 Form of Indemnification Agreement between Dreyer's Grand Ice
Cream, Inc. and each officer and director of Dreyer's Grand
Ice Cream, Inc. (Exhibit 10.47(4)).
10.11 Assignment of Lease dated as of March 31, 1989 among
Dreyer's Grand Ice Cream, Inc., Smithway Associates, Inc.
and Wilsey Foods, Inc. (Exhibit 10.52(5)).
10.12 Amendment of Lease dated as of March 31, 1989 between
Dreyer's Grand Ice Cream, Inc. and Smithway Associates,
Inc., as amended by letter dated April 17, 1989 between
Dreyer's Grand Ice Cream, Inc. and Wilsey Foods, Inc.,
amending Exhibit 10.11 (Exhibit 10.53(5)).
10.13 Third Amendment to General Continuing Guaranty and Waiver
dated January 29, 1991 between Dreyer's Grand Ice Cream,
Inc. and Security PacificNational Bank, amending the General
Continuing Guaranty referenced in Exhibit 10.4 (Exhibit
10.46(7)).
13
14
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.14 $25,000,000 9.3% Senior Notes: Form of Note Agreement dated
as of March 15, 1991, and executed on April 12, 1991 between
Dreyer's Grand Ice Cream, Inc. and each of Massachusetts
Mutual Life Insurance Company, Massachusetts Mutual Life
Pension Insurance Company, Connecticut Mutual Life Insurance
Company, the Equitable Life Assurance Society of the United
States, and Transamerica Occidental Life Insurance Company
(Exhibit 19.1(8)).
10.15 Second Amendment to Distribution Agreement dated as of
August 31, 1992 between Dreyer's Grand Ice Cream, Inc. and
Ben & Jerry's Homemade, Inc., amending Exhibit 10.5 (Exhibit
19.6(9)).
10.16 Dreyer's Grand Ice Cream, Inc. Stock Option Plan (1992)
(Exhibit 10.35(13)).
10.17 Agreement of Amendment and Waiver, dated as of September 30,
1992, between Dreyer's Grand Ice Cream, Inc. and each of
Massachusetts Mutual Life Insurance Company, MML Pension
Insurance Company, the Connecticut Mutual Life Insurance
Company, the Equitable Life Assurance Society of the United
States, and Transamerica Occidental Life Insurance Company
(together, the "Lenders") regarding the Note Agreements
dated as of March 15, 1991 between Dreyer's Grand Ice Cream,
Inc. and each of the Lenders, which Note Agreements are
referenced in Exhibit 10.14 (Exhibit 19.5(9)).
10.18 Second Amendment to Note Agreements dated as of September
30, 1992, between Dreyer's Grand Ice Cream, Inc. and each of
Massachusetts Mutual Life Insurance Company, MML Pension
Insurance Company, the Connecticut Mutual Life Insurance
Company, the Equitable Life Assurance Society of the United
States, and Transamerica Occidental Life Insurance Company
(together, the "Lenders") regarding the Note Agreements
dated as of March 15, 1991 between Dreyer's Grand Ice Cream,
Inc. and each of the Lenders, which Note Agreements are
referenced in Exhibit 10.14 (Exhibit 10.58(10)).
10.19 Description of Dreyer's Grand Ice Cream, Inc. Incentive
Bonus Plan (Exhibit 10.57(10)).
10.20 Dreyer's Grand Ice Cream, Inc. Stock Option Plan (1993), as
amended.
10.21 Dreyer's Grand Ice Cream, Inc. Income Swap Plan (Exhibit
10.38(13)).
10.22 Amendment to Distribution Agreement dated April 18, 1994,
and Letter Agreement modifying such Amendment to
Distribution Agreement dated April 18, 1994 between Dreyer's
Grand Ice Cream, Inc. and Ben & Jerry's Homemade, Inc.,
amending Exhibit 10.5 (Exhibit 10.3(14)).
10.23 Amendment to Distribution Agreement dated December 12, 1994
between Dreyer's Grand Ice Cream, Inc. and Ben & Jerry's
Homemade, Inc., amending Exhibit 10.5 (Exhibit 10.27(17)).
10.24 Third Amendment to Note Agreement dated as of June 5, 1995
between Dreyer's Grand Ice Cream, Inc. and each of
Massachusetts Mutual Life Insurance Company, MML Pension
Insurance Company, the Connecticut Mutual Life Insurance
Company, the Equitable Life Assurance Society of the United
States, and Transamerica Occidental Life Insurance Company
(together, the "Lenders"), regarding the Note Agreements
dated as of March 15, 1991 between Dreyer's Grand Ice Cream,
Inc. and each of the Lenders, which Note Agreements are
referenced in Exhibit 10.14 (Exhibit 10.3(18)).
10.25 Letter Agreement dated August 4, 1995 between Dreyer's Grand
Ice Cream, Inc. and Smithway Associates, Inc., amending
Exhibits 10.2 and 10.11 (Exhibit 10.29(20)).
10.26 Credit Agreement dated as of December 22, 1995 among
Dreyer's Grand Ice Cream, Inc., Bank of America NT & SA (as
a Bank and as Agent), ABN AMRO Bank N.V. (as a Bank and as
Co-Agent), Credit Suisse and The Bank of California (Exhibit
10.30(20)).
10.27 Participation Agreement dated March 29, 1996 among Dreyer's
Grand Ice Cream, Inc., Edy's Grand Ice Cream, BA Leasing &
Capital Corporation (as Agent and as a Participant), ABN
AMRO Bank N.V. and Credit Suisse (Exhibit 10.2(21)).
14
15
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.28 First Amendment to Credit Agreement dated April 15, 1996
among Dreyer's Grand Ice Cream, Inc., Bank of America, NT &
SA (as Agent and as a Bank), ABN AMRO Bank N.V. (as Co-Agent
and as a Bank), Credit Suisse and Union Bank of California,
NA, amending Exhibit 10.26 (Exhibit 10.1(21)).
10.29 April 1996 Amendment to Commerce Lease dated April 23, 1996
between Dreyer's Grand Ice Cream, Inc. and Smithway
Associates, Inc., amending Exhibits 10.2 and 10.11 (Exhibit
10.29(23)).
10.30 Letter Agreement dated April 23, 1996 between Dreyer's Grand
Ice Cream, Inc. and Smithway Associates, Inc., amending
Exhibits 10.2 and 10.11 (Exhibit 10.30(23)).
10.31 $15,000,000 7.86% Series A Senior Notes Due 2002,
$15,000,000 8.06% Series B Senior Notes Due 2006 and
$20,000,000 8.34% Series C Senior Notes Due 2008: Form of
Note Agreement dated as of June 6, 1996 between Dreyer's
Grand Ice Cream, Inc. and each of The Prudential Insurance
Company of America, Pruco Life Insurance Company, and
Transamerica Life Insurance and Annuity Company (Exhibit
10.1(22)).
10.32 Fourth Amendment to Note Agreement dated as of June 10, 1997
between Dreyer's Grand Ice Cream, Inc. and each of
Massachusetts Mutual Life Insurance Company, MML Pension
Insurance Company, the Connecticut Mutual Life Insurance
Company, the Equitable Life Assurance Society of the United
States, and Transamerica Occidental Life Insurance Company,
(together, the "Lenders"), regarding the Note Agreements
dated as of March 15, 1991 between Dreyer's Grand Ice Cream,
Inc. and each of the Lenders, which Note Agreements are
referenced in Exhibit 10.14 (Exhibit 10.1(26)).
10.33 Second Amendment to Credit Agreement dated as of December
26, 1997 among Dreyer's Grand Ice Cream, Inc., Bank of
America, NT & SA (as Agent and as a Bank), ABN AMRO Bank
N.V. (as Co-Agent and as a Bank), Credit Suisse First Boston
and Union Bank of California, NA, amending Exhibit 10.26.
(Exhibit 10.33(27)).
10.34 Amended and Restated Credit Agreement dated as of March 27,
1998 by and among Dreyer's Grand Ice Cream, Inc., Bank of
America National Trust and Savings Association, as one of
the Banks and as Agent, ABN AMRO Bank N.V., as one of the
Banks and as Co-Agent, Credit Suisse First Boston and Union
Bank of California, N.A. (Exhibit 10.1(28)).
10.35 First Amendment to Amended and Restated Credit Agreement
dated as of November 3, 1998 and effective as of September
25, 1998, among Dreyer's Grand Ice Cream, Inc. and Bank of
America National Trust and Savings Association, as a Bank
and as Agent, ABN AMRO Bank N.V., San Francisco
International Branch as a Bank and as Co-Agent, Credit
Suisse First Boston and Union Bank of California, N.A.
(collectively the "Banks"), amending the Amended and
Restated Credit Agreement dated as of March 27, 1998 among
Dreyer's Grand Ice Cream, Inc. and the Banks. (Exhibit
10.1(29)).
10.36 Fourth Amendment to General Continuing Guaranty and Waiver
dated November 12, 1998, between Dreyer's Grand Ice Cream,
Inc. and Bank of America National Trust and Savings
Association, amending the General Continuing Guaranty
referenced in Exhibit 10.4. (Exhibit 10.36 (30)).
10.37 First Amendment dated as of November 17, 1998 to Note
Purchase Agreements dated as of June 6, 1996 between
Dreyer's Grand Ice Cream, Inc. and each of The Prudential
Insurance Company of America, Pruco Life Insurance Company,
and Transamerica Life Insurance and Annuity Company amending
Exhibit 10.31. (Exhibit 10.37 (30)).
10.38 First Amendment to Participation Agreement dated December
21, 1998 among Dreyer's Grand Ice Cream, Inc., Edy's Grand
Ice Cream, BA Leasing & Capital Corporation (as Agent and as
a Participant), ABN AMRO Bank N.V. and Credit Suisse First
Boston (formerly Credit Suisse) amending Exhibit 10.27.
(Exhibit 10.38 (30)).
15
16
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.39 Letter Amendment Agreement dated as of January 11, 1999 to
that certain Distribution Agreement between Ben & Jerry's
Homemade, Inc., and Dreyer's Grand Ice Cream, Inc. and
certain of its subsidiaries, amending Exhibit 10.5. (*)
(Exhibit 10.39 (30)).
10.40 New Distribution Agreement between Dreyer's Grand Ice Cream,
Inc. and Ben & Jerry's Homemade, Inc. dated as of January
11, 1999 and related Addendum dated as of January 11, 1999.
(*) (Exhibit 10.40 (30)).
10.41 Secured Promissory Notes dated October 5, 1998 and December
11, 1998 in the principal sums of $95,000 and $186,000,
respectively, with Thomas M. Delaplane as Maker and Dreyer's
Grand Ice Cream, Inc. as Payee, and related Pledge Agreement
dated October 5, 1998 by and between Thomas Miller
Delaplane, as Trustee of the Delaplane Family Trust UAD
6/22/95 and Dreyer's Grand Ice Cream, Inc. (Exhibit 10.41
(30)).
10.42 Fifth Amendment to Note Agreement dated as of December 25,
1998 between Dreyer's Grand Ice Cream, Inc. and each of
Massachusetts Mutual Life Insurance Company, MML Pension
Insurance Company, the Connecticut Mutual Life Insurance
Company, the Equitable Life Assurance Society of the United
States, and Transamerica Occidental Life Insurance Company,
(together, the "Lenders"), regarding the Note Agreements
dated as of March 15, 1991 between Dreyer's Grand Ice Cream,
Inc. and each of the Lenders, which Note Agreements are
referenced in Exhibit 10.14. (Exhibit 10.1 (31)).
13 Those portions of the Dreyer's Grand Ice Cream, Inc. 1999
Annual Report to Stockholders which are incorporated by
reference into this Annual Report on Form 10-K.
21 Subsidiaries of Registrant.
23 Consent of Independent Accountants.
27.1 Financial Data Schedule for the year ended December 25,
1999.
27.2 Restated Financial Data Schedule for the 39-week period
ended September 25, 1999.
27.3 Restated Financial Data Schedule for the 26-week period
ended June 26, 1999.
27.4 Restated Financial Data Schedule for the 13-week period
ended March 27, 1999.
27.5 Restated Financial Data Schedule for the year ended December
26, 1998.
27.6 Restated Financial Data Schedule for the 39-week period
ended September 26, 1998.
27.7 Restated Financial Data Schedule for the 26-week period
ended June 27, 1998.
27.8 Restated Financial Data Schedule for the 13-week period
ended March 28, 1998.
27.9 Restated Financial Data Schedule for the year ended December
27, 1997.
(*) Confidential treatment requested and granted as to certain portions of
these exhibits. The term "confidential treatment" and the mark "*" used
throughout the indicated exhibits means that material has been omitted and
separately filed with the Commission.
- ---------------
(1) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Registration Statement on Form S-1 and Amendment No. 1
thereto, filed under Commission File No. 2-71841 on April 16, 1981 and June
11, 1981, respectively.
(2) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K and Amendment No. 1 thereto for
the year ended December 28, 1985 filed under Commission File No. 0-10259 on
March 28, 1986 and April 14, 1986, respectively.
(3) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Current Report on Form 8-K filed under Commission File No.
0-10259 on January 23, 1987.
16
17
(4) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1988 filed under Commission File No. 0-10259 on March 31, 1989.
(5) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 30,
1989 filed under Commission File No. 0-10259 on March 30, 1990.
(6) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Current Report on Form 8-K filed under Commission File No.
0-10259 on March 20, 1991.
(7) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 29,
1990 filed under Commission File No. 0-10259 on March 29, 1991.
(8) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
on June 29, 1991 filed under Commission File No. 0-10259 on August 13,
1991.
(9) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
on September 26, 1992 filed under Commission File No. 0-10259 on November
10, 1992.
(10) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 26,
1992 filed under Commission File No. 0-10259 on March 26, 1993.
(11) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Current Report on Form 8-K filed under Commission File No.
0-10259 on June 25, 1993.
(12) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
on June 26, 1993 filed under Commission File No. 0-10259 on August 10,
1993.
(13) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 25,
1993 filed under Commission File No. 0-14190 on March 25, 1994.
(14) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
March 26, 1994 filed under Commission File No. 0-14190 on May 10, 1994.
(15) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Current Report on Form 8-K filed under Commission File No.
0-14190 on May 9, 1994.
(16) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
June 25, 1994 filed under Commission File No. 0-14190 on August 9, 1994.
(17) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 31,
1994 filed under Commission File No. 0-14190 on March 30, 1995.
(18) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
July 1, 1995 filed under Commission File No. 0-14190 on August 15, 1995.
(19) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 1995 filed under Commission File No. 0-14190 on November 14,
1995.
(20) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 30,
1995 filed under Commission File No. 0-14190 on March 29, 1996.
17
18
(21) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
March 30, 1996 filed under Commission File No. 0-14190 on May 14, 1996.
(22) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
June 29, 1996 filed under Commission File No. 0-14190 on August 13, 1996.
(23) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 28,
1996 filed under Commission File No. 0-14190 on March 28, 1997.
(24) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Current Report on Form 8-K/A filed under Commission File No.
0-14190 on March 21, 1997.
(25) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Current Report on Form 8-K filed under Commission File No.
0-14190 on May 19, 1997.
(26) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
September 27, 1997 filed under Commission File No. 0-14190 on November 11,
1997.
(27) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 27,
1997 filed under Commission File No. 0-14190 on March 26, 1998.
(28) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
March 28, 1998 filed under Commission File No. 0-14190 on May 12, 1998.
(29) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
September 26, 1998 filed under Commission File No. 0-14190 on November 10,
1998.
(30) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Annual Report on Form 10-K for the year ended December 26,
1998 filed under Commission File No. 0-14190 on March 26, 1999.
(31) Incorporated by reference to the designated exhibit to Dreyer's Grand Ice
Cream, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended
March 27, 1999 filed under Commission File No. 0-14190 on May 10, 1999.
18
19
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.
DREYER'S GRAND ICE CREAM, INC.
By: /s/ T. GARY ROGERS
------------------------------------
(T. Gary Rogers)
Chairman of the Board and
Chief Executive Officer and Director
(Principal Executive Officer)
Date: March 23, 2000
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
--------- ----- ----
/s/ T. GARY ROGERS Chairman of the Board and Chief Executive March 23, 2000
- ------------------------------------------ Officer and Director
(T. Gary Rogers) (Principal Executive Officer)
/s/ WILLIAM F. CRONK, III President and Director March 23, 2000
- ------------------------------------------
(William F. Cronk, III)
/s/ EDMUND R. MANWELL Secretary and Director March 23, 2000
- ------------------------------------------
(Edmund R. Manwell)
/s/ TIMOTHY F. KAHN Vice President -- Finance and March 23, 2000
- ------------------------------------------ Administration and Chief Financial
(Timothy F. Kahn) Officer
(Principal Financial Officer)
/s/ JEFFREY P. PORTER Corporate Controller March 23, 2000
- ------------------------------------------ (Principal Accounting Officer)
(Jeffrey P. Porter)
/s/ JAN L. BOOTH Director March 23, 2000
- ------------------------------------------
(Jan L. Booth)
/s/ ROBERT A. HELMAN Director March 23, 2000
- ------------------------------------------
(Robert A. Helman)
Director March 23, 2000
- ------------------------------------------
(M. Steven Langman)
/s/ JOHN W. LARSON Director March 23, 2000
- ------------------------------------------
(John W. Larson)
/s/ JACK O. PEIFFER Director March 23, 2000
- ------------------------------------------
(Jack O. Peiffer)
/s/ TIMOTHY P. SMUCKER Director March 23, 2000
- ------------------------------------------
(Timothy P. Smucker)
Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act:
Not applicable.
19
20
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of Dreyer's Grand Ice Cream, Inc.
Our audits of the consolidated financial statements referred to in our
report dated February 15, 2000 appearing in the 1999 Annual Report to
Stockholders of Dreyer's Grand Ice Cream, Inc. (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)2 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.
/s/ PRICEWATERHOUSECOOPERS LLP
- ---------------------------------------------------------
PRICEWATERHOUSECOOPERS LLP
San Francisco, California
February 15, 2000
20
21
SCHEDULE II
DREYER'S GRAND ICE CREAM, INC.
VALUATION AND QUALIFYING ACCOUNTS
(TABLE AND FOOTNOTES IN THOUSANDS)
ADDITIONS
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END
DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS OF PERIOD
----------- ---------- ---------- ---------- ----------
Fiscal year ended December 27, 1997:
Allowance for doubtful accounts............... $ 755 $ 1,463 $1,508(1) $ 710
Accumulated amortization of goodwill and
distribution rights........................ 16,616 3,201 -- 19,817
Accumulated amortization of other assets...... 4,998 923 -- 5,921
------- ------- ------ -------
$22,369 $ 5,587 $1,508 $26,448
======= ======= ====== =======
Fiscal year ended December 26, 1998:
Allowance for doubtful accounts............... $ 710 $ 6,498(3) $1,498(1) $ 5,710(3)
Accumulated amortization of goodwill and
distribution rights........................ 19,817 12,603 2,208(4) 30,212
Accumulated amortization of other assets...... 5,921 1,001 1,061(2) 5,861
------- ------- ------ -------
$26,448 $20,102 $4,767 $41,783
======= ======= ====== =======
Fiscal year ended December 25, 1999:
Allowance for doubtful accounts............... $ 5,710(3) $ 857 $ 852(1) $ 5,715(3)
Accumulated amortization of goodwill and
distribution rights........................ 30,212 2,534 -- 32,746
Accumulated amortization of other assets...... 5,861 1,374 1,198(2) 6,037
------- ------- ------ -------
$41,783 $ 4,765 $2,050 $44,498
======= ======= ====== =======
- ---------------
(1) Write-off of receivables considered uncollectible.
(2) Removal of fully-amortized assets.
(3) Includes a bad debt allowance of $5,000 for trade accounts receivable from
an independent distributor in Texas.
(4) Includes a $2,208 impairment of goodwill and distribution rights related to
the restructuring program and other actions.
21
22
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.20 Dreyer's Grand Ice Cream, Inc. Stock Option Plan (1993), as
amended.
13 Those portions of the Dreyer's Grand Ice Cream, Inc. 1999
Annual Report to Stockholders which are incorporated by
reference in this Annual Report on Form 10-K.
21 Subsidiaries of Registrant.
23 Consent of Independent Accountants.
27.1 Financial Data Schedule for the year ended December 25,
1999.
27.2 Restated Financial Data Schedule for the 39-week period
ended September 25, 1999.
27.3 Restated Financial Data Schedule for the 26-week period
ended June 26, 1999.
27.4 Restated Financial Data Schedule for the 13-week period
ended March 27, 1999.
27.5 Restated Financial Data Schedule for the year ended December
26, 1998.
27.6 Restated Financial Data Schedule for the 39-week period
ended September 26, 1998.
27.7 Restated Financial Data Schedule for the 26-week period
ended June 27, 1998.
27.8 Restated Financial Data Schedule for the 13-week period
ended March 28, 1998.
27.9 Restated Financial Data Schedule for the year ended December
27, 1997.
22