<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 June 27, 1998
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
August 7, 1998
------------------
<S> <C>
Common stock, $1.00 par value 27,219,755
</TABLE>
<PAGE> 2
DREYER'S GRAND ICE CREAM, INC.
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DREYER'S GRAND ICE CREAM, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 27, December 27,
1998 1997
------------ ------------
($ in thousands, except per share amounts) (unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 1,683 $ 3,626
Trade accounts receivable, net of
allowance for doubtful accounts of
$759 in 1998 and $710 in 1997 117,930 82,011
Other accounts receivable 23,721 16,527
Inventories 56,718 49,720
Prepaid expenses and other 13,533 14,416
------------ ------------
Total current assets 213,585 166,300
Property, plant and equipment, net 241,626 232,826
Goodwill and distribution rights, net 88,611 89,932
Other assets 13,332 13,740
------------ ------------
Total assets $ 557,154 $ 502,798
============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements
2
<PAGE> 3
DREYER'S GRAND ICE CREAM, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 27, December 27,
1998 1997
------------ ------------
(unaudited)
($ in thousands, except per share amounts)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities $ 78,961 $ 57,037
Accrued payroll and employee benefits 15,240 22,323
Current portion of long-term debt 8,364 8,364
------------ ------------
Total current liabilities 102,565 87,724
Long-term debt, less current portion 206,523 165,913
Deferred income taxes 39,887 40,591
------------ ------------
Total liabilities 348,975 294,228
------------ ------------
Commitments and contingencies
Redeemable convertible preferred stock, $1 par
value - 1,008,000 shares authorized;
1,008,000 shares issued and
outstanding in 1998 and 1997 99,443 99,230
------------ ------------
Stockholders' Equity:
Preferred stock, $1 par value -
8,992,000 shares authorized; no shares
issued or outstanding in 1998 and 1997
Common stock, $1 par value - 60,000,000
shares authorized; 27,218,000
shares and 27,020,000 shares issued
and outstanding in 1998 and 1997,
respectively 27,218 27,020
Capital in excess of par 45,300 42,822
Retained earnings 36,218 39,498
------------ ------------
Total stockholders' equity 108,736 109,340
------------ ------------
Total liabilities and stockholders' equity $ 557,154 $ 502,798
============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements
3
<PAGE> 4
DREYER'S GRAND ICE CREAM, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
------------------------------- --------------------------------
($ in thousands, except per share amounts) June 27, 1998 June 28, 1997 June 27, 1998 June 28, 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 280,273 $ 271,972 $ 495,355 $ 472,410
Other income 960 593 1,637 997
------------ ------------ ------------ ------------
281,233 272,565 496,992 473,407
------------ ------------ ------------ ------------
Costs and expenses:
Cost of goods sold 217,771 212,716 396,739 374,968
Selling, general and
administrative 52,668 46,916 96,120 83,100
Interest, net of interest
capitalized 3,273 2,743 5,940 5,231
------------ ------------ ------------ ------------
273,712 262,375 498,799 463,299
------------ ------------ ------------ ------------
Income (loss) before income taxes 7,521 10,190 (1,807) 10,108
Income taxes 2,986 4,005 (717) 3,972
------------ ------------ ------------ ------------
Net income (loss) 4,535 6,185 (1,090) 6,136
Accretion of preferred stock
to redemption value 106 106 212 212
Preferred stock dividends 174 1,143 348 2,287
------------ ------------ ------------ ------------
Net income (loss) applicable
to common stock $ 4,255 $ 4,936 $ (1,650) $ 3,637
============ ============ ============ ============
Net income (loss) per common share:
Basic $ .16 $ .18 $ (.06) $ .14
============ ============ ============ ============
Diluted $ .13 $ .18 $ (.06) $ .13
============ ============ ============ ============
Dividends per common share $ .03 $ .03 $ .06 $ .06
============ ============ ============ ============
</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 28, 1996 13,345 $ 13,345 $ 51,956 $ 38,762 $ 104,063
Net income 6,136 6,136
Accretion of preferred stock
to redemption value (212) (212)
Preferred stock dividends declared (2,287) (2,287)
Common stock dividends declared (1,611) (1,611)
Repurchases and retirements
of common stock (6) (6) (189) (195)
Employee stock plans 104 104 2,696 2,800
---------- ---------- ---------- ---------- ----------
Balance at June 28, 1997 13,443 $ 13,443 $ 54,463 $ 40,788 $ 108,694
========== ========== ========== ========== ==========
Balance at December 27, 1997 27,020 $ 27,020 $ 42,822 $ 39,498 $ 109,340
Net loss (1,090) (1,090)
Accretion of preferred stock
to redemption value (212) (212)
Preferred stock dividends declared (348) (348)
Common stock dividends declared (1,630) (1,630)
Repurchases and retirements
of common stock (5) (5) (132) (137)
Employee stock plans 203 203 2,610 2,813
---------- ---------- ---------- ---------- ----------
Balance at June 27, 1998 27,218 $ 27,218 $ 45,300 $ 36,218 $ 108,736
========== ========== ========== ========== ==========
</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>
Twenty-Six Weeks Ended
-------------------------------
($ in thousands) June 27, June 28,
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (1,090) $ 6,136
Adjustments to reconcile net (loss) income
to cash from operations:
Depreciation and amortization 17,311 15,520
Deferred income taxes (195) 1,425
Changes in assets and liabilities, net
of amounts acquired:
Trade accounts receivable (35,919) (42,875)
Other accounts receivable (7,194) (4,262)
Inventories (6,998) (14,832)
Prepaid expenses and other 374 577
Accounts payable and accrued liabilities 21,913 35,397
Accrued payroll and employee benefits (7,083) 1,197
------------ ------------
(18,881) (1,717)
------------ ------------
Cash flows from investing activities:
Acquisition of property, plant and equipment (24,395) (16,052)
Retirement of property, plant and equipment 359 449
Increase in goodwill and distribution rights (304) (96)
Increase in other assets (42) (24)
------------ ------------
(24,382) (15,723)
------------ ------------
Cash flows from financing activities:
Proceeds from long-term debt 46,600 22,800
Reductions in long-term debt (5,990) (6,707)
Issuance of common stock under employee stock plans 2,813 2,800
Repurchases of common stock (137) (195)
Cash dividends paid (1,966) (3,892)
------------ ------------
41,320 14,806
------------ ------------
Decrease in cash and cash equivalents (1,943) (2,634)
Cash and cash equivalents, beginning of period 3,626 4,134
------------ ------------
Cash and cash equivalents, end of period $ 1,683 $ 1,500
============ ============
Supplemental Cash Flow Information --
Cash paid (refunded) during the period for:
Interest (net of amounts capitalized) $ 5,784 $ 5,147
Income taxes (net of refunds) (100) (2,900)
</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 dessert products to grocery and
convenience stores, foodservice accounts and independent distributors in the
United States.
The consolidated financial statements for the thirteen and twenty-six week
periods ended June 27, 1998 and June 28, 1997 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 27, 1997, appearing in the
Company's 1997 Annual Report to Stockholders.
NOTE 2 - Inventories:
Inventories are stated at the lower of cost (determined by the first-in,
first-out method) or market. Inventories at June 27, 1998 and December 27, 1997
consisted of the following (in thousands):
<TABLE>
<CAPTION>
June 27, December
1998 27, 1997
------------ ------------
(unaudited)
<S> <C> <C>
Raw materials $ 7,484 $ 7,411
Finished goods 49,234 42,309
------------ ------------
$ 56,718 $ 49,720
============ ============
</TABLE>
NOTE 3 - Preoperating Costs:
In April 1998, the Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities" (SOP
98-5). SOP 98-5 requires that the cost of start-up activities, including
preoperating costs, should be expensed as incurred. This new accounting standard
is effective for financial statements for periods beginning after December 15,
1998. The Company currently capitalizes preoperating costs incurred during the
construction and start-up of new manufacturing and distribution facilities and
amortizes these costs over three years. Upon adoption of SOP 98-5, the Company
will expense unamortized preoperating costs in the first quarter of 1999 as a
cumulative effect of a change in accounting principle. The Company does not
expect the adoption of SOP 98-5 to have a material adverse effect on its
financial position.
7
<PAGE> 8
NOTE 4 - Net Income (Loss) Per Common Share:
Net income (loss) per common share is computed as follows:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
-------------------------------- ---------------------------------
(In thousands, except per share amounts) June 27, 1998 June 28, 1997 June 27, 1998 June 28, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net income (loss) applicable
to common stock - basic $ 4,255 $ 4,936 $ (1,650) $ 3,637
Add: preferred dividends
and accretion 280
-------------- -------------- -------------- --------------
Net income (loss) applicable
to common stock - diluted $ 4,535 $ 4,936 $ (1,650) $ 3,637
============== ============== ============== ==============
Weighted average shares
outstanding - basic 27,160 26,830 27,100 26,783
Dilutive effect of options 1,630 803 193
Dilutive effect of warrants 677 259
Dilutive effect of
preferred stock 5,800
-------------- -------------- -------------- --------------
Weighted average shares
outstanding - diluted 35,267 27,892 27,100 26,976
============== ============== ============== ==============
Net income (loss) per common share:
Basic $ .16 $ .18 $ (.06) $ .14
============== ============== ============== ==============
Diluted $ .13 $ .18 $ (.06) $ .13
============== ============== ============== ==============
</TABLE>
NOTE 5 - Line of Credit:
During the quarter, the Company entered into an agreement to extend the
available borrowings under the Company's existing long-term line of credit an
additional $25,000,000 to $175,000,000. Additionally, the line of credit
agreement was extended an additional year and will expire December 31, 2000.
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 Operations bear to net sales
and the percentage change of such items compared to the indicated prior period:
<TABLE>
<CAPTION>
Period-to-Period
Increase (Decrease)
Percentage of Net Sales ----------------------
---------------------------------------------------------- Thirteen Twenty-Six
Thirteen Weeks Ended Twenty-Six Weeks Ended Weeks Weeks
------------------------- -------------------------- 1998 1998
June 27, June 28, June 27, June 28, Compared Compared
1998 1997 1998 1997 to 1997 to 1997
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenues:
Net sales 100.0% 100.0% 100.0% 100.0% 3.1% 4.9%
Other income 0.3 0.2 0.3 0.2 61.9 64.2
----- ----- ----- -----
Total revenues 100.3 100.2 100.3 100.2 3.2 5.0
----- ----- ----- -----
Costs and expenses:
Cost of goods sold 77.7 78.2 80.1 79.4 2.4 5.8
Selling, general and
administrative 18.8 17.3 19.4 17.6 12.3 15.7
Interest, net of interest
capitalized 1.1 1.0 1.2 1.1 19.3 13.6
----- ----- ----- -----
Total costs and expenses 97.6 96.5 100.7 98.1 4.3 7.7
----- ----- ----- -----
Income (loss) before income taxes 2.7 3.7 (0.4) 2.1 (26.2) (117.9)
----- ----- ----- -----
Income taxes 1.1 1.5 (0.2) 0.8 (25.4) (118.1)
----- ----- ----- -----
Net income (loss) 1.6 2.2 (0.2) 1.3 (26.7) (117.8)
Accretion of preferred stock
to redemption value 0.0 0.0 0.0 0.0 0.0 0.0
Preferred stock dividends 0.1 0.4 0.1 0.5 (84.8) (84.8)
----- ----- ----- -----
Net income (loss) applicable to
common stock 1.5% 1.8% (0.3)% 0.8% (13.8)% (145.4)%
===== ===== ===== =====
</TABLE>
9
<PAGE> 10
FORWARD LOOKING STATEMENTS
The Company may from time to time make written or oral forward-looking
statements. Written forward-looking statements may appear in documents filed
with the Securities and Exchange Commission, in press releases, and in reports
to stockholders. The Private Securities Litigation Reform Act of 1995 contains a
"safe harbor" for forward-looking statements upon which the Company relies in
making such disclosures. In accordance with this "safe harbor" provision, we
have identified that forward-looking statements are contained in this
Management's Discussion and Analysis of Consolidated Financial Condition and
Results of Operations. The Company undertakes no obligation to publicly revise
these forward-looking statements to reflect subsequent events or circumstances.
Also, in connection with this "safe harbor" provision, the Company identifies
important factors that could cause the Company's actual results to differ
materially from those contained in any forward-looking statement made by or on
behalf of the Company. Any such statement is qualified by reference to the
cautionary statement set forth below and in the Company's other filings with the
Securities and Exchange Commission.
RESULTS OF OPERATIONS
Strategic Plan
The Company embarked on a strategic plan (the Strategic Plan) during the
second quarter of 1994 to accelerate the sales of its brand throughout the
country. The key elements of this plan are: 1) to build a high margin brand with
a leading market share 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.
The Company has made significant progress against key elements of the Strategic
Plan. This progress has yielded a leading market share in a consolidating
industry. The Company's direct-store-delivery system has now reached national
scope and includes emerging category management and demand management
capabilities. The Company has launched a wide range of new product initiatives
including the national roll-outs of Whole Fruit Sorbet, Starbucks(TM) Ice Cream
and Dreyer's and Edy's Homemade Ice Cream. However, the Company's profitability
has been impacted by extraordinarily high dairy prices that have eroded product
margins at a time when the Company was beginning to leverage profitability from
these strategic investments. The financial pressure created by these cream
prices is likely to continue for the balance of 1998. The Company is currently
examining all aspects of its cost structure in order to reduce operating
expenses. The Company has also raised wholesale prices in response to the dairy
cost increases. The impact of these price increases on consumer demand is
uncertain, but the Company anticipates that the pricing actions will provide
partial coverage of the impact of dairy costs.
The Company believes that the benefits under the Strategic Plan will be realized
in future years, although dairy prices and competitive pressures may delay the
realization of those benefits. No assurance can be given that the expectations
relative to future market share and earnings benefits of the strategy will be
achieved. The realization of the benefits will depend upon, among other things,
consumer purchase responsiveness to the Company's new products and marketing and
promotion programs, competitors' marketing and promotion responses, market
conditions affecting the price of the Company's products, commodity costs and
efficiencies achieved in manufacturing and distribution operations.
Thirteen Weeks ended June 27, 1998 Compared with Thirteen Weeks Ended June 28,
1997
Consolidated net sales for the second quarter of 1998 increased by
$8,301,000, or 3%, to $280,273,000 from $271,972,000 for the same period last
year. Sales of the Company's branded products increased 3%, or $5,330,000, as a
result of higher selling prices and increased gallon sales. Dreyer's and Edy's
Homemade Ice Cream and classic Dreyer's and Edy's Grand Ice Cream achieved
strong sales increases, offsetting significant sales declines in the Company's
"better-for-you" frozen yogurt, sugar free and fat free products. Sales of
branded products purchased from other manufacturers (partner brands) increased
3% due to increases in sales of Ben and Jerry's Homemade(R) Superpremium
products, partially offset by declines in Healthy Choice(R) Lowfat Ice Cream
sales. Sales of partner brands represented 37% of consolidated net sales,
relatively unchanged from the same period a year ago. The effect of wholesale
price increases for the Company's branded products was approximately 2% between
10
<PAGE> 11
these periods, before the effect of increased trade promotion expense. The
effect of price increases for partner brands was not significant.
Cost of goods sold increased $5,055,000, or 2%, over the second quarter of 1997,
while the overall gross margin increased to 22.3% from 21.8%. The gross margin
increased due to price increases and a decrease in distribution costs as a
percent of sales, partially offset by lower margins on company brands in 1998
caused by higher dairy costs and a shift in the mix of products away from the
higher margin "better-for-you" products.
Selling, general and administrative expenses in the second quarter of 1998 were
$5,752,000, or 12%, higher than in the same period of 1997. This increase
related primarily to higher trade promotion expenses in the second quarter of
1998 compared with the same period in 1997. Selling, general and administrative
expenses increased to 19% of total sales in 1998 as compared to 17% of total
sales in 1997.
Interest expense increased $530,000, or 19%, over the second quarter of 1997,
due primarily to additional interest expense from higher average borrowings on
the Company's line of credit.
The income tax provision decreased due to comparatively lower pre-tax income in
the second quarter 1998. The effective tax rate increased to 39.7% for the
second quarter of 1998 from 39.3% for the second quarter of 1997.
Preferred dividends decreased due to the conversion of redeemable convertible
preferred stock from Series B to Series A in October 1997. Series A preferred
stock earns dividends at a lower rate than Series B.
Twenty-Six Weeks ended June 27, 1998 Compared with Twenty-Six Weeks Ended June
28, 1997
Consolidated net sales for the first two quarters of 1998 increased by
$22,945,000, or 5%, to $495,355,000 from $472,410,000 for the same period last
year. Sales of the Company's branded products were 6%, or $16,662,000, higher
than the comparable period in 1997 and accounted for the majority of the overall
increase. Dreyer's and Edy's Homemade Ice Cream and classic Dreyer's and Edy's
Grand Ice Cream achieved strong sales increases, offsetting significant declines
in sales of the Company's "better-for-you" frozen yogurt, sugar free and fat
free products. Sales of branded products purchased from other manufacturers
(partner brands) increased 3% due to increases in sales of Ben and Jerry's
Homemade(R) Superpremium products, partially offset by declines in Healthy
Choice(R) Lowfat Ice Cream sales. Sales of partner brands represented 37% of
consolidated net sales in both periods. Wholesale prices for the Company's
branded products increased 2% between these periods, before the effect of
increased trade promotion expense. The effect of price increases for partner
brands was not significant.
Cost of goods sold increased $21,771,000, or 6%, over the first six months of
1997, while the overall gross margin decreased from 20.6% to 19.9%. The gross
margin decreased due to lower margins on company brands in 1998 caused by higher
dairy costs and a shift in the mix of products away from the higher margin
"better-for-you" products, partially offset by lower distribution costs as a
percent of sales and price increases.
Selling, general and administrative expenses for the first six months of 1998
were $13,020,000, or 16%, higher than in the same period of 1997. This increase
related primarily to higher trade promotion expenses compared with the same
period in 1997. Selling, general and administrative expenses increased to 19% of
total sales for the first two quarters of 1998 as compared to 18% of total sales
for the same period in 1997.
Interest expense increased $709,000, or 14%, due primarily to additional
interest expense from higher average borrowings on the Company's line of credit.
The income tax benefit for the first two quarters of 1998 resulted from a
pre-tax loss. The effective tax rate increased to 39.7% for the first two
quarters of 1998 from 39.3% for the first two quarters of 1997.
Preferred dividends decreased due to the conversion of redeemable convertible
preferred stock from Series B to Series A in October 1997. Series A preferred
stock earns dividends at a lower rate than Series B.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 27, 1998 increased $32,444,000 from year-end 1997 due
primarily to the seasonal increase in trade accounts receivable partially offset
by an increase in accounts payable and accrued liabilities. Cash was provided
primarily from borrowings on the Company's line of credit and was used to fund a
$24,395,000 increase in property, plant and equipment.
11
<PAGE> 12
At June 27, 1998, the Company had $1,683,000 in cash and cash equivalents, and
an unused credit line of $41,000,000. 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 6, 1998, the Company held its 1998 Annual Meeting of
Stockholders. A total of 25,848,915 shares (95%) of the outstanding
shares were represented at the meeting whether in person or by proxy,
including the shares of common stock into which the outstanding shares
of Series A Convertible Preferred Stock were convertible on the record
date for the meeting. Matters submitted to a vote of securities holders
at the meeting were as follows:
a. Election of three Class I directors to hold office until the
2001 Annual Meeting of Stockholders or until their successors
are elected and qualified; and
b. Approving the appointment of Price Waterhouse LLP as independent
public accountants for the fiscal year 1998 and thereafter until
a successor is appointed.
At the Annual Meeting, Jan L. Booth, John W. Larson and Jack O. Peiffer
were elected as directors of Class I of the Company's Board of
Directors. Robert A. Helman, Edmund R. Manwell and Timothy P. Smucker
continue to hold office as directors of Class II of the Board of
Directors until the 1999 Annual Meeting. T. Gary Rogers, William F.
Cronk, and M. Steven Langman continue to hold office as directors of
Class III of the Board of Directors until the 2000 Annual Meeting.
Price Waterhouse LLP was approved as the Company's independent public
accountants for fiscal year 1998. The number of affirmative votes cast
was 25,830,899. The number of negative votes cast was 3,933.
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 June 27, 1998.
b. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule.
</TABLE>
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: August 11, 1998 By:/s/ Timothy F. Kahn
-------------------
Timothy F. Kahn
Vice President - Finance and
Administration and Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF OPERATIONS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-26-1998
<PERIOD-START> DEC-28-1997
<PERIOD-END> JUN-27-1998
<CASH> 1,683
<SECURITIES> 0
<RECEIVABLES> 118,689
<ALLOWANCES> (759)
<INVENTORY> 56,718
<CURRENT-ASSETS> 213,585
<PP&E> 368,373
<DEPRECIATION> (126,747)
<TOTAL-ASSETS> 557,154
<CURRENT-LIABILITIES> 102,565
<BONDS> 0
99,443
0
<COMMON> 27,218
<OTHER-SE> 81,518
<TOTAL-LIABILITY-AND-EQUITY> 557,154
<SALES> 495,355
<TOTAL-REVENUES> 496,992
<CGS> 396,739
<TOTAL-COSTS> 396,739
<OTHER-EXPENSES> 95,708
<LOSS-PROVISION> 412
<INTEREST-EXPENSE> 5,940
<INCOME-PRETAX> (1,807)
<INCOME-TAX> (717)
<INCOME-CONTINUING> (1,090)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,090)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
