<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- ----- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- ----- SECURITIES EXCHANGE ACT OF 1934
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)
(510) 652-8187
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
<TABLE>
<CAPTION>
Shares Outstanding
November 10, 1995
-----------------
<S> <C>
Common stock, $1.00 par value 12,900,460
</TABLE>
<PAGE> 2
DREYER'S GRAND ICE CREAM, INC.
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DREYER'S GRAND ICE CREAM, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, December 31,
($ in thousands, except per share amounts) 1995 1994
-------------- ------------
<S> <C> <C>
(unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 2,458 $ 6,334
Trade accounts receivable, net of
allowance for doubtful accounts of
$654 in 1995 and $635 in 1994 87,289 47,519
Other accounts receivable 12,790 6,243
Inventories 36,980 29,081
Prepaid expenses and other 4,347 9,657
---------- ----------
Total current assets 143,864 98,834
Property, plant and equipment, net 178,118 160,322
Goodwill and distribution rights, net 87,552 87,825
Other assets, net 12,635 15,045
---------- ----------
Total assets $422,169 $362,026
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
2
<PAGE> 3
DREYER'S GRAND ICE CREAM, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, December 31,
($ in thousands, except per share amounts) 1995 1994
------------ ------------
(unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities $ 37,795 $ 30,130
Accrued payroll and employee benefits 14,396 15,801
Current portion of long-term debt 3,600 4,500
-------- --------
Total current liabilities 55,791 50,431
Long-term debt, less current portion 137,300 46,100
Convertible subordinated debentures 100,752
Deferred income taxes 30,214 28,822
-------- --------
Total liabilities 223,305 226,105
-------- --------
Redeemable convertible Series B preferred stock,
$1 par value - 1,008,000 shares authorized;
1,008,000 shares and no shares issued and
outstanding in 1995 and 1994, respectively 98,214
-------- --------
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $1 par value -
8,992,000 shares authorized; no shares
issued or outstanding in 1995 and 1994
Common stock, $1 par value -
30,000,000 shares authorized; 12,900,000
shares and 14,064,000 shares issued and
outstanding in 1995 and 1994, respectively 12,900 14,064
Capital in excess of par 38,635 75,257
Retained earnings 49,115 46,600
-------- --------
Total stockholders' equity 100,650 135,921
-------- --------
Total liabilities and stockholders' equity $422,169 $362,026
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
3
<PAGE> 4
DREYER'S GRAND ICE CREAM, INC.
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
------------------------------- -------------------------------
($ in thousands, except per share amounts) Sept. 30, 1995 Sept. 24, 1994 Sept. 30, 1995 Sept. 24, 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 205,226 $ 168,704 $ 534,564 $ 428,432
Other income 789 838 1,702 1,520
--------- ---------- --------- ---------
206,015 169,542 536,266 429,952
Costs and expenses:
Cost of goods sold 154,773 123,646 412,042 322,057
Selling, general and administrative 45,914 39,881 107,091 97,007
Interest, net of interest capitalized 2,768 2,322 8,006 6,955
--------- ---------- --------- ---------
203,455 165,849 527,139 426,019
--------- ---------- --------- ---------
Income before income taxes 2,560 3,693 9,127 3,933
Income taxes (1,006) (1,433) (3,587) (1,526)
--------- ---------- --------- ---------
Net income 1,554 2,260 5,540 2,407
Preferred stock dividends (661) (661)
--------- ---------- --------- ---------
Net income applicable to
common stock $ 893 $ 2,260 $ 4,879 $ 2,407
========= ========== ========= =========
Net income per common share $ .07 $ .15 $ .36 $ .16
========= ========== ========= =========
Dividends per common share $ .06 $ .06 $ .18 $ .18
========= ========== ========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
4
<PAGE> 5
DREYER'S GRAND ICE CREAM, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(unaudited)
<TABLE>
<CAPTION>
Common Stock
-------------------- Capital in Retained
(In thousands) Shares Amount Excess of Par Earnings Total
------- ------- ------------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance at December 25, 1993 14,671 $14,671 $ 59,145 $49,218 $123,034
Net income 2,407 2,407
Common stock dividends declared (2,758) (2,758)
Common stock and warrants issued
to an affiliate of Nestle USA, Inc. 3,000 3,000 99,496 102,496
Repurchases and retirements
of common stock (2,931) (2,931) (65,574) (68,505)
Employee stock plans 146 146 1,949 2,095
------ ------- -------- ------- --------
Balance at September 24, 1994 14,886 $14,886 $ 95,016 $48,867 $158,769
====== ======= ========= ======= ========
Balance at December 31, 1994 14,064 $14,064 $ 75,257 $46,600 $135,921
Net income 5,540 5,540
Common stock dividends declared (2,364) (2,364)
Preferred stock dividends declared (661) (661)
Repurchases and retirements
of common stock (1,319) (1,319) (39,201) (40,520)
Employee stock plans 155 155 2,579 2,734
------ ------- -------- ------- --------
Balance at September 30, 1995 12,900 $12,900 $ 38,635 $49,115 $100,650
====== ======= ======== ======= ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
5
<PAGE> 6
DREYER'S GRAND ICE CREAM, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Thirty-Nine Weeks Ended
-----------------------
($ in thousands) Sept. 30, 1995 Sept. 24, 1994
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,540 $ 2,407
Adjustments to reconcile net income to cash provided from operations:
Depreciation and amortization 14,950 13,168
Deferred income taxes 1,392 1,288
Changes in assets and liabilities, net of amounts acquired:
Trade accounts receivable (39,770) (23,043)
Other accounts receivable (6,547) (1,910)
Inventories (7,899) (7,495)
Prepaid expenses and other 5,310 2,581
Accounts payable and accrued liabilities 7,753 20,608
Accrued payroll and employee benefits (1,405) 3,749
-------- --------
(20,676) 11,353
-------- --------
Cash flows from investing activities:
Acquisition of property, plant and equipment (29,941) (23,872)
Retirement of property, plant and equipment 395 688
Increase in goodwill and distribution rights (1,959) (15,540)
Increase in other assets (1,096) (2,252)
-------- --------
(32,601) (40,976)
-------- --------
Cash flows from financing activities:
Decrease in short-term bank borrowings (23,400)
Increase in short-term bank borrowings 23,400
Proceeds from long-term debt 94,800
Reductions in long-term debt (4,500) (1,610)
Issuance of common stock under employee stock plans 2,734 2,095
Net proceeds from issuance of common stock and warrants
to an affiliate of Nestle USA, Inc. 102,496
Repurchases and retirements of common stock (40,520) (68,505)
Cash dividends paid (3,113) (2,741)
-------- --------
49,401 31,735
-------- --------
(Decrease) increase in cash and cash equivalents (3,876) 2,112
Cash and cash equivalents, beginning of period 6,334 2,532
-------- --------
Cash and cash equivalents, end of period $ 2,458 $ 4,644
======== ========
Supplemental Cash Flow Information - cash paid during the period for:
Interest (net of amounts capitalized) $ 8,549 $ 7,539
Income taxes (net of refunds) 2,137 237
</TABLE>
See accompanying Notes to Consolidated Financial Statements
6
<PAGE> 7
DREYER'S GRAND ICE CREAM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - General:
Dreyer's Grand Ice Cream, Inc. and its subsidiaries (the Company) is a
single segment industry company engaged in the business of manufacturing and
distributing premium ice cream and other frozen dairy products.
The consolidated financial statements for the thirteen and thirty-nine week
periods ended September 30, 1995 and September 24, 1994, have not been audited
by independent public accountants, but include all adjustments, such as normal
recurring accruals, which management considers necessary for a fair presentation
of the consolidated operating results for the periods. The statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, certain information and footnote
disclosure normally included in financial statements prepared in conformity with
generally accepted accounting principles have been condensed or omitted pursuant
to such rules and regulations. The operating results for interim periods are not
necessarily indicative of results to be expected for an entire year. The
aforementioned statements should be read in conjunction with the consolidated
financial statements for the year ended December 31, 1994, appearing in the
Company's 1994 Annual Report to Stockholders.
NOTE 2 - Financial Statement Presentation:
Certain reclassifications have been made to the prior period financial
statements in order to conform to the current presentation.
NOTE 3 - Inventories:
Inventories are stated at the lower of cost (determined by the first-in,
first-out method) or market. Inventories at September 30, 1995 and December 31,
1994 consisted of the following (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Raw materials $ 4,302 $ 3,153
Finished goods 32,678 25,928
------- -------
$36,980 $29,081
======= =======
</TABLE>
7
<PAGE> 8
NOTE 4 - Net Income Per Common Share:
Net income per common share is computed using the weighted average number of
shares of common stock outstanding during the period which were 12,873,000 and
13,410,000 shares for the thirteen weeks and thirty-nine weeks ended September
30, 1995 and 15,444,000 and 14,840,000 shares for the thirteen weeks and
thirty-nine weeks ended September 24, 1994. The potentially dilutive effect of
the redeemable convertible preferred stock and common stock equivalents was
anti-dilutive for the thirteen and thirty-nine week periods ended September
30, 1995. The potentially dilutive effect of the convertible subordinated
debentures and common stock equivalents was anti-dilutive for the thirteen
and thirty-nine week periods ended September 24, 1994. Accordingly, fully
diluted net income per common share is not presented.
NOTE 5 - Common Stock:
The Company's common stock repurchase program commenced in May 1994 was
completed during the second quarter of 1995. Under this program the Company
repurchased 5,000,000 shares of its common stock at an average cost of $25.60
per share. During the first two quarters of 1995, the Company repurchased and
retired 1,291,000 shares of its common stock at prices ranging from $28.63 to
$34.25 per share. In addition, during the first three quarters of 1995 the
Company repurchased and retired 28,000 shares of its common stock at prices
ranging from $24.50 to $38.50 per share from employees who previously acquired
shares under employee stock plans.
NOTE 6 - Redeemable Convertible Preferred Stock:
On August 8, 1995, the Company converted $100,752,000 of 6.25% convertible
subordinated debentures into 1,008,000 shares of redeemable convertible Series B
Preferred Stock, due June 30, 2001. On the conversion date, $2,538,000 of
unamortized debenture issuance costs were charged against the book value of the
debentures to arrive at the carrying value of $98,214,000 for this preferred
stock. The Series B Preferred Stock is convertible, under certain conditions,
into a total of 1,008,000 shares of redeemable convertible Series A Preferred
Stock, due June 30, 2001. Additionally, both the Series A and Series B Preferred
Stock are convertible, under certain conditions, at an initial conversion price
of $34.74 into a total of 2,900,000 shares of common stock and can be called for
early redemption after December 15, 1997, subject to certain limitations.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following table sets forth for the periods indicated the percent which
the items in the Consolidated Statement of Income bear to net sales and the
percentage change of such items compared to the indicated prior period:
<TABLE>
<CAPTION>
Percentage of Net Sales Period-to-Period
----------------------- Increase (Decrease)
---------------------
Thirteen Thirty-Nine
Thirteen Weeks Ended Thirty-Nine Weeks Ended Weeks Weeks
-------------------- ----------------------- 1995 1995
Sept. 30, Sept. 24, Sept. 30, Sept. 24, Compared Compared
1995 1994 1995 1994 to 1994 to 1994
-------------------- ----------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues
Net sales 100.0% 100.0% 100.0% 100.0% 21.7% 24.8%
Other income 0.4 0.5 0.3 0.3 (5.8) 12.0
----- ----- ----- -----
100.4 100.5 100.3 100.3 21.5 24.7
----- ----- ----- -----
Costs and expenses:
Cost of goods sold 75.4 73.3 77.1 75.2 25.2 27.9
Selling, general and administrative 22.4 23.6 20.0 22.6 15.1 10.4
Interest, net of interest capitalized 1.3 1.4 1.5 1.6 19.2 15.1
----- ----- ----- -----
99.1 98.3 98.6 99.4 22.7 23.7
----- ----- ----- -----
Income before income taxes 1.3 2.2 1.7 0.9 (30.7) 132.1
----- ----- ----- -----
Income taxes (0.5) (0.9) (0.7) (0.3) (29.8) 135.1
----- ----- ----- -----
Net income 0.8 1.3 1.0 0.6 (31.2) 130.2
Preferred stock dividends (0.4) 0.0 (0.1) 0.0 -- --
----- ----- ----- -----
Net income applicable to common stock 0.4 1.3 0.9 0.6 (60.5) 102.7
===== ===== ===== =====
</TABLE>
9
<PAGE> 10
RESULTS OF OPERATIONS
Thirteen Weeks ended September 30, 1995 Compared with Thirteen Weeks ended
September 24, 1994
The Company embarked on a five year plan during the second quarter of 1994
to accelerate the sales of its Company brands by greatly increasing its consumer
marketing efforts and expanding its distribution system into additional markets
(the Strategic Plan). Under the Strategic Plan, the Company increased the amount
of its spending for advertising and consumer promotion from $11,486,000 in 1993
to $40,287,000 in 1994, and plans to spend approximately $50,000,000 annually on
these marketing activities from 1995 through 1998. During 1994 and 1995, the
Company introduced its product line and expanded its direct store delivery
capability into 34 new markets. In addition, the Company continued the rapid
expansion of the infrastructure necessary to support the new Grand Soft product
line. The Company anticipates that the Strategic Plan will continue to
materially reduce earnings during 1995 and some portion of 1996 below levels
that would have been attained under the former business plan. Specifically, the
Company expects a loss in the fourth quarter and near break-even results for
the year. The potential benefits of the new strategy are increased market share
and future earnings above those levels that would be attained in the absence of
the strategy. The Company believes that these benefits are not likely to impact
its results until 1996 at the earliest, and no assurance can be given that the
anticipated benefits of the strategy will be achieved. The success of the
strategy will depend upon, among other things, consumer responsiveness to the
increased marketing expenditures, competitors' activities and general economic
conditions.
Consolidated net sales for the third quarter of 1995 increased 22% to
$205,226,000 compared with $168,704,000 for the same period last year. Sales of
the Company's brands increased 22%. The increase related primarily to higher
unit sales of the Company's established brands in all markets led by increases
in the sales of Dreyer's and Edy's Fat Free Ice Cream and Dreyer's and Edy's
Grand Ice Cream. Sales of products purchased from other manufacturers (partner
brands) increased 19%, led by increases in the sales of frozen novelty and ice
cream products from Nestle Ice Cream Company. Sales of partner brands
represented 34% of consolidated net sales as compared with 35% in the third
quarter of 1994. The effect of price increases for the Company's brands and
partner brands was not significant.
Cost of goods sold increased $31,127,000, or 25%, over the third quarter of
1994, while the overall gross margin decreased from 26.7% in the third quarter
of 1994 to 24.6% in the third quarter of 1995. The decrease in gross margin was
largely due to higher distribution expenses related to accelerated new market
expansion.
Selling, general and administrative expenses in the third quarter of 1995 were
$6,033,000, or 15%, higher than in the same period of 1994. This increase
related primarily to an increase in overall advertising and consumer promotion
expenses of $6,864,000 compared to the same quarter in the prior year.
Interest expense increased $446,000, or 19%, over the third quarter of 1994
primarily due to increased borrowings under the Company's line of credit.
Income taxes decreased $427,000, reflecting a lower pre-tax income, while the
effective tax rate increased from 38.8% for the third quarter of 1994 to 39.3%
for the third quarter of 1995.
10
<PAGE> 11
Thirty-Nine Weeks ended September 30, 1995 Compared with Thirty-Nine Weeks ended
September 24, 1994
Consolidated net sales for the thirty-nine weeks ended September 30, 1995
increased 25% to $534,564,000 compared with $428,432,000 for the same period
last year. Sales of the Company's brands increased 23%. The increase related
primarily to higher unit sales of the Company's established brands in all
markets due to substantially higher advertising and consumer promotion spending
under the Company's Strategic Plan. The products that led this increase were
Dreyer's and Edy's Fat Free Ice Cream and Dreyer's and Edy's Grand Ice Cream.
Sales of partner brands increased 26%, led by an increase in sales of frozen
novelty and ice cream products from Nestle Ice Cream Company. Sales of partner
brands represented 35% of consolidated net sales for both 1995 and 1994. The
effect of price increases for the Company's brands and partner brands was not
significant.
Cost of goods sold increased $89,985,000, or 28%, as compared with 1994, while
the overall gross margin decreased from 24.8% in 1994 to 22.9% in 1995. The
decrease in gross margin was largely due to higher distribution expenses related
to accelerated new market expansion.
Selling, general and administrative expenses in the first three quarters of 1995
increased $10,084,000 or 10% as compared to the same period in 1994. This
increase related primarily to an increase in overall advertising and consumer
promotion marketing expenses of $10,838,000.
Interest expense in the first three quarters of 1995 was $1,051,000, or 15%,
higher than in the same period in the prior year primarily due to increased
borrowings under the Company's long term line of credit.
Income taxes increased $2,061,000 reflecting a higher pre-tax income, while the
effective tax rate increased from 38.8% for the first three quarters of 1994 to
39.3% for the first three quarters of 1995.
11
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
Working capital at September 30, 1995 increased $39,670,000 from year end
1994 primarily due to the seasonal increase in trade accounts receivable, other
accounts receivable and inventories partially offset by an increase in accounts
payable and accrued liabilities and a decrease in prepaid expenses and other.
Cash was provided primarily from the $94,800,000 proceeds from long-term debt.
This source was used to fund the $40,520,000 repurchases and retirements of
common stock and the $29,941,000 increase in property, plant and equipment.
At September 30, 1995, the Company had $2,458,000 in cash and cash equivalents,
and an unused credit line of $10,000,000. The Company is currently amending its
credit line to increase the amount available for borrowing and extend the term
in order to meet anticipated operating and capital requirements. The Company
believes that its credit line, along with its liquid resources, internally
generated cash and financing capacity are adequate to meet anticipated operating
and capital requirements.
12
<PAGE> 13
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. No reports on Form 8-K were filed by the Company during the
quarter ended September 30, 1995.
b. Exhibits
Exhibit No. Description
- ----------- -----------
10.1 Third Amendment to Securities Purchase Agreement dated October 30, 1995
and effective as of September 30, 1995 by and among the Company,
Trustees of General Electric Pension Trust, GE Investment Private
Placement Partners I, Limited Partnership and General Electric Capital
Corporation, amending the Securities Purchase Agreement dated June 24,
1993 between the Company, Trustees of General Electric Pension Trust,
GE Investment Private Placement Partners I, Limited Partnership and
General Electric Capital Corporation.
11 Computation of Net Income Per Common Share.
27 Financial Data Schedule.
13
<PAGE> 14
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.
DREYER'S GRAND ICE CREAM, INC.
Dated: November 14, 1995 By: /s/ Paul R. Woodland
----------------------
Paul R. Woodland
Vice President - Finance and Administration
and Chief Financial Officer
14
<PAGE> 15
EXHIBIT INDEX
Exhibit No. Description
10.1 Third Amendment to Securities Purchase Agreement
dated October 30, 1995 and effective as of
September 30, 1995 by and among the Company,
Trustees of General Electric Pension Trust, GE
Investment Private Placement Partners I, Limited
Partnership and General Electric Capital
Corporation, amending the Securities Purchase
Agreement dated June 24, 1993 between the Company,
Trustees of General Electric Pension Trust, GE
Investment Private Placement Partners I, Limited
Partnership and General Electric Capital
Corporation.
11 Computation of Net Income Per Common Share.
27 Financial Data Schedule.
<PAGE> 1
THIRD AMENDMENT TO SECURITIES PURCHASE AGREEMENT
This Third Amendment to Securities Purchase Agreement (the "Amendment")
is dated October 30, 1995 and is effective as of September 30, 1995 by and among
Dreyer's Grand Ice Cream, Inc., a Delaware corporation (the "Company"), and
Trustees of General Electric Pension Trust, a New York common law trust ("GE
Pension"), GE Investment Private Placement Partners I, a Delaware limited
partnership ("GEIPPP") and General Electric Capital Corporation, a New York
corporation (collectively the "Purchasers").
Recitals
A. Company entered into a Securities Purchase Agreement with Purchasers
dated June 24, 1993, and amended May 6, 1994 and July 28, 1995 (the
"Agreement"), pursuant to which Purchasers acquired various securities of
Company.
B. Company and Purchasers now desire to amend the Agreement as set forth
herein.
1. Amendment. Section 6.1(a) of the Agreement is hereby amended to read
in its entirety as follows:
"6.1. Financial Covenants. (a) The Company will not permit its
Consolidated Net Worth at any time to be less than the sum of
(i) $100,000,000 or, only during the Company's second fiscal
quarter of 1995, $99,000,000 and (ii) the aggregate Stated
Value of the outstanding shares of Preferred Stock net of
unamortized issuance costs associated with the Securities (it
being understood that, for the purposes of this paragraph (a),
(x) the Notes and any other Subordinated Indebtedness of the
Company shall not be treated as equity and (y) Consolidated
Net Worth shall not be reduced by any amount up to one hundred
and six million dollars ($106,000,000) borrowed to redeem,
purchase or acquire shares of Common Stock to the extent such
amounts are repaid from the net cash proceeds received, not
more than 180 days after the effective date of such borrowing,
by the Company from Nestle for the issue and sale of shares of
Common Stock and warrants to purchase or acquire shares of
Common Stock on the terms set forth in the Nestle Purchase
Agreement and the Nestle Warrant Agreement).
1
<PAGE> 2
2. Miscellaneous.
2.1. Except as expressly amended herein, all terms, covenants
and provisions of the Agreement are and shall remain in full force and effect
and all references therein to such Agreement shall henceforth refer to the
Agreement as amended by this Amendment. This Amendment shall be deemed
incorporated into, and a part of, the Agreement.
2.2. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. No
third party beneficiaries are intended in connection with this Amendment.
2.3. This Amendment shall be governed by and construed in
accordance with the law of the State of Delaware.
2.4. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Amendment to be executed and delivered as of the date first above written.
DREYER'S GRAND ICE CREAM, INC. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: /s/ Paul R. Woodland By: /s/ Alan M. Lewis
Title: Vice President Title: Trustee
GENERAL ELECTRIC CAPITAL GE INVESTMENT PRIVATE
CORPORATION PLACEMENT PARTNERS I
By: GE Investment Management
By: /s/ Sharon Pipe Incorporated, its
Title: Department Operations General Partner
Manager
By: /s/ Alan M. Lewis
Title: Executive Vice
President
2
<PAGE> 1
EXHIBIT 11
DREYER'S GRAND ICE CREAM, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
(unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
------------------------------- -------------------------------
(in thousands, except per share amounts) Sept. 30, 1995 Sept. 24, 1994 Sept. 30, 1995 Sept. 24, 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PRIMARY
Net income applicable to common stock $ 893 $ 2,260 $ 4,879 $ 2,407
Weighted average number of shares of common
stock outstanding 12,873 15,444 13,410 14,840
------- ------- ------- -------
Net income per share, as reported $ .07 $ .15 $ .36 $ .16
======= ======= ======= =======
Weighted average number of shares of common
stock outstanding 12,873 15,444 13,410 14,840
Common stock equivalent--assumed exercise of
common stock options and warrants 788 90 280 90
------- ------- ------- -------
Weighted average number of shares of common
stock outstanding, including common stock
equivalents 13,661 15,534 13,690 14,930
======= ======= ======= =======
Net income per common share $ .07 $ .15(1) $ .36 $ .16(1)
======= ======= ======= =======
</TABLE>
Continued on following page
<PAGE> 2
EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE
(unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
---------------------------------- ---------------------------------
(in thousands, except per share amounts) Sept. 30, 1995 Sept. 24, 1994 Sept. 30, 1995 Sept. 24, 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
FULLY DILUTED
Net income applicable to common stock $ 893 $ 2,260 $ 4,879 $ 2,407
Add preferred dividends on redeemable
convertible Series B Preferred Stock, due
June 2001 661 661
Add interest expense on convertible
subordinated debentures issued June 1993,
due June 2006 and amortization of related
issuance costs, net of tax 533 1,024 2,571 3,074
------- ------- ------- -------
Adjusted net income $ 2,087 $ 3,284 $ 8,111 $ 5,481
======= ======= ======= =======
Weighted average number of shares of common
stock outstanding 12,873 15,444 13,410 14,840
Common stock equivalent--assumed exercise of
common stock options and warrants 829 100 829 100
Assumed conversion of debentures 2,900 2,900
Assumed conversion of preferred stock 2,900 2,900
------- ------- ------- -------
Adjusted shares 16,602 18,444 17,139 17,840
======= ======= ======= =======
Net income per common share $ .13(2) $ .18(2) $ .47(2) $ .31(2)
======= ======= ======= =======
</TABLE>
(1) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although it is not required by footnote 2 to paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
(2) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although it is contrary to APB Opinion No. 15 because it
produces an anti-dilutive effect.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,458
<SECURITIES> 0
<RECEIVABLES> 87,943
<ALLOWANCES> (654)
<INVENTORY> 36,980
<CURRENT-ASSETS> 143,864
<PP&E> 252,142
<DEPRECIATION> (74,024)
<TOTAL-ASSETS> 422,169
<CURRENT-LIABILITIES> 55,791
<BONDS> 137,300
<COMMON> 12,900
98,214
0
<OTHER-SE> 87,750
<TOTAL-LIABILITY-AND-EQUITY> 422,169
<SALES> 534,564
<TOTAL-REVENUES> 536,266
<CGS> 412,042
<TOTAL-COSTS> 412,042
<OTHER-EXPENSES> 106,469
<LOSS-PROVISION> 622
<INTEREST-EXPENSE> 8,006
<INCOME-PRETAX> 9,127
<INCOME-TAX> 3,587
<INCOME-CONTINUING> 5,540
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,540
<EPS-PRIMARY> .36
<EPS-DILUTED> .47
</TABLE>
