<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(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 30, 1996
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 numbers 340-28130
SUIZA FOODS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-2559681
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
3811 Turtle Creek Boulevard, Suite 1300
Dallas, Texas 75219
(214) 528-0939
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be file 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 report(s), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
---------- ----------
As of August 9, 1996, the number of shares outstanding of each class of
common stock was:
Common Stock, $.01 par value: 10,739,729
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUIZA FOODS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, June 30,
1995 1996
------------ -----------
(Unaudited)
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,177 $ 1,179
Accounts receivable 31,045 33,670
Inventories 11,346 12,245
Prepaid expenses and other current assets 1,380 1,644
Deferred income taxes 1,448 1,587
-------- --------
Total current assets 48,396 50,325
PROPERTY, PLANT AND EQUIPMENT 92,715 95,955
INTANGIBLE AND OTHER ASSETS 91,411 91,693
TOTAL $232,522 $237,973
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 31,957 $ 29,998
Income Taxes Payable 2,415 1,023
Current portion of long-term debt 15,578 9,556
-------- --------
Total current liabilities 49,950 40,577
LONG-TERM DEBT 171,745 134,334
DEFERRED INCOME TAXES 1,367 2,273
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $.01; 20,000,000
shares authorized, 10,108,479 shares
issued and outstanding, as adjusted 63 101
Additional paid-in capital 31,023 79,593
Retained earnings (deficit) (21,626) (18,905)
-------- --------
Total stockholders' equity 9,460 60,789
-------- --------
TOTAL $232,522 $237,973
-------- --------
-------- --------
See notes to consolidated financial statements
2
<PAGE>
SUIZA FOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Six months ended
June 30, June 30,
---------------------- ----------------------
1995 1996 1995 1996
--------- --------- --------- ---------
(Dollars in thousands, except share data)
NET SALES $ 110,029 $ 116,272 $ 214,905 $ 225,307
COST OF SALES 78,983 83,302 157,652 165,917
--------- --------- --------- ---------
GROSS PROFIT 31,046 32,970 57,253 59,390
OPERATING COSTS AND EXPENSES:
Selling and distribution 15,997 17,180 31,391 32,682
General and Administration 5,112 4,884 10,271 9,805
Amortization of intangibles 914 1,023 1,949 1,960
--------- --------- --------- ---------
Total operating costs
and expenses 22,023 23,087 43,611 44,447
--------- --------- --------- ---------
INCOME FROM OPERATIONS 9,023 9,883 13,642 14,943
OTHER (INCOME) EXPENSE:
Interest expense, net 5,088 3,872 10,437 8,488
Merger and other costs 1,466 10,304
Other income, net (83) (172) (273) (252)
--------- --------- --------- ---------
Total other expense 6,471 3,700 20,468 8,236
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME
TAXES AND EXTRAORDINARY LOSS 2,552 6,183 (6,826) 6,707
INCOME TAXES 220 1,630 731 1,771
--------- --------- --------- ---------
INCOME (LOSS) BEFORE
EXTRAORDINARY LOSS 2,332 4,553 (7,557) 4,936
EXTRAORDINARY LOSS FROM
EXTINGUISHMENT OF DEBT - (2,215) (8,462) (2,215)
--------- --------- --------- ---------
NET INCOME (LOSS) $ 2,332 $ 2,338 $ (16,019) $ 2,721
--------- --------- --------- ---------
--------- --------- --------- ---------
NET EARNINGS (LOSS) PER SHARE:
Income (loss) before
extraordinary loss $ 0.37 $ 0.46 $ (1.28) $ 0.58
Extraordinary loss 0.00 (0.22) (1.43) (0.26)
--------- --------- --------- ---------
Net Income (loss) $ 0.37 $ 0.24 $ (2.71) $ 0.32
--------- --------- --------- ---------
--------- --------- --------- ---------
WEIGHTED AVERAGE SHARES
OUTSTANDING 6,313,000 9,921,715 5,905,000 8,455,332
--------- --------- --------- ---------
--------- --------- --------- ---------
See notes to consolidated financial statements
3
<PAGE>
SUIZA FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended June 30,
(Dollars in thousands)
-------------------------
1995 1996
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (16,019) $ 2,721
Operating activities:
Depreciation and amortization 4,571 4,479
Amortization of intangible assets, including
deferred financing costs 2,617 2,297
(Gain) loss on the sales of assets (150) 20
Extraordinary loss from early extinguishment
of debt 8,462 2,215
Merger costs 10,304
Noncash and imputed interest 670 236
Minority interests 101
Deferred income taxes (1,083) 767
Changes in operating assets and liabilities:
Accounts receivable (5,333) (2,625)
Inventories (602) (899)
Prepaid expenses and other assets (482) 37
Accounts payable and other accrued expenses 2,738 (1,959)
Income tax payable 2,207 (511)
--------- --------
Net cash provided by operating activities 8,001 6,778
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (5,264) (7,984)
Proceeds from the sale of property, plant
and equipment 286 245
Cash outflows for acquisitions (1,520) (4,176)
--------- --------
Net cash used in investing activities (6,498) (11,915)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of debt 146,700 8,653
Repayment of debt (139,405) (52,322)
Payment of deferred financing, debt
restructuring and merger costs (8,972) (1,800)
Issuance of common stock, net of expenses 4,087 48,608
Distributions to minority interests (63)
Purchase of subsidiary preferred stock (8,269) -
--------- --------
Net cash (used in) provided by
financing activities (5,922) 3,139
--------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (4,419) (1,998)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 5,395 3,177
--------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 976 $ 1,179
--------- --------
--------- --------
See notes to consolidated financial statements
4
<PAGE>
SUIZA FOODS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements as of June 30, 1996 and for
the three-month and six-month periods ended June 30, 1996 have been
prepared by Suiza Foods Corporation (the "Company" or "Suiza Foods")
without audit. In the opinion of management, all necessary adjustments
(which include only normal recurring adjustments) to present fairly, in all
material respects, the consolidated financial position, results of
operations and cash flows as of and for the three-month and six-month
periods ended June 30, 1996 have been made. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
These financial statements should be read in conjunction with the Company's
1995 financial statements contained in its Form S-1 as filed with the
Securities and Exchange Commission on March 1, 1996, as amended.
2. INVENTORIES
December 31, June 30,
1995 1996
------------ --------
Pasteurized and raw milk and raw materials $ 4,278 $ 4,018
Parts and supplies 3,105 3,966
Finished goods 3,963 4,261
-------- --------
$ 11,346 $ 12,245
-------- --------
-------- --------
3. LONG-TERM DEBT
December 31, June 30,
1995 1996
------------ --------
Senior credit facility:
Revolving loan facility $ 10,900 $ 12,298
Term loans 123,750 94,544
Subordinated notes 51,101 36,000
Capital lease obligations and other debt 1,572 1,048
-------- --------
187,323 143,890
Less: current portion (15,578) (9,556)
-------- --------
$171,745 $134,334
-------- --------
-------- --------
On April 22, 1996, the Company issued 3,795,000 shares of common stock,
$.01 par value per share, in a public offering (the "Offering") at an
issue price of $14 per share. The Offering
5
<PAGE>
SUIZA FOODS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 1996
3. LONG-TERM DEBT (Continued)
provided net cash proceeds to the Company of approximately $49 million. Of
this amount, $31.5 million was used to repay senior debt, $15.7 million was
used to repay the Company's 15% subordinated notes and $1.8 million was
used to pay prepayment penalties related to the early extinguishment of the
15% subordinated notes. As a result of these transactions, the Company
recorded a $2.2 million extraordinary loss from extinguishment of debt
which included $1.8 million in prepayment penalties and $1.3 million for
the write-off of deferred financing costs related to the repaid debt, net
of a tax benefit of $0.9 million.
On July 19, 1996, the Company amended its senior credit facilities to
borrow $35 million to complete the Garrido acquisition (see footnote 5,
"Subsequent Events"). Pursuant to this amendment, the Company's term loans
were combined into a single, $130 million U.S. based facility. Quarterly
amortization payments beginning September 30, 1996 will be $2.5 million,
increasing to: 1) $3.75 million on September 30, 1997; 2) $5.0 million on
September 30, 1998; 3) $5.375 million on September 30, 1999; 4) $6.0
million on September 30, 2000; 5) $9.875 on September 30, 2001 with a final
installment of $19.75 due on March 3, 2002.
4. ACQUISITIONS
During the quarter, the Company paid approximately $2.7 million to acquire
seven small ice businesses. Estimated annual sales of these seven ice
companies was $2.4 million.
5. STOCKHOLDERS' EQUITY
On April 22, 1996, the Company issued 3,795,000 shares of common stock,
$.01 par value per share, in a public offering at a price to the public of
$14.00 per share. Following this offering, the Company had 10,108,479
shares of common stock issued and outstanding. On August 7, 1996, the
Company issued 625,000 shares of common stock, $.01 par value per share
(see footnote 6, "Subsequent Events"). Following this private sale, the
Company had 10,739,729 shares of common stock issued and outstanding.
6. SUBSEQUENT EVENTS
On July 19, 1996, the Company acquired the common stock of Garrido y
Compania, Inc. ("Garrido"). The total purchase price was approximately
$35 million (inclusive of acquired cash) which was paid at closing plus an
additional future cash payment of up to $5.5 million if certain earnings
criteria are met during the first eighteen months of Garrido's
post-acquisition operating results. The cash paid at closing was funded by
additional borrowings under senior loan facilities. This acquisition was
accounted for using the purchase method of accounting as of the effective
date, and accordingly, only the results of operations of Garrido
subsequent to the
6
<PAGE>
SUIZA FOODS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 1996
6. SUBSEQUENT EVENTS (Continued)
acquisition date will be included in the consolidated financial statements
of the Company. The Puerto Rico Agricultural Tax Incentives Act of 1995
provides a 50% tax credit for certain "eligible investments" in qualified
agricultural businesses in Puerto Rico. The Company is currently
investigating whether its investment in Garrido or other recent
transactions regarding its other Puerto Rico based operations will qualify
for these tax credits. If the Company qualifies for such tax credits,
there can be no assurance as to the amounts or timing of any benefits that
the Company may realize.
On July 31, 1996, the Company announced that it had signed a non-binding
letter of intent to acquire Swiss Dairy Corporation of Riverside,
California. There are no assurances that this acquisition will be
consummated. It is the Company's plan to finance this potential
acquisition with additional borrowings from it senior lenders by obtaining
an amendment to its existing credit facilities.
On August 7, 1996, the Company issued 625,000 shares of common stock, $.01
par value per share, in a private sale to an institutional investor an
issue price of $16.00 per share. The private sale provided net cash
proceeds to the Company of approximately $9.5 million, which was used to
repay a portion of the amounts borrowed under the Company's revolving
credit facility. The Company has agreed to file a registration statement
with respect to these shares within 60 days of issuance.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
Suiza Foods is a leading manufacturer and distributor of fresh milk products
and refrigerated ready-to-serve fruit drinks in Puerto Rico, fresh milk and
related dairy products in Florida, and packaged ice in Florida and the
southwestern United States. The Company has grown primarily through
strategic and consolidating acquisitions. Through these acquisitions, the
Company has realized regional economies of scale and operating efficiencies
by consolidating manufacturing and distribution operations in each of its
core businesses. The Company operates through Suiza-Puerto Rico, Velda Farms
and Reddy Ice, each of which is a strong regional competitor with an
established reputation for customer service and product quality. These
subsidiaries market their products through extensive distribution networks to
a diverse group of customers, including convenience stores, grocery stores,
other retail outlets, schools and institutional food service customers.
The Company is a Delaware corporation, incorporated on September 19, 1994,
for the sole purpose of entering into certain mergers, exchanges and related
transactions (the "Combination"). On March 31, 1995, the Company completed
the Combination pursuant to which the Company acquired Suiza - Puerto Rico,
Velda Farms and Reddy Ice, which was accounted for as a pooling of interests.
Pursuant to the Combination, the Company issued 6,313,479 shares of its
common stock in exchange for all of the outstanding equity interest of the
combining entities. On April 22, 1996, the Company issued 3,795,000 shares
of common stock, $.01 par value per share, in a public offering (the
"Offering") at a price to the public of $14 per share. Prior to the
Offering, there was no public market for the Company's stock. The Offering
provided net cash proceeds to the Company of approximately $49 million. Of
this amount $31.5 million was used to repay senior debt, $15.7 million was
used to repay the Company's 15% subordinated notes and $1.8 million was used
to pay prepayment penalties related to the early extinguishment of the 15%
subordinated notes.
8
<PAGE>
RESULTS OF OPERATIONS
The Company currently operates in two distinct businesses: Dairy, which
includes the operations of Suiza - Puerto Rico and Velda Farms; and Ice,
which includes the operations of Reddy Ice.
<TABLE>
Three months ended June 30, Six months ended June 30,
------------------------------------------- -----------------------------------------------
Percent of Percent of Percent of Percent of
1995 Net Sales 1996 Net Sales 1995 Net Sales 1996 Net Sales
-------- ---------- -------- ---------- --------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales:
Dairy $ 95,193 $ 99,876 $ 193,657 $202,090
Ice 14,836 16,396 21,248 23,217
-------- -------- --------- --------
Net sales 110,029 100.0% 116,272 100.0% 214,905 100.0% 225,307 100.0%
Cost of Sales 78,983 71.8 83,302 71.6 157,652 73.4 165,917 73.6
-------- ----- -------- ----- --------- ----- -------- -----
Gross Profit 31,046 28.2 32,970 28.4 57,253 26.6 59,390 26.4
Operating expenses:
Selling and distribution 15,997 14.5 17,180 14.8 31,391 14.6 32,682 14.5
General and administrative 5,112 4.6 4,884 4.2 10,271 4.8 9,805 4.4
Amortization of intangibles 914 0.8 1,023 0.9 1,949 0.9 1,960 0.9
-------- ----- -------- ----- --------- ----- -------- -----
Total operating expenses 22,023 20.0 23,087 19.9 43,611 20.3 44,447 19.8
Operating income:
Dairy 6,178 5.7 5,814 5.0 12,387 5.8 12,375 5.5
Ice 3,572 3.2 4,781 4.1 2,479 1.2 4,188 1.9
Corporate Office (727) (0.7) (712) (0.6) (1,224) (0.6) (1,620) (0.7)
-------- ----- -------- ----- --------- ----- -------- -----
Operating income $ 9,023 8.2% $ 9,883 8.5% $ 13,642 6.3% $ 14,943 6.6%
-------- ----- -------- ----- --------- ----- -------- -----
-------- ----- -------- ----- --------- ----- -------- -----
</TABLE>
SECOND QUARTER AND YEAR-TO-DATE 1996 COMPARED TO SECOND QUARTER AND YEAR-TO-DATE
1995
NET SALES. The Company's net sales increased by 5.7% and 4.8% for the second
quarter and first six months of 1996 when compared to the like periods of
1995. Dairy net sales increased by 4.9% and 4.3% for the second quarter and
first six months of 1996 when compared to like periods of 1995, primarily
due to (i) an increase in prices charged for milk to recoup increases in raw
milk costs in the U.S. and (ii) the acquisition of Skinners' Dairy in January
1996. Ice net sales increased by 10.5% and 9.3% for the second quarter and
first six months of 1996 when compared to like periods of 1995 due to the
addition of new customers and from the acquisition of twelve small ice
businesses during 1995 and the first half of 1996.
COST OF SALES. The Company's cost of sales margins were 71.6% and 73.6% for
the second quarter and first six months of 1996 compared to 71.8% and 73.4%
for the same periods in 1995. Dairy cost of sales margins increased primarily
due to higher raw milk costs. Ice cost of sales margins decreased reflecting
additional efficiencies realized from acquired business and increased volumes
processed when compared to the same periods over last year.
9
<PAGE>
OPERATING EXPENSES. Operating expense ratios were 19.9% and 19.8% for the
second quarter and first six months of 1996 compared to 20.0% and 20.3% for
the same periods in 1995. Operating expense increases were experienced in
both Dairy and Ice as the result of acquisitions made during the past
eighteen months. Operating expense margins decreased in the second quarter
and six-month comparison because of increased Dairy net sales due to higher
milk costs which had little impact on operating expense levels.
OPERATING INCOME. The Company's operating income increased 9.5% to $9.9
million in the second quarter of 1996 from $9.0 million in the second quarter
of 1995 as a result of increased sales levels and improved gross margins
primarily in the Ice business. For the first six months, 1996 operating
income was $14.9 million, an increase of 9.5% from 1995 operating income of
$13.6 million. The Company's operating income margin increased to 8.5% in
the second quarter of 1996 from 8.2% in the second quarter of 1995 and
increased to 6.6% in the first six months of 1996 from 6.3% in the first six
months of 1995 due primarily to increased influence of the Ice business.
OTHER (INCOME) EXPENSE. Interest expense declined to $3.9 million in the
second quarter of 1996 from $5.1 million in the second quarter of 1995
primarily due to lower debt levels following the Company's initial public
offering which was completed in April 1996. The Company incurred $1.4 million
in other non-operating expenses during the second quarter of 1995 related to
several uncompleted acquisitions and to an uncompleted debt offering.
Interest expenses declined to $8.5 million during the first six months of
1996 from $10.4 million during the first six months of 1995. In addition to
the reduced debt levels experienced during the second quarter, the reduced
year-to-date interest expense resulted from a decrease in interest rates.
The Company also incurred $8.8 million in non-recurring, merger expenses on
March 31, 1995 related to the Combination.
EXTRAORDINARY ITEMS. During the second quarter of 1996, the Company incurred
$2.2 million in extraordinary costs (net of a $0.9 million tax benefit) as a
result of the early extinguishment of debt from the net cash proceeds of the
Companys' initial public offering. These costs included $1.3 million for the
write-off of deferred financing costs and $1.8 million in prepayment
penalties. During the first six months of 1995, the Company incurred $8.5
million in extraordinary costs (net of $0.7 million tax benefit) to refinance
the Company's debt in conjunction with the Combination which included the
write-off of deferred financing costs and certain prepayment penalties.
NET INCOME (LOSS). The Company reported net income of $2.3 million in the
second quarter of both 1995 and 1996. The 1996 net income was impacted by
higher income taxes and by a charge of $2.2 million for the extraordinary
item mentioned above. The Company reported net income of $2.7 million for
the first six months of 1996 compared to a loss of $16.0 million for the
first six months of 1995. The 1995 loss resulted from the $10.3 million in
one-time non-operating charges related to the Combination and uncompleted
acquisitions and to the $8.5 million extraordinary loss on early
extinguishment of debt mentioned above.
SEASONALITY
The Company's Ice business is seasonal with peak demand for its products
occurring during the second and third calendar quarters. Over the past two
fiscal years, Ice recorded an average of approximately 69% of its annual net
sales during these two quarters. While this percentage for the second and
third quarters has remained relatively constant over recent years, the timing
of the hottest summer weather can impact the distribution of sales between
these two quarters.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1996, the Company had total stockholders' equity of $60.8
million and total indebtedness of $143.9 million (including long-term debt
and the current portion of long-term debt). The Company is currently in
compliance with all covenants and financial ratios contained in its debt
agreements.
CASH FLOW. Historically, the working capital needs of the Company have been
met with cash flow from operations along with borrowings under revolving
credit facilities. Net cash provided by operating activities was $6.8
million for the first six months of 1996 as contrasted with net cash provided
by operations of $8.0 million for the first six months of 1995. Investing
activities in the first six months of 1996 included $8.0 million in capital
expenditures, of which $6.3 million was spent by Dairy and $1.7 million was
spent by Ice, and $4.2 million for acquisitions.
On April 22, 1996, the Company issued 3,795,000 shares of new common stock,
$.01 par value per share, in the Offering at a price to the public of $14 per
share. Prior to the Offering, there was no public market for the Company's
common stock. The Offering provided net cash proceeds to the Company of
approximately $49 million. Of this amount, $5.0 million was used to repay
amounts outstanding under the revolving credit facility, $8.7 million was
used to repay current maturities under the term loan facility, $17.8 million
was used to repay long-term maturities under the term loan facility, $15.7
million was used to repay the Company's 15% subordinated notes and $1.8
million was used to pay prepayment penalties related to the early
extinguishment of the 15% subordinated notes. Following the Offering, the
Company had 10,108,479 shares of common stock issued and outstanding.
FUTURE CAPITAL REQUIREMENTS. During the remainder of 1996, the Company
currently intends to invest approximately $3.7 million, in addition to the
$8.0 million spent during the first six months in expanding its manufacturing
facilities and distribution capabilities. Of these amounts, Dairy currently
intends to spend approximately a total of $9.5 million in 1996 to expand and
maintain its manufacturing facilities and for fleet replacement. Ice
currently intends to spend a total of $2.2 million in 1996, including $1.7
for maintenance of existing facilities and $0.5 million to increase
production capacity. On July 19, 1996, the Company acquired the common stock
of Garrido y Compania, Inc. ("Garrido"). The total purchase price was
approximately $35.0 million which was funded by additional borrowings under
existing senior loan facilities. On August 7, 1996, the Company issued
625,000 shares of new common stock, $.01 par value per share, to an
institutional investor at a price of $16 per share. The sale of stock
provided approximately $9.5 million in net cash proceeds which was used to
retire debt outstanding under the Company's revolving credit facility.
The Company expects that cash flow from operations along with additional
borrowings under existing and future Credit facilities will be sufficient to
meet the Company's requirements for the remainder of 1996 and for the
foreseeable future. During the remainder of 1996 and in the future, the
Company intends to pursue additional acquisitions in its existing regional
markets and to seek strategic acquisition opportunities that are compatible
with it core businesses. Management believes that the Company has the
ability to secure additional financing to pursue its acquisition and
consolidation strategy. Pursuant to the strategy, the Company announced on
July 31, 1996 that it had signed a non-binding letter of intent to purchase
the assets of Swiss Dairy Corporation of Riverside, California. It is the
Company's plan to finance this potential acquisition, if consummated, with
additional borrowings from its senior lenders by obtaining an amendment to
its existing credit facilities.
11
<PAGE>
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
To the knowledge of the Company, there are no reportable suits or
proceedings pending or threatened against or affecting the Company
other than those encountered in the ordinary course of the Company's
business.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There have been no matters submitted to a vote of the holders of
securities of the Company since the Company became subject to the
reporting requirements of the Securities Exchange Act of 1934, as
amended.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11. Statement re computation of per share earnings
27. Financial Data Schedule
(b) Reports on Form 8-K
None
12
<PAGE>
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.
SUIZA FOODS CORPORATION
/s/ Tracy L. Noll
---------------------------------------
Tracy L. Noll
Vice President, Chief Financial Officer
(Principal Accounting Officer)
Date: August 12, 1996
13
<PAGE>
EXHIBIT 11 - STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
For the three For the three For the six For the six
Months ended Months ended Months ended Months ended
June 30, June 30, June 30, June 30,
1995 1996 1995 1996
------------- ------------- ------------- -------------
(In thousands, except share and per-share amounts)
<S> <C> <C> <C> <C>
Income(loss) before extraordinary items $ 2,332 $ 4,553 $ (7,557) $ 4,936
Extraordinary loss 0 (2,215) (8,462) (2,215)
------------ ------------ ------------ ------------
Net income (loss) $ 2,332 $ 2,338 $ (16,019) $ 2,721
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Calculation of primary earnings (loss) per share:
Weighted average shares outstanding 6,313,000 9,191,006 5,905,000 7,752,243
Common stock equivalents (options & warrants) * 730,709 * 703,089
------------ ------------ ------------ ------------
Total weighted average shares outstanding 6,313,000 9,921,715 5,905,000 8,455,332
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Income (loss) before extraordinary items $ 0.37 $ 0.46 $ (1.28) $ 0.58
Extraordinary loss 0.00 (0.22) (1.43) (0.26)
------------ ------------ ------------ ------------
Net income (loss) $ 0.37 $ 0.24 $ (2.71) $ 0.32
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Calculation of fully diluted earnings (loss) per share:
Weighted average shares outstanding 6,313,000 9,191,006 5,905,000 7,752,243
Common stock equivalents (options & warrants) * 776,503 * 776,503
------------ ------------ ------------ ------------
Total weighted average shares outstanding 6,313,000 9,967,509 5,905,000 8,528,746
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Income (loss) before extraordinary items $ 0.37 $ 0.46 $ (1.28) $ 0.58
Extraordinary loss 0.00 (0.22) (1.43) (0.26)
------------ ------------ ------------ ------------
Net income (loss) $ 0.37 $ 0.23 $ (2.71) $ 0.32
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
* Excluded as such amounts are anti-dilutive
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,179
<SECURITIES> 0
<RECEIVABLES> 33,670
<ALLOWANCES> 0
<INVENTORY> 12,245
<CURRENT-ASSETS> 50,325
<PP&E> 95,955
<DEPRECIATION> 0
<TOTAL-ASSETS> 237,973
<CURRENT-LIABILITIES> 40,577
<BONDS> 134,334
0
0
<COMMON> 101
<OTHER-SE> 60,688
<TOTAL-LIABILITY-AND-EQUITY> 237,973
<SALES> 116,272
<TOTAL-REVENUES> 116,272
<CGS> 83,302
<TOTAL-COSTS> 23,087
<OTHER-EXPENSES> (172)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,872
<INCOME-PRETAX> 6,183
<INCOME-TAX> 1,630
<INCOME-CONTINUING> 4,553
<DISCONTINUED> 0
<EXTRAORDINARY> (2,215)
<CHANGES> 0
<NET-INCOME> 2,338
<EPS-PRIMARY> .24
<EPS-DILUTED> .23
</TABLE>
