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Previous: COUNTRYWIDE CREDIT INDUSTRIES INC, 424B3, 1995-10-11 |
Next: DIAGNOSTIC RETRIEVAL SYSTEMS INC, SC 13G, 1995-10-11 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 of 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended August 27, 1995 or
_____ Transition report pursuant to Section 13 of 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________________ to __________________
Commission file number 0-1118
DEAN FOODS COMPANY
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-0984820
- ------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
</TABLE>
3600 North River Road, Franklin Park, Illinois 60131
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 678-1680
-----------------------------
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
----- -----
The number of shares of the Registrant's Common Stock, par value $1 per share,
outstanding as of the date of this report was 40,125,448.
Total number of pages 10.
1
<PAGE> 2
PART I - FINANCIAL INFORMATION
A. UNAUDITED CONDENSED CONSOLIDATION FINANCIAL STATEMENTS
On August 4, 1995, the Registrant acquired the assets of Norcal
Crosetti Foods, Inc. Accordingly, the unaudited condensed consolidated
financial statements include the results of operations from the date of
acquisition. The acquisition did not materially impact the Registrant's
financial position or its results of operations.
In the opinion of the Registrant, all adjustments, consisting only
of normal recurring adjustments, necessary for a fair presentation of the
following unaudited condensed consolidated financial statements have been
included herein. Certain information and footnote disclosures normally
included in the financial statements have been omitted. These unaudited
condensed consolidated financial statements should be read in conjunction with
the Registrant's 1995 Annual Report on Form 10-K.
2
<PAGE> 3
ITEM 1.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED
AUGUST 27, 1995 AND AUGUST 28, 1994
(In Thousands Except for Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------
August 27, August 28,
1995 1994
----------- -------------
(Unaudited)
<S> <C> <C>
Net sales $651,505 $614,283
-------- --------
Costs and expenses:
Costs of products sold 502,820 472,873
Delivery, selling and administrative
expenses 120,756 108,657
Interest expense 5,658 4,743
Other income, net (652) (736)
-------- --------
628,582 585,537
-------- --------
Income before taxes 22,923 28,746
Provision for income taxes 9,262 11,786
-------- --------
Net income $ 13,661 $ 16,960
======== ========
Earnings per common share $ 0.34 $ 0.43
======== ========
Dividends per share (Declared and paid) $ 0.18 $ 0.17
======== ========
Weighted average common shares outstanding 40,092 39,803
======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 4
CONDENSED CONSOLIDATED BALANCE SHEETS
AUGUST 27, 1995 AND MAY 28, 1995
(In Thousands)
<TABLE>
<CAPTION>
August 27, May 28,
1995 1995
------------- ------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,884 $ 4,826
Accounts and notes receivable,
less allowance for doubtful
accounts of $4,245 and $4,257, respectively 178,564 184,210
Inventories 359,704 273,114
Other current assets 55.410 56,722
---------- ----------
Total Current Assets 597,562 518,872
---------- ----------
PROPERTIES:
Property, plant and equipment, at cost 1,028,761 996,663
Accumulated depreciation 443,167 426,518
---------- ----------
585,594 570,145
---------- ----------
OTHER ASSETS 113,687 113,409
---------- ----------
Total Assets $1,296,843 $1,202,426
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks $ 69,000 $ 29,000
Current installments of long-term obligations 12,071 11,995
Accounts payable and accrued expenses 283,538 248,721
Dividends payable 7,313 6,877
Federal and state income taxes 16,085 7,267
---------- ----------
Total Current Liabilities 388,007 303,860
---------- ----------
LONG-TERM OBLIGATIONS (Less current
installments included above) 226,873 224,679
---------- ----------
DEFERRED CREDITS 89,701 89,361
---------- ----------
SHAREHOLDERS' EQUITY:
Preferred stock - -
Common stock 41,387 41,339
Capital in excess of par value 13,988 12,705
Retained earnings 567,320 560,881
Cumulative translation adjustment (262) (228)
Less - Treasury stock - at cost 30,171 30,171
---------- ----------
Total Shareholders' Equity 592,262 584,526
---------- ----------
Total Liabilities and Shareholders' Equity $1,296,843 $1,202,426
========== ==========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
AUGUST 27, 1995 AND AUGUST 28, 1994
(In Thousands)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------
August 27, August 28,
1995 1994
-------------- -------------
(Unaudited)
<S> <C> <C>
Net cash provided from operations $ 12,505 $ 13,208
-------- ---------
Cash flows from investing activities:
Capital expenditures (28,208) (19,111)
Proceeds from disposition of property,
plant and equipment 527 571
Acquisition of business, net of
cash acquired (19,282) (11,581)
-------- --------
Net cash used in investing activities (46,963) (30,121)
-------- --------
Cash flows from financing activities:
Issuance of long-term obligations 3,799 80
Repayment of long-term obligations (1,554) (553)
Issuance of notes payable to banks, net 40,000 14,000
Unexpended industrial revenue bond proceeds (3,414) 97
Cash dividends paid (6,646) (6,247)
Issuance of common stock 1,331 1,264
--------- ---------
Net cash provided by financing activities 33,516 8,641
--------- ---------
Decrease in cash and cash equivalents (942) (8,272)
Cash and cash equivalents - beginning of period 4,826 10,967
--------- ---------
Cash and cash equivalents - end of period $ 3,884 $ 2,695
========= =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE> 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
INVENTORIES
The following is a tabulation of inventories by class at August 27,
1995, August 28, 1994, and May 28, 1995 (In Thousands).
<TABLE>
<CAPTION>
August 27, August 28, May 28,
1995 1994 1995
----------- ----------- ---------
(Unaudited)
<S> <C> <C> <C>
Raw materials and supplies $ 47,580 $ 60,007 $ 56,283
Materials in process 95,935 73,594 60,554
Finished goods 231,356 191,361 171,378
-------- -------- --------
374,871 324,962 288,215
Less: Excess of current cost
over stated value of
last-in, first-out
inventories (15,167) (15,622) (15,101)
-------- -------- --------
Total inventories $359,704 $309,340 $273,114
======== ======== ========
</TABLE>
Inventories at August 28, 1994 and May 28, 1995 have been reclassified to
conform with the August 27, 1995 presentation.
LEGAL PROCEEDINGS
See PART II, Item 1 for a discussion of pending legal proceedings.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
A.) Liquidity and Capital Resources
As of August 27, 1995, there has been no material overall
change in the Registrant's liquidity or its capital resources from
those described in the Management's Discussion and Analysis contained
in the Registrant's Annual Report on Form 10-K for the fiscal year
ended May 28, 1995. Cash and cash equivalents were $3.9 million at
August 27, 1995, a decrease of $0.9 million from the balance at May
28, 1995.
The inventories at August 27, 1995, were $359.7 million, an
increase of $86.6 million over the balance at May 28, 1995,
principally reflecting the 1995 vegetable and cucumber harvest and
inventories of a first quarter fiscal 1996 business acquisition. The
August 27, 1995, inventories were $50.4 million higher than
inventories a year ago reflecting the inventories of the fiscal 1994
and 1995 business acquisitions and the timing of the current year's
vegetable harvest compared to last year's harvest.
Short-term borrowings outstanding at August 27, 1995, were $69
million, an increase of $40 million from the balance outstanding at
May 28, 1995. Working capital at August 27, 1995, was $209.6 million
compared to $215.0 million at May 28, 1995. The Registrant's
debt-to-capital ratio was 27.7% at August 27, 1995, compared with
27.8% at May 28, 1995. The increase in short-term borrowings and the
decrease in working capital principally were the result of borrowings
associated with a business acquisition during the quarter ended August
27, 1995.
B.) Results of Operations
Overall sales for the first quarter ended August 27, 1995,
increased 6.1% over the same period a year ago, principally the result
of increased Dairy Products and Specialty Food Products unit sales
volumes and the sales of business acquisitions in fiscal 1995 and
during the first quarter this year. Consolidated after-tax earnings
for the quarter declined 19.5% from the earnings for the same period a
year ago, principally the result of lower earnings of the Registrant's
Specialty Food Products segment.
Sales of the Registrant's Dairy Products operations for the
first quarter were $390.3 million compared with $371.2 million for the
same period a year ago. The sales increase was principally the result
of increased unit sales volumes in certain markets, offset by lower
selling prices reflecting lower raw milk costs this year compared to
the same period a year ago.
Dairy Products operating earnings for the first quarter of
$20.3 million approximated the earnings for the corresponding period a
year ago. Competitive conditions in a couple market areas during the
current quarter limited overall increased Dairy Products earnings.
Raw milk supplies are plentiful and unusual raw milk cost increases
are not expected to occur over the balance of the year.
7
<PAGE> 8
Sales of the Registrant's Specialty Food Products operations
for the first quarter were $254.8 million, an increase of 7.8% over
sales of the corresponding period a year ago. The increased sales
principally were the result of:
1) Sales of vegetable operations acquired in the fourth
quarter fiscal 1995 and first quarter ended August 27,
1995 and
2) Increased sales unit volume by the vegetable and
pickle operations.
First quarter sales volumes for the balance of the Registrant's
Specialty Food Products operations exceeded sales volumes for the same
period a year ago.
Specialty Food Products' first quarter earnings of $13.0
million declined significantly over the earnings for the comparable
period a year ago, principally the result of lower operating earnings
of the Registrant's frozen and canned vegetable operations. Lower
vegetable selling prices and higher promotional costs during the first
quarter this year compared to the same period a year ago reflected
intense competitive activity reflecting the increased industry-wide
carryover inventory levels from the 1994 pack. Additionally, 1995
weather conditions in the Midwest vegetable growing areas resulted in
increased processing costs due to the lower pack. The Registrant's
pickle operations earnings were adversely affected by the spring and
early summer weather related conditions in the Registrant's Southeast
growing areas, resulting in increased processing costs. The abnormal
weather conditions encountered this season should result in an
industry-wide reduced vegetable and cucumber packs. Selling prices
should increase over the balance of the fiscal year reflecting the
lower supply of processed vegetables and pickles.
Delivery, selling and administrative expense for the quarter
ended August 27, 1995, increased 11.1% from the same period a year ago
principally the result of:
1) Increased marketing expense associated with new product
introductions;
2) Expenses of businesses acquired in the fourth quarter
fiscal 1995 and during the quarter ended August 27, 1995
and
3) Expenses associated with the increased sales volumes and
entry into new market areas.
Interest expense for the first quarter of $5.7 million
increased 19.3% over interest expense for the same period a year ago.
The increase reflects the interest on increased borrowings associated
with business acquisitions and higher prevailing interest rates during
the first quarter as compared with rates during the corresponding
period a year ago.
The effective income tax rate for the first quarter was 40.4%
compared with a rate of 41.0% for the first quarter a year ago.
8
<PAGE> 9
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
There has been no material change in the legal proceedings
reported under Item 3 - Legal Proceedings, of the Registrant's
Form 10-K Annual Report, for the fiscal year ended May 28,
1995.
ITEM 6. Exhibits and Reports on Form 8-K
a.) Exhibits
Item 12 - Computation of Ratio of Earnings to Fixed
Charges
Item 27 - Financial Data Schedules
b.) Reports on Form 8-K
None were filed during the quarter for which this
report is filed.
9
<PAGE> 10
SIGNATURES
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 thereunto duly authorized.
DEAN FOODS COMPANY
------------------
(Registrant)
DATE: October 11, 1995 Thomas L. Rose
---------------- ------------------
THOMAS L. ROSE
President
DATE: October 11, 1995 Dale I. Hecox
---------------- ------------------
DALE I. HECOX
Treasurer
10
<PAGE> 1
Exhibit 12
Dean Foods Company
Computation of ratio of Earnings to fixed Charges
<TABLE>
<CAPTION>
Fiscal Years Ending May
13 Weeks Ended ---------------------------------------------------------------------
August 27, 1995 1995 1994 1993 1992 1991
--------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Income before taxes $22,923 $136,388 $118,313 $114,759 $105,527 $124,340
----------------------------------------------------------------------------------------------
Fixed charges:
Interest expense 5,658 22,397 15,471 14,888 15,551 16,780
Debt issue costs 45 117 123 155 118 128
Portion of rentals(33%) 2,068 8,270 6,997 7,653 9,124 8,528
----------------------------------------------------------------------------------------------
Total fixed charges 7,771 30,784 22,591 22,696 24,793 25,436
----------------------------------------------------------------------------------------------
Earnings before taxes and
fixed charges $30,694 $167,172 $140,904 $137,455 $130,320 $149,776
==============================================================================================
Ratio of earnings to
fixed charges 3.9 5.4 6.2 6.1 5.3 5.9
==============================================================================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Registrants' Quarterly Report on Form 10-Q for the quarterly period ended August
27, 1995.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-26-1996
<PERIOD-START> MAY-28-1995
<PERIOD-END> AUG-27-1995
<CASH> 3,884
<SECURITIES> 0
<RECEIVABLES> 182,809
<ALLOWANCES> 4,245
<INVENTORY> 359,704
<CURRENT-ASSETS> 597,562
<PP&E> 1,028,761
<DEPRECIATION> 443,167
<TOTAL-ASSETS> 1,296,843
<CURRENT-LIABILITIES> 388,007
<BONDS> 226,873
<COMMON> 41,387
0
0
<OTHER-SE> 550,875
<TOTAL-LIABILITY-AND-EQUITY> 1,296,843
<SALES> 651,505
<TOTAL-REVENUES> 651,505
<CGS> 502,820
<TOTAL-COSTS> 502,820
<OTHER-EXPENSES> 120,756
<LOSS-PROVISION> 214
<INTEREST-EXPENSE> 5,658
<INCOME-PRETAX> 22,923
<INCOME-TAX> 9,262
<INCOME-CONTINUING> 13,661
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,661
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
</TABLE>
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